**Exhibit 10.49**

 

EXECUTION COPY

 

 

Published CUSIP Number:        

 

 

CREDIT AGREEMENT

 

Dated as of April 30, 2004

 

among

 

UNITED INDUSTRIES CORPORATION,

 

as the Borrower,

 

BANK OF AMERICA, N.A.,as Administrative Agent, Swing Line LenderandL/C Issuer,

 

and

 

The Other Lenders Party Hereto

 

and

 

CITIGROUP GLOBAL MARKETS INC., as Documentation Agent

 

and

 

BANC OF AMERICA SECURITIES LLC

 

and

 

CITIGROUP GLOBAL MARKETS INC.,

 

as

 

Joint Lead Arrangers and Joint Book Managers

 

 

----

 

**TABLE OFCONTENTS**

 
| Section                                     |   |                                                 |   |   |
|---------------------------------------------|--------|------------------------------------------------------|--------|--------|
|                                        |   |                                                 |   |   |
| ARTICLE I  DEFINITIONS AND ACCOUNTING TERMS |   |                                                 |
|                                        |   |                                                 |   |   |
| 1.01                                        |   | Defined Terms                                        |   |   |
| 1.02                                        |   | Other Interpretive Provisions                        |   |   |
| 1.03                                        |   | Accounting Terms                                     |   |   |
| 1.04                                        |   | Rounding                                             |   |   |
| 1.05                                        |   | References to Agreements and Laws                    |   |   |
| 1.06                                        |   | Times of Day                                         |   |   |
| 1.07                                        |   | Currency Equivalents Generally                       |   |   |
| 1.08                                        |   | Timing of Performance                                |   |   |
|                                        |   |                                                 |   |   |
|                                        |   | ARTICLE II                                           |   |   |
|                                        |   | THE COMMITMENTS AND CREDIT EXTENSIONS                |   |   |
|                                        |   |                                                 |   |   |
| 2.01                                        |   | The Loans                                            |   |   |
| 2.02                                        |   | Borrowings, Conversions and Continuations  of Loans  |   |   |
| 2.03                                        |   | Letters of Credit                                    |   |   |
| 2.04                                        |   | Swing Line Loans                                     |   |   |
| 2.05                                        |   | Prepayments                                          |   |   |
| 2.06                                        |   | Termination or Reduction of Commitments              |   |   |
| 2.07                                        |   | Repayment of Loans                                   |   |   |
| 2.08                                        |   | Interest                                             |   |   |
| 2.09                                        |   | Fees                                                 |   |   |
| 2.10                                        |   | Computation of Interest and Fees                     |   |   |
| 2.11                                        |   | Evidence of Indebtedness                             |   |   |
| 2.12                                        |   | Payments Generally                                   |   |   |
| 2.13                                        |   | Sharing of Payments                                  |   |   |
| 2.14                                        |   | Increase in Commitments                              |   |   |
| 2.15                                        |   | Use of Proceeds                                      |   |   |
|                                        |   |                                                 |   |   |
|                                        |   | ARTICLE III                                          |   |   |
|                                        |   | TAXES, YIELD PROTECTION AND ILLEGALITY               |   |   |
|                                        |   |                                                 |   |   |
| 3.01                                        |   | Taxes                                                |   |   |
| 3.02                                        |   | Illegality                                           |   |   |
| 3.03                                        |   | Inability to Determine Rates                         |   |   |
| 3.04                                        |   | Increased Cost and Reduced Return; Capital  Adequacy |   |   |
| 3.05                                        |   | Compensation for Losses                              |   |   |
| 3.06                                        |   | Matters Applicable to all Requests for  Compensation |   |   |
| 3.07                                        |   | Replacement of Lenders under Certain  Circumstances  |   |   |
| 3.08                                        |   | Survival                                             |   |   |

 

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|   |   | ARTICLE IV                                                             |   |   |
|--------|--------|------------------------------------------------------------------------|--------|--------|
|   |   | CONDITIONS PRECEDENT TO CREDIT EXTENSIONS                              |   |   |
|   |   |                                                                   |   |   |
| 4.01   |   | Conditions of Initial Credit Extension                                 |   |   |
| 4.02   |   | Conditions to all Credit Extensions                                    |   |   |
|   |   |                                                                   |   |   |
|   |   | ARTICLE V                                                              |   |   |
|   |   | REPRESENTATIONS AND WARRANTIES                                         |   |   |
|   |   |                                                                   |   |   |
| 5.01   |   | Existence, Qualification and Power                                     |   |   |
| 5.02   |   | Capitalization                                                         |   |   |
| 5.03   |   | Authorization; No Contravention                                        |   |   |
| 5.04   |   | Governmental Authorization; Other Consents                             |   |   |
| 5.05   |   | Enforceability                                                         |   |   |
| 5.06   |   | Financial Statements; No Material Adverse  Effect                      |   |   |
| 5.07   |   | Projections                                                            |   |   |
| 5.08   |   | Accuracy of Information                                                |   |   |
| 5.09   |   | Litigation                                                             |   |   |
| 5.10   |   | Collateral;  Liens                                                     |   |   |
| 5.11   |   | Intellectual Property                                                  |   |   |
| 5.12   |   | Margin Stock                                                           |   |   |
| 5.13   |   | Investment Company Act, Etc                                            |   |   |
| 5.14   |   | Solvency                                                               |   |   |
| 5.15   |   | Labor Matters                                                          |   |   |
| 5.16   |   | ERISA  Matters                                                         |   |   |
| 5.17   |   | Environmental Compliance                                               |   |   |
| 5.18   |   | Taxes                                                                  |   |   |
| 5.19   |   | Real Estate                                                            |   |   |
|   |   |                                                                   |   |   |
|   |   | ARTICLE VI                                                             |   |   |
|   |   | AFFIRMATIVE, REPORTING AND FINANCIAL COVENANTS                         |   |   |
|   |   |                                                                   |   |   |
| 6.01   |   | Compliance with Laws, Maintenance of  Governmental Authorizations, Etc |   |   |
| 6.02   |   | Payment of Taxes, Etc                                                  |   |   |
| 6.03   |   | Compliance with Environmental Laws                                     |   |   |
| 6.04   |   | Maintenance of Insurance                                               |   |   |
| 6.05   |   | Preservation of Corporate Existence, Etc                               |   |   |
| 6.06   |   | Visitation Rights                                                      |   |   |
| 6.07   |   | Keeping of Books                                                       |   |   |
| 6.08   |   | Maintenance of Properties, Etc                                         |   |   |
| 6.09   |   | Compliance with Terms of Leaseholds                                    |   |   |
| 6.10   |   | Transactions with Affiliates                                           |   |   |
| 6.11   |   | Covenant to Give Security                                              |   |   |
| 6.12   |   | Further Assurances                                                     |   |   |
| 6.13   |   | Reporting Requirements                                                 |   |   |
| 6.14   |   | Financial Covenants                                                    |   |   |
| 6.15   |   | Post-Closing Matters                                                   |   |   |

 

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|   |   | ARTICLE  VII                                                    |   |   |
|--------|--------|-----------------------------------------------------------------|--------|--------|
|   |   | NEGATIVE  COVENANTS                                             |   |   |
|   |   |                                                            |   |   |
| 7.01   |   | Liens,  Etc                                                     |   |   |
| 7.02   |   | Indebtedness                                                    |   |   |
| 7.03   |   | Mergers, Etc                                                    |   |   |
| 7.04   |   | Dispositions                                                    |   |   |
| 7.05   |   | Investments in Other Persons                                    |   |   |
| 7.06   |   | Restricted Payments                                             |   |   |
| 7.07   |   | Capital Expenditures                                            |   |   |
| 7.08   |   | Prepayments, Etc. of Indebtedness                               |   |   |
| 7.09   |   | Negative Pledge                                                 |   |   |
| 7.10   |   | Dividends and Other Payment Restrictions Affecting Subsidiaries |   |   |
| 7.11   |   | Change in Nature of Business                                    |   |   |
| 7.12   |   | Amendments to Constitutive Documents                            |   |   |
| 7.13   |   | Accounting Changes, Etc                                         |   |   |
| 7.14   |   | Amendments, Etc. of Nu-Gro Documents                            |   |   |
| 7.15   |   | Holdings                                                        |   |   |
|   |   |                                                            |   |   |
|   |   | ARTICLE VIII                                                    |   |   |
|   |   | EVENTS OF DEFAULT AND REMEDIES                                  |   |   |
|   |   |                                                            |   |   |
| 8.01   |   | Events of Default.                                              |   |   |
| 8.02   |   | Actions in Respect of the Letters of Credit  upon Default       |   |   |
| 8.03   |   | Application of Funds                                            |   |   |
|   |   |                                                            |   |   |
|   |   | ARTICLE IX                                                      |   |   |
|   |   | ADMINISTRATIVE AGENT AND OTHER AGENTS                           |   |   |
|   |   |                                                            |   |   |
| 9.01   |   | Appointment and Authorization of Agents                         |   |   |
| 9.02   |   | Delegation of Duties                                            |   |   |
| 9.03   |   | Liability of Agents                                             |   |   |
| 9.04   |   | Reliance by Agents                                              |   |   |
| 9.05   |   | Notice of Default                                               |   |   |
| 9.06   |   | Credit Decision; Disclosure of Information  by Agents           |   |   |
| 9.07   |   | Indemnification of Agents                                       |   |   |
| 9.08   |   | Agents in their Individual Capacities                           |   |   |
| 9.09   |   | Successor Agents                                                |   |   |
| 9.10   |   | Administrative Agent May File Proofs of  Claim                  |   |   |
| 9.11   |   | Collateral and Guaranty Matters                                 |   |   |
| 9.12   |   | Other Agents; Arrangers and Managers                            |   |   |
|   |   |                                                            |   |   |
|   |   | ARTICLE X                                                       |   |   |
|   |   | MISCELLANEOUS                                                   |   |   |
|   |   |                                                            |   |   |
| 10.01  |   | Amendments,  Etc                                                |   |   |
| 10.02  |   | Notices and Other Communications; Facsimile  Copies             |   |   |

 

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| 10.03      |   | No Waiver; Cumulative Remedies             |   |   |
|------------|--------|--------------------------------------------|--------|--------|
| 10.04      |   | Attorney Costs, Expenses and Taxes         |   |   |
| 10.05      |   | Indemnification by the Borrower            |   |   |
| 10.06      |   | Payments Set Aside                         |   |   |
| 10.07      |   | Successors and Assigns                     |   |   |
| 10.08      |   | Confidentiality                            |   |   |
| 10.09      |   | Setoff                                     |   |   |
| 10.10      |   | Interest Rate Limitation                   |   |   |
| 10.11      |   | Counterparts                               |   |   |
| 10.12      |   | Integration                                |   |   |
| 10.13      |   | Survival of Representations and Warranties |   |   |
| 10.14      |   | Severability                               |   |   |
| 10.15      |   | Tax Forms                                  |   |   |
| 10.16      |   | Governing Law                              |   |   |
| 10.17      |   | Waiver of Right to Trial by Jury           |   |   |
| 10.18      |   | Binding Effect                             |   |   |
| 10.19      |   | USA PATRIOT Act Notice                     |   |   |
| 10.20      |   | Judgment Currency                          |   |   |
|       |   |                                       |   |   |
| SIGNATURES |   |                                       |

 

iv

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| SCHEDULES |   |                                                               |
|-----------|--------|--------------------------------------------------------------------|
|      |   |                                                               |   |   |
| 1.01(a)   |   | Existing Letters of  Credit                                        |   |   |
| 1.01(c)   |   | Certain Adjustments to  Financial Covenants                        |   |   |
| 2.01      |   | Commitments and Pro  Rata Shares                                   |   |   |
| 5.02      |   | Subsidiaries                                                       |   |   |
| 5.17      |   | Environmental Matters                                              |   |   |
| 5.18      |   | Open Years                                                         |   |   |
| 5.19      |   | Owned and Leased Real  Property                                    |   |   |
| 7.01      |   | Existing Liens                                                     |   |   |
| 7.02      |   | Existing Indebtedness                                              |   |   |
| 7.04      |   | Dispositions                                                       |   |   |
| 7.05      |   | Investments                                                        |   |   |
| 10.02     |   | Administrative Agent’s  Office; Certain Addresses for Notices |   |   |
|      |   |                                                               |   |   |
| EXHIBITS  |   |                                                               |   |   |
| *Form of* |   |                                                               |   |   |
|      |   |                                                               |   |   |
| A         |   | Committed Loan Notice                                              |   |   |
| B         |   | Swing Line Loan Notice                                             |   |   |
| C-1       |   | Term Note                                                          |   |   |
| C-2       |   | Revolving Credit Note                                              |   |   |
| D         |   | Compliance Certificate                                             |   |   |
| E         |   | Assignment and Assumption                                          |   |   |
| F         |   | Guaranty                                                           |   |   |
| G         |   | Security Agreement                                                 |   |   |
| H         |   | Mortgage                                                           |   |   |
| I         |   | Intellectual Property  Security Agreement                          |   |   |
| J-1       |   | Opinion Matters –  Counsel to Loan Parties                    |   |   |
| J-2       |   | Opinion Matters – Local  Counsel to Loan Parties in Ohio      |   |   |
| K         |   | Holdings Joinder  Agreement and Guaranty                           |   |   |
| L         |   | Subordination  Provisions                                          |   |   |

 

v

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CREDIT AGREEMENT

 

This CREDIT AGREEMENT (“***Agreement***”) is entered into as of April 30,2004, among UNITED INDUSTRIES CORPORATION, a Delaware corporation (the “***Borrower***”), eachlender from time to time party hereto (collectively, the “***Lenders***” and individually, a “***Lender***”), CITIGROUPGLOBAL MARKETS INC., as Documentation Agent, and BANK OF AMERICA, N.A., asAdministrative Agent, Swing Line Lender and L/C Issuer.

 

PRELIMINARYSTATEMENTS:

 

(1)           TheBorrower has entered into an Amended and Restated Credit Agreement dated as ofMarch 24, 1999 (as supplemented or otherwise modified to the date hereof, the “***Existing******Credit Agreement***”)with certain banks, financial institutions and other institutional lendersparty thereto, and Bank of America, as administrative agent for the lendersthereunder.

 

(2)           Pursuantto the Arrangement Agreement dated March 1, 2004 (as amended, supplemented orotherwise modified to the date hereof, the “***Arrangement Agreement***”) among the Borrower, JupiterAcquisition Corporation, a corporation existing under the Business CorporationsAct (Ontario) and The Nu-Gro Corporation, a corporation existing under theBusiness Corporations Act (Ontario) (“***Nu-Gro***”), the Borrower has agreed to acquire(the “***Nu-Gro******Acquisition***”) all ofthe outstanding equity interests of Nu-Gro pursuant to a plan of arrangement.

 

(3)           TheBorrower has requested that the Lenders provide a revolving credit facility anda term loan facility, in order to, among other things, (i) refinance thecommitments and outstanding amounts under the Existing Credit Agreement, (ii)provide the Borrower with the funds necessary to consummate the Nu-GroAcquisition, (iii) redeem $56,000,000 of the Borrower’s preferred stock (the “***Preferred Stock Redemption***”),(iv) pay fees and expenses incurred in connection with each of the foregoingand (v) provide for the Borrower’s and its Subsidiaries’ ongoing workingcapital needs and other general corporate purposes.  The Lenders have indicated their willingness to lend and the L/CIssuer has indicated its willingness to so issue Letters of Credit, in eachcase, on the terms and subject to the conditions set forth herein.

 

In consideration of the mutual covenants andagreements herein contained, the parties hereto covenant and agree as follows:

 

# ARTICLE IDEFINITIONS AND ACCOUNTING TERMS

#  

1.01         Defined Terms.  As used in this Agreement, the followingterms shall have the meanings set forth below:

 

“***Acceptance***” means a draft drawn by a beneficiary under aLetter of Credit, which (a) provides for payment by the L/C Issuer on a datelater than (but not more than 180 days later than) the date on which suchbeneficiary presents the documents called for under such Letter of Credit and(b) has been stamped “accepted” by the L/C Issuer.

 

----

 

“***Actual Rate***” has the meaning specified in Section3.01(e).

 

“***Administrative Agent***” means Bank of America in itscapacity as administrative agent under any of the Loan Documents, or any successoradministrative agent.

 

“***Administrative Agent’s Office***” means the AdministrativeAgent’s address and, as appropriate, account as set forth on Schedule 10.02,or such other address or account as the Administrative Agent may from time totime notify the Borrower and the Lenders.

 

“***Administrative Questionnaire***” means an AdministrativeQuestionnaire in a form supplied by the Administrative Agent.

 

“***Affiliate***” means, with respect to any Person, anotherPerson that directly, or indirectly through one or more intermediaries,Controls or is Controlled by or is under common Control with the Personspecified.  “***Control***” means the possession, directly orindirectly, of the power to direct or cause the direction of the management orpolicies of a Person, whether through the ability to exercise voting power, bycontract or otherwise.  “***Controlling***” and “***Controlled***” havemeanings correlative thereto.  Notwithstanding the foregoing, neither anyAgent nor any Lender shall be deemed to be an Affiliate of any Loan Party orany Subsidiary or Affiliate of any Loan Party.

 

“***Agent-Related Persons***” means the Administrative Agent,each Arranger, and the Documentation Agent, together with their respectiveAffiliates (including, in the case of Bank of America in its capacity as theAdministrative Agent, BAS), and the officers, directors, employees, agents andattorneys-in-fact of such Persons and Affiliates.

 

“***Agents***” means, collectively, the Administrative Agent,the Documentation Agent and each co-agent or sub-agent appointed by theAdministrative Agent from time to time pursuant to Section 9.02.

 

“***Agreement Currency***” has the meanings specified in Section10.20.

 

“***Aggregate Commitments***” means the Commitments of all theLenders.

 

“***Aggregate Credit Exposures***” means, at any time, the sumof (i) the unused portion of the Revolving Credit Commitment then in effect,(ii) the unused portion of each Term Commitment then in effect and (iii) theTotal Outstandings at such time.

 

“***Agreement***” means this Credit Agreement.

 

“***Agreement Value***” means, with respect to each SwapContract on any date of determination, an amount equal to the greater of:

 

#### (a)           (i) in the case ofany Swap Contract documented pursuant to an ISDA Master Agreement, the amount,if any, that would be payable by any of the Loan Parties or any of theirSubsidiaries to its counterparty to such Swap Contract, as if (A) suchSwap Contract was being terminated early on such date of determination,(B) such Loan Party or such Subsidiary, as the case may be, was the soleAffected Party (as defined in

####  

2

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#### the applicableISDA Master Agreement) and (C) the Administrative Agent was the sole partydetermining such payment amount (with the Administrative Agent making suchdetermination pursuant to the provisions of the form of ISDA Master Agreement);or (ii) in the case of a Swap Contract traded on an exchange, themark-to-market value of such Swap Contract, which will be the unrealized losson such Swap Contract to the Loan Party or the Subsidiary of a Loan Party tosuch Swap Contract (determined by the Administrative Agent based on thesettlement price of such Swap Contract on such date); or

####  

#### (b)           in all other cases,the mark-to-market value of such Swap Contract, which will be the unrealized losson such Swap Contract to the Loan Party or the Subsidiary of a Loan Party partyto such Swap Contract (determined by the Administrative Agent based on theamount, if any, by which (i) the present value of the future cash flows to bepaid by such Loan Party or such Subsidiary of a Loan Party, as the case may be,exceeds (ii) the present value of the future cash flows to be received by suchLoan Party or such Subsidiary of a Loan Party pursuant to such Swap Contract).

####  

“***AlternateDate***” means December 31, 2008 if the Senior Subordinated Noteshave not by November 30, 2008 been refinanced with replacement seniorsubordinated notes having a maturity date of no sooner than the date which is71⁄2 years after the Closing Date, and otherwise in compliance with Section 7.02(b)(x).

 

“***Applicable Rate***” means (a) with respect to TermLoans, (i) 2.50% in the case of Eurodollar Rate Loans and Screen Rate Loans and(ii) 1.50% in the case of Base Rate Loans and (b) with respect to RevolvingCredit Loans, (i) for the period from the Closing Date through the date whichis six months after the Closing Date, (A) with respect to Eurodollar RateLoans, 2.50% and (B) with respect to Base Rate Loans, 1.50% and(ii) from and after the date which is six months after the Closing Date, thefollowing percentages per annum, based upon the Total Leverage Ratio as setforth in the most recent Compliance Certificate received by the AdministrativeAgent pursuant to Section 6.13(d):

 

| **Pricing  Level** |   | **Total  Leverage  Ratio** |   | **EurodollarRate + Letters of  Credit** |   | **Base Rate  +** |   |
|--------------------|--------|----------------------------|--------|----------------------------------------------|--------|------------------|--------|
| 1                  |   | <3.25:1                 |   | 1.75                                         |   | 0.75             |   |
| 2                  |   | >3.25:1 but <3.75:1  |   | 2.00                                         |   | 1.00             |   |
| 3                  |   | >3.75:1 but <4.25:1  |   | 2.25                                         |   | 1.25             |   |
| 4                  |   | >4.25:1                 |   | 2.50                                         |   | 1.50             |   |

 

Any increase or decrease in the Applicable Rateresulting from a change in the Total Leverage Ratio shall become effective asof the first Business Day immediately following the date a ComplianceCertificate is delivered pursuant to Section 6.13(d); provided, however,that if a Compliance Certificate is not delivered when due in accordance with suchSection, then Pricing Level 4 shall apply as of the first Business Day afterthe date on which such Compliance Certificate was required to have beendelivered until the first Business Day immediately following the date on whichsuch Compliance Certificate is delivered.

 

3

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“***Appropriate Lender***” means, at any time, (a) withrespect to the Term Facility or the Revolving Credit Facility, a Lender thathas a Commitment with respect to such Facility at such time, (b) withrespect to the Letter of Credit Sublimit, (i) the L/C Issuer and(ii) if any Letters of Credit have been issued pursuant to Section2.03(a), the Revolving Credit Lenders and (c) with respect to theSwing Line Facility, (i) the Swing Line Lender and (ii) if any SwingLine Loans are outstanding pursuant to Section 2.04(a), theRevolving Credit Lenders.

 

“***Approved Fund***” has the meaning specified in Section10.07(g).

 

“***Arrangement Agreement***” has the meaning specified in thepreliminary statements to this Agreement.

 

“***Arrangers***” means BAS and CGMI, in their capacities asjoint lead arrangers and joint book managers.

 

“***Assignment and Assumption***” means an Assignment andAssumption substantially in the form of Exhibit E.

 

“***Attorney Costs***” means and includes all reasonable fees,expenses and disbursements of any law firm or other external counsel.

 

“***Audited Financial Statements***” means the auditedconsolidated balance sheet of Borrower and its Subsidiaries for the fiscal yearended December 31, 2003, and the related consolidated statements of income oroperations, shareholders’ equity and cash flows for such fiscal year of theBorrower and its Subsidiaries, including the notes thereto.

 

“***Auto-Extension Letter of Credit***” has the meaningspecified in Section 2.03(b)(iii).

 

“***Availability Period***” means the period from and includingthe Closing Date to (a) in the case of the Revolving Credit Facility, theearliest of (i) the Maturity Date for such Facility, (ii) the date oftermination of the Revolving Credit Commitments pursuant to Section 2.06,and (iii) the date of termination of the commitment of each Revolving CreditLender to make Revolving Credit Loans and of the obligation of the L/C Issuerto make L/C Credit Extensions pursuant to Section 8.01, and (b) in thecase of the Term Facility, the earliest of (i) the Maturity Date for suchFacility, (ii) the date of termination of the Term Commitments pursuant to Section2.06, and (iii) the date of termination of the commitment of each TermLender to make Term Loans pursuant to Section 8.01.

 

“***Backstop L/C***” has the meaning specified in Section2.03(g).

 

“***Bank of America***” means Bank of America, N.A. and itssuccessors.

 

“***BAS***” means Banc of America Securities LLC and itssuccessors.

 

“***BaseRate***” means, for any day, with respect to any Loan other than aCanadian Term Loan, a fluctuating rate per annum equal to the higher of (a) theFederal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect forsuch day as publicly announced from time to

 

4

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time by Bank of America as its “prime rate.”  The “prime rate” is a rate set by Bank ofAmerica based upon various factors including Bank of America’s costs anddesired return, general economic conditions and other factors, and is used as areference point for pricing some loans, which may be priced at, above, or belowsuch announced rate.  Any change in suchrate announced by Bank of America shall take effect at the opening of businesson the day specified in the public announcement of such change.

 

“***Base Rate Loan***” means a Loan that bears interest based on the Base Rate.

 

“***Borrower***” has the meaning specified in the introductoryparagraph hereto.

 

“***Borrowing***” means a Revolving Credit Borrowing, a SwingLine Borrowing, a Canadian Term Borrowing or a Dollar Term Borrowing, as thecontext may require.

 

“***Business Day***” means any day other than a Saturday,Sunday or other day on which commercial banks are authorized to close under theLaws of, or are in fact closed in, the state where the Administrative Agent’sOffice is located and, if such day relates to any (a) Eurodollar RateLoan, means any such day on which dealings in Dollar deposits are conducted byand between banks in the London interbank eurodollar market and (b) Screen RateLoan, means any day on which dealings in deposits in Canadian Dollars areconducted by and between banks in the London interbank market for CanadianDollars.

 

“***CanadianDollar***” and“***CD***”mean lawful money of Canada.

 

“***CanadianGAAP***“ means generally accepted accounting principles in effectfrom time to time in Canada and applied on a consistent basis, subject, however,to the terms of Section 1.03.

 

“***CanadianLoan***” means the loan to be made in Canadian Dollars by aCanadian-based lending office of Bank of America to a successor of Nu-Gro onthe Closing Date and repaid within one Business Day with the proceeds receivedby such borrower from the purchase of certain of Nu-Gro’s Subsidiaries.

 

“***Canadian TermBorrowing***” means a borrowing consisting of simultaneous CanadianTerm Loans of the same Type and, in the case of Screen Rate Loans, having thesame Interest Period, made by the Canadian Term Lenders pursuant to Section2.01(a).

 

“***CanadianTerm Commitment***“ means, as to each Canadian Term Lender, itsobligation to make a Canadian Term Loan to the Borrower pursuant to Section2.01(a) in a principal amount not to exceed the amount set forth oppositesuch Lender’s name on Schedule 2.01 under the caption “Canadian TermCommitment” or in the Assignment and Assumption pursuant to which such Lenderbecomes a party hereto, as applicable, as such amount may be adjusted from timeto time in accordance with this Agreement.

 

“***Canadian******Term Facility***”means, at any time, the aggregate Canadian Term Commitments or Canadian TermLoans, as applicable, of all Canadian Term Lenders at such time.

 

5

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“***Canadian TermLender***” means each of the Term Lenders with a Canadian  Term Commitment, as set forth on Schedule2.01 hereto.

 

“***CanadianTerm Loan***” has the meaning specified in Section 2.01(a).

 

“***CapitalExpenditures***” means, with respect to any Person for anyperiod, all expenditures made by such Person during such period forcapital assets inaccordance with GAAP; provided however, that Capital Expenditures shallnot include (a) any expenditures by the Borrower or any of its Subsidiaries inconnection with a Permitted Acquisition or capital assets acquired inconnection with a Permitted Acquisition or (b) any expenditures made with theproceeds of condemnation or eminent domain proceedings affecting real propertyor with insurance proceeds; provided, further that anyexpenditure that is purchased with the trade-in or exchange of existingassets or the cash proceeds of the sale or other disposition of existing assetspermitted pursuant to Section 7.04(d) or with insurance proceedsshall be included in Capital Expenditures only to the extent of the grossamount by which such purchase price exceeds the credit granted by the seller ofsuch assets for the assets being traded in, the amount of the cash proceeds ofany such sale or disposition or the amount of such insurance proceeds, as thecase may be.

 

“***Capitalized Lease”***means any lease with respect to which the lessee is required to recognizeconcurrently the acquisition of property or an asset and the incurrence of aliability in accordance with GAAP.

 

“***Cash Collateral Account***” means a blocked, non-interestbearing deposit account at Bank of America in the name of the Collateral Agentand under the sole dominion and control of the Collateral Agent, and otherwiseestablished in a manner satisfactory to the Administrative Agent.

 

“***Cash Collateralize***” has the meaning specified in Section2.03(g).

 

“***CashEquivalents***” means any of the following types of Investments, tothe extent owned by the Borrower or any of its Subsidiaries free and clear ofall Liens (other than Liens created under the Collateral Documents):

 

#### (a)           readily marketableobligations issued or directly and fully guaranteed or insured by the UnitedStates of America or any agency or instrumentality thereof having maturities ofnot more than 360 days from the date of acquisition thereof; providedthat the full faith and credit of the United States of America is pledged insupport thereof;

####  

#### (b)           time deposits with,or insured certificates of deposit or bankers’ acceptances of, any commercialbank that (i) (A) is a Lender or (B) is organized under the laws of theUnited States of America, any state thereof or the District of Columbia, or isthe principal banking subsidiary of a bank holding company organized under thelaws of the United States of America, any state thereof or the District ofColumbia, and is a member of the Federal Reserve System, (ii) issues (or theparent of which issues) commercial paper rated as described below in clause(c) of this definition and (iii) has combined capital and surplus ofat least $500,000,000, in each case with a maturity of not more than one yearfrom the date of acquisition thereof;

####  

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#### (c)           commercial paperissued by any Person organized under the laws of any state of the United Statesof America and rated at least “Prime-1” (or the then equivalent grade) byMoody’s Investors Service, Inc. or at least “A-1” (or the then equivalentgrade) by Standard & Poor’s Ratings Group, in each case with amaturity of not more than 180 days from the date of acquisition thereof;

####  

#### (d)           solely with respectto any Foreign Subsidiary, non-Dollar denominated (i) certificates of depositof, bankers acceptances of, or time deposits with any commercial bank which isorganized and existing under the laws of the country in which such ForeignSubsidiary maintains its chief executive office and principal place of businessprovided such country is a member of the Organization for Economic Cooperationand Development, and whose short-term commercial paper rating is at least“Prime-1” (or the then equivalent grade) by Moody’s Investors Service,Inc. or at least “A-1” (or the then equivalent grade) by Standard &Poor’s Ratings Group (any such bank being an **“*ApprovedForeign Bank*”**) and maturing within twelve (12) months ofthe date of acquisition and (ii) equivalents of demand deposit accounts whichare maintained with an Approved Foreign Bank;

####  

#### (e)           repurchaseagreements entered into by any Person with a bank or trust company (includingany of the Lenders) or recognized securities dealer having capital and surplusin excess of $500,000,000 for direct obligations issued by or fully guaranteedby the United States in which such Person shall have a perfected first prioritysecurity interest (subject to no other Liens) and having, on the date ofpurchase thereof, a fair market value of at least 100% of the amount of therepurchase obligations;

####  

#### (f)            securities withmaturities of one year or less from the date of acquisition issued or fullyguaranteed by any state, commonwealth or territory of the United States, by anypolitical subdivision or taxing authority of any such state, commonwealth orterritory or by any foreign government, the securities or which state,commonwealth, territory, political subdivision, taxing authority or foreigngovernment (as the case may be) are rated at least “A” (or the then equivalentgrade) by Moody’s Investors Service, Inc. or at least “A” (or the thenequivalent grade) by Standard & Poor’s Ratings Group; and

####  

#### (g)           Investments,classified as Current Assets of the Borrower or any of its Subsidiaries, inmoney market investment programs registered under the Investment Company Act of1940, as amended, which are administered by financial institutions that havecapital of at least $500,000,000 and the portfolios of which are limited suchthat 95% of such Investments are of the character and quality described in clauses(a), (b), (c), (d), (e) and (f) ofthis definition, in each case with a maturity of not more than one year fromthe date of such Investment.

####  

“***CERCLA***” means the Comprehensive Environmental Response, Compensationand Liability Act of 1980.

 

“***CERCLIS***” means the Comprehensive EnvironmentalResponse, Compensation and Liability Information System maintained by the U.S.Environmental Protection Agency.

 

7

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“***CFC***” means a “controlled foreign corporation” underSection 957 of the Code.

 

“***CGMI***”means Citigroup Global Markets Inc.

 

“***Changeof Control***” means the earliest to occur of:

 

#### (a)           at any time prior to the consummationof a Qualifying IPO, and prior to the Holding Company Event, and for any reasonwhatsoever, (A) the Equity Investors do not have the right to designate (or donot so designate) a majority of the board of directors of the Borrower or(B)(1) the Equity Investors do not own of record or beneficially, directlyor indirectly, an amount of common stock of the Borrower equal to an amountmore than fifty percent (50%) of the amount of common stock of the Borrowerowned by the Equity Investors of record or beneficially, directly orindirectly, as of the Closing Date or (2) the Equity Investors do own thepercentage of common stock required by the foregoing subclause (1), butsuch ownership by the Equity Investors does not represent the largest singleblock of voting securities of the Borrower held by any Person or related groupfor purposes of Section 13(d) of the Securities and Exchange Act of 1934, asamended, or

####  

#### (b)           at any time prior to the consummationof a Qualifying IPO, and after the occurrence of the Holding Company Event, andfor any reason whatsoever, (A) the Equity Investors do not have the right todesignate (or do not so designate) a majority of the board of directors ofHoldings or (B)(1) the Equity Investors do not own of record orbeneficially, directly or indirectly, an amount of common stock of Holdingsequal to an amount more than fifty percent (50%) of the amount of common stockof Holdings owned by the Equity Investors of record or beneficially, directlyor indirectly, as of the date of the Holding Company Event or (2) the EquityInvestors do own the percentage of common stock required by the foregoing subclause(1), but such ownership by the Equity Investors does not represent thelargest single block of voting securities of Holdings held by any Person orrelated group for purposes of Section 13(d) of the Securities and Exchange Actof 1934, as amended or (C) the Borrower shall cease to be a wholly ownedSubsidiary of Holdings; or

####  

#### (c)           at any time after the consummation ofa Qualifying IPO, and for any reason whatsoever, (A) any “person” or “group”(as such terms are used in Sections 13(d) and 14(d) of the Securities ExchangeAct of 1934, as amended, but excluding any employee benefit plan of such personand its Subsidiaries, and any person or entity acting in its capacity astrustee, agent or other fiduciary or administrator of any such plan), excludingthe Equity Investors, shall become the “beneficial owner” (as defined in Rules13(d)-3 and 13(d)-5 under such Act), directly or indirectly, of more than thegreater of (x) thirty-five percent (35%) of the shares outstanding or (y)the percentage of the then outstanding voting stock of, in each case, theBorrower (or after the Holding Company Event, Holdings), owned beneficially bythe Equity Investors or (B) during any period of twelve (12) consecutivemonths, the board of directors of the Borrower (or after the Holding CompanyEvent, Holdings) shall not consist of a majority of the Continuing Directors;or

####  

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#### (d)           a “change of control” or anycomparable term under, and as defined in, the Senior Subordinated NotesDocuments or other Indebtedness of Holdings, the Borrower or any of theBorrower’s Subsidiaries with amounts outstanding in an aggregate principalamount of at least $15,000,000 shall have occurred.

####  

“***Citigroup***” means Citigroup Global Markets, Inc. and itssuccessors.

 

“***Closing Date***” means the first date all the conditionsprecedent in Section 4.01 are satisfied or waived in accordance with Section10.01.

 

“***Code***” means the U.S. Internal Revenue Code of 1986.

 

“***Collateral***” means all of the “*Collateral*”and “*Mortgaged Property*” referredto in the Collateral Documents and all of the other property and assets thatare or are intended under the terms of the Collateral Documents to be subjectto Liens in favor of the Administrative Agent for the benefit of the SecuredParties.

 

“***CollateralAgent***” has the meaning specified in Section 9.01(c).

 

“***Collateral Documents***” means, collectively, the SecurityAgreement, the Intellectual Property Security Agreement, the Mortgages, each ofthe mortgages, collateral assignments, Security Agreement Supplements, IPSecurity Agreement Supplements, security agreements, pledge agreements or othersimilar agreements delivered to the Administrative Agent and the Lenderspursuant to Section 6.11 and 6.15, and each of the otheragreements, instruments or documents that creates or purports to create a Lienin favor of the Administrative Agent for the benefit of the Secured Parties.

 

“***Commitment***” means a Term Commitment or a RevolvingCredit Commitment, as the context may require.

 

“***Committed Loan Notice***” means a notice of (a) a Term LoanBorrowing, (b) a Revolving Credit Borrowing, (c) a conversion of Loans from oneType to the other, or (d) a continuation of Eurodollar Rate Loans, pursuant to Section2.02(a), which, if in writing, shall be substantially in the form of ExhibitA.

 

“***Compensation Period***” has the meaning specified in Section2.12(c)(ii).

 

“***Compliance Certificate***” has the meaning specified in Section6.13(d).

 

“***Consolidated***”refers to the consolidation of accounts in accordance with GAAP.

 

“***ConsolidatedCash Interest Expense***” means, with respect to any Person for anyperiod, the interest expense paid or payable in cash on all Indebtedness ofsuch Person and its Subsidiaries (net of all interest income of such Person andits Subsidiaries) for such period, determined on a Consolidated basis and inaccordance with GAAP, including, without limitation, (a) in the case ofthe Borrower all fees paid or payable pursuant to Section 2.09(a),(b) the interest component of all obligations in respect of CapitalizedLeases, (c) commissions, discounts and other fees and charges paid or payablein connection with letters of credit (including, without

 

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limitation, the Letters of Credit) and (d) thenet payment, if any, paid or payable in connection with Swap Contractspertaining to interest payable in respect of Indebtedness for borrowed money *less* the net credit, if any, received inconnection with Swap Contracts, but excluding (A) any amortization oforiginal issue discount, (B) the interest portion of any deferred paymentobligation, (C) any other interest not payable in cash during such period,(D) fees and expenses associated with any Investment permitted under Section7.05, issuance of Equity Interests or issuance or incurrence ofIndebtedness permitted under Section 7.02 (whether or not consummated),as determined in accordance with GAAP, tothe extent the same are payable incash with respect to such period, (E) fees and expenses associatedwith the consummation of the Nu-Gro Transaction, (F) annual agency feespaid to the Administrative Agent and (G) costs associated with obtainingSwap Contracts.

 

“***ConsolidatedEBITDA***” means, with respect to any Person for any period,

 

#### (a)           the Consolidated Net Income of suchPerson and its Subsidiaries for such period (excluding, in each case,extraordinary gains and extraordinary losses) plus

####  

#### (b)           the sum of each ofthe following expenses that have been deducted from the determination of theConsolidated Net Income of such Person and its Subsidiaries for such period:

####  

###### (i)            all interestexpense of such Person and its Subsidiaries (net of (A) all interest income ofsuch Person and its Subsidiaries for such period and (B) solely to the extentotherwise excluded from the determination of the Consolidated interest expenseof such Person and its Subsidiaries for such period in accordance with GAAP,any unrealized gains or losses on any Swap Contracts pertaining to interestpayable in respect of Indebtedness for borrowed money of such Person and itsSubsidiaries resulting from the mark-to-market value thereof as of the last dayof such period),

######  

###### (ii)           all income,franchise or similar tax expense (whether federal, state, local, foreign orotherwise) of such Person and its Subsidiaries for such period,

######  

###### (iii)          all depreciationexpense of such Person and its Subsidiaries for such period,

######  

###### (iv)          all amortizationexpense of such Person and its Subsidiaries for such period,

######  

###### (v)           (A) all noncashlosses and noncash charges otherwise deducted from the determination of theConsolidated Net Income of such Person and its Subsidiaries for such period(other than any such noncash losses or noncash charges that require an accrualor reserve for cash charges or cash expenses paid or payable (or to be paid orpayable) at any time during such period and any write-downs or write-offs ofaccounts receivables) less (B) all noncash gains and noncash creditsotherwise added in the determination of the Consolidated Net Income of suchPerson and its Subsidiaries for such period, in each case

 

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###### determined ona Consolidated basis and in accordance with GAAP for such period,

######  

###### (vi)          cash expenses orcharges incurred in connection with or in contemplation of the Nu-GroTransaction or, to the extent permitted hereunder, any Investment permittedunder Section 7.05, issuance of Equity Interests or issuance orincurrence of Indebtedness permitted under Section 7.02 (in each case,whether or not consummated),

######  

###### (vii)         any losses (or minusany gains) realized upon the disposition of property outside of the ordinarycourse of business,

######  

###### (viii)        to the extentactually reimbursed, expenses incurred to the extent covered by indemnificationprovisions in any agreement in connection with a Permitted Acquisition,

######  

###### (ix)           to the extentcovered by insurance, expenses with respect to liability or casualty events,business interruption or product recalls,

######  

###### (x)            management feespermitted under Section 6.10,

######  

###### (xi)           fees and expenses(including any applicable premium) in connection with the exchange of theSenior Subordinated Notes for registered notes with identical terms ascontemplated by the Senior Subordinated Notes Documents or exchanges,redemptions or refinancings permitted by this Agreement,

######  

###### (xii)          with respect to anyPermitted Equity Issuance to the Equity Investors made to cure a prospectiveEvent of Default in respect of any covenant set forth in Section 6.14,the Net Cash Proceeds of such Permitted Equity Issuance solely to the extentthat such Net Cash Proceeds (A) are actually received by the Borrower(including through capital contribution of such Net Cash Proceeds by the EquityInvestors to the Borrower) no later than fifteen Business Days after thedelivery of a Notice of Intent to Cure, (B) have not been applied to make anypayment of the type described in Section 7.06 or any Investment or anyprepayment of Indebtedness (other than a prepayment of the Loans) and (C) donot exceed the aggregate amount necessary to cure such Event of Default under Section6.14 for any applicable period, provided that the provisions of thissubclause (b)(xii) may be relied on for purposes of determiningConsolidated EBITDA no more than two times in any twelve-month period, it beingunderstood that this subclause (b)(xii) may not be relied on forpurposes of calculating any financial ratios other than as applicable to Section6.14; and

######  

###### (xiii)         all non-recurringcash restructuring charges taken within 36 months after the Closing Date not toexceed $5,000,000 in the aggregate;

######  

provided,that to the extent the receipt of any Net Cash Proceeds of any Permitted EquityIssuance are an effective addition to Consolidated EBITDA as contemplated by,and in

 

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accordance with, the provisions of subclause(b)(xii) above and, as a result thereof, any Event of Default in respect ofthe covenants set forth in Section 6.14 shall have been cured for anyapplicable period, such cure shall be deemed to be effective as of the last dayof such applicable period; provided, further, that with respectto any Specified Transaction, for purposes of determining (1) compliance withthe covenants set forth in Section 6.14 (but excluding for purposes ofthe definition of “*Applicable Rate*”),Consolidated EBITDA shall be calculated on a Pro Forma Basis for such SpecifiedTransaction and (2) the calculation of the “Applicable Rate,” ConsolidatedEBITDA shall be calculated on a Pro Forma Basis for such Specified Transaction,but without giving effect to estimated cost savings reduction referred to inthe definition of “Pro Forma Basis,” in each case, subject to the adjustmentsset forth in Schedule 1.01(c).

 

“***ConsolidatedNet Income***” means, for any period, the net income (or net loss)of any Person and its Subsidiaries for such period, determined on aConsolidated basis and in accordance with GAAP, but excluding for each suchperiod (without duplication), the income (or loss) of any other Person (otherthan a Subsidiary of such Person) in which a Person other than such Person orany of its Subsidiaries owns or otherwise holds an Equity Interest, except tothe extent such income (or loss) shall have been received in the form of cashdividends or other distributions actually paid to such Person or any of itsSubsidiaries by such other Person during such period; *provided* that Consolidated Net Income forany such period shall not include (A) the cumulative effect of a change inaccounting principles during such period, (B) any net after-tax income or loss(less all fees and expenses or charges relating thereto) attributable to theearly extinguishment of Indebtedness, (C) any non-cash charges resulting frommark-to-market accounting relating to warrants and (D) any non-cash impairmentcharges resulting from the application of Statement of Financial AccountingStandards No. 142 – Goodwill and Other Intangibles and No. 144 – Accounting forthe Impairment or Disposal of Long-Lived Assets and the amortization ofintangibles including arising pursuant to Statement of Financial AccountingStandards No. 141 – Business Combinations.

 

“***ConstitutiveDocuments***” means, with respect to any Person, the certificate ofincorporation, formation or registration (including, if applicable, certificateof change of name), articles of incorporation or association, memorandum ofassociation, charter, bylaws, partnership agreement, trust agreement, limitedliability company operating or members agreement, joint venture agreement orone or more similar agreements, instruments or documents constituting theorganization or formation of such Person.

 

“***ContingentObligation***” means, with respect to any Person, withoutduplication, any obligation of such Person to guarantee or intended toguarantee any Indebtedness, leases, dividends or other obligations (“*primary obligations*”) of any other Person(the “*primary obligor*”) in anymanner, whether directly or indirectly, including, without limitation,(a) the direct or indirect guaranty, endorsement (other than for collectionor deposit in the ordinary course of business), co-making, discounting withrecourse or sale with recourse by such Person of the obligation of a primaryobligor, (b) the obligation to make take-or-pay or similar payments, ifrequired, regardless of nonperformance by any other party or parties to anagreement or (c) any obligation of such Person, whether or not contingent,(i) to purchase any such primary obligation or any property constitutingdirect or indirect security therefor, (ii) to advance or supply funds(A) for the purchase or payment of any such primary obligation or(B) to maintain working capital, equity capital, net worth or any otherbalance sheet condition or

 

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any income statement condition of the primary obligoror otherwise to maintain the solvency of the primary obligor, (iii) topurchase, lease or otherwise acquire property, assets, securities or servicesprimarily for the purpose of assuring the owner of any such primary obligationof the ability of the primary obligor to make payment of such primaryobligation or (iv) otherwise to assure or hold harmless the holder of suchprimary obligation against loss in respect thereof.  The amount of any Contingent Obligation shall be deemed to be anamount equal to the stated or determinable amount of the primary obligation inrespect of which such Contingent Obligation is made (or, if less, the maximumamount of such primary obligation for which such Person may be liable pursuantto the terms of the agreement, instrument or other document evidencing suchContingent Obligation) or, if not stated or determinable, the maximumreasonably anticipated liability in respect thereof, as determined by suchPerson in good faith.

 

“***Continuing Directors***” shall mean (a) in the case of theBorrower, the directors of the Borrower on the Closing Date, after givingeffect to the Nu-Gro Acquisition and the other transactions contemplatedhereby, and each other director, if, in each case, such other directors’nomination for election to the board of directors is recommended by a majorityof the then Continuing Directors or such other director receives the vote ofthe Equity Investors in his or her election by the stockholders of the Borrowerand (b) in the case of Holdings, upon and after the occurrence of the HoldingCompany Event, the directors of Holdings on the date of the occurrence of theHoldings Company Event and each other director, if, in each case, such otherdirectors’ nomination for election to the board of directors is recommended bya majority of the then Continuing Directors or such other director receives thevote of the Equity Investors in his or her election by the stockholders ofHoldings.

 

“***Control***” has the meaning specified in the definition of“Affiliate.”

 

“***Credit Extension***” means each of the following:  (a) a Borrowing and (b) an L/C CreditExtension.

 

“***CumulativeExcess Cash Flow***” means the sum of Excess Cash Flow for eachFiscal Year commencing with the Fiscal Year ended December 31, 2004 and endingwith the Borrower’s most recently ended Fiscal Year.

 

“***CurrentAssets***” means, with respect to any Person, all assets of suchPerson that, in accordance with GAAP, would be classified as current assets onthe balance sheet of a Person conducting a business the same as or similar tothat of such Person, after deducting appropriate and adequate reservestherefrom in accordance with GAAP.

 

“***CurrentLiabilities***” means, with respect to any Person, as of any dateof determination, (a) all Indebtedness of such Person that by its terms ispayable on demand or matures within one year after the date of determination(excluding any Indebtedness renewable or extendible, at the option of suchPerson, to a date more than one year from such date or arising under arevolving credit or similar agreement that obligates the lender or lenders toextend credit during a period of more than one year from suchdate), (b) all amounts of Funded Indebtedness of such Person requiredto be paid or prepaid within one year after such date and (c) all other items(including, without limitation, taxes accrued as estimated and trade payablesotherwise excluded from Indebtedness under clause (b) of thedefinition thereof set forth below in this

 

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Section 1.01)that, in accordance with GAAP, would be classified on the balance sheet of suchPerson as current liabilities of such Person, but excluding for all purposesthe Outstanding Amount of all Revolving Credit Loans, Swing Line Loans and L/CCredit Extensions.

 

“***Debtor Relief Laws***” means the Bankruptcy Code of theUnited States, and all other liquidation, conservatorship, bankruptcy, generalassignment for the benefit of creditors, moratorium, rearrangement,receivership, insolvency, reorganization, or similar debtor relief Laws of theUnited States or other applicable jurisdictions from time to time in effect andaffecting the rights of creditors generally.

 

“***Default***” means any event or condition that constitutesan Event of Default or that, with the giving of any notice, the passage oftime, or both, would be an Event of Default.

 

“***Default Rate***” means (a) when used with respect toObligations other than as set forth in clause (b) below, an interestrate equal to (i) the Base Rate plus (ii) the Applicable Rate, if any,applicable to Base Rate Loans plus (iii) 2.0% per annum; provided,however, that with respect to a Eurodollar Rate Loan or a Screen RateLoan, the Default Rate shall be an interest rate equal to the interest rate(including any Applicable Rate) otherwise applicable to such Loan plus 2.0% perannum and (b) when used with respect to Letter of Credit Fees, a rate equal tothe Applicable Rate plus 2% per annum, in all cases to the fullest extentpermitted by applicable Laws.

 

“***Defaulting Lender***” means any Lender that (a) has failedto fund any portion of the Term Loans, Revolving Credit Loans, participationsin L/C Obligations or participations in Swing Line Loans required to be fundedby it hereunder within one Business Day of the date required to be funded by ithereunder, (b) has otherwise failed to pay over to the Administrative Agent orany other Lender any other amount required to be paid by it hereunder withinone Business Day of the date when due, unless the subject of a good faithdispute, or (c) has been deemed insolvent or become the subject of a bankruptcyor insolvency proceeding.

 

“***Deferred Payment Obligation***” means the obligation of theL/C Issuer to make payment to a beneficiary arising under a Letter of Credit afixed number of calendar days after such beneficiary presents the documentscalled for in such Letter of Credit and with respect to which a draft is notdrawn by the beneficiary.

 

“***Disposition***” or “***Dispose***” means the sale, transfer, license, lease orother disposition (including any sale and leaseback transaction) of anyproperty by any Person, including any sale, assignment, transfer or otherdisposal, with or without recourse, of any notes or accounts receivable or anyrights and claims associated therewith (it being understood that theabandonment of any IP Right which abandonment is otherwise not prohibited bythe terms of the Loan Documents shall not be deemed a Disposition).

 

“***Documentation Agent***” means Citigroup Global Markets,Inc. in its capacity as documentation agent hereunder.

 

“***Dollar***” and “***$***” mean lawful money of the United States.

 

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“***DollarEquivalent***” means, on any date of determination, in relation toan amount denominated in a currency other than Dollars, the amount of Dollarswhich could be purchased with such amount at the Spot Rate on such date.

 

“***DollarTerm Borrowing***” means a borrowing consisting of simultaneousDollar Term Loans of the same Type and, in the case of Eurodollar Rate Loans,having the same Interest Period, made by the Dollar Term Lenders pursuant to Section2.01(a).

 

“***Dollar******Term Commitment***”means, as to each Dollar Term Lender, its obligation to make a Dollar Term Loanto the Borrower pursuant to Section 2.01(a) in a principal amount not toexceed the amount set forth opposite such Lender’s name on Schedule 2.01under the caption “Dollar Term Commitment” or in the Assignment and Assumptionpursuant to which such Lender becomes a party hereto, as applicable, as suchamount may be adjusted from time to time in accordance with this Agreement.

 

“***Dollar******Term Facility***”means, at any time, the aggregate Dollar Term Commitments or Dollar Term Loans,as applicable, of all Dollar Term Lenders at such time.

 

“***DollarTerm Lenders***” means each of the Term Lenders whose TermCommitment is denominated in Dollars, as set forth on Schedule 2.01hereto.

 

“***DollarTerm Loan***” has the meaning specified in Section 2.01(a).

 

“***Domestic Subsidiary***” means, at any time, each of thedirect and indirect Subsidiaries of the Borrower that is incorporated under thelaws of any state of the United States of America or the District of Columbia.

 

“***Eligible Assignee***” has the meaning specified in Section10.07(g).

 

“***Environmental Laws***” means any and all applicableFederal, state, local, and foreign statutes, laws, regulations, ordinances,rules, judgments, orders, decrees, permits, concessions, grants, licenses,agreements or governmental restrictions relating to pollution and theprotection of the environment or the release of any materials into theenvironment, including those related to hazardous substances or wastes, airemissions and discharges to waste or public systems.

 

“***Environmental Liability***” means any liability, contingentor otherwise (including any liability for damages, costs of environmentalremediation, fines, penalties or indemnities), of the Borrower, any other LoanParty or any of their respective Subsidiaries resulting from or based upon (a)violation of any Environmental Law, (b) the generation, use, handling,transportation, storage, treatment or disposal of any Hazardous Materials, (c)exposure to any Hazardous Materials, (d) the release or threatened release ofany Hazardous Materials into the environment or (e) any contract, agreement orother consensual arrangement pursuant to which liability is assumed or imposedwith respect to any of the foregoing; provided, however thatEnvironmental Liability shall not include the routine costs of complying withEnvironmental Laws and obtaining and complying with Environmental Permits thatare incurred in the ordinary course of business and for which financialreserves are not accrued and Capital Expenditures are not budgeted.

 

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“***Environmental Permit***” means any permit, approval,identification number, license or other authorization required under anyEnvironmental Law.

 

“***Equity Interests***” means, with respect to any Person, all ofthe shares of capital stock of (or other ownership or profit interests in) suchPerson, all of the warrants, options or other rights for the purchase oracquisition from such Person of shares of capital stock of (or other ownershipor profit interests in) such Person, all of the securities convertible into orexchangeable for shares of capital stock of (or other ownership or profitinterests in) such Person or warrants, rights or options for the purchase oracquisition from such Person of such shares (or such other interests), and allof the other ownership or profit interests in such Person (including, withoutlimitation, partnership, member or trust interests therein), whether voting ornonvoting, and whether or not such shares, warrants, options, rights or otherinterests are outstanding on any date of determination.

 

“***Equity Investors***” means, at any time, the Sponsor and theManagement Shareholders.

 

“***ERISA***” means the Employee Retirement Income Security Actof 1974.

 

“***ERISA Affiliate***” means any trade or business (whether ornot incorporated) under common control with the Borrower within the meaning ofSection 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code forpurposes of provisions relating to Section 412 of the Code).

 

“***ERISA Event***” means (a) a Reportable Event with respectto a Pension Plan; (b) a withdrawal by any of the Loan Parties or any ERISAAffiliate from a Pension Plan subject to Section 4063 of ERISA during a planyear in which it was a substantial employer (as defined inSection 4001(a)(2) of ERISA) or a cessation of operations that is treatedas such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partialwithdrawal by any of the Loan Parties or any ERISA Affiliate from aMultiemployer Plan or notification that a Multiemployer Plan is inreorganization; (d) the filing of a notice of intent to terminate, thetreatment of an amendment to a Pension Plan or to a Multiemployer Plan as atermination under Sections 4041 or 4041A of ERISA, or the commencement ofproceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e)an event or condition which constitutes grounds under Section 4042 of ERISA forthe termination of, or the appointment of a trustee to administer, any PensionPlan or Multiemployer Plan; or (f) the imposition of any liability under TitleIV of ERISA, other than for PBGC premiums due but not delinquent under Section4007 of ERISA, upon any of the Loan Parties or any ERISA Affiliate.

 

“***Eurodollar Rate***” means for any Interest Period withrespect to a Eurodollar Rate Loan, a rate per annum determined by the AdministrativeAgent pursuant to the following formula:

 
| Eurodollar Rate  = |                                       | LIBO Rate |   |
|-------------------------|--------------------------------------------|-----------|--------|
|                    | 1.00 — Eurodollar Reserve  Percentage |

 

Where,

 

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“***LIBO Rate***” means, for such Interest Period:

 

#### (a)           the rate per annumequal to the rate determined by the Administrative Agent to be the offered ratethat appears on the page of the Telerate screen (or any successor thereto) thatdisplays an average British Bankers Association Interest Settlement Rate fordeposits in Dollars (for delivery on the first day of such Interest Period)with a term equivalent to such Interest Period, determined as of approximately11:00 a.m. (London time) two Business Days prior to the first day of suchInterest Period, or

####  

#### (b)           if the ratereferenced in the preceding clause (a) does not appear on such page orservice or such page or service shall not be available, the rate per annumequal to the rate determined by the Administrative Agent to be the offered rateon such other page or other service that displays an average British BankersAssociation Interest Settlement Rate for deposits in Dollars (for delivery onthe first day of such Interest Period) with a term equivalent to such InterestPeriod, determined as of approximately 11:00 a.m. (London time) two BusinessDays prior to the first day of such Interest Period, or

####  

#### (c)           if the ratesreferenced in the preceding clauses (a) and (b) are notavailable, the rate per annum determined by the Administrative Agent as therate of interest at which deposits in Dollars for delivery on the first day ofsuch Interest Period in same day funds in the approximate amount of theEurodollar Rate Loan being made, continued or converted by Bank of America andwith a term equivalent to such Interest Period would be offered by Bank ofAmerica’s London Branch to major banks in the London interbank eurodollarmarket at their request at approximately 4:00 p.m. (London time) two BusinessDays prior to the first day of such Interest Period.

####  

“***Eurodollar Reserve Percentage***”means, for any day during any Interest Period, the reserve percentage(expressed as a decimal, carried out to five decimal places) in effect on suchday, whether or not applicable to any Lender, under regulations issued fromtime to time by the FRB for determining the maximum reserve requirement(including any emergency, supplemental or other marginal reserve requirement)with respect to Eurocurrency funding (currently referred to as “Eurocurrencyliabilities”).  The Eurodollar Rate foreach outstanding Eurodollar Rate Loan shall be adjusted automatically as of theeffective date of any change in the Eurodollar Reserve Percentage.

 

“***Eurodollar Rate Loan***” means a Loan that bears interestat a rate based on the Eurodollar Rate.

 

“***Event of Default***” has the meaning specified in Section8.01.

 

“***Excess Cash Flow***”means, with respect to any Fiscal Year of the Borrower and its Subsidiaries ona Consolidated basis, an amount equal to (a) Consolidated EBITDA minus(b) without duplication,

 

##### (i)            the aggregateamount of all Capital Expenditures made in cash by the Borrower and itsSubsidiaries during such period,

#####  

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##### (ii)           the aggregateamount of all Consolidated Cash Interest Expenses made by the Borrower and itsSubsidiaries during such period,

#####  

##### (iii)          theaggregate amount of all taxes, including cash payments for Federal, state andother income and franchise tax liabilities paid by the Borrower and itsSubsidiaries during such period,

#####  

##### (iv)          the aggregate amountof all Scheduled Principal Payments made by the Borrower and its Subsidiariesduring such period,

#####  

##### (v)           the aggregate amountof all Restricted Payments made in cash by the Borrower during such period tothe extent that such Restricted Payments are permitted to be made under Section 7.06,

#####  

##### (vi)          the aggregate amountof all (A) voluntary prepayments of any Indebtedness (other than theObligations) and (B) mandatory payments made pursuant to Section 2.05(b)(i),in each case, made in cash by the Borrower and its Subsidiaries during suchperiod; provided, that (1) such prepayments were not otherwiseprohibited hereunder and (2) in the case of clause (A), if suchIndebtedness consists of a revolving line of credit, the commitments under suchline of credit are permanently reduced by the amount of such prepayment,

#####  

##### (vii)         non-recurring cashcharges to the extent included in determining Consolidated EBITDA,

#####  

##### (viii)        management feespermitted to be paid pursuant to Section 6.10;

#####  

##### (ix)           proceeds receivedby or on behalf of the Borrower and its Subsidiaries from insurance claims withrespect to casualty events, business interruption or product recalls whichreimburse prior business expenses,

#####  

##### (x)            cash expenses orcharges incurred in connection with or in contemplation of the Nu-GroTransaction or, to the extent permitted hereunder, any Investment permittedunder Section 7.05, issuance of Equity Interests or issuance orincurrence of Indebtedness permitted by Section 7.02 (whether or notconsummated),

#####  

##### (xi)           fees and expenses(including any applicable premium) in connection with the exchange of theSenior Subordinated Notes for registered notes with identical terms ascontemplated by the Senior Subordinated Notes Documents or exchanges,redemptions or refinancings permitted by this Agreement,

#####  

##### (xii)          cash indemnitypayments received pursuant to indemnification provisions in any agreement inconnection with a Permitted Acquisition (or in any similar agreement related toany other acquisition consummated prior to the Closing Date),

#####  

##### (xiii)         expenses incurredin connection with deferred compensation arrangements in connection with theNu-Gro Transaction,

#####  

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##### (xiv)        cash from operationsused to consummate a Permitted Acquisition,

#####  

##### (xv)         to the extent added toConsolidated Net Income in determining Consolidated EBITDA, Net Cash Proceedsof Permitted Equity Issuances,

#####  

##### (xvi)        cash expendituresmade in respect of Swap Contracts during such period to the extent notreflected in the computation of Consolidated EBITDA or Consolidated CashInterest Expense,

#####  

##### (xvii)       to the extent notdeducted in the computation of Net Cash Proceeds in respect of any Dispositionor condemnation giving rise thereto, the amount of any mandatory prepayment ofIndebtedness (other than Indebtedness hereunder or under any other LoanDocument), together with any interest, premium or penalties required to be paid(and actually paid) in connection therewith,

#####  

##### (xviii)      Net Cash Proceedspending reinvestment in accordance with the provisions of Section 2.05(b),

#####  

##### (xix)         cash payments madein satisfaction of non-current liabilities, and

#####  

##### (xx)          theaggregate amount of all extraordinary cash charges made by the Borrower and itsSubsidiaries during such period,

#####  

plus(c) the aggregate amount of all extraordinary cash gains received by theBorrower and its Subsidiaries during such period plus/minus(d) changes in Working Capital.

 

“***ExchangeAct***” means the Securities Exchange Act of 1934, as amended fromtime to time, and the regulations promulgated and the rulings issuedthereunder.

 

“***Existing Credit Agreement***” has the meaning specified inthe preliminary statements to this Agreement.

 

“***Existing Letters of Credit***” means the Letters of CreditSpecified on Schedule 1.01(a).

 

“***Facility***” means the Term Facility, the RevolvingCredit Facility, the Swing Line Sublimit or the Letter of Credit Sublimit, asthe context may require.

 

“***FairMarket Value***” means, with respect to any property or assets(including, without limitation, any of the Equity Interests) of any Person onany date of determination, the value of the consideration obtainable in a saleof such property or asset in the open market on such date assuming anarm’s-length sale that has been arranged without duress or compulsion between awilling seller and a willing and knowledgeable purchaser in a commerciallyreasonable manner over a reasonable period of time under all conditionsnecessary or desirable for a fair sale (taking into account the nature andcharacteristics of such property or asset); provided that the FairMarket Value of any of the property or assets of any of the Loan Parties or anyof their respective Subsidiaries shall be determined in good faith by the boardof directors (or

 

19

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the persons performing similar functions) of such LoanParty or such Subsidiary, as the case may be.

 

“***Federal Funds Rate***” means, for any day, the rate perannum equal to the weighted average of the rates on overnight Federal fundstransactions with members of the Federal Reserve System arranged by Federalfunds brokers on such day, as published by the Federal Reserve Bank of New Yorkon the Business Day next succeeding such day; provided that (a) if suchday is not a Business Day, the Federal Funds Rate for such day shall be suchrate on such transactions on the next preceding Business Day as so published onthe next succeeding Business Day, and (b) if no such rate is so published onsuch next succeeding Business Day, the Federal Funds Rate for such day shall bethe average rate (rounded upward, if necessary, to a whole multiple of 1/100 of1%) charged to Bank of America on such day on such transactions as determinedby the Administrative Agent.

 

“***Fee Letter***” means the letter agreement, dated February29, 2004, among the Borrower, the Administrative Agent, BAS, Bank of America,CGMI and Citicorp North America, Inc.

 

“***FiscalQuarter***” means, with respect to Holdings, the Borrower or any oftheir respective Subsidiaries, the period commencing January 1 in anyFiscal Year and ending on or about the next succeeding March 31, the periodcommencing on or about April 1 in any Fiscal Year and ending on or aboutthe next succeeding June 30, the period commencing on or about July 1 inany Fiscal Year and ending on or about the next succeeding September 30 or theperiod commencing on or about October 1 (such period, in each case,determined in a manner consistent with prior practice) in any Fiscal Year andending on the next succeeding December 31, as the context may require, or,if any such Subsidiary was not in existence on the first day of any suchperiod, the period commencing on the date on which such Subsidiary isincorporated, organized, formed or otherwise created and ending on the last dayof such period.

 

“***FiscalYear***” means, with respect to Borrower or any of itsSubsidiaries, the period commencing on January 1 in any calendar year andending on the next succeeding December 31 or, if any such Subsidiary was not inexistence on January 1 in any calendar year, the period commencing on thedate on which such Subsidiary is incorporated, organized, formed or otherwisecreated and ending on the next succeeding December 31; provided thatwith respect to Nu-Gro and its Subsidiaries, for any period occurring prior tothe Closing Date, “Fiscal Year” shall mean each period commencing on October 1in any calendar year and ending on the next succeeding September 30.

 

“***ForeignCorporation***” means each Foreign Subsidiary that constitutes a “*controlled foreign corporation”* underSection 957 of the Internal Revenue Code.

 

“***Foreign Lender***” has the meaning specified in Section10.15(a)(i).

 

“***ForeignSubsidiary***” means, at any time, each of the direct or indirectSubsidiaries of the Borrower that is not a Domestic Subsidiary at such time.

 

“***FRB***” means the Board of Governors of the Federal ReserveSystem of the United States.

 

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“***Fund***” has the meaning specified in Section 10.07(g).

 

“***FundedIndebtedness***” means, with respect to any Person (a) Indebtednessin respect of the Credit Extensions, in the case of the Borrower, and (b) allother Indebtedness of the types described in clauses (a), (c), (e) and (i)of the definition of “Indebtedness” of such Person that by its terms maturesmore than one year after the date of its creation or matures within one yearfrom such date but is renewable or extendible, at the option of such Person, toa date more than one year after such date or arises under a revolving credit orsimilar agreement that obligates the lender or lenders to extend credit duringa period of more than one year after such date.

 

“***GAAP***”means generally accepted accounting principles in effect from time to time inthe United States of America and applied on a consistent basis or CanadianGAAP, as the context may require or as otherwise applicable, subject,**however, to the terms of Section1.03.

 

“***GovernmentalAuthority***” means any nation or government, any state, province,city, municipal entity or other political subdivision thereof, and any governmental,executive, legislative, judicial, administrative or regulatory agency,department, authority, instrumentality, commission, board or similar body,whether federal, state, territorial, local or foreign.

 

“***GovernmentalAuthorization***” means any authorization, approval, consent,franchise, license, covenant, order, ruling, permit, certification, exemption,notice, declaration or similar right, undertaking or other action of, to or by,or any filing, qualification or registration with, any Governmental Authority.

 

“***Granting Lender***” has the meaning specified in Section10.07(h).

 

“***GuaranteeSupplement***” has the meaning specified in Section 8(b) ofthe Guaranty.

 

“***Guarantee***” means, as to any Person, (a) any obligation,contingent or otherwise, of such Person guaranteeing or having the economiceffect of guaranteeing any Indebtedness or other obligation payable orperformable by another Person (the “***primary obligor***”) in any manner, whether directly orindirectly, and including any obligation of such Person, direct or indirect,(i) to purchase or pay (or advance or supply funds for the purchase or paymentof) such Indebtedness or other obligation, (ii) to purchase or lease property,securities or services for the purpose of assuring the obligee in respect ofsuch Indebtedness or other obligation of the payment or performance of suchIndebtedness or other obligation, (iii) to maintain working capital, equitycapital or any other financial statement condition or liquidity or level ofincome or cash flow of the primary obligor so as to enable the primary obligorto pay such Indebtedness or other obligation, or (iv) entered into for thepurpose of assuring in any other manner the obligee in respect of suchIndebtedness or other obligation of the payment or performance thereof or toprotect such obligee against loss in respect thereof (in whole or in part), or(b) any Lien on any assets of such Person securing any Indebtedness or otherobligation of any other Person, whether or not such Indebtedness or otherobligation is assumed by such Person (or any right, contingent or otherwise, ofany holder of such Indebtedness to obtain any such Lien).  The amount of any Guarantee shall be deemedto be an amount equal to the stated or determinable amount of the

 

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related primary obligation, or portion thereof, inrespect of which such Guarantee is made or, if not stated or determinable, themaximum reasonably anticipated liability in respect thereof as determined bythe guaranteeing Person in good faith. The term “***Guarantee***”as a verb has a corresponding meaning.

 

“***Guarantors***” means, collectively, (i) the DomesticSubsidiaries of the Borrower listed on Schedule 5.02, (ii) each otherSubsidiary of Holdings or the Borrower, as the case may be, that shall berequired to execute and deliver a Guaranty or Guarantee Supplement pursuant to Section6.11 and (iii) upon delivery of the Holdings Joinder Agreement and Guarantypursuant to Section 6.15, Holdings.

 

“***Guaranty***” means, collectively, (i) each SubsidiaryGuaranty made by the Guarantors in favor of the Administrative Agent on behalfof the Lenders in each case, substantially in the form of Exhibit F,(ii) each other Guaranty and Guarantee Supplement delivered pursuant to Section 6.11and (iii) the Holdings Joinder Agreement and Guaranty.

 

“***Hazardous Materials***” means all explosive or radioactivesubstances or wastes and all toxic substances, wastes or other pollutantsregulated or characterized as “hazardous” or “toxic” pursuant to EnvironmentalLaw or which would form the basis for liability under Environmental Law due totheir toxicity, including petroleum or petroleum distillates, asbestos orasbestos-containing materials, polychlorinated biphenyls and all othersubstances or wastes of any nature regulated pursuant to any Environmental Law.

 

“***Hedge Bank***” means any Person that is a Lender or anAffiliate of a Lender, in its capacity as a party to a Secured Hedge Agreement.

 

“***Holding Company Event***” means the transactions occurring onor after the Closing Date pursuant to which Holdings becomes the direct parentcompany of the Borrower.

 

“***Holdings***“ means a corporation or limited liabilitycompany organized under the laws of a jurisdiction located within the UnitedStates that directly owns 100% of the Equity Interests in the Borrower.

 

“***HoldingsJoinder Agreement and Guaranty***” has the meaning specified in Section 6.15.

 

“***HoldingsTotal Leverage Ratio***” means, at any date of determination, theratio of (a) (i) all Funded Indebtedness of Holdings and its Subsidiaries(other than the aggregate principal amount of all Revolving Credit Loans, SwingLine Loans and L/C Advances outstanding on such date) outstanding on such date plus(ii) the average daily aggregate principal amount of all Revolving CreditLoans, Swing Line Loans and L/C Advances outstanding on the last day of eachmonth during the most recently completed Measurement Period divided by 12 less(iii) the aggregate amount of all cash on the Consolidated balance sheet ofHoldings on the last day of each month during the most recent MeasurementPeriod divided by 12 to (b) Consolidated EBITDA of Holdings and itsSubsidiaries for the period of the four prior Fiscal Quarters ending on suchdate.

 

“***Honor Date***” has the meaning specified in Section2.03(c)(i).

 

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“***IncreaseEffective Date***” has the meaning specified in Section 2.14(b).

 

“***Indebtedness***”means, with respect to any Person (without duplication):

 

#### (a)           all indebtedness ofsuch Person for borrowed money;

####  

#### (b)           all obligations ofsuch Person for the deferred purchase price of property and assets or services(other than trade payables or other accounts payable incurred in the ordinarycourse of such Person’s business and not past due, by their respective terms,for more than 90 days);

####  

#### (c)           all obligations ofsuch Person evidenced by notes, bonds, debentures or other similar instruments;

####  

#### (d)           all obligations ofsuch Person created or arising under any conditional sale or other titleretention agreement with respect to property or assets acquired by such Person(even though the rights and remedies of the seller or the lender under suchagreement in the event of default are limited to repossession or sale of suchproperty or assets);

####  

#### (e)           all obligations ofsuch Person as lessee under Capitalized Leases;

####  

#### (f)            all obligations,contingent or otherwise, of such Person under acceptance, letter of credit orsimilar facilities;

####  

#### (g)           all obligations ofsuch Person to purchase, redeem, retire, defease or otherwise make any paymentin respect of any Redeemable Equity Interests in such Person or any otherPerson, valued, in the case of Redeemable Preferred Interests, at the greaterof its voluntary or involuntary liquidation preference plus accrued andunpaid dividends;

####  

#### (h)           all obligations,contingent or otherwise, of such Person in respect of Swap Contracts, in eachcase valued at the Agreement Value thereof;

####  

#### (i)            all obligations ofsuch Person under any synthetic lease, tax retention operating lease,off-balance sheet loan or similar off-balance sheet financing, if thetransaction giving rise to such obligation is considered indebtedness forborrowed money for tax purposes but is classified as an operating lease inaccordance with GAAP;

####  

#### (j)            all ContingentObligations of such Person in respect of obligations of a type described in clauses(a) through (i) above; and

####  

#### (k)           all Indebtednessreferred to in clauses (a) through (j) above secured by (orfor which the holder of such Indebtedness has an existing right, contingent orotherwise, to be secured by) any Lien on property or assets (including, withoutlimitation, accounts and contract rights) owned by such Person, even thoughsuch Person has not assumed or become liable for the payment of suchIndebtedness, valued at the lesser of (i) the aggregate unpaid amount of suchIndebtedness or, if not stated or determinable, the

####  

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#### maximumreasonably anticipated liability in respect thereof and (ii) the Fair MarketValue of such property or assets.

####  

The Indebtednessof any Person shall include all Obligations of the types described in clauses(a) through (k) above of any partnership in which such Person is ageneral partner or joint venture (other than a joint venture that is itself acorporation or limited liability company) of which such Person is a jointventurer, unless such Indebtedness is expressly made non-recourse to suchPerson.

 

“***Indemnified Liabilities***” has the meaning specified in Section10.05.

 

“***Indemnitees***” has the meaning specified in Section10.05.

 

“***Information***” has the meaning specified in Section10.08.

 

“***Information Memorandum***” means the information memorandumdated March, 2004 used by the Arrangers in connection with the syndicationof the Commitments.

 

“***Intellectual Property Security Agreement***” has themeaning specified in Section 4.01(a)(v).

 

“***InterestCoverage Ratio***” means, for any Measurement Period, the ratio of(a) Consolidated EBITDA of the Borrower and its Subsidiaries for the period ofthe four prior Fiscal Quarters ending on such date to (b) ConsolidatedCash Interest Expense of the Borrower and its Subsidiaries for such period; providedthat, solely for the purposes of determining the Interest Coverage Ratio forthe first three Measurement Periods ending after the Closing Date, theConsolidated Cash Interest Expense of the Borrower and its Subsidiaries forsuch Measurement Period shall be equal to (A) the Consolidated Cash InterestExpense for the completed Fiscal Quarters since the Closing Date multipliedby (B) a fraction the numerator of which is four and thedenominator of which is equal to the number of completed Fiscal Quarters sincethe Closing Date, subject in each case to the adjustments set forth on Schedule1.01(c).

 

“***Interest Payment Date***” means, (a) as to any Loan otherthan a Base Rate Loan, the last day of each Interest Period applicable to suchLoan and the Maturity Date of the Facility under which such Loan was made; provided,however, that if any Interest Period for a Eurodollar Rate Loan orScreen Rate Loan exceeds three months, the respective dates that fall everythree months after the beginning of such Interest Period shall also be InterestPayment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan),the last Business Day of each March, June, September and December and theMaturity Date of the Facility under which such Loan was made.

 

“***Interest Period***” means, as to each Eurodollar Rate Loanand Screen Rate Loan, the period commencing on the date such Loan is disbursedor converted to or continued as a Eurodollar Rate Loan or Screen Rate Loan andending on the date one, two, three or six months thereafter, as selected by theBorrower in its Committed Loan Notice, or to the extent available to allapplicable Lenders, nine or twelve months thereafter; provided that:

 

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##### (i)            any Interest Periodthat would otherwise end on a day that is not a Business Day shall be extendedto the next succeeding Business Day unless such Business Day falls in anothercalendar month, in which case such Interest Period shall end on the nextpreceding Business Day;

#####  

##### (ii)           any Interest Periodthat begins on the last Business Day of a calendar month (or on a day for whichthere is no numerically corresponding day in the calendar month at the end ofsuch Interest Period) shall end on the last Business Day of the calendar monthat the end of such Interest Period; and

#####  

##### (iii)          no Interest Periodshall extend beyond the Maturity Date of the Facility under which such Loan wasmade.

#####  

“***Investment***”means, with respect to any Person, (a) any direct or indirect purchase orother acquisition (whether for cash, securities, property, services orotherwise) by such Person of, or of a beneficial interest in, any EquityInterests or Indebtedness of any other Person, (b) any direct or indirectpurchase or other acquisition (whether for cash, securities, property, servicesor otherwise) by such Person of all or substantially all of the property andassets of any other Person or of any division, branch or other unit ofoperation of any other Person and (c) the making of any direct or indirectloan, advance, other extension of credit or capital contribution by such Personto, or any other investment by such Person in, any other Person (including,without limitation, any arrangement pursuant to which the investor incursIndebtedness of the types referred to in clause (j) or (k)of the definition of “*Indebtedness*”set forth above in this Section 1.01 in respect of such otherPerson).  The amount of any Investmentshall be the original cost of such Investment plus the cost of alladditions thereto, without any adjustments for increases or decreases in value,or write-ups, write-downs or write-offs with respect to such Investment.

 

“***IP Rights***” has the meaning specified in Section5.11.

 

“***IP Security Agreement Supplement***” has the meaning specified in Section1 of the Security Agreement.

 

“***IRS***” means the United States Internal Revenue Service.

 

“***ISDA Master Agreement***” means the Master Agreement(Multicurrency-Cross Border) published by the International Swap andDerivatives Association, Inc., as in effect from time to time.

 

“***ISP***”means, with respect to any Letter of Credit, the “International StandbyPractices 1998” published by the Institute of International Banking Law &Practice (or such later version thereof as may be in effect at the time ofissuance).

 

“***IssuerDocuments***” means with respect to any Letter of Credit, theLetter of Credit Application, and any other document, agreement and instrumententered into by the L/C Issuer and the Borrower (or any of its Subsidiaries) orin favor the L/C Issuer and relating to any such Letter of Credit.

 

25

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“***JudgmentCurrency***” has the meaning specified in Section 10.20.

 

“***Laws***” means, collectively, all applicable international,foreign, Federal, state and local statutes, treaties, rules, guidelines,regulations, ordinances, codes and administrative or judicial precedents orauthorities, including the interpretation or administration thereof by anyGovernmental Authority charged with the enforcement, interpretation oradministration thereof, and all applicable administrative orders, directedduties, licenses, authorizations and permits of, and settlement agreementswith, any Governmental Authority, in each case whether or not having the forceof law.

 

“***L/C Advance***” means, with respect to each RevolvingCredit Lender, such Lender’s funding of its participation in any L/C Borrowingin accordance with its Pro Rata Share.

 

“***L/C Borrowing***” means an extension of credit resultingfrom a drawing under any Letter of Credit which has not been reimbursed asprovided in Section 2.03(c) or refinanced as a Revolving CreditBorrowing.

 

“***L/C Cash Collateral Account***”means a blocked,non-interest bearing deposit account at Bank of America in the name of theCollateral Agent and under the sole dominion and control of the CollateralAgent, and otherwise established in a manner satisfactory to the AdministrativeAgent.

 

“***L/C Credit Extension***” means, with respect to any Letterof Credit, the issuance thereof or extension of the expiry date thereof, or therenewal or increase of the amount thereof.

 

“***L/C Issuer***” means Bank of America in its capacity asissuer of Letters of Credit hereunder, or any successor issuer of Letters ofCredit hereunder.

 

“***L/C Obligations***” means, as at any date of determination,the aggregate undrawn amount of all outstanding Letters of Credit plusthe aggregate of all Unreimbursed Amounts, including all L/C Borrowings plus,without duplication, the aggregate amount of all Acceptances and DeferredPayment Obligations.

 

“***Lender***” has the meaning specified in the introductoryparagraph hereto and, as the context requires, includes the L/C Issuer and theSwing Line Lender.

 

“***Lending Office***” means, as to any Lender, the office oroffices of such Lender described as such in such Lender’s AdministrativeQuestionnaire, or such other office or offices as a Lender may from time totime notify the Borrower and the Administrative Agent.

 

“***Letter of Credit***” means any letter of credit issuedhereunder and shall include the Existing Letters of Credit.  A Letter of Credit may be a commercialletter of credit or a standby letter of credit.

 

“***Letter of Credit Application***” means an application andagreement for the issuance or amendment of a Letter of Credit in the form fromtime to time in use by the L/C Issuer.

 

26

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“***Letter of Credit Expiration Date***” means the day that isseven days prior to the Maturity Date then in effect for the Revolving CreditFacility (or, if such day is not a Business Day, the next preceding BusinessDay).

 

“***Letterof Credit Fee***” has the meaning specified in Section 2.03(i).

 

“***Letter of Credit Sublimit***” means an amount equal to$20,000,000.  The Letter of CreditSublimit is part of, and not in addition to, the Revolving Credit Facility.

 

“***LIBO Rate***” has the meaning set forth in the definitionof Eurodollar Rate.

 

“***Lien***” means any mortgage, pledge, hypothecation,assignment, deposit arrangement, encumbrance, lien (statutory or other),charge, or preference, priority or other security interest or preferentialarrangement in the nature of a security interest of any kind or naturewhatsoever (including any conditional sale or other title retention agreement,any easement, right of way or other encumbrance on title to real property, andany financing lease having substantially the same economic effect as any of theforegoing).

 

“***Loan***” means an extension of credit by a Lender to theBorrower under Article II in the form of a Term Loan, a Revolving CreditLoan or a Swing Line Loan.

 

“***Loan Documents***” means, collectively, (a) for purposes ofthis Agreement and the Notes and any amendment, supplement or othermodification hereof or thereof and for all other purposes other than forpurposes of the Guaranty and the Collateral Documents, (i) this Agreement,(ii) the Notes, (iii) the Guaranty, (iv) the Collateral Documents, (v) the FeeLetter and (vi) each Issuer Document and (b) for purposes of the Guaranty andthe Collateral Documents, (i) this Agreement, (ii) the Notes, (iii) theGuaranty, (iv) the Collateral Documents, (v) each Issuer Document, (vi) the FeeLetter and (vii) each Secured Hedge Agreement.

 

“***Loan Parties***” means, collectively, the Borrower and eachGuarantor.

 

“***ManagementShareholders***” means Robert Caulk, Daniel Johnston, StevenSchultz and David Jones.

 

“***Master Agreement***” has the meaning specified in thedefinition of “*Swap Contract*.”

 

“***MaterialAdverse Effect***” means a material adverse effect on (a) thebusiness, condition (financial or otherwise), operations, liabilities (actualor contingent), or properties of the Borrower and its Subsidiaries, taken as awhole, (b) the rights and remedies of the Administrative Agent or theLenders under any of the Loan Documents or (c) the ability of any of theLoan Parties to perform its Obligations under any of the Loan Documents towhich it is or is to be a party.

 

“***Maturity Date***” means (a) with respect to the RevolvingCredit Facility, the earliest of (i) April 30, 2010, (ii) the date oftermination in whole of the Revolving Credit Commitments pursuant to Section 2.06or 8.01, and (iii) the Alternate Date and (b) with respect

 

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to the Term Facility, the earlier of (i)April 30, 2011, (ii) the date of termination in whole of the TermCommitments pursuant to Section 2.06 or 8.01 and(iii) the Alternate Date.

 

“***Maximum Rate***” has the meaning specified in Section 10.10.

 

“***MeasurementPeriod***” means, at any date of determination, the most recentlycompleted four consecutive Fiscal Quarters on or immediately prior to suchdate.

 

“***Mortgages***” has the meaning specified in Section 4.01(a)(iv).

 

“***Multiemployer Plan***” means any employee benefit plan ofthe type described in Section 4001(a)(3) of ERISA, to which any of theLoan Parties or any ERISA Affiliate makes or is obligated to makecontributions, or during the preceding five plan years, has made or beenobligated to make contributions.

 

“***NetCash Proceeds***” means, with respect to any Disposition of anyproperty or assets, or the incurrence or issuance of any Indebtedness, or thesale or issuance of any Equity Interests in any Person, or any condemnation orcasualty insurance proceeds received by or paid to or for the account of anyPerson, as the case may be, the aggregate amount of cash received from time totime (whether as initial consideration or through payment or disposition ofdeferred consideration, but only as and when received) by or on behalf of suchPerson for its own account in connection with any such transaction, afterdeducting therefrom only:

 

#### (a)           reasonable brokeragecommissions, underwriting fees and discounts, legal fees, finder’s fees andother similar fees, costs and commissions and reasonable out-of-pocket expensesincurred in connection therewith;

####  

#### (b)           the amount of taxespayable in connection with or as a result of such transaction (including incometaxes reasonably estimated to be actually payable within two (2) years of thedate of such transaction as a result of any gain recognized in connectiontherewith);

####  

#### (c)           in the case of anyDisposition of any property or asset (including any casualty or condemnation ofsuch asset), the outstanding principal amount of, the premium or penalty, ifany, on, and any accrued and unpaid interest on, any Indebtedness (other thanIndebtedness under or in respect of the Loan Documents) that is secured by aLien on the property and assets subject to such Disposition and is repaid as aresult of Disposition; and

####  

#### (d)           in the case of theDisposition of any property and assets (including any casualty or condemnationof such asset) of the Borrower or any of its Subsidiaries , any reserve foradjustment in respect of (x) the sale price of such asset or assets establishedin accordance with GAAP and (y) any liabilities associated with such asset orassets and retained by Holdings, the Borrower or any of their respectiveSubsidiaries after such sale or other disposition thereof, including, withoutlimitation, pension and other post-employment benefit liabilities andliabilities related to environmental matters or against any indemnificationobligations associated with such transaction;

####  

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in each case tothe extent, but only to the extent, that the amounts so deducted are properlyattributable to such transaction or to the property or asset that is thesubject thereof and (i) in the case of clauses (a) and (c) ofthis definition, are actually paid at the time of receipt of such cash orwithin 60 days thereafter to a Person that is not a Loan Party or Subsidiary ofa Loan Party, (ii) in the case of clause (b) of this definition, areactually paid at the time of receipt of such cash or within 60 days thereafterto a Person that is not a Loan Party or Subsidiary of a Loan Party or, so longas such Person is not otherwise indemnified therefor, are reserved for inaccordance with GAAP, as in effect at the time of receipt of such cash (basedupon such Person’s reasonable estimate of such taxes), and paid to theapplicable taxation authority or other Governmental Authority on or before whendue and (iii) in the case of clause (d) of this definition, are actuallypaid to the purchaser of the related property and assets within the periodspecified for payment thereof in the applicable purchase agreement to a Personthat is not a Loan Party or Subsidiary of a Loan Party; provided,**however, that if, at the time anysuch taxes or post-closing purchase price adjustments are actually paid orotherwise satisfied, the reserve therefor or the amount otherwise retained bysuch Person or its applicable Subsidiary for the payment thereof exceeds theamount paid or otherwise satisfied, then the amount of such excess reserve orretained amount, as the case may be, shall constitute “*Net Cash Proceeds*” on and as of the dateof such payment or other satisfaction for all purposes of this Agreement and,to the extent required under Sections 2.05(b) and 2.06(b), theBorrower shall reduce the Commitments on such date in accordance with the termsof Section 2.06(b), and shall prepay the Loans and cash collateralizethe Letters of Credit outstanding on such date in accordance with the terms of Section2.05(b), in an amount equal to the amount of such excess reserve orretained amount.

 

“***Nonextension Notice Date***” has the meaning specified in Section2.03(b)(iii).

 

“***Note***” means a Term Note or a Revolving Credit Note, asthe context may require.

 

“***Noticeof Intent to Cure***” has the meaning specified in Section6.13(d)(ii).

 

“***NPL***” means the National Priorities List under CERCLA.

 

“***Nu-Gro***”has the meaning specified in the preliminary statements to this Agreement.

 

“***Nu-GroAcquisition***” has the meaning specified in the preliminarystatements to this Agreement.

 

“***Nu-GroAcquisition Documents***” means, collectively, the ArrangementAgreement and  Shareholders Agreement.

 

“***Nu-GroMaterial Adverse Effect***” means (a) any adverse effect of$1,000,000 or more on the business, operations (including results ofoperations), assets, properties, capital or condition (financial or otherwise)of Nu-Gro and its Subsidiaries, taken as a whole (other than any effect of (i)developments in the industries in which Nu-Gro carries on business which do nothave a disproportionate impact on Nu-Gro or its Subsidiaries and (ii) changesin the price of the Nu-Gro Common Shares (as defined in the ArrangementAgreement) in response to the

 

29

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announcement of the Nu-Gro Acquisition) or (b) anyadverse effect on the rights and remedies of the Administrative Agent or theLenders under the Loan Documents.

 

“***Nu-Gro******Transaction***”means, collectively, the Nu-Gro Acquisition, the U.S. Reorganization, thePreferred Stock Redemption, the entering into and funding of the Facilities andall related transactions.

 

“***Obligations***” means all advances to, and debts,liabilities, obligations, covenants and duties of, any Loan Party arising underany Loan Document or otherwise with respect to any Loan or Letter of Credit,whether direct or indirect (including those acquired by assumption), absoluteor contingent, due or to become due, now existing or hereafter arising andincluding interest and fees that accrue after the commencement by or againstany Loan Party of any proceeding under any Debtor Relief Laws naming suchPerson as the debtor in such proceeding, regardless of whether such interestand fees are allowed claims in such proceeding. Without limiting the generalityof the foregoing, the Obligations of the Loan Parties under the Loan Documentsinclude (a) the obligation to pay principal, interest, Letter of Creditcommissions, charges, expenses, fees, Attorney Costs, indemnities and otheramounts payable by any Loan Party under any Loan Document and (b) theobligation of any Loan Party to reimburse any amount in respect of any of theforegoing that the Administrative Agent, in its sole discretion, may elect topay or advance on behalf of such Loan Party upon the failure of such Loan Partyto pay such amount.

 

“***Open Year”*** means,with respect to any Person, any year for which United States federal income taxreturns have been filed by or on behalf of such Person and for which theexpiration of the applicable statute of limitations for assessment,reassessment or collection has not occurred (whether by reason of extension orotherwise).

 

“***Operating Lease”***means, with respect to any Person, any lease (including, without limitation,leases that may be terminated by the lessee at any time) of any property(whether real, personal or mixed) that is not a Capitalized Lease or a leaseunder which such Person is the lessor.

 

“***Other Taxes***” has the meaning specified in Section3.01(b).

 

“***Outstanding Amount***” means (i) with respect to TermLoans, Revolving Credit Loans and Swing Line Loans on any date, the aggregateoutstanding principal amount thereof after giving effect to any borrowings andprepayments or repayments of Term Loans, Revolving Credit Loans and Swing LineLoans, as the case may be, occurring on such date; and (ii) with respect to anyL/C Obligations on any date, the amount of such L/C Obligations on such dateafter giving effect to any L/C Credit Extension occurring on such date and anyother changes in the aggregate amount of the L/C Obligations as of such date,including as a result of any reimbursements of outstanding unpaid drawingsunder any Letters of Credit or any reductions in the maximum amount availablefor drawing under Letters of Credit taking effect on such date.

 

“***Parent***” means a corporation or limited liability companyorganized under the laws of a jurisdiction located within the United Statesthat, upon consummation of the Holding Company Event, directly owns 100% of theEquity Interests of Holdings.

 

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“***Participant***” has the meaning specified in Section10.07(d).

 

“***PBGC***” means the Pension Benefit Guaranty Corporation.

 

“***Pension Plan***” means any “employee pension benefit plan”(as such term is defined in Section 3(2) of ERISA), other than a MultiemployerPlan, that is subject to Title IV of ERISA and is sponsored or maintained byany of the Loan Parties or any ERISA Affiliate or to which any of the LoanParties or any ERISA Affiliate contributes or has an obligation to contribute,or in the case of a multiple employer or other plan described in Section4064(a) of ERISA, has made contributions at any time during the immediatelypreceding five plan years.

 

“***PermittedAcquisition***” has the meaning specified in Section 7.05(h).

 

“***PermittedAffiliate Investment***” means (a) any capital contributions to theBorrower (or upon consummation of the Holding Company Event, Holdings) madedirectly or indirectly by one or more of the Equity Investors (and, uponconsummation of the Holding Company Event, contributed by Holdings to theBorrower) or (b) the Net Cash Proceeds received by the Borrower or Holdings, asthe case may be, from the issuance and sale of Equity Interests to one or moreof the Equity Investors (and, upon consummation of the Holding Company Event,contributed by Holdings to the Borrower); provided that on the date onwhich any such Permitted Affiliate Investment is made, the Borrower shalldeliver to the Administrative Agent, on behalf of the Lenders, a certificate ofa Responsible Officer of the Borrower certifying that such capitalcontributions or the Net Cash Proceeds received by the Borrower from suchissuance and sale are intended to constitute, and are to be used for, one ormore Investments to be made in accordance with the terms of Section 7.05(h),or one or more Restricted Payments to be made in accordance with the terms of Section7.06.

 

“***PermittedEquity Issuance***” means any sale or issuance of any EquityInterests (other than Redeemable Equity Interests) of Holdings to the extent(a) Holdings contributes the Net Cash Proceeds thereof to the Borrower and (b)such Net Cash Proceeds are not required to be applied to the prepayment of theLoans pursuant to Section 2.05(b).

 

“***PermittedHoldco Debt***” has the meaning specified in Section 7.02(c)(ii).

 

“***PermittedLiens***” means the following types of Liens (excluding any suchLien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal RevenueCode or by ERISA or any such Lien relating to or imposed in connection with anyEnvironmental Action):

 

#### (a)           Liens for taxes,assessments and governmental charges or levies to the extent not otherwiserequired to be paid under Section 6.02;

####  

#### (b)           Liens imposed bylaw, such as materialmen’s, mechanics’, carriers’, workmen’s, storage and repairmen’sLiens and other similar Liens arising in the ordinary course of business andsecuring obligations (other than Indebtedness for borrowed money) to the extentnot otherwise required to be paid under Section 6.02;

####  

#### (c)           Liens incurred orpledges or deposits made to secure obligations incurred in the ordinary courseof business under workers’ compensation laws, unemployment

####  

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#### insurance orother similar social security legislation (other than in respect of employeebenefit plans subject to ERISA) or to secure public or statutory obligations;

####  

#### (d)           Liens securing theperformance of, or payment in respect of, bids, insurance premiums, deductiblesor co-insured amounts, tenders, government or utility contracts (other than forthe repayment of borrowed money), surety, stay, customs and appeal bonds andother obligations of a similar nature incurred in the ordinary course ofbusiness;

####  

#### (e)           any interest ortitle of a lessor or sublessor or a licensor and any restriction or encumbranceto which the interest or title of such lessor, sublessor or licensor may besubject that is incurred in the ordinary course of business;

####  

#### (f)            Liens arising outof judgments or awards that do not constitute an Event of Default under Section8.01(g);

####  

#### (g)           Liens in favor ofcustoms and revenue authorities arising as a matter of law or pursuant to abond to secure payment of customs duties in connection with the importation ofgoods;

####  

#### (h)           customary rights ofsetoff upon deposits of cash in favor of banks or other depository institutionsin which such cash is maintained in the ordinary course of business;

####  

#### (i)            easements,rights-of-way, zoning restrictions and other encumbrances and surveyexceptions, minor defects or irregularities in title and other similarrestrictions on title to, or the use of, real property that do not, eitherindividually or in the aggregate, materially and adversely affect the use ofsuch real property for its intended purposes or the conduct of the business of theBorrower and its Subsidiaries in the ordinary course and, in any case, thatwere not incurred in connection with and do not secure Indebtedness or otherextensions of credit;

####  

#### (j)            Liens arising outof conditional sale, title retention, consignment or similar arrangements forthe sale of goods entered into by the Borrower or any of its Subsidiaries inthe ordinary course of business and not prohibited by this Agreement; and

####  

#### (k)           Liens encumberingreasonable customary initial deposits and margin deposits and similar Liensattaching to commodity trading accounts or other brokerage accounts incurred inthe ordinary course of business and not for speculative purposes.

####  

“***Permitted Subordinated Indebtedness***” means any unsecuredIndebtedness of the Borrower that (a) is expressly subordinated to the priorpayment in full in cash of the Obligations on terms and conditions no lessfavorable to the Lenders than the terms and conditions of the SeniorSubordinated Notes, (b) will not mature prior to the date that is ninety-one(91) days after the scheduled Maturity Date of the Term Facility, (c) has noscheduled amortization or payments of principal prior to the scheduled MaturityDate of the Term Facility, and (d) has covenant, default and remedy provisionsno more restrictive, and mandatory prepayment, repurchase or redemptionprovisions no more onerous or expansive in scope, than

 

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those contained in the Senior Subordinated NotesDocuments, taken as a whole; provided any such Indebtedness shallconstitute Permitted Subordinated Indebtedness only if (i) both before andafter giving effect to the issuance or incurrence thereof, no Default or Eventof Default shall have occurred and be continuing, and (ii) the Chief FinancialOfficer of the Borrower shall have delivered an officer’s certificatedemonstrating Pro Forma Compliance with the covenants set forth in Section6.14 in form and substance reasonably satisfactory to the AdministrativeAgent, it being understood that any capitalized or paid-in-kind interest oraccreted principal on such Indebtedness shall not constitute an issuance orincurrence of Indebtedness for purposes of this proviso.

 

“***Person***” means any natural person, corporation, limitedliability company, trust, joint venture, association, company, partnership,Governmental Authority or other entity.

 

“***Plan***” means any “employee benefit plan” (as such term isdefined in Section 3(3) of ERISA), other than a Multiemployer Plan, establishedby any of the Loan Parties or, with respect to any such plan that is subject toSection 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

 

“***Pledged Debt***” has the meaning specified in Section 1of the Security Agreement.

 

“***Pledged Equity***” has the meaning specified in Section 1of the Security Agreement.

 

“***Preferred Interests”***means, with respect to any Person, Equity Interests issued by such Person thatare entitled to a preference or priority over any other Equity Interests issuedby such Person upon any distribution of such Person’s property and assets,whether by dividend or upon liquidation.

 

“***Preferred Stock Redemption***” has the meaning specified inthe preliminary statements to this Agreement.

 

“***primaryobligations***” has the meaning specified in the definition of “*Contingent Obligation”* set forth above inthis Section 1.01.

 

“***primaryobligor***” has the meaning specified in the definition of “*Contingent Obligation”* set forth above inthis Section 1.01.

 

“***Pro Forma Basis***”, “***Pro Forma Compliance***” and “***Pro Forma Effect***” means, for purposes ofcalculating compliance with each of the financial covenants set forth in Section6.14 or Section 7.02(c)(ii), as applicable, in respect of aSpecified Transaction, that such Specified Transaction and the followingtransactions in connection therewith shall be deemed to have occurred as of thefirst day of the applicable Measurement Period:  (a) income statement items (whether positive or negative)attributable to the property or Person subject to such Specified Transaction,(i) in the case of a Disposition of all or substantially all Equity Interestsin any Subsidiary of the Borrower or any division, product line, or facilityused for operations of the Borrower or any of its Subsidiaries, shall beexcluded, and (ii) in the case of a Permitted Acquisition or Investmentdescribed in the definition of “Specified Transaction”, shall be 

 

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included, (b) any retirement of Indebtedness, and (c)any Indebtedness incurred or assumed by the Borrower or any of its Subsidiariesin connection therewith and if such Indebtedness has a floating or formularate, shall have an implied rate of interest for the applicable period forpurposes of this definition determined by utilizing the rate which is or wouldbe in effect with respect to such Indebtedness as at the relevant date ofdetermination.  Calculations madepursuant to this definition shall be (i) determined in good faith by aResponsible Officer of the Borrower and may include adjustments, in the reasonabledetermination of the Borrower as set forth in an officer’s certificate, toreflect operating expense reductions reasonably expected to result from anySpecified Transaction or Specified Disposition and (ii) reasonably acceptableto the Administrative Agent.  Withrespect to any determination of Pro Forma Compliance which is required to bemade pursuant to the terms of this Agreement on a date other than the last dayof a Fiscal Quarter, then such determination shall be made in respect of theMeasurement Period ending on the last day of the Fiscal Quarter most recentlyended and for which financial statements have been delivered to theAdministrative Agent pursuant to Section 6.13.

 

“***Pro Rata Share***” means, with respect to each Lender atany time, a fraction (expressed as a percentage, carried out to the ninthdecimal place), the numerator of which is the amount of the Commitment(s) ofsuch Lender under the applicable Facility or Facilities at such time and thedenominator of which is the amount of the Aggregate Commitments under theapplicable Facility or Facilities at such time; provided that if thecommitment of each Lender to make Loans and the obligation of the L/C Issuer tomake L/C Credit Extensions have been terminated pursuant to Section 8.01,then the Pro Rata Share of each Lender shall be determined based on the ProRata Share of such Lender immediately prior to such termination and aftergiving effect to any subsequent assignments made pursuant to the terms hereof.  The initial Pro Rata Share of each Lender isset forth opposite the name of such Lender on Schedule 2.01 or in theAssignment and Assumption pursuant to which such Lender becomes a party hereto,as applicable.

 

“***ProfessionalServices Agreement***” means the Professional Services Agreementdated as of January 20, 1999 by and among THL Equity Advisors IV, L.L.C.,Thomas H. Lee Capital, L.L.C. and the Borrower, as such agreement may beamended, supplemented or otherwise modified hereafter from time to time inaccordance with the terms thereof, but solely to the extent permitted under theterms of the Loan Documents.

 

“***QualifyingIPO***” means the issuance by Parent or Holdings of its commonEquity Interests in an underwritten primary public offering (other than apublic offering pursuant to a registration statement on Form S-8) pursuant toan effective registration statement filed with the SEC in accordance with theSecurities Act of 1933, as amended (whether alone or in connection with asecondary public offering).

 

“***Redeemable”***means (a) any Equity Interest that the issuer has undertaken to redeem ata fixed or determinable date or dates, whether by operation of a sinking fundor otherwise, or upon the occurrence of a condition not solely within thecontrol of the issuer or (b) any Equity Interest that is redeemable at theoption of the holder, in each case, occurring earlier than 91 days followingthe scheduled Maturity Date of any Facility.

 

“***Reduction Amount***” has the meaning set forth in Section2.05(b)(vi).

 

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“***Register***” has the meaning set forth in Section10.07(c).

 

“***Reportable Event***” means any of the events set forth inSection 4043(c) of ERISA, other than events for which the 30 day notice periodhas been waived.

 

“***Request for Credit Extension***” means (a) with respect toa Borrowing, conversion or continuation of Term Loans or Revolving CreditLoans, a Committed Loan Notice, (b) with respect to an L/C Credit Extension, aLetter of Credit Application, and (c) with respect to a Swing Line Loan, aSwing Line Loan Notice.

 

“***RequiredFinancial Information***” means, at any date of determination, theConsolidated financial statements of Borrower and its Subsidiaries mostrecently delivered to the Administrative Agent on or prior to such datepursuant to, and satisfying all of the requirements of, Section 6.13(b)or 6.13(c) and accompanied by the certificates and other informationrequired to be delivered therewith pursuant to Section 6.13(d).

 

“***Required Lenders***” means, as of any date ofdetermination, Lenders having more than 50% of the sum of the (a) TotalOutstandings (with the aggregate amount of each Lender’s risk participation andfunded participation in L/C Obligations and Swing Line Loans being deemed“held” by such Lender for purposes of this definition), (b) aggregate unusedTerm Commitments and (c) aggregate unused Revolving Credit Commitments; providedthat the unused Term Commitment, unused Revolving Credit Commitment of, and theportion of the Total Outstandings held or deemed held by, any Defaulting Lendershall be excluded for purposes of making a determination of Required Lenders.

 

“***Requirements of Law”***means, with respect to any Person, all laws, constitutions, statutes, treaties,ordinances, rules and regulations, all orders, writs, decrees, injunctions,judgments, determinations and awards of an arbitrator, a court or any otherGovernmental Authority, and all Governmental Authorizations, binding upon orapplicable to such Person or any of its Subsidiaries or to any of theirproperty, assets or businesses.

 

“***ResponsibleOfficer***” means (i) the chief executive officer, the president,the chief financial officer, the principal accounting officer, any vicepresident, secretary or the treasurer (or the equivalent of any of theforegoing) of the Borrower (or upon the consummation of the Holding CompanyEvent, Holdings) or any of its Subsidiaries and (ii) in the case of a CommittedLoan Notice or a Swing Line Loan Notice, any person authorized to sign suchCommitted Loan Notice or Swing Line Loan Notice by the board of directors ofthe Borrower.

 

“***RestrictedPayment***” has the meaning specified in Section 7.06.

 

“***RestrictedSubsidiary***” means (a) each of the wholly owned DomesticSubsidiaries and each of the other Subsidiaries of the Borrower (or upon theconsummation of the Holding Company Event, Holdings) that is organized,purchased or otherwise acquired after the Closing Date, whether pursuant to Section 7.05(h)or otherwise (other than any non-wholly owned Domestic Subsidiary or anyForeign Subsidiary that is a CFC that is organized, purchased or otherwiseacquired pursuant to Section 7.05(i)), or (b) each of the otherSubsidiaries of the Borrower (or upon the consummation of the Holding CompanyEvent, Holdings) that, at the option of the Borrower (i) executes and deliversthe Guaranty or a Guarantee Supplement and a

 

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Security Agreement Supplement, (ii) in which 100% ofthe issued and outstanding Equity Interests are pledged to the Administrative Agent,on behalf of the Secured Parties, pursuant to the applicable CollateralDocuments and (iii) delivers such other agreements, opinions, certificates andother documents as are required or requested under Section 6.11.

 

“***Revolving Credit Borrowing***” means a borrowing consistingof simultaneous Revolving Credit Loans of the same Type and, in the case ofEurodollar Rate Loans, having the same Interest Period made by each of theRevolving Credit Lenders pursuant to Section 2.01(b).

 

“***Revolving Credit Commitment***” means, as to each RevolvingCredit Lender, its obligation to (a) make Revolving Credit Loans to theBorrower pursuant to Section 2.01(b), (b) purchase participations in L/CObligations, and (c) purchase participations in Swing Line Loans, in an aggregateprincipal amount at any one time outstanding not to exceed the amount set forthopposite such Lender’s name on Schedule 2.01 under the caption“Revolving Credit Commitment” or in the Assignment and Assumption pursuant towhich such Lender becomes a party hereto, as applicable, as such amount may beadjusted from time to time in accordance with this Agreement.

 

“***Revolving Credit Facility***” means, at any time, theaggregate amount of the Revolving Credit Lenders’ Revolving Credit Commitmentsat such time.

 

“***Revolving Credit Lender***” means, at any time, any Lenderthat has a Revolving Credit Commitment at such time.

 

“***Revolving Credit Loan***” has the meaning specified in Section2.01(b).

 

“***Revolving Credit Note***” means a promissory note of theBorrower payable to the order of any Revolving Credit Lender or its registeredassigns, in substantially the form of Exhibit C-2 hereto,evidencing the aggregate indebtedness of the Borrower to such Revolving CreditLender resulting from the Revolving Credit Loans made by such Revolving CreditLender.

 

“***ScheduledPrincipal Payments***” means, with respect to any Person for anyperiod, the sum of all regularly scheduled principal payments or repurchases,redemptions or similar acquisitions for value of outstanding Indebtedness madeor required to be made during such period, including, without limitation, allrepayments of Loans outstanding hereunder pursuant to Section 2.07(a) or2.07(b).

 

“***ScreenRate***” means, with respect to any Canadian Term Loan for anyInterest Period:

 

#### (a)           the rate per annum equal to the ratedetermined by the Administrative Agent to be the offered rate that appears onthe page of the Telerate screen (or any successor thereto) that displays anaverage British Bankers Association Interest Settlement Rate for deposits inCanadian Dollars (for delivery on the first day of such Interest Period) with aterm equivalent to such Interest Period, determined as of approximately 11:00a.m. (London time) two Business Days prior to the first day of such InterestPeriod; or

####  

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#### (b)           if the ratereferenced in the preceding clause (a) does not appear on such page orservice or such page or service shall cease to be available, the rate per annumequal to the rate determined by the Administrative Agent to be the offered rateon such other page or other service that displays an average British BankersAssociation Interest Settlement Rate for deposits in Canadian Dollars (fordelivery on the first day of such Interest Period) with a term equivalent tosuch Interest Period, determined as of approximately 11:00 a.m. (London time)two Business Days prior to the first day of such Interest Period.

####  

“***ScreenRate Loan***” means a Loan that bears interest at the Screen Rate.

 

“***SEC***” means the U.S. Securities and Exchange Commission,or any Governmental Authority succeeding to any of its principal functions.

 

“***Secured Hedge Agreement***” means any interest rate Swap Contractpermitted under Article VI or VII that is entered into by andbetween the Borrower and any Hedge Bank.

 

“***Secured Obligations***” has the meaning specified in Section2 of the Security Agreement.

 

“***Secured Parties***” means, collectively, the AdministrativeAgent, the Lenders, the Hedge Banks, each co-agent or sub-agent appointed bythe Administrative Agent from time to time pursuant to Section 9.01(c),or Section 9.02, and the other Persons the Obligations owing to whichare or are purported to be secured by the Collateral under the terms of theCollateral Documents.

 

“***Security Agreement***” has the meaning specified in Section 4.01(a)(iii).

 

“***Security Agreement Supplement***” has the meaning specified in Section1 of the Security Agreement.

 

“***SeniorFinancial Officer***” means the chief financial officer, theprincipal accounting officer or the treasurer of the Borrower.

 

“***SeniorSubordinated Notes***” means the senior unsecured subordinatednotes of the Borrower due 2009 in an aggregate principal amount of$231,900,000.

 

“***SeniorSubordinated Notes Documents***” means all indentures, securitiespurchase agreements, and other agreements, instruments and documents pursuantto which the Senior Subordinated Notes have been issued or otherwise settingforth the terms of the Senior Subordinated Notes, in each case as suchagreement, instrument or other document may be amended, supplemented orotherwise modified from time to time in accordance with the terms thereof, butsolely to the extent permitted under the terms of the Loan Documents.

 

“***Shareholders Agreement***” means that certain letter agreementdated March 1, 2004 (as amended, supplemented or otherwise modified to theClosing Date) among the Borrower, Jupiter Acquisition Corporation, AustinBeutel, Robert Beutel and Oakwest Corporation Limited.

 

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“***SightDraft***” means a draft drawn by a beneficiary under a Letter ofCredit and presented to the L/C Issuer, which draft is payable uponpresentation to the L/C Issuer together with the documents called for undersuch Letter of Credit.

 

“***Solvent***”and “***Solvency***”mean, with respect to any Person on any date of determination, that, on suchdate:

 

#### (a)           the fair value ofthe property and assets of such Person is greater than the total amount ofliabilities (including, without limitation, contingent liabilities) of such Person;

####  

#### (b)           the present fairsalable value of the property and assets of such Person is not less than theamount that will be required to pay the probable liability of such Person onits debts as they become absolute and matured;

####  

#### (c)           such Person does notintend to, and does not believe that it will, incur debts or liabilities beyondsuch Person’s ability to pay such debts and liabilities as they mature; and

####  

#### (d)           such Person is notengaged in business or in a transaction, and is not about to engage in businessor in a transaction, for which such Person’s property and assets wouldconstitute an unreasonably small capital.

####  

The fair value andthe present fair salable value of the property and assets of any such Personshall be computed taking into account the aggregate amount of all payments inrespect of reimbursement, contribution and indemnification claims against anyother Person that, in light of the circumstances existing at such time, suchPerson reasonably believes in good faith it will receive with reasonablepromptness.  The amount of contingentliabilities of any such Person at any time shall be computed as the amountthat, in the light of all of the facts and circumstances existing at such time,represents the amount that can reasonably be expected to become an actual ormatured liability.

 

“***SPC***” has the meaning specified in Section 10.07(h).

 

“***Specified Equity Issuance***” means the sale or issuance bythe Borrower (or upon consummation of the Holding Company Event, Holdings) ofany of its Equity Interests in a public offering or in a private placement orsale that is underwritten, managed, arranged, placed or initially purchased byan investment bank (it being understood that the Sponsor is not an investmentbank), which, for the avoidance of doubt, does not include the sale or issuanceof any such Equity Interests (a) to the Equity Investors, their Affiliates,related funds and general partners, (b) to other Persons making additionalequity investments together with the Equity Investors after the Closing Date,(c) pursuant to stock option plans, (d) in connection with the cure of anyfinancial covenant and (e) in connection with Permitted Affiliate Investments.

 

“***Specified Transaction***” means, for any applicable period,the following transactions:  any PermittedAcquisition or any Investment (or series of related Investments) made pursuantto Section 7.05(h) or (i).

 

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“***Sponsor***”means the THL Entities and their Affiliates and related funds and generalpartners.

 

“***SpotRate***” for a currency means the rate determined by theAdministrative Agent to be the rate quoted by the Person acting in suchcapacity as the spot rate for the purchase by such Person of such currency withanother currency through its principal foreign exchange trading office atapproximately 11:00 a.m. on the date two Business Days prior to the date as ofwhich the foreign exchange computation is made; provided**thatthe Administrative Agent may obtain such spot rate from another financialinstitution designated by the Administrative Agent if the Person acting in suchcapacity does not have as of the date of determination a spot buying rate forany such currency.

 

“***Subsidiary***”means, with respect to any Person, any corporation, partnership, joint venture,limited liability company, unlimited liability company, trust or estate ofwhich (or in which) more than 50% of:

 

#### (a)           the issued andoutstanding shares of capital stock having ordinary voting power to elect amajority of the board of directors of such corporation (irrespective of whetherat the time shares of capital stock of any other class or classes of suchcorporation shall or might have voting power upon the occurrence of anycontingency);

####  

#### (b)           the interest in thecapital or profits of such partnership, joint venture, limited liabilitycompany or unlimited liability company; or

####  

#### (c)           the beneficialinterest in such trust or estate,

####  

is at the timedirectly or indirectly owned or controlled by such Person, by such Person andone or more of its other Subsidiaries or by one or more of such Person’s otherSubsidiaries.

 

“***Swap Contract***” means (a) any and all rate swaptransactions, basis swaps, credit derivative transactions, forward ratetransactions, commodity swaps, commodity options, forward commodity contracts,equity or equity index swaps or options, bond or bond price or bond index swapsor options or forward bond or forward bond price or forward bond indextransactions, interest rate options, forward foreign exchange transactions, captransactions, floor transactions, collar transactions, currency swaptransactions, cross-currency rate swap transactions, currency options, spotcontracts, or any other similar transactions or any combination of any of theforegoing (including any options to enter into any of the foregoing), whetheror not any such transaction is governed by or subject to any master agreement,and (b) any and all transactions of any kind, and the related confirmations,which are subject to the terms and conditions of, or governed by, any form ofmaster agreement published by the International Swaps and DerivativesAssociation, Inc., any International Foreign Exchange Master Agreement, or anyother master agreement (any such master agreement, together with any relatedschedules, a “***Master Agreement***”),including any such obligations or liabilities under any Master Agreement.

 

“***Swing Line***” means the revolving credit facility madeavailable by the Swing Line Lender pursuant to Section 2.04.

 

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“***Swing Line Borrowing***” means a borrowing of a Swing LineLoan pursuant to Section 2.04.

 

“***Swing Line Lender***” means Bank of America in its capacityas provider of Swing Line Loans, or any successor swing line lender hereunder.

 

“***Swing Line Loan***” has the meaning specified in Section2.04(a).

 

“***Swing Line Loan Notice***” means a notice of a Swing LineBorrowing pursuant to Section 2.04(b), which, if in writing, shall besubstantially in the form of Exhibit B.

 

“***Swing Line Sublimit***” means an amount equal to the lesserof (a) $10,000,000 and (b) the Revolving Credit Commitments.  The Swing Line Sublimit is part of, and notin addition to, the Revolving Credit Facility Commitments.

 

“***Taxes***” has the meaning specified in Section 3.01(a).

 

“***Term Commitments***” means, collectively, the Dollar TermCommitments and the Canadian Term Commitments.

 

“***TermFacility***” means the Dollar Term Facility and the Canadian TermFacility.

 

“***TermLenders***” means, collectively, the Dollar Term Lenders and theCanadian Term Lenders.

 

“***Term Loans***” means, collectively, the Dollar Term Loansand the Canadian Term Loans.

 

“***Term Note***” means a promissory note of the Borrowerpayable to the order of any Term Lender or its registered assigns, insubstantially the form of Exhibit C-1 hereto, evidencing theaggregate indebtedness of the Borrower to such Term Lender resulting from theTerm Loans made by such Term Lender.

 

“***TerminationDate***” means the date on which all of the Commitments of theLenders have terminated or expired, all of the Loans, L/C Obligations and otherObligations of any Loan Party under or in respect of the Loan Documentsspecified in clause (a) of the definition of “*Loan Documents*” (other than any such Obligations of any ofthe Loan Parties under Section 3.01, 3.04, 10.04 or 10.05(or other similar provisions of the other Loan Documents that are specifiedunder the terms thereof to survive the payment in full of such otherObligations under or in respect of the Loan Documents) to the extent no demandor claim thereunder has been made) have been paid in full in cash and allLetters of Credit have expired or been terminated or otherwise provided for ina manner satisfactory to the L/C Issuer in full.

 

“***THLEntities***” means, collectively, the Thomas H. Lee Equity Fund IV,L.P. and the Thomas H. Lee Foreign Fund IV, L.P.

 

“***TotalLeverage Ratio”*** means, at any date of determination, the ratioof (a) (i) all Funded Indebtedness of the Borrower and its Subsidiaries(other than the aggregate principal

 

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amount of all Revolving Credit Loans, Swing Line Loansand L/C Advances outstanding on such date) outstanding on such date plus(ii) the aggregate principal amount of all Revolving Credit Loans, Swing LineLoans and L/C Advances outstanding on the last day of each month occurringduring the most recently completed Measurement Period divided by 12 less(iii) the aggregate amount of all cash on the Consolidated balance sheet of theBorrower on the last day of each month occurring during the most recentMeasurement Period divided by 12 to (b) Consolidated EBITDA of the Borrower andits Subsidiaries for the period of the four prior Fiscal Quarters ending onsuch date, subject in each case to the adjustments set forth on Schedule1.01(c).

 

“***Total Outstandings***” means the aggregate OutstandingAmount of all Loans and all L/C Obligations.

 

“***Type***” means, with respect to a Loan, its character as aBase Rate Loan, a Eurodollar Rate Loan or a Screen Rate Loan.

 

“***United States***” and “***U.S.***” mean the United States of America.

 

“***Unreimbursed Amount***” has the meaning specified in Section2.03(c)(i).

 

“***UnrestrictedSubsidiary***” means, at any time, each of the Subsidiaries of theBorrower that does not constitute a Restricted Subsidiary at such time.

 

“***UnusedRevolving Credit Commitment***” means, with respect to any of theRevolving Credit Lenders at any time, (a) the Revolving Credit Commitment ofsuch Revolving Credit Lender at such time *less*(b) the sum of:

 

(i)            the aggregate principal amount ofall Revolving Credit Loans, Swing Line Loans and L/C Advances made (or deemedto have been made) by such Revolving Credit Lender (in its capacity as aLender) and outstanding at such time; and

 

(ii)           such Revolving Credit Lender’s ProRata Share of (A) the aggregate Available Amount of all Letters of Creditoutstanding at such time, (B) the aggregate principal amount of all L/CAdvances made by the Issuing Bank (in its capacity as the Issuing Bank)pursuant to Section 2.03(c)(i) and outstanding at such time and(C) the aggregate principal amount of all Swing Line Loans made by theSwing Line Bank (in its capacity as the Swing Line Bank) pursuant to Section 2.04(a)and outstanding at such time.

 

“***U.S.Lender***” has the meaning set forth in Section 10.15(b).

 

“***U.S.Reorganization***” means the transfer of all of the shares ofcapital stock of the Domestic Subsidiaries of Nu-Gro to the Borrower or suchother reorganization of the Domestic Subsidiaries of Nu-Gro as may beacceptable to the Arrangers having the result that such Domestic Subsidiariesof Nu-Gro are direct first or second-tier Domestic Subsidiaries of theBorrower.

 

“***WithdrawalLiability***” has the meaning specified in Part I of Subtitle E ofTitle IV of ERISA.

 

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“***WorkingCapital***” means, with respect to any period, an amount equal tothe excess of Current Assets (other than cash and Cash Equivalents) overCurrent Liabilities (excluding the current portion of any interest on anyIndebtedness which would otherwise be included therein).

 

1.02         OtherInterpretive Provisions.  Withreference to this Agreement and each other Loan Document, unless otherwisespecified herein or in such other Loan Document:

 

#### (a)           The meanings ofdefined terms are equally applicable to the singular and plural forms of thedefined terms.

####  

#### (b)           (i)  The words “herein,” “hereto,”“hereof” and “hereunder” and words of similar import when used inany Loan Document shall refer to such Loan Document as a whole and not to anyparticular provision thereof.

####  

##### (ii)           Article, Section,Exhibit and Schedule references are to the Loan Document in which suchreference appears.

#####  

##### (iii)          The term“including” is by way of example and not limitation.

#####  

##### (iv)          The term “documents”includes any and all instruments, documents, agreements, certificates, notices,reports, financial statements and other writings, however evidenced, whether inphysical or electronic form.

#####  

#### (c)           In the computationof periods of time from a specified date to a later specified date, the word “from”means “from and including;” the words “to” and “until”each mean “to but excluding;” and the word “through” means “toand including.”

####  

#### (d)           Section headingsherein and in the other Loan Documents are included for convenience ofreference only and shall not affect the interpretation of this Agreement or anyother Loan Document.

####  

1.03         AccountingTerms.  (a)  Allaccounting terms not specifically or completely defined herein shall beconstrued in conformity with, and all financial data (including financialratios and other financial calculations) required to be submitted pursuant tothis Agreement shall be prepared in conformity with, GAAP applied in a mannerconsistent with that used in preparing the Audited Financial Statements, exceptas otherwise specifically prescribed herein.

 

### (b)           If at any time any change in GAAP would affect thecomputation of any financial ratio or requirement set forth in any LoanDocument, and either the Borrower or the Required Lenders shall so request, theAdministrative Agent, the Lenders and the Borrower shall negotiate in goodfaith to amend such ratio or requirement to preserve the original intentthereof in light of such change in GAAP (subject to the approval of theRequired Lenders); provided that, until so amended, (i) such ratio orrequirement shall continue to be computed in accordance with GAAP prior to suchchange therein and (ii) the Borrower shall provide to the AdministrativeAgent and the Lenders financial statements and other documents required underthis Agreement or as reasonably requested hereunder setting forth areconciliation between

###  

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### calculations of such ratio or requirementmade before and after giving effect to such change in GAAP.

###  

### (c)           With respect to the time period commencing March 31, 2004and ending on June 30, 2004 (the “***2004 Second Quarter***”), and notwithstandingthe actual accounting periods for which any financial statements were preparedfor the 2004 Second Quarter, the 2004 Second Quarter shall be deemed toconstitute one accounting period and each of Consolidated Net Income andConsolidated EBITDA shall be calculated with all applicable financingstatements prepared for the 2004 Second Quarter taken as a whole.

###  

1.04         Rounding.  Any financial ratios required to be maintainedby the Borrower or Holdings pursuant to this Agreement shall be calculated bydividing the appropriate component by the other component, carrying the resultto one place more than the number of places by which such ratio is expressedherein and rounding the result up or down to the nearest number (with arounding-up if there is no nearest number).

 

1.05         Referencesto Agreements and Laws.  Unlessotherwise expressly provided herein, (a) references to Constitutive Documents,agreements (including the Loan Documents) and other contractual instrumentsshall be deemed to include all subsequent amendments, restatements, extensions,supplements and other modifications thereto, but only to the extent that suchamendments, restatements, extensions, supplements and other modifications arenot prohibited by any Loan Document; and (b) references to any Law shallinclude all statutory and regulatory provisions consolidating, amending,replacing, supplementing or interpreting such Law.

 

1.06         Times of Day.  Unless otherwise specified, all referencesherein to times of day shall be references to Eastern time (daylight orstandard, as applicable).

 

1.07         CurrencyEquivalents Generally.  Anyamount specified in this Agreement (other than in Articles II, IXand X) or any of the other Loan Documents to be in a currency other thanDollars shall also include the equivalent of such amount in Dollars, suchequivalent amount to be determined at the rate of exchange quoted by Bank ofAmerica in New York at the close of business on the Business Day immediatelypreceding any date of determination thereof, to prime banks in New York, NewYork for the spot purchase in the New York foreign exchange market of suchamount in such currency with U.S. Dollars. Any conversion of Dollars into Canadian Dollars will be made by theAdministrative Agent at the then-applicable Spot Rate.

 

1.08         Timingof Performance.  When theperformance of any covenant, duty or obligation is stated to be required on aday that is not a Business Day, the date for such performance shall extend tothe immediately succeeding Business Day.

 

# ARTICLE IITHE COMMITMENTS AND CREDIT EXTENSIONS

#  

2.01         The Loans.  (a)  The Term Borrowings.  Subject to the terms and conditions setforth herein, (i) each Dollar Term Lender severally agrees to make a singleloan (consisting of a Dollar Term Loan pursuant to the Dollar Term Facility inan amount equal to its Pro Rata Share of the Dollar Term Facility (each suchloan advanced by any Dollar Term Lender

 

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being a “***Dollar Term Loan***”) and (ii) each CanadianTerm Lender severally agrees to make a single loan (consisting of a CanadianTerm Loan pursuant to the Canadian Term Facility in an amount equal to its ProRata Share of the Canadian Term Facility (each such loan advanced by a CanadianTerm Lender being a “***CanadianTerm Loan***”), in each case, to the Borrower on (i) the ClosingDate or (ii) if such Term Lender has increased its Term Commitment pursuant to Section2.14, the Increase Effective Date. Each such Borrowing shall be in U.S. Dollars or Canadian Dollars, asapplicable, and shall consist of Term Loans made simultaneously by the TermLenders in accordance with their respective Pro Rata Share of the TermFacility.  Amounts borrowed under this Section 2.01(a)and repaid or prepaid may not be reborrowed. Term Loans may be Base Rate Loans, Eurodollar Rate Loans or Screen RateLoans, as applicable, as further provided herein.

 

### (b)           The Revolving Credit Borrowings.  Subject to the terms and conditions setforth herein, each Revolving Credit Lender severally agrees to make loans (eachsuch loan, a “***Revolving Credit Loan***”) to the Borrowerfrom time to time, on any Business Day during the Availability Period, in anaggregate amount not to exceed at any time outstanding the amount of suchLender’s Revolving Credit Commitment; provided, however, thatafter giving effect to any Revolving Credit Borrowing, (i) the TotalOutstandings shall not exceed the Aggregate Commitments, and (ii) the aggregateOutstanding Amount of the Revolving Credit Loans of any Lender, plussuch Lender’s Pro Rata Share of the Outstanding Amount of all L/C Obligations, plussuch Lender’s Pro Rata Share of the Outstanding Amount of all Swing Line Loansshall not exceed such Lender’s Revolving Credit Commitment.  Within the limits of each Lender’s RevolvingCredit Commitment, and subject to the other terms and conditions hereof, theBorrower may borrow under this Section 2.01(b), prepay under Section2.05, and reborrow under this Section 2.01(b).  Revolving Credit Loans may be Base RateLoans or Eurodollar Rate Loans, as further provided herein.

###  

2.02         Borrowings,Conversions and Continuations of Loans. (a)  Each Term Borrowing, eachRevolving Credit Borrowing, each conversion of Term Loans or Revolving CreditLoans from one Type to the other, and each continuation of Screen Rate Loans orEurodollar Rate Loans shall be made upon the Borrower’s irrevocable notice tothe Administrative Agent, which may be given by telephone.  Each such notice must be received by theAdministrative Agent not later than 11:00 a.m. (i) three Business Days prior tothe requested date of any Borrowing of, conversion to or continuation of ScreenRate Loans or Eurodollar Rate Loans or of any conversion of Eurodollar RateLoans to Base Rate Loans, and (ii) one Business Day before the requested dateof any Borrowing of Base Rate Loans; provided, however, that ifthe Borrower wishes to request Screen Rate Loans or Eurodollar Rate Loanshaving an Interest Period of nine or twelve months in duration as provided inthe definition of “Interest Period”, the applicable notice must be received bythe Administrative Agent not later than 11:00 a.m. four Business Days prior tothe requested date of such Borrowing, conversion or continuation, whereupon theAdministrative Agent shall give prompt notice to the Lenders of such requestand determine whether the requested Interest Period is available.  Not later than 11:00 a.m., three BusinessDays before the requested date of such Borrowing, conversion or continuation,the Administrative Agent shall notify the Borrower (which notice may be bytelephone) whether or not the requested Interest Period has been consented toby all the Lenders.  Each telephonicnotice by the Borrower pursuant to this Section 2.02(a) must beconfirmed promptly by delivery to the Administrative Agent of a writtenCommitted Loan Notice, appropriately completed and

 

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signed by a Responsible Officer of the Borrower.  Each Borrowing of, conversion to orcontinuation of Screen Rate Loans or Eurodollar Rate Loans, as applicable,shall be in a principal amount of (A) in the case of all Loans other thanCanadian Term Loans, $2,000,000 or a whole multiple of $1,000,000 in excessthereof and (B) in the case of Canadian Term Loans, CD2,000,000 or a wholemultiple of CD1,000,000 in excess thereof. Except as provided in Sections 2.03(c) and 2.04(c), eachBorrowing of or conversion to Base Rate Loans shall be in a principal amount of$500,000 or a whole multiple of $100,000 in excess thereof.  Each Committed Loan Notice  (whether telephonic or written) shallspecify (A) whether the Borrower is requesting a Term Borrowing, a RevolvingCredit Borrowing, a conversion of Term Loans or Revolving Credit Loans from oneType to the other, or a continuation of Screen Rate Loans or Eurodollar RateLoans, (B) the requested date of the Borrowing, conversion or continuation, asthe case may be (which shall be a Business Day), (C) the principal amount ofLoans to be borrowed, converted or continued, (D) the Type of Loans to beborrowed or to which existing Term Loans or Revolving Credit Loans are to beconverted, and (E) if applicable, the duration of the Interest Period withrespect thereto.  If the Borrower failsto specify a Type of Loan in a Committed Loan Notice or if the Borrower failsto give a timely notice requesting a conversion or continuation, then theapplicable Term Loans or Revolving Credit Loans shall be made as, or convertedto, Base Rate Loans (except in the case of Canadian Term Loans, which shallalways be Screen Rate Loans, and upon such failure the Borrower shall be deemedto have specified an Interest Period for Screen Rate Loans of one month).  Any such automatic conversion to Base RateLoans shall be effective as of the last day of the Interest Period then ineffect with respect to the applicable Eurodollar Rate Loans.  If the Borrower requests a Borrowing of,conversion to, or continuation of Eurodollar Rate Loans in any such CommittedLoan Notice, but fails to specify an Interest Period, it will be deemed to havespecified an Interest Period of one month.

 

### (b)           Following receipt of a Committed Loan Notice, theAdministrative Agent shall promptly notify each Lender of the amount of its ProRata Share of the applicable Term Loans or Revolving Credit Loans, and if notimely notice of a conversion or continuation is provided by the Borrower, theAdministrative Agent shall notify each Lender of the details of any automaticconversion to Base Rate Loans described in Section 2.02(a).  In the case of a Term Loan Borrowing or aRevolving Credit Borrowing, each Appropriate Lender shall make the amount ofits Loan available to the Administrative Agent in immediately available fundsat the Administrative Agent’s Office not later than 1:00 p.m. on the BusinessDay specified in the applicable Committed Loan Notice.  Upon satisfaction of the applicableconditions set forth in Section 4.02 (and, if such Borrowing is theinitial Credit Extension, Section 4.01), the Administrative Agent shallmake all funds so received available to the Borrower in like funds as receivedby the Administrative Agent either by (i) crediting the account of the Borroweron the books of Bank of America with the amount of such funds or (ii) wiretransfer of such funds, in each case in accordance with instructions providedto (and reasonably acceptable to) the Administrative Agent by the Borrower; provided,however, that if, on the date the Committed Loan Notice  with respect to such Borrowing is given bythe Borrower, there are L/C Borrowings outstanding, then the proceeds of suchBorrowing first shall be applied to the payment in full of any such L/CBorrowings.

###  

### (c)           Except as otherwise provided herein, a Screen Rate Loan orEurodollar Rate Loan may be continued or converted, as applicable, only on thelast day of an Interest Period for such Loan unless the Borrower pays theamount due under Section 3.05 in connection

###  

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### therewith. During the existence of an Event of Default, no Loans may be requestedas, converted to or continued as Eurodollar Rate Loans without the consent ofthe Required Lenders.

###  

### (d)           The Administrative Agent shall promptly notify the Borrowerand the Lenders of the interest rate applicable to any Interest Period forScreen Rate Loans or Eurodollar Rate Loans upon determination of such interestrate.  The determination of the ScreenRate and the Eurodollar Rate by the Administrative Agent shall be conclusive inthe absence of manifest error.  At anytime that Base Rate Loans are outstanding, the Administrative Agent shallnotify the Borrower and the Lenders of any change in Bank of America’s primerate used in determining the Base Rate promptly following the publicannouncement of such change.

###  

### (e)           After giving effect to all Term Borrowings, all RevolvingCredit Borrowings, all conversions of Term Loans or Revolving Credit Loans fromone Type to the other, and all continuations of Term Loans or Revolving CreditLoans as the same Type, there shall not be more than fifteen Interest Periodsin effect.

###  

### (f)            The failure of any Lender to make the Loan to be made byit as part of any Borrowing shall not relieve any other Lender of itsobligation, if any, hereunder to make its Loan on the date of such Borrowing,but no Lender shall be responsible for the failure of any other Lender to makethe Loan to be made by such other Lender on the date of any Borrowing.

###  

### (g)           For the avoidance of doubt, nothing in this Section2.02 is intended to result in, or permit, any redenomination of anyCanadian Term Loan into a Dollar Term Loan or of any Dollar Term Loan into aCanadian Term Loan.

###  

2.03         Letters ofCredit.  (a)  The Letter of Credit Commitment.  (i) Subject to the terms and conditions set forth herein, (A) the L/C Issueragrees, in reliance upon the agreements of the other Revolving Credit Lendersset forth in this Section 2.03, (1) from time to time on any BusinessDay during the period from the Closing Date until the Letter of CreditExpiration Date, to issue Letters of Credit for the account of the Borrower,and to amend or extend Letters of Credit previously issued by it, in accordancewith Section 2.03(b), and (2) to honor drawings under the Letters of Credit;and (B) the Revolving Credit Lenders severally agree to participate in Lettersof Credit issued for the account of the Borrower and any drawings thereunder(including Sight Drafts, Acceptances and Deferred Payment Obligations); providedthat after giving effect to any L/C Credit Extension with respect to any Letterof Credit, (x) the Total Outstandings shall not exceed the AggregateCommitments, (y) the aggregate Outstanding Amount of the Revolving Credit Loansof any Lender, plus such Lender’s Pro Rata Share of the OutstandingAmount of all L/C Obligations, plus such Lender’s Pro Rata Share of theOutstanding Amount of all Swing Line Loans shall not exceed such Lender’sRevolving Credit Commitment, and (z) the Outstanding Amount of the L/CObligations shall not exceed the Letter of Credit Sublimit.  Each request by the Borrower for theissuance or amendment of a Letter of Credit shall be deemed to be arepresentation by the Borrower that the L/C Credit Extension so requestedcomplies with the conditions set forth in the proviso to the precedingsentence.  Within the foregoing limits,and subject to the terms and conditions hereof, the Borrower’s ability toobtain Letters of Credit shall be fully revolving, and accordingly the Borrowermay, during the foregoing period, obtain Letters of Credit to replace Lettersof Credit that have expired or that have been drawn upon and reimbursed.  All Existing Letters of Credit shall bedeemed to have

 

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been issued pursuant hereto, and from and after theClosing Date shall be subject to and governed by the terms and conditionshereof.

 

##### (ii)           The L/C Issuershall not issue any Letter of Credit if:

#####  

(A)          Subject to Section 2.03(b)(iii),the expiry date of such requested Letter of Credit would occur more than twelvemonths after the date of issuance or last extension, unless the RequiredLenders have approved such expiry date; or

 

(B)           the expiry date of such requestedLetter of Credit would occur after the Letter of Credit Expiration Date, unlessall the Revolving Credit Lenders (other than Defaulting Lenders) have approvedsuch expiry date.

 

##### (iii)          The L/C Issuershall not be under any obligation to issue any Letter of Credit if:

#####  

(A)          any order, judgment or decree of anyGovernmental Authority or arbitrator shall by its terms purport to enjoin orrestrain the L/C Issuer from issuing such Letter of Credit, or any Lawapplicable to the L/C Issuer or any request or directive (whether or not havingthe force of law) from any Governmental Authority with jurisdiction over theL/C Issuer shall prohibit, or request that the L/C Issuer refrain from, theissuance of letters of credit generally or such Letter of Credit in particularor shall impose upon the L/C Issuer with respect to such Letter of Credit anyrestriction, reserve or capital requirement (for which the L/C Issuer is nototherwise compensated hereunder) not in effect on the Closing Date, or shallimpose upon the L/C Issuer any unreimbursed loss, cost or expense which was notapplicable on the Closing Date and which, in each case, the L/C Issuer in goodfaith deems material to it;

 

(B)           the issuance of such Letter of Creditwould violate any Laws applicable to the L/C Issuer or one or more policies ofthe L/C Issuer; or

 

(C)           except as otherwise agreed by theAdministrative Agent and the L/C Issuer, such Letter of Credit is in an initialface amount less than $50,000, in the case of a commercial Letter of Credit, or$50,000, in the case of a standby Letter of Credit, or is to be denominated ina currency other than Dollars or has provisions that permit the stated faceamount of such Letter of Credit to be increased; or

 

##### (iv)          The L/C Issuer shall be under no obligation to amend anyLetter of Credit if (A) the L/C Issuer would have no obligation at such time toissue such Letter of Credit in its amended form under the terms hereof, or (B)the beneficiary of such Letter of Credit does not accept the proposed amendmentto such Letter of Credit.

#####  

### (b)           Procedures for Issuance and Amendment of Letters ofCredit; Auto-Extension Letters of Credit. (i)  Each Letter of Credit shallbe issued or amended, as the case may be, upon the request of the Borrowerdelivered to the L/C Issuer (with a copy to the Administrative Agent) in theform of a Letter of Credit Application, appropriately completed and signed by aResponsible Officer of the Borrower. Such Letter of Credit Application must be received by the L/C Issuer andthe Administrative Agent not later than 1:00 p.m. at least two

###  

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### Business Days (or such later date and time asthe Administrative Agent and the L/C Issuer may agree in a particular instancein their sole discretion) prior to the proposed issuance date or date ofamendment, as the case may be.  In thecase of a request for an initial issuance of a Letter of Credit, such Letter ofCredit Application shall specify in form and detail reasonably satisfactory tothe L/C Issuer:  (A) the proposedissuance date of the requested Letter of Credit (which shall be a BusinessDay); (B) the amount thereof; (C) the expiry date thereof; (D) the name andaddress of the beneficiary thereof; (E) the documents to be presented by suchbeneficiary in case of any drawing thereunder; (F) the full text of anycertificate to be presented by such beneficiary in case of any drawingthereunder; and (G) such other matters as the L/C Issuer may reasonablyrequire.  In the case of a request foran amendment of any outstanding Letter of Credit, such Letter of Credit Applicationshall specify in form and detail reasonably satisfactory to the L/C Issuer (A)the Letter of Credit to be amended; (B) the proposed date of amendment thereof(which shall be a Business Day); (C) the nature of the proposed amendment; and(D) such other matters as the L/C Issuer may reasonably require.  Additionally, the Borrower shall furnish tothe L/C Issuer and the Administrative Agent such other documents andinformation pertaining to such requested Letter of Credit issuance oramendment, including any Issuer Documents, as the L/C Issuer or theAdministrative Agent may require.

###  

##### (ii)           Promptly after receipt of any Letter of CreditApplication, the L/C Issuer will confirm with the Administrative Agent (bytelephone or in writing) that the Administrative Agent has received a copy ofsuch Letter of Credit Application from the Borrower and, if not, the L/C Issuerwill provide the Administrative Agent with a copy thereof.  Unless the L/C Issuer has received writtennotice from any Lender, the Administrative Agent or any Loan Party, at leastone Business Day prior to the requested date of issuance or amendment of theapplicable Letter of Credit, that one or more applicable conditions containedin Article IV shall not then be satisfied, then, subject to the termsand conditions hereof, the L/C Issuer shall, on the requested date, issue aLetter of Credit for the account of the Borrower or enter into the applicableamendment, as the case may be. Immediately upon the issuance of each Letter of Credit, each RevolvingCredit Lender shall be deemed to, and hereby irrevocably and unconditionallyagrees to, purchase from the L/C Issuer a risk participation in such Letter ofCredit in an amount equal to the product of such Lender’s Pro Rata Share timesthe amount of such Letter of Credit.

#####  

##### (iii)          If the Borrower so requests in any applicable Letter ofCredit Application, the L/C Issuer may, in its sole and absolute discretion,agree to issue a Letter of Credit that has automatic extension provisions(each, an “***Auto-ExtensionLetter of Credit***”); provided that any such Auto-ExtensionLetter of Credit must permit the L/C Issuer to prevent any such renewal atleast once in each twelve-month period (commencing with the date of issuance ofsuch Letter of Credit) by giving prior notice to the beneficiary thereof notlater than a day (the “***NonextensionNotice Date***”) in each such twelve-month period to be agreed uponat the time such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer, the Borrower shall not berequired to make a specific request to the L/C Issuer for any suchextension.  Once an Auto-ExtensionLetter of Credit has been issued, the Lenders shall be deemed to haveauthorized (but may not require) the L/C Issuer to permit the extension of suchLetter of Credit at any time to an expiry date not later than the Letter ofCredit Expiration Date; provided, however, that the L/C Issuershall not permit any such extension if (A) the L/C Issuer has determined thatit would not be permitted, or would have no obligation at such time to issuesuch Letter of Credit in its revised form under the terms hereof (by reason ofthe provisions of Section 2.03(a)(ii) or otherwise), or

#####  

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##### (B) it has received notice (which may be bytelephone or in writing) on or before the day that is five Business Days beforethe Nonextension Notice Date (1) from the Administrative Agent that theRequired Lenders have elected not to permit such extension, (2) from theAdministrative Agent, any Revolving Credit Lender or any Loan Party that one ormore of the applicable conditions specified in Section 4.02 is not thensatisfied, and in each such case directing the L/C Issuer not to permit suchextension or (3) from the Borrower directing the L/C Issuer not to permit suchextension.

#####  

##### (iv)          Promptly after its delivery of any Letter of Credit or anyamendment to a Letter of Credit to an advising bank with respect thereto or tothe beneficiary thereof, the L/C Issuer will also deliver to the Borrower andthe Administrative Agent a true and complete copy of such Letter of Credit oramendment.

#####  

### (c)           Drawings and Reimbursements; Funding of Participations.  (i) Upon receipt from the beneficiary of any Letter of Credit of any noticeof a drawing under such Letter of Credit, the L/C Issuer shall notify theBorrower and the Administrative Agent thereof. If the L/C Issuer notifies the Borrower of such payment prior to 1:00p.m. on the date of any payment by the L/C Issuer under a Letter of Credit (eachsuch date, an “***Honor Date***”), the Borrower shallreimburse the L/C Issuer through the Administrative Agent in an amount equal tothe amount of such drawing; provided, that if such notice is notprovided to the Borrower prior to 1:00 p.m. on the Honor Date, then theBorrower shall reimburse the L/C Issuer through the Administrative Agent in anamount equal to the amount of such drawing on the next succeeding Business Dayand such extension of time shall be reflected in computing fees in respect ofany such Letter of Credit.  If theBorrower fails to so reimburse the L/C Issuer by such time, the AdministrativeAgent shall promptly notify each Revolving Credit Lender of the Honor Date, theamount of the unreimbursed drawing (the “***Unreimbursed Amount***”),and the amount of such Revolving Credit Lender’s Pro Rata Share thereof.  In such event, the Borrower shall be deemedto have requested a Revolving Credit Borrowing of Base Rate Loans to bedisbursed on the Honor Date in an amount equal to the Unreimbursed Amount,without regard to the minimum and multiples specified in Section 2.02for the principal amount of Base Rate Loans, but subject to the amount of theunutilized portion of the Revolving Credit Commitments and the conditions setforth in Section 4.02 (other than the delivery of a Committed LoanNotice).  Any notice given by the L/CIssuer or the Administrative Agent pursuant to this Section 2.03(c)(i)may be given by telephone if immediately confirmed in writing; providedthat the lack of such an immediate confirmation shall not affect theconclusiveness or binding effect of such notice.

###  

##### (ii)           Each Revolving Credit Lender (including the Lender actingas L/C Issuer) shall upon any notice pursuant to Section 2.03(c)(i) makefunds available to the Administrative Agent for the account of the L/C Issuerat the Administrative Agent’s Office in an amount equal to its Pro Rata Shareof the Unreimbursed Amount not later than 1:00 p.m. on the Business Dayspecified in such notice by the Administrative Agent, whereupon, subject to theprovisions of Section 2.03(c)(iii), each Revolving Credit Lender that somakes funds available shall be deemed to have made a Base Rate Loan to theBorrower in such amount.  TheAdministrative Agent shall remit the funds so received to the L/C Issuer.

#####  

##### (iii)          With respect to any Unreimbursed Amount that is not fullyrefinanced by a Revolving Credit Borrowing of Base Rate Loans because theconditions set forth in Section 4.02

#####  

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##### cannot be satisfied or for any other reason,the Borrower shall be deemed to have incurred from the L/C Issuer an L/CBorrowing in the amount of the Unreimbursed Amount that is not so refinanced,which L/C Borrowing shall be due and payable on demand (together with interest)and shall bear interest at the Default Rate. In such event, each Revolving Credit Lender’s payment to theAdministrative Agent for the account of the L/C Issuer pursuant to Section2.03(c)(ii) shall be deemed payment in respect of its participation in suchL/C Borrowing and shall constitute an L/C Advance from such Lender insatisfaction of its participation obligation under this Section 2.03.

#####  

##### (iv)          Until each Revolving Credit Lender funds its RevolvingCredit Loan or L/C Advance pursuant to this Section 2.03(c) to reimbursethe L/C Issuer for any amount drawn under any Letter of Credit, interest inrespect of such Lender’s Pro Rata Share of such amount shall be solely for theaccount of the L/C Issuer.

#####  

##### (v)           Each Revolving Credit Lender’s obligation to makeRevolving Credit Loans or L/C Advances to reimburse the L/C Issuer for amountsdrawn under Letters of Credit, as contemplated by this Section 2.03(c),shall be absolute and unconditional and shall not be affected by anycircumstance, including (A) any setoff, counterclaim, recoupment, defense orother right which such Lender may have against the L/C Issuer, the Borrower orany other Person for any reason whatsoever; (B) the occurrence or continuanceof a Default, or (C) any other occurrence, event or condition, whether or notsimilar to any of the foregoing; provided, however, that eachRevolving Credit Lender’s obligation to make Revolving Credit Loans pursuant tothis Section 2.03(c) is subject to the conditions set forth in Section4.02 (other than delivery by the Borrower of a Committed Loan Notice).  No such making of an L/C Advanceshall relieve or otherwise impair the obligation of the Borrower to reimbursethe L/C Issuer for the amount of any payment made by the L/C Issuer under anyLetter of Credit, together with interest as provided herein.

#####  

##### (vi)          If any Revolving Credit Lender fails to make available tothe Administrative Agent for the account of the L/C Issuer any amount requiredto be paid by such Lender pursuant to the foregoing provisions of this Section2.03(c) by the time specified in Section 2.03(c)(ii), the L/C Issuershall be entitled to recover from such Lender (acting through theAdministrative Agent), on demand, such amount with interest thereon for theperiod from the date such payment is required to the date on which such paymentis immediately available to the L/C Issuer at a rate per annum equal to theFederal Funds Rate from time to time in effect.  A certificate of the L/C Issuer submitted to any Revolving CreditLender (through the Administrative Agent) with respect to any amounts owingunder this Section 2.03(c)(vi) shall be conclusive absent manifesterror.

#####  

### (d)           Repayment of Participations.  (i) At any time after the L/C Issuer has made a payment under any Letter ofCredit and has received from any Revolving Credit Lender such Lender’s L/CAdvance in respect of such payment in accordance with Section 2.03(c),if the Administrative Agent receives for the account of the L/C Issuer anypayment in respect of the related Unreimbursed Amount or interest thereon(whether directly from the Borrower or otherwise, including proceeds of CashCollateral applied thereto by the Administrative Agent), the AdministrativeAgent will distribute to such Lender its Pro Rata Share thereof (appropriatelyadjusted, in the case of interest payments, to reflect the period of timeduring which such

###  

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### Lender’s L/C Advance was outstanding) in thesame funds as those received by the Administrative Agent.

###  

##### (ii)           If any payment received by the Administrative Agent forthe account of the L/C Issuer pursuant to Section 2.03(c)(i) is requiredto be returned under any of the circumstances described in Section 10.06(including pursuant to any settlement entered into by the L/C Issuer in itsdiscretion), each Revolving Credit Lender shall pay to the Administrative Agentfor the account of the L/C Issuer its Pro Rata Share thereof on demand of theAdministrative Agent, plus interest thereon from the date of such demand to thedate such amount is returned by such Lender, at a rate per annum equal to theFederal Funds Rate from time to time in effect.

#####  

### (e)           Obligations Absolute.  The obligation of the Borrower to reimburse the L/C Issuer foreach drawing under each Letter of Credit and to repay each L/C Borrowing shallbe absolute, unconditional and irrevocable, and shall be paid strictly inaccordance with the terms of this Agreement under all circumstances, includingthe following:

###  

##### (i)            any lack ofvalidity or enforceability of such Letter of Credit, this Agreement, or anyother Loan Document;

#####  

##### (ii)           the existence ofany claim, counterclaim, setoff, defense or other right that the Borrower mayhave at any time against any beneficiary or any transferee of such Letter ofCredit (or any Person for whom any such beneficiary or any such transferee maybe acting), the L/C Issuer or any other Person, whether in connection with thisAgreement, the transactions contemplated hereby or by such Letter of Credit orany agreement or instrument relating thereto, or any unrelated transaction;

#####  

##### (iii)          any draft, demand,certificate or other document presented under such Letter of Credit proving tobe forged, fraudulent, invalid or insufficient in any respect or any statementtherein being untrue or inaccurate in any respect; or any loss or delay in thetransmission or otherwise of any document required in order to make a drawingunder such Letter of Credit;

#####  

##### (iv)          any payment by theL/C Issuer under such Letter of Credit against presentation of a draft orcertificate that does not strictly comply with the terms of such Letter ofCredit; or any payment made by the L/C Issuer under such Letter of Credit toany Person purporting to be a trustee in bankruptcy, debtor-in-possession,assignee for the benefit of creditors, liquidator, receiver or otherrepresentative of or successor to any beneficiary or any transferee of suchLetter of Credit, including any arising in connection with any proceeding underany Debtor Relief Law;

#####  

##### (v)           any exchange, releaseor nonperfection of any Collateral, or any release or amendment or waiver of orconsent to departure from the Guaranty or any other guarantee, for all or anyof the Obligations of the Borrower in respect of such Letter of Credit; or

#####  

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##### (vi)          any othercircumstance or happening whatsoever, whether or not similar to any of theforegoing, including any other circumstance that might otherwise constitute adefense available to, or a discharge of, the Borrower.

#####  

The Borrower shall promptly examine a copy of eachLetter of Credit and each amendment thereto that is delivered to it and, in theevent of any claim of noncompliance with the Borrower’s instructions or otherirregularity, the Borrower will promptly notify the L/C Issuer.  The Borrower shall be conclusively deemed tohave waived any such claim against the L/C Issuer and its correspondents unlesssuch notice is given as aforesaid.

 

### (f)            Role of L/C Issuer.  Each Lender and the Borrower agree that, in paying any drawingunder a Letter of Credit, the L/C Issuer shall not have any responsibility toobtain any document (other than any sight draft, certificates and documentsexpressly required by the Letter of Credit) or to ascertain or inquire as tothe validity or accuracy of any such document or the authority of the Personexecuting or delivering any such document. None of the L/C Issuer, any Agent-Related Person nor any of therespective correspondents, participants or assignees of the L/C Issuer shall beliable to any Lender for (i) any action taken or omitted in connection herewithat the request or with the approval of the Lenders or the Required Lenders, asapplicable; (ii) any action taken or omitted in the absence of gross negligenceor willful misconduct; or (iii) the due execution, effectiveness, validity orenforceability of any document or instrument related to any Letter of Credit orLetter of Credit Application.  TheBorrower hereby assumes all risks of the acts or omissions of any beneficiary ortransferee with respect to its use of any Letter of Credit; provided, however,that this assumption is not intended to, and shall not, preclude the Borrower’spursuing such rights and remedies as it may have against the beneficiary ortransferee at law or under any other agreement.  None of the L/C Issuer, any Agent-Related Person, nor any of therespective correspondents, participants or assignees of the L/C Issuer, shallbe liable or responsible for any of the matters described in clauses (i)through (v) of Section 2.03(e); provided, however,that anything in such clauses to the contrary notwithstanding, the Borrower mayhave a claim against the L/C Issuer, and the L/C Issuer may be liable to theBorrower, to the extent, but only to the extent, of any direct, as opposed toconsequential or exemplary, damages suffered by the Borrower which the Borrowerproves were caused by the L/C Issuer’s willful misconduct or gross negligenceor the L/C Issuer’s willful or grossly negligent failure to pay under any Letterof Credit after the presentation to it by the beneficiary of a sight draft andcertificate(s) strictly complying with the terms and conditions of a Letter ofCredit.  In furtherance and not inlimitation of the foregoing, the L/C Issuer may accept documents that appear ontheir face to be in order, without responsibility for further investigation,regardless of any notice or information to the contrary, and the L/C Issuershall not be responsible for the validity or sufficiency of any instrumenttransferring or assigning or purporting to transfer or assign a Letter ofCredit or the rights or benefits thereunder or proceeds thereof, in whole or inpart, which may prove to be invalid or ineffective for any reason.

###  

### (g)           Cash Collateral. Upon the request of the Administrative Agent, (i) if the L/C Issuer hashonored any full or partial drawing request under any Letter of Credit and suchdrawing has resulted in an L/C Borrowing and the conditions set forth in Section4.02 to a Revolving Credit Borrowing cannot then be met, or (ii) if, as ofthe Letter of Credit Expiration Date, any Letter of Credit for any reasonremains outstanding and partially or wholly undrawn, the Borrower shallimmediately Cash Collateralize the then Outstanding Amount of all L/C

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### Obligations (in an amount equal to suchOutstanding Amount determined as of the date of such L/C Borrowing or theLetter of Credit Expiration Date, as the case may be).  Sections 2.05 and 8.02 setforth certain additional requirements to deliver Cash Collateralhereunder.  For purposes of this Section2.03, Section 2.05 and Section 8.02, “***Cash Collateralize***”means to pledge and deposit with or deliver to the Administrative Agent, forthe benefit of the L/C Issuer and the Lenders, as collateral for the L/CObligations, cash or deposit account balances (“***Cash Collateral***”)or one or more backstop Letters of Credit in form and substance acceptable to,and issued by financial institutions reasonably acceptable to, the L/C Issuer(each such letter of credit, a “***BackstopL/C***”) pursuant to documentation in form and substance reasonablysatisfactory to the Administrative Agent and the L/C Issuer (which documentsare hereby consented to by the Lenders). Derivatives of such term have corresponding meanings.  The Borrower hereby grants to theAdministrative Agent, for the benefit of the L/C Issuer and the Lenders, asecurity interest in all such cash, deposit accounts and all balances thereinand all proceeds of the foregoing.  CashCollateral shall be maintained in blocked, non-interest bearing depositaccounts at Bank of America.  If at anytime the Administrative Agent determines that any funds held as Cash Collateralare subject to any right or claim of any Person other than the AdministrativeAgent or that the total amount of such funds or Backstop L/Cs then held by theL/C Issuer is less than the aggregate Outstanding Amount of all L/CObligations, the Borrower will, forthwith upon demand by the AdministrativeAgent, either (x) deliver one or more additional Backstop L/Cs or (y) pay tothe Administrative Agent, as additional funds to be deposited and held in thedeposit accounts at Bank of America as aforesaid, an amount equal to the excessof (a) such aggregate Outstanding Amount over (b) the total amount offunds, if any, then held as Cash Collateral that the Administrative Agentdetermines to be free and clear of any such right and claim or subject to suchexisting Backstop L/Cs.  Upon thedrawing of any Letter of Credit for which funds are on deposit as CashCollateral, such funds shall be applied, to the extent permitted underapplicable law, to reimburse the L/C Issuer. To the extent the amount of any Cash Collateral exceeds the thenOutstanding Amount of such L/C Obligations and so long as no Event of Defaulthas occurred and is continuing, the excess shall be refunded to theBorrower.  To the extent that theaggregate amount available to be drawn under any Backstop L/C exceeds theOutstanding Amount of such L/C Obligations, then the L/C Issuer shall, uponrequest by the Borrower, use reasonable efforts to cause the aggregate amountavailable to be drawn under any Backstop L/C to be reduced by the amount ofsuch excess.

###  

### (h)           Applicability of ISP98 and UCP.  Unless otherwise expressly agreed by the L/CIssuer and the Borrower when a Letter of Credit is issued (including any suchagreement applicable to an Existing Letter of Credit), (i) the rules of ISPshall apply to each standby Letter of Credit, and (ii) the rules of the UniformCustoms and Practice for Documentary Credits, as most recently published by theInternational Chamber of Commerce at the time of issuance shall apply to eachcommercial Letter of Credit.

###  

### (i)            Letter of Credit Fees.  The Borrower shall pay to the Administrative Agent for theaccount of each Revolving Credit Lender in accordance with its Pro Rata Share aLetter of Credit fee (the “***Letter of Credit Fee***”) for each outstandingLetter of Credit equal to the Applicable Rate for Revolving Credit Loans whichare Eurodollar Rate Loans times the daily maximum amount available to bedrawn under such Letter of Credit.  SuchLetter of Credit Fees shall be (i) computed on a quarterly basis in arrears and(ii) due and payable on the last Business Day of each March, June, Septemberand December, commencing with the first such date to occur after the issuanceof such Letter of Credit, on the Letter of Credit Expiration Date andthereafter on demand.  If there is anychange in the Applicable Rate specified in the preceding sentence during anyquarter, the daily maximum amount of each Letter of Credit shall be computedand multiplied by the Applicable Rate separately for each period during suchquarter that such Applicable Rate was in effect.

###  

### (j)            Fronting Fee and Documentary and Processing ChargesPayable to L/C Issuer.  The Borrowershall pay directly to the L/C Issuer for its own account a fronting fee withrespect to each Letter of Credit equal to 0.125% per annum times the averagedaily maximum amount available to be drawn under such Letter of Credit.  Such fronting fee shall be computed on aquarterly basis in arrears.  Suchfronting fee shall be due and payable on the last Business Day of each of suchMarch, June, September and December, commencing with the first such date to

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### occur after the issuance of such Letter ofCredit, on the Letter of Credit Expiration Date and thereafter on demand.  In addition, the Borrower shall pay directlyto the L/C Issuer for its own account the customary issuance, presentation,amendment and other processing fees, and other standard costs and charges, ofthe L/C Issuer relating to letters of credit as from time to time ineffect.  Such customary fees andstandard costs and charges are due and payable within five Business Days ofdemand and are nonrefundable.

###  

### (k)           Conflict with Issuer Documents.  In the event of any conflict between theterms hereof and the terms of any Letter of Credit Application, the termshereof shall control.

###  

2.04         Swing LineLoans.  (a)  The Swing Line.  Subject to the terms and conditions setforth herein, the Swing Line Lender agrees to make loans (each such loan, a “***Swing Line Loan***”) tothe Borrower from time to time on any Business Day during the AvailabilityPeriod in an aggregate amount not to exceed at any time outstanding the amountof the Swing Line Sublimit, notwithstanding the fact that such Swing LineLoans, when aggregated with the Pro Rata Share of the Outstanding Amount ofLoans and L/C Obligations of the Lender acting as Swing Line Lender, may exceedthe amount of such Lender’s Commitment; provided, however, thatafter giving effect to any Swing Line Loan, (i) the Total Outstandings shallnot exceed the Aggregate Commitments, and (ii) the aggregate Outstanding Amountof the Revolving Credit Loans of any Lender, plus such Lender’s Pro RataShare of the Outstanding Amount of all L/C Obligations, plus suchLender’s Pro Rata Share of the Outstanding Amount of all Swing Line Loans shallnot exceed such Lender’s Revolving Credit Commitment, and providedfurtherthat the Borrower shall not use the proceeds of any Swing Line Loan torefinance any outstanding Swing Line Loan. Within the foregoing limits, and subject to the other terms andconditions hereof, the Borrower may borrow under this Section 2.04,prepay under Section 2.05, and reborrow under this Section 2.04.  Each Swing Line Loan shall be a Base RateLoan.  Immediately upon the making of aSwing Line Loan, each Revolving Credit Lender shall be deemed to, and herebyirrevocably and unconditionally agrees to, purchase from the Swing Line Lendera risk participation in such Swing Line Loan in an amount equal to the productof such Lender’s Pro Rata Share times the amount of such Swing LineLoan.

 

### (b)           Borrowing Procedures.  Each Swing Line Borrowing shall be made upon the Borrower’sirrevocable notice to the Swing Line Lender and the Administrative Agent, whichmay be given by telephone.  Each suchnotice must be received by the Swing Line Lender and the Administrative Agentnot later than 1:00 p.m. on the requested borrowing date, and shall

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### specify (i) the amount to be borrowed, whichshall be a minimum of $250,000, and (ii) the requested borrowing date, whichshall be a Business Day.  Each suchtelephonic notice must be confirmed promptly by delivery to the Swing LineLender and the Administrative Agent of a written Swing Line Loan Notice,appropriately completed and signed by a Responsible Officer of theBorrower.  Promptly after receipt by theSwing Line Lender of any telephonic Swing Line Loan Notice, the Swing LineLender will confirm with the Administrative Agent (by telephone or in writing)that the Administrative Agent has also received such Swing Line Loan Noticeand, if not, the Swing Line Lender will notify the Administrative Agent (bytelephone or in writing) of the contents thereof.  Unless the Swing Line Lender has received notice (by telephone orin writing) from the Administrative Agent (including at the request of anyRevolving Credit Lender) prior to 2:00 p.m. on the date of the proposed SwingLine Borrowing (A) directing the Swing Line Lender not to make such Swing LineLoan as a result of the limitations set forth in the proviso to the firstsentence of Section 2.04(a), or (B) that one or more of the applicableconditions specified in Section 4.02 is not then satisfied, then,subject to the terms and conditions hereof, the Swing Line Lender will, notlater than 3:00 p.m. on the borrowing date specified in such Swing Line LoanNotice, make the amount of its Swing Line Loan available to the Borrower at itsoffice by crediting the account of the Borrower on the books of the Swing LineLender in immediately available funds.

###  

### (c)           Refinancing of Swing Line Loans.  (i) The Swing Line Lender at any time in its sole and absolute discretionmay request, on behalf of the Borrower (which hereby irrevocably authorizes theSwing Line Lender to so request on its behalf), that each Revolving Credit Lendermake a Base Rate Loan in an amount equal to such Lender’s Pro Rata Share of theamount of Swing Line Loans then outstanding. Such request shall be made in writing (which written request shall bedeemed to be a Committed Loan Notice for purposes hereof) and in accordancewith the requirements of Section 2.02, without regard to the minimum andmultiples specified therein for the principal amount of Base Rate Loans, butsubject to the unutilized portion of the aggregate Revolving Credit Commitmentsand the conditions set forth in Section 4.02.  The Swing Line Lender shall furnish the Borrower with a copy ofthe applicable Committed Loan Notice promptly after delivering such notice tothe Administrative Agent.  EachRevolving Credit Lender shall make an amount equal to its Pro Rata Share of theamount specified in such Committed Loan Notice available to the AdministrativeAgent in immediately available funds for the account of the Swing Line Lenderat the Administrative Agent’s Office not later than 1:00 p.m. on the dayspecified in such Committed Loan Notice, whereupon, subject to Section2.04(c)(ii), each Revolving Credit Lender that so makes funds availableshall be deemed to have made a Base Rate Loan to the Borrower in suchamount.  The Administrative Agent shallremit the funds so received to the Swing Line Lender and the Swing Line Lendershall apply such funds in repayment of the Swing Line Loan.

###  

##### (ii)           Iffor any reason any Swing Line Loan cannot be refinanced by such a RevolvingCredit Borrowing in accordance with Section 2.04(c)(i), the request forBase Rate Loans submitted by the Swing Line Lender as set forth herein shall bedeemed to be a request by the Swing Line Lender that each of the RevolvingCredit Lenders fund its risk participation in the relevant Swing Line Loan andeach Revolving Credit Lender’s payment to the Administrative Agent for theaccount of the Swing Line Lender pursuant to Section 2.04(c)(i) shall bedeemed payment in respect of such participation.

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##### (iii)          If any Revolving Credit Lender fails to make available tothe Administrative Agent for the account of the Swing Line Lender any amountrequired to be paid by such Lender pursuant to the foregoing provisions of thisSection 2.04(c) by the time specified in Section 2.04(c)(i), theSwing Line Lender shall be entitled to recover from such Lender (acting throughthe Administrative Agent), on demand, such amount with interest thereon for theperiod from the date such payment is required to the date on which such paymentis immediately available to the Swing Line Lender at a rate per annum equal tothe Federal Funds Rate from time to time in effect.  A certificate of the Swing Line Lender submitted to any Lender(through the Administrative Agent) with respect to any amounts owing under thisclause (iii) shall be conclusive absent manifest error.

#####  

##### (iv)          Each Revolving Credit Lender’s obligation to make RevolvingCredit Loans or to purchase and fund risk participations in Swing Line Loans pursuantto this Section 2.04(c) shall be absolute and unconditional and shallnot be affected by any circumstance, including (A) any setoff, counterclaim,recoupment, defense or other right which such Lender may have against the SwingLine Lender, the Borrower or any other Person for any reason whatsoever, (B)the occurrence or continuance of a Default, or (C) any other occurrence, eventor condition, whether or not similar to any of the foregoing; provided, however,that each Revolving Credit Lender’s obligation to make Revolving Credit Loanspursuant to this Section 2.04(c) is subject to the conditions set forthin Section 4.02 (other than delivery of a Committed Loan Notice).  No such funding of risk participations shallrelieve or otherwise impair the obligation of the Borrower to repay Swing LineLoans, together with interest as provided herein.

#####  

### (d)           Repayment of Participations.  (i) At any time after any Revolving Credit Lender has purchased and funded arisk participation in a Swing Line Loan, if the Swing Line Lender receives anypayment on account of such Swing Line Loan, the Swing Line Lender willdistribute to such Lender its Pro Rata Share of such payment (appropriatelyadjusted, in the case of interest payments, to reflect the period of time duringwhich such Lender’s risk participation was funded) in the same funds as thosereceived by the Swing Line Lender.

###  

##### (ii)           If any payment received by the Swing Line Lender inrespect of principal or interest on any Swing Line Loan is required to bereturned by the Swing Line Lender under any of the circumstances described in Section10.06 (including pursuant to any settlement entered into by the Swing LineLender in its discretion), each Revolving Credit Lender shall pay to the SwingLine Lender its Pro Rata Share thereof on demand of the Administrative Agent,plus interest thereon from the date of such demand to the date such amount isreturned, at a rate per annum equal to the Federal Funds Rate.  The Administrative Agent will make suchdemand upon the request of the Swing Line Lender.

#####  

### (e)           Interest for Account of Swing Line Lender.  The Swing Line Lender shall be responsiblefor invoicing the Borrower for interest on the Swing Line Loans.  Until each Revolving Credit Lender funds itsBase Rate Loan or risk participation pursuant to this Section 2.04 torefinance such Lender’s Pro Rata Share of any Swing Line Loan, interest inrespect of such Pro Rata Share shall be solely for the account of the SwingLine Lender.

 

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### (f)            Payments Directly to Swing Line Lender.  The Borrower shall make all payments ofprincipal and interest in respect of the Swing Line Loans directly to the SwingLine Lender.

###  

2.05         Prepayments.  (a)  Optional.  (i)  The Borrower may, upon noticeto the Administrative Agent, at any time or from time to time voluntarilyprepay Loans in whole or in part without premium or penalty; providedthat (1) such notice must be received by the Administrative Agent not laterthan 1:00 p.m. (A) three Business Days prior to any date of prepayment ofEurodollar Rate Loans or Screen Rate Loans and (B) on the date of prepayment ofBase Rate Loans; (2) any prepayment of Eurodollar Rate Loans shall be in aminimum principal amount of $2,000,000 or a whole multiple of $500,000 inexcess thereof; (3) any prepayment of Canadian Term Loans shall be in aprincipal amount of CD2,000,000 or a whole multiple of CD500,000 in excessthereof; and (4) any prepayment of Base Rate Loans shall be in a minimumprincipal amount of $500,000 or a whole multiple of $100,000 in excess thereofor, in each case, if less, the entire principal amount thereof thenoutstanding.  Each such notice shallspecify the date and amount of such prepayment and the Type(s) of Loans to beprepaid.  The Administrative Agent willpromptly notify each Lender of its receipt of each such notice, and of theamount of such Lender’s Pro Rata Share of such prepayment.  If such notice is given by the Borrower, theBorrower shall make such prepayment and the payment amount specified in suchnotice shall be due and payable on the date specified therein; providedthat the Borrower may rescind or postpone any such notice of prepayment if suchprepayment would have resulted from a refinancing of all the Loans and such refinancingshall not be consummated or otherwise shall be delayed.  Any prepayment of a Eurodollar Rate Loan orScreen Rate Loan shall be accompanied by all accrued interest thereon, togetherwith any additional amounts required pursuant to Section 3.05.  Each prepayment of the outstanding TermLoans pursuant to this Section 2.05(a) shall be applied ratably amongthe Dollar Term Facility and Canadian Term Facility, and to the principalrepayment installments of the Term Facility in such order of maturity as theBorrower may direct and each such prepayment shall be paid to the Lenders inaccordance with their respective Pro Rata Shares (it being understood thatafter such ratable allocation among the Dollar Term Facility and Canadian TermFacility, an amount less than the applicable minimum amounts specified in thefirst sentence of this Section 2.05(a) may be paid to the applicableLenders).

 

##### (ii)           The Borrower may, upon notice to the Swing Line Lender(with a copy to the Administrative Agent), at any time or from time to time,voluntarily prepay Swing Line Loans in whole or in part without premium orpenalty; provided that (1) such notice must be received by the SwingLine Lender and the Administrative Agent not later than 1:00 p.m. on the dateof the prepayment, and (2) any such prepayment shall be in a minimum principalamount of $100,000.  Each such noticeshall specify the date and amount of such prepayment.  If such notice is given by the Borrower, the Borrower shall makesuch prepayment and the payment amount specified in such notice shall be dueand payable on the date specified therein.

#####  

### (b)           Mandatory.  (i)  Within five Business Daysafter financial statements have been delivered pursuant to Section 6.13(c)and the related Compliance Certificate has been delivered pursuant to Section6.13(d), the Borrower shall prepay an aggregate principal amount of Loansequal to, if the Total Leverage Ratio for such Fiscal Year is (x) greaterthan or equal to 4.00:1.00, 50%, (y) less than 4:00:1.00, but greater thanor equal to 3:00:1.00, 25% or (z) less

###  

57

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### than 3:00:1.00, 0%, in each case, of ExcessCash Flow for the Fiscal Year covered by such financial statements, commencingwith the Fiscal Year ended December 31, 2004; provided, that Excess CashFlow for the Fiscal Year ended December 31, 2004 shall be calculated on a *pro forma* basis as though the Nu-GroAcquisition had occurred on the first day of such Fiscal Year; providedfurtherthat any calculation of Excess Cash Flow by the Borrower may contain customarycurrency translation estimates, and may further contain deductions in respectof withholding taxes that would be otherwise payable if such funds wererepatriated to the United States as reasonably determined by a ResponsibleOfficer of the Borrower.

###  

##### (ii)           If, in each case, Holdings, the Borrower or any of theirrespective Subsidiaries Disposes of any property or assets in any singletransaction or series of related transactions (other than any Disposition ofany property or assets permitted by clauses (a), (b), (c),(d), (e), (f), (h), (i), (m), (n),(r) or (s) of Section 7.04) which in the aggregate resultsin the receipt by Holdings, the Borrower or such Subsidiary of Net CashProceeds in excess of $2,000,000 or receipt of condemnation or casualtyproceeds in respect of any asset or property, the Borrower shall prepay anaggregate principal amount of Loans in an amount equal to 100% of all Net CashProceeds received therefrom within two Business Days of receipt thereof byHoldings or such Subsidiary; provided, however, that, withrespect to any Net Cash Proceeds received in respect of a Disposition orproceeds of insurance and condemnation awards described in this Section2.05(b)(ii), at the option of the Borrower (as elected by the Borrower inwriting to the Administrative Agent on or prior to the date of the receipt ofsuch proceeds or awards), and so long as no Event of Default shall haveoccurred and be continuing, the Borrower may reinvest all or any portion of suchNet Cash Proceeds in assets useful in its business so long as (x) within 360days after the receipt of such Net Cash Proceeds, such purchase or repair shallhave been consummated or (y) if the Borrower or the relevant Subsidiary hasentered into a definitive agreement within 360 days after its receipt of suchNet Cash Proceeds to purchase or repair such assets within 180 days thereafter,within such 180 days after such receipt of Net Cash Proceeds (in each case, ascertified by the Borrower in writing to the Administrative Agent); providedfurther, however, that any Net Cash Proceeds not subject to suchdefinitive agreement or so reinvested shall be immediately applied to theprepayment of the Loans as set forth in this Section 2.05; and providedstillfurther that any Net Cash Proceeds received in connectionwith any Disposition of property or assets located outside the United Statesmay contain deductions in respect of withholding taxes that would otherwise bepayable if such funds were repatriated to the United States.

#####  

##### (iii)          Upon each Specified Equity Issuance, the Borrower shallprepay an aggregate principal amount of Loans in an amount equal to (x) ifthe Total Leverage Ratio for the most recent Measurement Period ending on orprior to the date of such sale is greater than or equal to 4.00:1.00, 50%, (y)if the Total Leverage Ratio for the Measurement Period ending on or prior tothe date of such sale is less than 4.00:1.00 but greater than or equal to3.00:1.00, 25% and (z) if the Total Leverage Ratio for the most recentMeasurement Period ending on or prior to the date of such sale is less than3.00:1.00, 0% of all Net Cash Proceeds received therefrom immediately uponreceipt thereof by the Borrower (or after the occurrence of the Holding CompanyEvent, Holdings).

#####  

##### (iv)          Upon the incurrence or issuance by Holdings, the Borroweror any of their respective Subsidiaries of (A) any Indebtedness notexpressly permitted to be incurred or issued

#####  

58

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##### pursuant to Section 7.02, and (B) anyPermitted Subordinated Indebtedness permitted to be incurred pursuant to Section7.02(a), to the extent not permitted to be retained by the Borrowerthereunder, the Borrower shall prepay an aggregate principal amount of Loans inan amount equal to 100% of all Net Cash Proceeds received therefrom immediatelyupon receipt thereof by Holdings, the Borrower or such Subsidiary.

#####  

##### (v)           If for any reason the Total Outstandings at any timeexceed the Aggregate Commitments then in effect, the Borrower shall immediatelyprepay Loans and/or Cash Collateralize the L/C Obligations in an aggregateamount equal to such excess; provided, however, that the Borrowershall not be required to Cash Collateralize the L/C Obligations pursuant tothis Section 2.05(b)(v) unless after the prepayment in full of the Loansand Swing Line Loans the Total Outstandings exceed the Aggregate Commitmentsthen in effect.

#####  

##### (vi)          Each prepayment of Loans pursuant to this Section2.05(b) shall be applied, first*,* to the Term Facilities, ratably among the Dollar TermFacility and the Canadian Term Facility and (i) to next four principalrepayment installments of each such Facility in direct order of maturity and(ii) to the remaining principal repayment installments of each such Facility ona pro-rata basis based on the number of remaining installments and, thereafter*,* to the Revolving Credit Facility (the amount of suchprepayment of the Revolving Credit Facility, the****“***Reduction Amount***”) in the manner setforth in clause (vii) of this Section 2.05(b); and each suchprepayment shall be paid to the Lenders in accordance with their respective ProRata Shares.

#####  

##### (vii)         The Revolving Credit Facility shall be permanently reducedby the Reduction Amount on the date of the applicable prepayment and suchprepayment shall be, first*,*applied to prepay L/C Borrowings outstanding at such time until all such L/CBorrowings are paid in full, second*,* applied toprepay Swing Line Loans outstanding at such time until all such Swing LineLoans are paid in full, third*,* applied toprepay Revolving Credit Loans outstanding at such time until all such RevolvingCredit Loans are paid in full and, fourth*,*used to Cash Collateralize the L/C Obligations; and, thereafter, the amountremaining, if any, after the prepayment in full of all Loans and L/C Borrowingsoutstanding at such time and the L/C Obligations have been Cash Collateralizedin full may be retained by the Borrower for use in the ordinary course of itsbusiness.  Upon the drawing of anyLetter of Credit which has been Cash Collateralized, such funds shall beapplied (without any further action by or notice to or from the Borrower or anyother Loan Party) to reimburse the L/C Issuer or the Revolving Credit Lenders,as applicable.

#####  

##### (viii)        Notwithstanding any of the other provisions of Section2.05(b)(i) through (vii), the Borrower may, in its sole discretion,deposit the amount of any such prepayment otherwise required to be madethereunder into a Cash Collateral Account until the last day of any InterestPeriod pertaining to Loans being prepaid, at which time the AdministrativeAgent shall be authorized (without any further action by or notice to or fromthe Borrower or any other Loan Party) to apply such amount to the prepayment ofsuch Loans in accordance with this Section 2.05(b).  Upon the occurrence and during thecontinuance of any Event of Default, the Administrative Agent shall also beauthorized (without any further action by or notice to or from the Borrower orany other Loan Party) to apply such amount to the prepayment of the outstandingLoans in accordance with this Section 2.05(b).

#####  

59

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##### (ix)           Anything contained in this Section 2.05(b) to thecontrary notwithstanding, (A) if, following the occurrence of any Dispositionby any Loan Party or any of its Subsidiaries, the Borrower is required tocommit by a particular date (a “***Commitment Date***”) toapply or cause its Subsidiaries to apply an amount equal to any of the proceedsthereof in a particular manner, or to apply by a particular date (an “***Application Date***”) anamount equal to any such proceeds in a particular manner, in either case inorder to excuse the Borrower from being required to make an offer to theholders of any other debt or equity securities of the Borrower (an “***Asset Sale Offer***”) in connectionwith such Disposition, and the Borrower shall have failed to so commit or to soapply an amount equal to such proceeds on or prior to the applicable CommitmentDate or Application Date, as the case may be, or (B) if the Borrower at anyother time shall have failed to apply or commit or cause to be applied anamount equal to any such proceeds, and, assuming no further application orcommitment of an amount equal to such proceeds the Borrower would otherwise berequired to make an Asset Sale Offer in respect thereof, then in either suchcase the Borrower shall immediately pay or cause to be paid to theAdministrative Agent on or prior to the date on which the Borrower would berequired to make an Asset Sale Offer an amount equal to such proceeds  to be applied to the payment of the Loansand L/C Borrowings and to Cash Collateralize the L/C Obligations in the mannerset forth in Section 2.05(b) in such amounts as shall excuse theBorrower from making any such Asset Sale Offer.

#####  

2.06         Termination or Reduction ofCommitments.  (a)  Optional.  The Borrower may, upon notice to the Administrative Agent,terminate the portions of the Term Commitments, the Letter of Credit Sublimit,or the unused Revolving Credit Commitments, or from time to time permanentlyreduce the portions of the Term Commitments, the Letter of Credit Sublimit, orthe unused Revolving Credit Commitments; provided that (i) any suchnotice shall be received by the Administrative Agent not later than 1:00 p.m.one Business Day prior to the date of termination or reduction, (ii) any suchpartial reduction shall be in an aggregate amount of (A) in the case of allLoans other than Canadian Term Loans, $10,000,000 or any whole multiple of $1,000,000in excess thereof and (B)  in the caseof  Canadian Term Loans, CD10,000,000 orany whole multiple of CD1,000,000 in excess thereof and (iii) the Borrowershall not terminate or reduce the Term Commitments, the Letter of CreditSublimit, or the unused Revolving Credit Commitments if, after giving effectthereto and to any concurrent prepayments hereunder, the Total Outstandingswould exceed the Aggregate Commitments; provided that the Borrower mayrescind or postpone any such notice of termination of the Revolving CreditCommitments if such termination would have resulted from a refinancing of allthe Loans and such refinancing shall not be consummated or otherwise shall bedelayed.

 

### (b)           Mandatory.  (i)  The Commitments under eachTerm Facility shall be automatically and permanently reduced from time to timeupon each repayment or prepayment of the outstanding Term Loans, by an amountequal to the amount by which (A) the Commitments under such Term Facilityimmediately prior to such reduction exceeds (B) the aggregate principal amountof all Term Loans outstanding under such Term Facility at such time.

###  

##### (ii)           The Revolving Credit Facility shall be automatically andpermanently reduced on each date on which the prepayment of Revolving CreditLoans outstanding thereunder is required to be made pursuant to Section2.05(b)(i), (ii), (iii) or (iv) by an amount equal tothe applicable Reduction Amount.

#####  

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##### (iii)          If after giving effect to any reduction or termination ofunused Revolving Credit Commitments under this Section 2.06, the Letterof Credit Sublimit or the Swing Line Sublimit exceeds the amount of theaggregate Revolving Credit Commitments, such Sublimit shall be automaticallyreduced by the amount of such excess.

#####  

### (c)           Application of CommitmentReductions; Payment of Fees.  TheAdministrative Agent will promptly notify the Lenders of any termination orreduction of the Term Commitment, the Letter of Credit Sublimit, or the unusedRevolving Credit Commitment under this Section 2.06.  Each reduction of the Term Commitmentspursuant to Section 2.06(a) shall be applied to the applicable TermFacility.  Upon any reduction ofCommitments under a Facility, the Commitment of each Lender under such Facilityshall be reduced by such Lender’s Pro Rata Share of the amount by which suchFacility is reduced (other than the termination of the Commitment of any Lenderas provided in Section 3.07). All commitment fees accrued until the effective date of any terminationof the Aggregate Commitments shall be paid on the effective date of suchtermination.

###  

2.07         Repaymentof Loans.  (a)  Dollar Term Loans.  The Borrower shall repay to theAdministrative Agent for the ratable account of the Dollar Term Lenders theaggregate principal amount of all Dollar Term Loans outstanding on thefollowing dates in the respective amounts set forth opposite such dates (whichamounts shall be reduced as a result of the application of prepayments inaccordance with the order of priority set forth in Section 2.05) orincreased as a result of any increase in the amount of Dollar Term Loanspursuant to Section 2.14 (such increased amortization payments to becalculated in the same manner (and on the same basis) as the schedules setforth below for the Dollar Term Loans made as of the Closing Date).

 
| **Date**            |   | **Dollar  Term Loan Principal Amortization Amount** |       |
|---------------------|--------|-----------------------------------------------------|------------|
| June 30, 2004       |   | $                                                   | 837,500    |   |
| September 30,  2004 |   | $                                                   | 837,500    |   |
| December 31,  2004  |   | $                                                   | 837,500    |   |
| March 31, 2005      |   | $                                                   | 837,500    |   |
| June 30, 2005       |   | $                                                   | 837,500    |   |
| September 30,  2005 |   | $                                                   | 837,500    |   |
| December 31,  2005  |   | $                                                   | 837,500    |   |
| March 31, 2006      |   | $                                                   | 837,500    |   |
| June 30, 2006       |   | $                                                   | 837,500    |   |
| September 30,  2006 |   | $                                                   | 837,500    |   |
| December 31,  2006  |   | $                                                   | 837,500    |   |
| March 31, 2007      |   | $                                                   | 837,500    |   |
| June 30, 2007       |   | $                                                   | 837,500    |   |
| September 30,  2007 |   | $                                                   | 837,500    |   |
| December 31,  2007  |   | $                                                   | 837,500    |   |
| March 31, 2008      |   | $                                                   | 837,500    |   |
| June 30, 2008       |   | $                                                   | 837,500    |   |
| September 30,  2008 |   | $                                                   | 837,500    |   |
| December 31,  2008  |   | $                                                   | 837,500    |   |
| March 31, 2009      |   | $                                                   | 837,500    |   |
| June 30, 2009       |   | $                                                   | 837,500    |   |
| September 30,  2009 |   | $                                                   | 837,500    |   |
| December 31,  2009  |   | $                                                   | 837,500    |   |
| March 31, 2010      |   | $                                                   | 837,500    |   |
| June 30, 2010       |   | $                                                   | 78,725,000 |   |
| September 30,  2010 |   | $                                                   | 78,725,000 |   |
| December 31,  2010  |   | $                                                   | 78,725,000 |   |
| March 31, 2011      |   | $                                                   | 78,725,000 |   |

 

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provided,however, that the final principal repayment installment of the DollarTerm Loans shall be repaid on the Maturity Date for the Facility under whichsuch Loans were made and in any event shall be in an amount equal to theaggregate principal amount of all Dollar Term Loans outstanding on such date.

 

### (b)           Canadian Term Loans.  The Borrower shall repay to theAdministrative Agent for the ratable account of the Canadian Term Lenders theaggregate principal amount of all Canadian Term Loans outstanding on thefollowing dates in the respective amounts set forth opposite such dates (whichamounts shall be reduced as a result of the application of prepayments inaccordance with the order of priority set forth in Section 2.05) orincreased as a result of any increase in the amount of Canadian Term Loanspursuant to Section 2.14 (such increased amortization payments to becalculated in the same manner (and on the same basis) as the schedules setforth below for the Canadian Term Loans made as of the Closing Date);

 
| **Date**            |   | **Canadian  Term Loan Principal Amortization Amount** |       |
|---------------------|--------|-------------------------------------------------------|------------|
| June 30, 2004       |   | CD                                                    | 169,250    |   |
| September 30,  2004 |   | CD                                                    | 169,250    |   |
| December 31,  2004  |   | CD                                                    | 169,250    |   |
| March 31, 2005      |   | CD                                                    | 169,250    |   |
| June 30, 2005       |   | CD                                                    | 169,250    |   |
| September 30,  2005 |   | CD                                                    | 169,250    |   |
| December 31,  2005  |   | CD                                                    | 169,250    |   |
| March 31, 2006      |   | CD                                                    | 169,250    |   |
| June 30, 2006       |   | CD                                                    | 169,250    |   |
| September 30,  2006 |   | CD                                                    | 169,250    |   |
| December 31,  2006  |   | CD                                                    | 169,250    |   |
| March 31, 2007      |   | CD                                                    | 169,250    |   |
| June 30, 2007       |   | CD                                                    | 169,250    |   |
| September 30,  2007 |   | CD                                                    | 169,250    |   |
| December 31,  2007  |   | CD                                                    | 169,250    |   |
| March 31, 2008      |   | CD                                                    | 169,250    |   |
| June 30, 2008       |   | CD                                                    | 169,250    |   |
| September 30,  2008 |   | CD                                                    | 169,250    |   |
| December 31,  2008  |   | CD                                                    | 169,250    |   |
| March 31, 2009      |   | CD                                                    | 169,250    |   |
| June 30, 2009       |   | CD                                                    | 169,250    |   |
| September 30,  2009 |   | CD                                                    | 169,250    |   |
| December 31,  2009  |   | CD                                                    | 169,250    |   |
| March 31, 2010      |   | CD                                                    | 169,250    |   |
| June 30, 2010       |   | CD                                                    | 15,909,500 |   |
| September 30,  2010 |   | CD                                                    | 15,909,500 |   |
| December 31,  2010  |   | CD                                                    | 15,909,500 |   |
| March 31, 2011      |   | CD                                                    | 15,909,500 |   |

 

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provided, however, that thefinal principal repayment installment of the Canadian Term Loans shall berepaid on the Maturity Date for the Facility under which such Loans were madeand in any event shall be in an amount equal to the aggregate principal amountof all Canadian Term Loans outstanding on such date.

 

### (c)           Revolving Credit Loans.  The Borrower shall repay to the Administrative Agent for theratable account of the Revolving Credit Lenders on the Maturity Date for theRevolving Credit Facility the aggregate principal amount of all RevolvingCredit Loans outstanding on such date.

###  

### (d)           Swing Line Loans. The Borrower shall repay each Swing Line Loan on the earlier to occur of(i) the date thirty days after such Loan is made and (ii) the Maturity Date.

###  

2.08         Interest.  (a) Subject to the provisions of Section 2.08(b), (i) each EurodollarRate Loan shall bear interest on the outstanding principal amount thereof foreach Interest Period at a rate per annum equal to the Eurodollar Rate for suchInterest Period plus the Applicable Rate; (ii) each Canadian Term Loanshall bear interest on the outstanding principal amount thereof for eachInterest Period at a rate per annum equal to the Screen Rate for such InterestPeriod plus the Applicable Rate; (iii) each Base Rate Loan shall bearinterest on the outstanding principal amount thereof from the applicableborrowing date at a rate per annum equal to the Base Rate plus theApplicable Rate; and (iv) each Swing Line Loan shall bear interest on theoutstanding principal amount thereof from the applicable borrowing date at arate per annum equal to the Base Rate plus the Applicable Rate.

 

### (b)           (i)  While anyEvent of Default of the type specified in Section 8.01(a) or Section8.01(f) exists, the Borrower shall pay interest on the principal amount ofall outstanding Obligations hereunder at a fluctuating interest rate per annumat all times equal to the Default Rate to the fullest extent permitted byapplicable Laws.

###  

##### (ii)           Accrued and unpaid interest on past due amounts (includinginterest on past due interest) shall be due and payable upon demand.

#####  

### (c)           Interest on each Loan shall be due and payable in arrearson each Interest Payment Date applicable thereto and at such other times as maybe specified herein.  Interest hereundershall be due and payable in accordance with the terms hereof before and after

###  

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### judgment, and before and after thecommencement of any proceeding under any Debtor Relief Law.

###  

2.09         Fees.  In addition to certain fees described in Sections2.03(i) and (j):

 

### (a)           Commitment Fee.  The Borrower shall pay to the AdministrativeAgent for the account of each Revolving Credit Lender in accordance with itsPro Rata Share, a commitment fee equal to 0.50% per annum times theactual daily amount by which the aggregate Revolving Credit Commitments exceedthe sum of (i) the Outstanding Amount of Revolving Credit Loans and (ii) theOutstanding Amount of L/C Obligations; provided, however, thatany commitment fee accrued with respect to any of the Commitments of aDefaulting Lender during the period prior to the time such Lender became aDefaulting Lender and unpaid at such time shall not be payable by the Borrowerso long as such Lender shall be a Defaulting Lender except to the extent thatsuch commitment fee shall otherwise have been due and payable by the Borrowerprior to such time; and providedfurther that no commitment feeshall accrue on any of the Commitments of a Defaulting Lender so long as suchLender shall be a Defaulting Lender. The commitment fee shall accrue at all times during the AvailabilityPeriod, including at any time during which one or more of the conditions in ArticleIV is not met, and shall be due and payable quarterly in arrears on thelast Business Day of each March, June, September and December, commencing withthe first such date to occur after the Closing Date, and on the Maturity Datefor the Revolving Credit Facility.  Thecommitment fee shall be calculated quarterly in arrears.

###  

### (b)           Other Fees.  (i)  The Borrower shall pay to theArrangers and the Administrative Agent for their own respective accounts feesin the amounts and at the times specified in the Fee Letter.  Such fees shall be fully earned when paidand shall not be refundable for any reason whatsoever.

###  

##### (ii)           The Borrower shallpay to the Agents such fees as shall have been separately agreed upon inwriting in the amounts and at the times so specified.  Such fees shall be fully earned when paid and shall not berefundable for any reason whatsoever.

#####  

2.10         Computationof Interest and Fees.  Allcomputations of interest for Base Rate Loans when the Base Rate is determinedby Bank of America’s “prime rate” shall be made on the basis of a year of 365or 366 days, as the case may be, and actual days elapsed.  All other computations of fees and interestshall be made on the basis of a 360-day year and actual days elapsed (whichresults in more fees or interest, as applicable, being paid than if computed onthe basis of a 365-day year).  Interest shallaccrue on each Loan for the day on which the Loan is made, and shall not accrueon a Loan, or any portion thereof, for the day on which the Loan or suchportion is paid, provided that any Loan that is repaid on the same dayon which it is made shall, subject to Section 2.12(a), bear interest forone day.  Each determination by theAdministrative Agent of an interest rate or fee hereunder shall be conclusiveand binding for all purposes, absent manifest error.

 

2.11         Evidenceof Indebtedness.  (a)  The Credit Extensions made by each Lendershall be evidenced by one or more accounts or records maintained by such Lenderand

 

64

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evidenced by one or more entries in the Registermaintained by the Administrative Agent, acting solely for purposes of TreasuryRegulation Section 5f.103-1(c), as agent for the Borrower, in each case in theordinary course of business.  Theaccounts or records maintained by the Administrative Agent and each Lendershall be *prima facie* evidenceabsent manifest error of the amount of the Credit Extensions made by theLenders to the Borrower and the interest and payments thereon.  In the event of any conflict between theaccounts and records maintained by any Lender and the accounts and records ofthe Administrative Agent in respect of such matters, the accounts and recordsof the Administrative Agent shall control in the absence of manifesterror.  Upon the request of any Lendermade through the Administrative Agent, the Borrower shall execute and deliverto such Lender (through the Administrative Agent) a Note payable to suchLender, which shall evidence such Lender’s Loans in addition to such accountsor records.  Each Lender may attachschedules to its Note and endorse thereon the date, Type (if applicable),amount and maturity of its Loans and payments with respect thereto.

 

### (b)           In addition to the accounts and records referred to in Section2.11(a), each Lender and the Administrative Agent shall maintain inaccordance with its usual practice accounts or records and, in the case of theAdministrative Agent, entries in the Register, evidencing the purchases andsales by such Lender of participations in Letters of Credit and Swing LineLoans.  In the event of any conflictbetween the accounts and records maintained by the Administrative Agent and theaccounts and records of any Lender in respect of such matters, the accounts andrecords of the Administrative Agent shall control in the absence of manifesterror.

###  

### (c)           Entries made in good faith by the Administrative Agent inthe Register pursuant to Section 2.11(a) and (b), and by each Lender inits account or accounts pursuant to Section 2.11(a), shall be *prima facie* evidence of the amount ofprincipal and interest due and payable or to become due and payable from theBorrower to, in the case of the Register, each Lender and, in the case of suchaccount or accounts, such Lender, under this Agreement and the other LoanDocuments, absent manifest error; provided that the failure of theAdministrative Agent or such Lender to make an entry, or any finding that anentry is incorrect, in the Register or such account or accounts shall not limitor otherwise affect the obligations of the Borrower or any Loan Party underthis Agreement and the other Loan Documents.

###  

2.12         PaymentsGenerally.  (a)  All payments to be made by the Borrowershall be made without condition or deduction for any counterclaim, defense,recoupment or setoff.  Except withrespect to the Canadian Term Loans or as otherwise expressly provided herein,all payments by the Borrower hereunder shall be made to the AdministrativeAgent, for the account of the respective Lenders to which such payment is owed,at the Administrative Agent’s Office in Dollars and in immediately availablefunds not later than 2:00 p.m. on the date specified herein.  All payments by the Borrower hereunder withrespect to the Canadian Term Loans shall be made to the Administrative Agent,for the account of the respective Canadian Term Lenders to which such payment isowed, at the Administrative Agent’s Office in Canadian Dollars and inimmediately available funds not later than 2:00 p.m. on the date specifiedherein.  The Administrative Agent willpromptly distribute to each Lender its Pro Rata Share (or other applicableshare as provided herein) of such payment in like funds as received by wiretransfer to such Lender’s Lending Office. All payments received by the Administrative Agent after 2:00 

 

65

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p.m. shall be deemedreceived on the next succeeding Business Day and any applicable interest or feeshall continue to accrue.

 

### (b)           If any payment to be made by the Borrower shall come dueon a day other than a Business Day, payment shall be made on the next followingBusiness Day, and such extension of time shall be reflected in computinginterest or fees, as the case may be; provided, however, that, ifsuch extension would cause payment of interest on or principal of EurodollarRate Loans or Screen Rate Loans to be made in the next succeeding calendarmonth, such payment shall be made on the immediately preceding Business Day.

###  

### (c)           Unless the Borrower or any Lender has notified theAdministrative Agent, prior to the date any payment is required to be made byit to the Administrative Agent hereunder, that the Borrower or such Lender, asthe case may be, will not make such payment, the Administrative Agent mayassume that the Borrower or such Lender, as the case may be, has timely madesuch payment and may (but shall not be so required to), in reliance thereon,make available a corresponding amount to the Person entitled thereto.  If and to the extent that such payment wasnot in fact made to the Administrative Agent in immediately available funds,then:

###  

##### (i)            if the Borrower failedto make such payment, each Lender shall forthwith on demand repay to theAdministrative Agent the portion of such assumed payment that was madeavailable to such Lender in immediately available funds, together with interestthereon in respect of each day from and including the date such amount was madeavailable by the Administrative Agent to such Lender to the date such amount isrepaid to the Administrative Agent in immediately available funds at theFederal Funds Rate from time to time in effect; and

#####  

##### (ii)           if any Lenderfailed to make such payment, such Lender shall forthwith on demand pay to theAdministrative Agent the amount thereof in immediately available funds,together with interest thereon for the period from the date such amount wasmade available by the Administrative Agent to the Borrower to the date suchamount is recovered by the Administrative Agent (the “***Compensation Period***”)at a rate per annum equal to the Federal Funds Rate from time to time ineffect.  If such Lender pays such amountto the Administrative Agent, then such amount shall constitute such Lender’sLoan included in the applicable Borrowing. If such Lender does not pay such amount forthwith upon theAdministrative Agent’s demand therefor, the Administrative Agent may make ademand therefor upon the Borrower, and the Borrower shall pay such amount tothe Administrative Agent, together with interest thereon for the CompensationPeriod at a rate per annum equal to the rate of interest applicable to theapplicable Borrowing.  Nothing hereinshall be deemed to relieve any Lender from its obligation to fulfill itsCommitment or to prejudice any rights which the Administrative Agent or theBorrower may have against any Lender as a result of any default by such Lenderhereunder.

#####  

A notice of the Administrative Agent to any Lender orthe Borrower with respect to any amount owing under this Section 2.12(c)shall be conclusive, absent manifest error.

 

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### (d)           If any Lender makes available to the Administrative Agentfunds for any Loan to be made by such Lender as provided in the foregoingprovisions of this Article II, and such funds are not made available tothe Borrower by the Administrative Agent because the conditions to the applicableCredit Extension set forth in Article IV are not satisfied or waived inaccordance with the terms hereof, the Administrative Agent shall return suchfunds (in like funds as received from such Lender) to such Lender, withoutinterest.

###  

### (e)           The obligations of the Lenders hereunder to make Loans andto fund participations in Letters of Credit and Swing Line Loans are severaland not joint.  The failure of anyLender to make any Loan or to fund any such participation on any date requiredhereunder shall not relieve any other Lender of its corresponding obligation todo so on such date, and no Lender shall be responsible for the failure of anyother Lender to so make its Loan or purchase its participation.

###  

### (f)            Nothing herein shall be deemed to obligate any Lender toobtain the funds for any Loan in any particular place or manner or toconstitute a representation by any Lender that it has obtained or will obtainthe funds for any Loan in any particular place or manner.

###  

### (g)           Whenever any payment received by the Administrative Agentunder this Agreement or any of the other Loan Documents is insufficient to payin full all amounts due and payable to the Agents and the Lenders under or inrespect of this Agreement and the other Loan Documents on any date, such paymentshall be distributed by the Administrative Agent and applied by the Agents and the Lenders in the order ofpriority set forth in Section 8.03. If the Administrative Agent receives funds for application to theObligations of the Loan Parties under or in respect of the Loan Documents undercircumstances for which the Loan Documents do not specify the manner in whichsuch funds are to be applied, the Administrative Agent may, but shall not beobligated to, elect to distribute such funds to each of the Lenders inaccordance with such Lender’s Pro Rata Share of the sum of (i) the OutstandingAmount of all Loans outstanding at such time and (ii) the Outstanding Amount ofall L/C Obligations outstanding at such time, in repayment or prepayment ofsuch of the outstanding Loans or other Obligations then owing to such Lender.

###  

2.13         Sharing ofPayments.  If, other than asexpressly provided elsewhere herein, any Lender shall obtain on account of theLoans made by it, or the participations in L/C Obligations or in Swing LineLoans held by it, any payment (whether voluntary, involuntary, through theexercise of any right of setoff, or otherwise) in excess of its ratable share(or other share contemplated hereunder) thereof, such Lender shall immediately(a) notify the Administrative Agent of such fact, and (b) purchase from theother Lenders such participations in the Loans made by them and/or suchsubparticipations in the participations in L/C Obligations or Swing Line Loansheld by them, as the case may be, as shall be necessary to cause suchpurchasing Lender to share the excess payment in respect of such Loans or suchparticipations, as the case may be, pro rata with each of them; provided,however, that if all or any portion of such excess payment is thereafterrecovered from the purchasing Lender under any of the circumstances describedin Section 10.06 (including pursuant to any settlement entered into bythe purchasing Lender in its discretion), such purchase shall to that extent berescinded and each other Lender shall repay to the purchasing Lender thepurchase price paid therefor, together with an amount equal to such payingLender’s ratable share (according to the proportion of (i) the

 

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amount of such paying Lender’s required repayment to(ii) the total amount so recovered from the purchasing Lender) of any interestor other amount paid or payable by the purchasing Lender in respect of thetotal amount so recovered, without further interest thereon.  The Borrower agrees that any Lender sopurchasing a participation from another Lender may, to the fullest extentpermitted by law, exercise all its rights of payment (including the right ofsetoff, but subject to Section 10.09) with respect to such participationas fully as if such Lender were the direct creditor of the Borrower in theamount of such participation; providedfurther that, so long asthe Obligations under the Loan Documents shall not have been accelerated, anyexcess payment received by any Appropriate Lender shall be shared on a pro ratabasis only with other Appropriate Lenders. The Administrative Agent will keep records (which shall be conclusiveand binding in the absence of manifest error) of participations purchased underthis Section and will in each case notify the Lenders following any suchpurchases or repayments.  Each Lenderthat purchases a participation pursuant to this Section shall from and aftersuch purchase have the right to give all notices, requests, demands, directionsand other communications under this Agreement with respect to the portion ofthe Obligations purchased to the same extent as though the purchasing Lenderwere the original owner of the Obligations purchased.

 

2.14         Increasein Commitments.  (a) Provided there exists no Event of Default after giving effect to anysuch increase, upon notice to the Administrative Agent (which shall promptlynotify the Lenders), the Borrower may from time to time, request an increase inthe Term Commitments or Revolving Credit Commitments by an amount (for all suchrequests) not exceeding $100,000,000. Each such request shall be for an increase of not less than$10,000,000.  At the time of sendingsuch notice, the Borrower (in consultation with the Administrative Agent) shallspecify the time period within which each Lender is requested to respond (whichshall in no event be less than ten Business Days from the date of delivery ofsuch notice to the Lenders).  EachLender shall notify the Administrative Agent within such time period whether ornot it agrees to increase its Term Commitment or Revolving Credit Commitmentand, if so, whether by an amount equal to, greater than, or less than its ProRata Share of such requested increase. Any Lender not responding within such time period shall be deemed tohave declined to increase its Commitment. The Administrative Agent shall notify the Borrower and each Lender ofthe Lenders’ responses to each request made hereunder.  To achieve the full amount of a requestedincrease, the Borrower may also invite additional Eligible Assignees to becomeLenders pursuant to a joinder agreement in form and substance reasonablysatisfactory to the Administrative Agent and its counsel.

 

### (b)           If the Term Commitments and/or Revolving CreditCommitments are increased in accordance with this Section, the AdministrativeAgent and the Borrower shall determine the closing date (the “***Increase Effective Date***”) and the final allocation ofsuch increase.  The Administrative Agentshall promptly notify the Borrower and the Lenders of the final allocation ofsuch increase and the Increase Effective Date. As a condition precedent to such increase, the Borrower shall deliver tothe Administrative Agent a certificate of each Loan Party dated as of theIncrease Effective Date signed by a Responsible Officer of such Loan Party (i)certifying and attaching the resolutions adopted by such Loan Party approvingor consenting to such increase, and (ii) in the case of the Borrower,certifying that, before and after giving effect to such increase, (A) therepresentations and warranties contained in Article V and the other LoanDocuments are true and correct in all material respects on and as of theIncrease Effective Date, except to the extent that such representations andwarranties specifically refer to

###  

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### an earlier date, in which case they are trueand correct in all material respects as of such earlier date, and except thatfor purposes of this Section 2.14, the representations and warrantiescontained in Section 5.06 and 5.07 shall be deemed to refer tothe most recent statements furnished pursuant to subsections (b) and (c),respectively, of Section 6.13, and (B) no Event of Default exists, aftergiving effect to any such increase.

###  

### (c)           To the extent the Commitment being increased on therelevant Increase Effective Date is a Term Commitment, then each of the Lendershaving an Term Loan prior to such Increase Effective Date (the “***Pre-Increase Term Lenders***”)shall assign to any lender making an additional Term Loan on the IncreaseEffective Date (the “***Post-IncreaseTerm Lenders***”), and such Post-Increase Term Lenders shallpurchase from each Pre-Increase Term Lenders, at the principal amount thereof,such interests in the Term Loans outstanding on such Increase Effective Date asshall be necessary in order that, after giving effect to all such assignmentsand purchases, such Term Loans will be held by Pre-Increase Term Lenders andPost-Increase Term Lenders ratably in accordance with the Outstanding Amount ofTerm Loans and increased Term Commitments after giving effect to such increasedTerm Commitments.  To the extent theCommitment being increased on the relevant Increase Effective Date is aRevolving Credit Commitment, then each of the Lenders having a Revolving CreditCommitment prior to such Increase Effective Date (the “***Pre-Increase Revolving Lenders***”) shall assignto any lender which is acquiring a new or additional Revolving CreditCommitment on the Increase Effective Date (the “***Post-Increase Revolving Lenders***”), and suchPost-Increase Revolving Lenders shall purchase from each Pre-Increase RevolvingLenders, at the principal amount thereof, such interests in the Revolving Loansand participation interests in L/C Obligations and Swing Line Loans outstandingon such Increase Effective Date as shall be necessary in order that, aftergiving effect to all such assignments and purchases, such Revolving Loans andparticipation interests in L/C Obligations and Swing Line Loans will be held byPre-Increase Revolving Lenders and Post-Increase Revolving Lenders ratably inaccordance with their Revolving Credit Commitments after giving effect to suchincreased Revolving Credit Commitments.

###  

### (d)           This Section shall supersede any provisions in Sections2.13 or 10.01 to the contrary.

###  

2.15         Use ofProceeds.  The proceeds of theLoans shall be available, and the Borrower hereby agrees that it shall use suchproceeds, solely (a) to finance the Nu-Gro Acquisition, (b) to pay certain feesand expenses incurred in connection with the Nu-Gro Transaction, (c) to financethe Preferred Stock Redemption, (d) to refinance the commitments andoutstanding amounts under the Existing Credit Facility, (e) to refinancecertain existing Indebtedness of Nu-Gro and its Subsidiaries, (f) pay certainfees and expenses incurred in connection with the Preferred Stock Redemptionand (g) to provide working capital to, and for other general purposes of, theBorrower and its Subsidiaries not otherwise prohibited under the terms of theLoan Documents.

 

# ARTICLE IIITAXES, YIELD PROTECTION AND ILLEGALITY

#  

3.01         Taxes.  (a) Except as provided in this Section 3.01, any and all payments

 

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by the Borrower to or for the account of any Agent orany Lender under any Loan Document shall be made free and clear of and withoutdeduction for any and all present or future taxes, duties, levies, imposts,deductions, assessments, fees, withholdings or similar charges, and allliabilities****(including additionsto tax, penalties and interest) with respect thereto, excluding, in thecase of each Agent and each Lender, taxes imposed on or measured by its overallnet income or overall gross income (including branch profits), and franchise(and similar) taxes imposed on it in lieu of net income taxes, by thejurisdiction (or any political subdivision thereof) under the Laws of whichsuch Agent or such Lender, as the case may be, is organized, has its principalplace of business or maintains a Lending Office, and all liabilities (includingadditions to tax, penalties and interest) with respect thereto (all suchnon-excluded taxes, duties, levies, imposts, deductions, assessments, fees,withholdings or similar charges, and liabilities being hereinafter referred to as“***Taxes***”).  If the Borrower shall be required by anyLaws to deduct any Taxes from or in respect of any sum payable under any LoanDocument to any Agent or any Lender, (i) the sum payable shall be increased asnecessary so that after making all required deductions (including deductionsapplicable to additional sums payable under this Section), each of such Agentand such Lender receives an amount equal to the sum it would have received hadno such deductions been made, (ii) the Borrower shall make such deductions,(iii) the Borrower shall pay the full amount deducted to the relevant taxationauthority or other authority in accordance with applicable Laws, and (iv)within 30 days after the date of such payment, the Borrower shall furnish tosuch Agent or Lender (as the case may be) the original or a certified copy of areceipt evidencing payment thereof to the extent such a receipt is issuedtherefor, or other written proof of payment thereof that is reasonablysatisfactory to the Administrative Agent.

 

### (b)           In addition, the Borrower agrees to pay any and allpresent or future stamp, court or documentary taxes and any other excise,property, intangible or mortgage recording taxes or charges or similar levieswhich arise from any payment made under any Loan Document or from theexecution, delivery, performance, enforcement or registration of, or otherwisewith respect to, any Loan Document (hereinafter referred to as “***Other Taxes***”).

###  

### (c)           The Borrower agrees to indemnify each Agent and eachLender for (i) the full amount of Taxes and Other Taxes (including any Taxes orOther Taxes imposed or asserted by any jurisdiction on amounts payable underthis Section) paid by such Agent and such Lender and (ii) any liability(including additions to tax, penalties, interest and expenses) arisingtherefrom or with respect thereto, in each case whether or not such Taxes orOther Taxes were correctly or legally imposed or asserted by the relevantGovernmental Authority; provided such Agent or Lender, as the case may be,provides the Borrower with a written statement thereof setting forth inreasonable detail the basis and calculation of such amounts.  Payment under this Section 3.01(c)shall be made within 30 days after the date such Lender or such Agent makes ademand therefor.

###  

### (d)           TheBorrower shall not be required pursuant to this Section 3.01 to pay anyadditional amount to, or to indemnify, any Lender or Agent, as the case may be, to the extent that such Lender or suchAgent becomes subject to Taxes subsequent to the Closing Date (or, if later,the date such Lender or Agent becomes a party to this Agreement) as a result ofa change in the place of organization of such Lender or Agent or a change inthe lending office of such Lender, except to the extent that any suchchange is requested or required by the Borrower (and provided, thatnothing in this clause (d) shall be construed as relieving the Borrowerfrom any

###  

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### obligation to make such payments orindemnification in the event of a change that is a change in Law).

###  

### (e)           If the forms provided by a Lender or an Agent pursuant to Section 10.15(a)at the time such Lender or such Agent, as the case may be, first becomes aparty to this Agreement at the Borrower’s discretion pursuant to Section10.07(g) indicate a United States withholding tax rate in excess of zero(the “***ActualRate***”), withholding tax in excess of the Actual Rate shall beconsidered excluded from Taxes unless and until such Lender or Agent, as thecase may be, provides the appropriate forms certifying that a lesser rateapplies, whereupon withholding tax at such lesser rate only shall be consideredexcluded from Taxes for periods governed by such forms; provided, however,that, if at the date of the Assignment and Acceptance pursuant to which aLender becomes a party to this Agreement, the Lender assignor was entitled topayments under clause (a) of this Section 3.01 in respect ofUnited States withholding tax with respect to interest paid at such date, then,to such extent, the term Taxes shall include (in addition to withholding taxesthat may be imposed in the future or other amounts otherwise includable inTaxes) United States withholding tax, if any, applicable with respect to theLender assignee on such date.

###  

### (f)            If any Lender or Agent determines that it has received a refund inrespect of any Taxes or Other Taxes as to which indemnification or additional amounts have been paid to itby the Borrower pursuant to this Section 3.01, it shall promptlyremit such refund (including any interest included in such refund) to theBorrower (to the extent that it determines that it can do so withoutprejudice to the retention of the refund),net of all out-of-pocket expenses of the Lender or Agent, as the case may be; provided,however, that the Borrower, upon the request of the Lender or Agent, asthe case may be, agrees promptly to return such refund to such party in theevent such party is required to repay such refund to the relevant taxingauthority.  Such Lender or Agent,as the case may be, shall, at the Borrower’s request, provide the Borrower witha copy of any notice of assessment or other evidence of the requirement torepay such refund received from the relevant taxing authority (provided,that such Lender or Agent may delete any information therein that such Lenderor Agent deems confidential).  Nothingherein contained shall interfere with the right of a Lender or Agent to arrangeits tax affairs in whatever manner it thinks fit nor oblige any Lender or Agentto claim any tax refund or to disclose any information relating to its taxaffairs or any computations in respect thereof or require any Lender or Agentto do anything that would prejudice its ability to benefit from any otherrefunds, credits, reliefs, remissions or repayments to which it may beentitled.

###  

### (g)           EachLender agrees that, upon the occurrence of any event giving rise to theoperation of Section 3.01(a) or (c) with respect to such Lenderit will, if requested by the Borrower, use commercially reasonable efforts (subject to such Lender’s overallinternal policies of general application and legal and regulatory restrictions)to avoid the consequences of such event, including to designate another LendingOffice for any Loan or Letter of Credit affected by such event; provided,that such efforts are made on terms that, in the reasonable judgment of suchLender, cause such Lender and its Lending Office(s) to suffer no materialeconomic, legal or regulatory disadvantage, and provided, further,that nothing in this Section 3.01(g) shall affect or postpone any of theObligations of the Borrower or the rights of such Lender pursuant to Sections3.01(a) and (c).

###  

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### (h)           Notwithstanding any provision contained herein to thecontrary, any indemnity with respect to taxes, duties, levies, imposts,deductions, assessments, fees, withholdings or similar charges imposed by anyGovernmental Authority, or any liabilities with respect thereto, shall begoverned solely and exclusively by this Section 3.01 and Section10.15.

###  

3.02         Illegality.  If any Lender determines that any Law hasmade it unlawful, or that any Governmental Authority has asserted that it isunlawful, for any Lender or its applicable Lending Office to make, maintain orfund Eurodollar Rate Loans or Screen Rate Loans, or to determine or chargeinterest rates based upon the Eurodollar Rate or Screen Rate, then, on noticethereof by such Lender to the Borrower through the Administrative Agent, anyobligation of such Lender to make or continue Eurodollar Rate Loans or ScreenRate Loans or to convert Base Rate Loans to Eurodollar Rate Loans shall besuspended until such Lender notifies the Administrative Agent and the Borrowerthat the circumstances giving rise to such determination no longer exist.  Upon receipt of such notice, the Borrowershall, upon demand from such Lender (with a copy to the Administrative Agent),prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender toBase Rate Loans, either on the last day of the Interest Period therefor, ifsuch Lender may lawfully continue to maintain such Eurodollar Rate Loans orScreen Rate Loans to such day, or immediately, if such Lender may not lawfullycontinue to maintain such Eurodollar Rate Loans or Screen Rate Loans.  Upon any such prepayment or conversion, theBorrower shall also pay accrued interest on the amount so prepaid orconverted.  Each Lender agrees to designatea different Lending Office if such designation will avoid the need for suchnotice and will not, in the good faith judgment of such Lender, otherwise bematerially disadvantageous to such Lender.

 

3.03         Inabilityto Determine Rates.  If theRequired Lenders determine that for any reason adequate and reasonable means donot exist for determining the LIBO Rate or Screen Rate, as applicable, for anyrequested Interest Period with respect to a proposed Eurodollar Rate Loan orScreen Rate Loan, or that the LIBO Rate or Screen Rate for any requestedInterest Period with respect to a proposed Eurodollar Rate Loan or Screen RateLoan does not adequately and fairly reflect the cost to such Lenders of fundingsuch Loan, or that Dollar deposits are not being offered to banks in the Londoninterbank eurodollar or Canadian Dollar market for the applicable amount andthe Interest Period of such Eurodollar Rate Loan or Screen Rate Loan, theAdministrative Agent will promptly so notify the Borrower and each Lender.  Thereafter, the obligation of the Lenders tomake or maintain Eurodollar Rate Loans or Screen Rate Loans, as applicable,shall be suspended until the Administrative Agent (upon the instruction of theRequired Lenders) revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending requestfor a Borrowing of, conversion to or continuation of Eurodollar Rate Loans orScreen Rate Loans or, failing that, with respect to Eurodollar Rate Loans, willbe deemed to have converted such request into a request for a CommittedBorrowing of Base Rate Loans in the amount specified therein.

 

3.04         Increased Cost and Reduced Return;Capital Adequacy.  (a)  If any Lender determines that as a result ofthe introduction of or any change in or in the interpretation of any Law, ineach case after the date hereof, or such Lender’s compliance therewith, thereshall be any increase in the cost to such Lender of agreeing to make or making,funding or maintaining Eurodollar Rate Loans or Screen Rate Loan (as the casemay be) or issuing or participating in Letters of Credit, or a reduction in theamount received or receivable by such Lender in

 

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connection with any of the foregoing (excluding forpurposes of this Section 3.04(a) any such increased costs or reductionin amount resulting from (i) Taxes or Other Taxes (as to which Section 3.01shall govern), (ii) changes in the basis of taxation of overall net income oroverall gross income (including branch profits), and franchise (and similar)taxes imposed in lieu of net income taxes, by the United States or any foreignjurisdiction or any political subdivision of either thereof under the Laws ofwhich such Lender is organized or maintains a Lending Office, and (iii) reserverequirements utilized in the determination of the Eurodollar Rate or ScreenRate), then from time to time upon demand of such Lender setting forth inreasonable detail such increased costs (with a copy of such demand to theAdministrative Agent given in accordance with Section 3.06), theBorrower shall pay to such Lender such additional amounts as will compensatesuch Lender for such increased cost or reduction.

 

### (b)           If any Lender determines that the introduction of any Lawregarding capital adequacy or any change therein or in the interpretationthereof, in each case after the date hereof, or compliance by such Lender (orits Lending Office) therewith, has the effect of reducing the rate of return onthe capital of such Lender or any corporation controlling such Lender as aconsequence of such Lender’s obligations hereunder (taking into considerationits policies with respect to capital adequacy and such Lender’s desired returnon capital), then from time to time upon demand of such Lender setting forth inreasonable detail the charge and the calculation of such reduced rate of return(with a copy of such demand to the Administrative Agent given in accordancewith Section 3.06), the Borrower shall pay to such Lender suchadditional amounts as will compensate such Lender for such reduction.

###  

3.05         Compensationfor Losses.  Upon demand of anyLender (with a copy to the Administrative Agent) from time to time, theBorrower shall promptly compensate such Lender for and hold such Lenderharmless from any loss, cost or expense incurred by it as a result of:

 

#### (a)           any continuation,conversion, payment or prepayment of any Loan other than a Base Rate Loan on aday other than the last day of the Interest Period for such Loan (whethervoluntary, mandatory, automatic, by reason of acceleration, or otherwise);

####  

#### (b)           any failure by theBorrower (for a reason other than the failure of such Lender to make a Loan) toprepay, borrow, continue or convert any Loan other than a Base Rate Loan on thedate or in the amount notified by the Borrower; or

####  

#### (c)           any assignment of aEurodollar Rate Loan or Screen Rate Loan on a day other than the last day ofthe Interest Period therefor as a result of a request by the Borrower pursuantto Section 3.07;

####  

including any loss or expense arising from theliquidation or reemployment of funds obtained by it to maintain such Loan orfrom fees payable to terminate the deposits from which such funds were obtained.

 

For purposes ofcalculating amounts payable by the Borrower to the Lenders under this Section3.05, each Lender shall bedeemed to have funded each Eurodollar Rate Loan or Screen Rate Loan, asapplicable, made by it at the rate used in determining the Eurodollar Rate orScreen

 

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Rate for such Loanby a matching deposit or other borrowing in the London interbank eurodollarmarket or Canadian Dollar market for a comparable amount and for a comparableperiod, whether or not such Eurodollar Rate Loan or Screen Rate Loan was infact so funded.

 

3.06         Matters Applicable to all Requestsfor Compensation.  (a)  A certificate of any Agent or any Lenderclaiming compensation under this Article III and setting forth theadditional amount or amounts to be paid to it hereunder shall be conclusive inthe absence of manifest error.  Indetermining such amount, such Agent or such Lender may use any reasonableaveraging and attribution methods.

 

### (b)           With respect to anyLender’s claim for compensation under Section 3.01, 3.02 or 3.04,the Borrower shall not be required to compensate such Lender for any amountincurred more than one hundred and eighty (180) days prior to the date thatsuch Lender notifies the Borrower of the event that gives rise to such claim; provided,that, if the circumstance giving rise to such claim is retroactive, then such180-day period referred to above shall be extended to include the period ofretroactive effect thereof.  If any Lender requests compensation by theBorrower under Section 3.04, the Borrower may, by notice to suchLender (with a copy to the Administrative Agent), suspend the obligation ofsuch Lender to make or continue from one Interest Period to another EurodollarRate Loans or Screen Rate Loans, orto convert Base Rate Loans into Eurodollar Rate Loans, until the event orcondition giving rise to such request ceases to be in effect (in which case theprovisions of Section 3.06(c) shall be applicable); provided,that such suspension shall not affect the right of such Lender to receive thecompensation so requested.

###  

### (c)           Ifthe obligation of any Lender to make or continuefrom one Interest Period to another any Eurodollar Rate Loan or ScreenRate Loan, or to convert Base Rate Loans into Eurodollar Rate Loans shall besuspended pursuant to Section 3.06(b) hereof, such Lender’s EurodollarRate Loans shall be automatically converted into Base Rate Loans on the lastday(s) of the then current Interest Period(s) for such Eurodollar Rate Loans(or, in the case of an immediate conversion required by Section 3.02, onsuch earlier date as required by Law) and, unless and until such Lender givesnotice as provided below that the circumstances specified in Section 3.01,3.02, 3.03 or 3.04 hereof that gave rise to suchconversion no longer exist:

###  

##### (i)            to the extent thatsuch Lender’s Eurodollar Rate Loans have been so converted, all payments andprepayments of principal that would otherwise be applied to such Lender’sEurodollar Rate Loans shall be applied instead to its Base Rate Loans; and

#####  

(ii)           all Loans that would otherwise bemade or continued from one Interest Periodto another by such Lender as Eurodollar Rate Loans shall be made orcontinued instead as Base Rate Loans, and all Base Rate Loans of such Lenderthat would otherwise be converted into Eurodollar Rate Loans shall remain asBase Rate Loans.

 

### (d)           If any Lender gives notice to the Borrower (with a copy tothe Agent) that the circumstances specified in Section 3.01, 3.02,3.03 or 3.04 hereof that gave rise to the conversion of suchLender’s Eurodollar Rate Loans pursuant to this Section 3.06 no longerexist (which such Lender agrees to do promptly upon such circumstances ceasingto exist) at a time when Eurodollar Rate Loans made by other Lenders areoutstanding, such Lender’s Base Rate Loans shall be automatically converted, onthe first day(s) of the next succeeding Interest

###  

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### Period(s) for such outstanding EurodollarRate Loans, to the extent necessary so that, after giving effect thereto, allLoans held by the Lenders holding Eurodollar Rate Loans and by such Lender areheld pro rata (as to principal amounts, interest rate basis, and InterestPeriods) in accordance with their respective Commitments.

###  

3.07         Replacement of Lenders underCertain Circumstances.  (a)  If at any time (i) the Borrower becomesobligated to pay additional amounts or indemnity payments described in Section3.01 or 3.04 as a result of any condition described in such Sectionsor any Lender ceases to make Eurodollar Rate Loans or Screen Rate Loans as aresult of any condition described in Section 3.02 or 3.03,(ii) any Lender becomes a Defaulting Lender, (iii) any Lender fails to promptlyexecute and deliver the assignment documents requested pursuant to Section2.14(c) or (iv) any Lender becomes a “Non-Consenting Lender” (as definedbelow in this Section 3.07), then the Borrower may, on ten (10)Business Days’ prior written notice to the Administrative Agent and suchLender, either (A) replace such Lender by causing such Lender to (and suchLender shall be obligated to) assign pursuant to Section 10.07(b)(with the assignment fee to be paid by the Borrower in such instance) all ofits rights and obligations under this Agreement to one or more EligibleAssignees; provided, that neither the Administrative Agent nor anyLender shall have any obligation to the Borrower to find a replacement Lenderor other such Person or (B) terminate the Commitment of such Lender andrepay all obligations of the Borrower owing to such Lender relating to theLoans and participations held by such Lender as of such termination date.

 

### (b)           Any Lender being replaced pursuant to Section 3.07(a)above shall (i) execute and deliver an Assignment and Assumption withrespect to such Lender’s Commitment and outstanding Loans and participations inL/C Obligations and Swing Line Loans, and (ii) deliver any Notes evidencingsuch Loans to the Borrower or Administrative Agent.  Pursuant to such Assignment and Assumption, (i) the assigneeLender shall acquire all or a portion, as the case may be, of the assigningLender’s Commitment and outstanding Loans and participations in L/C Obligationsand Swing Line Loans, (ii) all obligations of the Borrower owing to theassigning Lender relating to the Loans and participations so assigned shall bepaid in full by the assignee Lender to such assigning Lender concurrently withsuch assignment and assumption and (iii) upon such payment and, if sorequested by the assignee Lender, delivery to the assignee Lender of theappropriate Note or Notes executed by the Borrower, the assignee Lender shallbecome a Lender hereunder and the assigning Lender shall cease to constitute aLender hereunder with respect to such assigned Loans, Commitments andparticipations, except with respect to indemnification provisions under thisAgreement, which shall survive as to such assigning Lender.

###  

### (c)           Notwithstanding anything to the contrary contained above,(i) the Lender that acts as the L/C Issuer may not be replaced hereunder at anytime that it has any Letter of Credit outstanding hereunder unless arrangementssatisfactory to such L/C Issuer (including the furnishing of a back-up standbyletter of credit in form and substance, and issued by an issuer reasonablysatisfactory to such L/C Issuer or the depositing of cash collateral into acash collateral account in amounts and pursuant to arrangements reasonablysatisfactory to such L/C Issuer) have been made with respect to suchoutstanding Letter of Credit and (ii) the Lender that acts as theAdministrative Agent may not be replaced hereunder except in accordance withthe terms of Section 9.09.

###  

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### (d)           In the event that (i) the Borrower or the AdministrativeAgent has requested the Lenders to consent to a departure or waiver of anyprovisions of the Loan Documents or to agree to any amendment thereto, (ii) theconsent, waiver or amendment in question requires the agreement of all affectedLenders in accordance with the terms of Section 10.01 or all theLenders with respect to a certain class of the Loans and (iii) the RequiredLenders have agreed to such consent, waiver or amendment, then any Lender whodoes not agree to such consent, waiver or amendment shall be deemed a “***Non-ConsentingLender***.”

###  

### 3.08         Survival.  All of the Borrower’s obligations under thisArticle III shall survive the Termination Date.

 

# ARTICLE IVCONDITIONS PRECEDENT TO CREDIT EXTENSIONS

#  

4.01         Conditions of Initial CreditExtension.  The obligation ofeach Lender to make its initial Credit Extension hereunder is subject tosatisfaction or waiver of the following conditions precedent:

 

#### (a)           The AdministrativeAgent’s receipt of the following, each of which shall be originals orfacsimiles (followed promptly by originals) unless otherwise specified, eachproperly executed by a Responsible Officer of the signing Loan Party, eachdated the Closing Date (or, in the case of certificates of governmentalofficials, a recent date before the Closing Date) and each in form andsubstance reasonably satisfactory to the Administrative Agent and each of theLenders:

####  

###### (i)            executedcounterparts of this Agreement and the Guaranty, sufficient in number fordistribution to each Agent, each Lender and the Borrower;

######  

###### (ii)           a Note executed bythe Borrower in favor of each Lender requesting a Note;

######  

###### (iii)          a securityagreement, in substantially the form of Exhibit G hereto (togetherwith each other security agreement and security agreement supplement deliveredpursuant to Section 6.11 and 6.15, in each case as amended,the “***Security Agreement***”), duly executed by eachLoan Party, together with:

######  

(A)          certificates (if any) representing thePledged Interests referred to therein accompanied by undated stock powersexecuted in blank and instruments evidencing the Pledged Debt indorsed inblank,

 

(B)           copies of proper financingstatements, duly prepared for filing under the Uniform Commercial Code in alljurisdictions that the Administrative Agent may deem reasonably necessary ordesirable in order to perfect and protect the first priority liens and securityinterests created under the Security Agreement, covering the Collateral describedin the Security Agreement, and

 

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(C)           evidence that all other actions,recordings and filings of or with respect to the Security Agreement that theAdministrative Agent may deem reasonably necessary or desirable in order toperfect and protect the Liens created thereby;

 

###### (iv)          a mortgage, insubstantially the form of Exhibit H hereto (with such changes asmay be reasonably satisfactory to the Administrative Agent and its counsel toaccount for local law matters) and covering the Borrower’s Orrville, Ohiofertilizer plant (together with each other mortgage delivered pursuant to Section6.11, in each case as amended, the “***Mortgages***”), duly executed by the appropriateLoan Party, together with:

######  

(A)          evidence that a counterpart of theMortgage has been duly executed, acknowledged and delivered and is in formsuitable for filing or recording in the applicable Ohio jurisdiction and thatall applicable filing and recording taxes and fees have been paid, and

 

(B)           evidence that all other action thatthe Administrative Agent may reasonably deem necessary or desirable in order tocreate a valid first and subsisting Lien on the Orrville, Ohio property,subject to Liens permitted by Section 7.01, has been taken;

 

###### (v)           an intellectualproperty security agreement, in substantially the form of Exhibit Ihereto (together with each other intellectual property security agreement andintellectual property security agreement supplement delivered pursuant to Section 6.11and 6.15, in each case as amended, the “***Intellectual Property SecurityAgreement***”), duly executed by each Loan Party, together with evidencethat all action that the Administrative Agent may reasonably deem necessary ordesirable in order to perfect and protect the first priority liens and securityinterests created under the Intellectual Property Security Agreement has beentaken;

######  

###### (vi)          such certificates ofresolutions or other action, incumbency certificates and/or other certificatesof Responsible Officers of each Loan Party as the Administrative Agent mayreasonably require evidencing the identity, authority and capacity of eachResponsible Officer thereof authorized to act as a Responsible Officer inconnection with this Agreement and the other Loan Documents to which such LoanParty is a party or is to be a party;

######  

###### (vii)         such documents andcertifications as the Administrative Agent may reasonably require to evidencethat each Loan Party is duly organized or formed, and that each Loan Party isvalidly existing and in good standing under its jurisdiction of incorporation;

######  

###### (viii)        a reasonablysatisfactory opinion of Weil, Gotshal and Manges LLP, special counsel to theLoan Parties, addressed to each Agent and each Lender, as to the matters setforth in Exhibit J-1 and such other matters

######  

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###### concerning theLoan Parties and the Loan Documents as the Required Lenders may reasonablyrequest;

######  

###### (ix)           a reasonablysatisfactory opinion of Benesch, Friedlander, Coplan & Aronoff LLP, localcounsel to the Borrower in Ohio, as to the matters set forth in Exhibit J-2and such other matters concerning the Loan Parties and the Loan Documents asthe Required Lenders may reasonably request;

######  

###### (x)            a certificate of aResponsible Officer of the Borrower either (A) attaching copies of allconsents, licenses and approvals required in connection with the execution,delivery and performance by the Borrower or any other Loan Party and thevalidity against the Borrower or such Loan Party of the Loan Documents to whichit is a party, and such consents, licenses and approvals shall be in full forceand effect, or (B) stating that no such consents, licenses or approvals are sorequired;

######  

###### (xi)           a certificatesigned by a Responsible Officer of the Borrower certifying (A) that theconditions specified in Sections 4.02(a) and (b) have beensatisfied, and (B) that there has been no event or circumstance since February29, 2004 that has had or could be reasonably expected to have, eitherindividually or in the aggregate, a Nu-Gro Material Adverse Effect;

######  

###### (xii)          certificatesattesting to the Solvency of the Borrower and its Subsidiaries taken as awhole, before and after giving effect to the Nu-Gro Transaction, from its ChiefFinancial Officer;

######  

###### (xiii)         reasonablysatisfactory evidence that all insurance required to be maintained pursuant tothe Loan Documents has been obtained and is in effect, together with theendorsements of insurance required by the terms of the Security Agreement;

######  

###### (xiv)        a notice of borrowingor notice of letter of credit issuance, as applicable, relating to the initialCredit Extension;

######  

###### (xv)         reasonablysatisfactory evidence that the Existing Credit Agreement has been orconcurrently with the Closing Date is being terminated and all Liens securingobligations under the Existing Credit Agreement have been or concurrently withthe Closing Date are being released; and

######  

###### (xvi)        (A) unauditedconsolidated financial statements of Nu-Gro and its Subsidiaries for anyquarterly periods ended since December 31, 2003 for which such statements areavailable, and a pro forma balance sheet, income statement and statement ofcash flows as to the Company and its subsidiaries as of the end of and for themost recent four fiscal quarter period ended at least 45 days prior to theClosing Date, in each case adjusted to give effect to the consummation of theNu-Gro Acquisition as if the Nu-Gro Acquisition, (x) with respect to the proforma balance sheet, had occurred on such date, and (y) with respect to the proforma income statement and pro forma statement of cash flows, had occurred

######  

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###### on the firstday of such four fiscal quarter period and (B) the forecasts dated February 26,2004 prepared by management of the Borrower of balance sheets, incomestatements and cash flow statements for each month for the first twelve monthsfollowing the Closing Date and for each year commencing with the first fiscalyear following the Closing Date for the term of the Facilities.

######  

###### (xvii)       certified copies ofthe Nu-Gro Acquisition Documents duly executed by the parties thereto, whichshall be in form and substance reasonably satisfactory to the AdministrativeAgent.

######  

#### (b)           (i) The Acquisitionshall be consummated simultaneously with the initial Credit Extension inaccordance with applicable Law (including the requisite approval by 662/3%of Nu-Gro’s shareholders attending Nu-Gro’s shareholders’ meeting held for suchpurpose and the requisite court approval) and in accordance with the terms ofthe Arrangement Agreement and (ii) the U.S. Reorganization shall have beenconsummated simultaneously with the initial Credit Extension.

####  

#### (c)           The AdministrativeAgent shall be reasonably satisfied that there has been no material adversechange (from the standpoint of the Lenders) in the pro forma capital andownership structure and the shareholder arrangements of the Borrower and eachof the Guarantors since February 29, 2004 (other than as to be effectedpursuant to the Nu-Gro Transaction).

####  

#### (d)           There shall not haveoccurred an adverse change of $1,000,000 or more in the business, operations(including results of operations), assets, properties, capital or condition(financial or otherwise) of Nu-Gro and its Subsidiaries, taken as a whole,since September 30, 2003.

####  

#### (e)           All governmental,shareholder and material third party consents and approvals (including, withoutlimitation, Hart-Scott-Rodino clearance and Competition Act (Canada) andInvestment Canada Act approvals, if applicable) necessary in connection withthe Nu-Gro Transaction shall have been obtained and shall remain in effect; allapplicable waiting periods in connection with the Nu-Gro Transaction shall haveexpired without any action being taken by any Governmental Authority, thatcould restrain, prevent or impose materially adverse conditions upon theBorrower and its Subsidiaries or that could seek or threaten any of theforegoing in any material respect, and no Law shall be applicable which in thereasonable judgment of the Administrative Agent could reasonably be expected tohave such effect.

####  

#### (f)            There shall existno action, suit, investigation or proceeding affecting any Loan Party or any ofits Subsidiaries pending or, to the knowledge of the Borrower, threatenedbefore any Governmental Authority or arbitrator that could be reasonably beexpected to have a Nu-Gro Material Adverse Effect.

####  

#### (g)           All Loans made bythe Lenders to the Borrower shall be in full compliance with the FederalReserve’s margin regulations.

####  

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#### (h)           The Lenders shall besatisfied that the amount, terms, conditions and holders of all intercompanyIndebtedness (it being understood that intercompany indebtedness contemplatedby the Nu-Gro Transaction and described to the Lead Arrangers prior to February29, 2004 is acceptable) and all Indebtedness and other material liabilitiesowing to third parties to be outstanding on and after the Closing Date(including, for the avoidance of doubt, those of Nu-Gro and its Subsidiaries)are not materially and adversely different from those in effect on February 29,2004, except for those changes that relate to the Nu-Gro Transaction.

####  

#### (i)            All fees requiredto be paid on or before the Closing Date (including the fees and expenses ofcounsel to the Administrative Agent) shall have been paid.

####  

4.02         Conditions to all Credit Extensions.  The obligation of each Lender to honor anyRequest for Credit Extension (other than a Committed Loan Notice requestingonly a conversion of Loans to the other Type, or a continuation of EurodollarRate Loans) is subject to the following conditions precedent:

 

#### (a)           The representationsand warranties of the Borrower and each other Loan Party contained in ArticleV or any other Loan Document, shall be true and correct in all materialrespects on and as of the date of such Credit Extension, except to the extentthat such representations and warranties specifically refer to an earlier date,in which case they shall be true and correct in all material respects as of suchearlier date, and except that for purposes of this Section 4.02, therepresentations and warranties contained in Section 5.06 shall be deemedto refer to the most recent statements furnished pursuant to Sections6.13(b) and (c).

####  

#### (b)           No Default shall exist,or would result from such proposed Credit Extension or from the application ofthe proceeds therefrom.

####  

#### (c)           The AdministrativeAgent and, if applicable, the L/C Issuer or the Swing Line Lender shall havereceived a Request for Credit Extension in accordance with the requirementshereof.

####  

Each Request for Credit Extension (other than aCommitted Loan Notice requesting only a conversion of Loans to the other Typeor a continuation of Eurodollar Rate Loans) submitted by the Borrower shall bedeemed to be a representation and warranty that the conditions specified in Sections4.02(a) and (b) have been satisfied on and as of the date of theapplicable Credit Extension.

 

# ARTICLE VREPRESENTATIONS AND WARRANTIES

#  

Representations and Warranties.  Each of Holdings and the Borrower herebyrepresents and warrants as follows:

 

5.01         Existence,Qualification and Power.  Eachof the Loan Parties and each of their Subsidiaries (a) are corporations,limited partnerships or limited liability companies duly organized and validlyexisting under the laws of the jurisdictions of their respective organization

 

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and are in good standing under the laws of suchjurisdiction and (b) are duly qualified as foreign corporations, limitedpartnerships or limited liability companies and are in good standing in eachother jurisdiction in which the ownership, lease or operation of theirrespective property and assets or the conduct of their respective businessesrequire them to so qualify or be licensed, except, solely in the case of this clause(b), where the failure to so qualify or be licensed or to be in goodstanding, either individually or in the aggregate, could not reasonably beexpected to have a Material Adverse Effect. Each of the Loan Parties and each of their Subsidiaries have all of therequisite power and authority, and the legal right, to own or lease and tooperate all of the property and assets they purport to own, lease or operateand to conduct all of their respective businesses as now conducted.  Each of the Loan Parties has all of therequisite power and authority, and the legal right, to execute and deliver eachof the Loan Documents to which it is a party, to perform all of its obligationshereunder and thereunder and to consummate the Nu-Gro Transaction, the HoldingCompany Event (if and when consummated) and all of the other transactionscontemplated hereby and thereby.

 

5.02         Capitalization.  Set forth on Schedule 5.02 hereto isa complete and accurate list of all of the Subsidiaries of the Borrower as ofthe date of this Agreement showing, as to each such Subsidiary, the correctlegal name thereof, the type of entity, the jurisdiction of its organization,the number and type of each class of its Equity Interests authorized and thenumber outstanding, and the percentage of each such class of its EquityInterests outstanding on such date that are owned by any of the LoanParties.  As of the date of thisAgreement, all of the outstanding Equity Interests in each of the Subsidiariesof the Borrower are owned directly or indirectly by one or more of the LoanParties, free and clear of all Liens, except those created under the CollateralDocuments.  All of the outstandingEquity Interests in the Borrower and each of its Subsidiaries have been validlyissued and are fully paid and nonassessable.

 

5.03         Authorization;No Contravention.  Theexecution, delivery and performance by each of the Loan Parties of each of theLoan Documents and the Nu-Gro Acquisition Documents to which it is a party, andthe consummation of the Nu-Gro Transaction, the Holding Company Event (if andwhen consummated) and the other transactions contemplated hereby and thereby,have been duly authorized by all necessary action (including, without limitation,all necessary shareholder, partner, member or other similar action) and do not:

 

#### (a)           contravene theConstitutive Documents of such Loan Party;

####  

#### (b)           violate anyRequirement of Law;

####  

#### (c)           conflict with orresult in the breach of, or constitute a default under, any loan agreement,indenture, mortgage, deed of trust, lease, instrument, contract or otheragreement binding on or affecting such Loan Party or any of its Subsidiaries orany of their respective property or assets in a manner which could reasonably beexpected to have a Material Adverse Effect; or

####  

#### (d)           except for the Lienscreated under the Collateral Documents, result in or require the creation orimposition of any Lien upon or with respect to any of the property or assets ofsuch Loan Party or any of its Subsidiaries.

####  

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Neither any of the LoanParties nor any of their respective Subsidiaries is in violation of anyRequirement of Law or in breach of any loan agreement, indenture, mortgage,deed of trust, lease, instrument, contract or other agreement referred to inthe immediately preceding sentence, the violation or breach of which, eitherindividually or in the aggregate, could reasonably be expected to have aMaterial Adverse Effect.

 

5.04         Governmental Authorization; OtherConsents.  Each of the LoanParties and each of their Subsidiaries own or possess all of the GovernmentalAuthorizations that are necessary to own or lease and operate their respectiveproperty and assets and to conduct their respective businesses as nowconducted, except where and to the extent that the failure to obtain ormaintain in effect any such Governmental Authorization, either individually orin the aggregate, could not reasonably be expected to have a Material Adverse Effect.  Neither any of the Loan Parties nor any oftheir Subsidiaries has received any notice relating to or threatening therevocation, termination, cancellation, denial, impairment or modification ofany such Governmental Authorization, or is in violation or contravention of, orin default under, any such Governmental Authorization that in any case couldreasonably be expected to have a Material Adverse Effect.  No Governmental Authorization and noconsent, approval or authorization of, or notice to or filing with, or otheraction by, any other Person is required for:

 

#### (a)           the due execution,delivery or performance by any of the Loan Parties of any of the Loan Documentsor the Nu-Gro Acquisition Documents to which it is a party, or for theconsummation of any aspect of the Nu-Gro Transaction;

####  

#### (b)           the grant by any ofthe Loan Parties of the Liens granted by it pursuant to the CollateralDocuments;

####  

#### (c)           the perfection ormaintenance of the Liens created under the Collateral Documents (including thepriority thereof);

####  

#### (d)           the exercise by anyof the Agents or any of the Lenders of its rights under the Loan Documents orthe remedies in respect of the Collateral pursuant to the Collateral Documents;or

####  

#### (e)           the consummation ofthe Holding Company Event (if and when consummated),

####  

except for the approvals,consents, exemptions, authorizations, actions, notices and filings that havebeen duly obtained, taken, given or made and are in full force and effect and,in the case of the Nu-Gro Transaction and the Holding Company Event (if andwhen consummated), those approvals, consents, exemptions, authorizations orother actions, notices or filings, the failure of which to obtain or make couldnot reasonably be expected to have a Material Adverse Effect.  All applicable waiting periods in connectionwith each aspect of the Nu-Gro Transaction have expired without any actionhaving been taken by any competent Governmental Authority restraining,preventing or imposing materially adverse conditions upon the Loan Parties and theirSubsidiaries or that could seek or threaten any of the foregoing in anymaterial respect.

 

5.05         Enforceability.  This Agreement has been, and each of theNotes and each of the other Loan Documents when delivered hereunder will havebeen, duly executed and

 

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delivered by each of the Loan Parties partythereto.  This Agreement is, and each ofthe Notes and each of the other Loan Documents when delivered hereunder willbe, the legal, valid and binding obligations of each of the Loan Parties partythereto, enforceable against such Loan Party in accordance with theirrespective terms, except to the extent such enforceability may be limited bythe effect of applicable bankruptcy, insolvency, reorganization, moratorium orother similar laws affecting the enforcement of creditors’ rights generally orby general principles of equity.

 

5.06         Financial Statements; No MaterialAdverse Effect.  (a)  Thebalance sheets of the Borrower as of December 31, 2001, December 31, 2002 andDecember 31, 2003, and the related statements of income, stockholders’equity and cash flow of the Borrower for the Fiscal Years then ended, in eachcase including the schedules and notes thereto and accompanied by an opinion ofPricewaterhouseCoopers LLP, the independent auditors of the Borrower, copies ofall of which have been furnished to the Lenders, fairly present in all materialrespects the financial condition of the Borrower as at such dates and theresults of operations and cash flow of the Borrower for the respective periodsended on such dates.

 

### (b)           The balance sheets of Nu-Gro as of September 30, 2001,September 30, 2002 and September 30, 2003, and the related statements ofincome, stockholders’ equity and cash flow of Nu-Gro for the Fiscal Years thenended, and the balance sheet of Nu-Gro as of December 31, 2003, and the relatedstatements of income, stockholders’ equity and cash flow of Nu-Gro for thethree-month period then ended, in each case including the schedules and notes thereto(if any) and accompanied by an opinion of Ernst & Young LLP, theindependent auditors of Nu-Gro, copies of all of which have been furnished tothe Lenders, fairly present in all material respects (subject, solely in thecase of such financial statements of Nu-Gro as of and for the three-monthperiod ended December 31, 2003, to normal year-end audit adjustments and theabsence of footnotes) the financial condition of Nu-Gro as at such dates andthe results of operations and cash flow of Nu-Gro for the respective periodsended on such dates.

###  

### (c)           All of the financial statements referred to (i) in clause(a) above, including the schedules and notes thereto, have been prepared inaccordance with GAAP applied consistently throughout the respective periods coveredthereby, except as noted therein and (ii) in clause (b) above, includingthe schedules and notes thereto, have been prepared in accordance with CanadianGAAP applied consistently throughout the respective periods covered thereby,except as noted therein.  As of theClosing Date, neither the Borrower nor Nu-Gro has any material indebtedness orother material fixed or contingent liabilities, material liabilities for taxes,unusual forward or long-term material commitments or anticipated materiallosses from any unfavorable commitments, in each case that are required by GAAPto be disclosed, except as otherwise permitted hereunder.

###  

### (d)           Since February 29, 2004, there has been no event orcircumstance, either individually or in the aggregate, that has had or couldreasonably be expected to have a Material Adverse Effect.

###  

5.07         Projections.  The forecasted Consolidated balance sheetsand statements of income or operations, stockholders’ equity and cash flow ofthe Borrower and its Subsidiaries delivered to the Lenders pursuant to Section4.01(a)(xvi) or 6.13(e) were prepared in good faith

 

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on the basis of the assumptions stated therein, whichassumptions were fair in the light of conditions existing at the time made, andrepresented, at the time of delivery thereof to the Lenders, the Borrower’sreasonable estimate of its future financial performance (although the actualresults during the periods covered by such forecasts may differ from theforecasted results).

 

5.08         Accuracyof Information.  All of thewritten information (other than financial projections and *pro forma* information) furnished by or onbehalf of any of the Loan Parties or any of their Subsidiaries to any of theAgents or any of the Lenders or any of their representatives or advisors inconnection with the Loan Documents or the Nu-Gro Acquisition Documents or anyaspect of the Nu-Gro Transaction or any of the other transactions contemplatedhereby or thereby, considered as a whole, does not contain any untrue statementof a material fact or omit to state a material fact necessary to make thestatements made therein, in light of the circumstances in which any suchstatements were made, not materially misleading.

 

5.09         Litigation.  There is no action, suit, litigation,arbitration or proceeding pending or, to the knowledge of the Borrower,threatened (and, to the knowledge of the Borrower, there is no investigationpending or threatened) against or affecting any of the Loan Parties or any oftheir Subsidiaries or any of the property or assets thereof in any court orbefore any arbitrator or by or before any Governmental Authority of anykind that either individually or in the aggregate, could reasonably beexpected to have a Material Adverse Effect.

 

5.10         Collateral;Liens.  Each of the Loan Partiesis the legal and beneficial owner of the Collateral purported to be ownedthereby under the Collateral Documents, free and clear of all Liens, except forthe liens and security interests created or permitted under the LoanDocuments.  The Collateral Documents,together with the filing of appropriate Uniform Commercial Code financingstatements in favor of the Administrative Agent, on behalf of the SecuredParties, the possession of the certificates evidencing the Equity Interests inthe Subsidiaries of the Borrower (or upon consummation of the Holding CompanyEvent, the Subsidiaries of Holdings) comprising part of the Collateral and thetaking of any other actions described in the Collateral Documents, create validand perfected first priority liens on and security interests in the Collateral(subject to the liens and security interests permitted under Section 7.01)in favor of the Administrative Agent, for the benefit of the Secured Parties,securing the payment of the Secured Obligations.  Certificates (if applicable as to any Subsidiary) representingall of the Equity Interests in the Subsidiaries of the Loan Parties that arepurported to comprise part of the Collateral have been delivered to theAdministrative Agent as required under the terms of the Collateral Documents,together with undated stock powers or other appropriate powers duly executed inblank; all filings and other actions necessary to perfect and protect the liensand security interests of the Administrative Agent in the Collateral have beenduly made or taken and are in full force and effect or will be duly made ortaken in accordance with the terms of the Loan Documents; and all filing feesand recording taxes have been paid in full.

 

5.11         IntellectualProperty.  Each of the LoanParties and each of their Subsidiaries own or have the legal right to use allof the patents, licenses, franchises, copyrights, service marks, trademarks,trade secrets and trade names (collectively, “***IP Rights***”) that are necessary to own orlease and operate their respective property and assets and to conduct their

 

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respective businesses as now conducted, without knownconflict with the rights of any other Person except to the extent the failureto so own or possess any such IP Right (or such conflict pertaining thereto)could not, individually or in the aggregate, reasonably be expected to have aMaterial Adverse Effect.  No action,suit, litigation, arbitration or proceeding is pending or, to the knowledge ofthe Borrower, threatened (and, to the knowledge of the Borrower, noinvestigation is pending or threatened) challenging the use by any of the LoanParties or any of their Subsidiaries of any such IP Right or the validity oreffectiveness thereof, except for any such action, suit, investigation,litigation, arbitration or proceeding that, either individually or in theaggregate, could not reasonably be expected to have a Material Adverse Effect.

 

5.12         Margin Stock.  Neither any of the Loan Parties nor any oftheir respective Subsidiaries is engaged, principally or as one of itsimportant activities, in the business of extending credit for the purpose ofpurchasing or carrying any “*margin stock*”(within the meaning of Regulation U of the Board of Governors of the FederalReserve System (12 CFR 207)).  None ofthe proceeds of any Borrowing or the drawings under any Letter of Credit willbe used to purchase or carry any margin stock or to extend credit to others forthe purpose of purchasing or carrying margin stock.

 

5.13         InvestmentCompany Act, Etc.  Neither anyof the Loan Parties nor any of their Subsidiaries is an “*investment company*” or an “*affiliated person*” of, or “*promoter*” or “*principal underwriter*” for, an “*investment company*” (each as defined in the InvestmentCompany Act of 1940, as amended).  Noneof the making (or deemed making) of any Borrowing, the issuance (or deemedissuance) of any Letter of Credit or the application of the proceeds therefrom,or the repayment of any Borrowing by the Borrower, or the consummation of theNu-Gro Transaction, or the Holding Company Event (if and when consummated) orany of the other transactions contemplated hereby, will violate any provisionof the Investment Company Act of 1940, as amended, or any rule, regulation ororder of the Securities and Exchange Commission thereunder.

 

5.14         Solvency.  The Borrower is, individually and togetherwith its Subsidiaries, taken as a whole, Solvent.

 

5.15         Labor Matters.  Except as, either individually or in theaggregate, could not reasonably be expected to have a Material Adverse Effect,there is (a) no unfair labor practice complaint pending or, to theknowledge of the Borrower, threatened against any of the Loan Parties or any oftheir Subsidiaries by or before any Governmental Authority, and no grievance orarbitration proceeding pending or, to the knowledge of the Borrower, threatenedagainst any of the Loan Parties or any of their Subsidiaries which arises outof or under any collective bargaining agreement, (b) no strike, labordispute, slowdown, stoppage or similar action or grievance pending or, to theknowledge of the Borrower, threatened against any of the Loan Parties or any oftheir Subsidiaries and (c) to the knowledge of the Borrower, no unionrepresentation question existing with respect to the employees of any of theLoan Parties or any of their Subsidiaries and no union organizing activitytaking place with respect to any of the employees of any of them.

 

5.16         ERISA Matters.  No ERISA Event has occurred or couldreasonably be expected to occur that, either individually or in the aggregate,has had or could reasonably be

 

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expected to have, a Material Adverse Effect.  Schedule B (Actuarial Information) tothe most recent annual report (Form 5500 series) for each of the Pension Plans,copies of which have been filed with the Internal Revenue Service and furnishedor made available to the Lenders, is complete and accurate and fairly presentsin all material respects the funding status of such plan at such time; and, tothe knowledge of the Loan Parties, since the date of such Schedule B, there hasbeen no material adverse change in the funding status of such plan.  Neither any of the Loan Parties nor any ofthe ERISA Affiliates (i) has incurred any Withdrawal Liability to anyMultiemployer Plan in excess of $1,000,000 or (ii) has been notified by thesponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganizationor has been terminated, within the meaning of Title IV of ERISA, and, tothe best knowledge of the Loan Parties and the ERISA Affiliates, no suchMultiemployer Plan could reasonably be expected to be in reorganization or tobe terminated, within the meaning of Title IV of ERISA.

 

5.17         EnvironmentalCompliance.  (a)  Theoperations and properties of each of the Loan Parties and each of theirSubsidiaries comply in all material respects with all applicable EnvironmentalLaws and Environmental Permits; all past noncompliance with such EnvironmentalLaws and Environmental Permits has been resolved without any material ongoingobligations or costs; all Environmental Permits that are necessary for theoperations or properties of any of the Loan Parties or any of theirSubsidiaries have been obtained and are in full force and effect, except whereand to the extent that the failure to obtain or maintain in full force andeffect any such Environmental Permit, either individually or in the aggregate,could not reasonably be expected to have a Material Adverse Effect; and nocircumstances exist that, either individually or in the aggregate, couldreasonably be expected to (i) form the basis of an Environmental Actionagainst any of the Loan Parties or any of their Subsidiaries or any of theproperties thereof that, either individually or in the aggregate, couldreasonably be expected to have a Material Adverse Effect or (ii) cause anysuch property to be subject to any restrictions on ownership, occupancy or useor on the transferability of such property that could reasonably be expected,individually or in the aggregate, to have a Material Adverse Effect.

 

### (b)           Except as disclosed in Schedule 5.17, (i) none ofthe properties owned or operated by any of the Loan Parties or any of theirSubsidiaries is listed or, to the actual knowledge of the Borrower, is proposedfor listing on the NPL or on the CERCLIS or any analogous state or local list;and (ii) except as, either individually or in the aggregate, could not reasonablybe expected to have a Material Adverse Effect, (A) there are no, and neverhave been any, underground or aboveground storage tanks or any surfaceimpoundments, septic tanks, pits, sumps or lagoons in which Hazardous Materialsare being or have been treated, stored or disposed of on any property owned oroperated by any of the Loan Parties or any of their Subsidiaries or, to theknowledge of the Borrower, on any property formerly owned or operated by any ofthe Loan Parties or any of their Subsidiaries, (B) there is no asbestos orasbestos-containing material on any property owned or operated by any of theLoan Parties or any of their Subsidiaries and (C) Hazardous Materials havenot been released, discharged or disposed of on any property owned or operatedby any of the Loan Parties or any of their Subsidiaries.

###  

### (c)           Except as disclosed in Schedule 5.17, neither anyof the Loan Parties nor any of their Subsidiaries is undertaking, and has notcompleted, either individually or together with other potentially responsibleparties, any investigation or assessment or remedial or

###  

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### response action relating to any actual orthreatened release, discharge or disposal of Hazardous Materials at any site,location or operation, either voluntarily or pursuant to the order of anyGovernmental Authority or the requirements of any Environmental Law that,either individually or in the aggregate, could reasonably be expected to resultin the Borrower or any of its Subsidiaries incurring Environmental Liabilitythat could reasonably be expected to result in a Material Adverse Effect.

###  

5.18         Taxes.  (a)  Each of the Loan Parties andeach of their Subsidiaries have filed all federal and material state taxreturns, reports and statements, and all other material tax returns, reportsand statements, required to be filed and have paid or caused to be paid allfederal and material state and other taxes, assessments, levies, fees and othercharges shown thereon (or on any assessments received by any such Person or ofwhich any such Person has been notified) to be due and payable, together withapplicable interest and penalties, except for any such taxes, assessments,levies, fees and other charges (i) the amount, applicability or validity ofwhich is being contested in good faith and by appropriate proceedingsdiligently conducted and with respect to which the applicable Loan Party orSubsidiary or Affiliate of a Loan Party, as the case may be, has establishedappropriate and adequate reserves in accordance with GAAP or (ii) with respectto which the failure to make such filing or payment could not reasonably beexpected to have a Material Adverse Effect.

 

### (b)           Set forth on Schedule 5.18 hereto is acomplete and accurate list, as of the date of this Agreement, of each of theOpen Years of each of the Loan Parties and each of their Subsidiaries.  No issues have been raised by the InternalRevenue Service in respect of Open Years of any of the Loan Parties or any oftheir Subsidiaries or by any such foreign, state or local taxation authoritiesor other Governmental Authorities that, either individually or in theaggregate, could reasonably be expected to have a Material Adverse Effect.  Neither any of the Loan Parties nor any oftheir Subsidiaries has entered into an agreement or waiver or been requested toenter into an agreement or waiver extending any statute of limitations relatingto the assessment, reassessment, payment or collection of taxes of any LoanParty or any such Subsidiary, or is aware of any circumstances that would causethe taxable years or other taxable periods of any Loan Party or any suchSubsidiary to no longer be subject to the normally applicable statute oflimitations.

###  

5.19         Real Estate.  Set forth on (i) Part A of Schedule 5.19hereto is a complete and accurate list as of the date of this Agreement or asof the date of the most recent amendment, supplement or other modification to Schedule5.19 hereto (pursuant to Section 6.13(f)) of all real property ownedby the Borrower or any of its Subsidiaries, showing as of such date, the streetaddress, county or other relevant jurisdiction, state, record owner and bookand estimated fair value thereof and (ii) Part B of Schedule 5.19hereto is a complete and accurate list as of the date of this Agreement or asof the date of the most recent amendment, supplement or other modification to Schedule5.19 hereto (pursuant to Section 6.13(f)) of all leases of realproperty under which any of the Loan Parties or any of their Subsidiaries isthe lessee, showing as of such date, the street address, state, lessor andlessee thereof.  The Borrower and eachof its Subsidiaries have good and indefeasible fee simple title to all of thereal property set forth on Part A of Schedule 5.19 hereto, free andclear of all Liens other than Liens created or permitted under the LoanDocuments, except for any such real property that has been sold, leased,transferred or otherwise disposed of in accordance with the terms of the LoanDocuments.  All of

 

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the leases referred to on Schedule 5.19 heretoare valid and subsisting and in full force and effect, unless such lease haslapsed, terminated or been canceled in accordance with the terms of the LoanDocuments, except where failure of such leases to be valid and subsisting andin full force and effect could not, individually or in the aggregate,reasonably be expected to have a Material Adverse Effect.

 

# ARTICLE VIAFFIRMATIVE, REPORTING AND FINANCIAL COVENANTS

#  

Until the Termination Date, each of Holdings and theBorrower will, at all times:

 

6.01         Compliance with Laws, Maintenance ofGovernmental Authorizations, Etc. (a) Comply, and cause each of its Subsidiaries to comply, with allapplicable Requirements of Law, such compliance to include, without limitation,compliance with ERISA, with the Racketeer Influenced and Corrupt OrganizationsChapter of the Organized Crime Control Act of 1970 and with the Uniting andStrengthening America by Providing Appropriate Tools Required to Intercept andObstruct Terrorism Act of 2001, Pub. L.107-57 and all other laws andregulations relating to money laundering and terrorist activities except to theextent the failure of such Person to comply with any of the foregoing could notindividually or in the aggregate, reasonably be expected to have a MaterialAdverse Effect and (b) except as provided in Section 6.05, obtainand maintain in effect all Governmental Authorizations that are necessary (i)to own or lease and operate their respective property and assets and to conducttheir respective businesses as now conducted, except where and to the extentthat the failure to obtain or maintain in effect any such GovernmentalAuthorization, either individually or in the aggregate, could not reasonably beexpected to have a Material Adverse Effect, or (ii) for the due execution,delivery or performance by the Borrower or any of its Subsidiaries of any ofthe Loan Documents to which it is a party, or for the consummation of any aspectof the Transaction or any of the other transactions contemplated hereby andthereby.  This Section 6.01 shallnot apply to compliance with Environmental Laws or Environmental Permits (whichare the subject of Section 6.03).

 

6.02         Payment ofTaxes, Etc.  Pay and discharge,and cause each of its Subsidiaries to pay and discharge, to the extent due andpayable and before the same shall become delinquent, (a) all materialtaxes, assessments, reassessments, levies and other governmental chargesimposed upon it or upon its property, assets or income and (b) all lawfulclaims that, if unpaid, might by law become a Lien upon its property and assetsor any part thereof; provided, however*,*that neither the Borrower nor any of its Subsidiaries shall be required to pay ordischarge any such tax, assessment, reassessment, levy, charge or claim (i) theamount, applicability or validity of which is being contested in good faith andby proper proceedings diligently conducted and as to which appropriate andadequate reserves are being maintained by the Borrower or its applicableSubsidiary in accordance with GAAP and (ii) except, in each case, to the extentthat the failure to pay or discharge which tax, assessment, reassessment, levy,charge or claim could not, individually or when aggregated with all otherunpaid amounts of a type referred to in this Section 6.02, reasonably beexpected to have a Material Adverse Effect.

 

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6.03         Compliancewith Environmental Laws. (a) Comply (and use commercially reasonable efforts to require that alllessees and other Persons operating or occupying any of the Subsidiaries’properties to comply), and cause each of its Subsidiaries to comply (and to usecommercially reasonable efforts to require all lessees and other Personsoperating or occupying any of the Subsidiaries’ properties to comply), in allmaterial respects, with all Environmental Laws and the Environmental Permitsapplicable to such Person or its operations or properties; (b) obtain andrenew, and cause each of its Subsidiaries to obtain and renew, all of theEnvironmental Permits necessary for the ownership or operation of theirrespective properties or the conduct of their respective businesses as nowconducted and as proposed to be conducted; and (c) conduct, and cause each ofits Subsidiaries to conduct, any investigation, study, sampling or testing, andundertake, and cause each of its Subsidiaries to undertake, any cleanup,removal, remedial or other action, necessary to remove and clean up releases ofthe Hazardous Materials from any of its properties in accordance with therequirements of all applicable Environmental Laws, except, in the case of clause(b) or (c) of this Section 6.03, where the failure toobtain or renew any such Environmental Permit, to conduct any suchinvestigation, study, sampling or testing or to undertake any such cleanup,removal, remedial or other action, either individually or in the aggregate,could not reasonably be expected (i) to have a Material Adverse Effect or (ii)to subject any Loan Party or any of its Subsidiaries to any criminal penalty orliability or (iii) to subject the Administrative Agent or any of the Lenders toany criminal penalty or liability or (except for nonmaterial fines for whichthe Administrative Agent or such Lender is fully indemnified under Section10.05) any civil penalty or liability; provided, however,that no Loan Party nor any of their Subsidiaries shall be required to undertakeany such cleanup, removal, remedial or other action otherwise required underthis Section 6.03 to the extent that the amount, applicability orvalidity thereof is being contested in good faith and by proper proceedingsdiligently conducted and appropriate and adequate reserves are being maintainedby such Loan Party or such applicable Subsidiary with respect to suchcircumstances in accordance with GAAP.

 

6.04         Maintenanceof Insurance.  Maintain, andcause each of its Subsidiaries to maintain, insurance for their respectiveproperties, assets and businesses with financially sound and reputableinsurance companies or associations and of such types (including, withoutlimitation, insurance against theft and fraud and against loss or damage byfire, explosion or hazard of or to property and general public liabilityinsurance), in such amounts and with such deductibles, covering such casualtiesand contingencies and otherwise on such terms as are at least as favorable asthose usually carried by companies of established reputations engaged insimilar businesses and owning similar properties and assets in the same generalareas in which the Borrower or its applicable Subsidiary operates or as mayotherwise be required by applicable Requirements of Law; provided, however, that each Loan Party and their Subsidiariesmay effect workers’ compensation insurance or similar coverage with respect totheir respective operations in any particular jurisdiction through an insurancefund operated by such jurisdiction or by meeting the self-insurancerequirements of such jurisdiction so long as the Borrower, Holdings or suchSubsidiary establishes and maintains appropriate and adequate reserves thereforin accordance with GAAP.

 

6.05         Preservation of Corporate Existence,Etc.  Preserve and maintain, andcause each of its Subsidiaries to preserve and maintain, its legal existence,organization, rights (statutory and pursuant to its Constitutive Documents),permits, licenses, approvals, privileges

 

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and franchises; provided, however that the Borrowerand its Subsidiaries (i) may consummate any merger or consolidation otherwisepermitted under Section 7.03 and (ii) may amend, supplement orotherwise modify their rights under their respective Constitutive Documents tothe extent otherwise permitted under Section 7.12; and provided**further,**however, that neither the Borrower nor any of its Subsidiaries shall berequired to preserve any right, permit, license, approval, privilege orfranchise if the loss thereof, either individually or in the aggregate, couldnot reasonably be expected to have a Material Adverse Effect.

 

6.06         VisitationRights.  At any reasonable timeand from time to time, permit any of the Agents or any of the Lenders, or anyagents or representatives thereof (so long as such agents or representativesare or agree to be bound by the provisions of Section 10.08), to examineand make copies of and abstracts from the records and books of account of, andto visit the properties of, the Borrower and its Subsidiaries and to discussthe affairs, finances and accounts of the Borrower and/or any of itsSubsidiaries with any of their officers or directors and with their independentauditors; provided, that, excludingany such visits and inspections during the continuation of an Event of Default,only the Administrative Agent onbehalf of the Lenders may exercise rights under this Section 6.06 and theAdministrative Agent shall not exercisesuch rights more often than two (2) times during any calendar year absent theexistence of an Event of Default and only one (1) such time shall be at theBorrower’s expense; provided, further that when an Eventof Default exists the Administrative Agent or any Lender (or any of theirrespective representatives or independent contractors) may do any of theforegoing at the expense of the Borrower at any time and from time to timewithout limitation and without advance notice, except that any such visitsshall be done during normal business hours. The Administrative Agent and the Lenders shall give the Borrower theopportunity to participate in any discussions with the Borrower’s accountants.

 

6.07         Keeping ofBooks.  Keep, and cause each ofits Subsidiaries to keep, proper books of record and account in which full andaccurate entries shall be made of all of the financial transactions and theproperty, assets and businesses of the Borrower and each of its Subsidiaries(including, without limitation, the establishment and maintenance of adequateand appropriate reserves) in accordance with GAAP.

 

6.08         Maintenanceof Properties, Etc. (a)  Maintain and preserve, andcause each of its Subsidiaries to maintain and preserve, all of its materialproperties that, either individually or in the aggregate, are necessary in theconduct of its business in good working order and condition, ordinary wear andtear and casualty and condemnation excepted, and (b) make, and cause eachof its Subsidiaries to make, from time to time, all repairs, renewals,additions, replacements, betterments and improvements of such properties inaccordance with prudent industry practice.

 

6.09         Compliance with Terms of Leaseholds.  Make all payments and otherwise perform allobligations in respect of all leases of real property to which the Borrower orany of its Subsidiaries is a party, keep such leases in full force and effectand not allow such leases to lapse or to be terminated or any rights to renewsuch leases to be forfeited or canceled, in each case except to the extent thatsuch nonperformance, lapse, termination, forfeiture or cancellation, eitherindividually or in the aggregate, could not reasonably be expected to have aMaterial Adverse Effect.

 

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6.10         Transactionswith Affiliates.  Conduct, andcause each of its Subsidiaries to conduct, directly or indirectly, alltransactions or series of related transactions (including, without limitation,the purchase, sale, lease, transfer or exchange of property or assets of anykind or the rendering of services of any kind) otherwise permitted under theLoan Documents with any of their Affiliates on terms that are fair andreasonable and no less favorable to the Borrower (or upon consummation of theHolding Company Event, Holdings) or any of its Subsidiaries than it wouldobtain in a comparable arm’s-length transaction with a Person not an Affiliatethereof, other than:

 

#### (a)           the performance bythe Borrower and its Subsidiaries of its obligations under the Nu-GroAcquisition Documents, in each case as in effect on the Closing Date or as thesame may be amended pursuant to Section 7.14;

####  

#### (b)           the payment ofmanagement fees to the Sponsor pursuant to the terms of the ProfessionalServices Agreement, as in effect on the Closing Date, in an aggregate amountnot to exceed $1,000,000 in any Fiscal Year;

####  

#### (c)           the payment ofnonrecurring transaction fees to the Sponsor in connection with any purchase orother acquisition of a Person, substantially all or all of the assets of aPerson or a line of business or division of a Person by any Loan Party or anyof their Subsidiaries in an amount not to exceed 1% of the total considerationbeing paid by such Loan Party and its respective Subsidiaries for such purchaseor other acquisition, such fee, in each case, to be payable in full upon theconsummation of the related purchase or other acquisition;

####  

#### (d)           any transaction orseries of related transactions solely between or among (i) Holdings or theBorrower, on the one hand, and one or more of the Restricted Subsidiaries onthe other hand, (ii) one or more of the Restricted Subsidiaries, or (iii) oneor more of the Unrestricted Subsidiaries, on the one hand, and Holdings, theBorrower or any Restricted Subsidiary, on the other hand, in the case of this clause(iii) to the extent such transaction or series of related transactions isnot otherwise prohibited under the terms of the Loan Documents;

####  

#### (e)           equityissuances by Holdings not prohibited by this Agreement;

####  

#### (f)            customaryfees may be paid to any directors of Holdings and reimbursement may be made ofreasonable out-of-pocket costs of the directors of Holdings;

####  

#### (g)           each Loan Partyand their respective Subsidiaries may enter into employment andseverance arrangements with their respective officers and employees in theordinary course of business;

####  

#### (h)           each Loan Party and their respective Subsidiariesmay perform obligations under anyemployment contract, collective bargaining agreement, employee benefit plan,related trust agreement or any other similar arrangement heretofore orhereafter entered into in the ordinary course of business and not otherwiseprohibited hereunder;

####  

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#### (i)            each Loan Partyand their respective Subsidiaries maymaintain benefit programs or arrangements for their respective employees, officersor directors, including, without limitation, vacation plans, health and lifeinsurance plans, deferred compensation plans, and retirement or savings plansand similar plans, in each case, in the ordinary course of business and nototherwise prohibited hereunder;

####  

#### (j)            each Loan Partyand their respective Subsidiaries may make payments pursuant to anycustomary tax sharing arrangement among the Borrower (or upon the consummationof the Holding Company Event, Holdings) and its Subsidiaries entered into inthe ordinary course of business; and

####  

#### (k)           each Loan Party andits respective Subsidiaries may make loans and advances to its respectiveemployees, officers and directors to the extent permitted under Article VII.

####  

6.11         Covenantto Give Security.  (a)  Upon (i) the request of the AdministrativeAgent following the occurrence and during the continuance of a Default under Section8.01(a) or 8.01(f) or an Event of Default, (ii) the formationor acquisition of one or more new direct or indirect Subsidiaries by any LoanParty or (iii) the purchase or other acquisition of any real property or anypersonal property by any Loan Party with a value in excess of $2,500,000 in anysingle transaction or series of related transactions, which property, in thereasonable judgment of the Administrative Agent, shall not already be subjectto a valid and perfected lien and security interest in favor of theAdministrative Agent, for the benefit of the Secured Parties, the Borrowershall, in each case at its own expense:

 

(A)          within thirty (30) days after suchrequest or purchase or other acquisition, or such longer period, up to anadditional thirty (30) days, as the Administrative Agent may agree, furnish tothe Administrative Agent a description of such real and personal properties ofeach of the Loan Parties and their respective Subsidiaries in detail reasonablysatisfactory to the Administrative Agent;

 

(B)           in connection with the formation oracquisition of a Subsidiary, within thirty (30) days after such formationor acquisition or such longer period, not to exceed an additional sixty (60)days, as the Administrative Agent may agree in its sole discretion, (A) causeeach such Subsidiary that is not a Foreign Subsidiary, and cause each directand indirect parent of such Subsidiary (if it has not already done so), to dulyexecute and deliver to the Administrative Agent a Guaranty or GuaranteeSupplement, guaranteeing the other Loan Parties’ obligations under the LoanDocuments, (B) deliver (or cause such direct and indirect parent to deliver)certificates (if any) representing the Pledged Interests of such Subsidiaryaccompanied by undated stock powers or other appropriate instruments oftransfer executed in blank and instruments evidencing the Pledged Debt of suchSubsidiary indorsed in blank to the Administrative Agent, together with, ifrequested by the Administrative Agent, Security Agreement Supplements withrespect to the pledge of any Equity Interests or Indebtedness, provided,that no more than 66% of the voting Equity Interests of any first-tier Foreign

 

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Subsidiary shall berequired to be pledged as Collateral, (C) duly execute and deliver, and causeeach such Subsidiary to duly execute and deliver, to the Administrative Agentmortgages, collateral assignments, Security Agreement Supplements and othersecurity agreements, as specified by and in form and substance reasonablysatisfactory to the Administrative Agent, securing payment of all of theObligations of the applicable Loan Party or Subsidiary of a Loan Party, as thecase may be, under and in respect of the Loan Documents and constituting lienson and security interests in all such real and personal properties and (D) dulyexecute and deliver, and cause each such Subsidiary to duly execute anddeliver, Guarantee Supplements;

 

(C)           within thirty (30) days after suchrequest or purchase or other acquisition, or such longer period, not to exceedan additional sixty (60) days, as the Administrative Agent may agree in itssole discretion, take, and cause each such Subsidiary that is not a ForeignSubsidiary to take, whatever action (including, without limitation, therecording of Mortgages, the filing of Uniform Commercial Code financingstatements and IP Security Agreements, the giving of notices and theendorsement of notices on title documents) may be necessary or in thereasonable opinion of the Administrative Agent advisable to vest in theAdministrative Agent (or in any co-agent, sub-agent or other representative ofthe Administrative Agent designated by it) valid and subsisting Liens on thereal and personal properties purported to be subject to the Mortgages,collateral assignments, Security Agreement Supplements and security agreementsdelivered pursuant to this Section 6.11, enforceable against all thirdparties in accordance with their terms;

 

(D)          within thirty (30) days after therequest of the Administrative Agent (or such longer period, not to exceed anadditional sixty (60) days, as the Administrative Agent in its sole discretionmay permit), deliver to the Administrative Agent a signed copy of opinions ofcounsel for the applicable Loan Parties, addressed to the Administrative Agentand the other Secured Parties and reasonably acceptable to the Administrative Agent,as to the matters contained in subclauses (A), (B) and (C)of this Section 6.11, as to such mortgages, collateral assignments,Security Agreement Supplements and security agreements being legal, valid andbinding obligations of each of the Loan Parties party thereto, enforceableagainst such Loan Party in accordance with their terms, as to such recordings,filings, notices, endorsements and other actions being sufficient to createvalid and perfected liens on and security interests in such real and personalproperties, and as to such other matters as the Administrative Agent mayreasonably request;

 

(E)           as promptly as practicable after thereasonable request of the Administrative Agent, deliver to the AdministrativeAgent with respect to each parcel of real property owned by the Loan Party orthe Subsidiary of the Loan Party (other than a Foreign Subsidiary) that is thesubject of such request, title reports, surveys and engineering, soils andother reports, and Phase I environmental assessment reports, each in scope,form and substance reasonably

 

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satisfactory to theAdministrative Agent, provided,**however,that to the extent that any of the Loan Parties or any of its Subsidiariesshall have otherwise received any of the foregoing items with respect to suchreal property, such items shall, promptly after the receipt thereof, bedelivered to the Administrative Agent;

 

(F)           upon the occurrence and during thecontinuance of a Default under Section 8.01(a) or 8.01(f) or anEvent of Default, promptly execute and deliver, and cause each of itsSubsidiaries to promptly execute and deliver, any and all instruments and take,and cause each of its Subsidiaries to take, any and all such other actions asmay be necessary or as the Administrative Agent may deem reasonably desirablein order to obtain and maintain from and after the time any dividend or otherdistribution is paid or payable by any of the Subsidiaries of any Loan Party avalid and perfected first priority lien on and security interest in suchdividend or other distribution; and

 

(G)           at any time and from time to time,promptly execute and deliver any and all further instruments and documents andtake all such other action as may be necessary or as the Administrative Agentmay deem reasonably desirable in obtaining the full benefits of, or inperfecting and preserving the Liens created under, such Mortgages, collateralassignments, Security Agreement Supplements and security agreements.

 

#### (b)           Notwithstanding anything to the contrary in Section6.11(a), the Administrative Agent shall not take or perfect, as the casemay be, a security interest in those assets (and shall not request thepreparation of surveys, soil reports and environmental site assessments) as towhich the Administrative Agent shall determine, in its reasonable discretion,that the cost of obtaining or perfecting such Lien (including any mortgage,stamp, intangibles or other tax, or of obtaining surveys, soil reports orenvironmental site assessments not already available at such time) areexcessive in relation to the benefit to the Secured Parties of the security orinformation afforded thereby.

####  

6.12         FurtherAssurances.  Promptly upon therequest of the Administrative Agent, or any of the Lenders through theAdministrative Agent, at any time and from time to time, (a) correct, andcause each of its Subsidiaries to promptly correct, any defect or error thatmay be discovered in any of the Loan Documents or in the execution,acknowledgment, filing or recordation thereof and (b) do, execute, acknowledge,deliver, record, re-record, file, re-file, register and re-register any and allsuch further acts, deeds, conveyances, pledge agreements, mortgages, deeds oftrust, trust deeds, collateral assignments, financing statements andcontinuations thereof, termination statements, notices of assignment,transfers, certificates, assurances and other instruments and take such furtheractions, and cause each of its Subsidiaries promptly to do, execute, acknowledge,deliver, record, re-record, file, re-file, register and re-register any and allsuch further acts, deeds, conveyances, pledge agreements, mortgages, deeds oftrust, trust deeds, collateral assignments, financing statements andcontinuations thereof, termination statements, notices of collateralassignments, transfers, certificates, assurances and other instruments and takesuch further action, as may be necessary or as the Administrative Agent, or anyof the Lenders through the Administrative Agent, may reasonably request fromtime to time in order to (i) carry out more effectively the provisions andpurposes of the Loan

 

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Documents or assure theAdministrative Agent or the Lenders of their rights and interests herein andtherein, (ii) to the fullest extent permitted by applicable law, subjectany of the Loan Party’s or any of its Subsidiaries’ properties, assets, rightsor interests to the Liens now or hereafter intended to be covered by any of theCollateral Documents, (iii) perfect and maintain the validity,effectiveness and priority of any of the Collateral Documents and any of theLiens intended to be created thereunder and (iv) assure, convey, grant,assign, transfer, preserve, protect and confirm more effectively unto theSecured Parties the rights granted or now or hereafter intended to be grantedto the Secured Parties under any of the Loan Documents or under any otherinstrument executed in connection with any of the Loan Documents to which anyLoan Party or any of its Subsidiaries is or is to be a party, and cause each ofits Subsidiaries to do so.

 

6.13         ReportingRequirements.  Until theTermination Date, the Borrower will furnish to the Administrative Agent:

 

#### (a)           Default Notices.  As soon as possible and in any event withinthree Business Days after the occurrence of each Default or any event,development or occurrence that, either individually or in the aggregate, couldreasonably be expected to have a Material Adverse Effect continuing on the dateof such statement, a statement of a Responsible Officer of the Borrower settingforth the details of such Default or such event, development or occurrence(including, without limitation, the anticipated effect thereof), the period oftime such Default or such event, development or occurrence has existed and beencontinuing and the action that the Borrower has taken and/or proposes to takewith respect thereto.

####  

#### (b)           QuarterlyFinancials.  As soon as availableand in any event within 45 days after the end of each of the first three FiscalQuarters of each Fiscal Year, commencing with the Fiscal Quarter ending March31, 2004, a Consolidated balance sheet of the Borrower and its Subsidiaries asof the end of such Fiscal Quarter and Consolidated statements of income,stockholders’ equity and cash flows of the Borrower and its Subsidiaries forthe period commencing at the end of the previous Fiscal Quarter and ending withthe end of such Fiscal Quarter and for the period commencing at the end of theprevious Fiscal Year and ending with the end of such Fiscal Quarter, settingforth in comparative form, in the case of each such Consolidated balance sheet,the corresponding figures as of the last day of the corresponding period in theimmediately preceding Fiscal Year and, in the case of each such Consolidatedstatement of income or operations, stockholders’ equity and cash flows, thecorresponding figures for the corresponding period in the immediately precedingFiscal Year, all in reasonable detail (it being understood that such financialstatements delivered pursuant to this subsection (b) for the FiscalQuarter ending March 31, 2004 will not contain any information with respect toNu-Gro and its Subsidiaries).

####  

#### (c)           Annual Financials.  As soon as available and in any event within90 days after the end of each Fiscal Year, a copy of the annual audit reportfor such Fiscal Year for the Borrower and its Subsidiaries, including thereinthe Consolidated balance sheets of the Borrower and its Subsidiaries as of theend of such Fiscal Year and Consolidated statements of income or operations,stockholders’ equity and cash flows of the Borrower

####  

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#### and itsSubsidiaries for such Fiscal Year, accompanied by an unqualified opinion or anopinion otherwise reasonably acceptable to the Required Lenders ofPricewaterhouseCoopers LLP or other independent public accountants ofnationally recognized standing, setting forth in comparative form, in the caseof each such Consolidated balance sheet, the corresponding figures as of thelast day of the immediately preceding Fiscal Year, and, in the case of eachsuch Consolidated statement of income or operations, stockholders’ equity andcash flows, the corresponding figures for the corresponding period in theimmediately preceding Fiscal Year, together with (i) a letter fromPricewaterhouseCoopers LLP or such independent public accountants of nationallyrecognized standing stating that, in the course of their regular audit of theConsolidated financial statements of the Borrower and its Subsidiaries, whichaudit was conducted by such accountants in accordance with generally acceptedauditing standards, such accountants have not obtained any knowledge that anEvent of Default has occurred and is continuing under Section 6.14 orif, in the opinion of such accountants, an Event of Default has occurred and iscontinuing under Section 6.14, a statement as to the status and naturethereof and (ii) in the event of any change in the generally acceptedaccounting principles used by such accountants in the preparation of theConsolidated financial statements of the Borrower and its Subsidiaries referredto above in this Section 6.13(c) from GAAP, such accountants shall alsoprovide a reasonably detailed description of such changes.

####  

#### (d)           ComplianceCertificate.  Commencing for theFiscal Quarter ending on or about September 30, 2004, together with eachdelivery to the Administrative Agent of the Consolidated financial statementsof the Borrower and its Subsidiaries referred to in Sections 6.13(b) and6.13(c), a certificate in substantially the form of Exhibit Dhereto (each, a “***ComplianceCertificate***”) of a Senior Financial Officer, in form andsubstance reasonably satisfactory to the Administrative Agent:

####  

###### (i)            duly certifyingthat, subject, in the case of any such Consolidated financial statementsdelivered to the Administrative Agent and the Lenders pursuant to Section6.13(b), to the absence of footnote disclosure and normal year-end auditadjustments, (A) the Consolidated financial statements of the Borrower and itsSubsidiaries delivered with such certificate fairly present in all materialrespects the Consolidated financial condition of the Borrower and itsSubsidiaries as of the last day of such Fiscal Quarter or such Fiscal Year, asthe case may be, and the Consolidated results of operations and cash flows ofthe Borrower and its Subsidiaries for the Fiscal Quarter or the Fiscal Yearended on such date and (B) the Consolidated financial statements of theBorrower and its Subsidiaries delivered with such certificate have beenprepared in accordance with GAAP (or a reconciliation statement has beendelivered together therewith conforming such Consolidated financial statementsto GAAP);

######  

###### (ii)           duly certifyingthat no Default has occurred and is continuing or, if a Default has occurredand is continuing, a statement as to the nature thereof, the period of timesuch Default has existed and been continuing and the action that the Borrowerhas taken and/or proposes to take with respect thereto; provided, thatif such Compliance Certificate demonstrates an Event of Default in respect of

######  

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###### any covenantcontained in Section 6.14, the Equity Investors may deliver, togetherwith such Compliance Certificate, notice of their intent to cure (a “***Notice of Intent to Cure***”)such Event of Default through capital contributions or the purchase of EquityInterests as contemplated pursuant to subclause (b)(xii) and the final provisoof the definition of “Consolidated EBITDA”; providedfurther,that the delivery of a Notice of Intent to Cure shall in no way affect or alterthe occurrence, existence or continuation of any such Event of Default or therights, benefits, powers and remedies of the Administrative Agent and theLenders under any Loan Document unless and until such Event of Default has beencured as a result of the action contemplated by such Notice of Intent to Cureor otherwise;

######  

###### (iii)          setting forth aschedule of the computations used by the Borrower in determining compliancewith the covenants contained in Sections 7.07 and 6.14 (includingwith respect to each such Section, where applicable, the calculations of themaximum or minimum amount, ratio or percentage, as the case may be, permissibleunder the terms of such Section, and the calculation of the amount, ratio orpercentage then in existence) and, in the case of any such Consolidatedfinancial statements delivered to the Administrative Agent and the Lenders pursuantto Section 6.13(c), the amount of Excess Cash Flow for the FiscalYear covered thereby;

######  

###### (iv)          in the case of anysuch Consolidated financial statements delivered to the Administrative Agentand the Lenders pursuant to Section 6.13(b), setting forth (A) adescription in reasonable detail of all of the changes in the generallyaccepted accounting principles applied in the preparation of such financialstatements from GAAP and (B) a statement of reconciliation, if and to theextent necessary for determining whether any of the changes in the generallyaccepted accounting principles applied in the preparation of such financialstatements would affect the calculation of, or compliance with, Sections7.07 or 6.14, conforming such Consolidated financial statements toGAAP; and

######  

###### (v)           commencing upon theoccurrence of the Holding Company Event, setting forth a schedule in reasonabledetail of the computations used by Holdings in determining compliance with theprovisions in Section 7.02(c)(ii).

######  

#### (e)           Forecasts.  As soon as available and in any event atleast 30 days after the first day of each Fiscal Year, commencing with theFiscal Year ending December 31, 2004, Consolidated forecasts prepared bymanagement of the Borrower of balance sheets and statements of income, stockholders’equity and cash flows on a quarterly basis for such Fiscal Year in a formreasonably satisfactory to the Administrative Agent and setting forth incomparative form the corresponding figures for the immediately preceding FiscalYear.

####  

#### (f)            Schedule Updates.  Together with each Compliance Certificatedelivered pursuant to Section 6.13(d), amendments and supplements to Schedule5.19 to this Agreement, Schedules V and VII to the SecurityAgreement and such other Schedules to any of the Loan Documents as theAdministrative Agent shall reasonably request, in each

####  

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#### case so as toensure that, at the time of the delivery of such amendments and supplements,such Schedules are accurate and complete in all material respects as to thesubject matter thereof.

####  

#### (g)           Accountants’ Letters, Etc.  Promptlyupon receipt thereof, copies of all final “*managementrecommendation letters*” submitted to any Loan Party or any of itsSubsidiaries by any independent auditors of such Loan Party or any of itsSubsidiaries in connection with each annual audit of its Consolidated financialstatements made by such auditors.

####  

#### (h)           Licenses, Etc.  Promptly and in any event within fiveBusiness Days after receipt thereof, notice of any actual, pending orthreatened suspension, termination or revocation of any of the GovernmentalAuthorizations of any of the Loan Parties or any of their Subsidiaries, or anyenjoinment, barring or suspension of the ability of the or any such Loan Partyor Subsidiary to conduct any of its businesses in the ordinary course, in eachcase, that could reasonably be expected to have a Material Adverse Effect.

####  

#### (i)            Litigation.  Promptly and in any event within fiveBusiness Days after the service upon any Loan Party or any of its Subsidiariesof a pleading, summons or other service of process notifying it of thecommencement thereof, notice of all actions, suits, investigations, litigation,arbitrations and proceedings against or affecting such Loan Party or any of itsSubsidiaries or any of the property or assets thereof in any court or beforeany arbitrator or by or before any Governmental Authority of any kind in whichthere is a reasonable likelihood of an adverse determination and that, eitherindividually or in the aggregate, could reasonably be expected to have aMaterial Adverse Effect; and promptly after the occurrence thereof, notice ofany adverse change in the status, or in the reasonably anticipated financialeffect on such Loan Party or any of its Subsidiaries, of any such action, suit,investigation, litigation, arbitration or proceeding (and, in each case, uponthe reasonable request of the Administrative Agent, any other informationavailable to any of the Loan Parties or any of their Subsidiaries with respectto any of the foregoing that would enable the Administrative Agent and theLenders to more fully evaluate such action, suit, investigation, litigation,arbitration or proceeding, unless the Loan Party or the applicable Subsidiaryis precluded from disclosing any such report or statement pursuant to aconfidentiality agreement with the applicable Governmental Authority).

####  

#### (j)            Securities Reports, Etc.  Promptlyand in any event within five Business Days after the sending or filing thereof,copies of all proxy statements, financial statements, change reports and otherreports that any Loan Party or any of its Subsidiaries sends to itsstockholders, partners or members (or equivalent persons thereto), and copiesof all regular, periodic and special reports and information forms, and allregistration statements, prospectuses and information memoranda, that any LoanParty or any of its Subsidiaries files with the Securities and ExchangeCommission or any Governmental Authority that may be substituted therefor, orwith any national or international securities exchange, and copies of allprivate placement or offering memoranda pursuant to which securities of suchLoan Party or Subsidiary that are exempt from registration under the SecuritiesAct are proposed to be issued and sold thereby.

####  

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#### (k)           Creditor Reports.  Promptly after the furnishing or receiptthereof, copies of any statement or report furnished to or received from anyother holder of the securities of any Loan Party or any of its Subsidiariespursuant to the terms of any indenture, loan or credit agreement, receivablespurchase agreement or similar agreement of such Loan Party or Subsidiary withamounts outstanding or having commitments to extend credit in an aggregateprincipal amount of at least $20,000,000 (including, without limitation, anyamendments, waivers or consents given or requested in respect thereof and anynotices of default, acceleration or redemption delivered thereunder) and not otherwiserequired to be furnished to the Administrative Agent (for the benefit of theLenders) pursuant to any other clause of this Section 6.13.

####  

#### (l)            ERISA Events andERISA Reports; Plan Terminations, Etc. (i) Promptly and in any event within 15 days after any of the LoanParties or any of the ERISA Affiliates knows or has reason to know that anyERISA Event which could reasonably be expected to result in a materialliability has occurred, a statement of a Responsible Officer of the Borrowerdescribing such material ERISA Event and the action, if any, that the Borrower,such other applicable Loan Party or such ERISA Affiliate has taken and/orproposes to take with respect thereto, together with materials or informationfiled or to be filed with any Governmental Authority or any trustee for anyPlan as a result of such material ERISA Event; (ii) on the date on which anyrecords, documents or other information must be furnished to the PBGC withrespect to any Plan pursuant to Section 4010 of ERISA, a copy of such records,documents and information; (iii) promptly and in any event within five (5)Business Days after receipt thereof by any of the Loan Parties or any of theERISA Affiliates, copies of each notice from the PBGC stating its intention toterminate any Pension Plan or to have a trustee appointed to administer anyPension Plan; (iv) promptly following the request of the Administrative Agent,or any of the Lenders through the Administrative Agent, therefor, a copy of themost recent Schedule B (Actuarial Information) to the annual report (Form 5500)with respect to each of the Pension Plans; and (v) promptly and in any eventwithin 15 Business Days after receipt thereof by any of the Loan Parties or anyof the ERISA Affiliates from the sponsor of a Multiemployer Plan, copies ofeach notice concerning (A) the imposition of Withdrawal Liability by anysuch Multiemployer Plan, (B) the reorganization or termination, within themeaning of Title IV of ERISA, of any such Multiemployer Plan or (C) theamount of liability incurred, or that could reasonably be expected to beincurred, by such Loan Party or any such ERISA Affiliate in connection with anyevent described in subclause (v)(A) or (v)(B) of this Section6.13(l).

####  

#### (m)          “Reportable Transaction” Notification.  TheBorrower shall promptly notify the Administrative Agent of any determination bythe Borrower to treat the Loans and/or the related transactions contemplated bythis Agreement as a “reportable transaction” (within the meaning of TreasuryRegulation Section 1.6011-4), and shall provide the Administrative Agent(within five Business Days of such determination) with a duly completed copy ofIRS Form 8886 or any successor form.

####  

#### (n)           EnvironmentalConditions.  Promptly and in anyevent within ten Business Days after the assertion or occurrence thereof:

####  

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###### (i)            notice of anycondition or occurrence on or arising from any property owned or operated bythe Borrower or any of its Subsidiaries that resulted or is alleged to haveresulted in noncompliance in any material respect by the Borrower or suchSubsidiary with any applicable Environmental Law or Environmental Permit;

######  

###### (ii)           any condition oroccurrence on any property owned or operated by the Borrower or any of itsSubsidiaries that could reasonably be expected to cause such property to besubject to any material restrictions on the ownership, occupancy or use thereofor on the transferability of such property by the Borrower or its applicableSubsidiary under any Environmental Law; and

######  

###### (iii)          the taking of anyremoval or remedial action involving material costs or liabilities in responseto the actual or alleged presence of any Hazardous Material on any propertyowned or operated by the Borrower or any of its Subsidiaries as required by anyEnvironmental Law, any Environmental Permit or any Governmental Authority.

######  

All such notices shalldescribe in reasonable detail the nature of the condition, occurrence, removalor remedial action described therein, the period of time such condition orcircumstance has existed and been continuing and, in the case of each suchcondition or occurrence, the action that the Borrower or its applicableSubsidiary has taken and/or proposes to take with respect thereto.

 

#### (o)           Insurance.  As soon as available and in any event within90 days after the end of each Fiscal Year, commencing with the Fiscal Yearending December 31, 2004, a report summarizing the insurance coverage in effectfor the Loan Parties and their respective Subsidiaries, specifying therein thetype, carrier, amount, deductibles and co-insurance requirements and expirationdates thereof and containing such additional information as any of the Lenders,through the Administrative Agent, may reasonably request.

####  

#### (p)           Other Information.  Such other information respecting thebusiness, condition (financial or otherwise), operations, liabilities (actualor contingent), performance, properties or prospects of the Borrower or any ofits Subsidiaries as any of the Lenders, through the Administrative Agent, mayfrom time to time reasonably request.

####  

6.14         FinancialCovenants.  Until theTermination Date, the Borrower will:

 

#### (a)           Total LeverageRatio.  Maintain a Total LeverageRatio as of the last day of each Measurement Period set forth below of not morethan the amount set forth below for each Measurement Period set forth below:

 

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| **For Each Measurement   Period Ending During the   Period:**          |   | **Ratio** |   |
|------------------------------------------------------------------------|--------|-----------|--------|
| From September  30, 2004 through Fiscal Quarter ending March 31, 2005  |   | 6.25:1.00 |   |
| From April 1,  2005 through Fiscal Quarter ending September 30, 2005   |   | 6.00:1.00 |   |
| From October 1,  2005 through Fiscal Quarter ending September 30, 2006 |   | 5.50:1.00 |   |
| From October 1,  2006 through Fiscal Quarter ending September 30, 2007 |   | 4.75:1.00 |   |
| From October 1,  2007 through Fiscal Quarter ending September 30, 2008 |   | 4.25:1.00 |   |
| Each Fiscal  Quarter thereafter                                        |   | 3.75:1.00 |   |

 

#### (b)           Interest CoverageRatio.  Maintain an InterestCoverage Ratio as of the last day of each Measurement Period set forth below ofnot less than the amount set forth below for each Measurement Period set forthbelow:

 

| **For Each Measurement   Period Ending During   the Period**              |   | **Ratio** |   |
|---------------------------------------------------------------------------|--------|-----------|--------|
| From September  30, 2004 through Fiscal Quarter ending September 30, 2005 |   | 2.25:1.00 |   |
| From October 1,  2005 through Fiscal Quarter ending September 30, 2006    |   | 2.50:1.00 |   |
| From October 1,  2006 through Fiscal Quarter ending September 30, 2007    |   | 2.75:1.00 |   |
| From October 1,  2007 through Fiscal Quarter ending September 30, 2008    |   | 3.00:1.00 |   |
| Each Fiscal  Quarter thereafter                                           |   | 3.25:1.00 |   |

 

6.15         Post-ClosingMatters.  Upon the occurrence ofthe Holding Company Event, Holdings shall (i) execute and deliver a HoldingsJoinder Agreement and Guaranty in substantially the form of Exhibit Khereto (the “***HoldingsJoinder and Guaranty***”) and a

 

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Security Agreement Supplement, (ii) delivercertificates representing the Pledged Interests of Holdings in the Borrower,and (iii) have taken each such other action that would be required in respectof a newly-formed Subsidiary of the Borrower under Section 6.11(a)(without regard to any time period specified therein), including, withoutlimitation, delivery of an opinion of counsel to Holdings on the terms setforth in clause (a)(D) of Section 6.11.

 

# ARTICLE VIINEGATIVE COVENANTS

#  

Until the Termination Date, neither Holdings nor theBorrower shall, at any time:

 

7.01         Liens, Etc.  Create, incur, assume or suffer to exist, orpermit any of its Subsidiaries to create, incur, assume or suffer to exist, anyLien on or with respect to any of its property or assets of any character(including, without limitation, accounts), whether now owned or hereafteracquired, or sign or file or authorize, or permit any of its Subsidiaries tosign or file or authorize, under the Uniform Commercial Code or any similarRequirements of Law of any jurisdiction, a financing statement (or theequivalent thereof) that names Holdings or any of its Subsidiaries as debtor,or sign or authorize, or permit any of its Subsidiaries to sign or authorize,any security agreement authorizing any secured party thereunder to file anysuch financing statement (or the equivalent thereof), *excluding, however*, from theoperation of the foregoing restrictions:

 

#### (a)           Liens created underthe Loan Documents;

####  

#### (b)           Permitted Liens;

####  

#### (c)           Liens existing onthe Closing Date and described on Schedule 7.01 hereto;

####  

#### (d)           (i) purchase moneyLiens upon or in real property or equipment acquired or held by the Borrower orany of its Subsidiaries to secure the purchase price of such real property orequipment or to secure Indebtedness incurred solely for the purpose offinancing the acquisition, construction or improvement of any such realproperty or equipment to be subject to such Liens, or Liens existing on anysuch real property or equipment at the time of its acquisition or thecompletion of its construction or improvement (other than any such Lienscreated in contemplation of such acquisition, construction or improvement thatdo not secure the purchase price of such real property or equipment) and (ii)Liens arising in connection with Capitalized Leases; provided*,*however*,* that (A) no such Lien under this subclause (d)shall extend to or cover any property or assets other than the real property orequipment being so acquired, constructed or improved and the products andproceeds thereof, (B) such Liens attach concurrently or within 120 days afterthe acquisition, repair, replacement or improvement (as applicable) of theproperty subject to such Liens and (C) any Indebtedness secured by such Liensshall otherwise be permitted under Section 7.02(b)(iii);

####  

#### (e)           Liens upon any ofthe property and assets (other than any Equity Interests in any Person)existing at the time such property or asset is purchased or otherwise acquiredby the Borrower or any of its Subsidiaries; provided that any such Lienwas not created in contemplation of such purchase or other acquisition and doesnot extend to

####  

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#### or cover anyproperty or assets other than the property or asset being so purchased orotherwise acquired and the products and proceeds thereof; and provided**further**that any Indebtedness or other Obligations secured by suchLiens shall otherwise be permitted under Section 7.02;

####  

#### (f)            Liens upon any ofthe property and assets (other than any Equity Interests in any Person) of aPerson and its Subsidiaries existing at the time such Person is merged into orconsolidated with any of the Subsidiaries of the Borrower, or otherwise becomesa Subsidiary of the Borrower, in accordance with the terms of the LoanDocuments; provided that any such Lien was not created in contemplationof such merger, consolidation or acquisition and does not extend to or coverany property or assets other than property and assets and the products andproceeds thereof of the Person and its Subsidiaries being so merged into orconsolidated with the applicable Subsidiary of the Borrower or being acquired bythe Borrower or its applicable Subsidiary, as the case may be; and provided**further that any Indebtedness orother Obligations secured by such Lien shall otherwise be permitted under Section 7.02;

####  

#### (g)           deposits made, andletters of credit issued, to secure the performance of Operating Leases of theBorrower and its Subsidiaries in the ordinary course of business; provided that no such Lien shallextend to or cover any property or assets other than such deposit or suchletter of credit and the property and assets subject to such Operating Lease,as applicable;

####  

#### (h)           Liens arising solelyfrom precautionary filings of financing statements under the Uniform CommercialCode of the applicable jurisdictions in respect of Operating Leases enteredinto by the Borrower or any of its Subsidiaries in the ordinary course;

####  

#### (i)            Liens upon any ofthe property and assets of the Foreign Subsidiaries to secure Indebtednessotherwise permitted under Section 7.02(b)(vi);

####  

#### (j)            Liens not otherwisepermitted under this Section 7.01 securing obligations of the Borrowerand its Subsidiaries in an aggregate amount not to exceed $30,000,000 at anytime outstanding;

####  

#### (k)           the modification,replacement, extension or renewal of any Lien otherwise permitted to be createdor to exist under clauses (c), (e), (f) and (j) ofthis Section 7.01 upon or in the same property and assets theretoforesubject thereto; provided that no such extension, renewal or replacementshall extend to or cover any property or assets not theretofore subject to theLien being extended, renewed or replaced and shall not secure any additionalIndebtedness or other Obligations other than (A) after acquired property thatis affixed or incorporated into the property covered by such Lien and (B) theproceeds and products thereof; and provided**further that any Indebtedness secured by such Liensshall otherwise be permitted under the terms of the Loan Documents; and

####  

#### (l)            deposits made, andletters of credit issued, to secure the performance of trade contracts of theBorrower and its Subsidiaries in the ordinary course of business.

####  

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7.02         Indebtedness.  Create, incur, assume or suffer to exist, orpermit any of its Subsidiaries to create, incur, assume or suffer to exist, anyIndebtedness other than:

 

#### (a)           in the case of theBorrower, (i) subject to clause (ii) below, Permitted SubordinatedIndebtedness in an aggregate amount not to exceed $20,000,000 at any timeoutstanding and (ii) in an aggregate amount in excess of $20,000,000 solely tothe extent that such excess amounts are applied to prepay the Loans pursuant toSection 2.05(b)(iv); and

####  

#### (b)           in the case of theBorrower and its Subsidiaries,

####  

###### (i)            Indebtedness underthe Loan Documents;

######  

###### (ii)           Indebtedness of (A)the Borrower owing to Holdings or any of the Restricted Subsidiaries, (B) anyof the Restricted Subsidiaries owing to Holdings or the Borrower or any of theother Restricted Subsidiaries, (C) any of the Unrestricted Subsidiaries owingto Holdings or the Borrower or any of the Restricted Subsidiaries to the extentthe Investment in such Unrestricted Subsidiary is otherwise permitted under Section 7.05(d)and (D) any of the Unrestricted Subsidiaries owing to any of the otherUnrestricted Subsidiaries; provided that all such intercompanyIndebtedness owing by any Loan Party shall be evidenced by a promissory notecontaining subordination provisions in substantially the form of Exhibit Lhereto and such other terms and conditions as shall be reasonably acceptable tothe Administrative Agent, which promissory note shall, in each case, to theextent owing to a Loan Party, be pledged as Collateral to the AdministrativeAgent, on behalf of the Secured Parties, under the applicable CollateralDocuments immediately upon the creation thereof;

######  

###### (iii)          Indebtednesssecured by Liens permitted under Section 7.01(d) in an aggregateprincipal amount not to exceed $20,000,000 at any time outstanding;

######  

###### (iv)          ContingentObligations of Holdings, the Borrower and its Subsidiaries of Indebtedness ofthe Borrower or such Subsidiary; provided**that each such Obligation is not otherwise prohibited underthe terms of the Loan Documents;

######  

###### (v)           Indebtednesscomprised of trade payables or other accounts payable to trade creditorsincurred in the ordinary course of business to the extent otherwise included inthe definition of  “*Indebtedness*” set forth in Section 1.01;

######  

###### (vi)          Indebtedness of oneor more Foreign Subsidiaries arising in the ordinary course of business in anaggregate principal amount not to exceed $15,000,000 at any time outstanding; provided**that all such Indebtedness incurredpursuant to this subclause (b)(vi) shall be nonrecourse in all respectsto the property and assets of the Loan Parties and their Subsidiaries (otherthan one or more of the Foreign Subsidiaries);

######  

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###### (vii)         Indebtednessexisting at the time that any property or asset is purchased or otherwiseacquired by the Borrower or any of its Subsidiaries, or that any Person (otherthan the Borrower or any of its Subsidiaries) is merged into or consolidatedwith any of the Subsidiaries of the Borrower or otherwise becomes a Subsidiaryof the Borrower, in accordance with the terms of the Loan Documents; providedthat (x) no such Indebtedness shall be incurred in contemplation of any suchpurchase or other acquisition or any such merger, consolidation or acquisition,(y) such Indebtedness shall be secured, if at all, solely by Liens permittedunder Section 7.01(e) or 7.01(f) and (z) the Borrower and itsSubsidiaries will be in *Pro Forma Compliance* with the covenantsset forth in Section 6.14, after giving effect to such PermittedAcquisition and the incurrence or issuance of such Indebtedness;

######  

###### (viii)        Indebtedness nototherwise permitted under this Section 7.02 in an aggregate principalamount not to exceed $30,000,000 at any time outstanding;

######  

###### (ix)           endorsement ofnegotiable instruments for deposit or collection or similar transactions in theordinary course of business;

######  

###### (x)            Indebtedness extendingthe maturity of, or refunding, refinancing or replacing, in whole or in part,any Indebtedness incurred under any of subclauses (b)(vii), (b)(xix)and (c)(ii) of this Section 7.02; provided, however,that (A) the aggregate principal amount of such extended, refunding,refinancing or replacement Indebtedness shall not be increased above theprincipal amount thereof and the premium, if any, payable thereon outstandingimmediately prior to such extension, refunding, refinancing or replacement,except by an amount equal to a reasonable premium paid, and fees and expensesreasonably incurred, in connection with such modification, refinancing,refunding, renewal or extension and by an amount equal to any existingcommitments unutilized thereunder or as otherwise permitted pursuant to Section7.02, (B) the direct and contingent obligors therefor shall not bechanged as a result of or in connection with such extension, refunding,refinancing or replacement, (C) such extended, refunding, refinancing orreplacement Indebtedness shall not have a stated maturity date or mandatoryredemption date prior to the stated maturity date or mandatory redemption dateof the Indebtedness being so extended, refunded, refinanced or replaced, (D) ifthe Indebtedness being so extended, refunded, refinanced or replaced issubordinated in right of payment or otherwise to the Obligations of theBorrower or any of its Subsidiaries under and in respect of the Loan Documents,such extended, refunding, refinancing or replacement Indebtedness shall besubordinated to such Obligations to at least the same extent, (E) the terms ofany such extending, refunding, refinancing or replacement Indebtedness (and ofany agreement entered into and of any instrument issued in connectiontherewith) shall be not be materially less favorable to the Borrower and itsSubsidiaries or to the rights or interests of the Lenders than the terms of theIndebtedness being so extended, refunded, refinanced or replaced and (F)immediately before and immediately after giving *pro forma* effect to any such extension, refunding,refinancing or replacement, no Default shall have occurred and be continuing;

######  

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###### (xi)           Swap Contractsentered into in the ordinary course of business of the Borrower or suchSubsidiary for the purpose of hedging against fluctuations in the interestrates, foreign exchange rates or commodities pricing risks; providedthat all such Swap Contracts shall be nonspeculative in nature (including,without limitation, with respect to the term and purpose thereof);

######  

###### (xii)          Indebtedness ofBorrower and its Subsidiaries owed to the seller of any property acquired in aPermitted Acquisition on an unsecured subordinated basis, in each case, so longas both immediately prior and after giving effect thereto, (x) no Event ofDefault shall exist or result therefrom, and (y) the Borrower and itsSubsidiaries will be in *Pro Forma Compliance* with the covenantsset forth in Section 6.14, after giving effect to such Permitted Acquisitionand the incurrence or issuance of such Indebtedness;

######  

###### (xiii)         Indebtedness (otherthan for borrowed money) subject to Liens permitted under Section 7.01;

######  

###### (xiv)        Indebtednessrepresenting deferred compensation to employees of Holdings and its Subsidiariesin the ordinary course of business;

######  

###### (xv)         Indebtedness consisting of promissorynotes issued by any Loan Party to their respective current or former officers,directors and employees, their respective estates, spouses or former spouses tofinance the purchase or redemption of Equity Interests of Holdings permitted bySection 7.06;

######  

###### (xvi)        Indebtedness incurredby Holdings or its Subsidiaries in a Permitted Acquisition or Disposition underagreements providing for the adjustment of the purchase price or similaradjustments, in each case to the extent of such purchase price or similaradjustment;

######  

###### (xvii)       Indebtednessconsisting of obligations of Holdings or its Subsidiaries under deferredcompensation or other similar arrangements incurred by such Person inconnection with the Nu-Gro Transaction and Permitted Acquisitions;

######  

###### (xviii)      Indebtedness inrespect of netting services, overdraft protections and similar arrangements ineach case in connection with deposit accounts and entered into in the ordinarycourse of business;

######  

###### (xix)         Indebtednessexisting as of the Closing Date and described on Schedule 7.02; and

######  

###### (xx)          Indebtedness inrespect of the Canadian Loan; and

######  

#### (c)           in the case ofHoldings:

####  

###### (i)            Indebtedness under the LoanDocuments;

######  

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###### (ii)           unsecured Indebtedness of Holdings (“***PermittedHoldco Debt***”) that (A) is not subject to any Guarantee bythe Borrower or any Restricted Subsidiary, (B) will not mature prior tothe date that is ninety-one (91) days after the scheduled Maturity Date of theTerm Facility, (C) has no scheduled amortization or payments of principal,(D) does not permit any payments in cash of interest or other amounts inrespect of the principal thereof for at least five (5) years from the date ofthe issuance or incurrence thereof, (E) has mandatory prepayment,repurchase or redemption, covenant, default and remedy provisions customary forsenior discount notes of an issuer that is the parent of a borrower undersenior secured credit facilities, and in any event, with respect to covenant,default and remedy provisions, no more restrictive than those set forth in theindenture for the Senior Subordinated Notes taken as a whole (other thanprovisions customary for senior discount notes of a holding company), and (F)contains provisions with respect to paid-in-kind interest which are reasonablysatisfactory to the Administrative Agent; ***provided*** that any such Indebtednessshall constitute Permitted Holdco Debt only if (i) both before and after givingeffect to the issuance or incurrence thereof, no Event of Default shall haveoccurred and be continuing, (ii) after giving *Pro Forma Effect*to the issuance or incurrence thereof, theHoldings Total Leverage Ratio shall be less than 5.50:1 and the Total LeverageRatio shall be less than 3.50:1, and (iii) the Chief Financial Officer of theBorrower shall have delivered an officer’s certificate demonstrating *Pro Forma Compliance* with the covenantsset forth in Section 6.14 in form and substance reasonably satisfactory to theAdministrative Agent, it being understood that any capitalized or paid-in-kindinterest or accreted principal on such Indebtedness shall not constitute anissuance or incurrence of Indebtedness for purposes of this proviso;

######  

###### (iii)          Indebtednesspermitted pursuant to clauses(b)(ii), (iv), (xiv),(xv), (xvi) and (xvii) above; and

######  

###### (iv)          Indebtedness owed tothe seller of any property acquired in a Permitted Acquisition on an unsecuredsubordinated basis so long as, if applicable, Holdings complies with theproviso in Section 7.06(g)(v) (whether or not any Restricted Payment ismade to Holdings).

######  

7.03         Mergers,Etc.  Merge into or consolidate withany Person or permit any Person to merge into or consolidate with it, or permitany of its Subsidiaries to do so, except that:

 

#### (a)           any of theSubsidiaries of the Borrower may merge into or consolidate with the Borrower; providedthat the Borrower is the surviving corporation;

####  

#### (b)           any of theSubsidiaries of the Borrower may merge into or consolidate with any of theRestricted Subsidiaries; provided that the Person formed by such mergeror consolidation is a Restricted Subsidiary;

####  

#### (c)           any of theUnrestricted Subsidiaries may merge into or consolidate with any of the otherUnrestricted Subsidiaries;

####  

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#### (d)           in connection withany Investment permitted by Section 7.05, any of the Subsidiaries of theBorrower may merge into or consolidate with any other Person or permit anyother Person to merge into or consolidate with it; provided that (i) ifsuch Subsidiary of the Borrower is a Restricted Subsidiary, the Person formedby such merger or consolidation shall be a Restricted Subsidiary, (ii) if suchSubsidiary is a non-wholly owned Domestic Subsidiary, the Person formed by suchmerger or consolidation shall be a Domestic Subsidiary and (iii) if suchSubsidiary is a Foreign Subsidiary, the Person formed by such merger orconsolidation shall be a Subsidiary of the Borrower; and provided**further that the Person with whichsuch Subsidiary is merging or consolidating is engaged in substantially thesame line of business as one or more of the businesses engaged in by theBorrower and its Subsidiaries on the date of this Agreement and thosereasonably related or ancillary thereto;

####  

#### (e)           in connection withany Disposition permitted under Section 7.04(h), any of the Subsidiariesof the Borrower may merge into or consolidate with any other Person or permitany other Person to merge into or consolidate with it; and

####  

#### (f)            the Borrower andits Subsidiaries may consummate the Nu-Gro Transaction;

####  

#### (g)           the Borrower mayconsummate the Holding Company Event; and

####  

#### (h)           the Borrower mayenter into a merger for the purpose of changing its jurisdiction ofincorporation to another jurisdiction located within the United States, providedthat (i) if the Borrower is not the continuing or surviving Person, such Personshall assume the obligations and liabilities of the Borrower under the LoanDocuments in a manner and pursuant to documents reasonably acceptable to theAdministrative Agent and (ii) the Administrative Agent shall have reasonablydetermined that such merger will not materially and adversely affect the rightsand remedies of the Administrative Agent, any Secured Party or any Lender underany of the Loan Documents.

####  

In all cases under this Section 7.03,immediately before and immediately after giving *pro forma* effect to such merger or consolidation, no Defaultshall have occurred and be continuing. In addition, in the case of any merger or consolidation effectedpursuant to clause (d), (e) or (h) of this Section 7.03,immediately after giving effect to such merger or consolidation, the Borrowerand its Subsidiaries shall be in *pro forma*compliance with all of the covenants set forth in Section 6.14, suchcompliance to be determined on the basis of the Required Financial Informationmost recently delivered to the Administrative Agent and the Lenders as thoughsuch merger or consolidation had been consummated as of the first day of thefiscal period covered thereby.

 

7.04         Dispositions.  Dispose of, or permit any of itsSubsidiaries to Dispose of, any property or assets (including, withoutlimitation, any Equity Interests of its Subsidiaries), except:

 

#### (a)           the Borrower and itsSubsidiaries may sell inventory in the ordinary course of business;

####  

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#### (b)           the Borrower and itsSubsidiaries may Dispose of property and assets in a transaction otherwisepermitted under Section 7.01, Section 7.03 (so long as inthe case of clause (d) thereof, such Disposition is permitted pursuantto a different subclause of this Section 7.04), 7.05 or 7.06;

####  

#### (c)           (i) the Borrower mayDispose of any of its property and assets to any of the Restricted Subsidiaries,(ii) any of the Restricted Subsidiaries may Dispose of any of its property andassets to the Borrower or any of the other Restricted Subsidiaries, (iii) anyof the Unrestricted Subsidiaries may Dispose of any of its property and assetsfor an amount not in excess of Fair Market Value to the Borrower or any of itsRestricted Subsidiaries and (iv) any of the Unrestricted Subsidiaries mayDispose of any of its property and assets to any of the UnrestrictedSubsidiaries;

####  

#### (d)           the Borrower and itsSubsidiaries may Dispose of any obsolete, damaged or worn out assets thatare no longer useful or necessary in the conduct of their businesses andoperations in the ordinary course of business;

####  

#### (e)           leases or subleasesor licenses or sublicenses of real property and equipment of the Borrower orany of its Subsidiaries to any Person so long as each such lease or sublease orlicense or sublicense, as the case may be, shall not interfere in any materialrespect with the business or operations of the Borrower or any of itsSubsidiaries;

####  

#### (f)            licenses orsublicenses of IP Rights of the Borrower or any of its Subsidiaries in theordinary course of business;

####  

#### (g)           the Borrower and itsSubsidiaries may Dispose of property and assets not otherwise permitted to beDisposed of pursuant to this Section 7.04 so long as the (A) aggregatenet book value of all of the property and assets of the Borrower and itsSubsidiaries so Disposed of pursuant to this clause (g) (x) in anysingle transaction or series of related transactions does not exceed$10,000,000 and (y) in the aggregate for all transactions pursuant to this clause(g) does not exceed $50,000,000 and (B) the gross proceeds from any suchDisposition shall be at least equal to the Fair Market Value of the propertyand assets so Disposed of, determined at the time of such Disposition;

####  

#### (h)           any Subsidiary mayDispose of all or substantially all of its assets (upon voluntary liquidationor otherwise) to the Borrower or to another Subsidiary; provided, that if thetransferor in such a transaction is a Loan Party, then (i) the transferee musteither be a Loan Party or (ii) to the extent constituting an Investment, suchInvestment must be a permitted Investment in or Indebtedness of a Subsidiarywhich is not a Loan Party in accordance with Sections 7.02 and 7.05,respectively;

####  

#### (i)            Dispositions ofproperty to the extent that (i) such property is exchanged for credit againstthe purchase price of similar replacement property or (ii) the proceeds of suchDisposition are promptly applied to the purchase price of such replacementproperty;

####  

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#### (j)            Dispositions ofaccounts receivable solely in connection with the collection or compromisethereof;

####  

#### (k)           transfers ofproperty subject to casualty or condemnation events upon receipt of the NetCash Proceeds of such event;

####  

#### (l)            Dispositions by theBorrower and its Subsidiaries of property pursuant to sale-leasebacktransactions are permitted; provided, that (i) the Fair Market Value ofall property so Disposed of shall not exceed $15,000,000 from and after theClosing Date and (ii) the purchase price for such property shall be paid to theBorrower or such Subsidiary for not less than 75% cash consideration; providedfurther that this Section 7.04 shall not prohibit anysale-leaseback transaction resulting from the incurrence of any lease inrespect of any capital asset entered into within 180 days of the acquisition ofsuch capital asset for the purpose of providing permanent financing of suchcapital asset;

####  

#### (m)          the sale, transfer ordisposition of Cash Equivalents;

####  

#### (n)           consignments orsimilar arrangements for the sale of assets to third parties  in the ordinary course of businessconsistent with past practice;

####  

#### (o)           sales or otherdispositions of any minority interest in a joint venture or other Person;

####  

#### (p)           Dispositionsdescribed on Schedule 7.04 hereto;

####  

#### (q)           Dispositions inconnection with the rationalization or integration of Nu-Gro and itsSubsidiaries with the Borrower and its Subsidiaries after giving effect to theNu-Gro Acquisition in an aggregate amount not to exceed $10,000,000 andoccurring within three years after the Closing Date;

####  

#### (r)            intercompany salesof property in the ordinary course of business, provided that in thecase of any such sale from Holdings, the Borrower or any Restricted Subsidiaryto an Unrestricted Subsidiary, for a purchase price less than its net bookvalue, then the difference between such purchase price and the net book valueshall otherwise be permitted under Section 7.02 or Section 7.05(d);and

####  

#### (s)           Dispositions of IPRights for consideration other than cash, so long as such Dispositions couldnot reasonably be expected to have a Material Adverse Effect;

####  

In connection with any Disposition of Collateralpermitted by this Section 7.04 (which for the avoidance of doubt, shallnot include a Disposition of all or substantially all of the Collateral or arelease of all or substantially all of the value of the Guaranty) theAdministrative Agent will, at the Borrower’s expense, execute and deliver suchreleases of Collateral as may be reasonably necessary to evidence the releaseof all Liens on such Collateral under the Loan Documents.

 

7.05         Investmentsin Other Persons.  Purchase,acquire, make or hold, or permit any of its Subsidiaries to purchase, acquire,make or hold, any Investment in any Person, except:

 

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#### (a)           Investments existingon the Closing Date and described on Schedule 7.05 hereto and any modification, replacement, renewal,or extension thereof; provided that the amount of the original Investment isnot increased except by the terms of such Investment or as otherwise permittedby this Section 7.05;

####  

#### (b)           Investments in cashand Cash Equivalents;

####  

#### (c)           Investments inrespect of Swap Contracts permitted by Section 7.02(b)(xi);

####  

#### (d)           Investments by (i)the Borrower, Holdings or any Restricted Subsidiary in the Borrower, Holdingsor any Restricted Subsidiary, (ii) the Borrower, Holdings or any RestrictedSubsidiary in any Unrestricted Subsidiary in an aggregate principal amount forall such Investments not to exceed $15,000,000 less the aggregate amount of anyIndebtedness incurred pursuant to clause (C) of Section 7.02(b)(ii),(iii) any Unrestricted Subsidiary in Holdings or any of its Subsidiaries, and(iv) by Holdings in the Parent (to the extent of Restricted Payments permittedto be made by Holdings to the Parent pursuant to Section 7.06(h));

####  

#### (e)           Investments by theBorrower and its Subsidiaries in account debtors received in connection withthe bankruptcy or reorganization, or in settlement of the delinquentobligations of financially troubled suppliers or customers, in the ordinarycourse of business and in accordance with applicable collection and creditpolicies established by the Borrower or such Subsidiary, as the case may be;

####  

#### (f)            loans and advancesby Holdings and its Subsidiaries to their respective employees, officers anddirectors in an aggregate amount not to exceed $2,500,000 at any timeoutstanding;

####  

#### (g)           the acceptance ofpromissory notes, contingent payment obligations and other noncashconsideration received as payment of the purchase price of any property orassets Disposed of in accordance with Section 7.04(h);

####  

#### (h)           the purchase orother acquisition of all of the Equity Interests in, or all or substantiallyall of the property and assets of, any Person or of assets constituting abusiness unit, line of business of or division of any Person that, upon theconsummation thereof, will be owned directly by the Borrower or any of itsSubsidiaries (including, without limitation, as a result of a merger orconsolidation with or into the Borrower or a Subsidiary of the Borrower, exceptthat in the case of any such acquisition by the Borrower or a Restricted Subsidiary,the surviving entity of any such merger or consolidation shall be the Borroweror a Restricted Subsidiary); provided that, with respect to eachpurchase or other acquisition made pursuant to this clause (h) (each, a“***PermittedAcquisition***”):

####  

###### (i)            any newly createdor acquired Restricted Subsidiary shall comply with the requirements of Section6.11;

######  

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###### (ii)           the lines ofbusiness of the Person to be (or the property and assets of which are to be) sopurchased or otherwise acquired shall be substantially the same lines ofbusiness as one or more of the businesses engaged in by the Borrower and itsSubsidiaries on the date of this Agreement and those reasonably related orancillary thereto;

######  

###### (iii)          the total cashconsideration paid by or on behalf of the Borrower and its Subsidiaries for anysuch purchase or other acquisition, when aggregated with the total cashconsideration paid by or on behalf of the Borrower and its Subsidiaries for allother purchases and other acquisitions made by the Borrower and itsSubsidiaries pursuant to this clause (h), shall not exceed $50,000,000(it being understood that all indemnities, earnouts and other similarcontingent purchase price payment obligations to, and the aggregate amountspaid or to be paid under noncompete, consulting and other affiliated agreementswith, the sellers thereof, all reserves for liabilities with respect theretoand all assumptions of Indebtedness in connection therewith shall in each casebe included in determining the amount of cash consideration expended, providedthat to the extent that any of the foregoing amounts is not known ordeterminable, such amount shall be determined to be an amount reasonablyestimated in good faith to be payable at the time of the purchase oracquisition);

######  

###### (iv)          immediately beforeand immediately after giving *pro forma*effect to any such purchase or other acquisition, no Default shall haveoccurred and be continuing; and

######  

###### (v)           the Borrower shallhave delivered to the Administrative Agent, on behalf of the Lenders, at leastfive Business Days prior to the date on which any such purchase or otheracquisition is to be consummated, a certificate of a Senior Financial Officer,in form and substance reasonably satisfactory to the Administrative Agent,certifying that all of the requirements set forth in this clause (h)have been satisfied or will be satisfied on or prior to the consummation ofsuch purchase or other acquisition (and including a schedule that sets forth inreasonable detail all of the computations used by the Borrower in determiningcompliance with such requirements);

######  

#### (i)            Investments by theBorrower and its Subsidiaries not otherwise permitted under this Section7.05 in an aggregate amount not to exceed the sum of (i) $50,000,000 and(ii) (w) the portion of the Cumulative Excess Cash Flow which is not prepaid tothe Lenders pursuant to Section 2.06(b)(i) or not used to makeRestricted Payments pursuant to Section 7.06 or has not been used tomake Investments under this Section 7.05plus (x) the aggregateamount of Net Cash Proceeds of Permitted Holdco Debt, plus (y) theaggregate amount of Net Cash Proceeds of Permitted Subordinated Indebtednesspermitted to be retained by the Borrower pursuant to Section 7.02(a)(i)plus(z) the proceeds received by the Borrower from Permitted Affiliate Investments;provided that, with respect to each Investment made pursuant to this subsection7.05(i):

####  

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(A)          such Investment shall be in propertyand assets which are part of, or in lines of business substantially the same asone or more of the businesses engaged in by the Borrower and its Subsidiarieson the date of this Agreement and those reasonably related or ancillary thereto;

 

(B)           any determination of the amount ofsuch Investment shall include all cash and noncash consideration (including,without limitation, the Fair Market Value of all Equity Interests issued ortransferred to the sellers thereof, all indemnities, earnouts and othercontingent payment obligations to, and the aggregate amounts paid or to be paidunder noncompete, consulting and other affiliated agreements with, the sellersthereof, all reserves for liabilities with respect thereto and all assumptionsof Indebtedness in connection therewith, provided that to the extentthat any of the foregoing amounts are not known or determinable, such amountshall be determined to be an amount reasonably estimated in good faith to bepayable on the date such Investment is made) paid by or on behalf of theBorrower and its Subsidiaries in connection with such Investment; and

 

(C)           immediately before and immediatelyafter giving *pro forma* effect toany such purchase or other acquisition, no Default shall have occurred and be continuing;

 

#### (j)            the Nu-GroTransaction;

####  

#### (k)           Investments in theordinary course of business consisting of (i) endorsements for collection ordeposit and (ii) customary trade arrangements with customers consistent withpast practice;  and

####  

#### (l)            the licensing,sublicensing or contribution of IP Rights pursuant to joint marketingarrangements with Persons other than Holdings and its Subsidiaries;

####  

#### (m)          To the extent the same constituteInvestments, Contingent Obligations of Holdings, the Borrower and their respectiveSubsidiaries (i) (other than a Guarantee of Indebtedness) made in the ordinarycourse of business that, individually or in the aggregate, could not reasonablybe expected to have a Material Adverse Effect or (ii) permitted by Section7.02.

####  

7.06         Restricted Payments.  Declare or pay any dividends on, orpurchase, redeem, retire, defease or otherwise acquire for value, any of itsEquity Interests, now or hereafter outstanding, return any capital to itsstockholders, partners or members (or the equivalent Persons thereof) as such,make any distribution of property, assets, Equity Interests, obligations orsecurities to its stockholders, partners or members (or the equivalent Personsthereof) as such (any of the foregoing, a “***RestrictedPayment***”), or permit anyof its Subsidiaries to do any of the foregoing, or permit any of itsSubsidiaries to purchase, redeem, retire, defease or otherwise acquire forvalue any Equity Interests in the Borrower (or, after the HoldingsCompany Event, Holdings), or to issue orsell any of its Equity Interests in order to acquire such Equity Interests, or,in the case of any Loan Party, issue or sell any Equity Interests to any Person

 

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that is not a LoanParty (provided that the Borrower or, after the Holdings Company Event,Holdings, may issue and sell Equity Interests to the extent not otherwiseprohibited hereunder), exceptthat so long as no Default shall have occurred and be continuing at the time ofany of the transactions described in clause (f)(iv), (g)(iv), (i)or (j) or would occur as a result thereof:

 

#### (a)           the Borrower mayconsummate the Preferred Stock Redemption;

####  

#### (b)           Holdings and each ofits Subsidiaries may declare and make dividends and other distributions on itsoutstanding Equity Interests payable in such Equity Interests (other thanRedeemable Equity Interests);

####  

#### (c)           any of theSubsidiaries of the Borrower may declare and pay or make dividends and otherdistributions in cash or in additional Equity Interests therein to the Borroweror any of its Subsidiaries; provided that such additional EquityInterests issued to a Loan Party shall, to the extent required under the termsof the applicable Collateral Documents, be pledged as Collateral thereunder tothe Administrative Agent, on behalf of the Secured Parties, immediately uponthe issuance thereof;

####  

#### (d)           any of thenon-wholly owned Subsidiaries of the Borrower may declare and pay or makedividends and other distributions to its shareholders, partners or members (orthe equivalent persons thereof) generally so long as the Borrower and each ofthe Restricted Subsidiaries that own any of the Equity Interests thereinreceive at least their respective proportionate shares of any such dividend ordistribution (based upon their relative holdings of the Equity Intereststherein and taking into account the relative preferences, if any, of thevarious classes of the Equity Interests therein);

####  

#### (e)           to the extentconstituting Restricted Payments, the Borrower and its Subsidiaries may enterinto transactions permitted by Section 6.10 or 7.03;

####  

#### (f)            any Subsidiary ofHoldings may make Restricted Payments to Holdings:

####  

###### (i)            the proceeds ofwhich will be used to pay the tax liability for the relevant jurisdiction inrespect of consolidated, combined, unitary or affiliated returns for therelevant jurisdiction of Holdings attributable to the Borrower and itsSubsidiaries determined as if the Borrower and its Subsidiaries filed separatereturns;

######  

###### (ii)           the proceeds ofwhich shall be used by Holdings to pay its operating expenses incurred in theordinary course of business and other corporate overhead costs and expenses(including, without limitation, administrative, legal, accounting and similarexpenses provided by third parties), which are reasonable and customary andincurred in the ordinary course of business, in an aggregate amount not toexceed $500,000 in any Fiscal Year plus any reasonable and customaryindemnification claims made by directors or officers of Holdings attributable tothe ownership or operations of the Borrower and its Subsidiaries;

######  

###### (iii)          the proceeds ofwhich shall be used by Holdings to pay its franchise taxes;

######  

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###### (iv)          the proceeds ofwhich will be used to repurchase the Equity Interests of Holdings from currentor former directors, employees or members of management of Holdings or any ofits Subsidiaries (or their estate, family members, spouse and/or formerspouse), in an aggregate amount not in excess of $2,500,000 in any Fiscal Yearplus the proceeds of any key-man life insurance maintained by Holdings or anyof its Subsidiaries; provided, that Holdings may carry-over and make inany subsequent calendar year or years, in addition to the amount for suchcalendar year, the amount not utilized in the prior calendar year or years upto a maximum of $2,500,000; and

######  

###### (v)           to finance anyInvestment permitted to be made pursuant to Section 7.05; provided, that(A) such Restricted Payment shall be made concurrently with the closing of suchInvestment and (B) Holdings shall, immediately following the closing thereof,cause (1) all property acquired (whether assets or Equity Interests) to becontributed to the Borrower or its Subsidiaries or (2) the merger (to theextent permitted in Section 7.04) of the Person formed or acquired intothe Borrower or its Subsidiaries in order to consummate such PermittedAcquisition;

######  

#### (g)           any Subsidiary ofParent may make Restricted Payments to Parent:

####  

###### (i)            the proceeds ofwhich will be used to pay the tax liability for the relevant jurisdiction inrespect of consolidated, combined, unitary or affiliated returns for therelevant jurisdiction of Parent attributable to Holdings and its Subsidiariesdetermined as if Holdings and its Subsidiaries filed separate returns;

######  

###### (ii)           the proceeds ofwhich shall be used by Parent to pay its operating expenses incurred in theordinary course of business and other corporate overhead costs and expenses(including, without limitation, administrative, legal, accounting and similarexpenses provided by third parties), which are reasonable and customary andincurred in the ordinary course of business, in an aggregate amount not toexceed $500,000 in any Fiscal Year plus any reasonable and customaryindemnification claims made by directors or officers of Parent attributable tothe ownership or operations of Holdings and its Subsidiaries;

######  

###### (iii)          the proceeds ofwhich shall be used by Parent to pay its franchise taxes;

######  

###### (iv)          the proceeds ofwhich will be used to repurchase the Equity Interests of Parent from current orformer directors, employees or members of management of Parent or anySubsidiary (or their estate, family members, spouse and/or former spouse), inan aggregate amount not in excess of $2,500,000 in any Fiscal Year plus theproceeds of any key-man life insurance maintained by Parent or any of itsSubsidiaries; provided, that Parent may carry-over and make in anysubsequent calendar year or years, in addition to the amount for such calendaryear, the amount not utilized in the prior calendar year or years up to amaximum of $2,500,000; and

######  

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###### (v)           to finance anyInvestment permitted to be made pursuant to Section 7.05; provided,that (A) such Restricted Payment shall be made concurrently with the closing ofsuch Investment and (B) Parent shall, immediately following the closingthereof, cause (1) all property acquired (whether assets or Equity Interests)to be contributed to Holdings or its Subsidiaries or (2) the merger (to theextent permitted in Section 7.03) of the Person formed or acquired intoHoldings or its Subsidiaries in order to consummate such Permitted Acquisition;

######  

#### (h)           repurchases ofEquity Interests of Holdings deemed to occur upon the non-cash exercise ofstock options and warrants;

####  

#### (i)            Holdings may makeRestricted Payments with the proceeds of Permitted Holdco Debt and PermittedAffiliate Investments; and

####  

#### (j)            in addition to the foregoing RestrictedPayments, the Borrower may make additional Restricted Payments to Holdings theproceeds of which may be utilized by Holdings to make additional RestrictedPayments, in an aggregate amount not to exceed the sum of (A) $1,000,000 (such amount to beincreased to (x) $20,000,000 if the Total Leverage Ratio is, on a pro formabasis after giving effect to such Restricted Payment, less than 4.00:1.00 and(y) $35,000,000 if the Total Leverage Ratio is less than 3.50:1.00) plus(B) without duplication, the lesser of (1) 25% of the aggregate amount of theCumulative Excess Cash Flow and (2) the portion of the Cumulative Excess CashFlow which is not prepaid to the Lenders pursuant to Section 2.06(b)(i)or not used to make Investments pursuant to Section 7.05 or has not beenused to make Restricted Payments under this Section 7.06.

####  

7.07         CapitalExpenditures.  Make, orpermit any of its Subsidiaries to make, any Capital Expenditures that wouldcause the aggregate amount of all such Capital Expenditures made by theBorrower and its Subsidiaries during any Fiscal Year to exceed the amountspecified in the table below for such Fiscal Year; provided, however, that if, at the end of any FiscalYear, the aggregate amount of all Capital Expenditures made by the Borrower andits Subsidiaries during such Fiscal Year is less than the amount specified inthe table below for such Fiscal Year (the amount of such difference being the “***Carryover Capital ExpenditureAmount”***), then, notwithstanding the foregoing provision of this Section7.07, the Borrower and its Subsidiaries shall be permitted to makeadditional Capital Expenditures during the next succeeding Fiscal Year in anamount not to exceed the Carryover Capital Expenditure Amount, if any, fromsuch Fiscal Year; provided**further, however, that anyCarryover Capital Expenditure Amount carried forward to the next succeedingFiscal Year shall not be deemed to have been utilized to make CapitalExpenditures until after the utilization of the amount set forth above in this Section7.07 for Capital Expenditures permitted to be made in such Fiscal Year, andmay not be carried forward to any subsequent Fiscal Year.

 

| **Fiscal Year**                         |   | **Amount** |       |
|-----------------------------------------|--------|------------|------------|
| 2004                                    |   | $          | 30,000,000 |   |
| 2005                                    |   | $          | 30,000,000 |   |
| 2006                                    |   | $          | 35,000,000 |   |
| 2007                                    |   | $          | 35,000,000 |   |
| 2008 (and each  Fiscal Year thereafter) |   | $          | 40,000,000 |   |

 

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7.08         Prepayments,Etc. of Indebtedness.  (a)Prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduledmaturity thereof in any manner any of the Senior Subordinated Notes, anyPermitted Subordinated Indebtedness and any Permitted Holdco Debt(collectively, “***JuniorFinancing***”) or make any payment in violation of anysubordination terms contained in any Junior Financing, except (i) therefinancing thereof with the Net Cash Proceeds of any further incurrence ofPermitted Subordinated Indebtedness, Permitted Holdco Debt or Permitted EquityIssuance, in each case, to the extent not required to prepay any Loans orFacility pursuant to Section 2.05(b) and (ii) the conversionof any Junior Financing to Equity Interests (other than Redeemable EquityInterests), (b) amend, modify or change in any manner any term orcondition of any documentation related to any Junior Financing, except as couldnot materially and adversely affect the rights or interests of theAdministrative Agent or the Lenders  or(c) permit any of its Subsidiaries to do any of the foregoing.

 

7.09         Negative Pledge.  Enter into or suffer to exist, or permit anyof its Subsidiaries to enter into or suffer to exist, any agreement prohibitingor conditioning the creation or assumption of any Lien upon any of its propertyor assets other than:

 

#### (a)           any such agreementwith or in favor of the Secured Parties or the Administrative Agent, on behalfof the Secured Parties;

####  

#### (b)           any such agreementwith or in favor of the holders of the Senior Subordinated Notes or the trusteefor the Senior Subordinated Notes, on behalf of the holders thereof, in eachcase as such agreement was in effect on the Closing Date (or as amended incompliance with Section 7.08(b));

####  

#### (c)           in connection with(i) any Indebtedness described on Schedule 7.02, (ii) any Indebtednessotherwise permitted to be incurred under Section 7.02(b)(x) and (iii)any Indebtedness outstanding on the date any Person first becomes a Subsidiaryof the Borrower; provided that such agreement was not created incontemplation of the purchase or other acquisition of such Person and does notextend to or cover any property or assets other than property and assets of thePerson becoming such Subsidiary (or proceeds or products thereof);

####  

#### (d)           any such agreementprohibiting other encumbrances on specific property and assets of the Borroweror any of its Subsidiaries, which agreement secures the payment of Indebtednessincurred solely to acquire, construct or improve such property or assets or tofinance the purchase price therefor (including, without limitation, CapitalizedLeases) and which Indebtedness is otherwise permitted to be incurred under theterms of this Agreement;

####  

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#### (e)           any such agreementwith or in favor of the holders of the Indebtedness of one or more of theForeign Subsidiaries (or any agent for the holders of such Indebtedness)incurred pursuant to Section 7.02(b)(vi);

####  

#### (f)            any agreement settingforth customary restrictions on the subletting, assignment or transfer of anyproperty or asset that is a lease, license, conveyance or contract of similarproperty or assets; and

####  

#### (g)           any restriction orencumbrance imposed pursuant to an agreement that has been entered into by theBorrower or any of its Subsidiaries for the Disposition of any of its propertyor assets so long as such Disposition is otherwise permitted to be made under Section7.04.

####  

7.10         Dividendsand Other Payment Restrictions Affecting Subsidiaries.   Enter into, create, assume or otherwisesuffer to exist or become effective, or permit any of its Subsidiaries to enterinto, create, assume or otherwise suffer to exist or become effective, directlyor indirectly, any consensual encumbrance or restriction of any kind on theability of any of its Subsidiaries (a) to pay dividends or to make any otherdistributions on any of the Equity Interests in such Subsidiary owned orotherwise held by the Borrower or any of its Subsidiaries, (b) to repay orprepay or to subordinate any Indebtedness owed to the Borrower or any of itsSubsidiaries, (c) to make loans or advances to the Borrower or any of itsSubsidiaries, (d) to transfer any of its property or assets to the Borrower orany of its Subsidiaries or (e) to otherwise make Investments in the Borrower orany of its Subsidiaries (whether through a covenant restricting dividends,loans, asset transfers or investments, a financial covenant or otherwise);provided*,*however*,* that nothing in any of clauses (a) through (e)of this Section 7.10 shall prohibit any such encumbrance or restrictioncontained in:

 

#### (a)           this Agreement andthe other Loan Documents;

####  

#### (b)           any agreements ineffect on the Closing Date;

####  

#### (c)           in the case of clause (d)of this Section 7.10, any agreement setting forth customary restrictionson the subletting, assignment or transfer of any property or asset that is alease, license, conveyance or contract of similar property or assets;

####  

#### (d)           in the case of clause (d)of this Section 7.10, any agreement with the holder of a Lien otherwisepermitted to exist under Section 7.01(d) restricting on customaryterms the transfer of any property or assets subject thereto;

####  

#### (e)           any such agreementwith or in favor of the holders of the Indebtedness of one or more of theForeign Subsidiaries (or any agent for the holders of such Indebtedness)incurred pursuant to Section 7.02(b)(vi); provided that any suchrestrictions set forth therein shall not apply to any of the Loan Parties orany of their Subsidiaries (other than one or more of the Foreign Subsidiaries);

####  

#### (f)            any agreementevidencing Indebtedness outstanding on the date a Person first becomes aSubsidiary of the Borrower; provided that such agreement was not createdin contemplation of the purchase or other acquisition of such Person by the 

####  

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#### Borrower orany of its Subsidiaries and does not extend to or cover any property or assetsother than the property or assets of the Person becoming such Subsidiary (andproceeds and products thereof);

####  

#### (g)           any agreementevidencing or setting forth the terms of any refunding, refinancing orreplacement Indebtedness otherwise permitted to be incurred under Section7.02(b)(x); and

####  

#### (h)           any agreement thathas been entered into by the Borrower or any of its Subsidiaries for theDisposition of any of its property or assets so long as such Disposition isotherwise permitted to be made under Section 7.04.

####  

7.11         Changein Nature of Business.  Make, orpermit any of its Subsidiaries to make, any change in the nature of itsbusiness that would cause the Borrower or such Subsidiary to no longer beprimarily engaged in one or more of the businesses engaged in by the Borrowerand its Subsidiaries on the date of this Agreement and those reasonably relatedor ancillary thereto.

 

7.12         Amendments to Constitutive Documents.  Amend, or permit any of its Subsidiaries toamend, its Constitutive Documents, except where such amendment, eitherindividually or in the aggregate, could not reasonably be expected to have aMaterial Adverse Effect or to materially and adversely affect the rights orinterests of the Lenders.

 

7.13         AccountingChanges, Etc.  Make orpermit, or permit any of its Subsidiaries to make or permit, any change in (a)its accounting policies or reporting practices, except as required by GAAP ineffect at the time of such change or by applicable Requirements of Law, or (b)its Fiscal Year (other than the change of the Fiscal Year of Nu-Gro and itsSubsidiaries to that of the Borrower in connection with the Nu-Gro Acquisition.

 

7.14         Amendments, Etc. of Nu-Gro Documents.  Cancel or terminate any Nu-Gro Document orconsent to or accept any cancellation or termination thereof, amend, modify orchange in any manner any term or condition of any Nu-Gro Document or give anyconsent, waiver or approval thereunder, waive any default under or any breachof any term or condition of any Nu-Gro Document, agree in any manner to anyother amendment, modification or change of any term or condition of any Nu-GroDocument, or take any other action in connection with any Nu-Gro Document that,in each of the foregoing cases under this Section 7.14, eitherindividually or in the aggregate, could reasonably be expected to have aMaterial Adverse Effect, or permit any of its Subsidiaries to do any of theforegoing.

 

7.15         Holdings.  (a) In the case of Holdings, (i) conduct, transact or otherwise engagein any business or operations other than those incidental to its ownership ofthe Equity Interests of the Borrower, the performance of the Loan Documents andany transactions that Holdings is permitted to enter into or consummate underthis Article VII or (ii) incur any Indebtedness other thanIndebtedness permitted pursuant to Section 7.02(c); or

 

(b)           Fromand after the occurrence of the Holding Company Event, permit the Borrower tobe a Subsidiary that is not wholly owned by Holdings.

 

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# ARTICLE VIIIEVENTS OF DEFAULT AND REMEDIES

#  

8.01         Events ofDefault.  If any of thefollowing events (“***Eventsof Default”***) shall occur and be continuing:

 

#### (a)           (i)  the Borrower shall fail to pay any principalof any Loan when the same shall become due and payable, whether by scheduledmaturity or at a date fixed for prepayment or by acceleration, demand orotherwise, or (ii) the Borrower shall fail to pay any interest on any Loans, orany of the Loan Parties shall fail to make any other payment under or inrespect of any of the Loan Documents required to have been made by it, in eachcase whether by scheduled maturity or at a date fixed for prepayment or byacceleration, demand or otherwise and, in each case under this clause (ii),such failure remains unremedied for at least three Business Days after the samebecomes due and payable; or

####  

#### (b)           any representationor warranty made by any of the Loan Parties (or any of their respectiveofficers) under or in connection with any of the Loan Documents (including,without limitation, in any certificate, report, statement or other writing atany time furnished (or deemed to have been furnished) to the AdministrativeAgent or any of the Lenders by or on behalf of any of the Loan Parties) shallprove to have been incorrect in any material respect on the date as of which itwas made or deemed made; or

####  

#### (c)           (i)  the Borrower shall fail to perform orobserve any term, covenant or agreement contained in Section 2.15, 6.05(solely with respect to Holdings or the Borrower) or 6.10, any of subclauses(i) through (iv) of Section 6.11(a) or Section 6.13(a),6.14 or Article VII on its part to be performed or observed;provided that any Event of Default under Section 6.14 is subject to cureas contemplated by the penultimate proviso set forth in the definition of“Consolidated EBITDA”; or

####  

#### (d)           any of the LoanParties shall fail to perform or observe any term, covenant or agreementcontained in any of the Loan Documents on its part to be performed or observedthat is not otherwise referred to in Section 8.01(a) or (c)if such failure shall remain unremedied for at least 30 consecutive days afterthe date on which written notice thereof shall have been given to the Borrowerby the Administrative Agent; or

####  

#### (e)           (i) any of the LoanParties or any of their Subsidiaries shall fail to pay any principal of,premium or interest on, or any other amount payable in respect of, one or moreitems of Indebtedness of the Loan Parties and their Subsidiaries (excludingIndebtedness outstanding hereunder) that is outstanding in an aggregateprincipal amount (or, in the case of any Swap Contract, having an AgreementValue) of at least $10,000,000 at the time of such failure, when the samebecomes due and payable (whether by scheduled maturity, required prepayment,acceleration, demand or otherwise), and such failure shall continue after theapplicable grace period, if any, specified in the agreements or instrumentsrelating to all such Indebtedness; or (ii) any other event shall occur orcondition shall exist under the agreements or instruments relating to one or moreitems of Indebtedness of any of the Loan Parties or any of their

####  

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#### Subsidiaries(excluding Indebtedness outstanding hereunder) that is outstanding in anaggregate principal amount (or, in the case of any Swap Contract, having anAgreement Value) of at least $10,000,000 at the time of such other event orcondition, and shall continue after the applicable grace period, if any,specified in all such agreements or instruments, if the effect of such event orcondition is to accelerate, or to permit the acceleration of, the maturity ofsuch Indebtedness or otherwise to cause, or to permit the holder thereof tocause, such Indebtedness to mature prior to its stated maturity; or(iii) one or more items of Indebtedness of any of the Loan Parties or anyof their Subsidiaries (excluding Indebtedness outstanding hereunder) that isoutstanding (or under which one or more Persons have a commitment to extendcredit) in an aggregate principal amount (or, in the case of any Swap Contract,having an Agreement Value) of at least $10,000,000 shall be declared to be dueand payable or required to be prepaid or redeemed (other than by a regularlyscheduled or required prepayment or redemption), purchased or defeased, or an offerto prepay, redeem, purchase or defease such Indebtedness shall be required tobe made, in each case, prior to the stated maturity thereof; or

####  

#### (f)            any of the LoanParties or any of their Subsidiaries shall admit in writing its inability topay its debts generally, or shall make a general assignment for the benefit ofcreditors; or any proceeding shall be instituted by or against any of the LoanParties or any of their Subsidiaries seeking to adjudicate it a bankrupt orinsolvent, or seeking liquidation, winding up, reorganization, arrangement,adjustment, protection, relief, or composition of it or its debts under anyDebtor Relief Law, or seeking the entry of an order for relief or theappointment of a receiver, trustee, administrator or other similar official forit or for any substantial part of its property and assets and, in the case ofany such proceeding instituted against it (but not instituted by it) that isbeing diligently contested by it in good faith, either such proceeding shallremain undismissed or unstayed for a period of at least 60 consecutive days orany of the actions sought in such proceeding (including, without limitation,the entry of an order for relief against, or the appointment of a receiver,trustee, custodian or other similar official for, it or any substantial part ofits property and assets) shall occur; or any event or action analogous to orhaving a substantially similar effect to any of the events or actions set forthabove in this Section 8.01(f) (other than a solvent reorganization)shall occur under the Requirements of Law of any jurisdiction applicable to anyof the Loan Parties or any of their Subsidiaries; or any of the Loan Parties orany of their Subsidiaries shall take any corporate, partnership, limitedliability company or other similar action to authorize any of the actions setforth above in this Section 8.01(f); or

####  

#### (g)           one or morejudgments or orders for the payment of money in excess of $10,000,000 in theaggregate shall be rendered against one or more of the Loan Parties and theirSubsidiaries and shall remain unsatisfied and either (i) enforcementproceedings shall have been commenced by any creditor upon any such judgment ororder and remain unstayed or (ii) there shall be any period of at least 60consecutive days during which a stay of enforcement of any such judgment ororder, by reason of a pending appeal or otherwise, shall not be in effect; provided*,*however*,*that any such judgment or order shall not give rise to anEvent of Default under this Section 8.01(g) if and for so long as (A)the amount of such judgment or order which remains unsatisfied is covered by avalid

####  

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#### and bindingpolicy of insurance between the defendant and the insurer covering full paymentthereof (other than for deductibles) and (B) such insurer has been notified,and has not disputed the claim made for payment, of the amount of such judgmentor order; or

####  

#### (h)           any provision of anyof the Loan Documents after delivery thereof pursuant to Section 4.01,6.11 or 6.15 shall for any reason (other than pursuant to theterms thereof or expressly permitted hereunder (including as a result of atransaction permitted by Section 7.03 or 7.04)) cease to be validand binding on or enforceable against any of the Loan Parties intended to be aparty to it, or any such Loan Party shall so state in writing; or

####  

#### (i)            any CollateralDocument after delivery thereof pursuant to Section 4.01, 6.11or 6.15 shall for any reason (other than pursuant to the terms thereof,including as a result of a transaction permitted by Section 7.03 or 7.04)cease to create a valid and perfected first priority (subject to the liens andsecurity interests expressly permitted under Section 7.01) lien on andsecurity interest in the Collateral purported to be covered thereby; or

####  

#### (j)            any of thefollowing events or conditions shall have occurred and such event or condition,when aggregated with any and all other such events or conditions set forth inthis Section 8.01(j), has resulted, or, with respect to clause (i)of this Section 8.01(j), could reasonably be expected to result, inliabilities of one or more of the Loan Parties and/or the ERISA Affiliates inan aggregate amount exceeding $10,000,000 at any time:

####  

(i)            any ERISA Eventshall have occurred or

 

(ii)           any of the LoanParties or any of the ERISA Affiliates shall have incurred Withdrawal Liabilityto a Multiemployer Plan or liability in connection with the reorganization,insolvency or termination of a Multiemployer Plan; or

 

(iii)          any “*accumulated funding deficiency*” (asdefined in Section 302 of ERISA and Section 412 of the Internal Revenue Code),whether or not waived, shall exist with respect to one or more of the Plans, orany Lien shall exist on the property and assets of any of the Loan Parties orany of the ERISA Affiliates in favor of the PBGC or any Plan; or

 

#### (k)           an “*Event of Default*” (as defined in theapplicable Senior Subordinated Notes Documents) shall have occurred and becontinuing under the Senior Subordinated Notes Documents; or

####  

#### (l)            a Change of Controlshall occur;

####  

then, and in any such event, the Administrative Agent (i) shall atthe request, or may with the consent, of the Required Lenders, by notice to theBorrower, declare the Commitments of each of the Lenders and the obligation ofeach of the Lenders to make Loans (other than Swing Line Loans by any of theRevolving Credit Lenders pursuant to Section 2.04(c)(ii) and L/CAdvances

 

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by the Issuing Bank or any of the Revolving Credit Lenders pursuant to Section 2.03(c)(i))and of the Issuing Bank to issue Letters of Credit to be terminated, whereuponthe same shall forthwith terminate, and (ii) shall at the request, or maywith the consent, of the Required Lenders, by notice to the Borrower,declare the Notes, all interest thereon and all other amounts payable under orin respect of this Agreement and the other Loan Documents to be forthwith dueand payable, whereupon the Notes, all such interest and all such other amountsshall become and be forthwith due and payable, without presentment, demand,protest or further notice of any kind, all of which are hereby expressly waivedby the Borrower; provided*,*however*,* that in the event of an actual or deemedentry of an order for relief with respect to the Borrower under the UnitedStates Federal Bankruptcy Code or a similar order or action under any otherDebtor Relief Law, (1) the Commitments of each of the Lenders and theobligation of each of the Lenders to make Loans (other than Swing Line Loans byany of the Revolving Credit Lenders pursuant to Section 2.04(c)(ii)and L/C Advances by the Issuing Bank or any of the Revolving Credit Lenderspursuant to Section 2.03(c)(i)) and of the Issuing Bank to issueLetters of Credit shall automatically be terminated and (2) the Notes, allsuch interest and all such amounts shall automatically become and be due andpayable, without presentment, demand, protest or any notice of any kind, all ofwhich are hereby expressly waived by the Borrower.

 

8.02         Actions in Respect of the Letters ofCredit upon Default  If anyEvent of Default shall have occurred and be continuing, the AdministrativeAgent may, or shall at the request of the Required Lenders, irrespective ofwhether it is taking any of the actions described in Section 8.01or otherwise, make demand upon the Borrower to, and forthwith upon such demandthe Borrower will, pay to the Administrative Agent, on behalf of the Lenders,in same day funds at the Administrative Agent’s office designated in suchdemand, for deposit in the L/C Cash Collateral Account, an amount equal to theamount then available to be drawn under all outstanding Letters of Credit (the“***Available Amount***”).  If at any time the Administrative Agentdetermines that any funds held in the L/C Cash Collateral Account are subjectto any right or claim of any Person other than the Agents and the other SecuredParties or that the total amount of such funds is less than the aggregateAvailable Amount of all Letters of Credit, the Borrower will, forthwith upondemand by the Administrative Agent, pay to the Administrative Agent, asadditional funds to be deposited and held in the L/C Cash Collateral Account,an amount equal to the excess of (a) such aggregate Available Amount over(b) the total amount of funds, if any, then held in the L/C CashCollateral Account.  Upon the drawing ofany Letter of Credit for which funds are on deposit in the L/C Cash CollateralAccount, such funds shall be applied to reimburse the Issuing Bank or theRevolving Credit Lenders, as applicable, to the extent permitted underapplicable law.

 

8.03         Applicationof Funds.  After the exercise ofremedies provided for in Section 8.01 (or after the Loans haveautomatically become immediately due and payable and the L/C Obligations haveautomatically been required to be Cash Collateralized as set forth in Section8.02), any amounts received on account of the Obligations shall be appliedby the Administrative Agent in the following order:

 

First,to payment of that portion of the Obligations constituting fees, indemnities,expenses and other amounts (including Attorney Costs payable under Section10.04 and amounts payable under Article III and Section 10.15)payable to the Agents in their

 

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capacities as such ratably among them in proportion to the amountsdescribed in this clauseFirst payable to them;

 

Second, topayment of that portion of the Obligations constituting fees, indemnities andother amounts (other than principal and interest) payable to the Lenders(including Attorney Costs payable under Section 10.04 and amounts payable under Article IIIand Section 10.15), ratablyamong them in proportion to the amounts described in this clauseSecondpayable to them;

 

Third, topayment of that portion of the Obligations constituting accrued and unpaidinterest on the Loans and L/C Borrowings, ratably among the Lenders inproportion to the respective amounts described in this clauseThirdpayable to them;

 

Fourth, topayment of that portion of the Obligations constituting unpaid principal of theLoans and L/C Borrowings, ratably among the Lenders in proportion to therespective amounts described in this clauseFourth held by them;

 

Fifth, to theAdministrative Agent for the account of the L/C Issuer, to Cash Collateralizethat portion of L/C Obligations comprised of the aggregate undrawn amount ofLetters of Credit;

 

Sixth, tothe payment of all other Obligations of the Loan Parties owing under or in respectof the Loan Documents that are due and payable to the Agents and the otherSecured Parties on such date, ratably based upon the respective aggregateamounts of all such Obligations owing to the Agents and the other SecuredParties on such date; and

 

Last, thebalance, if any, after all of the Obligations have been paid in full, to theBorrower or as otherwise required by Law.

 

Subject to Section2.03(c), amounts used to Cash Collateralize the aggregate undrawn amount ofLetters of Credit pursuant to clauseFifth above shall be appliedto satisfy drawings under such Letters of Credit as they occur.  If any amount remains on deposit as CashCollateral after all Letters of Credit have either been fully drawn or expired,such remaining amount shall be applied to the other Obligations, if any, in theorder set forth above.

 

# ARTICLE IXADMINISTRATIVE AGENT AND OTHER AGENTS

#  

9.01         Appointment and Authorization ofAgents.

 

### (a)           Each Lender hereby irrevocably appoints, designates andauthorizes the Administrative Agent to take such action on its behalf under theprovisions of this Agreement and each other Loan Document and to exercise suchpowers and perform such duties as are expressly delegated to it by the terms ofthis Agreement or any other Loan Document, together with such powers as arereasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere hereinor in any other Loan Document, no Agent shall have any duties orresponsibilities, except those expressly set forth herein, nor shall any Agenthave or be deemed to have any fiduciary relationship with any Lender orparticipant, and no implied

###  

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### covenants, functions, responsibilities,duties, obligations or liabilities shall be read into this Agreement or anyother Loan Document or otherwise exist against any Agent.  Without limiting the generality of theforegoing sentence, the use of the term “agent” herein and in the other LoanDocuments with reference to any Agent is not intended to connote any fiduciaryor other implied (or express) obligations arising under agency doctrine of anyapplicable Law.  Instead, such term isused merely as a matter of market custom, and is intended to create or reflectonly an administrative relationship between independent contracting parties.

###  

### (b)           The L/C Issuer shall act on behalf of the Lenders withrespect to any Letters of Credit issued by it and the documents associatedtherewith, and the L/C Issuer shall have all of the benefits and immunities(i) provided to the Agents in this Article IX with respect to anyacts taken or omissions suffered by the L/C Issuer in connection with Lettersof Credit issued by it or proposed to be issued by it and the applications andagreements for letters of credit pertaining to such Letters of Credit as fullyas if the term “Agent” as used in this Article IX and in the definitionof “Agent-Related Person” included the L/C Issuer with respect to such acts oromissions, and (ii) as additionally provided herein with respect to theL/C Issuer.

###  

### (c)           The Administrative Agent shall also act as the “*collateralagent*” under the Loan Documents, and each of the Lenders (in itscapacities as a Lender, Swing Line Lender (if applicable), L/C Issuer (ifapplicable) and a potential Hedge Bank) hereby irrevocably appoints andauthorizes the Administrative Agent to act as the agent of such Lender forpurposes of acquiring, holding and enforcing any and all Liens on Collateralgranted by any of the Loan Parties to secure any of the Secured Obligations,together with such powers and discretion as are reasonably incidentalthereto.  In this connection, theAdministrative Agent, as “collateral agent” (and any co-agents, sub-agents andattorneys-in-fact appointed by the Administrative Agent pursuant to Section9.02 for purposes of holding or enforcing any Lien on the Collateral (orany portion thereof) granted under the Collateral Documents, or for exercisingany rights and remedies thereunder at the direction of the Administrative Agent),shall be entitled to the benefits of all provisions of this Article IX(including, without limitation, Section 9.07, as though suchco-agents, sub-agents and attorneys-in-fact were the “collateral agent” underthe Loan Documents) as if set forth in full herein with respect thereto.

###  

9.02         Delegationof Duties.  The AdministrativeAgent may execute any of its duties under this Agreement or any other LoanDocument (including for purposes of holding or enforcing any Lien on theCollateral (or any portion thereof) granted under the Collateral Documents orof exercising any rights and remedies thereunder) by or through agents,employees or attorneys-in-fact and shall be entitled to advice of counsel andother consultants or experts concerning all matters pertaining to suchduties.  The Administrative Agent shallnot be responsible for the negligence or misconduct of any agent orattorney-in-fact that it selects in the absence of gross negligence or willfulmisconduct.

 

9.03         Liabilityof Agents.  No Agent-RelatedPerson shall (a) be liable for any action taken or omitted to be taken by anyof them under or in connection with this Agreement or any other Loan Documentor the transactions contemplated hereby (except for its own gross negligence orwillful misconduct in connection with its duties expressly set forth herein),or (b) be responsible in any manner to any Lender or participant for anyrecital, statement, representation or warranty made by any Loan Party or anyofficer thereof, contained herein or in

 

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any other Loan Document, or in any certificate,report, statement or other document referred to or provided for in, or receivedby the Administrative Agent under or in connection with, this Agreement or any otherLoan Document, or the validity, effectiveness, genuineness, enforceability orsufficiency of this Agreement or any other Loan Document, or the perfection orpriority of any Lien or security interest created or purported to be createdunder the Collateral Documents, or for any failure of any Loan Party or anyother party to any Loan Document to perform its obligations hereunder orthereunder.  No Agent-Related Personshall be under any obligation to any Lender or participant to ascertain or toinquire as to the observance or performance of any of the agreements containedin, or conditions of, this Agreement or any other Loan Document, or to inspectthe properties, books or records of any Loan Party or any Affiliate thereof.

 

9.04         Reliance byAgents.

 

### (a)           Each Agent shall be entitled to rely, and shall be fullyprotected in relying, upon any writing, communication, signature, resolution,representation, notice, consent, certificate, affidavit, letter, telegram,facsimile, telex or telephone message, electronic mail message, statement orother document or conversation believed by it to be genuine and correct and tohave been signed, sent or made by the proper Person or Persons, and upon adviceand statements of legal counsel (including counsel to any Loan Party),independent accountants and other experts selected by such Agent.  Each Agent shall be fully justified infailing or refusing to take any action under any Loan Document unless it shallfirst receive such advice or concurrence of the Required Lenders as it deemsappropriate and, if it so requests, it shall first be indemnified to itssatisfaction by the Lenders against any and all liability and expense which maybe incurred by it by reason of taking or continuing to take any such action.  Each Agent shall in all cases be fullyprotected in acting, or in refraining from acting, under this Agreement or anyother Loan Document in accordance with a request or consent of the RequiredLenders (or such greater number of Lenders as may be expressly required herebyin any instance) and such request and any action taken or failure to actpursuant thereto shall be binding upon all the Lenders.

###  

### (b)           For purposes of determining compliance with the conditionsspecified in Section 4.01, each Lender that has signed this Agreementshall be deemed to have consented to, approved or accepted or to be satisfiedwith, each document or other matter required thereunder to be consented to orapproved by or acceptable or satisfactory to a Lender unless the AdministrativeAgent shall have received notice from such Lender prior to the proposed ClosingDate specifying its objection thereto.

###  

9.05         Notice ofDefault.  The AdministrativeAgent shall not be deemed to have knowledge or notice of the occurrence of anyDefault, except with respect to defaults in the payment of principal, interestand fees required to be paid to the Administrative Agent for the account of theLenders, unless the Administrative Agent shall have received written noticefrom a Lender or the Borrower referring to this Agreement, describing suchDefault and stating that such notice is a “notice of default.”  The Administrative Agent will notify theLenders of its receipt of any such notice. The Administrative Agent shall take such action with respect to suchDefault as may be directed by the Required Lenders in accordance with ArticleVIII; provided, however, that unless and until theAdministrative Agent has received any such direction, the Administrative Agentmay (but shall not be obligated to) take such action, or refrain from taking

 

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such action, with respect to such Event of Default asit shall deem advisable or in the best interest of the Lenders.

 

9.06         Credit Decision; Disclosure ofInformation by Agents.  EachLender acknowledges that no Agent-Related Person has made any representation orwarranty to it, and that no act by any Agent hereafter taken, including anyconsent to and acceptance of any assignment or review of the affairs of anyLoan Party or any Affiliate thereof, shall be deemed to constitute anyrepresentation or warranty by any Agent-Related Person to any Lender as to anymatter, including whether Agent-Related Persons have disclosed materialinformation in their possession.  EachLender represents to each Agent that it has, independently and without relianceupon any Agent-Related Person and based on such documents and information as ithas deemed appropriate, made its own appraisal of and investigation into thebusiness, prospects, operations, property, financial and other condition andcreditworthiness of the Loan Parties and their respective Subsidiaries, and allapplicable bank or other regulatory Laws relating to the transactionscontemplated hereby, and made its own decision to enter into this Agreement andto extend credit to the Borrower hereunder. Each Lender also represents that it will, independently and withoutreliance upon any Agent-Related Person and based on such documents andinformation as it shall deem appropriate at the time, continue to make its owncredit analysis, appraisals and decisions in taking or not taking action underthis Agreement and the other Loan Documents, and to make such investigations asit deems necessary to inform itself as to the business, prospects, operations,property, financial and other condition and creditworthiness of the Borrowerand the other Loan Parties.  Except fornotices, reports and other documents expressly required to be furnished to theLenders by any Agent herein, such Agent shall not have any duty orresponsibility to provide any Lender with any credit or other informationconcerning the business, prospects, operations, property, financial and othercondition or creditworthiness of any of the Loan Parties or any of theirrespective Affiliates which may come into the possession of any Agent-RelatedPerson.

 

9.07         Indemnificationof Agents.  Whether or not thetransactions contemplated hereby are consummated, the Lenders shall indemnifyupon demand each Agent-Related Person (to the extent not reimbursed by or onbehalf of any Loan Party and without limiting the obligation of any Loan Partyto do so), pro rata, and hold harmless each Agent-Related Person from andagainst any and all Indemnified Liabilities incurred by it; provided, however,that no Lender shall be liable for the payment to any Agent-Related Person ofany portion of such Indemnified Liabilities to the extent determined in afinal, nonappealable judgment by a court of competent jurisdiction to haveresulted from such Agent-Related Person’s own gross negligence or willfulmisconduct; provided, however, that no action taken in accordancewith the directions of the Required Lenders shall be deemed to constitute grossnegligence or willful misconduct for purposes of this Section.  In the case of any investigation, litigationor proceeding giving rise to any Indemnified Liabilities, this Section 9.07applies whether any such investigation, litigation or proceeding is brought byany Lender or any other Person.  Withoutlimitation of the foregoing, each Lender shall reimburse the AdministrativeAgent upon demand for its ratable share of any costs or out-of-pocket expenses(including Attorney Costs) incurred by the Administrative Agent in connectionwith the preparation, execution, delivery, administration, modification,amendment or enforcement (whether through negotiations, legal proceedings orotherwise) of, or legal advice in respect of rights or responsibilities under,this Agreement, any other Loan Document, or any document contemplated by orreferred to herein, to the extent that the Administrative Agent is

 

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not reimbursed for such expenses by or on behalf ofthe Borrower.  The undertaking in thisSection shall survive the Termination Date and the resignation of theAdministrative Agent.

 

9.08         Agents in their Individual Capacities.  Each of Bank of America and Citigroup andtheir respective Affiliates may make loans to, issue letters of credit for theaccount of, accept deposits from, acquire Equity Interests in and generallyengage in any kind of banking, trust, financial advisory, underwriting or otherbusiness with each of the Loan Parties and their respective Affiliates asthough (i) Bank of America were not the Administrative Agent or the L/C Issuerhereunder and (ii) Citigroup were not the Documentation Agent, and, in eachcase, without notice to or consent of the Lenders.  The Lenders acknowledge that, pursuant to such activities, each ofBank of America, Citigroup, or their respective Affiliates may receiveinformation regarding any Loan Party or its Affiliates (including informationthat may be subject to confidentiality obligations in favor of such Loan Partyor such Affiliate) and acknowledge that the Administrative Agent (in the caseof Bank of America) and the Documentation Agent (in the case of Citigroup)shall be under no obligation to provide such information to them.  With respect to its Loans, each of Bank ofAmerica and Citigroup shall have the same rights and powers under thisAgreement as any other Lender and may exercise such rights and powers as thoughit were not the Administrative Agent or the L/C Issuer (in the case of Bank ofAmerica) or the Documentation Agent (in the case of Citigroup), and the terms“Lender” and “Lenders” include each of Bank of America and Citigroup in itsindividual capacity.

 

9.09         SuccessorAgents.  The AdministrativeAgent may resign as the Administrative Agent upon 30 days’ notice to theLenders.  If the Administrative Agentresigns under this Agreement, the Required Lenders shall appoint from among theLenders a successor agent for the Lenders, which successor agent shall beconsented to by the Borrower at all times other than during the existence of anEvent of Default under Section 8.01(f) (which consent of the Borrowershall not be unreasonably withheld or delayed).  If no successor agent is appointed prior to the Closing Date ofthe resignation of the Administrative Agent, the Administrative Agent mayappoint, after consulting with the Lenders and the Borrower, a successor agentfrom among the Lenders.  Upon theacceptance of its appointment as successor agent hereunder, the Person actingas such successor agent shall succeed to all the rights, powers and duties ofthe retiring Administrative Agent and the term “Administrative Agent” shallmean such successor agent, and the retiring Administrative Agent’s appointment,powers and duties as Administrative Agent shall be terminated.  After the retiring Agent’s resignationhereunder as Agent, the provisions of this Article IX and Sections 10.04and 10.05 shall inure to its benefit as to any actions taken or omittedto be taken by it while it was the Agent under this Agreement.  If no successor agent has acceptedappointment as Administrative Agent by the date that is 30 days following aretiring Administrative Agent’s notice of resignation, the retiringAdministrative Agent’s resignation shall nevertheless thereupon becomeeffective and the Lenders shall perform all of the duties of such AdministrativeAgent hereunder until such time, if any, as the Required Lenders appoint asuccessor agent as provided for above. Upon the acceptance of any appointment as Administrative Agent hereunderby a successor and upon the execution and filing or recording of such financingstatements, or amendments thereto, and such amendments or supplements to theMortgages, and such other instruments or notices, as may be necessary ordesirable, or as the Required Lenders may request, in order to continue theperfection of the Liens granted or purported to be granted by the CollateralDocuments, such successor Administrative Agent shall thereupon succeed to andbecome vested with all the rights, powers,

 

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discretion, privileges, and duties of the retiringAdministrative Agent, and the retiring Administrative Agent shall be dischargedfrom its duties and obligations under the Loan Documents.  After any retiring Administrative Agent’sresignation hereunder as the Administrative Agent, the provisions of this ArticleIX shall continue in effect for its benefit in respect of any actions takenor omitted to be taken by it while it was acting as an Agent.

 

9.10         Administrative Agent May File Proofsof Claim.  In case of the pendencyof any receivership, insolvency, liquidation, bankruptcy, reorganization,arrangement, adjustment, composition or other judicial proceeding relative toany Loan Party, the Administrative Agent (irrespective of whether the principalof any Loan or L/C Obligation shall then be due and payable as herein expressedor by declaration or otherwise and irrespective of whether the AdministrativeAgent shall have made any demand on the Borrower) shall be entitled andempowered, by intervention in such proceeding or otherwise

 

#### (a)           to file and prove aclaim for the whole amount of the principal and interest owing and unpaid inrespect of the Loans, L/C Obligations and all other Obligations that are owingand unpaid and to file such other documents as may be necessary or advisable inorder to have the claims of the Lenders and the Agents (including any claim forthe reasonable compensation, expenses, disbursements and Loans of the Lendersand the Agents and their respective agents and counsel and all other amountsdue the Lenders and the Agents under Sections 2.03(i) and (j), 2.09and 10.04) allowed in such judicial proceeding; and

####  

#### (b)           to collect andreceive any monies or other property payable or deliverable on any such claimsand to distribute the same;

####  

and any custodian,receiver, assignee, trustee, liquidator, sequestrator or other similar officialin any such judicial proceeding is hereby authorized by each Lender to makesuch payments to the Administrative Agent and, in the event that theAdministrative Agent shall consent to the making of such payments directly tothe Lenders, to pay to the Administrative Agent any amount due for thereasonable compensation, expenses, disbursements and Loans of the Agents andtheir respective agents and counsel, and any other amounts due the Agents underSections 2.09 and 10.04.

 

Nothing contained herein shall be deemed to authorizethe Administrative Agent to authorize or consent to or accept or adopt onbehalf of any Lender any plan of reorganization, arrangement, adjustment orcomposition affecting the Obligations or the rights of any Lender or toauthorize the Administrative Agent to vote in respect of the claim of anyLender in any such proceeding.

 

9.11         Collateraland Guaranty Matters.  TheLenders irrevocably authorize the Administrative Agent, at its option and inits discretion,

 

#### (a)           to release any Lienon any property granted to or held by the Administrative Agent under any LoanDocument (i) upon the Termination Date, (ii) that is sold or to be sold as partof or in connection with any sale permitted hereunder or under

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#### any other LoanDocument, or (iii) subject to Section 10.01, if approved, authorized orratified in writing by the Required Lenders; and

####  

#### (b)           to release anyGuarantor from its obligations under the Guaranty and any other Loan Documentto which it is a party if such Person ceases to be a Subsidiary as a result ofa transaction permitted hereunder.

####  

Upon request by the Administrative Agent at any time,the Required Lenders will confirm in writing the Administrative Agent’sauthority to release its interest in particular types or items of property, orto release any Guarantor from its obligations under the Loan Documents pursuantto this Section 9.11.  In eachcase as specified in this Section 9.11, the Administrative Agent will,at the Borrower’s expense, execute and deliver to the applicable Loan Partysuch documents as such Loan Party may reasonably request to evidence therelease of such item of Collateral from the assignment and security interestgranted under the Collateral Documents, or to release such Guarantor from itsobligations under the Loan Documents, in each case in accordance with the termsof the Loan Documents and this Section 9.11.

 

9.12         OtherAgents; Arrangers and Managers. None of the Lenders or other Persons identified on the facing page orsignature pages of this Agreement as a “documentation agent,” “joint bookmanager” or “joint lead arranger” shall have any right, power, obligation,liability, responsibility or duty under this Agreement other than, in the caseof such Lenders, those applicable to all Lenders as such.  Without limiting the foregoing, none of theLenders or other Persons so identified shall have or be deemed to have anyfiduciary relationship with any Lender. Each Lender acknowledges that it has not relied, and will not rely, onany of the Lenders or other Persons so identified in deciding to enter intothis Agreement or in taking or not taking action hereunder.

 

# ARTICLE XMISCELLANEOUS

#  

10.01       Amendments,Etc.  No amendment or waiver of any provision ofthis Agreement or any other Loan Document, and no consent to any departure bythe Borrower or any other Loan Party therefrom, shall be effective unless inwriting signed by the Required Lenders and the Borrower or the applicable LoanParty, as the case may be, and each such waiver or consent shall be effectiveonly in the specific instance and for the specific purpose for which given; provided,however, that no such amendment, waiver or consent shall:

 

#### (a)           extend or increasethe Commitment of any Lender without the written consent of each Lenderdirectly affected thereby (it being understood that a waiver of any conditionprecedent set forth in Section 4.02 or the waiver of any Event ofDefault, mandatory prepayment or mandatory reduction of the Commitments shallnot constitute an extension or increase of any Commitment of any Lender);

####  

#### (b)           postpone any datescheduled for any payment of principal or interest under Sections 2.07or 2.08****without thewritten consent of each Lender directly affected thereby, it being understoodthat the waiver of any mandatory prepayment of the Term

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#### Loans shallnot constitute a postponement of any date scheduled for the payment ofprincipal or interest;

####  

#### (c)           reduce the principalof, or the rate of interest specified herein on, any Loan or L/C Borrowing, or(subject to clause (iii) of the second proviso to this Section 10.01)any fees or other amounts payable hereunder or under any other Loan Document ** **without the writtenconsent of each Lender directly affected thereby, it being understood that anychange to the definition of Total Leverage Ratio or in the componentdefinitions thereof shall not constitute a reduction in the rate; provided,however, that only the consent of the Required Lenders shall benecessary to amend the definition of “Default Rate” or to waive any obligationof the Borrower to pay interest at the Default Rate;

####  

#### (d)           change the order ofapplication of any reduction in the Commitments or any prepayment of Loansamong the Facilities from the application thereof set forth in the applicableprovisions of Section 2.06(b) or 2.05(b), respectively, inany manner that materially and adversely affects the Lenders under suchFacilities without the written consent of Lenders having more than 50% of theAggregate Credit Exposures then in effect within each of the following classesof Commitments, Loans and other Credit Extensions: (i) the class consisting ofthe Revolving Credit Commitment combined on an aggregate basis and (ii) theclass consisting of the Term Commitment combined on an aggregate basis;

####  

#### (e)           change the pro ratasharing of any reduction in the Commitments or any prepayment of Loans betweenthe Dollar Term Facility and the Canadian Term Facility set forth in Section2.05 and Section 2.06 without the written consent of Lenders havingmore than 50% of the Aggregate Credit Exposures then in effect within each ofthe following classes of Commitments, Loans and other Credit Extensions: (i)the class consisting of the Dollar Term Commitment combined on an aggregatebasis and (ii) the class consisting of the Canadian Term Commitment combined onan aggregate basis;

####  

#### (f)            change any provisionof this Section 10.01 or the definition of “*Required Lenders*” or Section 2.06(c) without thewritten consent of each Lender;

####  

#### (g)           release all orsubstantially all of the Collateral in any transaction or series of relatedtransactions, without the written consent of each Lender; or

####  

#### (h)           release all orsubstantially all of the value of the Guaranty, without the written consent ofeach Lender;

####  

and providedfurther that (i) no amendment, waiver or consent shall, unless inwriting and signed by the L/C Issuer in addition to the Lenders required above,affect the rights or duties of the L/C Issuer under this Agreement or anyLetter of Credit Application relating to any Letter of Credit issued or to beissued by it; (ii) no amendment, waiver or consent shall, unless in writing andsigned by the Swing Line Lender in addition to the Lenders required above,affect the rights or duties of the Swing Line Lender under this Agreement;(iii) no amendment, waiver or consent shall, unless in writing and signed by theAdministrative Agent in addition to the Lenders required above, affect therights or duties of, or any fees or other amounts payable to, the

 

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AdministrativeAgent under this Agreement or any other Loan Document; (iv) Section 10.07(h)may not be amended, waived or otherwise modified without the consent of eachGranting Lender all or any part of whose Loans are being funded by an SPC atthe time of such amendment, waiver or other modification; and (v) the FeeLetter may be amended, or rights or privileges thereunder waived, in a writingexecuted only by the parties thereto. Notwithstanding anything to the contrary herein, no Defaulting Lendershall have any right to approve or disapprove any amendment, waiver or consenthereunder, except that the Commitment of such Lender may not be increased orextended without the consent of such Lender (it being understood that anyCommitments or Loans held or deemed held by any Defaulting Lender shall beexcluded from a vote of the Lenders hereunder requiring any consent of theLenders).

 

10.02       Notices and Other Communications;Facsimile Copies.

 

### (a)           General. Unless otherwise expressly provided herein, all notices and othercommunications provided for hereunder or any other Loan Document shall be inwriting (including by facsimile transmission). All such written notices shall be mailed, faxed or delivered to theapplicable address, facsimile number or (subject to Section 10.02(c))electronic mail address, and all notices and other communications expresslypermitted hereunder to be given by telephone shall be made to the applicabletelephone number, as follows:

###  

##### (i)            if to the Borrower,the Administrative Agent, the L/C Issuer or the Swing Line Lender, to theaddress, facsimile number, electronic mail address or telephone numberspecified for such Person on Schedule 10.02 or to such other address,facsimile number, electronic mail address or telephone number as shall bedesignated by such party in a notice to the other parties; and

#####  

##### (ii)           if to any otherLender, to the address, facsimile number, electronic mail address or telephonenumber specified in its Administrative Questionnaire or to such other address,facsimile number, electronic mail address or telephone number as shall bedesignated by such party in a notice to the Borrower, the Administrative Agent,the L/C Issuer and the Swing Line Lender.

#####  

Notices sent byhand or courier service shall be deemed to have been given when received;notices sent by mail shall be deemed to have been given four (4) Business Daysafter deposit in the mails, postage prepaid; notices sent by facsimile shall bedeemed to have been given when sent and receipt has been confirmed by telephone(except that, if not given during normal business hours for the recipient,shall be deemed to have been given at the opening of business on the nextBusiness Day for the recipient). Notices delivered through electronic communications to the extentprovided in subsection (b) below shall be effective as provided in such subsection(b).

 

### (b)           Electronic Communications.  Notices and other communications to theLenders hereunder may be delivered or furnished by electronic communication(including e-mail and Internet or intranet websites) pursuant to procedures approvedby the Administrative Agent, provided that the foregoing shall not apply tonotices to any Lender pursuant to Article II if such Lender has notifiedthe Administrative Agent that it is incapable of receiving notices under suchArticle by electronic communication. The Administrative Agent or the Borrower may, in its

###  

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### discretion, agree to accept notices and othercommunications to it hereunder by electronic communications pursuant toprocedures approved by it, provided that approval of such procedures may belimited to particular notices or communications.

###  

### (c)           Effectiveness of Facsimile Documents and Signatures.  Loan Documents may be transmitted and/orsigned by facsimile.  The effectivenessof any such documents and signatures shall, subject to applicable Law, have thesame force and effect as manually-signed originals and shall be binding on allLoan Parties, the Agents and the Lenders. The Administrative Agent may also require that any such documents andsignatures be confirmed by a manually-signed original thereof; provided,however, that the failure to request or deliver the same shall not limitthe effectiveness of any facsimile document or signature.

###  

### (d)           Reliance by Agents and Lenders.  The Agents and the Lenders shall be entitledto rely and act upon any notices (including telephonic Committed Loan Noticesand Swing Line Loan Notices) purportedly given by or on behalf of the Borrowereven if (i) such notices were not made in a manner specified herein, wereincomplete or were not preceded or followed by any other form of noticespecified herein, or (ii) the terms thereof, as understood by the recipient,varied from any confirmation thereof. The Borrower shall indemnify each Agent-Related Person and each Lenderfrom all losses, costs, expenses and liabilities resulting from the reliance bysuch Person on each notice purportedly given by or on behalf of the Borrower inthe absence of gross negligence or willful misconduct.  All telephonic notices to the AdministrativeAgent may be recorded by such Agent, and each of the parties hereto herebyconsents to such recording.

###  

10.03       NoWaiver; Cumulative Remedies. No failure by any Lender or the Administrative Agent to exercise, and nodelay by any such Person in exercising, any right, remedy, power or privilegehereunder or any other Loan Document shall operate as a waiver thereof; norshall any single or partial exercise of any right, remedy, power or privilegehereunder preclude any other or further exercise thereof or the exercise of anyother right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided, andprovided under each other Loan Document, are cumulative and not exclusive ofany rights, remedies, powers and privileges provided by law.

 

10.04       AttorneyCosts, Expenses and Taxes. The Borrower agrees (a) to pay or reimburse the Administrative Agent forall reasonable costs and expenses incurred in connection with the development,preparation, negotiation, syndication and execution of this Agreement and theother Loan Documents, and any amendment, waiver, consent or other modificationof the provisions hereof and thereof (whether or not the transactionscontemplated hereby or thereby are consummated), and the consummation andadministration of the transactions contemplated hereby and thereby, includingall Attorney Costs of Shearman & Sterling LLP, and (b) to pay or reimbursethe Administrative Agent and each Lender for all reasonable costs and expensesincurred in connection with the enforcement of any rights or remedies underthis Agreement or the other Loan Documents (including all such costs andexpenses incurred during any legal proceeding, including any proceeding underany Debtor Relief Law), including all Attorney Costs of counsel to theAdministrative Agent).  The foregoingcosts and expenses shall include all search, filing, recording, title insuranceand appraisal charges and fees and taxes related thereto, and otherout-of-pocket expenses incurred by any Agent. All amounts due under this

 

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Section 10.04shall be paid within thirty (30) Business Days after invoiced or demandtherefor.  The agreements in thisSection shall survive the Termination Date. If any Loan Party fails to pay whendue any costs, expenses or other amounts payable by it hereunder or under anyLoan Document, including, without limitation, Attorney Costs and indemnities,such amount may be paid on behalf of such Loan Party by any Agent or anyLender, in its sole discretion.

 

10.05       Indemnificationby the Borrower.  Whetheror not the transactions contemplated hereby are consummated, the Borrower shallindemnify and hold harmless each Agent-Related Person, each Lender and theirrespective Affiliates, directors, officers, employees, counsel, agents and, inthe case of any funds, trustees and advisors and attorneys-in-fact(collectively the “***Indemnitees***”)from and against any and all liabilities, obligations, losses, damages,penalties, claims, demands, actions, judgments, suits, costs, expenses anddisbursements (including Attorney Costs (which shall be limited to one (1)counsel to the Administrative Agent and the Lenders, unless (x) theinterests of the Administrative Agent and the Lenders are sufficientlydivergent, in which case one (1) additional counsel may be appointed, and(y) if the interests of any Lender or group of Lenders (other than all ofthe Lenders) are distinctly or disproportionately affected, one (1) additionalcounsel for such Lender or group of Lenders)) of any kind or nature whatsoeverwhich may at any time be imposed on, incurred by or asserted against any suchIndemnitee in any way relating to or arising out of or in connection with (a)the execution, delivery, enforcement, performance or administration of any LoanDocument or any other agreement, letter or instrument delivered in connectionwith the transactions contemplated thereby or the consummation of thetransactions contemplated thereby, (b) any Commitment, Loan or Letter of Creditor the use or proposed use of the proceeds therefrom (including any refusal bythe L/C Issuer to honor a demand for payment under a Letter of Credit if thedocuments presented in connection with such demand do not strictly comply with theterms of such Letter of Credit), (c) any actual or alleged presence or releaseof Hazardous Materials on or from any property currently or formerly owned oroperated by the Borrower, any Subsidiary or any other Loan Party, or anyEnvironmental Liability related in any way to the Borrower, any Subsidiary orany other Loan Party, or (d) any actual or prospective claim, litigation,investigation or proceeding relating to any of the foregoing, whether based oncontract, tort or any other theory (including any investigation of, preparationfor, or defense of any pending or threatened claim, investigation, litigationor proceeding) and regardless of whether any Indemnitee is a party thereto (allthe foregoing, collectively, the “***Indemnified Liabilities***”), provided that suchindemnity shall not, as to any Indemnitee, be available to the extent that suchliabilities, obligations, losses, damages, penalties, claims, demands, actions,judgments, suits, costs, expenses or disbursements are determined by a court ofcompetent jurisdiction by final and nonappealable judgment to (a) have resultedfrom the gross negligence or willful misconduct of such Indemnitee or breach ofany Loan Document by such Indemnitee or (b) arise from claims of any of theLenders solely against one or more other Lenders (and not by one or moreLenders against the Administrative Agent or one or more of the other Agents)that have not resulted from the action, inaction, participation or contributionof the Borrower or its Subsidiaries or other Affiliates or any of theirrespective officers, directors, stockholders, partners, members, employees,agents, representatives or advisors.  NoIndemnitee shall be liable for any damages arising from the use by others ofany information or other materials obtained through IntraLinks or other similarinformation transmission systems in connection with this Agreement, nor shallany Indemnitee or any Loan Party have any liability for any special, punitive,indirect or consequential damages relating to this Agreement or any

 

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other Loan Document or arising out of its activitiesin connection herewith or therewith (whether before or after the ClosingDate).  In the case of an investigation,litigation or other proceeding to which the indemnity in this Section 10.05applies, such indemnity shall be effective whether or not such investigation,litigation or proceeding is brought by any Loan Party, its directors,shareholders or creditors or an Indemnitee or any other Person, whether or notany Indemnitee is otherwise a party thereto and whether or not any of thetransactions contemplated hereunder or under any of the other Loan Documents isconsummated.  All amounts due under thisSection 10.05 shall be payable within twenty (20) Business Days afterdemand therefor.  The agreements in thisSection shall survive the resignation of the Administrative Agent, thereplacement of any Lender and the Termination Date.

 

10.06       Payments Set Aside.  To the extent that any payment by or onbehalf of the Borrower is made to any Agent or any Lender, or any Agent or anyLender exercises its right of setoff, and such payment or the proceeds of suchsetoff or any part thereof is subsequently invalidated, declared to befraudulent or preferential, set aside or required (including pursuant to anysettlement entered into by such Agent or such Lender in its discretion) to berepaid to a trustee, receiver or any other party, in connection with anyproceeding under any Debtor Relief Law or otherwise, then (a) to the extent ofsuch recovery, the obligation or part thereof originally intended to besatisfied shall be revived and continued in full force and effect as if suchpayment had not been made or such setoff had not occurred, and (b) each Lenderseverally agrees to pay to the Administrative Agent upon demand its applicableshare of any amount so recovered from or repaid by any Agent, plus interestthereon from the date of such demand to the date such payment is made at a rateper annum equal to the Federal Funds Rate from time to time in effect.

 

10.07       Successorsand Assigns.  (a)  The provisions of this Agreement shall bebinding upon and inure to the benefit of the parties hereto and theirrespective successors and assigns permitted hereby, except that the Borrowermay not assign or otherwise transfer any of its rights or obligations hereunderwithout the prior written consent of each Lender (other than as provided in Section7.03(h) and no Lender may assign or otherwise transfer any of its rights orobligations hereunder except (i) to an Eligible Assignee in accordance with theprovisions of Section 10.07(b), (ii) by way of participation inaccordance with the provisions of Section 10.07(d), or (iii) by way ofpledge or assignment of a security interest subject to the restrictions of Section10.07(f), or (iv) to an SPC in accordance with the provisions of Section10.07(h) (and any other attempted assignment or transfer by any partyhereto shall be null and void).  Nothingin this Agreement, expressed or implied, shall be construed to confer upon anyPerson (other than the parties hereto, their respective successors and assignspermitted hereby, Participants to the extent provided in subsection (d)of this Section and, to the extent expressly contemplated hereby, theIndemnitees) any legal or equitable right, remedy or claim under or by reasonof this Agreement.

 

### (b)           Any Lender may at any time assign to one or more EligibleAssignees all or a portion of its rights and obligations under this Agreement(including all or a portion of its Commitment and the Loans (including forpurposes of this Section 10.07(b), participations in L/C Obligations andin Swing Line Loans) at the time owing to it); provided that (i) exceptin the case of an assignment of the entire remaining amount of the assigningLender’s Commitment and the Loans at the time owing to it or in the case of anassignment to a Lender or an Affiliate of a Lender or an Approved Fund withrespect to a Lender, the aggregate amount of the Commitment

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### (which for this purpose includes Loansoutstanding thereunder) or, if the applicable Commitment is not then in effect,the outstanding principal balance of the Loan of the assigning Lender subjectto each such assignment, determined as of the date the Assignment andAssumption with respect to such assignment is delivered to the AdministrativeAgent or, if “Trade Date” is specified in the Assignment and Assumption, as ofthe Trade Date, shall not be less than $2,500,000, in the case of anyassignment in respect of the Revolving Credit Facility, or $1,000,000 (or theDollar Equivalent thereof, if applicable), in the case of any assignment inrespect of the Term Facility, unless each of the Administrative Agent and, solong as no Event of Default under Section 8.01(a) or 8.01(f) hasoccurred and is continuing, the Borrower otherwise consents (each such consentnot to be unreasonably withheld or delayed); (ii) each partial assignment shallbe made as an assignment of a proportionate part of all the assigning Lender’srights and obligations under this Agreement with respect to the Loans or theCommitment assigned, except that this clause (ii) shall not (x) apply torights in respect of Swing Line Loans or (y) prohibit any Lender from assigningall or a portion of its rights and obligations among separate Facilities on anon-pro rata basis; (iii) any assignment of a Revolving Credit Commitment mustbe approved by the Administrative Agent, the L/C Issuer and the Swing LineLender unless the Person that is the proposed assignee is itself a RevolvingCredit Lender (whether or not the proposed assignee would otherwise qualify asan Eligible Assignee); (iv) the parties to each assignment shall execute anddeliver to the Administrative Agent an Assignment and Assumption, together witha processing and recordation fee of $3,500; provided that (A) no such fee shall be payable in the case of an assignment toa Lender, an Affiliate of a Lender or an Approved Fund with respect to aLender, and (B) in the case of contemporaneous assignments by a Lender to oneor more Funds managed by the same investment advisor (which Funds are not thenLenders hereunder), only a single such $3,500 fee shall be payable for all suchcontemporaneous assignments; and (v) the assigning Lender shall deliverto the Administrative Agent or the Borrower any Note issued to it marked“cancelled:”.  Subject to acceptance andrecording thereof by the Administrative Agent pursuant to Section 10.07(c),from and after the effective date specified in each Assignment and Assumption,the Eligible Assignee thereunder shall be a party to this Agreement and, to theextent of the interest assigned by such Assignment and Assumption, have therights and obligations of a Lender under this Agreement, and the assigningLender thereunder shall, to the extent of the interest assigned by suchAssignment and Assumption, be released from its obligations under thisAgreement (and, in the case of an Assignment and Assumption covering all of theassigning Lender’s rights and obligations under this Agreement, such Lendershall cease to be a party hereto but shall continue to be entitled to thebenefits of Sections 3.01, 3.04, 3.05, 10.04 and 10.05with respect to facts and circumstances occurring prior to the effective dateof such assignment).  Upon request, theBorrower (at its expense) shall execute and deliver a Note to the assigneeLender.  Any assignment or transfer by aLender of rights or obligations under this Agreement that does not comply withthis subsection shall be treated for purposes of this Agreement as a sale bysuch Lender of a participation in such rights and obligations in accordancewith Section 10.07(d).

###  

### (c)           The Administrative Agent, acting solely for this purposeas an agent of the Borrower, shall maintain at the Administrative Agent’sOffice a copy of each Assignment and Assumption delivered to it and a registerfor the recordation of the names and addresses of the Lenders, and theCommitments of, and principal amounts (and related interest amounts) of theLoans, L/C Obligations (specifying the Unreimbursed Amount), L/C Borrowings andamounts due under Section 2.03 owing to, each Lender pursuant to theterms hereof from time to time (the

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###  “***Register***”).  Theentries in the Register shall be conclusive, and the Borrower, the Agents andthe Lenders may treat each Person whose name is recorded in the Registerpursuant to the terms hereof as a Lender hereunder for all purposes of thisAgreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrower atany reasonable time and from time to time upon reasonable prior notice.  In addition, at any time that a request fora consent for a material or other substantive change to the Loan Documents ispending, any Lender may request and receive from the Administrative Agent acopy of the Register.  Upon receipt of aduly completed and executed Assignment and Assumption and compliance by theassigning Lender and Eligible Assignee with the other applicable provisions ofthis Section 10.07, the Administrative Agent shall accept suchAssignment and Assumption and record the information contained therein in theRegister.

###  

### (d)           Any Lender may at any time, without the consent of, ornotice to, the Borrower or the Administrative Agent, sell participations to anyPerson (other than a natural person or the Borrower or any of the Borrower’sAffiliates or Subsidiaries) (each, a “***Participant***”) in allor a portion of such Lender’s rights and/or obligations under this Agreement(including all or a portion of its Commitment and/or the Loans (including suchLender’s participations in L/C Obligations and/or Swing Line Loans) owing toit); provided that (i) such Lender’s obligations under thisAgreement shall remain unchanged, (ii) such Lender shall remain solelyresponsible to the other parties hereto for the performance of such obligationsand (iii) the Borrower, the Agents and the other Lenders shall continue todeal solely and directly with such Lender in connection with such Lender’srights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participationshall provide that such Lender shall retain the sole right to enforce thisAgreement and to approve any amendment, modification or waiver of any provisionof this Agreement; provided that such agreement or instrument mayprovide that such Lender will not, without the consent of the Participant,agree to any amendment, waiver or other modification described in the firstproviso to Section 10.01 that directly affects such Participant.  Subject to Section 10.07(e), theBorrower agrees that each Participant shall be entitled to the benefits of Sections3.01, 3.04 and 3.05**to the same extent as if it were a Lenderand had acquired its interest by assignment pursuant to Section 10.07(b).  To the extent permitted by law, eachParticipant also shall be entitled to the benefits of Section 10.09**asthough it were a Lender, provided such Participant agrees to be subjectto Section 2.13 as though it were a Lender.

###  

### (e)           A Participant shall not be entitled to receive any greaterpayment under Section 3.01, 3.04 or 3.05 than the applicable Lender would have beenentitled to receive with respect to the participation sold to such Participant,unless the sale of the participation to such Participant is made with theBorrower’s prior written consent and such Participant complies with Section10.15 as if such Participant were a Lender under Section 10.15.  A Participant that would be a Foreign Lenderif it were a Lender shall not be entitled to the benefits of Section 3.01unless the Borrower is notified of the participation sold to such Participantand such Participant agrees, for the benefit of the Borrower, to comply with Section10.15 as though it were a Lender.

###  

### (f)            Any Lender may at any time pledge or assign a securityinterest in all or any portion of its rights under this Agreement (includingunder its Note, if any) to secure obligations of such Lender, including anypledge or assignment to secure obligations to a Federal Reserve Bank; providedthat no such pledge or assignment shall release such Lender from any of

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### its obligations hereunder or substitute anysuch pledgee or assignee for such Lender as a party hereto.

###  

### (g)           As used herein, the following terms have the followingmeanings:

###  

“***Eligible Assignee***”means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d)any other Person (other than a natural person) approved by (i) theAdministrative Agent, (ii) in the case of any assignment of a RevolvingCommitment, the L/C Issuer and the Swing Line Lender, and (iii) (A) unless anEvent of Default under Section 8.01(a) or (f) has occurred and iscontinuing or (B) in the case of any assignment to any Person that would resultin an increase in the amounts payable by the Borrower under Section 3.01(a),the Borrower (each such approval under the foregoing clauses (i), (ii)and (iii)(A), not to be unreasonably withheld or delayed; it beingunderstood that if the Administrative Agent does not provide either a negativeor affirmative response to an approval request within 10 days, such approval shallbe deemed to have been given); provided that notwithstanding theforegoing, “*Eligible Assignee*”shall not include the Borrower or any of the Borrower’s Affiliates orSubsidiaries.

 

“***Fund***” means anyPerson (other than a natural person) that is (or will be) engaged in making,purchasing, holding or otherwise investing in commercial loans and similarextensions of credit in the ordinary course of its business.

 

“***Approved Fund***” meansany Fund that is administered, advised or managed by (a) a Lender, (b) anAffiliate of a Lender or (c) an entity or an Affiliate of an entity thatadministers, advises or manages a Lender. For the avoidance of doubt, “Approved Fund” does not include anyunaffiliated fund for which a Lender is acting solely in a fronting capacity.

 

### (h)           Notwithstanding anything to the contrary contained herein,any Lender (a “***Granting Lender***”) may grant to a specialpurpose funding vehicle identified as such in writing from time to time by theGranting Lender to the Administrative Agent and the Borrower (an “***SPC***”) the option to provide all or any part of any Loanthat such Granting Lender would otherwise be obligated to make pursuant to thisAgreement; provided that (i) nothing herein shall constitute acommitment by any SPC to fund any Loan, and (ii) if an SPC elects not toexercise such option or otherwise fails to make all or any part of such Loan,the Granting Lender shall be obligated to make such Loan pursuant to the termshereof or, if it fails to do so, to make such payment to the AdministrativeAgent as is required under Section 2.12(c)(ii).  Each party hereto hereby agrees that (i)neither the grant to any SPC nor the exercise by any SPC of such option shallincrease the costs or expenses or otherwise increase or change the obligationsof the Borrower under this Agreement (including its obligations under Section3.01 or 3.04), (ii) no SPC shall be liable for any indemnity orsimilar payment obligation under this Agreement for which a Lender would beliable, and (iii) the Granting Lender shall for all purposes, including theapproval of any amendment, waiver or other modification of any provision of anyLoan Document, remain the lender of record hereunder.  The making of a Loan by an SPC hereunder shall utilize theCommitment of the Granting Lender to the same extent, and as if, such Loan weremade by such Granting Lender. Notwithstanding anything to the contrary contained herein, any SPC may(i) with notice to, but without prior consent of the Borrower and the

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### Administrative Agent and with the payment ofa processing fee of $3,500, assign all or any portion of its right to receivepayment with respect to any Loan to the Granting Lender and (ii) disclose on aconfidential basis any non-public information relating to its funding of Loansto any rating agency, commercial paper dealer or provider of any surety orGuarantee or credit or liquidity enhancement to such SPC.

###  

### (i)            Notwithstanding anything to the contrary containedherein, if at any time Bank of America assigns all of its Commitments and Loanspursuant to Section 10.07(b), Bank of America may, (i) upon 30 days’notice to the Borrower and the Lenders, resign as L/C Issuer and/or (ii) upon30 days’ notice to the Borrower, resign as Swing Line Lender.  In the event of any such resignation as L/CIssuer or Swing Line Lender, the Borrower shall be entitled to appoint fromamong the Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided,however, that no failure by the Borrower to appoint any such successorshall affect the resignation of Bank of America as L/C Issuer or Swing LineLender, as the case may be.  If Bank ofAmerica resigns as L/C Issuer, it shall retain all the rights and obligationsof the L/C Issuer hereunder with respect to all Letters of Credit outstandingas of the effective date of its resignation as L/C Issuer and all L/CObligations with respect thereto (including the right to require the Lenders tomake Base Rate Loans or fund risk participations in Unreimbursed Amountspursuant to Section 2.03(c)).  IfBank of America resigns as Swing Line Lender, it shall retain all the rights ofthe Swing Line Lender provided for hereunder with respect to Swing Line Loansmade by it and outstanding as of the effective date of such resignation,including the right to require the Lenders to make Base Rate Loans or fund riskparticipations in outstanding Swing Line Loans pursuant to Section 2.04(c).

###  

### (j)            With respect to each Letter of Credit, ifan L/C Issuer transfers its rights with respect to the Borrower’sobligation to make payments to such L/C Issuer with respect to any UnreimbursedAmounts or L/C Borrowings, such L/C Issuer shall give notice of such transferto the Administrative Agent for notation in the Register and no such transferwill be effective for purposes of this Agreement unless it has been recorded inthe Register.

###  

10.08       Confidentiality.  Each of the Agents and the Lenders agrees tomaintain the confidentiality of the Information, except that Information may bedisclosed (a) to its directors, officers, employees, agents, advisors andrepresentatives (it being understood that the Persons to whom such disclosureis made will be informed of the confidential nature of such Information andinstructed to keep such Information confidential); (b) to the extentrequested by any regulatory authority purporting to have jurisdiction over it;(c) to the extent  required byapplicable Laws or regulations or by any subpoena or similar legal process; (d)to any other party to this Agreement; (e) subject to an agreement containingprovisions substantially the same as those of this Section 10.08, to anyEligible Assignee or pledgee (pursuant to Section 10.07(f)) of orParticipant in, or any prospective Eligible Assignee or pledgee (pursuant to Section10.07(f)) of or Participant in, any of its rights or obligations under thisAgreement; (f) with the consent of the Borrower; (g) to the extent suchInformation becomes publicly available other than as a result of a breach ofthis Section 10.08; (h) to any state, Federal or foreign authority orexaminer (including the National Association of Insurance Commissioners or anyother similar organization) regulating any Lender; or (i) to any rating agencywhen required by it (it being understood that, prior to any such disclosure,such rating agency shall undertake to preserve the confidentiality of anyInformation relating to the Loan Parties received by it from such Lender).

 

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In addition, the Agents and the Lenders may disclosethe existence of this Agreement and information about this Agreement to marketdata collectors, similar service providers to the lending industry, and serviceproviders to the Agents and the Lenders in connection with the administrationand management of this Agreement, the other Loan Documents, the Commitments,and the Credit Extensions.  For thepurposes of this Section, “***Information***”means all information received from any Loan Party relating to any Loan Partyor its business, other than any such information that is publicly available toany Agent or any Lender prior to disclosure by any Loan Party other than as aresult of a breach of this Section 10.08; provided that, in thecase of information received from a Loan Party after the date hereof, suchinformation is clearly identified at the time of delivery as confidential.  Any Person required to maintain theconfidentiality of Information as provided in this Section 10.08 shallbe considered to have complied with its obligation to do so if such Person hasexercised the same degree of care to maintain the confidentiality of suchInformation as such Person would accord to its own confidential information.

 

10.09       Setoff.  In addition to any rights and remedies ofthe Lenders provided by law, upon the occurrence and during the continuance ofany Event of Default and the making of the request or the granting of theconsent specified by Section 8.01 to authorize the Administrative Agentto declare the Loans due and payable pursuant to the provisions of Section8.01, each Lender is authorized at any time and from time to time, withoutprior notice to the Borrower or any other Loan Party, any such notice beingwaived by the Borrower (on its own behalf and on behalf of each Loan Party) tothe fullest extent permitted by law, to set off and apply any and all deposits(general or special, time or demand, provisional or final) at any time held by,and other Indebtedness at any time owing by, such Lender to or for the creditor the account of the respective Loan Parties against any and all Obligationsowing to such Lender hereunder or under any other Loan Document, now orhereafter existing, irrespective of whether or not such Agent or such Lendershall have made demand under this Agreement or any other Loan Document andalthough such Obligations may be contingent or unmatured or denominated in acurrency different from that of the applicable deposit or Indebtedness.  Each Lender agrees promptly to notify theBorrower and the Administrative Agent after any such set-off and applicationmade by such Lender; provided, however, that the failure to givesuch notice shall not affect the validity of such setoff and application.  The rights of the Administrative Agent andeach Lender under this Section are in addition to other rights and remedies(including, without limitation, other rights of setoff) that the AdministrativeAgent, such Lender and their respective Affiliates may have.

 

10.10       InterestRate Limitation. Notwithstanding anything to the contrary contained in any Loan Document,the interest paid or agreed to be paid under the Loan Documents shall notexceed the maximum rate of non-usurious interest permitted by applicable Law(the “***Maximum Rate***”).  If any Agent or any Lender shall receiveinterest in an amount that exceeds the Maximum Rate, the excess interest shallbe applied to the principal of the Loans or, if it exceeds such unpaidprincipal, refunded to the Borrower.  Indetermining whether the interest contracted for, charged, or received by anAgent or a Lender exceeds the Maximum Rate, such Person may, to the extentpermitted by applicable Law, (a) characterize any payment that is not principalas an expense, fee, or premium rather than interest, (b) exclude voluntary prepaymentsand the effects thereof, and (c) amortize, prorate, allocate, and spread inequal or

 

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unequal parts the total amount of interest throughoutthe contemplated term of the Obligations hereunder.

 

10.11       Counterparts.  This Agreement and each other Loan Documentmay be executed in one or more counterparts, each of which shall be deemed anoriginal, but all of which together shall constitute one and the sameinstrument. Delivery by telecopier of an executed counterpart of a signaturepage to this Agreement and each other Loan Document shall be effective asdelivery of an original executed counterpart of this Agreement and such otherLoan Document. The Agents may also require that any such documents andsignatures delivered by telecopier be confirmed by a manually-signed originalthereof; provided that the failure to request or deliver the same shallnot limit the effectiveness of any document or signature delivered bytelecopier.

 

10.12       Integration.  This Agreement, together with the other LoanDocuments, comprises the complete and integrated agreement of the parties onthe subject matter hereof and thereof and supersedes all prior agreements,written or oral, on such subject matter. In the event of any conflict between the provisions of this Agreementand those of any other Loan Document, the provisions of this Agreement shallcontrol; provided that the inclusion of supplemental rights or remediesin favor of the Agents or the Lenders in any other Loan Document shall not bedeemed a conflict with this Agreement. Each Loan Document was drafted with the joint participation of therespective parties thereto and shall be construed neither against nor in favorof any party, but rather in accordance with the fair meaning thereof.

 

10.13       Survivalof Representations and Warranties.  All representations and warranties made hereunder and in anyother Loan Document or other document delivered pursuant hereto or thereto orin connection herewith or therewith shall survive the execution and deliveryhereof and thereof.  Suchrepresentations and warranties have been or will be relied upon by each Agentand each Lender, regardless of any investigation made by any Agent or any Lenderor on their behalf and notwithstanding that any Agent or any Lender may havehad notice or knowledge of any Default at the time of any Credit Extension, andshall continue in full force and effect until the Termination Date.

 

10.14       Severability.  If any provision of this Agreement or the otherLoan Documents is held to be illegal, invalid or unenforceable, the legality,validity and enforceability of the remaining provisions of this Agreement andthe other Loan Documents shall not be affected or impaired thereby.  The invalidity of a provision in aparticular jurisdiction shall not invalidate or render unenforceable suchprovision in any other jurisdiction.

 

10.15       Tax Forms.  (a)  (i)  Each Lenderand Agent that is not a “United States person” within the meaning of Section7701(a)(30) of the Code (a “***Foreign Lender***”) shall deliver to the Borrower and theAdministrative Agent, prior to receipt of any payment subject to withholdingunder the Code (or upon accepting an assignment of an interest herein), twoduly signed, properly completed copies of either IRS Form W-8BEN or anysuccessor thereto (relating to such Foreign Lender and entitling it to anexemption from, or reduction of, United States withholding tax on all paymentsto be made to such Foreign Lender by the

 

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Borrower or any other Loan Party pursuant to thisAgreement or any other Loan Document) or IRS Form W-8ECI or any successorthereto (relating to all payments to be made to such Foreign Lender by theBorrower or any other Loan Party pursuant to this Agreement or any other LoanDocument) or such other evidence reasonably satisfactory to the Borrower andthe Administrative Agent that such Foreign Lender is entitled to an exemptionfrom, or reduction of, United States withholding tax, including any exemptionpursuant to Section 881(c) of the Code, and in the case of a Foreign Lenderclaiming such an exemption under Section 881(c) of the Code, a certificate thatestablishes in writing to the Borrower and the Administrative Agent that suchForeign Lender is not (i) a “bank” as defined in Section 881(c)(3)(A) of theCode, (ii) a 10-percent shareholder within the meaning of Section 871(h)(3)(B)of the Code, and (iii) a controlled foreign corporation related to the Borrowerwith the meaning of Section 864(d) of the Code.  Thereafter and from time to time, each such Foreign Lender shall(A) promptly submit to the Administrative Agent such additional duly completedand signed copies of one or more of such forms or certificates (or suchsuccessor forms or certificates as shall be adopted from time to time by therelevant United States taxing authorities) as may then be available under thencurrent United States laws and regulations to avoid, or such evidence as isreasonably satisfactory to the Borrower and the Administrative Agent of anyavailable exemption from, or reduction of, United States withholding taxes inrespect of all payments to be made to such Foreign Lender by the Borrower orany other Loan Party pursuant to this Agreement or any other Loan Document, ineach case, (1) on or before the date that any such form, certificate or otherevidence expires or becomes obsolete, (2) after the occurrence of any eventrequiring a change in the most recent form, certificate or evidence previously deliveredby it to the Borrower and the Administrative Agent and (3) from time to timethereafter if reasonably requested by the Borrower or the Administrative Agent,and (B) promptly notify the Borrower and the Administrative Agent of any changein circumstances which would modify or render invalid any claimed exemption orreduction.

 

(ii)           EachForeign Lender, to the extent it does not act or ceases to act for its ownaccount with respect to any portion of any sums paid or payable to such ForeignLender under any of the Loan Documents (for example, in the case of a typicalparticipation by such Foreign Lender), shall deliver to the Borrower and theAdministrative Agent on the date when such Foreign Lender ceases to act for itsown account with respect to any portion of any such sums paid or payable, andat such other times as may be necessary in the determination of the Borrowerand the Administrative Agent (in either case, in the reasonable exercise of itsdiscretion), (A) two duly signed completed copies of the forms or statementsrequired to be provided by such Foreign Lender as set forth above, to establishthe portion of any such sums paid or payable with respect to which such ForeignLender acts for its own account that is not subject to United States withholdingtax, and (B) two duly signed completed copies of IRS Form W-8IMY (or anysuccessor thereto), together with any information such Foreign Lender choosesto transmit with such form, and any other certificate or statement of exemptionrequired under the Code, to establish that such Foreign Lender is not actingfor its own account with respect to a portion of any such sums payable to suchForeign Lender.

 

(iii)          TheBorrower shall not be required to pay any additional amount or any indemnitypayment under Section 3.01 to (A) any Foreign Lender with respect to anyTaxes required to be deducted or withheld on the basis of the information,certificates or statements of exemption such Lender transmits with an IRS FormW-8IMY pursuant to this Section 10.15(a), (B) any Foreign Lender if suchForeign Lender shall have failed

 

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to satisfy the foregoing provisions of this Section10.15(a)**,** or (C) any U.S.Lender if such U.S. Lender shall have failed to satisfy the provisions of Section10.15(b); provided, that if such Lender shall have satisfied therequirement of this Section 10.15(a) or Section 10.15(b), as theapplicable, on the date such Lender became a Lender or ceased to act for itsown account with respect to any payment under any of the Loan Documents,nothing in this Section 10.15(a) or Section 10.15(b) shallrelieve the Borrower of its obligation to pay any amounts pursuant to Section3.01 in the event that, as a result of any change in any applicable Law,treaty or governmental rule, regulation or order, or any change in theinterpretation, administration or application thereof, such Lender is no longerproperly entitled to deliver forms, certificates or other evidence at asubsequent date establishing the fact that such Lender or other Person for theaccount of which such Lender receives any sums payable under any of the LoanDocuments is not subject to withholding or is subject to withholding at areduced rate.

 

(iv)          TheAdministrative Agent may deduct and withhold any taxes required by any Laws tobe deducted and withheld from any payment under any of the Loan Documents.

 

### (b)           Each Lender and Agent that is a “United States person” within themeaning of Section 7701(a)(30) of the Code (each, a****“***U.S. Lender***”**)**shall deliver to the Administrative Agent and the Borrower two duly signedcompleted copies of IRS Form W-9 on or prior to the Closing Date (or on orprior to the date it becomes a party to this Agreement), certifying that suchU.S. Lender is entitled to an exemption from United States backup withholdingtax, or any successor form.  If suchU.S. Lender fails to deliver such forms, then the Administrative Agent maywithhold from any interest payment to such U.S. Lender an amount equivalent tothe applicable back-up withholding tax imposed by the Code, without reduction.

###  

### (c)           If any Governmental Authority asserts that the Borrower orthe Administrative Agent did not properly withhold or backup withhold, as thecase may be, any tax or other amount from payments made to or for the accountof any Foreign Lender or U.S. Lender, such Foreign Lender or U.S. Lender shallindemnify the Borrower and the Administrative Agent therefor, including allpenalties and interest, any taxes imposed by any jurisdiction on the amountspayable to the Borrower and the Administrative Agent under this Section10.15, and costs and expenses (including Attorney Costs) of the Borrowerand the Administrative Agent.  Theobligation of the Foreign Lenders or U.S. Lenders, severally, under this Section10.15 shall survive the termination of the Aggregate Commitments, repaymentof all other Obligations hereunder and the resignation of the AdministrativeAgent.

###  

10.16       Governing Law.  (a) THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT SHALL BE GOVERNED BY, ANDCONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

### (b)           ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THISAGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATEOF NEW YORK SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERNDISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THEBORROWER, EACH AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITSPROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  THE BORROWER, EACH AGENT AND EACH LENDERIRREVOCABLY WAIVES ANY

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### OBJECTION, INCLUDING ANY OBJECTION TO THELAYING OF VENUE OR BASED ON THE GROUNDS OF *FORUM NON CONVENIENS*, WHICH IT MAY NOW ORHEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTIONIN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.

###  

10.17       Waiver ofRight to Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIALBY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOANDOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGSOF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THETRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTERARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTYHEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OFACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TOTHIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION10.17 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIESHERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

10.18       Binding Effect.  This Agreement shall become effective whenit shall have been executed by the Borrower and the Administrative Agent shallhave been notified by each Lender, Swing Line Lender and the L/C Issuer thateach such Lender, Swing Line Lender and the L/C Issuer has executed it andthereafter shall be binding upon and inure to the benefit of the Borrower, eachAgent and each Lender and their respective successors and permitted assigns,except that the Borrower shall not have the right (other than pursuant to Section7.03(h)) to assign its rights hereunder or any interest herein without theprior written consent of the Lenders.

 

10.19       USA PATRIOTAct Notice.  Each Lenderand the Administrative Agent (for itself and not on behalf of any Lender)hereby notifies the Borrower that pursuant to the requirements of the USAPatriot 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 theBorrower, which information includes the name and address of the Borrower andother information that will allow such Lender or the Administrative Agent, asapplicable, to identify the Borrower in accordance with the Act.

 

10.20       Judgment Currency.  If, for the purposes of obtaining judgmentin any court, it is necessary to convert a sum due hereunder or any other LoanDocument in one currency into another currency, the rate of exchange used shallbe that at which in accordance with normal banking procedures theAdministrative Agent could purchase the first currency with such other currencyon the Business Day preceding that on which final judgment is given.  The obligation of the Borrower in respect ofany such sum due from it to the Administrative Agent or the Lenders hereunderor under the other Loan Documents shall, notwithstanding any judgment in acurrency (the “***JudgmentCurrency***”) other than that in which such sum is denominated inaccordance with the applicable provisions of this Agreement (the “***Agreement Currency***”),be discharged only to the extent that on the Business Day following receipt bythe Administrative

 

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Agent of any sum adjudgedto be so due in the Judgment Currency, the Administrative Agent may inaccordance with normal banking procedures purchase the Agreement Currency withthe Judgment Currency.  If the amount ofthe Agreement Currency so purchased is less than the sum originally due to theAdministrative Agent from the Borrower in the Agreement Currency, the Borroweragrees, as a separate obligation and notwithstanding any such judgment, toindemnify the Administrative Agent or the Person to whom such obligation wasowing against such loss.  If the amountof the Agreement Currency so purchased is greater than the sum originally dueto the Administrative Agent in such currency, the Administrative Agent agreesto return the amount of any excess to the Borrower (or to any other Person whomay be entitled thereto under applicable law).

 

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*INWITNESS WHEREOF,*the parties hereto have caused thisAgreement to be duly executed as of the date first above written.

 
|   | UNITED INDUSTRIES  CORPORATION |
|--------|--------------------------------|
|   |                           |
|   | By:                            |   |   |
|   | Name:                          |   |   |
|   | Title:                         |   |   |
|        |                                |  |  |  |  |

 

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|   | BANK OF AMERICA, N.A.,  as   Administrative Agent |
|--------|---------------------------------------------------|
|   |                                              |
|   | By:                                               |   |   |
|   | Name:                                             |   |   |
|   | Title:                                            |   |   |
|        |                                                   |  |  |  |  |

 

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|   | BANK OF AMERICA, N.A.,  as a Lender, L/C   Issuer and Swing Line Lender |
|--------|-------------------------------------------------------------------------|
|   |                                                                    |
|   | By:                                                                     |   |   |
|   | Name:                                                                   |   |   |
|   | Title:                                                                  |   |   |
|        |                                                                         |  |  |  |  |

 

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| Agreed as of the  date first above written: |               |
|---------------------------------------------|--------------------|
|                                        |               |
|                                        |               |
|                                        |               |   |
| [Please type or  print name of Lender]      |               |
|                                        |               |
| By                                          |               |   |   |
|                                        |   Title: |   |   |

 

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