Exhibit 10.8

      06/12/2010   Agreed Form

Dated                                         
SELLER AND OTHERS
and
PURCHASER AND OTHERS
SHARE AND BUSINESS SALE AGREEMENT
relating to the companies and businesses comprising the Bloom Professional Group
Linklaters LLP
One Silk Street
London
EC2Y 8HQ
L-178217

Telephone 0207 456 2000
Facsimile 0207 456 2222

 

 

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      06/12/2010   Agreed Form

This Agreement (this “Agreement”) is made on
                                        
between:

(1)  
THE SCOTTS COMPANY LLC, a company incorporated in Ohio whose registered office
is at 14111 Scottslawn Road, Marysville, Ohio, U.S.A. (the “Seller”);

(2)  
Each of the Share Sellers and Business Sellers whose names are set out in
Schedule 1 (together with the Seller, the “Relevant Sellers”);

(3)  
ISRAEL CHEMICALS LTD. a company incorporated in Israel whose registered office
is at Millenium Tower, 23 Aranha St., Tel-Aviv 61070, Israel (the “Purchaser”);

(4)  
Each of the Share Purchasers and Business Purchasers whose names are set out in
Schedule 1 (together with the Purchaser, the “Relevant Purchasers”); and

(5)  
THE SCOTTS MIRACLE-GRO COMPANY whose registered office is at 14111 Scottslawn
Road, Marysville, Ohio 43041 (the “Seller Guarantor”).

Whereas:

(A)  
The Relevant Sellers have agreed to sell the Group (as defined below) and to
assume the obligations imposed on the Relevant Sellers under this Agreement.

(B)  
The Relevant Purchasers have agreed to purchase the Group and to assume the
obligations imposed on the Relevant Purchasers under this Agreement.

(C)  
The terms and conditions of the Offer Letter (as defined below) have been
satisfied or waived in full prior to the date hereof.

(D)  
The Seller Guarantor has agreed to enter into this Agreement for the purposes of
Clause 13 only.

It is agreed as follows:

1  
Interpretation

   
In this Agreement, unless the context otherwise requires, the provisions in this
Clause 1 apply:

1.1  
Definitions

   
“Accounts” means the unaudited pro forma combined financial information for the
Group for the 12-month period ended on 30 September 2007, 30 September 2008 and
30 September 2009 (as the case may be), copies of which are in folder 8 of the
Data Room, prepared for the purpose of the Transaction and based on the
Management Accounts of the Group Companies and the Business Sellers and have
been adjusted to reflect the perimeter of the Transaction;

   
“Accounts Date” means 30 September 2009;

   
“Affiliate” means, in relation to any person, a subsidiary of that person or a
holding company of that person or any other subsidiary of that holding company;

 

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      06/12/2010   Agreed Form

   
“Agent Assisted Product Registration” means any Product Registration owned by
any of The Scotts Company LLC, Scotts-Sierra Crop Protection Company,
Scotts-Sierra Horticultural Products Company or Scotts de Mexico S.A., and
obtained through a third-party agent, consultant or distributor pursuant to a
power of attorney and/or contract, in respect of a product or products forming
part of the Professional Business, and sold in any or all of the following
countries: Puerto Rico, Dominican Republic, Trinidad & Tobago, Mexico, Colombia,
Costa Rica, Honduras, Guatemala, Panama and Nicaragua, and as more particularly
delineated in documents 10.9.149.1 and 10.9.149.5, in the Data Room;

   
“Agreed Cash Sum” means the sum of US$1 million (comprising Cash Balances which
the Seller and the Purchaser have agreed will remain in the Group on Closing);

   
“Agreed Terms” means, in relation to a document, such document in the terms
agreed between the Seller and the Purchaser and, for the purposes of
identification only, initialled by or on behalf of the Seller and the Purchaser
with such alterations as may be agreed in writing between the Seller and the
Purchaser from time to time;

   
“ANSES” means L’Agence nationale de sécurité sanitaire de l’alimentation, de
l’environnement et du travail or any successor government agency in France;

   
“Assigned Intellectual Property” means the Intellectual Property assigned under
the Intellectual Property Assignments;

   
“Assigned Know-how” means the Know-how assigned under the Know-how Assignment;

   
“Assumed Liabilities” means all Liabilities at Closing of the Business Sellers
which relate predominantly to the Group (including, for the avoidance of doubt,
any Intra-Group Payables owed by a Business Seller to a member of the Retained
Group) other than the Excluded Liabilities, and “Assumed Liability” means any
one of them;

   
“Australian Dollar” means the lawful currency of Australia;

   
“Base Working Capital” means the aggregate of the relevant amount(s) expressed
in US Dollars, Pounds Sterling, Euros, Australian Dollars, Kenyan Shillings,
Malaysian Ringgit and Polish Zloty and shown in Part 2 of Schedule 11;

   
“Bid Value” means in relation to all the Shares and Group Businesses,
US$270 million (two hundred and seventy million US Dollars);

   
“Break Fee” means US$7.5 million;

   
“Business Assets” means all the property, rights and assets agreed to be sold
under Clause 2.3.1 of this Agreement or any relevant Local Transfer Document;

   
“Business Contracts” means the written and unwritten customer, supply,
distribution, hire purchase and other commercial contracts or agreements
(including the Licence Agreements) to which a member of the Retained Group is a
party which relates predominantly to the Group including the contracts listed in
Part 1 of Schedule 5 (but excluding any Third Party Agreement as defined in the
TSA), and “Business Contract” means any of them;

   
“Business Day” means a day which is not a Friday, Saturday, a Sunday or a public
holiday in London (UK), Ohio (USA), Israel or The Netherlands;

   
“Business Employees” means those employees of the Business Sellers in the UK,
Poland, Australia and New Zealand who are, immediately prior to Closing,
employed in Group Businesses, including those not actively at work due to
injury, vacation, military duty, disability or other leave of absence, and
“Business Employee” means any one of them;

 

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      06/12/2010   Agreed Form

   
“Business Intellectual Property” means all rights and interests owned by any
member of the Retained Group in Intellectual Property (including Know-how) which
at or immediately before Closing is used predominantly in relation to the Group,
including the Intellectual Property, details of which are set out in Part 1 of
Schedule 4;

   
“Business IT” has the meaning given to it in paragraph 5.3.1 of Schedule 12;

   
“Business Leased Properties” means the Leased Properties brief details of which
are set out in paragraph 2 of Part 2 of Schedule 3, and “Business Leased
Property” means any one of them;

   
“Business Owned Properties” means the Owned Properties, brief details of which
are set out in paragraph 1 of Part 2 of Schedule 3, and “Business Owned
Property” means any one of them;

   
“Business Properties” means the Business Owned Properties and the Business
Leased Properties, and “Business Property” means any one of them;

   
“Business Purchaser” means, in relation to each of the Group Businesses referred
to in column (2) of Part 2 of Schedule 1, the company whose name is set out
opposite that Group Business in column (3) of Part 2 of Schedule 1;

   
“Business Records” means all books of account, records, documents and
information of the Retained Group (in whatever form held) relating predominantly
to the Group Businesses, the Business Assets or, so far as permitted by law, the
Business Employees;

   
“Business Seller” means, in relation to each of the Group Businesses referred to
in column (2) of Part 2 of Schedule 1, the company whose name is set out
opposite that Group Business in column (1) of Part 2 of Schedule 1;

   
“Cash Balances” means cash in hand or credited to any account with a financial
institution but excluding any insurance proceeds received by the Seller or any
other Relevant Seller;

   
“Close of Business” means 5.30pm in each relevant jurisdiction;

   
“Closing” means the completion of the sale of Shares and the Group Businesses
pursuant to Clauses 6.1, 6.2 and 6.3 of this Agreement and any relevant Local
Transfer Document;

   
“Closing Date” means the date on which Closing takes place;

   
“Closing Statement” means the statement setting out the Working Capital, the
Working Capital Adjustment, the Group Companies’ Cash Balances, the Intra-Group
Receivables, the Third-Party Indebtedness, the Pension Liability and the
Intra-Group Payables, to be prepared by the Purchaser in accordance with Clause
7 and Schedule 11;

   
“Code” means the United States Internal Revenue Code of 1986, as amended, and
the Treasury regulations promulgated thereunder;

   
“Companies” means the companies whose details are set out in Schedule 2 (other
than the Subsidiaries), and “Company” means any one of them;

   
“Competent Authority” means DGAL and/or ANSES (as the case may be);

   
“Competition Condition” has the meaning given to it in Clause 4.1.1(i);

   
“Confidential Information” means information (however stored) predominantly
relating to the business, customers or financial or other affairs of the Group,
details of which are not in the public domain;

 

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      06/12/2010   Agreed Form

   
“Confidentiality Agreement” means the confidentiality agreement dated 16
June 2010 between the Seller and the Purchaser pursuant to which the Seller made
available to the Purchaser certain confidential information relating to the
Group;

   
“Consumer Business” means the direct or indirect sale or provision of Consumer
Products;

   
“Consumer Business Product Registrations” means any Product Registration owned
by any of the Companies or Subsidiaries immediately before Closing in respect of
a product or products that relates solely to the Consumer Business as more
particularly delineated in documents 10.9.149.14 and 10.9.149.15 in the Data
Room;

   
“Consumer Products” means: (a) consumer lawn and garden products including,
without limitation, plants, flowers, trees and shrubs, fertilizer, fertilizer
combination products, seed, growing media (including, without limitation, peat
products, soil conditioning agents, turf dressings, compost, mulches,
combination growing media and bark), plant foods, wetting agents, plant
protection products, pesticides, herbicides, insecticides, fungicides,
rodenticides, repellents, bird food and durable applicators; and (b) any
products sold or provided: (i) to professional or collegiate sporting fields and
stadiums in the United States and Canada, solely for the purposes of supporting
consumer marketing efforts; or (ii) to or by any lawn, tree, shrub and pest care
service businesses catering mainly to consumers for non-commercial use and which
use any trade marks owned by or licensed to the Seller or any member of the
Retained Group. For the avoidance of doubt in relation to (a) above, Consumer
Products will be further identified by reference to a combination of certain
parameters such as package size, labelling, advertising, positioning and
classification within store, price and targeted end user;

   
“Contamination” means the presence at any time of Hazardous Substances in, on or
under the soil, surface water or groundwater at any Business Property and/or the
migration of any such Hazardous Substances from any Business Property into
outside soil, surface water or groundwater;

   
“CRF” means controlled-release fertilizers;

   
“Data Pack” means the data pack dated 16 June 2010 containing certain
information relating to the Group (documents 8.4 to 8.12 in the Data Room);

   
“Data Room” means the virtual data room containing documents and information
relating to the Group made available by the Seller online at
https://services.intralinks.com, the contents of which are listed in Schedule 1
of the Disclosure Letter;

   
“DGAL” means the Direction Générale de l’Alimentation of the French Ministère de
l’Agriculture, de l’Alimentation, de la Pêche, de la Ruralité et de
l’Aménagement du territoire or any successor government agency;

   
“Disclosure Letter” means the letter dated on the same date as this Agreement
from the Seller to the Purchaser disclosing, as on the date of the Offer Letter:

  (i)  
information constituting exceptions to the Sellers’ Warranties; and

  (ii)  
details of the other matters referred to in Clause 9.2.1 of this Agreement;

 

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      06/12/2010   Agreed Form

   
“Discount Rate” means the discount rate as at the Valuation Date, calculated by
the Seller’s actuaries (Towers Watson) based on the Seller’s actuaries’ own
standard tool used to assist in the selection of discount rates that reflects
the characteristics of employer benefit plans, including a match with the nature
and term of cash flows of expected future benefit payments from the Dutch
Pension Scheme or the German Pension Scheme (as the case may be)(the Towers
Watson “Global Rate Link” tool);

   
“Distributor Owned Product Registration” means any Product Registration owned by
a third-party distributor or consultant, in respect of a product or products
forming part of the Professional Business, which is or are supplied by a member
of the Seller’s Group immediately before Closing to a third-party distributor or
consultant in any or all of the following countries: Brazil, Ecuador, Argentina,
Uruguay, China, South Korea, The Republic of the Philippines, Sri Lanka, Taiwan,
Thailand, Japan, Bahrain, Bosnia and Herzegovina, Croatia, Georgia, Jordan,
Israel, Qatar, The Republic of Moldova, Saudi Arabia, Serbia, South Africa,
Syria and Yemen, and as more particularly delineated in documents 10.9.149.1,
10.9.149.2 and 10.9.149.11, respectively, in the Data Room;

   
“Draft Closing Statement” has the meaning given to it in Clause 7.1;

   
“Dutch PBO” has the meaning given in Part 1 of Schedule 18;

   
“Dutch Pension Scheme” means the applicable Pensioenovereenkomst van Scotts
International B.V. en diens werknemers;

   
“Dutch MVA” has the meaning given in Part 1 of Schedule 18;

   
“Employment Costs” means a sum equivalent to the aggregate of:

  (i)  
the amount payable or paid to or in respect of the employment of the Business
Employees (including, but not limited to, salary, wages, tax and social security
contributions, employer’s pension contributions and other contributions which
the employer is required by law to provide, bonus, insurance premia, payments or
allowances or any other consideration for employment); and

  (ii)  
the cost of providing any non-cash benefits, which the employer is required to
provide by law or contract, or customarily provides in connection with such
employment;

   
“Employment Liabilities” means any and all Losses arising out of or connected
with employment or the employment relationship, or termination of employment or
of the employment relationship (including, but not limited to, all Losses in
connection with any claim for redundancy, termination or severance pay, or
damages or compensation for dismissal or breach of contract) other than
Employment Costs;

   
“Encumbrance” means any claim, charge, mortgage, pledge, lien, option, equity,
assignment (contingent or otherwise), power of sale, hypothecation, usufruct,
retention of title, right to acquire, right of pre-emption, right of first
refusal or other third-party rights or security interest of any kind or an
agreement, arrangement or obligation to create any of the foregoing;

   
“Environment”, “Environmental Authority”, “Environmental Law”, “Environmental
Permit”, “Hazardous Substances”, “REACH” and “Relevant Period” have the meanings
given to them in paragraph 9 of Schedule 12;

   
“Estimated Cash” means the Seller’s reasonable and good faith estimate of the
Group Companies’ Cash Balances expressed in US Dollars;

   
“Estimated Intra-Group Payables” means the Seller’s reasonable and good faith
estimate of the Intra-Group Payables expressed in US Dollars;

 

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      06/12/2010   Agreed Form

   
“Estimated Intra-Group Receivables” means the Seller’s reasonable and good faith
estimate of the Intra-Group Receivables expressed in US Dollars;

   
“Estimated Pension Liability” means the Seller’s reasonable and good faith
estimate of the Pension Liability expressed in US Dollars;

   
“Estimated Third-Party Indebtedness” means the Seller’s reasonable and good
faith estimate of the Third-Party Indebtedness expressed in US Dollars;

   
“Estimated Working Capital” means the Seller’s reasonable and good faith
estimate of the Working Capital expressed in US Dollars, Pounds Sterling, Euros,
Australian Dollars, Kenyan Shillings, Malaysian Ringgit and Polish Zloty (as the
case may be);

   
“Estimated Working Capital Adjustment” means the aggregate amount expressed in
US Dollars (as a positive or negative number as the case may require) which
represents the difference between the Estimated Working Capital and the Base
Working Capital, such difference as calculated pursuant to paragraph 2.4.1 of
Schedule 11;

   
“Euro” means the lawful currency of the European Union;

   
“European Pesticide Dossier” means technical data prepared in accordance with
Council Directive 91/414/EEC or Regulation (EC) 1107/2009 and supplied to a
regulatory authority with the aim of obtaining a Product Registration in respect
of a particular formulation;

   
“European Union” means the European Union as first established by the treaty
made at Maastricht on 7 February 1992;

   
“Excluded Assets” means those assets, contracts and rights excluded from the
sale of the Group Businesses under this Agreement and the Local Transfer
Documents, details of which are set out in Clause 2.3.3;

   
“Excluded Employees” means those employees whose names are set out in Part 4 of
Schedule 6, and being employees of the Group Companies being retained by the
Seller’s Group, whose employment will, with their agreement, be moved to a
member of the Seller’s Group other than a Group Company;

   
“Excluded Intellectual Property” means the Intellectual Property described at
paragraph 2 of Part 1 of Schedule 4;

   
“Excluded Liabilities” means the liabilities referred to in Clause 2.3.5;

   
“Expiry Date” means, subject to Clause 4.4.5, the earlier of (i) the last day of
the calendar month in which the Competition Condition is satisfied and (ii) 1
February 2011;

   
“Fairly Disclosed” means disclosed with sufficient clarity and detail to enable
a reasonable purchaser to make a reasonable assessment of the nature and
relevance of the matter in question;

   
“Field of Use Principles” means the set of principles set out at Part 4 of
Schedule 15;

   
“Final Payment Date” means 10 Business Days after the date on which the process
described in paragraph 3 of Part 1 of Schedule 11 for the preparation of the
Closing Statement is complete;

   
“Functional Team Leaders” means each of Michel Gasnier, Dimiter Todorov, Keith
Clark, Valerie Soulier, Bob Daniels, Scott Haefke, Tom Czajkowski and Krista
Heins and such other persons who may succeed the above persons in their current
roles from time to time;

 

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      06/12/2010   Agreed Form

   
“German PBO” has the meaning given in Part 2 of Schedule 18;

   
“German Pension Scheme” means the pension plan of Colonia Unterstützungskasse as
of 01.07.1992;

   
“German MVA” has the meaning given in Part 2 of Schedule 18;

   
“GL Codes” means the unique designating code that is assigned to each accounting
entity of each member of the Group for the purposes of the consolidated
accounting system of the Group;

   
“Goodwill” means the goodwill of the Business Sellers in relation to the Group
Businesses as at Closing together with the exclusive right (so far as the
Relevant Sellers can grant the same) for the Business Purchasers to represent
themselves as carrying on the Group Businesses in succession to the Business
Sellers;

   
“Government Authority” means any competition, antitrust, foreign investment,
national, local, supranational or supervisory or other government, governmental,
quasi-governmental, trade or regulatory body, agency, branch, subdivision,
department commission, official or authority including any Tax Authority and any
governmental department and any court or other tribunal;

   
“Group” means the Group Companies and the Group Businesses, taken as a whole;

   
“Group Businesses” means the unincorporated businesses carried on by the
Business Sellers in relation to the Professional Business at Closing and being
sold under this Agreement and the Local Transfer Documents, particulars of which
are contained or referred to in Part 2 of Schedule 1, and “Group Business” means
any one of them;

   
“Group Companies” means the Companies and the Subsidiaries, and “Group Company”
means any one of them;

   
“Group Companies’ Cash Balances” means the aggregate amount of the Cash Balances
(including, for the avoidance of doubt, the Agreed Cash Sum) held by or on
behalf of the Group Companies at the Close of Business on the Closing Date;

   
“Group Companies’ Properties” means the Properties set out in Part 1 of
Schedule 3;

   
“Group Company Insurance Policies” means all insurance policies held exclusively
for the benefit of the Group Companies, and “Group Company Insurance Policy”
means any one of them;

   
“Group Intellectual Property” means the material Intellectual Property used in
the business carried on by the Group;

   
“Group Know-how” has the meaning given to it in paragraph 5.2 of Schedule 12;

   
“Group Retirement Benefit Arrangements” has the meaning given to it in paragraph
7.9.1 of Schedule 12;

   
“Guidance” means any written draft, interim and/or final guidance in respect of
or applicable to CRFs issued by the DGAL or any French regulatory authority
competent to regulate CRFs under French law and any updates thereof published
between the signing of the Offer Letter and the Expiry Date;

 

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      06/12/2010   Agreed Form

   
“Humax Litigation” means the proceedings relating to claim number 9LV10408 in
the High Court of Justice, Queen’s Bench Division, Liverpool District Registry
(United Kingdom), concerning Paul Ernest Herman Juliard (trading as Burford
Nurseries) as plaintiff, BHGS Limited as defendant and Humax Horticulture
Limited as part 20 defendant;

   
“Indebtedness” means without duplication, in relation to any person, all loans
or other financing obligations in the nature of borrowings and/or indebtedness
from third-parties (including all interest accrued but unpaid thereon and
accrued but unpaid penalties and charges in respect thereof prior to the Closing
Date whether arising on the early settlement thereof or otherwise) which have
not been paid or repaid, including (without limitation):

  (i)  
obligations under any lease or hire purchase or other deferred purchase contract
treated for accounting purposes as a finance or capital lease to the extent such
obligations fall to be included as liabilities in the balance sheet of the
relevant entity;

  (ii)  
any factoring arrangement, bond, note, debenture, loan stock or similar
instrument, standby or documentary letter of credit, or counter-indemnity
guarantee (in each case, or similar instruments);

  (iii)  
any sale of receivables;

  (iv)  
any derivative transaction entered into in connection with protection against or
benefit from any interest rate or currency fluctuation; or

  (v)  
any amounts payable by a Group Company to third-party advisers in excess of
US$5,000, solely in connection with the Transaction,

   
in each case determined in accordance with generally accepted accounting
policies and principles in the United States (as applicable), but excluding
trading debt or liabilities arising in the ordinary course of trading;

   
“Intellectual Property” means trade marks, service marks, trade names, business
names, logos, get-up and all goodwill and any rights to sue for passing-off in
relation to the foregoing, patents, petty patents, innovation patents, utility
models, supplementary protection certificates, inventions, registered and
unregistered design rights, copyrights, plant breeders rights, database rights,
domain names, and all other similar rights in any part of the world (including
in Know-how), including, where such rights are obtained or enhanced by
registration, any registration of such rights and applications and rights to
apply for such registrations;

   
“Intellectual Property Assignments” means the Trade Mark Assignments, the Patent
Assignment, the Know-how Assignment and the Unregistered Intellectual Property
Assignment;

   
“Interim Dutch PBO” has the meaning given in Part 1 of Schedule 18;

   
“Interim Dutch MVA” has the meaning given in Part 1 of Schedule 18;

   
“Interim German PBO” has the meaning given in Part 2 of Schedule 18;

   
“Interim German MVA” has the meaning given in Part 2 of Schedule 18;

   
“Intra-Group Payables” means the amount set out against the “Intra-Group
Payables” entry in the Closing Statement, being the aggregate amount of all
relevant constituent line items comprising the aggregate amount of all
Indebtedness owed by (i) a Group Company to a member of the Retained Group and
(ii) a Business Seller to a member of the Retained Group to the extent incurred
for the purposes of the Group Businesses, in each case as at the Close of
Business on the Closing Date but excluding any item to the extent included in
calculating the Group Companies’ Cash Balances or the Third-Party Indebtedness;

 

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      06/12/2010   Agreed Form

   
“Intra-Group Receivables” means the amount set out against the “Intra-Group
Receivables” entry in the Closing Statement, being the aggregate amount of all
relevant constituent line items comprising the aggregate amount of all
Indebtedness owed by (i) a member of the Retained Group to a Group Company and
(ii) a member of the Retained Group to a Business Seller to the extent incurred
for the purposes of the Group Businesses, in each case as at the Close of
Business on the Closing Date but excluding any item to the extent included in
calculating the Group Companies’ Cash Balances or the Third-Party Indebtedness;

   
“IP Licence Agreements” means those documents set out in Part 2 of Schedule 15;

   
“Kenyan Shillings” means the lawful currency of Kenya;

   
“Know-how” means industrial and commercial information and techniques including
trade secrets in any tangible, written or electronic form including drawings,
formulae, test results, reports, project reports and testing procedures,
instruction and training manuals, tables of operating conditions, market
forecasts, lists and particulars of customers and suppliers and all information
and techniques arising from research and development activities including
research and development materials, process technology, specifications, product
dossiers and manufacturing and/or formulation know-how, documents relating to
REACH registration requirements and documents relating to notification
requirements under European Regulation (EC) No 1272/2008 on the classification,
labelling and packaging of substances and mixtures;

   
“Know-how Assignment” means the know-how assignment in the form attached at
Part 4 of Schedule 4 to be dated on or around the Closing Date;

   
“Leased Properties” means the leased properties, brief details of which are set
out in paragraph 2 of Part 1 of Schedule 3 and paragraph 2 of Part 2 of
Schedule 3, and “Leased Property” means any one of them;

   
“Letter of Access” means such approval, authorisation, licence or consent from a
third-party as may be required for the use of technical data owned by that
third-party to be used in support of a Product Registration;

   
“Liabilities” means all liabilities, duties and obligations of every
description, whether deriving from contract, common law, statute or otherwise
(and including, for the avoidance of doubt, liabilities in respect of Taxation),
whether present or future, actual or contingent, ascertained or unascertained or
disputed and whether owed or incurred severally or jointly or as principal or
surety, and “Liability” means any of them;

   
“LIBOR” means, in relation to a sum or amount payable or due to be paid under
this Agreement, the applicable screen rate for US$ as at 9.00 am GMT on the
first date on which such sum or amount is due to be paid in accordance with this
Agreement or, in the case of an amount payable pursuant to Clause 7, the Closing
Date;

   
“Licence Agreements” means all licence agreements, including computer software
licence agreements, entered into on or prior to Closing by any member of the
Retained Group and which relate to the Business Intellectual Property (other
than Excluded Intellectual Property), to the extent that at Closing such
agreements remain in force (in whole or in part) or any obligations under such
agreements remain to be performed, including those which are listed in Part 6 of
Schedule 4 (but excluding any Third Party Agreement as defined in the TSA);

 

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      06/12/2010   Agreed Form

   
“Licensed EU Product Registration” means any Product Registration owned by a
third-party supplier immediately before Closing, in respect of a product, or
products, forming part of the Professional Business and supplied by that
third-party, which is supported by a European Pesticide Dossier, and as more
particularly delineated in document 10.9.149.6 in the Data Room on the
spreadsheet entitled ‘Third-Party EU Products’;

   
“Local Transfer Document” has the meaning given to it in Clause 2.6.1;

   
“Long Stop Date” means 180 calendar days from the date of the Offer Letter or
such later date as the Seller and the Purchaser shall agree in writing;

   
“Losses” means all losses, liabilities, costs (including legal costs and
experts’ and consultants’ fees), fines, charges, expenses, actions, proceedings,
claims and demands;

   
“Malaysian Ringgit” means the lawful currency of Malaysia;

   
“Management Accounts” means the hyperion reports relating to the Group Companies
and each of the Group Businesses that are consolidated in the Seller’s Group’s
financial statements for the 12-month period ended on the Management Accounts
Date, a copy of which is at document 10.9.173 in the Data Room;

   
“Management Accounts Date” means 30 September 2010;

   
“Material Contracts” means (i) those contracts, arrangements or relationships
referred to in document 1.8.1.1 in the Data Room and (ii) the arrangements with
BWI Companies Inc and Agrium referred to on page 32 of the document at 8.6 in
the Data Room;

   
“Material Property” means the Properties named in paragraph 1.1 of Part 1 of
Schedule 3, paragraph 2.1 of Part 1 of Schedule 3 (with the exception of the
fourth Property listed in paragraph 2.1 of Part 1 of Schedule 3), paragraph 2.6
of Part 1 of Schedule 3, paragraph 1 of Part 2 of Schedule 3 and paragraph 2 of
Part 2 of Schedule 3;

   
“Moveable Assets” means the furniture, trade utensils, computer hardware and
peripherals, telecommunications equipment and infrastructure, other information
technology related to plant and equipment, plant and machinery, vehicles and
other equipment and other chattels (whether or not physically located at the
Properties) which are owned by a member of the Retained Group and used
predominantly in relation to the Group Businesses including those items listed
in Part 1 of Schedule 16 but excluding any such items which form part of the
Excluded Assets;

   
“New Coating Collaboration Agreement” means the collaboration agreement in the
Agreed Terms to be entered into at Closing between OMS Investments, Inc., The
Scotts Company LLC and the relevant member of the Purchaser’s Group;

   
“Offer Employees” means those employees listed in Part 3 of Schedule 6 who work
in the Group but are not employed by a Group Company or a Business Seller, as
updated after the date of the Offer Letter by the Seller (a) with the prior
agreement of the Relevant Purchasers (save that such agreement is not required
in relation to any such employees who resign from their employment) or (b) as
permitted in accordance with Clause 5.1.2(xvii) or Clause 5.9 of this Agreement;

 

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“Offer Letter” means the offer letter dated 6 December 2010 delivered by the
Purchaser and countersigned by the Seller on the same date in connection with
the sale and purchase of the Group;

   
“Osmocote” means products sold by or under the authorisation of the Seller or
its Affiliates under the name OSMOCOTE (and variations thereof, namely OSMOSOL
and OSMOFORM) in the three years prior to Closing and any other product so sold
during such period which was manufactured using substantially the same
ingredients and technology as the products previously sold under that name;

   
“Owned Group Intellectual Property” means any Group Intellectual Property owned
by any member of the Retained Group or any Group Company;

   
“Owned Properties” means the owned properties, brief details of which are set
out in paragraph 1.1 of Part 1 of Schedule 3 and paragraph 2 of Part 2 of
Schedule 3, and “Owned Property” means any one of them;

   
“Patent Assignment” means the patent assignment in the form attached at Part 2
of Schedule 4 to be dated on or around the Closing Date;

   
“Patent Licence Agreements” means the patent and know-how licence agreements in
the Agreed Terms to be entered into at Closing between some or all of OMS
Investments, Inc., the Seller and the relevant member of the Purchaser’s Group;

   
“Pension Liability” means the amount as calculated by the Seller and agreed with
the Purchaser as described in Schedule 18, expressed in US Dollars equal to the
aggregate, at Closing, of:

  (a)  
the amount by which the Dutch PBO of the Dutch Pension Scheme exceeds the Dutch
MVA, and for these purposes the Dutch PBO and the Dutch MVA will be calculated
in accordance with the actuarial methodology and assumptions set out in Part 1
of Schedule 18; and

  (b)  
the amount by which the German PBO of the German Pension Scheme exceeds the
German MVA, and for these purposes the German PBO and the German MVA will be
calculated in accordance with the actuarial methodology and assumptions set out
at in Part 2 of Schedule 18,

   
and any dispute in respect of the calculation of Pension Liability will be
governed by the procedure described in Schedule 18 (rather than, for the
avoidance of doubt, paragraph 3 of Schedule 11);

   
“Planning Legislation” means, in relation to the country or territory in which a
Property is situated, the relevant planning legislation or regulations or any
other subordinate legislation relating to planning matters;

   
“Polish Competition Authority” means the Polish Office for Competition and
Consumer Protection;

   
“Polish Zloty” means the lawful currency of Poland;

   
“Pounds Sterling” means the lawful currency of the United Kingdom;

   
“Pre-Sale Reorganisation Transactions” means the transactions set out or
referred to in Schedule 17;

 

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“Prior Service” means, in respect of a Business Employee, the period of service
(including any period of service deemed by law or contract) which a Business
Employee has had with the relevant Business Seller immediately before and
continuous with the commencement of employment with the relevant Business
Purchaser, or, in respect of an Offer Employee, the period of service (including
any period of service deemed by law or contract) which an Offer Employee has had
with a member of the Retained Group immediately before and continuous with the
commencement of employment with a Relevant Purchaser;

   
“Product Indemnities” means certain indemnities set out in Schedule 19;

   
“Product Registration” means such approval as may be granted by a relevant
regulatory authority to use, sell, supply, advertise or store a certain plant
protection product or fertilizer in a particular jurisdiction;

   
“Product Registration Condition” has the meaning given in Clause 4.1.1(ii);

   
“Product Registration Notice” has the meaning given in Clause 4.4.3;

   
“Professional Business” means the direct or indirect sale or provision of
Professional Products;

   
“Professional Business Product Registrations” means the Agent Assisted Product
Registrations, the Distributor Owned Product Registrations, the Seller Owned EU
Product Registrations, the Seller Owned Shared EU Product Registrations, the
Licensed EU Product Registrations, the Seller Owned Product Registrations and
any Unidentified Professional Business Product Registrations;

   
“Professional Products” means professional lawn and turf, horticultural,
floricultural and agricultural products including, without limitation,
fertilizer, fertilizer combination products, micro-nutrients, bio-stimulants,
seed, growing media (including, without limitation, peat products, soil
conditioning agents, turf dressings, compost, mulches, combination growing media
and bark), plant foods, wetting agents, plant protection products, pesticides,
herbicides, insecticides, fungicides, repellents, durable applicators and
commercial livestock feed products. For the avoidance of doubt, Professional
Products will be further identified by reference to a combination of certain
parameters such as package size, labelling, advertising, positioning and
classification within store, price and targeted end user;

   
“Properties” means the Owned Properties and the Leased Properties, and
“Property” means any one of them;

   
“Purchase Price” has the meaning set out in Clause 3.1;

   
“Purchase Price Allocation Agreement” means the agreement to be entered into at
Closing between the Seller and the Purchaser substantially in the form set out
in Schedule 8, and after agreement or determination of the Purchase Price
allocation pursuant to Clause 3.2;

   
“Purchaser’s Group” means the Purchaser and any holding company of the
Purchaser, and any undertaking which, in relation to the Purchaser and/or any
parent undertaking of the Purchaser, is a subsidiary undertaking from time to
time;

   
“Purchaser’s Lawyers” means DLA Piper UK LLP of 3 Noble Street, London EC2V 7EE;

   
“Purchaser’s Third-Party Claim” has the meaning given to it in Clause 11.7;

 

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“Registered Group Intellectual Property” means such of the Owned Group
Intellectual Property as is registered or the subject of applications for
registration in any patent, trade mark or other Intellectual Property registry
anywhere in the world, including those patents, trade marks and domain names,
details of which are set out in paragraphs 1 and 3 of Part 1 of Schedule 4;

   
“Relevant Capacity” means for its own account or for that of any person, firm or
company (other than the Purchaser and the other Relevant Purchasers);

   
“Relevant Employees” means:

  (i)  
those employees of the Group Companies who are immediately prior to Closing
employed in the Group (other than the Excluded Employees);

  (ii)  
the Business Employees; and

  (iii)  
the Offer Employees;

   
“Relevant Territory” means any jurisdiction in the world;

   
“Reporting Accountants” means (i) Grant Thornton or, if that firm is unable or
unwilling to act in any matter referred to them under this Agreement (save in
respect of matters relating to the Pensions Liability), a firm of accountants,
to be agreed by the Seller and the Purchaser within seven days of a notice by
one to the other requiring such agreement or, failing such agreement, to be
nominated on the application of either of them by or on behalf of the President
of the Institute of Chartered Accountants in England and Wales or (ii) in the
case of disputes relating to the Pensions Liability, a firm of actuaries to be
agreed by the Seller and the Purchaser within seven days of a notice by one to
the other requiring such agreement or, failing such agreement, to be nominated
on the application of either of them by or on behalf of the President of the
Institute and Faculty of Actuaries;

   
“Restricted Period” means three years commencing on Closing or such shorter
period of time recognised by applicable law as being binding on the Seller and
the other Relevant Sellers;

   
“Retained Group” means the Seller’s Group excluding the Group Companies;

   
“Seller’s Disagreement Notice” has the meaning given to it in paragraph 3.3 of
Part 1 of Schedule 11;

   
“Seller Information Document” means the seller information document in respect
of the Group dated 29 July 2010 prepared by Ernst & Young, a copy of which is at
document 8.2 in the Data Room;

   
“Seller’s Group” means the Seller and any holding company of the Seller, and any
undertaking which, in relation to the Seller and/or any parent undertaking of
the Seller, is a subsidiary undertaking from time to time;

   
“Seller’s Group Insurance Policies” means all insurance policies (whether under
policies maintained with third-party insurers or any member of the Retained
Group), other than Group Company Insurance Policies, maintained by the Seller or
any member of the Retained Group in relation to the Group or under which,
immediately prior to Closing, any Group Company or the Seller or any member of
the Retained Group in relation to the Group Businesses is entitled to any
benefit, and “Seller’s Group Insurance Policy” means any one of them;

 

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“Seller’s Lawyers” means Linklaters LLP of One Silk Street, London EC2Y 8HQ;

   
“Seller Owned EU Product Registration” means any Product Registration owned by
any member of the Retained Group, the Companies or Subsidiaries immediately
before Closing in respect of a product, or products, forming part of the
Professional Business only, which is supported by a European Pesticide Dossier,
where the relevant European Pesticide Dossier is owned by any member of the
Retained Group, the Companies or Subsidiaries, and as more particularly
delineated in document 10.9.149.6 in the Data Room on rows 66 to 81 of the
spreadsheet entitled ‘Scotts EU PPP Registrations’;

   
“Seller Owned Product Registration” means any Product Registration owned by
either The Scotts Company LLC, Scotts-Sierra Horticultural Products Company,
Scotts-Sierra Crop Protection Company, or Scotts Australia Pty. Ltd, in respect
of a product, or products, forming part of the Professional Business and sold in
any or all of the following countries: the United States of America, Canada,
Australia and New Zealand, and as more particularly delineated in documents
10.9.149.7, 10.9.149.8, 10.9.149.12 and 10.9.149.13 in the Data Room;

   
“Seller Owned Shared EU Product Registration” means any Product Registration
owned by any member of the Retained Group, the Companies or Subsidiaries
immediately before Closing in respect of a product, or products, forming part of
both the Professional Business and the Consumer Business, which is supported by
a European Pesticide Dossier where the relevant European Pesticides Dossier is
owned by any member of the Retained Group, the Companies or Subsidiaries, and as
more particularly delineated on rows 15 to 64 of the spreadsheet entitled
‘Scotts EU PPP Registrations’ in document 1.9.149.6 in the Data Room;

   
“Seller’s Third-Party Claim” has the meaning set out in Clause 11.5;

   
“Sellers’ Warranties” means the warranties given by the Seller and the other
Relevant Sellers pursuant to Clause 9 and Schedule 12 (including, for the
avoidance of doubt, the Tax Warranties), and “Sellers’ Warranty” means any one
of them;

   
“Senior Employees” means Fred Bosch, Wolter Van Rest, Joan Verhoeven, Craig
Bova, Frank Handels, Leon Terlingen, Harry Vandeburg, Paul Boers, Arnoud Touw,
William Kusey, Ted Piatt and Stephen Squires, and “Senior Employee” means any
one of them;

   
“Senior Representative” means, in the case of the Seller, the president of the
Seller Guarantor (currently Barry Sanders) and, in the case of the Purchaser,
the chief executive officer of ICL Fertilizers from time to time (currently Dani
Chen);

   
“Share Purchaser” means, in relation to each of the Companies referred to in
column (2) of Part 1 of Schedule 1, the company whose name is set out opposite
that company in column (4) of Part 1 of Schedule 1;

   
“Shares” means the issued shares and quotas in the capital of the Companies
specified in column (3) of Part 1 of Schedule 1;

   
“Share Seller” means, in relation to each of the Companies referred to in column
(2) of Part 1 of Schedule 1, the company whose name is set out opposite that
Company in column (1) of Part 1 of Schedule 1;

   
“Shared Business Agreements” has the meaning given to it in paragraph 6.2 of
Part 2 of Schedule 5;

 

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“Shared Consumer Agreements” has the meaning given to it in paragraph 6.1 of
Part 2 of Schedule 5;

   
“Software” has the meaning given to it in paragraph 5.3.1 of Schedule 12;

   
“SSHPC” means Scotts-Sierra Horticultural Products Company;

   
“Specified Products” means the Osmocote professional products and applications
sold in the French market at the date of this Agreement;

   
“SSCPC” means Scotts-Sierra Crop Protection Company;

   
“Statutory Accounts” means the statutory audited accounts for each of the Group
Companies (other than Scott O.M. España S.A.) and each of the Business Sellers
for the year ended 30 September 2009;

   
“Stay Incentive Agreements” means stay incentive agreements entered into between
members of the Seller’s Group and each of the Senior Employees;

   
“Stock” means the stock in trade of finished and unfinished goods and raw
materials and packaging owned by a Business Seller for the purposes of the Group
Businesses as at Closing (including items which, although supplied to a Business
Seller under reservation of title by the suppliers, are under the control of the
Seller’s Group);

   
“Subsidiaries” means the companies listed in paragraphs 1.1 and 2.1 of
Schedule 2, and “Subsidiary” means any one of them;

   
“Supply Agreements” means the agreements listed in Part 1 of Schedule 15;

   
“Taxation” or “Tax” means all forms of taxation (other than deferred tax) and
statutory, governmental, state, provincial, local governmental or municipal
impositions, duties, contributions and levies and whether levied by reference to
income, profits, gains, net wealth, asset values, turnover, added value or
otherwise and shall further include payments in respect of or on account of Tax,
whenever and wherever imposed and whether chargeable directly or primarily
against or attributable directly or primarily to a Group Company or any other
person (including, without limitation, any member of the Seller’s Group that is
treated as part of the same consolidated tax group as SSHPC for the purposes of
US federal income tax) and all penalties, charges, costs and interest relating
thereto;

   
“Tax Authority” means any taxing or other authority competent to impose any
liability in respect of Taxation or responsible for the administration and/or
collection of Taxation or enforcement of any law in relation to Taxation;

   
“Tax Indemnity” means the deed of covenant against Taxation in the Agreed Terms
to be entered into at Closing;

   
“Tax Warranties” means the Sellers’ Warranties contained in paragraph 14 of
Schedule 12, and “Tax Warranty” means any one of them;

   
“Termination Warranties” has the meaning given to it in Clause 9.5.8, and
“Termination Warranty” means any one of them;

   
“Third-Party Consents” means all consents, licences, approvals, permits,
authorisations or waivers required from third-parties for the assignment or
transfer to the relevant Business Purchaser of any of the Business Contracts,
and “Third-Party Consent” means any one of them;

 

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“Third-Party Indebtedness” means the aggregate amount as at the Close of
Business on the Closing Date of all outstanding Indebtedness owed by the Group
Companies to any third-party and, for the purposes of this definition,
third-party shall exclude any member of the Retained Group;

   
“Third-Party Receivables” means the aggregate amount as at the Close of Business
on the Closing Date of all outstanding accounts receivable (including all
trading debt or liabilities arising in the ordinary course in favour of the
Group Businesses) owed to a member of the Retained Group, to the extent they
relate to the Group Businesses, by any person other than: (i) any other member
of the Retained Group; or (ii) a Group Company;

   
“Trade Mark Assignments” means the trade mark assignments in the form attached
at Part 3 of Schedule 4 to be dated on or around the Closing Date;

   
“Trade Mark Licence Agreements” means the trade mark licence agreements in the
Agreed Terms to be entered into at Closing between some or all of the following:
OMS Investments, Inc., The Scotts Company (UK) Ltd., the Seller and the relevant
member of the Purchaser’s Group;

   
“Transaction” means the sale and purchase of the Group pursuant to this
Agreement;

   
“Transaction Documents” mean together, this Agreement, the Disclosure Letter,
the Local Transfer Documents, the Transitional Services Agreement, the Tax
Indemnity, the Purchase Price Allocation Agreement and each other document
identified in Part 1, Part 2 and Part 3 of Schedule 15;

   
“Transfer Provisions” means in the European Union the national legislation
implementing the provisions of the European Community’s directive 2001/23/EC of
12 March 2001 and outside the European Union any legislation applicable to
transfer a Business Employee’s employment by operation of law;

   
“Transitional Services Agreements” or “TSA” means the transitional services
agreement in the Agreed Terms which shall be entered into by the Purchaser and
the Seller, on the Closing Date;

   
“TSE” means Turf-Seed Europe Limited, an Irish company with its principal office
located at 17 Earlsfort Terrace, Dublin 2, Ireland;

   
“TSE Seed Varieties” means those grass seed varieties licensed to a member of
the Seller’s Group for which TSE has an option to produce and/or market in the
TSE Territory and which have been sold by TSE to the Group during the 12 months
immediately prior to Closing;

   
“TSE Territory” shall mean Austria, Belgium, Cyprus, Czech Republic, Denmark,
Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Spain,
Sweden, the United Kingdom, Norway, Egypt, Tunisia, Morocco, Lebanon, Jordan and
such other countries as may be added in the future by mutual consent of the
Seller and TSE;

   
“Unregistered Intellectual Property Assignment” means the assignment of
unregistered Business Intellectual Property in the form attached at Part 5 of
Schedule 4 to be dated on or around the Closing Date;

   
“US$” or “US Dollar” means the lawful currency of the United States of America;

   
“US GAAP” means the generally accepted accounting principles used in the United
States of America;

 

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“VAT” means within the European Union such Tax as may be levied in accordance
with (but subject to derogations from) Council Directive 2006/112/EC and outside
the European Union any Taxation levied by reference to added value or sales;

   
“Valuation Date” means 31 December 2010;

   
“Virus” has the meaning given to it in paragraph 5.3.1 of Schedule 12;

   
“Working Capital” means the aggregate amount of the working capital of the Group
Companies and the Group Businesses at the Close of Business on the Closing Date
which are accounted for in the GL Codes designated in the table referred to
under “Table 2” of Annex A of Schedule 11, the aggregate of which is shown
against the line item “Working Capital” in the Closing Statement expressed in US
Dollars, Pounds Sterling, Euros, Australian Dollars, Kenyan Shillings, Malaysian
Ringgit and Polish Zloty; and

   
“Working Capital Adjustment” means the amount expressed in US Dollars (as a
positive or negative number as the case may require) which represents the
difference between the Working Capital and the Base Working Capital, such
difference as calculated pursuant to paragraph 2.4.2 of Schedule 11.

1.2  
Rights of the Seller and the Purchaser

  1.2.1  
The Seller and the other Relevant Sellers agree that, where any right is given
to the Seller under this Agreement, such right shall be exercisable exclusively
by the Seller, and any such exercise shall be binding on the other Relevant
Sellers.

  1.2.2  
The Purchaser and the other Relevant Purchasers agree that, where any right is
given to the Purchaser under this Agreement, such right shall be exercisable
exclusively by the Purchaser, and any such exercise shall be binding on the
other Relevant Purchasers.

1.3  
Rights and Liabilities of the Relevant Sellers and Relevant Purchasers

  1.3.1  
Unless otherwise expressly provided, each Relevant Seller shall only have rights
and liabilities (including in relation to payment) under, or in relation to a
breach of, this Agreement or the Tax Indemnity:

  (i)  
to the extent that those rights and liabilities or the relevant breach relate to
or affect the Shares (including the relevant underlying business(es), assets and
Liabilities of the Companies the subject of such Shares) and/or the Group
Businesses it agrees to sell under this Agreement or otherwise arise in
connection with the sale of those Shares or Group Businesses to the Relevant
Purchaser; and

  (ii)  
on a several basis,

     
and references to “Share Seller” and “Business Seller” shall be construed
accordingly.

  1.3.2  
Unless otherwise expressly provided, each Relevant Purchaser shall only have
rights and liabilities (including in relation to payment) under, or in relation
to a breach of, this Agreement or the Tax Indemnity:

  (i)  
to the extent that those rights and liabilities or the relevant breach relate to
or affect the Shares (including the relevant underlying business(es), assets and
Liabilities of the Companies the subject of such Shares) and/or the Group
Businesses it agrees to purchase under this Agreement or otherwise arise in
connection with the sale of those Shares or Group Businesses to the Relevant
Purchaser; and

  (ii)  
on a several basis,

     
and references to “Share Purchaser” and “Business Purchaser” shall be construed
accordingly.

 

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1.4  
Singular, Plural, Gender

   
References to one gender include all genders and references to the singular
include the plural and vice versa.

1.5  
References to Persons and Companies

   
References to:

  1.5.1  
a person include any individual, company, partnership or unincorporated
association (whether or not having separate legal personality); and

  1.5.2  
a company include any company, corporation or any body corporate, wherever
incorporated.

1.6  
References to Subsidiaries and Holding Companies

  1.6.1  
A company is a “subsidiary” of another company (its “holding company”) if that
other company, directly or indirectly, through one or more subsidiaries:

  (i)  
holds a majority of the voting rights in it;

  (ii)  
is a member or shareholder of it and has the right to appoint or remove a
majority of its board of directors or equivalent managing body;

  (iii)  
is a member or shareholder of it and controls alone, pursuant to an agreement
with other shareholders or members, a majority of the voting rights in it; or

  (iv)  
has the right to exercise a dominant influence over it, for example by having
the right to give directions with respect to its operating and financial
policies, with which directions its directors are obliged to comply,

     
and for these purposes, without limitation to the foregoing, a company shall be
treated as a member of another company if any shares in that other company are
registered in the name of (a) a person by way of security (where the company has
provided the security) or (b) a person as nominee for the company.

  1.6.2  
The terms “subsidiary undertaking” and “parent undertaking” shall have the
meanings attributed to them in the Companies Act 2006.

1.7  
Schedules etc.

   
References to this Agreement shall include any Recitals and Schedules to it and
references to Clauses and Schedules are to Clauses of and Schedules to this
Agreement. References to paragraphs, Annexes and Parts are to paragraphs,
Annexes and Parts of the Schedules. The contents list and headings are for ease
of reference only and shall not affect the construction or interpretation of
this Agreement.

 

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1.8  
Information

   
References to books, records or other information mean books, records or other
information in any form including paper, electronically stored data, magnetic
media, film and microfilm.

1.9  
Legal Terms and Legislation

  1.9.1  
References to any English legal term shall, in respect of any jurisdiction other
than England, be construed as references to the term or concept which most
nearly corresponds to it in that jurisdiction.

  1.9.2  
References to legislation or a legislative provision includes reference to the
legislation or legislative provision as amended or re-enacted from time to time
(whether before or after the date of the Offer Letter) and any prior or
subsequent subordinate legislation made under it which is in force from time to
time (except to the extent that any amendment, re-enactment or subordinate
legislation made after the date of the Offer Letter would increase or extend the
liability of any party).

  1.9.3  
Statutory obligations include obligations arising under Articles of the Treaty
establishing the European Community and regulations and directives of the
European Union as well as UK Acts of Parliament and subordinate legislation.

1.10  
Non-limiting Effect of Words

   
The words “including”, “include”, “in particular” and words of similar effect
shall not be deemed to limit the general effect of the words that precede them.

1.11  
Currency Conversion

   
Any amount to be converted from one currency into another currency for the
purposes of this Agreement shall be converted into an equivalent amount at the
Conversion Rate prevailing at the Relevant Date. For the purposes of this Clause
1.11:

   
“Conversion Rate” means the close spot mid-trade composite (London) rate for a
transaction between the two currencies in question as quoted on Bloomberg on the
date immediately preceding the Relevant Date or, if no such rate is quoted on
that date, on the preceding date on which such rates are quoted;

   
“Relevant Date” means, save as otherwise provided in this Agreement, the date on
which a payment or an assessment is to be made, save that, for the following
purposes, the Relevant Date shall mean:

  (i)  
for the purposes of Clause 5.1, the date of the Offer Letter;

  (ii)  
for the purposes of Clause 6.4, the date of the Seller’s notification to the
Purchaser pursuant to Clause 6.4.1; and

  (iii)  
for the purposes of Clause 7 and Part 1 of Schedule 11, the Closing Date.

 

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1.12  
Materiality

   
For the purposes of Clause 5.4 any breach or non-compliance shall be material if
the Loss suffered (other than indirect or consequential loss and any costs and
expenses) or expected to be suffered by the Purchaser, any other Relevant
Purchaser and the Group or arising from such breach or non-compliance (or series
of breaches arising from substantially identical facts or circumstances) exceeds
or is expected to exceed US$10 million individually and when such breaches or
non-compliances are aggregated with any other breach or non-compliance of the
obligations referred to in such Clause exceed US$40 million.

1.13  
References at Closing

  1.13.1  
For the purposes of construing the defined terms in this Agreement, the steps
set out at paragraphs 2.1 to 2.4 (inclusive) of Schedule 10 shall be deemed to
happen simultaneously such that Scott O.M. España S.A. and Scotts Deutschland
GmbH shall be “Subsidiaries” and Scotts International B.V. shall be a “Group
Company” and all references in this Agreement to Subsidiaries and to Group
Companies shall be construed accordingly.

  1.13.2  
For the purposes of this Agreement, Scotts International B.V. shall be a “Share
Purchaser” and a “Relevant Purchaser” only after Closing and all references in
this Agreement to Share Purchaser and Relevant Purchaser shall be construed
accordingly and, for the avoidance of doubt, Scotts International B.V. shall not
incur any liability incurred by a Share Purchaser or Relevant Purchaser on or
prior to Closing.

2  
Agreement to Sell the Group
  2.1  
Sale and Purchase of the Group

   
On and subject to the terms of this Agreement and the Local Transfer Documents:

  2.1.1  
the Relevant Sellers (each as to the Shares or Group Businesses set out against
its name in Schedule 1) agree to sell and transfer to the Relevant Purchasers
(each as to the Shares or Group Businesses set out against its name in
Schedule 1) the whole of the Group (other than the Business Intellectual
Property, the Business Contracts and other assets of the Group Businesses not
owned by the Business Sellers);

  2.1.2  
the Seller shall procure that the Business Intellectual Property, the Business
Contracts, and any other asset of the Group Businesses not owned by a Business
Seller is assigned, novated or transferred (as the case may be) to the
Purchaser; and

  2.1.3  
the Relevant Purchasers (each as to the Shares or Group Businesses set out
against its name in Schedule 1) and the Purchaser (as to the Business
Intellectual Property, the Business Contracts and other assets of the Group
Businesses not owned by a Business Seller) agree to purchase and accept the
whole of the Group and the assignment of the Business Intellectual Property, the
Business Contracts and other assets of the Business.

 

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2.2  
Sale of the Shares

  2.2.1  
The Shares shall be sold and transferred with full title guarantee free from
Encumbrance together with all rights and advantages attaching or accruing to
them as at Closing (including the right to receive all dividends or
distributions declared, made or paid on or after Closing).

  2.2.2  
The Relevant Sellers hereby waive any right of pre-emption or other restriction
on transfer in respect of the Shares or any of them conferred on them under the
relevant constitutional documents or otherwise and shall procure that on or
prior to Closing any and all rights of pre-emption or other restrictions on
transfer in respect of the Shares are waived irrevocably by any other persons
entitled thereto.

2.3  
Sale of the Group Businesses

  2.3.1  
Subject to Clause 2.3.3, there shall be included in the sale and transfer of the
Group Businesses or the assignment of the Business Intellectual Property (as the
case may be), under this Agreement or, where relevant, the Local Transfer
Documents:

  (i)  
the Business Properties (on the terms set out in Schedule 3);
    (ii)  
the Business Intellectual Property (on the terms set out in Schedule 4);
    (iii)  
the Goodwill;
    (iv)  
the Moveable Assets;
    (v)  
the rights of any member of the Retained Group arising or existing at Closing
under the Business Contracts (on the terms set out in Part 2 of Schedule 5);
    (vi)  
such of the Intra-Group Receivables as are owed to a Business Seller;
    (vii)  
the Professional Business Product Registrations not owned by a Group Company at
Closing (on the terms set out in Part 7 of Schedule 4);
    (viii)  
the Stock;
    (ix)  
the Business Records;
    (x)  
the Third-Party Receivables; and
    (xi)  
all other property, rights and assets owned by or licensed to the Business
Sellers and used, enjoyed or exercised predominantly in relation to the Group
Businesses at Closing, in each case other than any Excluded Assets.

 

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  2.3.2  
The Business Assets shall be sold, transferred or assigned (as the case may be)
free from any Encumbrance.

  2.3.3  
There shall be excluded from the sale of the Group Businesses under this
Agreement and the Local Transfer Documents the following:

  (i)  
the Cash Balances held by or on behalf of the Business Sellers on Closing in
relation to the Group Businesses;
    (ii)  
except as set out in Clause 15, the benefit of any claim under any Seller’s
Group Insurance Policy;
    (iii)  
debts due from any relevant Tax Authority in respect of Taxation;
    (iv)  
the Excluded Intellectual Property; and
    (v)  
the plant and machinery located at the Gretna and Hatfield sites, which is
subject to the provisions of the relevant Supply Agreement.

  2.3.4  
The Business Sellers agree to transfer (to the extent they are able to do so)
and the Business Purchasers agree, with effect from the Closing Date, to accept
the transfer of, and to assume, duly and punctually pay, satisfy, discharge,
perform or fulfil, all Assumed Liabilities. The Business Sellers agree with the
Business Purchasers that the Assumed Liabilities shall be transferred to and
assumed by the Business Purchasers so that the Business Purchasers shall have
and be entitled to the benefit of the same rights, powers, remedies, claims,
defences, obligations and conditions (including rights of set-off and
counterclaim) as the Business Sellers.
    2.3.5  
The Business Sellers shall remain responsible for (and no Business Purchaser
shall be obliged to accept the transfer of and to assume), and shall duly and
punctually pay, satisfy, discharge, perform or fulfil:

  (i)  
any Liability (even if assumed by the Business Purchasers by operation of law),
in respect of any Indebtedness owed by any of the Business Sellers to any
third-party (other than Intra-Group Payables owed by a Business Seller) or any
security, guarantee, comfort or other financial accommodation in respect of such
monies or indebtedness;
    (ii)  
any Liability not otherwise expressly assumed by any member of the Purchaser’s
Group under this Agreement or any Transaction Document;
    (iii)  
any Liability in respect of Taxation relating to the Group Businesses arising in
respect of any period for Taxation purposes ending on or prior to Closing;
    (iv)  
any Liability arising in respect of any Business Contracts that cannot be
lawfully assigned to the Purchaser or any other Relevant Purchaser or the
benefits of which the Purchaser or any other Relevant Purchaser is unable to
receive, in each case in accordance with Part 2 of Schedule 5;
    (v)  
any and all fines imposed by the Polish Competition Authority in connection with
a breach or alleged breach by Scotts Poland Sp. z o.o. of Article 6 of the Act
dated 16 February 2007 on Protection of Competition and Consumers in relation to
any fact or matter found by the Polish Competition Authority as a result of its
inquiry into, among others, the affairs of Scotts Poland Sp. z o.o. (of which
Scotts Poland Sp. z o.o. was informed by a letter dated 23 February 2010, case
number DOK-400/1/10/MF) in respect of or attributable to the period of time up
to, and including, Closing;
    (vi)  
any Liability arising in relation to any Business Employee whose contract of
employment has not transferred pursuant to the Transfer Provisions for the
purposes of paragraphs 1.1.5 and 1.2 of Part 1 of Schedule 6; and
    (vii)  
any Liability relating to the Humax Litigation.

 

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2.4  
Intellectual Property and Product Registrations

   
The provisions of Schedule 4 shall apply in respect of the Business Intellectual
Property, the Professional Business Product Registrations and the Consumer
Business Product Registrations.

2.5  
Relevant Employees and Group Retirement Benefit Arrangements

  2.5.1  
The provisions of Schedule 6 shall apply in respect of the Relevant
Employees.     
    2.5.2  
The provisions of Schedule 7 shall apply in respect of the Group Retirement
Benefit Arrangements.

2.6  
Local Transfer Documents

  2.6.1  
On Closing, the Relevant Sellers and the Relevant Purchasers shall execute such
agreements, transfers, conveyances, dispositions and other documents, subject to
the relevant local law and otherwise as may be agreed between the Seller and the
Purchaser, to implement the transfer of:

  (i)  
the Shares; and
    (ii)  
the Group Businesses,

     
(the “Local Transfer Documents” and each, a “Local Transfer Document”).

     
The parties do not intend this Agreement to transfer title to any of the Shares.
Title shall be transferred by the applicable Local Transfer Document.

  2.6.2  
To the extent that the provisions of a Local Transfer Document are inconsistent
with or (except to the extent they implement a transfer in accordance with this
Agreement) additional to the provisions of this Agreement:

  (i)  
the provisions of this Agreement shall prevail; and

  (ii)  
so far as permissible under the laws of the relevant jurisdiction, the Seller
and the Purchaser shall procure that the provisions of the relevant Local
Transfer Document are adjusted, to the extent necessary to give effect to the
provisions of this Agreement or, to the extent this is not permissible, the
Seller shall indemnify the Purchaser against all Losses suffered by the Relevant
Purchasers or, as the case may be, the Purchaser shall indemnify the Seller
against all Losses suffered by the Relevant Sellers, in either case through or
arising from the inconsistency between the Local Transfer Document and the
Agreement or the additional provisions (except to the extent they implement a
transfer in accordance with this Agreement).

  2.6.3  
If there is an adjustment to the consideration under Clause 7.3 of this
Agreement which relates to a part of the Group which is the subject of a Local
Transfer Document, then, if required to implement the adjustment and so far as
permissible under the laws of the relevant jurisdiction, the Relevant Seller and
the Relevant Purchaser shall enter into a supplemental agreement reflecting such
adjustment and the allocation of such adjustment.

 

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  2.6.4  
No Relevant Seller shall bring any claim against any Relevant Purchaser pursuant
to the Local Transfer Documents, save to the extent necessary to implement any
transfer of the Shares or Group Businesses in accordance with this Agreement. To
the extent that a Relevant Seller does bring a claim in breach of this Clause
2.6.4, the Seller shall indemnify the Relevant Purchaser against all Losses
which the Relevant Purchaser may suffer through or arising from the bringing of
such a claim and the Relevant Seller shall indemnify the Seller against any
payment which the Seller shall make to the Relevant Purchaser pursuant to this
Clause 2.6.4.

  2.6.5  
No Relevant Purchaser shall bring any claim against any Relevant Seller pursuant
to the Local Transfer Documents, save to the extent necessary to implement any
transfer of the Shares or Group Businesses in accordance with this Agreement. To
the extent that a Relevant Purchaser does bring a claim in breach of this Clause
2.6.5, the Purchaser shall indemnify the Relevant Seller against all Losses
which the Relevant Seller may suffer through or arising from the bringing of
such a claim and the Relevant Purchaser shall indemnify the Purchaser against
any payment which the Purchaser shall make to the Relevant Seller pursuant to
this Clause 2.6.5.

2.7  
Moveable Assets

  2.7.1  
The provisions of Part 2 of Schedule 16 shall apply in relation to the Moveable
Assets.

  2.7.2  
Between the date of the Offer Letter and Closing, the Seller shall use its
reasonable endeavours to provide to the Purchaser a list of Moveable Assets, to
the extent that the list in Schedule 16 is incomplete.

2.8  
Third-Party Receivables

   
The provisions of Part 3 of Schedule 16 shall apply in relation to Third-Party
Receivables.     
  2.9  
Field of Use Principles

   
Upon Closing the relevant parties to this Agreement shall execute, or procure
the execution by the relevant members of the Seller’s Group and the Purchaser’s
Group (to the extent they are parties to such documents) of, each of the Supply
Agreements and the IP Licence Agreements. The parties to this Agreement agree
that the Supply Agreements and the IP Licence Agreements shall be governed by
the Field of Use Principles (as set out in Part 4 of Schedule 15) in so far as
the Field of Use Principles are applicable to each Supply Agreement and each IP
Licence Agreement. Save as otherwise set out in this Clause 2.9, the parties to
this Agreement agree and acknowledge that the Field of Use Principles do not
have any effect in this Agreement nor are they intended to impose any
restriction nor grant any rights other than in the context of the relevant
Supply Agreement(s) and/or the relevant IP Licence Agreement(s) to which they
apply.

 

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3  
Consideration
  3.1  
Amount

  3.1.1  
The aggregate consideration for the purchase of the Group under this Agreement
and the Local Transfer Documents (the “Purchase Price”) shall be an amount in US
Dollars equal to the sum of:

  (i)  
the Bid Value;

     
plus

  (ii)  
the Group Companies’ Cash Balances and the Intra-Group Receivables;

     
minus

  (iii)  
the Third-Party Indebtedness, the Intra-Group Payables, the Agreed Cash Sum and
the Pension Liability;

     
plus

  (iv)  
the Working Capital Adjustment.

3.2  
Allocation of Purchase Price

  3.2.1  
The Purchase Price shall be allocated in accordance with the Purchase Price
Allocation Agreement. The Seller and the Purchaser, each acting reasonably and
in good faith shall endeavour to agree such allocation, and the form of the
Purchase Price Allocation Agreement, between the date of the Offer Letter and
Closing.
    3.2.2  
Failing agreement between the Seller and the Purchaser on the allocation of the
Purchase Price and, accordingly, the form of the Purchase Price Allocation
Agreement, the allocation of the Purchase Price shall be determined by the
Reporting Accountants, on the application of the Seller or the Purchaser, who
shall allocate the Purchase Price in accordance with principles set out in the
form of the Purchase Price Allocation Agreement set out in Schedule 8.
Paragraphs 3.2 to 3.11 of Part 1 of Schedule 11 shall apply mutatis mutandis to
the engagement and determination of the Reporting Accountants pursuant to
paragraph 6 of the Purchase Price Allocation Agreement.

3.3  
VAT

   
The Relevant Sellers and the Relevant Purchasers agree that the consideration
given under this Agreement in respect of the sale of the Group Businesses and
the Shares is exclusive of any VAT, in respect of which the provisions of
Schedule 9 shall apply. To the extent that VAT is so chargeable then the
Relevant Purchasers shall, against delivery of a valid VAT invoice (or
equivalent, if any), in addition to any amount expressed in the Agreement to be
payable by the Relevant Purchasers, pay to the Relevant Sellers such VAT in
accordance with Schedule 9.

3.4  
Treatment of Payments by Relevant Sellers

  3.4.1  
If any payment is made by the Seller or any other Relevant Seller to any
Relevant Purchaser in respect of any claim for any breach of this Agreement or
any Local Transfer Document or pursuant to an indemnity under any such agreement
or the Tax Indemnity, the payment shall be treated as an adjustment of the
consideration paid by the Relevant Purchaser for the Shares or the particular
category of Business Asset (if any) to which the payment and/or claim relates
under this Agreement and the consideration shall be deemed to be reduced by the
amount of such payment.

 

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  3.4.2  
If:

  (i)  
the payment and/or claim relates to the Shares in more than one Group Company or
to more than one category of Business Asset, it shall be allocated in a manner
which reflects the impact of the matter to which the payment and/or claim
relates, failing which it shall be allocated rateably to the Shares in the Group
Companies or Business Assets concerned by reference to the proportions in which
the consideration is allocated in accordance with Schedule 8; or

  (ii)  
the payment and/or claim relates to no particular Shares in any Group Company or
no particular category of Business Asset, it shall be allocated rateably to all
the Shares and all the Business Assets by reference to the proportions in which
the consideration is allocated in accordance with Schedule 8,

     
and, in each case, the Purchase Price shall be deemed to have been reduced by
the amount of such payment.

3.5  
Tax Election

  3.5.1  
The Relevant Seller and the Relevant Purchaser shall jointly make a timely and
effective election provided for by Section 338(h)(10) of the Code and Section
1.338(h)(10)-1 of the Treasury Regulations and any comparable election under
state, local or foreign Tax law with respect to the acquisition by the Relevant
Purchaser of the stock of SSHPC and each of its wholly-owned Subsidiaries being
acquired pursuant to this Agreement (each, an “Election” and, collectively, the
“Elections”). The Relevant Purchaser and the Relevant Seller shall, and shall
cause their respective Affiliates (including, in the case of the Relevant
Purchaser, SSHPC and its Subsidiaries) to cooperate with each other to take all
actions necessary and appropriate, including filing Internal Revenue Service
Forms 8023 and 8883 and such additional forms, returns, elections, schedules and
other documents as may be required, to effect Elections in accordance with the
provisions of Section 338(h)(10) of the Code and Section 1.338(h)(10)-1 of the
Treasury Regulations (and any comparable provisions of state, local or foreign
Tax law) or any successor provisions. Unless required by a final,
non-appealable, decision of a court of competent jurisdiction, the Relevant
Purchaser and the Relevant Seller shall, and shall cause their respective
Affiliates (including, in the case of the Relevant Purchaser, SSHPC and its
Subsidiaries) to, report the acquisition by the Relevant Purchaser of the stock
of such domestic corporations consistently with the Elections made and shall
take no position inconsistent therewith in any Tax return, any proceeding before
any Tax Authority or otherwise.

  3.5.2  
Unless required by a final, non-appealable decision of a court of competent
jurisdiction, the Relevant Purchaser and the Relevant Seller shall, and shall
cause their respective Affiliates to (i) be bound by the Elections, the Purchase
Price allocation in Schedule 8 and the Section 338(h)(10) Allocation Statement
(as defined below) for purposes of determining any Taxes, (ii) prepare and file
their respective Tax returns on a basis consistent with the Elections and such
allocation statements and (iii) take no position inconsistent with the Elections
or any such allocation statements in any Tax return, any proceeding before any
Tax Authority or otherwise. In the event that any of such allocations determined
is disputed by any Tax Authority, the party receiving notice of the dispute
shall promptly notify the other party concerning resolution of the dispute. The
Relevant Purchaser and its Affiliates shall provide to the Relevant Seller
information to enable the Relevant Seller to support the Tax filing position
that, for US federal income Tax purposes, the direct and indirect acquisition of
any of SSHPC or its Subsidiaries qualifies as a “qualified stock purchase”
(within the meaning of Section 338 of the Code).

 

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  3.5.3  
In connection with an Election, as promptly as reasonably practicable after
Closing and in any event within six months following Closing, the Relevant
Purchaser shall provide to the Relevant Seller a statement (a
“Section 338(h)(10) Allocation Statement”) specifying the proposed manner in
which the “aggregate deemed sales price”, as defined in Treasury Regulations
Section 1.338-4, shall be allocated among the assets of each Group Company for
which an Election is made, which allocations shall be made in accordance with
Section 338(b) of the Code and any applicable Treasury Regulations and which
shall be consistent with the Purchase Price allocation in Schedule 8. If the
Relevant Seller does not object by written notice to a Section 338(h)(10)
Allocation Statement within 15 Business Days of receipt, such statement shall be
deemed to have been accepted and agreed upon, and final and conclusive, for all
purposes of this Agreement. If the Relevant Seller objects to a
Section 338(h)(10) Allocation Statement presented by the Relevant Purchaser, it
shall notify the Relevant Purchaser of such disputed item (or items) (in such
written notice) and the basis for its objection, and the Relevant Purchaser and
the Relevant Seller shall act in good faith to resolve any such dispute for the
30-day period thereafter.

4  
Conditions
  4.1  
Conditions Precedent

  4.1.1  
The agreement to sell and purchase the Group contained in Clause 2.1 is
conditional upon satisfaction of the following conditions, or their satisfaction
subject only to Closing:

  (i)  
the competition authority or other relevant governmental or regulatory body in
Cyprus, Germany, Kenya, the Ukraine and, to the extent required, the United
States of America having issued all necessary clearances and approvals under
applicable merger control laws, or such clearance or approval having otherwise
been obtained from such competition authority by the expiry of any applicable
time limits without any suit, investigation or proceeding having been initiated
or decisions issued or by the withdrawal by such competition authority of any
pending or threatened suit, investigation or proceeding (the “Competition
Condition”); and

  (ii)  
the Purchaser not having given the Product Registration Notice to the Seller
(the “Product Registration Condition”).

4.2  
Responsibility for Satisfaction of the Competition Condition

  4.2.1  
The Purchaser and the other Relevant Purchasers shall use all reasonable
endeavours to ensure the satisfaction of the Competition Condition as soon as
possible. The Seller shall provide and/or procure to be provided to the
Purchaser and the other Relevant Purchasers all reasonable assistance for the
purposes of satisfying the Competition Condition.

 

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  4.2.2  
The Purchaser and the other Relevant Purchasers will provide the Seller (or its
advisers) with draft copies of all notifications and communications (save that
confidential business information may be redacted or supplied on an outside
counsel-to-counsel basis only) that are to be sent or submitted to relevant
competition, governmental or regulatory authorities in relation to obtaining any
relevant consent, approval or action under Clause 4.1.1(i) at such time as will
allow the Seller a reasonable opportunity to provide comments on such
notifications and communications before they are submitted or sent to such
relevant competition, governmental or regulatory authorities and having regard
to any such comments as are reasonable and provide the Seller (or the Seller’s
nominated advisers) with copies of all such notifications and communications in
the form submitted or sent (save that confidential business information may be
redacted or supplied on an outside counsel-to-counsel basis only).

  4.2.3  
The Purchaser and the other Relevant Purchasers will promptly notify the Seller
and provide any material communications (whether written or oral), save in
respect of any confidential business information, received from any competition,
governmental or regulatory authority in relation to obtaining the Competition
Condition.

  4.2.4  
Where permitted by the relevant competition, governmental or regulatory
authorities concerned, the Purchaser and the other Relevant Purchasers will
allow persons nominated by the Seller to attend all meetings and all material
telephone calls with relevant competition, governmental or regulatory
authorities and, where appropriate, to make oral submissions at such meetings.

  4.2.5  
Without prejudice to Clause 4.2.1, the parties agree that all requests and
enquiries from any government, governmental, supranational or trade agency,
court or other regulatory body shall be dealt with by the Seller and the
Purchaser in consultation with each other and the Seller and the Purchaser shall
promptly co-operate with and provide all necessary information and assistance
reasonably required by such government, agency, court or body upon being
requested to do so by the other including, if necessary, after Closing.

  4.2.6  
If the Competition Condition is fulfilled with the exception of any clearance or
approval required in Kenya and such clearance is unlikely to be forthcoming
within 30 days of obtaining the other approvals or clearances required pursuant
to the Competition Condition, the Seller and the Purchaser will work jointly in
good faith, to the extent practicable, to proceed to Closing and exclude the
transfer of The Scotts Company Kenya Ltd. until the relevant clearance has been
obtained.

4.3  
Non-satisfaction

  4.3.1  
The Purchaser shall give notice to the Seller of the satisfaction or
non-satisfaction of the Competition Condition within two Business Days of
becoming aware of the same.

 

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  4.3.2  
For the avoidance of doubt, neither the Purchaser, any other Relevant Purchaser
nor any other member of the Purchaser’s Group shall be obliged to confirm the
satisfaction of the Competition Condition if such clearance or approval requires
the Purchaser, any other Relevant Purchaser or any other member of the
Purchaser’s Group to dispose of any assets that are material to the Group or the
Purchaser’s Group or to agree to any undertaking that would restrict the
Purchaser’s Group in carrying on the business of the Group or any other business
carried on by the Purchaser’s Group in the ordinary course.

  4.3.3  
If the Competition Condition is not satisfied (including as a result of
non-confirmation as contemplated by Clause 4.3.2) on or before the Long Stop
Date, save as expressly provided (including in Clause 4.2.6), this Agreement
(other than Clauses 1, 4.3.4, 4.3.5, 13, 14 and 16.2 to 16.17) shall lapse.
Neither the Seller nor the Purchaser may terminate this Agreement after
satisfaction of the Competition Condition, except in accordance with this
Agreement.

  4.3.4  
In the event that this Agreement lapses pursuant to Clause 4.3.3 the Purchaser
will pay the Seller the Break Fee no later than five Business Days after the
date on which the Agreement lapses in the form of an electronic funds transfer
to a bank account nominated by the Seller. For the avoidance of doubt, the
Purchaser will only be liable to pay the Break Fee once under this Agreement,
notwithstanding that the Seller may have a right to payment of the Break Fee
under more than one Clause of this Agreement.

  4.3.5  
Any payment received by the Seller pursuant to Clause 4.3.4 in circumstances
where the Purchaser or any other Relevant Purchasers have failed to comply with
their respective obligations under Clause 4.2 will be without prejudice to all
other rights or remedies available to the Seller, including the right to claim
damages.

4.4  
The Product Registration Condition

  4.4.1  
Each time that any Guidance is issued prior to the Expiry Date, the Seller shall
immediately inform the Purchaser and provide it with a copy of the Guidance.

  4.4.2  
Upon the issue of the Guidance, the Seller and the Purchaser shall each review
the Guidance and consult with each other for a period of 10 Business Days, or
such other period as is agreed between the Seller and the Purchaser in writing
(the “Consultation Period”).

  4.4.3  
If such Guidance issued prior to the Expiry Date contains:

  (i)  
a requirement that CRFs must display ready biodegradability or biodegradability;
or

  (ii)  
any other requirement that, even if all reasonable further tests or steps are
undertaken, Osmocote manifestly is and will be incapable of satisfying,

     
and in either case it is manifestly clear from the Guidance that this will
result in the Competent Authority requiring: (i) the initiation, by 1
February 2013, of a compulsory phase out from sale on the French market of at
least 60 per cent. of sales in the 12 months prior to the date of this Agreement
of the Specified Products; or (ii) by 1 February 2016, full implementation of a
total ban from sale on the French market of all of the Specified Products, then
in either case the Purchaser shall be entitled to terminate this Agreement upon
giving written notice to the Seller (the “Product Registration Notice”) and
making payment of the Break Fee to the Seller in the form of an electronic funds
transfer to a bank account nominated by the Seller within two Business Days
following expiry of the Consultation Period.

 

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  4.4.4  
The Purchaser’s rights under this Clause 4.4 shall terminate at 5.30pm GMT on
the Expiry Date provided that if the Expiry Date falls during the relevant
Consultation Period, the Expiry Date shall be deemed to be the next Business Day
after expiry of the Consultation Period.

  4.4.5  
If a Consultation Period commences after the date on which the Competition
Condition is satisfied or waived and the Closing Date would otherwise be a date
which is earlier than the Business Day following expiry of the Consultation
Period, unless the Purchaser is entitled to, and delivers, the Product
Registration Notice, the Closing Date will be postponed to the last Business Day
of the next following month.

  4.4.6  
The Purchaser may in its sole discretion waive its rights under this Clause 4.4
in whole or in part at any time by notice in writing delivered to the Seller.

  4.4.7  
In the event that the Purchaser seeks to terminate this Agreement in reliance
upon this Clause 4.4 and it is finally determined by a court of competent
jurisdiction that the test for termination as specified in this Clause 4.4 has
not been fulfilled, the payment by the Purchaser of the Break Fee shall be
without prejudice to all other rights or remedies available to the Seller,
including the right to claim damages.

5  
Pre-Closing
  5.1  
The Relevant Sellers’ Obligations in Relation to the Conduct of Business

  5.1.1  
The Seller and each of the other Relevant Sellers undertake to use all
reasonable endeavours to procure that between the date of the Offer Letter and
Closing, the Business Sellers and the relevant Group Companies shall carry on
the business of the Group as a going concern in the ordinary course as carried
on prior to the date of the Offer Letter, (i) save insofar as agreed in advance
in writing by the Purchaser, (ii) in accordance with all applicable legal and
administrative requirements and (iii) save insofar as is otherwise contemplated
by this Agreement, and, without prejudice to the foregoing, shall keep the
Purchaser informed (in reasonable time and detail) of any material matters
relating to the Group which may arise or occur between the date of the Offer
Letter and the Closing Date and shall notify the Purchaser as soon as reasonably
practicable following becoming aware of any breaches of the undertakings and
obligations set out in Clauses 5.1.1, 5.1.2 or 5.2.

  5.1.2  
Without prejudice to the generality of Clause 5.1.1 and subject to Clause 5.2,
between the date of the Offer Letter and Closing, the Business Sellers (in
relation to the Group Businesses only) and the relevant Group Companies shall
not without the prior written consent of the Purchaser, such consent not to be
unreasonably withheld or delayed:

  (i)  
other than as provided in the forecasts set out in the Seller Information
Document, make, or enter into any agreement or incur any commitment involving,
any capital expenditure in excess of US$100,000 per item and US$300,000 in
aggregate, in each case exclusive of VAT;

 

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  (ii)  
enter into or amend any agreement or incur any commitment which: (A) is not
capable of being terminated without compensation at any time with 12 months’
notice or less; (B) is not in the ordinary course of business; or (C) involves
or may involve total annual expenditure in excess of US$250,000, exclusive of
VAT;

  (iii)  
acquire or dispose of, or agree to acquire or dispose of, any assets or stocks,
involving consideration, expenditure or liabilities in excess of US$100,000 per
item or US$300,000 in aggregate, exclusive of VAT, other than in the ordinary
course of business;

  (iv)  
acquire or agree to acquire any share, shares or other interest in any company,
partnership or other venture, other than an investment of 5 per cent. or less of
the total shares or interest in such company, partnership or venture;

  (v)  
incur any additional borrowings or incur any other indebtedness in each case in
excess of US$100,000 other than in the ordinary course of business;

  (vi)  
create, allot or issue, or grant an option to subscribe for, any share capital
or other securities of any Group Company;

  (vii)  
repay, redeem or repurchase any share or loan capital of any Group Company;

  (viii)  
save as required pursuant to Clause 5.11, declare, make or pay any non-cash
dividend or other non-cash distribution to shareholders;

  (ix)  
pass a shareholders’ resolution (save for a shareholders’ resolution
representing the ordinary business of an annual general meeting or any
resolution authorising or effecting the matters set out in any Transaction
Document);

  (x)  
dispose of, or agree to dispose of, or adversely modify or intentionally permit
to lapse any material rights relating to, any Business Intellectual Property;

  (xi)  
dispose of, or agree to dispose of, transfer (except to the extent expressly
permitted under Part 7 of Schedule 4) or adversely modify any Professional
Business Product Registration;

  (xii)  
create, or agree to create or amend, any Encumbrance over any of the Properties,
any material Owned Group Intellectual Property or any other material asset owned
by or used in connection with any Group Company or any Group Business, other
than in the ordinary course of business;

  (xiii)  
in relation to each Material Property:

  (a)  
voluntarily change its existing use;
    (b)  
terminate, or give notice to terminate, a lease, tenancy or licence; or
    (c)  
voluntarily agree a new rent or fee payable under a lease, tenancy or otherwise,

   
other than in the ordinary course of business;

 

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  (xiv)  
initiate the amendment or termination of any Material Contract to which it is a
party or agree to any such termination or amendment;

  (xv)  
except as contemplated by this Agreement, enter into any contract, transaction
or arrangement with the Seller or any other member of the Seller’s Group;

  (xvi)  
give, or agree to give, a guarantee or indemnity other than in the ordinary
course of business;

  (xvii)  
increase or agree to increase the remuneration (including, without limitation,
salary, bonuses, commissions, profits in kind and pension contributions) of any
of its directors or Senior Employees or vary the terms of employment of or
dismiss any Senior Employee without cause or engage any new employee whose
annual base remuneration exceeds US$75,000 or whose overall annual remuneration
exceeds US$125,000 save where required to fill vacancies identified in the
Global Bloom Master Bloom Org. Chart and Hiring Plan Pro FY11 table (documents
4.1.10 and 4.1.11 in the Data Room) or agree to provide any gratuitous payment
or benefit to any person other than as received as a result of the Transactions
pursuant to paragraph 3 of Part 2 of Schedule 6 or other than as provided for in
the annual remuneration review process referred to at Clause 5.9.2 and ordinary
course bonuses;

  (xviii)  
redeploy any employee or contractor listed on the Global Bloom Master Roster
(document 4.1.9 in the Data Room) out of the Professional Business into the
Consumer Business;

  (xix)  
commence any litigation or arbitration proceedings with a potential value or
loss in excess of US$100,000 per claim or US$300,000 in aggregate;

  (xx)  
except in the ordinary course of business, compromise, settle, release,
discharge or compound litigation or arbitration proceedings or a liability,
claim, action, demand or dispute, or waive a right in relation to litigation or
arbitration proceedings other than for the purposes of debt collection in
amounts not exceeding US$50,000;

  (xxi)  
other than the Pre-Sale Reorganisation Transactions and the steps set out at
paragraphs 2.1 to 2.4 (inclusive) of Schedule 10, become involved in any merger,
demerger or other reorganisation (whether internal or with any other person) or
any joint venture, partnership or similar arrangement;

  (xxii)  
enter into dissolution or winding-up proceedings or any scheme or arrangement
with creditors;

  (xxiii)  
initiate the taking of any action or omit to take any reasonable action the
consequence of which is that any Professional Business Product Registration
lapses;

  (xxiv)  
artificially alter Working Capital levels to give rise to any unusual increases
or create any new GL Codes;

  (xxv)  
make any entity classification elections with regard to the Group; or
    (xxvi)  
agree, conditionally or otherwise, to do any of the foregoing.

 

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5.2  
The Relevant Sellers’ Obligations in relation to Insurance

   
Without prejudice to the generality of Clause 5.1.1, between the date of the
Offer Letter and Closing, each of the Seller and the other Relevant Sellers
shall, or shall procure that the relevant members of the Seller’s Group shall,
maintain in force all Group Company Insurance Policies and all Seller’s Group
Insurance Policies (in all material respects on the same terms and with a
similar level of cover prevailing at the date of the Offer Letter) for the
benefit of the Group, save that the Seller’s Group may amend the insurance
policies maintained for the benefit of the Group if such amended policies are
substantially the same as those generally applicable to the Seller’s Group as a
whole. The Seller’s Group shall be obliged to renew by the due date any
insurance policy for the benefit of the Group which may otherwise be due to
lapse or has lapsed save that such renewal need not be on any more onerous terms
than the Seller’s Group would incur in respect of any similar insurance
maintained or effected by the Seller or any member of the Seller’s Group in
respect of the business, assets and liabilities of the Retained Group.

5.3  
The Relevant Sellers’ and Relevant Purchasers’ Obligations in relation to the
Transitional Services Agreement

  5.3.1  
Without prejudice to the terms of the Transitional Services Agreement, the
Purchaser and the Seller shall, and shall procure that the relevant members of
the Purchaser’s Group and the Seller’s Group respectively shall, co-operate in
good faith and use reasonable endeavours to prepare for the separation of the
Group from the Retained Group and to prepare for the receipt and supply of
services by the Seller and the Purchaser (as the case may be) under the
Transitional Services Agreement.

  5.3.2  
Without prejudice to the generality of Clauses 5.1.1 and 5.3.1, the Relevant
Sellers and the Relevant Purchasers shall, or shall procure that the relevant
members of the Retained Group shall, between the date of the Offer Letter and
Closing co-operate in good faith and use reasonable endeavours to:

  (i)  
complete any outstanding details required in schedule 1 (Services and Charges)
to the Transitional Services Agreement; and

  (ii)  
obtain all necessary Third-Party Consents (as defined in, and in accordance
with, clause 4 of the Transitional Services Agreement)

  5.3.3  
The Seller shall implement the QAD enterprise resource planning application
(“QAD”) to the relevant Group Businesses in the US, UK and Poland in accordance
with Schedule 20. The Seller shall ensure that the QAD system being implemented:

  (i)  
shall have similar functionality to the existing QAD environment operating
within the Group where applicable;

  (ii)  
shall support a maximum number of 60 users;

  (iii)  
shall be hosted in Telford, UK (a third-party-managed site); and

  (iv)  
shall include the transfer of one year of sales history from the Group Business
in the US and UK,

     
(collectively, “the Deliverables”).

 

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  5.3.4  
For the avoidance of doubt, where relevant, the provisions of this Clause 5.3
shall continue beyond the Closing Date.

5.4  
Breach of Pre-closing Obligations

  5.4.1  
If the Seller or any other Relevant Seller fails to comply in any material
respect with any obligations in Clauses 5.1.2 (iv), (v), (vi), (vii), (viii),
(ix), (x), (xiii), (xiv), (xv), (xvi), (xix), (xx), (xxi), (xxii), (xxiii) and
(xxvi, in relation to the covenants listed in this Clause 5.4.1) the Purchaser
shall be entitled to terminate this Agreement (other than Clauses 1, 5.4.2,
5.4.3, 13, 14 and 16.2 to 16.17) without liability on its part or the part of
those on whose behalf notice is served.

  5.4.2  
If the Agreement is terminated pursuant to Clause 5.4.1, each party’s further
rights and obligations (save in respect of this Clause 5.4.2 and Clauses 1,
5.4.3, 13, 14 and 16.2 to 16.17) shall cease immediately on termination, but
termination shall not affect a party’s accrued rights and obligations as at the
date of termination.

  5.4.3  
If the Purchaser terminates this Agreement in accordance with Clause 5.4.1, the
Seller will pay the Purchaser the Break Fee no later than five Business Days
after the date on which the Agreement is terminated in the form of an electric
fund transfer to a bank account nominated by the Purchaser. For the avoidance of
doubt, the Seller will only be liable to pay the Break Fee once under the terms
of this Agreement and the Offer Letter notwithstanding that the Purchaser may
have a right to payment of the Break Fee under more than one Clause of this
Agreement and/or the Offer Letter.

  5.4.4  
Any payment received by the Purchaser pursuant to Clause 5.4.3 will be without
prejudice to all other rights or remedies available to the Purchaser, including
the right to claim damages.

5.5  
Provision of information and updating the Purchaser

  5.5.1  
The Seller and each of the other Relevant Sellers undertake to use all
reasonable endeavours to procure that between the date of the Offer Letter and
Closing, the Business Sellers (in relation to the Group Businesses only) and the
Group Companies shall, at their own respective cost, promptly deliver to the
Purchaser the management report (being the quarterly profit and loss
information) for the Group.

  5.5.2  
Throughout the period from the date of the Offer Letter until Closing, the
Seller shall, and shall procure that each member of the Seller’s Group shall,
afford the Purchaser and its officers, employees and counsel, upon sufficient
notice, reasonable access during normal business hours to:

  (i)  
the books and records of or relating in whole or in part to the Group Companies
and the Group Businesses;

  (ii)  
the physical sites, facilities and office locations of the Group Companies and
the Group Businesses; and

  (iii)  
the Functional Team Leaders, any officers or employees of any member of the
Seller’s Group specifically named as a “Service Manager” in the schedules to the
TSA, the management of the Group Companies and the Group Businesses and such
meetings as reasonably requested,

 

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to the extent required for the purposes of planning and preparing for the
transition of ownership and operation on a standalone basis of the Group, and
only to the extent that such access does not, in the Seller’s reasonable
opinion, unreasonably inhibit the conduct of the business of the Group. In
addition to the foregoing, the Seller may restrict the access to information to
the extent that any applicable law requires that access to such information be
restricted.

5.6  
Pre-Sale Reorganisation Transactions

   
The Seller shall, and shall cause the relevant members of the Seller’s Group to,
procure that the Pre-Sale Reorganisation Transactions are carried out, in all
respects in relation to those matters referred to in paragraphs 1 and 3 of
Schedule 17 and otherwise in all material respects prior to or conditional upon
Closing.

5.7  
Interim Accounting Practices

   
The Seller shall procure that the relevant members of the Seller’s Group shall
record items within the GL Codes consistently with past practice and as such
items were recorded in generating the Accounts for the period from 1
October 2008 to 30 September 2009.

5.8  
Corporate Income Tax

   
The Seller shall between the date of the Offer Letter and Closing procure that
the relevant Group Companies shall continue to make corporate income tax
payments on a basis consistent with past practice.

5.9  
Personnel

  5.9.1  
Between the date of the Offer Letter and Closing, the Seller, in reasonable
consultation with the Purchaser shall use its reasonable endeavours to recruit
personnel to fill the following positions:

  (i)  
Regional Marketing Manager in Asia; Staff Accountant in Poland; Finance Manager
for North America and Latin America; and Finance-Orders-to-Cash in North
America; and

  (ii)  
Six R&D posts in The Netherlands, for whom the Purchaser shall bear the
recruitment and remuneration costs.

  5.9.2  
The Seller shall procure that, between the date of the Offer Letter and Closing:

  (i)  
the annual bonus typically awarded in or around November/December each year in
respect of the year ended 30 September 2010 are awarded on such terms as it may
determine and to the people entitled thereto and shall provide to the Purchaser
at the time of paying such awards a list of the persons so entitled with details
of their awards; and

  (ii)  
the annual remuneration review for all Relevant Employees is conducted, and
provided to the Purchaser, at the time of notifying such employees of their
remuneration package, details of the packages in respect of 2010/2011 and the
Seller shall procure that the relevant member of the Group shall pay or fully
accrue for the amount of the package that relates to the period from 1
October 2010 until the next pay date following the date on which the annual
remuneration review came into effect (the “Applicable Pay Day”) on the
Applicable Pay Day or, if earlier, to the Closing Date.

 

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  5.9.3  
The Purchaser shall be liable for the cost of the employees hired in accordance
with Clause 5.9.1(ii) and such costs shall be disregarded for the purposes of
preparing the Closing Statement.

  5.9.4  
Between the date of the Offer Letter and Closing, the Seller where directed by
the Purchaser and in reasonable consultation with the Purchaser shall use its
reasonable endeavours to procure that, where applicable, contracts with an
employment agency to provide temporary workers will transfer to a member of the
Purchaser’s Group on the same terms and conditions as are in place at the date
of the Offer Letter or will terminate.

5.10  
Wastewater discharge

  5.10.1  
The Seller shall use all reasonable endeavours to procure that, to the extent
required by the relevant Environmental Authority or under Environmental Law, The
Scotts Company (UK) Ltd. obtains authorisations under the Water Environment
(Controlled Activities) (Scotland) Regulations 2005 (as amended) (“CAR
Authorisations”) in relation to each of the Business Properties prior to Closing
(subject to any prioritisation proposed by such Environmental Authority) and
shall make a joint application with the Relevant Purchaser on or as soon as
reasonably practicable after Closing to transfer each such CAR Authorisation to
the Relevant Purchaser. To the extent that any such CAR Authorisation cannot be
assigned or transferred to the Relevant Purchaser, the Relevant Purchaser shall
take all reasonable steps to obtain its own CAR Authorisation as soon as
reasonably practicable and the Seller shall procure that The Scotts Company (UK)
Ltd. provides to the Purchaser all such information and assistance as is
reasonably required for such application. From Closing as between the parties
the Relevant Purchaser shall assume responsibility for ongoing compliance with
the terms of any such CAR Authorisation, including for such period following
Closing as such CAR Authorisation remains in the name of The Scotts Company
(UK) Ltd.

  5.10.2  
To the extent The Scotts Company (UK) Ltd. is unable to obtain such a CAR
Authorisation in relation to any of the Business Properties prior to Closing the
Seller shall and shall procure that the Retained Group shall provide all
reasonable assistance to the Relevant Purchaser (including the provision of any
information that has been prepared in relation to any such application and
liaising with the Scottish Environment Protection Agency) to assist the Relevant
Purchaser in obtaining any such CAR Authorisation.

5.11  
Agreed Cash

   
The Seller shall, and shall cause the relevant members of the Seller’s Group to,
use reasonable endeavours to procure that at Closing the Group Companies Cash
Balances is as close to US$1,000,000 as is reasonably practicable.

 

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5.12  
Shared Contracts

   
The provisions of Part 2 of Schedule 5 shall apply with respect to the Shared
Consumer Contracts and the Shared Business Contracts.

5.13  
Confidentiality Agreements

   
The Seller shall use reasonable endeavours to assign, novate or transfer each of
the confidentiality agreements listed in Part 6 of Schedule 5 to Scotts
International B.V. prior to Closing.

5.14  
Other Agreements

  5.14.1  
The Seller shall use all reasonable endeavours to ensure that, prior to Closing,
the Seller shall inform each of The Andersons, Inc. and Agrium U.S., Inc. that
each of The Andersons, Inc. and Agrium U.S., Inc., respectively, are prohibited
from selling Poly-S in a market other than to Pro-Turf in any territory other
than the United States, Canada or Bermuda.

  5.14.2  
To the extent that the Purchaser is able to demonstrate to the reasonable
satisfaction of the Seller that there has been a material non-compliance with
the provisions of Clause 5.14.1 by The Andersons, Inc. and/or Agrium U.S., Inc.,
the Seller shall (i) stop supplying Poly-S to The Andersons, Inc. and/or Agrium
U.S., Inc (as the case may be) and (ii) inform The Andersons, Inc. and/or Agrium
U.S., Inc. (as the case may be) that the Group is a supplier of Poly-S and that,
should The Andersons, Inc. and/or Agrium U.S., Inc. wish to obtain supply in the
future, they may approach the Group to agree the terms of such supply.

6  
Closing
  6.1  
Date and Place

   
Subject to Clause 4, Closing shall take place at the offices of the Seller’s
Lawyers in Amsterdam on the later of (i) the date falling six Business Days
after the date of this Agreement or (ii) the last Business Day of the calendar
month in which fulfilment or waiver of the Competition Conditions occurs (or, if
such fulfilment or waiver falls less than three Business Days before the last
Business Day of a calendar month, on the last Business Day of the following
calendar month), or at such other location, time or date as may be agreed
between the Purchaser and the Seller.

6.2  
Closing Events

   
On Closing, without prejudice to Clause 6.5, the parties shall comply with their
respective obligations specified in Schedule 10. The Seller may waive some or
all of the obligations of the Purchaser or the other Relevant Purchasers as set
out in Schedule 10 and the Purchaser may waive some or all of the obligations of
the Seller or the other Relevant Sellers as set out in Schedule 10.

 

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6.3  
Payment on Closing and Initial Allocation of the Purchase Price

  6.3.1  
On Closing, the Purchaser, on behalf of the Relevant Purchasers, shall pay an
amount in cash in US Dollars to the Seller on behalf of the Relevant Sellers
which is equal to the sum of:

  (i)  
the Bid Value;

     
plus

  (ii)  
the Estimated Cash and the Estimated Intra-Group Receivables;

     
minus

  (iii)  
the Estimated Third-Party Indebtedness, the Estimated Intra-Group Payables, the
Agreed Cash Sum and the Estimated Pension Liability;

     
plus

  (iv)  
the Estimated Working Capital Adjustment.

  6.3.2  
The Purchase Price shall be allocated in accordance with the Purchase Price
Allocation Agreement.

6.4  
Notifications to Determine Payments on Closing

  6.4.1  
Five Business Days prior to Closing, the Seller shall, subject to engaging in a
reasonable period of good-faith prior consultation with the Purchaser in respect
of the same, notify the Purchaser in writing of:

  (i)  
the Estimated Cash;
    (ii)  
the Estimated Third-Party Indebtedness;
    (iii)  
the Estimated Intra-Group Receivables;
    (iv)  
the Estimated Intra-Group Payables;
    (v)  
the Estimated Pension Liability;
    (vi)  
the Estimated Working Capital;
    (vii)  
the Estimated Working Capital Adjustment; and
    (viii)  
the amount payable by the Purchaser at Closing pursuant to Clause 6.3.1.

  6.4.2  
The amount notified by the Seller in accordance with Clause 6.4.1(viii) shall,
in the absence of manifest error, be the amount payable by the Purchaser on
Closing.
    6.4.3  
The Seller’s notification pursuant to Clause 6.4.1 shall, to the extent
practicable, specify the relevant debtor and creditor for each Estimated
Intra-Group Payable and Estimated Intra-Group Receivable.
    6.4.4  
Immediately following Closing:

  (i)  
the Purchaser shall procure that each relevant Group Company or Relevant
Purchaser, as the case may be, repays to the relevant member of the Retained
Group the relevant amount of the Estimated Intra-Group Payables and shall
acknowledge on behalf of each relevant Group Company or Relevant Purchaser, as
the case may be, the payment of the relevant Estimated Intra-Group Receivables
in accordance with Clause 6.4.4(ii); and
    (ii)  
the Seller shall procure that each relevant member of the Retained Group repays
to the relevant Group Company or Relevant Purchaser, as the case may be, the
relevant amount of the Estimated Intra-Group Receivables and shall acknowledge
on behalf of each relevant member of the Retained Group the payment of the
relevant Estimated Intra-Group Payables in accordance with Clause 6.4.4(i).

 

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  6.4.5  
The repayments made pursuant to Clause 6.4.4 shall be adjusted in accordance
with Clause 7.4.1 when the Closing Statement becomes final and binding in
accordance with Clause 7.2.1.

6.5  
Breach of Closing Obligations

   
If any party fails to comply with any material obligation in Clauses 6.2, 6.3
and Schedule 10, the Purchaser, in the case of non-compliance by the Seller or
any other Relevant Sellers, or the Seller, in the case of non-compliance by the
Purchaser or any other Relevant Purchaser, shall be entitled (in addition to and
without prejudice to all other rights or remedies available, including the right
to claim damages) by written notice to the Seller or the Purchaser, as the case
may be:

  6.5.1  
to terminate this Agreement (other than Clauses 1, 13, 14 and 16.2 to 16.17)
without liability on its part or on the part of those on whose behalf notice is
served;

  6.5.2  
to effect Closing so far as practicable having regard to the failures which have
occurred (without limiting its rights under this Agreement); or

  6.5.3  
to fix a new date for Closing (not being more than 20 Business Days after the
agreed date for Closing), in which case the provisions of Schedule 10 shall
apply to Closing as so deferred but provided such deferral may only occur once.

   
If the Agreement is terminated pursuant to Clause 6.5.1, each party’s further
rights and obligations (save in respect of Clauses 1, 13, 14 and 16.2 to 16.17)
shall cease immediately on termination, but termination shall not affect a
party’s accrued rights and obligations as at the date of termination.

6.6  
Stock Take

  6.6.1  
A stock take (the “Closing Stock Take”) will be undertaken during any or all of
Thursday, Friday, Saturday and Sundayclosest to Closing (the “Stock Take
Period”) at the following inventory locations:

  (i)  
Heerlen;
    (ii)  
Charleston;
    (iii)  
Nutberry; and
    (iv)  
Howden.

  6.6.2  
The Closing Stock Take will be undertaken by a reputable firm to be agreed by
the Seller and the Purchaser (each acting reasonably) (the “Stock Take Firm”).

 

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  6.6.3  
The Purchaser and the Seller shall each have the right to be present (or
represented) at the Closing Stock Take.
    6.6.4  
The costs of the Closing Stock Take shall be borne equally between the Seller
and the Purchaser.
    6.6.5  
The Purchaser or the Seller, as the case may be, may, at its sole discretion,
elect that further stock takes are undertaken at locations other than those set
out in Clause 6.6.1, provided that:

  (i)  
such further stock takes are undertaken (i) by the Stock Take Firm (or such
other firm as the Seller and Purchaser may agree (each acting reasonably)) and
(ii) during the Stock Take Period;
    (ii)  
the Seller and the Purchaser shall each have the right to be present (or
represented) at such further stock takes; and
    (iii)  
the costs of such further stock takes shall be borne:

  (a)  
solely by the Purchaser where the Purchaser has made an election pursuant to
Clause 6.6.5;
    (b)  
solely by the Seller where the Seller has made an election pursuant to Clause
6.6.5; or
    (c)  
equally between the Seller and the Purchaser where the Seller and the Purchaser
have each made elections pursuant to Clause 6.6.5.

7  
Post-Closing Adjustments
  7.1  
Closing Statements

   
The Purchaser shall procure that as soon as practicable following Closing, and
in any event within 60 days of Closing, there shall be drawn up a draft of the
Closing Statement (the “Draft Closing Statement”) in accordance with Part 1 of
Schedule 11 in relation to the Group Companies and Group Businesses on a
consolidated basis.

7.2  
Determination of Closing Statement

  7.2.1  
The Draft Closing Statement as agreed or determined pursuant to paragraph 3 of
Part 1 of Schedule 11:

  (i)  
shall constitute the Closing Statement in relation to the Group for the purposes
of this Agreement; and

  (ii)  
shall be final and binding on the parties.

  7.2.2  
The Working Capital, the Group Companies’ Cash Balances, the Third-Party
Indebtedness, the Intra-Group Receivables, the Intra-Group Payables and the
Pension Liability shall be derived from the Closing Statement. For the avoidance
of doubt the Pensions Liability shall be determined pursuant to the provisions
of Schedule 18.

 

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7.3  
Adjustments to Purchase Price

  7.3.1  
Group Companies’ Cash Balances     

     
If:

  (i)  
the Group Companies’ Cash Balances are less than the Estimated Cash, the Seller
shall repay to the Purchaser an amount equal to the deficiency; or

  (ii)  
the Group Companies’ Cash Balances are greater than the Estimated Cash, the
Purchaser shall pay to the Seller an additional amount equal to the excess.

  7.3.2  
Intra-Group Receivables

     
If:

  (i)  
the Intra-Group Receivables are less than the Estimated Intra-Group Receivables,
the Seller shall repay to the Purchaser an amount equal to the deficiency; or

  (ii)  
the Intra-Group Receivables are greater than the Estimated Intra-Group
Receivables, the Purchaser shall pay to the Seller an additional amount equal to
the excess.

  7.3.3  
Third-Party Indebtedness

     
If:

  (i)  
the Third-Party Indebtedness is greater than the Estimated Third-Party
Indebtedness, the Seller shall repay to the Purchaser an amount equal to the
excess; or

  (ii)  
the Third-Party Indebtedness is less than the Estimated Third-Party
Indebtedness, the Purchaser shall pay to the Seller an additional amount equal
to the deficiency.

  7.3.4  
Intra-Group Payables

     
If:

  (i)  
the Intra-Group Payables are greater than the Estimated Intra-Group Payables,
the Seller shall repay to the Purchaser an amount equal to the excess; or

  (ii)  
the Intra-Group Payables are less than the Estimated Intra-Group Payables, the
Purchaser shall pay to the Seller an additional amount equal to the deficiency.

  7.3.5  
Pension Liability

     
If:

  (i)  
the Pension Liability is greater than the Estimated Pension Liability, the
Seller shall repay to the Purchaser an amount equal to the excess; or

  (ii)  
the Pension Liability is less than the Estimated Pension Liability, the
Purchaser shall pay to the Seller an additional amount equal to the deficiency.

 

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7.3.6 Working Capital

     
If:

  (i)  
the Working Capital Adjustment is less than the Estimated Working Capital
Adjustment, the Seller shall repay to the Purchaser an amount equal to the
mathematical difference; or

  (ii)  
the Working Capital Adjustment is greater than the Estimated Working Capital
Adjustment, the Purchaser shall pay to the Seller an additional amount equal to
the mathematical difference.

7.4  
Adjustments to Repayment of Intra-Group Payables and Intra-Group Receivables

  7.4.1  
Following the determination of the Closing Statement pursuant to Clause 7.2 and
paragraph 3 of Part 1 of Schedule 11, if the amount of any Intra-Group Payable
and/or any Intra-Group Receivable contained in the Closing Statement is greater
or less than the amount of the corresponding Estimated Intra-Group Payable or
Estimated Intra-Group Receivable, then the Seller and the Purchaser shall
procure that such adjustments to the repayments pursuant to Clause 6.4.4 are
made as are necessary to ensure that (taking into account such adjustments) the
actual amount of each Intra-Group Payable and each Intra-Group Receivable has
been repaid by the relevant Group Company to the relevant member of the Seller’s
Group or by the relevant member of the Seller’s Group to the relevant Group
Company, as the case may be.

  7.4.2  
The Seller and the Purchaser agree that the payments made pursuant to Clauses
6.4.4 and 7.4.1 shall constitute a good and valid discharge of the Intra-Group
Payables and Intra-Group Receivables.

7.5  
Interest

   
Any payment to be made in accordance with Clauses 7.3 and 7.4 shall include
interest thereon calculated from the Closing Date to the date of payment at a
rate per annum of 1 percentage point above LIBOR. Such interest shall accrue
from day to day.

7.6  
Payment and Allocation

  7.6.1  
Any payment pursuant to Clauses 7.3 or 7.4, and any interest payable pursuant to
Clause 7.5, shall be aggregated and, if any such payment is to be made by both
the Seller and the Purchaser, shall be set off against each other and the
resulting amount (if any) shall be made on or before the Final Payment Date.

  7.6.2  
Where any payment is required to be made pursuant to Clauses 7.3, 7.4 or 7.5 (in
relation to a payment pursuant to Clauses 7.3 or 7.4):

  (i)  
the payment made on account of the Purchase Price shall be reduced or increased
accordingly; and

  (ii)  
the allocation of the Purchase Price shall be adjusted in accordance with
paragraph 5 of Schedule 8.

 

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8  
Post-Closing Obligations
  8.1  
Indemnities

  8.1.1  
Indemnity by Purchaser against Assumed Liabilities     

     
The Purchaser shall indemnify and keep indemnified the Business Sellers against:

  (i)  
all Assumed Liabilities; and

  (ii)  
any Losses which the Business Sellers and/or any other member of the Retained
Group may suffer by reason of the Business Sellers taking any reasonable action
to avoid, resist or defend against, or otherwise in connection with or arising
from, any Assumed Liabilities.

  8.1.2  
Indemnity by Seller against Excluded Liabilities

     
The Seller shall indemnify and keep indemnified the Business Purchasers against:

  (i)  
any Excluded Liability; and

  (ii)  
any Losses which the Business Purchasers and/or any other member of the
Purchaser’s Group may suffer by reason of the Business Purchasers taking any
reasonable action to avoid, resist or defend against, or otherwise in connection
with or arising from, any Excluded Liability.

  8.1.3  
Other Indemnities

     
The Seller shall indemnify and keep indemnified the Indemnified Persons (as
defined in Schedule 19) against those indemnities set out in Schedule 19 in
accordance with and on the terms set out in such Schedule 19.

8.2  
Conduct of Claims

  8.2.1  
Assumed Liabilities     

  (i)  
If any Relevant Seller becomes aware after Closing of any claim which
constitutes or may constitute an Assumed Liability, the Relevant Seller shall as
soon as reasonably practicable (but in any event within such period as will
afford the Relevant Purchaser reasonable opportunity of requiring the Relevant
Seller to lodge a timely appeal) give written notice thereof to the Purchaser
and shall not admit, compromise, settle, discharge or otherwise deal with such
claim without the prior agreement of the Purchaser.
    (ii)  
The Relevant Sellers shall take such action as the Purchaser may reasonably
request to avoid, dispute, resist, appeal, compromise, defend or mitigate any
claim which constitutes or may constitute an Assumed Liability, provided that
(a) the Relevant Purchasers accept liability to the Relevant Sellers for such
claim, (b) the Relevant Purchasers indemnify and secure the Relevant Sellers to
their reasonable satisfaction against all Losses which may thereby be incurred
and (c) the Relevant Sellers shall not be obliged to take any action or omit to
do anything which would have a material adverse effect on the commercial
interests of the Retained Group as a whole. In connection therewith, the
Relevant Sellers shall (subject to duties of legal privilege and at the
Purchaser’s cost) make, or procure to be made, available to the Relevant
Purchasers or their duly authorised agents on reasonable notice during normal
business hours all relevant books of account, records and correspondence
relating to the Group Businesses which have been retained by the Relevant
Sellers (and shall permit the Relevant Purchasers to take copies thereof) for
the purposes of enabling the Relevant Purchasers to ascertain or extract any
information relevant to the claim.

 

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  8.2.2  
Excluded Liabilities etc.

  (i)  
If any Relevant Purchaser becomes aware after Closing of any claim which
constitutes or may constitute an Excluded Liability or which could give rise to
a liability for a member of the Purchaser’s Group in respect of which it is
entitled to be indemnified by a Relevant Seller, the Relevant Purchaser shall,
as soon as reasonably practicable (but in any event within such period as will
afford the Relevant Seller reasonable opportunity of requiring the Relevant
Purchaser to lodge a timely appeal), give written notice thereof to the Seller
and shall not admit, compromise, settle, discharge or otherwise deal with such
claim without the prior agreement of the Seller.
    (ii)  
The Relevant Purchasers shall take such action as the Relevant Sellers may
reasonably request to avoid, dispute, resist, appeal, compromise, defend or
mitigate any claim which constitutes or may constitute an Excluded Liability,
provided that (a) the Relevant Sellers accept liability to the Relevant
Purchasers for such claim, (b) the Relevant Sellers indemnify and secure the
Relevant Purchasers to their reasonable satisfaction against all Losses which
may thereby be incurred and (c) the Relevant Purchasers shall not be obliged to
take any action or omit to do anything which would or could reasonably be
expected to have an adverse effect on the commercial interests of it or any
member of the Purchaser’s Group. In connection therewith, the Relevant
Purchasers shall (subject to duties of legal privilege and at the Seller’s cost)
make or procure to be made available to the Relevant Sellers or their duly
authorised agents on reasonable notice during normal business hours all relevant
books of account, records and correspondence relating to the Group Businesses
which are in the possession of the Relevant Purchasers (and shall permit the
Relevant Sellers to take copies thereof) for the purposes of enabling the
Relevant Sellers to ascertain or extract any information relevant to the claim.

8.3  
Pre-Sale Reorganisation Transactions

  8.3.1  
The Seller shall, or shall procure that the Relevant Seller shall, indemnify and
keep indemnified the Purchaser’s Group against any Liability and Losses or
increase in any Liability or Losses:

  (i)  
which the Purchaser, Relevant Purchaser or Group Company would not have incurred
but for the Pre-Sale Reorganisation Transactions; and
    (ii)  
to the extent it arises solely and directly out of the implementation of, or
failure to implement, the Pre-Sale Reorganisation Transactions (or any part of
it), provided that this Clause 8.3.1 shall not apply to the extent that any such
Liability or Loss, or increase in such Liability or Loss, is the subject of any
other indemnity given for the benefit of any Group Company or other members of
the Purchaser’s Group.

 

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  8.3.2  
The Purchaser shall, or shall procure that the Relevant Purchaser shall,
indemnify and keep indemnified the Retained Group against any Liability and
Losses or increase in any Liability or Losses:

  (i)  
which the Seller or any member of the Retained Group would not have incurred but
for the matters set out in paragraph 2.1 of Schedule 10 (the “Purchaser
Acquisition Structure”); and
    (ii)  
to the extent it arises solely and directly out of the implementation of the
Purchaser Acquisition Structure (or any part of it),

     
provided that this Clause 8.3.2 shall not apply to the extent that any such
Liability or Loss, or increase in Liability or Loss, is the subject of any other
indemnity given for the benefit of the Seller or any other member of the
Retained Group.

  8.3.3  
The Seller and other Relevant Sellers, on the one hand, and the Purchaser and
other Relevant Purchasers, on the other hand, agree that:

  (i)  
from Scotts Italia Consumer Business Closing, the benefit of the Scotts Italia
Consumer Business Receivables shall be assigned to the relevant member of the
Retained Group to whom Scotts Italia S.r.l.’s Consumer Business in Italy has
transferred, and such member of the Retained Group shall be entitled to invoice,
collect and receive the Scotts Italia Consumer Business Receivables for its own
account;

  (ii)  
from Closing, the Purchaser shall, and shall procure that the relevant member of
the Purchaser’s Group shall:

  (a)  
at the Seller’s request and expense, take such steps as the Seller shall
reasonably require to assist the Seller to collect the Scotts Italia Consumer
Business Receivables (including threatening to commence or commencing legal
proceedings for the recovery of any Scotts Italia Consumer Business Receivables
in its name); and

  (b)  
account for and pay to the Seller any Scotts Italia Consumer Business
Receivables paid to it as soon as practicable after and, in any event, within 10
Business Days of receipt, and shall hold all Scotts Italia Consumer Business
Receivables paid to it on trust for the Seller until they are paid to the
Seller; and

  (iii)  
for the purposes of this Clause 8.3.3:

  (a)  
“Scotts Italia Consumer Business Closing” means the completion of the transfer
of Scotts Italia S.r.l.’s Consumer Business in Italy from Scotts Italia S.r.l.
to a member of the Retained Group as contemplated by Schedule 17; and

  (b)  
“Scotts Italia Consumer Business Receivables” means the aggregate amount (as at
the date of Scotts Italia S.r.l’.s Consumer Business Closing ) of outstanding
accounts receivable (including all trading debt or liabilities arising in the
ordinary course) owed to Scotts Italia S.r.l. to the extent they relate to
Scotts Italia S.r.l.’s Consumer Business in Italy by any person other than any
other member of the Retained Group.

 

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8.4  
The Relevant Sellers’ Continuing Obligations

   
Notwithstanding Closing, the Seller shall, and shall procure that each other
Relevant Seller shall:

  8.4.1  
pending registration of any Relevant Purchaser as owner of the relevant Shares,
exercise all voting and other rights in relation to such Shares in accordance
with the Relevant Purchaser’s instructions;

  8.4.2  
subject to Schedule 10 and the Know-how Assignment and save as comprised in the
Business Records transferred to the Purchaser or any Relevant Purchaser pursuant
to this Agreement, retain for a period of five years from Closing or such longer
period as is required by law or regulation the books of account, records,
documents and information relating to the Group to the extent they relate to the
period prior to Closing and shall provide to the Purchaser all such information
in its possession or under its control as the Purchaser shall from time to time
reasonably require (both before and after Closing) relating to the business of
the Group and shall allow the Purchaser and the other Relevant Purchasers
reasonable access to such books, records, documents and information, including
the right to take copies at the Purchaser’s or the other Relevant Purchasers’
expense; and

  8.4.3  
promptly upon receipt forward to the Purchaser all notices, correspondence,
information, orders or enquiries relating to the Group which it receives and
assign to the Purchaser all orders relating to the Group which it receives.

8.5  
The Relevant Purchasers’ Continuing Obligations

  8.5.1   Each of the Relevant Purchasers shall:     

  (i)  
as soon as reasonably practicable after the Closing Date and in any event within
30 days thereafter use its best endeavours to apply to or notify the relevant
registry that the name of any Group Company which it acquires and which consists
of or incorporates the word “Scotts” has been changed to a name which does not
include “Scotts” or any name which, in the reasonable opinion of the Seller, is
substantially or confusingly similar with the name “Scotts”; and
    (ii)  
as soon as reasonably practicable after the Closing Date and, except as
permitted under the Trade Mark Licence Agreements and the Supply Agreements,
procure that no member of the Purchaser’s Group shall, after Closing, use in any
way whatsoever any trading names or registered or unregistered trade marks owned
by any member of the Retained Group (excluding the Assigned Intellectual
Property) or any mark, name or logo which, in the reasonable opinion of the
Seller, is substantially or confusingly similar to any of them, provided that
(save as aforesaid) the Relevant Purchasers shall have six months or, in the
case of packaging requirements relating to Professional Business Product
Registrations, two years from Closing to procure that all such trading names and
trade marks are removed from all business stationery, all other assets acquired
by the Relevant Purchasers pursuant to this Agreement, any Local Transfer
Document or any other relevant Transaction Document and from all premises
occupied by the Relevant Purchasers, the Group Companies or any other member of
the Purchaser’s Group in connection with the Group.

 

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  8.5.2  
The Purchaser and the Seller agree and acknowledge that the provisions of Clause
8.5.1 shall not apply to the use of such trading names, trade marks, marks,
names or logos in respect of products relating to Professional Business Product
Registrations to the extent expressly permitted under Part 7 of Schedule 4.
    8.5.3  
The Purchaser and the other Relevant Purchasers shall, and shall procure that
the relevant Group Companies shall, retain for a period of five years from
Closing the corporate books, records and documents of the Group to the extent
they relate to the period prior to Closing (including the Business Records) and
shall provide to the Seller all such information in their possession or under
their control as the Seller shall from time to time reasonably require (both
before and after Closing) relating to the business of the Group prior to Closing
and shall, and shall procure that the relevant Group Companies shall, allow the
Seller and the other Relevant Sellers reasonable access to such books, records,
documents and information, including the right to take copies at the Seller’s or
the other Relevant Sellers’ expense.
    8.5.4  
If, following Closing, the Purchaser is actually aware that any property, right
or asset not predominantly used for the business of the Group has been
transferred to a Relevant Purchaser under or pursuant to this Agreement in
error, the Relevant Purchaser shall transfer such property, right or asset (and
any related liability which is an Assumed Liability) as soon as practicable, but
in any event within 45 Business Days following the Purchaser becoming actually
aware of this issue, to the transferor or another member of the Seller’s Group
nominated by the Seller reasonably acceptable to the Purchaser. The Seller shall
indemnify and keep indemnified the Purchaser or the other Relevant Purchaser
against any Liability in respect of Taxation arising in respect of such asset or
the transfer thereof. To the extent such property, right or asset was reflected
in the Closing Statement, the Seller shall procure that the transferor or the
nominated member of the Seller’s Group shall pay as consideration an amount
equal to that at which it (together with any such related liability) was
reflected in the Closing Statement, adjusted to take account of any benefit
enjoyed and any Loss suffered by the Purchaser’s Group in respect of such
property, right or asset from Closing until the date of transfer. Any dispute as
to the amount of the consideration shall be determined in accordance with this
Clause 8.5.4 by the Reporting Accountants on the application of the Seller or
the Purchaser. The provisions of paragraphs 3.2 to 3.11 of Part 1 of Schedule 11
shall apply mutatis mutandis to the engagement and determination of the
Reporting Accountants pursuant to this Clause 8.5.4.

8.6  
Research and Development Co-operation

   
Representatives of the Research & Development (“R&D”) teams of both the Seller
and the Purchaser will for 10 years from Closing meet twice a year to discuss in
confidence the status of R&D projects which each, in its sole discretion,
considers potentially to be of interest to the other for use in the Consumer
Business or Professional Business (as appropriate) and, in respect of any
projects which are of interest, negotiate in good faith commercial arm’s length
terms for further collaboration.

 

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8.7  
Humax Litigation

  8.7.1  
The Purchaser shall, following Closing, take such action as the Seller may
reasonably request to avoid, dispute, deny, defend, resist, appeal, compromise
or contest (including making counterclaims or other claims against
third-parties) all or any proceedings or any part of any proceedings which
comprise the Humax Litigation, subject to the Purchaser being paid all
reasonable costs and expenses incurred by it in complying with the Seller’s
requests and provided that the Purchaser shall not be required to agree to incur
any liabilities, obligations or restrictions which restrict or impair the
operations or businesses of the Purchaser’s Group.

  8.7.2  
The Purchaser shall, subject to its being promptly paid all costs and expenses
properly incurred by it, give or procure to be given to the Seller or its duly
authorised agents all such information and assistance, including access to
premises and personnel, and the right to examine and copy or photograph any
assets, accounts, documents and records, in each case during normal business
hours, as the Seller may reasonably request in connection with the Humax
Litigation, provided that the Purchaser shall not be required to provide such
information and assistance to the extent that it unreasonably interferes with
the ongoing operations of the Purchaser’s Group.

8.8  
Website forwarding

  8.8.1  
The Seller shall, in respect of any websites owned, maintained, used or
controlled by the Retained Group at the Closing Date, for a period of five years
from Closing maintain any page through which the domain names identified at
paragraph 1.3 of Part 1 of Schedule 4 are accessed and procure that any links to
those domain names are maintained and procure that the pages through which the
domain names are accessed shall be reasonably visibly marked with a notice in
substantively the following form (with the outstanding details to be agreed
between the parties):

      “The Professional business of The Scotts Company LLC was sold to Israel
Chemicals Ltd. in [month] 2011. [•] and its subsidiaries are now accordingly
financially and legally independent. Please click on this link for information
about these companies at (www.[•].com). If you are looking for information about
Israel Chemicals Ltd. or for any information related to any Professional Scotts®
or Osmocote® products or other Professional products, please click on this link
(www.[•].com).”

 

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  8.8.2  
The Purchaser shall, in respect of any websites owned, maintained, used or
controlled by the Group at the Closing Date, including those websites hosted at
the domain names identified at paragraph 1.3 of Part 1 of Schedule 4, for a
period of five years from Closing maintain any page through which any websites
owned, maintained, used or controlled by the Retained Group at the Closing Date
are accessed, procure that any links to those websites are maintained and
procure that the pages through which the domain names are accessed shall be
reasonably visibly marked with a notice in substantively the following form
(with the outstanding details to be agreed between the parties):

      “The Professional business of The Scotts Company LLC was purchased by
Israel Chemicals Ltd. in [month] 2011. [•] and its subsidiaries are now
accordingly financially and legally independent. Please click on this link for
information about these companies at (www.[•].com). If you are looking for
information about The Scotts Company LLC or for any information related to any
Consumer Scotts® or Osmocote® products or other Consumer products, please click
on this link (www.[•].com).”

8.9  
Professional Seed

  8.9.1  
The Retained Group shall use reasonable endeavours to ensure the continued
supply of the TSE Seed Varieties to the Purchaser’s Group after Closing on terms
and conditions that are no less favourable than the terms and conditions upon
which, at the date of the Offer Letter, the Group enjoys the TSE Seed Varieties.

  8.9.2  
The Seller shall procure that, in the event that it acquires 100 per cent. of
the shares of TSE and for as long as the Seller continues to own or control 100
per cent. of the shares of TSE, the Seller will pay to the Purchaser 40 per
cent. of operating income (net of expenses) that is attributable to TSE in the
form of an annual rebate, annual price adjustment or any other methodology
agreed by the Seller and the Purchaser in a manner which is tax deductible for
the Seller (directly or indirectly) and the Seller shall provide such financial
information as the Purchaser may reasonably require in order to verify the
amount of the payment.

  8.9.3  
In the event that the Seller decides to sell its North American professional
seed business, it shall first offer to the Purchaser the opportunity to acquire
such business on such terms as the Seller and the Purchaser may agree. If the
terms cannot be agreed between the parties the Seller may elect not to sell such
business or, if the Seller receives a better offer from a third-party, the
Seller may sell to such third—party on the terms of that better offer.

  8.9.4  
If the Seller acquires 100 per cent. of the shares of TSE and subsequently
decides to:

  (i)  
sell TSE, it shall first offer to the Purchaser the opportunity to acquire TSE
on such terms as the Seller and the Purchaser may agree. If the terms cannot be
agreed between the parties the Seller may elect not to sell such business or, if
the Seller receives a better offer from a third-party, the Seller may sell to
such third-party on the terms of that better offer; or
    (ii)  
dissolve TSE, the terms of Clause 8.9.1 shall apply.

9  
Warranties
  9.1  
The Sellers’ Warranties

  9.1.1  
The Relevant Sellers jointly and severally warrant to the Relevant Purchasers
that the statements set out in Schedule 12 are true and accurate as of the date
of the Offer Letter and, for this purpose, an express or implied reference in a
Sellers’ Warranty to the “date of this Agreement” or a similar expression is to
be construed as a reference to the date of the Offer Letter.

 

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  9.1.2  
Save in respect of the Sellers’ Warranties contained in paragraphs 4.3, 4.4 and
16 of Schedule 12, which shall be given in respect of all matters the subject of
the Sellers’ Warranties, the only Sellers’ Warranties given:

  (i)  
in respect of the Properties are those contained in paragraphs 4.1, 4.2 and 9.3
of Schedule 12 and each of the other Sellers’ Warranties shall be deemed not to
be given in respect of the Properties;
    (ii)  
in respect of Intellectual Property are those contained in paragraphs 5.1 and
5.2 of Schedule 12 and each of the other Sellers’ Warranties shall be deemed not
to be given in respect of Intellectual Property;
    (iii)  
in respect of the Business IT and data protection are those contained in
paragraphs 5.3 and 5.4 of Schedule 12, respectively, and each of the other
Sellers’ Warranties shall not be given in respect of Business IT and data
protection;
    (iv)  
in respect of employment or pension matters or Group Retirement Benefit
Arrangements are those contained in paragraph 7 of Schedule 12 and each of the
other Sellers’ Warranties shall be deemed not to be given in respect of such
matters;
    (v)  
in respect of anti-trust, fair trading, dumping, state and consumer protection
or similar matters are those contained in paragraph 10 of Schedule 12 and each
of the other Sellers’ Warranties shall be deemed not to be given in respect of
such matters;
    (vi)  
in respect of products or services manufactured, sold or supplied by any Group
Company or Group Business are those contained in paragraphs 8 and 13 of
Schedule 12 and each of the other Sellers’ Warranties shall be deemed not to be
given in respect of such matters;
    (vii)  
in respect of the Environment or Environmental Law are those contained in
paragraph 9 of Schedule 12 and each of the other Sellers’ Warranties shall be
deemed not to be given in respect of the Environment or Environmental Law; and
    (viii)  
in respect of Tax matters are the Tax Warranties and each of the other Sellers’
Warranties shall be deemed not to be given in respect of such matters.

  9.1.3  
Each of the Sellers’ Warranties shall be separate and independent and shall not
be limited by reference to any other paragraph of Schedule 12, except as
otherwise provided in this Agreement.
    9.1.4  
Any Sellers’ Warranty qualified by the expression “so far as the Relevant
Sellers are aware” or “so far as the Seller is aware” or any similar expression
shall, unless otherwise stated, be deemed to refer to the actual knowledge of
the persons whose names are set out in Schedule 14.

 

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  9.1.5  
The Seller and each of the other Relevant Sellers waives and may not enforce any
right which it may have in respect of any misrepresentation, inaccuracy or
omission in or from any information or advice supplied or given by any Group
Company or any Relevant Employees in enabling the Seller and the other Relevant
Sellers to give the Sellers’ Warranties and any representations or to prepare
the Disclosure Letter.

9.2  
Relevant Sellers’ disclosures

  9.2.1  
The Sellers’ Warranties are subject to the following matters:     

  (i)  
all matters which are Fairly Disclosed in the Disclosure Letter or in the
documents provided in the Data Room;
    (ii)  
all matters which would be revealed by making a search three Business Days prior
to the date of the Offer Letter of the corporate registry, including any public
filings required under US Securities Act Laws, which relates to a Group Company
or any Business Seller, as applicable, in any of the following jurisdictions:
the state of Ohio, the state of Delaware, the United Kingdom, The Netherlands,
Italy, Spain, France, Germany, Poland, Malaysia, Australia and Kenya;
    (iii)  
all matters which would be revealed by making searches three Business Days prior
to the date of the Offer Letter of the public files, including any online
databases that can be accessed by the public, maintained by any national or
supranational Intellectual Property registry;
    (iv)  
all matters relating to the Properties which would be revealed by making
enquiries or a search three Business Days prior to the date of the Offer Letter
of any public registry which relates to the Properties in any of the following
jurisdictions: The Netherlands, Italy, Hungary, Spain, Germany, Kenya, the
United States, Malaysia and the United Kingdom;
    (v)  
all matters Fairly Disclosed in the Seller Information Document;
    (vi)  
all matters Fairly Disclosed in the Data Pack; and
    (vii)  
all matters Fairly Disclosed in this Agreement.

  9.2.2  
References in the Disclosure Letter to paragraph numbers shall be to the
paragraphs in Schedule 12 to which the disclosure is most likely to relate. Such
references are given for convenience only and shall not limit the effect of any
of the disclosures, all of which are made against the Sellers’ Warranties as a
whole.

9.3  
Updating of the Sellers’ Warranties to Closing

  9.3.1  
Subject to Clause 9.2, the Relevant Sellers further warrant to the Relevant
Purchasers that each of the Sellers’ Warranties contained in paragraphs 1.1,
4.1.4, 4.1.5, 4.1.10, 4.1.11, 4.1.13, 4.1.18(i), 4.2.2, 4.3.1, 4.3.2, 4.3.3,
4.4, 5.1.2, 5.1.11, 5.2.1, 8.1, 8.2.1, 8.2.2(i), 8.2.2 (ii), 8.2.3, 9.5, 11.1,
11.2, 13.4, 16 and 17 of Schedule 12 will be true and accurate in all respects
immediately prior to Closing as if they had been repeated immediately prior to
Closing and, for this purpose, an express or implied reference in a Warranty to
the “date of this Agreement” or “the date of the Offer Letter” or a similar
expression is to be construed as a reference to the Closing Date.

 

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  9.3.2  
In respect of certain of the Sellers’ Warranties being given pursuant to Clause
9.3.1, the wording of the warranties shall be amended, such that, in the
Sellers’ Warranty:

  (i)  
at the end of the fourth line of paragraph 8.1 in Schedule 12, the words “any
Group Company or Group Business” shall be replaced by the words “the Group as a
whole”;
    (ii)  
in the first line of paragraph 8.2.2(ii) of Schedule 12, the word “material”
shall be added after the words “there is no...”;
    (iii)  
in the fourth line of paragraph 8.2.3 of Schedule 12, the word “material” shall
be added after the words “body with respect to a...”;
    (iv)  
in the fifth line of paragraph 8.2.4 of Schedule 12, the word “material” shall
be added after the words “omission of which is in...”;
    (v)  
in the last line of paragraph 11.1 of Schedule 12, the figure “£250,000” shall
be replaced by the figure “£500,000”; and
    (vi)  
in the second line of paragraph 11.2 of Schedule 12, the figure “£250,000” shall
be replaced by the figure “£500,000”.

9.4  
The Purchaser’s and other Relevant Purchasers’ Warranties

  9.4.1  
Each of the Purchaser and the other Relevant Purchasers warrant to the Relevant
Sellers that the statements set out in Schedule 13 are true and accurate as of
the date of the Offer Letter.
    9.4.2  
Each of the Purchaser and the other Relevant Purchasers further warrant to the
Relevant Sellers that the statements set out in Schedule 13 (save for paragraph
3 of Schedule 13) will be true and accurate in all respects immediately prior to
Closing Date as if they had been repeated immediately prior to the Closing Date.

9.5  
Breach of Sellers’ Warranties

  9.5.1  
Between the date of the Offer Letter and the Closing Date the Seller agrees that
it will, as soon as reasonably practicable upon becoming aware of the same,
disclose in writing to the Purchaser any event or circumstance which has arisen
which constitutes a breach of or is inconsistent with any of the Sellers’
Warranties or which might reasonably be expected to make any of them inaccurate
or misleading when given.
    9.5.2  
If on or before Closing:

  (i)  
the Seller or any other Relevant Seller is in material breach of any of the
Termination Warranties (as defined in Clause 9.5.8 below) when given at the date
of this Agreement; or
    (ii)  
the Seller or any other Relevant Seller would be in material breach of any of
the Termination Warranties when repeated at Closing in accordance with Clause
9.3 notwithstanding the disclosure of the matter giving rise to the breach
following the date of this Agreement),

 

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the Purchaser shall be entitled to (a) terminate this Agreement (other than
Clauses 1, 9.5.4, 9.5.5, 9.5.6, 13, 14 and 16.2 to 16.17) without liability on
its part or the part of those on whose behalf notice is served or (b) proceed to
Closing.

  9.5.3  
For the purposes of Clause 9.5.2, “in material breach” means a breach of the
relevant Sellers’ Warranty which will have or is expected to have a material
adverse effect on the Group as a whole.

  9.5.4  
If the Agreement is terminated pursuant to Clause 9.5.2, each party’s further
rights and obligations (save in respect of this Clause 9.5.4, Clauses 1, 9.5.5,
9.5.6, 13, 14 and 16.2 to 16.17) shall cease immediately on termination, but
termination shall not affect a party’s accrued rights and obligations as at the
date of termination.

  9.5.5  
If the Purchaser terminates this Agreement in accordance with Clause 9.5.2, the
Seller will pay the Purchaser the Break Fee no later than five Business Days
after the date on which the Agreement is terminated in the form of an electric
funds transfer to a bank account nominated by the Purchaser.

  9.5.6  
Any payment received by the Purchaser pursuant to Clause 9.5.5 will be without
prejudice to all other rights or remedies available to the Purchaser, including
the right to claim damages.

  9.5.7  
If the Purchaser elects to proceed to Closing in accordance with Clause 9.5.2:

  (i)  
the Seller shall remain liable (subject to the other provisions of this
Agreement) to the Purchaser notwithstanding the disclosure of the matter giving
rise to such breach; and

  (ii)  
the Purchaser shall not incur any liability by virtue of the provisions of
Clause 9.4.2.

  9.5.8  
For the purposes of this Clause 9.5, the “Termination Warranties” are those
contained in paragraphs 1.1, 4.1.4, 4.3.1, 4.3.2, 4.3.3, 5.1.2, the first
sentence of 8.1, 8.2.1, 16 and 17 of Schedule 12.

10  
Limitation of Seller’s and Other Relevant Sellers’ Liability
  10.1  
Time Limitation for Claims

   
No member of the Retained Group shall be liable under this Agreement (save in
respect of (i) Clauses 8, 12, 13 (to the extent it relates to a claim under
Clauses 8, 12, 14, 15 or 16 or Schedule 19), 14, 15 and 16 or (ii) Schedule 19)
or under the Tax Indemnity in respect of any claim unless written notice of the
claim on a without prejudice basis is given by the Purchaser to the Seller
specifying the matters set out in Clause 11.2 (or in the case of the Tax
Warranties in accordance with clause 7.1 of the Tax Indemnity):

  10.1.1  
in the case of any claim under the Tax Warranties or under the Tax Indemnity, by
no later than the date that is five years following Closing or, if later,
30 days after the expiry of the period specified by statute during which an
assessment of the liability to Tax giving rise to that claim under the Tax
Warranties or under the Tax Indemnity may be made by the relevant Tax Authority;

 

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  10.1.2  
in the case of any claims under the Sellers’ Warranties made under paragraphs
1.1, 4.1.4, 16 and 17 of Schedule 12 by no later than the date that is six years
following the Closing Date; and

  10.1.3  
in the case of any other claim, by no later than the date that is 20 months
following the Closing Date.

  10.1.4  
In the case of any claim under paragraph 2 of Schedule 19, paragraph 2.3 of
Schedule 19 shall apply.

10.2  
Minimum Claims

  10.2.1  
No member of the Retained Group shall be liable under this Agreement (other than
the Sellers’ Warranties made under paragraphs 1.1, 4.1.4, 16 and 17 of
Schedule 12 and the indemnities set out in Schedule 19) in respect of any
individual claim (or a series of such claims arising from substantially
identical facts or circumstances) where the liability agreed or determined
(disregarding the provisions of this Clause 10.2) in respect of any such claim
or series of claims does not exceed US$150,000.

  10.2.2  
Where the liability agreed or determined in respect of any such claim or series
of claims exceeds US$150,000, subject as provided elsewhere in this Clause 10,
the Seller or such other member of the Seller’s Group shall be liable for the
full amount of the claim or series of claims as agreed or determined.

10.3  
Aggregate Minimum Claims

  10.3.1  
No member of the Retained Group shall be liable under any Sellers’ Warranty or
otherwise under this Agreement (save in respect of Clauses 2.1, 2.2 and 2.3 of
this Agreement, the Sellers’ Warranties made under paragraphs 1.1, 4.1.4, 16 and
17 of Schedule 12 and the indemnities set out in Schedule 19) in respect of any
claim unless the aggregate amount of all such claims for which the Seller or
such other member of the Seller’s Group would otherwise be liable under the
Sellers’ Warranties (or otherwise under this Agreement other than Clauses 2.1,
2.2 and 2.3 of this Agreement, the Sellers’ Warranties made under paragraphs
1.1, 4.1.4, 16 and 17 of Schedule 12 or the indemnities set out in Schedule 19)
(disregarding the provisions of this Clause 10.3) exceeds US$1,750,000.

  10.3.2  
Where the aggregate liability agreed or determined in respect of any claims
exceeds US$1,750,000, subject as provided elsewhere in this Clause 10, the
Seller or such other member of the Seller’s Group shall be liable for the
aggregate amount of all claims as agreed or determined.

10.4  
Maximum Liability

  10.4.1  
The aggregate liability of all members of the Retained Group in respect of all
claims under this Agreement and the Tax Indemnity (excluding any claims made
pursuant to (i) paragraph 4 of Part 1 of Schedule 19, (ii) paragraph 5 of Part 1
of Schedule 19, and (iii) clause 2.1.2 of the Tax Indemnity (secondary tax
liabilities)) shall not exceed 100 per cent. of the Purchase Price.

 

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  10.4.2  
Subject to Clause 10.4.1:

  (i)  
the aggregate liability of all members of the Retained Group in respect of all
claims under paragraph 2 of Part 1 of Schedule 19 shall not exceed 75 per cent.
of the Purchase Price;

  (ii)  
the aggregate liability of all members of the Retained Group in respect of all
claims made pursuant to the Sellers’ Warranties (excluding any claims made
pursuant to the Sellers’ Warranties made under paragraphs 1.1, 4.1.4, 16 and 17
of Schedule 12) and all claims made pursuant to paragraph 3 of Schedule 19 shall
not exceed US$81 million; and

  (iii)  
the aggregate liability of all members of the Retained Group in respect of
claims made pursuant to Clause 5.3.3 and Schedule 20 shall not exceed
US$3 million.

10.5  
Contingent Liabilities

   
No member of the Retained Group shall be liable to make any payment under this
Agreement or under the Tax Indemnity in respect of any liability which is
contingent unless and until such contingent liability ceases to be contingent or
becomes capable of being quantified.

10.6  
Indirect or Consequential Losses

   
No member of the Retained Group shall be liable under this Agreement (other than
the Sellers’ Warranties made under paragraphs 1.1, 4.1.4, 16 and 17 of
Schedule 12) or under the Tax Indemnity in respect of any indirect or
consequential losses.

10.7  
Provisions

   
No member of the Retained Group shall be liable under any Sellers’ Warranty
(other than the Sellers’ Warranties made under paragraphs 1.1, 4.1.4, 16 and 17
of Schedule 12) in respect of any claim if and to the extent that any proper
allowance, provision or reserve for the matter giving rise to the claim is
expressly or specifically made in the Accounts or is expressly or specifically
provided for or otherwise taken into account in the Closing Statement or in any
consequential adjustment to the Purchase Price.

10.8  
Matters Arising Subsequent to this Agreement

   
No member of the Retained Group shall be liable under this Agreement (other than
the Sellers’ Warranties made under paragraphs 1.1, 4.1.4, 16 and 17 of
Schedule 12, paragraphs 2 to 5 of Schedule 19 (save in relation to Clause 10.8.2
below) and the Tax Warranties, to which, for the avoidance of doubt, the
provisions of the Tax Indemnity shall apply) in respect of any matter, act,
omission or circumstance (or any combination thereof), including the aggravation
of a matter or circumstance and any Losses arising therefrom, to the extent that
it is a result of:

  10.8.1  
Agreed Matters

     
any matter or thing done or omitted to be done pursuant to and in compliance
with any Transaction Document or otherwise at the request in writing or with the
approval in writing of the Purchaser or any other Relevant Purchaser or any
other member of the Purchaser’s Group;

 

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  10.8.2  
Acts of the Purchaser’s Group

     
any act, omission or transaction carried out by or on behalf of the Purchaser or
any other Relevant Purchaser or any other member of the Purchaser’s Group after
Closing other than in the ordinary course of business or pursuant to a legally
binding commitment entered into on or before Closing;

  10.8.3  
Changes in Legislation

  (i)  
the passing of, or any change in, after the date of the Offer Letter, any law,
rule, regulation or administrative practice of any Government Authority,
including (without prejudice to the generality of the foregoing) any increase in
the rates of Taxation or any imposition of Taxation or any withdrawal of relief
from Taxation not actually (or prospectively) in effect at the date of the Offer
Letter; or

  (ii)  
any change after the date of the Offer Letter of any interpretation or
application of any legislation by courts; or

  10.8.4  
Accounting and Taxation Policies

     
any change in accounting or Taxation policy, bases or practice of the Purchaser
or any other Relevant Purchaser or any other member of the Purchaser’s Group
introduced or having effect after Closing.

10.9  
Insurance

   
Without prejudice to Clause 15, no member of the Retained Group shall be liable
under any Sellers’ Warranty (other than the Tax Warranties, to which, for the
avoidance of doubt, the provisions of the Tax Indemnity shall apply) and under
any other claim under this Agreement (other than under Clauses 12 and 14, and
Schedule 19), in respect of any claim to the extent that the Losses in respect
of which such claim is made are recovered under a policy of insurance by any
member of the Purchaser’s Group and the Purchaser shall procure that reasonable
steps are taken to enforce recovery against the third-party and any actual
recovery (less any reasonable costs, charges, increases in premia and expenses
incurred in obtaining such recovery and less any Taxation attributable to such
recovery) shall reduce or satisfy, as the case may be, such claim to the extent
of such recovery.

10.10  
Mitigation of Losses

   
The Purchaser shall procure that all reasonable steps are taken and all
reasonable assistance is given to avoid or mitigate any Losses which, in the
absence of mitigation, could reasonably be expected to give rise to or increase
a Loss in respect of any claim under any Sellers’ Warranty and any other
provision of this Agreement (other than under Clauses 12 and 14, and
Schedule 19) provided that this Clause 10.10:

  (i)  
shall not oblige the Purchaser to incur any costs or expenses which would not be
recoverable under any claim; and

  (ii)  
shall not oblige the Purchaser to do anything which is reasonably likely to have
a materially negative effect on the Purchaser’s reputation.

 

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10.11  
Purchaser’s and Other Relevant Purchasers’ Right to Recover

  10.11.1  
Prior to Recovery from a Member of the Seller’s Group     

     
If any member of the Seller’s Group is liable to pay an amount in discharge of
any claims under any Sellers’ Warranty (other than the Tax Warranties, to which,
for the avoidance of doubt, the provisions of the Tax Indemnity shall apply) and
the Purchaser, any other Relevant Purchaser or any other member of the
Purchaser’s Group recovers or is entitled to recover (whether by payment,
discount, credit, relief, insurance or otherwise) from a third-party a sum which
indemnifies or compensates the Purchaser, any other Relevant Purchaser or any
other member of the Purchaser’s Group (in whole or in part) in respect of the
Loss which is the subject matter of the claim, the Purchaser shall procure that
where permitted under the terms of any relevant insurance policy, before steps
are taken to enforce a claim against any member of the Retained Group following
notification under Clause 11.2 of this Agreement, all reasonable steps are taken
to ensure recovery against the third-party and any actual recovery (less any
reasonable costs, charges and expenses incurred in obtaining such recovery and
less any Taxation attributable to such recovery) shall reduce or satisfy, as the
case may be, such claim to the extent of such recovery.

  10.11.2  
Following Recovery from a Member of the Seller’s Group

     
If any member of the Seller’s Group has paid an amount in discharge of any claim
under any Sellers’ Warranty (other than the Tax Warranties, to which, for the
avoidance of doubt, the provisions of the Tax Indemnity shall apply) or under
any other provision of this Agreement (other than Schedule 19) and the
Purchaser, any other Relevant Purchaser or any other member of the Purchaser’s
Group recovers from a third-party a sum which indemnifies or compensates the
Purchaser, any other Relevant Purchaser or any other member of the Purchaser’s
Group (in whole or in part) in respect of the Loss which is the subject matter
of the claim (the “Third-Party Recovery”) and the aggregate amount of the
Third-Party Recovery and the amount paid by the relevant member of the Seller’s
Group together (the “Total Sum Recovered”) exceeds the amount of the relevant
Loss, the Purchaser shall, or shall procure that the relevant member of the
Purchaser’s Group shall, pay to the Seller as soon as practicable after receipt
of the Third-Party Recovery a sum equal to the lesser of (i) the amount by which
the Total Sum Recovered exceeds the relevant Loss or (ii) the amount paid by the
relevant member of the Seller’s Group in respect of such Loss, in either case
less any costs, charges and expenses incurred in obtaining the Third-Party
Recovery and less any Taxation attributable to the Third-Party Recovery.

10.12  
Double Claims

   
No member of the Purchaser’s Group shall be entitled to recover from any member
of the Seller’s Group under any Transaction Document more than once in respect
of the same Loss suffered.

10.13  
Fraud

   
None of the limitations contained in this Clause 10 shall apply to any claim
which arises or is increased, or to the extent to which it arises or is
increased, as the consequence of, or which is delayed as a result of, fraud or
wilful misconduct by the Seller or any member of the Seller’s Group.

 

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10.14  
Limitations and Claims in Part 7 of Schedule 4

   
Clauses 10 and 11 shall not apply to Part 7 of Schedule 4, except to the extent
indicated in paragraph 12 of Part 7 of Schedule 4.

11  
Claims
  11.1  
Notification of Potential Claims

   
Without prejudice to the obligations of the Purchaser under Clause 11.2, if the
Purchaser or any other Relevant Purchaser or any member of the Purchaser’s Group
becomes aware of any matter or circumstance that could reasonably be expected to
give rise to a claim against any member of the Seller’s Group under the Sellers’
Warranties (other than the Tax Warranties, to which the provisions of the Tax
Indemnity shall apply) or under any other provision of this Agreement (other
than a claim under Schedule 19) (ignoring for these purposes the application of
Clause 11.2 or 11.3), the Purchaser shall within 20 Business Days give a notice
in writing to the Seller setting out such information as is available to the
Purchaser, any other Relevant Purchaser or any other member of the Purchaser’s
Group as is reasonably necessary to enable the Seller to assess the merits of
the potential claim, to act to preserve evidence and to make such provision as
the Seller or the Relevant Sellers may consider necessary, provided that
compliance by the Purchaser, other Relevant Purchaser or other member of the
Purchaser’s Group with this Clause 11.1 or Clause 11.2 shall not be a condition
precedent to the liability of the Seller or any other Relevant Seller under the
Sellers’ Warranties or under any other provision of this Agreement (other than
Schedule 19) (except to the extent that the Seller or any member of the Retained
Group is actually prejudiced to a material extent by such failure).

11.2  
Notification of Claims

   
Notices of claims under any of the Sellers’ Warranties (other than the Tax
Warranties, to which, for the avoidance of doubt, the provisions of the Tax
Indemnity shall apply) or under any other provision of this Agreement to which
Clause 10.1 applies shall be given by the Purchaser to the Seller, on a without
prejudice basis, within the time limits specified in Clause 11.1, specifying in
reasonable detail the legal and factual basis of the claim and, subject to
Clause 10.1, setting out the Purchaser’s estimate, on a without prejudice basis,
of the amount of Losses or other liabilities or potential liabilities (including
in relation to Taxation) which are, or are to be, the subject of the claim
(including any Losses or other liabilities or potential liabilities (including
in relation to Taxation) which are contingent on the occurrence of any future
event).

11.3  
Commencement of Proceedings

   
Any claim notified pursuant to Clause 11.2 shall (if it has not been previously
satisfied, settled or withdrawn) be deemed to be irrevocably withdrawn nine
months after the relevant time limit set out in Clause 10.1 or, where Clause
10.5 applies, nine months after the relevant contingent liability becomes an
actual liability and is due and payable or, where Clause 10.11.2 applies, six
months after the Purchaser has notified the Seller that all such reasonable
steps have been taken to enforce recovery against the relevant third-parties,
such notification having been made promptly upon the Purchaser having taken all
such reasonable steps, unless at such time legal proceedings in respect of the
relevant claim have been commenced by being both issued and served.

 

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11.4  
Investigation by the Seller

   
In connection with any fact, matter, event or circumstance that could reasonably
be expected to give rise to a claim against any member of the Seller’s Group
under the Sellers’ Warranties (other than the Tax Warranties, to which the
provisions of the Tax Indemnity shall apply) or under Clauses 2 (other than
2.9), 5.3, 8.3.1 and 8.3.3, and Schedules 1, 2, 3, 4 (other than Part 7), 5, 6,
7, 9, 10, 11, 16, 17, 18 and 20 of this Agreement, the Purchaser shall procure
that each relevant member of the Purchaser’s Group (to the extent reasonably
practicable and legally permissible):

  11.4.1  
shall allow the Seller and its financial, accounting or legal advisers to
investigate the fact, matter or circumstance alleged to give rise to such a
claim and whether and to what extent any amount is payable in respect of such
claim; and

  11.4.2  
shall disclose to the Seller (or any other member of the Seller’s Group) all
material of which each such member of the Purchaser’s Group is actually aware
which relates to the claim and shall, and shall procure that any other relevant
members of the Purchaser’s Group shall, give, subject to their being paid all
reasonable costs and expenses, all such reasonable information and assistance,
including reasonable access to premises and personnel and the right to examine
and copy or photograph any assets, accounts, documents and records, as the
Seller or its financial, accounting or legal advisers may reasonably request,
subject to the Seller agreeing in such form as the Purchaser may reasonably
require to keep all such information confidential and to use it only for the
purpose of investigating and defending the claim in question.

11.5  
Conduct of Seller’s Third-Party Claims

  11.5.1  
If any fact, matter, event or circumstance that could reasonably be expected to
give rise to a claim against any member of the Seller’s Group under the Sellers’
Warranties (other than in respect of a claim for breach of any of the Tax
Warranties, to which the provisions of the Tax Indemnity shall apply or in
respect of any matter capable of giving rise to criminal liability on the part
of any member of the Purchaser’s Group or any of such member’s officers,
employees, consultants or agents) or under Clauses 2 (other than 2.9), 5.3,
8.3.1 and 8.3.3, and Schedules 1, 2, 3, 4 (other than Part 7), 5, 6, 7, 9, 10,
11, 16, 17, 18 and 20 of this Agreement is a result of or in connection with a
claim by a third-party (a “Seller’s Third-Party Claim”) then, subject to Clause
11.5.3:

  (i)  
no admissions in relation to the Seller’s Third-Party Claim shall be made by or
on behalf of the Purchaser, any other Relevant Purchaser or any other member of
the Purchaser’s Group and the Seller’s Third-Party Claim shall not be
compromised, disposed of or settled without the written consent of the Seller;

  (ii)  
the Purchaser shall, or shall procure that any other Relevant Purchaser or any
other members of the Purchaser’s Group shall, to the extent legally permissible,
consult with the Seller and take such action as the Seller may reasonably
request to avoid, dispute, deny, defend, resist, appeal, compromise or contest
the Seller’s Third-Party Claim;

 

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  (iii)  
the Seller shall be entitled at its own expense and in its absolute discretion,
to the extent legally permissible, by notice in writing to the Purchaser, to
take such action as it shall deem necessary to avoid, dispute, deny, defend,
resist, appeal, compromise or contest the Seller’s Third-Party Claim (including
making counterclaims or other claims against third-parties) in the name of and
on behalf of the Purchaser, any other Relevant Purchaser or any other member of
the Purchaser’s Group concerned and to have the conduct of any related
proceedings, negotiations or appeals; and

  (iv)  
if the Seller sends a notice to the Purchaser pursuant to Clause 11.5.1(iii)
above, the Purchaser shall, and shall procure that any other Relevant Purchaser
or any other relevant member of the Purchaser’s Group shall give, subject to
their being paid all reasonable costs and expenses, all such information and
assistance, including access to premises and personnel, and the right to examine
and copy or photograph any assets, accounts, documents and records, as the
Seller may reasonably request including, to the extent legally permissible,
instructing such professional or legal advisers as the Seller (acting
reasonably) may nominate to act on behalf of the Purchaser, or any other
Relevant Purchaser concerned but in accordance with the Seller’s instructions.

  11.5.2  
If, due to the operation of any applicable law, the Seller cannot exercise its
rights or the Purchaser cannot fulfil its obligations as provided in Clauses
11.5.1(ii) to 11.5.1(iv) inclusive, above, the Purchaser shall procure that each
other Relevant Purchaser and any other relevant member of the Purchaser’s Group
shall co-operate with the Seller and shall use its reasonable endeavours to
achieve the same result as if Clauses 11.5.1(ii) to 11.5.1(iv) inclusive had
been able to be fully implemented.

  11.5.3  
The Seller shall:

  (i)  
indemnify and secure the Purchaser against all Losses for which the Purchaser or
any member of the Purchaser’s Group may become liable; and

  (ii)  
reimburse the Purchaser or any member of the Purchaser’s Group on demand all
out-of-pocket costs and expenses reasonably incurred by the Purchaser or any
member of the Purchaser’s Group,

in complying with its obligations under this Clause 11.5.

  11.5.4  
If, within six months of the fact, matter, event or circumstance that could
reasonably be expected to give rise to such claim against any member of the
Seller’s Group under the Sellers’ Warranties, the Seller has not accepted
liability under the relevant Sellers’ Warranty in connection with the relevant
Seller’s Third-Party Claim, neither the Purchaser nor any other member of the
Purchaser’s Group shall be obliged to continue to comply with this Clause 11.5
unless and until the Seller accepts liability under the relevant Sellers’
Warranty in connection with the relevant Seller’s Third-Party Claim and in any
event, neither the Purchaser nor any member of the Purchaser’s Group shall be
obliged to do any of the following pursuant to this Clause 11.5:

  (i)  
take any action or omit to do anything which could reasonable be expected to be
materially prejudicial to the commercial or economic interests of the Purchaser
or any member of the Purchaser’s Group; or

  (ii)  
delegate the conduct of any criminal proceedings to the Seller or any agent of
the Seller.

 

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11.6  
Investigation by the Purchaser

In connection with any fact, matter, event or circumstance that could reasonably
be expected to give rise to a claim against any member of the Purchaser’s Group
by the Seller or any other Relevant Seller under Clause 5.3, Schedule 3 ( with
respect to (a) paragraphs 5.2.2 and 5.2.4 of Part 1 and (b) paragraphs 5.5.4 to
5.5.6, 5.5.8 to 5.5.9, 5.6.1, 5.6.3, 5.6.6, 5.7.1(ii) and 5.7.2 of Part 2 only)
and Schedules 5, 6, 10, 11 and 20 of this Agreement, the Seller shall procure
that each relevant member of the Seller’s Group (to the extent reasonably
practicable and legally permissible):

  11.6.1  
shall allow the Purchaser and its financial, accounting or legal advisers to
investigate the fact, matter or circumstance alleged to give rise to such a
claim and whether and to what extent any amount is payable in respect of such
claim; and

  11.6.2  
shall disclose to the Purchaser (or any other member of the Purchaser’s Group)
all material of which each such member of the Seller’s Group is actually aware
which relates to the claim and shall, and shall procure that any other relevant
members of the Seller’s Group shall, give, subject to their being paid all
reasonable costs and expenses, all such reasonable information and assistance,
including reasonable access to premises and personnel and the right to examine
and copy or photograph any assets, accounts, documents and records, as the
Purchaser or its financial, accounting or legal advisers may reasonably request,
subject to the Purchaser agreeing in such form as the Seller may reasonably
require to keep all such information confidential and to use it only for the
purpose of investigating and defending the claim in question.

11.7  
Conduct of Purchaser’s Third-Party Claims

  11.7.1  
If any fact, matter, event or circumstance that could reasonably be expected to
give rise to a claim against any member of the Purchaser’s Group by the Seller
or any other Relevant Seller under Schedules 5 and 6 of this Agreement is a
result of or in connection with a claim by a third-party (a “Purchaser’s
Third-Party Claim”) then, subject to Clause 11.7.3:

  (i)  
no admissions in relation to the Purchaser’s Third-Party Claim shall be made by
or on behalf of the Seller, any other Relevant Seller or any other member of the
Seller’s Group and the Purchaser’s Third-Party Claim shall not be compromised,
disposed of or settled without the written consent of the Purchaser;

  (ii)  
the Seller shall, or shall procure that any other Relevant Seller or any other
members of the Seller’s Group shall, to the extent legally permissible, consult
with the Purchaser and take such action as the Purchaser may reasonably request
to avoid, dispute, deny, defend, resist, appeal, compromise or contest the
Purchaser’s Third-Party Claim;

 

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  (iii)  
the Purchaser shall be entitled at its own expense and in its absolute
discretion, to the extent legally permissible, by notice in writing to the
Seller, to take such action as it shall deem necessary to avoid, dispute, deny,
defend, resist, appeal, compromise or contest the Purchaser’s Third-Party Claim
(including making counterclaims or other claims against third-parties) in the
name of and on behalf of the Seller, any other Relevant Seller or any other
member of the Seller’s Group concerned and to have the conduct of any related
proceedings, negotiations or appeals; and

  (iv)  
if the Purchaser sends a notice to the Seller pursuant to Clause 11.7.1(iii)
above, the Seller shall, and shall procure that any other Relevant Seller or any
other relevant member of the Seller’s Group shall give, subject to their being
paid all reasonable costs and expenses, all such information and assistance,
including access to premises and personnel, and the right to examine and copy or
photograph any assets, accounts, documents and records, as the Purchaser may
reasonably request including, to the extent legally permissible, instructing
such professional or legal advisers as the Purchaser (acting reasonably) may
nominate to act on behalf of the Seller, or any other Relevant Seller concerned
but in accordance with the Purchaser’s instructions.

  11.7.2  
If, due to the operation of any applicable law, the Purchaser cannot exercise
its rights or the Seller cannot fulfil its obligations as provided in Clauses
11.7.1(ii) to 11.7.1(iv) inclusive, above, the Seller shall procure that each
other Relevant Seller and any other relevant member of the Seller’s Group shall
co-operate with the Purchaser and shall use its reasonable endeavours to achieve
the same result as if Clauses 11.7.1(ii) to 11.7.1(iv) inclusive had been able
to be fully implemented.

  11.7.3  
The Purchaser shall:

  (i)  
indemnify and secure the Seller against all Losses for which the Seller or any
member of the Seller’s Group may become liable; and

  (ii)  
reimburse the Seller or any member of the Seller’s Group on demand all
out-of-pocket costs and expenses reasonably incurred by the Seller or any member
of the Seller’s Group,

in complying with its obligations under this Clause 11.7.

 

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  11.7.4  
If, within six months of the fact, matter, event or circumstance that could
reasonably be expected to give rise to such claim against any member of the
Purchaser’s Group, the Purchaser has not accepted liability in connection with
the relevant Purchaser’s Third-Party Claim, neither the Seller nor any other
member of the Seller’s Group shall be obliged to continue to comply with this
Clause 11.7 unless and until the Purchaser accepts liability in connection with
the relevant Purchaser’s Third-Party Claim and in any event, neither the Seller
nor any member of the Seller’s Group shall be obliged to do any of the following
pursuant to this Clause 11.7:

  (i)  
take any action or omit to do anything which could reasonable be expected to be
materially prejudicial to the commercial or economic interests of the Seller or
any member of the Seller’s Group; or

  (ii)  
delegate the conduct of any criminal proceedings to the Purchaser or any agent
of the Purchaser.

12  
Restrictions
  12.1  
Restrictions on the Seller and the other Relevant Sellers

The Seller and the other Relevant Sellers undertake with the Purchaser and the
other Relevant Purchasers that no member of the Retained Group and no directors
or officers of any member of the Retained Group will, in any Relevant Capacity,
in the Relevant Territory during the Restricted Period, directly or indirectly:

  12.1.1  
carry on, be engaged in or be economically interested in any business which is
of the same or similar type to the Professional Business of the Group as carried
on at Closing or at any time during the 12 months immediately preceding Closing;

  12.1.2  
canvass or solicit the custom of any person, firm or company who has within two
years prior to Closing been a customer or distributor of the Group (or any part
thereof) in connection with carrying on the Professional Business and has not
been a regular customer or distributor of the Seller’s Group in connection with
carrying on the Consumer Business;

  12.1.3  
induce or seek to induce any managerial, sales or professional (including R&D)
employee of the Group (“Restricted Person”) to become employed or engaged
whether as employee, consultant or otherwise by any member of the Seller’s
Group, whether or not such Restricted Person would thereby commit a breach of
his contract of service. The placing of an advertisement of a post available to
a member of the public generally and the recruitment of a person through an
employment agency shall not constitute a breach of this Clause 12.1.3, provided
that no member of the Seller’s Group encourages or advises such agency to
approach any Restricted Person.

12.2  
Protection of goodwill

The Seller and the other Relevant Sellers undertake with the Purchaser and the
other Relevant Purchasers that no member of the Seller’s Group and no directors
of the Seller Guarantor will, for one year following the Closing Date, directly
publicly say anything which is intended to damage the goodwill or reputation of
the Group or any member of the Purchaser’s Group.

 

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12.3  
Exceptions

The restrictions in Clause 12.1 shall not operate to prohibit any member of the
Retained Group from:

  12.3.1  
engaging in any activity in relation to the Consumer Business;

  12.3.2  
until such time as the Retained Group obtains ownership or control of 100 per
cent. of the shares of TSE, TSE continuing to operate its business in accordance
with the TSE arrangements from time to time, provided that the Seller shall use
reasonable endeavours to use its influence to prevent TSE from changing (i) the
TSE Territory and (ii) the sales profile of TSE, from those that are in place at
the date of the Offer Letter;

  12.3.3  
in the event that the Seller obtains ownership or control of 100 per cent. of
the shares of TSE, continuing to operate the TSE business in the TSE Territory
exclusively in order to supply the Group;

  12.3.4  
subject to Clauses 12.3.2 and 12.3.3, engaging in any activity in relation to
the professional seed business other than in the countries that comprise the TSE
Territory as at the date of the Offer Letter;

  12.3.5  
holding or being interested in up to 5 per cent. of the outstanding issued share
capital of a company listed on any stock exchange;

  12.3.6  
fulfilling any obligation pursuant to this Agreement and any agreement to be
entered into pursuant to this Agreement; and

  12.3.7  
subject to the acquisition of any shares pursuant to Clause 12.3.3 in TSE,
acquiring the whole or part of any business if the turnover of such business
which is attributable to activities which are of the same or similar type to the
Professional Business of the Group (the “Competing Activities”) represents less
than 20 per cent. of the turnover of the acquired business during the last
complete financial year of such acquired business preceding such acquisition
being agreed (whether or not subject to the satisfaction of conditions),
provided that, where (i) the Competing Activities comprise a distinct standalone
and separable business or (ii) the Competing Activities represent a turnover in
the previous financial year in excess of US$30m, then in either case the Seller
shall, within six months of completing such acquisition, first offer to the
Purchaser the opportunity to acquire the Competing Activities on a “first look”
basis and shall provide sufficient financial, business and other due diligence
information in order that the Purchaser may make a cash offer for the Competing
Activities (at no less a price than the Seller paid for the Competing
Activities) on a reasonably informed basis 60 days following receipt of
reasonably sufficient information. If the Seller, acting reasonably, rejects the
Purchaser’s offer, or if the Purchaser does not make a cash offer for the
Competing Activities within 60 days following receipt of reasonably sufficient
information, the Seller may retain the Competing Activities or sell, at its
discretion, to any third-party.

 

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12.4  
Restrictions on the Purchaser and the Purchaser’s Group

The Purchaser and the Relevant Purchasers undertake with the Relevant Sellers
that no member of the Purchaser’s Group and no directors or officers of any
member of the Purchaser’s Group will, for its own account or for that of any
person, firm or company, in the Relevant Territory for a period of 12 months
commencing on Closing, directly or indirectly, induce or seek to induce any
managerial, sales or professional employee of the Retained Group to become
employed or engaged whether as an employee, consultant or otherwise by any
member of the Purchaser’s Group, whether or not such employee would thereby
commit a breach of his contract of service. The placing of an advertisement of a
post available to a member of the public generally and the recruitment of a
person through an employment agency or with the agreement of the Seller shall
not constitute a breach of this Clause 12.4, provided that no member of the
Purchaser’s Group encourages or advises such agency to approach any such
employee or encourages or advises any such employee to respond to any such
advertisement.

12.5  
Reasonableness of Restrictions

The Seller and the other Relevant Sellers agree that the restrictions contained
in this Clause 12 are no greater than are reasonable and necessary for the
protection of the interest of the Purchaser and the other Relevant Purchasers
but if any such restriction shall be held to be void but would be valid if
deleted in part or reduced in application, such restriction shall apply with
such deletion or modification as may be necessary to make it valid and
enforceable.

13  
Guarantee
  13.1  
Seller’s Guarantee

  13.1.1  
In consideration of the Purchaser and each other Relevant Purchaser entering
into this Agreement, the Seller Guarantor unconditionally and irrevocably
guarantees to the Purchaser (to the extent it is a beneficiary of an obligation
of a Relevant Seller) and the other Relevant Purchasers the due and punctual
performance and observance by each of the Relevant Sellers of all their
obligations, commitments, undertakings, covenants, warranties and indemnities
under or pursuant to this Agreement, any Local Transfer Document and the Tax
Indemnity (“Sellers’ Guaranteed Obligations”) to the extent of any limit on the
liability of the Seller and the other Relevant Sellers under this Agreement, any
Local Transfer Document and the Tax Indemnity and agrees to indemnify the
Purchaser and the other Relevant Purchasers against all reasonable costs
(including legal costs) which the Purchaser or the other Relevant Purchasers may
suffer or incur through or arising from the enforcement of this guarantee.

  13.1.2  
If and whenever any of the Relevant Sellers defaults for any reason whatsoever
in the performance of any of the Sellers’ Guaranteed Obligations, the Seller
Guarantor shall forthwith upon demand unconditionally perform (or procure the
performance of) and satisfy (or procure the satisfaction of) the Sellers’
Guaranteed Obligations in regard to which such default has been made in the
manner prescribed by this Agreement, any Local Transfer Document and the Tax
Indemnity and so that the same benefits shall be conferred on the Purchaser and
the other Relevant Purchasers as they would have received if the Sellers’
Guaranteed Obligations had been duly performed and satisfied by the Relevant
Sellers. The Seller Guarantor hereby waives any rights which it may have to
require the Purchaser and/or the other Relevant Purchasers to proceed first
against or claim payment from the Relevant Seller(s) to the intent that as
between the Purchaser and/or the other Relevant Purchasers and the Seller
Guarantor the latter shall be liable as principal debtor as if it has entered
all undertakings, agreements and other obligations jointly and severally with
the Relevant Sellers.

 

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  13.1.3  
This guarantee is to be a continuing security and accordingly is to remain in
force until all Sellers’ Guaranteed Obligations shall have been performed or
satisfied and shall not be satisfied, discharged or affected by an intermediate
payment or settlement of account by, or change in the constitution or control
of, or the insolvency of or winding-up or analogous proceeding relating to, any
Relevant Seller. This guarantee is in addition to and without prejudice to and
not in substitution for any rights or security which the Purchaser and the other
Relevant Purchasers may now or hereafter have or hold for the performance and
observance of the Sellers’ Guaranteed Obligations.

  13.1.4  
As a separate and independent obligation, the Seller Guarantor agrees that any
of the Sellers’ Guaranteed Obligations (including any monies payable) which may
not be enforceable against or recoverable from any of the Relevant Sellers by
reason of any legal limitation, disability or incapacity on or of any of the
Relevant Sellers or any other fact or circumstances (other than any limitation
imposed by this Agreement or Local Transfer Document or the Tax Indemnity) shall
nevertheless be enforceable against and recoverable from the Seller Guarantor as
though the same had been incurred by the Seller Guarantor and the Seller
Guarantor were the sole or principal obligor in respect thereof and shall be
performed or paid by the Seller Guarantor on demand.

  13.1.5  
The liability of the Seller Guarantor under this Clause 13.1:

  (i)  
shall not be released or diminished by any variation of the Sellers’ Guaranteed
Obligations or any forbearance, neglect or delay in seeking performance of the
Sellers’ Guaranteed Obligations or any granting of time for such performance;

  (ii)  
shall not be affected or impaired by reason of any other fact or event which in
the absence of this provision would or might constitute or afford a legal or
equitable discharge or release or a defence to a guarantor; and

  (iii)  
shall not be affected by any arrangements which the Purchaser and/or any other
Relevant Purchaser(s) may make with the Relevant Sellers or with another person
which (but for this Clause 13.1) might operate to diminish or discharge the
liability of or otherwise provide a defence to a surety.

13.2  
The Purchaser’s Guarantee

  13.2.1  
In consideration of the Seller and each other Relevant Seller entering into this
Agreement, the Purchaser unconditionally and irrevocably guarantees to the
Seller (to the extent it is a beneficiary of an obligation of a Relevant
Purchaser) and the other Relevant Sellers the due and punctual performance and
observance by each of the Relevant Purchasers of all their obligations,
commitments, undertakings, warranties and indemnities under or pursuant to this
Agreement, any Local Transfer Document and the Tax Indemnity (the “Purchasers’
Guaranteed Obligations”) to the extent of any limit on the liability of the
Purchaser and the other Relevant Purchasers under this Agreement, any Local
Transfer Document and the Tax Indemnity and agree to indemnify the Seller and
the other Relevant Sellers against all reasonable costs (including legal costs)
which the Seller or the other Relevant Sellers may suffer or incur through or
arising from the enforcement of this guarantee.

 

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  13.2.2  
If and whenever any of the Relevant Purchasers defaults for any reason
whatsoever in the performance of any of the Purchasers’ Guaranteed Obligations,
the Purchaser shall forthwith upon demand unconditionally perform (or procure
the performance of) and satisfy (or procure the satisfaction of) the Purchasers’
Guaranteed Obligations in regard to which such default has been made in the
manner prescribed by this Agreement, any Local Transfer Document and the Tax
Indemnity and so that the same benefits shall be conferred on the Seller and the
other Relevant Sellers as they would have received if the Purchasers’ Guaranteed
Obligations had been duly performed and satisfied by the Relevant Purchaser. The
Purchaser hereby waives any rights which it may have to require the Seller
and/or the other Relevant Sellers to proceed first against or claim payment from
the Relevant Purchaser(s) to the intent that as between the Seller and/or other
the Relevant Sellers and the Purchaser the latter shall be liable as principal
debtor as if it has entered all undertakings, agreements and other obligations
jointly and severally with the other Relevant Purchasers.

  13.2.3  
This guarantee is to be a continuing security and accordingly is to remain in
force until all the Purchasers’ Guaranteed Obligations shall have been performed
or satisfied and shall not be satisfied, discharged or affected by an
intermediate payment or settlement of account by, or change in the constitution
or control of, or the insolvency of or winding-up or analogous proceeding
relating to, any Relevant Purchaser. This guarantee is in addition to and
without prejudice to and not in substitution for any rights or security which
the Seller and the other Relevant Sellers may now or hereafter have or hold for
the performance and observance of the Purchasers’ Guaranteed Obligations.

  13.2.4  
As a separate and independent obligation, the Purchaser agrees that any of the
Purchasers’ Guaranteed Obligations (including any monies payable) which may not
be enforceable against or recoverable from any of the other Relevant Purchasers
by reason of any legal limitation, disability or incapacity on or of any of the
Relevant Purchasers or any other fact or circumstances (other than any
limitation imposed by this Agreement or Local Transfer Document or the Tax
Indemnity) shall nevertheless be enforceable against and recoverable from the
Purchaser as though the same had been incurred by the Purchaser and the
Purchaser were the sole or principal obligor in respect thereof and shall be
performed or paid by the Purchaser on demand.

  13.2.5  
The liability of the Purchaser under this Clause 13.2:

  (i)  
shall not be released or diminished by any variation of the Purchasers’
Guaranteed Obligations or any forbearance, neglect or delay in seeking
performance of the Purchasers’ Guaranteed Obligations or any granting of time
for such performance;

 

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  (ii)  
shall not be affected or impaired by reason of any other fact or event which in
the absence of this provision would or might constitute or afford a legal or
equitable discharge or release or a defence to a guarantor; and

  (iii)  
shall not be affected by any arrangements which the Seller and/or any Relevant
Seller(s) may make with the other Relevant Purchasers or with another person
which (but for this Clause 13.2) might operate to diminish or discharge the
liability of or otherwise provide a defence to a surety.

14  
Confidentiality
  14.1  
Announcements

For 12 months after the date of Closing, no announcement or circular in
connection with the existence or the subject matter of this Agreement shall be
made or issued by or on behalf of any member of the Retained Group or the
Purchaser’s Group without the prior written approval of the Seller and the
Purchaser (such approval not to be unreasonably withheld or delayed). This shall
not affect any announcement or circular required by law or any regulatory body
or the rules of any stock exchange on which the shares of either party (or its
holding company) are listed but the party with an obligation to make an
announcement or issue a circular shall consult with the other parties insofar as
is reasonably practicable before complying with such an obligation.

14.2  
Confidentiality

  14.2.1  
The Confidentiality Agreement shall cease to have any force or effect from the
date of this Agreement.
    14.2.2  
Subject to Clauses 14.1 and 14.2.3:

  (i)  
each of the parties shall treat as strictly confidential and not disclose or use
any information received or obtained as a result of entering into this Agreement
(or any agreement entered into pursuant to this Agreement) which relates to:

  (a)  
the provisions of this Agreement and/or any other Transaction Document; or

  (b)  
the negotiations relating to this Agreement (and/or any such other agreements);

  (ii)  
the Seller shall, and shall procure that each other member of the Retained Group
shall, treat as strictly confidential and not disclose or use any information
relating to the Group Companies and Group Businesses following Closing and any
other information relating to the business, financial or other affairs
(including future plans and targets) of the Purchaser’s Group; and

  (iii)  
the Purchaser shall, and shall procure that each other member of the Purchaser’s
Group shall, treat as strictly confidential and not disclose or use any
information relating to the business, financial or other affairs (including
future plans and targets) of the Seller’s Group including, prior to Closing, the
Group Companies and Group Businesses.

 

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  14.2.3  
Clause 14.2.2 shall not prohibit disclosure or use of any information if and to
the extent:

  (i)  
the disclosure or use is required by law, any regulatory body or any stock
exchange on which the shares of any party (or their holding company) are listed
(including where this is required as part of any actual or potential offering,
placing and/or sale of securities of any member of the Retained Group or the
Purchaser’s Group);

  (ii)  
the disclosure or use is required to vest the full benefit of this Agreement in
any party;

  (iii)  
the disclosure or use is required for the purpose of any judicial, arbitral or
analogous proceedings arising out of this Agreement or any other Transaction
Document or the disclosure is made to a Tax Authority in connection with the Tax
affairs of the disclosing party;

  (iv)  
the disclosure is made to professional advisers of any party on a need-to-know
basis and on terms that such professional advisers undertake to comply with the
provisions of Clause 14.2.2 in respect of such information as if they were a
party to this Agreement;

  (v)  
the information is or becomes publicly available (other than by breach of the
Confidentiality Agreement or of this Agreement);

  (vi)  
the other party has given prior written approval to the disclosure or use;
    (vii)  
the information is independently developed after Closing; or

  (viii)  
the disclosure is to any competition authority and is required to facilitate the
satisfaction of the Competition Condition,

provided that prior to disclosure or use of any information pursuant to Clauses
14.2.3(i), 14.2.3(ii) or 14.2.3(iii), the party concerned shall, so far as is
practicable, promptly notify the other parties of such requirement with a view
to providing the other parties with the opportunity to contest such disclosure
or use, or otherwise to agree on the timing and content of such disclosure or
use.

15  
Insurance
  15.1  
No Cover under Seller’s Group Insurance Policies from Closing

Each of the Purchaser and the other Relevant Purchasers acknowledges and agrees
that from the Closing Date:

  15.1.1  
no Group Company, and no Relevant Purchaser in relation to any Group Businesses,
will have or be entitled to the benefit of any Seller’s Group Insurance Policy
in respect of any event, act or omission that takes place after the Closing Date
and it shall be the sole responsibility of the Relevant Purchasers to ensure
that adequate insurances are put in place for the Group with effect from the
Closing Date; and

  15.1.2  
neither the Seller nor any other Relevant Seller nor any other member of the
Seller’s Group shall be required to maintain any Seller’s Group Insurance Policy
for the benefit of the Group, provided that it shall not cancel with
retrospective effect any “occurrence-based” Seller’s Group Insurance Policy
under which that part of the Group continues to be insured.

 

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15.2  
Existing Claims under Seller’s Group Insurance Policies

  15.2.1  
Each of the Seller and the other Relevant Sellers shall use reasonable
endeavours after the Closing Date to recover all monies due from insurers in
respect of any insurance claim which has been made before the Closing Date by or
on behalf of any Group Company or in relation to any Group Business under any
Seller’s Group Insurance Policy.

  15.2.2  
Each of the Seller and the other Relevant Sellers shall, to the extent that the
Losses in respect of which the claim is made are not reflected in the Closing
Statement or have not been made good prior to Closing or to the extent that the
Relevant Purchasers in relation to the Group Businesses or the relevant Group
Companies have not already been indemnified prior to Closing in respect of the
Losses giving rise to the insurance claim, pay any monies received in respect of
such claim (after taking into account any deductible or excess and less any
Taxation suffered on the proceeds after taking account of any Tax relief
obtained and utilised in respect of any matter giving rise to the claim and any
reasonable out-of-pocket expenses suffered or incurred by the Seller, the
Relevant Sellers or any member of the Seller’s Group in connection with such
claim) to the Purchaser or, at the Purchaser’s written direction, the Group
Company as soon as practicable after receipt by the Retained Group, but in any
event within 30 days of such receipt.

15.3  
New Claims under Occurrence-Based Policies

  15.3.1  
With respect to any event, act or omission relating to any Group Company or any
Group Business that occurred or existed or is attributable to the period prior
to Closing that is or is reasonably likely to be covered by an
“occurrence-based” Seller’s Group Insurance Policy, the Seller and/or Relevant
Sellers shall, at the direction of the Purchaser or the relevant Group Company,
make a claim under such insurance policy, provided that:

  (i)  
neither the Seller nor any Relevant Seller shall be obliged to make any such
claim if and to the extent that such claim is covered by an insurance policy
held by the Purchaser or a member of the Purchaser’s Group;

  (ii)  
the claim is notified to the Seller within 15 Business Days of the Purchaser or
other Relevant Purchaser or Group Company becoming aware of the claim and in any
event within three years after the Closing Date; and

  (iii)  
the Relevant Purchaser or Group Company shall be liable for any deductible or
excess payable in respect of the claim.

  15.3.2  
In the event that a Relevant Purchaser or Group Company notifies a claim
pursuant to Clause 15.3.1, the Seller or the Relevant Seller shall, at the
Purchaser’s or other Relevant Purchaser’s or the relevant Group Company’s cost,
make all necessary notifications and claims under the relevant Seller’s Group
Insurance Policy and the Relevant Purchaser or Group Company shall be entitled
to be paid any proceeds actually received under the Seller’s Group Insurance
Policy (less any deductible or excess actually paid by the Seller or the
Relevant Seller or any other member of the Seller’s Group and less any Taxation
suffered on the proceeds after taking account of any Tax relief obtained and
utilised in respect of any matter giving rise to the claim and any reasonable
out-of-pocket expenses suffered or incurred by the Relevant Seller or any other
member of the Seller’s Group), provided that:

  (i)  
neither the Seller nor any Relevant Seller shall be required, pursuant to any
requests made by a Purchaser or other Relevant Purchaser or any Group Company,
to undertake or threaten litigation or incur any expenditure or liability
without being put in reasonably sufficient funds by the Purchaser, the other
Relevant Purchaser or the relevant Group Company prior to incurring any such
expenditure or liability;

 

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  (ii)  
neither the Purchaser nor any other Relevant Purchaser nor any Group Company
shall be entitled to any proceeds received by the Seller’s Group under any
Seller’s Group Insurance Policy except to the extent that such proceeds relate
to a claim made pursuant to Clause 15.3.1 in respect of:

  (a)  
an event, act or omission connected with the carrying on of the business of any
Group Company or any Group Business prior to Closing;

  (b)  
a Loss for which the Purchaser or other Relevant Purchaser or the Group Company
has not already been reimbursed, indemnified or otherwise compensated for
whether under this Agreement or otherwise;

  (iii)  
each of the Purchaser and each other Relevant Purchaser shall provide (and shall
procure that the Group Company also provides) all assistance, information and
co-operation reasonably requested by the Seller or any other Relevant Seller or
any of their representatives (including the insurers, appointed claims handlers
or any lawyers instructed in relation to such claim); and

  (iv)  
each of the Purchaser and each other Relevant Purchaser shall or shall procure
that the Group Company shall pay or bear any deductible or excess element of any
such claim.

16  
Other Provisions
  16.1  
Further Assurances

Each of the Seller and the Purchaser shall from time to time execute, or procure
the execution of, such documents and perform such acts and things as either of
them may reasonably require to transfer the Shares and Group Businesses to the
Relevant Purchasers and to give the other the full benefit of this Agreement and
any Local Transfer Document.

 

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16.2  
Whole Agreement

  16.2.1  
This Agreement, together with the Disclosure Letter, Offer Letter, the Tax
Indemnity and the Purchase Price Allocation Agreement, contains the whole
agreement between the parties relating to the subject matter of this Agreement
at the date hereof to the exclusion of any terms implied by law which may be
excluded by contract and (except in the case of fraud or fraudulent
misrepresentation) supersedes any previous written or oral agreement between the
parties in relation to the matters dealt with in this Agreement.

  16.2.2  
Each of the Purchaser and the other Relevant Purchasers acknowledges that no
member of the Purchaser’s Group has been induced to enter this Agreement by any
representation, warranty or undertaking not expressly incorporated into it.

  16.2.3  
Save as expressly provided in this Agreement, so far as is permitted by law and
except in the case of fraud or fraudulent misrepresentation, each of the parties
agrees and acknowledges that its only right and remedy in relation to any
representation, warranty or undertaking made or given in connection with this
Agreement shall be for breach of the terms of this Agreement to the exclusion of
all other rights and remedies (including those in tort or arising under statute
and any right to rescind this Agreement).

16.3  
Reasonableness

Each of the parties confirms that it, and to the extent applicable, each
relevant member of the Seller’s Group or the Purchaser’s Group, has received
independent legal advice relating to all the matters provided for in this
Agreement, together with the Disclosure Letter, the Offer Letter and the Tax
Indemnity, including the terms of Clauses 12 and 16.2 and agrees that the
provisions of this Agreement are fair and reasonable.

16.4  
No Assignment

  16.4.1  
Except as otherwise expressly provided in this Agreement, no party may, without
the prior written consent of the Purchaser (in the case of the Seller or any
other Relevant Seller) or the Seller (in the case of the Purchaser or any other
Relevant Purchaser), assign, grant any security interest over, hold on trust or
otherwise transfer the benefit of the whole or any part of this Agreement.

  16.4.2  
Except as otherwise expressly provided in this Agreement, a party may, without
the consent of the other parties, assign to an Affiliate the benefit of the
whole or any part of this Agreement provided, however, that such assignment
shall not be absolute but shall be expressed to have effect only for so long as
the assignee remains an Affiliate of the party concerned and provided also that
the assignee shall not be entitled to receive under this Clause 16.4.2 any
greater amount than that to which the relevant assignor would have been
entitled.

16.5  
Third-Party Rights

A person who is not a party to this Agreement has no right under the Contracts
(Rights of Third Parties) Act 1999 to enforce any term of, or enjoy any benefit
under, this Agreement.

 

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16.6  
Variation

No variation of this Agreement shall be effective unless in writing and signed
by or on behalf of each of the Seller and the Purchaser.

16.7  
Method of Payment and Set-Off

  16.7.1  
Payments pursuant to this Agreement shall be settled by payments between the
Seller, for itself and on behalf of the other Relevant Sellers, and the
Purchaser, for itself and on behalf of the other Relevant Purchasers.

  16.7.2  
Any payments pursuant to this Agreement shall be effected by crediting for same
day value the account specified by the Seller or the Purchaser (as the case may
be) on behalf of the party entitled to the payment (reasonably in advance and in
sufficient detail to enable payment by telegraphic or other electronic means to
be effected) on or before the due date for payment.

  16.7.3  
Payment of a sum in accordance with this Clause 16.7 shall constitute a payment
in full of the sum payable and shall be a good discharge to the payer (and those
on whose behalf such payment is made) of the payer’s obligation to make such
payment and the payer (and those on whose behalf such payment is made) shall not
be obliged to see to the application of the payment as between those on whose
behalf the payment is received.

16.8  
Costs

  16.8.1  
The Seller and the other Relevant Sellers shall bear all costs incurred by them
in connection with the preparation, negotiation and execution of this Agreement,
any Transaction Documents and the sale of the Group.

  16.8.2  
The Purchaser and the other Relevant Purchasers shall bear all such costs
incurred by them in connection with the preparation, negotiation and execution
of this Agreement, any Transaction Documents and the purchase of the Group.

16.9  
Filing Fees, Notarial Fees, Registration, Stamp and Transfer Taxes and Duties

The Relevant Purchasers shall bear the cost of all filing fees in relation to
any competition clearance required pursuant to Clause 4.1, notarial fees and all
registration, stamp and transfer taxes and duties or their equivalents in all
jurisdictions where such fees, taxes and duties are payable as a result of the
transactions contemplated by this Agreement. The Relevant Purchasers shall be
responsible for arranging the payment of all such fees, taxes and duties,
including fulfilling any administrative or reporting obligation imposed by the
jurisdiction in question in connection with the payment of such fees, taxes and
duties. The Relevant Purchasers shall indemnify the Relevant Sellers or any
other member of the Seller’s Group against any Losses suffered by that Relevant
Seller or member of the Seller’s Group as a result of the Relevant Purchasers
failing to comply with their respective obligations under this Clause 16.9.

16.10  
Interest

If any party defaults in the payment when due of any sum payable under this
Agreement (howsoever determined) the liability of that party shall be increased
to include interest on such sum from the date when such payment is due until the
date of actual payment (as well after as before judgment) at a rate per annum of
2 percentage points above LIBOR. Such interest shall accrue from day-to-day.

 

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16.11  
Grossing-up of Indemnity Payments, VAT

  16.11.1  
All sums payable under this Agreement shall be paid free and clear of all
deductions, withholdings, set-offs or counterclaims whatsoever, save only as
required by law. If any deductions or withholdings are required by law, the
party making the payment shall (except in the case of interest payable under
Clause 7.5 or 16.10 or the Purchase Price) be obliged to pay to the other party
such sum as will, after such deduction or withholding has been made, leave the
other party with the same amount as it would have been entitled to receive in
the absence of any such requirement to make a deduction or withholding, provided
that, if either party to this Agreement shall have assigned the benefit in whole
or in part of this Agreement, then the liability of the other party under this
Clause 16.11.1 shall be limited to that (if any) which it would have been had no
such assignment taken place.

  16.11.2  
If any Tax Authority charges to Taxation any payment made under this Agreement
pursuant to an indemnity, compensation or reimbursement provision (other than
Taxation attributable to a payment being treated as an adjustment to the
consideration for the Shares under the terms of the Agreement and other than
Taxation attributable to interest payable under Clause 16.10) then, except to
the extent that the amount of the indemnity, compensation or reimbursement
provision has been increased to take account of the Taxation that will be
charged on receipt, the amount so payable shall be grossed up by such amount as
will ensure that after payment of the Taxation so charged there shall be left a
sum equal to the amount that would otherwise be payable under this Agreement,
provided that, if either party to this Agreement shall have assigned the benefit
in whole or in part of this Agreement, then the liability of the other party
under this Clause 16.11.2 shall be limited to that (if any) which it would have
been had no such assignment taken place.

  16.11.3  
Where any payment made under this Agreement pursuant to an indemnity,
compensation or reimbursement provision is paid to a person other than a party
to this Agreement but is treated as taxable in the hands of the party, the payer
shall also pay to the party such sum as shall reimburse such party for all
Taxation suffered by it in respect of the payment, provided that, if either
party to this Agreement shall have assigned the benefit in whole or in part of
this Agreement, then the liability of the other party under this Clause 16.11.3
shall be limited to that (if any) which it would have been had no such
assignment taken place.

  16.11.4  
The recipient of an amount paid under this Clause 16 shall claim from the
appropriate Tax Authority any exemption, rate reduction, refund, credit or
similar benefit (including pursuant to any relevant double tax treaty) to which
it is entitled in respect of any deduction or withholding in respect of which a
payment has been made pursuant to Clause 16.11.1 and, for such purposes shall,
within any applicable time limits, submit any claims, notices, returns or
applications and send a copy thereof to the payer.

  16.11.5  
If the recipient of a payment made under this Agreement receives a credit for or
refund of any Taxation payable by it or similar benefit by reason of any
deduction or withholding for or on account of Taxation, then it shall reimburse
to the other party such part of such additional amounts paid to it pursuant to
Clause 16.11.1 above as the recipient of the payment certifies to the other
party will leave it (after such reimbursement) in no better and no worse
position than it would have been in if the other party had not been required to
make such deduction or withholding.

 

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  16.11.6  
Where, under the terms of this Agreement, one party is liable to indemnify or
reimburse another party in respect of any costs, charges or expenses, the
payment shall include an amount equal to any VAT thereon not otherwise
recoverable by the other party, subject to that party using all reasonable
endeavours to recover such amount of VAT as may be practicable.

  16.11.7  
If any payment under this Agreement constitutes the consideration for a taxable
supply for VAT purposes, then, in addition to that payment, the payer shall pay
any VAT due.

16.12  
Notices

  16.12.1  
Any notice or other communication in connection with this Agreement (each, a
“Notice”) shall be by post or by courier using an internationally recognised
courier company.

  16.12.2  
A Notice to the Seller or any other Relevant Seller shall be sent to such party
at the following address, or such other person or address as the Seller may
notify to the Purchaser from time to time:

The Scotts Miracle-Gro Company

     
Address:
  14111 Scottslawn Road 
 
  Marysville, OH 43041
 
  USA
 
   
Attention:
  Vincent C. Brockman                    Title:          General Counsel
 
    with copy to:
 
    Linklaters LLP
 
   
Address:
  One Silk Street
 
  London EC2Y 8HQ
 
  UK
 
   
Attention:
  Sarah Wiggins; and
 
   
 
  Michael Sullivan

  16.12.3  
A Notice to the Purchaser or any other Relevant Purchaser shall be sent to such
party at the following address, or such other person or address as the Purchaser
may notify to the Seller from time to time:

      Israel Chemicals Ltd
 
   
Address:
  Millenium Tower
 
  23 Aranha St. 
 
  Tel-Aviv 61070
 
  Israel
 
   
Attention:
  Elisa Haimowitz                    Title:          Company Secretary

  16.12.4  
A Notice shall be effective upon receipt and shall be deemed to have been
received at the time of delivery, if delivered by registered post or courier.

 

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16.13  
Invalidity

  16.13.1  
If any provision in this Agreement shall be held to be illegal, invalid or
unenforceable, in whole or in part, in any respect under the law of any relevant
jurisdiction, the provision shall apply in such jurisdiction with whatever
deletion or modification is necessary so that the provision is legal, valid and
enforceable and gives effect to the commercial intention of the parties and
shall not affect or impair:

  (i)  
the legality, validity or enforceability in that jurisdiction of any other
provision of this Agreement; or

  (ii)  
the legality, validity or enforceability under the law of any other jurisdiction
of that or any other provision of this Agreement.

  16.13.2  
To the extent it is not possible to delete or modify the provision, in whole or
in part, under Clause 16.13.1, then such provision or part of it shall, to the
extent that it is illegal, invalid or unenforceable in such jurisdiction, be
deemed not to form part of this Agreement in such jurisdiction and the legality,
validity and enforceability of the remainder of this Agreement in such
jurisdiction shall, subject to any deletion or modification made under Clause
16.13.1, not be affected or impaired.

16.14  
Counterparts

This Agreement may be entered into in any number of counterparts, all of which
taken together shall constitute one and the same instrument. Any party may enter
into this Agreement by executing any such counterpart.

16.15  
Resolution of Disputes

Any dispute arising out of or in connection with this Agreement shall be
referred first, by notice in writing, to the Senior Representative of each party
who shall meet and endeavour to resolve the dispute between them within 20 days
of such notice. The joint written decision of the Senior Representatives shall
be binding upon the parties. If no agreement is reached between the Senior
Representatives, the provisions of Clause 16.16 will apply.

16.16  
Governing Law and Submission to Jurisdiction

  16.16.1  
This Agreement and the documents to be entered into pursuant to it, save as
expressly referred to herein, and any non-contractual obligations arising out of
or in connection with it, shall be governed by and construed in accordance with
English law.

  16.16.2  
Any dispute arising out of or in connection with this Agreement, including any
question regarding its existence, validity or termination, shall be referred to
and finally resolved by arbitration by the London Court of International
Arbitration under its rules (“Rules”), which Rules are deemed to be incorporated
by reference into this Agreement.

 

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  16.16.3  
The tribunal shall consist of three (3) arbitrators. The seat of the arbitration
shall be the City of London, England. The language of the arbitration shall be
English. The resulting arbitral award shall be final and binding upon the
parties without right of appeal.

16.17  
Appointment of Process Agent

  16.17.1  
Each of the Seller and the other Relevant Sellers not incorporated in England
and Wales hereby irrevocably appoints Scotts Holdings Limited of Salisbury
House, Weyside Park, Godalming, Surrey GU7 1XE as its agent to accept service of
process in England and Wales in any legal action or proceedings arising out of
this Agreement, service upon whom shall be deemed completed whether or not
forwarded to or received by the Seller or the other Relevant Sellers.

  16.17.2  
Each of the Seller and the other Relevant Sellers agrees to inform the Purchaser
in writing of any change of address of such process agent within 28 days of such
change.

  16.17.3  
If such process agent ceases to be able to act as such or to have an address in
England and Wales, each of the Seller and the other Relevant Sellers irrevocably
agrees to appoint a new process agent in England and Wales acceptable to the
Purchaser and to deliver to the Purchaser within 14 days a copy of a written
acceptance of appointment by the process agent.

  16.17.4  
Each of the Purchaser and the other Relevant Purchasers not incorporated in
England and Wales hereby irrevocably appoints Cleveland Potash Limited of
Boultby Mine, Loftus, Saltburn by the Sea, Cleveland TS13 4UZ as its agent to
accept service of process in England and Wales in any legal action or
proceedings arising out of this Agreement, service upon whom shall be deemed
completed whether or not forwarded to or received by the Purchaser or the other
Relevant Purchasers.

  16.17.5  
Each of the Purchaser and the other Relevant Purchasers agrees to inform the
Seller in writing of any change of address of such process agent within 28 days
of such change.

  16.17.6  
If such process agent ceases to be able to act as such or to have an address in
England and Wales, each of the Purchaser and the other Relevant Purchasers
irrevocably agrees to appoint a new process agent in England and Wales
acceptable to the Seller and to deliver to the Seller within 14 days a copy of a
written acceptance of appointment by the process agent.

  16.17.7  
Nothing in this Agreement shall affect the right to serve process in any other
manner permitted by law or the right to bring proceedings in any other
jurisdiction for the purposes of the enforcement or execution of any judgment or
other settlement in any other courts.

 

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This Agreement has been entered into on the date stated at the beginning.

     
SIGNED by:
   
 
         
 
  (IMAGE) [c11333c1133303.gif] 
and
     
 
 
on behalf of Israel Chemicals Ltd.
   

 

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SIGNED by
      (IMAGE) [c11333c1133303.gif]  on behalf of The Scotts Company LLC:
   
 
       
SIGNED by
      (IMAGE) [c11333c1133303.gif]  on behalf of The Scotts Miracle-Gro Company:
   
 
       
SIGNED by
      (IMAGE) [c11333c1133303.gif]  on behalf of OM Scott International
Investments Ltd:
   
 
        SIGNED by James Hagedorn:   (IMAGE) [c11333c1133303.gif] 
 
     
SIGNED by
      (IMAGE) [c11333c1133303.gif]  on behalf of Scotts France Holdings SARL:
   
 
       
SIGNED by
      (IMAGE) [c11333c1133303.gif]  on behalf of Scotts Holdings Limited:
   
 
       
SIGNED by
      (IMAGE) [c11333c1133303.gif]  on behalf of Scotts-Sierra Investments,
Inc.:
   
 
       
SIGNED by
      (IMAGE) [c11333c1133303.gif]  on behalf of OMS Investments, Inc.:
   

 

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SIGNED by
      (IMAGE) [c11333c1133303.gif]  on behalf of The Scotts Company (UK) Ltd.:
   
 
       
SIGNED by
      (IMAGE) [c11333c1133303.gif]  on behalf of Scotts Australia Pty. Ltd.:
   
 
       
SIGNED by
      (IMAGE) [c11333c1133303.gif]  on behalf of Scotts Poland Sp. z o.o.:
   
 
       
SIGNED by
      (IMAGE) [c11333c1133303.gif]  on behalf of ICL Holding The Netherlands
Cooperatief U.A.:
   
 
       
SIGNED by
      (IMAGE) [c11333c1133303.gif]  on behalf of PM Chemicals S.r.l:
   
 
       
SIGNED by
      (IMAGE) [c11333c1133303.gif]  on behalf of ICL North America Inc.:
   
 
       
SIGNED by
      (IMAGE) [c11333c1133303.gif]  on behalf of Anti Germ France SAS:
   
 
       
SIGNED by
      (IMAGE) [c11333c1133303.gif]  on behalf of ICL Iberia Limited:
   

 

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SIGNED by
      (IMAGE) [c11333c1133303.gif]  on behalf of Fibrisole Australia Pty
Limited:
   
 
       
SIGNED by
      (IMAGE) [c11333c1133303.gif]  on behalf of Bk Giulini Polska Sp. z.o.o.:
   
 
       
SIGNED by
      (IMAGE) [c11333c1133303.gif]  on behalf of Amsterdam Fertilisers B.V.:
   

 

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Schedule 1
Part 1
Details of the Share Sellers, Shares etc.
(Clause 2.1.1)

                  (1)   (2)   (3)   (4) Name   Name of           Name of Share
of Share Seller   Company   Shares   Purchaser
 
               
OM Scott International Investments Ltd.
  Scotts International B.V.   120,001       ICL Holding The Netherlands
Cooperatief U.A.
 
               
OM Scott International Investments Ltd.
  Scotts Italia S.r.l.   94,525       PM Chemicals S.r.l
 
               
James Hagedorn
  Scotts Italia S.r.l.   4,975       PM Chemicals S.r.l
 
               
The Scotts Company LLC
  Scotts-Sierra Horticultural Products Company   Class A
Common shares: 101

Class B
Common share: 1   ICL North America Inc.
 
               
Scotts France Holdings SARL
  Scotts France SARL   52,155       Anti Germ France SAS
 
               
Scotts Holdings Limited
  Scotts France SARL   1       Anti Germ France SAS
 
               
Scotts-Sierra Investments, Inc.
  The Scotts Company, Kenya Ltd.   1       Scotts International B.V.
 
               
OMS Investments, Inc.
  The Scotts Company, Kenya Ltd.   1       Amsterdam Fertilisers B.V.
 
               
Scotts-Sierra Investments, Inc.
  Scotts PBG Malaysia Sdn. Bhd.   50,002       Scotts International B.V.

 

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Part 2
Details of the Business Sellers, Group Businesses etc.
(Clause 2.1.1)

          (1)   (2)   (3) Name   Brief Description of Group     of Business
Seller   Business   Name of Business Purchaser
The Scotts Company (UK) Ltd.
  The Professional Business carried on by The Scotts Company (UK) Ltd. as at
Closing, including the properties set out in Part 2 of Schedule 3, the contracts
relating to the Professional Business as set out in Schedule 5 and the assets as
set out in Part 1 of Schedule 16, excluding, for the avoidance of doubt, the
Excluded Assets and the Excluded Liabilities.   ICL Iberia Limited
 
       
Scotts Australia Pty. Ltd.
  The Professional Business carried on by Scotts Australia Pty. Ltd. as at
Closing, including the contracts relating to the Professional Business as set
out in Schedule 5, excluding, for the avoidance of doubt, the Excluded Assets
and the Excluded Liabilities.   Fibrisole Australia Pty Limited
 
       
Scotts Poland Sp. z o.o.
  The Professional Business carried on by Scotts Poland Sp. z o.o. as at
Closing, including the contracts relating to the Professional Business as set
out in Schedule 5, excluding, for the avoidance of doubt, the Excluded Assets
and the Excluded Liabilities.   Bk Giulini Polska Sp. z.o.o.

 

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Schedule 2
Companies and Subsidiaries

1  
Particulars of the Companies

     
Name of Company:
  Scotts International B.V.
 
   
Registered Number:
  14027868 
 
   
Registered/Principal Office:
  Nijverheidsweg 1-5, 6422 PD Heerlen, The Netherlands
 
   
Date and place of incorporation:
  8 January 1975 in Heerlen 
 
   
Issued share capital:
  120,001 shares 
 
   
Authorised share capital:
  200,000 ordinary shares of €0.15 each 
 
   
Shareholders and shares held:
  OM Scott International Investments Ltd.: 120,001 shares (100 per cent. of
issued)
 
   
Directors:
  Fredericus Johannes Lambertus Bosch and Edward Ray Claggett
 
   
Secretary:
  Clifford Chance LLP
 
   
Managing Director/Chief Executive Officer:
  None

1.1  
Particulars of the Subsidiaries

     
Name of Subsidiary:
  Scott O.M. España S.A.
 
   
Registered Number:
  Page T-221, Volume 679, Sheet 23 (commercial register of Tarragona)
 
   
Registered/Principal Office:
  Avenida Roma 15, 1* 1a edificio Diagonal
 
  Tarragona
 
  Spain
 
   
Date and place of incorporation:
  18 June 1986 
 
   
Issued share capital:
  €968,511.5 (16,115 shares) 
 
   
Authorised share capital:
  16,115 bearer shares of €60.1 each 
 
   
Shareholders and shares held:
  Scotts International B.V.: 16,115 shares (100 per cent.)
 
   
Directors:
  Fredericus Johannes Lambertus Bosch, Wolter Van Rest and Edward Ray Claggett
 
   
Secretary:
  Wolter Van Rest
 
   
Managing Director/Chief Executive Officer:
  Fredericus Johannes Lambertus Bosch

 

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Name of Subsidiary:
  Scotts Deutschland GmbH
 
   
Registered Number:
  HRB130653
 
   
Registered/Principal Office:
  Veldhauserstrasse 197, 48527
Nordhorn, Germany
 
   
Date and place of incorporation:
  27 March 1991 
 
   
Issued share capital:
  1 share (valued at DM49,500) and 1 share (valued at DM500) 
 
   
Authorised share capital:
  DM50,000
 
   
Shareholders and shares held:
  Scotts International B.V.: 50,000 (100 per cent. of issued)
 
   
Directors:
  Fredericus Johannes Lambertus Bosch, Edward Ray Claggett, Dr. Antonius
Willenborg and Dr Winard Rose

2  
Particulars of the Companies

     
Name of Company:
  Scotts-Sierra Horticultural Products Company
 
   
Tax ID Number:
  94-1634227 
 
   
Registered/Principal Office:
  14111 Scottslawn Road, Marysville, Ohio 43041 
 
   
Date and place of incorporation:
  26 September 1966 in California 
 
   
Issued share capital:
  Class A Common shares: US$0.101 (101 shares)
 
  Class B Common share: US$0.001 (1 share)
 
   
Authorised share capital:
  6,099,900 Class A Common shares of US$0.001 each

100 Class B Common shares of US$0.001 each 
 
   
Shareholders and shares held:
  The Scotts Company LLC:
 
   
 
  Class A Common: 101 shares (100 per cent. of issued)
 
   
 
  Class B Common: 1 share (100 per cent. of issued)
 
   
Directors:
  James Hagedorn, Vincent Brockman and David Evans
 
   
Secretary:
  Vincent Brockman
 
   
Managing Director/Chief Executive Officer:
  James Hagedorn

 

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2.1  
Particulars of the Subsidiaries

     
Name of Company:
  Scotts-Sierra Crop Protection Company
 
   
Tax ID Number:
  77-0153275 
 
   
Registered/Principal Office:
  14111 Scottslawn Road 
 
  Marysville
 
  Ohio 43041
 
  USA
 
   
Date and place of incorporation:
  2 June 1987 in California 
 
   
Issued share capital:
  100 shares 
 
   
Authorised share capital:
  100 shares 
 
   
Shareholders and shares held:
  Scotts-Sierra Horticultural Products Company

100 shares
 
   
Directors:
  James Hagedorn, Vincent C. Brockman and David Evans
 
   
Secretary:
  Vincent C. Brockman
 
   
Managing Director/Chief Executive Officer:
  James Hagedorn

3  
Particulars of the Companies

     
Name of Company:
  Scotts France SARL
 
   
Registered Number:
  337 569 693 RCS Lyon 
 
   
Registered/Principal Office:
  21 Chemin de la Sauvegarde 
 
  69130 Ecully 
 
  France
 
   
Date and place of incorporation:
  8 July 1986 
 
   
Issued share capital:
  €795,379 (52,156 shares) 
 
   
Authorised share capital:
  52,156 shares of €15.25 each 
 
   
Shareholders and shares held:
  Scotts France Holdings SARL: 52,155 shares (99.998 per cent. of issued share
capital)
 
   
 
  Scotts Holdings Limited UK: 1 share (0.002 per cent. of issued share capital)
 
   
Directors:
  Fredericus Johannes Lambertus Bosch and Arnoud Touw

 

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4  
Particulars of the Companies

     
Name of Company:
  The Scotts Company Kenya Ltd.
 
   
Registered Number:
  C85614 
 
   
Registered/Principal Office:
  The Alpha Centre Mombasa Road,
L.R. Number 209/120428, Nairobi, Kenya
 
   
Date and place of incorporation:
  17 May 1999 
 
   
Issued share capital:
  KSH40 (2 shares)
 
   
Authorised share capital:
  2,000 shares of KSH20 each 
 
   
Shareholders and shares held:
  Scotts-Sierra Investments, Inc.: 1 share (50 per cent. of issued)
 
   
 
  OMS Investments, Inc.: 1 share (50 per cent. of issued)
 
   
Directors:
  Fredericus Johannes Lambertus Bosch, Edward Ray Claggett and Paul Boers
 
   
Secretary:
  David White and Associates

5  
Particulars of the Companies

     
Name of Company:
  Scotts Italia S.r.l.
 
   
Registered Number:
  031536002 
 
   
Registered/Principal Office:
  Via Daniele Monterumici 8, 31100
Treviso, Italy
 
   
Date and place of incorporation:
  4 October 1995, Treviso 
 
   
Issued share capital:
  €99,500 (99,500 shares) 
 
   
Authorised share capital:
  99,500 shares of €1 each 
 
   
Shareholders and shares held:
  OM Scotts International Investments Ltd.: 94,525 shares (95 per cent. of
issued)

James Hagedorn: 4,975 share (5 per cent. of issued)
 
   
Directors:
  Wolter Van Rest, Edward Ray Claggett and Fredericus Johannes Lambertus Bosch
 
   
Chairman:
  Wolter Van Rest

 

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6  
Particulars of the Companies

     
Name of Company:
  Scotts PBG Malaysia Sdn. Bhd.
 
   
Registered Number:
  505498-A 
 
   
Registered/Principal Office:
  Wisma Goshen 2nd floor, 60, 62 & 64
Jalan SS 22/21, Damansara Jaya,
47400 Petaling Jaya, Selangor,
Malaysia
 
   
Date and place of incorporation:
  16 February 2000 
 
   
Issued share capital:
  MYR50,002 (50,002 shares)
 
   
Authorised share capital:
  100,000 shares of MYR1 each 
 
   
Shareholders and shares held:
  Scotts-Sierra Investments, Inc.: 50,002 shares (100 per cent. of issued)
 
   
Directors:
  Edward Ray Claggett, Woon Chee Cheong, Guilhem Pierre Georges Pinault,
Sivagami A/P Mariappan
 
   
Secretaries:
  Wong Lee May
 
  Eng Soo Funn
 
  Lam Lee San

 

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Schedule 3
The Properties
Part 1
Group Companies’ Properties

1  
Group Companies’ Owned Properties

1.1  
Properties owned by Scotts International B.V.

      Property Description   Land registry code (kadastrale aanduiding)
1 ha 80 a 50 ca in size of land at Nijverheidsweg 5, 6422 PD Heerlen,
The Netherlands
  HEERLEN F 5274
 
   
1 ha, 92 a and 60 ca in size of buildings at Nijverheidsweg 1 and 36422 PD
Heerlen, The Netherlands
  HEERLEN F 5861

2  
Group Companies’ Leased Properties

2.1  
Properties leased by Scotts International B.V.

              Brief Description of
the Property   Date of Lease   Original Parties   Term
Approximately 1,109 square metres of office space (including the use of parking
lots) on the second and third floors of the office building at Koeweistraat 4,
Waardenburg, The Netherlands (Land registry code (kadastrale aanduiding)
WAARDENBURG X 1243)
  9 December 2005   (1) F.J. van Engelen
and L.A. Agterberg

(2) Scotts International B.V.   Three years from 1 December 2005. Thereafter,
the lease agreement is extended for three years until 30 November 2011 and,
thereafter, for subsequent periods of five years
 
           
Commercial building and land (1 ha 1 a 70 ca) at Nijverheidsweg 3A, 6422 PD
Heerlen, The Netherlands (Land registry code (kadastrale aanduiding) HEERLEN F
5862)
  18 May 2010   (1) FGH Bank N.V.

(2) Scotts International B.V.   15 years from 1 May 2010

 

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              Brief Description of
the Property   Date of Lease   Original Parties   Term
Commercial building and land (approximately 11,000 square metres) at Oude
Roderweg 18, 6422 PD Heerlen, The Netherlands (Land registry code (kadastrale
aanduiding) HEERLEN F 6034: formerly HEERLEN F5997)
  18 February 2008   (1) BAM Utiliteitsbouw B.V

(2) Scotts International B.V.   15 years from 1 October 2008
 
           
108 square metre apartment (and 1 parking lot and 14m2 storage in separate
garage) located in Budakeszi, Szanatóriumu. 4.I.em, Hungary
  15 August 2006   (1) Mr and Mrs Jenő Lucz

(2) Scotts International
B.V. (Magyarországi
Kèpviselete)   Extended term: three years from 31 July 2009

2.2  
Properties leased by Scotts Italia S.r.l.

              Brief Description of
the Property   Date of Lease   Original Parties   Term
Treviso Sales Office “Piazza Eden”, located in Treviso, Via Daniele Monterumici
— Giuseppe Verdi, registered with the Treviso Cadastre Register (Catasto
Fabbricati) under Section D, sheet no. 4, map 1211 sub 310, cat A/10, map 1211
sub 396, cat A/10 and Treviso car park spaces, located in Treviso, registered
with the Treviso Cadastre Register (Catasto Fabbricati) under Section D, sheet
no. 4 map 1211
sub 289, map 1211
sub 290, map 1211
sub 291, map 1211
sub 292, map 1211
sub 293 particle nos. 743, 744, 746, 759, 748, 159 and 633
  10 May 2005   (1) Giorgiana Marchesi

(2) Scotts Italia S.r.l.   Six years from 1 June 2005. The lease agreement will
expire on 31 May 2011 (“Expiration Date”). Unless a party withdraws from the
lease agreement (pursuant to articles 28 and 29 of law 392/1978), by means of a
written notice served to the other party at least 12 months before the
Expiration Date (i.e. 31 May 2010), the lease agreement will be automatically
renewed for a six-year period until 31 May 2017.

 

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              Brief Description of
the Property   Date of Lease   Original Parties   Term
Garage located in Treviso, Via Daniele Monterumici — Cadastre Register (Catasto
Fabbricati) under Section D, map 1211, sub 355 Sheet 4. 18sqm
  2 October 2006   (1) Pagi S.r.l.

(2) Scotts Italia S.r.l.   The lease agreement will expire on 2 Oct 2007
(“Expiration Date”). Unless a party withdraws from the lease agreement by means
of a written notice served to the other party at least three months before the
Expiration Date (or the next anniversary of the Expiration Date), the lease
agreement will be automatically renewed for a one-year period.

2.3  
Properties leased by Scott O.M. España S.A.

              Brief Description of
the Property   Date of Lease   Original Parties   Term
Office number 1 located at Avenida de Roma 15, Tarragona, Spain, and parking
spaces number 25 and 26
  17 October 2005   (1) Covas Arnau S.L.

(2) Scott O.M. España S.A.   Initial term of three years from 17 October 2005.
Once such period has expired, the lease can be automatically extended (tácita
reconducción) on a monthly basis.

 

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2.4  
Properties leased by Scotts Deutschland GmbH

              Brief Description of
the Property   Date of Lease   Original Parties   Term
Apartment 2 (ground floor left — used as office), one cellar room, 53,90 sqm,
three parking lots located at Veldhauser Str. 197-199, 48527 Nordhorn, Germany
  16 October 1993   (1) Ellen Kamphorst

(2) Grace-Sierra
Deutschland GmbH   From December 1993 until November 1998, subject to automatic
annual extension for further periods of 12 months if not terminated six months
prior to the end of the relevant extension period.
 
           
Apartment 1 (ground floor left — used as office), 76,80 sqm, four parking lots
located at Veldhauser Str. 197-199, 48527 Nordhorn, Germany
  16 October 1993   (1) Helga Kamphorst

(2) Grace-Sierra
Deutschland GmbH   From December 1993 until November 1998, subject to automatic
statutory extension unless terminated by serving a termination notice three
months in advance.
 
           
Office space (72 sqm) located at Veldhauser Str. 197, 48527

Nordhorn, Germany and one parking space
  17 May 2005   (1) Monika Wasserman

(2) Scotts Deutschland Gmbh   Indefinite term from 1 June 2005 subject to
termination by either party by service of three months’ notice, to expire at the
end of a calendar quarter.

2.5  
Properties leased by The Scotts Company Kenya Ltd.

              Brief Description of
the Property   Date of Lease   Original Parties   Term
Land situated in the city of Nairobi in the Nairobi area of the Republic of
Kenya (0.0551 hectare), land reference number: 209/12042/8, Land Survey Plan
Number 211735
  20 December 2005   (1) Akshrap Holdings Limited

(2) The Scotts Company Kenya Ltd.   Five years and six months as of 1 April 2005

 

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2.6  
Properties leased by Scotts-Sierra Horticultural Products Company

              Brief Description of
the Property   Date of Lease   Original Parties   Term
6.316 hectares of land located at 7200 Investment Drive, North Charleston, South
Carolina, USA
  1 September 1989

(Amended 17 December 1999
and 7 July 2005)   (1) Landmark Enterprises, Inc.

(2) Scotts-Sierra Horticultural Products Company (successor to Sierra Chemical
Company)   10 years as of 1 October 1989 through to 28 February 2015 (pursuant
to amendments)

2.7  
Properties leased by Scotts PBG Malaysia Sdn. Bhd.

              Brief Description of
the Property   Date of Lease   Original Parties   Term
Unit C-8-1.1, Level 8, Block C (1,009 sq ft), Mines Waterfront Business Park, No
3, Jalan Tasik, Mines Resort City, 43300 Selangor, Malaysia
  15 October 2010   (1) Mines Waterfront
Business Park Sdn. Bhd.

(2) Scotts PBG Malaysia Sdn. Bhd.   Two years from 1 October 2010
 
         

3  
Encumbrances in respect of the Group Companies’ Properties

3.1  
Office space located at Koeweistraat 4, Waardenburg, The Netherlands (Part 1 of
Schedule 3, paragraph 2.1)

  3.1.1  
Bank guarantee for an unlimited period dated 3 March 1997 provided by ABN AMRO
Bank B.V. in the name of Scotts International B.V. and with F.J. van Engelen as
beneficiary(ies) for an amount of Euro 90,525.34 with an annual guarantee
commission of one per cent. of the amount of the Bank guarantee.

  3.1.2  
A right in rem (zakelijk recht) in favour of Vitens B.V. in accordance with
Section 5 paragraph 3 under B of the Public Works (Removal of Impediments in
Private Law) Act (Wet Belemmeringenwet Privaatrecht).

  3.1.3  
The following obligations attached to the capacity of lessee (kwalitatieve
verplichtingen) have been included in the notarial deed of transfer dated 20
February 2007 between (1) Messrs. Agterberg and Van Engelen and
(2) Exploitatiemaatschappij Hakfort B.V. in relation to, among others, the
office building and parking lots located at Koeweistraat 4, Waardenburg, The
Netherlands with Land Registry code WAARDENBURG X 1243:

  (i)  
to refrain from any open storage of materials and/or substances unless
authorised by representative bodies of the municipality of Waardenburg;

 

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  (ii)  
to make a proportional and reasonable financial contribution to the costs of a
shuttle service during rush hour to transport employees working at business park
“Slimwei” and the Zaltbommel train station;
    (iii)  
to have, hold and maintain various pipes in favour of public utility companies
and to permit construction and maintenance of such pipes; and
    (iv)  
to have, hold and maintain a pressure pipe in favour of Zuiveringsschap
Rivierengebied.

3.2  
Office space located at Oude Roderweg 18, Heerlen, The Netherlands (Part 1 of
Schedule 3, paragraph 2.1)

Bank guarantee for an unlimited period dated 11 December 2008 provided by ABN
AMRO Bank B.V. in the name of Scotts International B.V. and with BAM
Utiliteitsbouw B.V. as beneficiary, for an amount of Euro 68,437, with an annual
guarantee commission of one per cent. of the amount of the bank guarantee.

3.3  
Treviso Sales Office and car park spaces located in Treviso, Via Daniele
Monterumici — Giuseppe Verdi (Part 1 of Schedule 3, paragraph 2.2)

Pursuant to article 12 of the lease set out in paragraph 2.2 of Part 1 of
Schedule 3, the tenant granted to the landlord an amount of Euro 9,000, as
guarantee for the performance of its obligations set forth under the lease.

3.4  
Land located at 7200 Investment Drive, North Charleston, South Carolina, USA
(Part 1 of Schedule 3, paragraph 2.6)

  3.4.1  
Indenture dated 17 December 1999 made between Landmark Enterprises, Inc. and
Scotts-Sierra Horticultural Products Company (the successor in interest to
Sierra Chemical Company).
    3.4.2  
Indenture dated 7 July 2005 made between Landmark Enterprises, Inc. and
Scotts-Sierra Horticultural Products Company (the successor in interest to
Sierra Chemical Company).

3.5  
Unit 1.1, Level 8, Block C, Mines Waterfront Business Park, No 3, Jalan Tasik,
Mines Resort City, 43300 Selangor, Malaysia (Part 1 of Schedule 3, paragraph
2.7)

Letter of Offer from Mines Waterfront Business Park Sdn Bhd to Scotts PBG
Malaysia Sdn. Bhd. dated 6 May 2010.

 

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4  
Provisions relating to the second Property referred to at paragraph 2.1 of
Part 1 of Schedule 3.

4.1  
The following definitions apply in paragraph 4 of Part 1 of this Schedule 3;

“Dutch Tenant” means Scotts International B.V.;
“Duty to Inform” means the duty to inform the Nijverheidsweg Landlord of the
decision with respect to the sale to the Relevant Purchaser of the Shares in the
Dutch Tenant;
“Nijverheidsweg Landlord” means the person entitled to the immediate reversion
to the Nijverheidsweg Lease; and
“Nijverheidsweg Lease” means the lease of the Group Company Property listed
second at paragraph 2.1 of Part 1 of this Schedule 3 dated 18 May 2010 and made
between FGH Bank N.V. (1) and the Dutch Tenant (2).

4.2  
Duty to Inform

The Relevant Seller shall procure that the Dutch Tenant meets the Duty to Inform
as required by clause 12 of the general terms of the Nijverheidsweg Lease within
10 Business Days hereof.

4.3  
Additional security required by Nijverheidsweg Landlord

In case, further to the Dutch Tenant meeting the Duty to Inform, the
Nijverheidsweg Landlord requires additional security for the performance of the
terms of the Nijverheidsweg Lease, the Seller and the Purchaser will discuss the
conditions of the additional security prior to the Dutch Tenant agreeing on any
such additional security.

5  
Provisions relating to the Property referred to at paragraph 2.5 of Part 1 of
Schedule 3
  5.1  
Interpretation

The following definitions apply in paragraph 5 of Part 1 of this Schedule 3:
“Change of Control Consent” means the consent by the Nairobi Landlord to the
sale to the Relevant Purchaser of the Shares in the Nairobi Tenant;
“Nairobi Landlord” means the person entitled to the immediate reversion to the
Nairobi Lease;
“Nairobi Lease” means, as appropriate, either (i) the lease of the Group Company
Property listed at paragraph 2.5 of Part 1 of this Schedule 3 dated 20
December 2005 and made between Akshrap Holdings Limited (1) and the Nairobi
Tenant (2); or (ii) the renewal lease of the Group Company Property listed at
paragraph 2.5 of Part 1 of this Schedule 3 to be entered into after the date
hereof between Akshrap Properties Limited (1) and the Nairobi Tenant (2); and
“Nairobi Tenant” means The Scotts Company Kenya Ltd.

5.2  
Change of Control Consent

  5.2.1  
The Relevant Seller shall procure that the Nairobi Tenant applies for the Change
of Control Consent as required by clause 3(o) of the Nairobi Lease.

 

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  5.2.2  
The Relevant Purchaser shall, at its own cost and without delay following the
application referred to in paragraph 5.2.1:

  (i)  
supply all such information, accounts and references as the Nairobi Landlord or
the Relevant Seller may reasonably require in connection with an application for
or consideration of the application for the Change of Control Consent;
    (ii)  
ensure that any amendments that the Relevant Purchaser proposes to make to the
form of Change of Control Consent or to any document mentioned in paragraph
5.2.2(iii) that has been submitted to the Nairobi Landlord or to the Nairobi
Landlord’s lawyers are communicated promptly to the Seller’s Lawyers;
    (iii)  
supply, procure or enter into any such guarantees, rental or other deposits,
direct covenants or other security for the performance of the tenant covenants
of the Nairobi Lease as may be properly required under the Nairobi Lease or as
the Nairobi Landlord or any superior landlord may reasonably require;
    (iv)  
use reasonable endeavours to obtain the Change of Control Consent;
    (v)  
keep the Relevant Seller fully informed;
    (vi)  
give the Relevant Seller notice immediately on obtaining the Change of Control
Consent and provide the Relevant Seller with a copy of the Change of Control
Consent as soon as reasonably practicable thereafter; and
    (vii)  
(if required) execute the documents containing the Change of Control Consent and
execute or procure the execution of the documents (if any) required to be
entered into pursuant to paragraph 5.2.2(iii), each in the form reasonably
required by the Nairobi Landlord or by any superior landlord. The Relevant
Purchaser will return all such documents duly executed to the Seller’s Lawyers
within five Business Days after the engrossment has been submitted to the
Purchaser’s Lawyers.

  5.2.3  
Subject to paragraph 5.3, the Relevant Seller shall procure that the Nairobi
Tenant executes the documents containing the Change of Control Consent (if
properly required by the Nairobi Landlord).
    5.2.4  
The Relevant Purchaser shall be responsible for and shall pay on demand the
proper costs of the Nairobi Landlord, any superior landlord and their respective
professional advisers in connection with the application for, and consideration
and grant of, the Change of Control Consent and, where required to do so by the
Nairobi Landlord and/or its professional advisers, provide a formal undertaking
in respect of such costs.

5.3  
Failure to obtain the Change of Control Consent by Closing

If the Change of Control Consent has not been obtained by Closing, this shall
not prevent Closing from taking place and:

  5.3.1  
with effect from Closing the liability of the Relevant Seller and the Relevant
Purchaser under paragraph 4 of Part 1 of this Schedule 3 shall cease; and
    5.3.2  
the Relevant Seller shall not be liable for any losses suffered by the Relevant
Purchaser or by the Nairobi Tenant as a result of any breach of the Nairobi
Lease which arises prior to Closing solely by reason of the fact that the Change
of Control Consent has not been obtained by Closing.

 

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6  
Provisions relating to the Property referred to at paragraph 2.6 of Part 1 of
this Schedule 3
  6.1  
The following definitions apply in paragraph 6 of Part 1 of this Schedule 3:

“Change of Control Notice” means a notice to be served on the Charleston
Landlord by SSHPC informing the Charleston Landlord of the proposed sale of the
Shares in SSHPC together with such evidence as the Relevant Purchaser shall
require to be provided that the Relevant Purchaser has the “Requisite Financial
Capacity” as required under the terms of the Charleston Lease;
“Charleston Landlord” means the person entitled to the immediate reversion to
the Charleston Lease; and
“Charleston Lease” means the lease of the Group Company Property listed at
paragraph 2.6 of Part 1 of this Schedule 3 dated 1 September 1989 and made
between Landmark Enterprises, Inc. (1) and SSHPC (successor to Sierra Chemical
Company) (2) (as amended and extended on 17 December 1999 and 7 July 2005).

6.2  
The Relevant Seller shall procure that SSHPC serves the Change of Control Notice
on the Charleston Landlord, as required by clause C.13 of the Charleston Lease,
within five Business Days hereof if SSHPC has not already done so.
  6.3  
Closing shall not be prevented from occurring by reason solely of the fact (if
the case) that Closing is set to occur on a date which is less than 30 days from
the date on which SSHPC served the Change of Control Notice on the Charleston
Landlord and:

  6.3.1  
the Relevant Purchaser shall have no claim against any Seller in that regard
under this Agreement; and
    6.3.2  
the Relevant Seller shall not be liable for any Losses suffered by the Relevant
Purchaser or SSHPC as a result of any breach of the Charleston Lease which
arises prior to Closing solely by reason of the fact (if the case) that Closing
is set to occur on a date which is less than 30 days from the date on which
SSHPC served the Change of Control Notice on the Charleston Landlord.

 

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Part 2
Business Properties (Clause 2.3.1(i))

1  
Business Owned Properties

Business Owned Properties owned by The Scotts Company (UK) Ltd.

      Property Description   Title Number (if registered)
Subjects at Nutberry Moss, Dumfries, lying to the north of the road from Annan
to Gretna
  Scottish Title Number: DMF17006
 
   
Subjects at Nutberry Moss, Dumfries, lying to the north of the road from Annan
to Gretna
  Scottish Title Number: DMF17003
 
   
Subjects lying to the West of Eastertown Road, Eastertown being 43.5 hectares in
measurement
  Scottish Title Number: LAN58915

2  
Business Leased Properties

Business Leased Properties leased in Scotland by The Scotts Company (UK) Ltd.
(described in the remainder of Part 2 of this Schedule 3 as the “Business Leased
Properties in Scotland” and “Business Leased Property in Scotland” shall refer
to any one)

              Brief Description of             the Property   Date of Lease  
Original Parties   Term
Subjects forming part of Nutberry Moss, Dumfriesshire extending to 32.42
hectares
  13 and 29 June 2006   (1) Margaret Halliday

(2) Neil William Halliday and John Irvine Halliday

(3) William Halliday and Sons

(4) Humax Horticulture Limited   Nine years from 1 March 2006 to 28
February 2015 (and on a monthly basis thereafter until terminated by one month’s
written notice served by either party)

 

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              Brief Description of             the Property   Date of Lease  
Original Parties   Term
Irregularly shaped area of ground in the former Parish of Annan in the County of
Dumfries known as Creca Moss and formerly known as Banshaw Flow or White Moss or
Flow or West Bretton Moss and extending to 90.18 hectares or thereby
  2 June, 11 and 25 July and 4 and 21 August all 2006   (1) Anne Merrifield
Johnstone, The Right Honourable Patrick Andrew Wentworth Hope Johnstone, Earl of
Annandale and Hartfell, William Giles Newbury Morgan and Henry Charles Abram as
Trustees acting Deed of Trust by Andrew John Robert Johnstone

(2) Humax Horticulture Limited   10 years from 11 May 2006 to 10 May 2016 (and
on a monthly basis thereafter until terminated by one month’s written notice
served by either party)
 
           
Access track forming part of the lands and farm of Beechhill
  25 May and 12 June 2006   (1) David Gilmour Armstrong and Mrs Carol Margaret
as Partners of and Trustees for the firm of D Armstrong Partners

(2) Humax Horticulture Limited   10 years from 11 May 2006 to 10 May 2016 (and
on a
monthly basis
thereafter until
terminated by one
month’s written
notice served by
either party)
 
           
Plot or area of ground extending 5.482 acres or thereby lying in the Parish of
Lesmahagow and County of Lanark forming PART and PORTION of the Farm and Lands
of Eastertown
  22 and 31 May 1996 (As varied by a Minute of Variation dated 12 September and
6 December 2002)   (1) Colin James Fleming Tennant and Mrs Carol Margaret
Tennant as partners for and trustees for the firm of C & C Tennant

(2) Levington Horticulture Limited (now The Scotts Company (UK) Ltd.)   14
June 1995 to 13 June 2000 - Lease extended by a Minute of Variation of Lease
until 14 June 2010 - Lease believed to currently be running on tacit relocation
from year to year

3  
Encumbrances in respect of the Business Properties
  3.1  
Subjects at Nutberry Moss, Dumfries, lying to the north of the road from Annan
to Gretna (DMF17006)

  3.1.1  
Disposition by H. M. Principal Secretary of State for the War Department to
Department of Agriculture for Scotland and its successors and assignees,
recorded G.R.S. (Dumfries) 23 August 1933.

 

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  3.1.2  
Disposition by The Secretary of State for Scotland to John Ebeneezer Innes
Nicholson and his executors and assignees, recorded G.R.S. (Dumfries) 10
August 1983.
    3.1.3  
Disposition by The Secretary of State for Scotland to Richardson’s Moss Litter
Company Limited and its successors and assignees, recorded G.R.S. (Dumfries) 9
July 1984.
    3.1.4  
Disposition by The Secretary of State for Scotland to Richardson’s Moss Litter
Company Limited and its successors and assignees, recorded G.R.S. (Dumfries) 8
December 1987.
    3.1.5  
Disposition by David Iain Martindale to Richardson’s Moss Litter Company Limited
and its successors and assignees, recorded G.R.S. (Dumfries) 20 October 1988.
    3.1.6  
Disposition by Richardson’s Moss Litter Company Limited to The Scotts Company
(UK) Ltd. and its successors and assignees, recorded G.R.S. (Dumfries) 30
November 2005.
    3.1.7  
All other matters contained or referred to in the Land Certificate for title
number DMF17006.

3.2  
Subjects at Nutberry Moss, Dumfries, lying to the north of the road from Annan
to Gretna (DMF17003)

  3.2.1  
Disposition by H. M. Principal Secretary of State for the War Department to
Department of Agriculture for Scotland and its successors and assignees,
recorded G.R.S. (Dumfries) 23 August 1933.
    3.2.2  
Disposition by James George Martindale to Richardson’s Moss Litter Company
Limited and their successors and assignees, recorded G.R.S. (Dumfries) 6
May 1959.
    3.2.3  
Disposition by Robert Irving to Richardson’s Moss Litter Company Limited and
their successors and assignees, recorded G.R.S. (Dumfries) 24 January 1962.
    3.2.4  
Disposition by The Secretary of State for Scotland to Richardson’s Moss Litter
Company Limited and its successors and assignees, recorded G.R.S. (Dumfries) 9
July 1984.
    3.2.5  
Disposition by The Secretary of State for Scotland to Richardson’s Moss Litter
Company Limited and its successors and assignees, recorded G.R.S. (Dumfries) 1
April 1986.
    3.2.6  
Disposition by Richardson’s Moss Litter Company Limited to David Iain Martindale
and his successors and assignees, recorded G.R.S. (Dumfries) 9 April 1987.
    3.2.7  
Disposition by Richardson’s Moss Litter Company Limited to The Scotts Company
(UK) Ltd. and its successors and assignees, recorded G.R.S. (Dumfries) 30
November 2005.
    3.2.8  
All other matters contained or referred to in the Land Certificate for title
number DMF17003.

 

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3.3  
Subjects lying to the west of Eastertown Road, Eastertown (LAN58915)

  3.3.1  
Disposition by Douglas and Angus Estates to Charles Prentice and his heirs and
assignees, recorded G.R.S. (Lanark) 1 October 1957.
    3.3.2  
Disposition by Douglas and Angus Estates with consent of and by Omnivale Limited
to John Jamieson Frame and Mary Margaret Caig or Frame and their assignees or
disponees, recorded G.R.S. (Lanark) 11 July 1983.
    3.3.3  
Disposition by Douglas and Angus Estates with consent of and by Omnivale Limited
to Omnivale Pension Scheme Trustees recorded G.R.S. (Lanark) 10 October 1983.

3.4  
Subjects forming part of Nutberry Moss, Dumfriesshire extending to 32.42
hectares

  3.4.1  
Disposition and Deed of Entail granted by the deceased Thomas Rodick of Flosh
dated 20 October 1781 in favour of himself in life rent and John Rodick, his
eldest son and his heirs male, which Deed of Entail is recorded in the Register
of Tailzies on 15 December 1781.
    3.4.2  
Decree of Special Service obtained before the Sheriff of Dumfriesshire in favour
of Robert Preston Birkett Rodick dated 22 and recorded in Chancery and extracted
on 23, both days of April and recorded in the Division of the General Register
of Sasines for the County of Dumfries on 19 May, all dates in 1870.
    3.4.3  
Disposition by Thomas Sanderson Halliday in favour of Hugh Sanderson dated 17
July and recorded in the Division of the General Register of Sasines for the
County of Dumfries on 14 August both dates in 1972.
    3.4.4  
Disposition by Thomas S Halliday in favour of Alexander Halliday and Mrs
Margaret Halliday dated 31 December 1973 and recorded GRS (Dumfries) 23
July 1975.
    3.4.5  
Disposition by Mrs Amelia White and David Halliday White as Executors of the
late Thomas Sanderson Halliday in favour of Neil William Halliday and John
Irvine Halliday as Executors of the late Alexander Halliday dated 16
December 1985 and recorded GRS (Dumfries) 15 January 1986 (Book 1718. Folio
226).
    3.4.6  
Disposition by Mrs Amelia White and David Halliday White as Executors of the
late Thomas Sanderson Halliday in favour of Mrs Margaret Halliday dated 16
December 1985 and recorded GRS (Dumfries) 15 January 1986 (Book 1718. Folio
223).
    3.4.7  
Missive Letter dated 18 and 30 August 2006 between Shepherd and Wedderburn on
behalf of Humax Horticulture Limited and Harper Robertson & Shannon on behalf of
Margaret Halliday, Neil William Halliday and John Irvine Halliday and William
Halliday and Sons.

 

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3.5  
Irregularly shaped area of ground in the former parish of Annan in the county of
Dumfries known as Creca Moss and formerly known as Banshaw Flow or White Moss or
Flow or West Bretton Moss and extending to 90.18 hectares

  3.5.1  
Disposition by Carlyle Murray Johnston, Thomas Graham Johnston, William Johnston
and Ian Johnston as Trustees for the firm of William Johnston and Sons in favour
of Mrs Anne Merrifield Johnstone and Sir Michael Alexander Robert Young Herries,
James Bright Robertson and Kenneth Murray Walker as Trustees acting under Deed
of Trust by the late Andrew John Robert Johnstone recorded GRS (Dumfries) 8
December 1983.
    3.5.2  
Deed of Assumption and Conveyance by Trustees acting under Deed of Trust by
Andrew John Robert Johnstone in favour of John Weir Johnstone with Resignation
by James Bright Robertson registered in the Books of Council and Session on 13
January 1984.
    3.5.3  
Deed of Assumption and Conveyance by Sir Michael Alexander Robert Young Herries
and Others in favour of The Right Honourable Patrick Andrew Wentworth Hope
Johnstone, Earl of Annandale and Hartfell incorporating resignation by Kenneth
Murray Walker and John Weir Johnstone registered in the Books of Council and
Session on 8 September 1994.
    3.5.4  
Deed of Assumption in favour of William Giles Newberry Morgan and Henry Charles
Abram registered in the Books of Council and Session on 15 May 1997.
    3.5.5  
Instrument of Sasine in favour of James Malcolm recorded in the New General
Register of Sasines etc. on 18 May 1852.
    3.5.6  
Disposition by Andrew Pearson and Another as Trustees therein mentioned in
favour of William Johnstone and Mrs Elizabeth Murray or Johnstone recorded GRS
(Dumfries) on 26 August and in the Register of Sasines Reversions etc. kept for
the Royal Burgh of Annan on 26 November, both dates in 1919.
    3.5.7  
Disposition by Andrew Pearson and Another as Trustees therein mentioned in
favour of John Thomson recorded GRS (Dumfries) 26 August 1919 and in the
Register of Sasines Reversions etc. for the Royal Burch of Annan on 26
November 1919.
    3.5.8  
Deed of Trust by Andrew John Robert Johnstone registered in the Books of Council
and Session on 8 May 1972.
    3.5.9  
Disposition by Anne Merrifield Johnstone and John Weir Johnstone and The Right
Honourable Patrick Andrew Wentworth Hope Johnstone, Earl of Annandale and
Hartfell, William Giles Newbury Morgan and Henry Charles Abram as Trustees
acting under Deed of Trust by Andrew John Robert Johnstone in favour of Robert
James Stodart and Mrs Alison Stodart recorded GRS (Dumfries) on 20
December 2005.

3.6  
Access track forming part of the lands and farm of Beechill

  3.6.1  
Disposition by Carlyle Murray Johnston, Thomas Graham Johnston, William Johnston
and Ian Johnston, as partners of and trustees for the firm of William Johnston
and Sons in favour of Charles Telfer Scott, Mrs Elizabeth Porter Scott, Robert
Anderson Scott and Miss Carol Margaret Scott, as partners of and trustees for
the firm of CT Scott & Partners recorded GRS (Dumfries) 1 December 1983.

 

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  3.6.2  
Disposition by Charles Telfer Scott and Mrs Elizabeth Porter Scott, Robert
Anderson Scott and Mrs Carol Margaret Scott or Armstrong as partners of and
trustees for the firm of CT Scott & Partners in favour of David Gilmour
Armstrong and Mrs Carol Margaret Armstrong as partners of and trustees for the
firm of D Armstrong & Partners recorded GRS (Dumfries) 1 March 2004.
    3.6.3  
Instrument of Sasine in favour of James Malcolm recorded in the New General
Register of Sasines etc. on 18 May 1852.
    3.6.4  
Grant of Servitude by Robert Johnston and Others as Trustees for William
Johnston and Sons in favour of The United Kingdom Atomic Energy Authority
recorded GRS (Dumfries) 14 April 1960.
    3.6.5  
Disposition by Andrew Pearson and Others in favour of John Thomson recorded GRS
(Dumfries) 26 August 1919 and in the Register of Sasines reversions etc. for the
Royal Burgh of Annan on 26 November 1919 (Lands of Beechhill etc.).
    3.6.6  
Disposition by British Nuclear Fuels Limited in favour of Carlyle Murray
Johnston and Others as Trustees for the firm of William Johnston and Sons
recorded GRS (Dumfries) 24 June 1971.
    3.6.7  
Disposition by Andrew Pearson and Another as Trustees therein mentioned in
favour of William Johnstone and Mrs Elizabeth Murray or Johnstone recorded GRS
(Dumfries) 26 August and in the Register of Sasines Reversions Etc. for the
Royal Burgh of Annan on 26 November 1919 (Lands of Johnstonlea etc.).
    3.6.8  
Disposition by John Thomson in favour of William Johnstone and Mrs Elizabeth
Murray or Johnstone recorded GRS (Dumfries) 4 August 1927 and in the Division of
the Register of Sasines Reversions etc. for the Royal Burgh of Annan on 12
March 1928.
    3.6.9  
Disposition and Assignation by Mrs Isabella Letham Coltart Penman or Penman and
Andrew Coltart Penman in favour of Themselves the said Isabella Letham Coltart
Penman or Penman and Andrew Coltart Penman recorded GRS (Dumfries) 29
October 1940.
    3.6.10  
Disposition by Charles Telfer Scott and Mrs Elizabeth Porter Scott, Robert
Anderson Scott and Mrs Carol Margaret Scott or Armstrong and David Gilmour
Armstrong as partners of and trustees for the firm of CT Scott & Partners in
favour of British Nuclear Fuels Limited recorded GRS (Dumfries) 15
February 1989.

3.7  
Plot or area of ground extending 5.482 acres or thereby lying in the Parish of
Lesmahagow and County of Lanark forming PART and PORTION of the Farm and Lands
at Eastertown

  3.7.1  
Disposition by Robert McKinlay Tennant and Mrs Janet McCaskie Kerr or Tennant in
favour of Colin James Fleming Tennant and Mrs Carol Margaret Tennant as trustees
for the firm of C & C Tennant dated 12 February and recorded in the Division of
the General Register of Sasines for the County of Lanark on 1 June, both dates
in 1994.
    3.7.2  
Disposition by Douglas and Angus Estates with consent in favour of Robert
McKinlay Tennant, Mrs Janet McCaskie Kerr or Tennant and Colin James Fleming
Tennant as partners of and trustees for the firm of Robert Tennant dated 20 and
23 and recorded in the Division of the General Register of Sasines for the
County of Lanark on 31, all dates in December 1982.

 

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4  
General provisions relating to the Business Owned Properties owned by The Scotts
Company (UK) Ltd.
  4.1  
Interpretation

“Scottish Property Purchaser” means ICL Iberia Limited;
“Scottish Property Seller” means The Scotts Company (UK) Ltd. (Registered Number
002924130); and
“Scottish Property Seller’s Scottish Solicitors” means Tods Murray LLP of
Edinburgh Quay, 133 Fountainbridge, Edinburgh EH3 9AG.

4.2  
Jurisdiction

The obligations and conditions in this paragraph 4 of Part 2 of Schedule 3 shall
be governed by and construed in accordance with Scottish law and the parties
irrevocably agree that the Scottish courts shall have exclusive jurisdiction to
settle any disputes which may arise out of or in connection with this paragraph
4 of Part 2 of Schedule 3.

4.3  
Closing Obligations

On the Closing Date in relation to the Business Owned Properties the Scottish
Property Seller shall deliver to the Scottish Property Purchaser:

  4.3.1  
a valid disposition for each of the Business Owned Properties in favour of the
Scottish Property Purchaser or its nominee in Agreed Terms and executed in
self-evidencing manner;
    4.3.2  
a Land Certificate in respect of each of the Business Owned Properties together
with all necessary links in title evidencing the Scottish Property Seller’s
exclusive ownership of each of the Business Owned Properties and Form 12 Report
and Form 13 Reports (the Form 12 Reports or Form 13 Reports, as the case may be,
brought down to a date as near as practicable to the Closing Date and showing no
entries adverse to the Scottish Property Seller’s interests (any cost of the
said Reports being the responsibility of the Scottish Property Seller));
    4.3.3  
an interim report on Search in the Company Charges Register and Company file
kept by the Registrar of Companies in respect of the Scottish Property Seller,
brought down to a date as close as practicable to the Closing Date, such Search
thereafter to be brought down to 22 days after the date of recording or
registration (as the case may be) of each of the said dispositions in favour of
the Scottish Property Purchaser or its nominee, each of the interim report and
the Search (i) to show that no notice has been lodged in relation to the
appointment of a receiver, administrator or liquidator, or the winding-up or
striking-off of the Scottish Property Seller, (ii) to contain no entry which may
be prejudicial to the valid grant, delivery and registration of the said
disposition and (iii) to disclose the full names of the Directors and Company
Secretary of the Scottish Property Seller;
    4.3.4  
a report, produced by a firm of professional searchers, in the Register of
Community Interests in Land brought down to a date as near as practicable to the
Closing Date, disclosing no entry relating to the Business Owned Properties or
any part of them;

 

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  4.3.5  
a letter of obligation duly signed by the Scottish Property Seller’s Scottish
Solicitor in favour of the Scottish Property Purchaser in Agreed Terms
(declaring that any obligation in relation to Company file or Register of
Charges searches shall be granted by the Scottish Property Seller’s Scottish
Solicitors on behalf of its clients only);
    4.3.6  
a letter of consent and non-crystallisation in the creditor’s standard form from
the holder of any floating charge granted by the Scottish Property Seller;
    4.3.7  
a valid discharge of any standard security affecting the Business Owned
Properties executed in a self-evidencing manner together with Forms 2 and 4 and
the Scottish Property Seller’s Scottish Solicitors’ cheque for the registration
dues thereon;
    4.3.8  
the principal First Scottish title indemnity policy number (Scotland)
0803860006; and
    4.3.9  
the whole original or copy (as appropriate) other title deeds and documents of
title and others relative to the Business Owned Properties as exhibited in the
Data Room.

4.4  
General Conditions

  4.4.1  
Entry and vacant possession shall be given at Closing.
    4.4.2  
The minerals are included in the sale but only so far as the Scottish Property
Seller has right thereto.
    4.4.3  
Any statutory notice issued and the cost of any repairs or other works
instructed (whether in pursuance of a statutory notice or otherwise) in respect
of the Business Owned Properties prior to Closing will be the responsibility (in
questions with the Scottish Property Purchaser) of the Scottish Property Seller,
who will make full disclosure thereof to the Scottish Property Purchaser prior
to Closing; liability under this condition will not be avoided by the withdrawal
of any such notice and the issue of a fresh notice.
    4.4.4  
The Scottish Property Seller shall pay and so free and relieve the Scottish
Property Purchaser of:

  (i)  
all outstanding accounts for repairs or improvements instructed or due by the
Scottish Property Seller in respect of the Business Owned Properties or any
common parts pertaining thereto in respect of the period prior to Closing; and
    (ii)  
any debts due in respect of the Business Owned Properties or any such common
parts (including for the supply of electricity, gas or other services) in
respect of the period prior to Closing.

  4.4.5  
The Scottish Property Seller shall procure that the Business Owned Properties
shall be maintained in substantially their present condition until Closing at
the expense of the Scottish Property Seller and the risk of damage to or
destruction of the Business Owned Properties or any part thereof shall not pass
to the Scottish Property Purchaser until Closing.

 

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  4.4.6  
The Scottish Property Seller shall maintain its existing insurance policy or
policies covering the Business Owned Properties against normal commercial risks.
If the Business Owned Properties are destroyed or damaged by any of the risks
insured against in terms of said policy or policies then the Scottish Property
Seller will (subject to the Scottish Property Seller receiving a satisfactory
undertaking from the Scottish Property Purchaser that it will implement and
perform any conditions which the insurers have attached to payment of the
insurance monies) pay over to the Scottish Property Purchaser at Closing all
insurance monies received in respect of such destruction or damage and will
assign to the Scottish Property Purchaser all rights to the proceeds of such
policy or policies in so far as unpaid at Closing.
    4.4.7  
Within five Business Days after the Closing Date, the Scottish Property
Purchaser or its agents on its behalf will advise the relevant local authority
of the change of ownership of the relevant Business Owned Property so that any
apportionment of rates can be carried out by the local authority.

5  
Provisions relating to the Business Leased Properties in Scotland
  5.1  
Interpretation and General Provisions

The following further definitions apply in paragraph 5 of Part 2 of this
Schedule 3:
“Assignee” means ICL Iberia Limited (company number 06735338);
“Assignor” means The Scotts Company (UK) Ltd.;
“Longstop Date” means the date falling 12 months after Closing;
“Scottish Assignations” means the assignations by the Assignor to the Assignee
of the tenant’s interest in the Scottish Leases in the Agreed Terms and
“Scottish Assignation” means any one of them;
“Scottish Landlord” means the person or persons who are the owners of the
relevant Business Leased Property in Scotland and “Scottish Landlords” means all
the owners of the Business Leased Properties in Scotland;
“Scottish Landlords’ Consents” means the consents by the Scottish Landlords to
the Scottish Assignations and “Scottish Landlord’s Consent” means any one of
them; and
“Scottish Leases” means the following leases, which together comprise the
Business Leased Properties in Scotland, and “Scottish Lease” means any one of
them:

  (1)  
the lease between Mrs Margaret Halliday, Neil William Halliday and John Irvine
Halliday, as Executors of the late Alexander Halliday and the firm of William
Halliday and Sons and Humax Horticulture Limited dated 13 and 29 June and
registered in the Books of Council and Session on 9 October, all dates in 2006
as varied by Missive letters between Shepherd & Wedderburn on behalf of Humax
Horticulture Limited and Harper Robertson & Shannon on behalf of Mrs Margaret
Halliday, Neil William Halliday and John Irvine Halliday as Executors of the
late Alexander Halliday and the firm of William Halliday and Sons dated 18 and
30 August 2006;

 

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  (2)  
the lease between Colin James Fleming Tennant and Mrs Carol Margaret Tennant
partners of and trustees for the firm of C & C Tennant and Levington
Horticulture Limited dated 22 May and 31 May 1996 and registered in the Books of
Council and Session on 18 March 1997 as amended by Minute of Variation of Lease
between Colin James Fleming Tennant and Mrs Carol Margaret Tennant as partners
of and trustees for the firm of C & C Tennant and The Scotts Company (UK) Ltd.
dated 12 September and 6 December 2002 and registered in the Books of Council
and Session on 17 July 2003;

  (3)  
the lease between Anne Merrifield Johnstone and The Right Honourable Patrick
Andrew Wentworth Hope Johnstone, Earl of Annandale and Hartfell, William Giles
Newbury Morgan, and Henry Charles Abram as Trustees acting under Deed of Trust
by Andrew John Robert Johnstone in favour of Humax Horticulture Limited dated 2
June, 11 and 25 July and 4 and 21 August and registered in the Books of Council
and Session on 9 October, all dates in 2006 as assigned by Assignation by Humax
Horticulture Limited in favour of the Assignor dated 21 December 2006 and
registered in the Books of Council and Session on 30 March 2007; and
    (4)  
the lease between David Gilmour Armstrong and Mrs Carol Margaret Armstrong as
partners of and Trustees for the firm of D. Armstrong & Partners in favour of
Humax Horticulture Limited dated 25 May and 12 June and registered in the Books
of Council and Session on 1 August, all dates in 2006 as assigned by Assignation
by Humax Horticulture Limited in favour of the Assignor dated 21 December 2006
and registered in the Books of Council and Session on 30 March 2007.

5.2  
Jurisdiction

The obligations and conditions in this paragraph 5 of Part 2 of Schedule 3 shall
be governed by and construed in accordance with Scottish law and the parties
irrevocably agree that the Scottish courts shall have exclusive jurisdiction to
settle any disputes which may arise out of or in connection with this paragraph
5 of Part 2 of Schedule 3.

5.3  
Title

The Assignee acknowledges that the Assignor has exhibited prior to the date of
this Agreement a valid and marketable title to the tenant’s interest in each of
the Scottish Leases.

5.4  
Matters affecting the Business Leased Properties in Scotland

  5.4.1  
The Business Leased Properties in Scotland are sold subject to and where
applicable with the benefit of:

  (i)  
all burdens, reservations, servitudes, conditions and others contained in the
landlord’s title to the property let under the relevant Scottish Lease;
    (ii)  
any servitudes and public rights of way or other third-party rights arising
through prescriptive use; and
    (iii)  
all matters contained or referred to in the documents listed in paragraph 3.4,
3.5, 3.6 or 3.7 (as appropriate) of Part 2 of this Schedule 3.

  5.4.2  
The Assignee is deemed to purchase the tenant’s interests in the Scottish Leases
with full knowledge of the matters referred to in this paragraph 5.4.

 

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  5.4.3  
Save insofar as affected by the encumbrances and other matters referred to in
this paragraph 5.4, the Business Leased Properties in Scotland are sold with
vacant possession on Closing (or such later date as may be determined in
accordance with paragraph 5.6.1 below).

  5.4.4  
The Business Leased Properties in Scotland are sold together with all tenant’s
fixtures and fittings therein and thereon.

5.5  
Scottish Landlord’s Consent

  5.5.1  
Completion of the Scottish Assignations is conditional in each case on the
relevant Scottish Landlord’s Consent being obtained and evidenced in a written,
formal letter of consent to assign and being obtained on terms acceptable to the
Assignor and the Assignee (both parties acting reasonably) and formally accepted
by the Assignor.
    5.5.2  
The Assignor shall apply for the Scottish Landlord’s Consents and shall, prior
to the Longstop Date, and without any obligation to make and pursue any
application in connection therewith to a court of competent jurisdiction, use
reasonable endeavours to obtain them.
    5.5.3  
If at any time the Assignor is not, in the reasonable opinion of the Assignee,
using reasonable endeavours to comply with its obligations under this paragraph
5.5, the Assignee may on each occasion at any time thereafter by written notice
served upon the Assignor take conduct of the application for the Scottish
Landlord’s consent.
    5.5.4  
The Assignee shall, at its own cost and without delay following the Assignor’s
application referred to in paragraph 5.5.2:

  (i)  
supply all such information, accounts and references as the Scottish Landlords,
or the Assignor, may reasonably require in connection with the application for
the Scottish Landlords’ Consents; and
    (ii)  
supply, procure or enter into any guarantees, rental or other deposits, direct
obligations or other security for the performance of the tenant’s obligations
under the Scottish Leases as may be properly required under the Scottish Leases
or the Scottish Landlords may reasonably require having regard to the terms of
the relevant Scottish Lease and the status and financial strength of the
Assignee.

  5.5.5  
The Assignee shall be responsible for and shall pay on demand the proper and
reasonable costs of the Scottish Landlords and their professional advisers in
connection with all applications for and consideration and any grant/refusal of
the Scottish Landlords’ Consents and, where required to do so by any of the
Scottish Landlords and/or their professional advisers, provide a formal
undertaking in respect of such costs.
    5.5.6  
The Assignee shall co-operate and render all reasonable assistance to the
Assignor to allow the Assignor to fulfil any conditions which any Scottish
Landlord may attach to its grant of consent to any of the Scottish Assignations.

 

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  5.5.7  
With reference to the Scottish Leases referred to at (3) and (4) of paragraph
5.1 above (the “Creca Leases”) and the relative Business Leased Properties in
Scotland, in relation to planning application reference 09/P/4/0298
(retrospective consent for extraction of peat for 40 years) the Assignor, shall
use its reasonable endeavours prior to Closing or, if the Scottish Landlord’s
Consent to the Scottish Assignation of each of the Creca Leases has not been
obtained prior to Closing, prior to the date of completion of the last Scottish
Assignation of the Creca Leases to negotiate and enter into a planning agreement
with the relevant local planning authority in order to allow the planning
consent pursuant to the said planning application reference 09/P/4/0298 (“Creca
Planning Consent”) to be granted.

  5.5.8  
In the event that at Closing or at any time thereafter, the Scottish Landlord’s
Consent to the Scottish Assignation of each of the Creca Leases has been
obtained and the planning agreement aforesaid has been entered into by the
Assignor, the Assignee shall, contemporaneously with the completion of the
Scottish Assignation of the Creca Leases, accept an assignation of the planning
agreement aforesaid by the Assignor to the Assignee. The Assignee shall use its
reasonable endeavours to have the Assignor discharged of its obligations under
the planning agreement aforesaid and the Assignee shall set up, to the
satisfaction of the local planning authority, in substitution for whatever
arrangements the Assignor has put in place in compliance with the terms of the
planning agreement aforesaid or the Creca Planning Consent, either an escrow
account in connection with restoration of the land which is let under the Creca
Leases or a restoration bond.
    5.5.9  
Once the Creca Leases have been assigned to the Assignee, the Assignee shall be
responsible for obtaining the Creca Planning Consent. In this case the Assignor
shall use its reasonable endeavours (not involving payment of money) to assist
the Assignee in completing the relevant planning agreement.
    5.5.10  
In the event that the Creca Planning Consent has not been obtained by the
Longstop Date, then the obligation on the Assignor, contained in paragraph 5.5.7
above, to use its reasonable endeavours to obtain the Creca Planning Consent
shall cease and terminate.

5.6  
Transfer of the Business Leased Properties in Scotland

  5.6.1  
Where a Scottish Landlord’s Consent is granted:

  (i)  
on or prior to Closing, the Assignor shall engross the relevant Scottish
Assignation and the Assignor and the Assignee shall validly execute the relevant
Scottish Assignation on Closing. Once the relevant Scottish Assignation has been
executed by the Assignor and the Assignee, the Assignor shall either deliver the
same to the Assignee or, if the Scottish Landlord requires to execute the same,
the Assignor shall use its reasonable endeavours to have the relevant Scottish
Assignation validly executed by the Scottish Landlord as soon as reasonably
practicable and shall deliver the validly executed Scottish Assignation to the
Assignee within 10 Business Days of its receipt thereof from the Scottish
Landlord; or
    (ii)  
after Closing, paragraph 5.7 shall apply and the Assignor shall engross the
relevant Scottish Assignation and the Assignor and the Assignee shall validly
execute the relevant Scottish Assignation no later than 10 Business Days after
the Scottish Landlord’s Consent is granted. Once the relevant Scottish
Assignation has been executed by the Assignor and the Assignee, the Assignor
shall either deliver the same to the Assignee or, if the Scottish Landlord
requires to execute the same, the Assignor shall use its reasonable endeavours
to have the relevant Scottish Assignation executed by the Scottish Landlord as
soon as reasonably practicable and shall deliver the validly executed Scottish
Assignation to the Assignee within 10 Business Days of its receipt thereof from
the Scottish Landlord.

 

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  5.6.2  
The date of completion of each Scottish Assignation shall be the date on which
the relevant Scottish Assignation validly executed by the Assignor and (if
required by the Scottish Landlord) the Scottish Landlord is delivered by the
Assignor to the Assignee on which date the Assignor shall deliver to the
Assignee:

  (i)  
a search in the personal register against the Assignor to a date as near as
practicable to the date of completion and showing no entries adverse to the
Assignor’s interest in the relevant Scottish Lease;
    (ii)  
searches in the Register of Charges and Companies File and the Register of
Insolvencies against the Assignor disclosing no entries prejudicial to the
granting of the relevant Scottish Assignation and in particular but without
prejudice to the foregoing generality no evidence of the appointment of a
receiver, administrator or liquidator or procedures for the winding-up or
striking-off of the Assignor. The Search in the Register of Charges and
Companies File and the Register of Insolvencies in respect of the Assignor will
be brought down to the earlier of 22 days after the date of completion of the
relevant Scottish Assignation and exhibited or delivered within three months of
such date. In the event of such searches disclosing any floating charge granted
by the Assignor over its interest in the relevant Scottish Lease, the Assignor
will deliver a letter of consent and non-crystallisation in the charge holder’s
standard form dated not more than two Business Days prior to the date of
completion;
    (iii)  
the Scottish Property Seller’s Scottish Solicitors’ Letter of Obligation in
‘classic’ form;
    (iv)  
a certified true copy of the relevant Scottish Landlord’s Consent; and
    (v)  
the principals or extracts of the relevant Scottish Lease.

  5.6.3  
The Assignee shall be responsible for the Stamp Duty Land Tax (“SDLT”) (if any)
on the Scottish Assignations. Once a Scottish Landlord’s Consent has been
issued, the Assignee shall deliver to the Assignor as soon as reasonably
practicable an SDLT 5 or SDLT Submission Receipt. Once such SDLT 5 or SDLT
Submission Receipt has been delivered as aforesaid, the Assignor shall, subject
to the Assignee delivering the fully executed and completed Scottish Assignation
to the Assignor, proceed to register the relevant duly executed Scottish
Assignation in the Books of Council and Session, obtaining three extracts of the
relevant Scottish Assignation, one for each of the Assignor, the Assignee and
the Scottish Landlord. The Assignee shall within 10 Business Days of written
demand reimburse the Assignor the costs of registration of the relevant Scottish
Assignation. The Assignor shall within 10 Business Days of the date of
completion of the relevant Scottish Assignation, intimate the relevant Scottish
Assignation to the Scottish Landlord and deliver a certified true copy thereof
to the Assignee. The Assignee shall assist the Assignor and use reasonable
endeavours to have the relevant Scottish Assignation effected.

 

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  5.6.4  
As between the Assignor and the Assignee, the Business Leased Properties in
Scotland shall be at the risk of the Assignee from the Closing Date.
    5.6.5  
The rent, service charge, insurance premiums and all other outgoings payable by
the Assignor under the Scottish Leases shall be apportioned on a daily/annual
basis between the Assignor and the Assignee as at the Closing Date.
    5.6.6  
Within five Business Days of the Closing Date or if any Scottish Landlord’s
Consent to the Assignation of the relevant Scottish Lease has not been granted
on or before the Closing Date, within five Business Days after the Scottish
Landlord’s Consent under the relevant Scottish Lease has been granted, the
Assignee or the Assignee’s Solicitors on its behalf will advise the local
authority of the change of occupier of the relevant leased property so that any
apportionment of rates can be carried out by the local authority.
    5.6.7  
Any statutory notices issued and the cost of any repairs or other works
instructed whether in pursuance of a statutory notice or otherwise in respect of
the relevant Business Leased Property in Scotland prior to Closing will be the
responsibility (in questions with the Assignee) of the Assignor who will make
full disclosure thereof to the Assignee prior to Closing; liability under this
paragraph will not be avoided by the withdrawal of any such notice and the issue
of a fresh notice.

5.7  
Failure to obtain the Scottish Landlord’s Consents by Closing

  5.7.1  
If any Scottish Landlord’s Consent has not been granted by Closing and the
relevant Scottish Assignation completed, then with effect from Closing and
pending completion of the relevant Scottish Assignation:

  (i)  
the Assignor:

  (a)  
shall permit the Assignee to use and occupy the relevant Business Leased
Property in Scotland subject to the Assignee observing and performing all
obligations and conditions on the part of the tenant in the relevant Scottish
Lease;
    (b)  
shall pay the rent, service charge and other sums payable under the relevant
Scottish Lease;
    (c)  
may, in the event of (a) the relevant Scottish Landlord serving any form of
notice on the Assignor in connection with the Assignee’s use as aforesaid of the
relevant Business Leased Property in Scotland or (b) threatening in writing to
terminate the relevant Scottish Lease because of the Assignee’s use of the
relevant Business Leased Property in Scotland or (c) any material breach by the
Assignee of the terms of the relevant Scottish Lease, require the Assignee to
quit and remove from the relevant Business Leased Property in Scotland on not
less than 10 Business Days’ notice (unless the Assignee has remedied such
material breach prior to expiry of the said notice period); and

 

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  (d)  
shall not exercise any entitlement to terminate or extend the relevant Scottish
Lease, enter into any contract disposing of or surrendering any interest in the
relevant Business Leased Property in Scotland or grant any security, charge
(other than a floating charge) or encumbrance over any interest in the relevant
Business Leased Property in Scotland and no variation of or amendment to or any
deed in any way affecting the relevant Scottish Lease shall be entered into with
the landlord or the consent of the landlord applied for (save as otherwise
provided for in this Part 2 of Schedule 3) without the consent of the Assignee
such consent not to be unreasonably withheld or delayed having regard always to
the tenant’s obligations under the relevant Scottish Lease; and

  (ii)  
the Assignee shall (with effect from Closing):

  (a)  
pay a licence fee equivalent to or indemnify the Assignor against rent, service
charge and other sums payable by the Assignor in accordance with the relevant
Scottish Lease and all outgoings in respect of the relevant Business Leased
Property in Scotland; and
    (b)  
indemnify the Assignor against any acts or omissions of the employees, servants
and agents of the Assignee in or about the relevant Business Leased Property in
Scotland, including (without limitation) any such acts leading to the Assignor
being in breach of the relevant Scottish Lease, including, for the avoidance of
doubt, any claim by the Scottish Landlord for breach of the prohibitions on
assignation without consent, sub-letting without consent and sharing occupation
in the relevant Scottish Lease.

  5.7.2  
If any Scottish Landlord’s Consent has not been obtained by the Longstop Date or
if any Scottish Landlord irritates or attempts to irritate or seeks to irritate
the relevant Scottish Lease, then either the Assignee may by notice in writing
require the Assignor to or the Assignor may (in both cases at the Assignee’s
expense):

  (i)  
make and pursue an application to a court of competent jurisdiction for a
declaration that the relevant Scottish Landlord’s Consent is being withheld
unreasonably (where the relevant landlord is not entitled to withhold consent in
such a manner); and/or
    (ii)  
apply to the relevant Scottish Landlord for its consent to a sublease to the
Assignee for a term equal to the residue of the term of the relevant Scottish
Lease and otherwise on the same terms as the relevant Scottish Lease in which
case the expression “Scottish Landlord’s Consent” shall be deemed to include the
consent sought by such application.

 

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6  
Environmental Protection Act 1990 Part 2A Transfer of Liability
  6.1  
The parties agree and declare that:

  6.1.1  
in the event that any Business Seller is held to be an appropriate person under
Part 2A of the Environmental Protection Act 1990 (including DEFRA Circular
1/2006 and/or Paper SE/2006/44 (the “Part 2A Guidance”)) (“Part 2A”) and/or is
served with a works notice under section 161A of the Water Resources Act 1991
(or an enforcement notice under regulation 28(2) of the Water Environment
(Controlled Activities) (Scotland) Regulations 2005 as the case may be), in each
case as may be amended from time to time, in relation to or in connection with
any Contamination on at or emanating from any Business Property on or after the
date of Closing, any liability that the Business Seller might have under Part 2A
and/or pursuant to a works notice under section 161A of the Water Resources Act
1991 (or an enforcement notice under regulation 28(2) of the Water Environment
(Controlled Activities) (Scotland) Regulations 2005 as the case may be) in
relation to such Contamination is transferred to and assumed in its entirety by
the Purchaser and that the Business Sellers shall be excluded from any such
liability in respect thereof; and
    6.1.2  
if any regulatory or relevant court seeks to allocate liability under Part 2A in
respect of such Contamination, the Business Seller and/or the Purchaser shall
provide a copy of this agreement on liabilities on demand to each regulatory
authority or court and neither party shall challenge it as an agreement on
liabilities with continuing effect as between the parties but shall request that
such authority or court gives effect to this agreement on liabilities including
without limitation for the purpose of paragraph D.38 of Annex 3 to the sPart 2A
Guidance (or any equivalent provisions under any statutory guidance that may
replace or amend it).

 

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Schedule 4
Intellectual Property
(Clause 2.4)
The Business Intellectual Property is sold subject to the provisions of the
Licence Agreements to which any member of the Retained Group is a party.
Part 1
Transfer of Intellectual Property

1  
Transfer of Business Intellectual Property
  1.1  
The Seller shall procure that the patents and patent applications identified
below shall be transferred to the Purchaser or its nominee at Closing by means
of Patent Assignments in substantially the form set out in Part 2 of this
Schedule 4.

Note: Relevant patents and patent applications listed in Data Room.

1.2  
The Seller shall procure that the trade mark applications and registered trade
marks identified below shall be transferred to the Purchaser or its nominee at
Closing by means of Trade Mark Assignments in substantially the form set out in
Part 3 of this Schedule 4.

Note: Relevant trade mark applications and registered trade marks listed in Data
Room.

1.3  
The Seller shall use its best endeavours to procure that the domain names
identified below shall be transferred to the Purchaser or its nominee at Closing
in accordance with paragraph 3.1.8 of Schedule 10.

Note: Relevant domain names listed in Data Room.

1.4  
The Seller shall procure that the Know-how required for the manufacture,
processing and sale of the following products, other than any Know-how which is
Excluded Intellectual Property, shall be transferred to the Purchaser or its
nominee at Closing by means of the Know-how Assignments in substantially the
form set out in Part 4 of this Schedule 4.

Note: Relevant Know-how listed in Data Room.

1.5  
Each party shall bear its own costs in relation to notarial or legalisation fees
in respect of the transfer of any Registered Group Intellectual Property.
  1.6  
The Seller shall procure that all Business Intellectual Property which is not
Registered Group Intellectual Property or Excluded Intellectual Property shall
be transferred to the Purchaser or its nominee at Closing by means of an
Unregistered Intellectual Property Assignment in substantially the form set out
in Part 5 of this Schedule 4.

 

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2  
Excluded Intellectual Property

The following Intellectual Property shall remain with the Retained Group:

2.1  
any trade marks, service marks, trade names, business names, logos, get-up and
any rights to sue for passing-off in relation to the foregoing and any domain
names that comprise or include the word “Scotts” and/or “Miracle-Gro”; and
  2.2  
any Intellectual Property (including Know-how) which is licensed to the
Purchaser’s Group by any member of the Retained Group under any of the IP
Licence Agreements.
  3  
Group Company Intellectual Property

Note: Relevant Group Company Intellectual property listed in Data Room.

 

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Part 2
Form of Patent Assignment
This Deed of Assignment is made the [•] day of [•] between:

(1)  
[•] of [•] (“Assignor”); and
  (2)  
[•] of [•] (“Assignee”).

Whereas:

(A)  
the Assignor is the proprietor of the patents and applicant for certain patents
described in the Schedule (the “Patents”); and
  (B)  
the Assignor has agreed to assign the Patents to the Assignee.

This Deed witnesses as follows:

1  
Assignment
     
The Assignor hereby assigns to the Assignee all right, title and interest in and
to the Patents, including all rights, privileges and advantages thereto,
including, without limitation, the right to take proceedings and recover damages
and obtain all other remedies in respect of past infringements thereof to hold
unto the Assignee absolutely (the “Assignment”).
  2  
Further Assurance
     
The Assignor agrees hereafter promptly to execute all such documents as the
Assignee may reasonably request to give full effect to the Assignment and secure
to the Assignee the full benefit of the rights assigned to the Assignee
hereunder.
  3  
Representations and Warranties
     
The Assignor does not make, nor shall be deemed to have made, to the Assignee
any express or implied representation or warranty with respect to any of the
Patents.
  4  
Law and Jurisdiction
  4.1  
This Deed and any non-contractual obligations arising out of it shall be
governed by and construed in accordance with English law.
  4.2  
Each of the parties irrevocably agrees that the courts of England are to have
exclusive jurisdiction to settle any dispute, whether contractual or
non-contractual, which may arise out of or in connection with the Assignment and
that accordingly any proceedings arising out of or in connection with the
Assignment shall be brought only in such courts. Each of the parties irrevocably
submits and agrees to submit to the jurisdiction of such courts and waives (and
agrees not to raise) any objection to proceedings in any such court on the
ground of venue or on the ground that proceedings have been brought in an
inconvenient forum or on any other ground.

 

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Part 3
Form of Trade Mark Assignment
This Deed of Assignment is made the [•] day of [•] between:

(1)  
[•] of [•] (“Assignor”); and
  (2)  
[•] of [•] (“Assignee”).

Whereas:

(A)  
the Assignor is the proprietor of the registered trade marks and applicant for
certain trade mark registrations described in the Schedule (the “Trade Marks”);
and
  (B)  
the Assignor has agreed to assign the Trade Marks to the Assignee.

This Deed witnesses as follows:

1  
Assignment
     
The Assignor hereby assigns to the Assignee all right, title and interest in and
to the Trade Marks together with all the goodwill represented by and associated
with the Trade Marks (but no other goodwill) including all rights, privileges
and advantages thereto including, without limitation, the right to take
proceedings and recover damages and obtain all other remedies in respect of past
infringements thereof to hold unto the Assignee absolutely (the “Assignment”).
  2  
Further Assurance
     
The Assignor agrees hereafter promptly to execute all such documents as the
Assignee may reasonably request to give full effect to the Assignment and secure
to the Assignee the full benefit of the rights assigned to the Assignee
hereunder.
  3  
Representations and Warranties
     
The Assignor does not make, nor shall be deemed to have made, to the Assignee
any express or implied representation or warranty with respect to any of the
Trade Marks.
  4  
Law and Jurisdiction
  4.1  
This Deed and any non-contractual obligations arising out of it shall be
governed by and construed in accordance with English law.
  4.2  
Each of the parties irrevocably agrees that the courts of England are to have
exclusive jurisdiction to settle any dispute, whether contractual or
non-contractual, which may arise out of or in connection with the Assignment and
that accordingly any proceedings arising out of or in connection with the
Assignment shall be brought only in such courts. Each of the parties irrevocably
submits and agrees to submit to the jurisdiction of such courts and waives (and
agrees not to raise) any objection to proceedings in any such court on the
ground of venue or on the ground that proceedings have been brought in an
inconvenient forum or on any other ground.

 

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Part 4
Form of Know-how Assignment
This Deed of Assignment is made the [•] day of [•] between:

(1)  
[•] of [•] (“Assignor”); and
  (2)  
[•] of [•] (“Assignee”).

Whereas:

(A)  
the Assignor is the owner of the Know-how; and
  (B)  
the Assignor has agreed to assign the Know-how to the Assignee.

This Deed witnesses as follows:

1  
Definitions
     
“Know-how” means industrial and commercial information and techniques including
trade secrets in any tangible, written or electronic form including drawings,
formulae, test results, reports, project reports and testing procedures,
instruction and training manuals, tables of operating conditions, market
forecasts, lists and particulars of customers and suppliers and all information
and techniques arising from research and development activities including
research and development materials, process technology, specifications, product
dossiers and manufacturing and/or formulation know-how and documents relating to
REACH registration requirements and documents relating to notification
requirements under European Regulation (EC) No. 1272/2008 on the classification,
labelling, and packaging of substances and mixtures, relating to the products
described in the Schedule; and
     
“SPA” means the share and business sale agreement dated [•] between, amongst
others, The Scotts Company LLC and Israel Chemicals Ltd.
     
Unless the context requires otherwise, capitalised words and phrases used but
not defined in this Agreement shall have the same meanings as attributed to them
in the SPA.
  2  
Assignment
  2.1  
The Assignor hereby:

  2.1.1  
assigns to the Assignee all right, title and interest in and to the Know-how,
including all rights, privileges and advantages thereto, including, without
limitation, the right to take proceedings and recover damages and obtain all
other remedies in respect of past infringements thereof to hold unto the
Assignee absolutely (the “Assignment”);
    2.1.2  
agrees, promptly after the date of this Assignment, to provide to the Assignee
copies of the Know-how in tangible, written or electronic form; and
    2.1.3  
agrees to use its reasonable endeavours not to retain copies of or use the
Know-how (if any) which is exclusive to the Professional Business except where
the Assignor is otherwise permitted pursuant to any Transaction Document or is
required pursuant to any Transaction Document or by law or regulation, to retain
copies of any of the Know-how.

 

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3  
Further Assurance
     
The Assignor agrees hereafter promptly to execute all such documents as the
Assignee may reasonably request to give full effect to the Assignment and secure
to the Assignee the full benefit of the rights assigned to the Assignee
hereunder.
  4  
Representations and Warranties
     
The Assignor does not make, nor shall be deemed to have made, to the Assignee
any express or implied representation or warranty with respect to any of the
Know-how.
  5  
Law and Jurisdiction
  5.1  
This Deed and any non-contractual obligations arising out of it shall be
governed by and construed in accordance with English law.
  5.2  
Each of the parties irrevocably agrees that the courts of England are to have
exclusive jurisdiction to settle any dispute, whether contractual or
non-contractual, which may arise out of or in connection with the Assignment and
that accordingly any proceedings arising out of or in connection with the
Assignment shall be brought only in such courts. Each of the parties irrevocably
submits and agrees to submit to the jurisdiction of such courts and waives (and
agrees not to raise) any objection to proceedings in any such court on the
ground of venue or on the ground that proceedings have been brought in an
inconvenient forum or on any other ground.

 

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Part 5
Form of Unregistered Intellectual Property Assignment
This Deed of Assignment is made the [•] day of [•] between:

(1)  
[•] of [•] (“Assignor”); and
  (2)  
[•] of [•] (“Assignee”).

Whereas:

(A)  
The Assignor has agreed to assign such right, title and interest as the Assignor
has in and to the Intellectual Property Rights to the Assignee.

This Deed witnesses as follows:

1  
Definitions
     
“Intellectual Property Rights” means the Owned Group Intellectual Property
excluding the Excluded Intellectual Property, the Registered Group Intellectual
Property and any Know-how; and
     
“SPA” means the share and business sale agreement dated [•] between, amongst
others, The Scotts Company LLC and Israel Chemicals Ltd.
     
Unless the context requires otherwise, capitalised words and phrases used but
not defined in this Agreement shall have the same meanings as attributed to them
in the SPA.
  2  
Assignment
     
The Assignor hereby assigns to the Assignee such right, title and interest as
the Assignor has in and to the Intellectual Property Rights, together with all
the goodwill represented by and associated with any of the Intellectual Property
Rights (but no other goodwill) including all rights, privileges and advantages
thereto including, without limitation, the right to take proceedings and recover
damages and obtain all other remedies in respect of past infringements thereof
to hold unto the Assignee absolutely (the “Assignment”).
  3  
Further Assurance
     
The Assignor agrees, at the Assignee’s request and expense, to execute all such
documents as the Assignee may reasonably request to give full effect to the
Assignment and secure to the Assignee the full benefit of the rights assigned to
the Assignee hereunder.
  4  
Representations and Warranties
     
The Assignor does not make, nor shall be deemed to have made, to the Assignee
any express or implied representation or warranty with respect to any of the
Intellectual Property Rights.

 

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5  
Law and Jurisdiction
  5.1  
This Deed and any non-contractual obligations arising out of it shall be
governed by and construed in accordance with English law.
  5.2  
Each of the parties irrevocably agrees that the courts of England are to have
exclusive jurisdiction to settle any dispute, whether contractual or
non-contractual, which may arise out of or in connection with the Assignment and
that accordingly any proceedings arising out of or in connection with the
Assignment shall be brought only in such courts. Each of the parties irrevocably
submits and agrees to submit to the jurisdiction of such courts and waives (and
agrees not to raise) any objection to proceedings in any such court on the
ground of venue or on the ground that proceedings have been brought in an
inconvenient forum or on any other ground.

 

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Part 6
Licence Agreements
Part 6.1
Licence Agreements relating to any licences of Group Intellectual Property to
any third-party and in respect of which any of the Group Companies or any
member of the Retained Group is the licensor
Note: Relevant Licence Agreements listed in Data Room.
Part 6.2
Licence Agreements relating to Group Intellectual Property and in respect of
which any of the Group Companies or any member of the Retained Group is the
licensee
Note: Relevant Licence Agreements listed in Data Room.

 

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Part 7
Product Registrations
Professional Business Product Registrations
The Seller and the Purchaser shall (and shall procure that the relevant member
of the Seller’s Group and the relevant member of the Purchaser’s Group (as the
case may be) shall) carry out any and all actions within their respective
control, in accordance with the obligations set out in this Part 7 of
Schedule 4.

1  
Agent Assisted Product Registrations
  1.1  
The Seller and the Purchaser shall (and shall procure that the relevant member
of the Seller’s Group and the relevant member of the Purchaser’s Group (as the
case may be) shall) carry out any and all actions within their respective
control that each of them needs to undertake to procure either that the Agent
Assisted Product Registrations are transferred to the Purchaser or its nominee,
or where such transfer is not legally possible, to procure that the Purchaser or
its nominee obtains an equivalent Product Registration, in each case at or as
soon as reasonably practicable after Closing.
  1.2  
The Seller shall, as soon as reasonably practicable after the date of the Offer
Letter and in any event by the Closing Date, provide full details of, and all
relevant agreements and powers of attorney in respect of, all relevant third
party agents, consultants or distributors, which are currently engaged by any
member of the Seller’s Group in relation to the Agent Assisted Product
Registrations, to the Purchaser or its nominee, with a view to the Purchaser or
its nominee entering into powers of attorney and/or contracts with the relevant
third-party agents, consultants or distributors where necessary.
  1.3  
The Seller shall procure that all technical data (including without limitation
any product dossier) in relation to the relevant product or products, which has,
prior to Closing:

  1.3.1  
been submitted by or on behalf of a member of the Seller’s Group to a relevant
regulatory authority whether through a relevant third party agent, consultant or
distributor or otherwise;
    1.3.2  
been prepared or is in the course of being prepared in relation to a request for
such information from a relevant regulatory authority; and/or
    1.3.3  
been prepared or is in the course of being prepared in relation to any future
submission to a relevant regulatory authority,

   
in each case in relation to an Agent Assisted Product Registration, is made
available to the Purchaser or its nominee at Closing.
  1.4  
The Seller shall be entitled to retain a copy of all documents and information
provided to the Purchaser or its nominee pursuant to paragraph 1.3 above for
regulatory record keeping purposes.

 

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1.5  
From Closing, until the Purchaser or its nominee has a Product Registration in
its own name (which allows it to use, sell, supply, advertise and/or store
relevant products using its own packaging and labelling) or until the
Purchaser’s or its nominee’s application for a Product Registration has been
finally rejected by the relevant regulatory authority, the relevant member of
the Retained Group shall, to the extent such actions are within its control:

  1.5.1  
at the Purchaser’s or its nominee’s sole expense, obtain the necessary
authorisation or appropriate amendments to the relevant Agent Assisted Product
Registration, so that the relevant product or products to which that Agent
Assisted Product Registration relates may be used, sold, supplied, advertised
and stored under or with reference to the Purchaser’s or its nominee’s name
(including without limitation the use of its own packaging and labelling) within
the relevant jurisdiction; and
    1.5.2  
at the Purchaser’s or its nominee’s sole expense, maintain the relevant Agent
Assisted Product Registration (as amended under paragraph 1.5.1 above where
relevant) in accordance with the requirements of the relevant regulatory
authority and all relevant laws, and such that immediately after Closing the
relevant product or products to which that Agent Assisted Product Registration
relates may be used, sold, supplied, advertised and stored under or with
reference to the relevant member of the Retained Group’s name, and once the
actions in paragraph 1.5.1 above are completed (where necessary) under or with
reference to the Purchaser’s or its nominee’s name (including without limitation
the use of its own packaging and labelling) within the relevant jurisdiction.

1.6  
During the transitional period contemplated by paragraph 1.5 above, the
Purchaser or its nominee shall comply with all relevant obligations under the
relevant Agent Assisted Product Registration as required by the relevant
regulatory authority and/or the laws of the relevant jurisdiction, in relation
to the use, sale, supply, labelling, advertisement and storage of the relevant
product or products to which that Agent Assisted Product Registration relates,
to the extent that this is within its control.
  1.7  
The Purchaser or its nominee shall indemnify the Seller on behalf of itself and
the relevant member of the Retained Group in respect of any Losses suffered or
incurred by the relevant member of the Retained Group that are attributable to a
breach of paragraph 1.6 above.
  2  
Distributor Owned Product Registrations
  2.1  
The Seller and the Purchaser shall (and shall procure that the relevant member
of the Seller’s Group and the relevant member of the Purchaser’s Group (as the
case may be) shall) carry out any and all actions within their respective
control that each of them needs to undertake to procure that any Distributor
Owned Product Registrations are supported at and after Closing, including,
without limitation, by ensuring the provision of all relevant information to the
relevant distributor to enable such Distributor Owned Product Registrations to
be supported. Any new information not already available at the Closing Date that
is required post-Closing to support any Distributor Owned Product Registration
shall be produced at the sole cost of the Purchaser or its nominee.
  2.2  
The Seller shall, as soon as reasonably practicable after the date of the Offer
Letter, and in any event by the Closing Date, provide full details of, and all
relevant agreements in respect of, all relevant third-party distributors or
consultants to the Purchaser or its nominee, with a view to the Purchaser or its
nominee (with the assistance of the relevant member of the Retained Group)
informing the relevant third-party distributor or consultant about changes to
suppliers, and entering into new supply agreements as necessary as soon as
reasonably practicable after Closing.

 

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2.3  
The Seller shall procure that all technical data (including without limitation
any product dossier) in relation to the relevant product or products, which has,
prior to Closing:

  2.3.1  
been submitted by or on behalf of a member of the Seller’s Group to a relevant
regulatory authority whether through a relevant third-party distributor or
consultant or otherwise;
    2.3.2  
been prepared or is in the course of being prepared in relation to a request for
such information from a relevant regulatory authority; and/or
    2.3.3  
been prepared or is in the course of being prepared in relation to any future
submission to a relevant regulatory authority,

   
in each case in relation to each Distributor Owned Product Registration, is made
available to the Purchaser or its nominee at Closing.
  2.4  
The Seller shall be entitled to retain a copy of all documents and information
provided to the Purchaser or its nominee pursuant to paragraph 2.3 above for
regulatory record keeping purposes.
  3  
Seller Owned EU Product Registrations
  3.1  
The Seller and the Purchaser shall (and shall procure that the relevant member
of the Seller’s Group and the relevant member of the Purchaser’s Group (as the
case may be) shall) carry out all actions within their respective control that
each of them needs to undertake to procure that the Seller Owned EU Product
Registrations are transferred to the Purchaser or its nominee at or as soon as
reasonably practicable after Closing, or where such transfer is not legally
possible, to procure that the Purchaser or its nominee obtains an equivalent
Product Registration at or as soon as reasonably practicable after Closing.
  3.2  
The Seller shall procure that all technical data in relation to the relevant
product or products, which has, prior to Closing:

  3.2.1  
been submitted by or on behalf of a member of the Seller’s Group to a relevant
regulatory authority;
    3.2.2  
been prepared or is in the course of being prepared in relation to a request for
such information from a relevant regulatory authority; and/or
    3.2.3  
been prepared or is in the course of being prepared in relation to any future
submission to a relevant regulatory authority,

   
in each case in relation to a Seller Owned EU Product Registration, is made
available to the Purchaser or its nominee at Closing. This technical data is to
include the relevant European Pesticide Dossier, which shall be maintained at
the sole expense of the Purchaser or its nominee from Closing.

 

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3.3  
From Closing, until the Purchaser or its nominee has a Product Registration in
its own name (which allows it to use, sell, supply, advertise and/or store
relevant products using its own packaging and labelling), or until the
Purchaser’s or its nominee’s application for a Product Registration has been
finally rejected by the relevant regulatory authority, the relevant member of
the Retained Group shall, to the extent such actions are within its control:

  3.3.1  
at the Purchaser’s or its nominee’s sole expense, obtain the necessary
authorisation or appropriate amendments to the relevant Seller Owned EU Product
Registration, so that the relevant product or products to which that Seller
Owned EU Product Registration relates may be used, sold, supplied, advertised
and stored under or with reference to the Purchaser’s or its nominee’s name
(including without limitation the use of its own packaging and labelling) within
the relevant jurisdiction; and
    3.3.2  
at the Purchaser’s or its nominee’s sole expense, maintain the relevant Seller
Owned EU Product Registration (as amended under paragraph 3.3.1 above where
relevant) in accordance with the requirements of the relevant regulatory
authority and all relevant laws, and such that immediately after Closing the
relevant product or products to which that Seller Owned EU Product Registration
relates may be used, sold, supplied, advertised and stored under or with
reference to the relevant member of the Retained Group’s name, and once the
actions in paragraph 3.3.1 above are completed (where necessary) under or with
reference to the Purchaser’s or its nominee’s name (including without limitation
the use of its own packaging and labelling) within the relevant jurisdiction.

3.4  
During the transitional period contemplated by paragraph 3.3 above, the
Purchaser or its nominee, shall comply with all relevant obligations under the
relevant Seller Owned EU Product Registration, as required by the relevant
regulatory authority and/or the laws of the relevant jurisdiction, in relation
to the use, sale, supply, labelling, advertisement and storage of the relevant
product or products to which that Seller Owned EU Product Registration relates,
to the extent this is within its control.
  3.5  
The Purchaser or its nominee shall indemnify the Seller on behalf of itself and
the relevant member of the Retained Group in respect of any Losses suffered or
incurred by the relevant member of the Retained Group that are attributable to a
breach of paragraph 3.4 above.
  4  
Seller Owned Shared EU Product Registrations
  4.1  
In respect of the Seller Owned Shared EU Product Registrations, the Seller and
the Purchaser agree that ownership of these and all related European Pesticide
Dossiers rests and should rest with a member of the Retained Group before or at
Closing, or in the event that this cannot be achieved by Closing, the Seller and
the Purchaser shall (and shall procure that the relevant member of the Retained
Group and the relevant member of the Purchaser’s Group (as the case may be)
shall) carry out any and all actions within their respective control that each
of them needs to undertake to procure that this occurs as soon as reasonably
practicable thereafter.
  4.2  
After Closing, any member of the Retained Group who owns a Seller Owned Shared
EU Product Registration and/or the associated European Pesticide Dossier shall
have the right to assign or transfer this to any other member of the Seller’s
Group at any time.

 

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4.3  
From Closing, the relevant member of the Seller’s Group shall supply the
relevant product or products, being those that are the subject of a Seller Owned
Shared EU Product Registration, to the extent they form part of the Professional
Business, to the Purchaser or its nominee in accordance with the relevant Supply
Agreement that deals with the supply of such product or products. The
maintenance of the Seller Owned Shared EU Product Registration and the relevant
European Pesticides Dossier shall be at the cost of the relevant member of the
Seller’s Group, and such costs shall not be recoverable by the relevant member
of the Seller’s Group, except to the extent that:

  4.3.1  
the Purchaser or its nominee reasonably requests that any alteration be made to
such Seller Owned Shared EU Product Registration and/or relevant European
Pesticide Dossier by the relevant member of the Seller’s Group (such requests
not to be unreasonably refused), in which case the costs associated with such
alteration shall be borne by the Purchaser or its nominee to the extent that
such costs relate to the use of the relevant product or products in the context
of the Professional Business of the Purchaser’s Group and an equivalent
alteration is not required, irrespective of such request, in relation to the
Consumer Business of the Seller’s Group; and/or
    4.3.2  
the relevant regulatory authority and/or the laws of the relevant jurisdiction
require that any action be taken in respect of such Seller Owned Shared EU
Product Registration and/or relevant European Pesticide Dossier, and such
requirement relates solely to the use of the relevant product or products in the
context of the Professional Business of the Purchaser’s Group, in which case the
reasonable costs associated with such action shall be divided between the
relevant member of the Seller’s Group and the Purchaser or its nominee in such
shares as are reasonably agreed between these parties,

   
in which case the Purchaser or its nominee shall reimburse the relevant member
of the Seller’s Group in relation to any recoverable costs under paragraph 4.3.1
and/or paragraph 4.3.2 as soon as reasonably practicable.
  4.4  
The relevant member of the Seller’s Group shall as soon as reasonably
practicable after Closing obtain the appropriate amendments to the relevant
Seller Owned Shared EU Product Registration, so that the relevant product or
products being supplied to the Purchaser or its nominee under paragraph 4.3
above may be used, sold, supplied, advertised and stored under or with reference
to the Purchaser’s or its nominee’s name (including without limitation the use
of its own packaging and labelling) within the relevant jurisdiction and that
the Purchaser or its nominee shall become the marketing company named in
relation to the relevant Seller Owned Shared EU Product Registration. The
Purchaser or its nominee shall pay the direct costs required to obtain the
appropriate amendments to the relevant Seller Owned Shared EU Product
Registration under this paragraph so that the Purchaser or its nominee shall
become the marketing company, up to a maximum total of US$30,000 in aggregate
for all the Seller Owned Shared EU Product Registrations. Any direct costs
required to obtain the appropriate amendments to all the relevant Seller Owned
Shared EU Product Registrations under this paragraph 4.4 that are in excess of
this US$30,000 shall be paid for by the Seller or the relevant member of the
Seller’s Group and for the avoidance of doubt paragraphs 4.3.1 and 4.3.2 shall
not apply for this purpose.

 

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4.5  
At and after Closing (including for as long as the relevant Supply Agreement
remains in existence, though subject to the exercise of its discretion under
paragraph 4.8 below), the relevant member of the Seller’s Group shall, to the
extent that such actions are within its control:

  4.5.1  
at the relevant member of the Seller’s Group’s sole expense, maintain each of
the Seller Owned Shared EU Product Registrations (as amended under paragraph 4.4
above and any sub-registration where relevant) and/or the relevant European
Pesticide Dossiers (as relevant) in accordance with all relevant regulatory
requirements and all relevant laws and such that the relevant product or
products to which the relevant Seller Owned Shared EU Product Registration
relates may immediately after Closing be used, sold, supplied, advertised and
stored under or with reference to the relevant member of the Retained Group’s
name, and once the actions in paragraph 4.4 above are completed (where
necessary) under or with reference to the Purchaser’s or its nominee’s name
(including without limitation the use of its own packaging and labelling) within
the relevant jurisdiction; and
    4.5.2  
pursuant to any request for information relating to the relevant product or
products by a regulatory authority, supply such information as it holds at the
date of such request direct to the relevant regulatory authority, for the
purposes of satisfying such information request.

4.6  
The Seller or the relevant member of the Seller’s Group shall indemnify the
Purchaser on behalf of itself and each member of the Purchaser’s Group in
respect of any Losses suffered or incurred by the Purchaser or the relevant
member of the Purchaser’s Group that are attributable to a breach of paragraph
4.5.1 above.
  4.7  
The Purchaser or its nominee shall comply with all relevant obligations under
the relevant Seller Owned Shared EU Product Registration, as required by the
relevant regulatory authority and/or the laws of the relevant jurisdiction, in
relation to the use, sale, supply, labelling, advertisement and storage of the
relevant product or products to which that Seller Owned Shared EU Product
Registration relates, to the extent this is within its control.
  4.8  
The Purchaser or its nominee shall indemnify the Seller on behalf of itself and
the relevant member of the Seller’s Group in respect of any Losses suffered or
incurred by the relevant member of the Retained Group that are attributable to a
breach of paragraph 4.7 above.
  4.9  
In the event that the relevant member of the Seller’s Group decides to cease to
maintain, to not renew or to withdraw any Seller Owned Shared EU Product
Registration, or any European Pesticide Dossier that relates to any Seller Owned
Shared EU Product Registration (which decision shall be exercisable at their
sole discretion and at any point in time), the member of the Seller’s Group who
owns the relevant European Pesticide Dossier shall offer this European Pesticide
Dossier to the Purchaser or its nominee. If the Purchaser or its nominee decides
to accept the offer of the relevant European Pesticide Dossier, it shall be
provided to the Purchaser or its nominee who shall pay to the relevant member of
the Seller’s Group a sum equal to the proportion of the costs that were incurred
by the relevant member of the Seller’s Group in maintaining the relevant
European Pesticide Dossier in relation to the Professional Business of the
Purchaser’s Group from the date of Closing until the date that the European
Pesticide Dossier is offered to the Purchaser or its nominee and from this later
date the European Pesticide Dossier shall be maintained independently by the
Purchaser or its nominee at its own expense. The relevant member of the Seller’s
Group shall at its own cost transfer the relevant Seller Owned Shared EU Product
Registration to the Purchaser or its nominee.

 

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4.10  
Any sale of a European Pesticide Dossier or copy of a European Pesticide Dossier
pursuant to paragraph 4.9 above shall be subject to a condition that such
European Pesticide Dossier will only be used by the Purchaser’s Group to support
a Product Registration in relation to the Professional Business of the
Purchaser’s Group.
  4.11  
In the event that the Purchaser or its nominee notifies the Seller that it
wishes it to obtain a new Product Registration for a product in respect of a
European Union jurisdiction in which the relevant product is not sold as part of
the Professional Business at the date of the Offer Letter but which is an
existing product forming part of the Professional Business and/or the Consumer
Business of the Seller’s Group, and in the event that the Seller or the relevant
member of the Seller’s Group holds a European Pesticide Dossier which is
sufficient without alteration (except for minor non-technical alterations) for
the purposes of obtaining such new Product Registration or where the Purchaser
will, under paragraph 4.11.1 below, bear the reasonable costs of alteration of
the relevant European Pesticide Dossier to make it so sufficient), the Seller or
such member of the Seller’s Group shall, at the request of the Purchaser or its
nominee, carry out any and all actions within its control (including appointing
any consultant or agent to assist in obtaining such new Product Registration) to
obtain the relevant new Product Registration in such European jurisdiction, so
that the relevant product or products may be used, sold, supplied, advertised
and stored under or with reference to the Purchaser’s or its nominee’s name
(including without limitation the use of its own packaging and labelling) within
the relevant European jurisdiction, and so that the Purchaser or its nominee may
become the marketing company named on the relevant Product Registration. Any
such new Product Registration will be obtained, as set out in this paragraph,
and subsequently maintained, subject to a condition that the Purchaser or its
nominee will not sell the relevant product or products other than in relation to
the Professional Business of the Purchaser’s Group, and a condition that such
Product Registration will be obtained and subsequently maintained at the
Purchaser’s or its nominee’s sole expense (including the costs of any consultant
or agents appointed by the Seller or the relevant member of the Seller’s Group
to the extent appointed because the Seller’s Group does not have the necessary
expertise to undertake such work). The maintenance of the relevant European
Pesticide Dossier shall be at the cost of the relevant member of the Seller’s
Group, except to the extent that:

  4.11.1  
the Purchaser or its nominee reasonably requests in relation to the new Product
Registration that any alteration (other than minor non-technical alterations) be
made to such European Pesticide Dossier by the relevant member of the Seller’s
Group (such requests not to be unreasonably refused), in which case the
reasonable costs associated with such alteration shall be borne by the Purchaser
or its nominee; and/or
    4.11.2  
the relevant regulatory authority and/or the laws of the relevant jurisdiction
require that any action be taken in respect of such European Pesticide Dossier
solely to enable the new Product Registration to be maintained in relation to
the Professional Business of the Purchaser’s Group, in which case the reasonable
costs associated with such action shall be born by the Purchaser or its nominee.

5  
Licensed EU Product Registrations
  5.1  
The Seller and the Purchaser shall (and shall procure that the relevant member
of the Seller’s Group and the relevant member of the Purchaser’s Group (as the
case may be) shall) carry out all actions within their respective control that
each of them needs to undertake to procure that the consent of the relevant
third-party supplier who holds a Licensed EU Product Registration is obtained,
in order that the Purchaser or its nominee may take over the role of distributor
from the relevant member of the Retained Group in respect of the relevant
product or products as soon as reasonably practicable after Closing.

 

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5.2  
In accordance with paragraph 5.1 above, the Seller shall, as soon as reasonably
practicable after the date of the Offer Letter and in any event by the Closing
Date, provide full details of, and all relevant agreements in respect of, the
relevant third-party suppliers who own the relevant Licensed EU Product
Registration to the Purchaser or its nominee, with a view to the Purchaser or
its nominee entering into a new supply agreement with the relevant third-party
supplier as necessary.
  5.3  
In relation to Clause 8.5.2 of this Agreement, the Purchaser and the Seller
agree that the Purchaser and each member of the Purchaser’s Group can, subject
to obtaining the consent of the relevant third-party supplier and meeting all
relevant regulatory requirements that are within its control, from Closing until
it enters into its own agreement with the relevant third-party supplier, and is
able to use, sell, supply, advertise and store relevant products under or with
reference to its own name, use, sell, supply, advertise and store inventory that
contains the trading names, trade marks, marks, names or logos of any member of
the Retained Group and in respect of which a member of the Retained Group may be
identified as the marketing company on or in relation to any Licensed EU Product
Registration.
  6  
Seller Owned Product Registration
  6.1  
The Seller and the Purchaser shall (and shall procure that the relevant member
of the Seller’s Group and the relevant member of the Purchaser’s Group (as the
case may be) shall) carry out all actions within their respective control that
each of them needs to undertake to procure that the Seller Owned Product
Registrations are transferred to the Purchaser or its nominee at or as soon as
reasonably practicable after Closing, or where such transfer is not legally
possible, to procure that the Purchaser or its nominee obtains an equivalent
Product Registration at or as soon as reasonably practicable after Closing.
  6.2  
The Seller shall, as soon as reasonably practicable after the date of the Offer
Letter, and in any event by the Closing Date, provide full details of all
relevant federal or state agencies which are applicable in relation to each
Seller Owned Product Registration to the Purchaser or its nominee, with a view
to the Purchaser or its nominee (with the assistance of the relevant member of
the Retained Group) notifying the relevant federal or state regulatory agency at
or as soon as reasonably practicable after Closing of any relevant changes to
the Seller Owned Product Registrations. Subject to paragraph 6.6 below, any fees
relevant to such notifications shall be paid by the Purchaser or its nominee.
  6.3  
The Seller shall procure that all technical data (including without limitation
any product dossier) in relation to the relevant product or products, which has,
prior to Closing:

  6.3.1  
been submitted by or on behalf of a member of the Seller’s Group to a relevant
federal, state or any other relevant regulatory agency;
    6.3.2  
has been prepared or is in the course of being prepared in relation to a request
for such information from a relevant federal, state or any other relevant
regulatory agency; and/or
    6.3.3  
been prepared or is in the course of being prepared in relation to any future
submission to a relevant federal, state or any other relevant regulatory agency,
in each case in relation to a Seller Owned Product Registration, is made
available to the Purchaser or its nominee at Closing.

 

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6.4  
The Seller shall be entitled to retain a copy of all documents and information
provided to the Purchaser or its nominee pursuant to paragraph 6.3 above for
regulatory record keeping purposes.
  6.5  
From Closing until the Purchaser or its nominee has a Product Registration in
its own name (which allows it to use, sell, supply, advertise and/or store
relevant products using its own packaging and labelling) or when the Purchaser’s
or its nominee’s application for a Product Registration has been finally
rejected by the relevant state or federal regulatory authority, the relevant
member of the Retained Group shall, to the extent that such actions are within
its control:

  6.5.1  
at the Purchaser’s sole expense, obtain the necessary authorisation or
appropriate amendments to the relevant Seller Owned Product Registration, so
that the relevant product or products to which that Seller Owned Product
Registration relates may be used, sold, supplied, advertised and stored under or
with reference to the Purchaser’s or its nominee’s name (including without
limitation the use of its own packaging and labelling) within the relevant
jurisdiction; and
    6.5.2  
subject to paragraph 6.6 below, at the Purchaser’s or its nominee’s sole
expense, maintain the relevant Seller Owned Product Registration in accordance
with the requirements of the relevant federal or state agency and all relevant
laws and such that immediately after Closing the relevant product or products to
which that Seller Owned Product Registration relates may be used, sold,
supplied, advertised and stored under or with reference to the relevant member
of the Retained Group’s name, and once the actions in paragraph 6.5.1 above are
completed (where necessary) under or with reference to the Purchaser’s or its
nominee’s name (including without limitation the use of its own packaging and
labelling) within the relevant jurisdiction. For the avoidance of doubt, any
taxes relating to quantities of product being used, sold, supplied, advertised
and stored under or with reference to the Purchaser’s or its nominee’s name,
shall be an expense paid directly by the Purchaser or its nominee.

6.6  
In relation to the Seller Owned Product Registrations that apply to products
sold in the United States of America, from Closing until the later of:
(i) 2 years from Closing; (ii) when the supply chain of any particular product
sold or supplied under or with reference to the relevant member of the Seller’s
Group’s name is exhausted; or (iii) when the relevant federal, state or other
relevant agency ceases to require the following requirements, the relevant
member of the Seller’s Group shall obtain and/or maintain, in accordance with
the requirements of the relevant federal, state or other relevant agency and all
relevant laws, at its sole cost all relevant Seller Owned Product Registrations
(and any equivalent registration) that any federal or state agency may require
it to obtain and/or maintain and shall submit relevant and accurate sales
reports and pay any relevant tonnage taxes as required in relation to any
product sold under or with reference to the relevant member of the Seller’s
Group’s name. The Purchaser shall provide the relevant member of the Seller’s
Group with such accurate information as it reasonably requires to submit such
reports, and shall as soon as reasonably practicable reimburse the relevant
member of the Seller’s Group the amount of such tonnage taxes paid.

 

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6.7  
During the transitional period contemplated by paragraph 6.5 above, the
Purchaser or its nominee shall comply with all relevant obligations under the
relevant Seller Owned Product Registration, as required by the relevant
regulatory authority and/or the laws of the relevant jurisdiction, in relation
to the use, sale, supply, labelling, advertisement and storage of the relevant
product or products to which that Seller Owned Product Registration relates, to
the extent that this is within its control.
  6.8  
The Purchaser or its nominee, shall indemnify the Seller on behalf of itself and
the relevant member of the Retained Group in respect of any Losses suffered or
incurred by the relevant member of the Retained Group that are attributable to a
breach of aragraph 6.7 above.
  7  
Consumer Business Product Registrations
  7.1  
The Seller and the Purchaser shall (and shall procure that the relevant member
of the Seller’s Group and the relevant member of the Purchaser’s Group (as the
case may be) shall) carry out all actions within their respective control that
each of them needs to undertake to procure that the Consumer Business Product
Registrations are transferred to the Seller or its nominee at or as soon as
reasonably practicable after Closing, or where such transfer is not legally
possible, to procure that the Seller or its nominee obtains an equivalent
product registration at or as soon as reasonably practicable after Closing.
  7.2  
From Closing until the Seller or its nominee has a Product Registration in its
own name (which allows it to use, sell, supply, advertise and/or store relevant
products using its own packaging and labelling), or until the Seller’s or its
nominee’s application for a Product Registration has been finally rejected by
the relevant regulatory authority, the relevant member of the Purchaser’s Group
shall, to the extent that such actions are within its control:

  7.2.1  
at the Seller’s or its nominee’s expense, obtain the necessary authorisation or
appropriate amendments to the relevant Consumer Business Product Registration,
so that the relevant product or products to which that Product Registration
relates may be used, sold, supplied, advertised and stored under or with
reference to the relevant member of the Retained Group’s name (including without
limitation the use of its own packaging and labelling) within the relevant
jurisdiction; and
    7.2.2  
subject to paragraph 7.3 below, at the Seller’s or its nominee’s expense,
maintain the relevant Product Registration in accordance with the requirements
of the relevant regulatory authority and all relevant laws, and such that
immediately after Closing the relevant product or products to which that
Consumer Business Product Registration relates may be used, sold, supplied,
advertised and stored under or with reference to the relevant member of the
Purchaser’s Group’s name, and once the actions in paragraph 7.2.1 above are
completed (where necessary) under or with reference to the relevant member of
the Retained Group’s name (including without limitation the use of its own
packaging and labelling) within the relevant jurisdiction. For the avoidance of
doubt, any taxes relating to quantities of product being used, sold, supplied,
advertised and stored under or with reference to the relevant member of the
Retained Group’s name, shall be an expense paid directly by the relevant member
of the Retained Group.

 

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7.3  
In relation to the Consumer Business Product Registrations that apply to
products sold in the United States of America, from Closing until the later of:
(i) 2 years from Closing; (ii) when the supply chain of any particular product
sold or supplied under or with reference to the relevant member of the
Purchaser’s Group’s name is exhausted; or (iii) when the relevant federal, state
or other relevant agency ceases to require such, the relevant member of the
Purchaser’s Group shall, to the extent such actions are within its control,
obtain and/or maintain, in accordance with the requirements of the relevant
federal, state or other relevant agency and all relevant laws, at the Seller’s
or its nominee’s sole cost all relevant Consumer Business Product Registrations
(and any equivalent registration) that any federal or state agency may require
it to obtain and/or maintain and shall submit relevant and accurate sales
reports and pay any relevant tonnage taxes as required in relation to any
product sold under or with reference to the relevant member of the Purchaser’s
Group’s name. The Seller shall provide the relevant member of the Purchaser’s
Group with such accurate information as it reasonably requires to submit such
reports and shall as soon as reasonably practicable reimburse the relevant
member of the Purchaser’s Group the amount of such tonnage taxes paid.
  7.4  
During the transitional period contemplated by paragraph 7.1 above, the Seller
or its nominee shall comply with all relevant obligations under the relevant
Consumer Business Product Registration as required by the relevant regulatory
authority and/or the laws of the relevant jurisdiction, in relation to the use,
sale, supply, labelling, advertisement and storage of the relevant product or
products to which that Product Registration relates, to the extent that this is
within its control.
  7.5  
The Seller shall indemnify the Purchaser on behalf of itself and the relevant
member of the Purchaser’s Group in respect of any Losses suffered or incurred by
the Purchaser or any member of the Purchaser’s Group that are attributable to
any breach of paragraph 7.4 above.
  8  
Pre- and Post-Closing Sales
  8.1  
Where any member of the Purchaser’s Group is required, post-Closing, to submit
relevant sales reports and/or pay any relevant taxes or other costs in relation
to any product sold prior to Closing by any of the Group or any member of the
Retained Group or post-Closing by any member of the Retained Group, the Seller
shall provide the relevant member of the Purchaser’s Group with such accurate
information as it reasonably requires to submit such reports and shall as soon
as reasonably practicable reimburse the relevant member of the Purchaser’s Group
the amount of such taxes and other costs paid.
  8.2  
Where any member of the Seller’s Group is required, post Closing, to submit
relevant sales reports and/or pay any relevant taxes or other costs in relation
to any product sold post-Closing by the Purchaser or any member of the
Purchaser’s Group, the Purchaser shall provide the relevant member of the
Seller’s Group with such accurate information as it reasonably requires to
submit such reports and shall as soon as reasonably practicable reimburse the
relevant member of the Seller’s Group the amount of such taxes and other costs
paid.

 

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9  
Detailed Transfer Strategies
  9.1  
The Seller and the Purchaser agree that as soon as reasonably practicable after
the date of the Offer Letter, and in any event before Closing, they shall
prepare and agree detailed strategies in relation to each product to which a
Professional Business Product Registration or a Consumer Business Product
Registration relates. The Seller and the Purchaser agree that these detailed
strategies will set out step-by-step what action each of the Seller and the
Purchaser (and the relevant members of the Seller’s Group and the Purchaser’s
Group as appropriate) will be required to take to procure that the actions
referred to in paragraphs 1 to 8 (inclusive) and paragraph 9.3 of this Part 7 of
Schedule 4 can be commenced and completed as soon as reasonably practicable
after Closing and shall also include (without limitation):

  9.1.1  
what liaison and notification the Seller and/or the Purchaser (or the respective
members of the Seller’s Group and the Purchaser’s Group) will be required to
make to any relevant regulatory authority or third-party;
    9.1.2  
what applications and information (whether in relation to an amendment to, or,
the renewal or transfer of any relevant Product Registration or in relation to
the obtaining of any new, dual or equivalent Product Registration) will need to
be submitted by the Seller and/or the Purchaser (or the respective members of
the Seller’s Group and the Purchaser’s Group) or any third-party to any relevant
regulatory authority or other third-party;
    9.1.3  
the arrangements for ensuring compliance with the requirements of any relevant
regulatory authority, of any relevant Product Registration and any relevant law
in each case in relation to the use of any packaging or labelling or the
provision of any information to third-parties;
    9.1.4  
the arrangements for ensuring that the sale, supply, use, advertisement and
storage of all relevant products in all relevant jurisdictions can continue to
occur immediately after the Closing Date; and
    9.1.5  
the provision of data relating to sales and supplies made prior to and
post-Closing where such information may have to be reported to any relevant
regulatory authority.

9.2  
The Seller and the Purchaser shall (and shall procure that the relevant member
of the Seller’s Group and the relevant member of the Purchaser’s Group (as the
case may be) shall) carry out any and all actions within their respective
control that each of them needs to undertake to procure the implementation and
completion of the detailed strategies referred to in paragraph 9.1 above at or
as soon as reasonably practicable after Closing.
  9.3  
The Seller and the Purchaser agree that if any relevant regulatory authority or
if any relevant law in any particular jurisdiction requires a process to be
undertaken that is different to that envisaged by paragraphs 1 to 7 of this
Part 7 of Schedule 4 in relation to any particular Product Registration (in
order to achieve the same outcome, and that the relevant member of the
Purchaser’s Group and/or the Retained Group as relevant will from Closing be
able to sell, supply, use, advertise and store the relevant product and as soon
as reasonably practicable shall be able to do so under or with reference to its
own name), the Seller and the Purchaser shall procure that relevant members of
the Seller’s Group and the Purchaser’s Group shall work together to undertake
such actions as are necessary to achieve the relevant outcome.

 

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10  
Unidentified Product Registrations
  10.1  
The Seller and the Purchaser agree that if after the date of the Offer Letter it
transpires that at the date of the Offer Letter there are any Product
Registrations held by any member of the Group or the Retained Group which relate
in any way to the Professional Business and which are not included in the
definition of Agent Assisted Product Registration, Distributor Owned Product
Registration, Licensed EU Product Registration, Seller Owned EU Product
Registration, Seller Owned Product Registration or Seller Owned Shared EU
Product Registration (“Unidentified Professional Business Product
Registrations”), the Purchaser and the Seller shall agree to treat such Product
Registrations in the way set out in paragraphs 1 – 6, 9 and 11 of this Part 7 of
Schedule 4 (as relevant to the particular Product Registration).
  10.2  
The Seller and the Purchaser agree that if after the date of the Offer Letter it
transpires that at the date of the Offer Letter there are any Product
Registrations held by any member of the Group or the Retained Group which relate
solely to the Consumer Business and which are not included in the definition of
Consumer Business Product Registrations (the “Unidentified Consumer Business
Product Registrations”), the Purchaser and the Seller shall agree to treat such
Product Registrations in the way set out in paragraphs 7 – 9 and 11 of this
Part 7 of Schedule 4.
  11  
Miscellaneous
  11.1  
In relation to Clause 8.5.2 of this Agreement the Purchaser and the Seller agree
that each member of the Purchaser’s Group may use the trading names, trade
marks, marks, names or logos referred to in that Clause in respect of products
to which a Professional Business Product Registration applies:

  11.1.1  
for as long as any of the actions provided for in this Part 7 of Schedule 4
remain outstanding in relation to such product;
    11.1.2  
until the relevant regulatory authority ceases to require the use of packaging,
labelling and other relevant documentation in the name of the relevant member of
the Retained Group; and
    11.1.3  
until all inventory containing such trade names, trade marks, marks, names or
logos is sold out where allowed to do so under the laws of the relevant
jurisdiction.

 

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12  
Indemnities and Liability
  12.1  
Clauses 10 and 11 of this Agreement shall not apply to this part of this
Schedule 4, except to the extent indicated in this paragraph 12, and the
following provisions shall apply to this Part 7 of Schedule 4 in their stead.
  12.2  
Under this part of the Schedule, the Seller and the Retained Group on the one
hand and the Purchaser and the Purchaser’s Group on the other hand are each
under obligations to undertake certain actions and each provide indemnities to
the other. The provisions of this paragraph shall apply to both the Seller and
the Retained Group and the Purchaser and the Purchaser’s Group. Where a party is
under an obligation to take or procure the undertaking of an action or to
indemnify the other, that person is known for the purposes of this clause as the
“Obligor” and where a party or its group of companies benefits from such action
or indemnity, that person is known as the “Obligee”.
  12.3  
Minimum Claims

  12.3.1  
No Obligor shall be liable under this part of this Schedule in respect of any
individual claim (or a series of such claims arising from substantially
identical facts or circumstances) where the liability agreed or determined
(disregarding the provisions of this paragraph 12.3) in respect of any such
claim or series of claims does not exceed US$150,000.
    12.3.2  
Where the liability agreed or determined in respect of any such claim or series
of claims exceeds US$150,000, subject as provided elsewhere in this paragraph
12.3, the Obligor shall be liable for the full amount of the claim or series of
claims as agreed or determined.
    12.3.3  
The limitations in this paragraph 12.3 above shall not apply in respect of fines
imposed by any relevant regulatory authority.

12.4  
Maximum Liability

  12.4.1  
The aggregate liability of all members of the Retained Group in respect of all
claims under this part of this Schedule and all claims under the Agreement, as
detailed under Clause 10.4 of this Agreement, shall not exceed 100 per cent. of
the Purchase Price.
    12.4.2  
The aggregate liability of all members of the Purchasers Group in respect of all
claims under this part of this Schedule, shall not exceed 100 per cent. of the
Purchase Price.

 

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12.5  
Wilful Default

  12.5.1  
Save for paragraph 12.4 which shall apply in the case of wilful default or
abandonment, the limitations of liability in this paragraph 12 shall not apply
to any claim which arises or is increased, or to the extent to which it arises
or is increased, as the consequence of, or which is delayed as a result of the
wilful default or abandonment of any member of the Obligor’s group of companies
where:

  (i)  
such wilful default or abandonment is in respect of the intentional failure by
the Obligor or relevant member of the Obligor’s group of companies to comply
with any of its obligations under this part of this Schedule; and
    (ii)  
the Obligor or the relevant member of Obligor’s group of companies, acting in
good faith does not dispute at the time of failure to comply with the relevant
obligation that it has an obligation to comply.

12.6  
Indirect or Consequential Losses
     
No Obligor shall be liable under this part of this Schedule in respect of any
indirect or consequential losses.
  12.7  
Insurance
     
No Obligor shall be liable under this part of this Schedule in respect of any
claim (except any claim for wilful default of the nature set out in paragraph
12.5 above) to the extent that the Losses in respect of which such claim is made
are recovered under a policy of insurance by the Obligee or any member of its
group of companies, and the Obligee shall procure that reasonable steps are
taken to enforce recovery under such insurance policy and any actual recovery
(less any reasonable costs, charges, increases in premia and expenses incurred
in obtaining such recovery and less any Taxation attributable to such recovery)
shall reduce or satisfy, as the case may be, such claim to the extent of such
recovery.
  12.8  
Double Claims
     
No Obligee shall be entitled to recover from any Obligor under any Transaction
Document more than once in respect of the same Loss suffered.
  12.9  
Fraud
     
None of the limitations in this paragraph 12 shall apply to any claim which
arises or is increased, or to the extent to which it arises or is increased, as
the consequence of or which is delayed as a result of fraud.
  12.10  
Precondition to Claims

  12.10.1  
If, in the reasonable opinion of any Obligee, any Obligor is in breach of any
obligations or undertakings to be performed or observed by it under or in
connection with this part of this Schedule:

  (i)  
the Obligee shall notify the Obligor in writing on the basis for its view that
the Obligor is in breach (“Notice”);
    (ii)  
promptly on receipt of such Notice, and in any event within 10 calendar days,
the Obligor shall respond to the Obligee either that (a) it intends to remedy
such breach, or (b) that it does not, in its reasonable opinion, consider that
it is in breach; and
    (iii)  
if the Obligor: (a) has not remedied the breach within 30 calendar days (or such
longer period as may be reasonably required to remedy the breach that is agreed
by the Obligee and the Obligor) from receipt of Notice;or (b) does not respond
to the Obligee’s Notice within 10 calendar days of receipt, and then and only
then may the Obligee bring a claim for breach or pursuant to any indemnity in
respect of any of the obligations or undertakings to be performed or observed
under or in connection with this part of this Schedule.

 

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12.11  
Conduct of Claims

  12.11.1  
If any Obligee who is entitled to claim against an Obligor under this part of
this Schedule becomes aware of any matter in respect of which it is or may be
entitled to claim (other than in respect of any matter capable of giving rise to
criminal liability), the Obligee shall promptly notify the Obligor of such
matter, specifying in reasonable detail the nature of the matter. If any action
or claim is brought against the Obligee in connection with such matter:

  (i)  
the Obligee shall make no admission, settlement or compromise with the relevant
third party in connection with the claim;
    (ii)  
the Obligor shall be entitled at its own expense to assume and take conduct of
any defence, dispute, compromise or appeal of the claim and of any incidental
negotiations in place of the Obligee using legal advisers approved by the
Obligee (such approval not to be unreasonably withheld or delayed); and
    (iii)  
the Obligee shall provide the Obligor and its advisers with such information and
assistance as the Obligor shall reasonably request in connection with the claim
at the cost of the Obligor.

12.12  
Mitigation of Losses

  12.12.1  
The Obligee shall procure that all reasonable steps are taken and all reasonable
assistance is given to avoid or mitigate any Losses which, in the absence of
mitigation, could reasonably be expected to give rise to or increase a Loss in
respect of any claim under this part of this Schedule provided that this
paragraph:

  (i)  
Shall not oblige the Obligee to incur any costs or expenses which would not be
recoverable under any claim; and
    (ii)  
Shall not oblige the Obligee to do anything which is reasonably likely to have a
materially negative effect on the Obligee’s reputation.

 

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Schedule 5
Business Contracts
(Clause 2.3.1(v))
Part 1
Business Contracts
Note: Relevant contracts listed in Data Room.

 

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Part 2
Third-Party Consents

1  
Obligation to obtain Third-Party Consents
  1.1  
Subject to Clause 2.3.5 of this Agreement, the benefit of each Business
Contract:

  1.1.1  
which can be assigned by the relevant member of the Retained Group without any
Third-Party Consent; and/or
    1.1.2  
which cannot be assigned, but in respect of which such Third-Party Consent has
been obtained at or before Closing,

   
shall be assigned to the relevant Business Purchaser with effect from Closing
and the Seller shall use reasonable endeavours to ensure that all relevant
Business Contracts are assigned by securing necessary Third-Party Consents as
soon as reasonably practicable.
  1.2  
In relation to any Business Contract which is not assignable without a
Third-Party Consent, this Agreement shall not be construed as an assignment or
an attempted assignment and the relevant member of the Retained Group and the
relevant Business Purchaser shall each use reasonable endeavours both before and
after Closing to obtain all necessary Third-Party Consents as soon as possible
and shall keep each other informed of progress in obtaining such Third-Party
Consents. The relevant member of the Retained Group shall deliver to the
relevant Business Purchaser, on Closing or, if later, as soon as possible after
receipt, any Third-Party Consent and a transfer duly executed by the appropriate
parties.
  1.3  
In connection with the obtaining of any Third-Party Consent referred to in
paragraph 1.1 of Part 2 of this Schedule 5, the relevant Business Purchaser
shall supply to the relevant member of the Retained Group on a confidential
basis such information and references regarding the financial position of the
relevant Business Purchaser as may be reasonably requested by the relevant
member of the Retained Group or any relevant third-party and shall enter into
such undertakings in favour of any relevant third-party as may be reasonably
requested by the Seller in respect of any obligations to which the relevant
Business Purchaser will become subject or which the relevant Business Purchaser
will incur on assignment.
  1.4  
Upon any such Third-Party Consent being obtained, this Agreement shall
constitute an assignment of the benefit (subject to the burden) of the Business
Contract to which the Third-Party Consent relates.
  1.5  
The Seller shall use its reasonable endeavours to amend the provisions of the
agreements that are the subject of the inquiry of the Polish Competition
Authority referred to in Clause 2.3.5(v).
  2  
Obligations until Third-Party Consents are obtained/where Third-Party Consents
are refused
  2.1  
Subject to paragraph 2.2 of Part 2 of this Schedule 5, the Business Purchasers
shall, from Closing, for their own benefit, assume, carry out, perform and
discharge the obligations of the members of the Retained Group under the
Business Contracts and shall indemnify and keep indemnified the members of the
Retained Group against any liability incurred by such members of the Retained
Group arising from the failure by the Business Purchasers to assume, carry out,
perform or discharge such obligations and against any Losses which the members
of the Retained Group may suffer by reason of such members of the Retained Group
taking any reasonable action to avoid, resist or defend any liability referred
to in this paragraph 2.1.

 

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2.2  
In respect of any Business Contract, from Closing until the relevant Third-Party
Consent has been obtained to the Purchaser’s reasonable satisfaction as
contemplated by paragraph 1.1 of Part 2 of this Schedule 5, or where the
Third-Party Consent has been refused:

  2.2.1  
the relevant member of the Retained Group shall hold the Business Contract on
trust for the relevant Business Purchaser to the extent it is lawfully able to
do so or, where it is not lawfully able to do so or where holding on trust is
not possible under local law, the relevant member of the Retained Group and the
relevant Business Purchaser shall make such other arrangements between
themselves to provide to the relevant Business Purchaser the benefits of the
Business Contract, including the enforcement at the cost and for the account of
the relevant Business Purchaser of all rights of the relevant member of the
Retained Group against any other party thereto, and shall, as soon as
practicable after receipt, account for and pay or otherwise transfer to the
relevant Business Purchaser any monies, goods or other benefits received by the
relevant member of the Retained Group in respect of the Business Contract
without any deduction or set-off, and, at the Purchaser’s request, enforce any
and all of its rights under the Business Contract; and
    2.2.2  
if and to the extent that the relevant Business Purchaser is lawfully able to do
so, the relevant Business Purchaser shall, for its own benefit, perform the
obligations of the relevant member of the Retained Group under the Business
Contract as agent or sub-contractor. To the extent that the relevant Business
Purchaser is not lawfully able to do so, the relevant member of the Retained
Group shall (subject to being indemnified by the relevant Business Purchaser for
any Losses the relevant member of the Retained Group may incur in connection
therewith) do all such things as the relevant Business Purchaser may reasonably
require to enable due performance of the Business Contract and the relevant
Business Purchaser shall indemnify the relevant member of the Retained Group in
respect thereof.

3  
Failure to obtain Third-Party Consents
  3.1  
If the relevant Business Purchaser is not lawfully able to perform or procure
the performance of any Business Contract in accordance with paragraph 2.2 of
Part 2 of this Schedule 5 or to receive the benefits of any Business Contract in
accordance with paragraph 2.1 of Part 2 of this Schedule 5 within 12 months of
Closing (or such longer period as the Purchaser and the Seller may agree):

  3.1.1  
the Purchaser shall be entitled to elect by notice in writing to the Seller that
either (a) the Seller shall (at its own cost) procure the termination of the
Business Contract or (b) the obligations of the parties under this Agreement in
relation to such Business Contract shall cease forthwith; and

 

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  3.1.2  
if the Purchaser makes the election referred to in paragraph 3.1.1 above,
references in this Agreement to the Business Contracts and the Group Businesses
(other than in this paragraph 3 of Part 2 of Schedule 5) shall be construed as
excluding such Business Contract, and the Seller or the other Relevant Sellers
shall repay to the Purchaser or a Relevant Purchaser an amount equal to that at
which it (together with any such related liability) was reflected in the Closing
Statement less the value of any benefit received by the Purchaser or any
Relevant Purchaser from Closing. Any dispute as to the amount of the repayment
shall be determined by the Reporting Accountants on application of the Seller or
the Purchaser. The provisions of paragraphs 3.4 to 3.11 of Part 1 of Schedule 11
shall apply mutatis mutandis to the engagements and determination of the
Reporting Accountants hereunder.

4  
Shared Consumer Agreements
  4.1  
Each of the Seller and the Purchaser shall use its reasonable endeavours to
procure that at Closing or as soon as reasonably practicable thereafter, but not
later than 90 days following Closing, each Shared Consumer Agreement is replaced
or varied, whether by means of a new contract, by a partial novation of the
Shared Consumer Agreement or otherwise, resulting in:

  4.1.1  
a separate contract between the counterparty to the Shared Consumer Agreement or
any other provider selected by the relevant Group Companies and the relevant
Group Companies or a member of the Purchaser’s Group nominated by the Purchaser
in writing, for the benefit of the relevant Group Companies, entitling the
relevant Group Companies to substantially the same rights to goods or services
to which they were entitled under the Shared Consumer Agreement (subject, in
each case, to the relevant burden of such Shared Consumer Agreement); and
    4.1.2  
a separate contract or contracts between the counterparty to the Shared Consumer
Agreement and the relevant members of the Retained Group entitling the relevant
members of the Retained Group to substantially the same rights to goods or
services to which they were entitled under the Shared Consumer Agreement
(subject, in each case, to the relevant burden of such Shared Consumer
Agreement).

4.2  
If the Seller reasonably considers that the consent or agreement to a new
agreement or partial novation in accordance with paragraph 4.1 of Part 2 of this
Schedule 5 is unlikely to be obtained from any counterparty to any Shared
Consumer Agreement, the Seller shall notify the Purchaser as soon as reasonably
practicable and shall, insofar as it is lawfully permitted to do so, use its
reasonable endeavours to maintain the Shared Consumer Agreement on behalf of
both the Retained Group and the relevant Group Companies, entitling such Group
Companies to substantially the same rights to goods or services to which they
were entitled under such Shared Consumer Agreement (subject, in each case, to
the relevant burden of such Shared Consumer Agreement) prior to Closing, until
the earlier of 1 October 2011 and the date on which the relevant Shared Consumer
Agreement expires or is terminated.

 

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5  
Shared Business Agreements
  5.1  
Each of the Purchaser and the Seller shall use its reasonable endeavours to
procure that at Closing or as soon as reasonably practicable thereafter, but not
later than 90 days following Closing, each Shared Business Agreement is replaced
or varied, whether by means of a new contract, by a partial novation of the
Shared Business Agreement or otherwise, resulting in:

  5.1.1  
a separate contract between the counterparty to the Shared Business Agreement or
any other provider selected by the relevant Retained Group companies, entitling
the relevant Retained Group companies to substantially the same rights to goods
or services to which they were entitled under the Shared Business Agreement
(subject, in each case, to the relevant burden of such Shared Business
Agreement); and
    5.1.2  
a separate contract or contracts between the counterparty to the Shared Business
Agreement and the relevant Group Companies or a member of the Purchaser’s Group.

5.2  
If the Purchaser reasonably considers that the consent or agreement to a new
agreement or partial novation in accordance with paragraph 5.1 is unlikely to be
obtained from any counterpart to any Shared Business Agreement, the Purchaser
shall notify the Seller as soon as reasonably practicable and shall, insofar as
it is lawfully permitted to do so, use its reasonable endeavours to maintain the
Shared Business Agreement on behalf of both the Retained Group and the relevant
Group Companies, entitling the Retained Group to substantially the same rights
to goods or services to which they were entitled under such Shared Business
Contract (subject, in each case, to the relevant burden of such Shared Business
Contract) prior to Closing, until the earlier of 1 October 2011 and the date on
which the relevant Shared Business Agreement expires or is terminated.
  6  
Definitions
     
For the purposes of this Schedule 5, the following terms shall have the
following meanings:
     
“Shared Consumer Agreements” means the written and unwritten customer, supply,
distribution, hire purchase and other commercial contracts or agreements to
which a member of the Retained Group is a party which relate in part to the
Group, including, but not limited to, the contracts or agreements listed in
Part 3 of Schedule 5 (but excludes any agreement that is a Third-Party Agreement
as defined in the TSA), and “Shared Consumer Agreement” means any of them; and
     
“Shared Business Agreements” means those written and unwritten customer, supply,
distribution, hire purchase and other commercial contracts or agreements to
which a Group Company is a party, which relate in part to the Group and in part
to the Retained Group including, but not limited to, the contracts or agreements
listed in Part 4 of Schedule 5 (but excludes any agreement that is a Third-Party
Agreement as defined in the TSA) and “Shared Business Agreement” means any of
them.

 

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Part 3
Shared Consumer Agreements
Note: Relevant contracts listed in Data Room.

 

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Part 4
Shared Business Agreements
Note: Relevant contracts listed in Data Room.

 

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Part 5
Intra-group Arrangements
Between the date of the Offer Letter and Closing the Seller and the Purchaser
shall discuss in good faith and shall use reasonable endeavours to determine
which of the intra-group agreements listed in this Part 5 of Schedule 5 will
either need to (i) be terminated, (ii) be transferred to the Relevant Purchaser
or (iii) will stay in full force and effect on or after the Closing Date.
Note: Relevant contracts listed in Data Room.

 

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Part 6
Confidentiality Agreements
Between the date of the Offer Letter and Closing the Seller and the Purchaser
shall discuss in good faith and shall use reasonable endeavours to determine
which of the confidentiality agreements listed in this Part 6 of Schedule 5 will
either need to (i) be terminated, (ii) be transferred to the Relevant Purchaser
or (iii) will stay in full force and effect on or after the Closing Date.
Note: Relevant contracts listed in Data Room.

 

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Schedule 6
Employees
(Clause 2.5.1)
Part 1
Business Employees and Offer Employees

1  
Transfer Pursuant to the Transfer Provisions
  1.1  
The following provisions shall apply to Business Employees engaged in Poland and
the UK.

  1.1.1  
The parties accept and agree that by virtue of Closing the Transfer Provisions
shall operate to transfer the contract of employment of each Business Employee
(subject to Schedule 7) to the relevant Business Purchaser and such relevant
Business Purchaser shall employ each such Business Employee with effect from the
Closing Date (which shall be the time of transfer under the Transfer Provisions)
and shall treat each such employee’s Prior Service as continuous with the
relevant Business Purchaser, including, without limitation, for eligibility and
vesting purposes under all employment benefit plans and, unless such service
credit would result in duplicate benefits, also for benefit accrual under such
benefit plans or in respect of severance or termination payments.
    1.1.2  
The relevant Business Seller shall discharge all Employment Costs and Employment
Liabilities of the Seller’s Group to the Business Employees that have accrued
and have not been discharged in respect of the period prior to the Closing Date
and shall indemnify and keep indemnified the relevant Business Purchaser from
and against any Losses incurred by it if the relevant Business Seller fails to
do so. Where the relevant national legislation provides that a Business Seller
or other member of the Seller’s Group is jointly liable with the relevant
Business Purchaser in respect of any obligation in relation to the Business
Employees, the relevant Business Seller shall indemnify and keep indemnified the
relevant Business Purchaser from and against any such liability. The indemnities
in this paragraph 1.1.2 shall not apply in respect of any Employment Costs,
Losses or Employment Liabilities to the extent that they are properly included
in the calculation of Working Capital.
    1.1.3  
The relevant Business Purchaser shall perform and discharge all obligations in
respect of each Business Employee for its own account due to be performed and
discharged from and including the Closing Date (which shall, for the avoidance
of doubt, include, but not be limited to, wages, salary, bonus, commission,
pension contributions, social security contributions and all tax deductions and
any other mandatory contributions or deductions).

 

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1.1.4
   

  (i)  
The relevant Business Purchaser shall indemnify and keep indemnified the Seller
(for itself and on behalf of each member of the Seller’s Group) and each
Business Seller from and against any Employment Liabilities arising out of or in
connection with:

  (a)  
any change in the working conditions of any Business Employee occurring or which
a Business Employee anticipates will occur on or after the Closing Date;
    (b)  
the change of employer occurring by virtue of the Transfer Provisions and/or
this Agreement;
    (c)  
the employment by the relevant Business Purchaser (or the Purchaser’s Group) on
or after the Closing Date of any of the Business Employees other than on no less
favourable terms and conditions as those enjoyed immediately prior to the
Closing Date (subject to Schedule 7) or the termination of the employment of any
of them on or after the Closing Date; and
    (d)  
any act or omission of the relevant Business Purchaser (or the Purchaser’s
Group) in relation to any Business Employee.

  (ii)  
The Seller shall procure that the relevant Business Seller shall indemnify the
Purchaser (for itself and on behalf of the relevant Business Purchaser) against
any cost, loss, damage, expense, order or award (“Damages”) suffered or incurred
by reason of any proceeding, claim or demand by any Business Employee (or, where
applicable, the employee representatives of any Business Employee) to the extent
that it arises from any failure by a Business Seller to comply with its
obligations to inform and consult under the Transfer Provisions in respect of
any Business Employee. For the avoidance of any doubt, this indemnity shall not
include any Damages arising from any failure by the relevant Business Purchaser
to comply with its obligations under the Transfer Provisions and/or any Damages
arising from any inaccuracy in information provided by the relevant Business
Purchaser to enable a Business Seller to comply with its obligations under the
Transfer Provisions.

  1.1.5  
If after Closing the Transfer Provisions are found not to apply to a Business
Employee in Poland or the UK, the relevant Business Purchaser shall, within
seven days of the earlier of the relevant Business Purchaser becoming aware of
or being notified by the relevant Business Seller that such employee’s contract
of employment has not transferred pursuant to the Transfer Provisions:

  (i)  
make an offer in writing to each such Business Employee to employ him or her
under a new contract of employment to take effect from the termination referred
to below;
    (ii)  
subject to Schedule 7, the offer will be to employ such Business Employee on no
less favourable terms and conditions on which he or she was employed in the
Seller’s Group immediately before the offer was made save as to the identity of
the employer and will provide that his or her Prior Service shall be counted as
continuous service with the relevant Business Purchaser including, without
limitation, for eligibility and vesting purposes under all employment benefit
plans and, unless such service credit would result in duplicate benefits, also
for benefit accrual under such benefit plans or in respect of severance or
termination payments; and

  (iii)  
within seven days of the earlier of the relevant Business Purchaser becoming
aware of or being notified by the relevant Business Seller that a Business
Employee’s contract of employment has not transferred (whether or not an offer
referred to in paragraphs (i) and (ii) above is made), the relevant Business
Seller shall be entitled to terminate the employment of each Business Employee
concerned.

 

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1.2  
Additional provisions relating to employees in Belgium.

  1.2.1  
The provisions of paragraph 1.1 above shall apply in relation to the employees
in Belgium listed on the Global Bloom Master Roster (document 4.1.9 in the Data
Room) (“Belgian Employees”) with the following changes in the text of paragraph
1.1 and in definitions used within it:

  (i)  
references to Business Employee(s) shall be substituted by references to Belgian
Employee(s);
    (ii)  
references to the relevant Business Purchaser shall be substituted by references
to the Purchaser;
    (iii)  
references to the relevant Business Seller shall be substituted by references to
the Seller; and
    (iv)  
in the definition of Prior Service, references to relevant Business Seller shall
be substituted by references to a Belgian Employee’s employer in the Retained
Group and references to a Relevant Purchaser shall be substituted by references
to the Purchaser.

  1.2.2  
If any offer of employment made to a Belgian Employee pursuant to paragraph
1.1.1 of Part 1 of this Schedule 6 does not comply with that paragraph and it is
not accepted by a Belgian Employee, then the Purchaser shall indemnify and keep
indemnified the Seller (for itself and on behalf of each member of the Seller’s
Group) from and against any severance or compensation payments on termination of
employment (including notice pay or pay in lieu of notice and taxes and social
security charges on all such payments) which a member of the Retained Group pays
to or in respect of such employee in accordance with its legal obligations or
consistent with its usual practice.

2  
Offer and Acceptance
     
The following provisions shall apply to Business Employees in Australia and New
Zealand and to the Offer Employees.
  2.1  
The Relevant Purchaser shall, as soon as practicable and at least 30 days before
Closing:

  2.1.1  
make an offer in writing (subject to Closing) to each such Business Employee and
Offer Employee to employ him or her from Closing; and
    2.1.2  
subject to Schedule 7, the offer will be to employ such Business Employees and
Offer Employees on no less favourable terms and conditions than those on which
he or she was employed in the Seller’s Group immediately before the offer was
made (and for the Offer Employees who are not home-based, their work location
shall be the same as or no more than 50 miles from their current work location)
save as to the identity of the employer and will provide that his or her Prior
Service shall be counted as continuous with the Relevant Purchaser including,
without limitation, for eligibility and vesting purposes under all employment
benefit plans and, unless such service credit would result in duplicate
benefits, also for benefit accrual under such benefit plans or in respect of
severance or termination payments.

 

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2.2  
If such Business Employee and Offer Employee accepts employment with the
Relevant Purchaser, each such Business Employee and Offer Employee shall be
deemed to have resigned from his/her employment with the Seller’s Group with
effect from Closing. The Seller shall indemnify and keep indemnified the
Relevant Purchasers from and against all and any Employment Liabilities arising
from the termination of employment of any employee who does not accept the offer
referred to in paragraph 2.1 above including, for the avoidance of doubt, any
amounts payable pursuant to paragraph 2.1 of Part 1 of this Schedule 6 and
amount payable pursuant to any Stay Incentive Agreement including in respect of
Equity Award Obligations (as defined in paragraph 3 of Part 2 of this
Schedule 6). In the event that the Seller is aware of any reasons why an
employee does not accept the offer, the Seller shall inform the Purchaser of
such reasons as soon as practicable.
  2.3  
If:

  2.3.1  
the Relevant Purchaser’s offer does not comply with paragraph 2.1 above and it
is not accepted by a Business Employee or Offer Employee; or
    2.3.2  
the Purchaser does not comply with its obligations pursuant to paragraph 6 below
(China) and as a result a member of the Retained Group is liable to make a
severance or compensation payment on termination of employment to or in respect
of an employee referred to in that paragraph,

   
then the Relevant Purchaser shall indemnify and keep indemnified the Seller (for
itself and on behalf of each member of the Seller’s Group) and each Relevant
Seller from and against any severance or compensation payments on termination of
employment (including notice pay or pay in lieu of notice and taxes and social
security charges on all such payments) which a member of the Retained Group pays
to or in respect of such employee in accordance with its legal obligations or
consistent with its usual practice.
  3  
Business Employees in Australia
     
The following additional provisions shall apply in relation to Business
Employees in Australia.
  3.1  
If, on or before the Close of Business on the Closing Date, a Business Employee
in Australia has not accepted the relevant Business Purchaser’s offer of
employment in accordance with paragraph 2.1 of Part 1 of this Schedule 6, the
relevant Business Seller shall pay to such Business Employee all amounts to
which such Business Employee is or may become entitled by law or under any
award, agreement or arrangement on termination of employment in connection with:

  3.1.1  
wages, salary or allowances accrued or arising on the Closing Date; and
    3.1.2  
untaken or pro rata annual leave and long service leave accrued or arising on
the Closing Date.

3.2  
The relevant Business Purchaser agrees that, subject to any relevant statute or
award, for the purpose of calculating any benefit arising under any statute or
award or contract of employment between the relevant Business Purchaser and the
Business Employee, Prior Service is to be deemed service with the relevant
Business Purchaser and the continuity of the period of service of the Business
Employee is to be deemed not broken because the Business Employee ceases to be
an employee of the relevant Business Seller and becomes an employee of the
relevant Business Purchaser.

 

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4  
France
     
Scotts France SARL shall, as soon as practicable and at least 30 days before
Closing:

4.1  
make an offer in writing (subject to Closing) to each employee of Scotts France
SAS listed on the Global Bloom Master Roster (document 4.1.9 in the Data Room)
to employ him or her from Closing; and
  4.2  
the offer will be to employ such employee on the same or where this is not
possible, comparable terms and conditions on which he or she was employed in the
Seller’s Group immediately before the offer was made save as to the identity of
the employer and will provide that his or her Prior Service shall be counted as
continuous with Scotts France SARL including, without limitation, for
eligibility and vesting purposes under all benefit plans and, unless such
service credit would result in duplicate benefits, also for benefit accrual
under such benefit plans or in respect of severance or termination payments.
  5  
Austria
     
Scotts Deutschland GmbH shall, as soon as reasonably practical and at least
30 days before Closing, enter into an agreement with Scotts Celaflor
Handelsges.m.b.H. and, with their agreement, each employee in Austria listed in
the Global Bloom Master Roster (document 4.1.9 in the Data Room) to transfer the
employment of that employee on and subject to Closing to Scotts Deutschland GmbH
such agreement to comply with paragraph 4 above, with necessary changes.
  6  
China
     
Subject to the agreement of FESCO Shenzhen and each FESCO employee in China
listed in the Global Bloom Master Roster (document 4.1.9 in the Data Room), the
Purchaser or its nominee will, on and subject to Closing, enter into a new
contract with FESCO to employ the Relevant Employees in China on substantially
similar terms to their current arrangements. The parties will, in good time
before Closing, agree arrangements for the engagement or employment, on and
subject to Closing, of the individual whose services are currently provided
pursuant to a services agreement (document 4.2.1.3.8 in the Data Room).

 

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Part 2
Relevant Employees

1  
Terms and Conditions
  1.1  
The Relevant Purchasers undertake to the Seller (for itself and on behalf of
each member of the Seller’s Group), each of the Relevant Sellers and each
Relevant Employee that both they and each member of the Purchaser’s Group will
provide no less favourable terms, conditions, contractual benefits and, whether
or not contractual, severance terms (subject to Schedule 7) to the Relevant
Employees as applied to them immediately before Closing for a period of at least
12 months from Closing (the “Protected Period”) (save in respect of stock
options or any other type of equity based compensation) and will provide that
each Relevant Employee’s period of continuous service with the Seller’s Group
(or any corporate predecessor of any member of such group) will be counted as
continuous with the Relevant Purchasers, including, without limitation, for
eligibility and vesting purposes under all employment benefit plans and, unless
such service credit would result in duplicate benefits, also for benefit accrual
under such benefit plans or in respect of severance or termination payments
provided always that this does not prevent the Relevant Purchasers from
terminating the employment of any Relevant Employee in circumstances where such
termination amounts to lawful dismissal or dismissal for cause under relevant
national legislation provided that the foregoing shall not oblige any member of
the Purchaser’s Group to provide retiree health or welfare benefits or defined
benefit retirement plans to any Relevant Employee in the United States. The
Relevant Purchasers shall use their best efforts to (i) waive any limitation on
medical coverage of Relevant Employees due to pre-existing conditions under the
applicable medical plan of the Relevant Purchasers or a member of the
Purchaser’s Group to the extent such Relevant Employees are currently covered
under a medical employee benefit plan of the Seller or a member of the Seller’s
Group except where to do so would involve significant unreasonable expense to a
member of the Purchaser’s Group and (ii) credit each Relevant Employee with all
deductible payments and co-payments paid by such employee under the medical
employee benefit plan of the Seller or a member of the Seller’s Group prior to
the Closing Date during the year in which the Closing occurs for the purpose of
determining the extent to which any such employee has satisfied his or her
deductible and whether he or she has reached the out-of-pocket maximum under any
medical plan of the Relevant Purchasers or a member of the Purchaser’s Group for
such year. Following the Protected Period, this paragraph 1.1 will no longer
apply.
  1.2  
Notwithstanding paragraph 1.1 of Part 2 of this Schedule 6, the Relevant
Purchasers undertake to the Seller (for itself and on behalf of each member of
the Seller’s Group), each of the Relevant Sellers and each Relevant Employee
that, on and following Closing, both they and each member of the Purchaser’s
Group will honour all obligations of the Group Companies under the collective
bargaining agreements and works council agreements applicable to the Group
Companies, including the agreements in the Data Room, and any replacement,
renewal or extension of any such agreements.
  1.3  
If permitted by law, a Purchaser may seek a Relevant Employee’s agreement to
vary his or her employment terms, conditions, contractual benefits and, whether
or not contractual, severance terms (subject to Schedule 7) during the Protected
Period and, if such Relevant Employee agrees, paragraph 1.1 shall not apply to
him or her.

 

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1.4  
Where employment terms, conditions, contractual benefits and, whether or not
contractual, severance terms (subject to Schedule 7) are negotiated
collectively, a Relevant Purchaser may, if permitted by law, seek to negotiate
with the relevant body to vary employment terms, conditions, contractual
benefits and, whether or not contractual, severance terms and, if such body is
legally able to and does agree on behalf of such employees, paragraphs 1.1 and
1.2 of Part 2 of this Schedule 6 shall not apply to the Relevant Employees on
whose behalf such body negotiates.
  1.5  
The Relevant Purchasers shall not, and shall cause all of the members of
Purchaser’s Group not to, at any time within 90 days after the Closing Date,
effect (i) a “plant closing” (as defined in the Worker Adjustment and Retraining
Notification Act of 1988 (the “WARN Act”)) affecting any site of employment or
one or more facilities or operating units within any site of employment or
facility of the Group Companies, (ii) a “mass layoff” (as defined in the WARN
Act) affecting any site of employment or facility of the Group Companies or
(iii) any action similar to paragraph 1.5(i) or 1.5(ii) of Part 2 of this
Schedule 6 under any other applicable foreign, state or local law requiring
notice to employees in the event of a plant closing or layoff. For the avoidance
of doubt, the Relevant Purchasers shall be responsible for notices or payments
due to any Relevant Employees and all applications, notices, payments, fines or
assessments due to any governmental authority pursuant to any applicable
federal, state, local or foreign law, with respect to the employment, discharge
or layoff of any employees by the Relevant Purchasers, the Group Companies or
any member of the Purchaser’s Group on or after Closing, including, but not
limited to, the WARN Act or any comparable foreign, state or local law as have
been issued in connection with the foregoing.
  1.6  
The Relevant Purchasers shall assume the annual incentive arrangements in place
in respect of Relevant Employees for the fiscal year in which Closing occurs and
shall calculate and make payments to, or procure that the relevant Group Company
makes payments to, Relevant Employees pursuant to the terms of those incentive
arrangements for the full fiscal year (including that part of the fiscal year
prior to the Closing Date) subject to the Seller having accrued and passed to
the Purchaser the benefit of such accrual for the period up to Closing.
  1.7  
The Seller shall indemnify and keep indemnified the Relevant Purchasers against
any claims by any Relevant Employee in respect of all Employment Costs which
arose or accrued prior to the Closing Date other than those entitlements
expressly assumed by the Relevant Purchaser under this Schedule 6.
  2  
Information and Consultation
     
The Seller and the Relevant Purchasers shall inform and consult with Relevant
Employees and/or their representatives, as appropriate, to the extent required
by law and the Relevant Purchasers shall indemnify and keep indemnified the
Seller (for itself and on behalf of each member of the Seller’s Group) and each
Relevant Seller against any Losses incurred by the Seller or any member of the
Seller’s Group as a result of a Relevant Purchaser’s failure to adhere to such
obligations.

 

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3  
Stay Incentive Agreements
     
The Seller will, or will procure that a member of the Retained Group will, make
payments due pursuant to the Stay Incentive Agreements in respect of the period
up to and including Closing, along with the stay incentive bonuses payable
pursuant to those agreements following Closing and in respect of obligations
relating to accelerated vesting, and any other obligation in respect of any
outstanding equity award (“Equity Award Obligations”). The Purchaser will, or
will procure that a member of the Purchaser’s Group will, make any severance
payments which become due pursuant to the Stay Incentive Agreements after
Closing.
  4  
Change to Relevant Employees
     
The Seller shall, between the date of the Offer Letter and Closing, notify the
Purchaser promptly following the resignation or termination of any person who,
if they had not resigned or been terminated, would have been a Relevant Employee
at Closing.

 

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Part 3
List of Offer Employees
The following employees work in the Group but are not employed by a Group
Company or a Business Seller.

          Employees   Country Base   Current Employer
Employees of The Scotts Company LLC listed on the Global Bloom Master Roster
(document 4.1.9 in the Data Room), the names of whom will be provided to the
Purchaser on signing of this Agreement.
  US   The Scotts Company LLC

 

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Part 4
Excluded Employees
Lorenzo Cassinelli
Gabriele Monsef

 

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Schedule 7
Group Retirement Arrangements
(Clause 2.5.2)

1  
Interpretation
     
In this Schedule 7, the definitions in this paragraph 1 shall apply:
     
“Replacement Arrangement” means an arrangement established in accordance with
paragraphs 3.1 and 3.2 below; and
     
“Transferred Arrangement” means a Group Retirement Benefit Arrangement that is
or will become the responsibility of a Company or a Relevant Purchaser at the
Closing Date.
  2  
Transferred Arrangements
     
The Purchaser will procure that each Transferred Arrangement will, subject to
law, for a period of at least 12 months following the Closing Date, provide
benefits that are, in the reasonable opinion of the Purchaser, no worse than the
benefits provided by the relevant company under such Transferred Arrangement
immediately before the Closing Date.
  3  
Replacement Arrangements
  3.1  
The Purchaser will procure that at the Closing Date the Relevant Purchasers set
up or nominate a Replacement Arrangement in respect of each Business Employee
and Offer Employee and Belgian Employee and Relevant Employee of SSHPC who was
provided with or participating in a Group Retirement Benefit Arrangement
immediately before the Closing Date.
  3.2  
Unless other arrangements are required by local law, the Purchaser will procure
that, for a period of not less than 12 months, the Replacement Arrangement
provides benefits to each Business Employee, Offer Employee, Belgian Employee or
Relevant Employee of SSHPC that are, in the reasonable opinion of the Purchaser,
equivalent in value to the benefits provided to the Business Employee, Offer
Employee, Belgian Employee or Relevant Employee of SSHPC by the Relevant Seller
immediately before the Closing Date provided that the Purchaser shall not be
obliged to provide any Offer Employee or Relevant Employee in the United States
with benefits or accruals under a defined benefit plan or any retiree health or
welfare benefit.
  3.3  
The Purchaser will further procure that each Business Employee, Offer Employee,
Belgian Employee or Relevant Employee of SSHPC who was provided with or
participating in a Group Retirement Benefit Arrangement immediately before the
Closing Date will be invited to join a Replacement Arrangement with effect from
the Closing Date. Where required by law, the Relevant Purchaser will
automatically place the Business Employee, Offer Employee, Belgian Employee
and/or Relevant Employee of SSHPC in a Replacement Arrangement from the Closing
Date.
  3.4  
Where benefits or accruals under any retiree health or welfare benefit
arrangement are provided to or in respect of Offer Employees or Relevant
Employees in the United States at Closing, the Seller will procure the provision
of benefits equivalent to those the relevant Offer Employee or Relevant Employee
(or any dependant of such person) would have received had the relevant Offer
Employee or Relevant Employee remained employed in the Seller’s Group until such
time as the relvant Offer Employee or Relevant Employee leaves the employment of
the Purchaser’s Group (other than on retirement or death) and, notwithstanding
any other provsion of this Schedule 7, the Purchaser shall not be obliged to
provide benefits or accruals for retiree health or welfare benefits in respect
of such individuals.:

 

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Schedule 8
Form of Purchase Price Allocation Agreement
(Clauses 3.2 and 7.6 of the Agreement)
Terms defined in this agreement shall have the meanings attributed to them in
the agreement between [•] and [•] of which this Purchase Price Allocation
Agreement forms a part.

1  
The Bid Value attributable to the Shares and the Group Businesses is as follows:

                              (4)         (3)   Part of Bid Value        
Particulars of   attributable to (1)   (2)   Shares/Group   Shares/Group Name of
Relevant Seller   Jurisdiction   Businesses   Businesses
[•]
  [•]   [•]   [•]

2  
Subject to paragraph 3 of this agreement, the Purchase Price shall initially be
allocated on the following basis:
  2.1  
The Bid Value shall initially be allocated on the basis of the Bid Value set out
in column (4) of paragraph 1 of this agreement.
  2.2  
Each of the Estimated Cash, Estimated Intra-Group Receivables, Estimated
Intra-Group Payables, Estimated Pension Liability and Estimated Third-Party
Indebtedness shall be allocated between the Shares according to the Group
Company to which such item is attributable and consequently shall be added to
(in the case of the Estimated Cash and the Estimated Intra-Group Receivables) or
deducted from (in the case of the Estimated Intra-Group Payables, Estimated
Pension Liability and the Estimated Third-Party Indebtedness) the Bid Value
allocated to those Shares in column (4) of paragraph 1 of this agreement.
  2.3  
The Estimated Working Capital Adjustment shall be allocated between the Shares
and Group Businesses according to the Group Company or Group Business to which
the adjustment is attributable and consequently shall be deducted from or added
to, as the case may be, the Bid Value allocated to those Shares or Group
Businesses in paragraph 1 of this agreement.
  3  
The balance of any loans or other financing liabilities owed by one Group
Company (or any of its Subsidiaries) to another Group Company (or any of its
Subsidiaries) shall be deducted from the allocation of the Shares of the Group
Company which owes (or which owns the Subsidiary which owes) such loans or
liabilities and shall be added to the allocation of the Shares of the Group
Company which is (or which owns the Subsidiary which is) owed such loans or
liabilities.
  4  
The part of the Purchase Price relating to the Group Businesses shall be
initially allocated between each of the following Business Assets included in
the sale of the Group Businesses, where relevant, as set out below:

 

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The Scotts Company (UK) Ltd.

     
 
  Part of Bid Value in column (4) of
 
  paragraph 1 of this agreement
Item
  attributable to relevant Business Asset

(i)  
Business Properties;
  (ii)  
Business Intellectual Property;
  (iii)  
Goodwill;
  (iv)  
Moveable Assets;
  (v)  
the rights of The Scotts Company (UK) Ltd. arising or existing at Closing under
the Business Contracts;
  (vi)  
such of the Intra-Group Receivables owed to The Scotts Company (UK) Ltd.;
  (vii)  
Professional Business Product Registrations owned by The Scotts Company
(UK) Ltd.;
  (viii)  
Stock;
  (ix)  
Business Records;
  (x)  
Third-Party Receivables;
  (xi)  
all other property, rights and assets owned by or licensed to The Scotts Company
(UK) Ltd. and used, enjoyed or exercised predominantly in relation to the Group
Businesses at Closing, in each case other than any Excluded Assets.

Scotts Australia Pty. Ltd.

     
 
  Part of Bid Value in column (4) of
 
  paragraph 1 of this agreement
Item
  attributable to relevant Business Asset

(i)  
Business Properties;
  (ii)  
Business Intellectual Property;
  (iii)  
Goodwill;
  (iv)  
Moveable Assets;
  (v)  
the rights of Scotts Australia Pty. Ltd. arising or existing at Closing under
the Business Contracts;
  (vi)  
such of the Intra-Group Receivables owed to Scotts Australia Pty. Ltd.;
  (vii)  
Professional Business Product Registrations owned by Scotts Australia Pty. Ltd.;

 

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  Part of Bid Value in column (4) of
 
  paragraph 1 of this agreement
Item
  attributable to relevant Business Asset

(viii)  
Stock;
  (ix)  
Business Records;
  (x)  
Third-Party Receivables;
  (xi)  
all other property, rights and assets owned by or licensed to Scotts Australia
Pty. Ltd. and used, enjoyed or exercised predominantly in relation to the Group
Businesses at Closing, in each case other than any Excluded Assets.

Scotts Poland Sp z o.o.

     
 
  Part of Bid Value in column (4) of
 
  paragraph 1 of this agreement
Item
  attributable to relevant Business Asset

(i)  
Business Properties;
  (ii)  
Business Intellectual Property;
  (iii)  
Goodwill;
  (iv)  
Moveable Assets;
  (v)  
the rights of Scotts Poland Sp z o.o. arising or existing at Closing under the
Business Contracts;
  (vi)  
such of the Intra-Group Receivables owed to Scotts Poland Sp z o.o.;
  (vii)  
the Professional Business Product Registrations owned by Scotts Poland Sp z
o.o.;
  (viii)  
the Stock;
  (ix)  
the Business Records;
  (x)  
the Third-Party Receivables; and
  (xi)  
all other property, rights and assets owned by or licensed to Scotts Poland Sp z
o.o. and used, enjoyed or exercised predominantly in relation to the Group
Businesses at Closing, in each case other than any Excluded Assets.

5  
The initial allocation set out in paragraphs 1 and 4 of this agreement shall be
adjusted to reflect the payments made pursuant to Clauses 7.3 and 7.5 of the
Agreement and the Relevant Sellers and Relevant Purchasers shall adopt that
allocation, as so adjusted, for all Tax purposes.

 

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Schedule 9
VAT
(Clause 3.3)

1  
VAT: Records
  1.1  
Each Relevant Seller may obtain a direction from the relevant Tax Authority for
the retention and preservation by it of any VAT records relating to its period
of ownership of the relevant part of the Group and, where such directions are
obtained, each Relevant Seller undertakes to preserve any such records in such a
manner and for such period as may be required by applicable law and will allow
the Relevant Purchasers, upon the Relevant Purchasers giving reasonable notice,
reasonable access to and copies of such records where reasonably required by the
Relevant Purchasers for their Taxation purposes.
  1.2  
If no such direction is obtained and any documents are required by law to be
preserved by the Relevant Purchasers, the Relevant Sellers shall, as soon as
reasonably practicable, deliver such documents to the Relevant Purchasers.
  2  
VAT: Going Concern — EU Member States
  2.1  
Each Relevant Seller and each Relevant Purchaser shall use all reasonable
endeavours (including, for the avoidance of doubt, the making of an election or
application in respect of VAT to any Tax Authority or entering into a written
agreement) to secure that the sale of the Group Businesses so far as carried on
in the EU is treated as neither a supply of goods nor a supply of services for
the purposes of the laws governing VAT in the relevant member state. Each
Relevant Purchaser warrants that it is or will become at Closing a taxable
person for VAT purposes in the relevant member state and agrees that it will use
the assets acquired in carrying on immediately after the Closing the same kind
of business, whether or not as part of its existing business, as the Relevant
Seller.
  2.2  
Each Relevant Seller shall have the right to seek a ruling from the relevant Tax
Authority as to whether the sale of the Group Businesses so far as carried on in
the relevant member state should be treated as neither a supply of goods nor a
supply of services for the purposes of the laws governing VAT in that member
state and to charge (or not to charge) VAT to the Relevant Purchaser in
accordance with that ruling. No less than 10 Business Days prior to submission
of any request for a ruling to the relevant Tax Authority, the Relevant Seller
shall provide a copy of the request to the Relevant Purchaser in draft form. The
Relevant Seller shall procure that any reasonable comments provided by the
Relevant Purchaser to the Relevant Seller in relation to the draft request are
incorporated prior to submission of the request to the relevant Tax Authority.
The Relevant Seller shall not be obliged to challenge that ruling. If the
Relevant Purchaser wishes to challenge any ruling it may do so at its own cost
but any such challenge shall not affect the date on which VAT must be paid to
the Relevant Seller under paragraph 4 of this Schedule 9 below.

 

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3  
VAT: Going Concern — non-EU Jurisdictions
  3.1  
To the extent that any state outside the European Union provides for relief or
exemption from VAT on the transfer of a business or a company or treats such a
transaction as being non-taxable for VAT purposes, each Relevant Seller and each
Relevant Purchaser shall use all reasonable endeavours (including, for the
avoidance of doubt, the making of an election or application in respect of VAT
to any Tax Authority or entering into a written agreement) to secure such
treatment as regards the sale of the Group Businesses and the Shares (insofar as
the business of the Group is carried on in the relevant state) under this
Agreement. Each Relevant Purchaser will use the assets acquired in carrying on
the same kind of business, whether or not as part of the existing business of
the Relevant Purchaser, as the Relevant Seller.
  3.2  
Each Relevant Seller shall have the right to seek a ruling from the relevant Tax
Authority as to whether the sale of the Group Businesses and the Shares, so far
as the business of the Group is carried on in the relevant state, is eligible
for a relief or exemption or is otherwise non-taxable for the purposes of the
laws governing VAT in that state and to charge (or not to charge) VAT to the
Relevant Purchaser in accordance with that ruling. No less than 10 Business Days
prior to submission of any request for a ruling to the relevant Tax Authority,
the Relevant Seller shall provide a copy of the request to the Relevant
Purchaser in draft form. The Relevant Seller shall procure that any reasonable
comments provided by the Relevant Purchaser to the Relevant Seller in relation
to the draft request are incorporated prior to submission of the request to the
relevant Tax Authority. The Relevant Seller shall not be obliged to challenge
that ruling. If the Relevant Purchaser wishes to challenge any ruling it may do
so at its own cost but any such challenge shall not affect the date on which VAT
must be paid to the Relevant Seller under paragraph 4 below.
  4  
VAT: Time, Manner and Currency of Payment
  4.1  
Any amounts of VAT which a Relevant Purchaser is obliged to pay to a Relevant
Seller shall be made by any Relevant Purchaser to the Relevant Seller or as it
may direct. Such amounts shall be paid in the currency in which the VAT in
question must be accounted for to the relevant Tax Authority.
  4.2  
Any VAT payable in any jurisdiction in respect of the transfer of any of the
Group Businesses or Shares shall be paid at Closing against production of a
valid VAT invoice (or equivalent, if any).
  4.3  
If at any date after Closing any Tax Authority determines in writing that any
sale carried out pursuant to this Agreement cannot be treated as being neither a
supply of goods nor a supply of services for VAT purposes, or does not qualify
for relief or exemption from VAT or is otherwise chargeable to VAT, the Relevant
Purchaser shall (against production of a valid VAT invoice or equivalent, if
any), in addition to any amounts expressed in this Agreement to be payable by
the Relevant Purchaser, pay the amount of any VAT (including any penalties and
interest, other than penalties or interest arising solely from the failure of a
Relevant Seller to account promptly for VAT to the relevant Tax Authority
following that Relevant Seller having been placed in the appropriate amount of
funds for that purpose by a Relevant Purchaser) which as a result of that
indication may be chargeable on any sale carried out pursuant to this Agreement.
Any such amounts shall be paid in cleared funds three Business Days prior to the
date on which the Relevant Seller is obliged to account for such amounts to the
relevant Tax Authority.

 

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Schedule 10
Closing Obligations

1  
General Obligations
  1.1  
The Seller’s Obligations
     
On Closing, the Seller shall deliver or make available to the Purchaser:

  1.1.1  
each of the Transaction Documents duly executed by the Seller and members of the
Seller’s Group, to the extent they are parties to such documents;
    1.1.2  
evidence that the Seller and the other Relevant Sellers are authorised to
execute this Agreement and any other Transaction Documents (including, where
relevant, any notarial deeds referred to in this Schedule 10), to the extent
that they are parties to such documents;
    1.1.3  
copies as at the Closing Date of all of the books of account, records, documents
and information to which Clause 8.4.2 of this Agreement relates;
    1.1.4  
evidence that the Seller and the other Relevant Sellers have satisfied the
Equity Award Obligation under the Stay Incentive Agreements; and
    1.1.5  
releases, in the Agreed Terms, in relation to:

  (i)  
SSHPC and Scotts-Sierra Crop Protection Company’s obligations as guarantor under
the US$200,000,000, 7.25% senior notes issued by The Scotts Miracle-Gro Company
and due on 15 January 2018; and
    (ii)  
any security, solely as it relates to the Group Businesses, given by The Scotts
Company (UK) Ltd. and Scotts Australia Pty. Ltd. in their capacity as borrowers
under an amended and restated credit facility entered into by The Scotts
Miracle-Gro Company (amongst others) dated 7 February 2007.

1.2  
The Purchaser’s Obligations
     
On Closing, the Purchaser shall deliver or make available to the Seller:

  1.2.1  
evidence of the due fulfilment of the conditions set out in Clause 4.1 for which
the Purchaser or the other Relevant Purchasers are responsible;
    1.2.2  
each of the Transaction Documents duly executed by the Purchaser and members of
the Purchaser’s Group, to the extent they are parties to such documents; and
    1.2.3  
evidence that the Purchaser and the other Relevant Purchasers are authorised to
execute this Agreement and each other Transaction Document (including, where
relevant, any notarial deeds referred to in this Schedule 10 to the extent they
are parties to such documents.

 

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1.3  
Payment for additional employees
     
On or following Closing, the Purchaser shall, on receipt of an appropriate
invoice, pay to the relevant member of the Retained Group, the costs that the
Purchaser agreed to incur in accordance with Clause 5.9.1(ii).
  2  
Transfer of the Shares and Group Businesses
  2.1  
General Transfer Obligations
     
On Closing, the Relevant Sellers and the Relevant Purchasers shall execute
and/or deliver and/or make available Local Transfer Documents and take such
steps as are required to transfer the Shares and Group Businesses. The steps
shall be taken in the following order:

  2.1.1  
first, Scotts International B.V. shall (a) sell to ICL Iberia Limited its
shareholding in Scott O.M. España S.A. and (b) sell to ICL Holdings Germany OHG
its shareholding in Scotts Deutschland GmbH (“Step 1”);
    2.1.2  
second, Scotts-Sierra Investments, Inc. shall sell to Scotts International B.V.
its shareholding in The Scotts Company Kenya Ltd. and Scotts PBG Malaysia Sdn.
Bhd. (“Step 2”); and
    2.1.3  
third, all remaining transfers of Shares and Group Businesses contemplated by
this Agreement shall occur simultaneously (“Step 3”).

2.2  
The consideration payable to Scotts International B.V. in respect of Step 1
shall be set out in the Purchase Price Allocation Agreement and shall:

  2.2.1  
in respect of the acquisition of Scott O.M. España S.A, be left outstanding as a
debt owed by ICL Iberia Limited to Scotts International B.V.; and
    2.2.2  
in respect of the acquisition of Scotts Deutschland GmbH, be left outstanding as
a debt owed by ICL Holdings Germany OHG to Scotts International B.V.
    2.2.3  
For the avoidance of doubt, any amounts under this paragraph 2.2 shall be
excluded from any and all of the calculations in Schedule 11.

2.3  
The consideration payable to Scotts-Sierra Investments, Inc. in respect of Step
2 shall be set out in the Purchase Price Allocation Agreement and shall:

  2.3.1  
in respect of the acquisition of The Scotts Company Kenya Ltd., be paid in cash
in full to Scotts-Sierra Investments, Inc. on completion of Step 3; and
    2.3.2  
in respect of the acquisition of Scotts PBG Malaysia Sdn. Bhd., be paid in cash
in full to Scotts-Sierra Investments, Inc. on completion of Step 3.

2.4  
The consideration payable in respect of Step 3 shall set out in the Purchase
Price Allocation Agreement and shall be paid in full to the parties contemplated
in Schedule 8 of this Agreement on Closing.
  2.5  
Notwithstanding paragraphs 2.1 to 2.4 of Part 1 of this Schedule 10, the
Relevant Sellers shall not conduct such steps as are set out in paragraphs 2.1
to 2.4 above until the Sellers are holding or have held to their order
absolutely the amount to be paid by the Purchaser pursuant to Clause 6.3.1 of
this Agreement.

 

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2.6  
Specific Transfer Obligations
     
For the purposes of compliance with paragraph 2.1 above, the Relevant Sellers
and Relevant Purchasers shall do the following in relation to any Companies and
Group Businesses incorporated or located in the jurisdictions listed below:

  2.6.1  
France
       
The Relevant Sellers shall transfer the relevant Shares (parts sociales) in
Scotts France SARL to the Relevant Purchasers and the Relevant Sellers and the
Relevant Purchasers shall execute a French language share transfer agreement
(acte de cession), in the Agreed Terms, suitable for the purpose of tax
registration and formalities.
    2.6.2  
Netherlands
       
The Relevant Seller shall transfer the relevant Shares in Scotts International
B.V. to the Relevant Purchaser, the Relevant Purchaser shall accept the
transfer, and the Relevant Seller shall procure that Scotts International B.V.
acknowledges the transfer, the foregoing to be effected by execution by the
Relevant Seller and the Relevant Purchaser, before one of the civil law notaries
of Linklaters LLP, of a notarial deed of transfer in the Agreed Terms.
    2.6.3  
Poland
       
In the case of a transfer of a Group Business (przedsiębiorstwo) located in
Poland, the Relevant Seller and the Relevant Purchaser shall sign, with
signatures authorised by a notary, a sale of business agreement (umowy sprzedaży
przedsiębiorstwa) in the Agreed Terms suitable for transferring all rights and
titles to the Group Business.
    2.6.4  
United Kingdom
       
The Relevant Sellers shall deliver or make available to the Relevant Purchasers
the following, to the extent they relate to any Group Business located in the
United Kingdom:

  (i)  
duly executed transfers of the Business Properties, together with the related
documents of title and the relevant Third-Party Consents, except that this
paragraph (i) shall not apply in relation to any Business Leased Property where
the necessary Third-Party Consent has not been obtained by the relevant Closing,
in which case such properties shall be transferred in accordance with
Schedule 3;
    (ii)  
assignments and novations in the Agreed Terms (duly executed as a deed by the
Relevant Sellers, any third-party and, if so reasonably required by the Relevant
Sellers, the Relevant Purchasers) together with the related documents of title
and such Third-Party Consents as the Relevant Sellers may have obtained;
    (iii)  
assignments of Registered Business Intellectual Property in accordance with
Schedule 4, to the extent it has been possible to prepare and execute these by
Closing;
    (iv)  
those Business Assets which are capable of transfer by delivery; and
    (v)  
subject to the matters specified in Schedule 3, vacant possession of the
Properties.

 

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  2.6.5  
United States
       
With respect to any Group Company that is incorporated or otherwise organised
under the laws of the State of California or any Group Business that is located
in the State of California, in the case of a sale of Shares, the Relevant
Sellers shall deliver to the Relevant Purchasers one or more certificates
representing all of the relevant Shares, duly endorsed in blank or accompanied
by stock powers or other instruments of transfer duly endorsed in blank, and
bearing or accompanied by all requisite stock transfer stamps.
    2.6.6  
Malaysia
       
Subject to any restrictions or transfer process requirements as stipulated by
Scotts PBG Malaysia Sdn. Bhd., the Relevant Seller shall lodge with Scotts PBG
Malaysia Sdn. Bhd. a transfer form, being Form 32A of the Companies Regulations
1966, in order to transfer the Shares in Scotts PBG Malaysia Sdn. Bhd. in favour
of the Relevant Purchaser or as it may direct accompanied by the relevant share
certificates (or an express indemnity in a form satisfactory to the Relevant
Purchaser in the case of any certificate found to be missing).
    2.6.7  
Australia
       
The Relevant Sellers shall deliver or make available to the Relevant Purchasers
the following, to the extent that they relate to any Group Business located in
Australia:

  (i)  
assignments and novations in the Agreed Terms (duly executed as a deed by the
Relevant Sellers, any third-party and, if so reasonably required by the Relevant
Sellers, the Relevant Purchasers) together with the relative documents of title
and such Third-Party Consents as the Relevant Sellers may have obtained;
    (ii)  
those Business Assets which are capable of transfer by delivery; and
    (iii)  
a valid GST invoice for the Business Assets.

     
For purposes of this paragraph, “GST” has the meaning given to that term in the
New Tax System (Goods and Services Tax) Act 1999 (Cth).
    2.6.8  
Kenya
       
The Relevant Sellers shall transfer the relevant Shares in The Scotts Company
Kenya Ltd. a form of transfer duly executed by the registered holders in favour
of the Relevant Purchasers or as they may direct accompanied by the related
share certificates (or an express indemnity in a form satisfactory to the
Relevant Purchasers in the case of any certificate found to be missing) and a
Form D certificate on transfer of certain marketable securities duly executed by
The Scotts Company Kenya Ltd. auditor.
    2.6.9  
Italy
       
The Relevant Sellers and the Relevant Purchasers shall execute a notarised deed
of conveyance in the Agreed Terms for the sale and transfer of the Shares (i.e.
the relevant quota capital) in Scotts Italia S.r.l. to the Relevant Purchasers.
The Italian Notary who will notarise the signatures on the deed of conveyance
will be selected by the Relevant Purchasers. The deed of conveyance shall not
amend or novate this Agreement which will continue to bind the Relevant Sellers
and the Relevant Purchasers regardless of the execution of such deed of
conveyance.

 

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  2.6.10  
Spain

  (i)  
The Relevant Sellers shall deliver to the Relevant Purchasers any documents of
title to the Shares in Scott O.M. España S.A. The Seller shall issue the
relevant titles if applicable.
    (ii)  
The Relevant Sellers shall deliver to the Notary Public a certificate issued by
the secretary of the board of directors of Scott O.M. España S.A., with the
approval of the president of Scott O.M. España S.A. declaring that all
requirements established in the bylaws for the transfer of the Shares in Scott
O.M. España S.A. have been fulfilled.
    (iii)  
The transfer of the Shares in Scott O.M. España S.A. shall be effected by
notarial deed in the Agreed Terms, executed before a Notary Public.
    (iv)  
Scott O.M. España S.A. shall register the Relevant Purchasers as the owners of
the Shares in Scott O.M. España S.A. in the book of registered shares (“Libro
Registro de Acciones Nominativas”).
    (v)  
The Relevant Sellers shall deliver or make available to the Relevant Purchasers
the corporate books, duly updated, of Scott O.M. España S.A.
    (vi)  
Simultaneously to the granting of the Spanish notarial deed transferring the
Shares in Scott O.M. España S.A., Scotts International B.V. shall deliver a D1-B
form and ICL Iberia Limited shall deliver a D1-A form to the Notary who will be
requested to inform the DGPCI (“Dirección General de Política Comercial e
Inversiones”) of the divestment in Scott O.M. España, S.A.
    (vii)  
Simultaneously to the granting of the Spanish notarial deed transferring the
Shares in Scott O.M. España S.A., the directors of Scott O.M. España, S.A. shall
hand out their letters of resignations to Scott O.M. España, S.A. to ICL Iberia
Limited’s advisers in Spain.
    (viii)  
The new shareholder of Scott O.M. España, S.A. shall, as sole shareholder,
accept the resignation of the directors, waiving any claim of Scott O.M. España,
S.A. against the directors, and decide the management of the company to be put
in place and, accordingly, appoint the new directors.
    (ix)  
The Commercial Registry must be notified of the change of sole shareholder or of
any change to this sole shareholder status.

  2.6.11  
Germany
       
The Relevant Sellers and the Relevant Purchasers shall notarise a transfer
agreement before a German notary public in the Agreed Terms through which the
Relevant Sellers transfer title to the Shares in Scotts Deutschland GmbH to the
Relevant Purchasers, and the Relevant Purchasers accept such transfer.

 

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3  
Further Obligations in Addition to Transfer
  3.1  
General Obligations
     
The Relevant Sellers shall deliver or make available to the Relevant Purchasers
the following:

  3.1.1  
the written resignations in the Agreed Terms (and legalised by a notary where
required) of each of the persons who are remaining with the Retained Group, to
take effect on Closing;
    3.1.2  
if practicable, to the extent requested by the Purchaser, the Relevant Sellers
having used reasonable endeavours to obtain the same, the written resignations
of the auditors of the Group Companies concerned, to take effect on the Closing
Date, with acknowledgements signed by each of them in a form satisfactory to the
Relevant Purchasers to the effect that they have no claim against any Group
Company or otherwise complying with any relevant law or regulation;
    3.1.3  
if any Relevant Purchaser reasonably requires and notifies the Relevant Seller
at least 30 days before Closing, irrevocable powers of attorney or such other
appropriate document (in such form and terms as the Relevant Purchaser may
reasonably require) executed by each of the holders of the Shares in favour of
the Relevant Purchaser or as it may direct to enable it (pending registration of
the relevant transfers) to exercise post-Closing all voting and other rights
attaching to the Shares and to appoint proxies for this purpose with an express
undertaking of the holder of the Shares not to exercise such voting and other
rights attached to the Shares;
    3.1.4  
in each case where the said information is not in the possession of the relevant
Group Company, the corporate books and records, duly written up to date,
including the shareholders’ register and share certificates in respect of the
Subsidiaries, and all other books and records, all to the extent required to be
kept by each Group Company under the law of its jurisdiction of incorporation;
    3.1.5  
in each case where the said information is not at the Properties, all other
books, records and other information relating exclusively or primarily to the
Group (save for books, records and other information which a Relevant Seller is
required by law to retain or in respect of which a Relevant Seller obtains a
direction to retain pursuant to Schedule 9) and all information relating to
customers, suppliers, agents and distributors and other information relating
exclusively or primarily to the Group (including the Relevant Employees) as the
Relevant Purchasers may reasonably require and copies or, at the Relevant
Sellers’ option, originals of any such books, records, documents or other
information in the possession or control of the Relevant Sellers which relate
only in part to the Group and which the Relevant Purchasers may reasonably
require;
    3.1.6  
evidence as to:

  (i)  
the acceptance by shareholders or the directors of each of the relevant Group
Companies of the resignations referred to in paragraph 3.1.1 and of the
appointment of such persons to take effect on Closing (within the maximum number
permitted by the constitutional documents of the Group Company concerned) as the
Relevant Purchasers may nominate as directors and (if relevant) secretary;
    (ii)  
the acceptance by shareholders or the directors of the relevant Group Companies
of the resignation of the auditors referred to in paragraph 3.1.2 and of the
appointment of such auditors as the Relevant Purchasers may nominate; and
    (iii)  
the approval by the shareholders or the directors of the transfer of the Shares
or the sale of the Group Businesses to the Relevant Purchasers,

 

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where such acceptance or approval is required by law or under the constitutional
documents of the Group Company concerned;
    3.1.7  
the duly executed Patent Assignment in the form of Part 2 of Schedule 4, the
duly executed Trade Mark Assignment in the form of Part 3 of Schedule 4, the
duly executed Know-how Assignment in the form of Part 4 of Schedule 4 and the
duly executed Unregistered Intellectual Property Assignment in the form of
Part 5 of Schedule 4; and
    3.1.8  
any forms and ancillary documents (executed by the Seller) required by the
relevant domain name registry to transfer the domain names listed in paragraph
1.3 of Part 1 of Schedule 4.

 

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Schedule 11
Post Closing Adjustments

Part 1 Closing Statement (Clause 7)

1  
Form and Content of Closing Statement
  1.1  
The Closing Statement shall include the assets and liabilities of the Group
Companies and the Group Businesses at the Close of Business on the Closing Date
which are accounted for within the GL Codes as set out in the tables contained
in, or referred to in, Annex A of this Schedule 11. No other categories of
assets or liabilities shall be included in Working Capital, provided that, if
any new asset or liability arises between the date of the Offer Letter and
Closing that should have been included in the Working Capital GL Codes but in
respect of which there is not an identifiable Working Capital GL Code in the
tables contained in, or referred to in, Annex A of this Schedule 11, then the
Seller and the Purchaser shall co-operate in good faith to determine the
appropriate GL Codes that will be included in the calculation of Working Capital
to accommodate such new working capital assets or liabilities. In the event that
the new QAD system requires new GL Codes following the transition from SAP, such
GL Codes will be tracked consistently from existing GL Codes.
  1.2  
The Closing Statement shall be drawn up in the form set out in Table 1 to Table
6 in Annex A of this Schedule 11. For the avoidance of doubt, Table 6 shall be
compiled in accordance with Schedule 18.
  1.3  
The Group Companies’ Cash Balances, Third-Party Indebtedness, Intra-Group
Payables, Intra-Group Receivables and Pension Liability shall not be taken into
account in calculating the Working Capital.
  1.4  
Where there is to be a repayment of Intra-Group Payables and Intra-Group
Receivables pursuant to Clause 7.4, the Closing Statement shall include a
breakdown for Intra-Group Payables and Intra-Group Receivables and shall specify
the relevant debtor and creditor for each Intra-Group Payable and Intra-Group
Receivable.
  2  
Accounting Policies
  2.1  
The Closing Statement shall be drawn up in accordance with the accounting
principles generally accepted in the United States as at the Closing Date with:

  2.1.1  
the specific accounting principles, policies, procedures, categorisations,
definitions, methods, practices and techniques set out in paragraphs 2.5 to 2.9
below applied and

  2.1.2  
to the extent not inconsistent with paragraph 2.1.1, the accounting principles,
policies, procedures, categorisations, definitions, methods, practices and
techniques adopted in the Accounts, applied on a consistent basis.

2.2  
The Closing Statement shall be drawn up as at Close of Business in the relevant
locations at the Closing Date. No account shall be taken of events taking place
after the Close of Business on the Closing Date and regard shall only be had to
information available to the parties to this Agreement at Close of Business on
the Closing Date.

 

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2.3  
Each Closing Statement item shall be expressed in US Dollars. Amounts in other
currencies shall be translated into US Dollars in accordance with Clause 1.11.

2.4  
Any calculation of the Estimated Working Capital Adjustment or the Working
Capital Adjustment shall be calculated in accordance with paragraphs 2.4.1 and
2.4.2.

  2.4.1  
The Estimated Working Capital Adjustment shall be calculated such that, in
relation to each of the constituents of Base Working Capital and Estimated
Working Capital expressed variously in US Dollar, Pounds Sterling, Euro,
Australian Dollar, Kenyan Shilling, Malaysian Ringgit and Polish Zloty
currencies (each a “Base Currency Amount”), where any relevant Base Currency
Amount in the Estimated Working Capital either exceeds the equivalent Base
Currency Amount in the Base Working Capital or is less than the relevant Base
Currency Amount the Base Working Capital, in each case, the difference between
any such amounts shall be converted into US Dollars in accordance with Clause
1.11 and the resulting US Dollar equivalent amounts shall be aggregated,
(treating cases where a Base Currency Amount in the Estimated Working Capital
exceeds the equivalent Base Currency Amount in the Base Working Capital as
positive and cases where a Base Currency Amount in the Estimated Working Capital
is less than the equivalent Base Currency Amount in the Base Working Capital as
negative) so as to arrive at the Estimated Working Capital Adjustment .

  2.4.2  
The Working Capital Adjustment shall be calculated such that, in relation to
each of the constituents of Base Working Capital and Working Capital expressed
variously in US Dollar, Pounds Sterling, Euro, Australian Dollar, Kenyan
Shilling, Malaysian Ringgit and Polish Zloty currencies (each a “Base Currency
Amount”), where any relevant Base Currency Amount in the Working Capital either
exceeds the equivalent Base Currency Amount in the Base Working Capital or is
less than the relevant Base Currency Amount in the Base Working Capital, in each
case, the difference between any such amounts shall be converted into US Dollars
in accordance with Clause 1.11 and the resulting US Dollar equivalent amounts
shall be aggregated, (treating cases where a Base Currency Amount in the Working
Capital exceeds the equivalent Base Currency Amount in the Base Working Capital
as positive and cases where a Base Currency Amount in the Working Capital is
less than the equivalent Base Currency Amount in the Base Working Capital as
negative) so as to arrive at the Working Capital Adjustment.

2.5  
Accounts receivable

  2.5.1  
Accounts receivable balances shall be recorded at the invoiced amounts
(including monthly revaluations of foreign currency amounts receivable
balances). The doubtful debtor allowances shall be determined differently
between the Americas and the rest of the world:

  (i)  
Americas
       
Customer accounts shall be stratified into risk categories based on periodic
(one—three times per year) credit reviews. Allowances shall be established based
on accounts receivable balances by account according to their risk category
(high risk — 25 per cent.; extreme high risk — 75 per cent.; accounts in legal
action — 95 per cent.), with a 0.5 per cent. allowance for collection and
related risks. Individual account circumstances may warrant special reserves.

 

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  (ii)  
Rest of the world
       
Balances overdue for more than 90 days shall be provided for 50 per cent.
Balances overdue for more than 180 days shall be provided for 100 per cent.
Other specific accounts may be provided before on an individual basis (for
example if the customer is in financial difficulty).

  2.5.2  
Accounts receivable shall include an account referred to as “Revenue recognition
adjustment”. This account shall include the deferred revenue adjustment (revenue
portion) relating to shipments in transit to customers (mainly to Asia) whereby
economic risk transfers on receipt of the goods. The sale shall initially be
recorded when the product is shipped whilst the reversal entry shall defer the
revenue until the product is received by the customer. This reversal should be
considered together with the reversal set out in paragraph 2.6.6 of this
Schedule 11.

2.6  
Inventory

  2.6.1  
The finished goods inventory shall be valued at standard cost as determined by
the Seller’s global supply chain. Standard cost per finished product shall be
determined as part of the annual budget process and shall be based on expected
plant performance and expected raw material purchasing terms and conditions.
Standard costs shall be determined annually and shall not be revised during the
financial year.

  2.6.2  
The inventory value includes variances which shall be capitalised based on the
calculated inventory months and the monthly incurred variances. The portion of
variances capitalised shall be determined at each month-end by adding variances
for the total of inventory months.

  2.6.3  
A finished goods inventory that exceeds a 12-month supply for sale forecasts
shall be considered excess and shall be evaluated for reserve requirements. A
supply in excess of 12 months may not be “excess” if the build-up is planned in
order to meet customer demand by working around capacity constraints. Obsolete
items shall be identified based upon the “status code” within the accounting
systems. Status codes shall be managed by the Seller’s marketing and R&D
department.

  2.6.4  
The raw material inventory shall be valued at standard cost as determined by the
Seller’s global supply chain. Standard cost per raw material shall be determined
based on the expected purchasing terms and conditions for the coming year.
Standard costs shall be determined annually and shall generally not be revised
during the financial year.

  2.6.5  
The excess component/raw material inventory shall be evaluated based on
estimated future use and recent activity. Inventory exceeding the necessary
inventory levels to produce the 12-month production forecast shall be classified
as excess. Inventory in a blocked status (within the accounting system) shall
generally be reserved at 100 per cent. of standard cost.

  2.6.6  
The inventory value shall also include a deferred revenue adjustment (COGS
portion) relating to shipments in transit to customers (mainly to Asia).

 

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2.7  
Prepaid expenses and other receivables
     
Prepaid expenses shall be recorded at the nominal value and shall be recognised
as expense based on the applicable service period. Other receivables shall
include receivable balances which are expected to be received within 12 months.
  2.8  
Accounts payable
     
Accounts payable balances shall be recorded at the invoiced amounts (including
monthly revaluations of foreign currency accounts payable balances).
  2.9  
Accrued expenses and other current liabilities

  2.9.1  
The following is a description of certain specific accruals and other current
liabilities:

  (i)  
VAT accounts
       
These accounts shall include the VAT amounts on sales and purchases and the
monthly settlements of VAT with the Tax Authorities.
    (ii)  
Accrued salaries
       
This accrual shall include salary costs which have been recognised in the
employee service period but have not yet been paid out.
    (iii)  
Accrued incentives
       
This accrual shall include all incentives/bonuses awarded but unpaid or expected
to be paid out to employees and management based on the performance against
incentive goals. Incentives shall generally be paid out within three months
after financial year-end.
    (iv)  
Vacation days accrual
       
This accrual shall be for earned vacation days not yet taken based on
outstanding vacation days per employee, employee salary and surcharge for social
premiums.
    (v)  
Vacation allowance
       
There shall be a monthly accrual of vacation allowance (e.g. 8 per cent. of
gross salary and gross social benefits per employee in The Netherlands). This
policy varies per country depending on the local regulations.
    (vi)  
Pension accounts (non FAS 87 related)
       
Pension accounts which are classified as working capital shall represent the
prepayments of pension premiums and the pension expense as incurred based on
annually set pension premiums. These accounts shall not include the FAS 87
calculations of the defined benefit plans (not included in the definition of
working capital).
    (vii)  
Customer volume rebate accruals
       
This shall represent incentives provided to various customers that are accrued
over the term of the incentive programme and paid out once performance as
against specific targets has been verified. The rebate shall be calculated based
upon the Seller’s assumption that all customers will hit rebate step and a
portion of the month’s sales shall be reserved for within this account.
Typically starting in July of each fiscal year, management will analyse the
performance of each customer programme to determine if the current reserve is
appropriate and will adjust over the fourth quarter. Different rebates shall be
utilised for CRF, PPP, and WSF and step rebates shall be used based upon volume
targets.

  2.9.2  
Other accruals not discussed above shall be recorded when products/services have
been received for which the related invoice has not been received (based on the
agreed value of such services/products).

 

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3  
Preparation

3.1  
No later than 60 days following Closing, the Purchaser shall deliver to the
Seller the Draft Closing Statement.

3.2  
In order to enable the Purchaser to prepare and agree the Draft Closing
Statement, the Seller and the other Relevant Sellers shall keep up to date and,
subject to reasonable notice, make available to the Purchaser’s representatives
and to the Purchaser’s accountants all books and records relating to the Group
during normal office hours and co-operate with them with regard to the
preparation of the Draft Closing Statement. Each of the Seller and the other
Relevant Sellers agrees, in so far as it is reasonable to do so, to make
available the services of the employees of the Seller’s Group to assist the
Purchaser in the performance of its duties under this Agreement.

3.3  
If the Seller does not within 30 days of presentation to it of the Draft Closing
Statement give notice to the Purchaser that it disagrees with the Draft Closing
Statement or any item thereof, such notice stating the reasons for the
disagreement in reasonable detail and specifying the adjustments which, in the
Seller’s opinion should be made to the Draft Closing Statement (the “Seller’s
Disagreement Notice”), the Draft Closing Statement shall be final and binding on
the parties for all purposes. If the Seller gives a valid Seller’s Disagreement
Notice within such 30 days, the Purchaser and the other Relevant Purchasers
shall keep up to date and, subject to reasonable notice, make available to the
Seller’s representatives and the Seller’s accountants all books and records
relating to the relevant part of the Group during normal office hours during the
period from the date of the Seller’s Disagreement Notice until the date on which
such disagreement is resolved. The Purchaser and the Seller shall attempt in
good faith to reach agreement in respect of the Draft Closing Statement and, if
they are unable to do so within 21 days of such notification, the Seller or the
Purchaser may by notice to the other require that the Draft Closing Statement be
referred to the Reporting Accountants.

3.4  
The Reporting Accountants shall be engaged jointly by the Seller and the
Purchaser on the terms set out in this paragraph 3 and otherwise on such terms
as shall be agreed; provided that neither the Seller nor the Purchaser shall
unreasonably (having regard, inter alia, to the provisions of this paragraph 3)
refuse its agreement to terms proposed by the Reporting Accountants or by the
other party. If the terms of engagement of the Reporting Accountants have not
been settled within 45 days of their identity having been determined (or such
longer period as the Seller and the Purchaser may agree) then, unless the Seller
or the Purchaser is unreasonably refusing its agreement to those terms, those
accountants shall be deemed never to have become the Reporting Accountants and
new Reporting Accountants shall be selected in accordance with the provisions of
this Agreement.

 

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3.5  
Except to the extent that the Seller and the Purchaser agree otherwise, the
Reporting Accountants shall determine their own procedure but:

  3.5.1  
apart from procedural matters and as otherwise set out in this Agreement shall
determine only:

  (i)  
whether any of the arguments for an alteration to the Draft Closing Statement
put forward in the Seller’s Disagreement Notice is correct in whole or in part;
and

  (ii)  
if so, what alterations should be made to the Draft Closing Statement in order
to correct the relevant inaccuracy in it;

  3.5.2  
shall apply the accounting principles, policies, procedures, practices and
estimation techniques set out in paragraphs 2.2 to 2.9 of Part 1 of this
Schedule 11;

  3.5.3  
shall make their determination pursuant to paragraph 3.5.1 of Part 1 of this
Schedule 11 as soon as is reasonably practicable but in any event within 30 days
of being engaged; and
    3.5.4  
the procedure of the Reporting Accountants shall:

  (i)  
give the Seller and Purchaser a reasonable opportunity to make written
representations to them;

  (ii)  
require that each party supply the other with a copy of any written
representations at the same time as they are made to the Reporting Accountants;
and

  (iii)  
for the avoidance of doubt, the Reporting Accountants shall not be entitled to
determine the scope of their own jurisdiction.

3.6  
The Reporting Accountants shall promptly upon the same becoming available send
the Seller and the Purchaser a copy of their determination pursuant to paragraph
3.5.1 above. Such determination shall:

  3.6.1  
be made in writing; and

  3.6.2  
unless otherwise agreed by the Seller and the Purchaser, include reasons for
each relevant determination.

3.7  
The Reporting Accountants shall act as experts and not as arbitrators and their
determination of any matter falling within their jurisdiction shall be final and
binding on the Relevant Sellers and Relevant Purchasers save in the event of
manifest error (when the relevant part of their determination shall be void and
the matter shall be remitted to the Reporting Accountants for correction). In
particular, their determination shall be deemed to be incorporated into the
Draft Closing Statement.

3.8  
The expenses (including VAT) of the Reporting Accountants shall be borne as they
shall direct at the time they make any determination under paragraph 3.5.1 or,
failing such direction, equally between the Purchaser, on the one hand, and the
Seller, on the other.

 

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3.9  
The Seller and the Purchaser shall co-operate with the Reporting Accountants and
comply with their reasonable requests made in connection with the carrying out
of their duties under this Agreement. In particular, the Purchaser and the other
Relevant Purchasers shall keep up to date and, subject to reasonable notice,
make available to the Seller’s representatives, the Seller’s accountants and the
Reporting Accountants all books and records relating to the Group during normal
office hours during the period from the appointment of the Reporting Accountants
down to the making of the relevant determination.

3.10  
Nothing in this Schedule 11 shall entitle a party or the Reporting Accountants
to access any information or document which is protected by legal professional
privilege or which has been prepared by the other party or its accountants or
other professional advisers with a view to assessing the merits of any claim or
argument.

3.11  
Each party and the Reporting Accountants shall, and shall procure that its
accountants and other advisers shall, keep all information and documents
provided to them pursuant to this paragraph 3 confidential and shall not use the
same for any purpose, except for disclosure or use in connection with the
preparation of the Draft Closing Statement, the proceedings of the Reporting
Accountants or any other matter arising out of this Agreement or in defending
any claim or argument or alleged claim or argument relating to this Agreement or
its subject matter.

 

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Part 2
Base Working Capital
(Clause 1.1)
The Base Working Capital figures listed below are derived from the Accounts:

                              Local Currency   Country/Currency           (000)
 
Australia
  AUD     3,960  
Australian Dollar
            3,960  
Belgium
  EUR     (82 )
France
  EUR     1,459  
Germany
  EUR     (137 )
International
  EUR     19,304  
Italy
  EUR     4,564  
Spain
  EUR     1,972  
Euro
            27,080  
UK
  GPB     13,151  
Pounds Sterling
            13,151  
Kenya
  KES     109,281  
Kenyan Shilling
            109,281  
Malaysia
  MYR     (18 )
Malaysian Ringgit
            (18 )
Poland
  PLZ     12,912  
Polish Zloty
            12,912  
LATAM
  USD     5,909  
USA 4000
  USD     27,863  
USA 9007
  USD     43  
USA 9017
  USD     371  
USA Far East
  USD     1,181  
US Dollar
            35,368  
Working Capital
               

 

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Schedule 11
Annex A
Form of Closing Statement
(Clause 7)
The Closing Statement shall be prepared in the form set out in Annex A of this
Schedule 11 and will comprise the following components:
Table 1: a table setting forth the values of (i) the Working Capital, (ii) the
Group Companies Cash Balances, (iii) the Third-Party Indebtedness, (iv) the
Pension Liability, (v) the Intra-Group Payables and (vi) the Intra-Group
Receivables. Table 1 shall be drawn up in the form set out below:

                  Table 1                
Working Capital
  (in each relevant currency)     As per Table 2
Group Companies Cash Balances
  $       As per Table 3
Third-Party Indebtedness
  $       As per Table 4
Intra-Group Payables
  $       As per Table 5
Intra-Group Receivables
  $       As per Table 5
Pension Liability
  $       As per Table 6
Agreed Cash Sum
  $ 1,000,000          

Table 2: a table in the Agreed Terms setting forth the GL Codes that make up the
Working Capital, which is attached to this Agreement.

 

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Table 3: a table listing the individual entities and countries which comprise
the total cash balance that, for each entity, sets forth the separate elements
of the balance which make up the Group Companies Cash Balances. Table 3 shall be
drawn up in the form set out below:
Table 3

              G/L Code   Country   Account   Cash Balances
 
           
CASH
           
 
           
Total
           

 

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Table 4: a table setting forth the individual components of the Third-Party
Indebtedness that in each case sets forth the value, counterparty, due date and
details of any related security. Table 4 shall be drawn up in the form set out
below:
Table 4

              Country   Value
 
       
[listing of individual components]
       
 
       
Third-Party Indebtedness
       

 

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Table 5: a table setting forth the individual components and their respective
counterparties and balances that comprise the constituent parts of the
Intra-Group Payables and the Intra-Group Receivables. Table 5 shall be drawn up
in the form set out below:
Table 5

                  Country   Account   Balance
[listing of individual components]
           
Total: Intra-Group Payables
           
Total: Intra-Group Receivables
           

 

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Table 6: a table setting forth the Pension Liability:
Table 6

              Country   Balance
[listing of individual components]
       
Total
       

 

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Schedule 12
Warranties given under Clause 9.1

1  
Corporate Information
  1.1  
The Shares and the Group Companies

  1.1.1  
Each of the Share Sellers specified in Part 1 of Schedule 1:

  (i)  
is the sole legal and beneficial owner of the Shares set out against its name in
column (3) of Part 1 of Schedule 1; and

  (ii)  
has the right to exercise all voting and other rights over the Shares set out
against its name in column (3) of Part 1 of Schedule 1.

  1.1.2  
The Shares set out in each row of column (3) of Part 1 of Schedule 1 represent
the whole of the issued and allotted share capital of the relevant Group
Company, have been properly and validly issued and allotted and are each fully
paid.

  1.1.3  
No person has the right (whether exercisable now or in the future and whether
contingent or not) to call for the allotment, issue, conversion, registration,
sale or transfer, amortisation, redemption or repayment of any share or loan
capital in any Group Company.

  1.1.4  
There are no Encumbrances over the shares in any Group Company and there is no
agreement or commitment to give or create such an Encumbrance or, so far as the
Seller is aware, negotiations which may lead to such an agreement or commitment.

  1.1.5  
The Shares have not been and are not listed on any stock exchange or regulated
market.
    1.1.6  
Save as set out in Schedule 2, no Group Company has:

  (i)  
any subsidiaries or any interest in any share or loan capital of any other
company; or

  (ii)  
any branch, division or establishment outside the jurisdiction in which it is
incorporated.

  1.1.7  
The particulars contained in Schedule 2 are true and accurate in all material
respects.

1.2  
Constitutional Documents, Corporate Registers and Minute Books

  1.2.1  
The constitutional documents of the Group Companies are in the Data Room and are
true and accurate copies of the constitutional documents of the Group Companies
and, so far as the Seller is aware, there are not any subsisting breaches by any
Group Company of its constitutional documents.

  1.2.2  
There are no shareholder agreements in relation to any Group Company or Group
Business or to which any Group Company or Business Seller (in respect of the
business of the Group) is a party.

 

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  1.2.3  
The registers and minute books required to be maintained by each Group Company
under the law of the jurisdiction of its incorporation are up to date in all
material respects.

  1.2.4  
All registers and books referred to in paragraph 1.2.3 of this Schedule 12 are
in the possession (or under the control) of the relevant Group Company.

2  
Accounts
  2.1  
Statutory Accounts
     
The Statutory Accounts have been prepared in accordance with the requirements of
the relevant statutes and on a basis consistent with that adopted in the
preparation of the audited accounts for such companies for each of the last two
preceding financial years of such companies and in accordance with applicable
law and with the generally accepted accounting principles and practices at the
date of preparation of such Statutory Accounts in the jurisdictions of their
incorporation and give a true and fair view of the assets and liabilities and
state of affairs of such companies as at the dates to which they were prepared
and the income, expenses and profitability of such companies for the periods for
which they were prepared.
  2.2  
Management Accounts
     
The Management Accounts have been prepared on basis consistent with previous
management accounts prepared for the Group and have been prepared with due care
and (i) disclose with reasonable accuracy; and (ii) give a reasonable view of
the profit and loss of the Group for the period commencing on 1 October 2009 and
ending on the Management Accounts Date and state of affairs of the Group as at
the Management Accounts Date having regard to the purposes for which they have
been prepared.
  2.3  
The Accounts

  2.3.1  
The Accounts:

  (i)  
relate to the unaudited pro forma combined financial information for the Group
and have been (a) prepared for the purpose of the Transaction, (b) based on the
Management Accounts of the Group Companies and the Business Sellers and
(c) adjusted to reflect the perimeter of the Transaction, to present an earnings
trend reflective of the Group and for unusual or infrequent/non-recurring items
and structural changes within the Group;

  (ii)  
have been prepared from the Group’s and/or the Seller’s Group’s accounting
records using US GAAP accounting policies, estimation techniques, measurement
bases, practices and procedures on a consistent basis; and

  (iii)  
disclose with reasonable accuracy the assets and liabilities and state of
affairs and the profits and losses of the Group as at the time and for the
period to which they relate.

  2.3.2  
The Accounts disclose all the assets and either make full provision or reserve
for or, as appropriate, disclose all bad and doubtful debts and all actual
accruals and liabilities of the Group as at the date to which they have been
prepared.

 

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  2.3.3  
The profits of the Group shown by the profit and loss accounts in each of the
Accounts have not been affected by:

  (i)  
extraordinary or exceptional item (except as disclosed on the face of or in the
notes to the Accounts); or

  (ii)  
any other factor rendering such profits for all or any of the period covered by
the Accounts unusually high or low.

3  
Financial Obligations
  3.1  
Financial Facilities

  3.1.1  
Details of all financial facilities (including loans, debentures, overdrafts,
factoring, derivatives and hedging arrangements) (together, the “Facilities” for
the purposes of this paragraph 3) that are outstanding or available to the Group
Companies or to any Business Seller in relation to the business carried on by
the Group (including details of all borrowings including, without limitation,
any bank overdrafts, liabilities under acceptances (otherwise than in respect of
normal trade bills) and acceptance credits, other than borrowing or indebtedness
arising in the ordinary course of business) are Fairly Disclosed in the Data
Room.

  3.1.2  
There has been no material contravention of, or non-compliance with, the terms
of any of the Facilities which constitutes an event of default or would give
rise to an obligation to make early repayment and no steps have been taken or
threatened for the early repayment of sums outstanding under the Facilities.

  3.1.3  
There are no arrangements under which any Group Company has received or repaid
(or may receive or may have to repay) any grant, subsidy or other financial
assistance of any kind from any government department or other body.

3.2  
Guarantees

Other than in the ordinary course of business, there is no outstanding
guarantee, indemnity, suretyship or security given:

  3.2.1  
by any Group Company or a Business Seller in relation to the business of the
Group; or

  3.2.2  
for the benefit of any Group Company or a Business Seller in relation to the
business of the Group.

4  
Assets
  4.1  
The Properties

  4.1.1  
The details of the Properties set out in Schedule 3 are true and accurate in all
material respects.

  4.1.2  
The Properties comprise all the land and premises owned or occupied by the Group
Companies and the Business Sellers (in relation to the business of the Group
only).

 

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  4.1.3  
In relation to each Group Company Property, the relevant Group Company named in
Part 1 of Schedule 3 is the owner or the lessee (as appropriate) of the Group
Company Property.

  4.1.4  
In relation to each Business Property, the relevant Business Seller named in
Part 2 of Schedule 3 is the legal and beneficial owner or the lessee (as
appropriate) of the Business Property and, save as Fairly Disclosed, there is
not in force any policy relating to defective title or restrictive covenant
indemnity.

  4.1.5  
The Business Seller or the relevant Group Company named in paragraphs 1 and 2 of
Part 1 and paragraphs 1 and 2 of Part 2 (as appropriate) of Schedule 3 is in
possession of each Property and, so far as the Seller is aware, no other person
is in, or otherwise entitled to, occupation or use of such Property.

  4.1.6  
All deeds and documents necessary to prove the title of the relevant Group
Company or Business Seller to the Properties are in the possession or under the
control of the Seller.

  4.1.7  
All taxes payable on the sale or transfer of interests in the Business
Properties have been paid in relation to the transfer of each Business Property
to the relevant Business Seller.

  4.1.8  
All taxes payable on the sale or transfer of the Group Company Properties have
been paid in relation to the transfer of each Group Company Property to the
relevant Group Company.
    4.1.9  
So far as the Seller is aware:

  (i)  
each Property (with the exception of the Business Owned Properties) has the
benefit of such rights as are necessary for the existing use of the Property;
and

  (ii)  
the Business Owned Properties have the benefits of such rights and servitudes as
are necessary for the existing use of the Business Owned Properties.

  4.1.10  
So far as the Seller is aware, no Property is subject to any material
Encumbrance save as set out in paragraph 3 of Part 1 and paragraph 3 of Part 2
(as appropriate) of Schedule 3.

  4.1.11  
The Seller has not received notice of any outstanding written notice or written
dispute as to the ownership, occupation or use of any Property which would, if
implemented or enforced, have a material adverse effect on the conduct of the
business carried on by the Group carried out at the Properties in substantially
the manner as at present.

  4.1.12  
So far as the Seller is aware, there are no compulsory purchase notices, orders
or resolutions affecting any Business Property.

  4.1.13  
So far as the Seller is aware, no Property is subject to any material liability
for the payment of any outgoings other than the usual relevant property taxes
and outgoings including national non domestic rates, water and sewerage
services, charges and insurance premiums and, additionally, in the case of the
Leased Properties, rents, service charges and all other outgoings referred to in
the relevant Lease.

 

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  4.1.14  
So far as the Seller is aware, no Property is subject to any material covenants,
obligations, restrictions, stipulations, licences, grants, exceptions or
reservations, unregistered interests which override either first registration
(where appropriate) or other such rights the benefit of which is vested in
third-parties, nor any agreement to create the same and which would have a
material adverse effect on the use and enjoyment of the relevant Property by the
relevant Group Company or Business Seller.

  4.1.15  
So far as the Seller is aware where any such matters as are referred to in
paragraphs 4.1.10, 4.1.13 and 4.1.14 have been Fairly Disclosed, the obligations
and liabilities imposed and arising under them have been observed and performed
in all material respects and all payments in respect of them due and payable
have been duly paid.

  4.1.16  
No Property is subject to any agreement or right to acquire the same, nor any
option, right of pre-emption or right of first refusal, and, so far as the
Seller is aware, there are no outstanding actions, claims or demands between the
relevant Group Company or Business Seller and any third-party affecting or in
respect of any Property which would, if implemented or enforced, have a material
adverse effect on the conduct of the Business carried on by the Group carried
out at the Properties in substantially the manner as at present.

  4.1.17  
So far as the Seller is aware, there are no closing, demolition, condemnation,
taking or clearance orders affecting any Business Property.
    4.1.18  
So far as the Seller is aware:

  (i)  
the use of each of the Material Properties is the permitted or lawful use for
the purposes of the relevant Planning Legislation; and

  (ii)  
the Seller has not received notice of any outstanding written notice or written
dispute as to any contravention by the relevant Group Company or Business Seller
of the relevant Planning Legislation or any alleged breach by the relevant Group
Company or Business Seller of Planning Legislation in relation to each Property
which would, if implemented or enforced, have a material adverse effect on the
conduct of the business carried on by the Group carried out at the Properties in
the manner as at present.

  4.1.19  
There are no major repairs under way or contracted for in respect of the
Properties.

  4.1.20  
In relation to the first two Business Owned Properties listed in paragraph 1 of
Part 2 of Schedule 3, no claims have been made under the indemnity policy in the
Data Room (document 1.5.3.2.2) and the conditions of such policy have been
observed.

  4.1.21  
So far as the Seller is aware, there are no contracts or agreements in relation
to the construction of any buildings or structures on the first two Business
Properties listed at paragraph 1 of Part 2 of Schedule 3 and the first Business
Property listed at paragraph 2 of Part 2 of Schedule 3 (or any extension or
alterations thereto) in relation to which any provision remains to be
implemented, observed or performed.

 

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4.2  
Leases

Where the relevant Group Company or the Business Seller occupies any Property
under a lease (which expression includes an underlease):

  4.2.1  
the requisite details have been completed in paragraph 2 of Part 1 and paragraph
2 of Part 2 (as appropriate) of Schedule 3, and there are no amendments,
guarantees or underleases except as referenced in such sections and as Fairly
Disclosed;

  4.2.2  
the relevant Group Company or Business Seller has paid the rent and observed and
performed, in all material respects, the covenants and obligations on the part
of the lessee and all material conditions contained in the lease and the lease
is valid and in full force and effect and the last demands for rent (or receipts
if issued) were unqualified;

  4.2.3  
so far as the Seller is aware, there is no subsisting written notice or
litigation alleging a monetary or material non-monetary breach or non-observance
of any covenant, condition or agreement contained in the lease under which the
relevant member of the Seller’s Group, in relation to the business carried on by
the Group, occupies the Property, on the part of the relevant landlord or such
member of the Seller’s Group;

  4.2.4  
so far as the Seller is aware, there are no circumstances which would entitle
any lessor to exercise any powers of entry or take possession of or otherwise
prevent the continued possession and enjoyment of the Leased Properties; and

  4.2.5  
there are no notices, negotiations or proceedings pending in relation to rent
reviews.

4.3  
Ownership of Assets

Each material asset described and included in the Accounts (other than the
Properties, the Intellectual Property and any assets disposed of or realised in
the ordinary course of business and excepting rights and retentions of title
arrangements arising by operation of law in the ordinary course of business) or
in the books of account or records of a Group Company or Business Seller in
relation to the business of the Group is:

  4.3.1  
legally and beneficially owned by the relevant Group Company or the Business
Seller or is the subject of a factoring arrangement, hire-purchase, conditional
sale or credit agreement;

  4.3.2  
where capable of possession, in the possession or under the control of the
relevant Group Company or the Business Seller or is the subject of a factoring
arrangement, hire-purchase, conditional sale or credit agreement;

  4.3.3  
free from Encumbrances and no Seller has agreed to give or create any
Encumbrance affecting such asset; and

  4.3.4  
so far as the Seller is aware, no claim has been made by any person to be
entitled to any Encumbrance affecting such asset.

 

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4.4  
Sufficiency of Assets

The real property and fixed assets owned or leased by the relevant member of the
Group, together with the Business Assets which are being sold to the Relevant
Purchasers pursuant to this Agreement and the rights and services to which the
Group and the Purchaser’s Group are entitled under the Transitional Services
Agreements, comprise the real property and fixed assets (other than insurance
and cash) reasonably necessary for the carrying on of the business of the Group
as a whole substantially in the manner in, and to the extent to which, it is
presently conducted.

4.5  
Moveable Assets

The details of the Moveable Assets set out in Schedule 16 are true and accurate
in all material respects and such moveable assets, along with the moveable
assets owned by a Group Company, reflect all of the moveable assets reasonably
necessary for the carrying on of the business of the Group as a whole
substantially in the manner in, and to the extent to which, it is presently
conducted.

4.6  
Books and Records

All books of accounts and records of the Seller’s Group (in whatever form held)
relating to all or any part of the business of the Group, the Moveable Assets or
the Relevant Employees:

  4.6.1  
have been properly and accurately maintained in all material respects and are up
to date in all material respects;

  4.6.2  
are in the possession or under the direct control of the Group or the Business
Sellers, or, to the extent that they relate to part of the Business of the Group
or the Moveable Assets or the Relevant Employees, the Retained Group; and

  4.6.3  
contain, with reasonable accuracy the records of assets and trading transactions
of the Group.

5  
Intellectual Property, Know-how and Information Technology

5.1  
Intellectual Property

  5.1.1  
The details of the Registered Group Intellectual Property set out in paragraphs
1 and 3 of Part 1 of Schedule 4 are true and accurate in all material respects.

  5.1.2  
Subject to paragraph 5.1.4 below, the Retained Group and the Group own all
Intellectual Property being assigned or licensed to the Purchaser under this
Agreement.

  5.1.3  
Save for those licences, brief details of which are set out in Part 6.1 of
Schedule 4, there are no licences of any Group Intellectual Property to any
third-party. No notice of breach has been given or received to or by any party
to any of the licences set out in Part 6 of Schedule 4.

  5.1.4  
Save for those licences, brief details of which are set out in Part 6.2 of
Schedule 4 and licences of standard application software used in the ordinary
course of business, there are no licences to the Retained Group or Group
Companies of or relating to any Intellectual Property material to the business
carried on by the Group Companies. So far as the Seller is aware, the Group has
not breached any agreement relating to the foregoing in any material respect and
neither has any other person and none will be materially affected by the
execution of this Agreement.

 

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  5.1.5  
So far as the Seller is aware, no Owned Group Intellectual Property is subject
to any material Encumbrances or other conditions or restrictions which are
likely to have a material adverse effect on the business carried on by the
Group.

  5.1.6  
So far as the Seller is aware, the Owned Group Intellectual Property is valid
and enforceable and no claims against or challenges to the validity of the Owned
Group Intellectual Property have been received by any member of the Retained
Group or any Group Company.

  5.1.7  
The Intellectual Property being assigned or licensed to the Purchaser under this
Agreement is all of the Intellectual Property that is required to carry on the
business carried on by the Group in substantially the same manner as carried on
in the 12 months immediately prior to the date of this Agreement, save that the
Seller will not be in breach of this warranty if an infringement claim is
successfully asserted against the Purchaser in respect of any rights of
third-parties of which the Seller was not aware at the date of this Agreement.

  5.1.8  
No current outstanding claims against the Group Companies or any member of the
Retained Group under any contract or applicable law for employee compensation in
respect of any Group Intellectual Property have been received by, or, so far as
the Seller is aware, are threatened against, the Group Companies or any member
of the Retained Group in respect of any such Group Intellectual Property.

  5.1.9  
There have been no claims against the Group Companies or any member of the
Retained Group under any contract or applicable law for employee compensation in
the last three years that have been settled on terms which are likely to have a
material effect on the ownership, use or validity of the Group Intellectual
Property.

  5.1.10  
So far as the Seller is aware, none of the employees of the Group Companies or
any other members of the Retained Group is entitled to any interest in, or a
payment or compensation in respect of, any Owned Group Intellectual Property,
other than any right to be named as an inventor on any patent or patent
application.

  5.1.11  
Paragraphs 1 and 3 of Part 1 of Schedule 4 list true and accurate details of all
Registered Group Intellectual Property other than any Excluded Intellectual
Property and, so far as the Seller is aware, all renewal fees which are due in
respect of such Registered Group Intellectual Property have been paid.

  5.1.12  
The Relevant Employees include all current employees of the Seller’s Group who
are named as inventors on any patents or patent applications which are the
subject of the Patent Assignment.

Infringement of third-party Intellectual Property

  5.1.13  
No outstanding claims or threats of infringement of or unauthorised use of any
rights of any third-party (including employees and former employees), which
would be material to the Group in any Group Intellectual Property, have been
received by any member of the Retained Group or any Group Company and, so far as
the Seller is aware, there are no circumstances which could give rise to any
claims of unauthorised use or infringement.

 

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  5.1.14  
There have been no claims against the Group Companies or any member of the
Retained Group in respect of any infringement or unauthorised use of any rights
of any third-party which would be material to the Group Intellectual Property in
the last three years that have been settled on terms which are likely to have a
material effect on the ownership, use or validity of the Group Intellectual
Property.

  5.1.15  
So far as the Seller is aware: (a) the activities of the Group Companies do not
infringe and have not within the last six years infringed the Intellectual
Property of any third-party; and (b) no member of the Group uses any processes,
nor is engaged in any activities, which involve the misuse or alleged misuse of
any Confidential Information belonging to any third-party.

Group Intellectual Property

  5.1.16  
So far as the Seller is aware, no third-party has in the three years immediately
prior to the date of this Agreement infringed or is infringing any of the Owned
Group Intellectual Property.

5.2  
Know-how

  5.2.1  
The material Know-how used in the business carried on by the Group, including
the Know-how set out in Part 1.4 of Schedule 4 (“Group Know-how”):

  (i)  
is owned by the Group Companies or the Retained Group or has been licensed to
the Group Companies or the Retained Group pursuant to licences set out in
Part 6.2 of Schedule 4;

  (ii)  
is adequately and properly documented and accessible, such that the Purchaser’s
Group will be able to take the full benefit of it; and

  (iii)  
so far as the Seller is aware and subject to any agreements which have been
Fairly Disclosed, is not subject to any third-party restriction as to its use,
exploitation or disclosure.

  5.2.2  
The Group Companies and the Retained Group have and follow adequate procedures
to maintain the confidentiality of Group Know-how that is Confidential
Information and, so far as the Seller is aware, there has been no unauthorised
disclosure of Group Know-how that is Confidential Information.

  5.2.3  
So far as the Seller is aware, save as set out in paragraph 5.2.4, neither the
Group nor the Retained Group has disclosed, and neither is obliged to disclose,
any Group Know-how that is Confidential Information to any person except:

  (i)  
to its employees who are bound by obligations of confidence; or

  (ii)  
to third-parties in the ordinary and usual course of business subject to a valid
and enforceable agreement which sets out that such disclosure is to be treated
as being of a confidential nature, and that it can be used only for the purpose
for which it was disclosed and cannot be further disclosed.

 

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  5.2.4  
So far as the Seller is aware:

  (i)  
there has not been any breach of any confidentiality obligations given by
third-parties in relation to any Group Know-how that is Confidential
Information;

  (ii)  
there has not been any actual or alleged misuse by any person of any Group
Know-how that is Confidential Information; and

  (iii)  
there are no circumstances which are likely to give rise to any such breach or
actual or alleged misuse.

  5.2.5  
So far as the Seller is aware, the Group Know-how that is Confidential
Information has not been subject to disclosure pursuant to the Freedom of
Information Act 2000 or the Environmental Information Regulations 2004, or
equivalent legislation in any jurisdiction.

5.3  
Information Technology

  5.3.1  
For the purposes of this paragraph 5.3:

“Business IT” means the information technology which is owned or used primarily,
in relation to the conduct of the business carried on presently by the Group and
which is material to the business carried on by the Group including computer
hardware, Software, telecommunications and network equipment and infrastructure
and any other information technology related plant and equipment;
“Software” means computer programs in object code or source code (including any
firmware or middleware) together with any technical information and
documentation necessary for the use of such programs; and
“Virus” means any virus or bug which adversely affects Software (including logic
bombs, worms, trap doors, Trojan horses or other similar destructive programs or
codes).

  5.3.2  
Full details of all of the material Business IT have been Fairly Disclosed and,
so far as the Sellers are aware, all material facilities and services relating
to the Business IT are being and have been provided substantially in accordance
with all applicable specifications and the terms of relevant contracts.
    5.3.3  
So far as the Sellers are aware, the Business IT:

  (i)  
is in good working order in all material respects;

  (ii)  
is configured and maintained with a view to minimising the effects of externally
introduced Viruses; and
    (iii)  
has been regularly maintained,

and any material warranty and/or material maintenance, support and services
agreements relating to the Business IT is in the Data Room.

 

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  5.3.4  
So far as the Sellers are aware, in the last 12 months there has not been, in
relation to Business IT (or any part of it), any:

  (i)  
breakdown, defect or failure, Virus, destruction, corruption or loss of access
to any of the information held or data stored on the Business IT;

  (ii)  
breach of security or any unauthorised access to the Business IT; or

  (iii)  
information or data held or stored on, or transmitted by, the Business IT,

which has had a material adverse effect on the Group or caused material
disruption, interruption or loss to its business.

5.4  
Data Protection

So far as the Sellers are aware, no formal written notice or other communication
alleging non-compliance with any applicable data protection legislation
(including any enforcement notice, information notice or equivalent notice) has
been received by any member of the Group, or, in relation to the business
carried on by the Group or any member of the Retained Group, in the last
12 months, and is outstanding, from any competent data protection authority, and
nor has any member of the Group or the Retained Group (in relation to the
business carried on by the Group) been the subject of enquiries by, or, so far
as the Seller is aware, complaints to, any such authority.

6  
Contracts

6.1  
Contracts

  6.1.1  
No member of the Group or the Retained Group (in relation to the business
carried on by the Group) is a party to or subject to any contract, transaction,
arrangement, understanding or obligation (other than in relation to any Property
or contract of employment of a Relevant Employee) which:

  (i)  
is not in the ordinary course of business and which is material;
    (ii)  
is not on an arm’s length basis and which is material;

  (iii)  
restricts its freedom to carry on its business in any part of the world in such
manner as it thinks fit so as to have a material adverse effect on the business
carried out by the relevant member of the Group;

  (iv)  
contains a change of control provision pursuant to which such contract could be
terminated or materially affected as a result of Closing;

  (v)  
involves the supply of goods and services, the aggregate sales value of which
(exclusive of VAT) will be more than 5 per cent. of turnover of the Group as a
whole (exclusive of VAT) for the preceding financial year;

  (vi)  
contains any terms to be observed or performed by any member of the Group or any
Business Seller which such member of the Group or any Business Seller cannot
reasonably comply with on time or without undue or unusual expenditure of money
or effort and which is material; or

  (vii)  
is unprofitable (that is to say known to have been likely to result in a loss to
the Group Business or Group Company on completion of performance) or of a
long-term nature (that is to say incapable of performance in accordance with its
terms within 12 months after the date on which it was entered into or
undertaken) and which is material.

  6.1.2  
The information in Schedule 5 and Part 6 of Schedule 4 regarding the Business
Contracts is true and accurate in all material respects.

 

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  6.1.3  
The Seller has not been notified of and is not aware of any actual, intended or
proposed amendment to the material terms (including pricing) of any Material
Contract.

  6.1.4  
Each Group Company and Business Seller, and, so far as the Seller is aware, each
other party to any Material Contract, has in all material respects performed all
obligations to be performed under such Material Contract. No Group Company or
member of the Retained Group has received notice of the existence of any event
or condition which constitutes, or, after notice or lapse of time or both, will
constitute a material default on the part of the Group Company or a Business
Seller or any counterparty under any Material Contract and, so far as the Seller
is aware, there are no grounds for recission or repudiation of any Material
Contract and, so far as the Seller is aware, no event has occurred or
circumstance arisen (other than the effluxion of time) the effect of which is
that the counterparty is entitled to terminate any Material Contract in
circumstances where such entitlement would not exist but for the occurrence of
such event or such cumulative effect having arisen.

6.2  
Joint Ventures etc.

No member of the Group is a member of any joint venture, consortium,
partnership, profit-sharing arrangement or other unincorporated association
(other than a recognised trade association in relation to which such member of
the Group has no liability or obligation except for the payment of annual
subscription or membership fees).

6.3  
Agreements with Connected Parties

  6.3.1  
There are no existing (and during the past two years there have not been any)
agreements or arrangements material to the conduct of the business carried on by
the Group as a whole between, on the one hand, any member of the Group and, on
the other hand, any member of the Retained Group or any person connected with
it, other than on normal commercial terms in the ordinary course of business.

  6.3.2  
So far as the Seller is aware, no member of the Group is (or during the past two
years has been) party to any material contract or arrangement with any current
or former employee or current or former director or officer of such member of
the Group or any person connected (as defined by applicable law in the relevant
jurisdiction) with any of such persons, or in which any such person as aforesaid
is interested (whether directly or indirectly), other than on normal commercial
terms in the ordinary course of business.

7  
Employees and Employee Benefits
  7.1  
Employees and Terms of Employment

  7.1.1  
The Data Room contains details as of the date of the Offer Letter of:

  (i)  
the total number of the Relevant Employees; and

  (ii)  
the job title, period of employment with the Professional Business, current
salary and other benefits and location of each Relevant Employee.

  7.1.2  
Copies of the terms of the contract of employment of each Senior Employee are
contained in the Data Room.

  7.1.3  
Specimen terms and conditions of each position or category of Relevant Employee
are contained in the Data Room.

 

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  7.1.4  
The Master Global Bloom Roster (document 4.1.9 in the Data Room) includes all of
the employees of the Business Sellers who are predominantly assigned to the
Group.

  7.1.5  
The basis of remuneration or other terms of employment payable to the Relevant
Employees is the same as at the Accounts Date. None of the Group Companies is
under any obligation, contractual or otherwise, to increase the rates of
remuneration of, or to provide any bonus or incentive or other similar payments
to, any of the Relevant Employees at any future date, except to the extent that
any increase in remuneration results from the promotion of any individual
Relevant Employee and such promotion is in the ordinary course of business and
consistent with past practices.

  7.1.6  
No persons other than the Relevant Employees can successfully claim to be
considered employees of the Group Companies or any Business Seller in relation
to the business of the Group.

7.2  
Termination of Employment

  7.2.1  
No Senior Employee is currently under notice to terminate his or her employment.

  7.2.2  
There are no proposals to terminate the employment of more than 10 Relevant
Employees.
    7.2.3  
There have been no redundancies in the Group in the last 12 months.

  7.2.4  
No claim which remains outstanding has been made in the last 12 months against
any member of the Group (in respect of the Business Sellers, in relation to the
Group Businesses) for:

  (i)  
breach of any contract of employment with any Relevant Employee;

  (ii)  
breach of any statutory employment right or right arising out of any applicable
collective bargaining agreements in respect of any Relevant Employee; or

  (iii)  
failure to comply with any order for the reinstatement or re-engagement of any
Relevant Employee.

7.3  
Works Councils and Employee Representative Bodies

The Data Room identifies all work councils and employee representative bodies
which by law or any applicable collective bargaining agreement have the right to
be informed and/or consulted on matters which affect the Relevant Employees.

7.4  
Collective Bargaining Agreements etc.

Other than national collective bargaining agreements or industry-wide collective
agreements, the union recognition agreements, collective agreements and works
council agreements in the Data Room are all the agreements between any member of
the Group and trade unions or representative bodies

 

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7.5  
Working Time

The Group complies with compulsory regulations governing working time in each
jurisdiction.

7.6  
Industrial Disputes

No member of the Group is involved in any strike or industrial or trade dispute
or any dispute or negotiation regarding a claim of material importance with any
trade union or other body representing employees or former employees of any such
member of the Group.

7.7  
Bonus or Other Profit-related Schemes

The rules and other material documentation relating to all share incentive,
share option, profit sharing, cash bonus or other cash incentive arrangements
pursuant to which any Relevant Employees have outstanding entitlements together
with details of all awards allocated and options granted and the total potential
liability of any member of the Group in respect of such awards and options are
in the Data Room.

7.8  
Transfers of Undertakings etc.

There have been no transfers into the Group of employees under the Acquired
Rights Directive or equivalent legislation in the last two years.

7.9  
Group Retirement Benefit Arrangements

  7.9.1  
Group Retirement Benefit Arrangements

  (i)  
The arrangements Fairly Disclosed in the Data Room or the Disclosure Letter are
the only arrangements under which any Group Company or Business Seller makes (in
relation to the business carried on by the Group only) or could become liable to
make payments for providing retirement, death, disability or life assurance
benefits to any Relevant Employees or former employees of any member of the
Group or any dependant of a Relevant Employee or former employee of any member
of the Group, except for arrangements (“Mandatory Arrangements”) to which any
such member of the Group contributes in compliance with any law, regulation or
mandatory collective bargaining arrangements, the “Group Retirement Benefit
Arrangements” (which definition shall, for the avoidance of doubt, exclude
Mandatory Arrangements where the definition appears in this paragraph 7.9).

  (ii)  
Other than under “Pensioenovereenkomst van Scotts International B.V. en diens
werknemers“ and “Pension plan of Colonia Unterstützungskasse as of 01.07.1992”,
no benefits (other than lump sum benefits on death in service) payable under the
Group Retirement Benefit Arrangements are calculated by reference to an
employee’s remuneration.

  (iii)  
Neither SSCPC nor SSHPC is the sponsor of any Group Retirement Benefit
Arrangement and neither provides medical or life or other welfare benefits to
any current or future retired or terminated employee (or any dependant thereof)
of SSCPC or SSHPC (as the case may be) other than as required pursuant to Part 6
of Subtitle B of Title I of ERISA or Section 4980B of the Code.

 

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  7.9.2  
Disclosure

There are Fairly Disclosed in the Data Room or the Disclosure Letter copies of
all material documents governing such Group Retirement Benefit Arrangements as
will transfer to the Purchaser or other Relevant Purchasers on Closing
(“Transferred Arrangements”) and membership data to establish members’
entitlements to benefits under the Transferred Arrangements including current
details of the rates at which contributions are made in respect of the Relevant
Employees.

  7.9.3  
Regulation

  (i)  
So far as the Seller is aware, the Transferred Arrangements are in compliance
with their terms and with all applicable laws, regulations and government
taxation or funding requirements in all material respects. The Group Companies
and the Business Sellers have met their material legal obligations in respect of
the Group Retirement Benefit Arrangements and Mandatory Arrangements.

  (ii)  
To the extent required by law or regulation, the Group Retirement Benefit
Arrangements have been approved under relevant local tax legislation and
regulations and where any of the Group Retirement Benefit Arrangements are
required to be registered with or approved by any regulatory or supervisory body
such registration or approval has been validly made.

  (iii)  
Scotts Deutschland GmbH has always increased pensions in payment in accordance
with sec. 16 of the German Company Pension Act and Scotts Deutschland GmbH is
under no obligation to make good any omitted pension increases (“nachholende
Anspassung” in terms of sec. 16. para 2. of the German Company Pension Act).

  7.9.4  
Contributions

All contributions, payments, premiums, distributions or reimbursements due to
the Group Retirement Benefit Arrangements from any member of the Group in
respect of Relevant Employees have been paid in full and on time in all material
respects and there are no other costs or contributions paid or payable by any
member of the Group in respect of the Group Retirement Benefit Arrangements and
Mandatory Arrangements.

  7.9.5  
Members

  (i)  
There are no Relevant Employees who are members of the Group Retirement Benefit
Arrangements other than those whose names have been supplied to the Purchaser
and there are no other Relevant Employees who are currently eligible for or who
have been offered membership of the Group Retirement Benefit Arrangements.

 

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  (ii)  
No undertaking or assurance (whether or not legally enforceable) has been given
or discretion or power exercised by or on behalf of the Seller or any member of
the Seller’s Group or any member of the Group or, as far as the Seller is aware,
the trustees or managers of the Group Retirement Benefit Arrangements:

  (a)  
to any person as to the continuance of the Group Retirement Benefit Arrangements
or the continuance, increased security or improvement of any benefit provided
by, or contribution to, the Group Retirement Benefit Arrangements or to admit to
membership any person who would not normally be eligible for membership of the
Group Retirement Benefit Arrangements or on terms other than those that would
normally be applicable under the Group Retirement Benefit Arrangements; or

  (b)  
to provide or procure the provision of benefits to any person except on the
terms and to the extent applicable to that person that would normally be
applicable under the Group Retirement Benefit Arrangements.

  (iii)  
No Relevant Employee or former employee of any member of the Group has been
excluded from membership of the Group Retirement Benefit Arrangements or
Mandatory Arrangements who would otherwise have been eligible either under the
governing documentation of the Group Retirement Benefit Arrangements or under
any applicable law or under any announcement or other contractual obligations
and every such Relevant Employee or former employee of any member of the Group
has been properly notified of that right.

  (iv)  
No Relevant Employee or former employee of the Group in the UK has ever had his
contract of employment transferred to the Group from another employer in
circumstances where the Transfer of Undertakings (Protection of Employment)
Regulations 1981 or the Transfer of Undertakings (Protection of Employment)
Regulations 2006 applied and the Relevant Employee or former employee of the
Group was entitled to defined benefit occupational pension scheme rights in
respect of the former employment.
    7.9.6  
Claims

None of the Seller, any member of the Retained Group or any member of the Group,
or, as far as the Seller is aware, the trustees or managers of the Group
Retirement Benefit Arrangements, have received any actual or threatened claims,
requests for an audit from a competent regulatory authority, actions or disputes
in respect of the Group Retirement Benefit Arrangements (other than routine
claims for benefits), and, so far as the Seller is aware, there are no
circumstances which may give rise to any such dispute, action or claim being
made.

 

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8  
Legal Compliance
  8.1  
Licences and Consents

   
All licences, consents, authorisations, orders, warrants, confirmations,
permissions, certificates, approvals, registrations (including Product
Registrations) and authorities required by the Group to own and operate its
assets and to carry on its business, and which are material to the business as
carried on by any Group Company or Group Business (“Licences”), have been
obtained, are in force and effect and, so far as the Seller is aware, are being
complied with in all material respects. Details of all such Licences are Fairly
Disclosed in the Data Room or the Disclosure Letter and the Seller is not aware
of any reason why any of them should be suspended, modified or revoked or not
renewed (including as a result of the change of control of the Group or in
relation to the business carried on by the Group only) or, in relation to any
Product Registrations, why any relevant registration authority may not agree to
any transfer or amendment to such Product Registration or the grant of an
equivalent Product Registration or why any third-party may not grant a Letter of
Access in respect of such Product Registration.

8.2  
Compliance with Laws

  8.2.1  
The business carried on by the Group has, during the two-year period prior to
Closing, been conducted in material compliance with all applicable laws and
regulations in each country in which the business carried on by the Group is
carried on.

  8.2.2  
So far as the Seller is aware:

  (i)  
it has complied with all material obligations imposed by European Union
legislation and relevant statutes, statutory instruments and codes of practice;
and

  (ii)  
there is no investigation, disciplinary proceeding or enquiry by, or order,
decree, decision or judgment of, any court, tribunal, arbitrator, governmental
agency or regulatory body ongoing or outstanding or, so far as the Seller is
aware, pending against any Group Company, in relation to the business carried on
by the Group or against any person for whose acts or defaults the Group may be
vicariously liable.

  8.2.3  
No written notice has been received by any member of the Seller’s Group in
relation to the business carried on by the Group, in the past 12 months, or at
any time and is outstanding from any court, tribunal, arbitrator, governmental
agency or regulatory body with respect to a violation and/or failure to comply
with any such applicable law or regulation or requiring it to take or omit any
material action.

  8.2.4  
No member of the Group nor, so far as the Seller is aware, any of its officers,
agents or employees or any officer, agent or employee of the Retained Group
(during the course of their duties in relation to the business of the Group) has
committed or omitted to do any act or thing the commission or omission of which
is in contravention of any statutory obligation or any other law or regulations
in any country giving rise to any material fine, penalty, default proceedings or
other material liability in relation to the business of the Group.

9  
Environment

9.1  
For the purposes of this paragraph 9:

   
“Environment” means all or any of the following media (alone or in combination):
air (including the air within buildings and the air within other natural or
man-made structures whether above or below ground); water (including surface
water and water under or within land or in drains or sewers); and soil, sediment
and land and any ecological systems and living organisms supported by these
media, including any individual;

 

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“Environmental Authority” means any legal person or body of persons (including
any government department or government agency or court or tribunal) having
jurisdiction to determine or enforce any matter arising under Environmental Law
and/or relating to the Environment;

   
“Environmental Law” means all applicable laws (including, for the avoidance of
doubt, common law), directives, statutes, regulations, statutory guidance notes
and final and binding court and other tribunal decisions, orders or judgments in
force in the relevant jurisdiction at the date of the Offer Letter, whose
purpose is to protect, or prevent pollution of, the Environment or to regulate
emissions, discharges, or releases of Hazardous Substances into the Environment,
or to regulate the use, treatment, storage, burial, disposal, transport or
handling of Hazardous Substances, or to protect the health and safety of humans,
and all by-laws, codes, regulations, decrees or orders issued or promulgated or
approved thereunder or in connection therewith to the extent that the same have
force of law at or prior to the date of this Agreement excluding any such laws
relating to town and country planning;

   
“Environmental Permit” means any licence, approval, authorisation, permission,
notification, waiver, order or exemption which is issued, granted or required
under Environmental Law in relation to the business carried on by the Group on
or before the date of this Agreement;

   
“Hazardous Substances” means any wastes, pollutants, contaminants and any other
natural or artificial substance (whether in the form of a solid, liquid, gas or
vapour) which is capable of causing harm or damage to the Environment or to
human health or a nuisance to any person;

   
“REACH” means Regulation 2006/1907/EC concerning the registration, evaluation,
authorisation and restriction of chemicals; and

   
“Relevant Period” means during the 24-month period ending on the date of the
Offer Letter.

9.2  
The business carried on by the Group is being and has during the Relevant Period
been conducted in material compliance with Environmental Law.

9.3  
To the extent applicable:

9.3.1 all Environmental Permits have been obtained and are in force; and

  9.3.2  
no member of the Group, nor any other member of the Retained Group in relation
to the business carried on by the Group, has received any correspondence or
formal notice from any Environmental Authority which is outstanding as at the
date of this Agreement:

  (i)  
of any material non-compliance with such Environmental Permits or which provides
that such a non-compliance can continue to occur; or

  (ii)  
to revoke, suspend, materially vary or materially limit such Environmental
Permits.

9.4  
So far as the Seller is aware no expenditure in excess of US$1,000,000 in total
is required to be spent to ensure compliance with all Environmental Permits
(including any improvement programmes) or any Environmental Law over the next
two years in relation to the business carried on by the Group as at the date of
this Agreement. Details of budgeted expenditure on environmental and/or health
and safety matters over the next two years have been Fairly Disclosed.

 

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9.5  
No member of the Group, nor any other member of the Retained Group in relation
to the business carried on by the Group, has received any correspondence or
written notice from any Environmental Authority commencing or relating to any
criminal, regulatory or administrative action or investigation relating to any
alleged breach of or liability under any Environmental Law which is outstanding
at the date of this Agreement and, so far as the Seller is aware, there are no
circumstances which are reasonably likely to give rise to any such
correspondence or written notice in respect of any such criminal, regulatory or
administrative action or investigation which would have a material adverse
effect on the business carried on by the Group as a whole.

9.6  
No member of the Group, nor any other member of the Retained Group in relation
to the business carried on by the Group, is involved whether as claimant or
defendant or other party in any claim, legal action, proceeding, suit,
litigation, prosecution, investigation, enquiry or arbitration relating to any
alleged breach of or liability under Environmental Law and, so far as the Seller
is aware, no such claim, legal action, proceeding, suit, litigation,
prosecution, investigation, enquiry or arbitration is pending or threatened by
or against any member of the Group or any member of the Retained Group in
relation to the business carried on by the Group and so far as the Seller is
aware there are no circumstances that are reasonably likely to give rise to any
such claim, legal action, proceedings, suit, litigation, prosecution,
investigation, enquiry or arbitration which would have a material adverse effect
on the business carried on by the Group as a whole.

9.7  
Copies of all environmental and/or health and safety (including asbestos)
reports, surveys, assessments and investigations produced by third-parties in
the last five years and so far as the Seller is aware all material environmental
and/or health and safety regulations, audits and investigations produced by any
member of the Group or any other member of the Retained Group in the last two
years in respect of the business carried on by the Group and/or the Facilities
in the possession or control of the Group or any other member of the Retained
Group have been Fairly Disclosed in the Data Room or the Disclosure Letter.

9.8  
So far as the Seller is aware, no member of the Group, nor any other member of
the Retained Group in relation to the business carried on by the Group has
(i) caused or knowingly permitted the presence or disposal of any Hazardous
Substances at any of the Properties or any property formerly owned, used or
occupied by any member of the Group, or any other member of the Retained Group
in relation to the business carried on by the Group; or (ii) sent waste for
disposal to any property in the United States, in each case in circumstances
that are reasonably likely to give rise to any material liability on the part of
the relevant member of the Group or any Business Purchaser under Environmental
Law.

9.9  
Where any member of the Group or Business Seller in relation to the Group
Businesses has registration obligations under REACH, details of all
registrations made to date and of all registrations currently ongoing have been
Fairly Disclosed.

9.10  
Each Group Company and each Business Seller in relation to the Group Businesses
has taken reasonable steps to ensure that, where any substance, or product that
contains a substance, is supplied to any member of the Group and/or Business
Seller by a third-party who has an obligation to register such substance under
REACH and which substance and/or product is necessary to carry on the business
of the Group, such substance has been pre-registered and will be registered
under REACH by such third-party supplier and that any such registration has or
will include the relevant uses of that substance or product by any member of the
Group, Business Seller and/or Business Purchaser. Details of any such substance
which the Seller or any member of the Seller’s Group has identified as requiring
registration by any supplier but which will not be registered by such supplier
in accordance with REACH have been Fairly Disclosed.

 

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10  
Anti-Competitive Agreements and Practices

10.1  
So far as the Seller is aware, no member of the Group, nor any other member of
the Retained Group in relation to the business carried on by the Group only, has
during the last five years had an order, notice or direction made against it or
received any request for information or statement of objections from any court
or authority, in each case in relation to anti-trust or similar legislation.

10.2  
No member of the Group, nor any other member of the Retained Group in relation
to the business carried on by the Group only, is now, or has during the last
five years prior to the date of the Offer Letter been, a party to any agreement,
arrangement or concerted practice, or has been involved in any business practice
or conduct in respect of which an undertaking has been given by or an order made
in relation to it pursuant to any anti-trust or similar legislation in any
jurisdiction in which it carries on business or has assets or sales.

11  
Litigation

11.1  
Current Proceedings

   
No member of the Group, nor any other member of the Retained Group in relation
to the business carried on by the Group or any of the Group’s assets, is
involved whether as claimant or defendant or other party in any dispute, claim,
legal action, proceeding, suit, litigation, prosecution, investigation, enquiry
or arbitration (other than as claimant in the collection of debts arising in the
ordinary course of its business) which claim exceeds US$250,000.

11.2  
Pending or Threatened Proceedings

   
So far as the Seller is aware, no dispute, claim, legal action, proceeding,
suit, litigation, prosecution, investigation, enquiry or arbitration which claim
exceeds US$250,000 is pending or threatened by or against any member of the
Group or any other member of the Retained Group in relation to the business
carried on by the Group.

12  
Insurance

12.1  
Particulars of Insurances

  12.1.1  
All of the material assets which comprise the business carried on by the Group
which are capable of being insured have at all material times been and are
insured against fire and other risks normally insured against by companies
carrying on similar businesses or owning assets of a similar nature for amounts
and with deductibles and excesses reasonably regarded as adequate taking into
account the size and operations of the Group and the jurisdiction in which the
operations of the Group are carried on.

 

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  12.1.2  
Details of all insurance policies in respect of which the Group has an interest
(including any active historic policies which provide cover on an occurrence
basis) are Fairly Disclosed in the Data Room or the Disclosure Letter and such
details are true and accurate in all material respects, and not misleading.

  12.1.3  
Details of all claims made and losses and accidents covered (in each case in
excess of US$250,000) under any insurance policy by or on behalf of the Group in
the preceding three years have been Fairly Disclosed in the Data Room or the
Disclosure Letter and such details are true and accurate in all material
respects, and not misleading.

  12.1.4  
The Group has no outstanding insurance claims and, so far as the Seller is
aware, there are no facts, events, matters or circumstances which are likely to
give rise to any material claim or require notification under any of the
insurance policies in respect of which the Group has an interest and all such
claims have been notified to the relevant insurers.

12.2  
Details on Policies
     
In respect of the insurances referred to in paragraph 12.1:

  12.2.1  
all premiums have been duly paid to date; and

  12.2.2  
no Group Company or member of the Retained Group has received any notification
that such insurances are not in full force and effect or that any insurer
intends to dispute the validity of any of the policies on any grounds.

13  
Products

13.1  
During the period of 12 months prior to the date of the Offer Letter (or on any
earlier date where such notice, citation or decision remains outstanding), no
member of the Seller’s Group has received any written notices, citations or
decisions by any governmental or regulatory authority in the relevant
jurisdiction that any product produced, manufactured, marketed or distributed at
any time by any Group Company or by any member of the Retained Group in relation
to the Group Businesses (the “Products”) is defective or fails to meet in any
material respect any applicable standards legally required by any such
governmental or regulatory authority and no recall of any Product has been
undertaken.

13.2  
During the period of 12 months prior to the date of the Offer Letter (or on any
earlier date where such claim remains outstanding), there has been no claim with
respect to the Products received by any member of the Seller’s Group that would
materially impair the business of any Group Company or Group Business.

13.3  
The Group Companies have not at any time carried on any business other than the
business carried on at the date hereof.

13.4  
No products manufactured or supplied by the Group are in any respect faulty or
defective or fail to comply, in any material respect, with any applicable
regulations, standards or requirements or their terms of sale.

13.5  
Other than in the ordinary course of business, no member of the Group, and no
Business Seller in respect of the business of the Group, has given any guarantee
or warranty or made any representation in respect of goods or services supplied
or contracted to be supplied by it save for any guarantee or warranty implied by
law, and (save as aforesaid) no such person has accepted any liability or
obligation in respect of any goods or services that would apply after any such
goods or services have been supplied by it.

 

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13.6  
There is not outstanding any material claim against any member of the Group nor,
so far as the Sellers are aware, are there any deficiencies or defects or
breaches of contract which could result in any material claim being made against
any member of the Group in relation to any goods or services for which any
member of the group has been or is or may be or become liable or responsible in
the course of its business and, without prejudice to the generality of the
foregoing, no material dispute exists with respect to any Material Contract nor
so far as the Sellers are aware are there any circumstances which are believed
likely to give rise to any such dispute.

13.7  
There are no Product Claims (as defined below) which have commenced and, so far
as the Seller is aware, no Product Claims are pending or threatened.

   
For purposes of this paragraph 13.7, “Product Claim” means any legal
proceedings, actions or suits for damages or any other legal remedy (in which
any member of the Group is involved, or would be involved once the action is
commenced) which arises from any personal injury, illness and/or death alleged
by any person in whole or part to relate to any contact with, use of or exposure
to at any time any product or any constituent of any product manufactured,
distributed, sold or supplied by SSHPC or SSCPC.

14  
Tax

14.1  
Company Residence

   
Each Group Company has been resident for tax purposes in its jurisdiction of
incorporation and has not been resident anywhere else at any time since its
incorporation. For the avoidance of doubt, references to residence in this
paragraph shall be construed as references to residence as determined by the
local law of the jurisdiction or jurisdictions concerned and not by reference to
the provisions of any relevant double taxation treaty or convention.

14.2  
Returns and Information

   
All registrations, returns, computations, notices and information which are or
have been required to be made or given by each Group Company for any Taxation
purpose have been made or given within the requisite periods and on a proper
basis and are up-to-date and correct in all material respects.

14.3  
Special Regimes/Elections/Rulings

   
There are set out in the Disclosure Letter details of any agreement, arrangement
or election between any Group Company and any Tax Authority pursuant to which
the relevant Group Company or the Business Seller is authorised not to comply
with what, but for such agreement or arrangement, would be its statutory
obligations in respect of any Tax.

14.4  
Information

   
Each Group Company is in possession of or has access to sufficient information
to enable it and/or its officers, employees or representatives to capture its
liability to Taxation insofar as it depends on any Transaction (as defined in
the Tax Indemnity) occurring on or before Closing.

 

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14.5  
VAT

   
All proper records have been kept as requested by law for the purpose of VAT in
relation to the Group.

14.6  
Tax Indemnity

   
No Group Company is party to any agreement or arrangement pursuant to which it
is liable to reimburse, indemnify or otherwise compensate another person (other
than another Group Company) in respect of any Tax which may be suffered by that
other person.

15  
Important Business Issues since the Accounts Date

   
Since the Accounts Date:

  15.1.1  
the business carried on by the Group as a whole has been carried on as a going
concern in the ordinary course without any material interruption or material
alteration in its nature, scope or manner;

  15.1.2  
no Group Company has declared, made or paid any cash dividend or other cash
distribution to its members;

  15.1.3  
there has been no capitalisation of reserves and no Group Company has allotted
or issued or agreed to allot or issue any share or loan capital or any other
security giving rise to a right over its capital;

  15.1.4  
no Group Company has redeemed or purchased or agreed to redeem or purchase any
of its share capital;

  15.1.5  
there has been no material adverse change in turnover or in the trading position
of the Group;

  15.1.6  
there has not been any material change in the assets or liabilities of the Group
as shown in the Accounts except for changes arising from routine payments and
from routine supplies of goods or of services in the ordinary and usual course
of the Group’s business;

  15.1.7  
no supplier to or customer of the Group who accounted for more than 5 per cent.
of the Group’s annual turnover in the last financial year has ceased to trade
with the Group or notified the Group of its intention to do so;

  15.1.8  
the Group’s business has not been materially affected by any change in the terms
of business with such a supplier or customer and the Group has not been notified
of any such proposed change; and

  15.1.9  
the Group has not incurred or agreed to incur any capital expenditure or
commitments in excess of US$100,000 per item or US$300,000 in aggregate.

 

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16  
Authority and Capacity

   
For the purposes of this paragraph 16, references to Seller’s Group shall
include the Group, as applicable.

  16.1.1  
Each of the Seller, the other Relevant Sellers and each Group Company is and
will be, following completion of the Pre-Sale Reorganisation Transactions,
validly existing and is a company duly incorporated, organised and/or
registered, as applicable, under the law of its jurisdiction of incorporation,
organisation or registration.

  16.1.2  
Each of the Seller, the other Relevant Sellers and any other members of the
Seller’s Group, as applicable, has, as at the relevant date of signing, the
legal right and full power and authority to enter into and perform the
Transaction Documents to which it is a party and any other documents to be
executed by it pursuant to or in connection with the Transaction Documents.

  16.1.3  
The documents referred to in paragraph 16.1.2 will, when executed, constitute
valid and binding obligations on the Seller, the other Relevant Sellers and any
other members of the Seller’s Group, as applicable, in accordance with their
respective terms.

  16.1.4  
Each of the Seller, the other Relevant Sellers and any other members of the
Seller’s Group, as applicable, has taken or will have taken by Closing all
corporate action required by it to authorise it to enter into and to perform any
of the Transaction Documents to which it is a party and any other documents to
be executed by it pursuant to or in connection with the Transaction Documents.

  16.1.5  
Entry into and performance by each of the Seller, the other Relevant Sellers or
any other members of the Seller’s Group, as applicable, of each of the
Transaction Documents to which it is a party will not:

  (i)  
cause any such company to breach any agreement or other obligation or
restriction binding upon it or any provision of its memorandum or articles of
association, by-laws or other constitutional documents;

  (ii)  
(subject to fulfilment of any conditions set out in Clause 4.1) result in a
breach of any laws or regulations in its jurisdiction of incorporation or of any
order, decree or judgment of any court or any Government Authority; or

  (iii)  
(subject to fulfilment of any conditions set out in Clause 4.1) require the
consent of any person.

17  
Solvency etc.

  17.1.1  
None of the Seller, any other Relevant Sellers or any of the Group Companies is
insolvent under the laws of its jurisdiction of incorporation, organisation
and/or registration, as applicable, or unable to pay its debts as they fall due.

  17.1.2  
There are no proceedings (including passing of resolutions, calling of meetings,
circulation of written resolutions, presentation of petitions and making of
orders) in relation to any compromise or arrangement with creditors or any
winding-up, bankruptcy or other insolvency proceedings concerning the Seller,
any other Relevant Sellers or any Group Company.

  17.1.3  
So far as the Seller is aware, no steps have been taken to enforce any security
over any assets of the Seller, any other Relevant Seller or any Group Company
and, so far as the Seller is aware, no event has occurred to give the right to
enforce such security and no unsatisfied judgment, order or award is outstanding
against any of the Seller, or any other Relevant Seller or any Group Company.

 

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  17.1.4  
So far as the Seller is aware, no application has been made to court for an
administration order in respect of the Seller, any other Relevant Seller or any
Group Company and no notice of an intention to appoint an administrator of the
Seller, any other Relevant Seller or any Group Company has been given or filed.

  17.1.5  
No liquidator, administrator, receiver, receiver and manager, administrative
receiver or similar officer has been appointed in relation to the Seller, any
other Relevant Seller or any Group Company or in relation to the whole or any
part of their respective assets, rights or revenues.

18  
Business Names

   
No Group Company or Group Business carries on business or sells any product or
service under any name other than its corporate name.

 

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Schedule 13
Warranties given by the Purchaser and the other Relevant Purchasers under
Clause 9.4

1  
Authority and Capacity
  1.1  
Incorporation

   
Each of the Purchaser and the other Relevant Purchasers is validly existing and
is a company duly incorporated, organised and/or registered, as applicable,
under the law of its jurisdiction of incorporation, organisation or
registration.

1.2  
Authority to Enter into Agreements

  1.2.1  
Each of the Purchaser, the other Relevant Purchasers and any other members of
the Purchaser’s Group, as applicable, has, at the relevant date of signing, the
legal right and full power and authority to enter into and perform the
Transaction Documents to which it is a party and any other documents to be
executed by it pursuant to or in connection with the Transaction Documents.

  1.2.2  
The documents referred to in paragraph 1.2.1 above will, when executed,
constitute valid and binding obligations on the Purchaser, the other Relevant
Purchasers and any other members of the Purchaser’s Group, as applicable, in
accordance with their respective terms.

  1.2.3  
Entry into and performance by the Purchaser, the other Relevant Purchasers and
any other members of the Purchaser’s Group, as applicable, of any of the
Transaction Documents will not:

  (i)  
cause any such company to breach any provision of its memorandum or articles of
association, by-laws or other constitutional documents; or

  (ii)  
(subject, where applicable, to fulfilment of any conditions set out in Clause
4.1), result in a breach of any laws or regulations in its jurisdiction of
incorporation or of any order, decree or judgment of any court or any Government
Authority.

1.3  
Authorisation

   
Each of the Purchaser, the other Relevant Purchasers and any other members of
the Purchaser’s Group, as applicable, has taken or will have taken by Closing
all corporate action required by it to authorise it to enter into and to perform
any of the Transaction Documents to which it is a party and any other documents
to be executed by it pursuant to or in connection with any of the Transaction
Documents.

2  
Financing

   
At the relevant time for payment, the Purchaser and/or the other Relevant
Purchasers, as applicable, will be able to pay the Purchase Price from their
existing banking facilities and available cash.

 

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3  
Knowledge

   
The Purchaser is not actually aware of any facts, matters or circumstances which
could reasonably be expected to give rise to a claim against the Seller or any
other Relevant Seller for breach of this Agreement or the Tax Indemnity. For the
purposes of this paragraph 3, the actual knowledge of the Purchaser shall be
deemed to comprise the actual knowledge of Yossi Shahar, Shelly Shalev, Yoram
Cohen, Yossi Zidon, Ariana Cohen, Cees Langeveld, Avi Doitchman, Eyal Ginsberg,
Reinhardt Effenberger, Ronit Damri and Herzel Bar Niv.

4  
Solvency etc.

4.1  
None of the Purchaser or any of the other Relevant Purchasers is insolvent under
the laws of its jurisdiction of incorporation, organisation or registration, as
applicable, or unable to pay its debts as they fall due.

4.2  
There are no proceedings (including passing of resolutions, call of meetings,
circulation of written resolutions, presentation of petitions and making of
orders) in relation to any compromise or arrangement with creditors or any
winding-up, bankruptcy or other insolvency proceedings concerning the Purchaser
or any of the other Relevant Purchasers.

4.3  
So far as the Purchaser is aware, no steps have been taken to enforce any
security over any assets of the Purchaser or any of the other Relevant
Purchasers and no event has occurred to give the right to enforce such security
and no unsatisfied judgement, order or award is outstanding against any of the
Purchaser, or any other Relevant Purchaser.

 

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Schedule 14
Seller’s Knowledge
Wolter van Rest
Joan Verhoeven
Keith Clark
Valerie Soulier
Ed Claggett
Fred Bosch
Leon Terlingen
Aimee Zaleski
Dave Swihart
Gunter DePaepe
Bill Lechner
Pete Supron
Chris Crowder
Michael Campagna
Harry Vandeburg
Mike Kelty
David Evans
Arnoud Touw
Paul Boers
Guilhem Pinault
Tom Czajkowski
William Kusey
Ted Piatt
Stephen Squires
Bob Daniels
Dimiter Todorov

 

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Schedule 15
Transaction Documents
Part 1
Supply Agreements
Supply Agreement for Poly-S Products
Supply Agreement for Howden Pro Products
Supply Agreement for Osmocote (and derivative) Products in Charleston
Supply Agreement for Osmocote (and derivative) Products in Heerlen
Supply Agreement for growing media products from Gretna
Supply Agreement for growing media products from Hatfield
Supply Agreement for Bourth Plant Protection Products
Supply Agreement for Temecula Spreaders

 

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Part 2
IP Licence Agreements
Patent and Technology Licence Agreement from OMS Investments, Inc. to the
relevant member of the Purchaser’s Group
Patent and Technology Licence Agreement from the relevant member of the
Purchaser’s Group to the Seller
New Coating Research and Development Collaboration Agreement between OMS
Investments, Inc., the Seller and the relevant member of the Purchaser’s Group
Trade Mark Licence Agreement from OMS Investments, Inc. and The Scotts Company
(UK) Ltd. to the relevant member of the Purchaser’s Group
Trade Mark Licence Agreement from the relevant member of the Purchaser’s Group
to the Seller

 

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Part 3
Other Transaction Documents
Transitional Services Agreement
Tax Indemnity
Patent Assignment
Know-how Assignment
Trade Mark Assignments
Unregistered Intellectual Property Assignment

 

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Part 4
Field of Use Principles (Clause 2.9)

1  
The Purchaser1 can sell Professional Products.

   
“Professional Products” are professional lawn and turf, horticultural,
floricultural and agricultural products including, without limitation,
fertilizer, fertilizer combination products, micro-nutrients, bio-stimulants,
seed, growing media (including, without limitation, peat products, soil
conditioning agents, turf dressings, compost, mulches, combination growing media
and bark), plant foods, wetting agents, plant protection products, pesticides,
herbicides, insecticides, fungicides, repellents, durable applicators and
commercial livestock feed products.

2  
The Seller can sell Consumer Products.

   
“Consumer Products” are (a) consumer lawn and garden products including, without
limitation, plants, flowers, trees and shrubs, fertilizer, fertilizer
combination products, seed, growing media (including, without limitation, peat
products, soil conditioning agents, turf dressings, compost, mulches,
combination growing media and bark), plant foods, wetting agents, plant
protection products, pesticides, herbicides, insecticides, fungicides,
rodenticides, repellents, bird food and durable applicators; and (b) any
products sold or provided: (i) to professional or collegiate sporting fields and
stadiums in the United States and Canada, only for the purposes of supporting
consumer marketing efforts; or (ii) to or by, any lawn, tree, shrub and pest
care service businesses catering mainly to consumers for non-commercial use and
which use any trade marks owned by or licensed to the Seller.

   
For the avoidance of doubt, both Professional Products and those Consumer
Products falling in (a) in the “Consumer Products” definition above, will be
further identified by reference to a combination of certain parameters such as
package size, labelling, advertising, positioning and classification within
store, price and end user target.

To avoid the risk of disputes, there would also be certain limitations in
respect of certain agreements:

3  
SCOTTS trade mark licence: The Purchaser may not sell Scotts-branded products to
any retailers anywhere in the world, except that the Purchaser may sell
Professional Products to: (i) retailers to which Scotts-branded Professional
Products have been sold in the three years before Closing and then only in the
same manner as such Professional Products have been sold in the three years
before Closing; and (ii) Professional Retailers2.

4  
OSMOCOTE trade mark licence: The Purchaser may sell Osmocote-branded
Professional Products (including use of Osmocote as an ingredient) anywhere in
the world except, for five years from Closing, to a specific list of retailers
(see Annex A to this Part 4 of Schedule 15) in Australia, New Zealand, Poland
and France.

 

      1  
Reference to “the Purchaser” is a reference to the Purchaser and the Purchaser’s
Group and reference to “the Seller” is a reference to the Seller and the
Retained Group.
  2  
“Professional Retailer” means any retailer which sells Professional Products and
does not sell more than 5 per cent. of Consumer Products as measured against its
total sales of Professional Products and Consumer Products in any given period.

 

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5  
All trade mark licences/technology licences/supply agreements:

A.  
The Purchaser may not sell branded Professional Products/licensed Professional
Products/supplied Professional Products to potting soil manufacturers, private
label producers and blenders where such products are used as inputs to Consumer
Products in the United States and Canada.

B.  
In Mexico, the Purchaser may not knowingly sell branded Professional
Products/licensed Professional Products/supplied Professional Products to
potting soil manufacturers, private label producers and blenders where such
products are used as inputs to Consumer Products.

C.  
All trade mark licences: Outside the United States, Canada and Mexico, the
Purchaser may sell Professional Products to potting soil manufacturers, private
label producers and blenders anywhere in the world, provided that, if the
end-product is a Consumer Product, it shall not bear any of the licensed marks,
either as a brand or as an ingredient.

Annex A
Osmocote Consumer Retailers

     
France
  Australia/New Zealand
 
   
Gamm Vert
  Bunnings
 
   
Jardiland
  Mitre 10
 
   
Galec
  Taskmaster Hardware
 
   
Bricomarché
  Metcash
 
   
Apex
  Flower Power
 
   
 
  Retail Adventure
 
   
Poland
  TUI Products
 
   
Castorama
  Big-W
 
   
OBI
  Costco
 
   
Leroy Merlin
  Danks
 
   
Praktiker
   
 
   
Auchan
   

 

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Schedule 16
Part 1
Moveable Assets

1  
Nutberry, UK

  1  
Packing plant
    2  
Slootweg Screening Plant
    3  
Daewoo Mega MC160 Loading Shovel
    4  
Workshop Equipment Loading Shovel
    5  
Nutberry Production Upgrade
    6  
Nutberry CGB Expansion
    7  
Dosing pumps Nutberry Compost Plant
    8  
Nutberry Weighbridge wip
    9  
Valco Glue Machine

2  
Nutberry peat bog assets

  1  
Two NEW HOLLAND TV140 Tracked Tractors
    2  
Two Twin Axle Trailers
    3  
Six (TWEDDLE) Tracked Peat Trailers
    4  
FORD 7840 Tracked Tractor
    5  
SUOKONE 0J-1.3CP V-Ditcher
    6  
Grader/Leveller Attachment
    7  
DAEWOO SOLAR SL55 Excavator
    8  
9m Ridger Attachment
    9  
Two VAPO JLK 19-M Spoon Harrows
    10  
VAPO JLK 19-M Spoon Harrows
    11  
8m Chain HarrowsSPOON Harrows
    12  
VAPO JTJ6 8m Miller Attachment
    13  
Single Axle Trailer
    14  
Two Axle Trailer
    15  
Peat Trailer
    16  
HONDA Fourtrax ES Quad Bike
    17  
Workshop Equipment

 

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  18  
Nutberry Peatland Development
    19  
Nutberry Haul Road
    20  
Nutberry Peatland Development
    21  
Nutberry CBG Expansion
    22  
Nutberry Haul Road
    23  
Defibrillator

UK Pro Fixed Assets

3  
Old Moors

                  Plant     Asset     Description   7202       100106    
UK — Creca Moss Road lease
  7202       500463    
DOUGLAS WATER PEATLANDS
  7202       500911    
Peat Bog Nutberry
  7202       500914    
Nutberry land
  7202       500460    
Access Roads Douglas Water

4  
Douglas Water Peatbog

                  Plant     Asset     Description   7218       100232    
Diesel tanks on Moors
  7218       501374    
Douglas Water Diesel Tank

5  
Creca Peatbog

                  Plant     Asset     Description   7220       501066    
Access road creca moss
  7220       501109    
DAEWOO S150 LC-V Excavator
  7220       501110    
VAPO JLF-19M 19m Spoon Harrow Attachment
  7220       501111    
VAPO Harvester
  7220       501112    
VAPO JTJ -6 Miller Attachment
  7220       501113    
9m Ridger Attachment
  7220       501114    
(TWEDDLE) 6m Screw Leveller
  7220       501115    
Chain Harrows
  7220       501116    
NEW HOLLAND TV140 Tracked Tractor
  7220       501117    
Tracked Double Axle Trailer
  7220       501373    
Creca Diesel tank

 

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6  
Nutberry Peatbog

                  Plant     Asset     Description   7221       501291    
Nutberry Haul Road
  7221       501380    
Nutberry Upgrade Additions
  7221       501088    
Two NEW HOLLAND TV140 Tracked Tractors
  7221       501089    
Two Twin Axle Trailers
  7221       501090    
Six (TWEDDLE) Tracked Peat Trailers
  7221       501091    
FORD 7840 Tracked Tractor
  7221       501092    
SUOKONE OJ-1.3.CP V-Ditcher
  7221       501093    
Grader/Leveller Attachmentr
  7221       501095    
DAEWOO SOLAR SL55 Excavator
  7221       501096    
9m Ridger Attachment
  7221       501097    
Two VAPO JLK 19-M Spoon Harrows
  7221       501098    
VAPO JLK 19-M Spoon Harrows
  7221       501099    
8m Chain HarrowsSpoon Harrows
  7221       501100    
VAPO JTJ6 8m Miller Attachment
  7221       501101    
Single Axle Trailer
  7221       501102    
Two Axle Trailer
  7221       501103    
Peat Trailer
  7221       501104    
HONDA Fourtrax ES Quad Bike
  7221       501105    
Workshop Equipment
  7221       501278    
Nutberry Peatland Development
  7221       501377    
Nutberry Diesel tank

 

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7  
Nutberry Factory

                  Plant     Asset     Description   7233       501106    
SLOOTWEG Screening Plant comprising
  7233       501107    
DAEWOO MEGA MC160 Loading Shovel
  7233       501108    
Workshop Equipment Loading Shovel
  7233       100221    
Nutberry Weighbridge
  7233       501059    
Nutberry Factory
  7233       501314    
Nutberry Production Upgrade
  7233       501276    
Defibrillator
  7233       501316    
Nutberry CBG Expansion
  7233       501321    
Dosing pumps Nutberry Compost Plant
  7233       501358    
Nutberry Weighbridge
  7233       501366    
Nutberry Hard Standing

8  
Scotts Poland
     
Digitial projector
     
BENQ PB-7110

9  
South Australia
     
Agriform Tablet Machine Tools

 

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Part 2
General Provisions relating to the Transfer of the Moveable Assets

1  
This Part 2 of this Schedule 16 applies where it has been agreed that a Relevant
Purchaser is to collect Moveable Assets from land which is owned or leased by a
Relevant Seller.

2  
In this Part 2 of this Schedule 16:

   
“Land” means the land owned or leased by the Relevant Seller on which the
Moveable Assets in question are located; and

   
“Rights” means the rights granted to the Relevant Purchaser pursuant to
paragraph 3 of this Part 2 of this Schedule 16.

3  
On the Closing Date or within 12 months from the Closing Date, the Relevant
Purchaser (acting as agent for the Relevant Seller where Moveable Assets are
located on Land which is held by the Relevant Seller pursuant to a lease) may,
by prior arrangement with the Relevant Seller, enter onto the Land in order to
dismantle the Moveable Assets (if required) and remove the Moveable Assets from
the Land.

4  
The Relevant Purchaser shall:

4.1  
comply with any documents, restrictive covenants and other third-party rights
affecting the Land (to the extent that the same are Fairly Disclosed);

4.2  
comply with all relevant planning and other legislation in exercising the Rights
and shall not breach any statutory or regulatory provisions affecting the Land;

4.3  
cause as little inconvenience to the Relevant Seller as practicable in
exercising the Rights;

4.4  
make good all damage caused to the Land by the exercise of the Rights to the
reasonable satisfaction of the Relevant Seller; and

4.5  
indemnify the Relevant Seller against any Losses incurred by the Relevant Seller
as a result of any acts or omissions of the employees, servants or agents of the
Relevant Purchaser in connection with the exercise by the Relevant Purchaser of
the Rights.

5  
Where Moveable Assets are located on Land which is held by the Relevant Seller
pursuant to a lease, the following additional provisions apply:

5.1  
in exercising the Rights the Relevant Purchaser shall comply with the terms of
the lease pursuant to which the Land is held; and

5.2  
without prejudice to the generality of paragraph 4.5, the Relevant Purchaser
shall indemnify the Relevant Seller against any Losses incurred by the Relevant
Seller as a result of a breach by the Relevant Seller of any covenant contained
in the lease pursuant to which the Land is held where such breach is
attributable to the exercise by the Relevant Purchaser of the Rights.

 

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Part 3
General provision relating to the Transfer of the Third-Party Receivables

1  
From Closing, the benefit of the Third-Party Receivables shall be assigned to
the Purchaser, and the Purchaser shall be entitled to invoice, collect and
receive the Third-Party Receivables for its own account.

2  
The Seller shall:

2.1  
at the Purchaser’s request and expense, take such steps as the Purchaser shall
reasonably require to assist the Purchaser to collect the Third-Party
Receivables (including threatening to commence or commencing legal proceedings
for the recovery of any Third-Party Receivables in its name); and

2.2  
account for and pay to the Purchaser on a monthly basis any Third-Party
Receivables paid to it as soon as practicable after and, in any event, within 10
Business Days of receipt, and shall hold all Third-Party Receivables paid to it
on trust for the Purchaser until they are paid.

 

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Schedule 17
Pre-Sale Reorganisation Transactions

1  
Scotts-Sierra Investments, Inc. to be transferred from Scotts-Sierra
Horticulture Products Company to The Scotts Company LLC.

2  
Scotts Italia S.r.l. to transfer its Consumer Business in Italy to a member of
the Retained Group.

3  
Scotts Deutschland GmbH to transfer its partnership interest in Scotts Celaflor
GmbH & Co. KG, Frankfurt am Main, Germany to a member of the Retained Group.

4  
Consumer business packing line to be transferred from Heerlen plant to a member
of the Retained Group.

 

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Schedule 18
Pensions Liability Assumptions

Part 1
Dutch Actuarial Methodology and Assumptions
This Part 1 of Schedule 18 refers to the Dutch Pension Scheme.

1  
Projected benefit obligation in relation to the Dutch Pension Scheme as at the
Valuation Date (“Interim Dutch PBO”)

   
An actuarial valuation will be performed by or on behalf of the Seller on the
Valuation Date to determine the Interim Dutch PBO.

2  
Assumptions to be used in the valuation of the Interim Dutch PBO

2.1  
The financial and demographic assumptions to be used in the valuation of the
Interim Dutch PBO will be the same as the assumptions as stated in the FAS87
disclosures of 14 October 2010 and the letter of 21 September 2010 of Towers
Watson to Scotts International B.V. contained at document 10.9.172 of the Data
Room, save that the Discount Rate and the expected return on asset assumptions
will be determined as at the Valuation Date on the basis of the same methodology
as in the FAS87 disclosures of 14 October 2010 and the letter of 21
September 2010 of Towers Watson to Scotts International B.V. but reflecting
market interest rate developments between 30 September 2010 and the Valuation
Date. The actual valuation of the Interim Dutch PBO as at the Valuation Date
will include the actual determination of service cost, interest cost and benefit
payments.

2.2  
The financial and demographic assumptions referred to in paragraph 2.1 of this
Part 1 of Schedule 18 are as follows:

ECONOMIC ASSUMPTIONS:

              Assumption as at 30   Assumption as at the     September 2010  
Valuation Date
Discount Rate
  5.02%   To be determined at the
Valuation Date in
accordance with para 2.3,
below
Expected Long-Term Rate of Return
  5.02%   To be determined at the
Valuation Date in
accordance with para 2.3,
below
Salary Increases
  3.0%   3.0%
Social Security Increases
  2.0%   2.0%
Annual pension adjustments — former employees that became deferred participants
before 1 January 2007
  2% (2011 – 2013) / 0% thereafter   2% (2011 – 2013) / 0% thereafter
Annual pension adjustments — active participants between 1 January 2007 and 31
December 2010
  2.5%   2.5%
Annual pension adjustments — active participants between 1 January 2007 and 31
December 2010, but who became former participants during this period
  2.0%   2.0%

 

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DEMOGRAPHIC ASSUMPTIONS AS AT 30 SEPTEMBER 2010 AND THE VALUATION DATE

          Assumption
Retirement Age
  65 
Early retirement
  Could be ignored, assuming actuarially neutral
Mortality
  AG Gen. Table 2010-2060 setback -2/-2
Disability
  WGA 2000-2003, sector specific
Turnover
  8% at age 25, declining linearly to 2% from 40 onwards

2.3  
In calculating the Discount Rate and expected long term rate of return as at the
Valuation Date the Seller shall ensure that the input for the Towers Watson
“Global Rate Link” tool will be based on actual census and insurance data as at
the Valuation Date.

3  
Market value assets of the Dutch Pension Scheme as the Valuation Date (“Interim
Dutch MVA”)

   
The Interim Dutch MVA shall be calculated by or on behalf of the Seller on the
basis of the same methodology and assumptions as stated in the FAS87 disclosures
of 14 October 2010 and the letter of 21 September 2010 of Towers Watson to
Scotts International B.V. contained at document 10.9.172 of the Data Room save
that the Discount Rate and expected return on asset assumptions shall be
determined as at the Valuation date in accordance with paragraphs 2.1, 2.2 and
2.3 of this Part 1 of Schedule 18, above.

4  
Adjustment of Interim Dutch MVA for indexation depots as at the Valuation Date

   
The total Interim Dutch MVA shall be increased in line with the actual market
value of the indexation depots (nr 594846-D-01 and 445379-C-01) as at the
Valuation Date, and the Seller shall use its reasonable endeavours to procure
that such information is provided by AEGON (the insurer) to the Purchaser as
soon as reasonably practicable following the Valuation Date.

5  
Information to be provided by Seller

5.1  
The Seller shall use its reasonable endeavours to procure that AEGON provides to
the Purchaser as soon as reasonably practicable following the Valuation date,
the census and insurance data necessary for a valuation at the Valuation Date
(“Census Data”).

5.2  
An actuarial calculation will be performed by or on behalf of the Seller as soon
as reasonably practicable following Closing to determine the roll forward of the
Interim Dutch PBO and Interim Dutch MVA from the Valuation Date to Closing in
accordance with this Part 1 of Schedule 18. The Seller will provide the results
of the calculation (the “Seller’s Calculation (Dutch)”) to the Purchaser and the
Purchaser must confirm their agreement of the calculation within 30 days. If the
Purchaser is unable to agree the Seller’s Calculation (Dutch) will be referred
to an independent actuary agreed by the Seller and the Purchaser, or if they
fail to agree, an independent actuary shall be appointed by the President of the
Institute and Faculty of Actuaries in the United Kingdom. The independent
actuary will be asked to review the calculation and certify the Dutch PBO and
Dutch MVA roll forward to Closing in accordance with this Part 1 of Schedule 18.
The independent actuary shall act as an expert not an arbitrator. A certificate
given by independent actuary shall be conclusive and binding in the absence of
manifest error. His costs shall be borne equally by the Seller and the
Purchaser.

 

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6  
Projected Benefit Obligation as at Closing (“Dutch PBO”)

   
The Dutch PBO is calculated on a roll forward basis based on the Interim Dutch
PBO and assumptions as stated in the FAS87 disclosures of 14 October 2010 save
that the discount rate and expected long-term rate of return will be equal to
the Discount Rate.

7  
Methodology roll forward Dutch PBO

7.1  
The Interim Dutch PBO is adjusted for x months accrual of pension benefits by
adding x/12th of the annual Service cost for FY 2011 as determined at the
Valuation Date.

7.2  
The Interim Dutch PBO is adjusted for the actual amount of benefits paid between
the Valuation Date and Closing.

7.3  
The Interim Dutch PBO is adjusted for x months of interest accrual by adding
x/12th of the annual interest for FY 2011 as determined at the Valuation Date.

7.4  
In each of paragraphs 7.1 and 7.3 above, “x” shall equal the number of whole
calendar months from the Valuation Date to Closing (for example if Closing
occurs on 28 February 2011, x would equal 2).

8  
Adjustment for assumption changes

8.1  
The Dutch PBO is calculated using the Discount Rate and will not be adjusted for
market interest rate developments between the Valuation Date and Closing.

8.2  
All other assumptions are to be treated as being unchanged and therefore
unadjusted.

9  
Market Value Assets as at Closing (“Dutch MVA”)

   
The Dutch MVA as at Closing is calculated on a roll forward basis based on the
Interim Dutch MVA.

10  
Methodology roll forward Dutch MVA

10.1  
The roll forward calculation is based on the Interim Dutch MVA but excluding the
indexation depots.

10.2  
The Interim Dutch MVA is adjusted for x months accrual of pension benefits
secured with AEGON (the insurer) by adding x/12th of the annual service cost for
FY 2011, as determined at the Valuation Date.

10.3  
The Interim Dutch MVA is adjusted for the actual amount of benefits paid between
the Valuation Date and Closing.

10.4  
The Interim Dutch MVA is adjusted for x months of interest accrual by adding
x/12th of the annual interest, for FY 2011, as determined at the Valuation Date.

 

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10.5  
In each of paragraphs 10.2 and 10.4 above “x” equals the number of whole
calendar months from the Valuation Date to Closing (for example if Closing
occurs on 28 February 2011, x would equal 2).

11  
Adjustment for assumption changes

11.1  
The Dutch MVA is calculated using the Discount Rate and will not be adjusted for
market interest rate developments between the Valuation Date and Closing.

11.2  
All other assumptions are to be treated as being unchanged and therefore
unadjusted.

12  
Adjustment of Interim Dutch MVA for indexation depots as at Closing

   
The total Dutch MVA as at Closing is increased with the actual market value of
the indexation depots (nr 594846-D-01 and 445379-C-01) as at Closing, provided
by AEGON (the insurer). Additional contributions due by the Seller for
indexations up to and including Closing should be paid and included in the Dutch
MVA between the Valuation Date and Closing and should be taken into account (and
if not paid for should be included in the valuation of the liabilities).

13  
Adjustment for Exchange rate

   
The exchange rate for the purpose of this Part 1 of Schedule 18 shall be
adjusted to reflect the actual exchange rate at Closing as reported in the
Financial Times.

 

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Part 2
German Actuarial Assumptions
This Part 2 of Schedule 18 refers to the German Pension Scheme.

1  
Projected benefit obligation in relation to the German Pension Scheme as at the
Valuation Date (“Interim German PBO”)

   
An actuarial valuation will be performed by or on behalf of the Seller on the
Valuation Date to determine the Interim German PBO.

2  
Assumptions to be used in the valuation of the Interim German PBO

2.1  
The financial and demographic assumptions to be used in the valuation of the
Interim German PBO will be the same as the assumptions as stated in the FAS87
disclosures of 14 October 2010 contained at document 10.9.172 of the Data Room,
save that the Discount Rate and the expected return on asset assumptions will be
determined as at the Valuation Date on the basis of the same methodology as in
the FAS87 disclosures of 14 October 2010, but reflecting market interest rate
developments between 30 September 2010 and the Valuation Date. The actual
valuation of the Interim German PBO as at the Valuation Date will include the
actual determination of service cost, interest cost and benefit payments.

2.2  
The financial and demographic assumptions referred to in paragraph 2.1 of this
Part 2 of Schedule 18 are as follows:

ECONOMIC ASSUMPTIONS:

              Assumption as at 30   Assumption as at the     September 2010  
Valuation Date
Discount Rate
  4.58%   To be determined at the
Valuation Date
in accordance with para 2.3
below
Expected Long-Term Rate of Return
  5.00%   To be determined at the
Valuation Date
in accordance with para 2.3
below
Salary Increases
  3.0%   3.0%
Social Security Contribution Ceiling Increases
  3.0%   3.0%
Annual pension adjustments after retirement
  2.0%   2.0%

DEMOGRAPHIC ASSUMPTIONS AS AT 30 SEPTEMBER 2010 AND THE VALUATION DATE

          Assumption
Retirement Age
  63 years old
Mortality
  Heubeck 2005 G
Disability
  Heubeck 2005 G

 

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Turnover
Decreasing by age (see below):

          Age   Turnover rate  
20
    7.15 %
25
    5.00 %
30
    3.90 %
35
    3.20 %
40
    2.65 %
45
    1.80 %
50
    0.80 %
55
    0.30 %
60
    0.00 %

2.3  
In calculating the Discount Rate and expected long term rate of return as at the
Valuation Date the Seller shall ensure that the input for the Towers Watson
“Global Rate Link tool” will be based on actual census and insurance data as at
the Valuation Date.

3  
Market value assets of the German Pension Scheme as at the Valuation Date
(“Interim German MVA”)

   
The Interim German MVA shall be calculated by or on behalf of AXA
Lebensversicherung AG. on behalf of the Seller on the basis of the same
methodology and assumptions as stated in the FAS87 disclosures of 14
October 2010 contained at document 10.9.172 of the Data Room save that the
Discount Rate and expected return on asset assumptions shall be determined as at
the Valuation Date in accordance with paragraphs 2.1, 2.2 and 2.3 of this Part 2
of Schedule 18, above.

4  
Information to be provided by Seller

4.1  
The Seller shall use its reasonable endeavours to procure that AXA
Lebensversicherung AG. provides to the Purchaser as soon as reasonably
practicable following the Valuation Date, the census and insurance data
necessary for a valuation at the Valuation Date (“Census Data”).

4.2  
An actuarial calculation will be performed by or on behalf of the Seller as soon
as reasonably practicable following Closing to determine the roll forward of the
Interim German PBO and Interim German MVA from the Valuation Date to Closing in
accordance with this Part 2 of Schedule 18. The Seller will provide the results
of the calculation (the “Seller’s Calculation (German)”) to the Purchaser and
the Purchaser must confirm their agreement of the calculation within 30 days. If
the Purchaser is unable to agree, the Seller’s Calculation (German) will be
referred to an independent actuary agreed by the Seller and the Purchaser, or if
they fail to agree, an independent actuary shall be appointed by the President
of the Institute and Faculty of Actuaries in the United Kingdom. The independent
actuary will be asked to review the calculation and certify the German PBO and
German MVA roll forward to Closing in accordance with this Part 2 of
Schedule 18. The independent actuary shall act as an expert not an arbitrator. A
certificate given by independent actuary shall be conclusive and binding in the
absence of manifest error. His costs shall be borne equally by the Seller and
the Purchaser.

 

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5  
Projected Benefit Obligation as at Closing (“German PBO”)

   
The German PBO is calculated on a roll forward basis based on the Interim German
PBO and assumptions as stated in the FAS87 disclosures dated 14 October 2010
save that the discount rate will be equal to the Discount Rate.

6  
Methodology roll forward German PBO

6.1  
The Interim German PBO is adjusted for x months accrual of pension benefits by
adding x/12th of the annual Service cost for FY 2011 as determined at the
Valuation Date.

6.2  
The Interim German PBO is adjusted for the actual amount of benefits paid
between the Valuation Date and Closing.

6.3  
The Interim German PBO is adjusted for x months of interest accrual by adding
x/12th of the annual interest for FY 2011 as determined at the Valuation Date.

6.4  
In each of paragraphs 6.1 and 6.3 above “x” shall equal the number of whole
calendar months from the Valuation Date to Closing (for example if Closing
occurs on 28 February 2011, x would equal 2).

7  
Adjustment for assumption changes

7.1  
The German PBO is calculated using the Discount Rate and will not be adjusted
for market interest rate developments between the Valuation Date and Closing.

7.2  
All other assumptions are assumed to be unchanged and therefore unadjusted.
  8  
Market Value Assets as at Closing (“German MVA”)
     
The German MVA is calculated on a roll forward basis based on the Interim German
MVA.
  9  
Methodology roll forward German MVA

9.1  
The Interim German MVA is adjusted for x months of interest accrual by adding
x/12th of the annual expected return for FY 2011 as determined at the Valuation
Date.

9.2  
The Interim German MVA is adjusted for the actual amount of benefits paid
between the Valuation Date and Closing.

9.3  
The Interim German MVA is adjusted for the actual amount of contributions paid
by the Seller between the Valuation Date and Closing.

9.4  
In paragraph 9.1 above “x” shall equal the number of whole calendar months from
the Valuation Date to Closing (for example if Closing occurs on 28
February 2011, x would equal 2).
  10  
Adjustment for assumption changes
     
Not applicable.
  11  
Adjustment for Exchange rate

   
The exchange rate for the purpose of this Schedule 18 shall be adjusted to
reflect the actual exchange rate at Closing as reported in the Financial Times.

 

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Schedule 19
Product Indemnities
Part 1
Indemnities

1  
Definitions

   
For the purposes of this Schedule 19:

   
“Asbestos” means all or any of the following naturally occurring minerals,
chrysotile, amosite, crocidolite, anthophyllite, tremolite and actinolite,
richterite, winchite and/or any other amphibole mineral;

   
“Asbestos Claims” means any legal proceedings, actions, or suits for damages or
any other legal remedy arising from (a) the alleged exposure prior to Closing of
any employee or contractor to Asbestos during the manufacturing of any product
by any Bloom Entity at any facility operated by such Bloom Entity, or (b) the
alleged exposure of any person at any time to Asbestos contained in products
manufactured, distributed, sold or supplied by any Bloom Entity prior to
Closing, including, for the avoidance of doubt, the Little Claim;

   
“Asbestos Losses” means any Losses suffered or incurred by any Indemnified
Person in connection with any Asbestos Claim;

   
“Bloom Entity” means Scotts-Sierra Horticultural Products Company and
Scotts-Sierra Crop Protection Company;

   
“Debtors” means the debtors, debtors-in-possession, or their bankruptcy estates
in the W.R. Grace Bankruptcy Case;

   
“Dorantes Claim” means the legal proceedings brought by the estate of Victorino
Dorantes (deceased), in respect of the exposure of Victorino Dorantes to various
chemicals allegedly contained in fertilizers and pesticide products, including,
but not limited to, Oscmocote 18-6-12, 16-4-16, and Agriform 18-6-12, as listed
in Part 2 of this Schedule 19;

   
“Emissions Claim” means the legal proceedings brought by Sean Kelley in respect
of injuries suffered as a result of his alleged exposure to emissions emanating
from the Charleston facility prior to Closing as listed in Part 2 of this
Schedule 19;

   
“Emissions Losses” means any Losses suffered or incurred by any Indemnified
Person in connection with the Emissions Claim;

   
“EPA Claim” means any legal or regulatory proceedings, actions, or suits for
damages, fines or penalties against any Bloom Entity arising from any EPA
Matters;

   
“EPA Losses” means Losses suffered or incurred by any Indemnified Person
pursuant to an EPA Claim and resulting directly from the subject matter of any
of the EPA Matters;

   
“EPA Matters” means:

  (i)  
the investigation commenced in April 2008 by the US Environmental Protection
Authority (“U.S. EPA”) in connection with a former employee of the Seller’s
Group who was alleged to have deliberately circumvented the Seller’s Group
policies and U.S. EPA regulations under Federal Insecticide, Fungicide and
Rodenticide Act, as amended by failing to obtain valid registrations for certain
products of the Seller’s Group and/or causing certain invalid product
registration forms to be submitted to regulators;

 

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  (ii)  
the civil and criminal investigations by the U.S. EPA and the U.S. Department of
Justice (the “U.S. DOJ”) into the Seller’s Group pesticide product registration
issues and related allegations and/or investigations arising under federal or
state pesticide registration laws and regulations;

  (iii)  
the issue of a request for information to the Seller’s Group in June 2008 by the
California Department of Pesticide Regulation (“CDPR”) involving certain
products of the Seller’s’ Group that are the subject of the U.S. EPA
investigation referred to in (i) above; or

  (iv)  
any investigation by CDPR in relation to the matters referred to in paragraphs
(i) — (iii) above;

   
“Indemnified Persons” means the Purchaser, ICL North America Inc and the Bloom
Entities;

   
“Indemnity Claim” means any Pre-Existing Indemnity Claim and/or New Indemnity
Claim as the case may be;

   
“Indemnity Claim Notice” means any notice required under paragraph 6 setting out
to the extent that such information is available at the time brief particulars
of any New Indemnity Claim, including, without limitation, a copy of the
document evidencing the claim, details of the claimant, nature and quantum of
the claim, the identity of the claimant’s advisers and the status of the claim;

   
“Indemnity Losses” means Asbestos Losses and/or Emissions Losses and/or Product
Losses as the case may be;

   
“Joint Plan of Reorganisation” means the Debtors’ First Amended Joint Plan of
Reorganization under Chapter 11 of the Bankruptcy Code W.R. Grace & Co. et al.,
the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI
Future Claimants Representative, and the Official Committee of Equity Security
Holders Dated 27 February 2009, including all exhibits thereto, or any other
plan of reorganisation of the Debtors, as the same may be amended from time to
time;

   
“Little Claim” means the legal proceedings brought by brought by William Mark
Little acting as the executor of the estate of William R. Little (“decedent”) in
respect of injuries suffered as a result of his decedent’s alleged exposure to
asbestos prior to Closing as listed in Part 2 of this Schedule 19;

   
“New Indemnity Claim” means an Asbestos Claim and/or any Product Claim (as
relevant) that is not listed in Part 2 of this Schedule 19 or any EPA Claim;

   
“Pre-Existing Indemnity Claim” means the Emissions Claim and/or the Walsh Claim
and/or the Dorantes Claim and/or the Little Claim listed in Part 2 of this
Schedule 19 as the case may be;

   
“Product Claim” means any legal proceedings, actions or suits for damages or any
other legal remedy which is commenced, or in respect of which an intention to
commence such is notified in writing to any Bloom Entity or any other member of
the Seller’s Group by any person on or after the date of the Offer Letter and
before Closing and which arises from any personal injury, illness and/or death
alleged by any person in whole or part to relate to any contact with, use of or
exposure to at any time any product or any constituent of any product
manufactured, distributed, sold or supplied by any Bloom Entity prior to Closing
including without limitation the Walsh Claim and the Dorantes Claim;

 

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“Product Losses” means any Losses suffered or incurred by any Indemnified Person
in connection with any Product Claim;

   
“Walsh Claim” means the legal proceedings brought by Richard Thomas Walsh,
executor of the estate of Thomas J Walsh (deceased) in respect of the exposure
of Thomas J Walsh to Calo-Clor/Calo-Gran and/or Fungo and/or K-O-G prior to
Completion as listed in Part 2 of this Schedule 19;

   
“W.R. Grace Bankruptcy Case” means the W.R. Grace & Co. bankruptcy case filed
under Chapter 11 of the United States Bankruptcy Code in the United States
District Court for Delaware, In re W.R. Grace & Co., et al., No. 01-01139
(JKF) on 4 April, 2001;

   
“W.R. Grace Settlement Agreement” means the Settlement Agreement made and
entered into as of August 2009 by the Seller, on behalf of itself and on behalf
of its affiliates and subsidiaries and the Debtors as approved by that certain
Order Pursuant to Sections 105, 363, 1107 and 1108 of the Bankruptcy Code and
Rule 2002, 6004, 9014 and 9019 of the Federal Rules of Bankruptcy Procedure
Approving Settlement Agreement by and between W.R. Grace & Co., et al. and The
Scotts Company LLC entered on 9 September, 2009 (Bankruptcy Case Docket
No. 23203); and

   
“WRG Trust” means the WRG Asbestos PI Trust established pursuant to the Joint
Plan of Reorganisation.

2  
Asbestos Indemnity

   
Subject to the other provisions of this Schedule 19 and Clauses 1, 10.4, 10.6,
10.8.2, 10.12, 10.13, 14 and 16 of this Agreement, the Seller shall indemnify,
keep indemnified, defend and hold harmless the Purchaser (for and on behalf of
itself and each other Indemnified Person) from and against any Asbestos Losses
PROVIDED THAT:

2.1  
the Seller shall only be obliged to make any payment under this paragraph 2 to
the extent that any Indemnified Person has actually paid out an amount equal to
such Asbestos Loss;

2.2  
the Seller shall not be obliged to pay any amount to the Purchaser pursuant to
this paragraph 2 in connection with any Asbestos Losses suffered by an
Indemnified Person if such Indemnified Person does not form part of the
Purchaser’s Group at the time of notification of the relevant Asbestos Claim in
accordance with paragraph 6 below; and

2.3  
the Seller shall not be liable in relation to any claim under this paragraph 2
in respect of any Asbestos Claim that is a New Indemnity Claim unless an
Indemnity Claims Notice in respect thereof is given prior to the fifteenth
anniversary of Closing.

3  
Emissions Indemnity

   
Subject to the other provisions of this Schedule 19 and Clauses 1, 10.4, 10.6,
10.8.2, 10.12, 10.13, 14 and 16 of this Agreement, the Seller shall indemnify,
keep indemnified, defend and hold harmless the Purchaser (for and on behalf of
itself and each other Indemnified Person) from and against any Emissions Losses
PROVIDED THAT:

3.1  
the Seller shall only be obliged to make any payment under this paragraph 3 to
the extent that any Indemnified Person has actually paid out an amount equal to
such Emissions Loss; and

 

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3.2  
the Seller shall not be obliged to pay any amount to the Purchaser pursuant to
this paragraph 3 in connection with any Emissions Losses suffered by an
Indemnified Person if such Indemnified Person does not form part of the
Purchaser’s Group at the time an amount equal to such Emissions Loss is actually
paid out.

4  
Product Indemnity

   
Subject to the other provisions of this Schedule 19 and Clauses 1, 10.6, 10.8.2,
10.12, 10.13, 14 and 16 of this Agreement, the Seller agrees to notify the
Purchaser prior to Closing of any Product Claim other than the Dorantes Claim
and the Walsh Claim and the Seller shall indemnify, keep indemnified, defend and
hold harmless the Purchaser (for and on behalf of itself and each other
Indemnified Person) from and against any Product Losses PROVIDED THAT:

4.1  
the Seller shall only be obliged to make any payment under this paragraph 4 to
the extent that any Indemnified Person has actually paid out an amount equal to
such Product Loss; and

4.2  
the Seller shall not be obliged to pay any amount to the Purchaser pursuant to
this paragraph 4 in connection with any Product Losses suffered by an
Indemnified Person if such Indemnified Person does not form part of the
Purchaser’s Group at the time of notification of the relevant Product Claim in
accordance with paragraph 6 below.

5  
EPA Indemnity

   
Subject to the other provisions of this Schedule 19 and Clauses 1, 10.6, 10.8.2,
10.12, 10.13, 14 and 16 of this Agreement, the Seller shall indemnify, keep
indemnified, defend and hold harmless the Purchaser (for and on behalf of itself
and each other Indemnified Person) from and against any EPA Losses PROVIDED
THAT:

5.1  
the Seller shall only be obliged to make any payment under this paragraph 5 to
the extent that any Indemnified Person has actually paid out an amount equal to
such EPA Losses; and

5.2  
the Seller shall not be obliged to pay any amount to the Purchaser pursuant to
this paragraph 5 in connection with any EPA Losses suffered by an Indemnified
Person if such Indemnified Person does not form part of the Purchaser’s Group at
the time an amount equal to such EPA Loss is actually paid out.

6  
Notification of New Indemnity Claims and Assistance

6.1  
As a condition precedent to the Seller’s obligations under paragraph 2, and in
all other instances, as a term of this Agreement the Purchaser shall:

  6.1.1  
where a New Indemnity Claim has been served on, or formally notified as part of
the legal process to, any Indemnified Person, serve the Seller with an Indemnity
Claim Notice within 10 Business Days of service on or receipt of notification of
such claim by the relevant Indemnified Person; or

  6.1.2  
where any Indemnified Person has received written notice of intention to
commence a New Indemnity Claim, serve the Seller with an Indemnity Claim Notice
as soon as reasonably practicable (and in any event within 30 days of receipt by
the relevant Indemnified Person of such written notice); and

 

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6.2  
As a condition precedent to the Seller’s obligations under paragraphs 2, 3, 4
and 5 the Purchaser shall (and shall procure that each Indemnified Person shall)
at all times act reasonably in promptly providing the Seller and its legal and
professional advisers with access to premises and personnel (who shall be made
available to attend meetings, participate in discovery or depositions and to
appear as witnesses on behalf of any of the Seller and/or any Group Company
before any tribunal or court) and the right to examine and copy or photograph
all data, records, reports, documents, correspondence and other information in
the possession, custody or under the control of the Purchaser or any other
Indemnified Person relating to any Indemnity Claims.

7  
Conduct of Claims

7.1  
Subject to paragraph 7.2 below, the parties agree that the Seller shall have
full control over the conduct of all Indemnity Claims and, upon receipt of an
Indemnity Claim Notice pursuant to paragraph 6.1 above in respect of any New
Indemnity Claim and in any event in respect of any Pre-Existing Indemnity Claim,
the Seller shall assume the conduct of such Indemnity Claim and shall at its own
expense take such action (including retention of counsel) as it shall deem
necessary to avoid, dispute, deny, defend, resist, appeal, compromise, settle or
contest such Indemnity Claim, PROVIDED THAT the Seller shall not compromise or
settle any Indemnity Claim or accept criminal liability by or on behalf of any
Indemnified Person without the consent of the Purchaser, such consent not to be
unreasonably withheld or delayed. The Seller shall have the right at its option
to make counterclaims or claims against third-parties which may arise out of any
Indemnity Claim in the name of and on behalf of the relevant Indemnified Person.
The Seller shall, if so requested by the Purchaser in writing, keep the
Purchaser informed as to the progress of any such Indemnity Claim and shall
consult with the Purchaser in relation to any material steps in such Indemnity
Claim.

7.2  
In relation to any EPA Claim, the Seller shall only have conduct under paragraph
7.1 above where the Seller has accepted liability under the indemnity in
paragraph 5.1 above. If the EPA notifies the Seller of the intent to bring as
part of any EPA Claim any criminal proceeding against any employee, director or
other officer, agent or consultant of any Indemnified Person or requests that
information be provided by any such individual in relation to any allegation of
any criminal conduct by such individual, then the Seller shall notify the
relevant Indemnified Person as soon as practicable and the Indemnified Person
shall have conduct of such criminal proceeding.

7.3  
If the EPA notifies the Seller of any EPA Claim of direct and prospective
relevance to Professional Products, the Seller shall as soon as practicable
notify the relevant Indemnified Person. Nothing set forth herein shall be
deemed, construed to constitute or require a waiver of the attorney-work product
protection or attorney-client privilege of the Seller.

7.4  
The Seller has notified the Purchaser of the identity of any counsel and shall
notify the Purchaser of the identity of other experts retained at Closing in
relation to any Pre-Existing Indemnity Claim and in the event that the Seller
wishes to appoint any counsel different to such counsel or other experts in
respect of any Pre-Existing Indemnity Claim or any New Indemnity Claim, it shall
(i) consult with and pay reasonable regard to the views of the Purchaser in
relation to such appointment of any lead counsel; and (ii) notify the Purchaser
of the identity of any such other experts or any such counsel appointed as local
counsel.

 

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7.5  
The Purchaser shall co-operate fully (and to procure the full co-operation of
the other Indemnified Parties) with the Seller in any action taken by the Seller
under paragraph 7.1 above and, as a condition precedent to the Seller’s
obligations under paragraphs 2, 3, 4 and 5, the Purchaser shall not (and shall
procure that no other Indemnified Person shall) make any admission of liability
by or on behalf of any Indemnified Person nor compromise, dispose of or settle
any Indemnity Claim or pursue any claims against any third-party or take any
other action which could potentially impact the Seller’s ability to defend any
Indemnity Claim.

7.6  
The Seller agrees to comply with the Purchaser’s requests to take reasonable
steps to reduce the Purchaser’s and the other Indemnified Person’s indirect
costs and to reimburse the Purchaser all costs incurred by the Purchaser or any
Indemnified Person arising out of compliance by the Purchaser with its
obligations under paragraphs 6.2 and 7.4 above.

7.7  
If the Seller pays an amount in discharge of any Indemnity Claim and the
Purchaser or any other Indemnified Person subsequently recovers (whether by
payment, discount, credit, relief or otherwise) from a third-party a sum which
is referable to the subject matter of the Indemnity Claim and which would not
otherwise have been received by the Purchaser or such Indemnified Person, the
Purchaser shall procure that the Seller is reimbursed less any reasonable costs
and expenses incurred in obtaining such recovery and less any Taxation
attributable to the amount reimbursed.

8  
Mitigation

   
The Purchaser shall procure that all reasonable steps are taken and all
reasonable assistance is given to mitigate any Asbestos Losses, Emissions
Losses, Product Losses and/or EPA Losses which, in the absence of mitigation
could reasonably be expected to increase such a Loss provided that this
paragraph 8 shall not oblige the Purchaser to incur any costs, expense, loss or
liability which will not be recovered by the Purchaser under paragraphs 2, 3, 4
and 5 as relevant and further provided in the case of EPA Losses that the
obligation to mitigate shall not extend to the taking of action that could
reasonably be expected to damage the reputation of the Purchaser in the eyes of
any relevant Government Authority.

9  
W.R. Grace Settlement Agreement

9.1  
Notwithstanding any other provision in this Agreement, as between the
Purchaser’s Group and the Seller’s Group, neither the Purchaser nor any member
of the Purchaser’s Group shall have any claim or right to any recoveries or
payments due to or obtained by the Seller, or by any member of the Seller’s
Group or by any Bloom Entity, from the Debtors or from the WRG Trust, including,
but not limited to, any recoveries or payments obtained in accordance the W.R.
Grace Settlement Agreement.

9.2  
In the event that a Bloom Entity receives any payment from the Debtors or from
the WRG Trust following Closing, the Purchaser shall procure that the Seller is
reimbursed an amount equivalent to the payment received.

9.3  
The foregoing limitations of the Purchaser’s Group’s rights to any claims,
payments or recoveries under paragraph 9.1 and the requirement to reimburse
under paragraph 9.2 above shall not apply in the event of the Seller’s Group’s
breach of the indemnity obligations contained at paragraph 2 of this Schedule or
where such indemnity obligations have expired.

 

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10  
Maintenance of Privilege and Confidentiality

10.1  
The Purchaser shall not (and shall procure that no Indemnified Person shall)
disclose information concerning any Indemnity Claim or any information relating
to this Schedule 19 to any third-party without the prior written consent of the
Seller (such consent not to be unreasonably withheld), except where such
disclosure is required by law, by court order or by any state, federal, or other
relevant agency or authority. If disclosure is or is likely to be so required,
prior to making any such disclosure, the Purchaser shall promptly notify the
Seller of the requirement for disclosure in sufficient time to permit the Seller
to contest such disclosure at the Seller’s cost if it so elects or otherwise to
determine in consultation with the Purchaser the timing and content of such
disclosure.

10.2  
The Purchaser shall (and shall procure that the Indemnified Persons shall)
co-operate with the Seller and comply with the Seller’s reasonable requirements
to maintain confidentiality and legal privilege in relation to any information
or document relating to any Indemnity Claims including information relating to
this Schedule 19.

 

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Part 2
Details of Pre-Existing Claims
The Dorantes Claim
Estate of Victorino Dorantes vs. The Scotts Company LLC, The Scotts-Sierra
Horticultural Products Company, Grace-Sierra and others in California Superior
Court, San Francisco County served on 17 September 2009.
The Emissions Claim
Sean Kelly, Pltfs. vs. Scotts-Sierra Horticultural Products Company, et al
including Scotts Miracle-Gro Company. Case # 1 0CP1 0353 in the Charleston
County Court of Common Pleas, SC served on 22 January 2010.
The Little Claim
William Mark Little, Executor of the Estate of William R. Little vs. The Scotts
Company LLC, Scotts-Sierra Horticultural Products Company and others. Case
No. 541787 in the Court of Common Pleas, Cuyahoga County, Ohio served on 18
March 2007.
The Walsh Claim
Richard Thomas Walsh, Executor of the Estate of Thomas J. Walsh, deceased vs.
Scotts-Sierra Crop Protection Company and Others in the Court of Common Pleas of
Allegheny County Pennsylvania, Civil Division.

 

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Schedule 20
QAD Acceptance Process

1  
As at the date of the Offer Letter, the Seller has drafted test script
templates, schedules and standards which together shall regulate the acceptance
process for the Deliverables. From the date of the Offer Letter and before the
commencement of testing (and in any event before the Closing Date) the Seller
shall refine these documents (the “Relevant Documents”) in association with the
Purchaser as set out below:

  (i)  
within 10 Business Days of receiving the Relevant Documents, the Purchaser shall
review them and may submit written comments for suggested changes or additions
to the Relevant Documents to the Seller;

  (ii)  
in its sole discretion and acting reasonably, the Seller shall incorporate
reasonable changes or reasonable additions suggested by the Purchaser. The
Seller shall discuss with the Purchaser those changes or additions which the
Seller does not feel are appropriate;

  (iii)  
the Seller and the Purchaser shall discuss such issues in good faith, and in a
timely manner, to allow the Seller to finalise the Relevant Documents and
criteria for accepting the Deliverables (and the QAD system) (“Acceptance
Criteria”) prior to the commencement of any material testing of the QAD system;
and

  (iv)  
the finalised form of the Relevant Documents shall be made available to the
Purchaser five Business Days before the commencement of any material testing of
the QAD system.

2  
The Relevant Documents shall set out in sufficient detail to perform the
necessary tests for each Deliverable including:

  (i)  
acceptance test templates;

  (ii)  
acceptance test scenarios;

  (iii)  
test plans;

  (iv)  
dates for tests and associated administrative details such as attendees and
timings; and

  (v)  
all phases of testing, including systems testing in the DEV and QA environments,
integration testing, end-to-end testing and user acceptance testing (where user
lists shall be approved by Wolter van Rest (or any person who may succeed him in
his role within the Group in relation to the transition, implementation and
operation of the QAD System).

3  
Where necessary, QAD shall also be installed in selected third-party
warehouse/tolling providers. These providers shall be trained by the team
implementing the QAD system as part of the QAD implementation process to conduct
business with the Purchaser on the QAD platform. The applicable test scripts
shall include scenarios to validate the appropriate functionality for the
relevant type of transactions with such third-parties.

 

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4  
For the purposes of the QAD implementation, the QAD system shall be accepted by
the Purchaser when (i) the Deliverables have met the Acceptance Criteria and
(ii) One Month’s Successful Financial Closing (defined in paragraph (B) below)
has been met, (collectively, “Acceptance”) as set out below:

  (A)  
Acceptance testing of Deliverables

     
Prior to the QAD system commencing live operations, when the Seller reasonably
believes that the Deliverables shall meet the relevant Acceptance Criteria, it
shall notify the Purchaser and give the Purchaser at least five Business Days’
notice that it intends to test whether the relevant Acceptance Criteria have
been met. A representative of the Purchaser shall be invited (on reasonable
notice) to attend and observe such acceptance test and shall be given all
information and co-operation as may be reasonably requested in order to enable
that representative to monitor the acceptance test. If the relevant acceptance
test does not demonstrate that the Acceptance Criteria have been met, the
Purchaser or its representative shall notify the Seller in writing, specifying
those criteria which have not been met (such notification being a “Cure Notice”)
within one Business Day of the relevant acceptance test. On receipt of a Cure
Notice, the Seller and the Purchaser shall co-operate in good faith and use
reasonable endeavours to cure the relevant defects noted in the Cure Notice as
soon as practicable in order to conduct further acceptance tests. The Purchaser
shall not submit a Cure Notice where errors persist with the QAD system and such
errors are minor in nature and do not materially affect the performance or
functionality of the QAD system. If an acceptance test conducted under this
paragraph 4 demonstrates that the Acceptance Criteria have been met, the
Purchaser shall promptly notify the Seller in writing of its acceptance.

  (B)  
One Month’s Successful Financial Closing:

     
The Seller and Purchaser agree that errors may persist with the QAD system and
where such errors are minor in nature and do not materially affect the
performance or functionality of the QAD system, the Purchaser shall not withhold
its acceptance of the achievement of One Month’s Successful Financial Closing.

     
Wolter van Rest (or any person who may succeed him in his role in the Group in
relation to the transition, implementation or operation of the QAD system) and
the Global Process Owners (defined below) shall confirm the achievement of the
Acceptance Criteria and the One Month’s Successful Financial Closing and have
sign-off authority on behalf of the Purchaser to approve Acceptance. If the
Purchaser (through Wolter van Rest (or any person who may succeed him in his
role in the Group in relation to the transition, implementation or operation of
the QAD system) and the Global Process Owners) does not submit a Cure Notice, or
notify the Seller in writing of its acceptance of the relevant Deliverable, or
One Month’s Successful Financial Closing within 10 Business Days of the relevant
acceptance test, the Seller shall deem such Deliverable (and in the case of One
Month’s Successful Financial Closing, the QAD system) as accepted by the
Purchaser with no further responsibility, liability or obligation for the QAD
system save for those relevant services within the Transitional Services
Agreement.

 

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For the purpose of this Schedule:

     
“Global Process Owners” means the Group’s QAD functional experts who, at the
date of the Offer Letter, are Theo Zinken (finance, global ledger, accounts
receivable and payable) Erik-Jan Vlek (business control), Marc van den Biggelaar
(planning, forecasts and customer service), Erik Sondeijker (distribution), John
Peeters (production) and Armand Haemers (global master data) and those persons
who may succeed or replace the aforementioned people in their roles within the
Group in relation to the transition, implementation and operation of the QAD
system; and

     
“One Month’s Successful Financial Closing” means that an accurate and complete
(in relation to those accounting practices historically performed by the Group
immediately prior to the Closing Date) upload of the relevant trial balances
representing a month’s financial activity has been performed for the US, UK, and
Polish entities in which QAD has been implemented.

5  
If the QAD system does not achieve Acceptance (as defined above) on the Seller’s
first attempt at One Month’s Successful Financial Closing, the Seller shall
continue to be responsible for the project management and oversight of the
implementation of the QAD system and shall continue to carry out such project
management and oversight to seek to achieve Acceptance until the earlier of
(a) achieving Acceptance and (b) the date which is 6 months after the Closing
Date (the “Backstop Date”). If the Seller has not achieved Acceptance by the
Backstop Date, the Purchaser shall take on responsibility for the project
management and oversight of the implementation of the QAD system, and the Seller
shall, subject to Clauses 10.6 and 10.10, be liable to the Purchaser, for any
costs, liabilities, expenses or damages (whether in contract, tort, negligence
or otherwise), arising directly from the implementation or transition to the QAD
system from the date of the first failed attempt at achieving One Month’s
Successful Financial Closing (except where and to the extent that the Seller can
demonstrate that such costs, liabilities, expenses or damages are the result of
a breach by the Purchaser of its obligations under paragraph 6), provided that
the Seller’s liability for such costs, liabilities, expenses and damages arising
from such implementation or transition shall not, under any circumstances,
exceed US$3 million.

6  
The Purchaser shall provide the Seller with the sufficient and adequate
resources (including by making available such of its employees with experience
in operating or implementing a SAP or QAD system including after Closing, the
Relevant Employees, at such times and for such periods as the Seller may
reasonably require) and information to allow the Seller to perform the necessary
support functions to assist with achieving Acceptance.

7  
For all other IT applications (including Hyperion, SAP CRM, Labels, Stream
server, RIMS, GROE, IFIX, IHISTORIAN, OEE, PERMAN, LIMS, and third-party payroll
software):

  (i)  
written approvals by the Global Process Owners that a particular application (or
bundle of applications) has been transferred to the Purchaser and is functional
shall not be unreasonably withheld; and

  (ii)  
the Seller shall provide the Purchaser with existing, relevant and readily
available documentation (namely organisation details and users, deployment,
functionality, availability, stability, survivability, back-up, data security
and authorisation, reports, interfaces, localisation and regulations).

 

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      06/12/2010   Agreed Form

Table of Contents

          Contents   Page        
1 Interpretation
    1  
 
       
2 Agreement to Sell the Group
    20  
 
       
3 Consideration
    25  
 
       
4 Conditions
    27  
 
       
5 Pre-Closing
    30  
 
       
6 Closing
    37  
 
       
7 Post-Closing Adjustments
    40  
 
       
8 Post-Closing Obligations
    43  
 
       
9 Warranties
    49  
 
       
10 Limitation of Seller’s and Other Relevant Sellers’ Liability
    53  
 
       
11 Claims
    58  
 
       
12 Restrictions
    63  
 
       
13 Guarantee
    65  
 
       
14 Confidentiality
    68  
 
       
15 Insurance
    69  
 
       
16 Other Provisions
    71  

 

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          Contents   Page        
Schedule 1
    82  
 
       
Part 1 Details of the Share Sellers, Shares etc. (Clause 2.1.1)
    82  
 
       
Part 2 Details of the Business Sellers, Group Businesses etc. (Clause 2.1.1)
    83  
 
       
Schedule 2 Companies and Subsidiaries
    84  
 
       
Schedule 3 The Properties
    89  
 
       
Part 1 Group Companies’ Properties
    89  
 
       
Part 2 Business Properties (Clause 2.3.1(i))
    98  
 
       
Schedule 4 Intellectual Property (Clause 2.4)
    114  
 
       
Part 1 Transfer of Intellectual Property
    114  
 
       
Part 2 Form of Patent Assignment
    116  
 
       
Part 3 Form of Trade Mark Assignment
    117  
 
       
Part 4 Form of Know-how Assignment
    118  
 
       
Part 5 Form of Unregistered Intellectual Property Assignment
    120  
 
       
Part 6 Licence Agreements
    122  
 
       
Part 7 Product Registrations
    123  
 
       
1 Agent Assisted Product Registrations
    123  
 
       
2 Distributor Owned Product Registrations
    124  
 
       
3 Seller Owned EU Product Registrations
    125  
 
       
4 Seller Owned Shared EU Product Registrations
    126  
 
       
5 Licensed EU Product Registrations
    129  
 
       

 

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          Contents   Page        
6 Seller Owned Product Registration
    130  
 
       
7 Consumer Business Product Registrations
    132  
 
       
8 Pre- and Post-Closing Sales
    133  
 
       
9 Detailed Transfer Strategies
    134  
 
       
10 Unidentified Product Registrations
    135  
 
       
11 Miscellaneous
    135  
 
       
12 Indemnities and Liability
    136  
 
       
Schedule 5 Business Contracts (Clause 2.3.1(v))
    139  
 
       
Part 1 Business Contracts
    139  
 
       
Part 2 Third-Party Consents
    140  
 
       
Part 3 Shared Consumer Agreements
    144  
 
       
Part 4 Shared Business Agreements
    145  
 
       
Part 5 Intra-group Arrangements
    146  
 
       
Part 6 Confidentiality Agreements
    147  
 
       
Schedule 6 Employees (Clause 2.5.1)
    148  
 
       
Part 1 Business Employees and Offer Employees
    148  
 
       
Part 2 Relevant Employees
    153  
 
       
Part 3 List of Offer Employees
    156  
 
       
Part 4 Excluded Employees
    157  

 

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          Contents   Page        
Schedule 7 Group Retirement Arrangements (Clause 2.5.2)
    158  
 
       
Schedule 8 Form of Purchase Price Allocation Agreement (Clauses 3.2 and 7.6 of
the Agreement)
    160  
 
       
Schedule 9 VAT (Clause 3.3)
    162  
 
       
Schedule 10 Closing Obligations
    164  
 
       
Schedule 11 Post Closing Adjustments
    171  
 
       
Part 1 Closing Statement (Clause 7)
    171  
 
       
Part 2 Base Working Capital (Clause 1.1)
    178  
 
       
Schedule 11 Annex A Form of Closing Statement (Clause 7)
    179  
 
       
Schedule 12 Warranties given under Clause 9.1
    184  
 
       
Schedule 13 Warranties given by the Purchaser and the other Relevant Purchasers
under Clause 9.4
    209  
 
       
Schedule 14 Seller’s Knowledge
    211  
 
       
Schedule 15 Transaction Documents Part 1 Supply Agreements
    212  
 
       
Part 2 IP Licence Agreements
    213  
 
       
Part 3 Other Transaction Documents
    214  
 
       
Schedule 16
    217  
 
       
Part 1 Moveable Assets
    217  
 
       
Part 2 General Provisions relating to the Transfer of the Moveable Assets
    221  
 
       
Part 3 General provision relating to the Transfer of the Third-Party Receivables
    222  

 

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          Contents   Page        
Schedule 17 Pre-Sale Reorganisation Transactions
    223  
 
       
Schedule 18 Pensions Liability Assumptions
    224  
 
       
Part 1 Dutch Actuarial Methodology and Assumptions
    224  
 
       
Part 2 German Actuarial Assumptions
    228  
 
       
Schedule 19 Product Indemnities
    231  
 
       
Part 1 Indemnities
    231  
 
       
Part 2 Details of Pre-Existing Claims
    238  
 
       
Schedule 20 QAD Acceptance Process
    239  

 

v