EXHIBIT 4.1
EXECUTION VERSION
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REVOLVING CREDIT AGREEMENT
among
THE SCOTTS MIRACLE-GRO COMPANY,
as Borrower
The Subsidiary Borrowers From Time to Time Party Hereto,
The Several Lenders From Time to Time Party Hereto,
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent,
BANK OF AMERICA, N.A. AND CITICORP NORTH AMERICA, INC.,
as Syndication Agents,
and
BANK OF TOKYO-MITSUBISHI TRUST COMPANY, BNP PARIBAS, COBANK, ACB,
HARRIS, N.A., RABOBANK INTERNATIONAL and SUNTRUST BANK,
as Documentation Agents
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Dated as of July 21, 2005
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J.P. MORGAN SECURITIES INC., as
Sole Lead Arranger and as Sole Bookrunner
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS...................................................................................... 1
1.1 Defined Terms.................................................................................... 1
1.2 Other Definitional Provisions.................................................................... 22
SECTION 2. AMOUNT AND TERMS OF LOANS........................................................................ 23
2.1 Revolving Credit Commitment...................................................................... 23
2.2 Procedure for Revolving Credit Borrowing......................................................... 24
2.3 Swing Line Commitments........................................................................... 25
2.4 Participation.................................................................................... 27
2.5 Repayment of Revolving Credit Loans; Evidence of Debt............................................ 27
2.6 Facility Fee, etc................................................................................ 28
2.7 Termination or Reduction of Revolving Credit Commitments......................................... 28
2.8 Optional and Mandatory Prepayments............................................................... 29
2.9 Cash Collateralization of Letters of Credit...................................................... 30
2.10 Conversion Options............................................................................... 30
2.11 Interest Rate and Payment Dates.................................................................. 31
2.12 Computation of Interest and Fees................................................................. 31
2.13 Inability to Determine Interest Rate............................................................. 31
2.14 Pro Rata Treatment and Payments.................................................................. 32
2.15 Illegality....................................................................................... 33
2.16 Requirements of Law.............................................................................. 33
2.17 Indemnity........................................................................................ 35
2.18 Taxes............................................................................................ 35
2.19 Use of Proceeds.................................................................................. 37
2.20 Controls on Prepayment if Aggregate Revolving Extensions of Credit Exceed Aggregate Revolving
Credit Commitments............................................................................. 37
2.21 Lending Installations............................................................................ 38
2.22 Notices to Lenders............................................................................... 39
2.23 Revolving Credit Commitment Increases and Changes................................................ 39
SECTION 3. LETTER OF CREDIT FACILITIES...................................................................... 40
3.1 L/C Commitment................................................................................... 40
3.2 Procedure for Issuance of Letters of Credit...................................................... 41
3.3 Fees, Commissions and Other Charges.............................................................. 41
3.4 L/C Participation................................................................................ 41
3.5 Reimbursement Obligation of the Borrower......................................................... 42
3.6 Obligations Absolute............................................................................. 43
3.7 Increased Costs.................................................................................. 43
3.8 Letter of Credit Payments........................................................................ 44
SECTION 4. REPRESENTATIONS AND WARRANTIES................................................................... 44
PAGE
4.1 Financial Condition.............................................................................. 44
4.2 Corporate Existence; Compliance with Law......................................................... 45
4.3 Corporate Power; Authorization; Enforceable Obligations.......................................... 45
4.4 No Legal Bar..................................................................................... 45
4.5 No Material Litigation........................................................................... 45
4.6 No Burdensome Restrictions....................................................................... 46
4.7 No Default....................................................................................... 46
4.8 Subsidiaries..................................................................................... 46
4.9 Disclosure....................................................................................... 46
4.10 Schedules........................................................................................ 46
4.11 Federal Regulations.............................................................................. 46
4.12 Investment Company Act; Other Regulations........................................................ 46
4.13 Labor Matters.................................................................................... 46
4.14 ERISA............................................................................................ 47
4.15 Title to Real Property, Etc...................................................................... 47
4.16 Taxes............................................................................................ 47
4.17 Environmental Matters............................................................................ 47
4.18 Intellectual Property............................................................................ 48
4.19 Security Documents............................................................................... 48
4.20 Solvency......................................................................................... 49
4.21 Senior Indebtedness.............................................................................. 49
SECTION 5. CONDITIONS PRECEDENT............................................................................. 49
5.1 Conditions to Effectiveness of this Agreement.................................................... 49
5.2 Conditions to All Extensions of Credit........................................................... 52
5.3 Additional Conditions Applicable to Foreign Subsidiary Borrowers................................. 52
SECTION 6. AFFIRMATIVE COVENANTS............................................................................ 54
6.1 Financial Statements............................................................................. 54
6.2 Certificates; Other Information.................................................................. 55
6.3 Payment of Obligations........................................................................... 56
6.4 Compliance with Laws............................................................................. 56
6.5 Conduct of Business and Maintenance of Existence................................................. 56
6.6 Maintenance of Property, Insurance............................................................... 56
6.7 Inspection of Property; Books and Records; Discussions........................................... 56
6.8 Notices.......................................................................................... 56
6.9 Interest Coverage................................................................................ 57
6.10 Maintenance of Leverage Ratio.................................................................... 58
6.11 Additional Collateral, etc....................................................................... 58
6.12 Environmental, Health and Safety Matters......................................................... 60
6.13 Foreign Pledge Agreements........................................................................ 60
SECTION 7. NEGATIVE COVENANTS............................................................................... 61
7.1 Limitation on Liens.............................................................................. 61
7.2 Limitation on Contingent Obligations............................................................. 62
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PAGE
7.3 Limitation on Fundamental Changes................................................................ 62
7.4 Limitation on Acquisitions, Investments, Loans and Advances...................................... 63
7.5 Limitation on Indebtedness....................................................................... 64
7.6 Limitation on Restrictions on Subsidiary Distributions........................................... 65
7.7 Transactions with Affiliates and Officers........................................................ 66
7.8 Limitation on Sale of Assets..................................................................... 66
7.9 Sale and Leaseback............................................................................... 66
7.10 Fiscal Year...................................................................................... 66
7.11 Modifications of Certain Debt Instruments........................................................ 67
7.12 Negative Pledge Clauses.......................................................................... 67
7.13 Lines of Business................................................................................ 67
7.14 Restricted Payments.............................................................................. 67
7.15 Limitation of Redemptions of Certain Indebtedness................................................ 68
SECTION 8. EVENTS OF DEFAULT................................................................................ 68
SECTION 9. THE ADMINISTRATIVE AGENT......................................................................... 71
9.1 Appointment...................................................................................... 71
9.2 Delegation of Duties............................................................................. 72
9.3 Exculpatory Provisions........................................................................... 72
9.4 Reliance by Administrative Agent................................................................. 72
9.5 Notice of Default................................................................................ 73
9.6 Non-Reliance on Administrative Agent, Other Lenders and JPMCB.................................... 73
9.7 Indemnification.................................................................................. 73
9.8 Administrative Agent in Its Individual Capacity.................................................. 74
9.9 Parallel Debt.................................................................................... 74
9.10 Successor Administrative Agent................................................................... 74
9.11 The Syndication Agent and the Documentation Agents............................................... 75
SECTION 10. MISCELLANEOUS.................................................................................... 75
10.1 Amendments and Waivers........................................................................... 75
10.2 Notices.......................................................................................... 76
10.3 No Waiver; Cumulative Remedies................................................................... 78
10.4 Survival of Representations, Warranties and Indemnities.......................................... 78
10.5 Payment of Expenses and Taxes.................................................................... 78
10.6 Successors and Assigns; Participations and Assignments........................................... 79
10.7 Adjustments; Set-off............................................................................. 81
10.8 Enforceability; Usury............................................................................ 82
10.9 Judgment......................................................................................... 83
10.10 Counterparts..................................................................................... 83
10.11 Governing Law; No Third Party Rights............................................................. 83
10.12 Headings......................................................................................... 84
10.13 Submission To Jurisdiction; Waivers.............................................................. 84
10.14 Acknowledgments.................................................................................. 85
10.15 Confidentiality.................................................................................. 85
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PAGE
10.16 WAIVERS OF JURY TRIAL........................................................................... 86
10.17 Severability.................................................................................... 86
10.18 USA PATRIOT Act................................................................................. 86
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ANNEXES
Annex A Pricing Grid
Annex B Sterling Borrower Provisions
Annex C Australia Borrower Provisions
Annex D Canadian Borrower Provisions
SCHEDULES
Schedule 1 Lenders; Revolving Credit Commitments
Schedule 1.2 Non-Guarantor Domestic Subsidiaries
Schedule 4.1 Certain Financial Information
Schedule 4.5 Litigation
Schedule 4.8 Subsidiaries
Schedule 4.11 Certain Transactions
Schedule 4.19(ii) Certain Filings
Schedule 4.19(iii) Perfection of Foreign Stock Pledges
Schedule 5.1(b) Foreign Subsidiary Pledges
Schedule 5.1(g) Proceedings
Schedule 5.3(iii) Certain Filings
Schedule 6.13 Foreign Pledge Agreements
Schedule 7.1(i) Existing Liens and Encumbrances
Schedule 7.9 Sale and Leaseback
Schedule 7.2(iii) Existing Guarantees
Schedule 7.5(c) Existing Indebtedness
Schedule 10.2 Notices
EXHIBITS
Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Guarantee and Collateral Agreement
Exhibit C Form of Swing Line Loan Participation Certificate
Exhibit D Form of U.S. Tax Compliance Certificate
Exhibit E Form of Commitment Increase Supplement
Exhibit F Form of New Lender Supplement
Exhibit G Form of Opinion of Vorys, Sater, Seymour and Pease LLP
Exhibit H Form of Opinion of Counsel to Foreign Subsidiary Borrowers
Exhibit I Form of Borrowing Certificate
Exhibit J Form of New Domestic Subsidiary Certificate
Exhibit K Form of Joinder Agreement
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REVOLVING CREDIT AGREEMENT, dated as of July 21, 2005, by and among
THE SCOTTS MIRACLE-GRO COMPANY, an Ohio corporation (the "Borrower"), the
Subsidiary Borrowers (as defined herein) from time to time parties to this
agreement, the several banks and other financial institutions from time to time
parties to this Agreement (the "Lenders"), Bank of America, N.A. and CITICORP
NORTH AMERICA, Inc., as Syndication Agents, Bank of Tokyo-Mitsubishi Trust
Company, BNP Paribas, COBANK, ACB, HARRIS, N.A., RABOBANK INTERNATIONAL and
SUNTRUST BANK, as Documentation Agents, and JPMORGAN CHASE BANK, N.A., (together
with its banking affiliates, "JPMCB"), as agent for the Lenders hereunder (in
such capacity, the "Administrative Agent").
W I T N E S S E T H :
WHEREAS, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
have the following meanings:
"ABR" shall mean for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime
Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus -1/2 of 1%. For purposes hereof: "Prime Rate"
shall mean the rate of interest per annum publicly announced from time to
time by the Administrative Agent as its prime rate in effect at its
principal office in New York City (the Prime Rate not being intended to be
the lowest rate of interest charged by JPMCB in connection with extensions
of credit to debtors); and "Federal Funds Effective Rate" shall mean, for
any day, the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for the
day of such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by it. Any change in
the ABR due to a change in the Prime Rate or the Federal Funds Effective
Rate shall be effective as of the opening of business on the effective day
of such change in the Prime Rate or the Federal Funds Effective Rate, as
applicable.
"ABR Loans" shall mean the Loans at such time as they are made
and/or being maintained at a rate of interest based upon the ABR.
"Adjustment Date" shall have the meaning set forth in the Pricing
Grid.
"Affiliate" shall mean (a) any Person (other than a Subsidiary of
the Borrower) which, directly or indirectly, controls, is controlled by or
is under common control with, the Borrower or (b) any Person who is a
director or executive officer of the Borrower, any Subsidiary of the
Borrower or any Person described in clause (a) of this definition. For
purposes of this definition, "control" of a Person means the power, direct
or indirect, to vote 20% or more of the Capital Stock having voting power
for the election of directors of such Person or otherwise to direct or
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cause the direction of the management and policies of such Person, whether
by contract or otherwise.
"Aggregate Exposure" shall mean, with respect to any Lender at any
time, an amount equal to (a) until the Closing Date, the aggregate amount
of such Lender's Revolving Credit Commitment at such time and (b)
thereafter, the amount of such Lender's Revolving Credit Commitment then
in effect or, if the Revolving Credit Commitments have been terminated,
the amount of such Lender's Revolving Extensions of Credit then
outstanding.
"Aggregate Exposure Percentage" shall mean, with respect to any
Lender at any time, the ratio (expressed as a percentage) of such Lender's
Aggregate Exposure at such time to the Aggregate Exposure of all Lenders
at such time.
"Aggregate Australian Revolving Extensions of Credit" shall mean an
amount equal to the sum of (a) the aggregate principal amount of all
Australian Dollar Loans (including, without limitation, Australian Dollar
Swing Line Loans borrowed under Australian Commitments) then outstanding
and (b) the aggregate amount of all Australian L/C Obligations then
outstanding.
"Aggregate Canadian Revolving Extensions of Credit" shall mean an
amount equal to the sum of (a) the aggregate principal amount of all
Canadian Dollar Loans (including, without limitation, Canadian Dollar
Swing Line Loans borrowed under Canadian Commitments) then outstanding and
(b) the aggregate amount of all Canadian L/C Obligations then outstanding.
"Aggregate Facility A Revolving Extensions of Credit" shall mean an
amount equal to the sum of (a) the aggregate principal amount of all
Facility A Loans (including, without limitation, Swing Line Loans borrowed
under Facility A Commitments) then outstanding and (b) the aggregate
amount of all L/C Obligations then outstanding in respect of Letters of
Credit issued under the Facility A Commitments.
"Aggregate Facility B Revolving Extensions of Credit" shall mean an
amount equal to the sum of (a) the aggregate principal amount of all
Facility B Loans (including, without limitation, Swing Line Loans borrowed
under Facility B Commitments) then outstanding and (b) the aggregate
amount of all L/C Obligations then outstanding in respect of Letters of
Credit issued under the Facility B Commitments.
"Aggregate Facility C Revolving Extensions of Credit" shall mean an
amount equal to the sum of (a) the aggregate principal amount of all
Facility C Loans (including, without limitation, Swing Line Loans borrowed
under Facility C Commitments) then outstanding and (b) the aggregate
amount of all L/C Obligations then outstanding in respect of Letters of
Credit issued under the Facility C Commitments.
"Aggregate Facility D Revolving Extensions of Credit" shall mean an
amount equal to the sum of (a) the aggregate principal amount of all
Facility D Loans (including, without limitation, Swing Line Loans borrowed
under Facility D Commitments) then outstanding and (b) the aggregate
amount of all L/C Obligations then outstanding in respect of Letters of
Credit issued under the Facility D Commitments.
"Aggregate Sterling Revolving Extensions of Credit" shall mean an
amount equal to the sum of (a) the aggregate principal amount of all
Sterling Loans (including, without limitation, Sterling Swing Line Loans
borrowed under Sterling Commitments) then outstanding and (b) the
aggregate amount of all Sterling L/C Obligations then outstanding.
3
"Aggregate Revolving Extensions of Credit" shall mean, without
duplication, the Aggregate Facility A Revolving Extensions of Credit, the
Aggregate Facility B Revolving Extensions of Credit, the Aggregate
Facility C Revolving Extensions of Credit, the Aggregate Facility D
Revolving Extensions of Credit, the Aggregate Sterling Revolving
Extensions of Credit, the Aggregate Australian Dollar Revolving Extensions
of Credit and the Aggregate Canadian Dollar Revolving Extensions of
Credit.
"Agreement" shall mean this Revolving Credit Agreement, as amended,
supplemented or otherwise modified from time to time.
"Applicable Margin" shall mean for each Type of Loan, the rate per
annum set forth under the relevant column heading in the Pricing Grid.
"Application" shall mean an application, in such form as the Issuing
Lender may specify from time to time, requesting such Issuing Lender to
open a Letter of Credit.
"Assignment and Acceptance" shall mean an Assignment and Acceptance,
substantially in the form of Exhibit A hereto.
"Australian Commitments" shall have the meaning assigned to such
term in Annex C hereto.
"Australian Dollars" shall mean the lawful currency of the
Commonwealth of Australia.
"Australian Dollar Lender" shall mean each Lender that has an
Australian Commitment or that holds Australian Dollar Loans; collectively,
the "Australian Dollar Lenders". Each Australian Dollar Lender on the date
hereof and on each date on which a payment or prepayment of interest is
made represents that it is an Eligible Australian Bank.
"Australian Dollar Loan" shall mean any Australian Dollar Loan made
pursuant to Annex C hereto; collectively, the "Australian Dollar Loans".
"Australian Dollar Swing Line Lenders" shall have the meaning
assigned to such term in Annex C hereto.
"Australian Dollar Swing Line Loans" shall have the meaning assigned
to such term in Annex C hereto.
"Australian L/C Obligations" shall have the meaning assigned to such
term in Annex C hereto.
"Australian Subsidiary Borrower" shall mean Scotts Australia Pty
Ltd. or any other Foreign Subsidiary Borrower organized under the laws of
the Commonwealth of Australia and designated as such by the Borrower in a
notice to the Administrative Agent, which shall notify each Australian
Lender thereof.
"Available Australian Commitment" shall mean, as to any Lender at
any time, the amount equal to the excess, if any, of (a) such Lender's
Australian Commitment over (b) the sum of such Lender's (i) ratable
portion of the Aggregate Facility C Revolving Extensions of Credit and
(ii) ratable portion of the Aggregate Australian Revolving Extensions of
Credit. The Available Australian Commitment may be calculated as being
negative at any time.
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"Available Canadian Commitment" shall mean, as to any Lender at any
time, the amount equal to the excess, if any, of (a) such Lender's
Canadian Commitment over (b) the sum of such Lender's (i) ratable portion
of the Aggregate Facility D Revolving Extensions of Credit and (ii)
ratable portion of the Aggregate Canadian Revolving Extensions of Credit.
The Available Canadian Commitment may be calculated as being negative at
any time.
"Available Facility A Commitment" shall mean, as to any Lender at
any time, the amount equal to the excess, if any, of (a) such Lender's
Facility A Commitment over (b) such Lender's ratable portion of the
Aggregate Facility A Revolving Extensions of Credit. The Available
Facility A Commitment may be calculated as being negative at any time.
"Available Facility B Commitment" shall mean, as to any Lender at
any time, the amount equal to the excess, if any, of (a) such Lender's
Facility B Commitment over (b) the sum of such Lender's (i) ratable
portion of the Aggregate Facility B Revolving Extensions of Credit and
(ii) ratable portion of the Aggregate Sterling Revolving Extensions of
Credit. The Available Facility B Commitment may be calculated as being
negative at any time.
"Available Facility C Commitment" shall mean, as to any Lender at
any time, the amount equal to the excess, if any, of (a) such Lender's
Facility C Commitment over (b) the sum of such Lender's (i) ratable
portion of the Aggregate Facility C Revolving Extensions of Credit and
(ii) ratable portion of the Aggregate Australian Revolving Extensions of
Credit. The Available Facility C Commitment may be calculated as being
negative at any time.
"Available Facility D Commitment" shall mean, as to any Lender at
any time, the amount equal to the excess, if any, of (a) such Lender's
Facility D Commitment over (b) the sum of such Lender's (i) ratable
portion of the Aggregate Facility D Revolving Extensions of Credit and
(ii) ratable portion of the Aggregate Canadian Revolving Extensions of
Credit. The Available Facility D Commitment may be calculated as being
negative at any time.
"Available Sterling Commitment" shall mean, as to any Lender at any
time, the amount equal to the excess, if any, of (a) such Lender's
Sterling Commitment over (b) the sum of such Lender's (i) ratable portion
of the Aggregate Facility B Revolving Extensions of Credit and (ii)
ratable portion of the Aggregate Sterling Revolving Extensions of Credit.
The Available Sterling Commitment may be calculated as being negative at
any time.
"Average Total Indebtedness" shall mean the average of the Total
Indebtedness of the Borrower at the end of each of the four most recent
consecutive fiscal quarters.
"Borrowing Date" shall mean, as to any Lender, any Business Day
specified in a notice transmitted pursuant to subsection 2.2 or 2.3 as a
date on which such Lender has been requested by the Borrower or any
Subsidiary Borrower to make Loans hereunder.
"Business Day" shall mean a day other than a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or
required by law to close; provided, however, that when used to describe
the date of any borrowing of, or any payment or interest rate
determination in respect of a LIBOR Loan, the term "Business Day" shall
also exclude any day on which (i) commercial banks are not open for
dealings in deposits in the relevant currency in the London Interbank
Market and in the financial center for such currency and (ii) in the case
of Loans denominated in euros, the Trans-European Automated Real-time
Gross Settlement Express Transfer payment system is not open for
settlement of payments in euros.
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"Canadian Commitments" shall have the meaning assigned to such term
in Annex D hereto.
"Canadian Dollars" shall mean the lawful currency of Canada.
"Canadian Dollar Lender" shall mean each Lender that has a Canadian
Commitment or that holds Canadian Dollar Loans; collectively, the
"Canadian Dollar Lenders". Each Canadian Dollar Lender on the date hereof
and on each date on which a payment or prepayment of interest is made
represents that it is an Eligible Canadian Bank.
"Canadian Dollar Loan" shall mean any Canadian Dollar Loan made
pursuant to Annex D hereto; collectively, the "Canadian Dollar Loans".
"Canadian Dollar Swing Line Lenders" shall have the meaning assigned
to such term in Annex D hereto.
"Canadian Dollar Swing Line Loans" shall have the meaning assigned
to such term in Annex D hereto.
"Canadian L/C Obligations" shall have the meaning assigned to such
term in Annex D hereto.
"Canadian Subsidiary Borrower" shall mean Scotts Canada Ltd. or any
other Foreign Subsidiary Borrower organized under the laws of Canada and
designated as such by the Borrower in a notice to the Administrative
Agent, which shall notify each Canadian Lender thereof.
"Capital Stock" shall mean any and all shares, interests,
participations or other equivalents (however designated) of capital stock
of a corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants or options to purchase
any of the foregoing.
"Cash Equivalents" shall mean (a) marketable direct obligations
issued by, or unconditionally guaranteed by, the United States Government
or issued by any agency thereof and backed by the full faith and credit of
the United States, in each case maturing within one year from the date of
acquisition; (b) certificates of deposit, time deposits, eurodollar time
deposits or overnight bank deposits having maturities of one year or less
from the date of acquisition issued by any Lender or by any commercial
bank organized under the laws of the United States or any state thereof
having combined capital and surplus of not less than $300,000,000; (c)
commercial paper of an issuer rated at least A-1 by S&P or P-1 by Moody's,
or carrying an equivalent rating by a nationally recognized rating agency,
if both of the two named rating agencies cease publishing ratings of
commercial paper issuers generally, and maturing within one year from the
date of acquisition; (d) repurchase obligations of any Lender or of any
commercial bank satisfying the requirements of clause (b) of this
definition, having a term of not more than 30 days, with respect to
securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the
date of acquisition issued or fully guaranteed by any state, commonwealth
or territory of the United States, by any political subdivision or taxing
authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory,
political subdivision, taxing authority or foreign government (as the case
may be) are rated at least A by S&P or A by Moody's; (f) securities with
maturities of one year or less from the date of acquisition backed by
standby letters of credit issued by any Lender or any commercial bank
satisfying the requirements
6
of clause (b) of this definition; (g) auction rate securities of an issuer
rated at least AA by S&P or Aa2 by Moody's, regardless of the stated
maturity, so long as such securities have a liquidity mechanism permitting
the Disposition at par within one year from the issuance of such
securities or from the date of the immediately preceding permitted
Disposition of such securities (h) money market mutual or similar funds
that invest exclusively in assets satisfying the requirements of clauses
(a) through (f) of this definition; or (i) money market funds that (i)
comply with the criteria set forth in SEC Rule 2a-7 under the Investment
Company Act of 1940, as amended, (ii) are rated AAA by S&P and Aaa by
Moody's and (iii) have portfolio assets of at least $5,000,000,000.
"Closing Date" shall mean the date upon which all of the conditions
precedent to the effectiveness of this Agreement contained in subsection
5.1 are satisfied or waived by the Administrative Agent and each of the
Lenders.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean the shares of Capital Stock, now owned or
hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
"Collateral Release Date" shall have the meaning specified in the
Guarantee and Collateral Agreement.
"Collateral Reinstatement Date" shall have the meaning specified in
the Guarantee and Collateral Agreement.
"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with the Borrower within the
meaning of Section 4001 of ERISA.
"Confidential Information Memorandum" shall mean the confidential
information memorandum distributed to the Lenders, dated June 2005.
"Consolidated Interest Expense" shall mean, for any period of
determination thereof, the interest expense of the Borrower and its
Subsidiaries for such period, as determined in accordance with GAAP;
provided that non-cash interest costs and expenses arising out of the
Refinancing shall not be considered for the purpose of determining
Consolidated Interest Expense for any period during the fiscal year of the
Borrower ending September 30, 2005.
"Consolidated Net Income" shall mean, for any period of
determination thereof, net income of the Borrower and its Subsidiaries for
such period, as determined in accordance with GAAP.
"Consolidated Net Worth" shall mean, in respect of any Person at a
particular date, all amounts which, in conformity with GAAP, would be
included under the caption "total shareholders' equity" (or any like
caption) on a consolidated balance sheet of such Person and its
Subsidiaries at such date.
"Consolidated Total Assets" shall mean, at any date, all amounts
that would, in conformity with GAAP, be set forth opposite the caption
"total assets" (or any like caption) on a consolidated balance sheet of
the Borrower and its Subsidiaries at such date.
7
"Contingent Obligation" shall mean as to any Person, the outstanding
amount of letters of credit (other than the Letters of Credit) with
respect to which such Person is the account party that have not been drawn
upon and any obligation of such Person guaranteeing or in effect
guaranteeing any Indebtedness, leases, dividends or other obligations
primarily to pay money ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person, whether or
not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance
or supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or services
primarily for the purpose of assuring the obligee under any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (d) otherwise to assure or hold harmless the obligee
under such primary obligation against loss in respect thereof; provided,
however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary
course of business.
"Contractual Obligation" shall mean, as to any Person, any material
provision of any material security issued by such Person or of any
material agreement, instrument or undertaking to which such Person is a
party or by which it or any of its property is bound.
"Control Group" shall mean the Hagedorn Partnership, L.P., the
general partners of the Hagedorn Partnership, L.P. and, in the case of
such individuals, their respective executors, administrators and heirs and
their families and trusts for their benefit.
"Default" shall mean any of the events specified in Section 8,
whether or not any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Disposition" shall mean with respect to any property, any sale,
lease, sale and leaseback, assignment, conveyance, transfer or other
disposition thereof; provided that any such sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition of
property to, in, by or between the Borrower and any Subsidiary or between
any two or more Subsidiaries shall not constitute a "Disposition". The
terms "Dispose" and "Disposed of" shall have correlative meanings.
"Dollar Equivalent" shall mean, on any Business Day with respect to
any amount denominated in euros or any other currency, the amount of
Dollars that would be required to purchase such amount of euros or such
other currency, as the case may be, based upon the spot selling rate at
which JPMCB London offers to sell each for Dollars in the London foreign
exchange market at approximately 11:00 a.m. London time on such Business
Day for delivery two Business Days later.
"Dollars", "$" and "U.S.$" shall mean dollars in lawful currency of
the United States of America.
"Domestic Assets" shall mean the assets of the Borrower and any
Domestic Subsidiary, wherever located, and the assets of any Foreign
Subsidiary located or domiciled in any jurisdiction within the United
States.
"Domestic Subsidiary" shall mean any Subsidiary incorporated under
the laws of the United States or any political subdivision thereof.
8
"Domestic Subsidiary Borrower" shall mean any Domestic Subsidiary
which (a) is a Subsidiary Borrower hereunder on the Closing Date or (b)
which is designated by the Borrower to be a Subsidiary Borrower pursuant
to subsection 10.1(b).
"EBITDA" shall mean without duplication, for any fiscal period, the
sum of the amounts for such fiscal period of (i) Consolidated Net Income,
(ii) provision for taxes based on income, (iii) depreciation expense, (iv)
Consolidated Interest Expense, (v) amortization expense, (vi) expenses in
an aggregate amount not to exceed $10,000,000 incurred in connection with
Project Excellence and (vii) other non-recurring, non-cash items reducing
Consolidated Net Income (reduced by any non-recurring, non-cash items
increasing Consolidated Net Income), all as determined on a consolidated
basis for the Borrower and its Subsidiaries in conformity with GAAP.
"Effective Interbank Rate" shall have the meaning specified in
subsection 2.14(d).
"Eligible Australian Bank" shall mean (a) a resident of Australia
which does not make Australian Dollar Loans as part of carrying on
business outside of Australia at or through a permanent establishment
outside of Australia; or (b) a non-resident of Australia which makes Swing
Line Loans or Revolving Credit Loans as part of carrying on business in
Australia at or through a permanent establishment of the non-resident in
Australia. In this definition, words and expressions used shall have the
meaning ascribed to them for the purposes of S. 128B of the Australian
Income Tax Assessment Act of 1936.
"Eligible Canadian Bank" shall mean (a) those banks listed on
Schedules I, II or III to the Bank Act (Canada), (b) any (i) trust
company, savings bank, savings and loan association or similar financial
institution, or (ii) insurance company engaged in the business of writing
insurance which, in either case (A) has total assets of $10,000,000,000 or
more, (B) is engaged in the business of lending money and extending credit
under credit facilities substantially similar to those extended under this
Agreement, (C) is operationally and procedurally able to meet the
obligations of a Lender hereunder to the same degree as a commercial bank,
and (c) any other financial institution (including a mutual fund or other
fund) having total assets of $10,000,000,000 or more which meets the
requirements set forth in subclauses (B) and (C) of clause (b) above;
provided that each Eligible Canadian Bank must be organized under the laws
of either Canada or a political subdivision thereof or, if not, it must
(i) act hereunder through a branch, agency or funding office located in
Canada and (ii) be exempt from withholding of tax on interest payments.
"Eligible U.K. Bank" shall mean a Person that is both (i) a bank as
defined in Section 840A of the United Kingdom Income and Corporation Taxes
Act 1988, and (ii) a Person within the charge to United Kingdom
corporation tax (i.e., a United Kingdom resident company or a non-resident
company which is carrying on a trade in the United Kingdom through a
permanent establishment in the United Kingdom to which the beneficial
interest in interest accrued under Loans made to the Borrower or a
Subsidiary Borrower is attributable and which is not entitled to exemption
from tax in respect of that interest).
"Environmental Laws" shall mean any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority or requirements
of law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or
the environment, as now or may at any time hereafter be in effect.
9
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"euro" and "(euro)" shall mean the single currency of Participating
Member States.
"Event of Default" shall mean any of the events specified in Section
8, provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Excluded Foreign Subsidiary" shall mean any Foreign Subsidiary a
guarantee from which, a pledge of the assets of which, or the pledge of 66
2/3% or more of the Capital Stock of which under the applicable Security
Document would have adverse tax consequences on the Borrower, any of its
Subsidiaries or such Foreign Subsidiary or would reasonably be deemed an
unlawful act of such Foreign Subsidiary or any of its officers or
directors under the laws of the applicable foreign jurisdiction.
"Existing Credit Agreement" shall mean the Second Amended and
Restated Credit Agreement dated as of October 22, 2003, as amended, among
the Borrower, the Subsidiary Borrowers, the several banks and other
financial institutions parties thereto and JPMCB, as administrative agent.
"Extension of Credit" shall mean (i) all Loans or advances made to
the Borrower and the Subsidiary Borrowers hereunder and (ii) all Letters
of Credit issued for the account of the Borrower and the Subsidiary
Borrowers and any unreimbursed drawings hereunder.
"Facility A Commitment" shall mean, as to each Facility A Lender,
the obligation of such Lender, if any, to make Facility A Loans and
participate in Swing Line Loans or Letters of Credit made under the
Facility A Commitments in an aggregate principal and/or face amount not to
exceed the amount set forth under the heading "Facility A Commitment"
opposite such Facility A Lender's name on Schedule 1 or in the Assignment
and Acceptance pursuant to which such Facility A Lender became a party
hereto, as the same may be changed from time to time pursuant to the terms
hereof. The original amount of the Facility A Commitments is $640,000,000.
"Facility A Lenders" shall mean each Lender that has a Facility A
Commitment or that holds Facility A Loans; collectively, the "Facility A
Lenders".
"Facility A Loan" shall mean any Loan made under the Facility A
Commitments pursuant to subsection 2.1; collectively, the "Facility A
Loans".
"Facility B Commitment" shall mean, as to each Facility B Lender,
the obligation of such Lender, if any, to make Facility B Loans and
participate in Swing Line Loans and Letters of Credit issued under the
Facility B Commitments in an aggregate principal and/or face amount not to
exceed the amount set forth under the heading "Facility B Commitment"
opposite such Facility B Lender's name on Schedule 1 or in the Assignment
and Acceptance pursuant to which such Facility B Lender became a party
hereto, as the same may be changed from time to time pursuant to the terms
hereof. The original amount of the Facility B Commitments is $300,000,000.
"Facility B Lender" shall mean each Lender that has a Facility B
Commitment or that holds Facility B Loans; collectively, the "Facility B
Lenders".
10
"Facility B Loan" shall mean any Loan made under the Facility B
Commitments pursuant to subsection 2.1; collectively, the "Facility B
Loans".
"Facility C Commitment" shall mean, as to each Facility C Lender,
the obligation of such Lender, if any, to make Facility C Loans and
participate in Swing Line Loans and Letters of Credit issued under the
Facility C Commitments in an aggregate principal and/or face amount not to
exceed the amount set forth under the heading "Facility C Commitment"
opposite such Facility C Lender's name on Schedule 1 or in the Assignment
and Acceptance pursuant to which such Lender became a party hereto, as the
same may be changed from time to time pursuant to the terms hereof. The
original amount of the Facility C Commitments is $25,000,000.
"Facility C Lender" shall mean each Lender that has a Facility C
Commitment or that holds Facility C Loans; collectively, the "Facility C
Lenders".
"Facility C Loan" shall mean any Loan made under the Facility C
Commitments pursuant to subsection 2.1; collectively, the "Facility C
Loans".
"Facility D Commitment" shall mean, as to each Facility D Lender,
the obligation of such Lender, if any, to make Facility D Loans and
participate in Swing Line Loans and Letters of Credit issued under the
Facility D Commitments in an aggregate principal and/or face amount not to
exceed the amount set forth under the heading "Facility D Commitment"
opposite such Facility D Lender's name on Schedule 1 or in the Assignment
and Acceptance pursuant to which such Lender became a party hereto, as the
same may be changed from time to time pursuant to the terms hereof. The
original amount of the Facility D Commitments is $35,000,000.
"Facility D Lender" shall mean each Lender that has a Facility D
Commitment or that holds Facility D Loans; collectively, the "Facility D
Lenders".
"Facility D Loan" shall mean any Loan made under the Facility D
Commitments pursuant to subsection 2.1; collectively, the "Facility D
Loans".
"Facility Fee Rate" shall mean the rate per annum set forth under
the relevant column heading in the Pricing Grid.
"Foreign Pledge Agreements" shall mean each pledge agreement, charge
or collateral security instrument creating a security interest in the
Capital Stock of the Foreign Subsidiary Borrowers (other than Scotts
Treasury EEIG) and certain other Foreign Subsidiaries of the Borrower, in
each case, in form and substance reasonably satisfactory to the
Administrative Agent, as such agreements may be amended, supplemented or
otherwise modified from time to time.
"Foreign Subsidiary" shall mean any Subsidiary of the Borrower which
is organized under the laws of any jurisdiction outside of the United
States of America.
"Foreign Subsidiary Borrower" shall mean any Sterling Subsidiary
Borrower, Australian Subsidiary Borrower or Canadian Subsidiary Borrower
(a) which is a Subsidiary Borrower hereunder on the Closing Date or (b)
which is designated by the Borrower pursuant to subsection 10.1(b).
"Funded Debt" shall mean, as to any Person, all Indebtedness of such
Person that matures more than one year from the date of its creation or
matures within one year from such date but is
11
renewable or extendible, at the option of such Person, to a date more than
one year from such date or arises under a revolving credit or similar
agreement that obligates the lender or lenders to extend credit during a
period of more than one year from such date, including all current
maturities and current sinking fund payments in respect of such
Indebtedness whether or not required to be paid within one year from the
date of its creation and, in the case of the Borrower and the Subsidiary
Borrowers, Indebtedness in respect of the Loans.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time; provided,
however, that if any modifications in GAAP after the Closing Date change
any calculation of any financial covenants under this Agreement, the
Administrative Agent and the Lenders agree to amend this Agreement to the
effect that each such financial covenant is no more restrictive than such
covenant was prior to such modification in GAAP (and until such agreement,
such covenants shall be calculated in accordance with GAAP before such
modification).
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions
of or pertaining to government (including the National Association of
Insurance Commissioners).
"Guarantee and Collateral Agreement" shall mean the Guarantee and
Collateral Agreement, executed and delivered by the Borrower and the
Subsidiary Guarantors, substantially in the form of Exhibit B, and as
amended, supplemented or otherwise modified from time to time.
"Hedging Agreements" shall mean any interest rate protection
agreement, interest rate future, interest rate option, interest rate swap,
interest rate cap, interest rate exchange (from fixed to floating rates,
from one floating rate to another floating rate or otherwise) or other
interest rate hedge or arrangement under which the Borrower is a party or
a beneficiary and (b) any agreement or arrangement designed to limit or
eliminate the risk and/or exposure of the Borrower to fluctuations in
currency exchange rates or in commodity prices.
"Hedging Lender" shall mean any Lender or affiliate thereof which
from time to time enters into a Hedging Agreement with the Borrower.
"Hostile Take-Over Bid" shall mean an offer to purchase a
controlling interest in any Person by the Borrower or any of its
Subsidiaries or in which the Borrower or any of its Subsidiaries is
involved, in respect of which the board of directors (or equivalent
governing body for such entity) of the target entity has recommended
against acceptance of such offer to the target entity's shareholders or
equity holders or which is similarly opposed or contested.
"Indebtedness" shall mean, as to any Person, at a particular time,
(a) indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (including, without limitation, any
such indebtedness which is non-recourse to the credit of such Person but
is secured by assets of such Person, but excluding current amounts payable
incurred in the ordinary course of business), (b) obligations of such
Person under leases which shall have been or should be, in accordance with
GAAP, recorded as capitalized leases, (c) indebtedness of such Person
arising under acceptance facilities, (d) indebtedness of such Person
arising under unpaid reimbursement obligations in respect of all drafts
drawn under letters of credit issued for the account of such Person, (e)
the incurrence of withdrawal liability under Title IV of ERISA by such
Person or a Commonly Controlled Entity to a Multi-employer Plan, (f)
liabilities arising
12
under Hedging Agreements of such Person and (g) indebtedness of such
Person under any synthetic lease.
"Insolvency" shall mean, with respect to any Multi-employer Plan,
the condition that such Plan is insolvent within the meaning of such term
as used in Section 4245 of ERISA.
"Interest Payment Date" shall mean (a) as to any ABR Loan, the last
day of each March, June, September and December, commencing on the first
of such days to occur after such ABR Loan is made or any LIBOR Loan is
converted to such ABR Loan, (b) as to any LIBOR Loan in respect of which
the Borrower or applicable Subsidiary Borrower has selected an Interest
Period of one month, two months or three months, the last day of such
Interest Period and (c) as to any LIBOR Loan in respect of which the
Borrower or applicable Subsidiary Borrower has selected a longer Interest
Period than the periods described in preceding clause (b), the day three
months after the commencement of such Interest Period and the last day of
such Interest Period.
"Interest Period" shall mean with respect to any LIBOR Loan, (i)
initially, the period commencing on, as the case may be, the borrowing or
conversion date with respect to a LIBOR Loan, and ending one, two, three
or six months thereafter, as selected by the Borrower or applicable
Subsidiary Borrower, as the case may be, in its irrevocable written notice
of borrowing as provided in subsection 2.2 and, in the case of LIBOR
Loans, 2.2 or 2.3 or, in the case of LIBOR Loans, its written irrevocable
notice of conversion as provided in subsection 2.10 and (ii) thereafter,
each period commencing on the last day of the next preceding Interest
Period applicable to such LIBOR Loan and ending one, two, three or six
months thereafter, as selected by the Borrower or applicable Subsidiary
Borrower by irrevocable written notice to the Administrative Agent not
less than three Business Days prior to the last day of the then current
Interest Period with respect to such Loan; provided that all of the
foregoing provisions relating to Interest Periods are subject to the
following:
(A) if any Interest Period pertaining to a LIBOR Loan would
otherwise end on a day which is not a Business Day, that Interest
Period shall be extended to the next succeeding Business Day unless
the result of such extension would be to carry such Interest Period
into another calendar month in which event such Interest Period
shall end on the next preceding Business Day;
(B) (1) if the Borrower or applicable Subsidiary Borrower
shall fail to give notice as provided in clauses (i) and (ii) in
this definition with respect to a LIBOR Loan denominated in Dollars,
the Borrower or applicable Subsidiary Borrower shall be deemed to
have requested conversion of the affected LIBOR Loan to an ABR Loan
on the last day of the then current Interest Period with respect
thereto; and (2) if the Borrower or applicable Subsidiary Borrower
shall fail to give notice as provided in clauses(i) and (ii) in this
definition with respect to a Loan denominated in a currency other
than Dollars, the Borrower or applicable Subsidiary Borrower shall
be deemed to have requested a continuation of the affected Loan for
a period commencing on the last day of the next preceding Interest
Period applicable to such Loan and ending one month thereafter;
(C) any Interest Period that would otherwise extend beyond the
applicable Termination Date shall end on the applicable Termination
Date; and
(D) any Interest Period pertaining to a LIBOR Loan that begins
on the last Business Day of a calendar month (or on day for which
there is no numerically
13
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month.
"International Standby Practices" shall mean the International
Standby Practices, International Chamber of Commerce Publication No.
ISP98, as the same may be effectively replaced in whole or in part or
amended from time to time.
"Issuing Lender" shall mean, in respect of any Letter of Credit,
JPMCB or, at the option of JPMCB, any affiliate of JPMCB, or with the
consent of the Borrower and the Administrative Agent, any other Lender, in
each case in its capacity as the issuer of such Letter of Credit.
"JPMCB" shall have the meaning assigned to such term in the preamble
hereto.
"L/C Commitment" shall mean the amount of $65,000,000.
"L/C Obligations" shall mean, at any time, an amount equal to the
sum of (a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings
under Letters of Credit which have not then been reimbursed pursuant to
Section 3.
"L/C Participants" shall mean, with respect to any Revolving
Facility under which a Letter of Credit is issued, the collective
reference to all the Revolving Credit Lenders under such Revolving
Facility other than the Issuing Lender.
"Lending Installation" shall mean, with respect to a Lender, the
office, branch, subsidiary or affiliate of such Lender listed on the
signature pages hereof or on a Schedule or otherwise selected by such
Lender pursuant to subsection 2.21.
"Letter of Credit" shall mean any Standby L/C or Trade L/C.
"Lenders" shall have the meaning assigned to such term in the
preamble hereto. As the context shall require, a Lender shall include any
of its affiliates that is a Sterling Lender, an Australian Dollar Lender,
or a Canadian Dollar Lender.
"Leverage Ratio" shall mean, as at the last day of any fiscal
quarter of the Borrower, the ratio of (i) Average Total Indebtedness of
the Borrower and its Subsidiaries on such day to (ii) EBITDA for the four
consecutive fiscal quarters ending on such day; provided any calculation
of the above ratio following any acquisition made during the twelve-month
period covered by such calculation, by purchase or otherwise, of all or
substantially all of the business or assets of, any Person or of any line
of business of any Person shall be determined on a pro forma basis without
duplication, including (y) in Average Total Indebtedness and in the amount
of preferred stock accruals, an annualization of the actual indebtedness
or preferred stock accruals relating to such acquisition for the portion
of such twelve-month period prior to the date of such acquisition (or, if
such acquisition occurred on the last day of a fiscal quarter, an
annualization estimate of the daily indebtedness or preferred stock
accruals relating to such acquisition based on the indebtedness incurred
and based on the current Interest Rates for such indebtedness or preferred
stock issued on such date) and (z) in EBITDA the EBITDA of the acquired
Person for any portion of such twelve-month period prior to such
acquisition.
"LIBOR Base Rate" shall mean, with respect to any LIBOR Loan in
Dollars, euros or any Optional Currency for any Interest Period therefor:
14
(a) the rate per annum (rounded to the nearest 1/16 of 1%)
appearing on the Screen for such currency as the London Interbank
Offered Rate for deposits in such currency at approximately 11:00
a.m. London time (or as soon thereafter as practicable) on (in the
case of any LIBOR Loan in Sterling), or two Business Days prior to
(in the case of any LIBOR Loan in Dollars, euros or any other
Optional Currency), the first day of such Interest Period as the
London Interbank Offered Rate for such currency having a term
comparable to such Interest Period and in an amount of $1,000,000 or
the Non-Dollar Currency Equivalent thereof; or
(b) if such rate does not appear on the Screen (or, if the
Screen shall cease to be publicly available or if the information
contained on the Screen, in the Administrative Agent's reasonable
judgment, shall cease accurately to reflect such LIBOR Base Rate, as
reported by any publicly available source of similar market data
selected by the Administrative Agent that, in the Administrative
Agent's reasonable judgment, accurately reflects such LIBOR Base
Rate), the LIBOR Base Rate shall mean, with respect to any LIBOR
Loan for any Interest Period, the arithmetic mean, as determined by
the Administrative Agent, of the rate per annum (rounded to the
nearest 1/16 of 1%) quoted by each relevant Reference Lender at
approximately 11:00 a.m. London time (or as soon thereafter as
practicable) on (in the case of any LIBOR Loan in Sterling), or two
Business Days prior to (in the case of any LIBOR Loan in Dollars,
euros or any other Optional Currency), the first day of the Interest
Period for such Loan for the offering by such Reference Lender to
leading banks in the London interbank market of deposits in such
currency having a term comparable to such Interest Period and in an
amount comparable to the principal amount of the LIBOR Loan to be
made by such Reference Lender (or its relevant applicable Lending
Installation, as the case may be) for such Interest Period.
"LIBOR Loans" shall mean the Loans hereunder at such time as they
are made and/or being maintained at a rate of interest based upon the
applicable LIBOR Rate.
"LIBOR Rate" shall mean (a) with respect to a LIBOR Loan denominated
in Dollars, euros or any Optional Currency for each day during each
Interest Period pertaining thereto, the rate per annum equal to the LIBOR
Base Rate or, to the extent such reserve requirements are generally
applicable with respect to loans to the relevant Borrower or Subsidiary
Borrower, the quotient (rounded upward to the nearest 1/100 of 1%) of (A)
the LIBOR Base Rate, divided by (B) a number equal to 1.00 minus the
aggregate of the rates (expressed as a decimal fraction) of reserve
requirements current on such day (including, without limitation, basic,
supplemental, marginal and emergency reserves under any regulations of the
Board of Governors of the Federal Reserve System or other Governmental
Authority having jurisdiction with respect thereto), as now and from time
to time hereafter in effect, dealing with reserve requirements prescribed
for eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D of such Board) maintained by a member of such
System or (b) to the extent applicable with respect to a LIBOR Loan
denominated in Sterling for each day during each Interest Period
pertaining thereto, the sum of the LIBOR Base Rate plus, to the extent
generally applicable to loans to the relevant Borrower or Subsidiary
Borrower, the Financial Services Authority charges for such day.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, charge, encumbrance, lien
(statutory or other), or preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the authorized filing
15
by or against a Person of any financing statement as debtor under the
Uniform Commercial Code or comparable law of any jurisdiction).
"Loan" shall mean any Revolving Credit Loan or Swing Line Loan, as
the context shall require; collectively, the "Loans".
"Loan Parties" shall mean the Borrower, each Subsidiary Borrower and
each other Subsidiary of the Borrower which is a party to any Loan
Document.
"Loan Documents" shall mean, collectively, this Agreement, any
Notes, the Applications, the Letters of Credit and the Security Documents.
"Material Adverse Effect" shall mean a material adverse effect on
(a) the business, operations, property, financial condition or prospects
of the Borrower and its Subsidiaries taken as a whole or (b) the validity
or enforceability of any material term of this Agreement or any of the
other Loan Documents or the rights or remedies of the Administrative Agent
or the Lenders hereunder or thereunder.
"Material Environmental Amount" shall mean (a) an amount payable by
the Borrower or any of its Subsidiaries for investigative and remedial
costs, compliance costs, compensatory damages, natural resource damages,
punitive damages, fines, and penalties, in the aggregate, that exceeds
$20,000,000 (net of insurance), or (b) any other impact on the Borrower or
any of its Subsidiaries arising out of any of the Environmental Laws
which, in the aggregate, could reasonably be anticipated to exceed
$20,000,000 (net of insurance).
"Material Subsidiary" shall mean at any time (a) any Subsidiary
Borrower, (b) any Subsidiary of the Borrower created or acquired after the
Closing Date which has a Total Capitalization of more than $20,000,000,
(c) any Subsidiary of the Borrower with assets greater than or equal to 5%
of all assets of the Borrower and its Subsidiaries, computed and
consolidated in accordance with GAAP ("Consolidated Assets"), (d) any
Subsidiary with revenues greater than or equal to 5% of the revenues of
the Borrower and its Subsidiaries, computed and consolidated in accordance
with GAAP ("Net Revenues") or (e) any Subsidiary designated in writing by
the Borrower as a Material Subsidiary, which designation shall be
irrevocable; provided that if at any time (i) the aggregate Total
Capitalization of all Subsidiaries that are not Material Subsidiaries
shall exceed 10% of the Total Capitalization of the Borrower and its
Subsidiaries, computed and consolidated in accordance with GAAP, (ii) the
aggregate assets of all Subsidiaries that are not Material Subsidiaries
shall exceed 10% of Consolidated Assets or (iii) the aggregate revenues of
all Subsidiaries that are not Material Subsidiaries shall exceed 10% of
Net Revenues, then, in any such case, the term Material Subsidiary shall
be deemed to include such Subsidiaries (as determined pursuant to the next
following sentence) of the Borrower as may be required so that none of
preceding clauses (i), (ii) or (iii) shall continue to be true. For
purposes of the proviso to the next preceding sentence, the Subsidiaries
which shall be deemed to be Material Subsidiaries shall be determined
based on the percentage that the assets of each such Subsidiary are of
Consolidated Assets, with the Subsidiary with the highest such percentage
being selected first, and each other Subsidiary required to satisfy the
requirements set forth in such proviso being selected in descending order
of such respective percentages.
"Materials of Environmental Concern" shall mean any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Law, including,
16
without limitation, asbestos, polychlorinated biphenyls, and
urea-formaldehyde insulation; and any other substance that could give rise
to liability under any Environmental Law.
"Minimum Interest Coverage" shall mean for each fiscal quarter of
the Borrower the ratio of (a) the sum of EBITDA as of the end of such
fiscal quarter for the preceding twelve months to (b) the Consolidated
Interest Expense as of the end of such fiscal quarter for the preceding
twelve months.
"Moody's" shall mean Moody's Investors Service, Inc.
"Multi-employer Plan" shall mean a Plan which is a multi-employer
plan as defined in Section 4001(a)(3) of ERISA.
"New Lender Supplement" shall have the meaning set forth in
subsection 2.23(a).
"New Revolving Credit Lender" shall have the meaning set forth in
subsection 2.23(a).
"Non-Dollar Currency Equivalent" shall mean, on any Business Day
with respect to any amount in Dollars, the amount of euros or the relevant
Optional Currency that could be purchased with such amount of Dollars
using the foreign exchange rate for such Business Day specified in the
definition of "Dollar Equivalent".
"Non-Excluded Taxes" shall have the meaning set forth in subsection
2.18.
"Note" shall have the meaning set forth in subsection 10.6(e).
"Obligations" shall mean the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of
the Loans and interest thereon accruing after the filing of any petition
in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Borrower or any Subsidiary Borrower,
whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding) and all other obligations and liabilities
(including all obligations in respect of overdrafts and related
liabilities owed to any Lender or affiliate of a Lender or the
Administrative Agent arising from treasury, depositary and cash management
services or in connection with any automated clearinghouse transfer of
funds) of the Borrower or any Subsidiary Borrower to the Administrative
Agent or the Lenders, whether direct or indirect, absolute or contingent,
due or to become due, now existing or hereafter incurred, which may arise
under, out of, or in connection with, this Agreement, the other Loan
Documents, any Hedge Agreement or cash management arrangement entered into
with a Lender or an affiliate thereof or any other document made,
delivered or given in connection herewith or therewith, whether on account
of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, all fees and disbursements
of counsel to the Administrative Agent or any Lender) or otherwise.
"Optional Currency" shall mean euros and any other freely tradable
currency readily available in the London interbank market and approved by
the Administrative Agent.
"Participants" shall mean one or more banks or other entities to
which one or more Lenders have sold, in the ordinary course of business
and in accordance with applicable law, participating interests in any
Loan, Note, Revolving Credit Commitment or any other interest hereunder
owing to such Lender.
17
"Participating Member State" shall mean a member state of the
European Communities that adopts or has adopted the euro as its lawful
currency in accordance with legislation of the European Community relating
to Economic and Monetary Union.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.
"Permitted Acquisition" shall mean any acquisition of all or
substantially all the assets of, or shares or other equity interests in, a
Person or division or line of business of a Person or other significant
assets of a Person (other than inventory, leases, materials and equipment
and other assets in the ordinary course of business) if immediately after
giving effect thereto: (i) no Default or Event of Default shall have
occurred and be continuing or would result therefrom, (ii) such acquired
subsidiary or newly formed subsidiary owning the acquired assets shall be
a Subsidiary of the Borrower or a wholly-owned Subsidiary and all actions
required to be taken, if any, with respect to such acquired or newly
formed subsidiary under subsection 6.11 shall have been taken or shall be
planned to be taken in a manner reasonably satisfactory to the
Administrative Agent, (iii) no Material Adverse Effect would be likely to
result therefrom and (iv)(I) the Borrower shall be in compliance, on a pro
forma basis after giving effect to such acquisition or formation, with the
covenants contained in subsections 6.9 and 6.10 recomputed as at the last
day of the most recently ended fiscal quarter of the Borrower as if such
acquisition had occurred on the first day of each relevant period for
testing such compliance and any savings associated with such acquisition
had been achieved on the first day of such relevant period, and, in the
case of an acquisition involving consideration in excess of $10,000,000,
the Borrower shall have delivered to the Administrative Agent an officers'
certificate to such effect, together with all relevant financial
information for such subsidiary or assets (to the extent reasonably
available), and (II) after giving effect to such transaction, any acquired
or newly formed subsidiary shall not be liable for any Indebtedness
(except for Indebtedness permitted by subsection 7.5).
"Permitted Foreign Debt" shall have the meaning specified in
subsection 7.5(k).
"Person" shall mean an individual, a partnership, a corporation, a
limited liability company, a business trust, a joint stock company, a
trust, an unincorporated association, a joint venture, a Governmental
Authority or any other entity of whatever nature.
"Plan" shall mean, at any particular time, any employee benefit plan
which is covered by ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or if such plan were terminated at such
time, would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Pricing Grid" shall mean the pricing grid attached hereto as Annex
A.
"Project Excellence" shall mean the Borrower's one-time management
restructuring event occurring between June 2005 and December 2005.
"Properties" shall mean the real property listed on Schedule
4.19(b).
"Receivable" shall mean any account and any other right to payment
for goods sold or leased or for services rendered, whether or not such
right is evidenced by an instrument or chattel paper and whether or not it
has been earned by performance. The terms "account", "instrument" and
"chattel paper" as used herein shall have the meaning assigned to such
terms in the Uniform Commercial Code in effect from time to time in the
State of New York.
18
"Receivables Subsidiary" shall mean a Subsidiary of the Borrower
created to purchase and finance Sold Receivables.
"Receivables Purchase Facility" shall mean any receivables purchase
facility with terms and conditions reasonably satisfactory to the
Administrative Agent and pursuant to which ownership interests in, or
notes, commercial paper, certificates or other debt instruments in respect
of which, are secured by the Sold Receivables.
"Reference Lenders" shall mean JPMCB, Citicorp North America, Inc.
and Bank of America, N.A.
"Refinancing" shall be as defined in subsection 2.19(a).
"Refunded Swing Line Loans" shall have the meaning assigned to such
term in subsection 2.3(b).
"Register" shall have the meaning specified in subsection
10.6(b)(iv).
"Regular Subsidiary Borrower" shall mean Scotts Treasury EEIG, any
Domestic Subsidiary Borrower, any Foreign Subsidiary Borrower which is
designated by the Borrower as a "Regular Subsidiary Borrower" in a notice
to the Administrative Agent (which shall notify each Revolving Credit
Lender of such designation), and any Foreign Subsidiary designated by the
Borrower as a Regular Subsidiary Borrower after the Closing Date pursuant
to subsection 10.1(b); provided that so long as any such Foreign
Subsidiary Borrower is so designated, it is not required under the laws or
regulations of any Governmental Authority to deduct or withhold any
Excluded Taxes from any payment made by it under Section 2 or otherwise
pursuant to this Agreement. The Borrower may rescind any such designation
at any time by notice to the Administrative Agent, which shall notify each
Revolving Credit Lender of such rescission.
"Reimbursement Obligation" shall mean the Borrower's obligation to
reimburse the Administrative Agent or any other Issuing Lender on account
of the Letters of Credit as provided in Section 3.
"Reorganization" shall mean, with respect to any Multi-employer
Plan, the condition that such Plan is in reorganization within the meaning
of such term as used in Section 4241 of ERISA.
"Reportable Event" shall mean any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder (with respect to which the
PBGC has not, by regulation, waived the 30-day notice requirement).
"Required Lenders" shall mean at any time, the holders of more than
50% of the Total Revolving Credit Commitments then in effect or, if the
Revolving Credit Commitments have been terminated, the Aggregate Revolving
Extensions of Credit then outstanding.
"Requirement of Law" shall mean, as to any Person, the Certificate
of Incorporation or Articles of Incorporation, as the case may be, and
Code of Regulations and/or By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or a court or other Governmental Authority,
in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
19
"Responsible Officer" shall mean, as to any Person, the Chairman,
President or an Executive, Senior or other Vice President (or, in the case
of any Foreign Subsidiary, any analogous title) of such Person and, with
respect to financial matters, the Chief Financial Officer, the Treasurer
or the Controller (or, in the case of any Foreign Subsidiary, any
analogous title) of such Person.
"Revolving Credit Commitments" shall mean, as to any Lender, such
Lender's Facility A Commitments, Facility B Commitments, Facility C
Commitments, Facility D Commitments, for all purposes other than Section 2
(other than subsections 2.1 and 2.23) and Section 3, Sterling Commitments,
Australian Commitments and Canadian Commitments, if any, and such other
Commitments under any new Revolving Facility established in accordance
with subsection 2.23(b). The original amount of the Total Revolving Credit
Commitments is $1,000,000,000.
"Revolving Credit Commitment Period" shall mean the period from and
including the Closing Date to, but not including, the Revolving Credit
Termination Date or such earlier date as the Revolving Credit Commitments
may terminate as provided herein.
"Revolving Credit Lender" shall mean each of the Facility A Lenders,
the Facility B Lenders, the Facility C Lenders, the Facility D Lenders
and, for all purposes other than Section 2 (other than subsections 2.1 and
2.23) and Section 3, the Australian Dollar Lenders, the Canadian Dollar
Lenders and the Sterling Lenders.
"Revolving Credit Loan" shall mean each Facility A Loan, Facility B
Loan, Facility C Loan, Facility D Loan and, for all purposes other than
Section 2 (other than subsections 2.1 and 2.23) and Section 3, each
Sterling Loan, Australian Dollar Loan and Canadian Dollar Loan;
collectively, the "Revolving Credit Loans".
"Revolving Credit Termination Date" shall be July 21, 2010 or such
earlier date on which the Revolving Credit Commitments shall be terminated
in accordance with this Agreement.
"Revolving Extensions of Credit" shall mean, as to any Revolving
Credit Lender at any time, an amount equal to the sum of (a) the aggregate
principal amount of all Revolving Credit Loans held by such Lender then
outstanding, (b) such Lender's Revolving Percentage of the L/C Obligations
then outstanding and (c) such Lender's Revolving Percentage of the
aggregate principal amount of Swing Line Loans then outstanding.
"Revolving Facilities" shall mean, without duplication, (a) the
Facility A Commitments together with the Aggregate Facility A Revolving
Extensions of Credit ("Facility A"); the Facility B Commitments together
with the Aggregate Facility B Revolving Extensions of Credit ("Facility
B"); the Facility C Commitments together with the Aggregate Facility C
Revolving Extensions of Credit ("Facility C"); the Facility D Commitments
together with the Aggregate Facility D Revolving Extensions of Credit
("Facility D"); and, for all purposes other than Section 2 (other than
subsections 2.4 and 2.23) and Section 3, the Sterling Commitments together
with the Aggregate Sterling Revolving Extensions of Credit (the "Sterling
Facility"); the Australian Commitments together with the Aggregate
Australian Revolving Extensions of Credit (the "Australian Facility"); the
Canadian Commitments together with the Aggregate Canadian Revolving
Extensions of Credit (the "Canadian Facility"), or any other Revolving
Facility established pursuant to subsection 2.23(b).
"Revolving Percentage" shall mean, as to any Revolving Credit Lender
in respect of any Revolving Facility at any time, the percentage which
such Lender's Revolving Credit
20
Commitment under such Revolving Facility then constitutes of the aggregate
Revolving Credit Commitments in respect of such Revolving Facility (or, at
any time after the Revolving Credit Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such
Lender's Revolving Extension of Credit under any Revolving Facility then
outstanding constitutes of the aggregate principal amount of the Revolving
Extension of Credit in respect of such Revolving Facility then
outstanding).
"S&P" shall mean Standard & Poor's Ratings Services.
"Screen" shall mean, with respect to any currency, the relevant
Telerate Page on which appears the LIBOR Base Rate for deposits in such
currency; provided that, if there is no such Telerate Page, the relevant
Bloomberg Financial Markets Service page will be substituted.
"Security Document" shall mean each of (a) the Guarantee and
Collateral Agreement and (b) the Foreign Pledge Agreements.
"Senior Subordinated Note Indenture" shall mean the Indenture
entered into by the Borrower on October 8, 2003 together with all
instruments and other agreements to be entered into by the Borrower and
its Subsidiaries in connection therewith, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with
subsection 7.11.
"Senior Subordinated Notes" shall mean senior subordinated notes of
the Borrower issued under the Senior Subordinated Note Indenture.
"Single Employer Plan" shall mean any Plan which is covered by Title
IV of ERISA but which is not a Multi-employer Plan.
"Sold Receivables" shall mean Receivables, originated by the
Borrower or its Subsidiaries and in an aggregate amount not to exceed
$200,000,000 at any time outstanding, sold to the Receivables Subsidiary
or any other Person pursuant to and securing obligations under any
Receivables Purchase Facility.
"Solvent", when used with respect to any Person, shall mean that, as
of any date of determination, (a) the amount of the "present fair saleable
value" of the assets of such Person will, as of such date, exceed the
amount of all "liabilities of such Person, contingent or otherwise", as of
such date, as such quoted terms are determined in accordance with
applicable federal and state laws governing determinations of the
insolvency of debtors, (b) the present fair saleable value of the assets
of such Person will, as of such date, be greater than the amount that will
be required to pay the liability of such Person on its debts as such debts
become absolute and matured, (c) such Person will not have, as of such
date, an unreasonably small amount of capital with which to conduct its
business, and (d) such Person will be able to pay its debts as they
mature. For purposes of this definition, (i) "debt" means liability on a
"claim", and (ii) "claim" means any (x) right to payment, whether or not
such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or
not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured or unmatured, disputed, undisputed, secured or
unsecured.
"Standby L/C" and "Standby L/Cs" shall each have the meaning
specified in subsection 3.1(a).
21
"Sterling" shall have the meaning assigned to such term in Annex B
hereto.
"Sterling Commitments" shall have the meaning assigned to such term
in Annex B hereto.
"Sterling L/C Obligations" shall have the meaning assigned to such
term in Annex B hereto.
"Sterling Lender" shall mean each Lender that has a Sterling
Commitment or that holds Sterling Loans; collectively, the "Sterling
Lenders". Each Sterling Lender on the date hereof represents that it is an
Eligible U.K. Bank.
"Sterling Loan" shall mean any Sterling Loan made pursuant to Annex
B hereto; collectively, the "Sterling Loans".
"Sterling Subsidiary Borrower" shall mean, Scotts Holdings Limited,
Scotts Treasury EEIG and The Scotts Company (UK) Ltd. or any other Foreign
Subsidiary Borrower organized under the laws of the United Kingdom and
designated as such by the Borrower in a notice to the Administrative
Agent, which shall notify each Sterling Lender thereof.
"Sterling Swing Line Lenders" shall have the meaning assigned to
such term in Annex B hereto.
"Sterling Swing Line Loans" shall have the meaning assigned to such
term in Annex B hereto.
"Subordinated Debt" shall mean the Indebtedness of the Borrower
pursuant to the Senior Subordinated Note Indenture and the Senior
Subordinated Notes and the Subordinated Debt permitted under subsections
7.5(e), (f) and 7.5(g).
"Subsidiary" shall mean, as to any Person, a corporation,
partnership, limited liability company, business trust, joint stock
company, trust, unincorporated association, joint venture or the European
equivalent thereof of which shares of Capital Stock having ordinary voting
power (other than Capital Stock having such power only by reason of the
happening of a contingency) to elect a majority of the board of directors
or equivalent are at the time owned, or the management of which is
otherwise controlled, directly, or indirectly, through one or more
intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall
refer to a Subsidiary or Subsidiaries of the Borrower.
"Subsidiary Borrowers" shall mean EG Systems, Inc., Hyponex
Corporation, Scotts Australia Pty. Ltd., Scotts Canada Ltd., The Scotts
Company LLC, The Scotts Company (UK) Ltd., Scotts Holdings Limited, Scotts
Manufacturing Company, Scotts Temecula Operations, LLC, Scotts Treasury
EEIG, Smith & Hawken, Ltd. and all existing or future, Domestic or
Foreign, Subsidiaries then designated by the Borrower pursuant to
subsection 10.1(b).
"Subsidiary Guarantors" shall mean (a) each Domestic Subsidiary of
the Borrower executing the Guarantee and Collateral Agreement and (b) each
Domestic Subsidiary acquired or organized subsequent to the Closing Date,
except as otherwise provided in subsection 6.11(c).
"Supported Foreign Indebtedness" shall have the meaning specified in
subsection 7.5(m).
22
"Swing Line Commitment" shall mean the obligation of the Swing Line
Lenders, at any date, to make a Swing Line Loan pursuant to subsection
2.3(a) in the amount referred to therein.
"Swing Line Loan Participation Certificate" shall mean a
certificate, substantially in the form of Exhibit C hereto.
"Swing Line Lenders" shall mean JPMCB or such other Revolving Credit
Lenders as may be requested by the Borrower or the Administrative Agent to
make Swing Line Loans from time to time.
"Swing Line Loan" shall mean any Swing Line Loan made under the
Facility A Commitments, the Facility B Commitments, the Facility C
Commitments and the Facility D Commitments pursuant to subsection 2.3;
collectively, the "Swing Line Loans".
"Telerate Page" shall mean the "British Bankers Assoc. Interest
Settlement Rates Page" display designated at Page 3750 (or such other page
on which euros or any Optional Currency then appears) on the Moneyline
Telerate (or such other page as may replace such page on such service for
the purpose of displaying the rates at which Dollar deposits or deposits
in euros or any Optional Currency are offered by leading banks in the
London interbank deposit market).
"Total Capitalization" shall mean, in respect of any Person at a
particular date, the sum at such date of the Total Indebtedness of such
Person and the Consolidated Net Worth of such Person.
"Total Indebtedness" shall mean, in respect of any Person at a
particular date, the sum at such date of (a) the aggregate outstanding
principal amount of all Indebtedness for borrowed money of such Person,
(b) all other items which would properly be included as indebtedness,
determined in accordance with GAAP, on a consolidated balance sheet of
such Person and its Subsidiaries and (c) the aggregate outstanding
principal amount of the obligations secured by Sold Receivables; provided
that, for the purpose of calculating the Leverage Ratio for any period,
Total Indebtedness shall be reduced by cash and Cash Equivalents set forth
on the balance sheet of such Person as at such date.
"Total Revolving Credit Commitments" shall mean, at any time, the
aggregate amount of the Revolving Credit Commitments then in effect
(without duplication for the Sterling Commitments, the Australian
Commitments and the Canadian Commitments).
"Trade L/C" shall have the meaning assigned to such term in
subsection 3.1(a).
"Type" shall mean as to any Loan, its nature as an ABR Loan or a
LIBOR Loan.
"Uniform Customs" shall mean the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be effectively replaced in whole or
in part or amended from time to time.
"wholly owned Subsidiary" or "wholly-owned Subsidiary" shall mean
any subsidiary of any Person all of the Capital Stock of which (other than
directors' qualifying shares required by law) is owned by such Person
directly and/or through other wholly owned Subsidiaries.
1.2 Other Definitional Provisions.
23
(a) All terms defined in this Agreement shall have the defined
meanings when used in any of the other Loan Documents or in any certificate or
other document made or delivered pursuant hereto or thereto unless otherwise
defined therein.
(b) As used herein, in any of the other Loan Documents, or in any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms, to the extent not otherwise defined in subsection 1.1, shall
have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and section,
subsection, schedule and exhibit references are to this Agreement unless
otherwise specified.
(d) An "affiliate" of a Lender includes, in the case of a Lender
which is an investment fund, the investment adviser thereof and any other
investment fund having the same investment adviser.
SECTION 2. AMOUNT AND TERMS OF LOANS
2.1 Revolving Credit Commitment.
(a) Subject to and upon the terms and conditions of this Agreement:
(i) each Facility A Lender severally (but not jointly) agrees to
make Facility A Loans in Dollars, euros and any Optional Currency to the
Borrower and/or the Regular Subsidiary Borrowers from time to time during
the Revolving Credit Commitment Period in an aggregate principal amount
not to exceed at any one time the Available Facility A Commitment of such
Facility A Lender; provided that, after giving effect to the making of
such Facility A Loans, the Aggregate Facility A Revolving Extensions of
Credit will not exceed the Facility A Commitments;
(ii) each Facility B Lender severally (but not jointly) agrees to
make Facility B Loans in Dollars, euros, and any Optional Currency to the
Borrower and/or the Regular Subsidiary Borrowers from time to time during
the Revolving Credit Commitment Period in an aggregate principal amount
not to exceed the Available Facility B Commitment of such Facility B
Lender (which for this purpose shall be computed as though the amount in
subclause (b)(i) in the definition thereof is $0); provided that, after
giving effect to the making of such Facility B Loans, the Aggregate
Facility B Revolving Extensions of Credit will not exceed the Facility B
Commitments;
(iii) each Facility C Lender severally (but not jointly) agrees to
make Facility C Loans in Dollars, euros, and any Optional Currency to the
Borrower and/or the Regular Subsidiary Borrowers from time to time during
the Revolving Credit Commitment Period in an aggregate principal amount
not to exceed the Available Facility C Commitment of such Facility C
Lender; provided that, after giving effect to the making of such Facility
C Loans, the Aggregate Facility C Revolving Extensions of Credit will not
exceed the Facility C Commitments (which for this purpose shall be
computed as though the amount in subclause (b)(i) in the definition
thereof is $0);
(iv) each Facility D Lender severally (but not jointly) agrees to
make Facility D Loans in Dollars, euros, and any Optional Currency to the
Borrower and/or the Regular Subsidiary
24
Borrowers from time to time during the Revolving Credit Commitment Period
in an aggregate principal amount not to exceed the Available Facility D
Commitment of such Facility D Lender (which for this purpose shall be
computed as though the amount in subclause (b)(i) in the definition
thereof is $0); provided that, after giving effect to the making of such
Facility D Loans, the Aggregate Facility D Revolving Extensions of Credit
will not exceed the Facility D Commitments;
(v) each Sterling Lender, which shall also be a Facility B Lender or
an affiliate thereof, severally (but not jointly) agrees to make Sterling
Loans in Sterling or euros to each Sterling Subsidiary Borrower from time
to time during the Revolving Credit Commitment Period in an aggregate
principal amount not to exceed the Available Sterling Commitment of such
Sterling Lender in accordance with the terms of Annex B hereto (which for
this purpose shall be computed as though the amount in subclause (b)(i) in
the definition thereof is $0); provided that, after giving effect to the
making of such Sterling Loans, the Aggregate Sterling Revolving Extensions
of Credit will not exceed the Sterling Commitments;
(vi) each Australian Dollar Lender, which shall be a Facility C
Lender or an affiliate thereof, severally (but not jointly) agrees to make
Australian Dollar Loans in Australian Dollars to each Australian
Subsidiary Borrower from time to time during the Revolving Credit
Commitment Period in an aggregate principal amount not to exceed the
Available Australian Commitment of such Australian Dollar Lender in
accordance with the terms of Annex C hereto (which for this purpose shall
be computed as though the amount in subclause (b)(i) in the definition
thereof is $0); provided that, after giving effect to the making of such
Australian Dollar Loans, the Aggregate Australian Revolving Extensions of
Credit will not exceed the Australian Commitments; and
(vii) each Canadian Dollar Lender, which shall be a Facility D
Lender or an affiliate thereof, severally (but not jointly) agrees to
make, Canadian Dollar Loans in Canadian Dollars to each Canadian
Subsidiary Borrower from time to time during the Revolving Credit
Commitment Period in an aggregate principal amount not to exceed the
Available Canadian Commitment of such Canadian Dollar Lender in accordance
with the terms of Annex D hereto (which for this purpose shall be computed
as though the amount in subclause (b)(i) in the definition thereof is $0);
provided that, after giving effect to the making of such Canadian Dollar
Loans, the Aggregate Canadian Revolving Extensions of Credit will not
exceed the Canadian Commitment.
(b) During the Revolving Credit Commitment Period the Borrower and
the Subsidiary Borrowers may use the Revolving Credit Commitments by borrowing,
repaying the Revolving Credit Loans in whole or in part, and reborrowing, all in
accordance with the terms and conditions hereof. Except as provided in Annex B,
Annex C or Annex D, each Revolving Credit Lender shall only be required to make
Revolving Credit Loans (x) in Dollars, (y) in euros and (z) in Optional
Currencies. The Borrower and Regular Subsidiary Borrowers may make ABR Loan and
LIBOR Loan borrowings in Dollars and may make LIBOR Loan borrowings in euros and
any Optional Currency under any Revolving Facility. Foreign Subsidiary Borrowers
may make borrowings under the Revolving Facilities as provided for in Annex B,
Annex C or Annex D. Each Facility B Lender, in respect of Sterling Loans,
Facility C Lender, in respect of Australian Dollar Loans, and Facility D Lender
in respect of Canadian Dollar Loans, agrees that each of its Lending
Installations making or holding Sterling Loans, Australian Dollar Loans or
Canadian Dollar Loans hereunder shall be on the date hereof, on the date any
such Loans are made hereunder and, after giving effect to an assignment pursuant
to subsection 10.6 hereof, an Eligible U.K. Bank, an Eligible Australian Bank or
an Eligible Canadian Bank, as the case may be.
2.2 Procedure for Revolving Credit Borrowing.
25
(a) The Borrower and the Regular Subsidiary Borrowers may borrow
under any Revolving Facility during the Revolving Credit Commitment Period on
any Business Day; provided that the Borrower or the relevant Regular Subsidiary
Borrower shall give the Administrative Agent irrevocable notice (which notice
may be made by telephone and confirmed in writing promptly thereafter) (1) on
the requested Borrowing Date, in the case of ABR Loans (which notice must be
received by the Administrative Agent prior to 11:00 A.M., New York City time),
(2) three Business Days prior to the requested Borrowing Date, in the case of
LIBOR Loans in Dollars (which notice must be received by the Administrative
Agent prior to 11:00 A.M., New York City time) and (3) three Business Days prior
to the requested Borrowing Date, in the case of LIBOR Loans in euros or an
Optional Currency (which notice must be received by 11:00 A.M. London time),
specifying (i) the identity of the Borrower or Regular Subsidiary Borrower
borrowing and the amount and currency to be borrowed, (ii) the requested
Borrowing Date, (iii) the Revolving Facility under which the borrowing is to be
made, (iv) whether the borrowing is to be an ABR Loan (in the case of Revolving
Credit Loans in Dollars) or a LIBOR Loan or a combination thereof, and (v) if
the borrowing is to be entirely or partly a LIBOR Loan, the amount to be a LIBOR
Loan and the length of the Interest Period for such LIBOR Loan. Each ABR
borrowing by the Borrower or any Regular Subsidiary Borrower pursuant to the
Revolving Credit Commitments shall be in an aggregate principal amount equal to
$1,000,000 or a whole multiple of $250,000 in excess thereof. Each LIBOR
borrowing in Dollars by the Borrower or any Regular Subsidiary Borrower pursuant
to the Revolving Credit Commitments shall be in an aggregate principal amount
equal to $1,000,000 or a whole multiple of $1,000,000 in excess thereof. Each
LIBOR borrowing in euros or an Optional Currency by the Borrower or any Regular
Subsidiary Borrower pursuant to the Revolving Credit Commitments shall be in an
aggregate principal amount equal to $2,500,000 or a whole multiple of $1,000,000
in excess thereof in the Non-Dollar Currency Equivalent thereof.
(b) Upon receipt of any notice from the Borrower or a Regular
Subsidiary Borrower pursuant to this subsection 2.2, the Administrative Agent
shall promptly notify each Revolving Credit Lender under the relevant Revolving
Facility thereof. Each such Revolving Credit Lender will make the amount of its
ratable share (subject to subsection 2.1) of each borrowing available to the
Administrative Agent for the account of the Borrower or such Regular Subsidiary
Borrower at the office of the Administrative Agent specified in subsection 10.2
prior to 2:00 P.M., New York City time (or in the case of any borrowing in an
Optional Currency, at the place and time specified by the Administrative Agent
from time to time), on the Borrowing Date requested by the Borrower or such
Regular Subsidiary Borrower in funds immediately available to the Administrative
Agent. Such borrowing will then be made available to the Borrower or such
Regular Subsidiary Borrower by the Administrative Agent crediting the account of
the Borrower or such Regular Subsidiary Borrower on the books of such office
with the aggregate of the amounts made available to the Administrative Agent by
such Revolving Credit Lenders and in like funds as received by the
Administrative Agent.
2.3 Swing Line Commitments.
(a) Subject to the terms and conditions hereof, from time to time
prior to the Revolving Credit Termination Date and to the Borrower or any
Regular Subsidiary Borrower (i) each Swing Line Lender severally (but not
jointly) agrees to make Swing Line Loans in Dollars or euros in an aggregate
principal amount not to exceed $30,000,000 at any one time outstanding (each of
the foregoing individually, a "Swing Line Loan"; collectively the "Swing Line
Loans"), which Swing Line Loans may be borrowed under any of the Facility A
Commitments, the Facility B Commitments, the Facility C Commitments or the
Facility D Commitments; provided that, after giving effect to the making of such
Swing Line Loans, the aggregate principal amount of Swing Line Loans (including
any Sterling Swing Line Loans, Australian Dollar Swing Line Loans and Canadian
Dollar Swing Line Loans) made under any Revolving Facility (including the
Sterling Facility, Australian Facility and Canadian Facility) at any one time
outstanding shall not exceed $100,000,000 or the Non-Dollar Currency Equivalent
thereof and
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the Aggregate Facility A Revolving Extensions of Credit shall not exceed the
Facility A Commitments, the Aggregate Facility B Revolving Extensions of Credit
shall not exceed the Facility B Commitments, the Aggregate Facility C Revolving
Extensions of Credit shall not exceed the Facility C Commitments and the
Aggregate Facility D Revolving Extensions of Credit shall not exceed the
Facility D Commitments. All Swing Line Loans shall be made on terms agreed upon
by the relevant Swing Line Lender and the Borrower or applicable Regular
Subsidiary Borrower. The Borrower or applicable Regular Subsidiary Borrower
shall give the Administrative Agent irrevocable notice (which notice may be made
by telephone (and confirmed in writing promptly thereafter) and must be received
by the Administrative Agent at or prior to 1:00 P.M., New York City time, on the
requested Borrowing Date), specifying the amount of each requested Swing Line
Loan, which shall be greater than or equal to a minimum amount to be agreed upon
by the Borrower or applicable Regular Subsidiary Borrower and the relevant Swing
Line Lender, and the Revolving Facility under which it is to be borrowed. In
giving irrevocable notice, the Borrower or the applicable Regular Subsidiary
Borrower shall designate, at its option, one or two Swing Line Lenders to make
one or more Swing Line Loans in the relevant currency. Upon such notice, the
Administrative Agent shall promptly notify each applicable Swing Line Lender
thereof. Each Swing Line Lender which has been designated by the Borrower or the
applicable Regular Subsidiary Borrower in its irrevocable notice shall make the
amount of its ratable share of each borrowing in the currency requested
available to the Borrower or applicable Regular Subsidiary Borrower in the
manner directed by the Administrative Agent on the requested Borrowing Date.
(b) The Swing Line Lenders or any of them at any time and in their
or its sole and absolute discretion, may, on behalf of the Borrower or
applicable Regular Subsidiary Borrower (which hereby irrevocably directs the
Swing Line Lenders to act on its behalf), request each Revolving Credit Lender
under the applicable Revolving Facility, including each Swing Line Lender, with
respect to all other Swing Line Loans, to make a Revolving Credit Loan under
such Revolving Facility, in the currency of the Swing Line Loan(s) made by such
Swing Line Lender(s) in an amount equal to such Lender's Revolving Percentage
under such Revolving Facility of the amount of the Swing Line Loans (the
"Refunded Swing Line Loans") outstanding on the date such notice is given.
Unless any of the events described in paragraph (f) of Section 8 shall have
occurred (in which event the procedures of paragraph (c) of this subsection 2.3
shall apply), each Revolving Credit Lender shall make the proceeds of its
Revolving Credit Loan available to the Administrative Agent for the account of
the Swing Line Lenders, at the office of the Administrative Agent prior to 12:00
Noon (New York City time) in funds immediately available on the Business Day
next succeeding the date such notice is given. The proceeds of such Revolving
Credit Loans shall be immediately applied to repay the Refunded Swing Line
Loans.
(c) If, prior to the making of a Revolving Credit Loan pursuant to
paragraph (b) of subsection 2.3, one of the events described in paragraph (f) of
Section 8 shall have occurred, each Revolving Credit Lender under the applicable
Revolving Facility hereby agrees to and will, on the date such Revolving Credit
Loan was to have been made, purchase an undivided participating interest in each
Refunded Swing Line Loan in an amount equal to its Revolving Percentage under
such Revolving Facility of such Refunded Swing Line Loan. Such Revolving Credit
Lender will immediately transfer to the Administrative Agent for the account of
the Swing Line Lenders, in immediately available funds denominated in Dollars,
the Dollar Equivalent (if applicable) of the amount of its participations and,
upon its receipt of its ratable share thereof, each Swing Line Lender will
deliver to such Revolving Credit Lender a Swing Line Loan Participation
Certificate dated the date of receipt of such funds and in such amount. On such
date, any Swing Line Loans not denominated in Dollars shall, without any further
action or notice being required, be converted to and become denominated in
Dollars in an amount equal to the Dollar Equivalent of the amount thereof on
such date.
(d) Whenever, at any time after any Swing Line Lender has received
from any Revolving Credit Lender such Revolving Credit Lender's participating
interest in a Refunded Swing Line Loan and
27
such Swing Line Lender receives any payment on account thereof, such Swing Line
Lender will distribute to such Revolving Credit Lender through the
Administrative Agent its participating interest in such Dollar Equivalent amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Revolving Credit Lender's participating interest was
outstanding and funded) in funds denominated in Dollars; provided, however, that
in the event that such payment received by such Swing Line Lender is required to
be returned, such Revolving Credit Lender will return to such Swing Line Lender
through the Administrative Agent any portion thereof previously distributed by
such Swing Line Lender to it in like funds as such payment is required to be
returned by such Swing Line Lender.
2.4 Participation. Each Revolving Credit Lender's obligation to
purchase participating interests pursuant to paragraph (c) of subsection 2.3
shall be absolute and unconditional and shall not be affected by any
circumstances, including, without limitation, (a) any set-off, counterclaim,
recoupment, defense or other right which such Revolving Credit Lender may have
against the Swing Line Lender, the Borrower, any Regular Subsidiary Borrower or
any other Person for any reason whatsoever; (b) the occurrence or continuance of
an Event of Default; (c) any adverse change in the condition (financial or
otherwise) of the Borrower or any Subsidiary; (d) any breach of this Agreement
by the Borrower, any Regular Subsidiary Borrower or any other Revolving Credit
Lender; or (e) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing. Notwithstanding the foregoing, no Revolving
Credit Lender shall have any obligation to purchase participating interests
pursuant to paragraph (c) of subsection 2.3 or to make any Refunded Swing Line
Loans in respect of any Swing Line Loan which was made at any time following
receipt by the Administrative Agent of a notice from any Revolving Credit Lender
specifying that (x) a Default or Event of Default has occurred and is continuing
and (y) explicitly stating that such Revolving Credit Lender will not purchase
such participating interests or make Refunded Swing Line Loans with respect to
Swing Line Loans made after the date of receipt of such notice.
2.5 Repayment of Revolving Credit Loans; Evidence of Debt.
(a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender (i) the then unpaid
principal amount of each Revolving Credit Loan of such Lender on the Revolving
Credit Termination Date (or such earlier date on which the Loans become due and
payable pursuant to Section 8) and (ii) the then unpaid principal amount of the
Swing Line Loans of the Swing Line Lender on the Revolving Credit Termination
Date (or such earlier date on which the Swing Line Loans become due and payable
pursuant to Section 8). Each of the Regular Subsidiary Borrowers hereby
unconditionally promises to pay to the Administrative Agent for the account of
such Lender (i) the then unpaid principal amount of each Loan to such Subsidiary
Borrower on the Revolving Credit Termination Date (or such earlier date on which
the Revolving Credit Loans become due and payable pursuant to Section 8) and
(ii) the then unpaid principal amount of the Swing Line Loans to such Subsidiary
Borrower of the Swing Line Lender on the Revolving Credit Termination Date (or
such earlier date on which the Swing Line Loans became due and payable pursuant
to Section 8). Each of the Borrower and the relevant Subsidiary Borrowers hereby
further agrees to pay interest on the unpaid principal amount of the Loans from
time to time outstanding to the Borrower or such Subsidiary Borrower, as
applicable, from the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in subsection 2.11.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrower and the
Subsidiary Borrowers to such Lender resulting from each Loan of such Lender from
time to time, including the amounts of principal and interest payable and paid
to such Lender from time to time under this Agreement.
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(c) The Administrative Agent shall maintain the Register pursuant to
subsection 10.6(b)(iv), and a subaccount therein for each Lender, in which shall
be recorded (i) the amount of each Loan made hereunder, the Type thereof and
each Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower or a
Regular Subsidiary Borrower to each Lender hereunder and (iii) both the amount
of any sum received by the Administrative Agent hereunder from the Borrower or
such Regular Subsidiary Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to subsection 2.5(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower and each Regular Subsidiary Borrower therein
recorded; provided, however, that the failure of any Lender or the
Administrative Agent to maintain the Register or any such account, or any error
therein, shall not in any manner affect the obligation of the Borrower or such
Regular Subsidiary Borrower to repay (with applicable interest) the Loans made
to such Borrower or such Regular Subsidiary Borrower by such Lender in
accordance with the terms of this Agreement.
(e) No Loan to Scotts Treasury EEIG may remain outstanding for more
than 11.5 months and, after any such Loan is repaid, there shall be a period of
at least two weeks during which Scotts Treasury EEIG has no Loan or other amount
outstanding under any Revolving Facility; provided that the Borrower may deliver
a notice to the Administrative Agent at any time directing that the restriction
in this subsection 2.5(e) shall cease to apply with respect to such Loan or such
period as are mentioned in any such notice.
2.6 Facility Fee, etc.
(a) The Borrower agrees to pay to the Administrative Agent, for the
account of each Revolving Credit Lender, a facility fee in Dollars for the
period from and including the Closing Date to the date that the Revolving Credit
Commitments are terminated (or if later, the date that the Loans and L/C
Obligations shall be repaid in full), calculated as an amount equal to the
product of (a) the Facility Fee Rate and (b) the average daily amount of the
Revolving Credit Commitment of such Lender (regardless of usage) during the
period for which such facility fee is calculated, payable quarterly in arrears
on the last day of each March, June, September and December and on the Revolving
Credit Termination Date (or if later, the date that the Loans and L/C
Obligations shall be repaid in full).
(b) The Borrower agrees to pay to the Administrative Agent the fees
in the amounts and on the dates as set forth in any fee agreements with the
Administrative Agent and to perform any other obligations contained therein.
2.7 Termination or Reduction of Revolving Credit Commitments.
(a) Optional. The Borrower shall have the right, upon not less than
five Business Days' written notice to the Administrative Agent, to terminate the
Revolving Credit Commitments or, from time to time, reduce the amount of the
Revolving Credit Commitments, provided that (i) any such reduction shall be
applied ratably across the Facility A, Facility B, Facility C and Facility D
(with corresponding reductions across the Sterling Facility, the Australian
Facility and the Canadian Facility), (ii) any such reduction shall be
accompanied by prepayment of the Revolving Credit Loans under the applicable
Revolving Facility by the Borrower and/or any Regular Subsidiary Borrower, as
applicable, together with accrued interest on the amount so prepaid to the date
of such prepayment, to the extent, if any, the Available Facility A Commitments,
the Available Facility B Commitments, Available Facility C Commitments or the
Available Facility D Commitments would be negative, (iii) any such termination
of
29
the Revolving Credit Commitments shall be accompanied by (A) prepayment in full
of the Revolving Credit Loans then outstanding hereunder, (B) cash
collateralization of all L/C Obligations then outstanding in accordance with the
provisions of subsection 2.9, and (C) payment of accrued interest thereon to the
date of such prepayment and the payment of any unpaid fees then accrued
hereunder (including, without limitation, in respect of any Letters of Credit)
and (iii) any termination of the Revolving Credit Commitments while LIBOR Loans
are outstanding under the Revolving Credit Commitments and any reduction of the
aggregate amount of the Revolving Credit Commitments that reduces the amount of
the Revolving Credit Commitments under any Revolving Facility below the
principal amount of the LIBOR Loans then outstanding thereunder may be made only
on the last day of the respective Interest Periods for such LIBOR Loans. Upon
receipt of such notice, the Administrative Agent shall promptly notify each
Lender thereof. Any such reduction shall be in an amount of $1,000,000 or a
whole multiple of $1,000,000 in excess thereof (or in the case of a LIBOR
borrowing in euros, an Optional Currency, the Dollar Equivalent thereof) and
shall reduce permanently the amount of the Revolving Credit Commitments then in
effect.
(b) Mandatory. The Revolving Credit Commitments shall automatically
terminate on the Revolving Credit Termination Date and all Revolving Credit
Loans shall be repaid and to the extent any Letter of Credit remains outstanding
after the Revolving Credit Termination Date, the Borrower shall cash
collateralize such L/C Obligations (and the fees thereon) in accordance with the
provisions of subsection 2.9.
2.8 Optional and Mandatory Prepayments(a) .
(a) Optional Prepayments. The Borrower or any Regular Subsidiary
Borrower may, at any time and from time to time prepay Loans under any Revolving
Facility made to it hereunder, in whole or in part, without premium or penalty,
upon irrevocable notice to the Administrative Agent (which notice may be made by
telephone and confirmed in writing promptly thereafter): (1) on the date of such
prepayment, in the case of ABR Loans (which notice must be received by the
Administrative Agent prior to 12:00 Noon, New York City time), (2) three
Business Days prior to the date of such prepayment, in the case of LIBOR Loans
in Dollars (which notice must be received by the Administrative Agent prior to
12:00 Noon, New York City time) and (3) three Business Days prior to the date of
such prepayment, in the case of LIBOR Loans in euros or an Optional Currency
(which notice must be received by 12:00 Noon, London time), specifying the date
and amount of prepayment, the relevant Revolving Facility and whether the
prepayment is of LIBOR Loans, ABR Loans or a combination thereof, and, if a
combination thereof, the amount of prepayment allocable to each. If such notice
is given, the Borrower or the relevant Regular Subsidiary Borrower shall make
such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to such
date on the amount prepaid. Partial prepayments shall be in an aggregate
principal amount of $1,000,000 or a whole multiple of $250,000 in excess thereof
(or in the case of a LIBOR borrowing in euros or an Optional Currency, the
Dollar Equivalent thereof), provided that unless a LIBOR Loan is prepaid in
full, no prepayment shall be made if, after giving effect to such prepayment,
the aggregate principal amount of LIBOR Loans in Dollars outstanding with
respect to which a common Interest Period has been selected shall be less than
$1,000,000 or, in the case of LIBOR Loans in euros or an Optional Currency,
after giving effect to such prepayment, the aggregate principal amount of LIBOR
Loans in euros or an Optional Currency outstanding with respect to which a
common Interest Period has been selected shall be less than $2,500,000 or the
Non-Dollar Currency Equivalent thereof.
(b) Mandatory Prepayments. The Borrower, without notice or demand,
shall immediately prepay the Revolving Credit Loans under any Revolving
Facility, or cause such Loans to be prepaid by the Regular Subsidiary Borrowers,
to the extent, if any, that the Available Facility A Commitments, the Available
Facility B Commitments, the Available Facility C Commitments or the
30
Available Facility D Commitments, as the case may be, are negative, together
with accrued interest to the date of such prepayment on the amount so prepaid;
provided that if such prepayment is required solely as a result of a change in
the aggregate Dollar Equivalent of the Revolving Credit Loans in euros or an
Optional Currency, no prepayment shall be made unless such prepayment is
required pursuant to subsection 2.20 under the applicable Revolving Facility.
2.9 Cash Collateralization of Letters of Credit. To the extent that
at any time and from time to time, the L/C Obligations exceed the amount of the
L/C Commitments or the L/C Obligations under any Revolving Facility exceed the
Revolving Credit Commitments under such Revolving Facility (whether pursuant to
subsections 2.7, 2.8 or otherwise), the Borrower shall cash collateralize (in a
manner reasonably satisfactory to the Administrative Agent) such portion of the
L/C Obligations (and the fees thereon through the stated expiration date of the
Letters of Credit giving rise to such L/C Obligations) which is in excess of the
L/C Commitments or such Revolving Credit Commitments, as applicable.
2.10 Conversion Options. (a) The Borrower or any Regular Subsidiary
Borrower may elect from time to time to convert LIBOR Loans in Dollars under any
Revolving Facility to ABR Loans under such Revolving Facility, and may elect
from time to time to convert ABR Loans in Dollars under any Revolving Facility
to LIBOR Loans under such Revolving Facility, by giving the Administrative Agent
at least three Business Days' prior irrevocable written notice of such election
to convert (which date shall be a Business Day and in the case of any conversion
of any LIBOR Loans to ABR Loans, the last day of an Interest Period therefor),
the amount and type of conversion and, in the case of any conversion of ABR
Loans to LIBOR Loans, the Interest Period selected with respect thereto;
provided, however, that (i) ABR Loans may not be converted to LIBOR Loans when
any Default or Event of Default has occurred and is continuing without the
consent of the Administrative Agent and (ii) Swing Line Loans may not, at any
time, be converted to LIBOR Loans. All or any part of outstanding LIBOR Loans or
ABR Loans may be converted as provided herein, provided that partial conversions
of LIBOR Loans to ABR Loans shall be in an aggregate principal amount of
$2,500,000 or a whole multiple thereof and partial conversions of ABR Loans to
LIBOR Loans with respect to which a common Interest Period has been selected
shall be in an aggregate principal amount of $5,000,000 or a whole multiple of
$2,500,000 in excess thereof, and provided, further, that in the case of a
partial conversion of LIBOR Loans to ABR Loans, after giving effect to such
conversion, the aggregate principal amount of the LIBOR Loans outstanding with
respect to which a common Interest Period has been selected shall be not less
than $5,000,000.
(b) Any LIBOR Loans may be continued as such upon the expiration of
an Interest Period by compliance by the Borrower or the Regular Subsidiary
Borrowers with the notice provisions contained in the definition of Interest
Period, provided that no LIBOR Loan in Dollars may be continued as such when any
Default or Event of Default has occurred and is continuing, but shall be
automatically converted to an ABR Loan on the last day of the last Interest
Period for which a LIBOR Rate was determined by the Administrative Agent on or
prior to the Administrative Agent's obtaining knowledge of such Default or Event
of Default.
(c) No conversion or continuation of any Revolving Credit Loans
under any Revolving Facility shall be made pursuant to this subsection 2.10 if,
after giving effect to such conversion or continuation the amount of the
Available Facility A Commitments, the Available Facility B Commitments, the
Available Facility C Commitments or the Available Facility D Commitments, as the
case may be, would be negative.
(d) Conversions of Revolving Credit Loans in any currency to another
currency shall be made by repaying such Revolving Credit Loans and reborrowing
in such other currency in compliance with the provisions hereof.
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2.11 Interest Rate and Payment Dates.
(a) Each LIBOR Loan shall bear interest for each day during each
Interest Period with respect thereto at a rate per annum equal to the LIBOR Rate
determined for such Interest Period plus the Applicable Margin.
(b) Each ABR Loan shall bear interest for the period from and
including the date thereof until maturity at a rate per annum equal to the ABR
plus the Applicable Margin.
(c) If all or a portion of (i) the principal amount of any Loan or
any reimbursement obligation, (ii) any interest payable thereon or (iii) any
facility fee, commission or other amount payable hereunder shall not be paid
when due (whether at the stated maturity, by acceleration or otherwise), such
overdue amount shall bear interest at a rate per annum which is (A) the rate
pursuant to paragraph (a) of this subsection plus 2% or (B) in the case of
amounts in Dollars, if higher, the rate described in paragraph (b) of this
subsection 2.11 plus 2%, in each case from the date of such non-payment until
such amount is paid in full (as well after as before judgment). The
Administrative Agent may choose any Interest Period from time to time (including
one Interest Period of shorter than one month) with respect to any overdue
amount bearing interest based upon paragraph (a) of this subsection.
(d) Interest shall be payable in arrears on each Interest Payment
Date, except that interest payable pursuant to subsection 2.11(c) shall be
payable upon demand.
2.12 Computation of Interest and Fees.
(a) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Regular Subsidiary Borrowers absent manifest
error.
(b) Interest (other than interest based on the Prime Rate) shall be
calculated on the basis of a 360-day year for the actual days elapsed (subject,
in the case of any LIBOR Loan in an Optional Currency, to any market convention
for a different basis as determined by the Administrative Agent); and facility
fees and interest based on the Prime Rate shall be calculated on the basis of a
365- (366-, as the case may be) day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Borrower and the
affected Lenders of each determination of the LIBOR Rate. Any change in the
interest rate on a Loan resulting from a change in the ABR, any LIBOR reserve
requirements, the C/D Assessment Rate or the C/D Reserve Percentage shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the affected Lenders of the Closing Date and the amount of such
change in interest rate.
(c) The Administrative Agent shall, at the request of the Borrower
or a Regular Subsidiary Borrower or any Lender, deliver to the Borrower or a
Regular Subsidiary Borrower or such Lender a statement showing in reasonable
detail the calculations used by the Administrative Agent in determining any
interest rate pursuant to subsection 2.11, excluding any LIBOR Base Rate which
is based upon the British Bankers Assoc. Interest Settlement Rates Page.
2.13 Inability to Determine Interest Rate. In the event that the
Reference Lenders shall have reasonably determined (which determination shall be
conclusive and binding upon the Borrower and the Regular Subsidiary Borrowers
absent manifest error) that by reason of circumstances affecting the interbank
eurocurrency market, adequate and reasonable means do not exist for ascertaining
the LIBOR Rate applicable pursuant to subsection 2.11(a) for any Interest Period
with respect to (a) a proposed Loan
32
that has been requested be made as a LIBOR Loan, (b) a LIBOR Loan that will
result from the requested conversion of an ABR Loan into a LIBOR Loan or (c) the
continuation of LIBOR Loans beyond the expiration of the then current Interest
Period with respect thereto, the Administrative Agent shall forthwith give
telecopy or telephonic notice of such determination, confirmed in writing, to
the Borrower and the Lenders at least one Business Day prior to, as the case may
be, the requested Borrowing Date for such LIBOR Loan, the conversion date of
such ABR Loan or the last day of such Interest Period. If such notice is given
(i) any requested LIBOR Loan in Dollars shall be made as an ABR Loan, (ii) any
ABR Loan that was to have been converted to a LIBOR Loan shall be continued as
an ABR Loan, (iii) any outstanding LIBOR Loan in Dollars shall be converted, on
the last day of the then current Interest Period with respect thereto, to an ABR
Loan and (iv) the LIBOR Rate for such Interest Period for any affected LIBOR
Loans in euros or any Optional Currency shall bear interest for such Interest
Period at a rate reasonably determined by the Administrative Agent as
representing the cost to Lenders generally holding such LIBOR Loans of funding
such LIBOR Loans for such Interest Period plus the Applicable Margin. Until such
notice has been withdrawn by the Administrative Agent, no further LIBOR Loans
shall be made nor shall the Borrower have the right to convert an ABR Loan to a
LIBOR Loan. Such notice shall be withdrawn by the Administrative Agent when the
Administrative Agent shall reasonably determine that adequate and reasonable
means exist for ascertaining the LIBOR Rate.
2.14 Pro Rata Treatment and Payments.
(a) Each borrowing from the Revolving Credit Lenders hereunder shall
be made under the Revolving Facility specified by the Borrower in accordance
with subsections 2.1 and 2.2. The reduction of the Revolving Credit Commitments
under any Revolving Facility of the Lenders shall be made ratably.
(b) Each payment (including each prepayment) on account of principal
of and interest on the Revolving Credit Loans in any currency shall be made
ratably according to the respective outstanding principal amounts of such Loans
then held by the Revolving Credit Lenders, subject in the case of prepayments of
principal to any designation of the Administrative Agent pursuant to subsection
2.1. The Borrower or a Regular Subsidiary Borrower may select the currency or
currencies of any optional or mandatory prepayment of the Revolving Credit
Loans.
(c) All payments (including prepayments) to be made by the Borrower
or any Regular Subsidiary Borrower hereunder, whether on account of principal,
interest, fees or otherwise, shall be made without set off or counterclaim and
shall be made prior to 12:00 Noon, New York City time, on the due date thereof
to the Administrative Agent, for the account of the relevant Lenders, at the
Administrative Agent's office specified in subsection 10.2, in Dollars or euros,
as applicable, and in immediately available funds (or in the case of any payment
in an Optional Currency, in the relevant Optional Currency and at the place and
time specified by the Administrative Agent from time to time). The
Administrative Agent shall distribute such payments to the relevant Lenders
promptly upon receipt in like funds as received. If any payment hereunder (other
than payments on LIBOR Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding Business Day
and such extension of time shall in such case be included in the computation of
the amount payable hereunder. If any payment on a LIBOR Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day.
(d) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a Borrowing Date that such Lender will not make
the amount that would constitute its share of the borrowing on such date
available to the Administrative Agent, the Administrative Agent may assume that
33
such Lender has made such amount available to the Administrative Agent on such
Borrowing Date, and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower or the relevant Regular Subsidiary
Borrower a corresponding amount. If such amount is made available to the
Administrative Agent on a date after such Borrowing Date, such Lender shall pay
to the Administrative Agent on demand an amount equal to the product of (i) the
daily average Federal funds rate (or, in the case of any borrowing in euros or
an Optional Currency, the customary rate as selected by the Administrative Agent
for the settlement of obligations between banks) during such period as quoted by
the Administrative Agent, times (ii) the amount of such Lender's share of such
borrowing, times (iii) a fraction the numerator of which is the number of days
that elapse from and including such Borrowing Date to the date on which such
Lender's Revolving Percentage or Term Percentage of such borrowing shall have
become immediately available to the Administrative Agent and the denominator of
which is 360 (the "Effective Interbank Rate"). A certificate of the
Administrative Agent submitted to any Lender with respect to any amounts owing
under this subsection shall be conclusive in the absence of manifest error. If
such amount is so made available, such payment to the Administrative Agent shall
constitute such Lender's Loan on such Borrowing Date for all purposes of this
Agreement. If such amount is not so made available to the Administrative Agent,
then the Administrative Agent shall notify the Borrower or the relevant Regular
Subsidiary Borrower of such failure and on the fourth Business Day following
such Borrowing Date, the Borrower or such Regular Subsidiary Borrower shall pay
to the Administrative Agent such ratable portion, together with interest thereon
for each day that the Borrower or such Regular Subsidiary Borrower had the use
of such ratable portion, at the Effective Interbank Rate. Nothing contained in
this subsection 2.14(d) shall relieve any Lender which has failed to make
available its ratable portion of any borrowing hereunder from its obligation to
do so in accordance with the terms hereof.
(e) The failure of any Lender to make the Loan to be made by it on
any Borrowing Date shall not relieve any other Lender of its obligation, if any,
hereunder to make its Loan on such Borrowing Date, but no Lender shall be
responsible for the failure of any other Lender to make the Loan to be made by
such other Lender on such Borrowing Date.
2.15 Illegality. Notwithstanding any other provisions herein, if any
introduction of or change in any law, regulation, treaty or directive or in the
interpretation or application thereof occurring after the date hereof shall make
it unlawful for any Lender to make or maintain LIBOR Loans as contemplated by
this Agreement, (a) such Lender shall forthwith give telecopy or telephonic
notice of such circumstances, confirmed in writing, to the Borrower or the
relevant Regular Subsidiary Borrower (which notice shall be withdrawn by such
Lender when such Lender shall reasonably determine that it shall no longer be
illegal for such Lender to make or maintain LIBOR Loans or to convert ABR Loans
to LIBOR Loans), (b) the commitment of such Lender hereunder to make LIBOR Loans
or to convert ABR Loans to LIBOR Loans shall forthwith be canceled and (c) such
Lender's Loans then outstanding as LIBOR Loans, if any, shall be, in the case of
Loans in Dollars, converted automatically to ABR Loans based upon the ABR on the
last day of the then current Interest Period with respect to such Loans or
within such earlier period as may be required by law and in the case of Loans in
euros or any Optional Currency, shall be prepaid on the last day of the then
current Interest Period with respect to such Loans or within such earlier period
as may be required by law. The Borrower and each Regular Subsidiary Borrower
hereby agrees promptly to pay the Administrative Agent for the account of each
Lender, upon demand by the Administrative Agent, any additional amounts
necessary to compensate the Lenders for any costs incurred by the Lenders in
making any conversion in accordance with this subsection 2.15, including, but
not limited to, any interest or fees payable by the Lenders to lenders of funds
obtained by them in order to make or maintain their LIBOR Loans hereunder (the
Administrative Agent's notice of such costs, as certified to the Borrower or
such Regular Subsidiary Borrower, to be conclusive, absent manifest error).
2.16 Requirements of Law.
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(a) In the event that any introduction of or change in any law,
regulation, treaty or directive or in the interpretation or application thereof
occurring after the date hereof or compliance by any Lender with any request or
directive (whether or not having the force of law) from any central bank or
other governmental authority, agency or instrumentality (including the National
Association of Insurance Commissioners):
(i) shall subject such Lender to any tax of any kind,
whatsoever with respect to this Agreement, any Letter of Credit, any
Application, any Loan or any LIBOR Loans made by it or its obligation to
make LIBOR Loans or change the basis of taxation of payments to such
Lender of principal, facility fee, interest or any other amount payable
hereunder (other than Non-Excluded Taxes or changes in the rate of tax on
the overall net income of such Lender)
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, or deposits or other liabilities in or for the account of,
advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Lender which are not otherwise
included in the determination of the LIBOR Rate hereunder, or
(iii) shall impose on such Lender or the eurocurrency market
any other condition;
and the result of any of the foregoing is to increase the cost to such Lender
(which increase in cost shall be the result of such Lender's reasonable
allocation of the aggregate of such cost increases resulting from such events),
of making, renewing or maintaining LIBOR Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable thereunder then, in any
such case, the Borrower or the relevant Regular Subsidiary Borrower shall, upon
notice to it from such Lender (with a copy to the Administrative Agent)
certifying that (x) one of the events described in this subsection 2.16(a) has
occurred and the nature of such event, (y) the increased cost or reduced amount
resulting from such event and (z) the additional amounts demanded by such Lender
and a reasonably detailed explanation of the calculation thereof, promptly pay
to the Administrative Agent for the account of the applicable Lender, upon
demand by the Administrative Agent, without duplication, any additional amounts
necessary to compensate such Lender for such increased cost or reduced amount
receivable which such Lender deems to be material as determined in good faith by
such Lender with respect to this Agreement or the Loans made hereunder, provided
that, in any such case, the Borrower or the relevant Regular Subsidiary Borrower
(if otherwise not prohibited hereunder) may elect to convert the LIBOR Loans in
Dollars made hereunder to ABR Loans by giving such Lender and the Administrative
Agent at least one Business Day's prior irrevocable notice of such election in
which case the Borrower or relevant Regular Subsidiary Borrower shall promptly
pay the Administrative Agent for the account of the applicable Lender, upon
demand by the Administrative Agent, without duplication, any loss or expense
incurred by such Lender in liquidating or re-employing the deposits from which
the funds were obtained by such Lender for the purpose of making and/or
maintaining such LIBOR Loans, together with any amount due under this subsection
2.16(a) in respect of the period prior to such conversion. If such Lender
becomes entitled to claim any additional amounts pursuant to this subsection, it
shall promptly notify the Borrower or the relevant Regular Subsidiary Borrower
of the event by reason of which it has become so entitled.
(b) In the event that any Lender shall have determined that any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof does or shall have the effect of
reducing the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under any Letters
35
of Credit to a level below that which such Lender or such corporation could have
achieved but for such change or compliance (taking into consideration such
Lender's or such corporation's policies with respect to capital adequacy) by an
amount deemed by such Lender to be material, then from time to time, within 15
days after submission by such Lender to the Borrower (with a copy to the
Administrative Agent) of a written request therefor certifying that (x) one of
the events described in this subsection 2.16(b) has occurred and the nature of
such event, (y) the increased cost or reduced amount resulting from such event
and (z) the additional amounts demanded by such Lender and a reasonably detailed
explanation of the calculation thereof, the Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender for such
reduction.
(c) A certificate as to any additional amounts payable pursuant to
paragraphs (a) and (b) above submitted by any Lender to the Borrower or a
Regular Subsidiary Borrower shall be conclusive absent manifest error.
2.17 Indemnity. The Borrower and each Regular Subsidiary Borrower
agrees to indemnify each Lender and to hold each Lender harmless from any loss
or expense which such Lender may sustain or incur as a consequence of (a)
default by the Borrower or such Regular Subsidiary Borrower in payment of the
principal amount of or interest on any LIBOR Loans including, but not limited
to, any such loss or expense arising from interest or fees payable by such
Lender to lenders of funds obtained by them in order to maintain their LIBOR
Loans, (b) default by the Borrower or such Regular Subsidiary Borrower in making
LIBOR Loans or conversion after the Borrower or such Regular Subsidiary Borrower
has given a notice in accordance with subsection 2.2 or 2.10, (c) default by the
Borrower or such Regular Subsidiary Borrower in making any prepayment of a LIBOR
Loan after the Borrower or such Regular Subsidiary Borrower has given a notice
in accordance with subsection 2.8(a), and (d) the making of any payment or
conversion of LIBOR Loans on a day which is not the last day of the applicable
Interest Period with respect thereto, including, but not limited to, any such
loss or expense arising from interest or fees payable by the Lenders to lenders
of funds obtained by them in order to maintain their LIBOR Loans hereunder. This
covenant shall survive termination of this Agreement and payment of the
outstanding Notes. The obligations of indemnity of each of the respective
Regular Subsidiary Borrowers hereunder are limited only to the loss and expense
described herein arising from or as a result of any act or omission by such
Regular Subsidiary Borrower, and are not, and shall not be deemed to be, the
joint and several obligations of each such Regular Subsidiary Borrower as to any
loss or expense arising from or as a result of any act or omission by the
Borrower or the other Regular Subsidiary Borrower.
2.18 Taxes.
(a) Except as provided below in this subsection or in any Annex
hereto, all payments made by the Borrower or any Subsidiary Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding the following taxes ("Excluded Taxes") (x) taxes measured
by or imposed upon the overall net income of any Lender or its applicable
lending office, or any branch or affiliate thereof, and (y) all franchise taxes
or branch taxes imposed upon any Lender or its applicable lending office, or any
branch or affiliate thereof, in each case imposed: (i) by the jurisdiction under
the laws of which such Lender, applicable lending office, branch or affiliate is
organized or is located, or in which its principal executive office is located,
or any nation within which such jurisdiction is located or any political
subdivision thereof; or (ii) by reason of any connection between the
jurisdiction imposing such tax and such Lender, applicable lending office,
branch or affiliate other than a connection arising solely from such Lender
having executed, delivered or performed its obligations under, or received
payment under or enforced, this Agreement. If any such non-excluded
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taxes, levies, imposts, duties, charges, fees, deductions or withholdings
("Non-Excluded Taxes") are required to be withheld from any amounts payable to
the Administrative Agent or any Lender hereunder, the amounts so payable to the
Administrative Agent or such Lender shall be increased to the extent necessary
to yield to the Administrative Agent or such Lender (after payment of all
Non-Excluded Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement, provided, however, that the
Borrower and/or such Subsidiary Borrower shall be entitled to deduct and
withhold any Non-Excluded Taxes and shall not be required to increase any such
amounts payable to any Lender that are attributable to (i) such Lender's failure
to comply with the requirements of paragraph (b) of this subsection or (ii) the
Lender's failure at all times during which it is a party to this Agreement to
comply with the requirements of subsection 2.1 or 2.3 unless such failure is due
to a change in treaty, law or regulation or any application or interpretation
thereof. Whenever any Non-Excluded Taxes are payable by the Borrower or any
Subsidiary Borrower, as promptly as possible thereafter the applicable Borrower
or Subsidiary Borrower shall send to the Administrative Agent for its own
account or for the account of such Lender, as the case may be, a certified copy
of an original official receipt received by such Borrower or such Subsidiary
Borrower showing payment thereof. If the Borrower or any Subsidiary Borrower
fails to pay any Non-Excluded Taxes when due to the appropriate taxing authority
or fails to remit to the Administrative Agent the required receipts or other
required documentary evidence, such Borrower or Subsidiary Borrower shall
indemnify the Administrative Agent and the Lenders for any incremental taxes,
interest or penalties that may become payable by the Administrative Agent or any
Lender as a result of any such failure. The agreements in this subsection shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
(b) (1) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof shall:
(X) (i) on or before the date of any payment by the Borrower or
any Regular Subsidiary Borrower under this Agreement or any Notes to such
Lender, deliver to the Borrower and the Administrative Agent two duly
completed copies of United States Internal Revenue Service Form W-8BEN or
W-8ECI, as applicable, or such successor applicable form, statement or
certificate, as the case may be, certifying that it is entitled to an
exemption from United States backup withholding tax or is entitled receive
payments under this Agreement and any Notes without deduction or
withholding (or, upon the prior written consent of the Borrower, at a
reduced rate of withholding) of any United States federal income taxes;
(ii) deliver to the Borrower and the Administrative Agent two
further copies of any such form or certification on or before the date
that any such form or certification expires or becomes obsolete and after
the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower or such Domestic Subsidiary
Borrower; and
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the
Borrower or the Administrative Agent;
(Y) in the case of any such Lender that is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code, (i) represent to the Borrower
(for the benefit of each of the Borrower, the relevant Subsidiary
Borrowers and the Administrative Agent) that it is not a bank within the
meaning of Section 881(c)(3)(A) of the Code, (ii) agree to furnish to the
Borrower on or before the date of any payment by the Borrower or any
Domestic Subsidiary Borrower, with a copy to the Administrative Agent, (A)
a certificate substantially in the form of Exhibit D (any such certificate
a "U.S. Tax Compliance Certificate") and (B) two accurate and complete
original signed copies of Internal Revenue Service Form W-8 BEN or W-8
ECI, as applicable, or successor applicable form certifying to such
Lender's legal entitlement at the date of such
37
certificate to an exemption from U.S. withholding tax under the provisions
of Sections 871(h), 881(c) and 1441(c)(9) of the Code with respect to
payments to be made under this Agreement and any Notes (and to deliver to
the Borrower and the Administrative Agent two further copies of such form
on or before the date it expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recently provided
form and, if necessary, obtain any extensions of time reasonably requested
by the Borrower or the Administrative Agent for filing and completing such
forms), and (iii) agree, to the extent legally entitled to do so, upon
reasonable request by the Borrower, to provide to the Borrower (for the
benefit of each of the Borrower, the Domestic Subsidiary Borrowers and the
Administrative Agent) such other forms as may be reasonably required in
order to establish the legal entitlement of such lender to an exemption
from withholding with respect to payments under this Agreement and any
Notes, provided that in determining the reasonableness of a request under
this clause (iii) such Lender shall be entitled to consider the cost (to
the extent unreimbursed by the Borrower) which would be imposed on such
Lender of complying with such request;
unless in any such case any change in treaty, law or regulation has occurred
after the date such Person becomes a Lender hereunder which renders all such
forms inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender so advises the
Borrower and the Administrative Agent.
(2) Each Lender that is not incorporated or organized under the laws
of the jurisdiction under which a Foreign Subsidiary Borrower is incorporated or
organized or is not a resident for taxation purposes of such Foreign Subsidiary
Borrower's country of tax residence, shall upon written request by such Foreign
Subsidiary Borrower, deliver to such Foreign Subsidiary Borrower or the
applicable Governmental Authority or taxing authority, as the case may be, any
form or certificate required in order that any payment by such Foreign
Subsidiary Borrower under this Agreement or any Notes to such Lender may be made
free and clear of, and without deduction or withholding for or on account of any
tax (or to allow any such deduction or withholding to be at a reduced rate)
imposed on such payment under the laws of the jurisdiction under which such
Foreign Subsidiary Borrower is incorporated or organized or is otherwise a
resident for taxation purposes, provided that such Lender is legally entitled to
complete, execute and deliver such form or certificate and such completion,
execution or submission would not materially prejudice the legal position of
such Lender.
2.19 Use of Proceeds. The Revolving Facilities and the proceeds of
the Revolving Credit Loans shall be used (a) for the repayment in full of the
loans under the Existing Credit Agreement and the payment in full of any and all
other amounts owing to the lenders thereunder (the "Refinancing") and (b) for
working capital and other general corporate purposes (which shall include any
purpose expressly permitted by this Agreement) of the Borrower and its
Subsidiaries; provided that, notwithstanding the foregoing, none of the proceeds
of the Revolving Credit Loans may be used to finance any Hostile Take-Over Bid.
2.20 Controls on Prepayment if Aggregate Revolving Extensions of
Credit Exceed Aggregate Revolving Credit Commitments.
(a) The Borrower will implement and maintain internal controls to
monitor the borrowings and repayments of Revolving Credit Loans by both the
Borrower and the relevant Regular Subsidiary Borrowers and the issuance of and
drawings under Letters of Credit, with the object of preventing any request for
an Extension of Credit that would result in the Available Facility A
Commitments, the Available Facility B Commitments the Available Facility C
Commitments or the Available Facility D Commitments becoming negative by more
than 5% of the Revolving Credit
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Commitments under the relevant Revolving Facility, and, if such Commitments are
negative by more than 5%, the Borrower will promptly notify the Administrative
Agent.
(b) The Administrative Agent will calculate the Available Facility A
Commitments, the Available Facility B Commitments the Available Facility C
Commitments or the Available Facility D Commitments from time to time, and in
any event not less frequently than once during each calendar quarter. In making
such calculations, the Administrative Agent will rely on the information most
recently received by it from the Swing Line Lenders in respect of outstanding
Swing Line Loans and from the Issuing Lenders in respect of outstanding L/C
Obligations.
(c) In the event that on any date the Administrative Agent
calculates that the Available Facility A Commitments, the Available Facility B
Commitments the Available Facility C Commitments or the Available Facility D
Commitments have become negative solely as a result of a change in the aggregate
Dollar Equivalent of the Revolving Credit Loans under such Revolving Facility in
euros or in Optional Currencies, by more than 5%, the Administrative Agent will
give notice to such effect to the Borrower or any such Regular Subsidiary
Borrower and the Lenders. Within five Business Days of receipt of any such
notice, the Borrower or any such Regular Subsidiary Borrower will, as soon as
practicable but in any event within five Business Days of receipt of such
notice, first, make such repayments or prepayments of Revolving Credit Loans
under the relevant Revolving Facility (together with interest accrued to the
date of such repayment or prepayment), second, pay any Reimbursement Obligations
under such Revolving Facility then outstanding and, third, cash collateralize
any outstanding L/C Obligations under such Revolving Facility on terms
reasonably satisfactory to the Administrative Agent as shall be necessary to
cause the Available Facility A Commitments, the Available Facility B Commitments
the Available Facility C Commitments or the Available Facility D Commitments, as
applicable, not to be negative. If any such repayment or prepayment of a LIBOR
Loan pursuant to this subsection occurs on a day which is not the last day of
the then current Interest Period with respect thereto, the Borrower shall pay to
the Lenders such amounts, if any, as may be required pursuant to subsection
2.17.
2.21 Lending Installations.
(a) Subject to subsection 2.1 and 2.3 each Lender may book its Loans
at any Lending Installation selected by such Lender and may change its Lending
Installation from time to time, provided that (i) in the case of a Facility C
Lender, that Lending Installation is an Eligible Australian Bank and (ii) in the
case of a Facility D Lender, that Lending Installation is an Eligible Canadian
Bank. All terms of this Agreement shall apply to any such Lending Installation
and the Loans made hereunder shall be deemed held by each Lender for the benefit
of such Lending Installation. Each Lender may, by written notice to the
Administrative Agent and the Borrower in accordance with subsection 10.2 and
subject always to subsection 2.1 and 2.3 designate replacement or additional
Lending Installations through which Loans will be made by it and for whose
account Loan payments are to be made.
(b) Each Lender agrees that, upon the occurrence of any event giving
rise to the operation of subsection 2.16 or 2.18(a) with respect to such Lender,
it will, if requested by the Borrower, use reasonable efforts (subject to
overall policy considerations of such Lender) to designate another Lending
Installation for any Loans affected by such event with the object of avoiding
the consequences of such event; provided, that such designation is made on terms
that, in the sole judgment of such Lender, cause such Lender and any of its
Lending Installations to suffer no economic, legal or regulatory disadvantage,
and provided, further, that nothing in this subsection 2.21(b) shall affect or
postpone any of the obligations of the Borrower or any Regular Subsidiary
Borrower or the rights of any Lender pursuant to subsection 2.16 or 2.18(a).
39
2.22 Notices to Lenders. All notices under this Section 2 to Lenders
by the Borrower, any Regular Subsidiary Borrower or the Administrative Agent,
and all payments by the Administrative Agent to the Lenders, shall be made to
the respective Lending Installations of the Lenders maintaining the relevant
Loans or Commitments.
2.23 Revolving Credit Commitment Increases and Changes.
(a) From time to time the Borrower may, with the consent of the
Administrative Agent and the Issuing Lender and one or more (i) of the Revolving
Credit Lenders and/or (ii) banks or other financial institutions to be added to
this Agreement (each such entity a "New Revolving Credit Lender"), increase the
Total Revolving Credit Commitments, which increase shall be provided by such
Revolving Credit Lenders and/or New Revolving Credit Lenders and which may be
applied to each of or any of the Revolving Facilities as agreed by the Borrower
and the Administrative Agent. Any such increase in the Total Revolving Credit
Commitments shall be evidenced by (x) in the case of clause (i) above, the
execution and delivery by the Borrower, the Regular Subsidiary Borrowers, the
Administrative Agent and such Revolving Credit Lender of a Commitment Increase
Supplement, substantially in the form of Exhibit E (a "Commitment Increase
Supplement") and (y) in the case of clause (ii) above, the execution and
delivery by the Borrower, the Subsidiary Borrowers, the Administrative Agent and
such New Revolving Credit Lender of a New Lender Supplement, substantially in
the form of Exhibit F (a "New Lender Supplement"), and shall be effective as of
the date specified for effectiveness in such Commitment Increase Supplement or
New Lender Supplement, as the case may be, whereupon such Revolving Credit
Lender or New Revolving Credit Lender shall be bound by and entitled to the
benefits of this Agreement with respect to the full amount of its Revolving
Credit Commitment in respect of each such Revolving Facility as so increased or
provided, and Schedule 1 shall be deemed to be amended to so increase the
Revolving Credit Commitment under each such Revolving Facility and/or add the
name and Revolving Credit Commitment of such New Revolving Credit Lender.
(b) At the request of the Borrower and with the consent of the
Administrative Agent (which consent shall not be unreasonably withheld), a
Revolving Credit Lender may from time to time either (i) increase (including
from zero) its Facility B Commitment, Facility C Commitment or Facility D
Commitment (with a concomitant increase as appropriate in its Sterling
Commitment, Canadian Dollar Commitment or Australian Dollar Commitment) or (ii)
establish a new Revolving Facility (such as a "Facility E" or "Facility F") and
a related local facility with a commitment thereunder and, in either case,
equivalently reduce its commitment under one of its other Revolving Facilities
which is Facility A, Facility B, Facility C or Facility D (with a concomitant
reduction as appropriate in its Sterling Commitment, Canadian Dollar Commitment
or Australian Dollar Commitment). Any such increase or establishment and
equivalent reduction shall be evidenced by the execution and delivery by the
Borrower, the Subsidiary Borrowers, the Administrative Agent and such Revolving
Credit Lenders of documentation satisfactory to such parties providing for such
increase or establishment and equivalent reduction and any amendments to this
Section 2 and to the relevant annexes hereto (including the inclusion of a new
annex) as are necessary or appropriate to afford such parties with the benefits
of this Agreement and the rights and remedies hereunder for such increase or
such new Revolving Facility and any related local facility as are comparable to
the benefits hereof and the rights and remedies hereunder for the existing
Revolving Facilities.
(c) If, on the date upon which the Revolving Credit Commitment of
any Revolving Credit Lender under any Revolving Facility is increased pursuant
to subsection 2.23(a) or there is an increase in or establishment of a Revolving
Facility and an equivalent reduction in any other Revolving Facility pursuant to
subsection 2.23(b), there is an unpaid principal amount of Revolving Credit
Loans under any Revolving Facility affected thereby the Borrower or any Regular
Subsidiary Borrower in which such Revolving Credit Lender has agreed to
participate, the principal outstanding amount of all such
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Revolving Credit Loans shall (A) in the case of such Revolving Credit Loans
which are ABR Loans, be immediately prepaid by the Borrower or Subsidiary
Borrower (but all such Revolving Credit Loans may, on the terms and conditions
hereof, be reborrowed on such date on a ratable basis, based on the revised
Revolving Credit Commitments as then in effect under the relevant Revolving
Facilities) and (B) in the case of such Revolving Credit Loans which are LIBOR
Loans, continue to remain outstanding (notwithstanding any other requirement in
this Agreement that such Revolving Credit Loans be held ratably based on the
revised Commitments under the relevant Revolving Facilities as then in effect)
until the end of the then current Interest Period therefor, at which time such
LIBOR Loans shall be paid by the Borrower or Subsidiary Borrower (but all such
Revolving Credit Loans may, on the terms and conditions hereof, be reborrowed on
such date on a ratable basis, based on the Revolving Facilities as then in
effect).
(d) Notwithstanding anything to the contrary in this subsection
2.23, (i) in no event shall any transaction effected pursuant to this subsection
2.23 cause the aggregate Revolving Credit Commitments to exceed $1,150,000,000
and (ii) no Lender shall have any obligation to increase its Revolving Credit
Commitment under any Revolving Facility unless it agrees to do so in its sole
discretion. Each Commitment Increase Supplement shall be deemed to be a
supplement to this Agreement.
SECTION 3. LETTER OF CREDIT FACILITIES
3.1 L/C Commitment.
(a) Subject to the terms and conditions hereof, the Issuing Lender,
in reliance on the agreements of the other Lenders set forth in subsection
3.4(a), agrees to issue letters of credit ("Letters of Credit") under any
Revolving Facility for the account of the Borrower or any Regular Subsidiary
Borrower on any Business Day during the Revolving Credit Commitment Period in
such form as may be approved from time to time by the Issuing Lender; provided
that the Issuing Lender shall not have any obligation to issue any Letter of
Credit if, after giving effect to such issuance, (i) the L/C Obligations would
exceed the L/C Commitment or (ii) the Available Facility A Commitments, the
Available Facility B Commitments the Available Facility C Commitments or the
Available Facility D Commitments would be negative. Each Letter of Credit shall
(i) be denominated in Dollars, euros or in any Optional Currency, (ii) be either
(x) a standby letter of credit (a "Standby L/C") issued to support obligations
of the Borrower or any Regular Subsidiary Borrower, contingent or otherwise,
with an expiry date occurring not later than one year after such standby L/C was
issued (which expiry date may be subject to one or more automatic extensions of
one year or less unless 60-day notice, or such other notice as is satisfactory
to the Borrower and the Issuing Lender, is given that any such extension shall
not be effective) or (y) a documentary letter of credit in respect of the
purchase of goods or services by the Borrower and its Subsidiaries in the
ordinary course of business with an expiry date occurring not later than one
year after such documentary letter of credit was issued and, in the case of any
such documentary letter of credit which is to be accepted by the Issuing Lender
pending payment at a date after presentation of sight drafts, with a payment
date no more than one year after such drafts were presented for acceptance (a
"Trade L/C") and (iii) expire no later than five days before the Revolving
Credit Termination Date.
(b) Each Standby L/C shall be subject to the International Standby
Practices and each Trade L/C shall be subject to the Uniform Customs and, in
each case, to the extent not inconsistent therewith, the laws of the State of
New York.
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(c) The Issuing Lender shall at no time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause the
Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
(d) Notwithstanding anything to the contrary contained herein, each
Letter of Credit outstanding under the Existing Credit Agreement on the Closing
Date shall be deemed to be issued and outstanding under this Agreement as of the
Closing Date.
3.2 Procedure for Issuance of Letters of Credit. The Borrower or any
Regular Subsidiary Borrower may from time to time request that the Issuing
Lender issue a Letter of Credit under any Revolving Facility by delivering to
the Issuing Lender (with a copy to the Administrative Agent) at its address for
notices specified herein an Application therefor, completed to the satisfaction
of the Issuing Lender, and such other certificates, documents and other papers
and information as the Issuing Lender may reasonably request. Upon receipt of
any Application, the Issuing Lender will process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby (but in no event shall the
Issuing Lender be required to issue any Letter of Credit earlier than four
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed by the Issuing Lender and the Borrower or any relevant
Regular Subsidiary Borrower. The Issuing Lender shall furnish a copy of such
Letter of Credit to the Borrower, to the Administrative Agent and to any
relevant Regular Subsidiary Borrower promptly following the issuance thereof.
3.3 Fees, Commissions and Other Charges.
(a) The Borrower or the relevant Regular Subsidiary Borrower shall
pay to the Administrative Agent, for the ratable account of the Issuing Lender
and the L/C Participants under the relevant Revolving Facility, a letter of
credit commission in Dollars with respect to each Letter of Credit issued by the
Issuing Lender (i) in an amount equal to the Dollar Equivalent of such issuance
and payment fees as have been agreed upon by the Borrower and the Issuing Lender
and (ii) in an amount equal to the product of, on the date on which such
commission is calculated, (A) the rate per annum equal to the Applicable Margin
in respect of LIBOR Loans that are Revolving Credit Loans and (B) the Dollar
Equivalent of the aggregate amount available to be drawn under each Letter of
Credit (plus an additional 1/8 of 1% per annum which shall be payable for the
account of the Issuing Lender). Such letter of credit commissions shall be
payable in arrears on the last day of each March, June, September and December
and shall be nonrefundable.
(b) In addition to the foregoing fees and commissions, the Borrower
or the relevant Regular Subsidiary Borrower shall pay or reimburse the Issuing
Lender for such normal and customary costs and expenses as are incurred or
charged by the Issuing Lender in issuing, effecting payment under, amending or
otherwise administering any Letter of Credit issued by it.
(c) The Administrative Agent shall, promptly following its receipt
thereof, distribute to the Issuing Lender and the L/C Participants under the
relevant Revolving Facility all fees and commissions received by the
Administrative Agent for their respective accounts pursuant to this subsection
3.3.
3.4 L/C Participation.
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(a) The Issuing Lender irrevocably agrees to grant and hereby grants
to each L/C Participant under the relevant Revolving Facility, and, to induce
the Issuing Lender to issue Letters of Credit hereunder, each such L/C
Participant irrevocably agrees to accept and purchase and hereby accepts and
purchases from the Issuing Lender, on the terms and conditions hereinafter
stated, for such L/C Participant's own account and risk an undivided interest
equal to such L/C Participant's ratable share of the Revolving Facility under
which such Letter of Credit is to be issued in the Issuing Lender's obligations
and rights under each Letter of Credit issued hereunder under such Revolving
Facility and the amount of each draft paid by the Issuing Lender thereunder.
Each such L/C Participant unconditionally and irrevocably agrees with the
Issuing Lender that, if a draft is paid under any such Letter of Credit for
which the Issuing Lender is not reimbursed in full by the Borrower or the
relevant Regular Subsidiary Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Issuing Lender upon demand at
the Issuing Lender's address for notices specified herein an amount equal to
such L/C Participant's ratable share of the Revolving Facility under which such
Letter of Credit was issued of the amount of such draft, or any part thereof,
which is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant under
any Revolving Facility to the Issuing Lender pursuant to subsection 3.4(a) in
respect of any unreimbursed portion of any payment made by the Issuing Lender
under any Letter of Credit issued under such Revolving Facility is not paid to
the Issuing Lender within three Business Days after the date such payment is
due, such L/C Participant shall pay to the Issuing Lender on demand an amount
equal to the product of (i) such amount, times (ii) the daily average Federal
funds rate, as quoted by the Issuing Lender, during the period from and
including the date such payment is required to the date on which such payment is
immediately available to the Issuing Lender, times (iii) a fraction the
numerator of which is the number of days that elapse during such period and the
denominator of which is 360. If any such amount required to be paid by any such
L/C Participant pursuant to subsection 3.4(a) is not in fact made available to
the Issuing Lender by such L/C Participant within three Business Days after the
date such payment is due, the Issuing Lender shall be entitled to recover from
such L/C Participant, on demand, such amount with interest thereon calculated
from such due date at the rate per annum applicable to ABR Loans that are
Revolving Credit Loans hereunder. A certificate of the Issuing Lender submitted
to any L/C Participant with respect to any amounts owing under this subsection
shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit issued under any Revolving Facility and has received
from any L/C Participant its ratable share of such payment in accordance with
subsection 3.4(a), the Issuing Lender receives any payment related to such
Letter of Credit (whether directly from the Borrower, the relevant Regular
Subsidiary Borrower or otherwise), or any payment of interest on account
thereof, the Issuing Lender will distribute to such L/C Participant its ratable
share thereof; provided, however, that in the event that any such payment
received by the Issuing Lender shall be required to be returned by the Issuing
Lender, such L/C Participant shall return to the Issuing Lender the portion
thereof previously distributed by the Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower. The Borrower or the
relevant Regular Subsidiary Borrower agrees to reimburse the Issuing Lender on
each date on which the Issuing Lender notifies the Borrower or the relevant
Regular Subsidiary Borrower of the date and amount of a draft presented under
any Letter of Credit and paid by the Issuing Lender for the amount of (a) such
draft so paid and (b) any taxes (other than Excluded Taxes), fees, charges or
other costs or expenses incurred by the Issuing Lender in connection with such
payment; provided that upon the acceleration of such reimbursement obligations
in accordance with Section 8, the Borrower or the relevant Regular Subsidiary
Borrower agrees to reimburse the Issuing Lender for the amount equal to the then
maximum liability (whether direct or contingent) of the Issuing Lender and the
L/C Participants under such Letter of Credit. Each such payment shall be made to
the Issuing Lender, at its address for notices specified herein in the currency
in which such Letter of Credit is denominated (except that, in the case of any
Letter of Credit
43
denominated in euros or any Optional Currency, in the event that such payment is
not made to the Issuing Lender within three Business Days of the date of receipt
by the Borrower or any relevant Regular Subsidiary Borrower of such notice, upon
notice by the Issuing Lender to the Borrower or the relevant Regular Subsidiary
Borrower, such payment shall be made in Dollars, in an amount equal to the
Dollar Equivalent of the amount of such payment converted on the date of such
notice into Dollars at the spot rate of exchange on such date) and in
immediately available funds, on the date on which the Borrower or any relevant
Regular Subsidiary Borrower (on behalf of itself or such Regular Subsidiary
Borrower, as the case may be) receives such notice, if received prior to 11:00
A.M., New York City time, on a Business Day and otherwise on the next succeeding
Business Day. Any conversion by the Issuing Lender of any payment to be made by
the Borrower or any Regular Subsidiary Borrower in respect of any Letter of
Credit denominated in euros or any Optional Currency into Dollars in accordance
with this subsection 3.5 shall be conclusive and binding upon such Borrower or
such relevant Regular Subsidiary Borrower and the Lenders in the absence of
manifest error; provided that upon the request of any Lender, the Issuing Lender
shall provide to such Lender a certificate including reasonably detailed
information as to the calculation of such conversion.
3.6 Obligations Absolute. The Borrower's and any relevant Regular
Subsidiary Borrower's obligations under this Section 3 shall be absolute and
unconditional under any and all circumstances and irrespective of any set-off,
counterclaim or defense to payment which the Borrower or any relevant Regular
Subsidiary Borrower may have or have had against the Issuing Lender or any
beneficiary of a Letter of Credit. The Borrower also agrees with the Issuing
Lender that the Issuing Lender shall not be responsible for, and the Borrower's
or such relevant Regular Subsidiary Borrower's Reimbursement Obligations under
subsection 3.5 shall not be affected by, among other things, the validity or
genuineness of documents or of any endorsements thereon, even though such
documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower, any relevant Regular Subsidiary Borrower
and any beneficiary of any Letter of Credit or any other party to which such
Letter of Credit may be transferred or any claims whatsoever of the Borrower or
relevant Regular Subsidiary Borrower against any beneficiary of such Letter of
Credit or any such transferee. The Issuing Lender shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit issued by it, except for errors or omissions caused by the Issuing
Lender's gross negligence or willful misconduct. The Borrower and any relevant
Regular Subsidiary Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit issued by it or
the related drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards of care specified in the
Uniform Commercial Code of the State of New York, shall be binding on the
Borrower or any relevant Regular Subsidiary Borrower and shall not result in any
liability of the Issuing Lender to the Borrower or any relevant Regular
Subsidiary Borrower.
3.7 Increased Costs. If the adoption of or any change in any law or
regulation or in the interpretation thereof after the date hereof by any court
or administrative or Governmental Authority charged with the administration
thereof shall either (i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against Letters of Credit issued by the Issuing
Lender or participated in by the Lenders or (ii) impose on any Lender any other
condition regarding any Letter of Credit, and the result of any event referred
to in clauses (i) or (ii) above shall be to increase the cost to the Issuing
Lender or any Lender of issuing or maintaining such Letter of Credit (or its
participation therein, as the case may be) (which increase in cost shall be the
result of the Issuing Lender's or such Lender's reasonable allocation of the
aggregate of such cost increases resulting from such events), then, upon notice
to it from the Issuing Lender or such Lender (with a copy to the Administrative
Agent) certifying that (x) one of the events herein above described has occurred
and the nature of such event, (y) the increased cost or reduced amount resulting
from such event and (z) the additional amounts demanded by the Issuing Lender or
such Lender, as the case may be, and a reasonably detailed explanation of the
44
calculation thereof, the Borrower shall immediately pay to such Issuing Lender
or such Lender, as the case may be, from time to time as specified by the
Administrative Agent or such Lender, additional amounts which shall be
sufficient to compensate such Issuing Lender or such Lender for such increased
cost, together with interest on each such amount from the date demanded until
payment in full thereof at the rate provided in subsection 3.3. A certificate as
to the fact and amount of such increased cost incurred by the Issuing Lender or
such Lender as a result of any event mentioned in clauses (i) or (ii) above,
submitted by the Issuing Lender or such Lender to the Borrower, shall be
conclusive, absent manifest error.
3.8 Letter of Credit Payments. If any draft in Dollars, euros or in
any Optional Currency shall be presented for payment under any Letter of Credit,
the Issuing Lender shall promptly notify the Borrower and the Administrative
Agent of the date and amount of the Dollars, euros or the Optional Currency
thereof. The responsibility of the Issuing Lender to the Borrower in connection
with any draft presented for payment under any Letter of Credit shall, in
addition to any payment obligation expressly provided for in such Letter of
Credit, be limited to determining that the documents (including each draft)
delivered under such Letter of Credit in connection with such presentment are in
conformity with such Letter of Credit.
(a) Application. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of
this Agreement, the provisions of this Agreement shall apply.
(b) Purpose of the Letters of Credit. The Letters of Credit shall be
used for any lawful purposes requested by the Borrower or any Regular
Subsidiary Borrower.
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Administrative Agent to enter
into this Agreement and to make the Loans and issue or participate in the
Letters of Credit herein provided for, the Borrower hereby represents and
warrants to the Administrative Agent and to each Lender that:
4.1 Financial Condition.
(a) The unaudited pro forma consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at April 2, 2005 (including the
notes thereto) (the "Pro Forma Balance Sheet"), copies of which have heretofore
been furnished to each Lender, has been prepared giving effect (as if such
events had occurred on such date) to (i) the consummation of the Refinancing and
(ii) the payment of fees and expenses in connection with the Refinancing. The
Pro Forma Balance Sheet has been prepared based on the best information
available to the Borrower as of the date of delivery thereof, and presents
fairly on a pro forma basis the estimated financial position of Borrower and its
consolidated Subsidiaries as at April 2, 2005, assuming that the events
specified in the preceding sentence had actually occurred at such date.
(b) The consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at September 30, 2004 and the related consolidated
statements of income and of cash flows for the fiscal year ended on such date,
reported on by Deloitte & Touche LLP and the unaudited consolidated statements
of income and of cash flows for the three consecutive fiscal quarters ended
since September 30, 2004, copies of which have heretofore been delivered to each
of the Lenders, are complete and correct and present fairly in all material
respects the consolidated financial condition of the Borrower and its
45
consolidated Subsidiaries as at such respective dates, and the consolidated
results of their operations and their consolidated cash flows for the fiscal
year or fiscal period then ended. All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by such
accountants and as disclosed therein). Neither the Borrower nor any of its
consolidated Subsidiaries had, at the date of the balance sheet referred to
above, any material obligation, contingent liability or liability for taxes, or
any long-term lease or unusual forward or long-term commitment, including
without limitation, any interest rate or foreign currency swap or exchange
transaction, which is not reflected in the foregoing statements or in Schedule
4.1. Since September 30, 2004 there has been no development or event which has
had or could reasonably be expected to have a Material Adverse Effect.
4.2 Corporate Existence; Compliance with Law. Each of the Borrower
and its Material Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, (b) has
the corporate or other power and authority and the legal right to own and
operate its property, to lease the property it leases and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation or other applicable entity and in good standing under the laws of
any jurisdiction where its ownership, lease or operation of property or the
conduct or proposed conduct of its business requires such qualification, except
where the failure to so qualify would not, in any instance or in the aggregate,
reasonably be expected to have a Material Adverse Effect and (d) is in
compliance with all material Requirements of Law applicable to it or its
business, provided that the provisions of this clause (d) do not restrict or
limit the applicability of any knowledge or other qualification which is given
in this Agreement in any other matter which constitutes a "Requirement of Law".
4.3 Corporate Power; Authorization; Enforceable Obligations. Each of
the Borrower and its Subsidiaries has the corporate or other power and authority
and the legal right to make, deliver and perform this Agreement and the other
Loan Documents to which it is a party and to borrow hereunder (in the case of
the Borrower and any Subsidiary Borrower) and has taken all corporate or other
action necessary to be taken by it to authorize such actions. No consent, waiver
or authorization of, filing with, or other act by or in respect of, any
Governmental Authority or any other Person is required to be made or obtained by
the Borrower or its Subsidiaries in connection with the borrowings hereunder or
the execution, delivery, performance, validity or enforceability of this
Agreement and the other Loan Documents to which it is a party. This Agreement
constitutes, and the other Loan Documents to which the Borrower or any
Subsidiary is a party when executed and delivered hereunder will constitute, a
legal, valid and binding obligation of the Borrower and such Subsidiary,
enforceable against the Borrower and such Subsidiary in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
4.4 No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents, the borrowings hereunder and the use of
the proceeds thereof or of any Subordinated Debt do not violate any usury law
applicable to the Borrower or any Subsidiary Borrower or any other Requirement
of Law or Contractual Obligation of the Borrower or any of its Material
Subsidiaries and do not result in, or require, the creation or imposition of any
Lien on any of its or their respective properties or revenues pursuant to any
such Requirement of Law or Contractual Obligation which could reasonably be
expected to have a Material Adverse Effect except for Liens which may be
required by the Senior Subordinated Note Indenture.
4.5 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the best knowledge of the Borrower, threatened by
46
or against the Borrower or any of its Subsidiaries or against any of its or
their respective properties or revenues (a) with respect to this Agreement, any
of the other Loan Documents or any of the transactions contemplated hereby or
thereby except as set forth on Schedule 4.5 or (b) which could reasonably be
expected to have a Material Adverse Effect.
4.6 No Burdensome Restrictions. No Requirement of Law or Contractual
Obligation of the Borrower or any of its Subsidiaries could reasonably be
expected to have a Material Adverse Effect.
4.7 No Default. Neither the Borrower nor any of its Subsidiaries is
in default under or with respect to any of its Contractual Obligations in any
respect which would reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing. Neither the Borrower
nor any of its Subsidiaries is in default under any order, award or decree of
any arbitrator or Governmental Authority binding upon or affecting it or by
which any of its properties or assets may be bound or affected, where such
default would reasonably be expected to have a Material Adverse Effect.
4.8 Subsidiaries. The Subsidiaries listed on Schedule 4.8 constitute
all of the Subsidiaries of the Borrower in existence on the date hereof.
4.9 Disclosure. No representations or warranties made by, or
information supplied by, the Borrower or any of its Subsidiaries in this
Agreement, any other Loan Document or in any other document, including without
limitation the Confidential Information Memorandum, furnished to the Lenders
from time to time in connection herewith or therewith (as such other documents
may be supplemented from time to time) contains or will contain any untrue
statement of a material fact or omits or will omit to state any material fact
necessary to make the statements herein or therein, in light of the
circumstances under which they were made, not misleading. Except as disclosed in
the Loan Documents or as otherwise disclosed in writing to the Lenders, there is
no fact known to the Borrower or any of its Subsidiaries which has, or which
would reasonably be expected to have, in the Borrower's or such Subsidiary's
reasonable judgment, a Material Adverse Effect.
4.10 Schedules. Each of the Schedules to this Agreement contains
true, complete and correct information in all material respects.
4.11 Federal Regulations. No part of the proceeds of any Loans will
be used for (i) any purpose which violates, or which would be inconsistent with,
the provisions of the Regulations of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect, and if deemed
necessary in the reasonable judgment of the Administrative Agent or its counsel,
the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G-3 or FR Form U-1, as applicable, referred to in Regulation U of said Board or
(ii) except as set forth on Schedule 4.11, purchasing any security in any
transaction which is subject to Sections 13 and 14 of the Securities Exchange
Act of 1934, as amended.
4.12 Investment Company Act; Other Regulations. Neither the Borrower
nor any of its Subsidiaries is an "investment company", or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended. Neither the Borrower nor any of its
Subsidiaries is subject to regulation under any U.S. federal or state statute or
regulation which limits its ability to incur indebtedness.
4.13 Labor Matters. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect: (a) there are no
strikes or other labor disputes against the Borrower or any of its Subsidiaries
pending or, to the knowledge of the Borrower, threatened; (b) hours worked by
and payment made to employees of the Borrower and its Subsidiaries have not been
in violation of the Fair
47
Labor Standards Act or any other applicable Requirement of Law dealing with such
matters; and (c) all payments due from the Borrower or any of its Subsidiaries
on account of employee health and welfare insurance have been paid or accrued as
a liability on the books of the Borrower or the relevant Subsidiary.
4.14 ERISA. No "prohibited transaction" or "accumulated funding
deficiency" (each as defined in Section 8 hereof) or Reportable Event has
occurred within the applicable statute of limitations in effect as of the date
hereof which has not been cured with respect to any Single Employer Plan. The
present value of all benefits vested under all Single Employer Plans maintained
by the Borrower or a Commonly Controlled Entity (based on those assumptions used
to fund such Plans in accordance with Section 412 of the Code) did not, as of
the last annual valuation date, exceed the value of the assets of such Plan
determined in accordance with Section 412 of the Code allocable to such vested
benefits. The liability to which the Borrower or any Commonly Controlled Entity
would become subject under ERISA if the Borrower or any such Commonly Controlled
Entity were to withdraw completely (as defined in Section 4203 of ERISA) from
all Multi-employer Plans as of the valuation date most closely preceding the
date hereof is not in excess of $3,000,000. The Borrower does not currently
participate in any Multi-employer Plans.
4.15 Title to Real Property, Etc. Each of the Borrower and its
Subsidiaries has good and marketable title in fee simple to, or a valid and
subsisting leasehold interest in, all its real property and good title to all
its other property, except where the failure to have such good and marketable
title would not reasonably be expected to have a Material Adverse Effect, and
none of such property is subject to any Lien, except as permitted by subsection
7.1 of this Agreement.
4.16 Taxes. Each of the Borrower and its Subsidiaries has filed or
caused to be filed all tax returns which are required to be filed and has paid
all taxes shown to be due and payable on said returns or on any assessments made
against it or any of its property and all other taxes, fees or other charges
imposed on it or any of its property by any Governmental Authority (other than
any the amount or validity of which are currently being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of the Borrower or its Subsidiaries, as the
case may be) except where the failure to file such returns or pay such taxes
and/or assessments would not reasonably be expected to have a Material Adverse
Effect; no tax Lien has been filed, and, to the knowledge of the Borrower, no
claim is being asserted, with respect to any such tax, fee or other charge.
4.17 Environmental Matters. Each of the following is true and
correct as of the date hereof, other than exceptions to any of the following
that, in the aggregate, would not reasonably be expected by the Borrower to have
a Material Adverse Effect:
(a) Each of the properties owned or operated by the Borrower or any
of its Subsidiaries does not contain, and has not previously contained,
any Materials of Environmental Concern in amounts or concentrations which
(i) constitute or constituted a violation of, or (ii) could reasonably
give rise to liability under, Environmental Laws.
(b) The Borrower and its Subsidiaries are and have been in
compliance with all applicable Environmental Laws, and there is no
contamination or violation of any Environmental Law which, in the
aggregate with all other contaminations and violations, would interfere
with the continued operations or the business of the Borrower and its
Subsidiaries, in each case taken as a whole or impair the fair saleable
value thereof.
(c) Neither the Borrower nor any of its Subsidiaries has received
any notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters
48
or compliance with Environmental Laws nor does the Borrower have knowledge
or reason to believe that any such notice will be received or is being
threatened.
(d) With respect to the Borrower and its Subsidiaries, Materials of
Environmental Concern have not been transported or disposed of in
violation of, or in a manner or to a location which would reasonably give
rise to liability under, Environmental Laws, nor have any Materials of
Environmental Concern been generated, treated, stored or disposed of at,
on or under any of the Properties in violation of, or in a manner that
would reasonably give rise to liability under, any applicable
Environmental Laws.
(e) No judicial proceedings or governmental or administrative action
is pending, or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any of its Subsidiaries is or
will be named as a party or which will adversely affect the ability of the
Borrower or any of its Subsidiaries to conduct any part of their business
nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to the
Borrower or any of its Subsidiaries.
(f) There has been no release or threat of release of Materials of
Environmental Concern at any location for which the Borrower or any of its
Subsidiaries is liable by contract or operation of law, in violation of or
in amounts or in a manner that would reasonably give rise to liability
under Environmental Laws.
4.18 Intellectual Property. The Borrower and each of its
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted except for those the failure of which to own or
license would not reasonably be expected to have a Material Adverse Effect (the
"Intellectual Property"). No claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, and the
Borrower does not know of any valid basis for any such claim, except for such
claims which have previously been disclosed to the Lenders and would not
reasonably be expected to have a Material Adverse Effect. The use of such
Intellectual Property by the Borrower and its Subsidiaries does not infringe on
the rights of any Person, except for such claims and infringements that, in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
4.19 Security Documents. Except to the extent otherwise noted
therein, each Security Document is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders (or, where required by law,
in favor of each Lender), a legal, valid and enforceable security interest in
the Collateral described therein. When (i) stock certificates representing the
Collateral are delivered to the Administrative Agent, (ii) the financing
statements specified on Schedule 4.19(ii) in appropriate form are filed in the
offices specified on Schedule 4.19(ii) and (iii) the filings and other actions
are made in respect of the Foreign Pledge Agreements specified on Schedule
4.19(iii), each Security Document shall constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the Loan Parties in
such Collateral and the proceeds thereof, as security for the Obligations (as
defined in the Security Documents), in each case prior and superior in right to
any other Person. The pledge of the Capital Stock of any Excluded Foreign
Subsidiary will be limited to 65% of the Capital Stock of such Excluded Foreign
Subsidiary. The obligations of a Foreign Subsidiary Borrower (other than Scotts
Treasury EEIG) shall be secured by 100% of the Capital Stock of such Foreign
Subsidiary Borrower (except with respect to Scotts Australia Pty Ltd., which
shall be secured by 65% of the Capital Stock of such Subsidiary), 100% of the
Capital Stock of each first-tier Subsidiary of such Foreign
49
Subsidiary Borrower that is not an Excluded Foreign Subsidiary and 65% of the
Capital Stock of the each first-tier Subsidiary of such Foreign Subsidiary
Borrower that is an Excluded Foreign Subsidiary, but no other assets of Foreign
Subsidiaries of the Borrower shall be pledged as collateral security.
4.20 Solvency.
(a) The Borrower and each of its Subsidiaries is, and after giving
effect to the Refinancing and the incurrence of all Indebtedness and obligations
being incurred in connection herewith and therewith will be and will continue to
be, Solvent.
(b) Each Subsidiary Borrower is in compliance with all material
Requirements of Law applicable to it with respect to capitalization and, to the
knowledge of the Borrower or such Subsidiary Borrower, has sufficient capital
with which to conduct its business in accordance with past practice. No
Subsidiary Borrower is undercapitalized to such an extent that, solely as a
result of such undercapitalization, any Lender would be deemed under the laws of
the relevant jurisdiction to owe a fiduciary duty to any other creditor of such
Subsidiary Borrower or the Loans made by relevant Lenders to such Subsidiary
Borrower would be subordinated to any obligations of such Subsidiary Borrower
owing to any other Person.
4.21 Senior Indebtedness. The Obligations constitute "Senior
Indebtedness" or "Senior Debt" of the Borrower and each Subsidiary Borrower
under and as defined in the Senior Subordinated Note Indenture. The obligations
of each Subsidiary Guarantor under the Guarantee and Collateral Agreement
constitute "Guarantor Senior Indebtedness" of such Subsidiary Guarantor under
and as defined in the Senior Subordinated Note Indenture.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Effectiveness of this Agreement. The agreement of
each Lender to make the initial Extension of Credit requested to be made by it
is subject to the satisfaction, prior to or concurrently with the making of such
Extension of Credit on the Closing Date, of the following conditions precedent:
(a) Execution of Agreement. The Administrative Agent shall have
received this Agreement, duly executed and delivered by the Borrower and
each of the Subsidiary Borrowers party to this Agreement as of the Closing
Date and by each of the Lenders listed on Schedule 1.
(b) Execution of Guarantee and Collateral Agreement. The
Administrative Agent shall have received the Guarantee and Collateral
Agreement, duly executed and delivered by the Borrower and each of the
Subsidiary Guarantors party thereto as of the Closing Date.
(c) Pro Forma Balance Sheet; Financial Statements. The Lenders shall
have received the financial statements described in subsections 4.1(a) and
(b) and such financial statements shall not, in the reasonable judgment of
the Lenders, reflect any material adverse change in the consolidated
financial condition of the Borrower or its Subsidiaries, as reflected in
the financial statements or projections contained in the Confidential
Information Memorandum.
(d) Fees. The Lenders and the Administrative Agent shall have
received all fees required to be paid, and all expenses for which invoices
have been presented by the Administrative Agent (including the reasonable
fees and expenses of legal counsel), on or before the Closing Date. All
such amounts will be paid with proceeds of Loans made on the Closing Date
and will be reflected
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in the funding instructions given by the Borrower to the Administrative
Agent on or before the Closing Date.
(e) Legal Opinion of Counsel to the Borrower and the Subsidiary
Borrowers. The Administrative Agent and each Lender shall have received:
(i) an executed legal opinion of Vorys, Sater, Seymour and
Pease LLP, special counsel to the Borrower, dated the Closing Date
and addressed to the Administrative Agent and the Lenders
substantially in the form of Exhibit G. The Administrative Agent and
each Lender shall have received an executed legal opinion of Vorys,
Sater, Seymour and Pease LLP, or such other counsel reasonably
satisfactory to the Administrative Agent, as counsel to each
Domestic Subsidiary Borrower, dated the Closing Date and addressed
to the Administrative Agent and the Lenders;
(ii) an executed legal opinion of Clifford Chance, as counsel
to each Foreign Subsidiary Borrower (or such other counsel to any
Foreign Subsidiary Borrower as may be selected by the Borrower and
reasonably satisfactory to the Administrative Agent), dated the
Closing Date and addressed to the Administrative Agent and the
Lenders substantially in the form required by subsection 5.3; and
(iii) an executed legal opinion from such special or local
counsel as the Administrative Agent shall reasonably request, in
each case, in form and substance reasonably satisfactory to the
Administrative Agent.
(f) Corporate Proceedings of the Borrower and its Subsidiaries. The
Administrative Agent shall have received a copy of the resolutions (in
form and substance reasonably satisfactory to the Administrative Agent and
its counsel) of the Board of Directors of each of the Borrower and each of
its Subsidiaries executing any Loan Document authorizing on or within 30
days prior to the Closing Date (i) the execution, delivery and performance
of each of the Loan Documents to which it is a party, (ii) the
consummation of the transactions contemplated hereby and thereby and (iii)
the borrowings herein provided for, all certified by the Secretary or the
Assistant Secretary (or equivalent Person for Subsidiaries which are not
corporations) of the Borrower or such Subsidiary, as the case may be. Each
such certificate shall (A) state that the resolutions set forth therein
have not been amended, modified, revoked or rescinded as of the date of
such certificate, (B) specify the names and titles of the officers of the
Borrower or such Subsidiary, as the case may be, authorized to sign the
Loan Documents to which it is a party and (C) contain specimens of the
signatures of such officers.
(g) No Proceeding or Litigation; No Injunctive Relief. No action,
suit, investigation or other proceeding (including, without limitation,
the enactment or promulgation of a statute or rule) by or before any
arbitrator or any Governmental Authority shall be threatened or pending
and no preliminary or permanent injunction or order by a state or federal
court shall have been entered (i) in connection with this Agreement or any
transaction contemplated hereby except as set forth in Schedule 5.1(g) or
(ii) which, in any case, in the reasonable judgment of the Administrative
Agent, could reasonably be expected to have a Material Adverse Effect.
(h) Consents, Licenses, Approvals, etc. The Administrative Agent
shall have received true copies (certified to be such by the Borrower or
other appropriate party) of all material consents, licenses and approvals
required in accordance with applicable law in connection with the
execution, delivery, performance, validity and enforceability of this
Agreement and the other Loan Documents to be delivered on or before the
Closing Date, and the Borrower and its Material
51
Subsidiaries shall have all such material consents, licenses and approvals
required in connection with the continued operation of the Borrower and
its Material Subsidiaries, and such approvals shall be in full force and
effect, and all applicable waiting periods shall have expired without any
action being taken or threatened by any competent authority which would
restrain, prevent or otherwise impose adverse conditions on this Agreement
and the actions contemplated hereby.
(i) Representations and Warranties. Each of the representations and
warranties made by the Borrower and its Subsidiaries in or pursuant to
this Agreement and any other Loan Document to which it is a party and the
representations of the Borrower and its Subsidiaries which are contained
in any certificate, document or financial or other statement furnished
pursuant hereto or thereto on or before the Closing Date shall be true and
correct in all material respects on and as of the Closing Date as if made
on and as of such date both before and after giving effect to the making
of the Loans hereunder.
(j) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing hereunder after giving effect to the
making of any Extension of Credit hereunder.
(k) Borrowing Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a Borrowing Certificate,
dated the Closing Date, substantially in the form of Exhibit I hereto,
with appropriate insertions, executed by a duly authorized Responsible
Officer of the Borrower.
(l) Pledged Stock; Stock Powers. Except as set forth on Schedule
5.1(b) or contemplated in subsection 6.11(a), the Administrative Agent
shall have received (i) the certificates representing the shares of
Capital Stock pledged pursuant to the Guarantee and Collateral Agreement,
together with an undated stock power for each such certificate executed in
blank by a duly authorized officer of the pledgor thereof.
(m) Filings, Registrations and Recordings. Each document (including
any Uniform Commercial Code financing statement or foreign equivalent)
required by the Loan 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 the
Lenders, a perfected Lien on the Collateral described therein, prior and
superior in right to any other Person (other than with respect to Liens
expressly permitted by subsection 7.1), shall be in proper form for
filing, registration or recordation in the applicable jurisdiction.
(n) Repayment and Termination of Existing Credit Agreement. The
loans under the Existing Credit Agreement shall have been repaid, or
arrangements satisfactory to the Administrative Agent for the repayment
thereof, the letters of credit outstanding thereunder shall have been
returned or shall be deemed to be outstanding hereunder pursuant to
subsection 3.1(d), the commitments under the Existing Credit Agreement
shall have been terminated, all accrued interest and fees thereunder shall
have been paid and, except as set forth on Schedule 7.1(i), the liens
granted as collateral security in respect thereof shall have been
released.
(o) Business Plan; Projections. The Administrative Agent and the
Lenders shall have received a satisfactory business plan and projections
for fiscal years 2005 through 2009 and a satisfactory written analysis of
the business and prospects of the Borrower and its Subsidiaries for the
period from the Closing Date through the Revolving Credit Termination
Date.
52
(p) Additional Matters. All corporate and other proceedings and all
other documents and legal matters in connection with the transactions
contemplated by this Agreement and the other Loan Documents, including,
without limitation, documentation concerning the status of all labor, tax,
employee benefit and health and safety matters involving the Borrower and
its Subsidiaries shall be reasonably satisfactory in form and substance to
the Administrative Agent and its counsel.
(q) Additional Information. The Administrative Agent shall have
received such additional information which the Administrative Agent shall
have reasonably requested, including, without limitation, copies of any
debt agreements, security agreements, tax sharing agreements, employment
agreements, management compensation arrangements, financing arrangements
and other material contracts, and such agreements or arrangements shall be
reasonably satisfactory in form and substance to the Administrative Agent
and its counsel.
5.2 Conditions to All Extensions of Credit. The obligation of each
Lender to make any Loan (other than any Loan the proceeds of which are to be
used exclusively to repay Refunded Swing Line Loans) or of the Issuing Lender to
issue, increase or extend any Letter of Credit requested to be issued, increased
or extended by it hereunder on any date (including, without limitation, the
Closing Date) is subject to the satisfaction of the following conditions
precedent as of such date:
(a) Representations and Warranties. The representations and
warranties made by the Borrower or any of its Subsidiaries in the Loan
Documents to which it is a party and any representations and warranties
made by the Borrower or any of its Subsidiaries which are contained in any
certificate, document or financial or other statement furnished at any
time pursuant hereto or thereto shall be true and correct in all material
respects on and as of the date thereof as if made on and as of such date
unless stated to relate to a specific earlier date (in which case the same
shall be true and correct in all material respects on and as of such
specific earlier date).
(b) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on such date or after giving effect
to the Extension of Credit to be made on such date.
(c) Subsidiary Borrower Borrowing. With respect to any borrowing
made by any Subsidiary Borrower, a certificate of the Borrower to the
effect that such borrowing will not give rise to an Event of Default under
the Senior Subordinated Note Indenture or under any other Subordinated
Debt permitted hereunder and dated as of the date of such borrowing shall
have been delivered to the Administrative Agent.
Each borrowing by the Borrower under this Agreement, each conversion
of any Loan pursuant to subsection 2.10 of this Agreement and each issuance,
increase or extension of any Letter of Credit hereunder shall constitute a
representation and warranty by the Borrower as of the date of such borrowing,
conversion or issuance, increase or extension that the conditions contained in
the foregoing paragraphs (a) and (b) of this subsection 5.2 have been satisfied.
5.3 Additional Conditions Applicable to Foreign Subsidiary
Borrowers. The agreement of each Lender to make any Extension of Credit
requested to be made by it to any Foreign Subsidiary Borrower on any date
(including, without limitation, the initial Extension of Credit and each Swing
Line Loan, if requested to be made to any Foreign Subsidiary Borrower) is
subject to satisfaction or waiver of, in addition to the conditions precedent
set forth in subsections 5.1 (in the case of the initial Extension of Credit)
and 5.2, the following conditions precedent: (a) in the case of the making of
any Extension of
53
Credit to any Foreign Subsidiary Borrower for the first time, the delivery to
the Administrative Agent, with a copy for each Lender, of the executed legal
opinion of counsel to such Foreign Subsidiary Borrower addressed to the
Administrative Agent and the Lenders, as to the matters set forth in Exhibit H
and otherwise in form and substance reasonably satisfactory to the
Administrative Agent and (b) the truthfulness and correctness in all material
respects on and as of such date of the following additional representations and
warranties:
(i) Pari Passu. The obligations of such Foreign Subsidiary
Borrower under this Agreement, when executed and delivered by such Foreign
Subsidiary Borrower, will rank at least pari passu with all unsecured
Indebtedness of such Foreign Subsidiary Borrower.
(ii) No Immunities, etc. Such Foreign Subsidiary Borrower is
subject to civil and commercial law with respect to its obligations under
this Agreement and any Note, and the execution, delivery and performance
by such Foreign Subsidiary Borrower of this Agreement constitute and will
constitute private and commercial acts and not public or governmental
acts. Neither such Foreign Subsidiary Borrower nor any of its property,
whether or not held for its own account, has any immunity (sovereign or
other similar immunity) from any suit or proceeding, from jurisdiction of
any court or from set-off or any legal process (whether service or notice,
attachment prior to judgment, attachment in aid of execution of judgment,
execution of judgment or other similar immunity) under laws of the
jurisdiction in which such Foreign Subsidiary Borrower is organized and
existing in respect of its obligations under this Agreement or any Note.
Such Foreign Subsidiary Borrower has waived every immunity (sovereign or
otherwise) to which it or any of its properties would otherwise be
entitled from any legal action, suit or proceeding, from jurisdiction of
any court and from set-off or any legal process (whether service or
notice, attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or otherwise) under the laws of the
jurisdiction in which such Foreign Subsidiary Borrower is organized and
existing in respect of its obligations under this Agreement and any Note.
The waiver by such Foreign Subsidiary Borrower described in the
immediately preceding sentence is the legal, valid and binding obligation
of such Foreign Subsidiary Borrower.
(iii) No Recordation Necessary. Except as otherwise noted on
Schedule 5.3(iii), this Agreement and each Note, if any, is in proper
legal form under the law of the jurisdiction in which such Foreign
Subsidiary Borrower is organized and existing for the enforcement hereof
or thereof against such Foreign Subsidiary Borrower under the law of such
jurisdiction, and to ensure the legality, validity, enforceability,
priority or admissibility in evidence of this Agreement and any such Note.
It is not necessary to ensure the legality, validity, enforceability,
priority or admissibility in evidence of this Agreement and any such Note
that this Agreement, any Note or any other document be filed, registered
or recorded with, or executed or notarized before, any court or other
authority in the jurisdiction in which such Foreign Subsidiary Borrower is
organized and existing or that any registration charge or stamp or similar
tax be paid on or in respect of this Agreement, any Note or any other
document, except for any such filing, registration or recording, or
execution or notarization, as has been made or is not required to be made
until this Agreement, any Note or any other document is sought to be
enforced and for any charge or tax as has been timely paid.
(iv) Exchange Controls. The execution, delivery and
performance by such Foreign Subsidiary Borrower of this Agreement, any
Note or the other Loan Documents is, under applicable foreign exchange
control regulations of the jurisdiction in which such Foreign Subsidiary
Borrower is organized and existing, not subject to any notification or
authorization except (i) such as have been made or obtained or (ii) such
as cannot be made or obtained until a
54
later date (provided any notification or authorization described in
immediately preceding clause (ii) shall be made or obtained as soon as is
reasonably practicable).
Each borrowing by, and Letter of Credit issued for the account of,
any Foreign Subsidiary Borrower hereunder shall constitute a representation and
warranty by each of the Borrower and such Foreign Subsidiary Borrower as of the
date of such borrowing or such issuance that the conditions contained in this
subsection 5.3 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Revolving Credit
Commitments remain in effect, any Letter of Credit is outstanding or any amount
is owing to any Lender or the Administrative Agent hereunder or under any other
Loan Document, the Borrower shall, and in the case of the agreements set forth
in subsections 6.3, 6.4, 6.5, 6.6, 6.7, 6.11 and 6.12, shall cause each of its
Material Subsidiaries to:
6.1 Financial Statements. Furnish to the Administrative Agent and
each Lender:
(a) as soon as available, but in any event within ninety days after
the end of each fiscal year of the Borrower, a copy of the consolidated
balance sheet of the Borrower and its Subsidiaries as at the end of such
year and the related statements of consolidated income and retained
earnings and of cash flows for such year, setting forth in each case in
comparative form the figures for the previous year; provided that the
consolidated statements shall be certified without a "going concern" or
like qualification or exception or qualification arising out of the scope
of the audit by independent certified public accountants of nationally
recognized standing; and
(b) as soon as available, but in any event not later than forty-five
days after the end of each of the first three quarterly periods of each
fiscal year of the Borrower, a copy of the unaudited consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of each such
quarter and the related unaudited statements of consolidated income and
retained earnings and of cash flows for such quarter and the portion of
the fiscal year through such date setting forth in each case in
comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects;
all such financial statements to be complete and correct in all material
respects and prepared in reasonable detail and in accordance with GAAP (except,
in the case of the financial statements referred to in subparagraph (b), such
financial statements need not contain notes and shall be prepared substantially
in accordance with GAAP) applied consistently throughout the periods reflected
therein, except as otherwise disclosed in the notes thereto.
Any financial statement required to be delivered pursuant to this
Section 6.1 shall be deemed to have been delivered on the date on which the
Borrower posts such financial statement on its website on the Internet at
www.scotts.com or when such financial statement is posted on the SEC's website
on the Internet at www.sec.gov; provided that the Borrower shall give notice of
any such posting to the Administrative Agent (who shall then give notice of any
such posting to the Lenders); provided, further, that the Borrower shall deliver
paper copies of any financial statement referred to in this Section 6.1 to the
Administrative Agent if the Administrative Agent or any Lender requests the
Borrower to deliver such paper copies until written notice to cease delivering
such paper copies is given by the Administrative Agent.
55
6.2 Certificates; Other Information. Furnish to the Administrative
Agent and each Lender:
(a) concurrently with the delivery of the financial statements
referred to in subsection 6.1(a) above, a certificate of the independent
certified public accountants certifying such financial statements (i)
stating that in making the examination necessary therefor no knowledge was
obtained of any Default or Event of Default, except as specified in such
certificate and (ii) showing in detail the calculations supporting such
statement in respect of subsections 6.9, 6.10, 7.4 and 7.5;
(b) concurrently with the delivery of the financial statements
referred to above, a certificate from the auditing accountants (for the
year-end statements) or a Responsible Officer of the Borrower (for all
statements) stating that, to the best of such Responsible Officer's
knowledge, the Borrower and each of its Material Subsidiaries during such
period has observed or performed in all material respects all of its
material covenants and other agreements, and satisfied every condition
contained in this Agreement, any Notes and the Security Documents to be
observed, performed or satisfied by it, and that such Officer has obtained
no knowledge of any Default or Event of Default except as specified in
such certificate, and showing in detail the calculations supporting such
statement in respect of subsections 6.9, 6.10, 7.4 and 7.5;
(c) as soon as available, and in any event no later than 90 days
after the end of each fiscal year of the Borrower, a detailed consolidated
budget for the following fiscal year (including a projected consolidated
balance sheet of the Borrower and its Subsidiaries as of the end of the
following fiscal year, the related consolidated statements of projected
cash flow, projected changes in financial position and projected income
and a description of the underlying assumptions applicable thereto), and,
as soon as available, significant revisions, if any, of such budget and
projections with respect to such fiscal year (collectively, the
"Projections"), which Projections shall in each case be accompanied by a
certificate of a Responsible Officer stating that such Projections are
based on reasonable estimates, information and assumptions and that such
Responsible Officer has no reason to believe that such Projections are
incorrect or misleading in any material respect;
(d) concurrently with the delivery of the financial statements
referred to in subsection 6.1(a) and (b) above, a written discussion and
analysis (in a form and detail substantially similar to that contained in
the Form 10-K or Form 10-Q filed by the Borrower with the Securities and
Exchange Commission for the period covered by such financial statements)
by the Borrower with respect to the period covered by such financial
statements;
(e) promptly after the same are sent and received, copies of all
financial statements, reports and notices which the Borrower or any of its
Subsidiaries sends to its shareholders and promptly after the same are
filed and received, copies of all financial statements and reports which
the Borrower or any of its Subsidiaries may make to, or file with, and
copies of all material notices the Borrower or any such Subsidiary
receives from, the Securities and Exchange Commission or any public body
succeeding to any or all of the functions of the Securities and Exchange
Commission;
(f) promptly upon receipt thereof, copies of all final reports
submitted to the Borrower by independent certified public accountants in
connection with each annual, interim or special audit of the books of the
Borrower or any of its Subsidiaries made by such accountants, including,
without limitation, any final comment letter submitted by such accountants
to management in connection with their annual audit; and
56
(g) promptly, on reasonable notice to the Borrower, such additional
financial and other information as the Administrative Agent or any Lender
may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
Indebtedness and other material obligations of whatever nature, except, without
prejudice to the effectiveness of paragraph (e) of Section 8 hereof for any
Indebtedness or other obligations (including any obligations for taxes), when
the amount or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of the Borrower or its Subsidiaries, as
the case may be, and except for trade accounts payable incurred in the ordinary
course of business which are paid in accordance with normal industry practice.
6.4 Compliance with Laws. Comply with all laws, rules, regulations
and orders of any Governmental Authority and any Contractual Obligations
applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
6.5 Conduct of Business and Maintenance of Existence. Continue to
engage in business of the same general type as now conducted by it and, except
as may be permitted under subsection 7.3, preserve, renew and keep in full force
and effect its corporate existence and take all reasonable action to maintain
all material rights, privileges, contracts, copyrights, patents, trademarks,
tradenames and franchises necessary or desirable in the normal conduct of its
business; and comply with all of its Contractual Obligations and Requirements of
Law except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
6.6 Maintenance of Property, Insurance. Keep all property useful and
necessary in its business in good working order and condition; maintain with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks (but including
in any event public liability, product liability and business interruption
insurance) as are usually insured against in the same general area by companies
engaged in the same or a similar business; and furnish to each Lender, upon
written request, reasonable information as to the insurance carried.
6.7 Inspection of Property; Books and Records; Discussions. Keep
proper books of record and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of the Administrative Agent or upon the occurrence and during
the continuance of an Event of Default, the Lenders to visit and inspect any of
its properties, and examine and make abstracts from any of its books and records
at the Borrower's expense, at any reasonable time and as often as may reasonably
be requested, and to discuss the business, operations, properties and financial
and other condition of the Borrower and its Subsidiaries with officers and
employees of the Borrower and its Subsidiaries and with its independent
certified public accountants.
6.8 Notices. Promptly give notice to the Administrative Agent and
each Lender (and, in the case of clauses (a), (b) and (c), in any event within
five Business Days after learning thereof):
(a) of the occurrence of any Default or Event of Default;
(b) of any (i) default or event of default under any material
Contractual Obligation of the Borrower or any of its Material Subsidiaries
or (ii) litigation, investigation or proceeding which may exist at any
time between the Borrower or any of its Subsidiaries and any Governmental
57
Authority, which, if adversely determined, would reasonably be expected to
have a Material Adverse Effect;
(c) of any litigation or proceeding affecting the Borrower or any of
its Subsidiaries (i) (A) in which the amount of liability asserted against
the Borrower and its Subsidiaries is $5,000,000 or more and not covered by
insurance and (B) which, in the reasonable opinion of a Responsible
Officer of the Borrower, if adversely determined, would reasonably be
expected to have a Material Adverse Effect or (ii) in which injunctive or
similar relief is sought and which, in the reasonable opinion of a
Responsible Officer of the Borrower, if adversely determined, would
reasonably be expected to have a Material Adverse Effect;
(d) of the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof: (i)
the occurrence of any Reportable Event with respect to any Plan, or (ii)
the institution of proceedings or the taking or expected taking of any
other action by PBGC or the Borrower or any Commonly Controlled Entity to
terminate or withdraw or partially withdraw from any Plan under
circumstances which could lead to material liability to the PBGC or, with
respect to a Multi-employer Plan, the Reorganization or Insolvency (as
each such term is defined in ERISA) of the Plan and in addition to such
notice, deliver to the Administrative Agent and each Lender whichever of
the following may be applicable: (A) a certificate of a Responsible
Officer of the Borrower setting forth details as to such Reportable Event
and the action that the Borrower or a Commonly Controlled Entity proposes
to take with respect thereto, together with a copy of any notice of such
Reportable Event that may be required to be filed with PBGC, or (B) any
notice delivered by PBGC evidencing its intent to institute such
proceedings or any notice to PBGC that such Plan is to be terminated, as
the case may be; and
(e) any decision or other action of any Governmental Authority which
cancels, limits, or otherwise restricts the use or sale of any of the
products (including any of the material active ingredients in any of the
products) of the Borrower or any of its Subsidiaries; and
(f) of any event, act or omission which would reasonably be expected
to have a Material Adverse Effect.
Each notice pursuant to subsections (a) through (e) of this subsection 6.8 shall
be accompanied by a statement of the Chief Executive Officer or Chief Financial
Officer or other Responsible Officer of the Borrower setting forth details of
the occurrence referred to therein and stating what action the Borrower proposes
to take with respect thereto. For all purposes of clause (d) of this subsection
6.8, the Borrower shall be deemed to have knowledge of all facts attributable to
the administrator of such Plan.
6.9 Interest Coverage. At each quarterly date set forth below with
respect to the fiscal quarter of the Borrower then ending maintain the
Minimum Interest Coverage of the Borrower at not less than the applicable
ratio set forth opposite each such date:
Fiscal Quarter Ratio
- -------------- -----
June 30, 2005 3.25 to 1.00
September 30, 2005 3.25 to 1.00
December 31, 2005 3.25 to 1.00
March 31, 2006 and thereafter 3.50 to 1.00
58
Covenant calculations shall be made on the date that is the nearest to each
quarterly date listed above, to the extent the last day for the relevant fiscal
quarter of the Borrower falls on a day other than on the corresponding covenant
test date.
6.10 Maintenance of Leverage Ratio. At each quarterly date set forth
below with respect to the fiscal quarter of the Borrower then ending maintain
the Leverage Ratio of the Borrower at not greater than the applicable ratio set
forth opposite each such date:
Fiscal Quarter Ratio
- -------------- -----
June 30, 2005 4.00 to 1.00
September 30, 2005 4.00 to 1.00
December 31, 2005 4.00 to 1.00
March 31, 2006 3.75 to 1.00
June 30, 2006 3.75 to 1.00
September 30, 2006 3.75 to 1.00
December 31, 2006 3.75 to 1.00
March 31, 2007 3.50 to 1.00
June 30, 2007 3.50 to 1.00
September 30, 2007 3.50 to 1.00
December 31, 2007 3.50 to 1.00
March 31, 2008 and thereafter 3.25 to 1.00
Covenant calculations shall be made on the date that is the nearest to each
quarterly date listed above, to the extent the last day for the relevant fiscal
quarter of the Borrower falls on a day other than on the corresponding covenant
test date.
6.11 Additional Collateral, etc.(a) Prior to the Collateral Release
Date (and after the Collateral Reinstatement Date):
(a) with respect to any new Domestic Subsidiary (other than a
Domestic Subsidiary that is a Receivables Subsidiary) created or acquired after
the Closing Date by the Borrower or any of its Subsidiaries, promptly (i)
execute and deliver to the Administrative Agent such amendments to the Guarantee
and Collateral Agreement as the Administrative Agent deems necessary or
advisable to grant to the Administrative Agent, for the benefit of the Lenders,
a perfected first priority security interest in the Capital Stock of such new
Domestic Subsidiary that is owned by the Borrower or any of its Subsidiaries,
(ii) deliver to the Administrative Agent the certificates representing such
Capital Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of the Borrower or such Subsidiary, as
the case may be, (iii) cause such new Domestic Subsidiary (A) to become a party
to the Guarantee and Collateral Agreement and such other Security Documents, as
applicable, (B) to take such actions necessary or advisable to grant to the
Administrative Agent for the benefit of the Lenders a perfected first priority
security interest in the Collateral described in the Guarantee and Collateral
Agreement or such other Security Document, as applicable, with respect to such
new Domestic Subsidiary (however, in the case of a pledge by the new Domestic
Subsidiary of Capital Stock of an Excluded Foreign Subsidiary, such pledge shall
be limited to 65% of voting Capital Stock of such
59
Excluded Foreign Subsidiary), including the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by applicable
Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent and (C) to deliver to the Administrative Agent a
certificate of such new Domestic Subsidiary, substantially in the form of
Exhibit J, with appropriate insertions and attachments, and (iv) if requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent, provided that, if the initial investment in or purchase price of such new
Domestic Subsidiary is less than $5,000,000, the obligations of the Borrower
discussed in clauses (i) through (iv) of this subsection 6.11(a) shall not take
effect unless and until the financial statements delivered to the Administrative
Agent following each fiscal year of the Borrower pursuant to subsection 6.1(a)
show the tangible net worth of such new Domestic Subsidiary to be more than
$5,000,000.
(b) with respect to any new Foreign Subsidiary (other than an
Excluded Foreign Subsidiary) created or acquired after the Closing Date by the
Borrower or any of its Subsidiaries and with respect to each new Foreign
Subsidiary Borrower, promptly (i) execute and deliver to the Administrative
Agent such amendments to the applicable Security Document or execute such
additional Security Documents as the Administrative Agent deems necessary or
advisable to grant to the Administrative Agent, for the benefit of the Lenders,
a perfected first priority security interest in the Capital Stock of such new
Foreign Subsidiary or Foreign Subsidiary Borrower that is owned by the Borrower
or any of its Domestic Subsidiaries or any Foreign Subsidiary Borrower (in the
case of such Foreign Subsidiary Borrower or first-tier Subsidiaries of any
Foreign Subsidiary Borrower, to secure the obligations of such Foreign
Subsidiary Borrower hereunder), (ii) deliver to the Administrative Agent the
certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
Borrower or such Subsidiary, as the case may be, (iii) in the case of a new
Foreign Subsidiary Borrower, cause such new Foreign Subsidiary Borrower (A) to
become a party to the applicable Security Document, and (B) to take such actions
necessary or advisable to grant to the Administrative Agent for the benefit of
the Lenders a perfected first priority security interest in the Capital Stock of
its Subsidiaries (other than Excluded Foreign Subsidiaries) if such Foreign
Subsidiary Borrower is a check the box entity or a similar pass through entity,
and (iv) if requested by the Administrative Agent, deliver to the Administrative
Agent legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent, provided that, if the initial investment in or purchase
price of such new Foreign Subsidiary or Foreign Subsidiary Borrower (as
applicable) is less than $5,000,000, the obligations of the Borrower discussed
in clauses (i) through (iv) of this subsection 6.11(b) shall not take effect
unless and until the financial statements delivered to the Administrative Agent
following the end of each fiscal year of the Borrower pursuant to subsection
6.1(a) show the tangible net worth of such new Foreign Subsidiary or Foreign
Subsidiary Borrower (as applicable) to be more than $5,000,000. For purposes of
this Agreement, (i) a check the box entity shall mean an entity that has elected
to be, or is by default, an entity that is disregarded as a separate entity from
its U.S. parent or owner for U.S. federal income tax consequences, and (ii) a
"pass through entity" shall mean an entity that has elected to be, or is by
default, treated as a partnership for U.S. federal income tax consequences.
(c) With respect to any new Excluded Foreign Subsidiary owned by the
Borrower or any of its Domestic Subsidiaries or by any Foreign Subsidiary
Borrower that is a check the box entity or a pass through entity created or
acquired after the Closing Date by the Borrower or any of its Subsidiaries,
promptly (i) execute and deliver to the Administrative Agent such amendments to
the applicable Security Document as the Administrative Agent deems necessary or
advisable to grant to the Administrative Agent, for the benefit of the Lenders,
a perfected first priority security interest in the Capital Stock of such new
Subsidiary that is owned by the Borrower or any of its Domestic Subsidiaries or
by such a Foreign Subsidiary Borrower (provided that in no event shall more than
65% of the total outstanding
60
voting Capital Stock of any such new Subsidiary be required to be so pledged),
(ii) deliver to the Administrative Agent the certificates representing such
voting Capital Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of the Borrower or such Subsidiary, as
the case may be, and take such other action as may be necessary or, in the
opinion of the Administrative Agent, desirable to perfect the Administrative
Agent's security interest therein, and (iii) if requested by the Administrative
Agent, deliver to the Administrative Agent legal opinions relating to the
matters described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent, provided that, if
the initial investment in or purchase price of such new Excluded Foreign
Subsidiary is less than $5,000,000, the obligations of the Borrower discussed in
clauses (i) through (iii) of this subsection 6.11(c) shall not take effect
unless and until the financial statements delivered to the Administrative Agent
following the end of each fiscal year of the Borrower pursuant to subsection
6.1(a) show the tangible net worth of such new Excluded Foreign Subsidiary to be
more than $5,000,000.
6.12 Environmental, Health and Safety Matters.
(a) Comply with, and ensure compliance by all tenants and
subtenants, if any, with, all applicable Environmental Laws, including, without
limitation, obtaining and complying with and maintaining, and ensuring that all
tenants and subtenants obtain and comply with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws. For purposes of this 6.12 (a), noncompliance by
the Borrower or any of its Subsidiaries with any applicable Environmental Law
shall be deemed not to constitute a breach of this covenant provided that, upon
learning of any actual or suspected noncompliance, the Borrower and the relevant
Subsidiaries shall promptly undertake all reasonable efforts to achieve
compliance (or contest in good faith by appropriate proceedings the applicable
Environmental Law at issue and (to the extent required by GAAP) provide on the
books of the Borrower or any of its Subsidiaries, as the case may be, reserves
in conformity with GAAP with respect thereto), and provided further that, in any
case, such non-compliance, and any other noncompliance with Environmental Law,
individually or in the aggregate, could not reasonably be expected to result in
a Material Environmental Amount.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and directives of
all Governmental Authorities regarding Environmental Laws, except to the extent
that the amount or validity thereof is currently being contested in good faith
by appropriate proceedings and (to the extent required by GAAP) reserves in
conformity with GAAP with respect thereto have been provided on the books of the
Borrower or any of its Subsidiaries, as the case may be.
(c) Defend, indemnify and hold harmless the Administrative Agent and
the Lenders, and their respective parents, subsidiaries, affiliates, employees,
agents, officers and directors, from and against any claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses of whatever kind or
nature known or unknown, contingent or otherwise, arising out of, or in any way
relating to the violation of, noncompliance with or liability under any
Environmental Laws applicable to the Borrower or any of its Subsidiaries or any
of their respective operations or Properties, or any orders, requirements or
demands of Governmental Authorities related thereto, including, without
limitation, attorney's and consultant's fees, investigation and laboratory fees,
response costs, court costs and litigation expenses, except to the extent that
any of the foregoing arise out of the gross negligence or willful misconduct of
the party seeking indemnification therefor. This indemnity shall continue in
full force and effect regardless of the termination of this Agreement.
6.13 Foreign Pledge Agreements. Use commercially reasonable efforts
to, within 60 days after the Closing Date, deliver to the Administrative Agent
(i) the duly executed Foreign Pledge
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Agreements described in Schedule 6.13 granting to the Administrative Agent, for
the benefit of the Lenders, a perfected first priority security interest in the
Capital Stock of such Foreign Subsidiaries or Foreign Subsidiary Borrowers
(other than Scotts Treasury EEIG), (ii) the certificates representing such
Capital Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of the Borrower or relevant Subsidiary
and (iii) legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
Section 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, from the Closing Date and so long
as the Revolving Credit Commitments remain in effect, any Letter of Credit is
outstanding or any amount is owing to any Lender or the Administrative Agent
hereunder or under any other Loan Document, the Borrower shall not, nor shall it
permit any of its Subsidiaries to, directly or indirectly:
7.1 Limitation on Liens. Create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except:
(a) Liens securing Indebtedness in an aggregate amount not exceeding
$75,000,000 at any time outstanding in respect of (i) capitalized lease
obligations and purchase money obligations for fixed or capital assets;
provided that (x) such Liens do not at any time encumber any property
other than the property financed by such Indebtedness and (y) the
Indebtedness secured thereby shall not exceed the cost or fair market
value, whichever is lower, of the property being acquired on the date of
acquisition and (ii) Indebtedness permitted pursuant to subsection 7.5(l);
(b) Liens on assets of a Foreign Subsidiary which is not a Foreign
Subsidiary Borrower to secure Permitted Foreign Debt of such Foreign
Subsidiary; provided that such Permitted Foreign Debt is not guaranteed by
the Borrower;
(c) Liens for taxes and special assessments not yet due or which are
being contested in good faith and by appropriate proceedings if adequate
reserves with respect thereto are maintained on the books of the Borrower
and its Subsidiaries in accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 30 days or which
are being contested in good faith and by appropriate proceedings;
(e) pledges or deposits in connection with workmen's compensation,
unemployment insurance and other social security legislation;
(f) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory and other obligations
required by law, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and other Liens
incurred in the ordinary course of business which, in the aggregate, are
not substantial in amount, and which do not in any case materially detract
from
62
the value of the property subject thereto or interfere with the ordinary
conduct of the business of the Borrower or its Subsidiaries;
(h) Liens resulting from judgments of any court or governmental
proceeding, provided such Liens in the aggregate do not constitute an
Event of Default under subsection 8(h);
(i) Liens in existence on the Closing Date described in Schedule
7.1(i);
(j) Liens of landlords or of mortgagees of landlords, arising solely
by operation of law, on fixtures located on premises leased in the
ordinary course of business, provided that the rental payments secured
thereby are not yet due;
(k) Liens contemplated under Section 4.12 of the Senior Subordinated
Note Indenture;
(l) Liens on Sold Receivables created under any Receivables Purchase
Facility;
(m) Liens created by or pursuant to this Agreement or the other Loan
Documents;
(n) Liens on assets of Foreign Subsidiaries arising by operation of
law or pursuant to customary business practice and not known to the
Borrower to materially affect the value of such assets; and
(o) purchase money Liens on assets acquired with seller-financed
Indebtedness permitted pursuant to subsection 7.5(o), so long as such
Liens encumber only assets (and proceeds thereof) acquired with such
Indebtedness and do not secure any other Indebtedness.
7.2 Limitation on Contingent Obligations. Agree to or assume,
guarantee, indorse or otherwise in any way be or become responsible or liable
for, directly or indirectly, any Contingent Obligation except for (i) the
guarantees contemplated by the Security Documents, (ii)(x) guarantees by the
Borrower of Indebtedness of Foreign Subsidiary Borrowers in an aggregate amount
not to exceed $75,000,000 at any one time outstanding and (y) guarantees by the
Borrower of Permitted Foreign Debt of any Foreign Subsidiary, provided that such
Permitted Foreign Debt is not secured by any Liens, (iii) guarantees in
existence on the Closing Date as described in Schedule 7.2(iii), (iv) Contingent
Obligations in an aggregate amount not to exceed $100,000,000 at any one time
outstanding, (v) Contingent Obligations of any Subsidiary Guarantor in respect
of Indebtedness permitted under subsections 7.5(e)-(g), provided that such
Contingent Obligations are subordinated to the same extent as the obligations of
the Borrower in respect of the related Indebtedness, (vi) any guarantees of the
Borrower or any of its Subsidiaries under subsection 5.1(b), (vii) any guarantee
of the obligations of the Borrower by its Subsidiaries of Indebtedness in
respect of the Senior Subordinated Notes or (viii) guarantees by the Borrower of
operating lease obligations of any Domestic Subsidiary incurred in connection
with "build to suit" real property improvements in an aggregate amount not to
exceed $60,000,000; provided that such Contingent Obligations are subordinated
to the same extent as the obligations of the Borrower in respect of the related
Indebtedness.
7.3 Limitation on Fundamental Changes. Except as permitted or
contemplated by this Agreement or any other Loan Document, enter into any
transaction of merger or consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), convey, sell, lease,
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any material part of its business or assets, whether now
owned or hereafter acquired, or acquire by purchase or otherwise all or
substantially all the business or assets of, or stock or other evidence of
beneficial
63
ownership of, any Person, or make any material change in the method by which it
conducts business, except that:
(a) any Subsidiary of the Borrower may be merged, amalgamated or
consolidated with or into the Borrower or any wholly owned Subsidiary of
the Borrower (provided that in the case of each such merger or
consolidation, the Borrower or such wholly owned Subsidiary, as the case
may be, shall be the continuing or surviving corporation);
(b) any Subsidiary of the Borrower may be liquidated, wound up or
dissolved into, or all or substantially all, or such lesser amount thereof
as the Borrower shall determine, of its business, property or assets may
be conveyed, sold, leased, transferred or otherwise disposed of, in one
transaction or a series of transactions, to, (i) the Borrower or any
wholly owned Subsidiary of the Borrower (provided that such wholly owned
Subsidiary shall be a Subsidiary Guarantor) or (ii) to any other Person in
compliance with subsection 7.8; and
(c) the Borrower or any Subsidiary of the Borrower may acquire by
purchase or otherwise all or substantially all the business or assets of,
or stock or other evidence of beneficial ownership of, any Person
(including, without limitation, any Affiliate of the Borrower), provided
that such acquisition shall be a Permitted Acquisition.
7.4 Limitation on Acquisitions, Investments, Loans and Advances.
Make or commit to make any advance, loan, extension of credit or capital
contribution to, or purchase of stock, bonds, notes, debentures or other
securities of any Person, or make any other investment in any Person, except:
(a) investments in Cash Equivalents;
(b) loans and advances to officers and directors of the Borrower or
any of its Subsidiaries (or employees thereof or manufacturers'
representatives provided such loans and advances are approved by an
officer of the Borrower) for travel, entertainment and relocation expenses
in the ordinary course of business in an aggregate amount not to exceed
$5,000,000 at any one time outstanding;
(c) loans and advances to and investments in the Borrower or its
Subsidiaries including loans made by Scotts Treasury EEIG to any Foreign
Subsidiary;
(d) investments in notes and other securities received in the
settlement of overdue debts and accounts payable in the ordinary course of
business and for amounts which, individually or in the aggregate, are not
material to the Borrower and its Subsidiaries taken as a whole;
(e) Permitted Acquisitions;
(f) insofar as not otherwise permitted pursuant to preceding clauses
(a) through (e), loans to or investments in Affiliates in an aggregate
amount not to exceed $20,000,000 at any one time outstanding;
(g) investments in the Capital Stock of a joint venture entity that
is a United States Person in an aggregate amount not to exceed the greater
of (x) $250,000,000 and (y) 7.5% of Consolidated Total Assets; provided
that the amount of such investments permitted pursuant to this subsection
7.4(g) shall be reduced by the aggregate amount of non-cash consideration
received in respect of Dispositions permitted pursuant to subsection 7.8;
64
(h) investments in the Capital Stock of a joint venture entity that
is not a United States Person;
(i) investments in the nature of seller financing of or other
consideration received in any Disposition by the Borrower or any of its
Subsidiaries of any assets permitted by subsection 7.8; and
(j) insofar as not otherwise permitted pursuant to preceding clauses
(a) through (i), investments in an aggregate amount not to exceed
$50,000,000 at any one time outstanding.
7.5 Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
(b) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary to the Borrower or any other Subsidiary;
(c) Indebtedness outstanding on the date hereof and listed on
Schedule 7.5(c) (including the Senior Subordinated Notes) and any
refinancings, refundings, renewals or extensions thereof (without
increasing, or shortening the maturity of, the principal amount thereof);
(d) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by subsection 7.1(a) in an
aggregate principal amount not to exceed $75,000,000 at any one time
outstanding;
(e) unsecured Indebtedness of the Borrower under subordinated notes
pursuant to one or more subordinated note indentures having subordination
provisions as favorable to the Lenders as those in the Senior Subordinated
Note Indenture and having no scheduled principal payments or prepayments
prior to the Revolving Credit Termination Date which may be used to
repurchase or redeem the Senior Subordinated Notes;
(f) unsecured Indebtedness of the Borrower in an aggregate principal
amount not to exceed $200,000,000 under subordinated notes pursuant to one
or more subordinated note indentures having subordination provisions as
favorable to the Lenders as those in the Senior Subordinated Note
Indenture and having no scheduled principal payments or prepayments prior
to the Revolving Credit Termination Date; provided any such Indebtedness
permitted under this subsection 7.5(f) may be incurred only if the
Borrower shall be in compliance, on a pro forma basis after giving effect
to such incurrence, with the covenant contained in subsection 6.10
recomputed as at the last day of the most recently ended fiscal quarter of
the Borrower as if such incurrence had occurred on such day;
(g) unsecured or subordinated Indebtedness of the Borrower having no
scheduled principal payments or prepayments prior to the Revolving Credit
Termination Date and which Indebtedness shall be used for Permitted
Acquisitions; provided any such Indebtedness permitted under this
subsection 7.5(g) may be incurred only if the Borrower shall be in
compliance, on a pro forma basis after giving effect to such incurrence,
with the covenant contained in subsection 6.10 recomputed as at the last
day of the most recently ended fiscal quarter of the Borrower as if such
incurrence had occurred on such day; provided further that any such
subordinated Indebtedness permitted under this subsection 7.5(g) shall be
under subordinated notes pursuant to
65
one or more subordinated note indentures having subordination provisions
as favorable to the Lenders as those in the Senior Subordinated Note
Indenture of the Borrower;
(h) additional Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount (for the Borrower and all
Subsidiaries) not to exceed $50,000,000 at any one time outstanding;
(i) Indebtedness under Hedging Agreements entered into with any
Hedging Lender in the ordinary course of business, provided that such
Hedging Agreements are entered into in the ordinary course of business to
hedge or mitigate risks as to which the Borrower or any of its
Subsidiaries reasonably believes it is exposed in the conduct of its
business or the management of its liabilities;
(j) Indebtedness contemplated by subsection 7.4(c);
(k) Indebtedness incurred by any Foreign Subsidiary, provided that
the aggregate principal amount of all such Indebtedness of all Foreign
Subsidiaries which are not Subsidiary Guarantors or Foreign Subsidiary
Borrowers shall not exceed $60,000,000 or the equivalent thereof at any
one time outstanding (any Indebtedness incurred pursuant to this
subsection 7.5(k), "Permitted Foreign Debt"); and
(l) Indebtedness of any Person that becomes a Subsidiary of the
Borrower in a Permitted Acquisition or Indebtedness otherwise assumed by
the Borrower or any of its subsidiaries in connection with a Permitted
Acquisition in an aggregate principal amount for all such Indebtedness at
any time outstanding of up to $30,000,000;
(m) Indebtedness incurred by any Foreign Subsidiary supported by a
Letter of Credit ("Supported Foreign Indebtedness"), provided that the
aggregate principal amount of all such Indebtedness shall not exceed
$65,000,000 at any one time outstanding;
(n) to the extent that the Receivables Subsidiary's or any other
Person's obligation to purchase or acquire Sold Receivables under the
Receivables Purchase Facility is deemed to be an obligation to lend money
to the Borrower or such Receivables Subsidiary, any Indebtedness of the
Borrower or such Receivables Subsidiary under the Receivables Purchase
Facility; and
(o) seller-financed Indebtedness incurred by the Borrower or any of
its Subsidiaries in an aggregate principal amount not to exceed
$100,000,000 at any one time outstanding.
7.6 Limitation on Restrictions on Subsidiary Distributions. Enter
into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary of the Borrower which is not a
Subsidiary Guarantor to (a) pay dividends or make any other distributions in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Subsidiary of the Borrower, (b) pay dividends
or make any other distributions from a Foreign Subsidiary which is not a
Subsidiary Guarantor or a Subsidiary Borrower except in agreements governing
Permitted Foreign Debt, (c) make loans or advances to the Borrower or any other
Subsidiary of the Borrower or (d) transfer any of its assets to the Borrower or
any other Subsidiary of the Borrower, except for such encumbrances or
restrictions existing under or by reason of any restrictions with respect to
such Subsidiary imposed pursuant to an agreement which has been entered into in
connection with the sale or disposition of all or substantially all of the
Capital Stock or assets of such Subsidiary.
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7.7 Transactions with Affiliates and Officers. Except for
transactions associated with the relocation expenses of officers of the Borrower
in the ordinary course of business, (a) enter into any transaction, including,
without limitation, the purchase, sale or exchange of property or the rendering
of any services, with any Affiliate or any executive officer or director
thereof, or enter into, assume or suffer to exist any employment or consulting
contract with any Affiliate or any executive officer or director thereof, except
any transaction or contract which is in the ordinary course of the Borrower's or
such Subsidiary's business and which is upon fair and reasonable terms no less
favorable to the Borrower or such Subsidiary than it would obtain in a
comparable arm's length transaction with a Person not an Affiliate, (b) make any
advance or loan to any Affiliate (except as otherwise made pursuant to
subsection 7.4) or any director or executive officer thereof or to any trust of
which any of the foregoing is a beneficiary, or to any Person on the guarantee
of any of the foregoing or (c) pay any fees (other than reasonable directors'
fees or expenses) or expenses to, or reimburse or assume any obligation for the
reimbursement of any expenses incurred by, any Affiliate or any executive
officer or director thereof.
7.8 Limitation on Sale of Assets. Except as permitted or
contemplated by this Agreement or any other Loan Document, Dispose of any of its
Domestic Assets (including, without limitation, receivables and leasehold
interests, but excluding obsolete or worn out property or property (including
inventory) Disposed of in the ordinary course of business) with a fair market
value (in combination with any other Domestic Assets sold in the same or any
related transaction) in excess of $5,000,000, whether now owned or hereafter
acquired, except that the Borrower or any of its Subsidiaries may Dispose of:
(a) Domestic Assets, provided that the aggregate fair market value
of all such Domestic Assets in all such transactions after giving pro
forma effect to such Disposal shall not exceed 10% of Consolidated Total
Assets (calculated by aggregating the percentage of Consolidated Total
Assets represented by each Disposal at the time of such Disposal); and
(b) Sold Receivables pursuant to any Receivables Purchase Facility;
provided that, in the case of any such Disposition (including, without
limitation, any Disposition for which the Borrower received as consideration the
Capital Stock of a joint venture entity), the Borrower shall receive cash
consideration equal to at least 80% of the fair market value of the Disposed
assets except to the extent that the non-cash consideration received in such
Disposition in excess of 20% of the aggregate total consideration received in
such Disposition, together with the aggregate value of the non-cash
consideration received in any prior Disposition in excess of 20% of the total
consideration therefor and the aggregate amount of other investments in joint
venture interests permitted pursuant to subsection 7.4(g) since the date hereof
(valued as of the date of receipt thereof) shall not exceed 7.5% of Consolidated
Total Assets.
7.9 Sale and Leaseback. Enter into any arrangement with any Person
providing for the leasing by the Borrower or any of its Subsidiaries of real or
personal property which has been or is to be sold or transferred by the Borrower
or any such Subsidiary to such Person or to any other Person to whom funds have
been or are to be advanced by such Person on the security of such property or
rental obligations of the Borrower or any such Subsidiary, except with respect
to (i) such transactions described on Schedule 7.9 and (ii) any other such
transactions which shall not have an aggregate fair market value in excess of
(A) $30,000,000 in any fiscal year and (B) $75,000,000 since the Closing Date.
7.10 Fiscal Year. Permit the fiscal year of the Borrower and its
Subsidiaries to end on a day other than September 30; provided, that after the
Closing Date, the Borrower may, on one occasion, permanently change the date on
which the fiscal year of the Borrower and its Subsidiaries ends upon 30 days
prior written notice to the Administrative Agent.
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7.11 Modifications of Certain Debt Instruments. (a) Amend, modify,
waive or otherwise change, or consent or agree to any amendment, modification,
waiver or other change to, any of the terms of the Senior Subordinated Notes or
any other unsecured or subordinated notes (or any refinancing thereof) issued
pursuant to subsections 7.5(e), (f) or (g) or unsecured notes issued pursuant to
subsection 7.5(f) (other than any such amendment, modification, waiver or other
change that (i)(x) would extend the maturity or reduce the amount of any payment
of principal thereof or reduce the rate or extend any date for payment of
interest thereon and (y) does not involve the payment of a consent fee material
in proportion to the outstanding principal amount thereof or (ii) provides for
actions which (x) are expressly permitted under this Agreement and (y) do not
require the consent of any of the holders of the applicable Senior Subordinated
Notes or subordinated notes (or refinancing thereof) issued pursuant to
subsections 7.5(e), (f) or (g) or unsecured notes issued pursuant to subsection
7.5(f) or (g)); or (c) designate any Indebtedness (other than obligations of the
Loan Parties pursuant to the Loan Documents) as "Designated Senior Indebtedness"
for the purposes of the Senior Subordinated Note Indenture.
7.12 Negative Pledge Clauses. Enter into or suffer to exist or
become effective any agreement that prohibits or limits the ability of the
Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist
any Lien upon any of its property or revenues, whether now owned or hereafter
acquired, to secure its obligations under the Loan Documents to which it is a
party other than (a) this Agreement and the other Loan Documents; (b) any
agreements governing any purchase money Liens or Capital Lease Obligations
otherwise permitted hereby (in which case, any prohibition or limitation shall
only be effective against the assets financed thereby) and (c) any agreements
governing any Receivables Purchase Facility provided that such limitation shall
only be effective against the Sold Receivables.
7.13 Lines of Business. Engage to any material extent in any
business activities other than in the respective primary lines of business of
the Borrower and its Subsidiaries (which shall include any evolution or
extension of business activities and any business activities reasonably related
to such primary lines of business conducted on the Closing Date).
7.14 Restricted Payments. Declare or pay any dividend (other than
dividends payable solely in common stock of the Person making such dividend) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any of its Capital Stock, whether now or hereafter outstanding,
or make any other distribution in respect thereof, either directly or
indirectly, whether in cash or property or in obligations (collectively,
"Restricted Payments"), except that any Subsidiary may make Restricted Payments
to the Borrower or any Subsidiary and that, so long as no Default or Event of
Default has occurred and is continuing or would result therefrom:
(a) the Borrower may declare and pay dividends on its Capital Stock
(including its preferred stock) in an aggregate amount of up to
$55,000,000 in each fiscal year of the Borrower; provided, that, if after
giving effect to any such dividend the Leverage Ratio (calculated on a pro
forma basis as of the last day of the most recently completed fiscal
quarter, but including in the calculation thereof the Indebtedness of the
Borrower and its consolidated Subsidiaries after giving effect to the
payment of such dividends) is less than 2.5 to 1.0, the Borrower may
declare and pay dividends on its Capital Stock in an aggregate amount of
up to $75,000,000 in each fiscal year, and
(b) the Borrower may make a repurchase or redemption of shares of
its Capital Stock, so long as after giving effect to such repurchase or
redemption the aggregate cost of all such repurchases and redemptions in
the fiscal year during which such repurchase or redemption is to
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occur is not greater than the amount set forth below opposite such fiscal
year:
Fiscal Year Repurchase/Redemption Amount
- ----------- ----------------------------
2005 $125,000,000
2006 $150,000,000
2007 and in each
fiscal year thereafter $175,000,000
provided, that any originally permitted amounts not used for repurchases
or redemptions in any fiscal period listed above may be carried over to be
used in the next succeeding fiscal period; provided further, that
transactions permitted by subsection 7.15 effected prior to January 1,
2007 shall reduce the amount available for repurchases or redemptions of
shares of the Borrower's Capital Stock in the fiscal year in which such
transaction occurs by an amount equal to the Indebtedness prepaid,
retired, redeemed, purchased, defeased or exchanged.
7.15 Limitation of Redemptions of Certain Indebtedness. Prior to
January 1, 2007, optionally prepay, retire, redeem, purchase, defease or
exchange, or make or arrange for any mandatory prepayment, retirement,
redemption, purchase or defeasance of Indebtedness outstanding pursuant to
subsection 7.5(c), (e), (f) or (g); provided that (a) Indebtedness permitted
pursuant to subsection 7.5(c) may be refinanced, refunded, renewed or extended
in accordance with the provisions of such subsection and (b) Indebtedness
permitted pursuant to subsection 7.5(c), (e), (f) or (g) may be redeemed by the
Borrower (i) on any date when the Leverage Ratio would not exceed 2.50 to 1.00,
on a pro forma basis after giving effect to such redemption, recomputed as at
the last day of the most recently ended fiscal quarter of the Borrower as if
such redemption had occurred on such date, for aggregate consideration
(including any premium paid in connection with such redemption) not in excess of
the lesser of (x) $100,000,000 (less the aggregate consideration for all prior
redemptions of such Indebtedness during such fiscal year) and (y) the amount
available for redemptions or repurchases of the Borrower's Capital Stock
pursuant to subsection 7.14(b) for the fiscal year in which such date falls and
(ii) with consideration consisting of the proceeds of the issuance of shares of
the Borrower's Capital Stock.
Section 8. EVENTS OF DEFAULT
Upon the occurrence of any of the following events:
(a) Payments. The Borrower or the relevant Subsidiary Borrower shall
fail to pay any principal of any Loan or any Reimbursement Obligation when
any such amount becomes due in accordance with the terms thereof or hereof
(including, without limitation, all amounts of L/C Obligations, whether or
not the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder); or the Borrower or the
relevant Subsidiary Borrower shall fail to pay any interest on any Loan or
any fee or other amount payable hereunder, within five days after any such
interest, fee or amount becomes due in accordance with the terms thereof
or hereof (including, without limitation, all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit
shall have presented the documents required thereunder); or
(b) Representations and Warranties. Any representation or warranty
made or deemed made by the Borrower or any of its Subsidiaries in any of
the Loan Documents to which it is a party or which is contained in any
certificate, document or financial or other statement furnished
69
at any time under or in connection herewith or therewith shall prove to
have been incorrect in any material respect on or as of the date made or
deemed made; or
(c) Certain Covenants. The Borrower shall default in the observance
or performance of any covenant or agreement contained in subsection 6.9 or
6.10; or
(d) Other Covenants. The Borrower or any of its Subsidiaries shall
default in the observance or performance of any covenant or agreement (i)
contained in subsections 7.3, 7.5, 7.8, 7.9 or 7.14 and such default shall
continue unremedied for a period of 10 days or (ii) contained in this
Agreement or in any other Loan Document not referred to in preceding
clause (i) or subsection 8(c) and such default shall continue unremedied
for a period of 30 days; or
(e) Cross-Default. The Borrower or any of its Material Subsidiaries
shall (i) default in any payment of principal of or interest on any
Indebtedness (other than the Loans) or in the payment of any Contingent
Obligation, the aggregate principal amount of which exceeds $50,000,000,
beyond the period of grace (not to exceed 30 days), if any, provided in
the instrument or agreement under which such Indebtedness or Contingent
Obligation was created; or (ii) default in the observance or performance
of any other agreement or condition relating to any such Indebtedness or
Contingent Obligation or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur
or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Contingent Obligation
(or a trustee or agent on behalf of such holder or holders or beneficiary
or beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or such Contingent
Obligation to become payable; or (iii) any such Indebtedness or Contingent
Obligation shall be declared to be due and payable, or required to be
prepaid (other than by a regularly scheduled required prepayment) prior to
the stated maturity thereof; or
(f) Commencement of Bankruptcy or Reorganization Proceedings. (i)
The Borrower or any of its Material Subsidiaries shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it
or its debts, or (B) seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or any substantial part of its
assets, or the Borrower or any of its Subsidiaries shall make a general
assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Borrower or any of its Material Subsidiaries any
case, proceeding or other action of a nature referred to in clause (i)
above which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced
against the Borrower or any of its Material Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial
part of its assets which results in the entry of an order for any such
relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) the Borrower
or any of its Material Subsidiaries shall take any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any of
the acts set forth in clause (i), (ii) or (iii) above; or (v) the Borrower
or any of its Material Subsidiaries shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as
they become due; or
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(g) ERISA. (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Plan, (iii) a Reportable Event shall occur with respect to,
or proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or institution of proceedings is, in the
reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA in a "distress
termination" (within the meaning of Section 4041(c) of ERISA), and, in the
case of a Reportable Event, the continuance of such Reportable Event
unremedied for ten days after notice of such Reportable Event pursuant to
Section 4043(a), (c) or (d) of ERISA is given or, in the case of
institution of proceedings, the continuance of such proceedings for ten
days after commencement thereof, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA in a "distress termination"
(within the meaning of Section 4041(c) of ERISA), (v) the Borrower or any
Commonly Controlled Entity shall, or is, in the reasonable opinion of the
Required Lenders, likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with
respect to a Single Employer Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other such events
or conditions, if any, is reasonably likely to subject the Borrower or any
of its Subsidiaries to any tax, penalty or other liabilities in the
aggregate material in relation to the business, operations, property or
financial or other condition of the Borrower and its Subsidiaries taken as
a whole; or
(h) Material Judgments. One or more judgments or decrees shall be
entered against the Borrower or any of its Material Subsidiaries involving
in the aggregate a liability (not covered by insurance) of $50,000,000 or
more and all such judgments or decrees shall not have been vacated,
satisfied, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or
(i) Change in Control. (i) Any Person (other than one or more
members of the Control Group) shall at any time own, directly or
indirectly shares representing more than 30% of the aggregate ordinary
voting power represented by the issued and outstanding Capital Stock of
the Borrower or (ii) a "Change of Control" as defined in the Senior
Subordinated Notes Indenture or any "Change of Control" as defined in any
other subordinated note indenture or any event described with similar
terminology thereunder shall occur; or
(j) Effectiveness of the Security Documents. Any Security Document
shall cease for any reason to be in full force and effect in accordance
with its terms or any party thereto shall so assert in writing or any Lien
on any material Collateral created by any of the Guarantee and Collateral
Agreements shall cease to be enforceable and of the same effect and
priority purported to be created thereby (other than pursuant to the terms
and conditions of this Agreement or the other Loan Documents); or
then, and in any such event, (a) if such event is an Event of Default specified
in paragraph (f) above with respect to the Borrower or any Subsidiary Borrower,
automatically the Revolving Credit Commitments, the Swing Line Commitment and
the L/C Commitment shall immediately terminate and the Swing Line Loans, the
Revolving Credit Loans and the Reimbursement Obligations hereunder (with accrued
interest thereon), the maximum amount available to be drawn under all
outstanding Letters of Credit and all other amounts owing by the Borrower or
such Subsidiary Borrower, as the case may be, under this Agreement shall
immediately become due and payable, and (b) if such event is any Event of
Default and is continuing, either or both of the following actions may be taken
(to the extent not already automatically taken pursuant to the foregoing clause
(a)): (i) with the consent of the Required Lenders, the
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Administrative Agent may or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower, declare the Revolving
Credit Commitments, the Swing Line Commitment and the L/C Commitment to be
terminated forthwith, whereupon the Revolving Credit Commitments, the Swing Line
Commitment and the L/C Commitment shall immediately terminate; and (ii) with the
consent of the Required Lenders, the Administrative Agent may or upon the
request of the Required Lenders, the Administrative Agent shall, by notice of
default to the Borrower, the Swing Line Loans, the Revolving Credit Loans and
the Reimbursement Obligations hereunder (with accrued interest thereon), the
maximum amount available to be drawn under all outstanding Letters of Credit and
all other amounts owing under this Agreement to be due and payable forthwith,
whereupon the same shall immediately become due and payable. Any amounts paid by
the Borrower in respect of such undrawn Letters of Credit shall be returned to
the Borrower after the last expiry date of the Letters of Credit and after all
Obligations under the Loan Documents have been paid in full.
With respect to all Letters of Credit for which presentment for
honor shall not have occurred at the time of an acceleration pursuant to the
preceding paragraph, the Borrower or the relevant Subsidiary Borrower, as the
case may be, shall at such time deposit in a cash collateral account opened by
the Administrative Agent an amount equal to the aggregate then undrawn and
unexpired amount of such Letters of Credit. Amounts held in such cash collateral
account shall be applied by the Administrative Agent to the payments of drafts
drawn under such Letters of Credit, and the unused portion thereof after all
such Letters of Credit shall have expired or been fully drawn upon, if any,
shall be applied to repay other Obligations. After all such Letters of Credit
shall have expired or been fully drawn upon, all Reimbursement Obligations shall
have been satisfied and all other Obligations shall have been paid in full, the
balance, if any, in such cash collateral account shall be returned to the
Borrower or such Subsidiary Borrower, as the case may be.
Except as expressly provided above in this Section 8, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
Section 9. THE ADMINISTRATIVE AGENT
9.1 Appointment.
(a) Each Lender hereby irrevocably designates and appoints JPMCB as
the Administrative Agent of such Lender under this Agreement and the other Loan
Documents, and each such Lender hereby irrevocably authorizes JPMCB, as the
Administrative Agent for such Lender, to take such action on its behalf under
the provisions of this Agreement and the other Loan Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement or the
other Loan Documents, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or the other Loan Documents or otherwise exist against the
Administrative Agent.
(b) Any proceeds received by the Administrative Agent pursuant to
the terms of any Guarantee and Collateral Agreement shall be applied as provided
in such Guarantee and Collateral Agreement. Each Hedging Lender agrees that (i)
if at any time it shall receive any proceeds pursuant to the terms of either
Guarantee and Collateral Agreement (other than through application by the
Administrative Agent in accordance with this subsection 9.1(b)), it shall
promptly turn the same over to
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the Administrative Agent for application in accordance with the provisions
hereof and (ii) it will not take or cause to be taken any action, including,
without limitation, the commencement of any legal or equitable proceedings, the
purpose of which is or could be to give such Hedging Lender any preference or
priority against the other Lenders with respect to such proceeds.
9.2 Delegation of Duties. The Administrative Agent may execute any
of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or the other Loan
Documents (except for its or such Person's own gross negligence or wilful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower or any
relevant Subsidiary Borrower or any officer thereof contained in this Agreement
or the other Loan Documents or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative Agent
under or in connection with, this Agreement or the other Loan Documents or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement, any Notes or the other Loan Documents or for any failure of
the Borrower or any relevant Subsidiary Borrower to perform its obligations
hereunder or thereunder. The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or the other Loan Documents, or to inspect the properties, books or
records of the Borrower or any Subsidiary Borrower.
9.4 Reliance by Administrative Agent. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any Note,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy or teletype message, statement, order or other document or
conversation reasonably believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless (a) a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent and (b) the Administrative Agent shall have received the
written agreement of such assignee that such assignee is bound hereby as it
would have been had it been an original Lender party hereto, in each case in
form and substance satisfactory to the Administrative Agent. The Administrative
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or the other Loan Documents unless it shall first receive such
advice or concurrence of the Required Lenders as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
and the other Loan Documents in accordance with a request of the Required
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Loans. The Administrative Agent and the Issuing Lender shall not be required to
give any notice to any Person other than the Borrower or the applicable
Subsidiary Borrower that an automatic extension of a Letter of Credit shall not
be effective, unless the Required Lenders otherwise direct.
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9.5 Notice of Default. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Borrower or any Subsidiary Borrower referring to this Agreement, describing
such Default or Event of Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives such a notice, the
Administrative Agent promptly shall give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders;
provided that, unless and until the Administrative Agent shall have received
such directions, the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests of
the Lenders.
9.6 Non-Reliance on Administrative Agent, Other Lenders and JPMCB.
Each Lender expressly acknowledges that neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates
(including, without limitation, JPMCB) has made any representations or
warranties to it and that no act by the Administrative Agent hereinafter taken,
including any review of the affairs of the Borrower or any Subsidiary Borrower,
shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender. Each Lender represents to the Administrative
Agent and JPMCB that it has, independently and without reliance upon the
Administrative Agent or any other Lender or JPMCB, and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own decision to make
its extensions of credit hereunder and enter into this Agreement. Each Lender
also represents that it will, independently and without reliance upon the
Administrative Agent, JPMCB or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement or the other Loan Documents, and to make such investigation as it
deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent hereunder, the Administrative Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, financial and
other condition or creditworthiness of the Borrower which may come into the
possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
9.7 Indemnification. The Lenders agree to indemnify each of the
Administrative Agent and JPMCB in its capacity as such (to the extent not
reimbursed by the Borrower or any Subsidiary Borrower and without limiting the
obligation of the Borrower or any Subsidiary Borrower to do so), ratably
according to the respective amounts of their Aggregate Exposure in effect on the
date on which indemnification is sought (or, if indemnification is sought after
the date upon which the Revolving Credit Commitments shall have terminated and
the Loans shall have been paid in full, ratably according to their Aggregate
Exposure Percentage immediately prior to such date), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Loans) be imposed on, incurred by or asserted against the Administrative Agent
or JPMCB in any way relating to or arising out of this Agreement, any of the
other Loan Documents, or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by the Administrative Agent or JPMCB under or in connection with any
of the foregoing; provided that no Lender shall be liable for any payment of any
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements to the extent that they result from the
Administrative Agent's or JPMCB's gross negligence or willful misconduct. The
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agreements in this subsection shall survive the payment of the Loans and all
other amounts payable hereunder.
9.8 Administrative Agent in Its Individual Capacity. The
Administrative Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower or any Subsidiary
Borrower as though the Administrative Agent were not the Administrative Agent
hereunder. With respect to its Loans made or renewed by it and any Note issued
to it and with respect to any Letter of Credit issued or participated in by it,
the Administrative Agent shall have the same rights and powers under this
Agreement as any Lender and may exercise the same as though it were not the
Administrative Agent, and the terms "Lender" and "Lenders" shall include the
Administrative Agent in its individual capacity.
9.9 Parallel Debt. (a) (i) Notwithstanding any other provision of
this Agreement, the Borrower and each Subsidiary Borrower hereby irrevocably and
unconditionally undertakes to pay to the Administrative Agent, as creditor in
its own right and not as representative of the other Lenders, sums equal to and
in the currency of each amount payable by the Borrower or such Subsidiary
Borrower to each of the Lenders under each of the Loan Documents as and when
that amount falls due for payment under the relevant Loan Document or would have
fallen due but for any discharge resulting from failure of another Lender to
take appropriate steps, in insolvency proceedings affecting the Borrower or such
Subsidiary Borrower, to preserve its entitlement to be paid that amount.
(ii) The Administrative Agent shall have its own independent right
to demand payment of the amounts payable by the Borrower and each
Subsidiary Borrower under this subsection 9.9(a), irrespective of any
discharge of the Borrower's or a Subsidiary Borrower's obligation to pay
those amounts to the other Lenders resulting from failure by them to take
appropriate steps, in insolvency proceedings affecting the Borrower or
such Subsidiary Borrower, to preserve their entitlement to be paid those
amounts.
(iii) Any amount due and payable by the Borrower or a Subsidiary
Borrower to the Administrative Agent under this subsection 9.9(a) shall be
decreased to the extent that the other Lenders have received (and are able
to retain) payment in full of the corresponding amount under the other
provisions of the Loan Documents and any amount due and payable by the
Borrower or a Subsidiary Borrower to the other Lenders under those
provisions shall be decreased to the extent that the Administrative Agent
has received (and is able to retain) payment in full of the corresponding
amount under this subsection 9.9(a).
(iv) The rights of the Lenders (other than the Administrative Agent)
to receive payment of amounts payable by the Borrower and each Subsidiary
Borrower under the Loan Documents are several and are separate and
independent from, and without prejudice to, the rights of the
Administrative Agent to receive payment under this subsection 9.9(a).
(b) All amounts from time to time received or recovered by the
Administrative Agent under subsection 9.9(a) and/or in connection with the
realization and enforcement of all or any part of the Security Documents shall
be held by the Administrative Agent in trust to apply in accordance with the
terms of the Loan Documents.
9.10 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement,
then the Required Lenders shall appoint from among the Lenders a successor agent
for the Lenders (with, as long as no Event of Default has occurred and is
continuing, the approval of the Borrower, which approval shall not be
unreasonably withheld). Upon the
75
acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon its appointment, and the former Administrative
Agent's rights, powers and duties as Administrative Agent shall be terminated,
without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement or any holders of
the Loans. Any appointed successor agent shall act as Administrative Agent only
through a branch in the United States in respect of Facility A, Facility B,
Facility C or Facility D. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Section 9 shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
9.11 The Syndication Agent and the Documentation Agents. The
Syndication Agent and the Documentation Agents do not assume any responsibility
or obligation under this Agreement or any of the other Loan Documents or any
duties as agents for the Lenders. The titles "Syndication Agent" and
"Documentation Agent" imply no fiduciary responsibility on the part of either of
the Syndication Agent or the Documentation Agents to any Person and the use of
such title does not impose on the Syndication Agent or the Documentation Agents
any duties or obligations under this Agreement or any of the other Loan
Documents.
Section 10. MISCELLANEOUS
10.1 Amendments and Waivers.
(a) The Administrative Agent, the Borrower and the Subsidiary
Borrowers may, from time to time, with the written consent of the Required
Lenders, enter into written amendments, supplements or modifications for the
purpose of adding any provisions to this Agreement, the Guarantee and Collateral
Agreements or any other Loan Document or changing in any manner the rights of
the Lenders or the Borrower or any Subsidiary Borrower hereunder or thereunder,
and, with the consent of the Required Lenders, the Administrative Agent, on
behalf of the Lenders, may execute and deliver to the Borrower a written
instrument waiving, on such terms and conditions as the Administrative Agent may
specify in such instrument, any of the requirements of this Agreement or any
other Loan Document or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, supplement or
modification shall (i) extend the final maturity of any Loan or reduce the rate
or extend the time of payment of interest or fees thereon, or reduce the
principal amount thereof, or change the amount or terms of any Lender's
Revolving Credit Commitment (including the Optional Currencies applicable to
such Lender) or reduce any outstanding L/C Obligation, or amend, modify or waive
any provision of this subsection (except as expressly provided herein), or
reduce the percentage specified in the definition of Required Lenders, or
consent to the assignment or transfer by the Borrower or any Subsidiary Borrower
of any of its rights and obligations under this Agreement or any other Loan
Document (except to the extent otherwise provided therein), or release the
guarantee obligations of any significant Guarantor (including, without
limitation, the Borrower) or all or substantially all of the collateral under
the Guarantee and Collateral Agreements, in each case without the written
consent of each Lender affected thereby, (ii) amend, modify or waive any other
provision hereof if the effect is to subordinate one of the Revolving Facilities
in right of payment to any other of the Revolving Facilities without the consent
of each Lender adversely affected thereby, (iii) amend, modify or waive any
provision of Section 9 without the written consent of the then Administrative
Agent, or (iv) amend, modify or waive the provisions of any Letters of Credit or
Reimbursement Obligation, without the written consent of the Borrower or the
relevant Subsidiary Borrower and the Issuing Lender, or the provisions
applicable to the Swing Line Loans without the consent of each Swing Loan
Lender. Any such waiver
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and any such amendment, supplement or modification shall be binding upon the
Borrower, the Subsidiary Borrowers, the Lenders and all future holders of the
Loans. In the case of any waiver, the Borrower and the Lenders shall be restored
to their former position and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon.
(b) This Agreement may be amended without consent of the Lenders, so
long as no Default or Event of Default shall have occurred and be continuing, as
follows:
(i) This Agreement will be amended to add Subsidiaries as
additional Subsidiary Borrowers (which in the case of a Foreign
Subsidiary, may at such time be designated by the Borrower as a
Regular Subsidiary Borrower) upon (x) execution and delivery by the
Borrower, such additional Subsidiary Borrowers and the
Administrative Agent, of a Joinder Agreement, substantially in the
form of Exhibit K (a "Joinder Agreement"), providing for such
Subsidiaries to become Subsidiary Borrowers, (y) agreement and
acknowledgment by the Borrower and such additional Subsidiaries that
the Guarantee and Collateral Agreement covers the obligations of
such additional Subsidiaries and (z) delivery to the Administrative
Agent of (1) corporate or other applicable resolutions, other
corporate or other applicable documents, certificates and legal
opinions in respect of such additional Subsidiary Borrowers
substantially equivalent to comparable documents delivered on the
Closing Date and (2) such other documents with respect thereto as
the Administrative Agent shall reasonably request.
(ii) This Agreement will be amended to remove any Subsidiary
as a Subsidiary Borrower upon execution and delivery by the Borrower
to the Administrative Agent of a written notification to such effect
and repayment in full of all Loans made to such Subsidiary Borrower,
cash collateralization of all L/C Obligations in respect of Letters
of Credit issued for the account of such Subsidiary Borrower and
repayment in full of all other amounts owing by such Subsidiary
Borrower under this Agreement and the other Loan Documents (it being
agreed that any such repayment shall be in accordance with the other
terms of this Agreement).
(iii) This Agreement may be amended as contemplated by
subsection 2.23(b).
(c) The Lenders (and each of their respective successors, assigns
and transferees) hereby authorize the Administrative Agent to release any
Collateral or the obligations of any Subsidiary under any Guarantee and
Collateral Agreement on their behalf in the event of a sale or other transfer of
such Collateral or such Subsidiary permitted under this Agreement.
(d) Notwithstanding any other provision herein, the terms and
provisions of Annex B, C or D may be amended, supplemented, modified or waived
in any manner which could not reasonably be considered as adversely affecting in
any material respect the benefits hereof and the rights and remedies hereunder
of the other Lenders with the consent of the Borrower, the Administrative Agent
and the Sterling Lenders, the Australian Dollar Lenders or the Canadian Dollar
Lenders, as the case may be.
10.2 Notices. Except as provided in subsections 2.2 and 2.3, all
notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing or by telecopy and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made when delivered
by hand, or when deposited in the mail, postage prepaid, or, in the case of
telecopy notice, when received, addressed as follows in the case of the Borrower
and each of the Subsidiary Borrowers and the
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Administrative Agent, and as set forth in Schedule 10.2 in the case of the
Lenders, or to such address or other address as may be hereafter notified by the
respective parties hereto and any future holders of the Loans:
The Borrower and
each Subsidiary Borrower: The Scotts Miracle-Gro Company
14111 Scottslawn Road
Marysville, Ohio 43041
Attention: Treasurer
Telephone: (937) 664-7221
Telecopy: (937) 578-5754
With a copy sent to: Vorys, Sater, Seymour and Pease LLP
52 East Gay Street
Columbus, Ohio 43215
Attention: John B. Weimer, Esq. and
Stephen D. Browning, Esq.
Telephone: (614) 464-8343
Telecopy: (614) 719-5086
The Administrative Agent: JPMorgan Chase Bank, N.A.
270 Park Avenue
New York, New York 10017
Attention.: Randolph E. Cates
Telephone: (212) 270-8997
Telecopy: (212) 270-6041
With a copy sent to: J.P. Morgan Europe Limited
125 London Wall
London EC2Y 5AJ England
Attention: Maxine Graves/Stephen Gillies,
Agency Department
Telephone: +44 207 325 5424
Telecopy: +44 207 777 2360
JPMorgan Chase Bank, N.A.
Loan and Agency Services
1111 Fannin Street
10th Floor
Houston, Texas 77002
Attention: Vaughan D. Nguyen
Telephone: (713) 750-3550
Telecopy: (713) 750-2932
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The Australian Administrative Agent: J.P. Morgan Australia Limited
Level 32, Grosvenor Place
225 George Street
Sydney NSW 2000 Australia
Attention: Jason M. Lock/Graham McKinley,
Agency
Telephone: +61-(2)-9220-3162/1907
Telecopy: +61-(2)-9247-7698
With a copy sent to: JPMorgan Chase Bank, N.A., Mumbai Mahakali
Caves Road, Chakala Junction
Floor 3
Mumbai 400093 India
Attention: Preetam D. Dalvi, Asia Loan
Operations
Telephone: (91-22) 56953625
Telecopy: (91-22) 56954361
The Canadian Administrative Agent: J.P. Morgan Bank, N.A., Toronto Branch
200 Bay Street
Royal Bank Plaza, Floor 18
Toronto M57 2J2 Canada
Attention: Amanda Vidulich
Telephone: (416) 981-9235
Telecopy: (416) 982-9128
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
10.4 Survival of Representations, Warranties and Indemnities. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement and the making of the Loans
hereunder. The obligation of the Borrower to make payments or to provide
indemnities as provided for in this Agreement shall survive payment in full of
the Loans, expiration of all Letters of Credit and termination of the Revolving
Credit Commitments and this Agreement.
10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay
or reimburse the Administrative Agent for all its reasonable and documented
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement, the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements of counsel to the Administrative Agent, (b) to pay or
reimburse each Lender and the Administrative Agent for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the reasonable fees and disbursements
of counsel (including, without limitation, in-house counsel) to the
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Administrative Agent and to the several Lenders, (c) to pay, indemnify and hold
each Lender and the Administrative Agent harmless from any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other similar non-income taxes (and, for the
avoidance of doubt, other than Excluded Taxes), if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents provided
that and notwithstanding any other provision of this Agreement to the contrary,
the Borrower and/or any Subsidiary Borrower shall only be liable to make any
payment to the Administrative Agent or any Lender regarding any UK stamp duty or
SDRT in respect of any transfer if such transfer is effected by an Assignment
and Acceptance which operates as a novation, i.e., if the original rights and
obligations as between the relevant Borrower and the transferor Lender are
extinguished and new rights and obligations between the relevant Borrower and
the transferee Lender are created, and (d) to pay, indemnify, and hold each
Lender and the Administrative Agent and their respective officers, directors,
trustees, employees, advisers and agents harmless from and against any and all
other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
(including the reasonable legal fees and expenses of each Lender and the
Administrative Agent with respect to third party enforcement actions arising out
of the transactions contemplated under this Agreement and the other Loan
Documents) with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan Documents and any such other
documents; provided, however, that with respect to subparagraphs (c) and (d),
the Borrower shall not be liable for the payment of any losses, costs,
penalties, judgments, suits, liabilities, damages, penalties, actions, expenses
or disbursements resulting solely from the gross negligence or willful
misconduct of any such Lender. The agreements in this subsection shall survive
repayment of the Loans, the Reimbursement Obligations and all other amounts
payable hereunder.
10.6 Successors and Assigns; Participations and Assignments. (a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby
(including any affiliate of the Issuing Lender that issues any Letter of
Credit), except that (i) the Borrower may not assign or otherwise transfer any
of its rights or obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by the Borrower without such
consent shall be null and void) and (ii) no Lender may assign or otherwise
transfer its rights or obligations hereunder except in accordance with this
Section.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more assignees (each, an "Assignee") all
or a portion of its rights and obligations under this Agreement (including all
or a portion of its Commitments and the Loans at the time owing to it) with the
prior written consent (such consent not to be unreasonably withheld or delayed)
of:
(A) the Borrower, provided that no consent of the Borrower shall be
required for an assignment to a Lender, an affiliate of a Lender, an
Approved Fund (as defined below) or, if an Event of Default under Section
8(a) or (f) has occurred and is continuing, any other Person;
(B) the Administrative Agent, provided that no consent of the
Administrative Agent shall be required for an assignment of any Revolving
Commitment to an assignee that is a Lender with a Revolving Commitment
immediately prior to giving effect to such assignment; and
(C) the Issuing Lender.
(ii) Assignments shall be subject to the following additional
conditions:
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(A) except in the case of an assignment to a Lender, an affiliate of
a Lender or an Approved Fund or an assignment of the entire remaining
amount of the assigning Lender's Revolving Credit Commitments or Loans
under any Revolving Facility, the amount of the Revolving Credit
Commitments or Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent) shall
not be less than $5,000,000, or the Non-Dollar Currency Equivalent
thereof, unless each of the Borrower and the Administrative Agent
otherwise consent, provided that (y) no such consent of the Borrower shall
be required if an Event of Default under Section 8(a) or (f) has occurred
and is continuing and (z) such amounts shall be aggregated in respect of
each Lender and its affiliates or Approved Funds, if any; provided
further, that no such assignment of less than all of an assigning Lender's
Commitments under a Revolving Facility shall reduce the assigning Lender's
Revolving Credit Commitment to less than $5,000,000 or the Non-Dollar
Currency Equivalent thereof or such other amount as agreed upon by the
Administrative Agent and the Borrower.
(B) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee of $3,500;
(C) the Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an administrative questionnaire; and
(D) the Assignee shall not be entitled to the benefits of Section
2.18 unless the Assignee complies with the applicable requirements set
forth in Section 2.18(b).
For the purposes of this Section 10.6, "Approved Fund" means any
Person (other than a natural person) that is engaged in making, purchasing,
holding or investing in bank loans and similar extensions of credit in the
ordinary course of its business and that is administered or managed by (a) a
Lender, (b) an affiliate of a Lender or (c) an entity or an affiliate of an
entity that administers or manages a Lender.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) below, from and after the effective date specified in each
Assignment and Acceptance the Assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.16, 2.17, 2.18 and 10.5). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 10.6
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.
(iv) The Administrative Agent, acting for this purpose as an agent
of the Borrower, shall maintain at one of its offices a copy of each Assignment
and Acceptance delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Revolving Credit Commitments of, and
principal amount of the Loans and L/C Obligations owing to, each Lender pursuant
to the terms hereof from time to time (the "Register"). The entries in the
Register shall, in the absence of manifest error, be conclusive, and the
Borrower, the Administrative Agent, the Issuing Lender and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The
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Register shall be available for inspection by the Borrower, the Issuing Lender
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.
(v) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an Assignee, the Assignee's completed
administrative questionnaire (unless the Assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(c) (i) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a "Participant") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of its Commitments and the
Loans owing to it); provided that (A) such Lender's obligations under this
Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrower, the Administrative Agent, the Issuing Lender and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, modification or
waiver that (1) requires the consent of each Lender directly affected thereby
pursuant to the proviso to the second sentence of Section 10.1 and (2) directly
affects such Participant. Subject to paragraph (c)(ii) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.14, 2.15, 2.16 and 2.18 to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to paragraph (b) of this
Section. To the extent permitted by law, each Participant also shall be entitled
to the benefits of Section 10.7(b) as though it were a Lender.
(ii) A Participant shall not be entitled to receive any greater
payment under Section 2.17 or 2.18 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. Any Participant shall not be entitled to the
benefits of Section 2.18 unless such Participant complies with the applicable
requirements set forth in Section 2.18(b).
(d) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or Assignee for such Lender as a party hereto.
(e) The Borrower, upon receipt of written notice from the relevant
Lender, agrees to issue a promissory note (a "Note") to any Lender requiring
Notes to facilitate transactions of the type described in paragraph (d) above.
10.7 Adjustments; Set-off.
(a) Except to the extent that this Agreement expressly provides for
payments to be allocated to a particular Lender or to the Lenders under a
particular Revolving Facility, if any Lender (a
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"Benefitted Lender") shall, at any time after the Loans and other amounts
payable hereunder shall immediately become due and payable pursuant to Section
8, receive any payment of all or part of the Obligations owing to it, or receive
any collateral in respect thereof (whether voluntarily or involuntarily, by
set-off, pursuant to events or proceedings of the nature referred to in Section
8(f), or otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of the Obligations
owing to such other Lender, such Benefitted Lender shall purchase for cash from
the other Lenders a participating interest in such portion of the Obligations
owing to each such other Lender, or shall provide such other Lenders with the
benefits of any such collateral, as shall be necessary to cause such Benefitted
Lender to share the excess payment or benefits of such collateral ratably with
each of the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefitted Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided
by law, upon the occurrence of an Event of Default and acceleration of the
obligations owing in connection with this Agreement, each Lender shall have the
right, without prior notice to the Borrower or any Subsidiary Borrower, any such
notice being expressly waived by the Borrower to the extent permitted by
applicable law, to set off, appropriate and apply against any indebtedness,
whether matured or unmatured, of the Borrower or such Subsidiary Borrower to
such Lender, any amount held by or owing from such Lender to or for the credit
or the account of the Borrower or such Subsidiary Borrower at, or at any time
after, the happening of any of the above mentioned events, and the aforesaid
right of set-off may be exercised by such Lender against the Borrower or such
Subsidiary Borrower or against any trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, receiver, custodian or execution,
judgment or attachment creditor of the Borrower or such Subsidiary Borrower, or
against anyone else claiming through or against the Borrower or such Subsidiary
Borrower or such trustee in bankruptcy, debtor in possession, assignee for the
benefit of creditors, receiver, custodian or execution, judgment or attachment
creditor, notwithstanding the fact that such right of set-off shall not have
been exercised by such Lender prior to the making, filing or issuance of, or
service upon such Lender of, or of notice of, any such petition, assignment for
the benefit of creditors, appointment or application for the appointment of a
receiver, or issuance of execution, subpoena, order or warrant. Each Lender
agrees promptly to notify the Borrower or such Subsidiary Borrower after any
such set-off and application made by such Lender, provided that the failure to
give such notice shall not affect the validity of such set-off and application.
Any set-off pursuant to this paragraph may be effected notwithstanding that the
currencies of the offsetting indebtedness may be different, and any such set-off
shall be done by reference to the spot exchange rate for such currencies on the
date of such set-off. Each Lender agrees that it will promptly pay to the
Administrative Agent the amount of any set-off by it against the obligations
hereunder as contemplated above for distribution by the Administrative Agent in
accordance with the provisions of this Agreement.
(c) In calculating the amount of Commitments, Loans or Obligations
for any purpose under this Agreement and the other Loan Documents, including,
without limitation, voting or distribution purposes, the amount of any thereof
which is denominated in a currency other than Dollars shall be converted into
Dollars at the Dollar Equivalent thereof on the date on which such calculation
is to be made.
10.8 Enforceability; Usury. In no event shall any provision of this
Agreement or any other instrument evidencing or securing the indebtedness of the
Borrower or any Subsidiary Borrower hereunder ever obligate the Borrower or any
of the Subsidiary Borrowers to pay or allow any Lender to collect interest on
the Loans or any other indebtedness of the Borrower or any of the Subsidiary
Borrowers hereunder at a rate greater than the maximum non-usurious rate
permitted by applicable law (herein referred to as the "Highest Lawful Rate"),
or obligate the Borrower or any of the Subsidiary
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Borrowers to pay any taxes, assessments, charges, insurance premiums or other
amounts to the extent that such payments, when added to the interest payable on
the Loans or any other indebtedness hereunder, would be held to constitute the
payment by the Borrower or such Subsidiary Borrower of interest at a rate
greater than the Highest Lawful Rate; and this provision shall control over any
provision to the contrary.
Without limiting the generality of the foregoing, in the event the
maturity of all or any part of the principal amount of the indebtedness of the
Borrower or any of the Subsidiary Borrowers hereunder shall be accelerated for
any reason, then such principal amount so accelerated shall be credited with any
interest theretofore paid thereon in advance and remaining unearned at the time
of such acceleration. If, pursuant to the terms of this Agreement, any funds are
applied to the payment of any part of the principal amount of the indebtedness
of the Borrower or any of the Subsidiary Borrowers hereunder prior to the
maturity thereof, then (a) any interest which would otherwise thereafter accrue
on the principal amount so paid by such application shall be canceled, and (b)
the indebtedness of the Borrower or such Subsidiary Borrower hereunder remaining
unpaid after such application shall be credited with the amount of all interest,
if any, theretofore collected on the principal amount so paid by such
application and remaining unearned at the date of said application; and if the
funds so applied shall be sufficient to pay in full all the indebtedness of the
Borrower or such Subsidiary Borrower hereunder, then the Lenders shall refund to
the Borrower or such Subsidiary Borrower all interest theretofore paid thereon
in advance and remaining unearned at the time of such acceleration. Regardless
of any other provision in this Agreement, or in any of the written evidences of
the indebtedness of the Borrower or any of the Subsidiary Borrowers hereunder,
neither the Borrower nor any of the Subsidiary Borrowers shall be required to
pay any unearned interest on such indebtedness or any portion thereof, or be
required to pay interest thereon at a rate in excess of the Highest Lawful Rate
construed by courts having competent jurisdiction thereof.
10.9 Judgment. The obligations of the Borrower or any Subsidiary
Borrower in respect of this Agreement and any Note due to any party hereto or
any holder of any bond shall, notwithstanding any judgment in a currency (the
"judgment currency") other than the currency in which the sum originally due to
such party or such holder is denominated (the "original currency"), be
discharged only to the extent that on the Business Day following receipt by such
party or such holder (as the case may be) of any sum adjudged to be so due in
the judgment currency such party or such holder (as the case may be) may in
accordance with normal banking procedures purchase the original currency with
the judgment currency; if the amount of the original currency so purchased is
less than the sum originally due to such party or such holder (as the case may
be) in the original currency, the Borrower or such Subsidiary Borrower, as the
case may be, agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify such party or such holder (as the case may be) against
such loss, and if the amount of the original currency so purchased exceeds the
sum originally due to any party to this Agreement or any holder of Notes (as the
case may be), such party or such holder (as the case may be), agrees to remit to
the Borrower or such Subsidiary Borrower, as the case may be, such excess. This
covenant shall survive the termination of this Agreement and payment of the
Loans and all other amounts payable hereunder.
10.10 Counterparts. This Agreement may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
hereto shall be delivered to the Borrower and the Administrative Agent. Delivery
of an executed counterpart of a signature page of this Agreement by telecopy
shall be effective as delivery of a manually executed counterpart of this
Agreement.
10.11 Governing Law; No Third Party Rights. This Agreement and the
rights and obligations of the parties under this Agreement shall be governed by,
and construed and interpreted in accordance with, the law of the State of New
York. This Agreement is solely for the benefit of the parties
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hereto and their respective successors and assigns, and no other Person shall
have any right, benefit, priority or interest under, or because of the existence
of, this Agreement. If any amendment to this Agreement provides for (a) the
payment in full of all the Loans of a Lender outstanding under this Agreement,
together with any accrued interest thereon and any accrued fees payable to such
Lender under this Agreement, and (b) the termination of all Commitments of such
Lender under this Agreement, then (i) such amendment shall not require the
consent of such Lender (but shall in any event require the consent of each
continuing Lender with Loans or a Commitment under the same Revolving Facility),
and (ii) concurrently with the effectiveness of such amendment, such Lender
shall cease to be a party to this Agreement and shall cease to have any rights
under this Agreement (other than rights hereunder expressly stated to survive
the termination of this Agreement and any rights hereunder and under the other
Loan Documents with respect to any Hedge Agreement entered into by such Lender
or any of its affiliates prior to the date such amendment becomes effective).
10.12 Headings. The headings of the Sections and subsections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute a part hereof.
10.13 Submission To Jurisdiction; Waivers. Each of the Borrower and
the Subsidiary Borrowers hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts
of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Borrower and the Subsidiary Borrowers at their respective addresses set
forth in subsection 10.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred
to in this subsection any special, exemplary, punitive or consequential
damages.
(f) Upon any Foreign Subsidiary becoming a Foreign Subsidiary
Borrower, such Foreign Subsidiary Borrower hereby agrees to irrevocably
and unconditionally appoint the Borrower or an agent for service of
process located in The City of New York (the "New York Process
Administrative Agent"), reasonably satisfactory to the Administrative
Agent, as its agent to receive on behalf of such Foreign Subsidiary
Borrower and its property service of copies of the summons and complaint
and any other process which may be served in any action or proceeding in
any such New York State or Federal court described in paragraph (a) of
this subsection and agrees promptly to appoint a successor New York
Process Administrative Agent in The City of
85
New York (which successor New York Process Administrative Agent shall
accept such appointment in a writing reasonably satisfactory to the
Administrative Agent) prior to the termination for any reason of the
appointment of the initial New York Process Administrative Agent. In any
such action or proceeding in such New York State or Federal court, such
service may be made on such Foreign Subsidiary Borrower by delivering a
copy of such process to such Foreign Subsidiary Borrower in care of the
New York Process Administrative Agent at the New York Process
Administrative Agent's address and by depositing a copy of such process in
the mails by certified or registered air mail, addressed to such Foreign
Subsidiary Borrower at its address specified in subsection 10.2 (such
service to be effective upon such receipt by the New York Process
Administrative Agent and the depositing of such process in the mails as
aforesaid). Each of the Foreign Subsidiary Borrowers hereby irrevocably
and unconditionally authorizes and directs the New York Process
Administrative Agent to accept such service on its behalf. As an alternate
method of service, each of the Foreign Subsidiary Borrowers irrevocably
and unconditionally consents to the service of any and all process in any
such action or proceeding in such New York State or Federal court by
mailing of copies of such process to such Foreign Subsidiary Borrower by
certified or registered air mail at its address specified in subsection
10.2. Each of the Foreign Subsidiary Borrowers agrees that, to the fullest
extent permitted by applicable law, a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions
by suit on the judgment or in any other manner provided by law.
(g) To the extent that any Foreign Subsidiary Borrower has or
hereafter may acquire any immunity (sovereign or otherwise) from any legal
action, suit or proceeding, from jurisdiction of any court or from set-off
or any legal process (whether service or notice, attachment prior to
judgment, attachment in aid of execution of judgment, execution of
judgment or otherwise) with respect to itself or any of its property, such
Foreign Subsidiary Borrower hereby irrevocably waives and agrees not to
plead or claim such immunity in respect of its obligations under this
Agreement and any Note.
10.14 Acknowledgments. Each of the Borrower and the Subsidiary
Borrowers hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship to the Borrower or any Subsidiary Borrower, and the
relationship between Administrative Agent and Lenders, on one hand, and
the Borrower or any Subsidiary Borrower, on the other hand, is solely that
of debtor and creditor; and
(c) no joint venture exists among the Lenders or among the Borrower
or any Subsidiary Borrower and the Lenders.
10.15 Confidentiality. Each of the Administrative Agent and each
Lender agrees to keep confidential all non-public information provided to it by
any Loan Party, the Administrative Agent or any Lender pursuant to or in
connection with this Agreement that is designated by the provider thereof as
confidential; provided that nothing herein shall prevent the Administrative
Agent or any Lender from disclosing any such information (a) to the
Administrative Agent, any other Lender or any affiliate thereof, (b) subject to
an agreement to comply with the provisions of this subsection 10.15, to any
actual or prospective transferee or any direct or indirect counterparty to any
Hedging Agreement (or any professional advisor to such counterparty), (c) to its
employees, directors, agents, attorneys, accountants and other professional
advisors or those of any of its affiliates (it being understood that the Persons
to
86
whom such disclosure is made will be informed of the confidential nature of such
information and instructed to keep such information confidential), (d) upon the
request or demand of any Governmental Authority, (e) in response to any order of
any court or other Governmental Authority or as may otherwise be required
pursuant to any Requirement of Law, (f) if requested or required to do so in
connection with any litigation or similar proceeding, (g) that has been publicly
disclosed, (h) to the National Association of Insurance Commissioners or any
similar organization or any nationally recognized rating agency that requires
access to information about a Lender's investment portfolio in connection with
ratings issued with respect to such Lender, or (i) in connection with the
exercise of any remedy hereunder or under any other Loan Document.
10.16 WAIVERS OF JURY TRIAL. THE BORROWER, THE SUBSIDIARY BORROWERS,
THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.17 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.18 USA PATRIOT Act. Each Lender hereby notifies the Borrower that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the "Act"), it is required to obtain,
verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will
allow such Lender to identify the Borrower in accordance with the Act. The
Borrower shall promptly provide such information upon request by any Lender.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in New York, New York by their proper and duly
authorized officers as of the day and year first above written.
THE SCOTTS MIRACLE-GRO COMPANY
By:/s/ Christopher L. Nagel
-----------------------------------------
Name: Christopher L. Nagel
Title: Executive Vice President and CFO
HYPONEX CORPORATION
By:/s/ Christopher L. Nagel
-----------------------------------------
Name: Christopher L. Nagel
Title: Executive Vice President and CFO
SCOTTS AUSTRALIA PTY. LTD.
By: /s/ Edward R. Claggett
----------------------------------------
Name: Edward R. Claggett
Title: Director
SCOTTS CANADA LTD.
By: /s/ Edward R. Claggett
----------------------------------------
Name: Edward R. Claggett
Title: Vice President & Assistant Secretary
SCOTTS HOLDINGS LIMITED
By: /s/ Edward R. Claggett
----------------------------------------
Name: Edward R. Claggett
Title: Director
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
SCOTTS MANUFACTURING COMPANY
By: /s/ Paul DeSantis
----------------------------------------
Name: Paul DeSantis
Title: Vice President and Treasurer
EG Systems, Inc.
By: /s/ Paul DeSantis
----------------------------------------
Name: Paul DeSantis
Title: Vice President and Treasurer
SCOTTS TEMECULA OPERATIONS, LLC
By: /s/ Paul DeSantis
----------------------------------------
Name: Paul DeSantis
Title: Vice President and Treasurer
THE SCOTTS COMPANY (UK) LTD.
By: /s/ Edward R. Claggett
----------------------------------------
Name: Edward R. Claggett
Title: Director
SCOTTS TREASURY EEIG
By: /s/ Paul DeSantis
----------------------------------------
Name: Paul DeSantis
Title: Authorized Signatory
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
THE SCOTTS COMPANY LLC
By: /s/ Paul DeSantis
----------------------------------------
Name: Paul DeSantis
Title: Vice President and Treasurer
SMITH & HAWKEN, LTD.
By: /s/ Christopher L. Nagel
----------------------------------------
Name: Christopher L. Nagel
Title: Executive Vice President and CFO
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent and as a Lender
By: /s/ Randolph Cates
-----------------------------------------
Name: Randolph Cates
Title: Vice President
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
JPMORGAN EUROPE LIMITED
as Sterling Administrative Agent
By: /s/ M. Graves
----------------------------------------
Name: M. Graves
Title: Associate
By: /s/ Ching Loh
----------------------------------------
Name: Ching Loh
Title: Associate
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
J.P. MORGAN AUSTRALIA LIMITED
By: /s/ Randolph Cates
----------------------------------------
Name: Randolph Cates
Title: Vice President, JPMorgan Chase Bank,
N.A.
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
BANK OF AMERICA, N.A.,
as Syndication Agent and as a Lender
By: /s/ Sharon Burkes Horos
----------------------------------------
Name: Sharon Burkes Horos
Title: Vice President
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
CITICORP NORTH AMERICA, INC.,
as Syndication Agent and as a Lender
By: /s/ William S. Timmons, III
--------------------------------
Name: William S. Timmons, III
Title: Vice President
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY,
as Document Agent and as a Lender
By: /s/ Spencer Hughes
---------------------------
Name: Spencer Hughes
Title: Vice President
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
BNP PARIBAS,
as Documentation Agent and as a Lender
By: /s/ Curt Price
----------------------------
Name: Curt Price
Title: Managing Director
By: /s/ Gaye Plunkett
----------------------------
Name: Gaye Plunkett
Title: Vice President
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK, B.A. "RABOBANK
INTERNATIONAL" New York Branch,
as Documentation Agent and as a Lender
By: /s/ Eric Hurshman
---------------------------
Name: Eric Hurshman
Title: Managing Director
By: /s/ Brett Delfino
---------------------------
Name: Brett Delfino
Title: Executive Director
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
HARRIS N.A.,
as Documentation Agent and as a Lender
By: /s/ Jennifer Wendrow
---------------------------
Name: Jennifer Wendrow
Title: Vice President
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
SUNTRUST BANK,
as Documentation Agent and as a Lender
By: /s/ Molly J. Drennan
---------------------------
Name: Molly J. Drennan
Title: Director
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
1 ST FARM CREDIT SERVICES, PCA
By: /s/ Dale A. Richardson
----------------------------------
Name: Dale A. Richardson
Title: VP-Capital Markets
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
BANK OF MONTREAL
By: /s/ Ben Ciallella
---------------------------
Name: Ben Ciallella
Title: Vice President
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
CALYON NEW YORK BRANCH
By: /s/ Joseph A. Philbin
--------------------------
Name: Joseph A. Philbin
Title: Director
By: /s/ Lee E. Greve
--------------------------
Name: Lee E. Greve
Title: Managing Director
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
CITIZENS BANK OF PENNSYLVANIA
By: /s/ Dwayne R. Finney
----------------------------
Name: Dwayne R. Finney
Title: Senior Vice President
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
COBANK, ACB,
as Documentation Agent and as a Lender
By: /s/ S. Richard Dill
------------------------
Name: S. Richard Dill
Title: Vice President
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
COMERICA
By: /s/ Scott M. Kowalski
----------------------------------
Name: Scott M. Kowalski
Title: Assistant Vice President
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
FARM CREDIT BANK OF TEXAS
By: /s/ Luis M. H. Requejo
----------------------------
Name: Luis M. H. Requejo
Title: Vice President
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
FIFTH THIRD BANK, an Ohio banking
Corporation
By: /s/ Christopher D. Jones
-------------------------------
Name: Christopher D. Jones
Title: Vice President
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
FORTIS CAPITAL CORP.
By: /s/ John W. Deegan
-------------------------------
Name: John W. Deegan
Title: Senior Vice President
By: /s/ Kathleen de Lathauwer
-------------------------------
Name: Kathleen de Lathauwer
Title: Senior Vice President
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
LASALLE BANK, N.A.
By: /s/ Warren F. Weber
------------------------
Name: Warren F. Weber
Title: Senior Vice President
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
MIZUHO CORPORATE BANK, LTD.
By: /s/ Raymond Ventura
----------------------------
Name: Raymond Ventura
Title: Senior Vice President
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
NATIONAL CITY BANK
By: /s/ Thomas E. Redmond
----------------------------
Name: Thomas E. Redmond
Title: Senior Vice President
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
PEOPLE'S BANK
By: /s/ George F. Paik
--------------------------
Name: George F. Paik
Title: Vice President
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
SUMITOMO MITSUI BANKING CORPORATION
By: /s/ Yoshihiro Hyakutome
------------------------------
Name: Yoshihiro Hyakutome
Title: Joint General Manager
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
THE BANK OF NEW YORK
By: /s/ Kenneth R. McDonnell
-----------------------------
Name: Kenneth R. McDonnell
Title: Vice President
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
SCOTIABANC INC.
By: /s/ N. Bell
------------------------
Name: N. Bell
Title: Sr. Manager
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
THE NORTHERN TRUST COMPANY
By: /s/ David J. Sullivan
-------------------------
Name: David J. Sullivan
Title: Vice President
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
UFJ BANK LIMITED
By: /s/ Russell Bohner
------------------------
Name: Russell Bohner
Title: Vice President
SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
U.S BANK NATIONAL ASSOCIATION
By: /s/ Robert H. Friend
---------------------------
Name: Robert H. Friend
Title: Vice President
Annex A
PRICING GRID
Leverage Applicable Facility
Ratio Margin Fee
- ------------------- --------------- --------
LIBOR ABR
------ ------
> or = 3.25 to 1.00 1.200% 0.200% 0.300%
> or = 2.75 to 1.00 1.000% 0.000% 0.250%
> or = 2.25 to 1.00 0.750% 0.000% 0.250%
> or = 1.75 to 1.00 0.625% 0.000% 0.250%
> or = 1.25 to 1.00 0.550% 0.000% 0.200%
< 1.25 to 1.00 0.450% 0.000% 0.175%
Changes in the Applicable Margin or in the Facility Fee Rate resulting from
changes in the Leverage Ratio shall become effective on the date (the
"Adjustment Date") on which financial statements are delivered to the Lenders
pursuant to subsection 6.1 (but in any event not later than the 45th day after
the end of each of the first three quarterly periods of each fiscal year of the
Borrower or the 90th day after the end of each fiscal year of the Borrower, as
the case may be) and shall remain in effect until the next change to be effected
pursuant to this paragraph. If any financial statements referred to above are
not delivered within the time periods specified above, then, until such
financial statements are delivered, the Leverage Ratio as at the end of the
fiscal period that would have been covered thereby shall for the purposes of
this definition be deemed to be greater than or equal to 3.25 to 1.00. In
addition, at all times while an Event of Default shall have occurred and be
continuing, the Leverage Ratio shall for the purposes of this definition be
deemed to be greater than 3.25 to 1.00. Each determination of the Leverage Ratio
pursuant to this pricing grid shall be made with respect to (or, in the case of
Average Total Indebtedness, as at the end of) the period of four consecutive
fiscal quarters of the Borrower ending at the end of the period covered by the
relevant financial statements.
ANNEX B
SECTION 1. DEFINITIONS
Defined Terms. Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement, and the following terms shall have the following meanings:
"Aggregate Sterling Revolving Extensions of Credit" shall mean an
amount equal to the sum of (a) the aggregate principal amount of all
Sterling Loans (including, without limitation, Sterling Swing Line Loans
borrowed under Sterling Commitments) then outstanding and (b) the
aggregate amount of all Sterling L/C Obligations then outstanding.
"Aggregate Facility B Revolving Extensions of Credit" shall mean an
amount equal to the sum of (a) the aggregate principal amount of all
Facility B Loans (including, without limitation, Sterling Swing Line Loans
borrowed under Facility B Commitments) then outstanding and (b) the
aggregate amount of all Sterling L/C Obligations then outstanding in
respect of Letters of Credit issued under the Facility B Commitments.
"Applicable Margin for Sterling Borrowing" shall mean for each type
of Sterling Loan, the rate per annum set forth under the relevant column
heading in the pricing grid attached as Appendix I hereto.
"Application" shall mean an application, in such form as the
Sterling Issuing Lender may specify from time to time, requesting such
Sterling Issuing Lender to open a Sterling Letter of Credit.
"Available Sterling Commitment" shall mean, as to any Lender at any
time, the amount equal to the excess, if any, of (a) such Lender's
Sterling Commitment over (b) the sum of such Lender's (i) ratable portion
of the Aggregate Facility B Revolving Extensions of Credit and (ii)
ratable portion of the Aggregate Sterling Revolving Extensions of Credit.
The Available Sterling Commitment may be calculated as being negative at
any time.
"Borrowing Date (U.K.)" shall mean any Business Day (U.K.) specified
in a notice as a date on which the Sterling Subsidiary Borrower requests
the relevant Sterling Lenders to make Sterling Loans under this Annex B to
the Credit Agreement.
"Business Day (U.K.)" shall mean a day on which banks are open for
business in London but excludes Saturday, Sunday and any other day which
is a legal holiday in London.
"Eligible U.K. Bank" shall mean a Person that is both (i) a bank as
defined in Section 840A of the United Kingdom Income and Corporation Taxes
Act 1988, and (ii) a Person within the charge to United Kingdom
corporation tax (i.e., a United Kingdom resident company or a non-resident
company which is carrying on a trade in the United Kingdom through a
permanent establishment in the United Kingdom to which the beneficial
interest in interest accrued under Loans made to the Borrower or a
Subsidiary Borrower is attributable and which is not entitled to exemption
from tax in respect of that interest).
"Facility Fee Rate" shall mean the rate per annum set forth under
the relevant column heading in the pricing grid attached as Appendix I
hereto.
2
"Interest Payment Date" shall mean (a) as to any Reference Rate
Loan, the last day of each March, June, September and December, commencing
on the first of such days to occur after such Reference Rate Loan is made
or any LIBOR Loan is converted to such Reference Rate Loan, (b) as to any
LIBOR Loan in respect of which the relevant Sterling Subsidiary Borrower
has selected an Interest Period of one month, two months or three months,
the last day of such Interest Period and (c) as to any LIBOR Loan in
respect of which the relevant Sterling Subsidiary Borrower has selected a
longer Interest Period than the periods described in preceding clause (b),
the day three months after the commencement of such Interest Period and
the last day of such Interest Period.
"Interest Period" shall mean with respect to any LIBOR Loan, (i)
initially, the period commencing on, as the case may be, the borrowing or
conversion date with respect to a LIBOR Loan, and ending one, two, three
or six months thereafter, as selected by the relevant Sterling Subsidiary
Borrower in its irrevocable written notice of borrowing as provided in
subsection 2.2 or its written irrevocable notice of conversion as provided
in subsection 2.11 and (ii) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to such LIBOR Loan
and ending one, two, three or six months thereafter, as selected by the
relevant Sterling Subsidiary Borrower by irrevocable written notice to the
Sterling Administrative Agent not less than three Business Days (U.K.)
prior to the last day of then current Interest Period with respect to such
Sterling Loan; provided that all of the foregoing provisions relating to
Interest Periods are subject to the following:
1. if any Interest Period pertaining to a LIBOR Loan would
otherwise end on a day which is not a Business Day (U.K.), that
Interest Period shall be extended to the next succeeding Business
Day (U.K.) unless the result of such extension would be to carry
such Interest Period into another calendar month in which event such
Interest Period shall end on the next preceding Business Day (U.K.);
2. if the relevant Sterling Subsidiary Borrower shall fail to
give notice as provided in clauses (i) and (ii) in this definition,
the relevant Sterling Subsidiary Borrower shall be deemed to have
requested conversion of the affected LIBOR Loan to a Reference Rate
Loan on the last day of then current Interest Period with respect
thereto;
3. any Interest Period that would otherwise extend beyond the
Revolving Credit Termination Date shall end on the Revolving Credit
Termination Date; and
4. any Interest Period pertaining to a LIBOR Loan that begins
on the last Business Day (U.K.) of a calendar month (or on day a for
which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last
Business Day (U.K.) of a calendar month.
"LIBOR Base Rate" shall mean, with respect to any LIBOR Loan for any
Interest Period therefor:
1. the rate per annum (rounded to the nearest 1/16 of 1%)
appearing on the Screen for such currency as the London Interbank
Offered Rate for deposits in such currency at approximately 11:00
a.m. London time (or as soon thereafter as practicable) on (in the
case of any LIBOR Loan in Sterling) or two Business Days prior to
(in the case of any LIBOR Loan in euros) the first day of such
Interest Period as the London Interbank Offered Rate for such
currency having a term comparable to such Interest
3
Period and in an amount equal to the Sterling or euro equivalent, as
the case may be, of U.S.$1,000,000; or
2. if such rate does not appear on the Screen (or, if the
Screen shall cease to be publicly available or if the information
contained on the Screen, in the Sterling Administrative Agent's
reasonable judgment, shall cease accurately to reflect such LIBOR
Base Rate, as reported by any publicly available source of similar
market data selected by the Sterling Administrative Agent that, in
the Sterling Administrative Agent's reasonable judgment, accurately
reflects such LIBOR Base Rate), the LIBOR Base Rate shall mean, with
respect to any LIBOR Loan for any Interest Period, the arithmetic
mean, as determined by the Sterling Administrative Agent, of the
rate per annum (rounded to the nearest 1/16 of 1%) quoted by each
relevant Reference Bank at approximately 11:00 a.m. London time (or
as soon thereafter as practicable) on the first day of the Interest
Period for such Loan for the offering by such Reference Bank to
leading banks in the London interbank market of deposits in such
currency having a term comparable to such Interest Period and in an
amount comparable to the principal amount of the LIBOR Loan to be
made by such Reference Bank (or its applicable Lending Installation,
as the case may be) for such Interest Period.
"LIBOR Loans" shall mean the Sterling Loans hereunder at such time
as they are made and/or being maintained at a rate of interest based upon
the applicable LIBOR Rate.
"LIBOR Rate" shall mean with respect to a LIBOR Loan for each day
during each Interest Period pertaining thereto, the sum of the LIBOR Base
Rate plus, to the extent generally applicable to loans to the relevant
Borrower or Subsidiary Borrower, the Financial Services Authority charges
for such day.
"Post-Default Rate" shall mean a rate equal to the sum or 2% plus
the rate of interest otherwise applicable to such Sterling Loan.
"Reference Banks": JPMorgan Chase Bank, N.A., Citicorp North
America, Inc. and Bank of America, N.A. or such other Sterling Lenders, as
determined by the Sterling Administrative Agent, from time to time.
"Reference Rate": the rates of interest publicly announced by the
Reference Banks from time to time as their respective reference or prime
rates, which such rates may not be the lowest rate of interest charged by
such Reference Banks.
"Reference Rate Loans": Sterling Loans hereunder at such time as
they are made or being maintained at a rate of interest based upon the
Reference Rate.
"Requirement of Law" shall mean, as to any Person, the Certificate
of Incorporation or Articles of Incorporation, as the case may be, and
Code of Regulations and/or By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or a court or other Governmental Authority,
in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
"Screen" shall mean the Telerate Page on which appears the LIBOR
Base Rate for deposits in Sterling or euros, as applicable; provided that,
if there is no such Telerate Page, the relevant Bloomberg Financial
Markets Service page will be substituted.
4
"Sterling" or "(pound)" shall mean pounds sterling in the lawful
currency of the United Kingdom.
"Sterling Administrative Agent" shall mean J.P. Morgan Europe
Limited, together with its affiliates, as the agent for the Sterling
Lenders under the Credit Agreement.
"Sterling Administrative Office" shall mean the Sterling
Administrative Agent's office located at 125 London Wall, London England
EC2 5AJ, telecopy: +44-207-777-2360, attention: Maxine Graves/Stephen
Gillies, Agency Department, or such other office in the United Kingdom as
may be designated as such by the Sterling Administrative Agent by written
notice to the Sterling Subsidiary Borrowers and the Sterling Lenders.
"Sterling Commitment" shall mean, as to any Sterling Lender, the
obligation of such Sterling Lender to make Sterling Loans and participate
in Sterling Swing Line Loans or Sterling Letters of Credit hereunder in an
aggregate principal or face amount at any one time outstanding up to but
not exceeding the amount set forth opposite such Sterling Lender's name on
Schedule 1 to the Credit Agreement under the caption "Sterling Commitment"
or in the Assignment and Acceptance pursuant to which such Sterling Lender
became party to the Credit Agreement, as the same may be changed from time
to time pursuant to the terms hereof. The original aggregate principal
amount of the Sterling Commitments is the Sterling or euro equivalent of
U.S.$300,000,000.
"Sterling Commitment Percentage" shall mean as to any Sterling
Lender at any time, the percentage of the aggregate Sterling Commitments
then constituted by such Sterling Lender's Sterling Commitment.
"Sterling Facility" shall mean the Sterling Commitments together
with the Aggregate Sterling Revolving Extensions of Credit.
"Sterling Issuing Lender" shall mean J.P. Morgan Europe Limited.
"Sterling L/C Commitment" shall mean the amount equal to the
Sterling or euro equivalent of U.S.$65,000,000.
"Sterling L/C Obligations" shall mean, at any time, an amount equal
to the sum of (a) the aggregate then undrawn and unexpired amount of then
outstanding Sterling Letters of Credit and (b) the aggregate amount of
drawings under Sterling Letters of Credit which have not then been
reimbursed pursuant to Section 3.
"Sterling L/C Participants" shall mean the collective reference to
all the Sterling Lenders other than the Issuing Lender.
"Sterling Lender" shall mean each Lender that has a Sterling
Commitment or that holds Sterling Loans; collectively, the "Sterling
Lenders". Each Sterling Lender on the date hereof represents that it is an
Eligible U.K. Bank.
"Sterling Letter of Credit" shall mean any Sterling Standby L/C or
Sterling Trade L/C, as each term is defined in subsection 3.1.
"Sterling Loan" shall mean any Loan made under the Sterling
Commitments pursuant to subsection 2.1; collectively, the "Sterling
Loans".
5
"Sterling Lending Office" shall mean for each Sterling Lender, the
lending office for such Sterling Lender (or of an affiliate of such
Sterling Lender) designated for each type of Sterling Loan in the
Administrative Questionnaire of such Sterling Lender or such other lending
office of such Sterling Lender (or of an affiliate of such Sterling
Lender) as such Sterling Lender may from time to time specify to the
Sterling Administrative Agent and the Sterling Subsidiary Borrowers as the
office by which its Sterling Loans of such type are to be made and
maintained.
"Sterling Swing Line Commitment" shall mean the obligation of the
Sterling Swing Line Lender, at any date, to make a Sterling Swing Line
Loan pursuant to subsection 2.3(a) in the amount referred to therein.
"Sterling Swing Line Lender" shall mean J.P. Morgan Europe Limited.
"Sterling Swing Line Loan" shall mean any Sterling Swing Line Loan
made pursuant to subsection 2.3 hereof.
"Telerate Page" shall mean the "British Bankers Assoc. Interest
Settlement Rates Page" display designated on the Moneyline Telerate for
the purpose of displaying the rates at which Sterling or euro deposits, as
applicable, are offered by leading banks in the London interbank deposit
market.
SECTION 2. THE STERLING COMMITMENTS
2.1. The Sterling Commitments. Subject to the terms and conditions
hereof, each Sterling Lender severally (but not jointly) agrees to make Sterling
Loans in Sterling or euros to each Sterling Subsidiary Borrower from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount not to exceed the Available Sterling Commitment of such Sterling Lender
in accordance with the terms hereof (which for this purpose shall be computed as
though the amount in subclause (b)(i) in the definition thereof is U.S.$0);
provided that, after giving effect to the making of such Sterling Loans, the
Aggregate Sterling Revolving Extensions of Credit will not exceed the Sterling
Commitment. During the Revolving Credit Commitment Period, the Sterling
Subsidiary Borrowers may use the Sterling Commitments by borrowing, repaying the
Sterling Loans in whole or in part, and reborrowing, all in accordance with the
terms and conditions hereof. Each Sterling Lender agrees that each of its
Lending Installations listed on Schedule 1 and subsequently agreed from time to
time in the United Kingdom shall be on the date hereof or the date of such
agreement an Eligible U.K. Bank.
2.2. Procedure for Sterling Loan Borrowing. (a) The Sterling
Subsidiary Borrowers may borrow under the Sterling Facility during the Revolving
Credit Commitment Period on any Business Day (U.K.); provided that the relevant
Sterling Subsidiary Borrower shall give the Sterling Administrative Agent
irrevocable notice (1) on the requested Borrowing Date (U.K.), in the case of
Reference Rate Loans (which notice must be received by the Sterling
Administrative Agent prior to 11:00 A.M., London time) and (2) two Business Days
(U.K.) prior to the requested Borrowing Date (U.K.), in the case of LIBOR Loans
in Sterling (which notice must be received by the Sterling Administrative Agent
prior to 11:00 A.M., London time), and (3) three Business Days (U.K.) prior to
the requested Borrowing Date (U.K.), in the case of LIBOR Loans in euros (which
notice must be received by the Sterling Administrative Agent prior to 11:00
A.M., London time), specifying (i) the identity of the Sterling Subsidiary
Borrower borrowing and the amount and currency to be borrowed, (ii) the
requested Borrowing Date (U.K.), (iii) whether the borrowing is to be a
Reference Rate Loan (in the case of Sterling Loans in Sterling) or a LIBOR Loan
or a combination thereof, and (iv) if the borrowing is to be entirely or partly
a LIBOR Loan, the amount to be a LIBOR Loan and the length of the Interest
Period for such LIBOR Loan. Each Reference Rate borrowing by any Sterling
Subsidiary Borrower pursuant to the
6
Sterling Commitments shall be in an aggregate principal amount equal to the
Sterling equivalent of U.S.$1,000,000 or a whole multiple of the Sterling
equivalent of U.S.$500,000 in excess thereof. Each LIBOR borrowing by any
Sterling Subsidiary Borrower pursuant to the Sterling Commitments shall be in an
aggregate principal amount equal to the Sterling or euro equivalent, as the case
may be, of U.S.$1,000,000 or a whole multiple of the Sterling or euro
equivalent, as the case may be, of U.S.$500,000 in excess thereof.
(b) Upon receipt of any notice from a Sterling Subsidiary Borrower
pursuant to this subsection 2.2, the Sterling Administrative Agent shall
promptly notify each Sterling Lender thereof. Each such Sterling Lender will
make the amount of its ratable share (subject to subsection 2.1) of each
borrowing available to the Sterling Administrative Agent for the account of the
such Sterling Subsidiary Borrower at the Sterling Administrative Office prior to
2:00 P.M., London time, on the Borrowing Date (U.K.) requested by the such
Sterling Subsidiary Borrower in funds immediately available to the Sterling
Administrative Agent. Such borrowing will then be made available to such
Sterling Subsidiary Borrower by the Sterling Administrative Agent crediting the
account of such Sterling Subsidiary Borrower on the books of such office with
the aggregate of the amounts made available to the Sterling Administrative Agent
by such Sterling Lenders.
2.3. Swing Line Commitments. (a) Subject to the terms and conditions
hereof, from time to time prior to the Revolving Credit Termination Date and to
the Sterling Subsidiary Borrowers (i) the Sterling Swing Line Lender agrees to
make Sterling Swing Line Loans in Sterling in an aggregate principal amount not
to exceed the Sterling equivalent of U.S.$20,000,000 at any one time outstanding
(each of the foregoing individually, a "Sterling Swing Line Loan"; collectively
the "Sterling Swing Line Loans"); provided that, after giving effect to the
making of such Sterling Swing Line Loans, the aggregate principal amount of
Swing Line Loans under any Revolving Facility at any one time outstanding shall
not exceed U.S.$100,000,000 and the Aggregate Sterling Revolving Extensions of
Credit shall not exceed the Sterling Commitments. All Sterling Swing Line Loans
shall be made as Reference Rate Loans. The relevant Sterling Subsidiary
Borrowers shall give the Sterling Administrative Agent irrevocable notice (which
notice must be received by the Sterling Administrative Agent at or prior to 1:00
P.M., London time, on the requested Borrowing Date (U.K.)), specifying the
amount of each requested Sterling Swing Line Loan, which shall be greater than
or equal to a minimum amount to be agreed upon by such Sterling Subsidiary
Borrowers and the relevant Sterling Swing Line Lender. Upon such notice, the
Sterling Administrative Agent shall promptly notify the Sterling Swing Line
Lender thereof. The Sterling Swing Line Lender shall make the amount of each
borrowing available to the relevant Sterling Subsidiary Borrowers in the manner
directed by the Sterling Administrative Agent on the requested Borrowing Date.
(b) The Sterling Swing Line Lender in its sole and absolute
discretion, may, on behalf of the relevant Sterling Subsidiary Borrower (which
hereby irrevocably directs the Sterling Swing Line Lender to act on its behalf),
request each Sterling Lender, including the Sterling Swing Line Lender, with
respect to all other Sterling Swing Line Loans, to make a Sterling Loan, in an
amount equal to such Sterling Lender's Revolving Percentage under the Sterling
Facility of the amount of the Sterling Swing Line Loans (the "Refunded Sterling
Swing Line Loans") outstanding on the date such notice is given. Unless any of
the events described in paragraph (f) of Section 8 of the Credit Agreement shall
have occurred (in which event the procedures of paragraph (c) of this subsection
2.3 shall apply), each Sterling Lender shall make the proceeds of its Sterling
Loan available to the Sterling Administrative Agent for the account of the
Sterling Swing Line Lender, at the office of the Sterling Administrative Agent
prior to 12:00 Noon (London time) in funds immediately available on the Business
Day (U.K.) next succeeding the date such notice is given. The proceeds of such
Sterling Loans shall be immediately applied to repay the Refunded Sterling Swing
Line Loans.
7
(c) If, prior to the making of a Sterling Swing Line Loan pursuant
to paragraph (b) of this subsection 2.3, one of the events described in
paragraph (f) of Section 8 of the Credit Agreement shall have occurred, each
Sterling Lender hereby agrees to and will, on the date such Sterling Swing Line
Loan was to have been made, purchase an undivided participating interest in each
Refunded Sterling Swing Line Loan in an amount equal to its Revolving Percentage
under the Sterling Facility of such Refunded Sterling Swing Line Loan. Such
Revolving Credit Lender will immediately transfer to the Sterling Administrative
Agent for the account of the Sterling Swing Line Lender, in immediately
available funds of the amount of its participations and, upon its receipt of its
ratable share thereof, the Sterling Swing Line Lender will deliver to such
Sterling Lender a Swing Line Loan Participation Certificate dated the date of
receipt of such funds and in such amount.
(d) Whenever, at any time after the Sterling Swing Line Lender has
received from any Sterling Lender such Sterling Lender's participating interest
in a Refunded Sterling Swing Line Loan and the Sterling Swing Line Lender
receives any payment on account thereof, the Sterling Swing Line Lender will
distribute to such Sterling Lender through the Sterling Administrative Agent its
participating interest; provided, however, that in the event that such payment
received by the Sterling Swing Line Lender is required to be returned, such
Sterling Lender will return to the Sterling Swing Line Lender through the
Sterling Administrative Agent any portion thereof previously distributed by the
Sterling Swing Line Lender to it.
2.4. Participation. Each Sterling Lender's obligation to purchase
participating interests pursuant to paragraph (c) of this subsection 2.3 shall
be absolute and unconditional and shall not be affected by any circumstances,
including, without limitation, (a) any set-off, counterclaim, recoupment,
defense or other right which such Sterling Lender may have against the Sterling
Swing Line Lender, any Sterling Subsidiary Borrower or any other Person for any
reason whatsoever; (b) the occurrence or continuance of an Event of Default; (c)
any adverse change in the condition (financial or otherwise) of the Borrower or
any Sterling Subsidiary Borrower; (d) any breach of the Credit Agreement by the
Borrower, any Subsidiary Borrower or any other Revolving Credit Lender; or (e)
any other circumstance, happening or event whatsoever, whether or not similar to
any of the foregoing. Notwithstanding the foregoing, no Sterling Lender shall
have any obligation to purchase participating interests pursuant to paragraph
(c) of this subsection 2.3 or to make any Refunded Sterling Swing Line Loans in
respect of any Sterling Swing Line Loan which was made at any time following
receipt by the Sterling Administrative Agent of a notice from any Sterling
Lender specifying that (x) a Default or Event of Default has occurred and is
continuing and (y) explicitly stating that such Sterling Lender will not
purchase such participating interests or make Refunded Sterling Swing Line Loans
with respect to Sterling Swing Line Loans made after the date of receipt of such
notice.
2.5. Repayment of Sterling Loans; Evidence of Debt. (a) Each
Sterling Subsidiary Borrower hereby unconditionally promises to pay to the
Sterling Administrative Agent for the account of each Sterling Lender (i) then
unpaid principal amount of each Sterling Loan of such Sterling Lender on the
Revolving Credit Termination Date (or such earlier date on which the Loans
become due and payable pursuant to Section 8 of the Credit Agreement) and (ii)
then unpaid principal amount of the Sterling Swing Line Loans of the Sterling
Swing Line Lender on the Revolving Credit Termination Date (or such earlier date
on which the Sterling Swing Line Loans become due and payable pursuant to
Section 8 of the Credit Agreement). Each Sterling Subsidiary Borrower hereby
unconditionally promises to pay to the Sterling Administrative Agent for the
account of such Lender (i) then unpaid principal amount of each Loan to such
Subsidiary Borrower on the Revolving Credit Termination Date (or such earlier
date on which the Revolving Credit Loans become due and payable pursuant to
Section 8 of the Credit Agreement) and (ii) then unpaid principal amount of the
Sterling Swing Line Loans to such Subsidiary Borrower of the Sterling Swing Line
Lender on the Revolving Credit Termination Date (or such earlier date on which
the Sterling Swing Line Loans became due and payable pursuant to Section 8 of
the Credit
8
Agreement). Each Sterling Subsidiary Borrower hereby further agrees to pay
interest on the unpaid principal amount of the Sterling Loans from time to time
outstanding to such Sterling Subsidiary Borrower from the date hereof until
payment in full thereof at the rates per annum, and on the dates, set forth in
subsection 2.12.
(a) Each Sterling Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Sterling
Subsidiary Borrowers to such Sterling Lender resulting from each Sterling Loan
of such Sterling Lender from time to time, including the amounts of principal
and interest payable and paid to such Sterling Lender from time to time under
the Credit Agreement.
(b) The Sterling Administrative Agent shall maintain a register (the
"Sterling Register") in respect of the Sterling Facility in a manner similar to
the Register described in Section 10.6(b)(iv) of the Credit Agreement, and a
subaccount therein for each Sterling Lender, in which shall be recorded (i) the
amount of each Sterling Loan made hereunder and the type thereof, (ii) the
amount of any principal or interest due and payable or to become due and payable
from any Sterling Subsidiary Borrower to each Sterling Lender hereunder and
(iii) both the amount of any sum received by the Sterling Administrative Agent
hereunder from any Sterling Subsidiary Borrower and each Sterling Lender's share
thereof.
(c) The entries made in the Sterling Register and the accounts of
each Sterling Lender maintained pursuant to subsection 2.5(b) shall, to the
extent permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of each Sterling Subsidiary Borrower therein
recorded; provided, however, that the failure of any Sterling Lender or the
Sterling Administrative Agent to maintain the Sterling Register or any such
account, or any error therein, shall not in any manner affect the obligation of
any Sterling Subsidiary Borrower to repay (with applicable interest) the
Sterling Loans made to such Sterling Subsidiary Borrower by such Sterling Lender
in accordance with the terms of the Credit Agreement.
2.6. Facility Fee. Each Sterling Subsidiary Borrower agrees to pay
to the Sterling Administrative Agent, for the account of each Sterling Lender, a
facility fee for the period from and including the Closing Date to the Revolving
Credit Termination Date, calculated as an amount equal to the product of (a) the
Facility Fee Rate and (b) the average daily amount of the Sterling Commitment of
such Lender (regardless of usage) during the period for which such facility fee
is calculated, payable quarterly in arrears on the last day of each March, June,
September and December and on the Revolving Credit Termination Date.
2.7. Termination or Reduction of the Sterling Commitments. (a)
Optional. The Sterling Subsidiary Borrowers shall have the right, upon not less
than five Business Days' (U.K.) written notice to the Sterling Administrative
Agent, to terminate the Sterling Commitments or, from time to time, reduce the
amount of the Sterling Commitments, provided that (i) any such reduction shall
be accompanied by prepayment of the Sterling Loans by the relevant Sterling
Subsidiary Borrower, together with accrued interest on the amount so prepaid to
the date of such prepayment, to the extent, if any, the Available Sterling
Commitments would be negative and (ii) any such termination of the Sterling
Commitments shall be accompanied by (A) prepayment in full of the Sterling Loans
then outstanding hereunder, (B) cash collateralization of all Sterling L/C
Obligations then outstanding in accordance with the provisions of subsection
2.10, and (C) payment of accrued interest thereon to the date of such prepayment
and the payment of any unpaid fees then accrued hereunder (including, without
limitation, in respect of any Sterling Letters of Credit). Upon receipt of such
notice, the Sterling Administrative Agent shall promptly notify each Lender
thereof. Any such reduction shall be in an amount equal to the Sterling or euro
equivalent, as the case may be, of U.S.$1,000,000 or a whole multiple of the
Sterling or euro equivalent,
9
as the case may be, of U.S.$500,000 in excess thereof and shall reduce
permanently the amount of the Sterling Commitments then in effect.
(b) Mandatory. The Revolving Credit Commitments shall automatically
terminate on the Revolving Credit Termination Date and all Sterling Loans shall
be repaid and to the extent any Sterling Letter of Credit remains outstanding
after the Revolving Credit Termination Date, the relevant Sterling Subsidiary
Borrower shall cash collateralize such Sterling L/C Obligations (and the fees
thereon) in accordance with the provisions of subsection 2.10. The Revolving
Credit Commitments shall also be reduced in accordance with subsection 2.9.
2.8. Optional Prepayments. Any Sterling Subsidiary Borrower may,
at any time and from time to time, prepay the Sterling Loans made to it
hereunder, in each case in whole or in part, without premium or penalty, upon at
least one Business Day's (U.K.) irrevocable notice to the Sterling
Administrative Agent, specifying the date and amount of prepayment. If such
notice is given, the relevant Sterling Subsidiary Borrower shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to such
date on the amount prepaid. Partial prepayments shall be in an aggregate
principal amount of the Sterling or euro equivalent, as the case may be, of
U.S.$1,000,000 or a whole multiple of the Sterling or euro equivalent, as the
case may be, of U.S.$500,000 in excess thereof.
2.9. Mandatory Prepayments. The Sterling Subsidiary Borrowers,
without notice or demand, shall immediately prepay the Sterling Loans, to the
extent, if any, that the Available Sterling Commitments are negative, together
with accrued interest to the date of such prepayment on the amount so prepaid;
provided that if such prepayment is required solely as a result of a change in
the aggregate Dollar Equivalent of the Sterling Loans, no prepayment shall be
made unless such prepayment is required pursuant to subsection 2.21.
2.10. Cash Collateralization of Sterling Letters of Credit. To the
extent that at any time and from time to time, the Sterling L/C Obligations
exceed the amount of the Sterling L/C Commitments or the Sterling L/C
Obligations exceed the Sterling Commitments (whether pursuant to subsections
2.7, 2.8, 2.9 or otherwise), the Sterling Subsidiary Borrowers shall cash
collateralize (in a manner reasonably satisfactory to the Sterling
Administrative Agent) such portion of the Sterling L/C Obligations (and the fees
thereon through the stated expiration date of the Sterling Letters of Credit
giving rise to such Sterling L/C Obligations) which is in excess of the Sterling
L/C Commitments or such Sterling Commitments, as applicable.
2.11. Conversion Options. Any Sterling Subsidiary Borrower may
elect from time to time to convert LIBOR Loans in Sterling to Reference Rate
Loans, and may elect from time to time to convert Reference Rate Loans to LIBOR
Loans, by giving the Sterling Administrative Agent at least three Business Days'
(U.K.) prior irrevocable written notice of such election to convert (which date
shall be a Business Day (U.K.) and in the case of any conversion of any LIBOR
Loans in Sterling to Reference Rate Loans, the last day of an Interest Period
therefor), the amount and type of conversion and, in the case of any conversion
of Reference Rate Loans to LIBOR Loans, the Interest Period selected with
respect thereto; provided, however, that (i) Reference Rate Loans may not be
converted to LIBOR Loans when any Default or Event of Default has occurred and
is continuing without the consent of the Administrative Agent and (ii) Swing
Line Loans may not, at any time, be converted to LIBOR Loans. All or any part of
outstanding LIBOR Loans or Reference Rate Loans may be converted as provided
herein, provided that partial conversions of LIBOR Loans in Sterling to
Reference Rate Loans shall be in an aggregate principal amount of the Sterling
equivalent of U.S.$1,000,000 or a whole multiple thereof and partial conversions
of Reference Rate Loans to LIBOR Loans with respect to which a common Interest
Period has been selected shall be in an aggregate principal amount of the
Sterling or euro equivalent, as the case
10
may be, of U.S.$1,000,000 or a whole multiple thereof and provided, further,
that in the case of a partial conversion of LIBOR Loans in Sterling to Reference
Rate Loans, after giving effect to such conversion, the aggregate principal
amount of the LIBOR Loans outstanding with respect to which a common Interest
Period has been selected shall be not less than the Sterling or euro equivalent,
as the case may be, of U.S.$5,000,000.
(b) Any LIBOR Loans may be continued as such upon the expiration of
an Interest Period by compliance by the Sterling Subsidiary Borrowers with the
notice provisions contained in the definition of Interest Period, provided that
no LIBOR Loan may be continued as such when any Default or Event of Default has
occurred and is continuing, but shall be automatically converted to a Reference
Rate Loan on the last day of the last Interest Period for which a LIBOR Rate was
determined by the Sterling Administrative Agent on or prior to the Sterling
Administrative Agent's obtaining knowledge of such Default or Event of Default.
(c) No conversion or continuation of any Sterling Loans shall be
made pursuant to this subsection 2.11 if, after giving effect to such conversion
or continuation the amount of the Available Sterling Commitments would be
negative.
2.12. Interest Rate and Payment Dates.
(a) Each LIBOR Loan shall bear interest for each day during each
Interest Period with respect thereto at a rate per annum equal to the LIBOR Rate
determined for such Interest Period plus the Applicable Margin.
(b) Each Reference Rate Loan shall bear interest for the period from
and including the date thereof until maturity at a rate per annum equal to the
Reference Rate plus the Applicable Margin.
(c) If all or a portion of (i) the principal amount of any Sterling
Loan or any reimbursement obligation, (ii) any interest payable thereon or (iii)
any facility fee, commission or other amount payable hereunder shall not be paid
when due (whether at the stated maturity, by acceleration or otherwise), such
overdue amount shall bear interest at a rate per annum which is (A) the rate
pursuant to paragraph (a) of this subsection plus 2% or (B) the rate described
in paragraph (b) of this subsection 2.12 plus 2%, in each case from the date of
such non-payment until such amount is paid in full (as well after as before
judgment). The Sterling Administrative Agent may choose any Interest Period from
time to time (including one Interest Period of shorter than one month) with
respect to any overdue amount bearing interest based upon paragraph (a) of this
subsection.
(d) Interest shall be payable in arrears on each Interest Payment
Date, except that interest payable pursuant to subsection 2.12(c) shall be
payable upon demand.
2.13. Computation of Interest and Fees. Each determination of an
interest rate by the Sterling Administrative Agent pursuant to any provision of
this Annex B shall be conclusive and binding on the Sterling Subsidiary
Borrowers absent manifest error.
(b) Interest (other than interest based on the Reference Rate) shall
be calculated on the basis of a 360-day year for the actual days elapsed; and
facility fees and interest based on the Reference Rate shall be calculated on
the basis of a 365- (366-, as the case may be) day year for the actual days
elapsed. The Sterling Administrative Agent shall as soon as practicable notify
the affected Sterling Lenders of each determination of the LIBOR Rate. Any
change in the interest rate on a Sterling Loan resulting from a change in the
Reference Rate or any LIBOR reserve requirements shall become effective as of
the opening of business on the day on which such change becomes effective. The
Sterling
11
Administrative Agent shall as soon as practicable notify the affected Sterling
Lenders of the Closing Date and the amount of such change in interest rate.
(c) The Sterling Administrative Agent shall, at the request of the
Sterling Subsidiary Borrowers or any Sterling Lender, deliver to the Sterling
Subsidiary Borrowers or such Sterling Lender a statement showing in reasonable
detail the calculations used by the Sterling Administrative Agent in determining
any interest rate pursuant to subsection 2.12, excluding any LIBOR Base Rate
which is based upon the British Bankers Assoc. Interest Settlement Rates Page.
2.14. Inability to Determine Interest Rate. In the event that the
Reference Banks shall have reasonably determined (which determination shall be
conclusive and binding upon the Sterling Subsidiary Borrowers absent manifest
error) that by reason of circumstances affecting the interbank eurocurrency
market, adequate and reasonable means do not exist for ascertaining the LIBOR
Rate applicable pursuant to subsection 2.12(a) for any Interest Period with
respect to (a) a proposed Sterling Loan that has been requested be made as a
LIBOR Loan, (b) a LIBOR Loan that will result from the requested conversion of a
Reference Rate Loan into a LIBOR Loan or (c) the continuation of LIBOR Loans
beyond the expiration of then current Interest Period with respect thereto, the
Sterling Administrative Agent shall forthwith give telecopy or telephonic notice
of such determination, confirmed in writing, to the relevant Sterling Subsidiary
Borrowers and the Sterling Lenders at least one Business Day (U.K.) prior to, as
the case may be, the requested Borrowing Date (U.K.) for such LIBOR Loan, the
conversion date of such Reference Rate Loan or the last day of such Interest
Period. If such notice is given (i) any requested LIBOR Loan shall be made as a
Reference Rate Loan, (ii) any Reference Rate Loan that was to have been
converted to a LIBOR Loan shall be continued as a Reference Rate Loan and (iii)
any outstanding LIBOR Loan shall be converted, on the last day of then current
Interest Period with respect thereto, to a Reference Rate Loan. Until such
notice has been withdrawn by the Sterling Administrative Agent, no further LIBOR
Loans shall be made nor shall the Sterling Subsidiary Borrowers have the right
to convert a Reference Rate Loan to a LIBOR Loan. Such notice shall be withdrawn
by the Sterling Administrative Agent when the Sterling Administrative Agent
shall reasonably determine that adequate and reasonable means exist for
ascertaining the LIBOR Rate.
2.15. Pro Rata Treatment and Payments. Each borrowing under and
any reduction of the Sterling Commitments shall be made ratably according to
each Sterling Lender's share of the Sterling Commitments.
(b) Each payment (including each prepayment) on account of principal
of and interest on the Sterling Loans shall be made ratably according to the
respective outstanding principal amounts of such Loans then held by the Sterling
Lenders.
(c) All payments (including prepayments) to be made by any Sterling
Subsidiary Borrower hereunder, whether on account of principal, interest, fees
or otherwise, shall be made without set off or counterclaim and shall be made
prior to 12:00 Noon, London time, on the due date thereof to the Sterling
Administrative Agent, for the account of the relevant Sterling Lenders, at the
Sterling Administrative Office office, in Sterling, and in immediately available
funds. The Sterling Administrative Agent shall distribute such payments to the
relevant Sterling Lenders promptly upon receipt in like funds as received. If
any payment hereunder (other than payments on LIBOR Loans) becomes due and
payable on a day other than a Business Day (U.K.), such payment shall be
extended to the next succeeding Business Day (U.K.) and such extension of time
shall in such case be included in the computation of the amount payable
hereunder. If any payment on a LIBOR Loan becomes due and payable on a day other
than a Business Day (U.K.), the maturity thereof shall be extended to the next
succeeding Business Day (U.K.) unless the result of such extension would be to
extend such payment into
12
another calendar month, in which event such payment shall be made on the
immediately preceding Business Day (U.K.).
(d) Unless the Sterling Administrative Agent shall have been
notified in writing by any Sterling Lender prior to a Borrowing Date (U.K.) that
such Sterling Lender will not make the amount that would constitute its share of
the borrowing on such date available to the Sterling Administrative Agent, the
Sterling Administrative Agent may assume that such Sterling Lender has made such
amount available to the Sterling Administrative Agent on such Borrowing Date
(U.K.), and the Sterling Administrative Agent may, in reliance upon such
assumption, make available to the relevant Sterling Subsidiary Borrower a
corresponding amount. If such amount is made available to the Sterling
Administrative Agent on a date after such Borrowing Date (U.K.), such Sterling
Lender shall pay to the Sterling Administrative Agent on demand an amount equal
to the product of (i) the customary rate as selected by the Sterling
Administrative Agent for the settlement of obligations between banks during such
period as quoted by the Sterling Administrative Agent, times (ii) the amount of
such Sterling Lender's share of such borrowing, times (iii) a fraction the
numerator of which is the number of days that elapse from and including such
Borrowing Date (U.K.) to the date on which such Sterling Lender's Revolving
Percentage of such borrowing shall have become immediately available to the
Sterling Administrative Agent and the denominator of which is 360 (the
"Effective Interbank Rate"). A certificate of the Sterling Administrative Agent
submitted to any Sterling Lender with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error. If such amount
is so made available, such payment to the Sterling Administrative Agent shall
constitute such Sterling Lender's Loan on such Borrowing Date (U.K.) for all
purposes of this Agreement. If such amount is not so made available to the
Sterling Administrative Agent, then the Sterling Administrative Agent shall
notify the relevant Sterling Subsidiary Borrower of such failure and on the
fourth Business Day (U.K.) following such Borrowing Date (U.K.), such Sterling
Subsidiary Borrower shall pay to the Sterling Administrative Agent such ratable
portion, together with interest thereon for each day that such Sterling
Subsidiary Borrower had the use of such ratable portion, at the Effective
Interbank Rate. Nothing contained in this subsection 2.15(d) shall relieve any
Sterling Lender which has failed to make available its ratable portion of any
borrowing hereunder from its obligation to do so in accordance with the terms
hereof.
(e) The failure of any Sterling Lender to make the Sterling Loan to
be made by it on any Borrowing Date (U.K.) shall not relieve any other Sterling
Lender of its obligation, if any, hereunder to make its Sterling Loan on such
Borrowing Date (U.K.), but no Sterling Lender shall be responsible for the
failure of any other Sterling Lender to make the Sterling Loan to be made by
such other Sterling Lender on such Borrowing Date (U.K.).
2.16. Illegality. Notwithstanding any other provisions herein, if
any introduction of or change in any law, regulation, treaty or directive or in
the interpretation or application thereof occurring after the date hereof shall
make it unlawful for any Sterling Lender to make or maintain LIBOR Loans as
contemplated by this Annex B, (a) such Sterling Lender shall forthwith give
telecopy or telephonic notice of such circumstances, confirmed in writing, to
the relevant Sterling Subsidiary Borrower (which notice shall be withdrawn by
such Sterling Lender when such Sterling Lender shall reasonably determine that
it shall no longer be illegal for such Sterling Lender to make or maintain LIBOR
Loans or to convert Reference Rate Loans to LIBOR Loans), (b) the commitment of
such Sterling Lender hereunder to make LIBOR Loans or to convert Reference Rate
Loans to LIBOR Loans shall forthwith be canceled and (c) such Sterling Lender's
Sterling Loans then outstanding as LIBOR Loans, if any, shall be converted
automatically to Reference Rate Loans based upon the Reference Rate on the last
day of then current Interest Period with respect to such Loans or within such
earlier period as may be required by law. Each Sterling Subsidiary Borrower
hereby agrees promptly to pay the Sterling Administrative Agent for the account
of each Sterling Lender, upon demand by the Sterling Administrative Agent, any
additional amounts necessary to compensate the Sterling Lenders for any costs
incurred by the Sterling Lenders in
13
making any conversion in accordance with this subsection 2.16, including, but
not limited to, any interest or fees payable by the Sterling Lenders to lenders
of funds obtained by them in order to make or maintain their LIBOR Loans
hereunder (the Sterling Administrative Agent's notice of such costs, as
certified to such Sterling Subsidiary Borrower, to be conclusive, absent
manifest error).
2.17. Requirements of Law. (a) In the event that any introduction of
or change in any law, regulation, treaty or directive or in the interpretation
or application thereof occurring after the date hereof or compliance by any
Sterling Lender with any request or directive (whether or not having the force
of law) from any central bank or other governmental authority, agency or
instrumentality:
(i) shall subject such Sterling Lender to any tax of any kind,
whatsoever with respect to the Credit Agreement, including this Annex B, any
Sterling Letter of Credit, any Application, or any Sterling Loan made by it or
its obligation to make Sterling Loans or change the basis of taxation of
payments to such Sterling Lender of principal, facility fee, interest or any
other amount payable hereunder (other than Non-Excluded Taxes (as defined in
subsection 2.19) or changes in the rate of tax on the overall net income of such
Sterling Lender)
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by, or
deposits or other liabilities in or for the account of, advances or loans by, or
other credit extended by, or any other acquisition of funds by, any office of
such Sterling Lender which are not otherwise included in the determination of
the LIBOR Rate hereunder, or
(iii) shall impose on such Sterling Lender or the eurocurrency
market any other condition;
and the result of any of the foregoing is to increase the cost to such Sterling
Lender (which increase in cost shall be the result of such Sterling Lender's
reasonable allocation of the aggregate of such cost increases resulting from
such events), of making, renewing or maintaining LIBOR Loans or issuing or
participating in Sterling Letters of Credit or to reduce any amount receivable
thereunder then, in any such case, the relevant Sterling Subsidiary Borrower
shall, upon notice to it from such Sterling Lender (with a copy to the
Administrative Agent) certifying that (x) one of the events described in this
subsection 2.17(a) has occurred and the nature of such event, (y) the increased
cost or reduced amount resulting from such event and (z) the additional amounts
demanded by such Sterling Lender and a reasonably detailed explanation of the
calculation thereof, promptly pay to the Sterling Administrative Agent for the
account of the relevant Sterling Lender, upon demand by the Sterling
Administrative Agent, without duplication, any additional amounts necessary to
compensate such Sterling Lender for such increased cost or reduced amount
receivable which such Sterling Lender deems to be material as determined in good
faith by such Sterling Lender with respect to the Credit Agreement, including
this Annex B, or the Sterling Loans made hereunder, provided that, in any such
case, the relevant Sterling Subsidiary Borrower (if otherwise not prohibited
hereunder) may elect to convert the LIBOR Loans made hereunder to Reference Rate
Loans by giving such Sterling Lender and the Sterling Administrative Agent at
least one Business Day's (U.K.) prior irrevocable notice of such election in
which case the relevant Sterling Subsidiary Borrower shall promptly pay the
Sterling Administrative Agent for the account of the relevant Sterling Lender,
upon demand by the Sterling Administrative Agent, without duplication, any loss
or expense incurred by such Sterling Lender in liquidating or re-employing the
deposits from which the funds were obtained by such Sterling Lender for the
purpose of making and/or maintaining such LIBOR Loans, together with any amount
due under this subsection 2.17(a) in respect of the period prior to such
conversion. If such Sterling Lender becomes entitled to claim any additional
amounts pursuant to this subsection, it shall promptly notify the relevant
Sterling Subsidiary Borrower of the event by reason of which it has become so
entitled.
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(b) In the event that any Sterling Lender shall have determined that
any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Sterling Lender or
any corporation controlling such Sterling Lender with any request or directive
regarding capital adequacy (whether or not having the force of law) from any
Governmental Authority made subsequent to the date hereof does or shall have the
effect of reducing the rate of return on such Sterling Lender's or such
corporation's capital as a consequence of its obligations hereunder or under any
Letters of Credit to a level below that which such Sterling Lender or such
corporation could have achieved but for such change or compliance (taking into
consideration such Sterling Lender's or such corporation's policies with respect
to capital adequacy) by an amount deemed by such Sterling Lender to be material,
then from time to time, within 15 days after submission by such Sterling Lender
to the Sterling Subsidiary Borrowers (with a copy to the Sterling Administrative
Agent) of a written request therefor certifying that (x) one of the events
described in this subsection 2.17(b) has occurred and the nature of such event,
(y) the increased cost or reduced amount resulting from such event and (z) the
additional amounts demanded by such Sterling Lender and a reasonably detailed
explanation of the calculation thereof, the Sterling Subsidiary Borrowers shall
pay to such Sterling Lender such additional amount or amounts as will compensate
such Sterling Lender for such reduction.
(c) A certificate as to any additional amounts payable pursuant to
paragraphs (a) and (b) above submitted by any Sterling Lender to a Sterling
Subsidiary Borrower shall be conclusive absent manifest error.
2.18. Indemnity. Each Sterling Subsidiary Borrower agrees to
indemnify each Sterling Lender and to hold each Sterling Lender harmless from
any loss or expense which such Sterling Lender may sustain or incur as a
consequence of (a) default by such Sterling Subsidiary Borrower in payment of
the principal amount of or interest on any LIBOR Loans including, but not
limited to, any such loss or expense arising from interest or fees payable by
such Sterling Lender to lenders of funds obtained by them in order to maintain
their LIBOR Loans, (b) default by such Sterling Subsidiary Borrower in making
LIBOR Loans or conversion after such Sterling Subsidiary Borrower has given a
notice in accordance with subsection 2.2 or 2.11, (c) default by such Sterling
Subsidiary Borrower in making any prepayment of a LIBOR Loan after such Sterling
Subsidiary Borrower has given a notice in accordance with subsection 2.8, and
(d) the making of any payment or conversion of LIBOR Loans on a day which is not
the last day of the applicable Interest Period with respect thereto, including,
but not limited to, any such loss or expense arising from interest or fees
payable by the Sterling Lenders to lenders of funds obtained by them in order to
maintain their LIBOR Loans hereunder. This covenant shall survive termination of
the Credit Agreement. The obligations of indemnity of each of the respective
Sterling Subsidiary Borrowers hereunder are limited only to the loss and expense
described herein arising from or as a result of any act or omission by such
Sterling Subsidiary Borrower, and are not, and shall not be deemed to be, the
joint and several obligations of each such Sterling Subsidiary Borrower as to
any loss or expense arising from or as a result of any act or omission by the
other Sterling Subsidiary Borrowers.
2.19. Taxes. All payments made by the Sterling Subsidiary Borrowers
in respect of amounts owing under this Annex B shall be made free and clear of,
and without deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions
or withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, excluding gross or net income or gross
receipts taxes, ad valorem taxes, personal property and/or sales taxes and
franchise taxes (imposed in lieu of net income taxes) imposed on the Sterling
Administrative Agent or any Sterling Lender as a result of a present or former
connection between the Sterling Administrative Agent or such Sterling Lender and
the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Sterling Administrative Agent or such
Sterling Lender having executed, delivered or performed its obligations or
received a payment under, or
15
enforced, this Annex B). If any such non-excluded taxes, levies, imposts,
duties, charges, fees deductions or withholdings ("Non-Excluded Taxes") are
required to be withheld from any amounts payable to the Sterling Administrative
Agent or any Sterling Lender hereunder, the amounts so payable to the Sterling
Administrative Agent or such Sterling Lender shall be increased to the extent
necessary to yield to the Sterling Administrative Agent or such Sterling Lender
(after payment of all Non-Excluded Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Annex B,
provided, however, that none of the Sterling Subsidiary Borrowers shall be
required to increase any such amounts payable to the Sterling Administrative
Agent or any Sterling Lender if such increased amount arises as a result of the
failure of such Sterling Lender or the Sterling Administrative Agent to be an
Eligible U.K. Bank. The Sterling Subsidiary Borrowers shall also indemnify the
Sterling Administrative Agent and each Sterling Lender on an after-tax basis for
any additional taxes on net income which the Sterling Administrative Agent or
such Sterling Lender, as the case may be, may be obligated to pay as a result of
the receipt of additional amounts under this subsection 2.19. Whenever any
Non-Excluded Taxes are payable by any Sterling Subsidiary Borrower, as promptly
as possible thereafter but in any event within 45 days after the date of payment
such Sterling Subsidiary Borrower shall send to the Sterling Administrative
Agent for its own account or for the account of such Sterling Lender, as the
case may be, a certified copy of an original official receipt received by such
Sterling Subsidiary Borrower showing payment thereof. If any Sterling Subsidiary
Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing
authority or fails to remit to the Sterling Administrative Agent the required
receipts or other required documentary evidence, such Sterling Subsidiary
Borrower shall indemnify the Sterling Administrative Agent and the Sterling
Lenders for any incremental taxes, interest or penalties that may become payable
by the Sterling Administrative Agent or any Sterling Lender as a result of any
such failure. The agreements in this subsection shall survive the termination of
this Annex B and the payment of the Sterling Loans and all other amounts payable
hereunder.
2.20. Use of Proceeds. The Sterling Facility and the proceeds of the
Sterling Loans shall be used by the Sterling Subsidiary Borrowers for working
capital and other general corporate purposes (which shall include any purpose
expressly permitted by the Credit Agreement) of the Sterling Subsidiary
Borrowers; provided that, notwithstanding the foregoing, none of the proceeds of
the Sterling Loans may be used to finance any Hostile Take-Over Bid.
2.21. Controls on Prepayment if Aggregate Revolving Extensions of
Credit Exceed Aggregate Revolving Credit Commitments. (a) The Sterling
Subsidiary Borrowers will implement and maintain internal controls to monitor
the borrowings and repayments of Sterling Loans by the relevant Sterling
Subsidiary Borrowers and the issuance of and drawings under Sterling Letters of
Credit, with the object of preventing any request for an Extension of Credit
that would result in the Available Sterling Commitments becoming negative by
more than 5% of the Sterling Commitments, if such Commitments are negative by
more than 5%, the Sterling Subsidiary Borrowers will promptly notify the
Sterling Administrative Agent.
(b) The Sterling Administrative Agent will calculate the Available
Sterling Commitments from time to time, and in any event not less frequently
than once during each calendar quarter. In making such calculations, the
Sterling Administrative Agent will rely on the information most recently
received by it from the Sterling Swing Line Lender in respect of outstanding
Sterling Swing Line Loans and from the Sterling Issuing Lender in respect of
outstanding Sterling L/C Obligations.
(c) In the event that on any date the Sterling Administrative Agent
calculates that (i) the Available Sterling Commitments have become negative
solely as a result of a change in the aggregate Dollar Equivalent of the
Sterling Loans by more than 5%, the Sterling Administrative Agent will give
notice to such effect to the relevant Sterling Subsidiary Borrowers and the
Sterling Lenders. Within five Business Days (U.K.) of receipt of any such
notice, such Sterling Subsidiary Borrower will, as soon as
16
practicable but in any event within five Business Days (U.K.) of receipt of such
notice, first, make such repayments or prepayments of Sterling Loans (together
with interest accrued to the date of such repayment or prepayment), second, pay
any Reimbursement Obligations under the Sterling Facility then outstanding and
third, cash collateralize any outstanding Sterling L/C Obligations on terms
reasonably satisfactory to the Sterling Administrative Agent as shall be
necessary to cause the Available Sterling Commitments not to be negative.
2.22. Lending Installations. (a) Subject to subsection 2.4 of the
Credit Agreement and subsections 2.1 and 2.3 of this Annex B, each Sterling
Lender may book its Sterling Loans at any Lending Installation selected by such
Sterling Lender and may change its Lending Installation from time to time. All
terms of the Credit Agreement shall apply to any such Lending Installation and
the Sterling Loans made hereunder shall be deemed held by each Sterling Lender
for the benefit of such Lending Installation. Each Sterling Lender may, by
written notice to the Sterling Administrative Agent and the Sterling Subsidiary
Borrowers in accordance with subsection 10.2 of the Credit Agreement and subject
always to subsection 2.4 of the Credit Agreement and subsections 2.13 and 2.3 of
this Annex B designate replacement or additional Lending Installations through
which Sterling Loans will be made by it and for whose account Sterling Loan
payments are to be made.
(b) Each Sterling Lender agrees that, upon the occurrence of any
event giving rise to the operation of subsection 2.17 or 2.19 with respect to
such Sterling Lender, it will, if requested by the Sterling Subsidiary Borrower,
use reasonable efforts (subject to overall policy considerations of such
Sterling Lender) to designate another Lending Installation for any Sterling
Loans affected by such event with the object of avoiding the consequences of
such event; provided, that such designation is made on terms that, in the sole
judgment of such Sterling Lender, cause such Sterling Lender and any of its
Lending Installations to suffer no economic, legal or regulatory disadvantage,
and provided, further, that nothing in this subsection 2.22(b) shall affect or
postpone any of the obligations of the Sterling Subsidiary Borrowers or the
rights of any Sterling Lender pursuant to subsection 2.17 or 2.19.
2.23. Notices to Lenders. All notices under this Section 2 to
Sterling Lenders by the Sterling Subsidiary Borrowers or the Sterling
Administrative Agent, and all payments by the Sterling Administrative Agent to
the Sterling Lenders, shall be made to the respective Lending Installations of
the Sterling Lenders maintaining the relevant Sterling Loans or Sterling
Commitments.
SECTION 3. LETTER OF CREDIT FACILITIES
3.1. Sterling L/C Commitment. (a) Subject to the terms and
conditions hereof, the Sterling Issuing Lender, in reliance on the agreements of
the other Lenders set forth in subsection 3.4(a), agrees to issue letters of
credit ("Sterling Letters of Credit") under the Sterling Commitments for the
account of any Sterling Subsidiary Borrower on any Business Day (U.K.) during
the Revolving Credit Commitment Period in such form as may be approved from time
to time by the Sterling Issuing Lender; provided that the Sterling Issuing
Lender shall not have any obligation to issue any Sterling Letter of Credit if,
after giving effect to such issuance, (i) the Sterling L/C Obligations would
exceed the Sterling L/C Commitment or (ii) the Available Sterling Commitments
would be negative. Each Sterling Letter of Credit shall (i) be denominated in
Sterling, (ii) be either (x) a standby letter of credit (a "Sterling Standby
L/C") issued to support obligations of any Sterling Subsidiary Borrower,
contingent or otherwise, with an expiry date occurring not later than one year
after such standby Sterling L/C was issued (which expiry date may be subject to
one or more automatic extensions of one year or less unless 60-day notice, or
such other notice as is satisfactory to the relevant Sterling Subsidiary
Borrower and the Sterling Issuing Lender, is given that any such extension shall
not be effective) or (y) a documentary letter of credit in respect of the
purchase of goods or services by any Sterling Subsidiary Borrower in the
ordinary course of business with an expiry date occurring not later than one
year after such documentary letter of credit was
17
issued and, in the case of any such documentary letter of credit which is to be
accepted by the Sterling Issuing Lender pending payment at a date after
presentation of sight drafts, with a payment date no more than one year after
such drafts were presented for acceptance (a "Sterling Trade L/C") and (iii)
expire no later than five days before the Revolving Credit Termination Date.
(b) Each Sterling Standby L/C shall be subject to the International
Standby Practices and each Sterling Trade L/C shall be subject to the Uniform
Customs and, in each case, to the extent not inconsistent therewith, the laws of
the State of New York.
(c) The Sterling Issuing Lender shall at no time be obligated to
issue any Sterling Letter of Credit hereunder if such issuance would conflict
with, or cause the Sterling Issuing Lender or any Sterling L/C Participant to
exceed any limits imposed by, any applicable Requirement of Law.
3.2. Procedure for Issuance of Letters of Credit. Any Sterling
Subsidiary Borrower may from time to time request that the Sterling Issuing
Lender issue a Sterling Letter of Credit by delivering to the Sterling Issuing
Lender (with a copy to the Sterling Administrative Agent) at its address for
notices specified herein an Application therefor, completed to the satisfaction
of the Sterling Issuing Lender, and such other certificates, documents and other
papers and information as the Sterling Issuing Lender may reasonably request.
Upon receipt of any Application, the Sterling Issuing Lender will process such
Application and the certificates, documents and other papers and information
delivered to it in connection therewith in accordance with its customary
procedures and shall promptly issue the Sterling Letter of Credit requested
thereby (but in no event shall the Sterling Issuing Lender be required to issue
any Sterling Letter of Credit earlier than four Business Days (U.K.) after its
receipt of the Application therefor and all such other certificates, documents
and other papers and information relating thereto) by issuing the original of
such Sterling Letter of Credit to the beneficiary thereof or as otherwise may be
agreed by the Sterling Issuing Lender and any relevant Sterling Subsidiary
Borrower. The Sterling Issuing Lender shall furnish a copy of such Sterling
Letter of Credit to the relevant Sterling Subsidiary Borrower, to the Sterling
Administrative Agent promptly following the issuance thereof.
3.3. Fees, Commissions and Other Charges. (a) The relevant Sterling
Subsidiary Borrower shall pay to the Sterling Administrative Agent, for the
ratable account of the Sterling Issuing Lender and the Sterling L/C
Participants, a letter of credit commission in Sterling with respect to each
Sterling Trade L/C issued by the Sterling Issuing Lender (i) in an amount equal
to the Dollar Equivalent of such issuance and payment fees as have been agreed
upon by the relevant Sterling Subsidiary Borrower and the Sterling Issuing
Lender and (ii) in an amount equal to the product of, on the date on which such
commission is calculated, (A) the rate per annum equal to the Applicable Margin
in respect of LIBOR Loans and (B) the Dollar Equivalent of the aggregate amount
available to be drawn under each Sterling Letter of Credit (plus an additional
- -1/4 of 1% per annum which shall be payable for the account of the Sterling
Issuing Lender). Such letter of credit commissions shall be payable in arrears
on the last day of each March, June, September and December and shall be
nonrefundable.
(b) The relevant Sterling Subsidiary Borrower shall pay to the
Sterling Administrative Agent, for the ratable account of the Sterling Issuing
Lender and the Sterling L/C Participants, a letter of credit commission in
Sterling with respect to each Sterling Standby L/C issued by the Sterling
Issuing Lender, computed for the period from the date of such payment to the
date upon which the next such payment is due hereunder in an amount equal to the
product of (i) the rate equal to the Applicable Margin in respect of LIBOR in
effect on the date on which such commission is calculated and (ii) the Sterling
Equivalent of the aggregate amount available to be drawn under such Sterling
Standby L/C on the date on which such commission is calculated (plus an
additional -1/4 of 1% per annum which shall be payable for the account of the
Sterling Issuing Lender). The relevant Sterling Subsidiary Borrower shall also
pay to the Sterling Administrative Agent, for the account of the Sterling
Issuing Lender, such issuance fees as
18
have been agreed upon by the relevant Sterling Subsidiary Borrower and the
Sterling Issuing Lender. Such letter of credit commissions shall be payable in
arrears on the last day of each March, June, September and December and shall be
nonrefundable.
(c) In addition to the foregoing fees and commissions, the relevant
Sterling Subsidiary Borrower shall pay or reimburse the Sterling Issuing Lender
for such normal and customary costs and expenses as are incurred or charged by
the Sterling Issuing Lender in issuing, effecting payment under, amending or
otherwise administering any Sterling Letter of Credit issued by it.
(d) The Sterling Administrative Agent shall, promptly following its
receipt thereof, distribute to the Sterling Issuing Lender and the Sterling L/C
Participants all fees and commissions received by the Sterling Administrative
Agent for their respective accounts pursuant to this subsection 3.3.
3.4. Sterling L/C Participation. (a) The Sterling Issuing Lender
irrevocably agrees to grant and hereby grants to each Sterling L/C Participant,
and, to induce the Sterling Issuing Lender to issue Sterling Letters of Credit
hereunder, each such Sterling L/C Participant irrevocably agrees to accept and
purchase and hereby accepts and purchases from the Sterling Issuing Lender, on
the terms and conditions hereinafter stated, for such Sterling L/C Participant's
own account and risk an undivided interest equal to such Sterling L/C
Participant's ratable share of the Sterling Facility in the Sterling Issuing
Lender's obligations and rights under each Sterling Letter of Credit issued
hereunder and the amount of each draft paid by the Sterling Issuing Lender
thereunder. Each such Sterling L/C Participant unconditionally and irrevocably
agrees with the Sterling Issuing Lender that, if a draft is paid under any such
Sterling Letter of Credit for which the Sterling Issuing Lender is not
reimbursed in full by the relevant Sterling Subsidiary Borrower in accordance
with the terms of the Credit Agreement (including this Annex B), such Sterling
L/C Participant shall pay to the Sterling Issuing Lender upon demand at the
Sterling Issuing Lender's address for notices specified herein an amount equal
to such Sterling L/C Participant's ratable share of the Sterling Facility of the
amount of such draft, or any part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any Sterling L/C
Participant to the Sterling Issuing Lender pursuant to subsection 3.4(a) in
respect of any unreimbursed portion of any payment made by the Sterling Issuing
Lender under any Sterling Letter of Credit is not paid to the Sterling Issuing
Lender within three Business Days (U.K.) after the date such payment is due,
such Sterling L/C Participant shall pay to the Sterling Issuing Lender on demand
an amount equal to the product of (i) such amount, times (ii) the customary rate
as selected by the Sterling Issuing Lender for the settlement of obligations
between banks during the period from and including the date such payment is
required to the date on which such payment is immediately available to the
Sterling Issuing Lender, times (iii) a fraction the numerator of which is the
number of days that elapse during such period and the denominator of which is
360. If any such amount required to be paid by any such Sterling L/C Participant
pursuant to subsection 3.4(a) is not in fact made available to the Sterling
Issuing Lender by such Sterling L/C Participant within three Business Days
(U.K.) after the date such payment is due, the Sterling Issuing Lender shall be
entitled to recover from such Sterling L/C Participant, on demand, such amount
with interest thereon calculated from such due date at the rate per annum
applicable to LIBOR hereunder. A certificate of the Sterling Issuing Lender
submitted to any Sterling L/C Participant with respect to any amounts owing
under this subsection shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Sterling Issuing Lender has made
payment under any Sterling Letter of Credit and has received from any Sterling
L/C Participant its ratable share of such payment in accordance with subsection
3.4(a), the Sterling Issuing Lender receives any payment related to such
Sterling Letter of Credit (whether directly from the relevant Sterling
Subsidiary Borrower or
19
otherwise), or any payment of interest on account thereof, the Sterling Issuing
Lender will distribute to such Sterling L/C Participant its ratable share
thereof; provided, however, that in the event that any such payment received by
the Sterling Issuing Lender shall be required to be returned by the Sterling
Issuing Lender, such Sterling L/C Participant shall return to the Sterling
Issuing Lender the portion thereof previously distributed by the Sterling
Issuing Lender to it.
3.5. Reimbursement Obligation of the Sterling Subsidiary Borrowers.
The relevant Sterling Subsidiary Borrower agrees to reimburse the Sterling
Issuing Lender on each date on which the Sterling Issuing Lender notifies such
Sterling Subsidiary Borrower of the date and amount of a draft presented under
any Sterling Letter of Credit and paid by the Sterling Issuing Lender for the
amount of (a) such draft so paid and (b) any taxes (other than Excluded Taxes),
fees, charges or other costs or expenses incurred by the Sterling Issuing Lender
in connection with such payment; provided that upon the acceleration of such
reimbursement obligations in accordance with Section 8 of the Credit Agreement,
the relevant Sterling Subsidiary Borrower agrees to reimburse the Sterling
Issuing Lender for the amount equal to then maximum liability (whether direct or
contingent) of the Sterling Issuing Lender and the Sterling L/C Participants
under such Sterling Letter of Credit. Each such payment shall be made to the
Sterling Issuing Lender, at its address for notices specified herein in Sterling
and in immediately available funds, on the date on which the relevant Sterling
Subsidiary Borrower receives such notice, if received prior to 11:00 A.M.,
London time, on a Business Day (U.K.) and otherwise on the next succeeding
Business Day (U.K.).
3.6. Obligations Absolute. Any relevant Sterling Subsidiary
Borrower's obligations under this Section 3 shall be absolute and unconditional
under any and all circumstances and irrespective of any set-off, counterclaim or
defense to payment which any relevant Sterling Subsidiary Borrower may have or
have had against the Sterling Issuing Lender or any beneficiary of a Sterling
Letter of Credit. Each Sterling Subsidiary Borrower also agrees with the
Sterling Issuing Lender that the Sterling Issuing Lender shall not be
responsible for, such relevant Sterling Subsidiary Borrower's Reimbursement
Obligations under subsection 3.5 shall not be affected by, among other things,
the validity or genuineness of documents or of any endorsements thereon, even
though such documents shall in fact prove to be invalid, fraudulent or forged,
or any dispute between or among any relevant Sterling Subsidiary Borrower and
any beneficiary of any Sterling Letter of Credit or any other party to which
such Sterling Letter of Credit may be transferred or any claims whatsoever of
the relevant Sterling Subsidiary Borrower against any beneficiary of such
Sterling Letter of Credit or any such transferee. The Sterling Issuing Lender
shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Sterling Letter of Credit issued by it,
except for errors or omissions caused by the Sterling Issuing Lender's gross
negligence or willful misconduct. Each Sterling Subsidiary Borrower agrees that
any action taken or omitted by the Sterling Issuing Lender under or in
connection with any Sterling Letter of Credit issued by it or the related drafts
or documents, if done in the absence of gross negligence or willful misconduct
and in accordance with the standards of care specified in the Uniform Commercial
Code of the State of New York, shall be binding on the relevant Sterling
Subsidiary Borrower and shall not result in any liability of the Sterling
Issuing Lender to any relevant Sterling Subsidiary Borrower.
3.7. Increased Costs. If the adoption of or any change in any law or
regulation or in the interpretation thereof after the date hereof by any court
or administrative or Governmental Authority charged with the administration
thereof shall either (i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against Sterling Letters of Credit issued by the
Sterling Issuing Lender or participated in by the Lenders or (ii) impose on any
Sterling Lender any other condition regarding any Sterling Letter of Credit, and
the result of any event referred to in clauses (i) or (ii) above shall be to
increase the cost to the Sterling Issuing Lender or any Sterling Lender of
issuing or maintaining such Sterling Letter of Credit (or its participation
therein, as the case may be) (which increase
20
in cost shall be the result of the Sterling Issuing Lender's or such Lender's
reasonable allocation of the aggregate of such cost increases resulting from
such events), then, upon notice to it from the Sterling Issuing Lender or such
Lender (with a copy to the Sterling Administrative Agent) certifying that (x)
one of the events herein above described has occurred and the nature of such
event, (y) the increased cost or reduced amount resulting from such event and
(z) the additional amounts demanded by the Sterling Issuing Lender or such
Lender, as the case may be, and a reasonably detailed explanation of the
calculation thereof, the relevant Sterling Subsidiary Borrower shall immediately
pay to such Sterling Issuing Lender or such Lender, as the case may be, from
time to time as specified by the Sterling Administrative Agent or such Sterling
Lender, additional amounts which shall be sufficient to compensate such Sterling
Issuing Lender or such Sterling Lender for such increased cost, together with
interest on each such amount from the date demanded until payment in full
thereof at the rate provided in subsection 3.3. A certificate as to the fact and
amount of such increased cost incurred by the Sterling Issuing Lender or such
Sterling Lender as a result of any event mentioned in clauses (i) or (ii) above,
submitted by the Sterling Issuing Lender or such Lender to such Sterling
Subsidiary Borrower, shall be conclusive, absent manifest error.
3.8. Sterling Letter of Credit Payments. If any draft in Sterling
shall be presented for payment under any Sterling Letter of Credit, the Sterling
Issuing Lender shall promptly notify the relevant Sterling Subsidiary Borrower
and the Sterling Administrative Agent of the date and amount of the Sterling
thereof. The responsibility of the Sterling Issuing Lender to the Sterling
Subsidiary Borrowers in connection with any draft presented for payment under
any Sterling Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Sterling Letter of Credit, be limited to
determining that the documents (including each draft) delivered under such
Sterling Letter of Credit in connection with such presentment are in conformity
with such Sterling Letter of Credit.
(a) Application. To the extent that any provision of any Application
related to any Sterling Letter of Credit is inconsistent with the provisions of
the Credit Agreement, the provisions of the Credit Agreement shall apply.
(b) Purpose of the Letters of Credit. The Sterling Letters of Credit
shall be used for any lawful purposes requested by the Sterling Subsidiary
Borrowers.
APPENDIX I
PRICING GRID FOR STERLING LOANS AND FACILITY FEE
PRICING GRID
Applicable Margin
-------------------
Leverage Ratio LIBOR Reference Rate Facility Fee
- -------------- ----- -------------- ------------
> or = 3.25 to 1.00 1.200% 0.200% 0.300%
> or = 2.75 to 1.00 1.000% 0.000% 0.250%
> or = 2.25 to 1.00 0.750% 0.000% 0.250%
> or = 1.75 to 1.00 0.625% 0.000% 0.250%
> or =1.25 to 1.00 0.550% 0.000% 0.200%
< 1.25 to 1.00 0.450% 0.000% 0.175%
Changes in the Applicable Margin or in the Facility Fee Rate resulting from
changes in the Leverage Ratio shall become effective on the date (the
"Adjustment Date") on which financial statements are delivered to the Lenders
pursuant to subsection 6.1 (but in any event not later than the 45th day after
the end of each of the first three quarterly periods of each fiscal year of the
Borrower or the 90th day after the end of each fiscal year of the Borrower, as
the case may be) and shall remain in effect until the next change to be effected
pursuant to this paragraph. If any financial statements referred to above are
not delivered within the time periods specified above, then, until such
financial statements are delivered, the Leverage Ratio as at the end of the
fiscal period that would have been covered thereby shall for the purposes of
this definition be deemed to be greater than or equal to 3.25 to 1.00. In
addition, at all times while an Event of Default shall have occurred and be
continuing, the Leverage Ratio shall for the purposes of this definition be
deemed to be greater than 3.25 to 1.00. Each determination of the Leverage Ratio
pursuant to this pricing grid shall be made with respect to (or, in the case of
Average Total Indebtedness, as at the end of) the period of four consecutive
fiscal quarters of the Borrower ending at the end of the period covered by the
relevant financial statements.
ANNEX C
SECTION 1. DEFINITIONS
Defined Terms. Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement, and the following terms shall have the following meanings:
"Administrative Questionnaire" shall mean the administrative
questionnaire of each Lender referred to in subsection 10.6 of the Credit
Agreement.
"Aggregate Australian Revolving Extensions of Credit" shall mean an
amount equal to the sum of (a) the aggregate principal amount of all
Australian Dollar Loans (including, without limitation, Australian Dollar
Swing Line Loans borrowed under Australian Commitments) then outstanding
and (b) the aggregate amount of all Australian L/C Obligations then
outstanding.
"Aggregate Facility C Revolving Extensions of Credit" shall mean an
amount equal to the sum of (a) the aggregate principal amount of all
Facility C Loans (including, without limitation, Australian Dollar Swing
Line Loans borrowed under Facility C Commitments) then outstanding and (b)
the aggregate amount of all Australian L/C Obligations then outstanding in
respect of Letters of Credit issued under the Facility C Commitments.
"Applicable Margin for Australian Borrowing" shall mean the rate per
annum set forth in the pricing grid attached as Appendix I hereto.
"Application" shall mean an application, in such form as the
Australian Issuing Lender may specify from time to time, requesting such
Australian Issuing Lender to open an Australian Letter of Credit.
"Australian Dollars" or "A$" shall mean the lawful currency of the
Commonwealth of Australia.
"Australian Administrative Agent" shall mean J.P. Morgan Australia
Limited, together with its affiliates, as the agent for the Australian
Dollar Lenders under the Credit Agreement.
"Australian Administrative Office" shall mean the Australian
Administrative Agent's office located at Level 32, Grosvenor Place, 225
George Street, Sydney NSW 2000 Australia, telecopy: +61-(2)-9247-7698,
attention: Yvonne Blunt/Jason M. Lock/Graham McKinley, Agency, or such
other office in Australia as may be designated as such by the Australian
Administrative Agent by written notice to the Australian Subsidiary
Borrowers and the Australian Dollar Lenders.
"Australian Commitment" shall mean, as to any Australian Dollar
Lender, the obligation of such Australian Dollar Lender to make Australian
Dollar Loans and participate in Australian Dollar Swing Line Loans or
Australian Letters of Credit hereunder in an aggregate principal or face
amount at any one time outstanding up to but not exceeding the amount set
forth opposite such Australian Dollar Lender's name on Schedule 1 to the
Credit Agreement under the caption "Australian Commitment" or in the
Assignment and Acceptance pursuant to which such Australian Dollar Lender
became party to the Credit Agreement, as the same may be changed from time
to time pursuant to the terms hereof. The original aggregate principal
amount of the Australian Commitments is the Australian Dollar equivalent
of U.S.$25,000,000.
2
"Australian Commitment Percentage" shall mean as to any Australian
Dollar Lender at any time, the percentage of the aggregate Australian
Commitments then constituted by such Australian Dollar Lender's Australian
Commitment.
"Australian Dollar Lender" shall mean each Lender that has an
Australian Commitment or that holds Australian Dollar Loans; collectively,
the "Australian Dollar Lenders". Each Australian Dollar Lender on the date
hereof and on each date on which a payment or prepayment of interest is
made represents that it is an Eligible Australian Bank.
"Australian Dollar Loan" shall mean any Loan made under the
Australian Commitments pursuant to subsection 2.1; collectively, the
"Australian Dollar Loans".
"Australian Dollar Swing Line Commitment" shall mean the obligation
of the Australian Dollar Swing Line Lender, at any date, to make an
Australian Dollar Swing Line Loan pursuant to subsection 2.3(a) in the
amount referred to therein.
"Australian Dollar Swing Line Lender" shall mean JPMorgan Chase
Bank, N.A., Sydney Branch.
"Australian Dollar Swing Line Loan" shall mean any Australian Dollar
Swing Line Loan made pursuant to subsection 2.3 hereof.
"Australian Facility" shall mean the Australian Commitments together
with the Aggregate Australian Revolving Extensions of Credit.
"Australian Issuing Lender" shall mean JPMorgan Chase Bank, N.A.,
Sydney Branch.
"Australian L/C Commitment" shall mean the Australian Dollar
equivalent of U.S.$25,000,000.
"Australian L/C Obligations" shall mean, at any time, an amount
equal to the sum of (a) the aggregate then undrawn and unexpired amount of
then outstanding Australian Letters of Credit and (b) the aggregate amount
of drawings under Australian Letters of Credit which have not then been
reimbursed pursuant to Section 3.
"Australian L/C Participants" shall mean the collective reference to
all the Australian Dollar Lenders other than the Australian Issuing
Lender.
"Australian Lending Office" shall mean for each Australian Dollar
Lender, the lending office for such Australian Dollar Lender (or of an
affiliate of such Australian Dollar Lender) designated for each type of
Australian Dollar Loan in the Administrative Questionnaire of such
Australian Dollar Lender or such other lending office of such Australian
Dollar Lender (or of an affiliate of such Australian Dollar Lender) as
such Australian Dollar Lender may from time to time specify to the
Australian Administrative Agent and the Australian Subsidiary Borrowers as
the office by which its Australian Dollar Loans of such type are to be
made and maintained.
"Australian Letter of Credit" shall mean any Australian Standby L/C
or Australian Trade L/C, as each term is defined in subsection 3.1.
"Available Australian Commitment" shall mean, as to any Lender at
any time, the amount equal to the excess, if any, of (a) such Lender's
Australian Commitment over (b) the sum
3
of such Lender's (i) ratable portion of the Aggregate Facility C Revolving
Extensions of Credit and (ii) ratable portion of the Aggregate Australian
Revolving Extensions of Credit. The Available Australian Commitment may be
calculated as being negative at any time.
"BBR Loans" shall mean the Loans hereunder at such time as they are
made and/or being maintained at a rate of interest based upon the
applicable Bank Bill Rate.
"Bank Bill Rate" shall mean, for an Interest Period, the average bid
rate for Bills having a tenor closest to the Interest Period as displayed
on the "BBSY" page of the Reuters Monitor System on the first day of that
Interest Period. However, if the average bid rate is not displayed by
10:30 a.m. Sydney time on that day, or if it is displayed but there is an
obvious error in that rate, "Bank Bill Rate" shall mean the rate set by
the Australian Administrative Agent in good faith at approximately 10:30
a.m. Sydney time on that day, having regard, to the extent possible, to
the rates otherwise bid for Bills of that tenor at or around that time
(including any displayed on the "BBSW" page of the Reuters Monitor
System).
"Bill" shall have the meaning given such term in the Bills of
Exchange Act 1909 (Cwlth) and a reference to the drawing, acceptance or
endorsement of, or other dealing with, a Bill is to be interpreted in
accordance with that Act.
"Borrowing Date (Australia)" shall mean any Business Day (Australia)
specified in a notice as a date on which an Australian Subsidiary Borrower
requests the relevant Australian Dollar Lenders to make Australian Dollar
Loans under this Annex C to the Credit Agreement.
"Business Day (Australia)" shall mean a day on which banks are open
for business in Sydney but excludes Saturday, Sunday and any other day
which is a public holiday in Sydney.
"Dollar Equivalent (Australia)" shall mean, on any Business Day
(Australia) with respect to any amount denominated in Australian Dollars,
the amount of U.S. Dollars that would be required to purchase such amount
of Australian Dollars based upon the spot selling rate at which JPMorgan
Chase Bank offers to sell Australian Dollars for U.S. Dollars in the
Sydney foreign exchange market at approximately 11:00 A.M. Sydney time on
such Business Day (Australia) for delivery two Business Days (Australia)
later.
"Eligible Australian Bank" shall mean (a) a resident of Australia
which does not make Australian Dollar Loans as part of carrying on
business outside of Australia at or through a permanent establishment
outside of Australia; or (b) a non-resident of Australia which makes Swing
Line Loans or Revolving Credit Loans as part of carrying on business in
Australia at or through a permanent establishment of the non-resident in
Australia. In this definition, words and expressions used shall have the
meaning ascribed to them for the purposes of S. 128B of the Australian
Income Tax Assessment Act of 1936.
"Facility Fee Rate" shall mean the rate per annum set forth under
the relevant column heading in the pricing grid attached as Appendix I
hereto.
"Interest Payment Date" shall mean (i) for an Interest Period of 3
months or less, the last day of that Interest Period or (ii) for an
Interest Period which is greater than 3 months, the last day of each 3
month period (or the next following Business Day (Australia) if such day
is not a Business Day (Australia)) within that Interest Period and the
last day of, that Interest Period.
4
"Interest Period" shall mean with respect to any Australian Dollar
Loan, (i) initially, the period commencing on the date on which such
Australian Dollar Loan is made and ending one, two, three or six months or
such other period as agreed by the Australian Administrative Agent
thereafter, as selected by the relevant Australian Subsidiary Borrower in
its irrevocable written notice of borrowing as provided in subsection 2.2
and (ii) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Australian Dollar Loan and
ending one, two, three or six months thereafter, as selected by the
relevant Australian Subsidiary Borrower by irrevocable written notice to
the Australian Administrative Agent not less than three Business Days
(Australia) prior to the last day of then current Interest Period with
respect to such Australian Dollar Loan; provided that all of the foregoing
provisions relating to Interest Periods are subject to the following:
1. if any Interest Period would otherwise end on a day which
is not a Business Day (Australia), that Interest Period shall be
extended to the next succeeding Business Day (Australia) unless the
result of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period shall end
on the next preceding Business Day (Australia);
2. if the relevant Australian Subsidiary Borrower shall fail
to give notice as provided in clause (ii) in this definition, the
relevant Australian Subsidiary Borrower shall be deemed to have
requested continuation of the affected Australian Dollar Loan as
provided in subsection 2.11;
3. any Interest Period that would otherwise extend beyond the
Revolving Credit Termination Date shall end on the Revolving Credit
Termination Date; and
4. any Interest Period pertaining to an Australian Dollar Loan
that begins on the last Business Day (Australia) of a calendar month
(or on a day for which there is no numerically corresponding day in
the calendar month at the end of such Interest Period) shall end on
the last Business Day (Australia) of a calendar month.
"Overnight Rate" shall mean, with respect to any day:
(1) the Reserve Bank of Australia Official Cash Rate
(expressed as a percentage yield per annum rounded up to the nearest
two decimal places) published at or about 10:00 a.m. Sydney time on
the Reuters Monitor System screen under the heading "RBA" or, at the
discretion of the Swing Line Lender or Australian Dollar Lender
making Australian Dollar Loans to any Australian Subsidiary
Borrower, the bank bill swap rate (expressed as a percentage yield
per annum rounded up to the nearest two decimal places) published at
or about 10:00 a.m. Sydney time;
(2) if the rate under clause (1) is not published at the
relevant time, the rate (expressed as a percentage yield per annum)
determined by the Australian Administrative Agent to be the
prevailing buying rate for Australian Dollar cash deposits.
"Post-Default Rate" shall mean a rate equal to the sum or 2% plus
the rate of interest otherwise applicable to such Australian Dollar Loan.
"Requirement of Law" shall mean, as to any Person, the Certificate
of Incorporation, constitution or Articles of Incorporation, as the case
may be, and Code of Regulations and/or By-Laws or other organizational or
governing documents of such Person, and any law, treaty,
5
rule or regulation, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its
property is subject.
SECTION 2. THE AUSTRALIAN COMMITMENTS
2.1. The Australian Commitments. Subject to the terms and conditions
hereof, each Australian Dollar Lender severally (but not jointly) agrees to make
Australian Dollar Loans in Australian Dollars to each Australian Subsidiary
Borrower from time to time during the Revolving Credit Commitment Period in an
aggregate principal amount not to exceed the Available Australian Commitment of
such Australian Dollar Lender in accordance with the terms hereof (which for
this purpose shall be computed as though the amount in subclause (b)(i) in the
definition thereof is $0); provided that, after giving effect to the making of
such Australian Dollar Loans, the Aggregate Australian Revolving Extensions of
Credit will not exceed the Australian Commitment. During the Revolving Credit
Commitment Period the Australian Subsidiary Borrowers may use the Australian
Commitments by borrowing, repaying the Australian Dollar Loans in whole or in
part, and reborrowing, all in accordance with the terms and conditions hereof.
Each Australian Dollar Lender agrees that each of its Lending Installations
listed on Schedule 1 and subsequently agreed from time to time in Australia
shall be on the date hereof or the date of such agreement an Eligible Australian
Bank.
2.2. Procedure for Australian Dollar Loan Borrowing. (a) The
Australian Subsidiary Borrowers may borrow under the Australian Facility during
the Revolving Credit Commitment Period on any Business Day (Australia); provided
that the relevant Australian Subsidiary Borrower shall give the Australian
Administrative Agent irrevocable notice three Business Days (Australia) prior to
the requested Borrowing Date (Australia) (which notice must be received by the
Australian Administrative Agent prior to 11:00 A.M., Sydney time), specifying
(i) the identity of the Australian Subsidiary Borrower borrowing and the amount
to be borrowed, (ii) the requested Borrowing Date (Australia) and (iii) the
length of the Interest Period for such Australian Dollar Loan. Each borrowing by
any Australian Subsidiary Borrower pursuant to the Australian Commitments shall
be in an aggregate principal amount equal to the Australian Dollar equivalent of
U.S.$1,000,000 or a whole multiple of the Australian Dollar equivalent of
U.S.$500,000 in excess thereof.
(b) Upon receipt of any notice from an Australian Subsidiary
Borrower pursuant to this subsection 2.2, the Australian Administrative Agent
shall promptly notify each Australian Dollar Lender thereof. Each such
Australian Dollar Lender will make the amount of its ratable share (subject to
subsection 2.1) of such borrowing available to the Australian Administrative
Agent for the account of such Australian Subsidiary Borrower at the Australian
Administrative Office prior to 2:00 P.M., Sydney time, on the Borrowing Date
(Australia) requested by the such Australian Subsidiary Borrower in funds
immediately available to the Australian Administrative Agent. Such borrowing
will then be made available to such Australian Subsidiary Borrower by the
Australian Administrative Agent crediting the account of such Australian
Subsidiary Borrower on the books of the Australian Administrative Office with
the aggregate of the amounts made available to the Australian Administrative
Agent by such Australian Dollar Lenders.
2.3. Swing Line Commitments. (a) Subject to the terms and conditions
hereof, from time to time prior to the Revolving Credit Termination Date and to
the Australian Subsidiary Borrowers (i) the Australian Dollar Swing Line Lender
severally (but not jointly) agrees to make Australian Dollar Swing Line Loans in
Australian Dollars in an aggregate principal amount not to exceed the Australian
Dollar equivalent of U.S.$ 15,000,000 at any one time outstanding (each of the
foregoing individually, a "Australian Dollar Swing Line Loan"; collectively the
"Australian Dollar Swing Line Loans"); provided that, after giving effect to the
making of such Australian Dollar Swing Line Loans, the aggregate principal
6
amount of Swing Line Loans under any Revolving Facility at any one time
outstanding shall not exceed U.S.$100,000,000 and the Aggregate Australian
Revolving Extensions of Credit shall not exceed the Australian Commitments. All
Australian Dollar Swing Line Loans shall be made on terms agreed upon by the
Australian Dollar Swing Line Lender and the applicable Australian Subsidiary
Borrowers. The relevant Australian Subsidiary Borrowers shall give the
Australian Administrative Agent irrevocable notice (which notice must be
received by the Australian Administrative Agent at or prior to 1:00 p.m., Sydney
time, on the requested Borrowing Date (Australia)), specifying the amount of
each requested Australian Dollar Swing Line Loan, which shall be greater than or
equal to a minimum amount to be agreed upon by such Australian Subsidiary
Borrowers and the relevant Australian Dollar Swing Line Lender. Upon such
notice, the Australian Administrative Agent shall promptly notify the Australian
Dollar Swing Line Lender thereof. The Australian Dollar Swing Line Lender shall
make the amount of each requested Australian Dollar Swing Line Loan available to
the relevant Australian Subsidiary Borrowers in the manner directed by the
Australian Administrative Agent on the requested Borrowing Date (Australia).
(b) The Australian Dollar Swing Line Lender in its sole and absolute
discretion, may, on behalf of the relevant Australian Subsidiary Borrower (which
hereby irrevocably directs the Australian Dollar Swing Line Lender to act on its
behalf), request each Australian Dollar Lender, including the Australian Dollar
Swing Line Lender, with respect to all other Australian Dollar Swing Line Loans,
to make an Australian Dollar Loan, in an amount equal to such Australian Dollar
Lender's Revolving Percentage under the Australian Facility of the amount of the
Australian Dollar Swing Line Loans (the "Refunded Australian Dollar Swing Line
Loans") outstanding on the date such notice is given. Unless any of the events
described in paragraph (f) of Section 8 of the Credit Agreement shall have
occurred (in which event the procedures of paragraph (c) of this subsection 2.3
shall apply), each Australian Dollar Lender shall make the proceeds of its
Australian Dollar Loan available to the Australian Administrative Agent for the
account of the Australian Dollar Swing Line Lender, at the office of the
Australian Administrative Agent prior to 11:00 a.m. (Sydney time) in funds
immediately available on the third Business Day (Australia) following the date
such notice is given. The proceeds of such Australian Dollar Loans shall be
immediately applied to repay the Refunded Australian Dollar Swing Line Loans.
(c) If, prior to the making of an Australian Dollar Swing Line Loan
pursuant to paragraph (b) of subsection 2.3, one of the events described in
paragraph (f) of Section 8 of the Credit Agreement shall have occurred, each
Australian Dollar Lender hereby agrees to and will, on the date such Australian
Dollar Swing Line Loan was to have been made, purchase an undivided
participating interest in each Refunded Australian Dollar Swing Line Loan in an
amount equal to its Revolving Percentage under the Australian Facility of such
Refunded Australian Dollar Swing Line Loan. Such Revolving Credit Lender will
immediately transfer to the Australian Administrative Agent for the account of
the Australian Dollar Swing Line Lender, in immediately available funds of the
amount of its participations and, upon its receipt of its ratable share thereof,
the Australian Dollar Swing Line Lender will deliver to such Australian Dollar
Lender a Swing Line Loan Participation Certificate dated the date of receipt of
such funds and in such amount.
(d) Whenever, at any time after the Australian Dollar Swing Line
Lender has received from any Australian Dollar Lender such Australian Dollar
Lender's participating interest in a Refunded Australian Dollar Swing Line Loan
and the Australian Dollar Swing Line Lender receives any payment on account
thereof, the Australian Dollar Swing Line Lender will distribute to such
Australian Dollar Lender through the Australian Administrative Agent its
participating interest; provided, however, that in the event that such payment
received by the Australian Dollar Swing Line Lender is required to be returned,
such Australian Dollar Lender will return to the Australian Dollar Swing Line
Lender through the Australian Administrative Agent any portion thereof
previously distributed by the Australian Dollar Swing Line Lender to it.
7
2.4. Participation. Each Australian Dollar Lender's obligation to
purchase participating interests pursuant to paragraph (c) of subsection 2.3
shall be absolute and unconditional and shall not be affected by any
circumstances, including, without limitation, (a) any set-off, counterclaim,
recoupment, defense or other right which such Australian Dollar Lender may have
against the Australian Dollar Swing Line Lender, any Australian Subsidiary
Borrower or any other Person for any reason whatsoever; (b) the occurrence or
continuance of an Event of Default; (c) any adverse change in the condition
(financial or otherwise) of the Borrower or any Australian Subsidiary Borrower;
(d) any breach of the Credit Agreement by the Borrower, any Subsidiary Borrower
or any other Revolving Credit Lender; or (e) any other circumstance, happening
or event whatsoever, whether or not similar to any of the foregoing.
Notwithstanding the foregoing, no Australian Dollar Lender shall have any
obligation to purchase participating interests pursuant to paragraph (c) of
subsection 2.3 or to make any Refunded Australian Dollar Swing Line Loans in
respect of any Australian Dollar Swing Line Loan which was made at any time
following receipt by the Australian Administrative Agent of a notice from any
Australian Dollar Lender specifying that (x) a Default or Event of Default has
occurred and is continuing and (y) explicitly stating that such Australian
Dollar Lender will not purchase such participating interests or make Refunded
Australian Dollar Swing Line Loans with respect to Australian Dollar Swing Line
Loans made after the date of receipt of such notice.
2.5. Repayment of Australian Dollar Loans; Evidence of Debt. (a)
Each Australian Subsidiary Borrower hereby unconditionally promises to pay to
the Australian Administrative Agent for the account of each Australian Dollar
Lender (i) then unpaid principal amount of each Australian Dollar Loan of such
Australian Dollar Lender on the Revolving Credit Termination Date (or such
earlier date on which the Loans become due and payable pursuant to Section 8 of
the Credit Agreement) and (ii) then unpaid principal amount of the Australian
Dollar Swing Line Loans of the Australian Dollar Swing Line Lender on the
Revolving Credit Termination Date (or such earlier date on which the Australian
Dollar Swing Line Loans become due and payable pursuant to Section 8 of the
Credit Agreement). Each Australian Subsidiary Borrower hereby unconditionally
promises to pay to the Australian Administrative Agent for the account of such
Lender (i) then unpaid principal amount of each Loan to such Subsidiary Borrower
on the Revolving Credit Termination Date (or such earlier date on which the
Revolving Credit Loans become due and payable pursuant to Section 8 of the
Credit Agreement) and (ii) then unpaid principal amount of the Australian Dollar
Swing Line Loans to such Subsidiary Borrower of the Australian Dollar Swing Line
Lender on the Revolving Credit Termination Date (or such earlier date on which
the Australian Dollar Swing Line Loans became due and payable pursuant to
Section 8 of the Credit Agreement). Each of the Australian Subsidiary Borrowers
hereby further agrees to pay interest on the unpaid principal amount of the
Australian Dollar Loans from time to time outstanding to such Australian
Subsidiary Borrower from the date hereof until payment in full thereof at the
rates per annum, and on the dates, set forth in subsection 2.12.
(a) Each Australian Dollar Lender shall maintain in accordance with
its usual practice an account or accounts evidencing indebtedness of the
Australian Subsidiary Borrowers to such Australian Dollar Lender resulting from
each Australian Dollar Loan of such Australian Dollar Lender from time to time,
including the amounts of principal and interest payable and paid to such
Australian Dollar Lender from time to time under the Credit Agreement.
(b) The Australian Administrative Agent shall maintain a register
(the "Australian Register") in respect of the Australian Facility in a manner
similar to the Register described in Section 10.6(b)(iv) of the Credit
Agreement, and a subaccount therein for each Australian Dollar Lender, in which
shall be recorded (i) the amount of each Australian Dollar Loan made hereunder
and the type thereof, (ii) the amount of any principal or interest due and
payable or to become due and payable from any Australian Subsidiary Borrower to
each Australian Dollar Lender hereunder and (iii) both the amount of
8
any sum received by the Australian Administrative Agent hereunder from any
Australian Subsidiary Borrower and each Australian Dollar Lender's share
thereof.
(c) The entries made in the Australian Register and the accounts of
each Australian Dollar Lender maintained pursuant to subsection 2.5(b) shall, to
the extent permitted by applicable law, be prima facie evidence of the existence
and amounts of the obligations of each Australian Subsidiary Borrower therein
recorded; provided, however, that the failure of any Australian Dollar Lender or
the Australian Administrative Agent to maintain the Australian Register or any
such account, or any error therein, shall not in any manner affect the
obligation of any Australian Subsidiary Borrower to repay (with applicable
interest) the Australian Dollar Loans made to such Australian Subsidiary
Borrower by such Australian Dollar Lender in accordance with the terms of the
Credit Agreement.
2.6. Facility Fee. The Australian Subsidiary Borrowers agree to pay
to the Australian Administrative Agent, for the account of each Australian
Dollar Lender, a facility fee for the period from and including the Closing Date
to the Revolving Credit Termination Date, calculated as an amount equal to the
product of (a) the Facility Fee Rate and (b) the average daily amount of the
Australian Commitment of such Lender (regardless of usage) during the period for
which such facility fee is calculated, payable quarterly in arrears on the last
day of each March, June, September and December and on the Revolving Credit
Termination Date.
2.7. Termination or Reduction of the Australian Commitments.
(a) Optional. The Australian Subsidiary Borrowers shall have the
right, upon not less than five Business Days' (Australia) written notice to the
Australian Administrative Agent, to terminate the Australian Commitments or,
from time to time, reduce the amount of the Australian Commitments, provided
that (i) any such reduction shall be accompanied by prepayment of the Australian
Dollar Loans by the relevant Australian Subsidiary Borrower, together with
accrued interest on the amount so prepaid to the date of such prepayment, to the
extent, if any, the Available Australian Commitments would be negative as a
result of such reduction and (ii) any such termination of the Australian
Commitments shall be accompanied by (A) prepayment in full of the Australian
Dollar Loans then outstanding hereunder, (B) cash collateralization of all
Australian L/C Obligations then outstanding in accordance with the provisions of
subsection 2.10, and (C) payment of accrued interest thereon to the date of such
prepayment and the payment of any unpaid fees then accrued hereunder (including,
without limitation, in respect of any Australian Letters of Credit). Upon
receipt of such notice, the Australian Administrative Agent shall promptly
notify each Lender thereof. Any such reduction shall be in an amount equal to
the Australian Dollar equivalent of U.S.$500,000 or a whole multiple of the
Australian Dollar equivalent of U.S.$250,000 in excess thereof and shall reduce
permanently the amount of the Australian Commitments then in effect.
(b) Mandatory. The Revolving Credit Commitments shall automatically
terminate on the Revolving Credit Termination Date and all Australian Dollar
Loans shall be repaid and to the extent any Australian Letter of Credit remains
outstanding after the Revolving Credit Termination Date, the relevant Australian
Subsidiary Borrower shall cash collateralize such Australian L/C Obligations
(and the fees thereon) in accordance with the provisions of subsection 2.10. The
Revolving Credit Commitments shall also be reduced in accordance with subsection
2.9.
2.8. Optional Prepayments. Any Australian Subsidiary Borrower
may, at any time and from time to time, prepay the Australian Dollar Loans made
to it hereunder, in each case in whole or in part, without premium or penalty,
upon at least three Business Days' (Australia), in the case of BBR Loans, and on
one Business Day's (Australia), in the case of Loans bearing interest at the
Overnight Rate, irrevocable notice to the Australian Administrative Agent,
specifying the date and amount of prepayment.
9
If such notice is given, the relevant Australian Subsidiary Borrower shall make
such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to such
date on the amount prepaid. Partial prepayments shall be in an aggregate
principal amount of the Australian Dollar equivalent of U.S.$500,000 or a whole
multiple of the Australian Dollar equivalent of U.S.$250,000 in excess thereof.
2.9. Mandatory Prepayments. The Australian Subsidiary Borrowers,
without notice or demand, shall immediately prepay the Australian Dollar Loans,
to the extent, if any, that the Available Australian Commitments are negative,
together with accrued interest to the date of such prepayment on the amount so
prepaid; provided that if such prepayment is required solely as a result of a
change in the aggregate Dollar Equivalent (Australia) of the Australian Dollar
Loans, no prepayment shall be made unless such prepayment is required pursuant
to subsection 2.21.
2.10. Cash Collateralization of Australian Letters of Credit. To the
extent that at any time and from time to time, the Australian L/C Obligations
exceed the amount of the Australian L/C Commitments or the Australian L/C
Obligations exceed the Australian Commitments (whether pursuant to subsections
2.7, 2.8, 2.9 or otherwise), the Australian Subsidiary Borrowers shall cash
collateralize (in a manner reasonably satisfactory to the Australian
Administrative Agent) such portion of the Australian L/C Obligations (and the
fees thereon through the stated expiration date of the Australian Letters of
Credit giving rise to such Australian L/C Obligations) which is in excess of the
Australian L/C Commitments or such Australian Commitments, as applicable.
2.11. Continuation Options. (a) Any Australian Dollar Loan may be
continued as such upon the expiration of an Interest Period by compliance by the
Australian Subsidiary Borrowers with the notice provisions contained in the
definition of Interest Period, provided that no Australian Dollar Loan may be
continued as such when any Default or Event of Default has occurred and is
continuing.
(b) No continuation of any Australian Dollar Loans shall be made
pursuant to this subsection 2.11 if, after giving effect to such continuation
the amount of the Available Australian Commitments would be negative.
2.12. Interest Rate and Payment Dates.
(a) Each Australian Dollar Loan shall bear interest for each day
during each Interest Period with respect thereto at a rate per annum equal to
the Bank Bill Rate determined for such Interest Period (or, as applicable, the
Overnight Rate), plus the Applicable Margin.
(b) If all or a portion of (i) the principal amount of any
Australian Dollar Loan or any reimbursement obligation, (ii) any interest
payable thereon or (iii) any facility fee, commission or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum which is (A) the rate pursuant to paragraph (a) of this subsection
plus 2% from the date of such non-payment until such amount is paid in full (as
well after as before judgment). The Australian Administrative Agent may choose
any Interest Period from time to time (including one Interest Period of shorter
than one month) with respect to any overdue amount bearing interest based upon
paragraph (a) of this subsection.
(c) Interest shall be payable in arrears on each Interest Payment
Date, except that interest payable pursuant to subsection 2.12(b) shall be
payable upon demand.
10
2.13. Computation of Interest and Fees. Each determination of an
interest rate by the Australian Administrative Agent pursuant to any provision
of this Annex C shall be conclusive and binding on the Australian Subsidiary
Borrowers absent manifest error.
(b) Interest shall be calculated on the basis of a 365- (366-, as
the case may be) day year for the actual days elapsed. The Australian
Administrative Agent shall as soon as practicable notify the affected Australian
Dollar Lenders of each determination of the Bank Bill Rate. Any change in the
interest rate on an Australian Dollar Loan resulting from a change in any
reserve requirements shall become effective as of the opening of business on the
day on which such change in reserve requirements becomes effective. The
Australian Administrative Agent shall as soon as practicable notify the affected
Australian Dollar Lenders of the Closing Date and the amount of such change in
interest rate.
(c) The Australian Administrative Agent shall, at the request of the
Australian Subsidiary Borrowers or any Australian Dollar Lender, deliver to the
Australian Subsidiary Borrowers or such Australian Dollar Lender a statement
showing in reasonable detail the calculations used by the Australian
Administrative Agent in determining any interest rate pursuant to subsection
2.12, excluding any Bank Bill Rate which is based upon the "BBSW" page of the
Reuters Monitor System.
2.14. Inability to Determine Interest Rate. In the event that the
Australian Administrative Agent has reasonably determined (which determination
shall be conclusive and binding upon the Australian Subsidiary Borrowers absent
manifest error) that by reason of circumstances affecting the interbank
depositary market, adequate and reasonable means do not exist for ascertaining
the Bank Bill Rate applicable pursuant to subsection 2.12(a) for any Interest
Period with respect to (a) a proposed Australian Dollar Loan or (b) the
continuation of an Australian Dollar Loan beyond the expiration of then current
Interest Period with respect thereto, the Australian Administrative Agent shall
forthwith give telecopy or telephonic notice of such determination, confirmed in
writing, to the relevant Australian Subsidiary Borrowers and the Australian
Dollar Lenders at least one Business Days (Australia) prior to, as the case may
be, the requested Borrowing Date (Australia) for such Australian Dollar Loan or
the last day of such Interest Period. If such notice is given (i) any requested
Australian Dollar Loan shall bear interest at the Overnight Rate plus the
Applicable Margin and (ii) any outstanding Australian Dollar Loan shall, at the
end of such Interest Period, be continued at the Overnight Rate plus the
Applicable Margin. Until such notice has been withdrawn by the Australian
Administrative Agent, no further Bank Bill Rate Australian Dollar Loans shall be
made. Such notice shall be withdrawn by the Australian Administrative Agent when
the Australian Administrative Agent shall reasonably determine that adequate and
reasonable means exist for ascertaining the Bank Bill Rate.
2.15. Pro Rata Treatment and Payments. Each borrowing under and any
reduction of the Australian Commitments shall be made ratably according to each
Australian Dollar Lenders' share of the Australian Commitments.
(b) Each payment (including each prepayment) on account of principal
of and interest on the Australian Dollar Loans shall be made ratably according
to the respective outstanding principal amounts of such Loans then held by the
Australian Dollar Lenders.
(c) All payments (including prepayments) to be made by any
Australian Subsidiary Borrower hereunder, whether on account of principal,
interest, fees or otherwise, shall be made without set off or counterclaim and
shall be made prior to 12:00 Noon, Sydney time, on the due date thereof to the
Australian Administrative Agent, for the account of the relevant Australian
Dollar Lenders, at the Australian Administrative Office, in Australian Dollars,
and in immediately available funds. The Australian Administrative Agent shall
distribute such payments to the relevant Australian Dollar Lenders promptly upon
receipt in like funds as received. If any payment on an Australian Dollar Loan
becomes
11
due and payable on a day other than a Business Day (Australia), the maturity
thereof shall be extended to the next succeeding Business Day (Australia) unless
the result of such extension would be to extend such payment into another
calendar month, in which event such payment shall be made on the immediately
preceding Business Day (Australia).
(d) Unless the Australian Administrative Agent shall have been
notified in writing by any Australian Dollar Lender prior to a Borrowing Date
(Australia) that such Australian Dollar Lender will not make the amount that
would constitute its share of the borrowing on such date available to the
Australian Administrative Agent, the Australian Administrative Agent may assume
that such Australian Dollar Lender has made such amount available to the
Australian Administrative Agent on such Borrowing Date (Australia), and the
Australian Administrative Agent may, in reliance upon such assumption, make
available to the relevant Australian Subsidiary Borrower a corresponding amount.
If such amount is made available to the Australian Administrative Agent on a
date after such Borrowing Date (Australia), such Australian Dollar Lender shall
pay to the Australian Administrative Agent on demand an amount equal to the
product of (i) the Overnight Rate during such period as quoted by the Australian
Administrative Agent, times (ii) the amount of such Australian Dollar Lender's
share of such borrowing, times (iii) a fraction the numerator of which is the
number of days that elapse from and including such Borrowing Date (Australia) to
the date on which such Australian Dollar Lender's Revolving Percentage of such
borrowing shall have become immediately available to the Australian
Administrative Agent and the denominator of which is 360 (the "Effective
Interbank Rate"). A certificate of the Australian Administrative Agent submitted
to any Australian Dollar Lender with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error. If such amount
is so made available, such payment to the Australian Administrative Agent shall
constitute such Australian Dollar Lender's Loan on such Borrowing Date
(Australia) for all purposes of this Agreement. If such amount is not so made
available to the Australian Administrative Agent, then the Australian
Administrative Agent shall notify the relevant Australian Subsidiary Borrower of
such failure and on the fourth Business Days (Australia) following such
Borrowing Date (Australia), such Australian Subsidiary Borrower shall pay to the
Australian Administrative Agent such ratable portion, together with interest
thereon for each day that such Australian Subsidiary Borrower had the use of
such ratable portion, at the Effective Interbank Rate. Nothing contained in this
subsection 2.15(d) shall relieve any Australian Dollar Lender which has failed
to make available its ratable portion of any borrowing hereunder from its
obligation to do so in accordance with the terms hereof.
(e) The failure of any Australian Dollar Lender to make the
Australian Dollar Loan to be made by it on any Borrowing Date (Australia) shall
not relieve any other Australian Dollar Lender of its obligation, if any,
hereunder to make its Australian Dollar Loan on such Borrowing Date (Australia),
but no Australian Dollar Lender shall be responsible for the failure of any
other Australian Dollar Lender to make the Australian Dollar Loan to be made by
such other Australian Dollar Lender on such Borrowing Date (Australia).
2.16. Illegality. Notwithstanding any other provisions herein, if
any introduction of or change in any law, regulation, treaty or directive or in
the interpretation or application thereof occurring after the date hereof shall
make it unlawful for any Australian Dollar Lender to make or maintain BBR Loans
as contemplated by this Annex C, (a) such Australian Dollar Lender shall
forthwith give telecopy or telephonic notice of such circumstances, confirmed in
writing, to the relevant Australian Subsidiary Borrower (which notice shall be
withdrawn by such Australian Dollar Lender when such Australian Dollar Lender
shall reasonably determine that it shall no longer be illegal for such
Australian Dollar Lender to make or maintain BBR Loans), (b) the commitment of
such Australian Dollar Lender hereunder to make BBR Loans shall forthwith be
canceled and (c) such Australian Dollar Lender's Australian Dollar Loans then
outstanding, if any, shall be converted automatically to bear interest at the
Overnight Rate plus the Applicable Margin on the last day of then current
Interest Period with respect to such BBR
12
Loans or within such earlier period as may be required by law. Each Australian
Subsidiary Borrower hereby agrees promptly to pay the Australian Administrative
Agent for the account of each Australian Dollar Lender, upon demand by the
Australian Administrative Agent, any additional amounts necessary to compensate
the Australian Dollar Lenders for any costs incurred by the Australian Dollar
Lenders in making any conversion in accordance with this subsection 2.16,
including, but not limited to, any interest or fees payable by the Australian
Dollar Lenders to lenders of funds obtained by them in order to make or maintain
their BBR Loans hereunder (the Australian Administrative Agent's notice of such
costs, as certified to such Australian Subsidiary Borrower, to be conclusive,
absent manifest error).
2.17. Requirements of Law. (a) In the event that any introduction of
or change in any law, regulation, treaty or directive or in the interpretation
or application thereof occurring after the date hereof or compliance by any
Australian Dollar Lender with any request or directive (whether or not having
the force of law) from any central bank or other governmental authority, agency
or instrumentality:
(i) shall subject such Australian Dollar Lender to any tax of any
kind, whatsoever with respect to the Credit Agreement, including this Annex C,
any Australian Letter of Credit, any Application, or any Australian Dollar Loan
made by it or its obligation to make Australian Dollar Loans or change the basis
of taxation of payments to such Australian Dollar Lender of principal, facility
fee, interest or any other amount payable hereunder (other than Non-Excluded
Taxes (as defined in subsection 2.19) or changes in the rate of tax on the
overall net income of such Australian Dollar Lender)
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by, or
deposits or other liabilities in or for the account of, advances or loans by, or
other credit extended by, or any other acquisition of funds by, any office of
such Australian Dollar Lender which are not otherwise included in the
determination of the Bank Bill Rate hereunder, or
(iii) shall impose on such Australian Dollar Lender or the interbank
depositary market any other condition;
and the result of any of the foregoing is to increase the cost to such
Australian Dollar Lender (which increase in cost shall be the result of such
Australian Dollar Lender's reasonable allocation of the aggregate of such cost
increases resulting from such events), of making, renewing or maintaining
Australian Dollar Loans or issuing or participating in Australian Letters of
Credit or to reduce any amount receivable thereunder then, in any such case, the
relevant Australian Subsidiary Borrower shall, upon notice to it from such
Australian Dollar Lender (with a copy to the Administrative Agent) certifying
that (x) one of the events described in this subsection 2.17(a) has occurred and
the nature of such event, (y) the increased cost or reduced amount resulting
from such event and (z) the additional amounts demanded by such Australian
Dollar Lender and a reasonably detailed explanation of the calculation thereof,
promptly pay to the Australian Administrative Agent for the account of the
relevant Australian Dollar Lender, upon demand by the Australian Administrative
Agent, without duplication, any additional amounts necessary to compensate such
Australian Dollar Lender for such increased cost or reduced amount receivable
which such Australian Dollar Lender deems to be material as determined in good
faith by such Australian Dollar Lender with respect to the Credit Agreement,
including this Annex C, or the Australian Dollar Loans made hereunder.
(b) In the event that any Australian Dollar Lender shall have
determined that any change in any Requirement of Law regarding capital adequacy
or in the interpretation or application thereof or compliance by such Australian
Dollar Lender or any corporation controlling such Australian Dollar Lender with
any request or directive regarding capital adequacy (whether or not having the
force of law)
13
from any Governmental Authority made subsequent to the date hereof does or shall
have the effect of reducing the rate of return on such Australian Dollar
Lender's or such corporation's capital as a consequence of its obligations
hereunder or under any Letters of Credit to a level below that which such
Australian Dollar Lender or such corporation could have achieved but for such
change or compliance (taking into consideration such Australian Dollar Lender's
or such corporation's policies with respect to capital adequacy) by an amount
deemed by such Australian Dollar Lender to be material, then from time to time,
within 15 days after submission by such Australian Dollar Lender to the
Australian Subsidiary Borrowers (with a copy to the Australian Administrative
Agent) of a written request therefor certifying that (x) one of the events
described in this subsection 2.17(b) has occurred and the nature of such event,
(y) the increased cost or reduced amount resulting from such event and (z) the
additional amounts demanded by such Australian Dollar Lender and a reasonably
detailed explanation of the calculation thereof, the Australian Subsidiary
Borrowers shall pay to such Australian Dollar Lender such additional amount or
amounts as will compensate such Australian Dollar Lender for such reduction.
(c) Such Lender who has submitted a certificate as to additional
amounts payable pursuant to paragraphs (a) and (b) above agrees to use
reasonable efforts for a period of 90 days following the submission of such
certificate to make the Australian Dollar Loans available by some other means
(including changing its Lending Installation).
(d) A certificate as to any additional amounts payable pursuant to
paragraphs (a) and (b) above submitted by any Australian Dollar Lender to an
Australian Subsidiary Borrower shall be conclusive absent manifest error.
2.18. Indemnity. Each Australian Subsidiary Borrower agrees to
indemnify each Australian Dollar Lender and to hold each Australian Dollar
Lender harmless from any loss or expense which such Australian Dollar Lender may
sustain or incur as a consequence of (a) default by such Australian Subsidiary
Borrower in payment of the principal amount of or interest on any Australian
Dollar Loans including, but not limited to, any such loss or expense arising
from interest or fees payable by such Australian Dollar Lender to lenders of
funds obtained by them in order to maintain their Australian Dollar Loans, (b)
default by such Australian Subsidiary Borrower in borrowing Australian Dollar
Loans after such Australian Subsidiary Borrower has given a notice in accordance
with subsection 2.2, (c) default by such Australian Subsidiary Borrower in
making any prepayment of an Australian Dollar Loan after such Australian
Subsidiary Borrower has given a notice in accordance with subsection 2.8, and
(d) the making of any payment of Australian Dollar Loans on a day which is not
the last day of the applicable Interest Period with respect thereto, including,
but not limited to, any such loss or expense arising from interest or fees
payable by the Australian Dollar Lenders to lenders of funds obtained by them in
order to maintain their Australian Dollar Loans hereunder. This covenant shall
survive termination of the Credit Agreement. The obligations of indemnity of
each of the respective Australian Subsidiary Borrowers hereunder are limited
only to the loss and expense described herein arising from or as a result of any
act or omission by such Australian Subsidiary Borrower, and are not, and shall
not be deemed to be, the joint and several obligations of each such Australian
Subsidiary Borrower as to any loss or expense arising from or as a result of any
act or omission by the other Australian Subsidiary Borrowers.
2.19. Taxes. All payments made by the Australian Subsidiary
Borrowers in respect of amounts owing under this Annex C shall be made free and
clear of, and without deduction or withholding for or on account of, any present
or future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding gross or net
income or gross receipts taxes, ad valorem taxes, personal property and/or sales
taxes and franchise taxes (imposed in lieu of net income taxes) imposed on the
Australian Administrative Agent or any Australian Dollar Lender as a result of a
present or former
14
connection between the Australian Administrative Agent or such Australian Dollar
Lender and the jurisdiction of the Governmental Authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Australian Administrative Agent or such
Australian Dollar Lender having executed, delivered or performed its obligations
or received a payment under, or enforced, this Annex C). If any such
non-excluded taxes, levies, imposts, duties, charges, fees deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Australian Administrative Agent or any Australian Dollar Lender
hereunder, the amounts so payable to the Australian Administrative Agent or such
Australian Dollar Lender shall be increased to the extent necessary to yield to
the Australian Administrative Agent or such Australian Dollar Lender (after
payment of all Non-Excluded Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Annex C, provided,
however, that none of the Australian Subsidiary Borrowers shall be required to
increase any such amounts payable to the Australian Administrative Agent or any
Australian Dollar Lender if such increased amount arises as a result of the
failure of such Australian Dollar Lender or the Australian Administrative Agent
to be an Eligible Australian Bank or as a result of the failure of the
Australian Administrative Agent or such Australian Dollar Lender to provide its
tax file number, ABN or similar information to the Australian Subsidiary
Borrowers. The Australian Subsidiary Borrowers shall also indemnify the
Australian Administrative Agent and each Australian Dollar Lender on an
after-tax basis for any additional taxes on net income which the Australian
Administrative Agent or such Australian Dollar Lender, as the case may be, may
be obligated to pay as a result of the receipt of additional amounts under this
subsection 2.19. Whenever any Non-Excluded Taxes are payable by any Australian
Subsidiary Borrower, as promptly as possible thereafter but in any event within
45 days after the date of payment such Australian Subsidiary Borrower shall send
to the Australian Administrative Agent for its own account or for the account of
such Australian Dollar Lender, as the case may be, a certified copy of an
original official receipt received by such Australian Subsidiary Borrower
showing payment thereof. If any Australian Subsidiary Borrower fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Australian Administrative Agent the required receipts or other
required documentary evidence, such Australian Subsidiary Borrower shall
indemnify the Australian Administrative Agent and the Australian Dollar Lenders
for any incremental taxes, interest or penalties that may become payable by the
Australian Administrative Agent or any Australian Dollar Lender as a result of
any such failure. The agreements in this subsection shall survive the
termination of this Annex C and the payment of the Australian Dollar Loans and
all other amounts payable hereunder.
2.20. Use of Proceeds. The Australian Facility and the proceeds of
the Australian Dollar Loans shall be used by the Australian Subsidiary Borrowers
for working capital and other general corporate purposes (which shall include
any purpose expressly permitted by the Credit Agreement) of the Australian
Subsidiary Borrowers; provided that, notwithstanding the foregoing, none of the
proceeds of the Australian Dollar Loans may be used to finance any Hostile
Take-Over Bid.
2.21. Controls on Prepayment if Aggregate Revolving Extensions of
Credit Exceed Aggregate Revolving Credit Commitments. (a) The Australian
Subsidiary Borrowers will implement and maintain internal controls to monitor
the borrowings and repayments of Australian Dollar Loans by the relevant
Australian Subsidiary Borrowers and the issuance of and drawings under
Australian Letters of Credit, with the object of preventing any request for an
Extension of Credit that would result in the Available Australian Commitments
becoming negative by more than 5% of the Australian Commitments, if such
Commitments are negative by more than 5%, the Australian Subsidiary Borrowers
will promptly notify the Australian Administrative Agent.
(b) The Australian Administrative Agent will calculate the Available
Australian Commitments from time to time, and in any event not less frequently
than once during each calendar quarter. In making such calculations, the
Australian Administrative Agent will rely on the information
15
most recently received by it from the Australian Dollar Swing Line Lender in
respect of outstanding Australian Dollar Swing Line Loans and from the
Australian Issuing Lender in respect of outstanding Australian L/C Obligations.
(c) In the event that on any date the Australian Administrative
Agent calculates that (i) the Available Australian Commitments have become
negative solely as a result of a change in the aggregate Dollar Equivalent
(Australia) of the Australian Dollar Loans by more than 5%, the Australian
Administrative Agent will give notice to such effect to the relevant Australian
Subsidiary Borrowers and the Australian Dollar Lenders. Within five Business
Days (Australia) of receipt of any such notice, such Australian Subsidiary
Borrower will, as soon as practicable but in any event within five Business Days
(Australia) of receipt of such notice, first, make such repayments or
prepayments of Australian Dollar Loans (together with interest accrued to the
date of such repayment or prepayment), second, pay any Reimbursement Obligations
under the Australian Facility then outstanding and third, cash collateralize any
outstanding Australian L/C Obligations on terms reasonably satisfactory to the
Australian Administrative Agent as shall be necessary to cause the Available
Australian Commitments not to be negative.
2.22. Lending Installations. (a) Subject to subsection 2.4 of the
Credit Agreement and subsections 2.1 and 2.3 of this Annex C each Australian
Dollar Lender may book its Australian Dollar Loans at any Lending Installation
selected by such Australian Dollar Lender and may change its Lending
Installation from time to time. All terms of the Credit Agreement shall apply to
any such Lending Installation and the Australian Dollar Loans made hereunder
shall be deemed held by each Australian Dollar Lender for the benefit of such
Lending Installation, provided that such Lending Installation is an Eligible
Australian Bank. Each Australian Dollar Lender may, by written notice to the
Australian Administrative Agent and the Australian Subsidiary Borrowers in
accordance with subsection 10.2 of the Credit Agreement and subject always to
subsection 2.4 of the Credit Agreement and subsections 2.1 and 2.3 of this Annex
C designate replacement or additional Lending Installations through which
Australian Dollar Loans will be made by it and for whose account Australian
Dollar Loan payments are to be made.
(b) Each Australian Dollar Lender agrees that, upon the occurrence
of any event giving rise to the operation of subsection 2.17 or 2.19 with
respect to such Australian Dollar Lender, it will, if requested by the
Australian Subsidiary Borrower, use reasonable efforts (subject to overall
policy considerations of such Australian Dollar Lender) to designate another
Lending Installation for any Australian Dollar Loans affected by such event with
the object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the sole judgment of such Australian
Dollar Lender, cause such Australian Dollar Lender and any of its Lending
Installations to suffer no economic, legal or regulatory disadvantage, and
provided, further, that nothing in this subsection 2.22(b) shall affect or
postpone any of the obligations of the Australian Subsidiary Borrowers or the
rights of any Australian Dollar Lender pursuant to subsection 2.17 or 2.19.
2.23. Notices to Lenders. All notices under this Section 2 to
Australian Dollar Lenders by the Australian Subsidiary Borrowers or the
Australian Administrative Agent, and all payments by the Australian
Administrative Agent to the Australian Dollar Lenders, shall be made to the
respective Lending Installations of the Australian Dollar Lenders maintaining
the relevant Australian Dollar Loans or Australian Commitments.
SECTION 3. LETTER OF CREDIT FACILITIES
3.1. Australian L/C Commitment. (a) Subject to the terms and
conditions hereof, the Australian Issuing Lender, in reliance on the agreements
of the other Lenders set forth in subsection 3.4(a), agrees to issue letters of
credit ("Australian Letters of Credit") under the Australian Commitments
16
for the account of any Australian Subsidiary Borrower on any Business Day
(Australia) during the Revolving Credit Commitment Period in such form as may be
approved from time to time by the Australian Issuing Lender; provided that the
Australian Issuing Lender shall not have any obligation to issue any Australian
Letter of Credit if, after giving effect to such issuance, (i) the Australian
L/C Obligations would exceed the Australian L/C Commitment or (ii) the Available
Australian Commitments would be negative. Each Australian Letter of Credit shall
(i) be denominated in Australian Dollars, (ii) be either (x) a standby letter of
credit (a "Australian Standby L/C") issued to support obligations of any
Australian Subsidiary Borrower, contingent or otherwise, with an expiry date
occurring not later than one year after such standby Australian L/C was issued
(which expiry date may be subject to one or more automatic extensions of one
year or less unless 60-day notice, or such other notice as is satisfactory to
the relevant Australian Subsidiary Borrower and the Australian Issuing Lender,
is given that any such extension shall not be effective) or (y) a documentary
letter of credit in respect of the purchase of goods or services by any
Australian Subsidiary Borrower in the ordinary course of business with an expiry
date occurring not later than one year after such documentary letter of credit
was issued and, in the case of any such documentary letter of credit which is to
be accepted by the Australian Issuing Lender pending payment at a date after
presentation of sight drafts, with a payment date no more than one year after
such drafts were presented for acceptance (a "Australian Trade L/C") and (iii)
expire no later than five days before the Revolving Credit Termination Date.
(b) Each Australian Standby L/C shall be subject to the
International Standby Practices and each Australian Trade L/C shall be subject
to the Uniform Customs and, in each case, to the extent not inconsistent
therewith, the laws of the State of New York.
(c) The Australian Issuing Lender shall at no time be obligated to
issue any Australian Letter of Credit hereunder if such issuance would conflict
with, or cause the Australian Issuing Lender or any Australian L/C Participant
to exceed any limits imposed by, any applicable Requirement of Law.
3.2. Procedure for Issuance of Letters of Credit. Any Australian
Subsidiary Borrower may from time to time request that the Australian Issuing
Lender issue an Australian Letter of Credit by delivering to the Australian
Issuing Lender (with a copy to the Australian Administrative Agent) at its
address for notices specified herein an Application therefor, completed to the
satisfaction of the Australian Issuing Lender, and such other certificates,
documents and other papers and information as the Australian Issuing Lender may
reasonably request. Upon receipt of any Application, the Australian Issuing
Lender will process such Application and the certificates, documents and other
papers and information delivered to it in connection therewith in accordance
with its customary procedures and shall promptly issue the Australian Letter of
Credit requested thereby (but in no event shall the Australian Issuing Lender be
required to issue any Australian Letter of Credit earlier than four Business
Days (Australia) after its receipt of the Application therefor and all such
other certificates, documents and other papers and information relating thereto)
by issuing the original of such Australian Letter of Credit to the beneficiary
thereof or as otherwise may be agreed by the Australian Issuing Lender and any
relevant Australian Subsidiary Borrower. The Australian Issuing Lender shall
furnish a copy of such Australian Letter of Credit to the relevant Australian
Subsidiary Borrower, to the Australian Administrative Agent promptly following
the issuance thereof.
3.3. Fees, Commissions and Other Charges. (a) The relevant
Australian Subsidiary Borrower shall pay to the Australian Administrative Agent,
for the ratable account of the Australian Issuing Lender and the Australian L/C
Participants, a letter of credit commission in Australian Dollars with respect
to each Australian Trade L/C issued by the Australian Issuing Lender (i) in an
amount equal to the Dollar Equivalent (Australia) of such issuance and payment
fees as have been agreed upon by relevant Australian Subsidiary Borrower and the
Australian Issuing Lender and (ii) in an amount equal to the product of, on the
date on which such commission is calculated, (A) the rate per annum equal to the
17
Applicable Margin in respect of BBR Loans and (B) the Dollar Equivalent
(Australia) of the aggregate amount available to be drawn under each Australian
Letter of Credit (plus an additional 1/4 of 1% per annum which shall be payable
for the account of the Australian Issuing Lender). Such letter of credit
commissions shall be payable in arrears on the last day of each March, June,
September and December and shall be nonrefundable.
(b) The relevant Australian Subsidiary Borrower shall pay to the
Australian Administrative Agent, for the ratable account of the Australian
Issuing Lender and the Australian L/C Participants, a letter of credit
commission in Australian Dollars with respect to each Australian Standby L/C
issued by the Australian Issuing Lender, computed for the period from the date
of such payment to the date upon which the next such payment is due hereunder in
an amount equal to the product of (i) the rate equal to the Applicable Margin in
respect of BBR Loans in effect on the date on which such commission is
calculated and (ii) the Australian Dollar equivalent of the aggregate amount
available to be drawn under such Australian Standby L/C on the date on which
such commission is calculated (plus an additional 1/4 of 1% per annum which
shall be payable for the account of the Australian Issuing Lender). The relevant
Australian Subsidiary Borrower shall also pay to the Australian Administrative
Agent, for the account of the Australian Issuing Lender, such issuance fees as
have been agreed upon by the relevant Australian Subsidiary Borrower and the
Australian Issuing Lender. Such letter of credit commissions shall be payable in
arrears on the last day of each March, June, September and December and shall be
nonrefundable.
(c) In addition to the foregoing fees and commissions, the relevant
Australian Subsidiary Borrower shall pay or reimburse the Australian Issuing
Lender for such normal and customary costs and expenses as are incurred or
charged by the Australian Issuing Lender in issuing, effecting payment under,
amending or otherwise administering any Australian Letter of Credit issued by
it.
(d) The Australian Administrative Agent shall, promptly following
its receipt thereof, distribute to the Australian Issuing Lender and the
Australian L/C Participants all fees and commissions received by the Australian
Administrative Agent for their respective accounts pursuant to this subsection
3.3.
3.4. Australian L/C Participation. (a) The Australian Issuing Lender
irrevocably agrees to grant and hereby grants to each Australian L/C
Participant, and, to induce the Australian Issuing Lender to issue Australian
Letters of Credit hereunder, each such Australian L/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases from the
Australian Issuing Lender, on the terms and conditions hereinafter stated, for
such Australian L/C Participant's own account and risk an undivided interest
equal to such Australian L/C Participant's ratable share of the Australian
Facility in the Australian Issuing Lender's obligations and rights under each
Australian Letter of Credit issued hereunder and the amount of each draft paid
by the Australian Issuing Lender thereunder. Each such Australian L/C
Participant unconditionally and irrevocably agrees with the Australian Issuing
Lender that, if a draft is paid under any such Australian Letter of Credit for
which the Australian Issuing Lender is not reimbursed in full by the relevant
Australian Subsidiary Borrower in accordance with the terms of the Credit
Agreement (including this Annex C), such Australian L/C Participant shall pay to
the Australian Issuing Lender upon demand at the Australian Issuing Lender's
address for notices specified herein an amount equal to such Australian L/C
Participant's ratable share of the Australian Facility of the amount of such
draft, or any part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any Australian L/C
Participant to the Australian Issuing Lender pursuant to subsection 3.4(a) in
respect of any unreimbursed portion of any payment made by the Australian
Issuing Lender under any Australian Letter of Credit is not paid to the
Australian Issuing Lender within three Business Days (Australia) after the date
such payment is due, such Australian
18
L/C Participant shall pay to the Australian Issuing Lender on demand an amount
equal to the product of (i) such amount, times (ii) the customary rate as
selected by the Australian Issuing Lender for the settlement of obligations
between banks during the period from and including the date such payment is
required to the date on which such payment is immediately available to the
Australian Issuing Lender, times (iii) a fraction the numerator of which is the
number of days that elapse during such period and the denominator of which is
360. If any such amount required to be paid by any such Australian L/C
Participant pursuant to subsection 3.4(a) is not in fact made available to the
Australian Issuing Lender by such Australian L/C Participant within three
Business Days (Australia) after the date such payment is due, the Australian
Issuing Lender shall be entitled to recover from such Australian L/C
Participant, on demand, such amount with interest thereon calculated from such
due date at the rate per annum applicable to BBR Loans hereunder. A certificate
of the Australian Issuing Lender submitted to any Australian L/C Participant
with respect to any amounts owing under this subsection shall be conclusive in
the absence of manifest error.
(c) Whenever, at any time after the Australian Issuing Lender has
made payment under any Australian Letter of Credit and has received from any
Australian L/C Participant its ratable share of such payment in accordance with
subsection 3.4(a), the Australian Issuing Lender receives any payment related to
such Australian Letter of Credit (whether directly from the relevant Australian
Subsidiary Borrower or otherwise), or any payment of interest on account
thereof, the Australian Issuing Lender will distribute to such Australian L/C
Participant its ratable share thereof; provided, however, that in the event that
any such payment received by the Australian Issuing Lender shall be required to
be returned by the Australian Issuing Lender, such Australian L/C Participant
shall return to the Australian Issuing Lender the portion thereof previously
distributed by the Australian Issuing Lender to it.
3.5. Reimbursement Obligation of the Australian Subsidiary
Borrowers. The relevant Australian Subsidiary Borrower agrees to reimburse the
Australian Issuing Lender on each date on which the Australian Issuing Lender
notifies such Australian Subsidiary Borrower of the date and amount of a draft
presented under any Australian Letter of Credit and paid by the Australian
Issuing Lender for the amount of (a) such draft so paid and (b) any taxes (other
than Excluded Taxes), fees, charges or other costs or expenses incurred by the
Australian Issuing Lender in connection with such payment; provided that upon
the acceleration of such reimbursement obligations in accordance with Section 8
of the Credit Agreement, the relevant Australian Subsidiary Borrower agrees to
reimburse the Australian Issuing Lender for the amount equal to then maximum
liability (whether direct or contingent) of the Australian Issuing Lender and
the Australian L/C Participants under such Australian Letter of Credit. Each
such payment shall be made to the Australian Issuing Lender, at its address for
notices specified herein in Australian Dollars and in immediately available
funds, on the date on which the relevant Australian Subsidiary Borrower receives
such notice, if received prior to 11:00 A.M., Sydney time, on a Business Day
(Australia) and otherwise on the next succeeding Business Day (Australia).
3.6. Obligations Absolute. Any relevant Australian Subsidiary
Borrower's obligations under this Section 3 shall be absolute and unconditional
under any and all circumstances and irrespective of any set-off, counterclaim or
defense to payment which any relevant Australian Subsidiary Borrower may have or
have had against the Australian Issuing Lender or any beneficiary of an
Australian Letter of Credit. Each Australian Subsidiary Borrower also agrees
with the Australian Issuing Lender that the Australian Issuing Lender shall not
be responsible for, such relevant Australian Subsidiary Borrower's Reimbursement
Obligations under subsection 3.5 shall not be affected by, among other things,
the validity or genuineness of documents or of any endorsements thereon, even
though such documents shall in fact prove to be invalid, fraudulent or forged,
or any dispute between or among any relevant Australian Subsidiary Borrower and
any beneficiary of any Australian Letter of Credit or any other party to which
such Australian Letter of Credit may be transferred or any claims whatsoever of
the relevant Australian Subsidiary Borrower against any beneficiary of such
Australian Letter of Credit or any such transferee.
19
The Australian Issuing Lender shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Australian Letter of Credit
issued by it, except for errors or omissions caused by the Australian Issuing
Lender's gross negligence or willful misconduct. Each Australian Subsidiary
Borrower agrees that any action taken or omitted by the Australian Issuing
Lender under or in connection with any Australian Letter of Credit issued by it
or the related drafts or documents, if done in the absence of gross negligence
or willful misconduct and in accordance with the standards of care specified in
the Uniform Commercial Code of the State of New York, shall be binding on the
any relevant Australian Subsidiary Borrower and shall not result in any
liability of the Australian Issuing Lender to any relevant Australian Subsidiary
Borrower.
3.7. Increased Costs. If the adoption of or any change in any law or
regulation or in the interpretation thereof after the date hereof by any court
or administrative or Governmental Authority charged with the administration
thereof shall either (i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against Australian Letters of Credit issued by
the Australian Issuing Lender or participated in by the Lenders or (ii) impose
on any Australian Dollar Lender any other condition regarding any Australian
Letter of Credit, and the result of any event referred to in clauses (i) or (ii)
above shall be to increase the cost to the Australian Issuing Lender or any
Australian Dollar Lender of issuing or maintaining such Australian Letter of
Credit (or its participation therein, as the case may be) (which increase in
cost shall be the result of the Australian Issuing Lender's or such Lender's
reasonable allocation of the aggregate of such cost increases resulting from
such events), then, upon notice to it from the Australian Issuing Lender or such
Lender (with a copy to the Australian Administrative Agent) certifying that (x)
one of the events herein above described has occurred and the nature of such
event, (y) the increased cost or reduced amount resulting from such event and
(z) the additional amounts demanded by the Australian Issuing Lender or such
Lender, as the case may be, and a reasonably detailed explanation of the
calculation thereof, the relevant Australian Subsidiary Borrower shall
immediately pay to such Australian Issuing Lender or such Lender, as the case
may be, from time to time as specified by the Australian Administrative Agent or
such Australian Dollar Lender, additional amounts which shall be sufficient to
compensate such Australian Issuing Lender or such Australian Dollar Lender for
such increased cost, together with interest on each such amount from the date
demanded until payment in full thereof at the rate provided in subsection 3.3. A
certificate as to the fact and amount of such increased cost incurred by the
Australian Issuing Lender or such Australian Dollar Lender as a result of any
event mentioned in clauses (i) or (ii) above, submitted by the Australian
Issuing Lender or such Lender to such Australian Subsidiary Borrower, shall be
conclusive, absent manifest error.
3.8. Australian Letter of Credit Payments. If any draft in
Australian Dollars shall be presented for payment under any Australian Letter of
Credit, the Australian Issuing Lender shall promptly notify the relevant
Australian Subsidiary Borrower and the Australian Administrative Agent of the
date and amount of the Australian thereof. The responsibility of the Australian
Issuing Lender to the Australian Subsidiary Borrowers in connection with any
draft presented for payment under any Australian Letter of Credit shall, in
addition to any payment obligation expressly provided for in such Australian
Letter of Credit, be limited to determining that the documents (including each
draft) delivered under such Australian Letter of Credit in connection with such
presentment are in conformity with such Australian Letter of Credit.
(a) Application. To the extent that any provision of any Application
related to any Australian Letter of Credit is inconsistent with the provisions
of the Credit Agreement, the provisions of the Credit Agreement shall apply.
(b) Purpose of the Letters of Credit. The Australian Letters of
Credit shall be used for any lawful purposes requested by the Australian
Subsidiary Borrowers.
APPENDIX I
PRICING GRID FOR AUSTRALIAN DOLLAR LOANS AND FACILITY FEE
PRICING GRID
Applicable
Margin
Leverage ------------------------------------- Facility
Ratio Bank Bill Rate Overnight Rate Fee
-------------- -------------- -------------- ---------
> or = 3.25 to 1.00 1.200% 0.200% 0.300%
> or = 2.75 to 1.00 1.000% 0.000% 0.250%
> or = 2.25 to 1.00 0.750% 0.000% 0.250%
> or = 1.75 to 1.00 0.625% 0.000% 0.250%
> or = 1.25 to 1.00 0.550% 0.000% 0.200%
< 1.25 to 1.00 0.450% 0.000% 0.175%
Changes in the Applicable Margin or in the Facility Fee Rate resulting from
changes in the Leverage Ratio shall become effective on the date (the
"Adjustment Date") on which financial statements are delivered to the Lenders
pursuant to subsection 6.1 (but in any event not later than the 45th day after
the end of each of the first three quarterly periods of each fiscal year of the
Borrower or the 90th day after the end of each fiscal year of the Borrower, as
the case may be) and shall remain in effect until the next change to be effected
pursuant to this paragraph. If any financial statements referred to above are
not delivered within the time periods specified above, then, until such
financial statements are delivered, the Leverage Ratio as at the end of the
fiscal period that would have been covered thereby shall for the purposes of
this definition be deemed to be greater than or equal to 3.25 to 1.00. In
addition, at all times while an Event of Default shall have occurred and be
continuing, the Leverage Ratio shall for the purposes of this definition be
deemed to be greater than 3.25 to 1.00. Each determination of the Leverage Ratio
pursuant to this pricing grid shall be made with respect to (or, in the case of
Average Total Indebtedness, as at the end of) the period of four consecutive
fiscal quarters of the Borrower ending at the end of the period covered by the
relevant financial statements.
ANNEX D
SECTION 1. DEFINITIONS
Defined Terms. Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement, and the following terms shall have the following meanings:
"Acceptance Fee" shall mean the fee payable in Canadian Dollars to
each Canadian Dollar Lender in respect of Bankers' Acceptances computed in
accordance with subsection 2.3(g).
"Aggregate Canadian Revolving Extensions of Credit" shall mean an
amount equal to the sum of (a) the aggregate principal amount of all
Canadian Dollar Loans (including, without limitation, Canadian Dollar
Swing Line Loans borrowed under Canadian Commitments) then outstanding and
(b) the aggregate amount of all Canadian L/C Obligations then outstanding.
"Aggregate Facility D Revolving Extensions of Credit" shall mean an
amount equal to the sum of (a) the aggregate principal amount of all
Facility D Loans (including, without limitation, Canadian Dollar Swing
Line Loans borrowed under Facility D Commitments) then outstanding and (b)
the aggregate amount of all Canadian L/C Obligations then outstanding in
respect of Letters of Credit issued under the Facility D Commitments.
"Applicable BA Discount Rate" shall mean (i) with respect to any
Schedule I Canadian Dollar Lender, as applicable to a Bankers' Acceptance
being purchased by such Schedule I Canadian Dollar Lender on any day, the
CDOR Rate on such day (or, if no CDOR Rate is quoted for such day, the
average (as determined by the Canadian Administrative Agent) of the
respective percentage discount rates (expressed to two decimal places and
rounded upward, if necessary, to the nearest 1/100th of 1%) quoted to the
Canadian Administrative Agent by each Schedule I Canadian Dollar Reference
Lender as the percentage discount rate at which such Schedule I Canadian
Dollar Reference Lender would, in accordance with its normal practices, at
or about 10:00 A.M. (Toronto time) on such day, be prepared to purchase
bankers' acceptances accepted by such Schedule I Canadian Dollar Reference
Lender having a term and face amount comparable to the term and face
amount of such Bankers' Acceptance) and (ii) with respect to any
Non-Schedule I Canadian Dollar Lender, as applicable to a Bankers'
Acceptance being purchased by such Non-Schedule I Canadian Dollar Lender
on any day, the lesser of (x) the average (as determined by the Canadian
Administrative Agent) of the respective percentage discount rates
(expressed to two decimal places and rounded upward, if necessary, to the
nearest 1/100th of 1%) quoted to the Canadian Administrative Agent by the
Non-Schedule I Canadian Dollar Reference Lender as the percentage discount
rate at which such Non-Schedule I Canadian Dollar Reference Lender would,
in accordance with its normal practices, at or about 10:00 A.M. (Toronto
time) on such day, be prepared to purchase bankers' acceptances accepted
by such Non-Schedule I Canadian Dollar Lender Reference having a term and
a face amount comparable to the term and face amount of such Bankers'
Acceptance and (y) the rate that is 0.10% per annum in excess of the rate
determined pursuant to clause (i) of this definition in connection with
the relevant issuance of Bankers' Acceptances.
"Applicable Margin for Canadian Borrowing" shall mean for each type
of Canadian Dollar Loan, the rate per annum set forth under the relevant
column heading in the pricing grid attached as Appendix I hereto.
2
"Application" shall mean an application, in such form as the
Canadian Issuing Lender may specify from time to time, requesting such
Canadian Issuing Lender to open a Canadian Letter of Credit.
"Available Canadian Commitment" shall mean, as to any Lender at any
time, the amount equal to the excess, if any, of (a) such Lender's
Canadian Commitment over (b) the sum of such Lender's (i) ratable portion
of the Aggregate Facility D Revolving Extensions of Credit and (ii)
ratable portion of the Aggregate Canadian Revolving Extensions of Credit.
The Available Canadian Commitment may be calculated as being negative at
any time.
"BA Equivalent Loan" shall have the meaning assigned such term in
subsection 2.3(c).
"BA Discount Proceeds" shall mean in respect of any Bankers'
Acceptance to be purchased by a Canadian Dollar Lender on any day under
subsection 2.3, an amount (rounded to the nearest whole Canadian cent, and
with one-half of one Canadian cent being rounded up) calculated on such
day by dividing:
(a) the face amount of such Bankers' Acceptance; by
(b) the sum of one plus the product of:
(i) the Applicable BA Discount Rate (expressed as a decimal)
applicable to such Bankers' Acceptance; and
(ii) a fraction, the numerator of which is the number of days
remaining in the term of such Bankers' Acceptance and
the denominator of which is 365;
with such product being rounded up or down to the fifth
decimal place and .000005 being rounded up.
"Bankers' Acceptance" shall mean a bill of exchange or a depository
bill governed by the Depository Bills and Notes Act (Canada) denominated
in Canadian Dollars drawn by the Canadian Subsidiary Borrowers and
accepted by a Canadian Dollar Lender pursuant to subsection 2.3.
"Borrowing Date (Canada)" shall mean any Business Day (Canada)
specified in a notice as a date on which any Canadian Subsidiary Borrower
requests the relevant Canadian Dollar Lenders to make Canadian Dollar
Loans under this Annex D to the Credit Agreement.
"Business Day (Canada)" shall mean a day on which banks are open for
business in Toronto, Ontario, Canada but excludes Saturday, Sunday and any
other day which is a legal holiday in Toronto, Ontario, Canada.
"Canadian Administrative Agent" shall mean JPMorgan Chase Bank,
N.A., Toronto Branch, together with its affiliates, as the agent for the
Canadian Dollar Lenders under the Credit Agreement.
"Canadian Administrative Office" shall mean the Canadian
Administrative Agent's office located at 200 Bay Street, Royal Bank Plaza,
South Tower, Suite 1800, Toronto, Ontario M5J 2J2, or such other office in
Canada as may be designated as such by the Canadian
3
Administrative Agent by written notice to the Canadian Subsidiary
Borrowers and the Canadian Dollar Lenders.
"Canadian Commitment" shall mean, as to any Canadian Dollar Lender,
the obligation of such Canadian Dollar Lender to make Canadian Dollar
Prime Loans to and purchase Bankers' Acceptances from the Canadian
Subsidiary Borrowers and participate in Canadian Dollar Swing Line Loans
or Canadian Letters of Credit hereunder in an aggregate principal or face
amount at any one time outstanding up to but not exceeding the amount set
forth opposite such Canadian Dollar Lender's name on Schedule 1 to the
Credit Agreement under the caption "Canadian Commitment" or in the
Assignment and Acceptance pursuant to which such Canadian Dollar Lender
became party to the Credit Agreement, as the same may be changed from time
to time pursuant to the terms hereof. The original aggregate principal
amount of the Canadian Commitments is the Canadian Dollar equivalent of
U.S.$35,000,000.
"Canadian Dollars" or "C$" shall mean dollars in lawful currency of
Canada.
"Canadian Dollar Commitment Percentage" shall mean as to any
Canadian Dollar Lender at any time, the percentage of the aggregate
Canadian Commitments then constituted by such Canadian Dollar Lender's
Canadian Commitment.
"Canadian Dollar Lender" shall mean each Lender that has a Canadian
Commitment or that holds Canadian Dollar Loans; collectively, the
"Canadian Dollar Lenders". Each Canadian Dollar Lender on the date hereof
and on each date on which a payment or prepayment of interest is made
represents that it is an Eligible Canadian Bank.
"Canadian Dollar Loans" shall mean the collective reference to
Canadian Dollar Prime Loans and Bankers' Acceptances; for the purposes of
the Credit Agreement, the principal amount of any Canadian Dollar Loan
constituting a Bankers' Acceptance shall be deemed to be the undiscounted
face amount of such Bankers' Acceptance.
"Canadian Dollar Swing Line Commitment" shall mean the obligation of
the Canadian Dollar Swing Line Lender, at any date, to make a Canadian
Dollar Swing Line Loan pursuant to subsection 2.6(a) in the amount
referred to therein.
"Canadian Dollar Swing Line Lender" shall mean the Bank of Montreal.
"Canadian Dollar Swing Line Loan" shall mean any Canadian Dollar
Swing Line Loan made pursuant to subsection 2.6 hereof.
"Canadian Dollar Prime Loans" shall mean advances denominated in
Canadian Dollars that bear interest at a rate based upon the Canadian
Dollar Prime Rate.
"Canadian Dollar Prime Rate" shall mean with respect to a Canadian
Dollar Prime Loan, on any day, the greater of (a) the annual rate of
interest announced from time to time by the Canadian Administrative Agent
as its reference rate then in effect for determining interest rates on
Canadian Dollar denominated commercial loans in Canada and (b) the annual
rate of interest equal to the sum of (i) the 30-day CDOR Rate and (ii)
0.50% per annum.
"Canadian Facility" shall mean the Canadian Commitments together
with the Aggregate Canadian Revolving Extensions of Credit.
4
"Canadian Issuing Lender" shall mean the Bank of Montreal.
"Canadian L/C Commitment" shall mean the Canadian Dollar equivalent
of U.S.$35,000,000.
"Canadian L/C Obligations" shall mean, at any time, an amount equal
to the sum of (a) the aggregate then undrawn and unexpired amount of then
outstanding Canadian Letters of Credit and (b) the aggregate amount of
drawings under Canadian Letters of Credit which have not then been
reimbursed pursuant to Section 3.
"Canadian L/C Participants" shall mean the collective reference to
all the Canadian Dollar Lenders other than the Canadian Issuing Lender.
"Canadian Lending Office" shall mean for each Canadian Dollar
Lender, the lending office for such Canadian Dollar Lender (or of an
affiliate of such Canadian Dollar Lender) designated for each type of
Canadian Dollar Loan in the Administrative Questionnaire of such Canadian
Dollar Lender or such other lending office of such Canadian Dollar Lender
(or of an affiliate of such Canadian Dollar Lender) as such Canadian
Dollar Lender may from time to time specify to the Canadian Administrative
Agent and the Canadian Subsidiary Borrowers as the office by which its
Canadian Dollar Loans of such type are to be made and maintained.
"Canadian Letter of Credit" shall mean any Canadian Standby L/C or
Canadian Trade L/C, as each term is defined in subsection 3.1.
"CDOR Rate" shall mean on any date, the per annum rate of interest
which is the rate based on the rate applicable to Canadian Dollar bankers'
acceptances for the applicable term appearing on the "Reuters Screen CDOR
Page" (as defined in the International Swap Dealer Association, Inc.
definitions, as modified and amended from time to time) on such date, or
if such date is not a Business Day (Canada), then on the immediately
preceding Business Day (Canada); provided, however, that if no such rate
appears on the Reuters Screen CDOR Page as contemplated, then the CDOR
Rate on any date shall be calculated as the arithmetic mean of the rates
for the term and amount referred to above applicable to Canadian Dollar
bankers' acceptances quoted by the Schedule I Canadian Dollar Reference
Lenders as of 10:00 A.M., Toronto time, on such date or, if such date is
not a Business Day (Canada), then on the immediately preceding Business
Day (Canada).
"Dollar Equivalent (Canada)" shall mean, on any Business Day
(Canada) with respect to any amount denominated in Canadian Dollars, the
amount of U.S. Dollars that would be required to purchase such amount of
Canadian Dollars based upon the spot selling rate at which JPMorgan Chase
Bank, N.A., Toronto Branch offers to sell Canadian Dollars for U.S.
Dollars in the Toronto foreign exchange market at approximately 11:00 A.M.
Toronto time on such Business Day (Canada) for delivery two Business Days
(Canada) later.
"Draft" shall mean a blank bill of exchange, within the meaning of
the Bills of Exchange Act (Canada), in substantially the form set forth in
Exhibit A to this Annex D, drawn by the Canadian Subsidiary Borrowers on a
Canadian Dollar Lender, denominated in Canadian Dollars and bearing such
distinguishing letters and numbers as such Lender may determine, but which
at such time, except as otherwise provided herein, has not been completed
or accepted by such Lender.
5
"Drawing" shall mean the creation and purchase of Bankers'
Acceptances and/or the purchase of completed Drafts, by the Canadian
Dollar Lenders pursuant to subsection 2.3.
"Eligible Canadian Bank" shall mean (a) those banks listed on
Schedules I, II or III to the Bank Act (Canada), (b) any (i) trust
company, savings bank, savings and loan association or similar financial
institution, or (ii) insurance company engaged in the business of writing
insurance which, in either case (A) has total assets of
U.S.$10,000,000,000 or more, (B) is engaged in the business of lending
money and extending credit under credit facilities substantially similar
to those extended under this Agreement, (C) is operationally and
procedurally able to meet the obligations of a Lender hereunder to the
same degree as a commercial bank, and (c) any other financial institution
(including a mutual fund or other fund) having total assets of
U.S.$10,000,000,000 or more which meets the requirements set forth in
subclauses (B) and (C) of clause (b) above, and in each case, which agree
to make Canadian Dollar Loans hereunder; provided that each Eligible
Canadian Bank must be organized under the laws of either Canada or a
political subdivision thereof or, if not, it must (i) act hereunder
through a branch, agency or funding office located in Canada and (ii) be
exempt from withholding of tax on interest payments made to it by
residents of Canada.
"Facility Fee Rate" shall mean the rate per annum set forth under
the relevant column heading in the pricing grid attached as Appendix I
hereto.
"Non-Schedule I Canadian Dollar Lender" shall mean each Canadian
Dollar Lender which is not a Schedule I Canadian Dollar Lender.
"Non-Schedule I Canadian Dollar Reference Lender" shall mean
JPMorgan Chase Bank, N.A., Toronto Branch.
"Post-Default Rate" shall mean a rate equal to the sum of 2% plus
the rate of interest otherwise applicable to such Canadian Dollar Loan.
"Requirement of Law" shall mean, as to any Person, the Certificate
of Incorporation or Articles of Incorporation, as the case may be, and
Code of Regulations and/or By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or a court or other Governmental Authority,
in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
"Schedule I Canadian Dollar Lender" shall mean any Canadian bank
named on Schedule I to the Bank Act (Canada).
"Schedule I Canadian Dollar Reference Lender" shall mean the Bank of
Montreal.
SECTION 2. THE CANADIAN COMMITMENTS
2.1. The Canadian Commitments. Subject to the terms and conditions
hereof, each Canadian Dollar Lender severally (but not jointly) agrees to make
Canadian Dollar Loans in Canadian Dollars to each Canadian Subsidiary Borrower
from time to time during the Revolving Credit Commitment Period in an aggregate
principal amount not to exceed the Available Canadian Commitment of such
Canadian Dollar Lender in accordance with the terms hereof (which for this
purpose shall be computed as though the amount in subclause (b)(i) in the
definition thereof is $0); provided that, after giving effect to the making of
such Canadian Dollar Loans, the Aggregate Canadian Revolving
6
Extensions of Credit will not exceed the Canadian Commitment. During the
Revolving Credit Commitment Period the Canadian Subsidiary Borrowers may use the
Canadian Commitments by borrowing, repaying the Canadian Dollar Loans in whole
or in part, and reborrowing, all in accordance with the terms and conditions
hereof. Each Canadian Dollar Lender agrees that each of its Lending
Installations listed on Schedule 1 and subsequently agreed from time to time in
Canada shall be on the date hereof or the date of such agreement an Eligible
Canadian Bank.
2.2. Procedure for Canadian Dollar Prime Loan Borrowing. The
Canadian Subsidiary Borrowers may borrow Canadian Dollar Prime Loans during the
Commitment Period on any Business Day (Canada), provided that the Canadian
Subsidiary Borrowers shall give the Canadian Administrative Agent irrevocable
written or telephonic notice (in the case of telephonic notice, to be promptly
confirmed in writing) one Business Day (Canada) prior to the requested Borrowing
Date (Canada) (which notice must be received by the Canadian Administrative
Agent prior to 10:00 A.M., Toronto time), specifying (a) the amount to be
borrowed and (b) the requested Borrowing Date (Canada). Each borrowing of
Canadian Dollar Prime Loans shall be in an amount equal to C$300,000 or a whole
multiple of C$100,000 in excess thereof. Upon receipt of any such irrevocable
notice from the Canadian Subsidiary Borrower, the Canadian Administrative Agent
shall promptly notify each Canadian Dollar Lender thereof. Each Canadian Dollar
Lender will make the amount of its ratable share of each such borrowing
available to the Canadian Administrative Agent for the account of the Canadian
Subsidiary Borrowers at the Canadian Administrative Office prior to 11:00 A.M.,
Toronto time, on the Borrowing Date (Canada) requested by the Canadian
Subsidiary Borrowers in funds immediately available to the Canadian
Administrative Agent. Such borrowing will then be made available on such date to
the Canadian Subsidiary Borrowers by the Canadian Administrative Agent crediting
the account(s) designated by the Canadian Subsidiary Borrowers with the
aggregate of the amounts made available to the Canadian Administrative Agent by
the Canadian Dollar Lenders and in like funds as received by the Canadian
Administrative Agent.
2.3. Bankers' Acceptances.
(a) The Canadian Subsidiary Borrowers may issue Bankers' Acceptances
denominated in Canadian Dollars, for acceptance and, at the Canadian Subsidiary
Borrowers' option, purchase by the Canadian Dollar Lenders, each in accordance
with the provisions of this subsection 2.3.
(b) Procedures.
(1) Notice. The Canadian Subsidiary Borrowers shall notify the
Canadian Administrative Agent by irrevocable written or telephonic notice
(in the case of telephonic notice, to be promptly confirmed in writing) by
10:00 A.M., Toronto time, two Business Days (Canada) prior to the date of
the relevant borrowing in respect of any borrowing by way of Bankers'
Acceptances.
(2) Minimum Borrowing Amount. Each borrowing by way of Bankers'
Acceptances shall be in a minimum aggregate face amount of C$1,000,000 or
a whole multiple of C$100,000 in excess thereof.
(3) Face Amounts. The face amount of each Bankers' Acceptance shall
be C$100,000 or any whole multiple thereof.
(4) Term. Bankers' Acceptances shall be issued and shall mature on a
Business Day (Canada). Each Bankers' Acceptance shall have a term of 30,
60, 90 or 180 days (or such shorter or longer term as shall be agreed to
by all of the Canadian Dollar Lenders), shall mature on or
7
before the Revolving Commitment Termination Date and shall be in form and
substance reasonably satisfactory to each Canadian Dollar Lender.
(5) Bankers' Acceptances in Blank. To facilitate the acceptance of
Bankers' Acceptances under the Credit Agreement, the Canadian Subsidiary
Borrowers shall, from time to time as required, provide to the Canadian
Administrative Agent Drafts duly executed and endorsed in blank by the
Canadian Subsidiary Borrowers in quantities sufficient for each Canadian
Dollar Lender to fulfill its obligations hereunder. In addition, the
Canadian Subsidiary Borrowers hereby appoint each Canadian Dollar Lender
as its attorney, with respect to Bankers' Acceptances for which the
Canadian Subsidiary Borrowers have provided a Bankers' Acceptance notice:
(i) to complete and sign on behalf of the Canadian Subsidiary
Borrower, either manually or by facsimile or mechanical signature,
the Drafts to create the Bankers' Acceptances (with, in each
Canadian Dollar Lender's discretion, the inscription "This is a
depository bill subject to the Depository Bills and Notes Act
(Canada)");
(ii) after the acceptance thereof by any Canadian Dollar
Lender, to endorse on behalf of the Canadian Subsidiary Borrower,
either manually or by facsimile or mechanical signature, such
Bankers' Acceptance in favor of the applicable purchaser or endorsee
thereof including, in such Canadian Dollar Lender's discretion, such
Canadian Dollar Lender or a clearing house (as defined by the
Depository Bills and Notes Act (Canada));
(iii) to deliver such Bankers' Acceptances to such purchaser
or to deposit such Bankers' Acceptances with such clearing house;
and
(iv) to comply with the procedures and requirements
established from time to time by such Canadian Dollar Lender or such
clearing house in respect of the delivery, transfer and collection
of Bankers' Acceptances and depository bills.
The Canadian Subsidiary Borrowers recognize and agree that all Bankers'
Acceptances signed, endorsed, delivered or deposited on its behalf by a
Canadian Dollar Lender shall bind the Canadian Subsidiary Borrowers as
fully and effectually as if signed in the handwriting of and duly issued,
delivered or deposited by the proper signing officer of the Canadian
Subsidiary Borrower. Each Canadian Dollar Lender is hereby authorized to
accept such Drafts or issue such Bankers' Acceptances endorsed in blank in
such face amounts as may be determined by such Canadian Dollar Lender in
accordance with the terms of the Credit Agreement, provided that the
aggregate amount thereof is less than or equal to the aggregate amount of
Bankers' Acceptances required to be accepted by such Canadian Dollar
Lender. No Canadian Dollar Lender shall be responsible or liable for its
failure to accept a Bankers' Acceptance if the cause of such failure is,
in whole or in part, due to the failure of the Canadian Subsidiary
Borrowers to provide duly executed and endorsed Drafts to the Canadian
Administrative Agent on a timely basis, nor shall any Canadian Dollar
Lender be liable for any damage, loss or other claim arising by reason of
any loss or improper use of any such instrument except loss or improper
use arising by reason of the gross negligence or willful misconduct of
such Canadian Dollar Lender, its officers, employees, agents or
representatives. The Canadian Administrative Agent and each Canadian
Dollar Lender shall exercise such care in the custody and safekeeping of
Drafts as it would exercise in the custody and safekeeping of similar
property owned by it. Each Canadian Dollar Lender will, upon the request
of the Canadian Subsidiary Borrower, promptly advise the Canadian
Subsidiary Borrowers of the number and designation, if any, of Drafts then
held by it for the Canadian
8
Subsidiary Borrower. Each Canadian Dollar Lender shall maintain a record
with respect to Drafts and Bankers' Acceptances (i) received by it from
the Canadian Administrative Agent in blank hereunder, (ii) voided by it
for any reason, (iii) accepted by it hereunder, (iv) purchased by it
hereunder and (v) canceled at their respective maturities. Each Canadian
Dollar Lender further agrees to retain such records in the manner and for
the statutory periods provided in the various Canadian provincial or
federal statutes and regulations which apply to such Canadian Dollar
Lender.
(6) Execution of Bankers' Acceptances. Drafts of the Canadian
Subsidiary Borrowers to be accepted as Bankers' Acceptances hereunder
shall be duly executed on behalf of the Canadian Subsidiary Borrower.
Notwithstanding that any person whose signature appears on any Bankers'
Acceptance as a signatory for the Canadian Subsidiary Borrowers may no
longer be an authorized signatory for the Canadian Subsidiary Borrowers at
the date of issuance of a Bankers' Acceptance, such signature shall
nevertheless be valid and sufficient for all purposes as if such authority
had remained in force at the time of such issuance, and any such Bankers'
Acceptance so signed shall be binding on the Canadian Subsidiary Borrower.
(7) Issuance of Bankers' Acceptances. Promptly following receipt of
a notice of borrowing by way of Bankers' Acceptances, the Canadian
Administrative Agent shall so advise the Canadian Dollar Lenders and shall
advise each Canadian Dollar Lender of the face amount of each Draft to be
accepted by it and the term thereof. The aggregate face amount of Drafts
to be accepted by a Canadian Dollar Lender shall be determined by the
Canadian Administrative Agent on a ratable basis by reference to the
respective Canadian Commitments of the Canadian Dollar Lenders, except
that, if the face amount of a Draft which would otherwise be accepted by a
Canadian Dollar Lender would not be C$100,000 or a whole multiple thereof,
such face amount shall be increased or reduced by the Canadian
Administrative Agent in its sole and unfettered discretion to the nearest
whole multiple of C$100,000.
(8) Acceptance of Bankers' Acceptances. Each Draft to be accepted by
a Canadian Dollar Lender shall be accepted at such Canadian Dollar
Lender's Canadian Lending Office.
(9) Purchase of Bankers' Acceptances. Each Canadian Dollar Lender
shall be required to purchase from the Canadian Subsidiary Borrowers on
the Borrowing Date (Canada), at the Applicable BA Discount Rate, the
Bankers' Acceptances accepted by it on such date and to provide to the
Canadian Administrative Agent the BA Discount Proceeds thereof not later
than 12:00 Noon, Toronto time, on such Borrowing Date (Canada) for the
account of the Canadian Subsidiary Borrower. The Acceptance Fee payable by
the Canadian Subsidiary Borrowers to such Canadian Dollar Lender under
subsection 2.3(f) in respect of each Bankers' Acceptance accepted and
purchased by such Canadian Dollar Lender from the Canadian Subsidiary
Borrowers shall be set off against the BA Discount Proceeds payable by
such Canadian Dollar Lender under this subsection 2.3(b)(9). Not later
than 2:00 P.M., Toronto time, on such Borrowing Date (Canada), the
Canadian Administrative Agent shall make such BA Discount Proceeds
available to the Canadian Subsidiary Borrowers by crediting the account(s)
designated by the Canadian Subsidiary Borrowers with the aggregate of the
amounts made available to the Canadian Administrative Agent by the
Canadian Dollar Lenders and in like funds as received by the Canadian
Administrative Agent.
(10) Sale of Bankers' Acceptances. Each Canadian Dollar Lender may
at any time and from time to time hold, sell, rediscount or otherwise
dispose of any or all Bankers' Acceptances accepted and purchased by it.
9
(11) Waiver of Presentment and Other Conditions. To the extent
permitted by applicable law, each Canadian Subsidiary Borrower waives
presentment for payment and any other defense to payment of any amounts
due to a Canadian Dollar Lender in respect of a Bankers' Acceptance
accepted by it pursuant to the Credit Agreement which might exist solely
by reason of such Bankers' Acceptance being held, at the maturity thereof,
by such Canadian Dollar Lender in its own right, and each Canadian
Subsidiary Borrower agrees not to claim any days of grace if such Canadian
Dollar Lender as holder sues any Canadian Subsidiary Borrower on the
Bankers' Acceptances for payment of the amount payable by any Canadian
Subsidiary Borrower thereunder.
(c) If a Canadian Dollar Lender is not a chartered bank under the
Bank Act (Canada) or if a Lender notifies the Canadian Administrative Agent in
writing that it is otherwise unable to accept Bankers' Acceptances, such
Canadian Dollar Lender will, instead of accepting and purchasing Bankers'
Acceptances, make a Loan (a "BA Equivalent Loan") (which shall be a Canadian
Dollar Loan) to the applicable Canadian Subsidiary Borrower in the amount and
for the same term as the draft which such Canadian Dollar Lender would otherwise
have been required to accept and purchase hereunder. Each such Canadian Dollar
Lender will provide to the Canadian Administrative Agent the BA Discount
Proceeds of such BA Equivalent Loan for the account of the applicable Canadian
Subsidiary Borrower. Each such BA Equivalent Loan will bear interest at the same
rate which would result if such Canadian Dollar Lender had accepted (and been
paid an Acceptance Fee) and purchased if such Canadian Dollar Lender had
accepted (and been paid an Acceptance Fee) and purchased (on a discounted basis)
a Bankers' Acceptance for the relevant term (it being the intention of the
parties that each such BA Equivalent Loan shall have the same economic
consequences for the parties that each such BA Equivalent Loan replaces). All
such interest shall be paid in advance on the date such BA Equivalent Loan is
made, and will be deducted from the principal amount of such BA Equivalent Loan
in the same manner in which the BA Discount Proceeds of a Bankers' Acceptance
would be deducted from the face amount of the Bankers' Acceptance. Subject to
repayment requirements, on the last day of the relevant term for such BA
Equivalent Loan, the applicable Canadian Subsidiary Borrower shall be entitled
to convert each such BA Equivalent Loan into another type of Loan, or to roll
over each such BA Equivalent Loan into another BA Equivalent Loan, all in
accordance with the applicable provisions of the Credit Agreement and this Annex
D. The Canadian Subsidiary Borrowers shall pay, indemnify and hold the Canadian
Administrative Agent and each Canadian Dollar Lender harmless from any and all
liabilities (on an after-tax basis) with respect to any Non-Excluded Taxes which
the Canadian Administrative Agent or any Canadian Dollar Lender, as the case may
be, may be obligated to pay to any Governmental Authority as a result of the
receipt of amounts owing under this Annex D, provided however, that none of the
Canadian Subsidiary Borrowers shall be required to make an indemnification
payment to the Canadian Administrative Agent, any Canadian Dollar Lender or any
holder of Bankers' Acceptances if such indemnification payment arises as a
result of a failure of such Canadian Dollar Lender, the Canadian Administrative
Agent or any holder of Bankers' Acceptances to be a Person resident in Canada
for the purposes of the Income Tax Act (Canada) or an "authorized foreign bank"
under Section 2 of the Bank Act (Canada).
(d) The Canadian Subsidiary Borrowers shall reimburse each
applicable Canadian Dollar Lender for, and there shall become due and payable at
4:00 A.M., Toronto time, on the maturity date for each Bankers' Acceptance, an
amount in Canadian Dollars in same day funds equal to the face amount of such
Bankers' Acceptance. The Canadian Subsidiary Borrowers shall make each such
reimbursement payment (i) by causing any proceeds of a Refunding Bankers'
Acceptance (as defined in subsection 2.3(f) below) issued in accordance with
subsection 2.3(f) or conversion of such Bankers' Acceptance in accordance with
subsection 2.4 to be applied in reduction of such reimbursement payment; and
(ii) by depositing the amount of such reimbursement payment (or any portion
thereof remaining unpaid after application of any proceeds referred to in clause
(i)) with the Canadian Administrative Office in accordance with subsection 2.15.
The Canadian Subsidiary Borrowers' payment in accordance with this
10
subsection shall satisfy its obligations under any Bankers' Acceptance to which
it relates, and the Canadian Dollar Lender which has accepted such Bankers'
Acceptance shall thereafter be solely responsible for the payment of such
Bankers' Acceptance.
(e) The Canadian Subsidiary Borrowers shall give irrevocable written
or telephonic notice (in the case of telephonic notice, to be promptly confirmed
in writing) (or such other method of notification as may be agreed upon between
the Canadian Administrative Agent and the Canadian Subsidiary Borrowers) to the
Canadian Administrative Agent at or before 10:00 A.M., Toronto time, two
Business Days (Canada) prior to the maturity date of each Bankers' Acceptance of
the Canadian Subsidiary Borrowers' intention to issue a Bankers' Acceptance on
such maturity date (a "Refunding Bankers' Acceptance") to provide for the
payment of such maturing Bankers' Acceptance (it being understood that payments
by the Canadian Subsidiary Borrowers and fundings by the Canadian Dollar Lenders
in respect of each maturing Bankers' Acceptance and the related Refunding
Bankers' Acceptance shall be made on a net basis reflecting the difference
between the face amount of such maturing Bankers' Acceptance and the BA Discount
Proceeds (net of the applicable Acceptance Fee) of such Refunding Bankers'
Acceptance). If the Canadian Subsidiary Borrowers fail to give such notice or do
not have sufficient funds on deposit in the amount of reimbursement payment in
accordance with subsection 2.3(e)(ii), the Canadian Subsidiary Borrowers shall
be deemed to have requested that such maturing Bankers' Acceptances be repaid
with the proceeds of Canadian Dollar Prime Loans (without any requirement to
give notice with respect thereto), commencing on the maturity date of such
maturing Bankers' Acceptances.
(f) An Acceptance Fee shall be payable by the Canadian Subsidiary
Borrowers to each Canadian Dollar Lender in advance (in the manner specified in
subsection 2.3(b)(9) hereof) upon the issuance of a Bankers' Acceptance to be
accepted by such Canadian Dollar Lender calculated at the rate per annum equal
to the Applicable Margin for Canadian Borrowing, such Acceptance Fee to be
calculated on the face amount of such Bankers' Acceptance and to be computed on
the basis of the number of days in the term of such Bankers' Acceptance and a
year of 365 days.
(g) Upon the occurrence of any Event of Default which is continuing,
the Canadian Subsidiary Borrowers shall, forthwith, without any demand or the
taking of any action by the Canadian Administrative Agent, provide cover for all
outstanding Bankers' Acceptances by paying to the Canadian Administrative Agent
immediately available funds in an amount equal to then aggregate face amount of
all outstanding Bankers' Acceptances, which funds shall be held by the Canadian
Administrative Agent in an account as collateral security, and in addition to
any other rights or remedies of any Canadian Dollar Lender and the Canadian
Administrative Agent hereunder, any Canadian Dollar Lender or the Canadian
Administrative Agent (or such alternate arrangement as may be agreed upon by the
Canadian Subsidiary Borrowers and such Canadian Dollar Lender or the Canadian
Administrative Agent, as applicable) shall be entitled to deposit and retain in
an account to be maintained by the Canadian Administrative Agent (bearing
interest at the Canadian Administrative Agent's rates as may be applicable in
respect of other deposits of similar amounts for similar terms), for the ratable
benefit of the Canadian Dollar Lenders, amounts which are received by such
Canadian Dollar Lender or the Canadian Administrative Agent from the Canadian
Subsidiary Borrowers hereunder or as proceeds of the exercise of any rights or
remedies of any Canadian Dollar Lender or the Canadian Administrative Agent
hereunder against the Canadian Subsidiary Borrowers, to the extent such amounts
may be required to satisfy any contingent or unmatured obligations or
liabilities of the Canadian Subsidiary Borrowers to the Canadian Dollar Lenders
or the Canadian Administrative Agent, or any of them hereunder.
2.4. Conversion Option. Subject to the provisions of the Credit
Agreement, the Canadian Subsidiary Borrowers may, prior to the Revolving
Commitment Termination Date, effective on any Business Day (Canada), convert, in
whole or in part, Canadian Dollar Prime Loans into Bankers'
11
Acceptances or vice versa upon giving to the Canadian Administrative Agent prior
irrevocable written or telephonic notice (in the case of telephonic notice, to
be promptly confirmed in writing) within the notice period and in the form which
would be required to be given to the Canadian Administrative Agent in respect of
the category of Canadian Dollar Loan into which the outstanding Canadian Dollar
Loan is to be converted in accordance with the provisions of subsection 2.2 or
2.3, as applicable, provided that:
(a) no Canadian Dollar Prime Loan may be converted into a Bankers'
Acceptance when any Event of Default has occurred and is
continuing;
(b) each conversion to Bankers' Acceptances shall be for an
aggregate amount of C$1,000,000 (and whole multiples of
C$100,000 in excess thereof), and each conversion to Canadian
Dollar Prime Loans shall be in a minimum aggregate amount of
C$300,000; and
(c) Bankers' Acceptances may be converted only on the maturity
date of such Bankers' Acceptances and, provided that, if less
than all Bankers' Acceptances are converted, then after such
conversion not less than C$1,000,000 (and whole multiples of
C$100,000 in excess thereof) shall remain as Bankers'
Acceptances.
2.5. Circumstances Making Bankers' Acceptances Unavailable.
(a) If the Canadian Administrative Agent determines in good faith,
which determination shall be final, conclusive and binding upon the Canadian
Subsidiary Borrowers, and notifies the Canadian Subsidiary Borrowers that, by
reason of circumstances affecting the money market, there is no market for
Bankers' Acceptances, then:
(i) the right of the Canadian Subsidiary Borrowers to request a
borrowing by way of Bankers' Acceptance shall be suspended until the
Canadian Administrative Agent determines that the circumstances causing
such suspension no longer exist and the Canadian Administrative Agent so
notifies the Canadian Subsidiary Borrowers; and
(ii) any notice relating to a borrowing by way of Bankers'
Acceptance which is outstanding at such time shall be deemed to be a
notice requesting a borrowing by way of Canadian Dollar Prime Loans (all
as if it were a notice given pursuant to subsection 2.2).
(b) The Canadian Administrative Agent shall promptly notify the
Canadian Subsidiary Borrowers and the Canadian Dollar Lenders of the suspension
of the Canadian Subsidiary Borrowers' right to request a borrowing by way of
Bankers' Acceptance and of the termination of such suspension.
2.6. Swing Line Commitments. (a) Subject to the terms and
conditions hereof, from time to time prior to the Revolving Credit Termination
Date (i) the Canadian Dollar Swing Line Lender severally (but not jointly)
agrees to make Canadian Dollar Swing Line Loans to the Canadian Subsidiary
Borrowers in Canadian Dollars in an aggregate principal amount not to exceed the
Canadian Dollar equivalent of U.S.$15,000,000 at any one time outstanding (each
of the foregoing individually, a "Canadian Dollar Swing Line Loan"; collectively
the "Canadian Dollar Swing Line Loans"); provided that, after giving effect to
the making of any such Canadian Dollar Swing Line Loans, the aggregate principal
amount of Swing Line Loans under any Revolving Facility at any one time
outstanding shall not exceed U.S.$100,000,000 and the Aggregate Canadian
Revolving Extensions of Credit shall not exceed the Canadian Commitments. All
Canadian Dollar Swing Line Loans shall be made as Canadian Dollar Prime Loans.
The relevant Canadian Subsidiary Borrowers shall give the Canadian
Administrative Agent irrevocable notice (which notice must be received by the
Canadian Administrative Agent at or prior to
12
1:00 P.M., Toronto time, on the requested Borrowing Date), specifying the amount
of each requested Canadian Dollar Swing Line Loan, which shall be greater than
or equal to a minimum amount to be agreed upon by such Canadian Subsidiary
Borrowers and the relevant Canadian Dollar Swing Line Lender. Upon such notice,
the Canadian Administrative Agent shall promptly notify the Canadian Dollar
Swing Line Lender thereof. The Canadian Dollar Swing Line Lender shall make the
amount of each borrowing available to the applicable Canadian Subsidiary
Borrowers in the manner directed by the Canadian Administrative Agent on the
requested Borrowing Date.
(b) The Canadian Dollar Swing Line Lender in its sole and absolute
discretion, may, on behalf of the applicable Canadian Subsidiary Borrower (which
hereby irrevocably directs the Canadian Dollar Swing Line Lender to act on its
behalf), request each Canadian Dollar Lender, including the Canadian Dollar
Swing Line Lender, with respect to all other Canadian Dollar Swing Line Loans,
to make a Canadian Dollar Prime Loan, in an amount equal to such Canadian Dollar
Lender's Revolving Percentage under the Canadian Facility of the amount of the
Canadian Dollar Swing Line Loans (the "Refunded Canadian Dollar Swing Line
Loans") outstanding on the date such notice is given. Unless any of the events
described in paragraph (f) of Section 8 of the Credit Agreement shall have
occurred (in which event the procedures of paragraph (c) of this subsection 2.6
shall apply), each Canadian Dollar Lender shall make the proceeds of its
Canadian Dollar Prime Loan available to the Canadian Administrative Agent for
the account of the Canadian Dollar Swing Line Lender, at the office of the
Canadian Administrative Agent prior to 12:00 Noon (Toronto time) in funds
immediately available on the Business Day (Canada) next succeeding the date such
notice is given. The proceeds of such Canadian Dollar Prime Loans shall be
immediately applied to repay the Refunded Canadian Dollar Swing Line Loans.
(c) If, prior to the making of a Canadian Swing Line Loan pursuant
to paragraph (b) of subsection 2.6, one of the events described in paragraph (f)
of Section 8 of the Credit Agreement shall have occurred, each Canadian Dollar
Lender hereby agrees to and will, on the date such Canadian Swing Line Loan was
to have been made, purchase an undivided participating interest in each Refunded
Canadian Dollar Swing Line Loan in an amount equal to its Revolving Percentage
under the Canadian Facility of such Refunded Canadian Dollar Swing Line Loan.
Such Revolving Credit Lender will immediately transfer to the Canadian
Administrative Agent for the account of the Canadian Dollar Swing Line Lender,
in immediately available funds of the amount of its participations and, upon its
receipt of its ratable share thereof, the Canadian Dollar Swing Line Lender will
deliver to such Canadian Dollar Lender a Swing Line Loan Participation
Certificate dated the date of receipt of such funds and in such amount.
(d) Whenever, at any time after the Canadian Dollar Swing Line
Lender has received from any Canadian Dollar Lender such Canadian Dollar
Lender's participating interest in a Refunded Canadian Dollar Swing Line Loan
and the Canadian Dollar Swing Line Lender receives any payment on account
thereof, the Canadian Dollar Swing Line Lender will distribute to such Canadian
Dollar Lender through the Canadian Administrative Agent its participating
interest; provided, however, that in the event that such payment received by the
Canadian Dollar Swing Line Lender is required to be returned, such Canadian
Dollar Lender will return to the Canadian Dollar Swing Line Lender through the
Canadian Administrative Agent any portion thereof previously distributed by the
Canadian Dollar Swing Line Lender to it.
2.7. Participation. Each Canadian Dollar Lender's obligation to
purchase participating interests pursuant to paragraph (c) of subsection 2.6
shall be absolute and unconditional and shall not be affected by any
circumstances, including, without limitation, (a) any set-off, counterclaim,
recoupment, defense or other right which such Canadian Dollar Lender may have
against the Canadian Dollar Swing Line Lender, any Canadian Subsidiary Borrower
or any other Person for any reason whatsoever; (b) the occurrence or continuance
of an Event of Default; (c) any adverse change in the condition (financial or
13
otherwise) of the Borrower or any Canadian Subsidiary Borrower; (d) any breach
of the Credit Agreement by the Borrower, any Subsidiary Borrower or any other
Revolving Credit Lender; or (e) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing. Notwithstanding the
foregoing, no Canadian Dollar Lender shall have any obligation to purchase
participating interests pursuant to paragraph (c) of subsection 2.6 or to make
any Refunded Canadian Dollar Swing Line Loans in respect of any Canadian Dollar
Swing Line Loan which was made at any time following receipt by the Canadian
Administrative Agent of a notice from any Canadian Dollar Lender specifying that
(x) a Default or Event of Default has occurred and is continuing and (y)
explicitly stating that such Canadian Dollar Lender will not purchase such
participating interests or make Refunded Canadian Dollar Swing Line Loans with
respect to Canadian Dollar Swing Line Loans made after the date of receipt of
such notice.
2.8. Repayment of Canadian Dollar Loans; Evidence of Debt. (a) Each
Canadian Dollar Subsidiary Borrower hereby unconditionally promises to pay to
the Canadian Administrative Agent for the account of each Canadian Dollar Lender
(i) then unpaid principal amount of each Canadian Dollar Loan of such Canadian
Dollar Lender on the Revolving Credit Termination Date (or such earlier date on
which the Loans become due and payable pursuant to Section 8 of the Credit
Agreement) and (ii) then unpaid principal amount of the Canadian Dollar Swing
Line Loans of the Canadian Dollar Swing Line Lender on the Revolving Credit
Termination Date (or such earlier date on which the Canadian Dollar Swing Line
Loans become due and payable pursuant to Section 8 of the Credit Agreement).
Each Canadian Subsidiary Borrower hereby unconditionally promises to pay to the
Canadian Administrative Agent for the account of such Lender (i) then unpaid
principal amount of each Loan to such Subsidiary Borrower on the Revolving
Credit Termination Date (or such earlier date on which the Revolving Credit
Loans become due and payable pursuant to Section 8 of the Credit Agreement) and
(ii) then unpaid principal amount of the Canadian Dollar Swing Line Loans to
such Subsidiary Borrower of the Canadian Dollar Swing Line Lender on the
Revolving Credit Termination Date (or such earlier date on which the Canadian
Dollar Swing Line Loans became due and payable pursuant to Section 8 of the
Credit Agreement). Each Canadian Subsidiary Borrower hereby further agrees to
pay interest on the unpaid principal amount of the Canadian Dollar Loans from
time to time outstanding to such Canadian Subsidiary Borrower from the date
hereof until payment in full thereof at the rates per annum, and on the dates,
set forth in subsection 2.14.
(b) Each Canadian Dollar Lender shall maintain in accordance with
its usual practice an account or accounts evidencing indebtedness of the
Canadian Subsidiary Borrowers to such Canadian Dollar Lender resulting from each
Canadian Dollar Loan of such Canadian Dollar Lender from time to time, including
the amounts of principal and interest payable and paid to such Canadian Dollar
Lender from time to time under the Credit Agreement.
(c) The Canadian Administrative Agent shall maintain a register (the
"Canadian Register") in respect of the Canadian Facility in a manner similar to
the Register described in Section 10.6(b)(iv) of the Credit Agreement, and a
subaccount therein for each Canadian Dollar Lender, in which shall be recorded
(i) the amount of each Canadian Dollar Loan made hereunder and the type thereof,
(ii) the amount of any principal or interest due and payable or to become due
and payable from any Canadian Subsidiary Borrower to each Canadian Dollar Lender
hereunder and (iii) both the amount of any sum received by the Canadian
Administrative Agent hereunder from any Canadian Subsidiary Borrower and each
Canadian Dollar Lender's share thereof.
(d) The entries made in the Canadian Register and the accounts of
each Canadian Dollar Lender maintained pursuant to subsection 2.8(b) shall, to
the extent permitted by applicable law, be prima facie evidence of the existence
and amounts of the obligations of each Canadian Subsidiary Borrower therein
recorded; provided, however, that the failure of any Canadian Dollar Lender or
the Canadian
14
Administrative Agent to maintain the Canadian Register or any such account, or
any error therein, shall not in any manner affect the obligation of any Canadian
Subsidiary Borrower to repay (with applicable interest) the Canadian Dollar
Loans made to such Canadian Subsidiary Borrower by such Canadian Dollar Lender
in accordance with the terms of the Credit Agreement.
2.9. Facility Fee.
(a) Each Canadian Subsidiary Borrower agrees to pay to the Canadian
Administrative Agent, for the account of each Canadian Dollar Lender, a facility
fee for the period from and including the Closing Date to the Revolving Credit
Termination Date, calculated as an amount equal to the product of (a) the
Facility Fee Rate and (b) the average daily amount of the Canadian Commitment of
such Lender (regardless of usage) during the period for which such facility fee
is calculated, payable quarterly in arrears on the last day of each March, June,
September and December and on the Revolving Credit Termination Date. Termination
or Reduction of the Canadian Commitments.
(b) Optional. The Canadian Subsidiary Borrowers shall have the
right, upon not less than five Business Days' (Canada) written notice to the
Canadian Administrative Agent, to terminate the Canadian Commitments or, from
time to time, reduce the amount of the Canadian Commitments, provided that (i)
any such reduction shall be accompanied by prepayment of the Canadian Dollar
Loans by the relevant Canadian Subsidiary Borrower, together with accrued
interest on the amount so prepaid to the date of such prepayment, to the extent,
if any, the Available Canadian Commitments would be negative, (ii) any such
termination of the Canadian Commitments shall be accompanied by (A) prepayment
in full of the Canadian Dollar Loans then outstanding hereunder, (B) cash
collateralization of all Canadian L/C Obligations then outstanding in accordance
with the provisions of subsection 2.13, and (C) payment of accrued interest
thereon to the date of such prepayment and the payment of any unpaid fees then
accrued hereunder (including, without limitation, in respect of any Canadian
Letters of Credit) and (iii) any termination of the Canadian Commitments while
Bankers' Acceptances are outstanding under the Canadian Commitments and any
reduction of the aggregate amount of the Canadian Commitments that reduces the
amount of the Canadian Commitments below the principal amount of the Bankers'
Acceptances then outstanding may be made only on the maturity date of any such
Bankers' Acceptance. Upon receipt of such notice, the Canadian Administrative
Agent shall promptly notify each Canadian Dollar Lender thereof. Any such
reduction shall be in an amount of C$300,000 or a whole multiple of C$100,000 in
excess thereof and shall reduce permanently the amount of the Canadian
Commitments then in effect.
(c) Mandatory. The Revolving Credit Commitments shall automatically
terminate on the Revolving Credit Termination Date and all Canadian Dollar Loans
shall be repaid and to the extent any Canadian Letter of Credit remains
outstanding after the Revolving Credit Termination Date, the Canadian Subsidiary
Borrowers shall cash collateralize such Canadian L/C Obligations (and the fees
thereon) in accordance with the provisions of subsection 2.13. The Revolving
Credit Commitments shall also be reduced in accordance with subsection 2.12.
2.10. Optional Prepayments. Any Canadian Subsidiary Borrower
may, at any time and from time to time, prepay the Canadian Dollar Loans made to
it hereunder, in each case in whole or in part, without premium or penalty, upon
at least one Business Day's (Canada) irrevocable notice to the Canadian
Administrative Agent, specifying the date and amount of prepayment. If such
notice is given, the relevant Canadian Subsidiary Borrower shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to such
date on the amount prepaid. Partial prepayments shall be in an aggregate
principal amount of C$300,000 or a whole multiple of C$100,000 in excess
thereof. Notwithstanding anything to
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the contrary above, Canadian Dollar Loans consisting of Bankers' Acceptances may
not be prepaid pursuant to this subsection.
2.11. Mandatory Prepayments. The Canadian Subsidiary Borrowers,
without notice or demand, shall immediately prepay the Canadian Dollar Loans
(or, in the case of Bankers' Acceptances, cash collateralize such Bankers'
Acceptances), to the extent, if any, that the Available Canadian Commitments are
negative, together with accrued interest to the date of such prepayment on the
amount so prepaid; provided that if such prepayment is required solely as a
result of a change in the aggregate Dollar Equivalent (Canada) of the Canadian
Dollar Loans, no prepayment shall be made unless such prepayment is required
pursuant to subsection 2.19.
2.12. Cash Collateralization of Canadian Letters of Credit. To the
extent that at any time and from time to time, the Canadian L/C Obligations
exceed the amount of the Canadian L/C Commitments or the Canadian L/C
Obligations exceed the Canadian Commitments (whether pursuant to subsections
2.10, 2.11, 2.12 or otherwise), the Canadian Subsidiary Borrowers shall cash
collateralize (in a manner reasonably satisfactory to the Canadian
Administrative Agent) such portion of the Canadian L/C Obligations (and the fees
thereon through the stated expiration date of the Canadian Letters of Credit
giving rise to such Canadian L/C Obligations) which is in excess of the Canadian
L/C Commitments or such Canadian Commitments, as applicable.
2.13. Interest Rate and Payment Dates.
(a) Subject to subsection 2.13(b) below, each Canadian Dollar Prime
Loan shall bear interest at a rate per annum equal to the Canadian Dollar Prime
Rate plus the Applicable Margin for Canadian Borrowing.
(b) Each Canadian Subsidiary Borrower hereby promises to pay to the
Canadian Administrative Agent for the account of each applicable Canadian Dollar
Lender interest at the applicable Post-Default Rate (x) on any principal of any
Canadian Dollar Loan made by such Canadian Dollar Lender and on any other amount
payable by such Canadian Subsidiary Borrower hereunder to or for account of such
Canadian Dollar Lender, that shall not be paid in full when due (whether at
stated maturity, by acceleration, by mandatory prepayment or otherwise), for the
period from and including the due date thereof but excluding the date the same
is paid in full and (y) during any period when an Event of Default shall have
occurred under Section 8(a) of the Credit Agreement and for so long as such
Event of Default shall be continuing, on any principal of any Canadian Dollar
Loan made by such Canadian Dollar Lender.
(c) Accrued interest on each Canadian Dollar Prime Loan shall be
calculated monthly and payable quarterly in arrears, and in any event, upon the
payment or prepayment thereof, but only on the principal so paid or prepaid;
provided that interest payable after the occurrence of a Default at the
Post-Default Rate shall be payable from time to time on demand of the Canadian
Administrative Agent or the Canadian Dollar Lenders having greater than 50% of
the aggregate amount of the Canadian Commitments. Promptly after the
determination of any interest rate provided for herein or any change therein,
the Canadian Administrative Agent shall notify the Canadian Dollar Lenders and
the Canadian Borrower thereof.
(d) Interest in respect of Canadian Dollar Prime Loans (and all
other amounts denominated in Canadian Dollars) shall be payable in Canadian
Dollars and shall be payable based upon a year of 365 days.
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(e) (i) If any provision of this Annex D would obligate any party to
the Credit Agreement to make any payment of interest or other amount payable to
any Canadian Dollar Lender in an amount or calculated at a rate which would be
prohibited by law or would result in a receipt by such Canadian Dollar Lender of
"interest" at a "criminal rate" (as such terms are construed under the Criminal
Code (Canada)), then notwithstanding such provision, such amount or rate shall
be deemed to have been adjusted with retroactive effect to the maximum amount or
rate of interest, as the case may be, as would not be so prohibited by law or so
result in a receipt by such Canadian Dollar Lender of "interest" at a "criminal
rate," such adjustment to be effected, to the extent necessary, as follows:
(x) first, by reducing the amount or rates of interest required to
be paid under this subsection 2.13; and
(y) thereafter, by reducing any fees, commissions, premiums and
other amounts which would constitute interest for purposes of
Section 347 of the Criminal Code (Canada).
(ii) If, notwithstanding the provisions of clause (i) of this
subsection 2.13(e), and after giving effect to all adjustments contemplated
thereby, any Canadian Dollar Lender shall have received an amount in excess of
the maximum permitted by such clause, then the party having paid such amount
shall be entitled, by notice in writing to such Canadian Dollar Lender, to
obtain reimbursement from such Canadian Dollar Lender of an amount equal to such
excess, and, pending such reimbursement, such amount shall be deemed to be an
amount payable by such Canadian Dollar Lender to such party.
(f) Any amount or rate of interest referred to in this subsection
2.13(e) shall be determined in accordance with generally accepted actuarial
practices and principles as an effective annual rate of interest over the term
of any Canadian Dollar Loan on the assumption that any charges, fees or expenses
that fall within the meaning of "interest" (as defined in the Criminal Code
(Canada)) shall, if they relate to a specific period of time, be prorated over
that period of time and otherwise be prorated over the period from the Closing
Date to the Revolving Credit Commitment Termination Date and, in the event of
dispute, a certificate of a Fellow of the Canadian Institute of Actuaries
appointed by the Canadian Administrative Agent shall be conclusive for the
purposes of such determination absent manifest error.
2.14. Computation of Interest and Fees. For the purposes of the
Interest Act (Canada), in any case in which an interest rate is stated in this
Annex D to be calculated on the basis of a year of 360 days or 365 days, as the
case may be, the yearly rate of interest to which such interest rate is
equivalent is equal to such interest rate multiplied by the number of days in
the year in which the relevant interest payment accrues and divided by 360 or
365, respectively. In addition, the principles of deemed investment of interest
do not apply to any interest calculations under this Annex D and the rates of
interest stipulated in this Annex D are intended to be nominal rates and not
effective rates or yields.
2.15. Pro Rata Treatment and Payments. (a) Each borrowing by any
Canadian Subsidiary Borrower from the Canadian Dollar Lenders hereunder, each
payment by any Canadian Subsidiary Borrower on account of any commitment fee or
Acceptance Fee hereunder and any reduction of the Canadian Commitments of the
Canadian Dollar Lenders shall be made ratably according to each Lender's
respective share of the Canadian Commitments. Each payment by any Canadian
Subsidiary Borrower on account of principal of and interest on the Canadian
Dollar Loans shall be made ratably according to the respective outstanding
principal amounts of the relevant Canadian Dollar Loans then held by the
relevant Canadian Dollar Lenders. All payments (including prepayments) to be
made by any Canadian Subsidiary Borrower hereunder, whether on account of
principal, interest, fees or otherwise, shall be made without set off or
counterclaim and shall be made prior to 11:00 A.M., Toronto time, on the
17
due date thereof to the Canadian Administrative Agent, for the account of the
Canadian Dollar Lenders, at the Canadian Administrative Office in Canadian
Dollars and in immediately available funds. The Canadian Administrative Agent
shall distribute such payments to the Canadian Dollar Lenders promptly upon
receipt in like funds as received, but the relevant Canadian Subsidiary Borrower
shall have satisfied its payment obligation hereunder upon payment to the
Canadian Administrative Agent, regardless of whether such Canadian
Administrative Agent distributes such payments as required hereunder. If any
payment hereunder becomes due and payable on a day other than a Business Day
(Canada), such payment shall be extended to the next succeeding Business Day
(Canada), and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension.
(b) Unless the Canadian Administrative Agent shall have received
notice from a Canadian Dollar Lender prior to 11:00 A.M., Toronto time, on any
Borrowing Date (Canada) that such Lender will not make available to the Canadian
Administrative Agent such Canadian Dollar Lender's share of the borrowing
requested to be made on such Borrowing Date (Canada), the Canadian
Administrative Agent may assume that such Canadian Dollar Lender has made its
share of such borrowing available to the Canadian Administrative Agent on such
Borrowing Date (Canada), and the Canadian Administrative Agent may, in reliance
upon such assumption, make available to the relevant Canadian Subsidiary
Borrower on such Borrowing Date (Canada) a corresponding amount. If such amount
is not so made available to the Canadian Administrative Agent by such Canadian
Dollar Lender on such Borrowing Date (Canada), the Canadian Administrative Agent
shall also be entitled to recover such amount with interest thereon at the rate
per annum applicable to the Canadian Dollar Prime Rate determined for such day
plus 1%, on demand, from the relevant Canadian Dollar Lender. Nothing contained
in this subsection 2.15(b) shall relieve any Canadian Dollar Lender which has
failed to make available its share of any borrowing hereunder from its
obligation to do so in accordance with the terms hereof or prejudice any rights
which any Canadian Subsidiary Borrower may have against any Canadian Dollar
Lender as a result of any default by such Canadian Dollar Lender to make
Canadian Dollar Loans.
(c) The failure of any Canadian Dollar Lender to make the Canadian
Dollar Loan to be made by it on any Borrowing Date (Canada) shall not relieve
any other Canadian Dollar Lender of its obligation, if any, hereunder to make
its Canadian Dollar Loan on such Borrowing Date (Canada), but no Canadian Dollar
Lender shall be responsible for the failure of any other Canadian Dollar Lender
to make the Canadian Dollar Loan to be made by such other Canadian Dollar Lender
on such Borrowing Date (Canada).
2.16. Requirements of Law.
(a) If the adoption of or any change in any Requirement of Law
regarding capital adequacy or in the interpretation or application thereof by
any Governmental Authority or compliance by any Canadian Dollar Lender or any
corporation controlling such Canadian Dollar Lender with any request or
directive regarding capital adequacy (whether or not having the force of law)
from any Governmental Authority made subsequent to the date hereof shall have
the effect of reducing the rate of return on such Canadian Dollar Lender's or
such corporation's capital as a consequence of its obligations hereunder to a
level below that which such Canadian Dollar Lender or such corporation could
have achieved but for such adoption, change or compliance (taking into
consideration such Lender's or such corporation's policies with respect to
capital adequacy) by an amount deemed by such Canadian Dollar Lender to be
material, then from time to time, the relevant Canadian Subsidiary Borrower
shall promptly pay to such Canadian Dollar Lender, upon written demand therefor,
such additional amount or amounts as will compensate such Canadian Dollar Lender
for such reduced rate of return. In determining such additional amounts, each
Canadian Dollar Lender will act reasonably and in good faith and will use
averaging and attribution methods which are reasonable and which will, to the
extent the reduced rate of return relates to such Canadian Dollar Lender's loans
or commitments in general and are not specifically attributable to
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Canadian Dollar Loans or Canadian Commitments hereunder, be calculated with
respect to all loans or commitments similar to the Canadian Dollar Loans or
Canadian Commitments made by such Canadian Dollar Lender hereunder whether or
not the loan documentation for such other loans or commitments permits the
Canadian Dollar Lender to charge the respective borrower on a basis similar to
that provided in this subsection 2.16.
(b) If any Canadian Dollar Lender becomes entitled to claim any
additional amounts pursuant to this subsection, it shall promptly notify the
relevant Canadian Subsidiary Borrower (with a copy to the Canadian
Administrative Agent) of the event by reason of which it has become so entitled.
A certificate as to any additional amounts payable pursuant to this subsection
submitted by such Canadian Dollar Lender to the relevant Canadian Subsidiary
Borrower (with a copy to the Canadian Administrative Agent), showing in
reasonable detail the basis for the calculation thereof, shall be prima facie
evidence of such additional amounts payable. The agreements in this subsection
shall survive the termination of the Credit Agreement and the payment of the
Canadian Dollar Loans and all other amounts payable thereunder.
2.17. Taxes. All payments made by any Canadian Subsidiary Borrower
in respect of amounts owing under this Annex D shall be made free and clear of,
and without deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions
or withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, excluding gross or net income or gross
receipts taxes, ad valorem taxes, personal property and/or sales taxes and
franchise taxes (imposed in lieu of net income taxes) imposed on the Canadian
Administrative Agent or any Canadian Dollar Lender as a result of a present or
former connection between the Canadian Administrative Agent or such Canadian
Dollar Lender and the jurisdiction of the Governmental Authority imposing such
tax or any political subdivision or taxing authority thereof or therein (other
than any such connection arising solely from the Canadian Administrative Agent
or such Canadian Dollar Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, this Annex D). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Canadian Administrative Agent or any Canadian Dollar Lender
hereunder, the amounts so payable to the Canadian Administrative Agent or such
Canadian Dollar Lender shall be increased to the extent necessary to yield to
the Canadian Administrative Agent or such Canadian Dollar Lender (after payment
of all Non-Excluded Taxes) interest or any such other amounts payable hereunder
at the rates or in the amounts specified in this Annex D, provided, however,
that none of the Canadian Subsidiary Borrowers shall be required to increase any
such amounts payable to the Canadian Administrative Agent, any Canadian Dollar
Lender or any holder of Bankers' Acceptances if such increased amount arises as
a result of the failure of such Canadian Dollar Lender, the Canadian
Administrative Agent or any holder of Bankers' Acceptances to be a Person
resident in Canada for the purposes of the Income Tax Act (Canada) or an
"authorized foreign bank" under Section 2 of the Bank Act (Canada). The Canadian
Subsidiary Borrowers shall also indemnify the Canadian Administrative Agent and
each Canadian Dollar Lender on an after-tax basis for any additional taxes on
net income which the Canadian Administrative Agent or such Canadian Dollar
Lender, as the case may be, may be obligated to pay as a result of the receipt
of additional amounts under this subsection 2.17. Whenever any Non-Excluded
Taxes are payable by any Canadian Subsidiary Borrower, as promptly as possible
thereafter but in any event within 45 days after the date of payment such
Canadian Subsidiary Borrower shall send to the Canadian Administrative Agent for
its own account or for the account of such Canadian Dollar Lender, as the case
may be, a certified copy of an original official receipt received by such
Canadian Subsidiary Borrower showing payment thereof. If any Canadian Subsidiary
Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing
authority or fails to remit to the Canadian Administrative Agent the required
receipts or other required documentary evidence, such Canadian Subsidiary
Borrower shall indemnify the Canadian Administrative Agent and the Canadian
19
Dollar Lenders for any incremental taxes, interest or penalties that may become
payable by the Canadian Administrative Agent or any Canadian Dollar Lender as a
result of any such failure. The agreements in this subsection shall survive the
termination of this Annex D and the payment of the Canadian Dollar Loans and all
other amounts payable hereunder.
2.18. Use of Proceeds. The Canadian Facility and the proceeds of the
Canadian Dollar Loans shall be used by the Canadian Subsidiary Borrowers for
working capital and other general corporate purposes (which shall include any
purpose expressly permitted by the Credit Agreement) of the Canadian Subsidiary
Borrowers; provided that, notwithstanding the foregoing, none of the proceeds of
the Canadian Dollar Loans may be used to finance any Hostile Take-Over Bid.
2.19. Controls on Prepayment if Aggregate Revolving Extensions of
Credit Exceed Aggregate Revolving Credit Commitments. (a) The Canadian
Subsidiary Borrowers will implement and maintain internal controls to monitor
the borrowings and repayments of Canadian Dollar Loans by the relevant Canadian
Subsidiary Borrowers and the issuance of and drawings under Canadian Letters of
Credit, with the object of preventing any request for an Extension of Credit
that would result in the Available Canadian Commitments becoming negative by
more than 5% of the Canadian Commitments, if such Commitments are negative by
more than 5%, the Canadian Subsidiary Borrowers will promptly notify the
Canadian Administrative Agent.
(b) The Canadian Administrative Agent will calculate the Available
Canadian Commitments from time to time, and in any event not less frequently
than once during each calendar quarter. In making such calculations, the
Canadian Administrative Agent will rely on the information most recently
received by it from the Canadian Dollar Swing Line Lender in respect of
outstanding Canadian Dollar Swing Line Loans and from the Canadian Issuing
Lender in respect of outstanding Canadian L/C Obligations.
(c) In the event that on any date the Canadian Administrative Agent
calculates that (i) the Available Canadian Commitments have become negative
solely as a result of a change in the aggregate Dollar Equivalent (Canada) of
the Canadian Dollar Loans by more than 5%, the Canadian Administrative Agent
will give notice to such effect to the relevant Canadian Subsidiary Borrowers
and the Canadian Dollar Lenders. Within five Business Days (Canada) of receipt
of any such notice, such Canadian Subsidiary Borrower will, as soon as
practicable but in any event within five Business Days (Canada) of receipt of
such notice, first, make such repayments or prepayments of Canadian Dollar Prime
Loans (together with interest accrued to the date of such repayment or
prepayment), second, pay any Reimbursement Obligations under the Canadian
Facility then outstanding, third, cash collateralize any outstanding Bankers'
Acceptances, and fourth, cash collateralize any outstanding Canadian L/C
Obligations on terms reasonably satisfactory to the Canadian Administrative
Agent as shall be necessary to cause the Available Canadian Commitments not to
be negative.
2.20. Lending Installations. (a) Subject to subsection 2.4 of the
Credit Agreement and subsections 2.1 and 2.6 of this Annex D, each Canadian
Dollar Lender may book its Canadian Dollar Loans at any Lending Installation
selected by such Canadian Dollar Lender and may change its Lending Installation
from time to time; provided that such Lending Installation is an Eligible
Canadian Bank. All terms of the Credit Agreement shall apply to any such Lending
Installation and the Canadian Dollar Loans made hereunder shall be deemed held
by each Canadian Dollar Lender for the benefit of such Lending Installation.
Each Canadian Dollar Lender may, by written notice to the Canadian
Administrative Agent and the Canadian Subsidiary Borrowers in accordance with
subsection 10.2 of the Credit Agreement and subject always to subsection 2.4 of
the Credit Agreement and subsections 2.1 and 2.6 of this Annex D designate
replacement or additional Lending Installations through which Canadian Dollar
Loans will be made by it and for whose account Canadian Dollar Loan payments are
to be made.
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(b) Each Canadian Dollar Lender agrees that, upon the occurrence of
any event giving rise to the operation of subsection 2.16 or 2.17 with respect
to such Canadian Dollar Lender, it will, if requested by the Canadian Subsidiary
Borrower, use reasonable efforts (subject to overall policy considerations of
such Canadian Dollar Lender) to designate another Lending Installation for any
Canadian Dollar Loans affected by such event with the object of avoiding the
consequences of such event; provided, that such designation is made on terms
that, in the sole judgment of such Canadian Dollar Lender, cause such Canadian
Dollar Lender and any of its Lending Installations to suffer no economic, legal
or regulatory disadvantage, and provided, further, that nothing in this
subsection 2.20(b) shall affect or postpone any of the obligations of the
Canadian Subsidiary Borrowers or the rights of any Canadian Dollar Lender
pursuant to subsection 2.16 or 2.17.
2.21. Notices to Lenders. All notices under this Section 2 to
Canadian Dollar Lenders by the Canadian Subsidiary Borrowers or the Canadian
Administrative Agent, and all payments by the Canadian Administrative Agent to
the Canadian Dollar Lenders, shall be made to the respective Lending
Installations of the Canadian Dollar Lenders maintaining the relevant Canadian
Dollar Loans or Canadian Commitments.
SECTION 3. LETTER OF CREDIT FACILITIES
3.1. Canadian L/C Commitment. (a) Subject to the terms and
conditions hereof, the Canadian Issuing Lender, in reliance on the agreements of
the other Lenders set forth in subsection 3.4(a), agrees to issue letters of
credit ("Canadian Letters of Credit") under the Canadian Commitments for the
account of any Canadian Subsidiary Borrower on any Business Day (Canada) during
the Revolving Credit Commitment Period in such form as may be approved from time
to time by the Canadian Issuing Lender; provided that the Canadian Issuing
Lender shall not have any obligation to issue any Canadian Letter of Credit if,
after giving effect to such issuance, (i) the Canadian L/C Obligations would
exceed the Canadian L/C Commitment or (ii) the Available Canadian Commitments
would be negative. Each Canadian Letter of Credit shall (i) be denominated in
Canadian Dollars, (ii) be either (x) a standby letter of credit (a "Canadian
Standby L/C") issued to support obligations of any Canadian Subsidiary Borrower,
contingent or otherwise, with an expiry date occurring not later than one year
after such standby Canadian L/C was issued (which expiry date may be subject to
one or more automatic extensions of one year or less unless 60-day notice, or
such other notice as is satisfactory to the relevant Canadian Subsidiary
Borrower and the Canadian Issuing Lender, is given that any such extension shall
not be effective) or (y) a documentary letter of credit in respect of the
purchase of goods or services by any Canadian Subsidiary Borrower in the
ordinary course of business with an expiry date occurring not later than one
year after such documentary letter of credit was issued and, in the case of any
such documentary letter of credit which is to be accepted by the Canadian
Issuing Lender pending payment at a date after presentation of sight Drafts,
with a payment date no more than one year after such Drafts were presented for
acceptance (a "Canadian Trade L/C") and (iii) expire no later than five days
before the Revolving Credit Termination Date.
(b) Each Canadian Standby L/C shall be subject to the International
Standby Practices and each Canadian Trade L/C shall be subject to the Uniform
Customs and, in each case, to the extent not inconsistent therewith, the laws of
the State of New York.
(c) The Canadian Issuing Lender shall at no time be obligated to
issue any Canadian Letter of Credit hereunder if such issuance would conflict
with, or cause the Canadian Issuing Lender or any Canadian L/C Participant to
exceed any limits imposed by, any applicable Requirement of Law.
3.2. Procedure for Issuance of Letters of Credit. Any Canadian
Subsidiary Borrower may from time to time request that the Canadian Issuing
Lender issue a Canadian Letter of Credit by
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delivering to the Canadian Issuing Lender (with a copy to the Canadian
Administrative Agent) at its address for notices specified herein an Application
therefor, completed to the satisfaction of the Canadian Issuing Lender, and such
other certificates, documents and other papers and information as the Canadian
Issuing Lender may reasonably request. Upon receipt of any Application, the
Canadian Issuing Lender will process such Application and the certificates,
documents and other papers and information delivered to it in connection
therewith in accordance with its customary procedures and shall promptly issue
the Canadian Letter of Credit requested thereby (but in no event shall the
Canadian Issuing Lender be required to issue any Canadian Letter of Credit
earlier than four Business Days (Canada) after its receipt of the Application
therefor and all such other certificates, documents and other papers and
information relating thereto) by issuing the original of such Canadian Letter of
Credit to the beneficiary thereof or as otherwise may be agreed by the Canadian
Issuing Lender and any relevant Canadian Subsidiary Borrower. The Canadian
Issuing Lender shall furnish a copy of such Canadian Letter of Credit to the
relevant Canadian Subsidiary Borrower and to the Canadian Administrative Agent
promptly following the issuance thereof.
3.3. Fees, Commissions and Other Charges. (a) The relevant Canadian
Subsidiary Borrower shall pay to the Canadian Administrative Agent, for the
ratable account of the Canadian Issuing Lender and the Canadian L/C
Participants, a letter of credit commission in Canadian Dollars with respect to
each Canadian Trade L/C issued by the Canadian Issuing Lender (i) in an amount
equal to the Dollar Equivalent (Canada) of such issuance and payment fees as
have been agreed upon by the relevant Canadian Subsidiary Borrower and the
Canadian Issuing Lender and (ii) in an amount equal to the product of, on the
date on which such commission is calculated, (A) the rate per annum equal to the
Applicable Margin in respect of Canadian Dollar Prime Loans and (B) the
aggregate amount available to be drawn under each Canadian Letter of Credit
(plus an additional -1/4 of 1% per annum which shall be payable for the account
of the Canadian Issuing Lender). Such letter of credit commissions shall be
payable in arrears on the last day of each March, June, September and December
and shall be nonrefundable.
(b) The relevant Canadian Subsidiary Borrower shall pay to the
Canadian Administrative Agent, for the ratable account of the Canadian Issuing
Lender and the Canadian L/C Participants, a letter of credit commission in
Canadian Dollars with respect to each Canadian Standby L/C issued by the
Canadian Issuing Lender, computed for the period from the date of such payment
to the date upon which the next such payment is due hereunder in an amount equal
to the product of (i) the rate equal to the Applicable Margin in respect of
Canadian Dollar Prime Loans in effect on the date on which such commission is
calculated and (ii) the aggregate amount available to be drawn under such
Canadian Standby L/C on the date on which such commission is calculated (plus an
additional -1/4 of 1% per annum which shall be payable for the account of the
Canadian Issuing Lender). The relevant Canadian Subsidiary Borrower shall also
pay to the Canadian Administrative Agent, for the account of the Canadian
Issuing Lender, such issuance fees as have been agreed upon by the relevant
Canadian Subsidiary Borrower and the Canadian Issuing Lender. Such letter of
credit commissions shall be payable in arrears on the last day of each March,
June, September and December and shall be nonrefundable.
(c) In addition to the foregoing fees and commissions, the relevant
Canadian Subsidiary Borrower shall pay or reimburse the Canadian Issuing Lender
for such normal and customary costs and expenses as are incurred or charged by
the Canadian Issuing Lender in issuing, effecting payment under, amending or
otherwise administering any Canadian Letter of Credit issued by it.
(d) The Canadian Administrative Agent shall, promptly following its
receipt thereof, distribute to the Canadian Issuing Lender and the Canadian L/C
Participants all fees and commissions
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received by the Canadian Administrative Agent for their respective accounts
pursuant to this subsection 3.3.
3.4. Canadian L/C Participation. (a) The Canadian Issuing Lender
irrevocably agrees to grant and hereby grants to each Canadian L/C Participant,
and, to induce the Canadian Issuing Lender to issue Canadian Letters of Credit
hereunder, each such Canadian L/C Participant irrevocably agrees to accept and
purchase and hereby accepts and purchases from the Canadian Issuing Lender, on
the terms and conditions hereinafter stated, for such Canadian L/C Participant's
own account and risk an undivided interest equal to such Canadian L/C
Participant's ratable share of the Canadian Facility in the Canadian Issuing
Lender's obligations and rights under each Canadian Letter of Credit issued
hereunder and the amount of each Draft paid by the Canadian Issuing Lender
thereunder. Each such Canadian L/C Participant unconditionally and irrevocably
agrees with the Canadian Issuing Lender that, if a Draft is paid under any such
Canadian Letter of Credit for which the Canadian Issuing Lender is not
reimbursed in full by the relevant Canadian Subsidiary Borrower in accordance
with the terms of the Credit Agreement (including this Annex D), such Canadian
L/C Participant shall pay to the Canadian Issuing Lender upon demand at the
Canadian Issuing Lender's address for notices specified herein an amount equal
to such Canadian L/C Participant's ratable share of the Canadian Facility of the
amount of such Draft, or any part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any Canadian L/C
Participant to the Canadian Issuing Lender pursuant to subsection 3.4(a) in
respect of any unreimbursed portion of any payment made by the Canadian Issuing
Lender under any Canadian Letter of Credit is not paid to the Canadian Issuing
Lender within three Business Days (Canada) after the date such payment is due,
such Canadian L/C Participant shall pay to the Canadian Issuing Lender on demand
an amount equal to the product of (i) such amount, times (ii) the prevailing
customary rate for Canadian interbank transactions, as quoted by the Canadian
Issuing Lender, during the period from and including the date such payment is
required to the date on which such payment is immediately available to the
Canadian Issuing Lender, times (iii) a fraction the numerator of which is the
number of days that elapse during such period and the denominator of which is
365. If any such amount required to be paid by any such Canadian L/C Participant
pursuant to subsection 3.4(a) is not in fact made available to the Canadian
Issuing Lender by such Canadian L/C Participant within three Business Days
(Canada) after the date such payment is due, the Canadian Issuing Lender shall
be entitled to recover from such Canadian L/C Participant, on demand, such
amount with interest thereon calculated from such due date at the rate per annum
applicable to the prevailing customary rate for Canadian interbank transactions,
as quoted by the Canadian Issuing Lender. A certificate of the Canadian Issuing
Lender submitted to any Canadian L/C Participant with respect to any amounts
owing under this subsection shall be conclusive in the absence of manifest
error.
(c) Whenever, at any time after the Canadian Issuing Lender has made
payment under any Canadian Letter of Credit and has received from any Canadian
L/C Participant its ratable share of such payment in accordance with subsection
3.4(a), the Canadian Issuing Lender receives any payment related to such
Canadian Letter of Credit (whether directly from the relevant Canadian
Subsidiary Borrower or otherwise), or any payment of interest on account
thereof, the Canadian Issuing Lender will distribute to such Canadian L/C
Participant its ratable share thereof; provided, however, that in the event that
any such payment received by the Canadian Issuing Lender shall be required to be
returned by the Canadian Issuing Lender, such Canadian L/C Participant shall
return to the Canadian Issuing Lender the portion thereof previously distributed
by the Canadian Issuing Lender to it.
3.5. Reimbursement Obligation of the Canadian Subsidiary Borrowers.
The relevant Canadian Subsidiary Borrower agrees to reimburse the Canadian
Issuing Lender on each date on which the Canadian Issuing Lender notifies such
Canadian Subsidiary Borrower of the date and amount of a Draft presented under
any Canadian Letter of Credit and paid by the Canadian Issuing Lender for the
23
amount of (a) such Draft so paid and (b) any taxes (other than Excluded Taxes),
fees, charges or other costs or expenses incurred by the Canadian Issuing Lender
in connection with such payment; provided that upon the acceleration of such
reimbursement obligations in accordance with Section 8 of the Credit Agreement,
the relevant Canadian Subsidiary Borrower agrees to reimburse the Canadian
Issuing Lender for the amount equal to then maximum liability (whether direct or
contingent) of the Canadian Issuing Lender and the Canadian L/C Participants
under such Canadian Letter of Credit. Each such payment shall be made to the
Canadian Issuing Lender, at its address for notices specified herein in Canadian
Dollars and in immediately available funds, on the date on which the relevant
Canadian Subsidiary Borrower receives such notice, if received prior to 11:00
A.M., Toronto time, on a Business Day (Canada) and otherwise on the next
succeeding Business Day (Canada).
3.6. Obligations Absolute. Any relevant Canadian Subsidiary
Borrower's obligations under this Section 3 shall be absolute and unconditional
under any and all circumstances and irrespective of any set-off, counterclaim or
defense to payment which any relevant Canadian Subsidiary Borrower may have or
have had against the Canadian Issuing Lender or any beneficiary of a Canadian
Letter of Credit. Each Canadian Subsidiary Borrower also agrees with the
Canadian Issuing Lender that the Canadian Issuing Lender shall not be
responsible for, and such relevant Canadian Subsidiary Borrower's Reimbursement
Obligations under subsection 3.5 shall not be affected by, among other things,
the validity or genuineness of documents or of any endorsements thereon, even
though such documents shall in fact prove to be invalid, fraudulent or forged,
or any dispute between or among any relevant Canadian Subsidiary Borrower and
any beneficiary of any Canadian Letter of Credit or any other party to which
such Canadian Letter of Credit may be transferred or any claims whatsoever of
the relevant Canadian Subsidiary Borrower against any beneficiary of such
Canadian Letter of Credit or any such transferee. The Canadian Issuing Lender
shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Canadian Letter of Credit issued by it,
except for errors or omissions caused by the Canadian Issuing Lender's gross
negligence or willful misconduct. Each Canadian Subsidiary Borrower agrees that
any action taken or omitted by the Canadian Issuing Lender under or in
connection with any Canadian Letter of Credit issued by it or the related Drafts
or documents, if done in the absence of gross negligence or willful misconduct
and in accordance with the standards of care specified in the Uniform Commercial
Code of the State of New York, shall be binding on each Canadian Subsidiary
Borrower and shall not result in any liability of the Canadian Issuing Lender to
any Canadian Subsidiary Borrower.
3.7. Increased Costs. If the adoption of or any change in any law or
regulation or in the interpretation thereof after the date hereof by any court
or administrative or Governmental Authority charged with the administration
thereof shall either (i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against Canadian Letters of Credit issued by the
Canadian Issuing Lender or participated in by the Lenders or (ii) impose on any
Canadian Dollar Lender any other condition regarding any Canadian Letter of
Credit, and the result of any event referred to in clauses (i) or (ii) above
shall be to increase the cost to the Canadian Issuing Lender or any Canadian
Dollar Lender of issuing or maintaining such Canadian Letter of Credit (or its
participation therein, as the case may be) (which increase in cost shall be the
result of the Canadian Issuing Lender's or such Lender's reasonable allocation
of the aggregate of such cost increases resulting from such events), then, upon
notice to it from the Canadian Issuing Lender or such Lender (with a copy to the
Canadian Administrative Agent) certifying that (x) one of the events herein
above described has occurred and the nature of such event, (y) the increased
cost or reduced amount resulting from such event and (z) the additional amounts
demanded by the Canadian Issuing Lender or such Lender, as the case may be, and
a reasonably detailed explanation of the calculation thereof, the relevant
Canadian Subsidiary Borrower shall immediately pay to such Canadian Issuing
Lender or such Lender, as the case may be, from time to time as specified by the
Canadian Administrative Agent or such Canadian Dollar Lender, additional amounts
which shall be sufficient to compensate such Canadian Issuing Lender or such
Canadian Dollar Lender for such
24
increased cost, together with interest on each such amount from the date
demanded until payment in full thereof at the rate provided in subsection 3.3. A
certificate as to the fact and amount of such increased cost incurred by the
Canadian Issuing Lender or such Canadian Dollar Lender as a result of any event
mentioned in clauses (i) or (ii) above, submitted by the Canadian Issuing Lender
or such Lender to such Canadian Subsidiary Borrower, shall be conclusive, absent
manifest error.
3.8. Canadian Letter of Credit Payments. If any Draft in Canadian
Dollars shall be presented for payment under any Canadian Letter of Credit, the
Canadian Issuing Lender shall promptly notify the relevant Canadian Subsidiary
Borrower and the Canadian Administrative Agent of the date and amount of the
Canadian Dollars thereof. The responsibility of the Canadian Issuing Lender to
the Canadian Subsidiary Borrowers in connection with any Draft presented for
payment under any Canadian Letter of Credit shall, in addition to any payment
obligation expressly provided for in such Canadian Letter of Credit, be limited
to determining that the documents (including each Draft) delivered under such
Canadian Letter of Credit in connection with such presentment are in conformity
with such Canadian Letter of Credit.
(a) Application. To the extent that any provision of any Application
related to any Canadian Letter of Credit is inconsistent with the provisions of
the Credit Agreement, the provisions of the Credit Agreement shall apply.
(b) Purpose of the Letters of Credit. The Canadian Letters of Credit
shall be used for any lawful purposes requested by the Canadian Subsidiary
Borrowers.
APPENDIX I
PRICING GRID FOR CANADIAN DOLLAR LOANS AND FACILITY FEE
Applicable
Margin
----------------------------------
Leverage Bankers' Canadian Dollar Facility
Ratio Acceptances Prime Rate Loans Fee
-------- ----------- ---------------- --------
> or = 3.25 to 1.00 1.200% 0.200% 0.300%
> or = 2.75 to 1.00 1.000% 0.000% 0.250%
> or = 2.25 to 1.00 0.750% 0.000% 0.250%
> or = 1.75 to 1.00 0.625% 0.000% 0.250%
> or = 1.25 to 1.00 0.550% 0.000% 0.200%
> 1.25 to 1.00 0.450% 0.000% 0.175%
Changes in the Applicable Margin or in the Facility Fee Rate resulting from
changes in the Leverage Ratio shall become effective on the date (the
"Adjustment Date") on which financial statements are delivered to the Lenders
pursuant to subsection 6.1 (but in any event not later than the 45th day after
the end of each of the first three quarterly periods of each fiscal year of the
Borrower or the 90th day after the end of each fiscal year of the Borrower, as
the case may be) and shall remain in effect until the next change to be effected
pursuant to this paragraph. If any financial statements referred to above are
not delivered within the time periods specified above, then, until such
financial statements are delivered, the Leverage Ratio as at the end of the
fiscal period that would have been covered thereby shall for the purposes of
this definition be deemed to be greater than or equal to 3.25 to 1.00. In
addition, at all times while an Event of Default shall have occurred and be
continuing, the Leverage Ratio shall for the purposes of this definition be
deemed to be greater than 3.25 to 1.00. Each determination of the Leverage Ratio
pursuant to this pricing grid shall be made with respect to (or, in the case of
Average Total Indebtedness, as at the end of) the period of four consecutive
fiscal quarters of the Borrower ending at the end of the period covered by the
relevant financial statements.
Schedule 1
Lenders; Revolving Credit Commitments; Revolving Credit Commitment Percentage
Revolving Credit Commitments (in US$)
Revolving
Facility B/ Facility C/ Facility D/ Credit
Facility A Sterling Australian Canadian Commitment
Lender Commitment Commitment Commitment Commitment Total Percentage
- -------------------------- ------------ ------------ ----------- ----------- ---------- ----------
Bank of America, N.A. 5,000,000 50,000,000 0 0 55,000,000 5.50%
The Bank of New York 32,500,000 0 0 0 32,500,000 3.25%
Bank of 55,000,000 0 0 0 55,000,000 5.50%
Tokyo-Mitsubishi Trust
Company
Bank of Montreal/Harris 30,000,000 0 0 25,000,000 55,000,000 5.50%
N.A.
BNP Paribas 20,000,000 35,000,000 0 0 55,000,000 5.50%
Calyon New York Branch 17,500,000 15,000,000 0 0 32,500,000 3.25%
Citicorp North America, 5,000,000 50,000,000 0 0 55,000,000 5.50%
Inc.
Citizens Bank of 17,500,000 15,000,000 0 0 32,500,000 3.25%
Pennsylvania
Comerica 15,000,000 7,500,000 0 0 22,500,000 2.25%
CoBank, ACB 55,000,000 0 0 0 55,000,000 5.50%
Farm Credit Bank of 32,500,000 0 0 0 32,500,000 3.25%
Texas
Fifth Third Bank 32,500,000 0 0 0 32,500,000 3.25%
1st Farm Credit 22,500,000 0 0 0 22,500,000 2.25%
Services, PCA
Fortis Capital Corp. 32,500,000 0 0 0 32,500,000 3.25%
JPMorgan Chase Bank, 0 45,000,000 25,000,000 0 70,000,000 7.00%
N.A.
LaSalle Bank, N.A. 22,500,000 0 0 0 22,500,000 2.25%
Mizuho Corporate Bank, 22,500,000 10,000,000 0 0 32,500,000 3.25%
Ltd.
National City Bank 32,500,000 0 0 32,500,000 3.25%
The Northern Trust 10,000,000 5,000,000 0 0 15,000,000 1.50%
Company
People's Bank 15,000,000 0 0 0 15,000,000 1.50%
Cooperatieve Centrale 30,000,000 25,000,000 0 0 55,000,000 5.50%
Raiffeisen-Boerenleenbank,
B.A. "Rabobank
International" New York
Branch
The Bank of Nova Scotia 5,000,000 17,500,000 0 10,000,000 32,500,000 3.25%
Sumitomo Mitsui Banking 32,500,000 0 0 0 32,500,000 3.25%
Corporation
SunTrust Bank 30,000,000 25,000,000 0 0 55,000,000 5.50%
UFJ Bank Limited 22,500,000 0 0 0 22,500,000 2.25%
U.S. Bank National 45,000,000 0 0 0 45,000,000 4.50%
Association
------------ ------------ ----------- ----------- ---------- ---
TOTAL $640,000,000 $300,000,000 $25,000,000 $35,000,000 $1,000 (MM) 100%
------------ ------------ ----------- ----------- ---------- ---
Schedule 1.2
Non-Guarantor Domestic Subsidiaries
Scotts Global Services, Inc., a Nevada corporation
SMGM LLC, an Ohio limited liability company
SMG Brands, Inc., a Delaware corporation
Custom Lawn Care Service, Inc., a Pennsylvania corporation
Schedule 4.1
Certain Financial Information
SUMMARY OF CURRENT CURRENCY SWAPS OF THE SCOTTS MIRACLE-GRO COMPANY
USD AMOUNT LOCAL CURRENCY INCEPTION SWAP MATURITY INSTITUTION
----------- ----------------- --------- ------------- ------------------
Scotts Treasury EEIG $21,659,454 (euro) 17,947,841 21-Jul-05 22-Aug-05 National City Bank
Scotts Treasury EEIG 12,684,557 (euro) 10,521,364 21-Jul-05 11-Aug-05 Fifth Third Bank
Scotts Treasury EEIG 13,836,796 (euro) 11,471,394 21-Jul-05 22-Aug-05 Fifth Third Bank
Scotts Treasury EEIG 6,019,293 (euro) 4,990,295 21-Jul-05 22-Aug-05 Fifth Third Bank
Scotts Treasury EEIG 6,377,761 (euro) 5,288,052 21-Jul-05 22-Aug-05 Citizens Bank
----------- -----------------
Total $60,577,861 (euro) 50,218,946
Scotts Holdings Limited $17,722,888 (pound)10,122,737 21-Jul-05 22-Aug-05 Fifth Third Bank
Scotts Holdings Limited 7,041,966 (pound) 4,022,142 21-Jul-05 22-Aug-05 Fifth Third Bank
Scotts Holdings Limited 17,930,471 (pound)10,246,276 21-Jul-05 22-Aug-05 National City Bank
Scotts Holdings Limited 15,885,737 (pound) 9,076,527 21-Jul-05 11-Aug-05 Citizens Bank
Scotts Holdings Limited 15,897,000 (pound) 9,078,293 21-Jul-05 22-Aug-05 Citizens Bank
----------- -----------------
Total $74,478,062 (pound)42,545,975
EUR to USD currency swaps totaling approximately $150,000,000 mature on July 21,
2005 as part of the inception of the Revolving Credit Agreement.
GBP to USD currency swaps totaling approximately $50,000,000 mature on July 21,
2005 as part of the inception of the Revolving Credit Agreement.
SUMMARY OF CURRENCY FORWARDS OF THE SCOTTS MIRACLE-GRO COMPANY
None
SUMMARY OF CURRENT INTEREST RATE SWAPS OF THE SCOTTS MIRACLE-GRO COMPANY
INSTITUTION AMOUNT START DATE END DATE RATE FIXING
- ---------------- ------------ ---------- --------- -----------
Bank of Montreal 50,000,000 28-Nov-03 28-Nov-08 3.5480%
Bank of Tokyo 40,000,000 28-Nov-03 28-Nov-08 3.5650%
Fleet 10,000,000 28-Nov-03 28-Nov-08 3.5650%
BNP Paribas 10,000,000 28-Nov-03 28-Nov-07 3.2200%
JP Morgan Chase 15,000,000 28-Nov-03 28-Nov-06 2.7625%
------------
Total $125,000,000
The original counterparty to these interest rate swaps was The Scotts Company.
SUMMARY OF OUTSTANDING LETTERS OF CREDIT FOR THE SCOTTS MIRACLE-GRO COMPANY (IN
000's)
LETTER'S OF CREDIT AMOUNT MATURITY BENEFICIARY
- ------------------ ----------- --------- ----------------------------------
B620440 $ 420,083 30-Sep-05 ZHEJIANG CEREALS,OILS AND
B695412 747,158 31-Oct-05 DIETHELM SCANSTYLE PTE LTD
B695429 147,623 10-Nov-05 CV JAMRUD, JL
B695430 507,817 12-Nov-05 HADINATA BROTHERS AND CO, PT
B695974 350,593 15-Jan-06 PT DWIPAPURI ASRI
B696527 72,658 08-Aug-05 PARKER INTERNATIONAL
P200765 602,500 30-Apr-06 THE PROVIDENT BANK, AS TRUSTEE
P218576 744,000 30-Sep-05 LUMBERMENS MUTUAL CASUALTY COMPANY
P224253 10,302 01-May-06 OHIO ENVIRONMENTAL PROTECTION
P234324 145,809 28-Jan-06 STATE OF FLORIDA, DEPARTMENT OF
P238657 6,158,141 30-Sep-05 ARGONAUT INSURANCE CO.
TBTI672040 30,925 01-Jul-05 FUJIAN EXTERNAL LABOR SERVICES
TBTI673183 207,843 15-Oct-05 KRISTALYA
TBTS672219 100,000 30-Sep-05 APPLEBEE EXPORT B.V.
T217922 450,000 30-Sep-05 CITY OF SPOKANE, SOLID WASTE
T237913 9,000 23-Nov-05 S.C. Dept of Health
T244095 333,240 19-Apr-06 OHIO ENVIRONMENTAL PROTECTION
T296770 450,000 30-Sep-05 CITY OF GREENSBORO
430736018 4,054,568 30-Sep-05 ACE American Insurance Co.
-----------
TOTAL $15,542,261
Schedule 4.5
Litigation
The Scotts Miracle-Gro Company (the "Company") is not presently aware of any
litigation which would constitute an exception to the representation contained
in subsection 4.5. However, the Company identifies in the Notes to its
Consolidated Financial Statements and in its filings with the Securities and
Exchange Commission the more significant of its identified contingencies,
including certain lawsuits and administrative proceedings. The following details
the contingencies that were identified in the Company's most recent Quarterly
Report on Form 10-Q filed May 12, 2005, updated through July 12, 2005. As used
herein, "we", "us" and "our" refers to the Company and its subsidiaries.
ENVIRONMENTAL MATTERS
In June 1997, the Ohio EPA initiated an enforcement action against us with
respect to alleged surface water violations and inadequate treatment
capabilities at our Marysville, Ohio facility and seeking corrective action
under the federal Resource Conservation and Recovery Act. The action related to
discharges from on-site waste water treatment and several discontinued on-site
disposal areas. The waste water discharges were re-directed to the City of
Marysville system in 1998. The on-site disposal areas date back to the early
operations of the Marysville facility and are areas that we had already been
assessing and, in some cases, restoring, on a voluntary basis. On December 3,
2001, an agreed judicial Consent Order was submitted to the Union County Common
Pleas Court and was entered by the court on January 25, 2002.
Pursuant to the Consent Order, we paid a $275,000 fine and must satisfactorily
restore the site such that we eliminate exposure to waste materials historically
disposed of at the Marysville site. We completed an updated evaluation of our
expected liability related to this matter based on the fine paid and restoration
actions that we have taken and expect to take in the future. As a result, we
accrued an additional $3.0 million in the third quarter of fiscal 2002 to
increase our reserve based on the then latest estimates.
On October 18, 2004, an agreed judicial Consent Decree was entered by the court
as a result of not obtaining a permit from the Philadelphia District of the U.S.
Army Corps of Engineers for prior peat harvesting operations at our Lafayette,
New Jersey facility. The Consent Decree requires minor mitigation efforts and
annual monitoring through 2009 as well as payment of a $50,000 civil penalty.
We are also addressing remediation concerns raised by the Environment Agency of
the United Kingdom with respect to emissions to air and groundwater at our
Bramford (Suffolk), United Kingdom facility. We have reserved for our estimates
of probable losses to be incurred in connection with this facility.
At April 2, 2005, $5.2 million was accrued for the environmental site
remediation and regulatory matters described herein. Most of the costs accrued
as of the end of the current fiscal quarter, are expected to be paid in fiscal
2005 and 2006; however, payments could be made for a period thereafter. During
the first six months of fiscal 2005, we have expensed approximately $1.6 million
related to environmental matters, compared with approximately $3.3 million in
environmental expenditures for all of fiscal 2004.
We believe that the amounts accrued as of the end of the current fiscal quarter
are adequate to cover our known environmental exposures based on current facts
and estimates of likely outcomes. However, the adequacy of these accruals is
based on several significant assumptions:
-- that we have identified all of the significant sites that must be
restored;
-- that there are no significant conditions of potential contamination
that are unknown to us; and
-- that with respect to the agreed judicial Consent Order in Ohio, that
historical wastes can be left in place rather than having to be removed
and only specific stream segments will require remediation/restoration as
opposed to the entire stream.
If there is a significant change in the facts and circumstances surrounding
these assumptions, it could have a material impact on the ultimate outcome of
these matters and our results of operations, financial position and cash flows.
LEGAL PROCEEDINGS
As noted in the discussion above under "Environmental Matters," we are involved
in several pending environmental matters. We believe that our assessment of
contingencies is reasonable and that related reserves, in the aggregate, are
adequate; however, there can be no assurance that the final resolution of these
matters will not have a material adverse affect on our results of operations,
financial position and cash flows.
Pending material legal proceedings are as follows:
AGREVO ENVIRONMENTAL HEALTH, INC.
On June 3, 1999, AgrEvo Environmental Health, Inc. ("AgrEvo") (which
subsequently changed its name to Aventis Environmental Health Science USA LP)
filed a complaint in the U.S. District Court for the Southern District of New
York (the "New York Action"), against The Scotts Company, a subsidiary of The
Scotts Company and Monsanto seeking damages and injunctive relief for alleged
antitrust violations and breach of contract by The Scotts Company and its
subsidiary and antitrust violations and tortious interference with contract by
Monsanto. The Scotts Company purchased a consumer herbicide business from AgrEvo
in May 1998. AgrEvo claims in the suit that The Scotts Company's subsequent
agreement to become Monsanto's exclusive sales and marketing agent for
Monsanto's consumer Roundup(R) business violated the federal antitrust laws.
AgrEvo contends that Monsanto attempted to or did monopolize the market for
non-selective herbicides and conspired with The Scotts Company to eliminate the
herbicide The Scotts Company previously purchased from AgrEvo, which competes
with Monsanto's Roundup(R). AgrEvo also contends that The Scotts Company's
execution of various agreements with Monsanto, including the Roundup(R)
Marketing Agreement, as well as The Scotts Company's subsequent actions,
violated agreements between AgrEvo and The Scotts Company.
AgrEvo is requesting damages as well as affirmative injunctive relief, and
seeking to have the court invalidate the Roundup(R) Marketing Agreement as
violative of the federal antitrust laws. Under the indemnification provisions of
the Roundup(R) Marketing Agreement, Monsanto and The Scotts Company each have
requested that the other indemnify against any losses arising from this lawsuit.
On January 10, 2003, The Scotts Company filed a supplemental counterclaim
against AgrEvo for breach of contract. The Scotts Company alleges that AgrEvo
owes The Scotts Company for amounts that The Scotts Company overpaid to AgrEvo.
The Scotts Company's counterclaim is now part of the underlying litigation.
Recently, Monsanto settled with AgrEvo. The terms of that settlement are not
known.
Trial was held from May 23, 2005 to June 13, 2005. The jury rejected all of
AgrEvo's antitrust claims and all but one of AgrEvo's contract claims, a claim
for non-payment of an invoice of approximately $194,000.
Scotts' counterclaim, seeking approximately $690,000 in damages from AgrEvo, was
tried to the judge without a jury, and a decision on that claim is pending. Once
the counterclaim is decided, the court will issue a final judgment.
Although The Scotts Company has prevailed extensively in the litigation with
AgrEvo, the verdicts in The Scotts Company's favor are subject to appeal and
possible further proceedings. If, upon appeal or otherwise, the above actions
are determined adversely to The Scotts Company, the result could have a material
adverse effect on The Scotts Company's results of operations, financial position
and cash flows. The Scotts Company believes that it will continue to prevail in
the AgrEvo matters and that any potential exposure that The Scotts Company may
face cannot be reasonably estimated. Therefore, no accrual has been established
related to the claims brought against The Scotts Company by AgrEvo. The Scotts
Company believes it has adequate reserves recorded for the amounts it may
ultimately be required to pay.
CENTRAL GARDEN & PET COMPANY
THE SCOTTS COMPANY V. CENTRAL GARDEN, SOUTHERN DISTRICT OF OHIO
On June 30, 2000, The Scotts Company filed suit against Central Garden & Pet
Company ("Central Garden") in the U.S. District Court for the Southern District
of Ohio (the "Ohio Action") to recover approximately $24 million in accounts
receivable and additional damages for other breaches of duty.
On April 22, 2002, a jury returned a verdict in favor of The Scotts Company of
$22.5 million and for Central Garden on its remaining counterclaims in an amount
of approximately $12.1 million. Various post-trial motions were filed. As a
result of those motions, the trial court reduced Central Garden's verdict by
$750,000, denied Central Garden's motion for a new trial on two of its
counterclaims and granted the parties pre-judgment interest on their respective
verdicts. On September 22, 2003, the court entered a final judgment, which
provided for a net award to The Scotts Company of approximately $14 million,
together with interest at 2.31% through the date of payment. Central Garden
appealed and The Scotts Company cross-appealed from that final judgment. On
April 12, 2005, the Sixth Circuit modified in part and affirmed the trial
court's judgment. The judgment as modified and affirmed provided for a net award
of approximately $15 million to the Company, which judgment was recently
satisfied by Central.
U.S. HORTICULTURAL SUPPLY, INC. (F/K/A E.C. GEIGER, INC.)
On February 7, 2003, U.S. Horticultural Supply ("Geiger") filed suit against The
Scotts Company in the U.S. District Court for the Eastern District of
Pennsylvania. Geiger alleged claims of breach of contract, promissory estoppel,
and a violation of federal antitrust laws, and seeks an unspecified amount of
damages. Geiger's promissory estoppel claims have been dismissed. The parties
have concluded discovery on the antitrust and breach of contract claims. At the
conclusion of discovery, the Plaintiff withdrew its antitrust claim. On May 2,
2005, Scotts filed a Motion for Summary Judgment on the breach of contract
claim. The motion is pending with the Court. No trial date has been set for the
breach of contract claim.
On November 5, 2004, Geiger filed another suit against The Scotts Company in the
U.S. District Court for the Eastern District of Pennsylvania. This complaint
alleges that The Scotts Company conspired with another distributor, Griffin
Greenhouse Supplies, Inc., to restrain trade in the horticultural products
market, in violation of Sections 1 and 57 of the Sherman Antitrust Act. The
Scotts Company moved to dismiss the suit on December 2, 2004, and the Court held
oral argument on the Motion for March 18, 2005. The motion is currently pending
with the Court.
The Scotts Company believes that all of Geiger's claims are without merit and
intends to vigorously defend against them. If any of the above actions are
determined adversely to The Scotts Company, the result could have a material
adverse effect on The Scotts Company's results of operations, financial position
and cash flows. Any potential exposure that The Scotts Company may face cannot
be reasonably estimated. Therefore, no accrual has been established related to
this matter.
THE SCOTTS COMPANY V. AVENTIS S.A. AND STARLINK LOGISTICS, INC.
On August 9, 2002, The Scotts Company filed suit against Aventis S.A. and its
wholly-owned subsidiary Starlink Logistics, Inc. in the U.S. District Court for
the Southern District of Ohio. In the complaint, The Scotts Company alleges it
is entitled to injunctive and monetary relief arising from Aventis' and
Starlink's interference with The Scotts Company's contractual right to purchase
a company called TechPac, L.L.C. from one of Aventis' former subsidiaries,
Aventis CropScience. The complaint alleges that pursuant to a contract between
The Scotts Company and a predecessor-in-interest to Aventis CropScience, Aventis
CropScience was obligated to make a bona fide offer to sell its interest in
TechPac to The Scotts Company. The complaint further alleges that Aventis
directed Aventis CropScience to make a belated sham offer to The Scotts Company
and that later, upon the sale of Aventis CropScience to Bayer AG, Aventis
transferred ownership of TechPac to Starlink, an act which has made it
impossible for Aventis CropScience's successor-in-interest to make a bona fide
offer to sell TechPac to The Scotts Company.
In this suit, The Scotts Company seeks to ensure that it is able to exercise its
right to receive a bona fide offer to acquire TechPac, and The Scotts Company
seeks to recover compensatory and punitive damages in an amount as yet
undetermined for Aventis' and Starlink's interference with The Scotts Company's
right to receive such an offer. On October 4, 2002, Starlink filed a motion to
dismiss the complaint on jurisdictional grounds. On December 17, 2002, Aventis
filed a similar motion. On April 23, 2004, the court dismissed the action
without prejudice.
The Scotts Company appealed the dismissal to the United States Court of Appeals
for the Sixth Circuit, where the appeal remains pending. In addition, The Scotts
Company and certain subsidiaries filed an action against Aventis, Starlink and
others, in the Court of Common Pleas of Union County, Ohio. The defendants
removed that action to the United States District Court for the Southern
District of Ohio, where it is currently pending as Civil Action No. 04-CV-352.
OTHER
The Scotts Company has been named a defendant in a number of cases alleging
injuries that the lawsuits claim resulted from exposure to asbestos-containing
products, apparently based on The Scotts Company's historic use of vermiculite
in certain of its products. The complaints in these cases are not specific about
the plaintiffs' contacts with The Scotts Company or its products. The Scotts
Company in each case is one of numerous defendants and none of the claims seeks
damages from The Scotts Company alone. The Scotts Company believes that the
claims against it are without merit and is vigorously defending them. It is not
currently possible to reasonably estimate a probable loss, if any, associated
with the cases and, accordingly, no accrual or reserves have been recorded in
The Scotts Company's consolidated financial statements. There can be no
assurance that these cases, whether as a result of adverse outcomes or as a
result of significant defense costs, will not have a material adverse effect on
The Scotts Company, its financial condition or its results of operations.
The Scotts Company is reviewing agreements and policies that may provide
insurance coverage or indemnity as to these claims and is pursuing coverage
under some of these agreements, although there can be no assurance of the
results of these efforts.
We are involved in other lawsuits and claims which arise in the normal course of
our business. In our opinion, these claims individually and in the aggregate are
not expected to result in a material adverse effect on our results of
operations, financial position or cash flows.
Schedule 4.8
Subsidiaries
SUBSIDIARIES OF THE SCOTTS MIRACLE-GRO COMPANY(1)
SMG Brands, Inc., a Delaware corporation
SMGM LLC, an Ohio limited liability company
The Scotts Company LLC, an Ohio limited liability company
Smith & Hawken, Ltd., a Delaware corporation
EG Systems, Inc., an Indiana corporation
Custom Lawn Care Service, Inc., a Pennsylvania corporation(2)
Swiss Farms Products, Inc., a Delaware corporation
Hyponex Corporation, a Delaware corporation
OMS Investments, Inc., a Delaware corporation
Scotts Temecula Operations, LLC, a Delaware limited liability company
Sanford Scientific, Inc., a New York corporation
Scotts Global Services, Inc., a Nevada corporation
Scotts-Sierra Horticultural Products Company, a California corporation
Scotts-Sierra Crop Protection Company, a California corporation
Scotts-Sierra Investments, Inc., a Delaware corporation
#Scotts de Mexico SA de CV (Mexico)
#Scotts Australia Pty Limited (Australia)
#Scotts Canada Ltd. (Canada)
#Scotts Sweden AB (Sweden)
#The Scotts Company (Nordic) AS (Denmark)
#Scotts Norway AS (Norway)
#Scotts Holdings Limited (United Kingdom)
#Scotts Horticulture Limited (Ireland)
#Levington Group Limited (United Kingdom)
#The Scotts Company (UK) Limited (United Kingdom)
#The Scotts Company (Manufacturing) Limited (United
Kingdom)
#OM Scott International Investments Limited (United Kingdom)
*#Scotts Italia S.r.l. (Italy) (5% owned by a
non-voting nominated party)
#Corwen Home and Garden Ltd. (United Kingdom)
#Scotts International BV (Netherlands)
#Scotts Profi HGmbH. (Austria)
#Scotts Deutschland GmbH (Germany)
#Scotts O.M. Espana, SA (Spain)
#Scotts Finland OY (Finland)
*#Scotts Benelux BVBA (Belgium) (1 share owned by a non-voting
nominated party)
#ASEF BV (Netherlands)
#The Scotts Company Italia S.r.l. (Italy)
#The Scotts Company Kenya Ltd. (Kenya)
#Scotts France Holdings SARL (France)
#Scotts France SARL (France) (99.9981% ownership)
#Scotts France SAS (France) (99.97% by Scotts France
Holdings SARL and 0.03% by Scotts France
SARL)
- -------------
(1) * Not wholly-owned
# Foreign
(2) This company is inactive and is in the process of being dissolved.
#Scotts Poland Sp.z.o.o. (Poland)
#Scotts Holding GmbH (Germany)
#Scotts Celaflor GmbH & Co. KG (Germany)
#Scotts Celaflor HGmbH (Austria)
#Scotts PBG Malaysia Sdn. Bhd. (Malaysia)
#Scotts Czech s.r.o. (Czech Republic)
#Scotts Hungary KFT (Hungary)
*#Scotts Japan, Ltd. (Japan) (51% ownership)
#Scotts Chile Limitada (Chile)
Scotts Products Co., an Ohio corporation
Scotts Professional Products Co., an Ohio corporation
Scotts Manufacturing Company, a Delaware corporation
Miracle-Gro Lawn Products, Inc., a New York corporation
Schedule 4.11
Certain Transactions
1. Purchases of any security as part of or in connection with a Permitted
Acquisition.
2. Repurchases or redemptions of the Borrower's Capital Stock and payment of
dividends permitted by Section 7.14.
3. Redemptions of certain Indebtedness permitted by Section 7.15.
4. Any use of proceeds permitted by Section 2.19.
5. Any use of proceeds otherwise contemplated or permitted by the Agreement.
Schedule 4.19(ii)
Certain Filings
The Scotts Miracle-Gro Company:
Ohio Secretary of State
The Scotts Company LLC:
Ohio Secretary of State
Scotts Manufacturing Company:
Delaware Secretary of State
Scotts-Sierra Horticultural Products Company:
California Secretary of State
OMS Investments, Inc.:
Delaware Secretary of State
Scotts-Sierra Investments, Inc.:
Delaware Secretary of State
Schedule 4.19(iii)
Perfection of Foreign Stock Pledges
DOCUMENT ACTION
-------- ------
Share Pledge granted by Scotts Sierra Investments Execution before a notary in Amsterdam and
Inc over the shares of Asef B.V. registration in the shareholders register of
Asef B.V.
Share Pledge granted by Scotts Sierra Investments Execution before a notary (in either Switzerland
Inc. over the shares of Scotts Holding GmbH or Germany)
Share Pledge granted by Scotts Sierra Investments Registration in the shareholders register of
Inc. over the shares of Scotts Benelux BVBA Scotts Benelux BVBA
Share Pledge granted by Scotts Sierra Investments Registration with the French tax authorities and
Inc. over the shares of Scotts France Holdings SARL notification by bailiff on Scotts France Holding
SARL
Schedule 5.1(b)
Foreign Subsidiary Pledges
A. SCHEDULE OF CAPITAL STOCK OF FOREIGN SUBSIDIARIES PLEDGED BY DOMESTIC
SUBSIDIARIES
Borrower shall use commercially reasonable efforts to effect the following
pledges within 60 days after the Closing Date.
Name of Domestic Percentage of Capital
Subsidiaries Name of Foreign Subsidiary Stock Pledged
- ------------------------------- -------------------------------------- -----------------------------------
Scotts-Sierra Investments, Inc. Scotts Australia Pty Limited (provided 65% of Voting Capital Stock to
that delivery of this pledge is secure obligations of Scotts-Sierra
contingent upon confirmation from Investments, Inc./ 65% of Voting
Australian tax authorities that the Capital Stock to secure borrowings
applicable Australian stamp duty will of Foreign Subsidiary
not be based on the total aggregate
amount of the Facility)
Scotts Canada Limited 65% of Voting Capital Stock to
secure obligations of Scotts-Sierra
Investments, Inc./ 100% of Voting
Capital Stock to secure borrowings
of Foreign Subsidiary
Scotts Holdings Limited 100% of Capital Stock to secure
obligations of Scotts-Sierra
Investments Inc.
Scotts Benelux BVBA 100% of Capital Stock to secure
obligations of Scotts-Sierra
Investments Inc. (one share being
pledged separately by OMS
Investments, Inc.)
ASEF B.V. 100% of Capital Stock to secure
obligations of Scotts-Sierra
Investments Inc.
Scotts France Holdings SARL 100% of Capital Stock to secure
obligations of Scotts-Sierra
Investments Inc.
Scotts Holding GmbH 100% of Capital Stock to secure
obligations of Scotts-Sierra
Investments Inc.
B. SCHEDULE OF CAPITAL STOCK OF SUBSIDIARIES PLEDGED WITH RESPECT TO FOREIGN
SUBSIDIARY BORROWERS
Name of Subsidiary
Name of Foreign Whose Capital Stock Percentage of Owned
Subsidiary Borrower is to be Pledged Capital Stock Pledged
- ---------------------------- ---------------------------- ------------------------------------------------
Scotts Holdings Limited Levington Group Limited 100% of Capital Stock to secure borrowings of
Scotts Holdings Limited
O M Scott International 65% of Capital Stock to secure borrowings of
Investments Ltd. Scotts Holdings Limited
The Scotts Company (UK) Ltd. The Scotts Company 65% of Capital Stock to secure borrowings of The
(Manufacturing) Limited Scotts Company (UK) Ltd.
The Scotts Company (UK) Ltd. The Scotts Company (UK) Ltd. 100% of Capital Stock pledged by Levington
Group Limited to secure borrowings of The Scotts
Company (UK) Ltd.
Schedule 5.1(g)
Proceedings
None, except as otherwise disclosed in Schedule 4.5.
Schedule 5.3(iii)
Certain Required Recordations
DOCUMENT ACTION
-------- ------
1. Scotts France Holdings SARL Share Pledge Notarisation, registration and notification
by bailiff
2. Scotts Holding GmbH Share Pledge Notarisation
3. Scotts Benelux BVBA Share Pledge Registration
4. ASEF B.V. Share Pledge Notarisation and registration
Schedule 6.13
Foreign Pledge Agreements
See Schedule 5.1(b) which lists those foreign pledges that will be delivered
post-closing.
Schedule 7.1(i)
Existing Liens and Encumbrances
1. All of the UCC filings described in the summary of lien searches provided to
the Administrative Agent on July 20, 2005 and July 21, 2005.
2. Liens of lessors under capital leases in the amount of $.228 million, as
described in Schedule 7.5(c).
3. The following liens on the assets of Foreign Subsidiaries:
Levington Horticulture Limited Standard Security presented for
registration in Scotland in favour of
National Westminster Plc (as Security
Trustee for itself and the beneficiaries)
dated 22 July 1992
O.M. Scott & Sons Ltd. Deed of Charge over Credit Balances in
favour of Barclays Bank Plc dated 14
December 1992
4. Liens permitted by Section 7.1(k) of the December 4, 1998 Credit Agreement;
provided that the Indebtedness secured by such liens has been paid in full.
Schedule 7.2(iii)
Existing Guarantees
1. Guarantee by The Scotts Company of certain obligations of E.G.
Systems, Inc. d/b/a Scotts LawnService as described below:
Liqui Green - Spraying (Peoria) $ 131,650
Liqui Green - Lawn Care Corp. $ 550,000
Custom Care Lawn - Pittsburgh $ 510,000
Custom Care - Reading $ 600,000
All Pro Enviro Services (Nutri-Lawn - Seattle) $2,550,000
Guaranteed Scotts LawnService Leases $ 577,947
----------
Subtotal $4,919,597
==========
2. Springing guarantee in the amount of $945,000, by The Scotts Company
for lease of manufacturing equipment used for the production and
packaging of certain Scotts products in Europe, which equipment is
leased by Peltracom Potgrand Divisie N.V., as lessee, from KBC Bank
and DeLage Landen, as lessors.
3. Guarantees by The Scotts Company of the following foreign subsidiary
transactions:
Heller lease in Switzerland $119,589
4. Parent guarantee supporting a euro denominated bank line of credit
extended to Scotts France SAS. The July 19, 2005 available balance
of such bank line of credit was U.S.$4,244,286 using a euro to
dollars exchange rate of 1.20.
5. Guarantee of Performance, dated March 18, 2005, of E.G. Systems,
Inc. under its franchise registrations in the States of California,
Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York,
North Dakota, Rhode Island, South Dakota, Virginia, Washington and
Wisconsin and under its Scotts LawnService Franchise Agreements with
franchisees, which guarantee continues in effect until E.G. Systems,
Inc. has satisfied all of its obligations under the state franchise
registrations and the Scotts LawnService Franchise Agreements.
Maximum exposure at any one time is estimated to be ten franchisee
set-ups at $10,000 per set-up, or $100,000.
Total guarantees for The Scotts Company = $10,328,472
Schedule 7.5(c)
Existing Indebtedness
1. All Working capital lines of credit currently available to any
Foreign Subsidiaries, in an aggregate amount not to exceed the
Dollar Equivalent of $25,000,000.
2. All outstanding letters of credit, interest rate swap hedging
instruments, and foreign currency exchange hedging agreements that
are listed on Schedule 4.1.
3. All synthetic leases described below:
AMOUNT TERM MATURITY LESSOR
----------- ---- ---------- ----------
The Scotts Company $12,900,000 5-yr 08/30/2008 Fleet Bank
The Scotts Company $ 5,846,230 8-yr 12/29/2009 Fleet Bank
-----------
Total $18,746,230
4. Various capital leases totaling approximately $.228 million,
consisting primarily of computer equipment and software.
5. Deferred purchase obligations totaling approximately $8.65 million
for various acquisitions for EG Systems, Inc. d/b/a Scotts
LawnService.
Schedule 7.9
Sale and Leaseback
As of May 1, 2000, certain real property located in Marysville including The
Scotts Miracle-Gro Company headquarters building, research building and parcel
"C" (a test plot) were transferred to The State of Ohio Department of
Development, who immediately leased it to the Community Improvement Corporation
of Union County, who then immediately subleased it to The Scotts Company. A
partial release of the JPMorgan Chase Bank mortgage was recorded releasing the
subject property.
Schedule 10.2
Notices
1. Bank of America, N.A.
231 South La Salle St., 10th Floor
Chicago, IL 60697
Attn: Sharon Burks Horos
312-828-2149
2. Bank of Montreal
4th Floor, 1 First Canadian Place
Toronto, Ontario M5X 1H3
Attn: Ben Ciallella
416-359-6816
Harris N.A.
111 W. Monroe St., 20 West
Chicago, IL 60603
Attn: Bradley Pierce
312-461-6756
3. The Bank of New York
One Wall Street-21st Floor
New York, NY 10286
Attn: Kenneth R. McDonnell
212-635-1066
4. Bank of Tokyo-Mitsubishi Trust Company
1251 Avenue of the Americas
New York, NY 10020-1104
Attn: Andrew Green
212-782-4303
5. BNP Paribas
209 South La Salle, Suite 500
Chicago, IL 60604
Attn: Deanna Cook
312-977-2233
6. Calyon Corporate and Investment Bank
227 West Monroe St., Suite 3800
Chicago, IL 60606
Attn: Joseph Philbin
312-220-7310
7. Citicorp North America, Inc.
233 South Wacker Drive - 86th Floor
Chicago, IL 60606
Attn: Rich Levin
312-876-3260
w/ a copy sent to:
Citicorp North America, Inc.
Loan Administration
2 Penns Way
New Castle, DE
Attn: Carolyn Figueroa
302-894-6089
8. Citizens Bank of Pennsylvania
525 William Penn Plaza, Suite 2910
Pittsburgh, PA 15259
Attn: Dwayne Finney
412-867-2425
9. CoBank, ACB
5500 South Quebec Street
Greenwood Village, CO 80111
Attention: Antonette C. Leflar
303-740-4172
10. Comerica
500 Woodward Ave.
Detroit, MI 48226
MC3268
Attn: Scott Kowalski
313-222-9452
11. Farm Credit Bank of Texas
4801 Plaza on the Lake Dr.
Austin, TX 78746
Attn: Luis Requejo
512-465-0774
12. Fifth Third Bank
21 East State St.
MD: 468371
Columbus, OH 43215
Attn: Christopher Jones
614-744-5982
13. 1st Farm Credit Services, PCA
1560 Wall Street, Suite 221
Naperville, IL 60563
Attn: Dale Richardson
630-527-6426
14. Fortis Capital Corp.
301 Tressler Blvd.
9th Floor
Stamford, CT 06901
Attn: John Spillane
203-705-5802
15. JPMorgan Chase Bank, N.A.
270 Park Avenue
New York, NY 10017
Attn: Randolph Cates
212-270-8997
16. LaSalle Bank, N.A.
312 Walnut Street, Suite 2450
Cincinnati, OH 45202
Attn: Cynthia Gray
513-368-4641
17. Mizuho Corporate Bank, Ltd.
1251 Avenue of the Americas
New York, NY 10020
Attn: Azlan S. Ahmad
212-282-3414
18. National City Bank
Columbus Paza
155 East Broad St.
Columbus, OH 43251
Attn: Thomas Redmond
614-463-8540
19. The Northern Trust Company
50 South LaSalle Street
Chicago, IL 60675
Attn: Dave Sullivan
312-444-2287
20. People's Bank
National Credits Department
Bridgeport Center, 850 Main Street
Bridgeport, CT 06604
Attn: George Paik
203-338-3563
21. Rabobank International
New York Branch - 37th Floor
245 Park Avenue
New York, NY 10167
Attn: Rebecca Morrow
212-916-3743
22. The Bank of Nova Scotia
600 Peachtree Street, N.E.. Suite 2700
Atlanta, GA 30308
Attn: George Wong
404-877-1556
23. Sumitomo Mitsui Banking Corporation
277 Park Ave.
New York, NY 10172
Attn: Bill Vukovich
212-224-4015
24. SunTrust Bank
401 North Michigan Ave.
Suite 1200
Chicago, IL 60611
Attn: Molly Drennan
312-840-7982
25. UFJ Bank Limited
55 East 52nd St.
New York, NY 10055
Attn: Russell Bohner
212-339-6202
26. U.S. Bank National Association
175 South Third St. 4th Floor
Columbus, OH 43215-5134
Attn: Bob Friend
614-232-2249
EXHIBIT A
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Revolving Credit Agreement, dated as of
July 21, 2005, by and among The Scotts Miracle-Gro Company, an Ohio corporation
(the "Borrower" or "Scotts"), the subsidiaries of the Borrower from time to time
parties thereto (the "Subsidiary Borrowers"), the several banks and other
financial institutions from time to time parties thereto (the "Lenders"), Bank
of America, N.A. and Citicorp North America, Inc., as Syndication Agents, Bank
of Tokyo-Mitsubishi Trust Company, BNP Paribas, CoBank, ACB, Harris, N.A.,
Rabobank International, and Suntrust Bank, as Documentation Agents and JPMorgan
Chase Bank, N.A., as agent for the Lenders thereunder (in such capacity, the
"Administrative Agent"). Terms defined in the Credit Agreement are used herein
with the same meanings.
__________ (the "Assignor") and __________ (the "Assignee") agree as
follows:
The Assignor identified on Schedule l hereto (the "Assignor") and
the Assignee identified on Schedule l hereto (the "Assignee") agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date (as defined below), the interest described in Schedule 1 hereto
(the "Assigned Interest") in and to the Assignor's rights and obligations under
the Credit Agreement with respect to those credit facilities contained in the
Credit Agreement as are set forth on Schedule 1 (individually, an "Assigned
Facility"; collectively, the "Assigned Facilities"), in a principal amount for
each Assigned Facility as set forth on Schedule 1.
2. The Assignor (i) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, any other Loan Document or any other instrument or document furnished
pursuant thereto, other than that it has not created any adverse claim upon the
interest being assigned by it hereunder and that such interest is free and clear
of any such adverse claim; (ii) makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Borrower, any
of its Subsidiaries or any other obligor or the performance or observance by the
Borrower, any of its Subsidiaries or any other obligor of any of their
respective obligations under the Credit Agreement or any other Loan Document or
any other instrument or document furnished pursuant hereto or thereto; and (iii)
attaches the Note(s) held by it, if any, evidencing the Assigned Facilities,
which Notes(s) the Administrative Agent promptly will return to the Borrower or
relevant Subsidiary Borrower, and, if applicable, requests that the
Administrative Agent exchange such Note(s) for a new Note or Notes payable to
the Assignee and (if the Assignor has retained any interest in the Assigned
Facility) a new Note or Notes payable to the Assignor in the respective amounts
which reflect the assignment being made hereby (and after giving effect to any
other assignments which have become effective on or after the Effective Date)
and
2
3. The Assignee (i) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (ii) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements delivered pursuant to subsection 4.1 thereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (iii) agrees
that it will, independently and without reliance upon the Assignor, the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement, the
other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; (iv) appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under the Credit Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are
incidental thereto; and (v) agrees that it will be bound by the provisions of
the Credit Agreement and will perform in accordance with its terms all the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender.
4. The effective date of this Assignment and Acceptance shall be
Effective Date of the Assignment described on Schedule 1 hereto (the "Effective
Date"). Following the execution of this Assignment and Acceptance, it will be
delivered to the Administrative Agent for acceptance by it and recording by the
Administrative Agent pursuant to the Credit Agreement, effective as of the
Effective Date (which shall not, unless otherwise agreed to by the
Administrative Agent, be earlier than five Business Days after the date of such
acceptance and recording by the Administrative Agent).
5. Upon such acceptance and recording, from and after the Effective
Date, the Administrative Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignee. The Assignor and the Assignee shall make all
appropriate adjustments in payments by the Administrative Agent for periods
prior to the Effective Date or with respect to the making of this assignment
directly between themselves.
6. From and after the Effective Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and under the
other Loan Documents and shall be bound by the provisions thereof and (ii) to
the extent provided in this Assignment and Acceptance, the rights of the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the the Credit
Agreement.
7. This Assignment and Acceptance shall be governed by and construed
and interpreted in accordance with, the law of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Acceptance to be executed as of the date first above written by their
respective duly authorized officers on Schedule 1 hereto.
Schedule 1
to Assignment and Acceptance relating to the Revolving Credit Agreement
dated as of July 21, 2005, among the Borrower, the Subsidiary Borrowers, the
Lenders from time to time parties thereto and JPMorgan Chase Bank, N.A., as
Administrative Agent
Name of Assignor:
Name of Assignee:
[(a) Assignee is a Lender Affiliate of: _________________](1)
[(b) Assignee is an Approved Fund administered or managed by:
______________](2)
Effective Date of Assignment:
Credit Principal
Facility Assigned Amount Assigned(3) Commitment Percentage Assigned
- ----------------- ------------------ ------------------------------
[NAME OF ASSIGNOR],
as Assignor
By: _____________________
Name:
Title:
[NAME OF ASSIGNEE],
as Assignee
By: _____________________
Name:
Title:
- -------------------
(1) To be completed by the Assignee if applicable.
(2) To be completed by the Assignee if applicable.
(3) In Dollars, euros, Sterling, Canadian Dollars, Australian Dollars or
Optional Currencies, as applicable.
2
JPMORGAN CHASE, N.A.,
as Administrative Agent [and Issuing Lender]
By: _____________________
Name:
Title:
[NAME OF ISSUING LENDER](4),
as Issuing Lender
By: _____________________
Name:
Title:
[Consented To:
THE SCOTTS MIRACLE-GRO COMPANY
By:_________________________
Name:
Title:](5)
- ------------------
(4) Include if the Issuing Lender is a Lender other than JPMorgan Chase Bank,
N.A.
(5) Include if applicable.
EXHIBIT C
FORM OF SWING LINE LOAN PARTICIPATION CERTIFICATE
[Letterhead of JPMorgan Chase Bank, N.A.]
[Name of Lender]
[Address of Lender]
Dear Sirs:
Pursuant to subsection 2.3(c) of the Revolving Credit Agreement, dated as of
July 21, 2005, by and among The Scotts Miracle-Gro Company, an Ohio corporation
(the "Borrower" or "Scotts"), the subsidiaries of the Borrower from time to time
parties thereto (the "Subsidiary Borrowers"), the several banks and other
financial institutions from time to time parties thereto (the "Lenders"), Bank
of America, N.A. and Citicorp North America, Inc., as Syndication Agents, Bank
of Tokyo-Mitsubishi Trust Company, BNP Paribas, CoBank, ACB, Harris, N.A.,
Rabobank International, and Suntrust Bank, as Documentation Agents and JPMorgan
Chase Bank, N.A., a New York banking corporation, as agent for the Lenders
thereunder (in such capacity, the "Administrative Agent"), the undersigned
hereby acknowledges receipt from you on the date hereof of [AMOUNT IN WORDS]
DOLLARS [OR DOLLAR EQUIVALENT] AND [AMOUNT IN WORDS] CENTS ($__________) as
payment for a participating interest in the following Swing Line Loan:
Date of Swing Line Loan: ___________________________________
Principal Amount of Swing Line Loan: _________________________
Facility to which Swing Line Loan Will Be Applied: ________________
Very truly yours,
[NAME OF SWING LINE LENDER]
By: _______________________
Name:
Title:
EXHIBIT D
FORM OF U.S. TAX COMPLIANCE CERTIFICATE
Reference is made to the Loan(s) held by the undersigned pursuant to
the Revolving Credit Agreement (as amended, supplemented, waived or otherwise
modified from time to time, the "Credit Agreement"), dated as of July 21, 2005,
by and among The Scotts Miracle-Gro Company, an Ohio corporation (the "Borrower"
or "Scotts"), the subsidiaries of the Borrower from time to time parties thereto
(the "Subsidiary Borrowers"), the several banks and other financial institutions
from time to time parties thereto (the "Lenders"), Bank of America, N.A. and
Citicorp North America, Inc., as Syndication Agents, Bank of Tokyo-Mitsubishi
Trust Company, BNP Paribas, CoBank, ACB, Harris, N.A., Rabobank International,
and Suntrust Bank, as Documentation Agents and JPMorgan Chase Bank, N.A., a New
York banking corporation ("JPMCB"), as agent for the Lenders thereunder (in such
capacity, the "Administrative Agent"). The undersigned hereby certifies under
penalty of perjury that:
(1) The undersigned is the beneficial owner of the Loan(s) (as well
as any Note(s) evidencing such Loan(s)) registered in its name;
(2) The income from the Loan(s) held by the undersigned is not
effectively connected with the conduct of a trade or business within the
United States;
(3) The undersigned is not a bank (as such term is used in Section
881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the
"Code")), is not subject to regulatory or other legal requirements as a
bank in any jurisdiction, and has not been treated as a bank for purposes
of any tax, securities law or other filing or submission made to any
governmental authority, any application made to a rating agency or any
qualification for any exemption from any tax, securities law or other
legal requirements;
(4) The undersigned is not a 10-percent shareholder of the Borrower
within the meaning of Section 881(c)(3)(B) of the Code; and
(5) The undersigned is not a controlled foreign corporation
receiving interest from a related person within the meaning of Section
881(c)(3)(C) of the Code.
2
We have furnished you with a certificate of our non-U.S. person
status on Internal Revenue Service Form W-8BEN or W-8ECI. By executing
this certificate, the undersigned agrees that (1) if the information
provided on this certificate changes, the undersigned shall so inform the
Borrower (for the benefit of each of the Borrower, the Subsidiary
Borrowers and the Administrative Agent) in writing within thirty days of
such change and (2) the undersigned shall furnish the Borrower (for the
benefit of each of the Borrower, the Subsidiary Borrowers and the
Administrative Agent) a properly completed and currently effective
certificate in either the calendar year in which payment is to be made by
any of the Subsidiary Borrowers to the undersigned, or in either of the
two calendar years preceding such payment.
Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement.
[NAME OF LENDER]
By:_____________________________
Name:
Title:
[Address]
Dated: ____________, 200_
EXHIBIT E
FORM OF COMMITMENT INCREASE SUPPLEMENT
SUPPLEMENT, dated __________ to the Revolving Credit Agreement (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), dated as of July 21, 2005, by and among The Scotts Miracle-Gro
Company, an Ohio corporation (the "Borrower"), the subsidiaries of the Borrower
from time to time parties thereto (the "Subsidiary Borrowers"), the several
banks and other financial institutions from time to time parties thereto (the
"Lenders"), Bank of America, N.A. and Citicorp North America, Inc., as
Syndication Agents, Bank of Tokyo-Mitsubishi Trust Company, BNP Paribas, CoBank,
ACB, Harris, N.A., Rabobank International, and Suntrust Bank, as Documentation
Agents and JPMorgan Chase Bank, N.A., a New York banking corporation (together
with its banking affiliates, as agent for the Lenders (in such capacity, the
"Administrative Agent").
WITNESSETH:
WHEREAS, the Credit Agreement provides in subsection 2.23(a) thereof that
any Lender to which a commitment increase is offered may increase the amount of
its Revolving Credit Commitment in respect of each or any of the Revolving
Credit Facilities by executing and delivering to the Borrower, the Subsidiary
Borrowers and the Administrative Agent a supplement to the Credit Agreement in
substantially the form of this Supplement; and
WHEREAS, the undersigned now desires to increase the amount of its
Revolving Credit Commitment under the Credit Agreement;
NOW, THEREFORE, the undersigned hereby agrees as follows:
1. The undersigned agrees, subject to the terms and conditions of
the Credit Agreement, that on the date this Supplement is accepted by the
Borrower, the Subsidiary Borrowers and the Administrative Agent it shall
have its Revolving Credit Commitment increased by $_________ [or Dollar
equivalent] thereby making the amount of its Revolving Credit Commitment
$_______ [or Dollar equivalent] in respect of [FACILITY].
2. Terms defined in the Credit Agreement shall have their defined
meanings when used herein.
2
IN WITNESS WHEREOF, the undersigned has caused this Supplement to be
executed and delivered by a duly authorized officer on the date first above
written.
[INSERT NAME OF REVOLVING
CREDIT LENDER]
By: ____________________________
Name:
Title:
3
Accepted this _____ day of
______________________, ________.
THE SCOTTS MIRACLE-GRO COMPANY
By: __________________________
Name:
Title:
SCOTTS TREASURY EEIG
By: __________________________
Name:
Title
4
Accepted this ____ day of
_______________, 200__.
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
By: __________________________
Name:
Title:
EXHIBIT F
FORM OF NEW LENDER SUPPLEMENT
SUPPLEMENT, dated _________________, to the Revolving Credit
Agreement dated as of July 21, 2005 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"; terms defined therein being
used herein as therein defined unless otherwise defined), by and among The
Scotts Miracle-Gro Company, an Ohio corporation (the "Borrower"), the
subsidiaries of the Borrower from time to time parties thereto (the "Subsidiary
Borrowers"), the several banks and other financial institutions from time to
time parties thereto (the "Lenders"), Bank of America, N.A. and Citicorp North
America, Inc., as Syndication Agents, Bank of Tokyo-Mitsubishi Trust Company,
BNP Paribas, CoBank, ACB, Harris, N.A., Rabobank International, and Suntrust
Bank, as Documentation Agents and JPMorgan Chase Bank, N.A., as agent for the
Lenders thereunder (in such capacity, the "Administrative Agent").
WITNESSETH:
WHEREAS, the Credit Agreement provides in Section 2.23(a) thereof
that any bank, financial institution or other entity may become a party to the
Credit Agreement with the consent of the Borrower and the Administrative Agent
by executing and delivering to the Borrower and the Administrative Agent a
supplement to the Credit Agreement in substantially the form of this Supplement;
and
WHEREAS, the undersigned now desires to become a party to the Credit
Agreement;
NOW, THEREFORE, the undersigned hereby agrees as follows:
1. The undersigned agrees to be bound by the provisions of the
Credit Agreement, and agrees that it shall, on the date this Supplement is
accepted by the Borrower and the Administrative Agent, become a Revolving
Credit Lender for all purposes of the Credit Agreement to the same extent
as if originally a party thereto, with [Facility A Commitments of
$__________________] [Facility B Commitments of $____________] [Facility C
Commitments of $_____________] [Facility D Commitments of $_____________]
(with a concomitant Commitment of its [Sterling Commitment][Canadian
Dollar Commitment][Australian Dollar Commitment]).
2. The undersigned (a) represents and warrants that it is legally
authorized to enter into this Supplement; (b) confirms that it has
received a copy of the Credit Agreement, together with copies of the
financial statements referred to in Section 4.1 thereof and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Supplement; (c) agrees
that it has made and will, independently and without reliance upon any
Agents or any other Lender and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit Agreement or any
instrument or document furnished pursuant hereto or thereto; (d) appoints
and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers and discretion under the Credit
Agreement or any instrument or document furnished pursuant hereto or
thereto as are delegated to the
2
Administrative Agent by the terms thereof, together with such powers as
are incidental thereto; and (e) agrees that it will be bound by the
provisions of the Credit Agreement and will perform in accordance with its
terms all the obligations which by the terms of the Credit Agreement are
required to be performed by it as a Lender including, without limitation,
if it is organized under the laws of a jurisdiction outside the United
States, its obligation pursuant to Section 2.18(b) of the Credit
Agreement.
3. The undersigned's address for notices for the purposes of the
Credit Agreement is as follows:
[INSERT ADDRESS OF REVOLVING CREDIT LENDER]
3
IN WITNESS WHEREOF, the undersigned has caused this Supplement to be
executed and delivered by a duly authorized officer on the date first above
written.
[INSERT NAME OF REVOLVING
CREDIT LENDER]
By______________________________
Name:
Title:
Accepted this _____ day of
________________, _____.
THE SCOTTS MIRACLE-GRO COMPANY
By: ____________________________
Name:
Title:
THE SCOTTS MIRACLE-GRO COMPANY
By: ____________________________
Name:
Title:
HYPONEX CORPORATION
By: ____________________________
Name:
Title:
SCOTTS AUSTRALIA PTY. LTD.
By: ____________________________
Name:
Title:
4
SCOTTS CANADA LTD.
By: ____________________________
Name:
Title:
SCOTTS HOLDINGS LIMITED
By: ____________________________
Name:
Title:
SCOTTS MANUFACTURING COMPANY
By: ____________________________
Name:
Title:
EG SYSTEMS, INC.
By: ____________________________
Name:
Title:
SCOTTS TEMECULA OPERATIONS, LLC
By: ____________________________
Name:
Title:
THE SCOTTS COMPANY (UK) LTD.
By: ____________________________
Name:
Title:
5
SCOTTS TREASURY EEIG
By: ____________________________
Name:
Title:
THE SCOTTS COMPANY LLC
By: ____________________________
Name:
Title:
SMITH & HAWKEN, LTD.
By: ____________________________
Name:
Title:
Accepted this _____ day of
________________, _____.
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
By: ____________________________
Name:
Title:
EXHIBIT G
FORM OF OPINION OF VORYS, SATER, SEYMOUR AND PEASE LLP
July 21, 2005
JPMorgan Chase Bank, N.A., as Administrative Agent
270 Park Avenue
New York, New York 10017
and
Each of the Lenders that are parties to
the Credit Agreement (hereinafter defined)
as of the date hereof
Ladies and Gentlemen:
We have acted as special counsel to The Scotts Miracle-Gro Company, an
Ohio corporation ("SMG"), and certain domestic subsidiaries of SMG listed in
Annex A attached hereto (each a "Subsidiary" or, collectively, the
"Subsidiaries"), in connection with the transactions contemplated by the
Revolving Credit Agreement, dated as of July 21, 2005 (the "Credit Agreement"),
among SMG, certain of its Domestic Subsidiaries and Foreign Subsidiaries (as
each such term is defined in the Credit Agreement), including the following six
Subsidiaries: Hyponex Corporation, a Delaware corporation, Scotts Temecula
Operations, LLC, a Delaware limited liability company, Scotts Manufacturing
Company, a Delaware corporation, EG Systems, Inc., an Indiana corporation, Smith
& Hawken, Ltd., a Delaware corporation, and The Scotts Company LLC, an Ohio
limited liability company (each individually, a "Subsidiary Borrower" and
together with SMG, collectively, the "Borrowers"); the lenders parties thereto
(the "Lenders"), JPMorgan Chase Bank, N.A., as Administrative Agent (in such
capacity, the "Administrative Agent"), and the Syndication Agents and
Documentation Agents named therein. The remaining Subsidiaries, together with
the Subsidiary Borrowers and the Borrower, are executing and delivering the
Guarantee and Collateral Agreement, dated as of July 21, 2005, in favor of the
Administrative Agent for the benefit of the Lenders (the "Guarantee and
Collateral Agreement").
The opinions expressed below are furnished to you pursuant to Section
5.1(e) of the Credit Agreement. Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.
Uncapitalized terms used herein that are defined in Articles 8 and 9 (and
other Articles made applicable thereby) of the Uniform Commercial Code (the
"Code") as enacted in the State
July 21, 2005
Page 2
of Ohio (the "Ohio UCC"), Chapters 1308 and 1309 of the Revised Code of Ohio
("R.C.") have the meanings specified in the Ohio UCC, unless otherwise defined
herein.
In arriving at the opinions expressed below, we have examined an original
or certified, conformed or reproduction copy form identified to our
satisfaction, and, with respect to the terms set forth in clause (d) below, have
relied upon the accuracy of, without independent verification or investigation:
(a) the Credit Agreement and the form of the Note (collectively, the
"Credit Documents"); and the Guarantee and Collateral Agreement (each
Borrower or Subsidiary party to the Guarantee and Collateral Agreement, a
"Grantor"); all of the foregoing referred to hereinafter as the
"Documents";
(b) documents and records of SMG and each of the Subsidiaries
consisting of their respective (i) Articles of Incorporation, Certificate
of Incorporation, Certificate of Formation or Articles of Organization,
(ii) Code of Regulations, By-laws, Limited Liability Company Agreement or
Operating Agreement, and (iii) certified copies of the resolutions adopted
by their Boards of Directors or sole member, and such other corporate or
limited liability company documents, proceedings and records as we have
deemed necessary or appropriate for purposes of this opinion
(collectively, the "Company Legislation");
(c) unfiled copies of the financing statements listed on Annex B
hereto (collectively, the "Financing Statements"), naming the Grantors
indicated on such Annex B as debtors and the Administrative Agent as
secured party; we understand such Financing Statements will be filed in
the offices listed on Annex B (collectively, the "Filing Offices");
(d) certificate of an officer or officers of SMG and the
Subsidiaries, and statements of other representatives of SMG and the
Subsidiaries, as to certain factual matters, and a certificate of officers
of SMG and the Subsidiaries as to the incumbency of the officer(s) of SMG
and the Subsidiaries authorized to sign the Documents;
(e) certificates from (i) the Secretary of State of the state shown
next to the name of each of SMG and the Subsidiaries listed on Annex C
attached hereto, dated the date indicated, with respect to the good
standing or full force and effect, as applicable, of each of SMG and the
Subsidiaries; and
(f) such authorities of law as we have deemed relevant as a basis
for the opinions expressed herein.
With respect to each document examined we have assumed, as to all parties
thereto except, with respect to the matters referenced in clauses (a), (b), (c),
and (d) of this paragraph, as to SMG and the Subsidiaries, (a) the genuineness
of all signatures, the authenticity of all documents submitted to us as
originals, the conformity to original documents of documents submitted to us as
certified or photostatic copies, forms or drafts, and the authenticity of such
originals of such latter documents; (b) the due completion, execution, and
acknowledgment as
July 21, 2005
Page 3
indicated thereon and delivery of all Documents; (c) that each of such parties
has the requisite power and authority to execute and deliver the Documents to
which it is a party and all other documents and instruments contemplated
thereby, and to perform its obligations thereunder, and that all such actions
have been duly and validly authorized by all necessary proceedings on the part
of such parties; (d) that the Documents constitute the legal, valid and binding
obligations of such parties thereto, enforceable against each of such parties in
accordance with their respective terms; (e) that each of the Documents is
supported by adequate consideration; and (f) that the laws of any jurisdiction
other than the United States, the State of Ohio, the General Corporation Law of
Delaware or the Delaware Limited Liability Company Act that may govern any of
the Documents or the Company Legislation are not inconsistent with the laws of
Ohio, the General Corporation Law of Delaware or the Delaware Limited Liability
Company Act in any matter material to this opinion.
We have also assumed that (a) each Grantor has, or has the power to
transfer, rights in that portion of the Collateral for which it is granting a
security interest consistent with and sufficient for the purposes of R.C.
Section 1309.203, and the description of such personal property reasonably
identifies the personal property subject to the security interest granted
therein; and (b) that the Financing Statements contain the correct name of the
Administrative Agent or a representative of the Administrative Agent.
As to all matters of fact which are material to our opinion, we have
relied, without any independent due diligence or other investigation, upon the
truth and accuracy of the representations, warranties and recitals of fact (as
opposed to conclusions of law) made or set forth in the Documents, but we have
no knowledge that any such statements are inaccurate or incomplete.
To the extent the Documents are governed by the internal laws of New York,
we have assumed that each of the Documents constitutes the legal, valid and
binding obligation of each party thereto other than SMG and the Subsidiaries,
enforceable against each such other party in accordance with its respective
terms under the internal laws of the State of New York and under the internal
laws of the jurisdiction of incorporation or formation of each such other party.
As used herein, the phrase "all necessary company action" means, with
respect to SMG and the Subsidiaries, all necessary corporate or limited
liability company action of SMG and the Subsidiaries under their respective
Company Legislation and the corporation law or limited liability company law of
their respective states of incorporation, formation, or organization. As used
herein, the phrase "power and authority" means, with respect to SMG and the
Subsidiaries, power and authority under their respective Company Legislation and
the corporation law or limited liability company law of their respective states
of incorporation, formation or organization. For purposes of the definitions in
this paragraph, with respect to any Subsidiary not incorporated or formed in
Ohio or Delaware, we have assumed that the corporation or limited liability
company law of each such Subsidiary's state of incorporation is not different
from the General Corporation Law of the State of Ohio, the General Corporation
Law of the State of Delaware, or the Delaware Limited Liability Company Act in
any matter material to this opinion.
July 21, 2005
Page 4
Based upon and subject to the foregoing and the further qualifications and
limitations set forth below, as of the date hereof (or as of the date of any
certificate stated to have been relied on by us), we are of the opinion that:
1. Each of SMG and the Subsidiaries (a) is duly incorporated or formed, as
applicable, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation and (b) has the power and
authority to own and operate its property, to lease the property it operates as
lessee and to conduct the business in which it is currently engaged.
2. Each of the Borrowers has the power and authority to make, deliver and
perform its obligations under the Documents to which it is a party and to borrow
under the Credit Agreement and each of the Grantors has the power and authority
to grant the security interests, if any, to be granted by it pursuant to the
Guarantee and Collateral Agreement. Each of the Borrowers has taken all
necessary company action to authorize the execution, delivery and performance of
the Credit Documents and each of the Grantors has taken all necessary company
action to authorize the execution, delivery and performance of the Guarantee and
Collateral Agreement. No consent or authorization of, approval by, notice to,
filing with or other act by or in respect of, any Governmental Authority or, to
our knowledge, any other Person is required in connection with the borrowings
under the Credit Agreement, the execution, delivery, performance, validity or
enforceability of the Documents, or the granting of any security interests under
the Guarantee and Collateral Agreement (except filings related to the perfection
of such security interests), except for such consents and approvals as have
already been obtained.
3. The Credit Agreement has been duly executed and delivered on behalf of
the Borrowers and constitutes a legal, valid and binding obligation of the
Borrowers, enforceable against the Borrowers in accordance with its terms. The
Guarantee and Collateral Agreement has been duly executed and delivered on
behalf of the Grantors and constitutes a legal, valid and binding obligation of
the Grantors, enforceable against the Grantors in accordance with its terms.
4. The execution and delivery of the Documents to which it is a party by
each of the Borrowers and Grantors, the performance by each of the Borrowers and
Grantors of its obligations thereunder, the consummation of the transactions
contemplated thereby by the Borrowers and Grantors, the compliance by each of
the Borrowers and Grantors with any of the provisions thereof as contemplated
thereby, the compliance by each of the Borrowers and Grantors with any of the
provisions thereof as contemplated as of the date hereof, the borrowings under
the Credit Agreement and the use of proceeds thereof in compliance with the
terms of the Credit Agreement, all as provided therein, (a) will not violate, or
constitute a material default under any Requirement of Law applicable to
corporations for profit or limited liability companies generally, or to our
knowledge, any material Contractual Obligation of any of the Borrowers or
Grantors and (b) will not result in, or require, the creation or imposition of
any Lien on any of the properties or revenues of any of the Borrowers or
Grantors, except as described in this opinion and as described in the Guarantee
and Collateral Agreement.
5. None of SMG or the Subsidiaries is (a) an "investment company," or a
company "controlled" by an "investment company," within the meaning of the
Investment Company Act
July 21, 2005
Page 5
of 1940, as amended, or (b) a "holding company" as defined in, or otherwise
subject to regulation under, the Public Utility Holding Company Act of 1935.
6. To our knowledge, no litigation, investigation or proceeding of or
before, any arbitrator or Governmental Authority is pending or threatened by or
against any of the Borrowers or Grantors or against any of their respective
properties or revenues (a) with respect to any of the Documents or any of the
transactions contemplated thereby, or (b) which would have a Material Adverse
Effect.
7. To our knowledge, none of the Borrowers or Grantors is in default under
or with respect to any Contractual Obligation in any respect which could
reasonably be expected to have a Material Adverse Effect.
8. If the Guarantee and Collateral Agreement were stated to be governed by
and construed in accordance with the laws of the State of Ohio, (a) it will be
effective to attach a security interest in favor of the Administrative Agent
under the Ohio UCC to the Collateral and (b) the perfection of the
Administrative Agent's security interests in the Collateral (i) will, as a
general matter, and except as otherwise provided in Sections 1309.301 through
1309.307 of the Ohio UCC, be governed by the local law of the jurisdiction in
which the applicable Grantor is located (which in the case of a registered
organization is the state under the laws of which such registered organization
is organized) and (ii) which constitute certificated securities will be governed
by the local law of the jurisdiction in which the certificated securities are
located (except as to perfection by filing, which is governed by the laws
referred to in clause (b)(i) of this paragraph) as specified in Section
1309.305(A)(1) of the Ohio UCC.
9. Under the principles described in paragraph 8(b)(i) above, the
perfection of the Administrative Agent's security interest in the Collateral
(except as to perfection by possession of certificated securities as described
in paragraph 10 below) is governed by the laws of the states of organization of
each Grantor, as set forth on Annex C attached hereto. We are licensed to
practice law only in the State of Ohio, and do not practice law in any of such
other jurisdictions, and express no opinions as to such laws; however, we have
reviewed the text of the relevant provisions of Articles 8 and 9 of the Uniform
Commercial Code, as enacted in such states (the "Jurisdiction of Organization
Codes") as displayed on Westlaw on July 20, 2005, but without regard to the
decisional or other law of such states. We confirm that, upon communication of
the Financing Statements and tender of the applicable filing fee or acceptance
of the Financing Statements in or by the Filing Offices in accordance with the
provisions of each applicable Jurisdiction of Organization Code, the security
interests created by the Guarantee and Collateral Agreement in such Collateral
described in each such Financing Statement will be perfected to the extent a
security interest can be perfected in the Collateral by the filing of a
financing statement.
10. We understand that the stock or share certificates listed on Annex D
attached hereto and evidencing the shares of Capital Stock of each of the
Subsidiaries other than The Scotts Company LLC and Scotts Temecula Operations,
LLC (collectively, the "Stock Certificates") are to be held by the
Administrative Agent in the States of New York and Texas. We have reviewed the
text of the relevant provisions of Articles 8 and 9 of the Uniform Commercial
Code, as enacted in the States of New York and Texas (the "New York/Texas
July 21, 2005
Page 6
Codes") as displayed on Westlaw on July 20, 2005, but without regard to the
decisional or other law of the States of New York and Texas. We confirm that,
assuming that the Administrative Agent has taken and retained possession of the
Stock Certificates in either the State of New York or the State of Texas, duly
indorsed to the Administrative Agent or in blank, any security interest of the
Administrative Agent in the Stock Certificates which has attached is a perfected
security interest in the Capital Stock evidenced thereby under the New
York/Texas Codes, as applicable.
The opinions expressed above are subject to the following additional
qualifications:
(a) Our opinions are subject to the limitations, if any, of Title 11,
U.S.C., as amended, and of any applicable insolvency, reorganization, moratorium
or other similar laws affecting creditors' rights generally and by principles of
equity. In addition, certain remedial and other provisions of the Documents may
be limited by (i) implied covenants of good faith, fair dealing and commercially
reasonable conduct; (ii) judicial discretion, in the instance of multiple or
equitable remedies; and (iii) by the public policies and laws of the State of
Ohio, the General Corporation Law of the State of Delaware, and the Delaware
Limited Liability Company Act to the extent, if any, applicable. Subject to the
qualification that we have no knowledge of the extent to which the
Administrative Agent and the Lenders consider any of the provisions of the
Documents that may be limited by the foregoing to be critical or essential, none
of the foregoing limitations will make, in our view, the remedies provided for
in the Documents, taken as a whole, inadequate for the practical realization of
the benefits of the rights provided or purported to be provided by the
Documents.
(b) We have made no examination of, and express no opinion as to, title to
any of the real or personal property interests described in or affected by the
Documents, and, accordingly, we express no opinion as to the existence of any
liens, encumbrances, security interests or charges thereon, or the validity,
and/or perfection of the liens or security interests that may be created,
evidenced or effected by any of the Documents, except as set forth in paragraphs
8, 9 and 10. We express no opinion as to the priority of any liens or security
interests that may be created, evidenced or affected by any of the Documents. We
also express no opinion as to the enforceability against Scotts-Sierra
Investments, Inc. of any provisions of the Guarantee and Collateral Agreement
relating to, or any liens thereunder relating to, the Capital Stock of non-U.S.
subsidiaries of Scotts-Sierra Investments, Inc.
(c) We have not conducted factual or legal examinations, and accordingly
we express no opinion as to (i) federal and state securities laws; (ii) the
effect or application, if any, of any laws or regulations (a) concerning or
promulgated by environmental agencies or authorities, or (b) industries the
operations, financial affairs or profits of which are regulated by the United
States of America or the State of Ohio; for example, banks and thrift
institutions, (iii) fraudulent dispositions or obligations; (iv) racketeer
influenced and corrupt organizations (RICO) statutes; (v) taxes or tax effects;
(vi) qualification, registration or filing requirements of the State of Ohio or
the State of Delaware; or (vii) any order of any court or other authority, of
which we do not have knowledge, directed specifically to any party to any of the
Documents.
(d) We express no opinion as to the effect of, and the enforceability of
the Documents is subject to the effect of, general principles of equity,
including, without limitation, the discretionary nature of specific performance
and other equitable remedies, judicial limitations
July 21, 2005
Page 7
that may be imposed on the availability of equitable remedies, including court
decisions and federal and state laws and interpretations thereof. We note that
certain other remedial, waiver and other provisions of the Documents may also be
limited or rendered invalid by applicable federal or state laws, rules,
regulations, court decisions and constitutional requirements in and of the State
of Ohio and the United States of America; however, in such cases, there exist
adequate remedial provisions for the practical realization of the benefits
intended to be conferred thereby. The provisions of the Documents regarding the
remedies available to the Administrative Agent and the other Lenders upon
default are subject to procedural requirements under applicable laws and
regulations.
(e) We express no opinion as to the enforceability of rights, provisions
or interests to the extent, if any, dependent upon the enforceability of (i)
waivers of rights of debtors or others which may not be waived or which may be
waived only under certain circumstances under applicable law; (ii) provisions of
the Documents to the extent held to (a) require the payment of interest on
interest, (b) compensate any party in excess of actual loss or reasonable
expenses or constitute a penalty, (c) require reimbursement for or indemnity
against actions by the Administrative Agent or others taken in violation of
duties under the Documents or applicable law or public policy (this exception
does not include repayments of the Loans and reimbursements for amounts drawn on
Letters of Credit in accordance with the terms of the Documents), (d) require
indemnity or reimbursement by a Person for additional costs or expenses where
the party reimbursed has incurred such expense by reason in part of the effect
of activities with others not party to the Documents and has assigned or
allocated the burden of reimbursement unreasonably or arbitrarily, (e) purport
to waive or negate in favor of the Administrative Agent or others the effect of
notice of Default or Event of Default, if any, which the Administrative Agent or
others may have at closing, or (f) include an acceleration clause and a
prepayment penalty exercised with respect to the same obligation; or (iii) any
provision for the award of attorneys' fees to an opposing party.
(f) The foregoing opinions concerning the security interests of the
Administrative Agent are subject to the qualifications that we express no
opinion as to any situation or transaction excluded from the Ohio Code by virtue
of R. C. Section 1309.109.
(g) To the extent that the Administrative Agent elects to proceed under
the Ohio Code, the security interests created by the Guarantee and Collateral
Agreement are subject to such limitations, exceptions and rights of purchasers
and creditors as are provided for under the provisions of Sections 1309.601 to
1309.628 of the Ohio Code.
(h) Whenever any matter is indicated to be based on our knowledge, we are
referring to the actual knowledge of the Vorys, Sater, Seymour and Pease LLP
attorneys who have represented SMG and the Subsidiaries in connection with the
transactions contemplated by the Documents. We have relied solely upon the
examinations and inquiries recited herein and we have not undertaken any other
independent investigation to determine the existence or absence of any facts,
and no inference as to our knowledge concerning such facts should be drawn.
Without limiting the generality of the foregoing, we have made no examination of
the character, organization, activities, or authority of the Administrative
Agent or any of the Lenders which might have any effect upon our opinions as
expressed herein, and we have neither examined, nor
July 21, 2005
Page 8
do we opine upon, any provision or matter to the extent that the examination or
opinion would require a financial, mathematical or accounting calculation or
determination.
This opinion is limited to the federal laws of the United States of
America, the laws of the State of Ohio, the General Corporation Law of the State
of Delaware, and the Delaware Limited Liability Company Act having effect on the
date hereof. Accordingly, we express no opinion as to the laws of any other
jurisdiction or as to any time after the date hereof. This opinion is furnished
to you solely in connection with the transactions described herein. This opinion
may not be used or relied upon by you for any other purpose and may not be
relied upon for any purpose by any other Person without our prior written
consent; provided, however, that this opinion may be delivered to your
regulators, accountants, attorneys and other professional advisers and may be
used in connection with any legal or regulatory proceeding relating to the
subject matter of this opinion for the purpose of proving this opinion's
existence.
Very truly yours,
ANNEX A
OTHER SUBSIDIARIES
SUBSIDIARY STATE OF INCORPORATION OR FORMATION
- ---------- -----------------------------------
Scotts-Sierra Horticultural
Products Company California
Scotts-Sierra Investments, Inc. Delaware
Scotts Professional Products Co. Ohio
OMS Investments, Inc. Delaware
Miracle-Gro Lawn Products, Inc. New York
Scotts-Sierra Crop Protection Company California
Swiss Farms Products, Inc. Delaware
Sanford Scientific, Inc. New York
Scotts Products Co. Ohio
ANNEX B
FINANCING STATEMENTS
1. UCC Financing Statement naming The Scotts Miracle-Gro Company as debtor
and filed with the Ohio Secretary of State.
2. UCC Financing Statement naming The Scotts Company LLC as debtor and filed
with the Ohio Secretary of State.
3. UCC Financing Statement naming Scotts Manufacturing Company as debtor and
filed with the Delaware Secretary of State.
4. UCC Financing Statement naming Scotts-Sierra Horticultural Products
Company as debtor and filed with the California Secretary of State.
5. UCC Financing Statement naming OMS Investments, Inc. as debtor and filed
with the Delaware Secretary of State.
6. UCC Financing Statement naming Scotts-Sierra Investments, Inc. as debtor
and filed with the Delaware Secretary of State.
ANNEX C
GOOD STANDING/FULL FORCE AND EFFECT CERTIFICATES
ENTITY NAME STATE ISSUING CERTIFICATE DATE OF CERTIFICATE
- ----------- ------------------------- -------------------
The Scotts Miracle-Gro Company, an Ohio Ohio Secretary of State 7/8/05
corporation
The Scotts Company LLC, an Ohio limited Ohio Secretary of State 7/8/05
liability company
EG Systems, Inc., an Indiana corporation Indiana Secretary of State 7/7/05
Hyponex Corporation, a Delaware corporation Delaware Secretary of State 7/7/05
OMS Investments, Inc., a Delaware corporation Delaware Secretary of State 7/7/05
Scotts Temecula Operations, LLC, a Delaware Delaware Secretary of State 7/7/05
corporation
Sanford Scientific, Inc., a New York corporation New York Department of State 7/6/05
Scotts Manufacturing Company, a Delaware Delaware Secretary of State 7/7/05
corporation
Miracle-Gro Lawn Products, Inc., a New York New York Department of State 7/6/05
corporation
Scotts Products Co., an Ohio corporation Ohio Secretary of State 7/8/05
Scotts Professional Products Co., an Ohio Ohio Secretary of State 7/8/05
corporation
Scotts-Sierra Horticultural Products Company, a California Secretary of State 7/13/05
California corporation
Scotts-Sierra Crop Protection Company, a California Secretary of State 7/13/05
California corporation
Scotts-Sierra Investments, Inc., a Delaware Delaware Secretary of State 7/7/05
corporation
Smith & Hawken, Ltd., a Delaware corporation Delaware Secretary of State 7/11/05
Swiss Farms Products, Inc., a Delaware Delaware Secretary of State 7/7/05
corporation
ANNEX D
STOCK OR SHARE CERTIFICATES
ISSUER CLASS OF STOCK STOCK CERTIFICATE NO. NO. OF SHARES
------ -------------- --------------------- -------------
1. SCOTTS MANUFACTURING common shares, $.01 par value 2 1,000
COMPANY
2. MIRACLE-GRO LAWN voting common stock, without par V13 1,000
PRODUCTS, INC. value
non-voting common stock, without NV11 999.8
par value
3. OMS INVESTMENTS, INC. common stock, 3 100
$.01 par value
4. HYPONEX CORPORATION common stock, 3 100
$.01 par value
5. SCOTTS PRODUCTS CO. common shares, without par value 3 100
6. SCOTTS PROFESSIONAL common shares, without par value 3 100
PRODUCTS CO.
7. SCOTTS-SIERRA Class A voting common shares, Class A Cert. No. 6 100
HORTICULTURAL PRODUCTS $.001 par value
COMPANY
Class A voting common shares, Class A Cert. No. 6 1
$.001 par value
Class B non-voting common shares, Class B Cert. No. 3 1
$.001 par value
ISSUER CLASS OF STOCK STOCK CERTIFICATE NO. NO. OF SHARES
------ -------------- --------------------- -------------
8. SCOTTS-SIERRA CROP common shares, without par value 1 100
PROTECTION COMPANY
9. SCOTTS-SIERRA Class A common stock, without par 3A 100
INVESTMENTS, INC. value
Class A common stock, without par 4A 1
value
Class B common stock, without par 2B 1
value
10. SWISS FARMS PRODUCTS, common stock, without par value 2 100
INC.
11. SMITH & HAWKEN, LTD. Common stock 18 11,652,708
12. EG SYSTEMS, INC. Common stock 29 36,480,458
13. SANFORD SCIENTIFIC, INC. Common stock 8 99
14. THE SCOTTS COMPANY LLC limited liability company interest n/a n/a
(not certificated)
15. SCOTTS TEMECULA limited liability company interest n/a n/a
OPERATIONS, LLC (not certificated)
EXHIBIT H
FORM OF OPINION OF CLIFFORD CHANCE US LLP
---------------------------------------------------------
CLIFFORD CHANCE OPINION LETTER
ISSUED IN CONNECTION WITH THE PROVISION OF A
REVOLVING CREDIT AGREEMENT TO THE
SCOTTS MIRACLE-GRO COMPANY AND CERTAIN SUBSIDIARIES
---------------------------------------------------------
[ ]
To: JPMorgan Chase Bank, N.A., as Administrative Agent for the Lenders (as
defined below) and the Lenders (as defined below)
Dear Sirs
THE SCOTTS MIRACLE-GRO COMPANY - REVOLVING CREDIT AGREEMENT
We have acted as English legal advisers to The Scotts Miracle-Gro Company
("SCOTTS") in connection with the provision of a US$1,000,000,000 loan facility
to Scotts and certain of its subsidiaries by the Lenders (the "TRANSACTION").
1. INTRODUCTION
1.1 FINANCE DOCUMENTS
The opinions given in this Opinion Letter relate to the following
documents entered into in connection with the Transaction (the "FINANCE
DOCUMENTS"):
1.1.1 a revolving credit agreement dated [ ], 2005 between, inter alia,
Scotts as borrower (the "BORROWER"), certain subsidiaries of the
Borrower who are also borrowers from time to time (the "SUBSIDIARY
BORROWERS"), the lenders from time to time parties thereto (the
"LENDERS") and JPMorgan Chase Bank, N.A., as agent for the Lenders
(in such capacity, the "ADMINISTRATIVE AGENT") (the "CREDIT
AGREEMENT");
1.1.2 a security over shares agreement dated [ ] 2005 granted by Scotts
Holdings Limited over 100% of its shares in Levington Group Limited
in order to secure the borrowings of Scotts Holdings Limited;
1.1.3 a security over shares agreement dated [ ] 2005 granted by Scotts
Holdings Limited over 65% of its shares in O M Scott International
Investments Limited in order to secure the borrowings of Scotts
Holdings Limited;
1.1.4 a security over shares agreement dated [ ] 2005 granted by The
Scotts Company (UK) Limited over 65% of its shares in The Scotts
Company (Manufacturing) Limited in order to secure the borrowings of
The Scotts Company (UK) Limited;
-2-
1.1.5 a security over shares agreement dated [ ] 2005 granted by Scotts
Sierra Investments, Inc. over 100% of its shares in Scotts Holdings
Limited in order to secure the borrowings of Scotts Sierra
Investments, Inc.; and
1.1.6 a security over shares agreement dated [ ] 2005 granted by Levington
Group Limited over 100% of its shares in The Scotts Company (UK)
Limited in order to secure the borrowings of The Scotts Company (UK)
Limited,
the documents listed in paragraphs 1.1.2 to 1.1.6, together, the "SECURITY
DOCUMENTS".
1.2 DEFINED TERMS
In this Opinion Letter:
1.2.1 "ENGLISH OBLIGORS" means Scotts Treasury EEIG (the "EEIG"), Scotts
Holdings Limited, The Scotts Company (UK) Limited and Levington
Group Limited;
1.2.2 "LENDERS" means any person which is a "Lender" under the Credit
Agreement as at the date of this Opinion Letter.
1.2.3 terms defined or given a particular construction in the Credit
Agreement have the same meaning in this Opinion Letter unless a
contrary indication appears; and
1.2.4 headings in this Opinion Letter are for ease of reference only and
shall not affect its interpretation.
1.3 LEGAL REVIEW
For the purpose of issuing this Opinion Letter we have reviewed only the
documents and completed only the searches and enquiries referred to in
Schedule 1 (Documents and Enquiries) to this Opinion Letter.
1.4 APPLICABLE LAW
The Opinion Letter and the opinions given in it are governed by English
law and relate only to English law as applied by the English courts as at
today's date. We express no opinion in this Opinion Letter on the laws of
any other jurisdiction.
1.5 ASSUMPTIONS AND RESERVATIONS
The opinions given in this Opinion Letter are given on the basis of our
understanding of the terms of the Finance Documents and the assumptions
set out in Schedule 2 (Assumptions) and are subject to the reservations
set out in Schedule 3 (Reservations) to this Opinion Letter. The opinions
given in this Opinion Letter are strictly limited to the matters stated in
paragraph 1.7 to 1.20 (Opinions) and do not extend to any other matters.
1.6 OPINIONS
We are of the opinion that:
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1.7 CORPORATE EXISTENCE
1.7.1 Each of the English Obligors is a company or body corporate duly
incorporated or registered in England and has the capacity and power
to enter into each Finance Document to which it is party and to
exercise its rights and perform its obligations under each Finance
Document to which it is party.
1.7.2 All corporate action required to authorise the execution by each
English Obligor of each Finance Document to which it is party and
the exercise by it of its rights and the performance by it of its
obligations under each Finance Document to which it is party has
been duly taken.
1.8 DUE EXECUTION
Each Finance Document has been duly executed by each of the English
Obligors to the extent that English law is applicable.
1.9 CONFLICT
Neither the execution nor the delivery of each Finance Document to which
it is party by the English Obligors nor the performance of the obligations
of the English Obligors under each Finance Document to which it is party
conflict with or will conflict with:
1.9.1 any present law or regulation having the force of law in England and
applicable to the English Obligors; or
1.9.2 any term of the memorandum and articles of association or the
constitutive documents, where applicable, of each of the English
Obligors.
1.10 LEGAL, VALID, BINDING AND ENFORCEABLE OBLIGATIONS
In any proceedings taken in England for the enforcement of any Finance
Document, the obligations expressed to be assumed by each of the English
Obligors in each Finance Document to which it is party would be recognised
by the English courts as its legal, valid and binding obligations and
would be enforceable in the English courts.
1.11 VALID SECURITY INTEREST
Each English Obligor that is a party to the Security Documents has created
a valid security interest over the assets owned by it which are expressed
to be subject to a security interest under the Security Documents.
1.12 FURTHER ACTS
No further acts, conditions or things are required by English law to be
done, fulfilled or performed in order to enable any of the English
Obligors lawfully to enter into, exercise its rights or perform its
obligations under each Finance Document to which it is party or make each
Finance Document to which it is party admissible in evidence in England.
-4-
1.13 REGISTRATION TAXES
No United Kingdom stamp duty, stamp duty reserve tax, registration,
documentary or similar tax is required to be paid in England on execution
of any Finance Document.
1.14 LICENSED TO CARRY ON BUSINESS
It is not necessary under English law (i) in order to enable any party
(other than the English Obligors) to enforce its rights under any Finance
Document or (ii) by reason only of the execution, delivery and performance
of the Finance Documents that any such party to any Finance Document
should be licensed, authorised or otherwise entitled to carry on business
in England.
1.15 RESIDENCE
Neither the Administrative Agent nor any Lender is or will be deemed to be
resident, domiciled, carrying on business or subject to United Kingdom
taxation by reason only of the execution of the Finance Documents or the
performance by the parties to the Finance Documents of their obligations
thereunder (save that United Kingdom income tax may be withheld at source
from interest payments made to the Lenders).
1.16 PERFORMANCE
The performance by the Administrative Agent or any Lender of any action
required or permitted under the Finance Documents will not violate any law
or regulation of England.
1.17 IMMUNITY
In any proceedings taken in England in relation to any Finance Document,
none of the English Obligors is entitled to claim in relation to itself or
its assets immunity from suit, attachment, execution or other legal
process.
1.18 GOVERNING LAW
In any proceedings taken in England for the enforcement of the obligations
of the relevant English Obligors under the Credit Agreement, the English
courts would recognise the choice of the laws of New York to govern the
Credit Agreement, subject to the provisions of the Contracts (Applicable
Law) Act 1990.
1.19 SUBMISSION TO JURISDICTION
The submission to the jurisdiction of the courts of New York by the
relevant English Obligors contained in the Credit Agreement is legal,
valid and binding.
1.20 ENFORCEMENT OF FOREIGN JUDGMENT
The English courts will enforce by separate action a final and conclusive
judgment for a definite sum of money (not being a sum payable in respect
of taxes or other charges of a like nature or in respect of a fine or
other penalty) entered against the relevant English Obligors in connection
with the enforcement of the Credit Agreement in civil proceedings in a
court of competent jurisdiction in New York.
-5-
2. LIMITS OF OPINION
No opinion is given or implied with regard to taxation except as expressly
set out in paragraph 1.13 (Registration Taxes) and paragraph 1.15
(Residence).
3. ADDRESSEES AND PURPOSE
This Opinion Letter is provided in connection with the satisfaction of the
conditions precedent under the Credit Agreement and is addressed to the
Administrative Agent and the Lenders. It may not, without our prior
written consent, be relied on for any other purpose or be disclosed to or
relied upon by any other person.
Yours faithfully
CLIFFORD CHANCE US LLP
-6-
SCHEDULE 1
DOCUMENTS AND ENQUIRIES
1. DOCUMENTS
We have reviewed only the following documents for the purposes of this
Opinion Letter.
(a) A faxed executed copy of the Credit Agreement.
(b) Faxed executed copies of each Security Document.
(c) A certified copy of the certificate of incorporation (and any
certificate of change of name) and memorandum and articles of
association of each English Obligor (apart from the EEIG).
(d) A certified copy of the certificate of incorporation, formation
agreement, management agreement and operating agreement (the
"CONSTITUTIVE DOCUMENTS") of the EEIG.
(e) A certified copy of the written resolutions of the board of
directors of each English Obligor (apart from the EEIG) dated [ ]
2005.
(f) A certified copy of the written resolutions of the shareholders of
the relevant English Obligor (apart from the EEIG) dated [ ] 2005.
(g) A certified copy of the written resolutions of the members
representatives of the EEIG dated [ ] 2005 ("MEMBERS'
REPRESENTATIVES RESOLUTION").
(h) A closing certificate of an officer of each English Obligor (apart
from Levington Group Limited) dated [ ] 2005.
2. SEARCHES AND ENQUIRIES
We have undertaken only the following searches and enquires for the
purposes of this Opinion Letter.
(a) A search was conducted at the Registrar of Companies in respect of
each English Obligor on [ ] 2005.
(b) An enquiry by telephone/a personal search was made at the Central
Index of Winding Up Petitions on [ ] 2005 at [ ]am/pm GMT with
respect to each English Obligor.
-7-
SCHEDULE 2
ASSUMPTIONS
The opinions in this Opinion Letter have been made on the following assumptions.
1. ORIGINAL AND GENUINE DOCUMENTATION
(a) All signatures, stamps and seals are genuine, all original documents
are authentic and all copy documents are complete and conform to the
originals.
(b) Any certificate referred to in Schedule 1 (Documents and Enquiries)
is correct in all respects.
(c) The authorised signatories executing the EEIG Members'
Representatives Resolution delivered to the Administrative Agent
pursuant to the Credit Agreement are so authorised by the relevant
EEIG member.
2. PARTIES OTHER THAN THE ENGLISH OBLIGORS
(a) Each party to the Finance Documents (other than the English
Obligors) has the capacity, power and authority to enter into and to
exercise its rights and to perform its obligations under the
relevant Finance Documents.
(b) Each party to the Finance Documents (other than the English
Obligors) has duly executed and delivered the Finance Documents.
(c) The Administrative Agent has complied with the Financial Services
and Markets Act 2000 and the Financial Services and Markets Act 2000
(Regulated Activities) Order 2001 in relation to any security taken
over shares, securities or other investments (falling within the
scope of the term "investment", as defined in that Act).
(d) The steps taken by which any person not originally a party to the
Credit Agreement becomes a Lender under the Credit Agreement are
effective to ensure that it is treated as a party to the Credit
Agreement under the laws of New York and are within the capacity and
powers of, and are duly authorised by, each of the relevant parties.
(e) Each of the Lenders is at all relevant times a person acting in the
course of carrying on a business consisting wholly or to a
significant extent of lending money or is otherwise a person of a
kind specified in article 6 of the Financial Services and Markets
Act 2000 (Regulated Activities) Order 2001.
3. DOCUMENT NOT GOVERNED BY ENGLISH LAW
(a) The obligations expressed to be assumed by the relevant English
Obligors to the Credit Agreement constitute their legal, valid,
binding and enforceable obligations under the laws of New York.
(b) The submission to the jurisdiction of the courts of New York by the
relevant English Obligors contained in the Credit Agreement is
legal, valid and binding under the laws of New York.
-8-
4. CORPORATE AUTHORITY OF THE ENGLISH OBLIGORS
(a) There have been no amendments to the form of the memorandum and
articles of association of any English Obligor (apart from the EEIG)
or to the constitutive documents of the EEIG referred to in Schedule
1 (Documents and Enquiries).
(b) The resolutions of the board of directors of each English Obligor
(apart from the EEIG) referred to in Schedule 1 (Documents and
Enquiries):
(i) were duly passed at properly convened meetings of duly
appointed directors or, as the case may be, duly appointed
committees of directors of the relevant English Obligor; and
(ii) have not been amended or rescinded and are in full force and
effect.
(c) the execution and delivery of the Finance Documents by the English
Obligors to which it is party and the exercise of its rights and
performance of its obligations thereunder will materially benefit
and is in the best interests of the English Obligors. In particular,
whilst the written resolutions referred to in paragraphs 1(e) and
1(g) of Schedule 1 state that the board of directors of the English
Obligors and the members' representatives of the EEIG (where
applicable) pursuant to the Finance Documents has considered whether
the English Obligors will derive a benefit from the transaction
referred to therein, this is a question of fact relating to the
nature of the business and operations of the English Obligors and we
do not express any opinion as to whether the English Courts would
determine that the English Obligors in fact derived a benefit from
that transaction
(d) The resolution of the shareholders of each English Obligor (apart
from the EEIG) referred to in Schedule 1 was duly passed at a
properly convened meeting of the shareholders of each English
Obligor (apart from the EEIG) and has not been amended or rescinded
and is in full force and effect.
(e) The resolutions of the members representatives of the EEIG referred
to in Schedule 1 (Documents and Enquiries):
(i) were duly passed at properly convened meetings of duly
appointed members representatives of the EEIG; and
(ii) have not been amended or rescinded and are in full force and
effect.
(f) The Manager of the EEIG acted within the parameters of its powers
and authority granted to it under and in accordance with the
constitutive documents of the EEIG.
(g) Where applicable, each director has disclosed any interest which he
may have in the transactions contemplated by the Finance Documents
in accordance with the provisions of the Companies Act 1985 and the
articles of association of the relevant English Obligor and none of
the directors of that English Obligor has any interest in such
transactions except to the extent permitted by the articles of
association of that English Obligor.
(h) The Credit Agreement states that the purpose of the Facilities is to
repay the loans under the Existing Credit Agreement and for the
general corporate purposes of Scotts and certain of its
subsidiaries. We assume that this does not include any financing or
-9-
refinancing of an acquisition of shares in contravention of section
151 of the Companies Act 1985.
(i) The directors of each English Obligor acted in good faith and in the
interests of that English Obligor in approving the Finance Documents
and the Transaction described in this Opinion Letter.
(j) Where applicable, the provisions of the articles of association or
the consitutive documents of the English Obligor's (which limit the
English Obligors' directors' authority to borrow) have been, and
will be, duly observed.
5. SEARCHES AND ENQUIRIES
There has been no alteration in the status or condition of any English
Obligor as disclosed by the searches and enquiries referred to in Schedule
1 (Documents and Enquiries). However, it is our experience that the
searches and enquiries referred to in paragraphs 2 of Schedule 1
(Documents and Enquiries) may be unreliable. In particular, they are not
conclusively capable of disclosing whether or not insolvency proceedings
have been commenced.
6. OTHER DOCUMENTS
Save for those listed in Schedule 1 (Documents and Enquiries), there is no
other agreement, instrument or other arrangement between any of the
parties to any of the Finance Documents which modifies or supersedes any
of the Finance Documents.
7. OTHER LAWS
All acts, conditions or things required to be fulfilled, performed or
effected in connection with the Finance Documents under the laws of any
jurisdiction other than England have been duly fulfilled, performed and
effected.
-10-
SCHEDULE 3
RESERVATIONS
The opinions in this Opinion Letter are subject to the following reservations.
1. EFFECTIVENESS OF SECURITY
(a) We express no opinion as to:
(i) whether any of the English Obligors have good legal or other
title to the assets or rights which are expressed to be
subject to a security interest under the Security Documents,
or as to the existence or value of any such assets or rights;
(ii) the priority of any security interest created under the
Security Document or whether any such security interest
constitutes a legal or equitable security interest or a fixed
or specific (rather than a floating) charge; or
(iii) whether the Security Documents breach any other agreement or
instrument.
(b) The exercise by the Administrative Agent of the powers and remedies
conferred by the Security Documents or by law is subject to general
equitable principles regarding the enforcement of security and the
supervisory powers of the English courts.
(c) Any obligation imposed on an English Obligor to hold certain moneys
to the order of the Administrative Agent pursuant to a Security
Document may constitute a charge which may be required to be
registered in accordance with the Companies Act 1985. This provision
has not been registered.
2. LIMITATIONS ARISING FROM INSOLVENCY LAW
(a) The opinions set out in this Opinion Letter are subject to any
limitations arising from insolvency, liquidation, administration,
moratorium, reorganisation and similar laws affecting the rights of
creditors or secured creditors generally.
(b) The opinion set out in paragraph 1.11 (Valid Security Interest) of
this Opinion Letter is subject to the following:
(x) the security interest being held to be wholly or partly
invalid as a result of any of the following sections of the
Insolvency Act 1986 (if the circumstances described in any of
these sections is applicable):
(i) section 127 (avoidance of property dispositions, etc.);
(ii) section 178 (power to disclaim onerous property);
(ii) section 186 (rescission of contracts by the court);
(iv) section 238 (transactions at an undervalue);
(v) section 239 (preferences);
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(vi) section 245 (avoidance of certain floating charges);
(vii) section 423 (transactions defrauding creditors); or
(viii) section 426 (co-operation between courts exercising
jurisdiction in relation to insolvency);
(y) a security interest created by the Security Documents may be
held to be wholly or partly invalid as a result of the opening
of insolvency proceedings, within the meaning of Council
Regulation (EC) No 1346/2000 of 29 May 2000 on insolvency
proceedings against any English Obligor in another EU Member
State or as a result of the English courts being required,
under that Regulation, to give effect to the law of that EU
Member State or to recognise or enforce any judgment of a
court of that EU Member State concerning those proceedings;
and
(z) preferential debts (as defined in the Insolvency Act 1986) of
the English Obligors and part of the unsecured debts (as
determined by the Insolvency Act 1986) may be paid out of the
proceeds of any property subject to any floating charge
created by any Security Document, in priority to the claims of
the holder of the floating charge pursuant to section 175 or
176A of the Insolvency Act 1986,
although, if and to the extent that a security interest
created by the Security Documents constitutes a financial
collateral arrangement over cash or financial instruments (as
defined in the Financial Collateral Arrangements (No. 2)
Regulations 2003, then, inter alia, sections 127, 176A, 178
and 245 of the Insolvency Act 1986 may not apply to that
security interest.
(c) Any provision in the Finance Documents which confers, purports to
confer or waives a right of set-off or similar right may be
ineffective against a liquidator or creditor.
3. ENFORCEABILITY OF CLAIMS
In this Opinion Letter "ENFORCEABLE" means that an obligation is of a type
which the English courts enforce. It does not mean that those obligations
will be enforced in all circumstances in accordance with the terms of the
Finance Document. In particular:
(a) the power of an English court to order specific performance of an
obligation or other equitable remedy is discretionary and,
accordingly, an English court might make an award of damages where
specific performance of an obligation or other equitable remedy is
sought;
(b) where any party to the Finance Documents is vested with a discretion
or may determine a matter in its opinion, that party may be required
to exercise its discretion in good faith, reasonably and for a
proper purpose, and to form its opinion in good faith and on
reasonable grounds;
(c) enforcement may be limited by the provisions of English law
applicable to agreements held to have been frustrated by events
happening after their execution;
(d) claims may become barred under the Limitation Acts or may be or
become subject to a defence of set-off or counterclaim;
-12-
(e) an English court may stay proceedings if concurrent proceedings are
being brought elsewhere and may decline to accept jurisdiction in
certain cases;
(f) a party to a contract may be able to avoid its obligations under
that contract (and may have other remedies) where it has been
induced to enter into that contract by a misrepresentation and the
English courts will generally not enforce an obligation if there has
been fraud;
(g) whilst an English court has power to give judgment in a currency
other than pounds sterling, it has the discretion to decline to do
so; and
(h) any provision providing that any calculation, determination or
certification is to be conclusive and binding may not be effective
if such calculation, determination or certification is fraudulent or
manifestly incorrect and an English court may regard any
certification, determination or calculation as no more than prima
facie evidence.
4. GOVERNING LAW
(a) An English court may not apply the laws of New York if to do so
would be contrary to public policy or mandatory rules of English
law. Based on our review of the Credit Agreement, in our opinion,
none of the provisions of the Credit Agreement would be contrary to
public policy or mandatory rules of English law (except as otherwise
stated in this Schedule).
(b) If all the elements relevant to the situation are connected with one
country only, the choice of New York law will not prejudice the
application of rules of law of that country which cannot be
derogated from by contract.
5. JURISDICTION
If any proceedings are brought in the English courts, those courts may
accept jurisdiction if there is a strong case for so doing,
notwithstanding the provisions of the Credit Agreement providing that the
courts of New York have exclusive jurisdiction in relation thereto.
6. ENFORCEMENT OF FOREIGN JUDGMENT
(a) There are no reciprocal arrangements in force between New York and
the United Kingdom for the recognition or enforcement of judgments.
Accordingly, a judgment by the courts of New York is not enforceable
directly in England but may be recognised by the English courts
according to common law principles. A judgment by those courts will
not be enforced by the English courts if:
(i) those courts had no jurisdiction, as a matter of English law,
over the defendant;
(ii) the proceedings in which the judgment was given were opposed
to natural justice;
(iii) the judgment was obtained by fraud;
(iv) the enforcement of the judgment would be contrary to English
public policy;
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(v) an order has been made and remains effective under section 9
of the Foreign Judgments (Reciprocal Enforcement) Act 1933
applying that section to judgments of those courts;
(vi) before the date on which those courts gave judgment, the
matter in dispute had been the subject of a final judgment of
another court having jurisdiction whose judgment is
enforceable in England;
(vii) the judgment is for multiple damages within the meaning of
section 5(3) of the Protection of Trading Interests Act 1980;
(viii) the judgment is based on a rule of law specified by the
Secretary of State as concerned with the prohibition of
restrictive trade practices;
(ix) the judgment is based on a rule of law which the Secretary of
State specifies as regulating and controlling international
trade and which, in so far as they apply to persons carrying
on business in the United Kingdom, are damaging or threaten to
damage the trading interests of the United Kingdom; or
(x) the bringing of proceedings in those courts was contrary to an
agreement under which the dispute in question was to be
settled otherwise than by proceedings in those courts.
(b) If the English court gives judgment for the sum payable under a
judgment of the courts of New York, the English judgment would be
enforceable by the methods generally available for the enforcement
of English judgments. These give the court a discretion whether to
allow enforcement by any particular method. In addition, it may not
be possible to obtain an English judgment or to enforce that
judgment if the judgment debtor is subject to any insolvency or
similar proceedings, if there is delay, or if the judgment debtor
has any set-off or counterclaim against the judgment creditor.
7. APPLICATION OF FOREIGN LAW
(a) If any obligation is to be performed in a jurisdiction outside
England, it may not be enforceable in England to the extent that
performance would be illegal or contrary to public policy under the
laws of the other jurisdiction and an English court may take into
account the law of the place of performance in relation to the
manner of performance and to the steps to be taken in the event of
defective performance.
(b) It is uncertain whether the parties can agree in advance the
governing law of claims connected with the contract but which are
not claims on the contract, such as a claim in tort.
(c) We express no opinion as to whether any English Obligor has created
a valid security interest over any asset or right which is situated
outside England (including those situated outside England within the
meaning of Council Regulation (EC) No. 1346/2000 of 29 May 2000 on
insolvency proceedings) or governed by a foreign law
(notwithstanding the choice of English law as the governing law of
the Security Document).
-14-
8. DEFAULT INTEREST AND INDEMNITIES BETWEEN PARTIES
(a) Any provision of the Finance Documents requiring any person to pay
amounts imposed in circumstances of breach or default may be held to
be unenforceable on the grounds that it is a penalty. If the Finance
Documents do not provide a contractual remedy for late payment of
any amount payable thereunder that is a substantial remedy within
the meaning of the Late Payment of Commercial Debts (Interest) Act
1998, the person entitled to that amount may have a right to
statutory interest (and to payment of certain fixed sums) in respect
of that late payment at the rate (and in the amount) from time to
time prescribed pursuant to that Act. Any term of the Finance
Documents may be void to the extent that it excludes or varies that
right to statutory interest, or purports to confer a contractual
right to interest that is not a substantial remedy for late payment
of that amount, within the meaning of that Act.
(b) There is some possibility that an English court would hold that a
judgment on any Finance Document, whether given in an English court
or elsewhere, would supersede that Finance Document so that any
obligations relating to the payment of interest after judgment or
any currency indemnities would not be held to survive judgment.
(c) Any undertaking or indemnity given by an English Obligor in respect
of stamp duties or registration taxes payable in the United Kingdom
may be void.
(d) An English court may in its discretion decline to give effect to any
indemnity for legal costs incurred by a litigant.
9. OTHER QUALIFICATIONS
(a) The parties to a Security Document may be able to amend that
Security Document by oral agreement despite any provision to the
contrary.
(b) Any provision of the Finance Documents which constitutes, or
purports to constitute, a restriction on the exercise of any
statutory power by any party to the Finance Documents or any other
person may be ineffective.
(c) The power of an English court to order specific performance of an
obligation or other equitable remedy is discretionary and
accordingly, an English court might make an award of damages where
specific performance of an obligation or other equitable remedy is
sought.
(d) To the extent that any matter is expressly to be determined by
future agreement or negotiation, the relevant provision may be
unenforceable or void for uncertainty.
(e) Any provision of the Finance Documents stating that a failure or
delay, on the part of any Finance Party, in exercising any right or
remedy under the Security Documents shall not operate as a waiver of
such right or remedy may not be effective.
(f) The effectiveness of any provision of a Finance Document which
allows an invalid provision to be severed in order to save the
remainder of that Finance Document will be determined by the English
courts in their discretion.
-15-
(g) If a party to any Finance Document is controlled by or otherwise
connected with a person (or is itself) resident in, incorporated in
or constituted under the laws of a country which is the subject of
United Nations, European Community or UK sanctions implemented or
effective in the United Kingdom under the United Nations Act 1946,
the Emergency Laws (Re-enactments and Repeals) Act 1964 or the
Anti-terrorism, Crime and Security Act 2001, or under the Treaty
establishing the European Community, or is otherwise the target of
any such sanctions, then the obligations of the English Obligors to
that party (or if that party is an English Obligor, the obligations
of that English Obligor) under the Finance Documents may be
unenforceable or void.
(h) We express no opinion as to whether any United Kingdom stamp duty or
stamp duty reserve tax is required to be paid on or in relation to
any assignment or other transfer of any right or interest under the
Finance Documents.
-16-
EXHIBIT I
FORM OF BORROWING CERTIFICATE
Pursuant to subsection 5.1(k) of the Revolving Credit Agreement,
dated as of July 21, 2005, by and among The Scotts Miracle-Gro Company, an Ohio
corporation (the "Borrower"), the subsidiaries of the Borrower from time to time
parties thereto (the "Subsidiary Borrowers"), the several banks and other
financial institutions from time to time parties thereto (the "Lenders"), Bank
of America, N.A. and Citicorp North America, Inc., as Syndication Agents, Bank
of Tokyo-Mitsubishi Trust Company, BNP Paribas, CoBank, ACB, Harris, N.A.,
Rabobank International, and Suntrust Bank, as Documentation Agents and JPMorgan
Chase Bank, N.A., a New York banking corporation, as agent for the Lenders
thereunder (in such capacity, the "Administrative Agent"), the undersigned
Responsible Officer of The Scotts Miracle-Gro Company hereby certifies as
follows:
1. The representations and warranties of The Scotts Miracle-Gro
Company and each of its Subsidiaries set forth in the Credit Agreement and each
other Loan Document to which they are parties delivered today or which are
contained in any certificate, document or financial or other statement furnished
pursuant to or in connection with any of the foregoing are true and correct in
all material respects on and as of the date hereof unless stated to relate to a
specific earlier date;
2. Immediately prior to and immediately after the making of the
Extension of Credit requested to be made on the date hereof, no Default or Event
of Default shall have occurred and be continuing under the Credit Agreement;
3. There are no liquidation or dissolution proceedings pending or to
my knowledge threatened against the Borrower nor against any Subsidiary
Borrower, nor has any other event occurred affecting or threatening the
corporate existence of the Borrower nor the existence of any of the Subsidiary
Borrowers;
4. The Borrower is a corporation duly incorporated, validly existing
and in good standing under the laws of Ohio. Each Domestic Subsidiary Borrower
is a corporation duly incorporated, validly existing and in good standing under
the laws of the state or political subdivision of the United States under which
each is incorporated. Each Foreign Subsidiary Borrower is a corporation duly
incorporated, validly existing and in good standing (or the equivalent thereof)
under the laws of the country of its incorporation; and
5. [Name of Subsidiary Borrower] is a resident of [Name of Country]
for taxation purposes.
2
IN WITNESS WHEREOF, the undersigned have hereunto set our names and
affixed the corporate seal.
By: _________________________
Name:
Title:
Date: ________ __, 200_
EXHIBIT J
FORM OF NEW DOMESTIC SUBSIDIARY CERTIFICATE
DOMESTIC SUBSIDIARY CERTIFICATE
Pursuant to subsection 6.11(a) of the Revolving Credit Agreement,
dated as of July 21, 2005 (the "Credit Agreement"), by and among The Scotts
Miracle-Gro Company, an Ohio corporation (the "Borrower"), the subsidiaries of
the Borrower from time to time parties thereto (the "Subsidiary Borrowers"), the
several banks and other financial institutions from time to time parties thereto
(the "Lenders"), Bank of America, N.A. and Citicorp North America, Inc., as
Syndication Agents, Bank of Tokyo-Mitsubishi Trust Company, BNP Paribas, CoBank,
ACB, Harris, N.A., Rabobank International, and Suntrust Bank, as Documentation
Agents and JPMorgan Chase Bank, N.A., a New York banking corporation, as agent
for the Lenders thereunder (in such capacity, the "Administrative Agent") hereby
certifies as follows (terms defined in the Credit Agreement being used herein
with their defined meanings):
1. The representations and warranties made by the Subsidiary in each
of the Loan Documents to which it is a party are true and correct in all
material respects on and as of the date hereof as if made on and as of the date
hereof [and after giving effect to the Loans requested to be made pursuant to
the Credit Agreement] (unless stated to relate to a specific earlier date, in
which case, such representations and warranties shall be true and correct in all
material respects as of such earlier date);
2. Immediately prior to and immediately after the making of the
Loans requested to be made pursuant to the Credit Agreement on the date hereof,
no Default or Event of Default will have occurred and will be continuing under
the Credit Agreement or any other Loan Document; and
3. _______________ is the duly elected and qualified Secretary of
the Subsidiary and the signature set forth on the signature line for such
officer below is such officer's true and genuine signature, and the undersigned
Secretary of the Subsidiary hereby certifies as follows:
(a) Attached hereto as Exhibit A is a true and complete copy
of resolutions duly adopted by the Board of Directors of the
Subsidiary on the date thereof; such resolutions have not in any way
been amended, modified, revoked or rescinded and have been in full
force and effect since their adoption to and including the date
hereof and are now in full force and effect; such resolutions are
the only corporate proceedings of the Subsidiary now in force
relating to or affecting the matters referred to therein; attached
hereto as Exhibit B is a true and complete copy of the By-laws of
the Subsidiary as in effect on the date hereof; and attached
2
hereto as Exhibit C is a true and complete copy of the Certificate
of Incorporation of the Subsidiary as in effect on the date hereof;
(b) The following persons are now duly elected and qualified
officers of the Subsidiary, holding the offices indicated next to
their respective names below, and the signatures appearing opposite
their respective names below are the true and genuine signatures of
such officers, and each of such officers is duly authorized to
execute and deliver on behalf of the Subsidiary the Credit Documents
to which the Subsidiary is or shall be a party and any certificate
or other document to be delivered by the Subsidiary pursuant to the
Credit Documents:
Name Office Signature
- ------------------- -------------- ------------------
__________________ Vice President __________________
__________________ Secretary __________________
IN WITNESS WHEREOF, the undersigned have executed this Certificate
on the date set forth below.
[INSERT NAME OF SUBSIDIARY] [INSERT NAME OF SUBSIDIARY]
By:__________________________ By:_________________________
Name: Name:
Title: Vice President Title: Secretary
____________ __, 2005
Exhibit A
to the
Domestic Subsidiary Certificate
Board of Directors Resolutions
Exhibit B
to the
Domestic Subsidiary Certificate
By-Laws
Exhibit C
to the
Domestic Subsidiary Certificate
Certificate of Incorporation
2
EXHIBIT K
FORM OF JOINDER AGREEMENT
JOINDER AGREEMENT, dated as of ________ __, ____, made by each of
the corporations that are signatories hereto (the "Subsidiary Borrowers"), in
favor of JPMORGAN CHASE BANK, N.A., a New York banking corporation, as
administrative agent (in such capacity, the "Administrative Agent") for the
several banks and other financial institutions (the "Lenders") from time to time
parties to the Revolving Credit Agreement, dated as of July 21, 2005, by and
among The Scotts Miracle-Gro Company, an Ohio corporation (the "Borrower" or
"Scotts"), the subsidiaries of the Borrower from time to time parties thereto
(the "Subsidiary Borrowers"), the several banks and other financial institutions
from time to time parties thereto (the "Lenders"), Bank of America, N.A. and
Citicorp North America, Inc., as Syndication Agents, Bank of Tokyo-Mitsubishi
Trust Company, BNP Paribas, CoBank, ACB, Harris, N.A., Rabobank International,
and Suntrust Bank, as Documentation Agents, as the same may be amended,
supplemented, waived or otherwise modified from time to time (the "Credit
Agreement"), together with any agreement extending the maturity of, or
restructuring, refunding, refinancing or increasing, all or any portion of the
Indebtedness under such agreement or any successor agreements (as so assumed,
amended, supplemented, waived or modified).
WITNESSETH:
WHEREAS, the parties to this Joinder Agreement wish to add
Subsidiary Borrowers to the Credit Agreement in the manner hereinafter set
forth; and
WHEREAS, this Joinder Agreement is entered into pursuant to
subsection 10.1(b)(i) of the Credit Agreement;
NOW, THEREFORE, in consideration of the premises, the parties hereto
hereby agree as follows:
1. Each of the undersigned Subsidiaries of Scotts, hereby
acknowledges that it has received and reviewed a copy of the Credit Agreement,
and acknowledges and agrees to: join the Credit Agreement as a Subsidiary
Borrower, as indicated with its signature below; be bound by all covenants,
agreements and acknowledgments attributable to a Subsidiary Borrower in the
Credit Agreement; and perform all obligations and duties required of it by the
Credit Agreement.
2. Each of the undersigned Subsidiaries of Scotts hereby represents
and warrants that the representations and warranties with respect to it
contained in Section 4 of the Credit Agreement and each of the other Loan
Documents to which such Subsidiary of Scotts is a party
2
or which are contained in any certificate furnished by or on behalf of such
Subsidiary of Scotts are true and correct on the date hereof.
3. The address and jurisdiction of incorporation of each of the
undersigned Subsidiaries of Scotts is set forth in Annex I to this Joinder
Agreement.
4. THIS JOINDER AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
2
IN WITNESS WHEREOF, each of the undersigned has caused this Joinder
Agreement to be duly executed and delivered in [New York, New York] by its
proper and duly authorized officer as of the date set forth below.
[NAME OF SUBSIDIARY],
as a Subsidiary Borrower
By:__________________________
Name:
Title:
[NAME OF SUBSIDIARY],
as a Subsidiary Borrower
By:__________________________
Name:
Title:
THE SCOTTS MIRACLE-GRO COMPANY
By:_______________________
Name:
Title:
ACKNOWLEDGED AND AGREED TO:
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
By:_______________________
Name:
Title:
ANNEX I
[Insert administrative information concerning Subsidiary Borrowers]