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 Lender

and

L/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 OF
CONTENTS


 


	
  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

  	
   

  	
   

  



 


i

















 


	
   

  	
   

  	
  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

  	
   

  	
   

  



 


ii

















 


	
   

  	
   

  	
  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

  	
   

  	
   

  



 


iii

















 


	
  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

















 


	
  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

















 


CREDIT AGREEMENT


 


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


 


PRELIMINARY
STATEMENTS:


 


(1)           The
Borrower has entered into an Amended and Restated Credit Agreement dated as of
March 24, 1999 (as supplemented or otherwise modified to the date hereof, the “Existing  Credit Agreement”)
with certain banks, financial institutions and other institutional lenders
party thereto, and Bank of America, as administrative agent for the lenders
thereunder.


 


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


 


(3)           The
Borrower has requested that the Lenders provide a revolving credit facility and
a term loan facility, in order to, among other things, (i) refinance the
commitments and outstanding amounts under the Existing Credit Agreement, (ii)
provide the Borrower with the funds necessary to consummate the Nu-Gro
Acquisition, (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 foregoing
and (v) provide for the Borrower’s and its Subsidiaries’ ongoing working
capital needs and other general corporate purposes.  The Lenders have indicated their willingness to lend and the L/C
Issuer has indicated its willingness to so issue Letters of Credit, in each
case, on the terms and subject to the conditions set forth herein.


 


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


 


ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS


 


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


 


“Acceptance” means a draft drawn by a beneficiary under a
Letter of Credit, which (a) provides for payment by the L/C Issuer on a date
later than (but not more than 180 days later than) the date on which such
beneficiary 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 Section
3.01(e).


 


“Administrative Agent” means Bank of America in its
capacity as administrative agent under any of the Loan Documents, or any successor
administrative agent.


 


“Administrative Agent’s Office” means the Administrative
Agent’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 to
time notify the Borrower and the Lenders.


 


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


 


“Affiliate” means, with respect to any Person, another
Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified.  “Control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ability to exercise voting power, by
contract or otherwise.  “Controlling” and “Controlled” have
meanings correlative thereto.  Notwithstanding the foregoing, neither any
Agent nor any Lender shall be deemed to be an Affiliate of any Loan Party or
any Subsidiary or Affiliate of any Loan Party.


 


“Agent-Related Persons” means the Administrative Agent,
each Arranger, and the Documentation Agent, together with their respective
Affiliates (including, in the case of Bank of America in its capacity as the
Administrative Agent, BAS), and the officers, directors, employees, agents and
attorneys-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 the
Administrative Agent from time to time pursuant to Section 9.02.


 


“Agreement Currency” has the meanings specified in Section
10.20.


 


“Aggregate Commitments” means the Commitments of all the
Lenders.


 


“Aggregate Credit Exposures” means, at any time, the sum
of (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) the
Total Outstandings at such time.


 


“Agreement” means this Credit Agreement.


 


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


 


(a)           (i) in the case of
any 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 their
Subsidiaries to its counterparty to such Swap Contract, as if (A) such
Swap Contract was being terminated early on such date of determination,
(B) such Loan Party or such Subsidiary, as the case may be, was the sole
Affected Party (as defined in


 


2

















 


the applicable
ISDA Master Agreement) and (C) the Administrative Agent was the sole party
determining such payment amount (with the Administrative Agent making such
determination pursuant to the provisions of the form of ISDA Master Agreement);
or (ii) in the case of a Swap Contract traded on an exchange, the
mark-to-market value of such Swap Contract, which will be the unrealized loss
on such Swap Contract to the Loan Party or the Subsidiary of a Loan Party to
such Swap Contract (determined by the Administrative Agent based on the
settlement 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 loss
on such Swap Contract to the Loan Party or the Subsidiary of a Loan Party party
to such Swap Contract (determined by the Administrative Agent based on the
amount, if any, by which (i) the present value of the future cash flows to be
paid 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 such
Loan Party or such Subsidiary of a Loan Party pursuant to such Swap Contract).


 


“Alternate
Date” means December 31, 2008 if the Senior Subordinated Notes
have not by November 30, 2008 been refinanced with replacement senior
subordinated notes having a maturity date of no sooner than the date which is
71⁄2 years after the Closing Date, and otherwise in compliance with Section 7.02(b)(x).


 


“Applicable Rate” means (a) with respect to Term
Loans, (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 Revolving
Credit Loans, (i) for the period from the Closing Date through the date which
is six months after the Closing Date, (A) with respect to Eurodollar Rate
Loans, 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, the
following percentages per annum, based upon the Total Leverage Ratio as set
forth in the most recent Compliance Certificate received by the Administrative
Agent pursuant to Section 6.13(d):


 




	
  Pricing
  Level

  	
   

  	
  Total
  Leverage

  Ratio

  	
   

  	
  Eurodollar

  Rate +

   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 Rate
resulting from a change in the Total Leverage Ratio shall become effective as
of the first Business Day immediately following the date a Compliance
Certificate is delivered pursuant to Section 6.13(d); provided, however,
that if a Compliance Certificate is not delivered when due in accordance with such
Section, then Pricing Level 4 shall apply as of the first Business Day after
the date on which such Compliance Certificate was required to have been
delivered until the first Business Day immediately following the date on which
such Compliance Certificate is delivered.


 


3

















 


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


 


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


 


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


 


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


 


“Assignment and Assumption” means an Assignment and
Assumption 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 audited
consolidated balance sheet of Borrower and its Subsidiaries for the fiscal year
ended December 31, 2003, and the related consolidated statements of income or
operations, shareholders’ equity and cash flows for such fiscal year of the
Borrower and its Subsidiaries, including the notes thereto.


 


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


 


“Availability Period” means the period from and including
the Closing Date to (a) in the case of the Revolving Credit Facility, the
earliest of (i) the Maturity Date for such Facility, (ii) the date of
termination of the Revolving Credit Commitments pursuant to Section 2.06,
and (iii) the date of termination of the commitment of each Revolving Credit
Lender to make Revolving Credit Loans and of the obligation of the L/C Issuer
to make L/C Credit Extensions pursuant to Section 8.01, and (b) in the
case of the Term Facility, the earliest of (i) the Maturity Date for such
Facility, (ii) the date of termination of the Term Commitments pursuant to Section
2.06, and (iii) the date of termination of the commitment of each Term
Lender to make Term Loans pursuant to Section 8.01.


 


“Backstop L/C” has the meaning specified in Section
2.03(g).


 


“Bank of America” means Bank of America, N.A. and its
successors.


 


“BAS” means Banc of America Securities LLC and its
successors.


 


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


 


4

















 


time by Bank of America as its “prime rate.”  The “prime rate” is a rate set by Bank of
America based upon various factors including Bank of America’s costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate.  Any change in such
rate announced by Bank of America shall take effect at the opening of business
on 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 introductory
paragraph hereto.


 


“Borrowing” means a Revolving Credit Borrowing, a Swing
Line Borrowing, a Canadian Term Borrowing or a Dollar Term Borrowing, as the
context may require.


 


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


 


“Canadian
Dollar” and“CD”
mean lawful money of Canada.


 


“Canadian
GAAP “ means generally accepted accounting principles in effect
from time to time in Canada and applied on a consistent basis, subject, however,
to the terms of Section 1.03.


 


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


 


“Canadian Term
Borrowing” means a borrowing consisting of simultaneous Canadian
Term Loans of the same Type and, in the case of Screen Rate Loans, having the
same Interest Period, made by the Canadian Term Lenders pursuant to Section
2.01(a).


 


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


 


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


 


5

















 


“Canadian Term
Lender” means each of the Term Lenders with a Canadian  Term Commitment, as set forth on Schedule
2.01 hereto.


 


“Canadian
Term Loan” has the meaning specified in Section 2.01(a).


 


“Capital
Expenditures” means, with respect to any Person for any
period, all expenditures made by such Person during such period for
capital assets in
accordance with GAAP; provided however, that Capital Expenditures shall
not include (a) any expenditures by the Borrower or any of its Subsidiaries in
connection with a Permitted Acquisition or capital assets acquired in
connection with a Permitted Acquisition or (b) any expenditures made with the
proceeds of condemnation or eminent domain proceedings affecting real property
or with insurance proceeds; provided, further that any
expenditure that is purchased with the trade-in or exchange of existing
assets or the cash proceeds of the sale or other disposition of existing assets
permitted pursuant to Section 7.04(d) or with insurance proceeds
shall be included in Capital Expenditures only to the extent of the gross
amount by which such purchase price exceeds the credit granted by the seller of
such assets for the assets being traded in, the amount of the cash proceeds of
any such sale or disposition or the amount of such insurance proceeds, as the
case may be.


 


“Capitalized Lease”
means any lease with respect to which the lessee is required to recognize
concurrently the acquisition of property or an asset and the incurrence of a
liability in accordance with GAAP.


 


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


 


“Cash Collateralize” has the meaning specified in Section
2.03(g).


 


“Cash
Equivalents” means any of the following types of Investments, to
the extent owned by the Borrower or any of its Subsidiaries free and clear of
all Liens (other than Liens created under the Collateral Documents):


 


(a)           readily marketable
obligations issued or directly and fully guaranteed or insured by the United
States of America or any agency or instrumentality thereof having maturities of
not more than 360 days from the date of acquisition thereof; provided
that the full faith and credit of the United States of America is pledged in
support thereof;


 


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


 


6

















 


(c)           commercial paper
issued by any Person organized under the laws of any state of the United States
of America and rated 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, in each case with a
maturity of not more than 180 days from the date of acquisition thereof;


 


(d)           solely with respect
to any Foreign Subsidiary, non-Dollar denominated (i) certificates of deposit
of, bankers acceptances of, or time deposits with any commercial bank which is
organized and existing under the laws of the country in which such Foreign
Subsidiary maintains its chief executive office and principal place of business
provided such country is a member of the Organization for Economic Cooperation
and 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 “Approved
Foreign Bank”) and maturing within twelve (12) months of
the date of acquisition and (ii) equivalents of demand deposit accounts which
are maintained with an Approved Foreign Bank;


 


(e)           repurchase
agreements entered into by any Person with a bank or trust company (including
any of the Lenders) or recognized securities dealer having capital and surplus
in excess of $500,000,000 for direct obligations issued by or fully guaranteed
by the United States in which such Person shall have a perfected first priority
security interest (subject to no other Liens) and having, on the date of
purchase thereof, a fair market value of at least 100% of the amount of the
repurchase obligations;


 


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


 


(g)           Investments,
classified as Current Assets of the Borrower or any of its Subsidiaries, in
money market investment programs registered under the Investment Company Act of
1940, as amended, which are administered by financial institutions that have
capital of at least $500,000,000 and the portfolios of which are limited such
that 95% of such Investments are of the character and quality described in clauses
(a), (b), (c), (d), (e) and (f) of
this definition, in each case with a maturity of not more than one year from
the date of such Investment.


 


“CERCLA” means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980.


 


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


 


7

















 


“CFC” means a “controlled foreign corporation” under
Section 957 of the Code.


 


“CGMI”
means Citigroup Global Markets Inc.


 


“Change
of Control” means the earliest to occur of:


 


(a)           at any time prior to the consummation
of a Qualifying IPO, and prior to the Holding Company Event, and for any reason
whatsoever, (A) the Equity Investors do not have the right to designate (or do
not 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, directly
or indirectly, an amount of common stock of the Borrower equal to an amount
more than fifty percent (50%) of the amount of common stock of the Borrower
owned by the Equity Investors of record or beneficially, directly or
indirectly, as of the Closing Date or (2) the Equity Investors do own the
percentage of common stock required by the foregoing subclause (1), but
such ownership by the Equity Investors does not represent the largest single
block of voting securities of the Borrower held by any Person or related group
for purposes of Section 13(d) of the Securities and Exchange Act of 1934, as
amended, or


 


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


 


(c)           at any time after the consummation of
a 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 Exchange
Act of 1934, as amended, but excluding any employee benefit plan of such person
and its Subsidiaries, and any person or entity acting in its capacity as
trustee, agent or other fiduciary or administrator of any such plan), excluding
the Equity Investors, shall become the “beneficial owner” (as defined in Rules
13(d)-3 and 13(d)-5 under such Act), directly or indirectly, of more than the
greater of (x) thirty-five percent (35%) of the shares outstanding or (y)
the percentage of the then outstanding voting stock of, in each case, the
Borrower (or after the Holding Company Event, Holdings), owned beneficially by
the Equity Investors or (B) during any period of twelve (12) consecutive
months, the board of directors of the Borrower (or after the Holding Company
Event, Holdings) shall not consist of a majority of the Continuing Directors;
or


 


8

















 


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


 


“Citigroup” means Citigroup Global Markets, Inc. and its
successors.


 


“Closing Date” means the first date all the conditions
precedent in Section 4.01 are satisfied or waived in accordance with Section
10.01.


 


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


 


“Collateral” means all of the “Collateral”
and “Mortgaged Property” referred
to in the Collateral Documents and all of the other property and assets that
are or are intended under the terms of the Collateral Documents to be subject
to Liens in favor of the Administrative Agent for the benefit of the Secured
Parties.


 


“Collateral
Agent” has the meaning specified in Section 9.01(c).


 


“Collateral Documents” means, collectively, the Security
Agreement, the Intellectual Property Security Agreement, the Mortgages, each of
the mortgages, collateral assignments, Security Agreement Supplements, IP
Security Agreement Supplements, security agreements, pledge agreements or other
similar agreements delivered to the Administrative Agent and the Lenders
pursuant to Section 6.11 and 6.15, and each of the other
agreements, instruments or documents that creates or purports to create a Lien
in favor of the Administrative Agent for the benefit of the Secured Parties.


 


“Commitment” means a Term Commitment or a Revolving
Credit Commitment, as the context may require.


 


“Committed Loan Notice” means a notice of (a) a Term Loan
Borrowing, (b) a Revolving Credit Borrowing, (c) a conversion of Loans from one
Type to the other, or (d) a continuation of Eurodollar Rate Loans, pursuant to Section
2.02(a), which, if in writing, shall be substantially in the form of Exhibit
A.


 


“Compensation Period” has the meaning specified in Section
2.12(c)(ii).


 


“Compliance Certificate” has the meaning specified in Section
6.13(d).


 


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


 


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


 


9

















 


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


 


“Consolidated
EBITDA” means, with respect to any Person for any period,


 


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


 


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


 


(i)            all interest
expense of such Person and its Subsidiaries (net of (A) all interest income of
such Person and its Subsidiaries for such period and (B) solely to the extent
otherwise excluded from the determination of the Consolidated interest expense
of such Person and its Subsidiaries for such period in accordance with GAAP,
any unrealized gains or losses on any Swap Contracts pertaining to interest
payable in respect of Indebtedness for borrowed money of such Person and its
Subsidiaries resulting from the mark-to-market value thereof as of the last day
of such period),


 


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


 


(iii)          all depreciation
expense of such Person and its Subsidiaries for such period,


 


(iv)          all amortization
expense of such Person and its Subsidiaries for such period,


 


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


 


10

















 


determined on
a Consolidated basis and in accordance with GAAP for such period,


 


(vi)          cash expenses or
charges incurred in connection with or in contemplation of the Nu-Gro
Transaction or, to the extent permitted hereunder, any Investment permitted
under Section 7.05, issuance of Equity Interests or issuance or
incurrence of Indebtedness permitted under Section 7.02 (in each case,
whether or not consummated),


 


(vii)         any losses (or minus
any gains) realized upon the disposition of property outside of the ordinary
course of business,


 


(viii)        to the extent
actually reimbursed, expenses incurred to the extent covered by indemnification
provisions in any agreement in connection with a Permitted Acquisition,


 


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


 


(x)            management fees
permitted under Section 6.10,


 


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


 


(xii)          with respect to any
Permitted Equity Issuance to the Equity Investors made to cure a prospective
Event 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 extent
that such Net Cash Proceeds (A) are actually received by the Borrower
(including through capital contribution of such Net Cash Proceeds by the Equity
Investors to the Borrower) no later than fifteen Business Days after the
delivery of a Notice of Intent to Cure, (B) have not been applied to make any
payment of the type described in Section 7.06 or any Investment or any
prepayment of Indebtedness (other than a prepayment of the Loans) and (C) do
not exceed the aggregate amount necessary to cure such Event of Default under Section
6.14 for any applicable period, provided that the provisions of this
subclause (b)(xii) may be relied on for purposes of determining
Consolidated EBITDA no more than two times in any twelve-month period, it being
understood that this subclause (b)(xii) may not be relied on for
purposes of calculating any financial ratios other than as applicable to Section
6.14; and


 


(xiii)         all non-recurring
cash restructuring charges taken within 36 months after the Closing Date not to
exceed $5,000,000 in the aggregate;


 


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


 


11

















 


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


 


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


 


“Constitutive
Documents” means, with respect to any Person, the certificate of
incorporation, formation or registration (including, if applicable, certificate
of change of name), articles of incorporation or association, memorandum of
association, charter, bylaws, partnership agreement, trust agreement, limited
liability company operating or members agreement, joint venture agreement or
one or more similar agreements, instruments or documents constituting the
organization or formation of such Person.


 


“Contingent
Obligation” means, with respect to any Person, without
duplication, any obligation of such Person to guarantee or intended to
guarantee any Indebtedness, leases, dividends or other obligations (“primary obligations”) of any other Person
(the “primary obligor”) in any
manner, whether directly or indirectly, including, without limitation,
(a) the direct or indirect guaranty, endorsement (other than for collection
or deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of a primary
obligor, (b) the obligation to make take-or-pay or similar payments, if
required, regardless of nonperformance by any other party or parties to an
agreement or (c) any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting
direct 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 other
balance sheet condition or


 


12

















 


any income statement condition of the primary obligor
or otherwise to maintain the solvency of the primary obligor, (iii) to
purchase, lease or otherwise acquire property, assets, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the holder of such
primary obligation against loss in respect thereof.  The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made (or, if less, the maximum
amount of such primary obligation for which such Person may be liable pursuant
to the terms of the agreement, instrument or other document evidencing such
Contingent Obligation) or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof, as determined by such
Person in good faith.


 


“Continuing Directors” shall mean (a) in the case of the
Borrower, the directors of the Borrower on the Closing Date, after giving
effect to the Nu-Gro Acquisition and the other transactions contemplated
hereby, and each other director, if, in each case, such other directors’
nomination for election to the board of directors is recommended by a majority
of the then Continuing Directors or such other director receives the vote of
the Equity Investors in his or her election by the stockholders of the Borrower
and (b) in the case of Holdings, upon and after the occurrence of the Holding
Company Event, the directors of Holdings on the date of the occurrence of the
Holdings Company Event and each other director, if, in each case, such other
directors’ nomination for election to the board of directors is recommended by
a majority of the then Continuing Directors or such other director receives the
vote of the Equity Investors in his or her election by the stockholders of
Holdings.


 


“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 Credit
Extension.


 


“Cumulative
Excess Cash Flow” means the sum of Excess Cash Flow for each
Fiscal Year commencing with the Fiscal Year ended December 31, 2004 and ending
with the Borrower’s most recently ended Fiscal Year.


 


“Current
Assets” means, with respect to any Person, all assets of such
Person that, in accordance with GAAP, would be classified as current assets on
the balance sheet of a Person conducting a business the same as or similar to
that of such Person, after deducting appropriate and adequate reserves
therefrom in accordance with GAAP.


 


“Current
Liabilities” means, with respect to any Person, as of any date
of determination, (a) all Indebtedness of such Person that by its terms is
payable on demand or matures within one year after the date of determination
(excluding any Indebtedness renewable or extendible, at the option of such
Person, to a date more than one year from such date or arising under a
revolving credit or similar agreement that obligates the lender or lenders to
extend credit during a period of more than one year from such
date), (b) all amounts of Funded Indebtedness of such Person required
to be paid or prepaid within one year after such date and (c) all other items
(including, without limitation, taxes accrued as estimated and trade payables
otherwise excluded from Indebtedness under clause (b) of the
definition thereof set forth below in this


 


13

















 


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


 


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


 


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


 


“Default Rate” means (a) when used with respect to
Obligations other than as set forth in clause (b) below, an interest
rate 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 Rate
Loan, 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% per
annum and (b) when used with respect to Letter of Credit Fees, a rate equal to
the Applicable Rate plus 2% per annum, in all cases to the fullest extent
permitted by applicable Laws.


 


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


 


“Deferred Payment Obligation” means the obligation of the
L/C Issuer to make payment to a beneficiary arising under a Letter of Credit a
fixed number of calendar days after such beneficiary presents the documents
called for in such Letter of Credit and with respect to which a draft is not
drawn by the beneficiary.


 


“Disposition” or “Dispose” means the sale, transfer, license, lease or
other disposition (including any sale and leaseback transaction) of any
property by any Person, including any sale, assignment, transfer or other
disposal, with or without recourse, of any notes or accounts receivable or any
rights and claims associated therewith (it being understood that the
abandonment of any IP Right which abandonment is otherwise not prohibited by
the 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.


 


14

















 


“Dollar
Equivalent” means, on any date of determination, in relation to
an amount denominated in a currency other than Dollars, the amount of Dollars
which could be purchased with such amount at the Spot Rate on such date.


 


“Dollar
Term Borrowing” means a borrowing consisting of simultaneous
Dollar 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 Section
2.01(a).


 


“Dollar
Term Commitment”
means, as to each Dollar Term Lender, its obligation to make a Dollar Term Loan
to the Borrower pursuant to Section 2.01(a) in a principal amount not to
exceed the amount set forth opposite such Lender’s name on Schedule 2.01
under the caption “Dollar Term Commitment” or in the Assignment and Assumption
pursuant to which such Lender becomes a party hereto, as applicable, as such
amount 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.


 


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


 


“Dollar
Term Loan” has the meaning specified in Section 2.01(a).


 


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


 


“Eligible Assignee” has the meaning specified in Section
10.07(g).


 


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


 


“Environmental Liability” means any liability, contingent
or otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower, any other Loan
Party 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 of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing; provided, however that
Environmental Liability shall not include the routine costs of complying with
Environmental Laws and obtaining and complying with Environmental Permits that
are incurred in the ordinary course of business and for which financial
reserves are not accrued and Capital Expenditures are not budgeted.


 


15

















 


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


 


“Equity Interests” means, with respect to any Person, all of
the shares of capital stock of (or other ownership or profit interests in) such
Person, all of the warrants, options or other rights for the purchase or
acquisition from such Person of shares of capital stock of (or other ownership
or profit interests in) such Person, all of the securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the purchase or
acquisition from such Person of such shares (or such other interests), and all
of the other ownership or profit interests in such Person (including, without
limitation, partnership, member or trust interests therein), whether voting or
nonvoting, and whether or not such shares, warrants, options, rights or other
interests are outstanding on any date of determination.


 


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


 


“ERISA” means the Employee Retirement Income Security Act
of 1974.


 


“ERISA Affiliate” means any trade or business (whether or
not incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).


 


“ERISA Event” means (a) a Reportable Event with respect
to a Pension Plan; (b) a withdrawal by any of the Loan Parties or any ERISA
Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer (as defined in
Section 4001(a)(2) of ERISA) or a cessation of operations that is treated
as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial
withdrawal by any of the Loan Parties or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the
treatment of an amendment to a Pension Plan or to a Multiemployer Plan as a
termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e)
an event or condition which constitutes grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any Pension
Plan or Multiemployer Plan; or (f) the imposition of any liability under Title
IV of ERISA, other than for PBGC premiums due but not delinquent under Section
4007 of ERISA, upon any of the Loan Parties or any ERISA Affiliate.


 


“Eurodollar Rate” means for any Interest Period with
respect to a Eurodollar Rate Loan, a rate per annum determined by the Administrative
Agent pursuant to the following formula:


 


	
  Eurodollar Rate  =

  	
   

  	
  LIBO Rate

  	
   

  
	
   

  	
  1.00 — Eurodollar Reserve
  Percentage

  



 


Where,


 


16

















 


“LIBO Rate” means, for such Interest Period:


 


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


 


(b)           if the rate
referenced in the preceding clause (a) does not appear on such page or
service or such page or service shall not be available, the rate per annum
equal to the rate determined by the Administrative Agent to be the offered rate
on such other page or other service that displays an average British Bankers
Association Interest Settlement Rate for deposits in Dollars (for delivery on
the first day of such Interest Period) with a term equivalent to such Interest
Period, determined as of approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period, or


 


(c)           if the rates
referenced in the preceding clauses (a) and (b) are not
available, the rate per annum determined by the Administrative Agent as the
rate of interest at which deposits in Dollars for delivery on the first day of
such Interest Period in same day funds in the approximate amount of the
Eurodollar Rate Loan being made, continued or converted by Bank of America and
with a term equivalent to such Interest Period would be offered by Bank of
America’s London Branch to major banks in the London interbank eurodollar
market at their request at approximately 4:00 p.m. (London time) two Business
Days 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 such
day, whether or not applicable to any Lender, under regulations issued from
time 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 “Eurocurrency
liabilities”).  The Eurodollar Rate for
each outstanding Eurodollar Rate Loan shall be adjusted automatically as of the
effective date of any change in the Eurodollar Reserve Percentage.


 


“Eurodollar Rate Loan” means a Loan that bears interest
at a rate based on the Eurodollar Rate.


 


“Event of Default” has the meaning specified in Section
8.01.


 


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


 


(i)            the aggregate
amount of all Capital Expenditures made in cash by the Borrower and its
Subsidiaries during such period,


 


17

















 


(ii)           the aggregate
amount of all Consolidated Cash Interest Expenses made by the Borrower and its
Subsidiaries during such period,


 


(iii)          the
aggregate amount of all taxes, including cash payments for Federal, state and
other income and franchise tax liabilities paid by the Borrower and its
Subsidiaries during such period,


 


(iv)          the aggregate amount
of all Scheduled Principal Payments made by the Borrower and its Subsidiaries
during such period,


 


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


 


(vi)          the aggregate amount
of all (A) voluntary prepayments of any Indebtedness (other than the
Obligations) 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 such
period; provided, that (1) such prepayments were not otherwise
prohibited hereunder and (2) in the case of clause (A), if such
Indebtedness consists of a revolving line of credit, the commitments under such
line of credit are permanently reduced by the amount of such prepayment,


 


(vii)         non-recurring cash
charges to the extent included in determining Consolidated EBITDA,


 


(viii)        management fees
permitted to be paid pursuant to Section 6.10;


 


(ix)           proceeds received
by or on behalf of the Borrower and its Subsidiaries from insurance claims with
respect to casualty events, business interruption or product recalls which
reimburse prior business expenses,


 


(x)            cash expenses or
charges incurred in connection with or in contemplation of the Nu-Gro
Transaction or, to the extent permitted hereunder, any Investment permitted
under Section 7.05, issuance of Equity Interests or issuance or
incurrence of Indebtedness permitted by Section 7.02 (whether or not
consummated),


 


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


 


(xii)          cash indemnity
payments received pursuant to indemnification provisions in any agreement in
connection with a Permitted Acquisition (or in any similar agreement related to
any other acquisition consummated prior to the Closing Date),


 


(xiii)         expenses incurred
in connection with deferred compensation arrangements in connection with the
Nu-Gro Transaction,


 


18

















 


(xiv)        cash from operations
used to consummate a Permitted Acquisition,


 


(xv)         to the extent added to
Consolidated Net Income in determining Consolidated EBITDA, Net Cash Proceeds
of Permitted Equity Issuances,


 


(xvi)        cash expenditures
made in respect of Swap Contracts during such period to the extent not
reflected in the computation of Consolidated EBITDA or Consolidated Cash
Interest Expense,


 


(xvii)       to the extent not
deducted in the computation of Net Cash Proceeds in respect of any Disposition
or condemnation giving rise thereto, the amount of any mandatory prepayment of
Indebtedness (other than Indebtedness hereunder or under any other Loan
Document), together with any interest, premium or penalties required to be paid
(and actually paid) in connection therewith,


 


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


 


(xix)         cash payments made
in satisfaction of non-current liabilities, and


 


(xx)          the
aggregate amount of all extraordinary cash charges made by the Borrower and its
Subsidiaries during such period,


 


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


 


“Exchange
Act” means the Securities Exchange Act of 1934, as amended from
time to time, and the regulations promulgated and the rulings issued
thereunder.


 


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


 


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


 


“Facility” means the Term Facility, the Revolving
Credit Facility, the Swing Line Sublimit or the Letter of Credit Sublimit, as
the context may require.


 


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


 


19

















 


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


 


“Federal Funds Rate” means, for any day, the rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day; provided that (a) if such
day is not a Business Day, the Federal Funds Rate for such day shall be such
rate on such transactions on the next preceding Business Day as so published on
the next succeeding Business Day, and (b) if no such rate is so published on
such next succeeding Business Day, the Federal Funds Rate for such day shall be
the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of
1%) charged to Bank of America on such day on such transactions as determined
by the Administrative Agent.


 


“Fee Letter” means the letter agreement, dated February
29, 2004, among the Borrower, the Administrative Agent, BAS, Bank of America,
CGMI and Citicorp North America, Inc.


 


“Fiscal
Quarter” means, with respect to Holdings, the Borrower or any of
their respective Subsidiaries, the period commencing January 1 in any
Fiscal Year and ending on or about the next succeeding March 31, the period
commencing on or about April 1 in any Fiscal Year and ending on or about
the next succeeding June 30, the period commencing on or about July 1 in
any Fiscal Year and ending on or about the next succeeding September 30 or the
period commencing on or about October 1 (such period, in each case,
determined in a manner consistent with prior practice) in any Fiscal Year and
ending 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 such
period, the period commencing on the date on which such Subsidiary is
incorporated, organized, formed or otherwise created and ending on the last day
of such period.


 


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


 


“Foreign
Corporation” means each Foreign Subsidiary that constitutes a “controlled foreign corporation” under
Section 957 of the Internal Revenue Code.


 


“Foreign Lender” has the meaning specified in Section
10.15(a)(i).


 


“Foreign
Subsidiary” means, at any time, each of the direct or indirect
Subsidiaries of the Borrower that is not a Domestic Subsidiary at such time.


 


“FRB” means the Board of Governors of the Federal Reserve
System of the United States.


 


20

















 


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


 


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


 


“GAAP”
means generally accepted accounting principles in effect from time to time in
the United States of America and applied on a consistent basis or Canadian
GAAP, as the context may require or as otherwise applicable, subject,  however, to the terms of Section
1.03.


 


“Governmental
Authority” 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.


 


“Governmental
Authorization” 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 Section
10.07(h).


 


“Guarantee
Supplement” has the meaning specified in Section 8(b) of
the Guaranty.


 


“Guarantee” means, as to any Person, (a) any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation payable or
performable by another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect 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 other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien).  The amount of any Guarantee shall be deemed
to be an amount equal to the stated or determinable amount of the


 


21

















 


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


 


“Guarantors” means, collectively, (i) the Domestic
Subsidiaries of the Borrower listed on Schedule 5.02, (ii) each other
Subsidiary of Holdings or the Borrower, as the case may be, that shall be
required to execute and deliver a Guaranty or Guarantee Supplement pursuant to Section
6.11 and (iii) upon delivery of the Holdings Joinder Agreement and Guaranty
pursuant to Section 6.15, Holdings.


 


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


 


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


 


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


 


“Holding Company Event” means the transactions occurring on
or after the Closing Date pursuant to which Holdings becomes the direct parent
company of the Borrower.


 


“Holdings “ means a corporation or limited liability
company organized under the laws of a jurisdiction located within the United
States that directly owns 100% of the Equity Interests in the Borrower.


 


“Holdings
Joinder Agreement and Guaranty” has the meaning specified in Section 6.15.


 


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


 


“Honor Date” has the meaning specified in Section
2.03(c)(i).


 


22

















 


“Increase
Effective Date” has the meaning specified in Section 2.14(b).


 


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


 


(a)           all indebtedness of
such Person for borrowed money;


 


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


 


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


 


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


 


(e)           all obligations of
such Person as lessee under Capitalized Leases;


 


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


 


(g)           all obligations of
such Person to purchase, redeem, retire, defease or otherwise make any payment
in respect of any Redeemable Equity Interests in such Person or any other
Person, valued, in the case of Redeemable Preferred Interests, at the greater
of its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends;


 


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


 


(i)            all obligations of
such Person under any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing, if the
transaction giving rise to such obligation is considered indebtedness for
borrowed money for tax purposes but is classified as an operating lease in
accordance with GAAP;


 


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


 


(k)           all Indebtedness
referred to in clauses (a) through (j) above secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property or assets (including, without
limitation, accounts and contract rights) owned by such Person, even though
such Person has not assumed or become liable for the payment of such
Indebtedness, valued at the lesser of (i) the aggregate unpaid amount of such
Indebtedness or, if not stated or determinable, the


 


23

















 


maximum
reasonably anticipated liability in respect thereof and (ii) the Fair Market
Value of such property or assets.


 


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


 


“Indemnified Liabilities” has the meaning specified in Section
10.05.


 


“Indemnitees” has the meaning specified in Section
10.05.


 


“Information” has the meaning specified in Section
10.08.


 


“Information Memorandum” means the information memorandum
dated March, 2004 used by the Arrangers in connection with the syndication
of the Commitments.


 


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


 


“Interest
Coverage Ratio” means, for any Measurement Period, the ratio of
(a) Consolidated EBITDA of the Borrower and its Subsidiaries for the period of
the four prior Fiscal Quarters ending on such date to (b) Consolidated
Cash Interest Expense of the Borrower and its Subsidiaries for such period; provided
that, solely for the purposes of determining the Interest Coverage Ratio for
the first three Measurement Periods ending after the Closing Date, the
Consolidated Cash Interest Expense of the Borrower and its Subsidiaries for
such Measurement Period shall be equal to (A) the Consolidated Cash Interest
Expense for the completed Fiscal Quarters since the Closing Date multiplied
by (B) a fraction the numerator of which is four and the
denominator of which is equal to the number of completed Fiscal Quarters since
the Closing Date, subject in each case to the adjustments set forth on Schedule
1.01(c).


 


“Interest Payment Date” means, (a) as to any Loan other
than a Base Rate Loan, the last day of each Interest Period applicable to such
Loan 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 or
Screen Rate Loan exceeds three months, the respective dates that fall every
three months after the beginning of such Interest Period shall also be Interest
Payment 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 the
Maturity Date of the Facility under which such Loan was made.


 


“Interest Period” means, as to each Eurodollar Rate Loan
and Screen Rate Loan, the period commencing on the date such Loan is disbursed
or converted to or continued as a Eurodollar Rate Loan or Screen Rate Loan and
ending on the date one, two, three or six months thereafter, as selected by the
Borrower in its Committed Loan Notice, or to the extent available to all
applicable Lenders, nine or twelve months thereafter; provided that:


 


24

















 


(i)            any Interest Period
that would otherwise end on a day that is not a Business Day shall be extended
to the next succeeding Business Day unless such Business Day falls in another
calendar month, in which case such Interest Period shall end on the next
preceding Business Day;


 


(ii)           any Interest Period
that begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of the calendar month
at the end of such Interest Period; and


 


(iii)          no Interest Period
shall extend beyond the Maturity Date of the Facility under which such Loan was
made.


 


“Investment”
means, with respect to any Person, (a) any direct or indirect purchase or
other acquisition (whether for cash, securities, property, services or
otherwise) by such Person of, or of a beneficial interest in, any Equity
Interests or Indebtedness of any other Person, (b) any direct or indirect
purchase or other acquisition (whether for cash, securities, property, services
or otherwise) by such Person of all or substantially all of the property and
assets of any other Person or of any division, branch or other unit of
operation of any other Person and (c) the making of any direct or indirect
loan, advance, other extension of credit or capital contribution by such Person
to, or any other investment by such Person in, any other Person (including,
without limitation, any arrangement pursuant to which the investor incurs
Indebtedness 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 other
Person).  The amount of any Investment
shall be the original cost of such Investment plus the cost of all
additions 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 Section
5.11.


 


“IP Security Agreement Supplement” has the meaning specified in Section
1 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 and
Derivatives Association, Inc., as in effect from time to time.


 


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


 


“Issuer
Documents” means with respect to any Letter of Credit, the
Letter of Credit Application, and any other document, agreement and instrument
entered into by the L/C Issuer and the Borrower (or any of its Subsidiaries) or
in favor the L/C Issuer and relating to any such Letter of Credit.


 


25

















 


“Judgment
Currency” 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 or
authorities, including the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or
administration thereof, and all applicable administrative orders, directed
duties, licenses, authorizations and permits of, and settlement agreements
with, any Governmental Authority, in each case whether or not having the force
of law.


 


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


 


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


 


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


 


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


 


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


 


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


 


“Lender” has the meaning specified in the introductory
paragraph hereto and, as the context requires, includes the L/C Issuer and the
Swing Line Lender.


 


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


 


“Letter of Credit” means any letter of credit issued
hereunder and shall include the Existing Letters of Credit.  A Letter of Credit may be a commercial
letter of credit or a standby letter of credit.


 


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


 


26

















 


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


 


“Letter
of 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 Credit
Sublimit is part of, and not in addition to, the Revolving Credit Facility.


 


“LIBO Rate” has the meaning set forth in the definition
of 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 preferential
arrangement in the nature of a security interest of any kind or nature
whatsoever (including any conditional sale or other title retention agreement,
any easement, right of way or other encumbrance on title to real property, and
any financing lease having substantially the same economic effect as any of the
foregoing).


 


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


 


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


 


“Loan Parties” means, collectively, the Borrower and each
Guarantor.


 


“Management
Shareholders” means Robert Caulk, Daniel Johnston, Steven
Schultz and David Jones.


 


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


 


“Material
Adverse Effect” means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, liabilities (actual
or contingent), or properties of the Borrower and its Subsidiaries, taken as a
whole, (b) the rights and remedies of the Administrative Agent or the
Lenders under any of the Loan Documents or (c) the ability of any of the
Loan Parties to perform its Obligations under any of the Loan Documents to
which it is or is to be a party.


 


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


 


27

















 


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


 


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


 


“Measurement
Period” means, at any date of determination, the most recently
completed four consecutive Fiscal Quarters on or immediately prior to such
date.


 


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


 


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


 


“Net
Cash Proceeds” means, with respect to any Disposition of any
property or assets, or the incurrence or issuance of any Indebtedness, or the
sale or issuance of any Equity Interests in any Person, or any condemnation or
casualty insurance proceeds received by or paid to or for the account of any
Person, as the case may be, the aggregate amount of cash received from time to
time (whether as initial consideration or through payment or disposition of
deferred consideration, but only as and when received) by or on behalf of such
Person for its own account in connection with any such transaction, after
deducting therefrom only:


 


(a)           reasonable brokerage
commissions, underwriting fees and discounts, legal fees, finder’s fees and
other similar fees, costs and commissions and reasonable out-of-pocket expenses
incurred in connection therewith;


 


(b)           the amount of taxes
payable in connection with or as a result of such transaction (including income
taxes reasonably estimated to be actually payable within two (2) years of the
date of such transaction as a result of any gain recognized in connection
therewith);


 


(c)           in the case of any
Disposition of any property or asset (including any casualty or condemnation of
such asset), the outstanding principal amount of, the premium or penalty, if
any, on, and any accrued and unpaid interest on, any Indebtedness (other than
Indebtedness under or in respect of the Loan Documents) that is secured by a
Lien on the property and assets subject to such Disposition and is repaid as a
result of Disposition; and


 


(d)           in the case of the
Disposition of any property and assets (including any casualty or condemnation
of such asset) of the Borrower or any of its Subsidiaries , any reserve for
adjustment in respect of (x) the sale price of such asset or assets established
in accordance with GAAP and (y) any liabilities associated with such asset or
assets and retained by Holdings, the Borrower or any of their respective
Subsidiaries after such sale or other disposition thereof, including, without
limitation, pension and other post-employment benefit liabilities and
liabilities related to environmental matters or against any indemnification
obligations associated with such transaction;


 


28

















 


in each case to
the extent, but only to the extent, that the amounts so deducted are properly
attributable to such transaction or to the property or asset that is the
subject thereof and (i) in the case of clauses (a) and (c) of
this definition, are actually paid at the time of receipt of such cash or
within 60 days thereafter to a Person that is not a Loan Party or Subsidiary of
a Loan Party, (ii) in the case of clause (b) of this definition, are
actually paid at the time of receipt of such cash or within 60 days thereafter
to a Person that is not a Loan Party or Subsidiary of a Loan Party or, so long
as such Person is not otherwise indemnified therefor, are reserved for in
accordance with GAAP, as in effect at the time of receipt of such cash (based
upon such Person’s reasonable estimate of such taxes), and paid to the
applicable taxation authority or other Governmental Authority on or before when
due and (iii) in the case of clause (d) of this definition, are actually
paid to the purchaser of the related property and assets within the period
specified for payment thereof in the applicable purchase agreement to a Person
that is not a Loan Party or Subsidiary of a Loan Party; provided,  however, that if, at the time any
such taxes or post-closing purchase price adjustments are actually paid or
otherwise satisfied, the reserve therefor or the amount otherwise retained by
such Person or its applicable Subsidiary for the payment thereof exceeds the
amount paid or otherwise satisfied, then the amount of such excess reserve or
retained amount, as the case may be, shall constitute “Net Cash Proceeds” on and as of the date
of 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), the
Borrower shall reduce the Commitments on such date in accordance with the terms
of Section 2.06(b), and shall prepay the Loans and cash collateralize
the Letters of Credit outstanding on such date in accordance with the terms of Section
2.05(b), in an amount equal to the amount of such excess reserve or
retained amount.


 


“Nonextension Notice Date” has the meaning specified in Section
2.03(b)(iii).


 


“Note” means a Term Note or a Revolving Credit Note, as
the context may require.


 


“Notice
of Intent to Cure” has the meaning specified in Section
6.13(d)(ii).


 


“NPL” means the National Priorities List under CERCLA.


 


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


 


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


 


“Nu-Gro
Acquisition Documents” means, collectively, the Arrangement
Agreement and  Shareholders Agreement.


 


“Nu-Gro
Material Adverse Effect” means (a) any adverse effect of
$1,000,000 or more on 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 (other than any effect of (i)
developments in the industries in which Nu-Gro carries on business which do not
have a disproportionate impact on Nu-Gro or its Subsidiaries and (ii) changes
in the price of the Nu-Gro Common Shares (as defined in the Arrangement
Agreement) in response to the


 


29

















 


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


 


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


 


“Obligations” means all advances to, and debts,
liabilities, obligations, covenants and duties of, any Loan Party arising under
any Loan Document or otherwise with respect to any Loan or Letter of Credit,
whether direct or indirect (including those acquired by assumption), absolute
or contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against
any Loan Party of any proceeding under any Debtor Relief Laws naming such
Person as the debtor in such proceeding, regardless of whether such interest
and fees are allowed claims in such proceeding. Without limiting the generality
of the foregoing, the Obligations of the Loan Parties under the Loan Documents
include (a) the obligation to pay principal, interest, Letter of Credit
commissions, charges, expenses, fees, Attorney Costs, indemnities and other
amounts payable by any Loan Party under any Loan Document and (b) the
obligation of any Loan Party to reimburse any amount in respect of any of the
foregoing that the Administrative Agent, in its sole discretion, may elect to
pay or advance on behalf of such Loan Party upon the failure of such Loan Party
to pay such amount.


 


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


 


“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 lease
under which such Person is the lessor.


 


“Other Taxes” has the meaning specified in Section
3.01(b).


 


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


 


“Parent” means a corporation or limited liability company
organized under the laws of a jurisdiction located within the United States
that, upon consummation of the Holding Company Event, directly owns 100% of the
Equity Interests of Holdings.


 


30

















 


“Participant” has the meaning specified in Section
10.07(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 Multiemployer
Plan, that is subject to Title IV of ERISA and is sponsored or maintained by
any of the Loan Parties or any ERISA Affiliate or to which any of the Loan
Parties or any ERISA Affiliate contributes or has an obligation to contribute,
or in the case of a multiple employer or other plan described in Section
4064(a) of ERISA, has made contributions at any time during the immediately
preceding five plan years.


 


“Permitted
Acquisition” has the meaning specified in Section 7.05(h).


 


“Permitted
Affiliate Investment” means (a) any capital contributions to the
Borrower (or upon consummation of the Holding Company Event, Holdings) made
directly or indirectly by one or more of the Equity Investors (and, upon
consummation of the Holding Company Event, contributed by Holdings to the
Borrower) or (b) the Net Cash Proceeds received by the Borrower or Holdings, as
the case may be, from the issuance and sale of Equity Interests to one or more
of the Equity Investors (and, upon consummation of the Holding Company Event,
contributed by Holdings to the Borrower); provided that on the date on
which any such Permitted Affiliate Investment is made, the Borrower shall
deliver to the Administrative Agent, on behalf of the Lenders, a certificate of
a Responsible Officer of the Borrower certifying that such capital
contributions or the Net Cash Proceeds received by the Borrower from such
issuance and sale are intended to constitute, and are to be used for, one or
more 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 Section
7.06.


 


“Permitted
Equity Issuance” means any sale or issuance of any Equity
Interests (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 the
Loans pursuant to Section 2.05(b).


 


“Permitted
Holdco Debt” has the meaning specified in Section 7.02(c)(ii).


 


“Permitted
Liens” means the following types of Liens (excluding any such
Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue
Code or by ERISA or any such Lien relating to or imposed in connection with any
Environmental Action):


 


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


 


(b)           Liens imposed by
law, such as materialmen’s, mechanics’, carriers’, workmen’s, storage and repairmen’s
Liens and other similar Liens arising in the ordinary course of business and
securing obligations (other than Indebtedness for borrowed money) to the extent
not otherwise required to be paid under Section 6.02;


 


(c)           Liens incurred or
pledges or deposits made to secure obligations incurred in the ordinary course
of business under workers’ compensation laws, unemployment


 


31

















 


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


 


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


 


(e)           any interest or
title of a lessor or sublessor or a licensor and any restriction or encumbrance
to which the interest or title of such lessor, sublessor or licensor may be
subject that is incurred in the ordinary course of business;


 


(f)            Liens arising out
of judgments or awards that do not constitute an Event of Default under Section
8.01(g);


 


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


 


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


 


(i)            easements,
rights-of-way, zoning restrictions and other encumbrances and survey
exceptions, minor defects or irregularities in title and other similar
restrictions on title to, or the use of, real property that do not, either
individually or in the aggregate, materially and adversely affect the use of
such real property for its intended purposes or the conduct of the business of the
Borrower and its Subsidiaries in the ordinary course and, in any case, that
were not incurred in connection with and do not secure Indebtedness or other
extensions of credit;


 


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


 


(k)           Liens encumbering
reasonable customary initial deposits and margin deposits and similar Liens
attaching to commodity trading accounts or other brokerage accounts incurred in
the ordinary course of business and not for speculative purposes.


 


“Permitted Subordinated Indebtedness” means any unsecured
Indebtedness of the Borrower that (a) is expressly subordinated to the prior
payment in full in cash of the Obligations on terms and conditions no less
favorable to the Lenders than the terms and conditions of the Senior
Subordinated 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 no
scheduled amortization or payments of principal prior to the scheduled Maturity
Date of the Term Facility, and (d) has covenant, default and remedy provisions
no more restrictive, and mandatory prepayment, repurchase or redemption
provisions no more onerous or expansive in scope, than


 


32

















 


those contained in the Senior Subordinated Notes
Documents, taken as a whole; provided any such Indebtedness shall
constitute Permitted Subordinated Indebtedness only if (i) both before and
after giving effect to the issuance or incurrence thereof, no Default or Event
of Default shall have occurred and be continuing, and (ii) the Chief Financial
Officer of the Borrower shall have delivered an officer’s certificate
demonstrating Pro Forma Compliance with the covenants set forth in Section
6.14 in form and substance reasonably satisfactory to the Administrative
Agent, it being understood that any capitalized or paid-in-kind interest or
accreted principal on such Indebtedness shall not constitute an issuance or
incurrence of Indebtedness for purposes of this proviso.


 


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


 


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


 


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


 


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


 


“Preferred Interests”
means, with respect to any Person, Equity Interests issued by such Person that
are entitled to a preference or priority over any other Equity Interests issued
by 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 in
the preliminary statements to this Agreement.


 


“primary
obligations” has the meaning specified in the definition of “Contingent Obligation” set forth above in
this Section 1.01.


 


“primary
obligor” has the meaning specified in the definition of “Contingent Obligation” set forth above in
this Section 1.01.


 


“Pro Forma Basis”, “Pro Forma Compliance” and “Pro Forma Effect” means, for purposes of
calculating compliance with each of the financial covenants set forth in Section
6.14 or Section 7.02(c)(ii), as applicable, in respect of a
Specified Transaction, that such Specified Transaction and the following
transactions in connection therewith shall be deemed to have occurred as of the
first 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 Interests
in any Subsidiary of the Borrower or any division, product line, or facility
used for operations of the Borrower or any of its Subsidiaries, shall be
excluded, and (ii) in the case of a Permitted Acquisition or Investment
described in the definition of 
“Specified Transaction”, shall be 


 


33

















 


included, (b) any retirement of Indebtedness, and (c)
any Indebtedness incurred or assumed by the Borrower or any of its Subsidiaries
in connection therewith and if such Indebtedness has a floating or formula
rate, shall have an implied rate of interest for the applicable period for
purposes of this definition determined by utilizing the rate which is or would
be in effect with respect to such Indebtedness as at the relevant date of
determination.  Calculations made
pursuant to this definition shall be (i) determined in good faith by a
Responsible Officer of the Borrower and may include adjustments, in the reasonable
determination of the Borrower as set forth in an officer’s certificate, to
reflect operating expense reductions reasonably expected to result from any
Specified Transaction or Specified Disposition and (ii) reasonably acceptable
to the Administrative Agent.  With
respect to any determination of Pro Forma Compliance which is required to be
made pursuant to the terms of this Agreement on a date other than the last day
of a Fiscal Quarter, then such determination shall be made in respect of the
Measurement Period ending on the last day of the Fiscal Quarter most recently
ended and for which financial statements have been delivered to the
Administrative Agent pursuant to Section 6.13.


 


“Pro Rata Share” means, with respect to each Lender at
any time, a fraction (expressed as a percentage, carried out to the ninth
decimal place), the numerator of which is the amount of the Commitment(s) of
such Lender under the applicable Facility or Facilities at such time and the
denominator of which is the amount of the Aggregate Commitments under the
applicable Facility or Facilities at such time; provided that if the
commitment of each Lender to make Loans and the obligation of the L/C Issuer to
make 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 Pro
Rata Share of such Lender immediately prior to such termination and after
giving effect to any subsequent assignments made pursuant to the terms hereof.  The initial Pro Rata Share of each Lender is
set forth opposite the name of such Lender on Schedule 2.01 or in the
Assignment and Assumption pursuant to which such Lender becomes a party hereto,
as applicable.


 


“Professional
Services Agreement” means the Professional Services Agreement
dated 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 be
amended, supplemented or otherwise modified hereafter from time to time in
accordance with the terms thereof, but solely to the extent permitted under the
terms of the Loan Documents.


 


“Qualifying
IPO” means the issuance by Parent or Holdings of its common
Equity Interests in an underwritten primary public offering (other than a
public offering pursuant to a registration statement on Form S-8) pursuant to
an effective registration statement filed with the SEC in accordance with the
Securities Act of 1933, as amended (whether alone or in connection with a
secondary public offering).


 


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


 


“Reduction Amount” has the meaning set forth in Section
2.05(b)(vi).


 


34

















 


“Register” has the meaning set forth in Section
10.07(c).


 


“Reportable Event” means any of the events set forth in
Section 4043(c) of ERISA, other than events for which the 30 day notice period
has been waived.


 


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


 


“Required
Financial Information” means, at any date of determination, the
Consolidated financial statements of Borrower and its Subsidiaries most
recently delivered to the Administrative Agent on or prior to such date
pursuant to, and satisfying all of the requirements of, Section 6.13(b)
or 6.13(c) and accompanied by the certificates and other information
required to be delivered therewith pursuant to Section 6.13(d).


 


“Required Lenders” means, as of any date of
determination, Lenders having more than 50% of the sum of the (a) Total
Outstandings (with the aggregate amount of each Lender’s risk participation and
funded participation in L/C Obligations and Swing Line Loans being deemed
“held” by such Lender for purposes of this definition), (b) aggregate unused
Term Commitments and (c) aggregate unused Revolving Credit Commitments; provided
that the unused Term Commitment, unused Revolving Credit Commitment of, and the
portion of the Total Outstandings held or deemed held by, any Defaulting Lender
shall 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 other
Governmental Authority, and all Governmental Authorizations, binding upon or
applicable to such Person or any of its Subsidiaries or to any of their
property, assets or businesses.


 


“Responsible
Officer” means (i) the chief executive officer, the president,
the chief financial officer, the principal accounting officer, any vice
president, secretary or the treasurer (or the equivalent of any of the
foregoing) of the Borrower (or upon the consummation of the Holding Company
Event, Holdings) or any of its Subsidiaries and (ii) in the case of a Committed
Loan Notice or a Swing Line Loan Notice, any person authorized to sign such
Committed Loan Notice or Swing Line Loan Notice by the board of directors of
the Borrower.


 


“Restricted
Payment” has the meaning specified in Section 7.06.


 


“Restricted
Subsidiary” means (a) each of the wholly owned Domestic
Subsidiaries and each of the other Subsidiaries of the Borrower (or upon the
consummation 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 any
Foreign Subsidiary that is a CFC that is organized, purchased or otherwise
acquired pursuant to Section 7.05(i)), or (b) each of the other
Subsidiaries of the Borrower (or upon the consummation of the Holding Company
Event, Holdings) that, at the option of the Borrower (i) executes and delivers
the Guaranty or a Guarantee Supplement and a


 


35

















 


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


 


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


 


“Revolving Credit Commitment” means, as to each Revolving
Credit Lender, its obligation to (a) make Revolving Credit Loans to the
Borrower pursuant to Section 2.01(b), (b) purchase participations in L/C
Obligations, and (c) purchase participations in Swing Line Loans, in an aggregate
principal amount at any one time outstanding not to exceed the amount set forth
opposite such Lender’s name on Schedule 2.01 under the caption
“Revolving Credit Commitment” or in the Assignment and Assumption pursuant to
which such Lender becomes a party hereto, as applicable, as such amount may be
adjusted from time to time in accordance with this Agreement.


 


“Revolving Credit Facility” means, at any time, the
aggregate amount of the Revolving Credit Lenders’ Revolving Credit Commitments
at such time.


 


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


 


“Revolving Credit Loan” has the meaning specified in Section
2.01(b).


 


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


 


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


 


“Screen
Rate” means, with respect to any Canadian Term Loan for any
Interest Period:


 


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


 


36

















 


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


 


“Screen
Rate 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 Contract
permitted under Article VI or VII that is entered into by and
between the Borrower and any Hedge Bank.


 


“Secured Obligations” has the meaning specified in Section
2 of the Security Agreement.


 


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


 


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


 


“Security Agreement Supplement” has the meaning specified in Section
1 of the Security Agreement.


 


“Senior
Financial Officer” means the chief financial officer, the
principal accounting officer or the treasurer of the Borrower.


 


“Senior
Subordinated Notes” means the senior unsecured subordinated
notes of the Borrower due 2009 in an aggregate principal amount of
$231,900,000.


 


“Senior
Subordinated Notes Documents” means all indentures, securities
purchase agreements, and other agreements, instruments and documents pursuant
to which the Senior Subordinated Notes have been issued or otherwise setting
forth the terms of the Senior Subordinated Notes, in each case as such
agreement, instrument or other document may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof, but
solely to the extent permitted under the terms of the Loan Documents.


 


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


 


37

















 


“Sight
Draft” means a draft drawn by a beneficiary under a Letter of
Credit and presented to the L/C Issuer, which draft is payable upon
presentation to the L/C Issuer together with the documents called for under
such Letter of Credit.


 


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


 


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


 


(b)           the present fair
salable value of the property and assets of such Person is not less than the
amount that will be required to pay the probable liability of such Person on
its debts as they become absolute and matured;


 


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


 


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


 


The fair value and
the present fair salable value of the property and assets of any such Person
shall be computed taking into account the aggregate amount of all payments in
respect of reimbursement, contribution and indemnification claims against any
other Person that, in light of the circumstances existing at such time, such
Person reasonably believes in good faith it will receive with reasonable
promptness.  The amount of contingent
liabilities of any such Person at any time shall be computed as the amount
that, 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 or
matured liability.


 


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


 


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


 


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


 


38

















 


“Sponsor”
means the THL Entities and their Affiliates and related funds and general
partners.


 


“Spot
Rate” for a currency means the rate determined by the
Administrative Agent to be the rate quoted by the Person acting in such
capacity as the spot rate for the purchase by such Person of such currency with
another currency through its principal foreign exchange trading office at
approximately 11:00 a.m. on the date two Business Days prior to the date as of
which the foreign exchange computation is made; provided  that
the Administrative Agent may obtain such spot rate from another financial
institution designated by the Administrative Agent if the Person acting in such
capacity does not have as of the date of determination a spot buying rate for
any such currency.


 


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


 


(a)           the issued and
outstanding shares of capital stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of whether
at the time shares of capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency);


 


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


 


(c)           the beneficial
interest in such trust or estate,


 


is at the time
directly or indirectly owned or controlled by such Person, by such Person and
one or more of its other Subsidiaries or by one or more of such Person’s other
Subsidiaries.


 


“Swap Contract” means (a) any and all rate swap
transactions, basis swaps, credit derivative transactions, forward rate
transactions, commodity swaps, commodity options, forward commodity contracts,
equity or equity index swaps or options, bond or bond price or bond index swaps
or options or forward bond or forward bond price or forward bond index
transactions, interest rate options, forward foreign exchange transactions, cap
transactions, floor transactions, collar transactions, currency swap
transactions, cross-currency rate swap transactions, currency options, spot
contracts, or any other similar transactions or any combination of any of the
foregoing (including any options to enter into any of the foregoing), whether
or 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 of
master agreement published by the International Swaps and Derivatives
Association, Inc., any International Foreign Exchange Master Agreement, or any
other master agreement (any such master agreement, together with any related
schedules, a “Master Agreement”),
including any such obligations or liabilities under any Master Agreement.


 


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


 


39

















 


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


 


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


 


“Swing Line Loan” has the meaning specified in Section
2.04(a).


 


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


 


“Swing Line Sublimit” means an amount equal to the lesser
of (a) $10,000,000 and (b) the Revolving Credit Commitments.  The Swing Line Sublimit is part of, and not
in addition to, the Revolving Credit Facility Commitments.


 


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


 


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


 


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


 


“Term
Lenders” means, collectively, the Dollar Term Lenders and the
Canadian Term Lenders.


 


“Term Loans” means, collectively, the Dollar Term Loans
and the Canadian Term Loans.


 


“Term Note” means a promissory note of the Borrower
payable to the order of any Term Lender or its registered assigns, in
substantially the form of Exhibit C-1 hereto, evidencing the
aggregate indebtedness of the Borrower to such Term Lender resulting from the
Term Loans made by such Term Lender.


 


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


 


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


 


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


 


40

















 


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


 


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


 


“Type” means, with respect to a Loan, its character as a
Base 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 Section
2.03(c)(i).


 


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


 


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


 


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


 


(ii)           such Revolving Credit Lender’s Pro
Rata Share of (A) the aggregate Available Amount of all Letters of Credit
outstanding at such time, (B) the aggregate principal amount of all L/C
Advances 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 the
Swing 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 of
capital stock of the Domestic Subsidiaries of Nu-Gro to the Borrower or such
other reorganization of the Domestic Subsidiaries of Nu-Gro as may be
acceptable to the Arrangers having the result that such Domestic Subsidiaries
of Nu-Gro are direct first or second-tier Domestic Subsidiaries of the
Borrower.


 


“Withdrawal
Liability” has the meaning specified in Part I of Subtitle E of
Title IV of ERISA.


 


41

















 


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


 


1.02         Other
Interpretive Provisions.  With
reference to this Agreement and each other Loan Document, unless otherwise
specified herein or in such other Loan Document:


 


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


 


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


 


(ii)           Article, Section,
Exhibit and Schedule references are to the Loan Document in which such
reference 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 in
physical or electronic form.


 


(c)           In the computation
of 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 “to
and including.”


 


(d)           Section headings
herein and in the other Loan Documents are included for convenience of
reference only and shall not affect the interpretation of this Agreement or any
other Loan Document.


 


1.03         Accounting
Terms.  (a)  All
accounting terms not specifically or completely defined herein shall be
construed in conformity with, and all financial data (including financial
ratios and other financial calculations) required to be submitted pursuant to
this Agreement shall be prepared in conformity with, GAAP applied in a manner
consistent with that used in preparing the Audited Financial Statements, except
as otherwise specifically prescribed herein.


 


(b)           If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either the Borrower or the Required Lenders shall so request, the
Administrative Agent, the Lenders and the Borrower shall negotiate in good
faith to amend such ratio or requirement to preserve the original intent
thereof in light of such change in GAAP (subject to the approval of the
Required Lenders); provided that, until so amended, (i) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (ii) the Borrower shall provide to the Administrative
Agent and the Lenders financial statements and other documents required under
this Agreement or as reasonably requested hereunder setting forth a
reconciliation between


 


42

















 


calculations of such ratio or requirement
made before and after giving effect to such change in GAAP.


 


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


 


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


 


1.05         References
to Agreements and Laws.  Unless
otherwise expressly provided herein, (a) references to Constitutive Documents,
agreements (including the Loan Documents) and other contractual instruments
shall be deemed to include all subsequent amendments, restatements, extensions,
supplements and other modifications thereto, but only to the extent that such
amendments, restatements, extensions, supplements and other modifications are
not prohibited by any Loan Document; and (b) references to any Law shall
include all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting such Law.


 


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


 


1.07         Currency
Equivalents Generally.  Any
amount specified in this Agreement (other than in Articles II, IX
and X) or any of the other Loan Documents to be in a currency other than
Dollars shall also include the equivalent of such amount in Dollars, such
equivalent amount to be determined at the rate of exchange quoted by Bank of
America in New York at the close of business on the Business Day immediately
preceding any date of determination thereof, to prime banks in New York, New
York for the spot purchase in the New York foreign exchange market of such
amount in such currency with U.S. Dollars. 
Any conversion of Dollars into Canadian Dollars will be made by the
Administrative Agent at the then-applicable Spot Rate.


 


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


 


ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS


 


2.01         The Loans.  (a)  The Term Borrowings.  Subject to the terms and conditions set
forth herein, (i) each Dollar Term Lender severally agrees to make a single
loan (consisting of a Dollar Term Loan pursuant to the Dollar Term Facility in
an amount equal to its Pro Rata Share of the Dollar Term Facility (each such
loan advanced by any Dollar Term Lender


 


43

















 


being a “Dollar Term Loan”) and (ii) each Canadian
Term Lender severally agrees to make a single loan (consisting of a Canadian
Term Loan pursuant to the Canadian Term Facility in an amount equal to its Pro
Rata Share of the Canadian Term Facility (each such loan advanced by a Canadian
Term Lender being a “Canadian
Term Loan”), in each case, to the Borrower on (i) the Closing
Date or (ii) if such Term Lender has increased its Term Commitment pursuant to Section
2.14, the Increase Effective Date. 
Each such Borrowing shall be in U.S. Dollars or Canadian Dollars, as
applicable, and shall consist of Term Loans made simultaneously by the Term
Lenders in accordance with their respective Pro Rata Share of the Term
Facility.  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 Rate
Loans, as applicable, as further provided herein.


 


(b)           The Revolving Credit Borrowings.  Subject to the terms and conditions set
forth herein, each Revolving Credit Lender severally agrees to make loans (each
such loan, a “Revolving Credit Loan”) to the Borrower
from time to time, on any Business Day during the Availability Period, in an
aggregate amount not to exceed at any time outstanding the amount of such
Lender’s Revolving Credit Commitment; provided, however, that
after giving effect to any Revolving Credit Borrowing, (i) the Total
Outstandings shall not exceed the Aggregate Commitments, and (ii) the aggregate
Outstanding Amount of the Revolving Credit Loans of any Lender, plus
such Lender’s Pro Rata Share of the Outstanding Amount of all L/C Obligations, plus
such Lender’s Pro Rata Share of the Outstanding Amount of all Swing Line Loans
shall not exceed such Lender’s Revolving Credit Commitment.  Within the limits of each Lender’s Revolving
Credit Commitment, and subject to the other terms and conditions hereof, the
Borrower may borrow under this Section 2.01(b), prepay under Section
2.05, and reborrow under this Section 2.01(b).  Revolving Credit Loans may be Base Rate
Loans or Eurodollar Rate Loans, as further provided herein.


 


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


 


44

















 


signed by a Responsible Officer of the Borrower.  Each Borrowing of, conversion to or
continuation 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 than
Canadian Term Loans, $2,000,000 or a whole multiple of $1,000,000 in excess
thereof and (B) in the case of Canadian Term Loans, CD2,000,000 or a whole
multiple of CD1,000,000 in excess thereof. 
Except as provided in Sections 2.03(c) and 2.04(c), each
Borrowing 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) shall
specify (A) whether the Borrower is requesting a Term Borrowing, a Revolving
Credit Borrowing, a conversion of Term Loans or Revolving Credit Loans from one
Type to the other, or a continuation of Screen Rate Loans or Eurodollar Rate
Loans, (B) the requested date of the Borrowing, conversion or continuation, as
the case may be (which shall be a Business Day), (C) the principal amount of
Loans to be borrowed, converted or continued, (D) the Type of Loans to be
borrowed or to which existing Term Loans or Revolving Credit Loans are to be
converted, and (E) if applicable, the duration of the Interest Period with
respect thereto.  If the Borrower fails
to specify a Type of Loan in a Committed Loan Notice or if the Borrower fails
to give a timely notice requesting a conversion or continuation, then the
applicable Term Loans or Revolving Credit Loans shall be made as, or converted
to, Base Rate Loans (except in the case of Canadian Term Loans, which shall
always be Screen Rate Loans, and upon such failure the Borrower shall be deemed
to have specified an Interest Period for Screen Rate Loans of one month).  Any such automatic conversion to Base Rate
Loans shall be effective as of the last day of the Interest Period then in
effect 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 Committed
Loan Notice, but fails to specify an Interest Period, it will be deemed to have
specified an Interest Period of one month.


 


(b)           Following receipt of a Committed Loan Notice, the
Administrative Agent shall promptly notify each Lender of the amount of its Pro
Rata Share of the applicable Term Loans or Revolving Credit Loans, and if no
timely notice of a conversion or continuation is provided by the Borrower, the
Administrative Agent shall notify each Lender of the details of any automatic
conversion to Base Rate Loans described in Section 2.02(a).  In the case of a Term Loan Borrowing or a
Revolving Credit Borrowing, each Appropriate Lender shall make the amount of
its Loan available to the Administrative Agent in immediately available funds
at the Administrative Agent’s Office not later than 1:00 p.m. on the Business
Day specified in the applicable Committed Loan Notice.  Upon satisfaction of the applicable
conditions set forth in Section 4.02 (and, if such Borrowing is the
initial Credit Extension, Section 4.01), the Administrative Agent shall
make all funds so received available to the Borrower in like funds as received
by the Administrative Agent either by (i) crediting the account of the Borrower
on the books of Bank of America with the amount of such funds or (ii) wire
transfer of such funds, in each case in accordance with instructions provided
to (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 by
the Borrower, there are L/C Borrowings outstanding, then the proceeds of such
Borrowing first shall be applied to the payment in full of any such L/C
Borrowings.


 


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


 


45

















 


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


 


(d)           The Administrative Agent shall promptly notify the Borrower
and the Lenders of the interest rate applicable to any Interest Period for
Screen Rate Loans or Eurodollar Rate Loans upon determination of such interest
rate.  The determination of the Screen
Rate and the Eurodollar Rate by the Administrative Agent shall be conclusive in
the absence of manifest error.  At any
time that Base Rate Loans are outstanding, the Administrative Agent shall
notify the Borrower and the Lenders of any change in Bank of America’s prime
rate used in determining the Base Rate promptly following the public
announcement of such change.


 


(e)           After giving effect to all Term Borrowings, all Revolving
Credit Borrowings, all conversions of Term Loans or Revolving Credit Loans from
one Type to the other, and all continuations of Term Loans or Revolving Credit
Loans as the same Type, there shall not be more than fifteen Interest Periods
in effect.


 


(f)            The failure of any Lender to make the Loan to be made by
it as part of any Borrowing shall not relieve any other Lender of its
obligation, 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 make
the Loan to be made by such other Lender on the date of any Borrowing.


 


(g)           For the avoidance of doubt, nothing in this Section
2.02 is intended to result in, or permit, any redenomination of any
Canadian Term Loan into a Dollar Term Loan or of any Dollar Term Loan into a
Canadian Term Loan.


 


2.03         Letters of
Credit.  (a)  The Letter of Credit Commitment.  (i) 
Subject to the terms and conditions set forth herein, (A) the L/C Issuer
agrees, in reliance upon the agreements of the other Revolving Credit Lenders
set forth in this Section 2.03, (1) from time to time on any Business
Day during the period from the Closing Date until the Letter of Credit
Expiration 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 accordance
with 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 Letters
of Credit issued for the account of the Borrower and any drawings thereunder
(including Sight Drafts, Acceptances and Deferred Payment Obligations); provided
that after giving effect to any L/C Credit Extension with respect to any Letter
of Credit, (x) the Total Outstandings shall not exceed the Aggregate
Commitments, (y) the aggregate Outstanding Amount of the Revolving Credit Loans
of any Lender, plus such Lender’s Pro Rata Share of the Outstanding
Amount of all L/C Obligations, plus such Lender’s Pro Rata Share of the
Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s
Revolving Credit Commitment, and (z) the Outstanding Amount of the L/C
Obligations shall not exceed the Letter of Credit Sublimit.  Each request by the Borrower for the
issuance or amendment of a Letter of Credit shall be deemed to be a
representation by the Borrower that the L/C Credit Extension so requested
complies with the conditions set forth in the proviso to the preceding
sentence.  Within the foregoing limits,
and subject to the terms and conditions hereof, the Borrower’s ability to
obtain Letters of Credit shall be fully revolving, and accordingly the Borrower
may, during the foregoing period, obtain Letters of Credit to replace Letters
of Credit that have expired or that have been drawn upon and reimbursed.  All Existing Letters of Credit shall be
deemed to have


 


46

















 


been issued pursuant hereto, and from and after the
Closing Date shall be subject to and governed by the terms and conditions
hereof.


 


(ii)           The L/C Issuer
shall 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 twelve
months after the date of issuance or last extension, unless the Required
Lenders have approved such expiry date; or


 


(B)           the expiry date of such requested
Letter of Credit would occur after the Letter of Credit Expiration Date, unless
all the Revolving Credit Lenders (other than Defaulting Lenders) have approved
such expiry date.


 


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


 


(A)          any order, judgment or decree of any
Governmental Authority or arbitrator shall by its terms purport to enjoin or
restrain the L/C Issuer from issuing such Letter of Credit, or any Law
applicable to the L/C Issuer or any request or directive (whether or not having
the force of law) from any Governmental Authority with jurisdiction over the
L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the
issuance of letters of credit generally or such Letter of Credit in particular
or shall impose upon the L/C Issuer with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which the L/C Issuer is not
otherwise compensated hereunder) not in effect on the Closing Date, or shall
impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which, in each case, the L/C Issuer in good
faith deems material to it;


 


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


 


(C)           except as otherwise agreed by the
Administrative Agent and the L/C Issuer, such Letter of Credit is in an initial
face 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 in
a currency other than Dollars or has provisions that permit the stated face
amount of such Letter of Credit to be increased; or


 


(iv)          The L/C Issuer shall be under no obligation to amend any
Letter of Credit if (A) the L/C Issuer would have no obligation at such time to
issue 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 amendment
to such Letter of Credit.


 


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


 


47

















 


Business Days (or such later date and time as
the Administrative Agent and the L/C Issuer may agree in a particular instance
in their sole discretion) prior to the proposed issuance date or date of
amendment, as the case may be.  In the
case of a request for an initial issuance of a Letter of Credit, such Letter of
Credit Application shall specify in form and detail reasonably satisfactory to
the L/C Issuer:  (A) the proposed
issuance date of the requested Letter of Credit (which shall be a Business
Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and
address of the beneficiary thereof; (E) the documents to be presented by such
beneficiary in case of any drawing thereunder; (F) the full text of any
certificate to be presented by such beneficiary in case of any drawing
thereunder; and (G) such other matters as the L/C Issuer may reasonably
require.  In the case of a request for
an amendment of any outstanding Letter of Credit, such Letter of Credit Application
shall 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 to
the L/C Issuer and the Administrative Agent such other documents and
information pertaining to such requested Letter of Credit issuance or
amendment, including any Issuer Documents, as the L/C Issuer or the
Administrative Agent may require.


 


(ii)           Promptly after receipt of any Letter of Credit
Application, the L/C Issuer will confirm with the Administrative Agent (by
telephone or in writing) that the Administrative Agent has received a copy of
such Letter of Credit Application from the Borrower and, if not, the L/C Issuer
will provide the Administrative Agent with a copy thereof.  Unless the L/C Issuer has received written
notice from any Lender, the Administrative Agent or any Loan Party, at least
one Business Day prior to the requested date of issuance or amendment of the
applicable Letter of Credit, that one or more applicable conditions contained
in Article IV shall not then be satisfied, then, subject to the terms
and conditions hereof, the L/C Issuer shall, on the requested date, issue a
Letter of Credit for the account of the Borrower or enter into the applicable
amendment, as the case may be. 
Immediately upon the issuance of each Letter of Credit, each Revolving
Credit Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the L/C Issuer a risk participation in such Letter of
Credit in an amount equal to the product of such Lender’s Pro Rata Share times
the amount of such Letter of Credit.


 


(iii)          If the Borrower so requests in any applicable Letter of
Credit 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-Extension
Letter of Credit”); provided that any such Auto-Extension
Letter of Credit must permit the L/C Issuer to prevent any such renewal at
least once in each twelve-month period (commencing with the date of issuance of
such Letter of Credit) by giving prior notice to the beneficiary thereof not
later than a day (the “Nonextension
Notice Date”) in each such twelve-month period to be agreed upon
at the time such Letter of Credit is issued. 
Unless otherwise directed by the L/C Issuer, the Borrower shall not be
required to make a specific request to the L/C Issuer for any such
extension.  Once an Auto-Extension
Letter of Credit has been issued, the Lenders shall be deemed to have
authorized (but may not require) the L/C Issuer to permit the extension of such
Letter of Credit at any time to an expiry date not later than the Letter of
Credit Expiration Date; provided, however, that the L/C Issuer
shall not permit any such extension if (A) the L/C Issuer has determined that
it would not be permitted, or would have no obligation at such time to issue
such Letter of Credit in its revised form under the terms hereof (by reason of
the provisions of Section 2.03(a)(ii) or otherwise), or


 


48

















 


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


 


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


 


(c)           Drawings and Reimbursements; Funding of Participations.  (i) 
Upon receipt from the beneficiary of any Letter of Credit of any notice
of a drawing under such Letter of Credit, the L/C Issuer shall notify the
Borrower and the Administrative Agent thereof. 
If the L/C Issuer notifies the Borrower of such payment prior to 1:00
p.m. on the date of any payment by the L/C Issuer under a Letter of Credit (each
such date, an “Honor Date”), the Borrower shall
reimburse the L/C Issuer through the Administrative Agent in an amount equal to
the amount of such drawing; provided, that if such notice is not
provided to the Borrower prior to 1:00 p.m. on the Honor Date, then the
Borrower shall reimburse the L/C Issuer through the Administrative Agent in an
amount equal to the amount of such drawing on the next succeeding Business Day
and such extension of time shall be reflected in computing fees in respect of
any such Letter of Credit.  If the
Borrower fails to so reimburse the L/C Issuer by such time, the Administrative
Agent shall promptly notify each Revolving Credit Lender of the Honor Date, the
amount 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 deemed
to have requested a Revolving Credit Borrowing of Base Rate Loans to be
disbursed on the Honor Date in an amount equal to the Unreimbursed Amount,
without regard to the minimum and multiples specified in Section 2.02
for the principal amount of Base Rate Loans, but subject to the amount of the
unutilized portion of the Revolving Credit Commitments and the conditions set
forth in Section 4.02 (other than the delivery of a Committed Loan
Notice).  Any notice given by the L/C
Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i)
may be given by telephone if immediately confirmed in writing; provided
that the lack of such an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.


 


(ii)           Each Revolving Credit Lender (including the Lender acting
as L/C Issuer) shall upon any notice pursuant to Section 2.03(c)(i) make
funds available to the Administrative Agent for the account of the L/C Issuer
at the Administrative Agent’s Office in an amount equal to its Pro Rata Share
of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day
specified in such notice by the Administrative Agent, whereupon, subject to the
provisions of Section 2.03(c)(iii), each Revolving Credit Lender that so
makes funds available shall be deemed to have made a Base Rate Loan to the
Borrower in such amount.  The
Administrative Agent shall remit the funds so received to the L/C Issuer.


 


(iii)          With respect to any Unreimbursed Amount that is not fully
refinanced by a Revolving Credit Borrowing of Base Rate Loans because the
conditions set forth in Section 4.02


 


49

















 


cannot be satisfied or for any other reason,
the Borrower shall be deemed to have incurred from the L/C Issuer an L/C
Borrowing 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 the
Administrative Agent for the account of the L/C Issuer pursuant to Section
2.03(c)(ii) shall be deemed payment in respect of its participation in such
L/C Borrowing and shall constitute an L/C Advance from such Lender in
satisfaction of its participation obligation under this Section 2.03.


 


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


 


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


 


(vi)          If any Revolving Credit Lender fails to make available to
the Administrative Agent for the account of the L/C Issuer any amount required
to be paid by such Lender pursuant to the foregoing provisions of this Section
2.03(c) by the time specified in Section 2.03(c)(ii), the L/C Issuer
shall be entitled to recover from such Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the L/C Issuer at a rate per annum equal to the
Federal Funds Rate from time to time in effect.  A certificate of the L/C Issuer submitted to any Revolving Credit
Lender (through the Administrative Agent) with respect to any amounts owing
under this Section 2.03(c)(vi) shall be conclusive absent manifest
error.


 


(d)           Repayment of Participations.  (i) 
At any time after the L/C Issuer has made a payment under any Letter of
Credit and has received from any Revolving Credit Lender such Lender’s L/C
Advance 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 any
payment in respect of the related Unreimbursed Amount or interest thereon
(whether directly from the Borrower or otherwise, including proceeds of Cash
Collateral applied thereto by the Administrative Agent), the Administrative
Agent will distribute to such Lender its Pro Rata Share thereof (appropriately
adjusted, in the case of interest payments, to reflect the period of time
during which such


 


50

















 


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


 


(ii)           If any payment received by the Administrative Agent for
the account of the L/C Issuer pursuant to Section 2.03(c)(i) is required
to 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 its
discretion), each Revolving Credit Lender shall pay to the Administrative Agent
for the account of the L/C Issuer 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 is returned by such Lender, at a rate per annum equal to the
Federal Funds Rate from time to time in effect.


 


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


 


(i)            any lack of
validity or enforceability of such Letter of Credit, this Agreement, or any
other Loan Document;


 


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


 


(iii)          any draft, demand,
certificate or other document presented under such Letter of Credit proving to
be forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under such Letter of Credit;


 


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


 


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


 


51

















 


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


 


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


 


(f)            Role of L/C Issuer.  Each Lender and the Borrower agree that, in paying any drawing
under a Letter of Credit, the L/C Issuer shall not have any responsibility to
obtain any document (other than any sight draft, certificates and documents
expressly required by the Letter of Credit) or to ascertain or inquire as to
the validity or accuracy of any such document or the authority of the Person
executing or delivering any such document. 
None of the L/C Issuer, any Agent-Related Person nor any of the
respective correspondents, participants or assignees of the L/C Issuer shall be
liable to any Lender for (i) any action taken or omitted in connection herewith
at the request or with the approval of the Lenders or the Required Lenders, as
applicable; (ii) any action taken or omitted in the absence of gross negligence
or willful misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Letter of Credit Application.  The
Borrower hereby assumes all risks of the acts or omissions of any beneficiary or
transferee 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’s
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement.  None of the L/C Issuer, any Agent-Related Person, nor any of the
respective correspondents, participants or assignees of the L/C Issuer, shall
be 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 may
have a claim against the L/C Issuer, and the L/C Issuer may be liable to the
Borrower, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Borrower which the Borrower
proves were caused by the L/C Issuer’s willful misconduct or gross negligence
or the L/C Issuer’s willful or grossly negligent failure to pay under any Letter
of Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit.  In furtherance and not in
limitation of the foregoing, the L/C Issuer may accept documents that appear on
their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary, and the L/C Issuer
shall not be responsible for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, 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 has
honored any full or partial drawing request under any Letter of Credit and such
drawing has resulted in an L/C Borrowing and the conditions set forth in Section
4.02 to a Revolving Credit Borrowing cannot then be met, or (ii) if, as of
the Letter of Credit Expiration Date, any Letter of Credit for any reason
remains outstanding and partially or wholly undrawn, the Borrower shall
immediately Cash Collateralize the then Outstanding Amount of all L/C


 


52

















 


Obligations (in an amount equal to such
Outstanding Amount determined as of the date of such L/C Borrowing or the
Letter of Credit Expiration Date, as the case may be).  Sections 2.05 and 8.02 set
forth certain additional requirements to deliver Cash Collateral
hereunder.  For purposes of this Section
2.03, Section 2.05 and Section 8.02, “Cash Collateralize”
means to pledge and deposit with or deliver to the Administrative Agent, for
the benefit of the L/C Issuer and the Lenders, as collateral for the L/C
Obligations, 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 “Backstop
L/C”) pursuant to documentation in form and substance reasonably
satisfactory to the Administrative Agent and the L/C Issuer (which documents
are hereby consented to by the Lenders). 
Derivatives of such term have corresponding meanings.  The Borrower hereby grants to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, a
security interest in all such cash, deposit accounts and all balances therein
and all proceeds of the foregoing.  Cash
Collateral shall be maintained in blocked, non-interest bearing deposit
accounts at Bank of America.  If at any
time the Administrative Agent determines that any funds held as Cash Collateral
are subject to any right or claim of any Person other than the Administrative
Agent or that the total amount of such funds or Backstop L/Cs then held by the
L/C Issuer is less than the aggregate Outstanding Amount of all L/C
Obligations, the Borrower will, forthwith upon demand by the Administrative
Agent, either (x) deliver one or more additional Backstop L/Cs or (y) pay to
the Administrative Agent, as additional funds to be deposited and held in the
deposit accounts at Bank of America as aforesaid, an amount equal to the excess
of (a) such aggregate Outstanding Amount over (b) the total amount of
funds, if any, then held as Cash Collateral that the Administrative Agent
determines to be free and clear of any such right and claim or subject to such
existing Backstop L/Cs.  Upon the
drawing of any Letter of Credit for which funds are on deposit as Cash
Collateral, such funds shall be applied, to the extent permitted under
applicable law, to reimburse the L/C Issuer. 
To the extent the amount of any Cash Collateral exceeds the then
Outstanding Amount of such L/C Obligations and so long as no Event of Default
has occurred and is continuing, the excess shall be refunded to the
Borrower.  To the extent that the
aggregate amount available to be drawn under any Backstop L/C exceeds the
Outstanding Amount of such L/C Obligations, then the L/C Issuer shall, upon
request by the Borrower, use reasonable efforts to cause the aggregate amount
available to be drawn under any Backstop L/C to be reduced by the amount of
such excess.


 


(h)           Applicability of ISP98 and UCP.  Unless otherwise expressly agreed by the L/C
Issuer and the Borrower when a Letter of Credit is issued (including any such
agreement applicable to an Existing Letter of Credit), (i) the rules of ISP
shall apply to each standby Letter of Credit, and (ii) the rules of the Uniform
Customs and Practice for Documentary Credits, as most recently published by the
International Chamber of Commerce at the time of issuance shall apply to each
commercial Letter of Credit.


 


(i)            Letter of Credit Fees.  The Borrower shall pay to the Administrative Agent for the
account of each Revolving Credit Lender in accordance with its Pro Rata Share a
Letter of Credit fee (the “Letter of Credit Fee”) for each outstanding
Letter of Credit equal to the Applicable Rate for Revolving Credit Loans which
are Eurodollar Rate Loans times the daily maximum amount available to be
drawn under such Letter of Credit.  Such
Letter 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, September
and December, commencing with the first such date to occur after the issuance
of such Letter of Credit, on the Letter of Credit Expiration Date and
thereafter on demand.  If there is any
change in the Applicable Rate specified in the preceding sentence during any
quarter, the daily maximum amount of each Letter of Credit shall be computed
and multiplied by the Applicable Rate separately for each period during such
quarter that such Applicable Rate was in effect.


 


(j)            Fronting Fee and Documentary and Processing Charges
Payable to L/C Issuer.  The Borrower
shall pay directly to the L/C Issuer for its own account a fronting fee with
respect to each Letter of Credit equal to 0.125% per annum times the average
daily maximum amount available to be drawn under such Letter of Credit.  Such fronting fee shall be computed on a
quarterly basis in arrears.  Such
fronting fee shall be due and payable on the last Business Day of each of such
March, June, September and December, commencing with the first such date to


 


53

















 


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


 


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


 


2.04         Swing Line
Loans.  (a)  The Swing Line.  Subject to the terms and conditions set
forth herein, the Swing Line Lender agrees to make loans (each such loan, a “Swing Line Loan”) to
the Borrower from time to time on any Business Day during the Availability
Period in an aggregate amount not to exceed at any time outstanding the amount
of the Swing Line Sublimit, notwithstanding the fact that such Swing Line
Loans, when aggregated with the Pro Rata Share of the Outstanding Amount of
Loans and L/C Obligations of the Lender acting as Swing Line Lender, may exceed
the amount of such Lender’s Commitment; provided, however, that
after giving effect to any Swing Line Loan, (i) the Total Outstandings shall
not exceed the Aggregate Commitments, and (ii) the aggregate Outstanding Amount
of the Revolving Credit Loans of any Lender, plus such Lender’s Pro Rata
Share of the Outstanding Amount of all L/C Obligations, plus such
Lender’s Pro Rata Share of the Outstanding Amount of all Swing Line Loans shall
not exceed such Lender’s Revolving Credit Commitment, and provided  further
that the Borrower shall not use the proceeds of any Swing Line Loan to
refinance any outstanding Swing Line Loan. 
Within the foregoing limits, and subject to the other terms and
conditions 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 Rate
Loan.  Immediately upon the making of a
Swing Line Loan, each Revolving Credit Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the Swing Line Lender
a risk participation in such Swing Line Loan in an amount equal to the product
of such Lender’s Pro Rata Share times the amount of such Swing Line
Loan.


 


(b)           Borrowing Procedures.  Each Swing Line Borrowing shall be made upon the Borrower’s
irrevocable notice to the Swing Line Lender and the Administrative Agent, which
may be given by telephone.  Each such
notice must be received by the Swing Line Lender and the Administrative Agent
not later than 1:00 p.m. on the requested borrowing date, and shall


 


54

















 


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


 


(c)           Refinancing of Swing Line Loans.  (i) 
The Swing Line Lender at any time in its sole and absolute discretion
may request, on behalf of the Borrower (which hereby irrevocably authorizes the
Swing Line Lender to so request on its behalf), that each Revolving Credit Lender
make a Base Rate Loan in an amount equal to such Lender’s Pro Rata Share of the
amount of Swing Line Loans then outstanding. 
Such request shall be made in writing (which written request shall be
deemed to be a Committed Loan Notice for purposes hereof) and in accordance
with the requirements of Section 2.02, without regard to the minimum and
multiples specified therein for the principal amount of Base Rate Loans, but
subject to the unutilized portion of the aggregate Revolving Credit Commitments
and the conditions set forth in Section 4.02.  The Swing Line Lender shall furnish the Borrower with a copy of
the applicable Committed Loan Notice promptly after delivering such notice to
the Administrative Agent.  Each
Revolving Credit Lender shall make an amount equal to its Pro Rata Share of the
amount specified in such Committed Loan Notice available to the Administrative
Agent in immediately available funds for the account of the Swing Line Lender
at the Administrative Agent’s Office not later than 1:00 p.m. on the day
specified in such Committed Loan Notice, whereupon, subject to Section
2.04(c)(ii), each Revolving Credit Lender that so makes funds available
shall be deemed to have made a Base Rate Loan to the Borrower in such
amount.  The Administrative Agent shall
remit the funds so received to the Swing Line Lender and the Swing Line Lender
shall apply such funds in repayment of the Swing Line Loan.


 


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


 


55

















 


(iii)          If any Revolving Credit Lender fails to make available to
the Administrative Agent for the account of the Swing Line Lender any amount
required to be paid by such Lender pursuant to the foregoing provisions of this
Section 2.04(c) by the time specified in Section 2.04(c)(i), the
Swing Line Lender shall be entitled to recover from such Lender (acting through
the Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the Swing Line Lender at a rate per annum equal to
the 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 this
clause (iii) shall be conclusive absent manifest error.


 


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


 


(d)           Repayment of Participations.  (i) 
At any time after any Revolving Credit Lender has purchased and funded a
risk participation in a Swing Line Loan, if the Swing Line Lender receives any
payment on account of such Swing Line Loan, the Swing Line Lender will
distribute to such Lender its Pro Rata Share of such payment (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Lender’s risk participation was funded) in the same funds as those
received by the Swing Line Lender.


 


(ii)           If any payment received by the Swing Line Lender in
respect of principal or interest on any Swing Line Loan is required to be
returned by the Swing Line Lender under any of the circumstances described in Section
10.06 (including pursuant to any settlement entered into by the Swing Line
Lender in its discretion), each Revolving Credit Lender shall pay to the Swing
Line 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 is
returned, at a rate per annum equal to the Federal Funds Rate.  The Administrative Agent will make such
demand upon the request of the Swing Line Lender.


 


(e)           Interest for Account of Swing Line Lender.  The Swing Line Lender shall be responsible
for invoicing the Borrower for interest on the Swing Line Loans.  Until each Revolving Credit Lender funds its
Base Rate Loan or risk participation pursuant to this Section 2.04 to
refinance such Lender’s Pro Rata Share of any Swing Line Loan, interest in
respect of such Pro Rata Share shall be solely for the account of the Swing
Line Lender.


 


56

















 


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


 


2.05         Prepayments.  (a)  Optional.  (i)  The Borrower may, upon notice
to the Administrative Agent, at any time or from time to time voluntarily
prepay Loans in whole or in part without premium or penalty; provided
that (1) such notice must be received by the Administrative Agent not later
than 1:00 p.m. (A) three Business Days prior to any date of prepayment of
Eurodollar Rate Loans or Screen Rate Loans and (B) on the date of prepayment of
Base Rate Loans; (2) any prepayment of Eurodollar Rate Loans shall be in a
minimum principal amount of $2,000,000 or a whole multiple of $500,000 in
excess thereof; (3) any prepayment of Canadian Term Loans shall be in a
principal amount of CD2,000,000 or a whole multiple of CD500,000 in excess
thereof; and (4) any prepayment of Base Rate Loans shall be in a minimum
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof
or, in each case, if less, the entire principal amount thereof then
outstanding.  Each such notice shall
specify the date and amount of such prepayment and the Type(s) of Loans to be
prepaid.  The Administrative Agent will
promptly notify each Lender of its receipt of each such notice, and of the
amount of such Lender’s Pro Rata Share of such prepayment.  If such notice is given by the Borrower, the
Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein; provided
that the Borrower may rescind or postpone any such notice of prepayment if such
prepayment would have resulted from a refinancing of all the Loans and such refinancing
shall not be consummated or otherwise shall be delayed.  Any prepayment of a Eurodollar Rate Loan or
Screen Rate Loan shall be accompanied by all accrued interest thereon, together
with any additional amounts required pursuant to Section 3.05.  Each prepayment of the outstanding Term
Loans pursuant to this Section 2.05(a) shall be applied ratably among
the Dollar Term Facility and Canadian Term Facility, and to the principal
repayment installments of the Term Facility in such order of maturity as the
Borrower may direct and each such prepayment shall be paid to the Lenders in
accordance with their respective Pro Rata Shares (it being understood that
after such ratable allocation among the Dollar Term Facility and Canadian Term
Facility, an amount less than the applicable minimum amounts specified in the
first sentence of this Section 2.05(a) may be paid to the applicable
Lenders).


 


(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 or
penalty; provided that (1) such notice must be received by the Swing
Line Lender and the Administrative Agent not later than 1:00 p.m. on the date
of the prepayment, and (2) any such prepayment shall be in a minimum principal
amount of $100,000.  Each such notice
shall specify the date and amount of such prepayment.  If such notice is given by the Borrower, the Borrower shall make
such prepayment and the payment amount specified in such notice shall be due
and payable on the date specified therein.


 


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


 


57

















 


than 3:00:1.00, 0%, in each case, of Excess
Cash Flow for the Fiscal Year covered by such financial statements, commencing
with the Fiscal Year ended December 31, 2004; provided, that Excess Cash
Flow for the Fiscal Year ended December 31, 2004 shall be calculated on a pro forma basis as though the Nu-Gro
Acquisition had occurred on the first day of such Fiscal Year; provided  further
that any calculation of Excess Cash Flow by the Borrower may contain customary
currency translation estimates, and may further contain deductions in respect
of withholding taxes that would be otherwise payable if such funds were
repatriated to the United States as reasonably determined by a Responsible
Officer of the Borrower.


 


(ii)           If, in each case, Holdings, the Borrower or any of their
respective Subsidiaries Disposes of any property or assets in any single
transaction or series of related transactions (other than any Disposition of
any 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 results
in the receipt by Holdings, the Borrower or such Subsidiary of Net Cash
Proceeds in excess of $2,000,000 or receipt of condemnation or casualty
proceeds in respect of any asset or property, the Borrower shall prepay an
aggregate principal amount of Loans in an amount equal to 100% of all Net Cash
Proceeds received therefrom within two Business Days of receipt thereof by
Holdings or such Subsidiary; provided, however, that, with
respect to any Net Cash Proceeds received in respect of a Disposition or
proceeds of insurance and condemnation awards described in this Section
2.05(b)(ii), at the option of the Borrower (as elected by the Borrower in
writing to the Administrative Agent on or prior to the date of the receipt of
such proceeds or awards), and so long as no Event of Default shall have
occurred and be continuing, the Borrower may reinvest all or any portion of such
Net Cash Proceeds in assets useful in its business so long as (x) within 360
days after the receipt of such Net Cash Proceeds, such purchase or repair shall
have been consummated or (y) if the Borrower or the relevant Subsidiary has
entered into a definitive agreement within 360 days after its receipt of such
Net 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, as
certified by the Borrower in writing to the Administrative Agent); provided
further, however, that any Net Cash Proceeds not subject to such
definitive agreement or so reinvested shall be immediately applied to the
prepayment of the Loans as set forth in this Section 2.05; and provided
still  further that any Net Cash Proceeds received in connection
with any Disposition of property or assets located outside the United States
may contain deductions in respect of withholding taxes that would otherwise be
payable if such funds were repatriated to the United States.


 


(iii)          Upon each Specified Equity Issuance, the Borrower shall
prepay an aggregate principal amount of Loans in an amount equal to (x) if
the Total Leverage Ratio for the most recent Measurement Period ending on or
prior 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 to
the date of such sale is less than 4.00:1.00 but greater than or equal to
3.00:1.00, 25% and (z) if the Total Leverage Ratio for the most recent
Measurement Period ending on or prior to the date of such sale is less than
3.00:1.00, 0% of all Net Cash Proceeds received therefrom immediately upon
receipt thereof by the Borrower (or after the occurrence of the Holding Company
Event, Holdings).


 


(iv)          Upon the incurrence or issuance by Holdings, the Borrower
or any of their respective Subsidiaries of (A) any Indebtedness not
expressly permitted to be incurred or issued


 


58

















 


pursuant to Section 7.02, and (B) any
Permitted Subordinated Indebtedness permitted to be incurred pursuant to Section
7.02(a), to the extent not permitted to be retained by the Borrower
thereunder, the Borrower shall prepay an aggregate principal amount of Loans in
an amount equal to 100% of all Net Cash Proceeds received therefrom immediately
upon receipt thereof by Holdings, the Borrower or such Subsidiary.


 


(v)           If for any reason the Total Outstandings at any time
exceed the Aggregate Commitments then in effect, the Borrower shall immediately
prepay Loans and/or Cash Collateralize the L/C Obligations in an aggregate
amount equal to such excess; provided, however, that the Borrower
shall not be required to Cash Collateralize the L/C Obligations pursuant to
this Section 2.05(b)(v) unless after the prepayment in full of the Loans
and Swing Line Loans the Total Outstandings exceed the Aggregate Commitments
then in effect.


 


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


 


(vii)         The Revolving Credit Facility shall be permanently reduced
by the Reduction Amount on the date of the applicable prepayment and such
prepayment shall be, first,
applied to prepay L/C Borrowings outstanding at such time until all such L/C
Borrowings are paid in full, second, applied to
prepay Swing Line Loans outstanding at such time until all such Swing Line
Loans are paid in full, third, applied to
prepay Revolving Credit Loans outstanding at such time until all such Revolving
Credit Loans are paid in full and, fourth,
used to Cash Collateralize the L/C Obligations; and, thereafter, the amount
remaining, if any, after the prepayment in full of all Loans and L/C Borrowings
outstanding at such time and the L/C Obligations have been Cash Collateralized
in full may be retained by the Borrower for use in the ordinary course of its
business.  Upon the drawing of any
Letter of Credit which has been Cash Collateralized, such funds shall be
applied (without any further action by or notice to or from the Borrower or any
other Loan Party) to reimburse the L/C Issuer or the Revolving Credit Lenders,
as applicable.


 


(viii)        Notwithstanding any of the other provisions of Section
2.05(b)(i) through (vii), the Borrower may, in its sole discretion,
deposit the amount of any such prepayment otherwise required to be made
thereunder into a Cash Collateral Account until the last day of any Interest
Period pertaining to Loans being prepaid, at which time the Administrative
Agent shall be authorized (without any further action by or notice to or from
the Borrower or any other Loan Party) to apply such amount to the prepayment of
such Loans in accordance with this Section 2.05(b).  Upon the occurrence and during the
continuance of any Event of Default, the Administrative Agent shall also be
authorized (without any further action by or notice to or from the Borrower or
any other Loan Party) to apply such amount to the prepayment of the outstanding
Loans in accordance with this Section 2.05(b).


 


59

















 


(ix)           Anything contained in this Section 2.05(b) to the
contrary notwithstanding, (A) if, following the occurrence of any Disposition
by any Loan Party or any of its Subsidiaries, the Borrower is required to
commit by a particular date (a “Commitment Date”) to
apply or cause its Subsidiaries to apply an amount equal to any of the proceeds
thereof in a particular manner, or to apply by a particular date (an “Application Date”) an
amount equal to any such proceeds in a particular manner, in either case in
order to excuse the Borrower from being required to make an offer to the
holders of any other debt or equity securities of the Borrower (an “Asset Sale Offer”) in connection
with such Disposition, and the Borrower shall have failed to so commit or to so
apply an amount equal to such proceeds on or prior to the applicable Commitment
Date or Application Date, as the case may be, or (B) if the Borrower at any
other time shall have failed to apply or commit or cause to be applied an
amount equal to any such proceeds, and, assuming no further application or
commitment of an amount equal to such proceeds the Borrower would otherwise be
required to make an Asset Sale Offer in respect thereof, then in either such
case the Borrower shall immediately pay or cause to be paid to the
Administrative Agent on or prior to the date on which the Borrower would be
required to make an Asset Sale Offer an amount equal to such proceeds  to be applied to the payment of the Loans
and L/C Borrowings and to Cash Collateralize the L/C Obligations in the manner
set forth in Section 2.05(b) in such amounts as shall excuse the
Borrower from making any such Asset Sale Offer.


 


2.06         Termination or Reduction of
Commitments.  (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 permanently
reduce the portions of the Term Commitments, the Letter of Credit Sublimit, or
the unused Revolving Credit Commitments; provided that (i) any such
notice 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 such
partial reduction shall be in an aggregate amount of (A) in the case of all
Loans other than Canadian Term Loans, $10,000,000 or any whole multiple of $1,000,000
in excess thereof and (B)  in the case
of  Canadian Term Loans, CD10,000,000 or
any whole multiple of CD1,000,000 in excess thereof and (iii) the Borrower
shall not terminate or reduce the Term Commitments, the Letter of Credit
Sublimit, or the unused Revolving Credit Commitments if, after giving effect
thereto and to any concurrent prepayments hereunder, the Total Outstandings
would exceed the Aggregate Commitments; provided that the Borrower may
rescind or postpone any such notice of termination of the Revolving Credit
Commitments if such termination would have resulted from a refinancing of all
the Loans and such refinancing shall not be consummated or otherwise shall be
delayed.


 


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


 


(ii)           The Revolving Credit Facility shall be automatically and
permanently reduced on each date on which the prepayment of Revolving Credit
Loans outstanding thereunder is required to be made pursuant to Section
2.05(b)(i), (ii), (iii) or (iv) by an amount equal to
the applicable Reduction Amount.


 


60

















 


(iii)          If after giving effect to any reduction or termination of
unused Revolving Credit Commitments under this Section 2.06, the Letter
of Credit Sublimit or the Swing Line Sublimit exceeds the amount of the
aggregate Revolving Credit Commitments, such Sublimit shall be automatically
reduced by the amount of such excess.


 


(c)           Application of Commitment
Reductions; Payment of Fees.  The
Administrative Agent will promptly notify the Lenders of any termination or
reduction of the Term Commitment, the Letter of Credit Sublimit, or the unused
Revolving Credit Commitment under this Section 2.06.  Each reduction of the Term Commitments
pursuant to Section 2.06(a) shall be applied to the applicable Term
Facility.  Upon any reduction of
Commitments under a Facility, the Commitment of each Lender under such Facility
shall be reduced by such Lender’s Pro Rata Share of the amount by which such
Facility is reduced (other than the termination of the Commitment of any Lender
as provided in Section 3.07). 
All commitment fees accrued until the effective date of any termination
of the Aggregate Commitments shall be paid on the effective date of such
termination.


 


2.07         Repayment
of Loans.  (a)  Dollar Term Loans.  The Borrower shall repay to the
Administrative Agent for the ratable account of the Dollar Term Lenders the
aggregate principal amount of all Dollar Term Loans outstanding on the
following dates in the respective amounts set forth opposite such dates (which
amounts shall be reduced as a result of the application of prepayments in
accordance with the order of priority set forth in Section 2.05) or
increased as a result of any increase in the amount of Dollar Term Loans
pursuant to Section 2.14 (such increased amortization payments to be
calculated in the same manner (and on the same basis) as the schedules set
forth 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

  	
   

  



 


61

















 


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


 


(b)           Canadian Term Loans.  The Borrower shall repay to the
Administrative Agent for the ratable account of the Canadian Term Lenders the
aggregate principal amount of all Canadian Term Loans outstanding on the
following dates in the respective amounts set forth opposite such dates (which
amounts shall be reduced as a result of the application of prepayments in
accordance with the order of priority set forth in Section 2.05) or
increased as a result of any increase in the amount of Canadian Term Loans
pursuant to Section 2.14 (such increased amortization payments to be
calculated in the same manner (and on the same basis) as the schedules set
forth 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

  	
   

  



 


62

















 


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


 


(c)           Revolving Credit Loans.  The Borrower shall repay to the Administrative Agent for the
ratable account of the Revolving Credit Lenders on the Maturity Date for the
Revolving Credit Facility the aggregate principal amount of all Revolving
Credit 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 Eurodollar
Rate Loan shall bear interest on the outstanding principal amount thereof for
each Interest Period at a rate per annum equal to the Eurodollar Rate for such
Interest Period plus the Applicable Rate; (ii) each Canadian Term Loan
shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to the Screen Rate for such Interest
Period plus the Applicable Rate; (iii) each Base Rate Loan shall bear
interest on the outstanding principal amount thereof from the applicable
borrowing date at a rate per annum equal to the Base Rate plus the
Applicable Rate; and (iv) each Swing Line Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the Base Rate plus the Applicable Rate.


 


(b)           (i)  While any
Event of Default of the type specified in Section 8.01(a) or Section
8.01(f) exists, the Borrower shall pay interest on the principal amount of
all outstanding Obligations hereunder at a fluctuating interest rate per annum
at all times equal to the Default Rate to the fullest extent permitted by
applicable Laws.


 


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


 


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


 


63

















 


judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.


 


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


 


(a)           Commitment Fee.  The Borrower shall pay to the Administrative
Agent for the account of each Revolving Credit Lender in accordance with its
Pro Rata Share, a commitment fee equal to 0.50% per annum times the
actual daily amount by which the aggregate Revolving Credit Commitments exceed
the sum of (i) the Outstanding Amount of Revolving Credit Loans and (ii) the
Outstanding Amount of L/C Obligations; provided, however, that
any commitment fee accrued with respect to any of the Commitments of a
Defaulting Lender during the period prior to the time such Lender became a
Defaulting Lender and unpaid at such time shall not be payable by the Borrower
so long as such Lender shall be a Defaulting Lender except to the extent that
such commitment fee shall otherwise have been due and payable by the Borrower
prior to such time; and provided  further that no commitment fee
shall accrue on any of the Commitments of a Defaulting Lender so long as such
Lender shall be a Defaulting Lender. 
The commitment fee shall accrue at all times during the Availability
Period, including at any time during which one or more of the conditions in Article
IV is not met, and shall be due and payable quarterly in arrears on the
last Business Day of each March, June, September and December, commencing with
the first such date to occur after the Closing Date, and on the Maturity Date
for the Revolving Credit Facility.  The
commitment fee shall be calculated quarterly in arrears.


 


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


 


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


 


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


 


2.11         Evidence
of Indebtedness.  (a)  The Credit Extensions made by each Lender
shall be evidenced by one or more accounts or records maintained by such Lender
and


 


64

















 


evidenced by one or more entries in the Register
maintained by the Administrative Agent, acting solely for purposes of Treasury
Regulation Section 5f.103-1(c), as agent for the Borrower, in each case in the
ordinary course of business.  The
accounts or records maintained by the Administrative Agent and each Lender
shall be prima facie evidence
absent manifest error of the amount of the Credit Extensions made by the
Lenders to the Borrower and the interest and payments thereon.  In the event of any conflict between the
accounts and records maintained by any Lender and the accounts and records of
the Administrative Agent in respect of such matters, the accounts and records
of the Administrative Agent shall control in the absence of manifest
error.  Upon the request of any Lender
made through the Administrative Agent, the Borrower shall execute and deliver
to such Lender (through the Administrative Agent) a Note payable to such
Lender, which shall evidence such Lender’s Loans in addition to such accounts
or records.  Each Lender may attach
schedules 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 Section
2.11(a), each Lender and the Administrative Agent shall maintain in
accordance with its usual practice accounts or records and, in the case of the
Administrative Agent, entries in the Register, evidencing the purchases and
sales by such Lender of participations in Letters of Credit and Swing Line
Loans.  In the event of any conflict
between the accounts and records maintained by the Administrative Agent and the
accounts and records of any Lender in respect of such matters, the accounts and
records of the Administrative Agent shall control in the absence of manifest
error.


 


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


 


2.12         Payments
Generally.  (a)  All payments to be made by the Borrower
shall be made without condition or deduction for any counterclaim, defense,
recoupment or setoff.  Except with
respect to the Canadian Term Loans or as otherwise expressly provided herein,
all payments by the Borrower hereunder shall be made to the Administrative
Agent, for the account of the respective Lenders to which such payment is owed,
at the Administrative Agent’s Office in Dollars and in immediately available
funds not later than 2:00 p.m. on the date specified herein.  All payments by the Borrower hereunder with
respect 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 is
owed, at the Administrative Agent’s Office in Canadian Dollars and in
immediately available funds not later than 2:00 p.m. on the date specified
herein.  The Administrative Agent will
promptly distribute to each Lender its Pro Rata Share (or other applicable
share as provided herein) of such payment in like funds as received by wire
transfer to such Lender’s Lending Office. 
All payments received by the Administrative Agent after 2:00 


 


65

















 


p.m. shall be deemed
received on the next succeeding Business Day and any applicable interest or fee
shall continue to accrue.


 


(b)           If any payment to be made by the Borrower shall come due
on a day other than a Business Day, payment shall be made on the next following
Business Day, and such extension of time shall be reflected in computing
interest or fees, as the case may be; provided, however, that, if
such extension would cause payment of interest on or principal of Eurodollar
Rate Loans or Screen Rate Loans to be made in the next succeeding calendar
month, such payment shall be made on the immediately preceding Business Day.


 


(c)           Unless the Borrower or any Lender has notified the
Administrative Agent, prior to the date any payment is required to be made by
it to the Administrative Agent hereunder, that the Borrower or such Lender, as
the case may be, will not make such payment, the Administrative Agent may
assume that the Borrower or such Lender, as the case may be, has timely made
such 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 was
not in fact made to the Administrative Agent in immediately available funds,
then:


 


(i)            if the Borrower failed
to make such payment, each Lender shall forthwith on demand repay to the
Administrative Agent the portion of such assumed payment that was made
available to such Lender in immediately available funds, together with interest
thereon in respect of each day from and including the date such amount was made
available by the Administrative Agent to such Lender to the date such amount is
repaid to the Administrative Agent in immediately available funds at the
Federal Funds Rate from time to time in effect; and


 


(ii)           if any Lender
failed to make such payment, such Lender shall forthwith on demand pay to the
Administrative Agent the amount thereof in immediately available funds,
together with interest thereon for the period from the date such amount was
made available by the Administrative Agent to the Borrower to the date such
amount is recovered by the Administrative Agent (the “Compensation Period”)
at a rate per annum equal to the Federal Funds Rate from time to time in
effect.  If such Lender pays such amount
to the Administrative Agent, then such amount shall constitute such Lender’s
Loan included in the applicable Borrowing. 
If such Lender does not pay such amount forthwith upon the
Administrative Agent’s demand therefor, the Administrative Agent may make a
demand therefor upon the Borrower, and the Borrower shall pay such amount to
the Administrative Agent, together with interest thereon for the Compensation
Period at a rate per annum equal to the rate of interest applicable to the
applicable Borrowing.  Nothing herein
shall be deemed to relieve any Lender from its obligation to fulfill its
Commitment or to prejudice any rights which the Administrative Agent or the
Borrower may have against any Lender as a result of any default by such Lender
hereunder.


 


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


 


66

















 


(d)           If any Lender makes available to the Administrative Agent
funds for any Loan to be made by such Lender as provided in the foregoing
provisions of this Article II, and such funds are not made available to
the Borrower by the Administrative Agent because the conditions to the applicable
Credit Extension set forth in Article IV are not satisfied or waived in
accordance with the terms hereof, the Administrative Agent shall return such
funds (in like funds as received from such Lender) to such Lender, without
interest.


 


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


 


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


 


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


 


2.13         Sharing of
Payments.  If, other than as
expressly provided elsewhere herein, any Lender shall obtain on account of the
Loans made by it, or the participations in L/C Obligations or in Swing Line
Loans held by it, any payment (whether voluntary, involuntary, through the
exercise 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 the
other Lenders such participations in the Loans made by them and/or such
subparticipations in the participations in L/C Obligations or Swing Line Loans
held by them, as the case may be, as shall be necessary to cause such
purchasing Lender to share the excess payment in respect of such Loans or such
participations, as the case may be, pro rata with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from the purchasing Lender under any of the circumstances described
in Section 10.06 (including pursuant to any settlement entered into by
the purchasing Lender in its discretion), such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying
Lender’s ratable share (according to the proportion of (i) the


 


67

















 


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


 


2.14         Increase
in Commitments.  (a) 
Provided there exists no Event of Default after giving effect to any
such increase, upon notice to the Administrative Agent (which shall promptly
notify the Lenders), the Borrower may from time to time, request an increase in
the Term Commitments or Revolving Credit Commitments by an amount (for all such
requests) not exceeding $100,000,000. 
Each such request shall be for an increase of not less than
$10,000,000.  At the time of sending
such notice, the Borrower (in consultation with the Administrative Agent) shall
specify the time period within which each Lender is requested to respond (which
shall in no event be less than ten Business Days from the date of delivery of
such notice to the Lenders).  Each
Lender shall notify the Administrative Agent within such time period whether or
not it agrees to increase its Term Commitment or Revolving Credit Commitment
and, if so, whether by an amount equal to, greater than, or less than its Pro
Rata Share of such requested increase. 
Any Lender not responding within such time period shall be deemed to
have declined to increase its Commitment. 
The Administrative Agent shall notify the Borrower and each Lender of
the Lenders’ responses to each request made hereunder.  To achieve the full amount of a requested
increase, the Borrower may also invite additional Eligible Assignees to become
Lenders pursuant to a joinder agreement in form and substance reasonably
satisfactory to the Administrative Agent and its counsel.


 


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


 


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


 


(c)           To the extent the Commitment being increased on the
relevant Increase Effective Date is a Term Commitment, then each of the Lenders
having 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 Increase
Effective Date (the “Post-Increase
Term Lenders”), and such Post-Increase Term Lenders shall
purchase from each Pre-Increase Term Lenders, at the principal amount thereof,
such interests in the Term Loans outstanding on such Increase Effective Date as
shall be necessary in order that, after giving effect to all such assignments
and purchases, such Term Loans will be held by Pre-Increase Term Lenders and
Post-Increase Term Lenders ratably in accordance with the Outstanding Amount of
Term Loans and increased Term Commitments after giving effect to such increased
Term Commitments.  To the extent the
Commitment being increased on the relevant Increase Effective Date is a
Revolving Credit Commitment, then each of the Lenders having a Revolving Credit
Commitment prior to such Increase Effective Date (the “Pre-Increase Revolving Lenders”) shall assign
to any lender which is acquiring a new or additional Revolving Credit
Commitment on the Increase Effective Date (the “Post-Increase Revolving Lenders”), and such
Post-Increase Revolving Lenders shall purchase from each Pre-Increase Revolving
Lenders, at the principal amount thereof, such interests in the Revolving Loans
and participation interests in L/C Obligations and Swing Line Loans outstanding
on such Increase Effective Date as shall be necessary in order that, after
giving effect to all such assignments and purchases, such Revolving Loans and
participation interests in L/C Obligations and Swing Line Loans will be held by
Pre-Increase Revolving Lenders and Post-Increase Revolving Lenders ratably in
accordance with their Revolving Credit Commitments after giving effect to such
increased Revolving Credit Commitments.


 


(d)           This Section shall supersede any provisions in Sections
2.13 or 10.01 to the contrary.


 


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


 


ARTICLE III

TAXES, 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 or
any Lender under any Loan Document shall be made free and clear of and without
deduction for any and all present or future taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or similar charges, and all
liabilities  (including additions
to tax, penalties and interest) with respect thereto, excluding, in the
case of each Agent and each Lender, taxes imposed on or measured by its overall
net income or overall gross income (including branch profits), and franchise
(and similar) taxes imposed on it in lieu of net income taxes, by the
jurisdiction (or any political subdivision thereof) under the Laws of which
such Agent or such Lender, as the case may be, is organized, has its principal
place of business or maintains a Lending Office, and all liabilities (including
additions to tax, penalties and interest) with respect thereto (all such
non-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 any
Laws to deduct any Taxes from or in respect of any sum payable under any Loan
Document to any Agent or any Lender, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section), each of such Agent
and such Lender receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower shall make such deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable Laws, and (iv)
within 30 days after the date of such payment, the Borrower shall furnish to
such Agent or Lender (as the case may be) the original or a certified copy of a
receipt evidencing payment thereof to the extent such a receipt is issued
therefor, or other written proof of payment thereof that is reasonably
satisfactory to the Administrative Agent.


 


(b)           In addition, the Borrower agrees to pay any and all
present or future stamp, court or documentary taxes and any other excise,
property, intangible or mortgage recording taxes or charges or similar levies
which arise from any payment made under any Loan Document or from the
execution, delivery, performance, enforcement or registration of, or otherwise
with respect to, any Loan Document (hereinafter referred to as “Other Taxes”).


 


(c)           The Borrower agrees to indemnify each Agent and each
Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section) paid by such Agent and such Lender and (ii) any liability
(including additions to tax, penalties, interest and expenses) arising
therefrom or with respect thereto, in each case whether or not such Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority; provided such Agent or Lender, as the case may be,
provides the Borrower with a written statement thereof setting forth in
reasonable 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 a
demand therefor.


 


(d)           The
Borrower shall not be required pursuant to this Section 3.01 to pay any
additional amount to, or to indemnify, any Lender or Agent, as the case may be, to the extent that such Lender or such
Agent 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 of
a change in the place of organization of such Lender or Agent or a change in
the lending office of such Lender, except to the extent that any such
change is requested or required by the Borrower (and provided, that
nothing in this clause (d) shall be construed as relieving the Borrower
from any


 


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obligation to make such payments or
indemnification 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 a
party to this Agreement at the Borrower’s discretion pursuant to Section
10.07(g) indicate a United States withholding tax rate in excess of zero
(the “Actual
Rate”), withholding tax in excess of the Actual Rate shall be
considered excluded from Taxes unless and until such Lender or Agent, as the
case may be, provides the appropriate forms certifying that a lesser rate
applies, whereupon withholding tax at such lesser rate only shall be considered
excluded from Taxes for periods governed by such forms; provided, however,
that, if at the date of the Assignment and Acceptance pursuant to which a
Lender becomes a party to this Agreement, the Lender assignor was entitled to
payments under clause (a) of this Section 3.01 in respect of
United States withholding tax with respect to interest paid at such date, then,
to such extent, the term Taxes shall include (in addition to withholding taxes
that may be imposed in the future or other amounts otherwise includable in
Taxes) United States withholding tax, if any, applicable with respect to the
Lender assignee on such date.


 


(f)            If any Lender or Agent determines that it has received a refund in
respect of any Taxes or Other Taxes as to which indemnification or additional amounts have been paid to it
by the Borrower pursuant to this Section 3.01, it shall promptly
remit such refund (including any interest included in such refund) to the
Borrower (to the extent that it determines that it can do so without
prejudice 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, as
the case may be, agrees promptly to return such refund to such party in the
event such party is required to repay such refund to the relevant taxing
authority.  Such Lender or Agent,
as the case may be, shall, at the Borrower’s request, provide the Borrower with
a copy of any notice of assessment or other evidence of the requirement to
repay such refund received from the relevant taxing authority (provided,
that such Lender or Agent may delete any information therein that such Lender
or Agent deems confidential).  Nothing
herein contained shall interfere with the right of a Lender or Agent to arrange
its tax affairs in whatever manner it thinks fit nor oblige any Lender or Agent
to claim any tax refund or to disclose any information relating to its tax
affairs or any computations in respect thereof or require any Lender or Agent
to do anything that would prejudice its ability to benefit from any other
refunds, credits, reliefs, remissions or repayments to which it may be
entitled.


 


(g)           Each
Lender agrees that, upon the occurrence of any event giving rise to the
operation of Section 3.01(a) or (c) with respect to such Lender
it will, if requested by the Borrower, use commercially reasonable efforts (subject to such Lender’s overall
internal policies of general application and legal and regulatory restrictions)
to avoid the consequences of such event, including to designate another Lending
Office 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 such
Lender, cause such Lender and its Lending Office(s) to suffer no material
economic, legal or regulatory disadvantage, and provided, further,
that nothing in this Section 3.01(g) shall affect or postpone any of the
Obligations of the Borrower or the rights of such Lender pursuant to Sections
3.01(a) and (c).


 


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(h)           Notwithstanding any provision contained herein to the
contrary, any indemnity with respect to taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or similar charges imposed by any
Governmental Authority, or any liabilities with respect thereto, shall be
governed solely and exclusively by this Section 3.01 and Section
10.15.


 


3.02         Illegality.  If any Lender determines that any Law has
made it unlawful, or that any Governmental Authority has asserted that it is
unlawful, for any Lender or its applicable Lending Office to make, maintain or
fund Eurodollar Rate Loans or Screen Rate Loans, or to determine or charge
interest rates based upon the Eurodollar Rate or Screen Rate, then, on notice
thereof by such Lender to the Borrower through the Administrative Agent, any
obligation of such Lender to make or continue Eurodollar Rate Loans or Screen
Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans shall be
suspended until such Lender notifies the Administrative Agent and the Borrower
that the circumstances giving rise to such determination no longer exist.  Upon receipt of such notice, the Borrower
shall, upon demand from such Lender (with a copy to the Administrative Agent),
prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to
Base Rate Loans, either on the last day of the Interest Period therefor, if
such Lender may lawfully continue to maintain such Eurodollar Rate Loans or
Screen Rate Loans to such day, or immediately, if such Lender may not lawfully
continue to maintain such Eurodollar Rate Loans or Screen Rate Loans.  Upon any such prepayment or conversion, the
Borrower shall also pay accrued interest on the amount so prepaid or
converted.  Each Lender agrees to designate
a different Lending Office if such designation will avoid the need for such
notice and will not, in the good faith judgment of such Lender, otherwise be
materially disadvantageous to such Lender.


 


3.03         Inability
to Determine Rates.  If the
Required Lenders determine that for any reason adequate and reasonable means do
not exist for determining the LIBO Rate or Screen Rate, as applicable, for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan or
Screen Rate Loan, or that the LIBO Rate or Screen Rate for any requested
Interest Period with respect to a proposed Eurodollar Rate Loan or Screen Rate
Loan does not adequately and fairly reflect the cost to such Lenders of funding
such Loan, or that Dollar deposits are not being offered to banks in the London
interbank eurodollar or Canadian Dollar market for the applicable amount and
the Interest Period of such Eurodollar Rate Loan or Screen Rate Loan, the
Administrative Agent will promptly so notify the Borrower and each Lender.  Thereafter, the obligation of the Lenders to
make or maintain Eurodollar Rate Loans or Screen Rate Loans, as applicable,
shall be suspended until the Administrative Agent (upon the instruction of the
Required Lenders) revokes such notice. 
Upon receipt of such notice, the Borrower may revoke any pending request
for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or
Screen Rate Loans or, failing that, with respect to Eurodollar Rate Loans, will
be deemed to have converted such request into a request for a Committed
Borrowing 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 of
the introduction of or any change in or in the interpretation of any Law, in
each case after the date hereof, or such Lender’s compliance therewith, there
shall 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 case
may be) or issuing or participating in Letters of Credit, or a reduction in the
amount received or receivable by such Lender in


 


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


 


(b)           If any Lender determines that the introduction of any Law
regarding capital adequacy or any change therein or in the interpretation
thereof, in each case after the date hereof, or compliance by such Lender (or
its Lending Office) therewith, has the effect of reducing the rate of return on
the capital of such Lender or any corporation controlling such Lender as a
consequence of such Lender’s obligations hereunder (taking into consideration
its policies with respect to capital adequacy and such Lender’s desired return
on capital), then from time to time upon demand of such Lender setting forth in
reasonable detail the charge and the calculation of such reduced rate of return
(with a copy of such demand to the Administrative Agent given in accordance
with Section 3.06), the Borrower shall pay to such Lender such
additional amounts as will compensate such Lender for such reduction.


 


3.05         Compensation
for Losses.  Upon demand of any
Lender (with a copy to the Administrative Agent) from time to time, the
Borrower shall promptly compensate such Lender for and hold such Lender
harmless 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 a
day other than the last day of the Interest Period for such Loan (whether
voluntary, mandatory, automatic, by reason of acceleration, or otherwise);


 


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


 


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


 


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


 


For purposes of
calculating amounts payable by the Borrower to the Lenders under this Section
3.05, each Lender shall be
deemed to have funded each Eurodollar Rate Loan or Screen Rate Loan, as
applicable, made by it at the rate used in determining the Eurodollar Rate or
Screen


 


73

















 


Rate for such Loan
by a matching deposit or other borrowing in the London interbank eurodollar
market or Canadian Dollar market for a comparable amount and for a comparable
period, whether or not such Eurodollar Rate Loan or Screen Rate Loan was in
fact so funded.


 


3.06         Matters Applicable to all Requests
for Compensation.  (a)  A certificate of any Agent or any Lender
claiming compensation under this Article III and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error.  In
determining such amount, such Agent or such Lender may use any reasonable
averaging and attribution methods.


 


(b)           With respect to any
Lender’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 amount
incurred more than one hundred and eighty (180) days prior to the date that
such 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 such
180-day period referred to above shall be extended to include the period of
retroactive effect thereof.  If any Lender requests compensation by the
Borrower under Section 3.04, the Borrower may, by notice to such
Lender (with a copy to the Administrative Agent), suspend the obligation of
such Lender to make or continue from one Interest Period to another Eurodollar
Rate Loans or Screen Rate Loans, or
to convert Base Rate Loans into Eurodollar Rate Loans, until the event or
condition giving rise to such request ceases to be in effect (in which case the
provisions of Section 3.06(c) shall be applicable); provided,
that such suspension shall not affect the right of such Lender to receive the
compensation so requested.


 


(c)           If
the obligation of any Lender to make or continue
from one Interest Period to another any Eurodollar Rate Loan or Screen
Rate Loan, or to convert Base Rate Loans into Eurodollar Rate Loans shall be
suspended pursuant to Section 3.06(b) hereof, such Lender’s Eurodollar
Rate Loans shall be automatically converted into Base Rate Loans on the last
day(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, on
such earlier date as required by Law) and, unless and until such Lender gives
notice as provided below that the circumstances specified in Section 3.01,
3.02, 3.03 or 3.04 hereof that gave rise to such
conversion no longer exist:


 


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


 


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


 


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


 


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


 


3.07         Replacement of Lenders under
Certain Circumstances.  (a)  If at any time (i) the Borrower becomes
obligated to pay additional amounts or indemnity payments described in Section
3.01 or 3.04 as a result of any condition described in such Sections
or any Lender ceases to make Eurodollar Rate Loans or Screen Rate Loans as a
result of any condition described in Section 3.02 or 3.03,
(ii) any Lender becomes a Defaulting Lender, (iii) any Lender fails to promptly
execute and deliver the assignment documents requested pursuant to Section
2.14(c) or (iv) any Lender becomes a “Non-Consenting Lender” (as defined
below in this Section 3.07), then the Borrower may, on ten (10)
Business Days’ prior written notice to the Administrative Agent and such
Lender, either (A) replace such Lender by causing such Lender to (and such
Lender 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 of
its rights and obligations under this Agreement to one or more Eligible
Assignees; provided, that neither the Administrative Agent nor any
Lender shall have any obligation to the Borrower to find a replacement Lender
or other such Person or (B) terminate the Commitment of such Lender and
repay all obligations of the Borrower owing to such Lender relating to the
Loans 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 with
respect to such Lender’s Commitment and outstanding Loans and participations in
L/C Obligations and Swing Line Loans, and (ii) deliver any Notes evidencing
such Loans to the Borrower or Administrative Agent.  Pursuant to such Assignment and Assumption, (i) the assignee
Lender shall acquire all or a portion, as the case may be, of the assigning
Lender’s Commitment and outstanding Loans and participations in L/C Obligations
and Swing Line Loans, (ii) all obligations of the Borrower owing to the
assigning Lender relating to the Loans and participations so assigned shall be
paid in full by the assignee Lender to such assigning Lender concurrently with
such assignment and assumption and (iii) upon such payment and, if so
requested by the assignee Lender, delivery to the assignee Lender of the
appropriate Note or Notes executed by the Borrower, the assignee Lender shall
become a Lender hereunder and the assigning Lender shall cease to constitute a
Lender hereunder with respect to such assigned Loans, Commitments and
participations, except with respect to indemnification provisions under this
Agreement, 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 any
time that it has any Letter of Credit outstanding hereunder unless arrangements
satisfactory to such L/C Issuer (including the furnishing of a back-up standby
letter of credit in form and substance, and issued by an issuer reasonably
satisfactory to such L/C Issuer or the depositing of cash collateral into a
cash collateral account in amounts and pursuant to arrangements reasonably
satisfactory to such L/C Issuer) have been made with respect to such
outstanding Letter of Credit and (ii) the Lender that acts as the
Administrative Agent may not be replaced hereunder except in accordance with
the terms of Section 9.09.


 


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(d)           In the event that (i) the Borrower or the Administrative
Agent has requested the Lenders to consent to a departure or waiver of any
provisions of the Loan Documents or to agree to any amendment thereto, (ii) the
consent, waiver or amendment in question requires the agreement of all affected
Lenders in accordance with the terms of Section 10.01 or all the
Lenders with respect to a certain class of the Loans and (iii) the Required
Lenders have agreed to such consent, waiver or amendment, then any Lender who
does not agree to such consent, waiver or amendment shall be deemed a “Non-Consenting
Lender.”


 


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


 


ARTICLE IV

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS


 


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


 


(a)           The Administrative
Agent’s receipt of the following, each of which shall be originals or
facsimiles (followed promptly by originals) unless otherwise specified, each
properly executed by a Responsible Officer of the signing Loan Party, each
dated the Closing Date (or, in the case of certificates of governmental
officials, a recent date before the Closing Date) and each in form and
substance reasonably satisfactory to the Administrative Agent and each of the
Lenders:


 


(i)            executed
counterparts of this Agreement and the Guaranty, sufficient in number for
distribution to each Agent, each Lender and the Borrower;


 


(ii)           a Note executed by
the Borrower in favor of each Lender requesting a Note;


 


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


 


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


 


(B)           copies of proper financing
statements, duly prepared for filing under the Uniform Commercial Code in all
jurisdictions that the Administrative Agent may deem reasonably necessary or
desirable in order to perfect and protect the first priority liens and security
interests created under the Security Agreement, covering the Collateral described
in 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 the
Administrative Agent may deem reasonably necessary or desirable in order to
perfect and protect the Liens created thereby;


 


(iv)          a mortgage, in
substantially the form of Exhibit H hereto (with such changes as
may be reasonably satisfactory to the Administrative Agent and its counsel to
account for local law matters) and covering the Borrower’s Orrville, Ohio
fertilizer plant (together with each other mortgage delivered pursuant to Section
6.11, in each case as amended, the “Mortgages”), duly executed by the appropriate
Loan Party, together with:


 


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


 


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


 


(v)           an intellectual
property security agreement, in substantially the form of Exhibit I
hereto (together with each other intellectual property security agreement and
intellectual property security agreement supplement delivered pursuant to Section 6.11
and 6.15, in each case as amended, the “Intellectual Property Security
Agreement”), duly executed by each Loan Party, together with evidence
that all action that the Administrative Agent may reasonably deem necessary or
desirable in order to perfect and protect the first priority liens and security
interests created under the Intellectual Property Security Agreement has been
taken;


 


(vi)          such certificates of
resolutions or other action, incumbency certificates and/or other certificates
of Responsible Officers of each Loan Party as the Administrative Agent may
reasonably require evidencing the identity, authority and capacity of each
Responsible Officer thereof authorized to act as a Responsible Officer in
connection with this Agreement and the other Loan Documents to which such Loan
Party is a party or is to be a party;


 


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


 


(viii)        a reasonably
satisfactory opinion of Weil, Gotshal and Manges LLP, special counsel to the
Loan Parties, addressed to each Agent and each Lender, as to the matters set
forth in Exhibit J-1 and such other matters


 


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concerning the
Loan Parties and the Loan Documents as the Required Lenders may reasonably
request;


 


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


 


(x)            a certificate of a
Responsible Officer of the Borrower either (A) attaching copies of all
consents, licenses and approvals required in connection with the execution,
delivery and performance by the Borrower or any other Loan Party and the
validity against the Borrower or such Loan Party of the Loan Documents to which
it is a party, and such consents, licenses and approvals shall be in full force
and effect, or (B) stating that no such consents, licenses or approvals are so
required;


 


(xi)           a certificate
signed by a Responsible Officer of the Borrower certifying (A) that the
conditions specified in Sections 4.02(a) and (b) have been
satisfied, and (B) that there has been no event or circumstance since February
29, 2004 that has had or could be reasonably expected to have, either
individually or in the aggregate, a Nu-Gro Material Adverse Effect;


 


(xii)          certificates
attesting to the Solvency of the Borrower and its Subsidiaries taken as a
whole, before and after giving effect to the Nu-Gro Transaction, from its Chief
Financial Officer;


 


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


 


(xiv)        a notice of borrowing
or notice of letter of credit issuance, as applicable, relating to the initial
Credit Extension;


 


(xv)         reasonably
satisfactory evidence that the Existing Credit Agreement has been or
concurrently with the Closing Date is being terminated and all Liens securing
obligations under the Existing Credit Agreement have been or concurrently with
the Closing Date are being released; and


 


(xvi)        (A) unaudited
consolidated financial statements of Nu-Gro and its Subsidiaries for any
quarterly periods ended since December 31, 2003 for which such statements are
available, and a pro forma balance sheet, income statement and statement of
cash flows as to the Company and its subsidiaries as of the end of and for the
most recent four fiscal quarter period ended at least 45 days prior to the
Closing Date, in each case adjusted to give effect to the consummation of the
Nu-Gro Acquisition as if the Nu-Gro Acquisition, (x) with respect to the pro
forma balance sheet, had occurred on such date, and (y) with respect to the pro
forma income statement and pro forma statement of cash flows, had occurred


 


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


 


(xvii)       certified copies of
the Nu-Gro Acquisition Documents duly executed by the parties thereto, which
shall be in form and substance reasonably satisfactory to the Administrative
Agent.


 


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


 


(c)           The Administrative
Agent shall be reasonably satisfied that there has been no material adverse
change (from the standpoint of the Lenders) in the pro forma capital and
ownership structure and the shareholder arrangements of the Borrower and each
of the Guarantors since February 29, 2004 (other than as to be effected
pursuant to the Nu-Gro Transaction).


 


(d)           There shall not have
occurred 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, without
limitation, Hart-Scott-Rodino clearance and Competition Act (Canada) and
Investment Canada Act approvals, if applicable) necessary in connection with
the Nu-Gro Transaction shall have been obtained and shall remain in effect; all
applicable waiting periods in connection with the Nu-Gro Transaction shall have
expired without any action being taken by any Governmental Authority, that
could restrain, prevent or impose materially adverse conditions upon the
Borrower and its Subsidiaries or that could seek or threaten any of the
foregoing in any material respect, and no Law shall be applicable which in the
reasonable judgment of the Administrative Agent could reasonably be expected to
have such effect.


 


(f)            There shall exist
no action, suit, investigation or proceeding affecting any Loan Party or any of
its Subsidiaries pending or, to the knowledge of the Borrower, threatened
before any Governmental Authority or arbitrator that could be reasonably be
expected to have a Nu-Gro Material Adverse Effect.


 


(g)           All Loans made by
the Lenders to the Borrower shall be in full compliance with the Federal
Reserve’s margin regulations.


 


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(h)           The Lenders shall be
satisfied that the amount, terms, conditions and holders of all intercompany
Indebtedness (it being understood that intercompany indebtedness contemplated
by the Nu-Gro Transaction and described to the Lead Arrangers prior to February
29, 2004 is acceptable) and all Indebtedness and other material liabilities
owing 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 required
to be paid on or before the Closing Date (including the fees and expenses of
counsel to the Administrative Agent) shall have been paid.


 


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


 


(a)           The representations
and warranties of the Borrower and each other Loan Party contained in Article
V or any other Loan Document, shall be true and correct in all material
respects on and as of the date of such Credit Extension, except to the extent
that 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 such
earlier date, and except that for purposes of this Section 4.02, the
representations and warranties contained in Section 5.06 shall be deemed
to refer to the most recent statements furnished pursuant to Sections
6.13(b) and (c).


 


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


 


(c)           The Administrative
Agent and, if applicable, the L/C Issuer or the Swing Line Lender shall have
received a Request for Credit Extension in accordance with the requirements
hereof.


 


Each Request for Credit Extension (other than a
Committed Loan Notice requesting only a conversion of Loans to the other Type
or a continuation of Eurodollar Rate Loans) submitted by the Borrower shall be
deemed to be a representation and warranty that the conditions specified in Sections
4.02(a) and (b) have been satisfied on and as of the date of the
applicable Credit Extension.


 


ARTICLE V

REPRESENTATIONS AND WARRANTIES


 


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


 


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


 


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and are in good standing under the laws of such
jurisdiction and (b) are duly qualified as foreign corporations, limited
partnerships or limited liability companies and are in good standing in each
other jurisdiction in which the ownership, lease or operation of their
respective property and assets or the conduct of their respective businesses
require 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 good
standing, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. 
Each of the Loan Parties and each of their Subsidiaries have all of the
requisite power and authority, and the legal right, to own or lease and to
operate all of the property and assets they purport to own, lease or operate
and to conduct all of their respective businesses as now conducted.  Each of the Loan Parties has all of the
requisite power and authority, and the legal right, to execute and deliver each
of the Loan Documents to which it is a party, to perform all of its obligations
hereunder and thereunder and to consummate the Nu-Gro Transaction, the Holding
Company Event (if and when consummated) and all of the other transactions
contemplated hereby and thereby.


 


5.02         Capitalization.  Set forth on Schedule 5.02 hereto is
a complete and accurate list of all of the Subsidiaries of the Borrower as of
the date of this Agreement showing, as to each such Subsidiary, the correct
legal name thereof, the type of entity, the jurisdiction of its organization,
the number and type of each class of its Equity Interests authorized and the
number outstanding, and the percentage of each such class of its Equity
Interests outstanding on such date that are owned by any of the Loan
Parties.  As of the date of this
Agreement, all of the outstanding Equity Interests in each of the Subsidiaries
of the Borrower are owned directly or indirectly by one or more of the Loan
Parties, free and clear of all Liens, except those created under the Collateral
Documents.  All of the outstanding
Equity Interests in the Borrower and each of its Subsidiaries have been validly
issued and are fully paid and nonassessable.


 


5.03         Authorization;
No Contravention.  The
execution, delivery and performance by each of the Loan Parties of each of the
Loan Documents and the Nu-Gro Acquisition Documents to which it is a party, and
the consummation of the Nu-Gro Transaction, the Holding Company Event (if and
when 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 the
Constitutive Documents of such Loan Party;


 


(b)           violate any
Requirement of Law;


 


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


 


(d)           except for the Liens
created under the Collateral Documents, result in or require the creation or
imposition of any Lien upon or with respect to any of the property or assets of
such Loan Party or any of its Subsidiaries.


 


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Neither any of the Loan
Parties nor any of their respective Subsidiaries is in violation of any
Requirement of Law or in breach of any loan agreement, indenture, mortgage,
deed of trust, lease, instrument, contract or other agreement referred to in
the immediately preceding sentence, the violation or breach of which, either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.


 


5.04         Governmental Authorization; Other
Consents.  Each of the Loan
Parties and each of their Subsidiaries own or possess all of the Governmental
Authorizations that are necessary to own or lease and operate their respective
property and assets and to conduct their respective businesses as now
conducted, except where and to the extent that the failure to obtain or
maintain in effect any such Governmental Authorization, either individually or
in the aggregate, could not reasonably be expected to have a Material Adverse Effect.  Neither any of the Loan Parties nor any of
their Subsidiaries has received any notice relating to or threatening the
revocation, termination, cancellation, denial, impairment or modification of
any such Governmental Authorization, or is in violation or contravention of, or
in default under, any such Governmental Authorization that in any case could
reasonably be expected to have a Material Adverse Effect.  No Governmental Authorization and no
consent, approval or authorization of, or notice to or filing with, or other
action 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 Documents
or the Nu-Gro Acquisition Documents to which it is a party, or for the
consummation of any aspect of the Nu-Gro Transaction;


 


(b)           the grant by any of
the Loan Parties of the Liens granted by it pursuant to the Collateral
Documents;


 


(c)           the perfection or
maintenance of the Liens created under the Collateral Documents (including the
priority thereof);


 


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


 


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


 


except for the approvals,
consents, exemptions, authorizations, actions, notices and filings that have
been 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 and
when consummated), those approvals, consents, exemptions, authorizations or
other actions, notices or filings, the failure of which to obtain or make could
not reasonably be expected to have a Material Adverse Effect.  All applicable waiting periods in connection
with each aspect of the Nu-Gro Transaction have expired without any action
having been taken by any competent Governmental Authority restraining,
preventing or imposing materially adverse conditions upon the Loan Parties and their
Subsidiaries or that could seek or threaten any of the foregoing in any
material respect.


 


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


 


82

















 


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


 


5.06         Financial Statements; No Material
Adverse Effect.  (a)  The
balance sheets of the Borrower as of December 31, 2001, December 31, 2002 and
December 31, 2003, and the related statements of income, stockholders’
equity and cash flow of the Borrower for the Fiscal Years then ended, in each
case including the schedules and notes thereto and accompanied by an opinion of
PricewaterhouseCoopers LLP, the independent auditors of the Borrower, copies of
all of which have been furnished to the Lenders, fairly present in all material
respects the financial condition of the Borrower as at such dates and the
results of operations and cash flow of the Borrower for the respective periods
ended 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 of
income, stockholders’ equity and cash flow of Nu-Gro for the Fiscal Years then
ended, and the balance sheet of Nu-Gro as of December 31, 2003, and the related
statements of income, stockholders’ equity and cash flow of Nu-Gro for the
three-month period then ended, in each case including the schedules and notes thereto
(if any) and accompanied by an opinion of Ernst & Young LLP, the
independent auditors of Nu-Gro, copies of all of which have been furnished to
the Lenders, fairly present in all material respects (subject, solely in the
case of such financial statements of Nu-Gro as of and for the three-month
period ended December 31, 2003, to normal year-end audit adjustments and the
absence of footnotes) the financial condition of Nu-Gro as at such dates and
the results of operations and cash flow of Nu-Gro for the respective periods
ended 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 in
accordance with GAAP applied consistently throughout the respective periods covered
thereby, except as noted therein and (ii) in clause (b) above, including
the schedules and notes thereto, have been prepared in accordance with Canadian
GAAP applied consistently throughout the respective periods covered thereby,
except as noted therein.  As of the
Closing Date, neither the Borrower nor Nu-Gro has any material indebtedness or
other material fixed or contingent liabilities, material liabilities for taxes,
unusual forward or long-term material commitments or anticipated material
losses from any unfavorable commitments, in each case that are required by GAAP
to be disclosed, except as otherwise permitted hereunder.


 


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


 


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


 


83

















 


on the basis of the assumptions stated therein, which
assumptions were fair in the light of conditions existing at the time made, and
represented, at the time of delivery thereof to the Lenders, the Borrower’s
reasonable estimate of its future financial performance (although the actual
results during the periods covered by such forecasts may differ from the
forecasted results).


 


5.08         Accuracy
of Information.  All of the
written information (other than financial projections and pro forma information) furnished by or on
behalf of any of the Loan Parties or any of their Subsidiaries to any of the
Agents or any of the Lenders or any of their representatives or advisors in
connection with the Loan Documents or the Nu-Gro Acquisition Documents or any
aspect of the Nu-Gro Transaction or any of the other transactions contemplated
hereby or thereby, considered as a whole, does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made therein, in light of the circumstances in which any such
statements 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 investigation
pending or threatened) against or affecting any of the Loan Parties or any of
their Subsidiaries or any of the property or assets thereof in any court or
before any arbitrator or by or before any Governmental Authority of any
kind that either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.


 


5.10         Collateral;
Liens.  Each of the Loan Parties
is the legal and beneficial owner of the Collateral purported to be owned
thereby under the Collateral Documents, free and clear of all Liens, except for
the liens and security interests created or permitted under the Loan
Documents.  The Collateral Documents,
together with the filing of appropriate Uniform Commercial Code financing
statements in favor of the Administrative Agent, on behalf of the Secured
Parties, the possession of the certificates evidencing the Equity Interests in
the Subsidiaries of the Borrower (or upon consummation of the Holding Company
Event, the Subsidiaries of Holdings) comprising part of the Collateral and the
taking of any other actions described in the Collateral Documents, create valid
and 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) representing
all of the Equity Interests in the Subsidiaries of the Loan Parties that are
purported to comprise part of the Collateral have been delivered to the
Administrative Agent as required under the terms of the Collateral Documents,
together with undated stock powers or other appropriate powers duly executed in
blank; all filings and other actions necessary to perfect and protect the liens
and security interests of the Administrative Agent in the Collateral have been
duly made or taken and are in full force and effect or will be duly made or
taken in accordance with the terms of the Loan Documents; and all filing fees
and recording taxes have been paid in full.


 


5.11         Intellectual
Property.  Each of the Loan
Parties and each of their Subsidiaries own or have the legal right to use all
of the patents, licenses, franchises, copyrights, service marks, trademarks,
trade secrets and trade names (collectively, “IP Rights”) that are necessary to own or
lease and operate their respective property and assets and to conduct their


 


84

















 


respective businesses as now conducted, without known
conflict with the rights of any other Person except to the extent the failure
to 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 a
Material Adverse Effect.  No action,
suit, litigation, arbitration or proceeding is pending or, to the knowledge of
the Borrower, threatened (and, to the knowledge of the Borrower, no
investigation is pending or threatened) challenging the use by any of the Loan
Parties or any of their Subsidiaries of any such IP Right or the validity or
effectiveness thereof, except for any such action, suit, investigation,
litigation, arbitration or proceeding that, either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.


 


5.12         Margin Stock.  Neither any of the Loan Parties nor any of
their respective Subsidiaries is engaged, principally or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying any “margin stock”
(within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System (12 CFR 207)).  None of
the proceeds of any Borrowing or the drawings under any Letter of Credit will
be used to purchase or carry any margin stock or to extend credit to others for
the purpose of purchasing or carrying margin stock.


 


5.13         Investment
Company Act, Etc.  Neither any
of 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 Investment
Company Act of 1940, as amended).  None
of the making (or deemed making) of any Borrowing, the issuance (or deemed
issuance) 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 the
Nu-Gro Transaction, or the Holding Company Event (if and when consummated) or
any of the other transactions contemplated hereby, will violate any provision
of the Investment Company Act of 1940, as amended, or any rule, regulation or
order of the Securities and Exchange Commission thereunder.


 


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


 


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


 


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


 


85

















 


expected to have, a Material Adverse Effect.  Schedule B (Actuarial Information) to
the 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 furnished
or made available to the Lenders, is complete and accurate and fairly presents
in all material respects the funding status of such plan at such time; and, to
the knowledge of the Loan Parties, since the date of such Schedule B, there has
been no material adverse change in the funding status of such plan.  Neither any of the Loan Parties nor any of
the ERISA Affiliates (i) has incurred any Withdrawal Liability to any
Multiemployer Plan in excess of $1,000,000 or (ii) has been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization
or has been terminated, within the meaning of Title IV of ERISA, and, to
the best knowledge of the Loan Parties and the ERISA Affiliates, no such
Multiemployer Plan could reasonably be expected to be in reorganization or to
be terminated, within the meaning of Title IV of ERISA.


 


5.17         Environmental
Compliance.  (a)  The
operations and properties of each of the Loan Parties and each of their
Subsidiaries comply in all material respects with all applicable Environmental
Laws and Environmental Permits; all past noncompliance with such Environmental
Laws and Environmental Permits has been resolved without any material ongoing
obligations or costs; all Environmental Permits that are necessary for the
operations or properties of any of the Loan Parties or any of their
Subsidiaries have been obtained and are in full force and effect, except where
and to the extent that the failure to obtain or maintain in full force and
effect any such Environmental Permit, either individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect; and no
circumstances exist that, either individually or in the aggregate, could
reasonably be expected to (i) form the basis of an Environmental Action
against any of the Loan Parties or any of their Subsidiaries or any of the
properties thereof that, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect or (ii) cause any
such property to be subject to any restrictions on ownership, occupancy or use
or 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 of
the properties owned or operated by any of the Loan Parties or any of their
Subsidiaries is listed or, to the actual knowledge of the Borrower, is proposed
for 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 reasonably
be expected to have a Material Adverse Effect, (A) there are no, and never
have been any, underground or aboveground storage tanks or any surface
impoundments, septic tanks, pits, sumps or lagoons in which Hazardous Materials
are being or have been treated, stored or disposed of on any property owned or
operated by any of the Loan Parties or any of their Subsidiaries or, to the
knowledge of the Borrower, on any property formerly owned or operated by any of
the Loan Parties or any of their Subsidiaries, (B) there is no asbestos or
asbestos-containing material on any property owned or operated by any of the
Loan Parties or any of their Subsidiaries and (C) Hazardous Materials have
not been released, discharged or disposed of on any property owned or operated
by any of the Loan Parties or any of their Subsidiaries.


 


(c)           Except as disclosed in Schedule 5.17, neither any
of the Loan Parties nor any of their Subsidiaries is undertaking, and has not
completed, either individually or together with other potentially responsible
parties, any investigation or assessment or remedial or


 


86

















 


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


 


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


 


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


 


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


 


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


 


ARTICLE VI

AFFIRMATIVE, REPORTING AND FINANCIAL COVENANTS


 


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


 


6.01         Compliance with Laws, Maintenance of
Governmental Authorizations, Etc. 
(a) Comply, and cause each of its Subsidiaries to comply, with all
applicable Requirements of Law, such compliance to include, without limitation,
compliance with ERISA, with the Racketeer Influenced and Corrupt Organizations
Chapter of the Organized Crime Control Act of 1970 and with the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001, Pub. L.107-57 and all other laws and
regulations relating to money laundering and terrorist activities except to the
extent the failure of such Person to comply with any of the foregoing could not
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect and (b) except as provided in Section 6.05, obtain
and maintain in effect all Governmental Authorizations that are necessary (i)
to own or lease and operate their respective property and assets and to conduct
their respective businesses as now conducted, except where and to the extent
that the failure to obtain or maintain in effect any such Governmental
Authorization, either individually or in the aggregate, could not reasonably be
expected 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 of
the Loan Documents to which it is a party, or for the consummation of any aspect
of the Transaction or any of the other transactions contemplated hereby and
thereby.  This Section 6.01 shall
not apply to compliance with Environmental Laws or Environmental Permits (which
are the subject of Section 6.03).


 


6.02         Payment of
Taxes, Etc.  Pay and discharge,
and cause each of its Subsidiaries to pay and discharge, to the extent due and
payable and before the same shall become delinquent, (a) all material
taxes, assessments, reassessments, levies and other governmental charges
imposed upon it or upon its property, assets or income and (b) all lawful
claims that, if unpaid, might by law become a Lien upon its property and assets
or any part thereof; provided, however,
that neither the Borrower nor any of its Subsidiaries shall be required to pay or
discharge any such tax, assessment, reassessment, levy, charge or claim (i) the
amount, applicability or validity of which is being contested in good faith and
by proper proceedings diligently conducted and as to which appropriate and
adequate reserves are being maintained by the Borrower or its applicable
Subsidiary in accordance with GAAP and (ii) except, in each case, to the extent
that the failure to pay or discharge which tax, assessment, reassessment, levy,
charge or claim could not, individually or when aggregated with all other
unpaid amounts of a type referred to in this Section 6.02, reasonably be
expected to have a Material Adverse Effect.


 


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6.03         Compliance
with Environmental Laws. 
(a) Comply (and use commercially reasonable efforts to require that all
lessees and other Persons operating or occupying any of the Subsidiaries’
properties to comply), and cause each of its Subsidiaries to comply (and to use
commercially reasonable efforts to require all lessees and other Persons
operating or occupying any of the Subsidiaries’ properties to comply), in all
material respects, with all Environmental Laws and the Environmental Permits
applicable to such Person or its operations or properties; (b) obtain and
renew, and cause each of its Subsidiaries to obtain and renew, all of the
Environmental Permits necessary for the ownership or operation of their
respective properties or the conduct of their respective businesses as now
conducted and as proposed to be conducted; and (c) conduct, and cause each of
its Subsidiaries to conduct, any investigation, study, sampling or testing, and
undertake, and cause each of its Subsidiaries to undertake, any cleanup,
removal, remedial or other action, necessary to remove and clean up releases of
the Hazardous Materials from any of its properties in accordance with the
requirements of all applicable Environmental Laws, except, in the case of clause
(b) or (c) of this Section 6.03, where the failure to
obtain or renew any such Environmental Permit, to conduct any such
investigation, 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 or
liability or (iii) to subject the Administrative Agent or any of the Lenders to
any criminal penalty or liability or (except for nonmaterial fines for which
the Administrative Agent or such Lender is fully indemnified under Section
10.05) any civil penalty or liability; provided, however,
that no Loan Party nor any of their Subsidiaries shall be required to undertake
any such cleanup, removal, remedial or other action otherwise required under
this Section 6.03 to the extent that the amount, applicability or
validity thereof is being contested in good faith and by proper proceedings
diligently conducted and appropriate and adequate reserves are being maintained
by such Loan Party or such applicable Subsidiary with respect to such
circumstances in accordance with GAAP.


 


6.04         Maintenance
of Insurance.  Maintain, and
cause each of its Subsidiaries to maintain, insurance for their respective
properties, assets and businesses with financially sound and reputable
insurance companies or associations and of such types (including, without
limitation, insurance against theft and fraud and against loss or damage by
fire, explosion or hazard of or to property and general public liability
insurance), in such amounts and with such deductibles, covering such casualties
and contingencies and otherwise on such terms as are at least as favorable as
those usually carried by companies of established reputations engaged in
similar businesses and owning similar properties and assets in the same general
areas in which the Borrower or its applicable Subsidiary operates or as may
otherwise be required by applicable Requirements of Law; provided, however, that each Loan Party and their Subsidiaries
may effect workers’ compensation insurance or similar coverage with respect to
their respective operations in any particular jurisdiction through an insurance
fund operated by such jurisdiction or by meeting the self-insurance
requirements of such jurisdiction so long as the Borrower, Holdings or such
Subsidiary establishes and maintains appropriate and adequate reserves therefor
in accordance with GAAP.


 


6.05         Preservation of Corporate Existence,
Etc.  Preserve and maintain, and
cause 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 Borrower
and its Subsidiaries (i) may consummate any merger or consolidation otherwise
permitted under Section 7.03 and (ii) may amend, supplement or
otherwise modify their rights under their respective Constitutive Documents to
the extent otherwise permitted under Section 7.12; and provided  further,  however, that neither the Borrower nor any of its Subsidiaries shall be
required to preserve any right, permit, license, approval, privilege or
franchise if the loss thereof, either individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.


 


6.06         Visitation
Rights.  At any reasonable time
and from time to time, permit any of the Agents or any of the Lenders, or any
agents or representatives thereof (so long as such agents or representatives
are or agree to be bound by the provisions of Section 10.08), to examine
and make copies of and abstracts from the records and books of account of, and
to visit the properties of, the Borrower and its Subsidiaries and to discuss
the affairs, finances and accounts of the Borrower and/or any of its
Subsidiaries with any of their officers or directors and with their independent
auditors; provided, that, excluding
any such visits and inspections during the continuation of an Event of Default,
only the Administrative Agent on
behalf of the Lenders may exercise rights under this Section 6.06 and the
Administrative Agent shall not exercise
such rights more often than two (2) times during any calendar year absent the
existence of an Event of Default and only one (1) such time shall be at the
Borrower’s expense; provided, further that when an Event
of Default exists the Administrative Agent or any Lender (or any of their
respective representatives or independent contractors) may do any of the
foregoing at the expense of the Borrower at any time and from time to time
without limitation and without advance notice, except that any such visits
shall be done during normal business hours. 
The Administrative Agent and the Lenders shall give the Borrower the
opportunity to participate in any discussions with the Borrower’s accountants.


 


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


 


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


 


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


 


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6.10         Transactions
with Affiliates.  Conduct, and
cause each of its Subsidiaries to conduct, directly or indirectly, all
transactions or series of related transactions (including, without limitation,
the purchase, sale, lease, transfer or exchange of property or assets of any
kind or the rendering of services of any kind) otherwise permitted under the
Loan Documents with any of their Affiliates on terms that are fair and
reasonable and no less favorable to the Borrower (or upon consummation of the
Holding Company Event, Holdings) or any of its Subsidiaries than it would
obtain in a comparable arm’s-length transaction with a Person not an Affiliate
thereof, other than:


 


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


 


(b)           the payment of
management fees to the Sponsor pursuant to the terms of the Professional
Services Agreement, as in effect on the Closing Date, in an aggregate amount
not to exceed $1,000,000 in any Fiscal Year;


 


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


 


(d)           any transaction or
series of related transactions solely between or among (i) Holdings or the
Borrower, on the one hand, and one or more of the Restricted Subsidiaries on
the other hand, (ii) one or more of the Restricted Subsidiaries, or (iii) one
or more of the Unrestricted Subsidiaries, on the one hand, and Holdings, the
Borrower 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 is
not otherwise prohibited under the terms of the Loan Documents;


 


(e)           equity
issuances by Holdings not prohibited by this Agreement;


 


(f)            customary
fees may be paid to any directors of Holdings and reimbursement may be made of
reasonable out-of-pocket costs of the directors of Holdings;


 


(g)           each Loan Party
and their respective Subsidiaries may enter into employment and
severance arrangements with their respective officers and employees in the
ordinary course of business;


 


(h)           each Loan Party and their respective Subsidiaries
may perform obligations under any
employment contract, collective bargaining agreement, employee benefit plan,
related trust agreement or any other similar arrangement heretofore or
hereafter entered into in the ordinary course of business and not otherwise
prohibited hereunder;


 


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(i)            each Loan Party
and their respective Subsidiaries may
maintain benefit programs or arrangements for their respective employees, officers
or directors, including, without limitation, vacation plans, health and life
insurance plans, deferred compensation plans, and retirement or savings plans
and similar plans, in each case, in the ordinary course of business and not
otherwise prohibited hereunder;


 


(j)            each Loan Party
and their respective Subsidiaries may make payments pursuant to any
customary tax sharing arrangement among the Borrower (or upon the consummation
of the Holding Company Event, Holdings) and its Subsidiaries entered into in
the ordinary course of business; and


 


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


 


6.11         Covenant
to Give Security.  (a)  Upon (i) the request of the Administrative
Agent following the occurrence and during the continuance of a Default under Section
8.01(a) or 8.01(f) or an Event of Default, (ii) the formation
or acquisition of one or more new direct or indirect Subsidiaries by any Loan
Party or (iii) the purchase or other acquisition of any real property or any
personal property by any Loan Party with a value in excess of $2,500,000 in any
single transaction or series of related transactions, which property, in the
reasonable judgment of the Administrative Agent, shall not already be subject
to a valid and perfected lien and security interest in favor of the
Administrative Agent, for the benefit of the Secured Parties, the Borrower
shall, in each case at its own expense:


 


(A)          within thirty (30) days after such
request or purchase or other acquisition, or such longer period, up to an
additional thirty (30) days, as the Administrative Agent may agree, furnish to
the Administrative Agent a description of such real and personal properties of
each of the Loan Parties and their respective Subsidiaries in detail reasonably
satisfactory to the Administrative Agent;


 


(B)           in connection with the formation or
acquisition of a Subsidiary, within thirty (30) days after such formation
or acquisition or such longer period, not to exceed an additional sixty (60)
days, as the Administrative Agent may agree in its sole discretion, (A) cause
each such Subsidiary that is not a Foreign Subsidiary, and cause each direct
and indirect parent of such Subsidiary (if it has not already done so), to duly
execute and deliver to the Administrative Agent a Guaranty or Guarantee
Supplement, guaranteeing the other Loan Parties’ obligations under the Loan
Documents, (B) deliver (or cause such direct and indirect parent to deliver)
certificates (if any) representing the Pledged Interests of such Subsidiary
accompanied by undated stock powers or other appropriate instruments of
transfer executed in blank and instruments evidencing the Pledged Debt of such
Subsidiary indorsed in blank to the Administrative Agent, together with, if
requested by the Administrative Agent, Security Agreement Supplements with
respect 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 be
required to be pledged as Collateral, (C) duly execute and deliver, and cause
each such Subsidiary to duly execute and deliver, to the Administrative Agent
mortgages, collateral assignments, Security Agreement Supplements and other
security agreements, as specified by and in form and substance reasonably
satisfactory to the Administrative Agent, securing payment of all of the
Obligations of the applicable Loan Party or Subsidiary of a Loan Party, as the
case may be, under and in respect of the Loan Documents and constituting liens
on and security interests in all such real and personal properties and (D) duly
execute and deliver, and cause each such Subsidiary to duly execute and
deliver, Guarantee Supplements;


 


(C)           within thirty (30) days after such
request or purchase or other acquisition, or such longer period, not to exceed
an additional sixty (60) days, as the Administrative Agent may agree in its
sole discretion, take, and cause each such Subsidiary that is not a Foreign
Subsidiary to take, whatever action (including, without limitation, the
recording of Mortgages, the filing of Uniform Commercial Code financing
statements and IP Security Agreements, the giving of notices and the
endorsement of notices on title documents) may be necessary or in the
reasonable opinion of the Administrative Agent advisable to vest in the
Administrative Agent (or in any co-agent, sub-agent or other representative of
the Administrative Agent designated by it) valid and subsisting Liens on the
real and personal properties purported to be subject to the Mortgages,
collateral assignments, Security Agreement Supplements and security agreements
delivered pursuant to this Section 6.11, enforceable against all third
parties in accordance with their terms;


 


(D)          within thirty (30) days after the
request of the Administrative Agent (or such longer period, not to exceed an
additional sixty (60) days, as the Administrative Agent in its sole discretion
may permit), deliver to the Administrative Agent a signed copy of opinions of
counsel for the applicable Loan Parties, addressed to the Administrative Agent
and 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 and
binding obligations of each of the Loan Parties party thereto, enforceable
against such Loan Party in accordance with their terms, as to such recordings,
filings, notices, endorsements and other actions being sufficient to create
valid and perfected liens on and security interests in such real and personal
properties, and as to such other matters as the Administrative Agent may
reasonably request;


 


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


 


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satisfactory to the
Administrative Agent, provided,  however,
that to the extent that any of the Loan Parties or any of its Subsidiaries
shall have otherwise received any of the foregoing items with respect to such
real property, such items shall, promptly after the receipt thereof, be
delivered to the Administrative Agent;


 


(F)           upon the occurrence and during the
continuance of a Default under Section 8.01(a) or 8.01(f) or an
Event of Default, promptly execute and deliver, and cause each of its
Subsidiaries 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 as
may be necessary or as the Administrative Agent may deem reasonably desirable
in order to obtain and maintain from and after the time any dividend or other
distribution is paid or payable by any of the Subsidiaries of any Loan Party a
valid and perfected first priority lien on and security interest in such
dividend or other distribution; and


 


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


 


(b)           Notwithstanding anything to the contrary in Section
6.11(a), the Administrative Agent shall not take or perfect, as the case
may be, a security interest in those assets (and shall not request the
preparation of surveys, soil reports and environmental site assessments) as to
which 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 or
environmental site assessments not already available at such time) are
excessive in relation to the benefit to the Secured Parties of the security or
information afforded thereby.


 


6.12         Further
Assurances.  Promptly upon the
request of the Administrative Agent, or any of the Lenders through the
Administrative Agent, at any time and from time to time, (a) correct, and
cause each of its Subsidiaries to promptly correct, any defect or error that
may 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 all
such further acts, deeds, conveyances, pledge agreements, mortgages, deeds of
trust, trust deeds, collateral assignments, financing statements and
continuations thereof, termination statements, notices of assignment,
transfers, certificates, assurances and other instruments and take such further
actions, and cause each of its Subsidiaries promptly to do, execute, acknowledge,
deliver, record, re-record, file, re-file, register and re-register any and all
such further acts, deeds, conveyances, pledge agreements, mortgages, deeds of
trust, trust deeds, collateral assignments, financing statements and
continuations thereof, termination statements, notices of collateral
assignments, transfers, certificates, assurances and other instruments and take
such further action, as may be necessary or as the Administrative Agent, or any
of the Lenders through the Administrative Agent, may reasonably request from
time to time in order to (i) carry out more effectively the provisions and
purposes of the Loan


 


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


 


6.13         Reporting
Requirements.  Until the
Termination Date, the Borrower will furnish to the Administrative Agent:


 


(a)           Default Notices.  As soon as possible and in any event within
three Business Days after the occurrence of each Default or any event,
development or occurrence that, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect continuing on the date
of such statement, a statement of a Responsible Officer of the Borrower setting
forth the details of such Default or such event, development or occurrence
(including, without limitation, the anticipated effect thereof), the period of
time such Default or such event, development or occurrence has existed and been
continuing and the action that the Borrower has taken and/or proposes to take
with respect thereto.


 


(b)           Quarterly
Financials.  As soon as available
and in any event within 45 days after the end of each of the first three Fiscal
Quarters of each Fiscal Year, commencing with the Fiscal Quarter ending March
31, 2004, a Consolidated balance sheet of the Borrower and its Subsidiaries as
of the end of such Fiscal Quarter and Consolidated statements of income,
stockholders’ equity and cash flows of the Borrower and its Subsidiaries for
the period commencing at the end of the previous Fiscal Quarter and ending with
the end of such Fiscal Quarter and for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal Quarter, setting
forth 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 the
immediately preceding Fiscal Year and, in the case of each such Consolidated
statement of income or operations, stockholders’ equity and cash flows, the
corresponding figures for the corresponding period in the immediately preceding
Fiscal Year, all in reasonable detail (it being understood that such financial
statements delivered pursuant to this subsection (b) for the Fiscal
Quarter ending March 31, 2004 will not contain any information with respect to
Nu-Gro and its Subsidiaries).


 


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


 


95

















 


and its
Subsidiaries for such Fiscal Year, accompanied by an unqualified opinion or an
opinion otherwise reasonably acceptable to the Required Lenders of
PricewaterhouseCoopers LLP or other independent public accountants of
nationally recognized standing, setting forth in comparative form, in the case
of each such Consolidated balance sheet, the corresponding figures as of the
last day of the immediately preceding Fiscal Year, and, in the case of each
such Consolidated statement of income or operations, stockholders’ equity and
cash flows, the corresponding figures for the corresponding period in the
immediately preceding Fiscal Year, together with (i) a letter from
PricewaterhouseCoopers LLP or such independent public accountants of nationally
recognized standing stating that, in the course of their regular audit of the
Consolidated financial statements of the Borrower and its Subsidiaries, which
audit was conducted by such accountants in accordance with generally accepted
auditing standards, such accountants have not obtained any knowledge that an
Event of Default has occurred and is continuing under Section 6.14 or
if, in the opinion of such accountants, an Event of Default has occurred and is
continuing under Section 6.14, a statement as to the status and nature
thereof and (ii) in the event of any change in the generally accepted
accounting principles used by such accountants in the preparation of the
Consolidated financial statements of the Borrower and its Subsidiaries referred
to above in this Section 6.13(c) from GAAP, such accountants shall also
provide a reasonably detailed description of such changes.


 


(d)           Compliance
Certificate.  Commencing for the
Fiscal Quarter ending on or about September 30, 2004, together with each
delivery to the Administrative Agent of the Consolidated financial statements
of the Borrower and its Subsidiaries referred to in Sections 6.13(b) and
6.13(c), a certificate in substantially the form of Exhibit D
hereto (each, a “Compliance
Certificate”) of a Senior Financial Officer, in form and
substance reasonably satisfactory to the Administrative Agent:


 


(i)            duly certifying
that, subject, in the case of any such Consolidated financial statements
delivered to the Administrative Agent and the Lenders pursuant to Section
6.13(b), to the absence of footnote disclosure and normal year-end audit
adjustments, (A) the Consolidated financial statements of the Borrower and its
Subsidiaries delivered with such certificate fairly present in all material
respects the Consolidated financial condition of the Borrower and its
Subsidiaries as of the last day of such Fiscal Quarter or such Fiscal Year, as
the case may be, and the Consolidated results of operations and cash flows of
the Borrower and its Subsidiaries for the Fiscal Quarter or the Fiscal Year
ended on such date and (B) the Consolidated financial statements of the
Borrower and its Subsidiaries delivered with such certificate have been
prepared in accordance with GAAP (or a reconciliation statement has been
delivered together therewith conforming such Consolidated financial statements
to GAAP);


 


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


 


96

















 


any covenant
contained in Section 6.14, the Equity Investors may deliver, together
with 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 Equity
Interests as contemplated pursuant to subclause (b)(xii) and the final proviso
of the definition of “Consolidated EBITDA”; provided  further,
that the delivery of a Notice of Intent to Cure shall in no way affect or alter
the occurrence, existence or continuation of any such Event of Default or the
rights, benefits, powers and remedies of the Administrative Agent and the
Lenders under any Loan Document unless and until such Event of Default has been
cured as a result of the action contemplated by such Notice of Intent to Cure
or otherwise;


 


(iii)          setting forth a
schedule of the computations used by the Borrower in determining compliance
with the covenants contained in Sections 7.07 and 6.14 (including
with respect to each such Section, where applicable, the calculations of the
maximum or minimum amount, ratio or percentage, as the case may be, permissible
under the terms of such Section, and the calculation of the amount, ratio or
percentage then in existence) and, in the case of any such Consolidated
financial statements delivered to the Administrative Agent and the Lenders pursuant
to Section 6.13(c), the amount of Excess Cash Flow for the Fiscal
Year covered thereby;


 


(iv)          in the case of any
such Consolidated financial statements delivered to the Administrative Agent
and the Lenders pursuant to Section 6.13(b), setting forth (A) a
description in reasonable detail of all of the changes in the generally
accepted accounting principles applied in the preparation of such financial
statements from GAAP and (B) a statement of reconciliation, if and to the
extent necessary for determining whether any of the changes in the generally
accepted accounting principles applied in the preparation of such financial
statements would affect the calculation of, or compliance with, Sections
7.07 or 6.14, conforming such Consolidated financial statements to
GAAP; and


 


(v)           commencing upon the
occurrence of the Holding Company Event, setting forth a schedule in reasonable
detail of the computations used by Holdings in determining compliance with the
provisions in Section 7.02(c)(ii).


 


(e)           Forecasts.  As soon as available and in any event at
least 30 days after the first day of each Fiscal Year, commencing with the
Fiscal Year ending December 31, 2004, Consolidated forecasts prepared by
management 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 form
reasonably satisfactory to the Administrative Agent and setting forth in
comparative form the corresponding figures for the immediately preceding Fiscal
Year.


 


(f)            Schedule Updates.  Together with each Compliance Certificate
delivered pursuant to Section 6.13(d), amendments and supplements to Schedule
5.19 to this Agreement, Schedules V and VII to the Security
Agreement and such other Schedules to any of the Loan Documents as the
Administrative Agent shall reasonably request, in each


 


97

















 


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


 


(g)           Accountants’ Letters, Etc.  Promptly
upon receipt thereof, copies of all final “management
recommendation letters” submitted to any Loan Party or any of its
Subsidiaries by any independent auditors of such Loan Party or any of its
Subsidiaries in connection with each annual audit of its Consolidated financial
statements made by such auditors.


 


(h)           Licenses, Etc.  Promptly and in any event within five
Business Days after receipt thereof, notice of any actual, pending or
threatened suspension, termination or revocation of any of the Governmental
Authorizations of any of the Loan Parties or any of their Subsidiaries, or any
enjoinment, barring or suspension of the ability of the or any such Loan Party
or Subsidiary to conduct any of its businesses in the ordinary course, in each
case, that could reasonably be expected to have a Material Adverse Effect.


 


(i)            Litigation.  Promptly and in any event within five
Business Days after the service upon any Loan Party or any of its Subsidiaries
of a pleading, summons or other service of process notifying it of the
commencement thereof, notice of all actions, suits, investigations, litigation,
arbitrations and proceedings against or affecting such Loan Party or any of its
Subsidiaries or any of the property or assets thereof in any court or before
any arbitrator or by or before any Governmental Authority of any kind in which
there is a reasonable likelihood of an adverse determination and that, either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect; and promptly after the occurrence thereof, notice of
any adverse change in the status, or in the reasonably anticipated financial
effect on such Loan Party or any of its Subsidiaries, of any such action, suit,
investigation, litigation, arbitration or proceeding (and, in each case, upon
the reasonable request of the Administrative Agent, any other information
available to any of the Loan Parties or any of their Subsidiaries with respect
to any of the foregoing that would enable the Administrative Agent and the
Lenders to more fully evaluate such action, suit, investigation, litigation,
arbitration or proceeding, unless the Loan Party or the applicable Subsidiary
is precluded from disclosing any such report or statement pursuant to a
confidentiality agreement with the applicable Governmental Authority).


 


(j)            Securities Reports, Etc.  Promptly
and in any event within five Business Days after the sending or filing thereof,
copies of all proxy statements, financial statements, change reports and other
reports that any Loan Party or any of its Subsidiaries sends to its
stockholders, partners or members (or equivalent persons thereto), and copies
of all regular, periodic and special reports and information forms, and all
registration statements, prospectuses and information memoranda, that any Loan
Party or any of its Subsidiaries files with the Securities and Exchange
Commission or any Governmental Authority that may be substituted therefor, or
with any national or international securities exchange, and copies of all
private placement or offering memoranda pursuant to which securities of such
Loan Party or Subsidiary that are exempt from registration under the Securities
Act are proposed to be issued and sold thereby.


 


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(k)           Creditor Reports.  Promptly after the furnishing or receipt
thereof, copies of any statement or report furnished to or received from any
other holder of the securities of any Loan Party or any of its Subsidiaries
pursuant to the terms of any indenture, loan or credit agreement, receivables
purchase agreement or similar agreement of such Loan Party or Subsidiary with
amounts outstanding or having commitments to extend credit in an aggregate
principal amount of at least $20,000,000 (including, without limitation, any
amendments, waivers or consents given or requested in respect thereof and any
notices of default, acceleration or redemption delivered thereunder) and not otherwise
required to be furnished to the Administrative Agent (for the benefit of the
Lenders) pursuant to any other clause of this Section 6.13.


 


(l)            ERISA Events and
ERISA Reports; Plan Terminations, Etc. 
(i) Promptly and in any event within 15 days after any of the Loan
Parties or any of the ERISA Affiliates knows or has reason to know that any
ERISA Event which could reasonably be expected to result in a material
liability has occurred, a statement of a Responsible Officer of the Borrower
describing such material ERISA Event and the action, if any, that the Borrower,
such other applicable Loan Party or such ERISA Affiliate has taken and/or
proposes to take with respect thereto, together with materials or information
filed or to be filed with any Governmental Authority or any trustee for any
Plan as a result of such material ERISA Event; (ii) on the date on which any
records, documents or other information must be furnished to the PBGC with
respect 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 the
ERISA Affiliates, copies of each notice from the PBGC stating its intention to
terminate any Pension Plan or to have a trustee appointed to administer any
Pension Plan; (iv) promptly following the request of the Administrative Agent,
or any of the Lenders through the Administrative Agent, therefor, a copy of the
most 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 event
within 15 Business Days after receipt thereof by any of the Loan Parties or any
of the ERISA Affiliates from the sponsor of a Multiemployer Plan, copies of
each notice concerning (A) the imposition of Withdrawal Liability by any
such Multiemployer Plan, (B) the reorganization or termination, within the
meaning of Title IV of ERISA, of any such Multiemployer Plan or (C) the
amount of liability incurred, or that could reasonably be expected to be
incurred, by such Loan Party or any such ERISA Affiliate in connection with any
event described in subclause (v)(A) or (v)(B) of this Section
6.13(l).


 


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


 


(n)           Environmental
Conditions.  Promptly and in any
event within ten Business Days after the assertion or occurrence thereof:


 


99

















 


(i)            notice of any
condition or occurrence on or arising from any property owned or operated by
the Borrower or any of its Subsidiaries that resulted or is alleged to have
resulted in noncompliance in any material respect by the Borrower or such
Subsidiary with any applicable Environmental Law or Environmental Permit;


 


(ii)           any condition or
occurrence on any property owned or operated by the Borrower or any of its
Subsidiaries that could reasonably be expected to cause such property to be
subject to any material restrictions on the ownership, occupancy or use thereof
or on the transferability of such property by the Borrower or its applicable
Subsidiary under any Environmental Law; and


 


(iii)          the taking of any
removal or remedial action involving material costs or liabilities in response
to the actual or alleged presence of any Hazardous Material on any property
owned or operated by the Borrower or any of its Subsidiaries as required by any
Environmental Law, any Environmental Permit or any Governmental Authority.


 


All such notices shall
describe in reasonable detail the nature of the condition, occurrence, removal
or remedial action described therein, the period of time such condition or
circumstance has existed and been continuing and, in the case of each such
condition or occurrence, the action that the Borrower or its applicable
Subsidiary has taken and/or proposes to take with respect thereto.


 


(o)           Insurance.  As soon as available and in any event within
90 days after the end of each Fiscal Year, commencing with the Fiscal Year
ending December 31, 2004, a report summarizing the insurance coverage in effect
for the Loan Parties and their respective Subsidiaries, specifying therein the
type, carrier, amount, deductibles and co-insurance requirements and expiration
dates 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 the
business, condition (financial or otherwise), operations, liabilities (actual
or contingent), performance, properties or prospects of the Borrower or any of
its Subsidiaries as any of the Lenders, through the Administrative Agent, may
from time to time reasonably request.


 


6.14         Financial
Covenants.  Until the
Termination Date, the Borrower will:


 


(a)           Total Leverage
Ratio.  Maintain a Total Leverage
Ratio as of the last day of each Measurement Period set forth below of not more
than the amount set forth below for each Measurement Period set forth below:


 


100

















 




	
  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 Coverage
Ratio.  Maintain an Interest
Coverage Ratio as of the last day of each Measurement Period set forth below of
not less than the amount set forth below for each Measurement Period set forth
below:


 




	
  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-Closing
Matters.  Upon the occurrence of
the Holding Company Event, Holdings shall (i) execute and deliver a Holdings
Joinder Agreement and Guaranty in substantially the form of Exhibit K
hereto (the “Holdings
Joinder and Guaranty”) and a


 


101

















 


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


 


ARTICLE VII

NEGATIVE COVENANTS


 


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


 


7.01         Liens, Etc.  Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien on or with respect to any of its property or assets of any character
(including, without limitation, accounts), whether now owned or hereafter
acquired, or sign or file or authorize, or permit any of its Subsidiaries to
sign or file or authorize, under the Uniform Commercial Code or any similar
Requirements of Law of any jurisdiction, a financing statement (or the
equivalent 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 any
such financing statement (or the equivalent thereof), excluding, however, from the
operation of the foregoing restrictions:


 


(a)           Liens created under
the Loan Documents;


 


(b)           Permitted Liens;


 


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


 


(d)           (i) purchase money
Liens upon or in real property or equipment acquired or held by the Borrower or
any of its Subsidiaries to secure the purchase price of such real property or
equipment or to secure Indebtedness incurred solely for the purpose of
financing the acquisition, construction or improvement of any such real
property or equipment to be subject to such Liens, or Liens existing on any
such real property or equipment at the time of its acquisition or the
completion of its construction or improvement (other than any such Liens
created in contemplation of such acquisition, construction or improvement that
do 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 or
equipment being so acquired, constructed or improved and the products and
proceeds thereof, (B) such Liens attach concurrently or within 120 days after
the acquisition, repair, replacement or improvement (as applicable) of the
property subject to such Liens and (C) any Indebtedness secured by such Liens
shall otherwise be permitted under Section 7.02(b)(iii);


 


(e)           Liens upon any of
the property and assets (other than any Equity Interests in any Person)
existing at the time such property or asset is purchased or otherwise acquired
by the Borrower or any of its Subsidiaries; provided that any such Lien
was not created in contemplation of such purchase or other acquisition and does
not extend to


 


102

















 


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


 


(f)            Liens upon any of
the property and assets (other than any Equity Interests in any Person) of a
Person and its Subsidiaries existing at the time such Person is merged into or
consolidated with any of the Subsidiaries of the Borrower, or otherwise becomes
a Subsidiary of the Borrower, in accordance with the terms of the Loan
Documents; provided that any such Lien was not created in contemplation
of such merger, consolidation or acquisition and does not extend to or cover
any property or assets other than property and assets and the products and
proceeds thereof of the Person and its Subsidiaries being so merged into or
consolidated with the applicable Subsidiary of the Borrower or being acquired by
the Borrower or its applicable Subsidiary, as the case may be; and provided  further that any Indebtedness or
other Obligations secured by such Lien shall otherwise be permitted under Section 7.02;


 


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


 


(h)           Liens arising solely
from precautionary filings of financing statements under the Uniform Commercial
Code of the applicable jurisdictions in respect of Operating Leases entered
into by the Borrower or any of its Subsidiaries in the ordinary course;


 


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


 


(j)            Liens not otherwise
permitted under this Section 7.01 securing obligations of the Borrower
and its Subsidiaries in an aggregate amount not to exceed $30,000,000 at any
time outstanding;


 


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


 


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


 


103

















 


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


 


(a)           in the case of the
Borrower, (i) subject to clause (ii) below, Permitted Subordinated
Indebtedness in an aggregate amount not to exceed $20,000,000 at any time
outstanding and (ii) in an aggregate amount in excess of $20,000,000 solely to
the extent that such excess amounts are applied to prepay the Loans pursuant to
Section 2.05(b)(iv); and


 


(b)           in the case of the
Borrower and its Subsidiaries,


 


(i)            Indebtedness under
the Loan Documents;


 


(ii)           Indebtedness of (A)
the Borrower owing to Holdings or any of the Restricted Subsidiaries, (B) any
of the Restricted Subsidiaries owing to Holdings or the Borrower or any of the
other Restricted Subsidiaries, (C) any of the Unrestricted Subsidiaries owing
to Holdings or the Borrower or any of the Restricted Subsidiaries to the extent
the 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 other
Unrestricted Subsidiaries; provided that all such intercompany
Indebtedness owing by any Loan Party shall be evidenced by a promissory note
containing subordination provisions in substantially the form of Exhibit L
hereto and such other terms and conditions as shall be reasonably acceptable to
the Administrative Agent, which promissory note shall, in each case, to the
extent owing to a Loan Party, be pledged as Collateral to the Administrative
Agent, on behalf of the Secured Parties, under the applicable Collateral
Documents immediately upon the creation thereof;


 


(iii)          Indebtedness
secured by Liens permitted under Section 7.01(d) in an aggregate
principal amount not to exceed $20,000,000 at any time outstanding;


 


(iv)          Contingent
Obligations of Holdings, the Borrower and its Subsidiaries of Indebtedness of
the Borrower or such Subsidiary; provided  that each such Obligation is not otherwise prohibited under
the terms of the Loan Documents;


 


(v)           Indebtedness
comprised of trade payables or other accounts payable to trade creditors
incurred in the ordinary course of business to the extent otherwise included in
the definition of  “Indebtedness” set forth in Section 1.01;


 


(vi)          Indebtedness of one
or more Foreign Subsidiaries arising in the ordinary course of business in an
aggregate principal amount not to exceed $15,000,000 at any time outstanding; provided  that all such Indebtedness incurred
pursuant to this subclause (b)(vi) shall be nonrecourse in all respects
to the property and assets of the Loan Parties and their Subsidiaries (other
than one or more of the Foreign Subsidiaries);


 


104

















 


(vii)         Indebtedness
existing at the time that any property or asset is purchased or otherwise
acquired by the Borrower or any of its Subsidiaries, or that any Person (other
than the Borrower or any of its Subsidiaries) is merged into or consolidated
with any of the Subsidiaries of the Borrower or otherwise becomes a Subsidiary
of the Borrower, in accordance with the terms of the Loan Documents; provided
that (x) no such Indebtedness shall be incurred in contemplation of any such
purchase or other acquisition or any such merger, consolidation or acquisition,
(y) such Indebtedness shall be secured, if at all, solely by Liens permitted
under Section 7.01(e) or 7.01(f) and (z) the Borrower and its
Subsidiaries will be in Pro Forma Compliance with the covenants
set forth in Section 6.14, after giving effect to such Permitted
Acquisition and the incurrence or issuance of such Indebtedness;


 


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


 


(ix)           endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business;


 


(x)            Indebtedness extending
the 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 the
principal amount thereof and the premium, if any, payable thereon outstanding
immediately prior to such extension, refunding, refinancing or replacement,
except by an amount equal to a reasonable premium paid, and fees and expenses
reasonably incurred, in connection with such modification, refinancing,
refunding, renewal or extension and by an amount equal to any existing
commitments unutilized thereunder or as otherwise permitted pursuant to Section
7.02, (B) the direct and contingent obligors therefor shall not be
changed as a result of or in connection with such extension, refunding,
refinancing or replacement, (C) such extended, refunding, refinancing or
replacement Indebtedness shall not have a stated maturity date or mandatory
redemption date prior to the stated maturity date or mandatory redemption date
of the Indebtedness being so extended, refunded, refinanced or replaced, (D) if
the Indebtedness being so extended, refunded, refinanced or replaced is
subordinated in right of payment or otherwise to the Obligations of the
Borrower or any of its Subsidiaries under and in respect of the Loan Documents,
such extended, refunding, refinancing or replacement Indebtedness shall be
subordinated to such Obligations to at least the same extent, (E) the terms of
any such extending, refunding, refinancing or replacement Indebtedness (and of
any agreement entered into and of any instrument issued in connection
therewith) shall be not be materially less favorable to the Borrower and its
Subsidiaries or to the rights or interests of the Lenders than the terms of the
Indebtedness 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;


 


105

















 


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


 


(xii)          Indebtedness of
Borrower and its Subsidiaries owed to the seller of any property acquired in a
Permitted Acquisition on an unsecured subordinated basis, in each case, so long
as both immediately prior and after giving effect thereto, (x) no Event of
Default shall exist or result therefrom, and (y) the Borrower and its
Subsidiaries will be in Pro Forma Compliance with the covenants
set forth in Section 6.14, after giving effect to such Permitted Acquisition
and the incurrence or issuance of such Indebtedness;


 


(xiii)         Indebtedness (other
than for borrowed money) subject to Liens permitted under Section 7.01;


 


(xiv)        Indebtedness
representing deferred compensation to employees of Holdings and its Subsidiaries
in the ordinary course of business;


 


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


 


(xvi)        Indebtedness incurred
by Holdings or its Subsidiaries in a Permitted Acquisition or Disposition under
agreements providing for the adjustment of the purchase price or similar
adjustments, in each case to the extent of such purchase price or similar
adjustment;


 


(xvii)       Indebtedness
consisting of obligations of Holdings or its Subsidiaries under deferred
compensation or other similar arrangements incurred by such Person in
connection with the Nu-Gro Transaction and Permitted Acquisitions;


 


(xviii)      Indebtedness in
respect of netting services, overdraft protections and similar arrangements in
each case in connection with deposit accounts and entered into in the ordinary
course of business;


 


(xix)         Indebtedness
existing as of the Closing Date and described on Schedule 7.02; and


 


(xx)          Indebtedness in
respect of the Canadian Loan; and


 


(c)           in the case of
Holdings:


 


(i)            Indebtedness under the Loan
Documents;


 


106

















 


(ii)           unsecured Indebtedness of Holdings (“Permitted
Holdco Debt”) that (A) is not subject to any Guarantee by
the Borrower or any Restricted Subsidiary, (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 no scheduled amortization or payments of principal,
(D) does not permit any payments in cash of interest or other amounts in
respect of the principal thereof for at least five (5) years from the date of
the issuance or incurrence thereof, (E) has mandatory prepayment,
repurchase or redemption, covenant, default and remedy provisions customary for
senior discount notes of an issuer that is the parent of a borrower under
senior secured credit facilities, and in any event, with respect to covenant,
default and remedy provisions, no more restrictive than those set forth in the
indenture for the Senior Subordinated Notes taken as a whole (other than
provisions customary for senior discount notes of a holding company), and (F)
contains provisions with respect to paid-in-kind interest which are reasonably
satisfactory to the Administrative Agent; provided that any such Indebtedness
shall constitute Permitted Holdco Debt only if (i) both before and after giving
effect to the issuance or incurrence thereof, no Event of Default shall have
occurred and be continuing, (ii) after giving Pro Forma Effect to the issuance or incurrence thereof, the
Holdings Total Leverage Ratio shall be less than 5.50:1 and the Total Leverage
Ratio shall be less than 3.50:1, and (iii) the Chief Financial Officer of the
Borrower shall have delivered an officer’s certificate demonstrating Pro Forma Compliance with the covenants
set forth in Section 6.14 in form and substance reasonably satisfactory to the
Administrative Agent, it being understood that any capitalized or paid-in-kind
interest or accreted principal on such Indebtedness shall not constitute an
issuance or incurrence of Indebtedness for purposes of this proviso;


 


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


 


(iv)          Indebtedness owed to
the seller of any property acquired in a Permitted Acquisition on an unsecured
subordinated basis so long as, if applicable, Holdings complies with the
proviso in Section 7.06(g)(v) (whether or not any Restricted Payment is
made to Holdings).


 


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


 


(a)           any of the
Subsidiaries of the Borrower may merge into or consolidate with the Borrower; provided
that the Borrower is the surviving corporation;


 


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


 


(c)           any of the
Unrestricted Subsidiaries may merge into or consolidate with any of the other
Unrestricted Subsidiaries;


 


107

















 


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


 


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


 


(f)            the Borrower and
its Subsidiaries may consummate the Nu-Gro Transaction;


 


(g)           the Borrower may
consummate the Holding Company Event; and


 


(h)           the Borrower may
enter into a merger for the purpose of changing its jurisdiction of
incorporation to another jurisdiction located within the United States, provided
that (i) if the Borrower is not the continuing or surviving Person, such Person
shall assume the obligations and liabilities of the Borrower under the Loan
Documents in a manner and pursuant to documents reasonably acceptable to the
Administrative Agent and (ii) the Administrative Agent shall have reasonably
determined that such merger will not materially and adversely affect the rights
and remedies of the Administrative Agent, any Secured Party or any Lender under
any 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 Default
shall have occurred and be continuing. 
In addition, in the case of any merger or consolidation effected
pursuant to clause (d), (e) or (h) of this Section 7.03,
immediately after giving effect to such merger or consolidation, the Borrower
and its Subsidiaries shall be in pro forma
compliance with all of the covenants set forth in Section 6.14, such
compliance to be determined on the basis of the Required Financial Information
most recently delivered to the Administrative Agent and the Lenders as though
such merger or consolidation had been consummated as of the first day of the
fiscal period covered thereby.


 


7.04         Dispositions.  Dispose of, or permit any of its
Subsidiaries to Dispose of, any property or assets (including, without
limitation, any Equity Interests of its Subsidiaries), except:


 


(a)           the Borrower and its
Subsidiaries may sell inventory in the ordinary course of business;


 


108

















 


(b)           the Borrower and its
Subsidiaries may Dispose of property and assets in a transaction otherwise
permitted under Section 7.01, Section 7.03 (so long as in
the case of clause (d) thereof, such Disposition is permitted pursuant
to a different subclause of this Section 7.04), 7.05 or 7.06;


 


(c)           (i) the Borrower may
Dispose 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 and
assets to the Borrower or any of the other Restricted Subsidiaries, (iii) any
of the Unrestricted Subsidiaries may Dispose of any of its property and assets
for an amount not in excess of Fair Market Value to the Borrower or any of its
Restricted Subsidiaries and (iv) any of the Unrestricted Subsidiaries may
Dispose of any of its property and assets to any of the Unrestricted
Subsidiaries;


 


(d)           the Borrower and its
Subsidiaries may Dispose of any obsolete, damaged or worn out assets that
are no longer useful or necessary in the conduct of their businesses and
operations in the ordinary course of business;


 


(e)           leases or subleases
or licenses or sublicenses of real property and equipment of the Borrower or
any of its Subsidiaries to any Person so long as each such lease or sublease or
license or sublicense, as the case may be, shall not interfere in any material
respect with the business or operations of the Borrower or any of its
Subsidiaries;


 


(f)            licenses or
sublicenses of IP Rights of the Borrower or any of its Subsidiaries in the
ordinary course of business;


 


(g)           the Borrower and its
Subsidiaries may Dispose of property and assets not otherwise permitted to be
Disposed of pursuant to this Section 7.04 so long as the (A) aggregate
net book value of all of the property and assets of the Borrower and its
Subsidiaries so Disposed of pursuant to this clause (g) (x) in any
single 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 such
Disposition shall be at least equal to the Fair Market Value of the property
and assets so Disposed of, determined at the time of such Disposition;


 


(h)           any Subsidiary may
Dispose of all or substantially all of its assets (upon voluntary liquidation
or otherwise) to the Borrower or to another Subsidiary; provided, that if the
transferor in such a transaction is a Loan Party, then (i) the transferee must
either be a Loan Party or (ii) to the extent constituting an Investment, such
Investment must be a permitted Investment in or Indebtedness of a Subsidiary
which is not a Loan Party in accordance with Sections 7.02 and 7.05,
respectively;


 


(i)            Dispositions of
property to the extent that (i) such property is exchanged for credit against
the purchase price of similar replacement property or (ii) the proceeds of such
Disposition are promptly applied to the purchase price of such replacement
property;


 


109

















 


(j)            Dispositions of
accounts receivable solely in connection with the collection or compromise
thereof;


 


(k)           transfers of
property subject to casualty or condemnation events upon receipt of the Net
Cash Proceeds of such event;


 


(l)            Dispositions by the
Borrower and its Subsidiaries of property pursuant to sale-leaseback
transactions are permitted; provided, that (i) the Fair Market Value of
all property so Disposed of shall not exceed $15,000,000 from and after the
Closing Date and (ii) the purchase price for such property shall be paid to the
Borrower or such Subsidiary for not less than 75% cash consideration; provided  further that this Section 7.04 shall not prohibit any
sale-leaseback transaction resulting from the incurrence of any lease in
respect of any capital asset entered into within 180 days of the acquisition of
such capital asset for the purpose of providing permanent financing of such
capital asset;


 


(m)          the sale, transfer or
disposition of Cash Equivalents;


 


(n)           consignments or
similar arrangements for the sale of assets to third parties  in the ordinary course of business
consistent with past practice;


 


(o)           sales or other
dispositions of any minority interest in a joint venture or other Person;


 


(p)           Dispositions
described on Schedule 7.04 hereto;


 


(q)           Dispositions in
connection with the rationalization or integration of Nu-Gro and its
Subsidiaries with the Borrower and its Subsidiaries after giving effect to the
Nu-Gro Acquisition in an aggregate amount not to exceed $10,000,000 and
occurring within three years after the Closing Date;


 


(r)            intercompany sales
of property in the ordinary course of business, provided that in the
case of any such sale from Holdings, the Borrower or any Restricted Subsidiary
to an Unrestricted Subsidiary, for a purchase price less than its net book
value, then the difference between such purchase price and the net book value
shall otherwise be permitted under Section 7.02 or Section 7.05(d);
and


 


(s)           Dispositions of IP
Rights for consideration other than cash, so long as such Dispositions could
not reasonably be expected to have a Material Adverse Effect;


 


In connection with any Disposition of Collateral
permitted by this Section 7.04 (which for the avoidance of doubt, shall
not include a Disposition of all or substantially all of the Collateral or a
release of all or substantially all of the value of the Guaranty) the
Administrative Agent will, at the Borrower’s expense, execute and deliver such
releases of Collateral as may be reasonably necessary to evidence the release
of all Liens on such Collateral under the Loan Documents.


 


7.05         Investments
in 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:


 


110

















 


(a)           Investments existing
on 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 is
not increased except by the terms of such Investment or as otherwise permitted
by this Section 7.05;


 


(b)           Investments in cash
and Cash Equivalents;


 


(c)           Investments in
respect of Swap Contracts permitted by Section 7.02(b)(xi);


 


(d)           Investments by (i)
the Borrower, Holdings or any Restricted Subsidiary in the Borrower, Holdings
or any Restricted Subsidiary, (ii) the Borrower, Holdings or any Restricted
Subsidiary in any Unrestricted Subsidiary in an aggregate principal amount for
all such Investments not to exceed $15,000,000 less the aggregate amount of any
Indebtedness 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 permitted
to be made by Holdings to the Parent pursuant to Section 7.06(h));


 


(e)           Investments by the
Borrower and its Subsidiaries in account debtors received in connection with
the bankruptcy or reorganization, or in settlement of the delinquent
obligations of financially troubled suppliers or customers, in the ordinary
course of business and in accordance with applicable collection and credit
policies established by the Borrower or such Subsidiary, as the case may be;


 


(f)            loans and advances
by Holdings and its Subsidiaries to their respective employees, officers and
directors in an aggregate amount not to exceed $2,500,000 at any time
outstanding;


 


(g)           the acceptance of
promissory notes, contingent payment obligations and other noncash
consideration received as payment of the purchase price of any property or
assets Disposed of in accordance with Section 7.04(h);


 


(h)           the purchase or
other acquisition of all of the Equity Interests in, or all or substantially
all of the property and assets of, any Person or of assets constituting a
business unit, line of business of or division of any Person that, upon the
consummation thereof, will be owned directly by the Borrower or any of its
Subsidiaries (including, without limitation, as a result of a merger or
consolidation with or into the Borrower or a Subsidiary of the Borrower, except
that 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 Borrower
or a Restricted Subsidiary); provided that, with respect to each
purchase or other acquisition made pursuant to this clause (h) (each, a
“Permitted
Acquisition”):


 


(i)            any newly created
or acquired Restricted Subsidiary shall comply with the requirements of Section
6.11;


 


111

















 


(ii)           the lines of
business of the Person to be (or the property and assets of which are to be) so
purchased or otherwise acquired shall be substantially the same lines of
business as one or more of the businesses engaged in by the Borrower and its
Subsidiaries on the date of this Agreement and those reasonably related or
ancillary thereto;


 


(iii)          the total cash
consideration paid by or on behalf of the Borrower and its Subsidiaries for any
such purchase or other acquisition, when aggregated with the total cash
consideration paid by or on behalf of the Borrower and its Subsidiaries for all
other purchases and other acquisitions made by the Borrower and its
Subsidiaries pursuant to this clause (h), shall not exceed $50,000,000
(it being understood that all indemnities, earnouts and other similar
contingent purchase price payment obligations to, and the aggregate amounts
paid or to be paid under noncompete, consulting and other affiliated agreements
with, the sellers thereof, all reserves for liabilities with respect thereto
and all assumptions of Indebtedness in connection therewith shall in each case
be included in determining the amount of cash consideration expended, provided
that to the extent that any of the foregoing amounts is not known or
determinable, such amount shall be determined to be an amount reasonably
estimated in good faith to be payable at the time of the purchase or
acquisition);


 


(iv)          immediately before
and immediately after giving pro forma
effect to any such purchase or other acquisition, no Default shall have
occurred and be continuing; and


 


(v)           the Borrower shall
have delivered to the Administrative Agent, on behalf of the Lenders, at least
five Business Days prior to the date on which any such purchase or other
acquisition 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 of
such purchase or other acquisition (and including a schedule that sets forth in
reasonable detail all of the computations used by the Borrower in determining
compliance with such requirements);


 


(i)            Investments by the
Borrower and its Subsidiaries not otherwise permitted under this Section
7.05 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 to
the Lenders pursuant to Section 2.06(b)(i) or not used to make
Restricted Payments pursuant to Section 7.06 or has not been used to
make Investments under this Section 7.05  plus (x) the aggregate
amount of Net Cash Proceeds of Permitted Holdco Debt, plus (y) the
aggregate amount of Net Cash Proceeds of Permitted Subordinated Indebtedness
permitted 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 subsection
7.05(i):


 


112

















 


(A)          such Investment shall be in property
and assets which are part of, or in lines of business substantially the same as
one or more of the businesses engaged in by the Borrower and its Subsidiaries
on the date of this Agreement and those reasonably related or ancillary thereto;


 


(B)           any determination of the amount of
such Investment shall include all cash and noncash consideration (including,
without limitation, the Fair Market Value of all Equity Interests issued or
transferred to the sellers thereof, all indemnities, earnouts and other
contingent payment obligations to, and the aggregate amounts paid or to be paid
under noncompete, consulting and other affiliated agreements with, the sellers
thereof, all reserves for liabilities with respect thereto and all assumptions
of Indebtedness in connection therewith, provided that to the extent
that any of the foregoing amounts are not known or determinable, such amount
shall be determined to be an amount reasonably estimated in good faith to be
payable on the date such Investment is made) paid by or on behalf of the
Borrower and its Subsidiaries in connection with such Investment; and


 


(C)           immediately before and immediately
after giving pro forma effect to
any such purchase or other acquisition, no Default shall have occurred and be continuing;


 


(j)            the Nu-Gro
Transaction;


 


(k)           Investments in the
ordinary course of business consisting of (i) endorsements for collection or
deposit and (ii) customary trade arrangements with customers consistent with
past practice;  and


 


(l)            the licensing,
sublicensing or contribution of IP Rights pursuant to joint marketing
arrangements with Persons other than Holdings and its Subsidiaries;


 


(m)          To the extent the same constitute
Investments, Contingent Obligations of Holdings, the Borrower and their respective
Subsidiaries (i) (other than a Guarantee of Indebtedness) made in the ordinary
course of business that, individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect or (ii) permitted by Section
7.02.


 


7.06         Restricted Payments.  Declare or pay any dividends on, or
purchase, redeem, retire, defease or otherwise acquire for value, any of its
Equity Interests, now or hereafter outstanding, return any capital to its
stockholders, partners or members (or the equivalent Persons thereof) as such,
make any distribution of property, assets, Equity Interests, obligations or
securities to its stockholders, partners or members (or the equivalent Persons
thereof) as such (any of the foregoing, a “Restricted
Payment”), or permit any
of its Subsidiaries to do any of the foregoing, or permit any of its
Subsidiaries to purchase, redeem, retire, defease or otherwise acquire for
value any Equity Interests in the Borrower (or, after the Holdings
Company Event, Holdings), or to issue or
sell 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


 


113

















 


that is not a Loan
Party (provided that the Borrower or, after the Holdings Company Event,
Holdings, may issue and sell Equity Interests to the extent not otherwise
prohibited hereunder), except
that so long as no Default shall have occurred and be continuing at the time of
any of the transactions described in clause (f)(iv), (g)(iv), (i)
or (j) or would occur as a result thereof:


 


(a)           the Borrower may
consummate the Preferred Stock Redemption;


 


(b)           Holdings and each of
its Subsidiaries may declare and make dividends and other distributions on its
outstanding Equity Interests payable in such Equity Interests (other than
Redeemable Equity Interests);


 


(c)           any of the
Subsidiaries of the Borrower may declare and pay or make dividends and other
distributions in cash or in additional Equity Interests therein to the Borrower
or any of its Subsidiaries; provided that such additional Equity
Interests issued to a Loan Party shall, to the extent required under the terms
of the applicable Collateral Documents, be pledged as Collateral thereunder to
the Administrative Agent, on behalf of the Secured Parties, immediately upon
the issuance thereof;


 


(d)           any of the
non-wholly owned Subsidiaries of the Borrower may declare and pay or make
dividends and other distributions to its shareholders, partners or members (or
the equivalent persons thereof) generally so long as the Borrower and each of
the Restricted Subsidiaries that own any of the Equity Interests therein
receive at least their respective proportionate shares of any such dividend or
distribution (based upon their relative holdings of the Equity Interests
therein and taking into account the relative preferences, if any, of the
various classes of the Equity Interests therein);


 


(e)           to the extent
constituting Restricted Payments, the Borrower and its Subsidiaries may enter
into transactions permitted by Section 6.10 or 7.03;


 


(f)            any Subsidiary of
Holdings may make Restricted Payments to Holdings:


 


(i)            the proceeds of
which will be used to pay the tax liability for the relevant jurisdiction in
respect of consolidated, combined, unitary or affiliated returns for the
relevant jurisdiction of Holdings attributable to the Borrower and its
Subsidiaries determined as if the Borrower and its Subsidiaries filed separate
returns;


 


(ii)           the proceeds of
which shall be used by Holdings to pay its operating expenses incurred in the
ordinary course of business and other corporate overhead costs and expenses
(including, without limitation, administrative, legal, accounting and similar
expenses provided by third parties), which are reasonable and customary and
incurred in the ordinary course of business, in an aggregate amount not to
exceed $500,000 in any Fiscal Year plus any reasonable and customary
indemnification claims made by directors or officers of Holdings attributable to
the ownership or operations of the Borrower and its Subsidiaries;


 


(iii)          the proceeds of
which shall be used by Holdings to pay its franchise taxes;


 


114

















 


(iv)          the proceeds of
which will be used to repurchase the Equity Interests of Holdings from current
or former directors, employees or members of management of Holdings or any of
its Subsidiaries (or their estate, family members, spouse and/or former
spouse), in an aggregate amount not in excess of $2,500,000 in any Fiscal Year
plus the proceeds of any key-man life insurance maintained by Holdings or any
of its Subsidiaries; provided, that Holdings may carry-over and make in
any subsequent calendar year or years, in addition to the amount for such
calendar year, the amount not utilized in the prior calendar year or years up
to a maximum of $2,500,000; and


 


(v)           to finance any
Investment permitted to be made pursuant to Section 7.05; provided, that
(A) such Restricted Payment shall be made concurrently with the closing of such
Investment and (B) Holdings shall, immediately following the closing thereof,
cause (1) all property acquired (whether assets or Equity Interests) to be
contributed to the Borrower or its Subsidiaries or (2) the merger (to the
extent permitted in Section 7.04) of the Person formed or acquired into
the Borrower or its Subsidiaries in order to consummate such Permitted
Acquisition;


 


(g)           any Subsidiary of
Parent may make Restricted Payments to Parent:


 


(i)            the proceeds of
which will be used to pay the tax liability for the relevant jurisdiction in
respect of consolidated, combined, unitary or affiliated returns for the
relevant jurisdiction of Parent attributable to Holdings and its Subsidiaries
determined as if Holdings and its Subsidiaries filed separate returns;


 


(ii)           the proceeds of
which shall be used by Parent to pay its operating expenses incurred in the
ordinary course of business and other corporate overhead costs and expenses
(including, without limitation, administrative, legal, accounting and similar
expenses provided by third parties), which are reasonable and customary and
incurred in the ordinary course of business, in an aggregate amount not to
exceed $500,000 in any Fiscal Year plus any reasonable and customary
indemnification claims made by directors or officers of Parent attributable to
the ownership or operations of Holdings and its Subsidiaries;


 


(iii)          the proceeds of
which shall be used by Parent to pay its franchise taxes;


 


(iv)          the proceeds of
which will be used to repurchase the Equity Interests of Parent from current or
former directors, employees or members of management of Parent or any
Subsidiary (or their estate, family members, spouse and/or former spouse), in
an aggregate amount not in excess of $2,500,000 in any Fiscal Year plus the
proceeds of any key-man life insurance maintained by Parent or any of its
Subsidiaries; provided, that Parent may carry-over and make in any
subsequent calendar year or years, in addition to the amount for such calendar
year, the amount not utilized in the prior calendar year or years up to a
maximum of $2,500,000; and


 


115

















 


(v)           to finance any
Investment permitted to be made pursuant to Section 7.05; provided,
that (A) such Restricted Payment shall be made concurrently with the closing of
such Investment and (B) Parent shall, immediately following the closing
thereof, cause (1) all property acquired (whether assets or Equity Interests)
to be contributed to Holdings or its Subsidiaries or (2) the merger (to the
extent permitted in Section 7.03) of the Person formed or acquired into
Holdings or its Subsidiaries in order to consummate such Permitted Acquisition;


 


(h)           repurchases of
Equity Interests of Holdings deemed to occur upon the non-cash exercise of
stock options and warrants;


 


(i)            Holdings may make
Restricted Payments with the proceeds of Permitted Holdco Debt and Permitted
Affiliate Investments; and


 


(j)            in addition to the foregoing Restricted
Payments, the Borrower may make additional Restricted Payments to Holdings the
proceeds of which may be utilized by Holdings to make additional Restricted
Payments, in an aggregate amount not to exceed the sum of (A) $1,000,000 (such amount to be
increased to (x) $20,000,000 if the Total Leverage Ratio is, on a pro forma
basis 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 the
Cumulative Excess Cash Flow and (2) the portion of the Cumulative Excess Cash
Flow 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 been
used to make Restricted Payments under this Section 7.06.


 


7.07         Capital
Expenditures.  Make, or
permit any of its Subsidiaries to make, any Capital Expenditures that would
cause the aggregate amount of all such Capital Expenditures made by the
Borrower and its Subsidiaries during any Fiscal Year to exceed the amount
specified in the table below for such Fiscal Year; provided, however, that if, at the end of any Fiscal
Year, the aggregate amount of all Capital Expenditures made by the Borrower and
its Subsidiaries during such Fiscal Year is less than the amount specified in
the table below for such Fiscal Year (the amount of such difference being the “Carryover Capital Expenditure
Amount”), then, notwithstanding the foregoing provision of this Section
7.07, the Borrower and its Subsidiaries shall be permitted to make
additional Capital Expenditures during the next succeeding Fiscal Year in an
amount not to exceed the Carryover Capital Expenditure Amount, if any, from
such Fiscal Year; provided  further, however, that any
Carryover Capital Expenditure Amount carried forward to the next succeeding
Fiscal Year shall not be deemed to have been utilized to make Capital
Expenditures until after the utilization of the amount set forth above in this Section
7.07 for Capital Expenditures permitted to be made in such Fiscal Year, and
may 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

  	
   

  






 


116

















 


7.08         Prepayments,
Etc. of Indebtedness.  (a)
Prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled
maturity thereof in any manner any of the Senior Subordinated Notes, any
Permitted Subordinated Indebtedness and any Permitted Holdco Debt
(collectively, “Junior
Financing”) or make any payment in violation of any
subordination terms contained in any Junior Financing, except (i) the
refinancing thereof with the Net Cash Proceeds of any further incurrence of
Permitted Subordinated Indebtedness, Permitted Holdco Debt or Permitted Equity
Issuance, in each case, to the extent not required to prepay any Loans or
Facility pursuant to Section 2.05(b) and (ii) the conversion
of any Junior Financing to Equity Interests (other than Redeemable Equity
Interests), (b) amend, modify or change in any manner any term or
condition of any documentation related to any Junior Financing, except as could
not materially and adversely affect the rights or interests of the
Administrative 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 any
of its Subsidiaries to enter into or suffer to exist, any agreement prohibiting
or conditioning the creation or assumption of any Lien upon any of its property
or assets other than:


 


(a)           any such agreement
with or in favor of the Secured Parties or the Administrative Agent, on behalf
of the Secured Parties;


 


(b)           any such agreement
with or in favor of the holders of the Senior Subordinated Notes or the trustee
for the Senior Subordinated Notes, on behalf of the holders thereof, in each
case as such agreement was in effect on the Closing Date (or as amended in
compliance with Section 7.08(b));


 


(c)           in connection with
(i) any Indebtedness described on Schedule 7.02, (ii) any Indebtedness
otherwise permitted to be incurred under Section 7.02(b)(x) and (iii)
any Indebtedness outstanding on the date any Person first becomes a Subsidiary
of the Borrower; provided that such agreement was not created in
contemplation of the purchase or other acquisition of such Person and does not
extend to or cover any property or assets other than property and assets of the
Person becoming such Subsidiary (or proceeds or products thereof);


 


(d)           any such agreement
prohibiting other encumbrances on specific property and assets of the Borrower
or any of its Subsidiaries, which agreement secures the payment of Indebtedness
incurred solely to acquire, construct or improve such property or assets or to
finance the purchase price therefor (including, without limitation, Capitalized
Leases) and which Indebtedness is otherwise permitted to be incurred under the
terms of this Agreement;


 


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(e)           any such agreement
with or in favor of the holders of the Indebtedness of one or more of the
Foreign Subsidiaries (or any agent for the holders of such Indebtedness)
incurred pursuant to Section 7.02(b)(vi);


 


(f)            any agreement setting
forth customary restrictions on the subletting, assignment or transfer of any
property or asset that is a lease, license, conveyance or contract of similar
property or assets; and


 


(g)           any restriction or
encumbrance imposed pursuant to an agreement that has been entered into by the
Borrower or any of its Subsidiaries for the Disposition of any of its property
or assets so long as such Disposition is otherwise permitted to be made under Section
7.04.


 


7.10         Dividends
and Other Payment Restrictions Affecting Subsidiaries.   Enter into, create, assume or otherwise
suffer to exist or become effective, or permit any of its Subsidiaries to enter
into, create, assume or otherwise suffer to exist or become effective, directly
or indirectly, any consensual encumbrance or restriction of any kind on the
ability of any of its Subsidiaries (a) to pay dividends or to make any other
distributions on any of the Equity Interests in such Subsidiary owned or
otherwise held by the Borrower or any of its Subsidiaries, (b) to repay or
prepay or to subordinate any Indebtedness owed to the Borrower or any of its
Subsidiaries, (c) to make loans or advances to the Borrower or any of its
Subsidiaries, (d) to transfer any of its property or assets to the Borrower or
any of its Subsidiaries or (e) to otherwise make Investments in the Borrower or
any 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 restriction
contained in:


 


(a)           this Agreement and
the other Loan Documents;


 


(b)           any agreements in
effect on the Closing Date;


 


(c)           in the case of clause (d)
of this Section 7.10, any agreement setting forth customary restrictions
on the subletting, assignment or transfer of any property or asset that is a
lease, 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 otherwise
permitted to exist under Section 7.01(d) restricting on customary
terms the transfer of any property or assets subject thereto;


 


(e)           any such agreement
with or in favor of the holders of the Indebtedness of one or more of the
Foreign Subsidiaries (or any agent for the holders of such Indebtedness)
incurred pursuant to Section 7.02(b)(vi); provided that any such
restrictions set forth therein shall not apply to any of the Loan Parties or
any of their Subsidiaries (other than one or more of the Foreign Subsidiaries);


 


(f)            any agreement
evidencing Indebtedness outstanding on the date a Person first becomes a
Subsidiary of the Borrower; provided that such agreement was not created
in contemplation of the purchase or other acquisition of such Person by the 


 


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Borrower or
any of its Subsidiaries and does not extend to or cover any property or assets
other than the property or assets of the Person becoming such Subsidiary (and
proceeds and products thereof);


 


(g)           any agreement
evidencing or setting forth the terms of any refunding, refinancing or
replacement Indebtedness otherwise permitted to be incurred under Section
7.02(b)(x); and


 


(h)           any agreement that
has been entered into by the Borrower or any of its Subsidiaries for the
Disposition of any of its property or assets so long as such Disposition is
otherwise permitted to be made under Section 7.04.


 


7.11         Change
in Nature of Business.  Make, or
permit any of its Subsidiaries to make, any change in the nature of its
business that would cause the Borrower or such Subsidiary to no longer be
primarily engaged in one or more of the businesses engaged in by the Borrower
and its Subsidiaries on the date of this Agreement and those reasonably related
or ancillary thereto.


 


7.12         Amendments to Constitutive Documents.  Amend, or permit any of its Subsidiaries to
amend, its Constitutive Documents, except where such amendment, either
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect or to materially and adversely affect the rights or
interests of the Lenders.


 


7.13         Accounting
Changes, Etc.  Make or
permit, 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 in
effect 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 its
Subsidiaries 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 or
consent to or accept any cancellation or termination thereof, amend, modify or
change in any manner any term or condition of any Nu-Gro Document or give any
consent, waiver or approval thereunder, waive any default under or any breach
of any term or condition of any Nu-Gro Document, agree in any manner to any
other amendment, modification or change of any term or condition of any Nu-Gro
Document, or take any other action in connection with any Nu-Gro Document that,
in each of the foregoing cases under this Section 7.14, either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, or permit any of its Subsidiaries to do any of the
foregoing.


 


7.15         Holdings.  (a) 
In the case of Holdings, (i) conduct, transact or otherwise engage
in any business or operations other than those incidental to its ownership of
the Equity Interests of the Borrower, the performance of the Loan Documents and
any transactions that Holdings is permitted to enter into or consummate under
this Article VII or (ii) incur any Indebtedness other than
Indebtedness permitted pursuant to Section 7.02(c); or


 


(b)           From
and after the occurrence of the Holding Company Event, permit the Borrower to
be a Subsidiary that is not wholly owned by Holdings.


 


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ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES


 


8.01         Events of
Default.  If any of the
following events (“Events
of Default”) shall occur and be continuing:


 


(a)           (i)  the Borrower shall fail to pay any principal
of any Loan when the same shall become due and payable, whether by scheduled
maturity or at a date fixed for prepayment or by acceleration, demand or
otherwise, or (ii) the Borrower shall fail to pay any interest on any Loans, or
any of the Loan Parties shall fail to make any other payment under or in
respect of any of the Loan Documents required to have been made by it, in each
case whether by scheduled maturity or at a date fixed for prepayment or by
acceleration, demand or otherwise and, in each case under this clause (ii),
such failure remains unremedied for at least three Business Days after the same
becomes due and payable; or


 


(b)           any representation
or warranty made by any of the Loan Parties (or any of their respective
officers) under or in connection with any of the Loan Documents (including,
without limitation, in any certificate, report, statement or other writing at
any time furnished (or deemed to have been furnished) to the Administrative
Agent or any of the Lenders by or on behalf of any of the Loan Parties) shall
prove to have been incorrect in any material respect on the date as of which it
was made or deemed made; or


 


(c)           (i)  the Borrower shall fail to perform or
observe 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 cure
as contemplated by the penultimate proviso set forth in the definition of
“Consolidated EBITDA”; or


 


(d)           any of the Loan
Parties shall fail to perform or observe any term, covenant or agreement
contained in any of the Loan Documents on its part to be performed or observed
that is not otherwise referred to in Section 8.01(a) or (c)
if such failure shall remain unremedied for at least 30 consecutive days after
the date on which written notice thereof shall have been given to the Borrower
by the Administrative Agent; or


 


(e)           (i) any of the Loan
Parties 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 more
items of Indebtedness of the Loan Parties and their Subsidiaries (excluding
Indebtedness outstanding hereunder) that is outstanding in an aggregate
principal amount (or, in the case of any Swap Contract, having an Agreement
Value) of at least $10,000,000 at the time of such failure, when the same
becomes due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreements or instruments
relating to all such Indebtedness; or (ii) any other event shall occur or
condition shall exist under the agreements or instruments relating to one or more
items 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 an
aggregate principal amount (or, in the case of any Swap Contract, having an
Agreement Value) of at least $10,000,000 at the time of such other event or
condition, and shall continue after the applicable grace period, if any,
specified in all such agreements or instruments, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the maturity of
such Indebtedness or otherwise to cause, or to permit the holder thereof to
cause, such Indebtedness to mature prior to its stated maturity; or
(iii) one or more items of Indebtedness of any of the Loan Parties or any
of their Subsidiaries (excluding Indebtedness outstanding hereunder) that is
outstanding (or under which one or more Persons have a commitment to extend
credit) 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 due
and payable or required to be prepaid or redeemed (other than by a regularly
scheduled or required prepayment or redemption), purchased or defeased, or an offer
to prepay, redeem, purchase or defease such Indebtedness shall be required to
be made, in each case, prior to the stated maturity thereof; or


 


(f)            any of the Loan
Parties or any of their Subsidiaries shall admit in writing its inability to
pay its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against any of the Loan
Parties or any of their Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any
Debtor Relief Law, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, administrator or other similar official for
it or for any substantial part of its property and assets and, in the case of
any such proceeding instituted against it (but not instituted by it) that is
being diligently contested by it in good faith, either such proceeding shall
remain undismissed or unstayed for a period of at least 60 consecutive days or
any 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 of
its property and assets) shall occur; or any event or action analogous to or
having a substantially similar effect to any of the events or actions set forth
above in this Section 8.01(f) (other than a solvent reorganization)
shall occur under the Requirements of Law of any jurisdiction applicable to any
of the Loan Parties or any of their Subsidiaries; or any of the Loan Parties or
any of their Subsidiaries shall take any corporate, partnership, limited
liability company or other similar action to authorize any of the actions set
forth above in this Section 8.01(f); or


 


(g)           one or more
judgments or orders for the payment of money in excess of $10,000,000 in the
aggregate shall be rendered against one or more of the Loan Parties and their
Subsidiaries and shall remain unsatisfied and either (i) enforcement
proceedings shall have been commenced by any creditor upon any such judgment or
order and remain unstayed or (ii) there shall be any period of at least 60
consecutive days during which a stay of enforcement of any such judgment or
order, 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 an
Event 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 a
valid


 


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and binding
policy of insurance between the defendant and the insurer covering full payment
thereof (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 judgment
or order; or


 


(h)           any provision of any
of the Loan Documents after delivery thereof pursuant to Section 4.01,
6.11 or 6.15 shall for any reason (other than pursuant to the
terms thereof or expressly permitted hereunder (including as a result of a
transaction permitted by Section 7.03 or 7.04)) cease to be valid
and binding on or enforceable against any of the Loan Parties intended to be a
party to it, or any such Loan Party shall so state in writing; or


 


(i)            any Collateral
Document after delivery thereof pursuant to Section 4.01, 6.11
or 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 and
security interests expressly permitted under Section 7.01) lien on and
security interest in the Collateral purported to be covered thereby; or


 


(j)            any of the
following events or conditions shall have occurred and such event or condition,
when aggregated with any and all other such events or conditions set forth in
this Section 8.01(j), has resulted, or, with respect to clause (i)
of this Section 8.01(j), could reasonably be expected to result, in
liabilities of one or more of the Loan Parties and/or the ERISA Affiliates in
an aggregate amount exceeding $10,000,000 at any time:


 


(i)            any ERISA Event
shall have occurred or


 


(ii)           any of the Loan
Parties or any of the ERISA Affiliates shall have incurred Withdrawal Liability
to a Multiemployer Plan or liability in connection with the reorganization,
insolvency or termination of a Multiemployer Plan; or


 


(iii)          any “accumulated funding deficiency” (as
defined 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, or
any Lien shall exist on the property and assets of any of the Loan Parties or
any of the ERISA Affiliates in favor of the PBGC or any Plan; or


 


(k)           an “Event of Default” (as defined in the
applicable Senior Subordinated Notes Documents) shall have occurred and be
continuing under the Senior Subordinated Notes Documents; or


 


(l)            a Change of Control
shall occur;


 


then, and in any such event, the Administrative Agent (i) shall at
the request, or may with the consent, of the Required Lenders, by notice to the
Borrower, declare the Commitments of each of the Lenders and the obligation of
each of the Lenders to make Loans (other than Swing Line Loans by any of the
Revolving Credit Lenders pursuant to Section 2.04(c)(ii) and L/C
Advances


 


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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, whereupon
the same shall forthwith terminate, and (ii) shall at the request, or may
with the consent, of the Required Lenders, by notice to the Borrower,
declare the Notes, all interest thereon and all other amounts payable under or
in respect of this Agreement and the other Loan Documents to be forthwith due
and payable, whereupon the Notes, all such interest and all such other amounts
shall become and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by the Borrower; provided, however, that in the event of an actual or deemed
entry of an order for relief with respect to the Borrower under the United
States Federal Bankruptcy Code or a similar order or action under any other
Debtor Relief Law, (1) the Commitments of each of the Lenders and the
obligation of each of the Lenders to make Loans (other than Swing Line Loans by
any 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 Lenders
pursuant to Section 2.03(c)(i)) and of the Issuing Bank to issue
Letters of Credit shall automatically be terminated and (2) the Notes, all
such interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.


 


8.02         Actions in Respect of the Letters of
Credit upon Default  If any
Event of Default shall have occurred and be continuing, the Administrative
Agent may, or shall at the request of the Required Lenders, irrespective of
whether it is taking any of the actions described in Section 8.01
or otherwise, make demand upon the Borrower to, and forthwith upon such demand
the Borrower will, pay to the Administrative Agent, on behalf of the Lenders,
in same day funds at the Administrative Agent’s office designated in such
demand, for deposit in the L/C Cash Collateral Account, an amount equal to the
amount then available to be drawn under all outstanding Letters of Credit (the
“Available Amount”).  If at any time the Administrative Agent
determines that any funds held in the L/C Cash Collateral Account are subject
to any right or claim of any Person other than the Agents and the other Secured
Parties or that the total amount of such funds is less than the aggregate
Available Amount of all Letters of Credit, the Borrower will, forthwith upon
demand by the Administrative Agent, pay to the Administrative Agent, as
additional 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 Cash
Collateral Account.  Upon the drawing of
any Letter of Credit for which funds are on deposit in the L/C Cash Collateral
Account, such funds shall be applied to reimburse the Issuing Bank or the
Revolving Credit Lenders, as applicable, to the extent permitted under
applicable law.


 


8.03         Application
of Funds.  After the exercise of
remedies provided for in Section 8.01 (or after the Loans have
automatically become immediately due and payable and the L/C Obligations have
automatically been required to be Cash Collateralized as set forth in Section
8.02), any amounts received on account of the Obligations shall be applied
by 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 Section
10.04 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 amounts
described in this clause  First payable to them;


 


Second, to
payment of that portion of the Obligations constituting fees, indemnities and
other amounts (other than principal and interest) payable to the Lenders
(including Attorney Costs payable under Section 10.04 and amounts payable under Article III
and Section 10.15), ratably
among them in proportion to the amounts described in this clause  Second
payable to them;


 


Third, to
payment of that portion of the Obligations constituting accrued and unpaid
interest on the Loans and L/C Borrowings, ratably among the Lenders in
proportion to the respective amounts described in this clause  Third
payable to them;


 


Fourth, to
payment of that portion of the Obligations constituting unpaid principal of the
Loans and L/C Borrowings, ratably among the Lenders in proportion to the
respective amounts described in this clause  Fourth held by them;


 


Fifth, to the
Administrative Agent for the account of the L/C Issuer, to Cash Collateralize
that portion of L/C Obligations comprised of the aggregate undrawn amount of
Letters of Credit;


 


Sixth, to
the payment of all other Obligations of the Loan Parties owing under or in respect
of the Loan Documents that are due and payable to the Agents and the other
Secured Parties on such date, ratably based upon the respective aggregate
amounts of all such Obligations owing to the Agents and the other Secured
Parties on such date; and


 


Last, the
balance, if any, after all of the Obligations have been paid in full, to the
Borrower or as otherwise required by Law.


 


Subject to Section
2.03(c), amounts used to Cash Collateralize the aggregate undrawn amount of
Letters of Credit pursuant to clause  Fifth above shall be applied
to satisfy drawings under such Letters of Credit as they occur.  If any amount remains on deposit as Cash
Collateral 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 the
order set forth above.


 


ARTICLE IX

ADMINISTRATIVE AGENT AND OTHER AGENTS


 


9.01         Appointment and Authorization of
Agents.


 


(a)           Each Lender hereby irrevocably appoints, designates and
authorizes the Administrative Agent to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. 
Notwithstanding any provision to the contrary contained elsewhere herein
or in any other Loan Document, no Agent shall have any duties or
responsibilities, except those expressly set forth herein, nor shall any Agent
have or be deemed to have any fiduciary relationship with any Lender or
participant, and no implied


 


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covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Agreement or any
other Loan Document or otherwise exist against any Agent.  Without limiting the generality of the
foregoing sentence, the use of the term “agent” herein and in the other Loan
Documents with reference to any Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable Law.  Instead, such term is
used merely as a matter of market custom, and is intended to create or reflect
only an administrative relationship between independent contracting parties.


 


(b)           The L/C Issuer shall act on behalf of the Lenders with
respect to any Letters of Credit issued by it and the documents associated
therewith, 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 any
acts taken or omissions suffered by the L/C Issuer in connection with Letters
of Credit issued by it or proposed to be issued by it and the applications and
agreements for letters of credit pertaining to such Letters of Credit as fully
as if the term “Agent” as used in this Article IX and in the definition
of “Agent-Related Person” included the L/C Issuer with respect to such acts or
omissions, and (ii) as additionally provided herein with respect to the
L/C Issuer.


 


(c)           The Administrative Agent shall also act as the “collateral
agent” under the Loan Documents, and each of the Lenders (in its
capacities as a Lender, Swing Line Lender (if applicable), L/C Issuer (if
applicable) and a potential Hedge Bank) hereby irrevocably appoints and
authorizes the Administrative Agent to act as the agent of such Lender for
purposes of acquiring, holding and enforcing any and all Liens on Collateral
granted by any of the Loan Parties to secure any of the Secured Obligations,
together with such powers and discretion as are reasonably incidental
thereto.  In this connection, the
Administrative Agent, as “collateral agent” (and any co-agents, sub-agents and
attorneys-in-fact appointed by the Administrative Agent pursuant to Section
9.02 for purposes of holding or enforcing any Lien on the Collateral (or
any portion thereof) granted under the Collateral Documents, or for exercising
any 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 such
co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under
the Loan Documents) as if set forth in full herein with respect thereto.


 


9.02         Delegation
of Duties.  The Administrative
Agent may execute any of its duties under this Agreement or any other Loan
Document (including for purposes of holding or enforcing any Lien on the
Collateral (or any portion thereof) granted under the Collateral Documents or
of exercising any rights and remedies thereunder) by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such
duties.  The Administrative Agent shall
not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects in the absence of gross negligence or willful
misconduct.


 


9.03         Liability
of Agents.  No Agent-Related
Person shall (a) be liable for any action taken or omitted to be taken by any
of them under or in connection with this Agreement or any other Loan Document
or the transactions contemplated hereby (except for its own gross negligence or
willful misconduct in connection with its duties expressly set forth herein),
or (b) be responsible in any manner to any Lender or participant for any
recital, statement, representation or warranty made by any Loan Party or any
officer thereof, contained herein or in


 


125

















 


any other Loan Document, or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or the perfection or
priority of any Lien or security interest created or purported to be created
under the Collateral Documents, or for any failure of any Loan Party or any
other party to any Loan Document to perform its obligations hereunder or
thereunder.  No Agent-Related Person
shall be under any obligation to any Lender or participant to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the properties, books or records of any Loan Party or any Affiliate thereof.


 


9.04         Reliance by
Agents.


 


(a)           Each Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, electronic mail message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to any Loan Party),
independent accountants and other experts selected by such Agent.  Each Agent shall be fully justified in
failing or refusing to take any action under any Loan Document unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.  Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the Required
Lenders (or such greater number of Lenders as may be expressly required hereby
in any instance) and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders.


 


(b)           For purposes of determining compliance with the conditions
specified in Section 4.01, each Lender that has signed this Agreement
shall be deemed to have consented to, approved or accepted or to be satisfied
with, each document or other matter required thereunder to be consented to or
approved by or acceptable or satisfactory to a Lender unless the Administrative
Agent shall have received notice from such Lender prior to the proposed Closing
Date specifying its objection thereto.


 


9.05         Notice of
Default.  The Administrative
Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default, except with respect to defaults in the payment of principal, interest
and fees required to be paid to the Administrative Agent for the account of the
Lenders, unless the Administrative Agent shall have received written notice
from a Lender or the Borrower referring to this Agreement, describing such
Default and stating that such notice is a “notice of default.”  The Administrative Agent will notify the
Lenders of its receipt of any such notice. 
The Administrative Agent shall take such action with respect to such
Default as may be directed by the Required Lenders in accordance with Article
VIII; provided, however, that unless and until the
Administrative Agent has received any such direction, the Administrative Agent
may (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 as
it shall deem advisable or in the best interest of the Lenders.


 


9.06         Credit Decision; Disclosure of
Information by Agents.  Each
Lender acknowledges that no Agent-Related Person has made any representation or
warranty to it, and that no act by any Agent hereafter taken, including any
consent to and acceptance of any assignment or review of the affairs of any
Loan Party or any Affiliate thereof, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender as to any
matter, including whether Agent-Related Persons have disclosed material
information in their possession.  Each
Lender represents to each Agent that it has, independently and without reliance
upon any Agent-Related Person and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their respective Subsidiaries, and all
applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower hereunder. 
Each Lender also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower
and the other Loan Parties.  Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by any Agent herein, such Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of any of the Loan Parties or any of their
respective Affiliates which may come into the possession of any Agent-Related
Person.


 


9.07         Indemnification
of Agents.  Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand each Agent-Related Person (to the extent not reimbursed by or on
behalf of any Loan Party and without limiting the obligation of any Loan Party
to do so), pro rata, and hold harmless each Agent-Related Person from and
against any and all Indemnified Liabilities incurred by it; provided, however,
that no Lender shall be liable for the payment to any Agent-Related Person of
any portion of such Indemnified Liabilities to the extent determined in a
final, nonappealable judgment by a court of competent jurisdiction to have
resulted from such Agent-Related Person’s own gross negligence or willful
misconduct; provided, however, that no action taken in accordance
with the directions of the Required Lenders shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section.  In the case of any investigation, litigation
or proceeding giving rise to any Indemnified Liabilities, this Section 9.07
applies whether any such investigation, litigation or proceeding is brought by
any Lender or any other Person.  Without
limitation of the foregoing, each Lender shall reimburse the Administrative
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Administrative Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, any other Loan Document, or any document contemplated by or
referred to herein, to the extent that the Administrative Agent is


 


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not reimbursed for such expenses by or on behalf of
the Borrower.  The undertaking in this
Section shall survive the Termination Date and the resignation of the
Administrative Agent.


 


9.08         Agents in their Individual Capacities.  Each of Bank of America and Citigroup and
their respective Affiliates may make loans to, issue letters of credit for the
account of, accept deposits from, acquire Equity Interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with each of the Loan Parties and their respective Affiliates as
though (i) Bank of America were not the Administrative Agent or the L/C Issuer
hereunder and (ii) Citigroup were not the Documentation Agent, and, in each
case, without notice to or consent of the Lenders.  The Lenders acknowledge that, pursuant to such activities, each of
Bank of America, Citigroup, or their respective Affiliates may receive
information regarding any Loan Party or its Affiliates (including information
that may be subject to confidentiality obligations in favor of such Loan Party
or such Affiliate) and acknowledge that the Administrative Agent (in the case
of 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 of
America and Citigroup shall have the same rights and powers under this
Agreement as any other Lender and may exercise such rights and powers as though
it were not the Administrative Agent or the L/C Issuer (in the case of Bank of
America) or the Documentation Agent (in the case of Citigroup), and the terms
“Lender” and “Lenders” include each of Bank of America and Citigroup in its
individual capacity.


 


9.09         Successor
Agents.  The Administrative
Agent may resign as the Administrative Agent upon 30 days’ notice to the
Lenders.  If the Administrative Agent
resigns under this Agreement, the Required Lenders shall appoint from among the
Lenders a successor agent for the Lenders, which successor agent shall be
consented to by the Borrower at all times other than during the existence of an
Event of Default under Section 8.01(f) (which consent of the Borrower
shall not be unreasonably withheld or delayed).  If no successor agent is appointed prior to the Closing Date of
the resignation of the Administrative Agent, the Administrative Agent may
appoint, after consulting with the Lenders and the Borrower, a successor agent
from among the Lenders.  Upon the
acceptance of its appointment as successor agent hereunder, the Person acting
as such successor agent shall succeed to all the rights, powers and duties of
the retiring Administrative Agent and the term “Administrative Agent” shall
mean such successor agent, and the retiring Administrative Agent’s appointment,
powers and duties as Administrative Agent shall be terminated.  After the retiring Agent’s resignation
hereunder as Agent, the provisions of this Article IX and Sections 10.04
and 10.05 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was the Agent under this Agreement.  If no successor agent has accepted
appointment as Administrative Agent by the date that is 30 days following a
retiring Administrative Agent’s notice of resignation, the retiring
Administrative Agent’s resignation shall nevertheless thereupon become
effective and the Lenders shall perform all of the duties of such Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above. 
Upon the acceptance of any appointment as Administrative Agent hereunder
by a successor and upon the execution and filing or recording of such financing
statements, or amendments thereto, and such amendments or supplements to the
Mortgages, and such other instruments or notices, as may be necessary or
desirable, or as the Required Lenders may request, in order to continue the
perfection of the Liens granted or purported to be granted by the Collateral
Documents, such successor Administrative Agent shall thereupon succeed to and
become vested with all the rights, powers,


 


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discretion, privileges, and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under the Loan Documents.  After any retiring Administrative Agent’s
resignation hereunder as the Administrative Agent, the provisions of this Article
IX shall continue in effect for its benefit in respect of any actions taken
or omitted to be taken by it while it was acting as an Agent.


 


9.10         Administrative Agent May File Proofs
of Claim.  In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
any Loan Party, the Administrative Agent (irrespective of whether the principal
of any Loan or L/C Obligation shall then be due and payable as herein expressed
or by declaration or otherwise and irrespective of whether the Administrative
Agent shall have made any demand on the Borrower) shall be entitled and
empowered, by intervention in such proceeding or otherwise


 


(a)           to file and prove a
claim for the whole amount of the principal and interest owing and unpaid in
respect of the Loans, L/C Obligations and all other Obligations that are owing
and unpaid and to file such other documents as may be necessary or advisable in
order to have the claims of the Lenders and the Agents (including any claim for
the reasonable compensation, expenses, disbursements and Loans of the Lenders
and the Agents and their respective agents and counsel and all other amounts
due the Lenders and the Agents under Sections 2.03(i) and (j), 2.09
and 10.04) allowed in such judicial proceeding; and


 


(b)           to collect and
receive any monies or other property payable or deliverable on any such claims
and to distribute the same;


 


and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender to make
such payments to the Administrative Agent and, in the event that the
Administrative Agent shall consent to the making of such payments directly to
the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and Loans of the Agents and
their respective agents and counsel, and any other amounts due the Agents under
Sections 2.09 and 10.04.


 


Nothing contained herein shall be deemed to authorize
the Administrative Agent to authorize or consent to or accept or adopt on
behalf of any Lender any plan of reorganization, arrangement, adjustment or
composition affecting the Obligations or the rights of any Lender or to
authorize the Administrative Agent to vote in respect of the claim of any
Lender in any such proceeding.


 


9.11         Collateral
and Guaranty Matters.  The
Lenders irrevocably authorize the Administrative Agent, at its option and in
its discretion,


 


(a)           to release any Lien
on any property granted to or held by the Administrative Agent under any Loan
Document (i) upon the Termination Date, (ii) that is sold or to be sold as part
of or in connection with any sale permitted hereunder or under


 


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any other Loan
Document, or (iii) subject to Section 10.01, if approved, authorized or
ratified in writing by the Required Lenders; and


 


(b)           to release any
Guarantor from its obligations under the Guaranty and any other Loan Document
to which it is a party if such Person ceases to be a Subsidiary as a result of
a transaction permitted hereunder.


 


Upon request by the Administrative Agent at any time,
the Required Lenders will confirm in writing the Administrative Agent’s
authority to release its interest in particular types or items of property, or
to release any Guarantor from its obligations under the Loan Documents pursuant
to this Section 9.11.  In each
case as specified in this Section 9.11, the Administrative Agent will,
at the Borrower’s expense, execute and deliver to the applicable Loan Party
such documents as such Loan Party may reasonably request to evidence the
release of such item of Collateral from the assignment and security interest
granted under the Collateral Documents, or to release such Guarantor from its
obligations under the Loan Documents, in each case in accordance with the terms
of the Loan Documents and this Section 9.11.


 


9.12         Other
Agents; Arrangers and Managers. 
None of the Lenders or other Persons identified on the facing page or
signature pages of this Agreement as a “documentation agent,” “joint book
manager” or “joint lead arranger” shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than, in the case
of such Lenders, those applicable to all Lenders as such.  Without limiting the foregoing, none of the
Lenders or other Persons so identified shall have or be deemed to have any
fiduciary relationship with any Lender. 
Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders or other Persons so identified in deciding to enter into
this Agreement or in taking or not taking action hereunder.


 


ARTICLE X

MISCELLANEOUS


 


10.01       Amendments,
Etc.  No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by
the Borrower or any other Loan Party therefrom, shall be effective unless in
writing signed by the Required Lenders and the Borrower or the applicable Loan
Party, as the case may be, and each such waiver or consent shall be effective
only 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 increase
the Commitment of any Lender without the written consent of each Lender
directly affected thereby (it being understood that a waiver of any condition
precedent set forth in Section 4.02 or the waiver of any Event of
Default, mandatory prepayment or mandatory reduction of the Commitments shall
not constitute an extension or increase of any Commitment of any Lender);


 


(b)           postpone any date
scheduled for any payment of principal or interest under Sections 2.07
or 2.08  without the
written consent of each Lender directly affected thereby, it being understood
that the waiver of any mandatory prepayment of the Term


 


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Loans shall
not constitute a postponement of any date scheduled for the payment of
principal or interest;


 


(c)           reduce the principal
of, 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 written
consent of each Lender directly affected thereby, it being understood that any
change to the definition of Total Leverage Ratio or in the component
definitions thereof shall not constitute a reduction in the rate; provided,
however, that only the consent of the Required Lenders shall be
necessary to amend the definition of “Default Rate” or to waive any obligation
of the Borrower to pay interest at the Default Rate;


 


(d)           change the order of
application of any reduction in the Commitments or any prepayment of Loans
among the Facilities from the application thereof set forth in the applicable
provisions of Section 2.06(b) or 2.05(b), respectively, in
any manner that materially and adversely affects the Lenders under such
Facilities without the written consent of Lenders having more than 50% of the
Aggregate Credit Exposures then in effect within each of the following classes
of Commitments, Loans and other Credit Extensions: (i) the class consisting of
the Revolving Credit Commitment combined on an aggregate basis and (ii) the
class consisting of the Term Commitment combined on an aggregate basis;


 


(e)           change the pro rata
sharing of any reduction in the Commitments or any prepayment of Loans between
the Dollar Term Facility and the Canadian Term Facility set forth in Section
2.05 and Section 2.06 without the written consent of Lenders having
more than 50% of the Aggregate Credit Exposures then in effect within each of
the following classes of Commitments, Loans and other Credit Extensions: (i)
the class consisting of the Dollar Term Commitment combined on an aggregate
basis and (ii) the class consisting of the Canadian Term Commitment combined on
an aggregate basis;


 


(f)            change any provision
of this Section 10.01 or the definition of “Required Lenders” or Section 2.06(c) without the
written consent of each Lender;


 


(g)           release all or
substantially all of the Collateral in any transaction or series of related
transactions, without the written consent of each Lender; or


 


(h)           release all or
substantially all of the value of the Guaranty, without the written consent of
each Lender;


 


and provided
further that (i) no amendment, waiver or consent shall, unless in
writing 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 any
Letter of Credit Application relating to any Letter of Credit issued or to be
issued by it; (ii) no amendment, waiver or consent shall, unless in writing and
signed 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 the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of, or any fees or other amounts payable to, the


 


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Administrative
Agent 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 each
Granting Lender all or any part of whose Loans are being funded by an SPC at
the time of such amendment, waiver or other modification; and (v) the Fee
Letter may be amended, or rights or privileges thereunder waived, in a writing
executed only by the parties thereto. 
Notwithstanding anything to the contrary herein, no Defaulting Lender
shall have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Commitment of such Lender may not be increased or
extended without the consent of such Lender (it being understood that any
Commitments or Loans held or deemed held by any Defaulting Lender shall be
excluded from a vote of the Lenders hereunder requiring any consent of the
Lenders).


 


10.02       Notices and Other Communications;
Facsimile Copies.


 


(a)           General. 
Unless otherwise expressly provided herein, all notices and other
communications provided for hereunder or any other Loan Document shall be in
writing (including by facsimile transmission). 
All such written notices shall be mailed, faxed or delivered to the
applicable address, facsimile number or (subject to Section 10.02(c))
electronic mail address, and all notices and other communications expressly
permitted hereunder to be given by telephone shall be made to the applicable
telephone number, as follows:


 


(i)            if to the Borrower,
the Administrative Agent, the L/C Issuer or the Swing Line Lender, to the
address, facsimile number, electronic mail address or telephone number
specified for such Person on Schedule 10.02 or to such other address,
facsimile number, electronic mail address or telephone number as shall be
designated by such party in a notice to the other parties; and


 


(ii)           if to any other
Lender, to the address, facsimile number, electronic mail address or telephone
number specified in its Administrative Questionnaire or to such other address,
facsimile number, electronic mail address or telephone number as shall be
designated by such party in a notice to the Borrower, the Administrative Agent,
the L/C Issuer and the Swing Line Lender.


 


Notices sent by
hand 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 Days
after deposit in the mails, postage prepaid; notices sent by facsimile shall be
deemed 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 next
Business Day for the recipient). 
Notices delivered through electronic communications to the extent
provided in subsection (b) below shall be effective as provided in such subsection
(b).


 


(b)           Electronic Communications.  Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures approved
by the Administrative Agent, provided that the foregoing shall not apply to
notices to any Lender pursuant to Article II if such Lender has notified
the Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication. 
The Administrative Agent or the Borrower may, in its


 


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discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications.


 


(c)           Effectiveness of Facsimile Documents and Signatures.  Loan Documents may be transmitted and/or
signed by facsimile.  The effectiveness
of any such documents and signatures shall, subject to applicable Law, have the
same force and effect as manually-signed originals and shall be binding on all
Loan Parties, the Agents and the Lenders. 
The Administrative Agent may also require that any such documents and
signatures be confirmed by a manually-signed original thereof; provided,
however, that the failure to request or deliver the same shall not limit
the effectiveness of any facsimile document or signature.


 


(d)           Reliance by Agents and Lenders.  The Agents and the Lenders shall be entitled
to rely and act upon any notices (including telephonic Committed Loan Notices
and Swing Line Loan Notices) purportedly given by or on behalf of the Borrower
even if (i) such notices were not made in a manner specified herein, were
incomplete or were not preceded or followed by any other form of notice
specified 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 Lender
from all losses, costs, expenses and liabilities resulting from the reliance by
such Person on each notice purportedly given by or on behalf of the Borrower in
the absence of gross negligence or willful misconduct.  All telephonic notices to the Administrative
Agent may be recorded by such Agent, and each of the parties hereto hereby
consents to such recording.


 


10.03       No
Waiver; Cumulative Remedies. 
No failure by any Lender or the Administrative Agent to exercise, and no
delay by any such Person in exercising, any right, remedy, power or privilege
hereunder or any other Loan Document shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. 
The rights, remedies, powers and privileges herein provided, and
provided under each other Loan Document, are cumulative and not exclusive of
any rights, remedies, powers and privileges provided by law.


 


10.04       Attorney
Costs, Expenses and Taxes. 
The Borrower agrees (a) to pay or reimburse the Administrative Agent for
all reasonable costs and expenses incurred in connection with the development,
preparation, negotiation, syndication and execution of this Agreement and the
other Loan Documents, and any amendment, waiver, consent or other modification
of the provisions hereof and thereof (whether or not the transactions
contemplated hereby or thereby are consummated), and the consummation and
administration of the transactions contemplated hereby and thereby, including
all Attorney Costs of Shearman & Sterling LLP, and (b) to pay or reimburse
the Administrative Agent and each Lender for all reasonable costs and expenses
incurred in connection with the enforcement of any rights or remedies under
this Agreement or the other Loan Documents (including all such costs and
expenses incurred during any legal proceeding, including any proceeding under
any Debtor Relief Law), including all Attorney Costs of counsel to the
Administrative Agent).  The foregoing
costs and expenses shall include all search, filing, recording, title insurance
and appraisal charges and fees and taxes related thereto, and other
out-of-pocket expenses incurred by any Agent. 
All amounts due under this


 


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Section 10.04
shall be paid within thirty (30) Business Days after invoiced or demand
therefor.  The agreements in this
Section shall survive the Termination Date. If any Loan Party fails to pay when
due any costs, expenses or other amounts payable by it hereunder or under any
Loan Document, including, without limitation, Attorney Costs and indemnities,
such amount may be paid on behalf of such Loan Party by any Agent or any
Lender, in its sole discretion.


 


10.05       Indemnification
by the Borrower.  Whether
or not the transactions contemplated hereby are consummated, the Borrower shall
indemnify and hold harmless each Agent-Related Person, each Lender and their
respective Affiliates, directors, officers, employees, counsel, agents and, in
the 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 and
disbursements (including Attorney Costs (which shall be limited to one (1)
counsel to the Administrative Agent and the Lenders, unless (x) the
interests of the Administrative Agent and the Lenders are sufficiently
divergent, 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 of
the Lenders) are distinctly or disproportionately affected, one (1) additional
counsel for such Lender or group of Lenders)) of any kind or nature whatsoever
which may at any time be imposed on, incurred by or asserted against any such
Indemnitee in any way relating to or arising out of or in connection with (a)
the execution, delivery, enforcement, performance or administration of any Loan
Document or any other agreement, letter or instrument delivered in connection
with the transactions contemplated thereby or the consummation of the
transactions contemplated thereby, (b) any Commitment, Loan or Letter of Credit
or the use or proposed use of the proceeds therefrom (including any refusal by
the L/C Issuer to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with the
terms of such Letter of Credit), (c) any actual or alleged presence or release
of Hazardous Materials on or from any property currently or formerly owned or
operated by the Borrower, any Subsidiary or any other Loan Party, or any
Environmental Liability related in any way to the Borrower, any Subsidiary or
any other Loan Party, or (d) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory (including any investigation of, preparation
for, or defense of any pending or threatened claim, investigation, litigation
or proceeding) and regardless of whether any Indemnitee is a party thereto (all
the foregoing, collectively, the “Indemnified Liabilities”), provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final and nonappealable judgment to (a) have resulted
from the gross negligence or willful misconduct of such Indemnitee or breach of
any Loan Document by such Indemnitee or (b) arise from claims of any of the
Lenders solely against one or more other Lenders (and not by one or more
Lenders against the Administrative Agent or one or more of the other Agents)
that have not resulted from the action, inaction, participation or contribution
of the Borrower or its Subsidiaries or other Affiliates or any of their
respective officers, directors, stockholders, partners, members, employees,
agents, representatives or advisors.  No
Indemnitee shall be liable for any damages arising from the use by others of
any information or other materials obtained through IntraLinks or other similar
information transmission systems in connection with this Agreement, nor shall
any 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 activities
in connection herewith or therewith (whether before or after the Closing
Date).  In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section 10.05
applies, 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 not
any Indemnitee is otherwise a party thereto and whether or not any of the
transactions contemplated hereunder or under any of the other Loan Documents is
consummated.  All amounts due under this
Section 10.05 shall be payable within twenty (20) Business Days after
demand therefor.  The agreements in this
Section shall survive the resignation of the Administrative Agent, the
replacement of any Lender and the Termination Date.


 


10.06       Payments Set Aside.  To the extent that any payment by or on
behalf of the Borrower is made to any Agent or any Lender, or any Agent or any
Lender exercises its right of setoff, and such payment or the proceeds of such
setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by such Agent or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (b) each Lender
severally agrees to pay to the Administrative Agent upon demand its applicable
share of any amount so recovered from or repaid by any Agent, plus interest
thereon from the date of such demand to the date such payment is made at a rate
per annum equal to the Federal Funds Rate from time to time in effect.


 


10.07       Successors
and Assigns.  (a)  The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower
may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (other than as provided in Section
7.03(h) and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of Section 10.07(b), (ii) by way of participation in
accordance with the provisions of Section 10.07(d), or (iii) by way of
pledge or assignment of a security interest subject to the restrictions of Section
10.07(f), or (iv) to an SPC in accordance with the provisions of Section
10.07(h) (and any other attempted assignment or transfer by any party
hereto shall be null and void).  Nothing
in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (d)
of this Section and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim under or by reason
of this Agreement.


 


(b)           Any Lender may at any time assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans (including for
purposes of this Section 10.07(b), participations in L/C Obligations and
in Swing Line Loans) at the time owing to it); provided that (i) except
in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender or an Affiliate of a Lender or an Approved Fund with
respect to a Lender, the aggregate amount of the Commitment


 


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(which for this purpose includes Loans
outstanding thereunder) or, if the applicable Commitment is not then in effect,
the outstanding principal balance of the Loan of the assigning Lender subject
to each such assignment, determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Administrative
Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of
the Trade Date, shall not be less than $2,500,000, in the case of any
assignment in respect of the Revolving Credit Facility, or $1,000,000 (or the
Dollar Equivalent thereof, if applicable), in the case of any assignment in
respect of the Term Facility, unless each of the Administrative Agent and, so
long as no Event of Default under Section 8.01(a) or 8.01(f) has
occurred and is continuing, the Borrower otherwise consents (each such consent
not to be unreasonably withheld or delayed); (ii) each partial assignment shall
be made as an assignment of a proportionate part of all the assigning Lender’s
rights and obligations under this Agreement with respect to the Loans or the
Commitment assigned, except that this clause (ii) shall not (x) apply to
rights in respect of Swing Line Loans or (y) prohibit any Lender from assigning
all or a portion of its rights and obligations among separate Facilities on a
non-pro rata basis; (iii) any assignment of a Revolving Credit Commitment must
be approved by the Administrative Agent, the L/C Issuer and the Swing Line
Lender unless the Person that is the proposed assignee is itself a Revolving
Credit Lender (whether or not the proposed assignee would otherwise qualify as
an Eligible Assignee); (iv) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee of $3,500; provided that (A) no such fee shall be payable in the case of an assignment to
a Lender, an Affiliate of a Lender or an Approved Fund with respect to a
Lender, and (B) in the case of contemporaneous assignments by a Lender to one
or more Funds managed by the same investment advisor (which Funds are not then
Lenders hereunder), only a single such $3,500 fee shall be payable for all such
contemporaneous assignments; and (v) the assigning Lender shall deliver
to the Administrative Agent or the Borrower any Note issued to it marked
“cancelled:”.  Subject to acceptance and
recording 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 the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 3.01, 3.04, 3.05, 10.04 and 10.05
with respect to facts and circumstances occurring prior to the effective date
of such assignment).  Upon request, the
Borrower (at its expense) shall execute and deliver a Note to the assignee
Lender.  Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this subsection shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance
with Section 10.07(d).


 


(c)           The Administrative Agent, acting solely for this purpose
as an agent of the Borrower, shall maintain at the Administrative Agent’s
Office a copy of each Assignment and Assumption delivered to it and a register
for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts (and related interest amounts) of the
Loans, L/C Obligations (specifying the Unreimbursed Amount), L/C Borrowings and
amounts due under Section 2.03 owing to, each Lender pursuant to the
terms hereof from time to time (the


 


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 “Register”).  The
entries in the Register shall be conclusive, and the Borrower, the Agents and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrower at
any reasonable time and from time to time upon reasonable prior notice.  In addition, at any time that a request for
a consent for a material or other substantive change to the Loan Documents is
pending, any Lender may request and receive from the Administrative Agent a
copy of the Register.  Upon receipt of a
duly completed and executed Assignment and Assumption and compliance by the
assigning Lender and Eligible Assignee with the other applicable provisions of
this Section 10.07, the Administrative Agent shall accept such
Assignment and Assumption and record the information contained therein in the
Register.


 


(d)           Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations to any
Person (other than a natural person or the Borrower or any of the Borrower’s
Affiliates or Subsidiaries) (each, a “Participant”) in all
or 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 such
Lender’s participations in L/C Obligations and/or Swing Line Loans) owing to
it); provided that (i) such Lender’s obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, the Agents and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement. 
Any agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant,
agree to any amendment, waiver or other modification described in the first
proviso to Section 10.01 that directly affects such Participant.  Subject to Section 10.07(e), the
Borrower agrees that each Participant shall be entitled to the benefits of Sections
3.01, 3.04 and 3.05  to the same extent as if it were a Lender
and had acquired its interest by assignment pursuant to Section 10.07(b).  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 10.09  as
though it were a Lender, provided such Participant agrees to be subject
to Section 2.13 as though it were a Lender.


 


(e)           A Participant shall not be entitled to receive any greater
payment under Section 3.01, 3.04 or 3.05 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower’s prior written consent and such Participant complies with Section
10.15 as if such Participant were a Lender under Section 10.15.  A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 3.01
unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower, to comply with Section
10.15 as though it were a Lender.


 


(f)            Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of


 


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its obligations hereunder or substitute any
such pledgee or assignee for such Lender as a party hereto.


 


(g)           As used herein, the following terms have the following
meanings:


 


“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) the
Administrative Agent, (ii) in the case of any assignment of a Revolving
Commitment, the L/C Issuer and the Swing Line Lender, and (iii) (A) unless an
Event of Default under Section 8.01(a) or (f) has occurred and is
continuing or (B) in the case of any assignment to any Person that would result
in 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 being
understood that if the Administrative Agent does not provide either a negative
or affirmative response to an approval request within 10 days, such approval shall
be deemed to have been given); provided that notwithstanding the
foregoing, “Eligible Assignee”
shall not include the Borrower or any of the Borrower’s Affiliates or
Subsidiaries.


 


“Fund” means any
Person (other than a natural person) that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.


 


“Approved Fund” means
any Fund that is administered, advised or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers, advises or manages a Lender. 
For the avoidance of doubt, “Approved Fund” does not include any
unaffiliated 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 special
purpose funding vehicle identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and the Borrower (an “SPC”) the option to provide all or any part of any Loan
that such Granting Lender would otherwise be obligated to make pursuant to this
Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPC to fund any Loan, and (ii) if an SPC elects not to
exercise 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 terms
hereof or, if it fails to do so, to make such payment to the Administrative
Agent 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 shall
increase the costs or expenses or otherwise increase or change the obligations
of the Borrower under this Agreement (including its obligations under Section
3.01 or 3.04), (ii) no SPC shall be liable for any indemnity or
similar payment obligation under this Agreement for which a Lender would be
liable, and (iii) the Granting Lender shall for all purposes, including the
approval of any amendment, waiver or other modification of any provision of any
Loan Document, remain the lender of record hereunder.  The making of a Loan by an SPC hereunder shall utilize the
Commitment of the Granting Lender to the same extent, and as if, such Loan were
made 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 of
a processing fee of $3,500, assign all or any portion of its right to receive
payment with respect to any Loan to the Granting Lender and (ii) disclose on a
confidential basis any non-public information relating to its funding of Loans
to any rating agency, commercial paper dealer or provider of any surety or
Guarantee or credit or liquidity enhancement to such SPC.


 


(i)            Notwithstanding anything to the contrary contained
herein, if at any time Bank of America assigns all of its Commitments and Loans
pursuant 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) upon
30 days’ notice to the Borrower, resign as Swing Line Lender.  In the event of any such resignation as L/C
Issuer or Swing Line Lender, the Borrower shall be entitled to appoint from
among the Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided,
however, that no failure by the Borrower to appoint any such successor
shall affect the resignation of Bank of America as L/C Issuer or Swing Line
Lender, as the case may be.  If Bank of
America resigns as L/C Issuer, it shall retain all the rights and obligations
of the L/C Issuer hereunder with respect to all Letters of Credit outstanding
as of the effective date of its resignation as L/C Issuer and all L/C
Obligations with respect thereto (including the right to require the Lenders to
make Base Rate Loans or fund risk participations in Unreimbursed Amounts
pursuant to Section 2.03(c)).  If
Bank of America resigns as Swing Line Lender, it shall retain all the rights of
the Swing Line Lender provided for hereunder with respect to Swing Line Loans
made 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 risk
participations in outstanding Swing Line Loans pursuant to Section 2.04(c).


 


(j)            With respect to each Letter of Credit, if
an L/C Issuer transfers its rights with respect to the Borrower’s
obligation to make payments to such L/C Issuer with respect to any Unreimbursed
Amounts or L/C Borrowings, such L/C Issuer shall give notice of such transfer
to the Administrative Agent for notation in the Register and no such transfer
will be effective for purposes of this Agreement unless it has been recorded in
the Register.


 


10.08       Confidentiality.  Each of the Agents and the Lenders agrees to
maintain the confidentiality of the Information, except that Information may be
disclosed (a) to its directors, officers, employees, agents, advisors and
representatives (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential); (b) to the extent
requested by any regulatory authority purporting to have jurisdiction over it;
(c) to the extent  required by
applicable Laws or regulations or by any subpoena or similar legal process; (d)
to any other party to this Agreement; (e) subject to an agreement containing
provisions substantially the same as those of this Section 10.08, to any
Eligible Assignee or pledgee (pursuant to Section 10.07(f)) of or
Participant in, or any prospective Eligible Assignee or pledgee (pursuant to Section
10.07(f)) of or Participant in, any of its rights or obligations under this
Agreement; (f) with the consent of the Borrower; (g) to the extent such
Information becomes publicly available other than as a result of a breach of
this Section 10.08; (h) to any state, Federal or foreign authority or
examiner (including the National Association of Insurance Commissioners or any
other similar organization) regulating any Lender; or (i) to any rating agency
when required by it (it being understood that, prior to any such disclosure,
such rating agency shall undertake to preserve the confidentiality of any
Information relating to the Loan Parties received by it from such Lender).


 


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In addition, the Agents and the Lenders may disclose
the existence of this Agreement and information about this Agreement to market
data collectors, similar service providers to the lending industry, and service
providers to the Agents and the Lenders in connection with the administration
and management of this Agreement, the other Loan Documents, the Commitments,
and the Credit Extensions.  For the
purposes of this Section, “Information”
means all information received from any Loan Party relating to any Loan Party
or its business, other than any such information that is publicly available to
any Agent or any Lender prior to disclosure by any Loan Party other than as a
result of a breach of this Section 10.08; provided that, in the
case of information received from a Loan Party after the date hereof, such
information is clearly identified at the time of delivery as confidential.  Any Person required to maintain the
confidentiality of Information as provided in this Section 10.08 shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.


 


10.09       Setoff.  In addition to any rights and remedies of
the Lenders provided by law, upon the occurrence and during the continuance of
any Event of Default and the making of the request or the granting of the
consent specified by Section 8.01 to authorize the Administrative Agent
to declare the Loans due and payable pursuant to the provisions of Section
8.01, each Lender is authorized at any time and from time to time, without
prior notice to the Borrower or any other Loan Party, any such notice being
waived by the Borrower (on its own behalf and on behalf of each Loan Party) to
the 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 credit
or the account of the respective Loan Parties against any and all Obligations
owing to such Lender hereunder or under any other Loan Document, now or
hereafter existing, irrespective of whether or not such Agent or such Lender
shall have made demand under this Agreement or any other Loan Document and
although such Obligations may be contingent or unmatured or denominated in a
currency different from that of the applicable deposit or Indebtedness.  Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such set-off and application
made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such setoff and application.  The rights of the Administrative Agent and
each Lender under this Section are in addition to other rights and remedies
(including, without limitation, other rights of setoff) that the Administrative
Agent, such Lender and their respective Affiliates may have.


 


10.10       Interest
Rate Limitation. 
Notwithstanding anything to the contrary contained in any Loan Document,
the interest paid or agreed to be paid under the Loan Documents shall not
exceed the maximum rate of non-usurious interest permitted by applicable Law
(the “Maximum Rate”).  If any Agent or any Lender shall receive
interest in an amount that exceeds the Maximum Rate, the excess interest shall
be applied to the principal of the Loans or, if it exceeds such unpaid
principal, refunded to the Borrower.  In
determining whether the interest contracted for, charged, or received by an
Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent
permitted by applicable Law, (a) characterize any payment that is not principal
as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or


 


140

















 


unequal parts the total amount of interest throughout
the contemplated term of the Obligations hereunder.


 


10.11       Counterparts.  This Agreement and each other Loan Document
may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. Delivery by telecopier of an executed counterpart of a signature
page to this Agreement and each other Loan Document shall be effective as
delivery of an original executed counterpart of this Agreement and such other
Loan Document. The Agents may also require that any such documents and
signatures delivered by telecopier be confirmed by a manually-signed original
thereof; provided that the failure to request or deliver the same shall
not limit the effectiveness of any document or signature delivered by
telecopier.


 


10.12       Integration.  This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on
the 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 Agreement
and those of any other Loan Document, the provisions of this Agreement shall
control; provided that the inclusion of supplemental rights or remedies
in favor of the Agents or the Lenders in any other Loan Document shall not be
deemed a conflict with this Agreement. 
Each Loan Document was drafted with the joint participation of the
respective parties thereto and shall be construed neither against nor in favor
of any party, but rather in accordance with the fair meaning thereof.


 


10.13       Survival
of Representations and Warranties.  All representations and warranties made hereunder and in any
other Loan Document or other document delivered pursuant hereto or thereto or
in connection herewith or therewith shall survive the execution and delivery
hereof and thereof.  Such
representations and warranties have been or will be relied upon by each Agent
and each Lender, regardless of any investigation made by any Agent or any Lender
or on their behalf and notwithstanding that any Agent or any Lender may have
had notice or knowledge of any Default at the time of any Credit Extension, and
shall continue in full force and effect until the Termination Date.


 


10.14       Severability.  If any provision of this Agreement or the other
Loan Documents is held to be illegal, invalid or unenforceable, the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby.  The invalidity of a provision in a
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.


 


10.15       Tax Forms.  (a)  (i)  Each Lender
and Agent that is not a “United States person” within the meaning of Section
7701(a)(30) of the Code (a “Foreign Lender”) shall deliver to the Borrower and the
Administrative Agent, prior to receipt of any payment subject to withholding
under the Code (or upon accepting an assignment of an interest herein), two
duly signed, properly completed copies of either IRS Form W-8BEN or any
successor thereto (relating to such Foreign Lender and entitling it to an
exemption from, or reduction of, United States withholding tax on all payments
to be made to such Foreign Lender by the


 


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Borrower or any other Loan Party pursuant to this
Agreement or any other Loan Document) or IRS Form W-8ECI or any successor
thereto (relating to all payments to be made to such Foreign Lender by the
Borrower or any other Loan Party pursuant to this Agreement or any other Loan
Document) or such other evidence reasonably satisfactory to the Borrower and
the Administrative Agent that such Foreign Lender is entitled to an exemption
from, or reduction of, United States withholding tax, including any exemption
pursuant to Section 881(c) of the Code, and in the case of a Foreign Lender
claiming such an exemption under Section 881(c) of the Code, a certificate that
establishes in writing to the Borrower and the Administrative Agent that such
Foreign Lender is not (i) a “bank” as defined in Section 881(c)(3)(A) of the
Code, (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 Borrower
with 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 completed
and signed copies of one or more of such forms or certificates (or such
successor forms or certificates as shall be adopted from time to time by the
relevant United States taxing authorities) as may then be available under then
current United States laws and regulations to avoid, or such evidence as is
reasonably satisfactory to the Borrower and the Administrative Agent of any
available exemption from, or reduction of, United States withholding taxes in
respect of all payments to be made to such Foreign Lender by the Borrower or
any other Loan Party pursuant to this Agreement or any other Loan Document, in
each case, (1) on or before the date that any such form, certificate or other
evidence expires or becomes obsolete, (2) after the occurrence of any event
requiring a change in the most recent form, certificate or evidence previously delivered
by it to the Borrower and the Administrative Agent and (3) from time to time
thereafter if reasonably requested by the Borrower or the Administrative Agent,
and (B) promptly notify the Borrower and the Administrative Agent of any change
in circumstances which would modify or render invalid any claimed exemption or
reduction.


 


(ii)           Each
Foreign Lender, to the extent it does not act or ceases to act for its own
account with respect to any portion of any sums paid or payable to such Foreign
Lender under any of the Loan Documents (for example, in the case of a typical
participation by such Foreign Lender), shall deliver to the Borrower and the
Administrative Agent on the date when such Foreign Lender ceases to act for its
own account with respect to any portion of any such sums paid or payable, and
at such other times as may be necessary in the determination of the Borrower
and the Administrative Agent (in either case, in the reasonable exercise of its
discretion), (A) two duly signed completed copies of the forms or statements
required to be provided by such Foreign Lender as set forth above, to establish
the portion of any such sums paid or payable with respect to which such Foreign
Lender acts for its own account that is not subject to United States withholding
tax, and (B) two duly signed completed copies of IRS Form W-8IMY (or any
successor thereto), together with any information such Foreign Lender chooses
to transmit with such form, and any other certificate or statement of exemption
required under the Code, to establish that such Foreign Lender is not acting
for its own account with respect to a portion of any such sums payable to such
Foreign Lender.


 


(iii)          The
Borrower shall not be required to pay any additional amount or any indemnity
payment under Section 3.01 to (A) any Foreign Lender with respect to any
Taxes required to be deducted or withheld on the basis of the information,
certificates or statements of exemption such Lender transmits with an IRS Form
W-8IMY pursuant to this Section 10.15(a), (B) any Foreign Lender if such
Foreign Lender shall have failed


 


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to satisfy the foregoing provisions of this Section
10.15(a), or (C) any U.S.
Lender if such U.S. Lender shall have failed to satisfy the provisions of Section
10.15(b); provided, that if such Lender shall have satisfied the
requirement of this Section 10.15(a) or Section 10.15(b), as the
applicable, on the date such Lender became a Lender or ceased to act for its
own account with respect to any payment under any of the Loan Documents,
nothing in this Section 10.15(a) or Section 10.15(b) shall
relieve the Borrower of its obligation to pay any amounts pursuant to Section
3.01 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 the
interpretation, administration or application thereof, such Lender is no longer
properly entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender or other Person for the
account of which such Lender receives any sums payable under any of the Loan
Documents is not subject to withholding or is subject to withholding at a
reduced rate.


 


(iv)          The
Administrative Agent may deduct and withhold any taxes required by any Laws to
be deducted and withheld from any payment under any of the Loan Documents.


 


(b)           Each Lender and Agent that is a “United States person” within the
meaning of Section 7701(a)(30) of the Code (each, a  “U.S. Lender”)
shall deliver to the Administrative Agent and the Borrower two duly signed
completed copies of IRS Form W-9 on or prior to the Closing Date (or on or
prior to the date it becomes a party to this Agreement), certifying that such
U.S. Lender is entitled to an exemption from United States backup withholding
tax, or any successor form.  If such
U.S. Lender fails to deliver such forms, then the Administrative Agent may
withhold from any interest payment to such U.S. Lender an amount equivalent to
the applicable back-up withholding tax imposed by the Code, without reduction.


 


(c)           If any Governmental Authority asserts that the Borrower or
the Administrative Agent did not properly withhold or backup withhold, as the
case may be, any tax or other amount from payments made to or for the account
of any Foreign Lender or U.S. Lender, such Foreign Lender or U.S. Lender shall
indemnify the Borrower and the Administrative Agent therefor, including all
penalties and interest, any taxes imposed by any jurisdiction on the amounts
payable to the Borrower and the Administrative Agent under this Section
10.15, and costs and expenses (including Attorney Costs) of the Borrower
and the Administrative Agent.  The
obligation of the Foreign Lenders or U.S. Lenders, severally, under this Section
10.15 shall survive the termination of the Aggregate Commitments, repayment
of all other Obligations hereunder and the resignation of the Administrative
Agent.


 


10.16       Governing Law.  (a) 
THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.


 


(b)           ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
BORROWER, EACH AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  THE BORROWER, EACH AGENT AND EACH LENDER
IRREVOCABLY WAIVES ANY


 


143

















 


OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION
IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.


 


10.17       Waiver of
Right to Trial by Jury. 
EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL
BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN
DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS
OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION
10.17 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.


 


10.18       Binding Effect.  This Agreement shall become effective when
it shall have been executed by the Borrower and the Administrative Agent shall
have been notified by each Lender, Swing Line Lender and the L/C Issuer that
each such Lender, Swing Line Lender and the L/C Issuer has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, each
Agent and each Lender and their respective successors and permitted assigns,
except that the Borrower shall not have the right (other than pursuant to Section
7.03(h)) to assign its rights hereunder or any interest herein without the
prior written consent of the Lenders.


 


10.19       USA PATRIOT
Act Notice.  Each Lender
and the Administrative Agent (for itself and not on behalf of any Lender)
hereby notifies the Borrower that pursuant to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Act”),
it is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow such Lender or the Administrative Agent, as
applicable, to identify the Borrower in accordance with the Act.


 


10.20       Judgment Currency.  If, for the purposes of obtaining judgment
in any court, it is necessary to convert a sum due hereunder or any other Loan
Document in one currency into another currency, the rate of exchange used shall
be that at which in accordance with normal banking procedures the
Administrative Agent could purchase the first currency with such other currency
on the Business Day preceding that on which final judgment is given.  The obligation of the Borrower in respect of
any such sum due from it to the Administrative Agent or the Lenders hereunder
or under the other Loan Documents shall, notwithstanding any judgment in a
currency (the “Judgment
Currency”) other than that in which such sum is denominated in
accordance with the applicable provisions of this Agreement (the “Agreement Currency”),
be discharged only to the extent that on the Business Day following receipt by
the Administrative


 


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Agent of any sum adjudged
to be so due in the Judgment Currency, the Administrative Agent may in
accordance with normal banking procedures purchase the Agreement Currency with
the Judgment Currency.  If the amount of
the Agreement Currency so purchased is less than the sum originally due to the
Administrative Agent from the Borrower in the Agreement Currency, the Borrower
agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify the Administrative Agent or the Person to whom such obligation was
owing against such loss.  If the amount
of the Agreement Currency so purchased is greater than the sum originally due
to the Administrative Agent in such currency, the Administrative Agent agrees
to return the amount of any excess to the Borrower (or to any other Person who
may be entitled thereto under applicable law).


 


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IN
WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.


 


	
   

  	
  UNITED INDUSTRIES
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 

















 


	
   

  	
  BANK OF AMERICA, N.A.,
  as 

  Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 

















 


	
   

  	
  BANK OF AMERICA, N.A.,
  as a Lender, L/C 

  Issuer and Swing Line Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 

















 


	
  Agreed as of the
  date first above written:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [Please type or
  print name of Lender]

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
   

  	
    Title: