FIRST AMENDMENT AND CONSENT
FIRST AMENDMENT AND CONSENT, dated as of December 23, 1996, to the Fourth
Amended and Restated Credit Agreement, dated as of March 17, 1995, as amended
(the "Credit Agreement"), among The Scotts Company, an Ohio corporation (the
"Borrower" or "Scotts"), the several banks and other financial institutions from
time to time parties to this Agreement (individually, a "Lender" and,
collectively, the "Lenders") and The Chase Manhattan Bank (formerly Chemical
Bank), a New York banking corporation ("Chase"), as agent for the Lenders
thereunder (in such capacity, the "Agent").
W I T N E S S E T H :
WHEREAS, the Borrower has requested that the Agent and the Lenders enter
into this Amendment to among other things, increase the aggregate Revolving
Credit Commitments (as defined in the Credit Agreement) to $425,000,000 and to
allow ▇.▇. ▇▇▇▇▇ International Investments Limited and Miracle Garden Care
Limited, subsidiaries of the Borrower (the "U.K. Borrowers") to become borrowers
in Sterling as set forth herein; and
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. DEFINED TERMS. (a) Unless otherwise defined herein, all capitalized
terms defined in the Credit Agreement and used herein are so used as so defined.
(b) The following term shall have the following meaning:
"FIRST AMENDMENT" shall mean this First Amendment and Consent, as the
same may be amended, modified or otherwise supplemented from time to time.
2. AMENDMENTS TO SECTION 1 OF THE CREDIT AGREEMENT. (a) Subsection 1.1
of the Credit Agreement is hereby amended by inserting therein the following new
definitions in proper alphabetical order:
"CHASE" shall mean The Chase Manhattan Bank (formerly, Chemical Bank).
"CHASE LONDON" shall mean The Chase Manhattan Bank, London Branch.
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"DOLLAR EQUIVALENT" shall mean, on any Business Day with respect to
any Revolving Credit Loan denominated in Sterling, the amount of Dollars
that would be required to purchase the amount of Sterling of such Revolving
Credit Loan on the day two Business Days prior to such Business Day for
settlement on such Business Day, based upon the spot selling rate at which
Chase London offers to sell Sterling for Dollars in the London foreign
exchange market at approximately 11:00 a.m. London time for delivery two
Business Days later.
"FIRST AMENDMENT EFFECTIVE DATE" shall mean December 23, 1996.
"MLA COST" the MLA Cost for a LIBOR Loan denominated in Sterling is
calculated in accordance with the following formula:
BY + L(Y-X)+S(Y-Z)% per annum - MLA Cost
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where on the day of application of the formula;
B is the percentage of the Agent's eligible liabilities which the Bank
of England requires the Agent to hold on a noninterest-bearing deposit
account in accordance with its cash ratio requirements;
Y is the rate at which Sterling deposits are offered by the Agent to
leading banks in the London interbank market at or about 11:00 a.m. on
that day for the relevant period;
L is the percentage of eligible liabilities which the Bank of England
requires the Agent to maintain as secured money with members of the
London Discount Market Association and/or as secured call money with
certain money brokers and gilt-edged primary market markers;
X is the rate at which secured Sterling deposits in the relevant amount
may be placed by the Agent with members of the London Discount Market
Association and/or as secured call money with certain money brokers
and gilt-edged primary market makers at or about 11:00 a.m. on that
day for the relevant period;
S is the percentage of the Agent's eligible liabilities which the Bank
of England requires the Agent to place as a special deposit; and
Z in the interest rate per annum allowed by the Bank of England on
special deposits.
I. For the purposes of this formula:
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A. "eligible liabilities" and "special deposits" all have the
meanings given to them at the time of application of the formula
by the Bank of England;
B. "relevant period" in relation to a LIBOR Loan means;
1. if its term is three months or less, its term; or
2. if its term is more than three months, each successive
period of three months and any necessary short period
comprised in that term.
II. in the application of the formula, B, Y, L, X, S and Z are included in
the formula as figures and not as percentages, e.g. if B = 0.5% and Y
+ 15% BY is calculated as 0.5 x 15.
III. A. The formula is applied on the first day of each relevant period
comprised in the term of the relevant LIBOR Loan.
B. Each rate calculated in accordance with the formula is, if
necessary, rounded upward to four decimal places.
IV. If the Agent determines that a change in circumstances has rendered,
or will render, the formula inappropriate, the Agent (after
consultation with the U.K. Reference Lender) shall notify the U.K.
Borrowers of the manner in which the MLA Cost will subsequently be
calculated. The manner of calculation so notified by the Agent shall,
in the absence of manifest error, be binding on all the parties.
"SCREEN" shall mean, with respect to any currency, the relevant
Telerate Page on which appears the LIBOR Base Rate for deposits in such
currency; PROVIDED that, if there is no such Telerate Page, the relevant
Reuters Screen Page will be substituted.
"SCOTTS GUARANTEE" shall mean the guarantee to be executed and
delivered by Scotts, substantially in the form of Exhibit L, as the same
may be amended, supplemented or otherwise modified from time to time.
"STERLING" and "L" shall mean lawful currency of the U.K.
"STERLING EQUIVALENT" shall mean, on any Business Day with respect to
any amount in Dollars, the amount of Sterling that could be purchased with
such amount of Dollars
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using the foreign exchange rate for such Business Day specified in the
definition of "Dollar Equivalent", as determined by the Agent.
"U.K." shall mean the United Kingdom.
"U.K. BORROWERS" shall mean ▇.▇. ▇▇▇▇▇ International Investments
Limited and, on and after the date it becomes a party hereto, Miracle
Garden Care Limited.
"U.K. REFERENCE LENDER" shall mean the principal London office of
Chase London.
(b) Subsection 1.1 is further amended by deleting the definitions of
"Business Day", "Eurodollar Base Rate", "Eurodollar Rate", "LIBOR Rate" and
"Loan Documents" and substituting in lieu thereof the following new definitions
in proper alphabetical order:
"BUSINESS DAY" shall mean (a) when such term is used in respect of a
day on which a Loan in Dollars is to be made, a day other than Saturday,
Sunday or any other day on which commercial banks in New York City are
authorized or required by law to close; PROVIDED, HOWEVER, that when used
to describe the date of any borrowing of, or any payment or interest rate
determination in respect of, a LIBOR or LIBOR Bid Loan, the term "Business
Day" shall also exclude any day on which commercial banks are not open for
dealings in Dollar deposits in the London Interbank Market, and (b) when
such term is used in respect of a day on which a Loan in Sterling is made,
any day on which commercial banks are generally open for business in
London, England.
"LIBOR BASE RATE" shall mean, with respect to any LIBOR Loan in
Dollars or Sterling for any Interest Period therefor:
(a) the rate per annum (rounded to the nearest 1/16 of 1%) appearing
on the Screen for such currency as the London Interbank Offered Rate for
deposits in such currency at approximately 11:00 a.m. London time (or as
soon thereafter as practicable) on (in the case of any LIBOR Loan in
Sterling), or (in the case of any LIBOR Loan in Dollars) two Business Days
prior to, the first day of such Interest Period as the London Interbank
Offered Rate for such currency having a term comparable to such Interest
Period and in an amount of U.S.$1,000,000; or
(b) if such rate does not appear on the Screen (or, if the Screen
shall cease to be publicly available or if the information contained on the
Screen, in the Agent's reasonable judgment, shall cease accurately to
reflect such LIBOR Base Rate, as reported by any publicly available source
of similar market data selected by the Agent that, in
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the Agent's reasonable judgment, accurately reflects such LIBOR Base Rate),
the LIBOR Base Rate shall mean, with respect to any LIBOR Loan for any
Interest Period, the arithmetic mean, as determined by the Agent, of the
rate per annum (rounded to the nearest 1/16 of 1%) quoted by each relevant
U.K. Reference Lender at approximately 11:00 a.m. London time (or as soon
thereafter as practicable) on (in the case of any LIBOR Loan in Sterling),
or (in the case of any LIBOR Loan in Dollars) two Business Days prior to,
the first day of the Interest Period for such Loan for the offering by such
U.K. Reference Lender to leading banks in the London interbank market of
deposits in such currency having a term comparable to such Interest Period
and in an amount comparable to the principal amount of the LIBOR Loan to be
made by such U.K. Reference Lender (or its relevant Applicable Lending
Office, as the case may be) for such Interest Period.
"LIBOR RATE" shall mean (a) with respect to (i) a LIBOR Loan
denominated in Dollars and (ii) each day during each Interest period
pertaining to a LIBOR Loan, the rate per annum equal to the quotient
(rounded upward to the nearest 1/100 of 1%) of (A) the LIBOR Base Rate,
DIVIDED by (B) a number equal to 1.00 minus the aggregate of the rates
(expressed as a decimal fraction) of reserve requirements current on the
date two Business Days prior to the beginning of such Interest Period
(including, without limitation, basic, supplemental, marginal and emergency
reserves under any regulations of the Board of Governors of the Federal
Reserve System or other Governmental Authority having jurisdiction with
respect thereto), as now and from time to time hereafter in effect,
dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as "Eurocurrency liabilities" in Regulation D of
such Board) maintained by a member of such System, (b) with respect to a
LIBOR Loan denominated in Sterling, the sum of the LIBOR Base Rate PLUS the
MLA cost, and (c) with respect to any Bid Loan requested pursuant to a
LIBOR Bid Loan Request, the LIBOR Base Rate for such Bid Loan.
"LOAN DOCUMENTS" shall mean, collectively, this Agreement, any Notes,
the Applications, the Letters of Credit, the Subsidiaries Guarantee and the
Scotts Guarantee.
(c) Subsection 1.1 is further amended by adding after "(a)" in the
definition of "Aggregate Outstanding Extensions of Credit" the phrase "the
Dollar Equivalent of".
3. AMENDMENTS TO SECTION 2 OF THE CREDIT AGREEMENT. Section 2 of the
Credit Agreement is hereby amended by deleting such section in its entirety and
inserting in lieu thereof Annex I to this First Amendment.
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4. AMENDMENT TO SECTION 6 OF THE CREDIT AGREEMENT. Section 6.8(b)(ii) of
the Credit Agreement is hereby amended by adding after the phrase "preferred
stock of the Borrower or such Subsidiary", the following: "(PROVIDED that such
amount has not been paid in a prior period)".
5. AMENDMENT TO SECTION 10 OF THE CREDIT AGREEMENT. (a) Section 10 of
the Credit Agreement is hereby amended by adding the following new Sections
10.17 and 10.18 in their entirety:
10.17 JUDGMENT. (a) If for the purpose of obtaining judgment
in any court it is necessary to convert a sum due hereunder in one currency
into another currency, the parties hereto agree, to the fullest extent that
they may effectively do so, that the rate of exchange used shall be that at
which in accordance with normal banking procedures the Agent could purchase
the first currency with such other currency on the Business Day preceding
the day on which final judgment is given.
(b) The obligations of the Borrower or any U.K. Borrower in
respect of this Agreement and any Lender party hereto shall,
notwithstanding any judgment in a currency (the "JUDGMENT CURRENCY") other
than the currency in which the sum originally due to such Lender is
denominated (the "ORIGINAL CURRENCY"), be discharged only to the extent
that on the Business Day following receipt by such Lender of any sum
adjudged to be so due in the judgment currency such Lender may in
accordance with normal banking procedures purchase the original currency
with the judgment currency; if the amount of the original currency so
purchased is less than the sum originally due to such Lender in the
original currency, such Borrower or U.K. Borrower agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify such Lender
against such loss, and if the amount of the original currency so purchased
exceeds the sum originally due to any Lender to this Agreement, such Lender
agrees to remit to such Borrower or U.K. Borrower, such excess. This
covenant shall survive the termination of this Agreement and payment of the
Loans and all other amounts payable hereunder.
10.18 CHANGE OF LENDING OFFICE. Any Lender may at any time
change its office or branch in respect in respect of any of its Loans, or
make or maintain any of its Loans through any of its subsidiaries or
affiliates, by giving notice thereof to the Agent, PROVIDED that such
change shall not increase the cost to such Lender or such subsidiary or
affiliate of agreeing to make, making, funding or maintaining such Loans,
and PROVIDED, FURTHER that after any such change, such Lender or such
subsidiary or affiliate shall not have any greater rights in respect of
such Loan pursuant to Section 2.18 hereof than it had in respect thereof
immediately before such change.
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(b) All references to the Borrower in Sections 10.13, 10.14 and 10.15 shall
constitute a reference to the Borrower and the U.K. Borrowers.
6. AMENDMENT TO SCHEDULE I. Schedule I to the Credit Agreement is hereby
amended by deleting such Schedule I in its entirety and inserting in lieu
thereof Schedule I to this First Amendment with the effect that the aggregate
amount of the Revolving Credit Commitments is increased to $425,000,000.
7. ADDITION OF SCOTTS GUARANTEE. The Credit Agreement is hereby amended
by adding the Scotts Guarantee as Exhibit L.
8. THE CHASE MANHATTAN BANK. All references to "Chemical" and "Chemical
Bank" in the Credit Agreement shall hereinafter be deemed to be references to
"Chase" and to "The Chase Manhattan Bank".
9. LIBOR. All references to "Eurodollar" in the Credit Agreement shall
hereinafter be deemed to be references to "LIBOR".
10. CONSENT TO ACQUISITION OF MIRACLE HOLDINGS LIMITED. Each of the Agent
and the Lenders hereby consent to the acquisition by the Borrower or ▇.▇. ▇▇▇▇▇
International Investments Limited of the remaining outstanding shares of Miracle
Holdings Limited and agree that such acquisition shall not violate subsection
7.4 of the Credit Agreement and shall not constitute usage of any of the
permitted baskets therein.
11. EFFECTIVENESS. The amendments provided for herein shall become
effective on December 23, 1996 ( the "First Amendment Effective Date"), PROVIDED
that the following conditions precedent have been satisfied on or before such
date:
(a) the Agent shall have received counterparts of this First
Amendment, duly executed and delivered by all the parties listed on the
signature pages hereto;
(b) the Agent shall have received opinions of (i) ▇▇▇▇▇▇▇▇ Chance,
U.K. counsel to the U.K. Borrower and (ii) Vorys, ▇▇▇▇▇, ▇▇▇▇▇▇ and ▇▇▇▇▇,
counsel to Scotts.
(c) the Agent shall have received the Scotts Guarantee, duly executed
and delivered by a duly authorized officer of the Borrower.
(d) the Agent shall have received a copy of the resolutions, in form
and substance satisfactory to the Agent, of the Board of Directors of each
of the U.K. Borrowers authorizing the execution and delivery of this First
Amendment, certified by the Secretary or an Assistant Secretary of the U.K.
Borrowers, as the case may be, as of the First Amendment Effective Date,
which certificate shall
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state that the resolutions thereby certified have not been amended,
modified revoked or rescinded since the date of adoption thereof.
12. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and
warrants as of the date hereof that after giving effect to each of this First
Amendment and the Miracle Garden Supplement (as hereinafter defined) (a) each of
the representations and warranties made by the Borrower in or pursuant to
Section 4 of the Credit Agreement shall be true and correct on and as of such
date as if made on and as of such date and (b) no Default or Event of Default
shall have occurred and be continuing.
13. LIMITED AMENDMENT. Except as expressly amended hereby, all the
provisions of the Credit Agreement and the other Loan Documents are hereby
affirmed and shall continue to be in full force and effect in accordance with
their terms, and any amendments contained herein shall be limited precisely as
drafted and shall not constitute an amendment of any terms or provisions of the
Credit Agreement except as expressly provided herein.
14. U.K. BORROWER. By executing and delivering this First Amendment, ▇.▇.
▇▇▇▇▇ International Investments Limited shall become a party to the Credit
Agreement and entitled to the rights and subject to the liabilities and duties
provided for it in the Credit Agreement as amended by the First Amendment,
without any further action being necessary. By executing and delivering a
Supplement (the "Miracle Garden Supplement") to the Credit Agreement in
substantially the form of Annex II, Miracle Garden Care Limited shall become a
party to the Credit Agreement and entitled to the rights and subject to the
liabilities and duties provided for it in the Credit Agreement as amended by the
First Amendment, without any further action being necessary. Prior to its
execution and delivery of the Miracle Garden Supplement, Miracle Garden Care
Limited shall not be, and shall not be permitted to borrow as, a "U.K. Borrower"
under the Credit Agreement.
15. COUNTERPARTS. This First Amendment may be executed by the parties
hereto in any number of counterparts, and all of such counterparts taken
together shall be deemed to constitute one and the same instrument.
16. GOVERNING LAW. THIS FIRST AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the parties hereto have caused this amendment to be
duly executed and delivered in New York by their proper and duly authorized
officers as of the day and year first above written.
THE SCOTTS COMPANY
By: /s/ ▇. ▇. ▇▇▇▇▇▇
-------------------------------
Title: Chief Financial Officer
▇.▇. ▇▇▇▇▇ & SONS INTERNATIONAL
INVESTMENTS LIMITED
By: /s/ L. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Director
THE CHASE MANHATTAN BANK (formerly
Chemical Bank), as Agent and as a
Bank
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
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Title: Vice President
Attorney-in-fact
BANK ONE, COLUMBUS, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. Klamforth
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Title: Vice President
COMERICA BANK
By: /s/ ▇▇▇▇▇▇▇ ▇. Judge
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Title: Assistant Vice President
CREDIT LYONNAIS
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: ▇▇▇▇▇ ▇. ▇▇▇▇▇
VICE PRESIDENT
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THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
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Title: Senior Vice President
NATIONAL CITY BANK, COLUMBUS
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Vice President
PNC BANK, OHIO, NATIONAL
ASSOCIATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: SVP
SOCIETY NATIONAL BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: Vice President
THE TORONTO DOMINION BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Mgr. Cr. Admin.
NBD BANK
By:
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Title:
SOCIETE GENERALE
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Vice President
▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
By: /s/ F. C. H. ▇▇▇▇▇
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Title: Senior Manager Loan
Operations
SCOTIABANK (U.K.) LIMITED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Relationship Manager
THE BANK OF TOKYO - MITSUBISHI
NEW YORK BRANCH
By:
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Title: Assistant Vice President
UNION BANK OF CALIFORNIA, N.A.
By:
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Title: Vice President
THE NORTHERN TRUST COMPANY
By:
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Title: Vice President
ROYAL BANK OF SCOTLAND
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President &
Deputy Manager
THE SANWA BANK, LIMITED, CHICAGO
BRANCH
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: First Vice President
THE TOKAI BANK, LIMITED
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title: General Manager
