Unassociated Document


    Execution Version

     

    
      

      

    

    Master
Accounts Receivable Purchase Agreement

     

    among

     

    Calyon
New York Branch, as the Bank

     

    The
Scotts Company LLC, as
the Company

     

    and

     

    The
Scotts Miracle-Gro Company, as
the Parent

     

    Dated as
of May 1, 2009

     

    
      

      

    

    
      
         


      

      
        
        

        
          

        

      

      
         


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    Table
of Contents

    


    
      
        
          	
                  Section

                	
                  Heading        

                	 
      	
                  Page

                
	 
      	 
      	 
      	 
      
	
                  Section
      1.

                	
                  Definitions
      and Interpretation

                	 
      	
                  1

                
	 
      	 
      	 
      	 
      
	
                  Section
      2.

                	
                  The
      Agreement

                	 
      	
                  8

                
	 
      	 
      	 
      	 
      
	
                  Section
      3.

                	
                  Conditions
      Precedent

                	 
      	
                  8

                
	 
      	 
      	 
      	 
      
	
                  Section
      4.

                	
                  Purchase
      of Receivables

                	 
      	
                  9

                
	 
      	 
      	 
      	 
      
	
                  Section
      5.

                	
                  Limited
      Liability

                	 
      	
                  15

                
	 
      	 
      	 
      	 
      
	
                  Section
      6.

                	
                  The
      Company as Servicer and Agent of Bank

                	 
      	
                  16

                
	 
      	 
      	 
      	 
      
	
                  Section
      7.

                	
                  Payments

                	 
      	
                  18

                
	 
      	 
      	 
      	 
      
	
                  Section
      8.

                	
                  Changes
      in Circumstances

                	 
      	
                  19

                
	 
      	 
      	 
      	 
      
	
                  Section
      9.

                	
                  Further
      Assurances

                	 
      	
                  20

                
	 
      	 
      	 
      	 
      
	
                  Section
      10.

                	
                  Representations
      and Warranties

                	 
      	
                  20

                
	 
      	 
      	 
      	 
      
	
                  Section
      11.

                	
                  Covenants

                	 
      	
                  24

                
	 
      	 
      	 
      	 
      
	
                  Section
      12

                	
                  Partial
      Invalidity

                	 
      	
                  27

                
	 
      	 
      	 
      	 
      
	
                  Section
      13.

                	
                  No
      Bank Liability for Contract

                	 
      	
                  27

                
	 
      	 
      	 
      	 
      
	
                  Section
      14.

                	
                  Notices,
      Addresses, Language

                	 
      	
                  27

                
	 
      	 
      	 
      	 
      
	
                  Section
      15.

                	
                  Fees,
      Costs and Indemnity

                	 
      	
                  28

                
	 
      	 
      	 
      	 
      
	
                  Section
      16

                	
                  Calculations
      and Certificate

                	 
      	
                  30

                
	 
      	 
      	 
      	 
      
	
                  Section
      17.

                	
                  Set-Off

                	 
      	
                  31

                


        

      

    


    
      
         


      

      
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                  Section
      18.

                	
                  Termination

                	 
      	
                  31

                
	 
      	 
      	 
      	 
      
	
                  Section
      19.

                	
                  Miscellaneous

                	 
      	
                  33

                
	 
      	 
      	 
      	 
      
	
                  Section
      20.

                	
                  Governing
      Law

                	 
      	
                  36

                
	 
      	 
      	 
      	 
      
	
                  Section
      21.

                	
                  Optional
      Repurchase

                	 
      	
                  36

                
	 
      	 
      	 
      	 
      
	
                  Section
      22.

                	
                  Guaranty

                	 
      	
                  37

                
	 
      	 
      	 
      	 
      
	
                  Section
      23.

                	
                  [Intentionally
      Omitted]

                	 
      	
                  39

                
	 
      	 
      	 
      	 
      
	
                  Section
      24.

                	
                  Confidentiality

                	 
      	
                  39

                


        

      

    

     

    Schedule
1   —   Purchase Request

    Schedule
2   —   Conditions Precedent

    Schedule
3   —   UCC Details Schedule

    Schedule
4   —   Form of Portfolio Report

    Schedule
5   —   Approved Debtors


    
      
         


      

      
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    Master
Accounts Receivable Purchase Agreement

     

    Master
Accounts Receivable Purchase Agreement, dated as of May 1, 2009 (this
“Agreement”), among
The
Scotts Company, LLC, a limited liability company organized under the laws
of Ohio (the “Company”), The
Scotts Miracle-Gro Company, a company organized under the laws of Ohio
(the “Parent”), and
Calyon
New York Branch (the “Bank”), a duly licensed
branch under the New York Banking Law of a foreign banking corporation organized
and existing under the laws of the Republic of France.

     

    Whereas,
after the date hereof and subject to the terms and conditions of this Agreement,
the Company may sell to the Bank and the Bank may purchase from the Company, on
a revolving and uncommitted basis, certain Receivables.

     

    Whereas,
the transactions hereunder shall constitute a true sale of the Purchased
Receivables, providing the Bank with the full risks and benefits of ownership of
the Purchased Receivables without recourse to the Company, except as may
otherwise be set forth herein.

     

    Now,
Therefore, in consideration of the above premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

     

    
      
        	
                Section
      1. 

              	
                Definitions
      and Interpretation.

              


      

    

     

    In this
Agreement and each Schedule:

    


    “Act” has the meaning
ascribed to it in Section 19.9(a).

     

    “Adverse Claim” means any
Encumbrance on a Purchased Receivable other than those arising under this
Agreement.

     

    “Agreed Base Value” shall be
an amount equal to the product of (a) the difference between (i) the full
Original Amount of the Receivable being purchased less (ii) the Trade Credit
Amount and (b) 100% less the Agreed Dilution Percentage.

     

    “Agreed Dilution Percentage”
means, with respect to a Purchased Receivable at any time, a rate equal to (a)
5% if the sum of (i) the product of (x) two (2) and (y) Historical Dilution for
the Approved Debtor in respect of such Purchased Receivable in the same month of
the previous year, and (ii) Late Interest Percentage then in effect (the “Sum”) does not exceed 5%, (b)
10% if the Sum in respect of such Purchased Receivable is greater than 5% and
does not exceed 10%, and (c) the actual Sum if greater than 10%.

     

     “Agreement Amount”
means the maximum aggregate Funded Amounts of all Purchased Receivables, which
shall not exceed $80,000,000 at any time.

     

    “Agreement Office” means the
office through which the Bank will perform its obligations under this
Agreement.


    
      
         


      

      
        
        

        
          

        

      

      
         


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    “Applicable Margin” means the
applicable margin per annum for each Approved Debtor as listed on Schedule 5
hereto.

     

    “Approved Debtor” means each
Person listed as an Approved Debtor on Schedule 5 hereto.

     

    “Blocked Accounts” means each
account opened by the Company in its name for each Approved Debtor with JPMorgan
Chase Bank, N.A. or such other bank approved by the Bank for the purpose of
collecting the Purchased Receivables of such Approved Debtor and which shall be
subject to a blocked account agreement with the Bank providing the Bank with
control over such account.

     

    “Business Day” means a day on
which banks are open for business in Chicago and New York
City.

     

    “Closing Date” means the date
of this Agreement or such later Business Day upon which each condition described
on Schedule 2 shall be satisfied or waived in a manner acceptable to the
Bank in its reasonable discretion.

     

    “Collections” means all
payments made on each Purchased Receivable and any other payments, receipts or
recoveries (including any casualty insurance proceeds) by, or on behalf of, any
Debtor or otherwise with respect to any Purchased Receivable.

     

    “Contract” means a contract
or purchase order between the Company and a Debtor, as the same may be amended
and supplemented from time to time in accordance with the terms hereof, out of
which has arisen one or more Purchased Receivables.

     

    “Cost of Funds” means, with
respect to any Purchased Receivable(s), the rate, as determined by the Bank as
of the relevant date (which determination shall be conclusive and binding on the
Company absent manifest error) at which Dollars for a term comparable to the
applicable period of time and in an amount comparable to the relevant amount in
respect of such Receivable(s) are generally available to the Bank.

     

    “Credit Agreement” means that
certain Amended and Restated Credit Agreement dated as of February 7, 2007,
among the Parent, the subsidiary borrowers from time to time party thereto, the
several lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as
administrative agent and the various lenders from time to time to the party
thereto.

     

    “Debtor” means a person
obligated to make payments in respect of a Receivable.

     

    “Debtor Sublimit” means the
sublimit to the Agreement Amount for each Approved Debtor as listed on Schedule
5 hereto.

     

    “Defaulted Receivable” means
any Purchased Receivable which has not been paid when due or cannot be paid
solely as a result of the applicable Approved Debtor’s Financial Inability to
Pay.


    
      
         


      

      
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    “Dilution” means in respect
of each Debtor, any discount, adjustment, set-off, counterclaim, deduction,
reduction, warranty issue or refusal to pay not arising from such Debtor’s
Financial Inability to Pay, which would have the effect of reducing the amount
of part or all of any Purchased Receivable owed by a Debtor.

     

    “Discount” means, with
respect to each Purchased Receivable, 100% minus the product of (a) the sum of
the applicable Cost of Funds for seven days as of the purchase date thereof plus
the Applicable Margin applicable to the Approved Debtor in respect of such
Purchased Receivable, and (b) a fraction the numerator of which seven days
and the denominator of which is 360.

     

    “Dollar, USD” and “$” shall mean the lawful
currency of the United States of America.

    


    “Economic and Trade Sanctions and
Anti-Terrorism Laws” means any laws relating to economic or trade
sanctions, terrorism or money laundering, including without limitation Executive
Order 13224, the Patriot Act, the regulations administered by OFAC, the Trading
with the Enemy Act (12 U.S.C. §95), and the International Emergency Economic
Powers Act (50 U.S.C. §1701-1707).

     

    “Encumbrance” means a
mortgage, assignment, security interest, pledge, lien or other encumbrance
securing any obligation of any person or any other type of adverse claim or
preferential arrangement (including, without limitation, title transfer and
retention arrangements) having a similar effect.

     

    “Excess Amount” has the
meaning ascribed to it in Section 15.1(b).

    


    “Excess Fee” has the meaning
ascribed to it in Section 15.1(b).

     

     “Fee Letter” means the
letter among the Bank, the Company and the Parent of even date herewith
providing for the payment of certain fees by the Company to the Bank as
specified therein.

     

    “Final Collection Date” means
the date, following the termination of purchases under this Agreement, on which
all amounts to which the Bank shall be entitled in respect of Purchased
Receivables and all other amounts owing to the Bank hereunder and under the
other Transaction Documents are paid in full.


    
      
         


      

      
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    “Financial Inability to Pay”
means a Debtor’s failure or inability to pay a Receivable as a result of a
deterioration in such Debtor’s credit quality as evidenced by an event where
such Debtor (A)(i) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (ii) becomes insolvent or is unable to pay its
debts or fails or admits in writing its inability generally to pay its debts as
they become due; (iii) makes a general assignment, arrangement or
composition with or for the benefit of its creditors; (iv) institutes or
has instituted against it a proceeding seeking judgment of insolvency or
bankruptcy or any other relief under any bankruptcy or insolvency law or other
similar law affecting creditor’s rights, or a petition is presented for its
winding-up or liquidation, and, in the case of any such proceeding or petition
instituted or presented against it, such proceeding or petition
(aa) results in a judgment of insolvency or bankruptcy or the entry of an
order for relief or the making of an order for its winding up or liquidation or
(bb) is not dismissed, discharged, stayed or restrained in each case within
30 days of the institution or presentation thereof; (v) has a resolution
passed for its winding-up, official management or liquidation; (vi) seeks
or becomes subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other similar official
for it or for all or substantially all of its assets; (vii) has a secured
party take possession of all or substantially all its assets or has a distress,
execution, attachment, sequestration or other legal process levied, enforced or
sued on or against all or substantially all its assets and such secured party
maintains possession, or any such process is not dismissed, discharged, stayed
or restrained, in each case within 30 days thereafter, (viii) causes or is
subject to any event with respect to it which, under the applicable laws of any
jurisdiction, has an analogous effect to any of the events specified in clauses
(i) to (vii) (inclusive); (ix) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the foregoing
acts; or (x) at any time that the long-term unenhanced, unsecured
indebtedness rating of such Debtor is “CCC” (or its equivalent) or
lower, fails to pay 10% or more of the aggregate amount of Purchased Receivables
owed by it, for more than 30 days beyond the relevant Maturity Dates thereof
(unless such Debtor claims, and the Company agrees, such failure to pay is a
result of a commercial dispute related to such Purchased Receivables), or
(B) fails, after giving effect to any applicable grace period for the
relevant obligation(s) of such Debtor (other than such Receivable), to make,
when due, any payments equal to or exceeding $10,000,000 under such
obligations.

     

    “Funded Amount” means the
aggregate amount of Purchase Prices paid by the Bank hereunder, less the
Collections, if any, theretofore paid to and received by the Bank.

     

    “Governmental Authority”
means any nation or government, any state or other political subdivision thereof
and any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.

     

     “Historical Dilution”
means, with respect to a Debtor at any time, a rate equal to a fraction the
numerator of which is the value of the “Credit Memos” for the same month of the
previous year and the denominator of which is the value of “Sales” for such
month and year, in each case for such Debtor as indicated in the relevant
Portfolio Report received by the Bank.

     

    “Invoice” means an invoice
issued by the Company to a Debtor for payment for goods or services supplied
pursuant to a Contract between the Company and such
Debtor.  

     

    “Late Interest Percentage”
means, with respect to Purchased Receivables, a rate equal to the product of (a)
the sum of (i) the Cost of Funds for ninety-eight (98) days as of the relevant
date, and (ii) 2.25%, and (b) a fraction the numerator of which is
ninety-eight (98) and the denominator of which is 360.

     

    “Law” means any law
(including common law), constitution, statute, treaty, regulation, rule,
ordinance, order, injunction, writ, decree or award of any Governmental
Authority.


    
      
         


      

      
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    “Maturity Date” means, with
respect to a Purchased Receivable, the date on which such Purchased Receivable
becomes due and payable by the Debtor.

     

    “Monsanto Agreement” means
the Amended and Restated Exclusive Agency and Marketing Agreement by and between
The Monsanto Company and the Company.

     

    “Monsanto Receivables” means
accounts receivable (and all related proceeds) originated and owned by The
Monsanto Company of an Approved Debtor and otherwise subject to the terms of the
Monsanto Agreement.

    


    “OFAC” means the Office of
Foreign Assets Control of the United States Department of the
Treasury.

    


    “OFAC Lists” has the meaning
ascribed to it in Section 19.9(b).

    


    “OFAC Violation” has the
meaning ascribed to it in Section 19.9(c).

     

    “Original Amount” means, in
relation to a Purchased Receivable, the amount owing from the Debtor in respect
of such Purchased Receivable being the aggregate amount payable under the
relevant Invoice.  For the avoidance of doubt, the Original Amount of
any Purchased Receivable shall not be reduced as a result of any write-down or
write-off of such Purchased Receivable by the Bank.

     

    “Person” means an individual,
partnership, corporation, limited liability company, business trust, joint stock
company, trust, unincorporated association, joint venture, Governmental
Authority or other entity of whatever nature.

     

    “Portfolio Report” means a
report, substantially in the form of Schedule 4, signed by an officer of
the Company and which shall contain, inter alia, the list of
Receivables which have been determined to be Purchased Receivables hereunder as
well as a list of all relevant Invoices.

     

    “Purchase Price” means, in
relation to any Purchased Receivable, the Agreed Base Value thereof times the
applicable Discount.

     

    “Purchased Receivable” means,
at any time, any Receivable sold by the Company and acquired by the Bank under
this Agreement.

     

    “Purchase Request” means a
request for purchase in the form attached hereto as
Schedule 1.

     

    “Receivable” means the
indebtedness of an Approved Debtor to the Company arising under a Contract which
is evidenced by an Invoice (including the right to receive payment of any
interest or finance charges or other liabilities of such Debtor under the
Contract), all Related Assets with respect thereto, and all Collections and
other proceeds with respect to the foregoing.


    
      
         


      

      
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    “Related Assets” means, with
respect to the Receivables (i) all related rights and remedies under or in
connection with the Contract with respect thereto including bills of lading,
bills of exchange, promissory notes and accessions, (ii) all guaranties,
suretyships, letters of credit, security, liens and other arrangements
supporting payment thereof, (iii) all Sales Records (including electronic
records) with respect thereto, (iv) all related insurance, and (v) all proceeds
of the foregoing.

     

    “Relevant Quarter” means each
three month period ending June 30, 2009, September 30, 2009, December 31, 2009,
and March 31, 2010, respectively.

     

    “Replacement Receivables” is
defined in Section 4.2 hereof.

     

    “Repurchase Event” means,
with respect to a Purchased Receivable:

     

    (i)    
any representation or warranty made by the Company in Section 10 of this
Agreement with respect to such Receivable is inaccurate, incorrect or untrue, in
any material respect, on any date as of which it is made or deemed to be made;
or

     

    (ii)    
the Company fails to comply with any of its covenants with respect to such
Receivable set forth in Section 11 of this Agreement; or on any day the
Original Amount of such Purchased Receivable (i) is reduced or adjusted as
a result of any defective, rejected, returned, repossessed or foreclosed
merchandise, any defective or rejected services, any discount or other
adjustment by the Company (including on account of credits, rebates,
chargebacks, inventory transfers, allowances for early payments and other
allowances) or any obligation of the Company owed to the applicable Debtor to
make such a discount or adjustment, (ii) is reduced or cancelled as a
result of a setoff, deduction or counterclaim in respect of any claim by the
Debtor thereof against the Company (whether such claim arises out of the same or
a related or an unrelated transaction) or (iii) otherwise is less than the
amount reported by the Company in (or for purposes of) any settlement statement
delivered pursuant to this Agreement (for any reason other than receipt of
Collections on such Purchased Receivable or such Purchased Receivable being
written off as uncollectible based on Debtor’s Financial Inability to Pay);
provided, however, that
to the extent that the occurrence of any matter described in the foregoing
paragraphs (i) or (ii) would otherwise result in a Repurchase Event, no
Repurchase Event with respect to any such Purchased Receivable shall occur if
the amount of any such adjustment caused by the occurrence of such event has
already been included in the calculation of the Purchase Price paid with respect
to such Purchased Receivable.

     

    “Sales Records” means the
accounts, all sales ledgers, purchase and sales day books, sales invoices,
supply contracts and other related books and records of the Company relating to
a Debtor and on an individual Purchased Receivable basis for the purpose of
identifying amounts paid or to be paid in respect of such Purchased
Receivable.


    
      
         


      

      
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    “Settlement Date” means, in
respect of any Settlement Period, the Wednesday of the calendar week following
such Settlement Period (or, if such Wednesday is not a Business Day, the
immediately succeeding Business Day) or such other date as the Bank and the
Company may from time to time agree to, provided that (i) with
respect to the initial purchase hereunder, the date of such purchase shall be
the initial Settlement Date and (ii) on or after the Termination Date, the
Bank may select Settlement Dates by notice to the Company. 

     

    “Settlement Period” means
(a) with respect to the initial purchase, a period from the date of such
purchase pursuant to Section 4.1 to the Wednesday of the calendar week
following the calendar week in which such purchase is made (or, if such
Wednesday is not a Business Day, the immediately succeeding Business Day) or as
otherwise agreed between the Bank and the Company and (b) thereafter, each
period commencing on the last day of the immediately preceding such period and
ending on the next Settlement Date or as otherwise agreed between the Bank and
the Company, provided,
however, that at any
time the Bank and the Company may mutually agree to select any different period
as the Settlement Period; provided, further, however,
that if such agreement is not reached within 10 days, a Termination Event may be
declared by the Bank.

     

    “Stated Termination Date”
means May 1, 2010, or such later date as may be extended by mutual
agreement of the Bank and the Company.

     

    “Tax” means any present or
future withholding tax, levy, impost, duty or other tax or charge of any similar
nature (including but not limited to any interest or penalty payable in
connection with any failure to pay any of the same); and Taxation shall be
construed accordingly.

     

    “Termination Date” means the
earliest to occur of (i) termination of this Agreement pursuant to
Section 18, (ii) the Stated Termination Date and (iii) the
Business Day designated by either party with no less than thirty (30) days prior
notice to the other party.

     

    “Termination Event” means any
of the events set forth in Section 18.

     

    “Termination Interest” means,
with respect to the Total Purchased Receivables, a rate equal to the product of
(a) the sum of (i) the Cost of Funds for five (5) days and (ii) 3.25%,
(b) a fraction the numerator of which is the number of days during the
period referred to in clause (i) above plus fifteen (15) days, and the
denominator of which is 360 and (c) the aggregate Agreed Base Value of the Total
Purchased Receivables.

     

    “Trade Credit Amount” means,
with respect to a Purchased Receivable, the Dollar amount from time to time
accrued on the books and records of the Company and as reported to the Bank on
each Portfolio Report as a trade credit, trade allowance, return allowance or
similar arrangement between the Company and the related Approved Debtor that
might result in a reduction of such Purchased Receivable in the
future.

     

    “Transaction Document” means
each of this Agreement, each Purchase Request, each Portfolio Report, the
blocked account agreements, and all related documents.


    
      
         


      

      
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      “UCC” means the Uniform
Commercial Code as from time to time in effect in the State of
New York.

       

      
        
          	
                  Section
      2.

                	
                  Terms
      of Purchase on an Uncommitted
Basis.

                


        

      

       

      Section 2.1.   
 Prior to the Termination Date, subject to the terms and conditions
of this Agreement, the Company hereby agrees to offer to sell and assign from
time to time to the Bank, and the Bank hereby agrees to consider on an
uncommitted basis to purchase a 100% interest in all of the present and future
Receivables of each Approved Debtor and as identified in the most recent
Portfolio Report delivered to the Bank under this Agreement or as identified in
such other manner acceptable to the Bank provided that the Funded
Amount at no time shall exceed (a) the Agreement Amount, (b) the applicable
Debtor Sublimit, or (c) $10,000,000 on the Settlement Date immediately prior to
the last day of each Relevant Quarter (excluding for purposes of this clause (c)
the Funded Amount in respect of Defaulted Receivables in excess of
US$10,000,000) unless in the case of this clause (c), the Company has received
the Bank’s prior written consent to the Funded Amount exceeding US$10,000,000
and paid the applicable Excess Fee in accordance with the terms of Section
15.1); further
provided, that in any event the Receivables that may be purchased and
sold hereunder with respect to an Approved Debtor shall be deemed to be the
Receivables of such Approved Debtor with the earliest due date (based upon their
net invoice value excluding all accruals for any
discounts).  

       

      
        
          	
                  Section
      3.

                	
                  Conditions
      Precedent.

                


        

      

       

      Section 3.1.    The
Company shall not be entitled to request the Bank to make the initial purchase
of Purchased Receivables, unless:

       

      (a)     the
Bank has received all of the documents listed in Schedule 2 in form and
substance reasonably satisfactory to it;

       

      (b)     the
representations and warranties made by the Company in Section 10 of this
Agreement are true and correct as of the Closing Date;

       

      (c)     the
Bank has received the fees and other amounts payable by the Company pursuant to
Section 15;

       

      (d)     the
Company shall have established the segregated Blocked Accounts for the
collection of the Purchased Receivables;

       

      (e)     no
Termination Event shall have occurred; and

       

      (f)     the
Closing Date falls at least three Business Days after the date of the delivery
of the initial Purchase Request and initial Portfolio Report to the
Bank.  Such Portfolio Report shall list the Receivables requested to
be purchased in a format and contain such information as shall be reasonably
satisfactory to Bank.


      
        
           


        

        
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      Section 3.2.    
No purchase shall be made hereunder unless by 12:00 p.m. New York time at
least three Business Days prior to a Settlement Date on which the Company wishes
the Bank to purchase Receivables:

       

      (a)     the
Bank has received a Purchase Request in connection with such purchase, and the
Bank shall have agreed in its sole discretion to the purchase set forth in such
Purchase Request, which consent shall be set forth in writing to the Company
where indicated on such Purchase Request at least one day prior to the relevant
Settlement Date.

       

      (b)     The
aggregate of the Funded Amount of the Receivables referred to in the Portfolio
Report (after giving effect to such purchase) as of the applicable purchase date
will not exceed (i) the Agreement Amount, (ii) the Debtor Sublimit or (iii)
$10,000,000 on the Settlement Date immediately prior to the last day of each
Relevant Quarter, except as provided in Section 2.1.

       

      (c)     The
Invoices referred to in the Portfolio Report each shall have a date certain for
payment which is no more than 90 days from the relevant purchase date, and are
denominated in Dollars.

       

      (d)     As of
such Settlement Date, the representations and warranties made by the Company is
Section 10 of this Agreement are true and correct and no Termination Event shall
have occurred

       

      
        
          	
                  Section
      4.

                	
                  Purchase
      of Receivables.

                


        

      

       

      Section 4.1.   
(a) If the Bank decides in its sole discretion (or is required in
accordance with Section 4.4(e)), to purchase Receivables offered by the Company
in accordance with Section 3, the Bank shall pay the Purchase Price to the
Company for the Purchased Receivables sold to the Bank, as calculated by the
Bank in its discretion in accordance with the terms hereof, less any other
amounts owing to the Bank hereunder, by 4:00 p.m. New York time on the
applicable Settlement Date.

       

      (b)     If the
Bank decides, in its sole discretion, not to purchase Receivables offered by the
Company in accordance with Section 3 on the terms and conditions then in effect
(but subject to the requirements of Section 4.4(e)), the Bank may propose in
writing to the Company modifications to the Applicable Margin, Approved Debtors,
and/or Debtor Sublimits as conditions to its consent to purchase such
Receivables within one Business Day of receipt of the applicable Purchase
Request; if the Company agrees to such modifications, it shall so indicate in
writing within one Business Day of receipt of such proposal, whereupon the Bank
may decide to purchase the Receivables listed in the relevant Purchase Request
on such modified terms in accordance with clause (a) above.


      
        
           


        

        
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      (c)     The
Company shall be entitled, to the extent collected by the Company, to receive
and retain an amount equal to Collections on the Purchased Receivables in excess
of all amounts owed to the Bank as set forth in Section 4.4(d) and (e), such
amount to first be applied to the delivery to the Company of any Trade Credit
Amounts due to the Company, as applicable, with the remainder of such amounts to
be paid to the Company as a servicing fee.  Without limiting the
liability and obligations of the Company hereunder, the Bank shall be entitled
to offset against and deduct from such excess all amounts owing by the Company
to the Bank under this Agreement and the Transaction Documents not previously
distributed to the Bank.  So long as the Company is acting as servicer
for the Purchased Receivables, the Company will be entitled to retain such
excess (less such offsets and deductions) as the Purchased Receivables are
collected.  Should the Bank terminate the Company’s appointment as
servicer, the Bank will pay to the Company such excess over and above the
amounts which the Bank is entitled to offset, upon collection of all amounts
owing in respect of the Purchased Receivables.

       

      (d)   
The parties agree that the calculation of Agreed Base Value of Purchased
Receivables includes Trade Credit Amounts which the Approved Debtors have
historically been entitled to receive if certain conditions in the future are
met.  To the extent that such Approved Debtors are not entitled to
receive any such Trade Credit Amounts, or in the event that any such Approved
Debtors are entitled to receive such Trade Credit Amounts but elect not to apply
the corresponding Trade Credit Amount to the reduction of any payment made on a
Purchased Receivable, and the Collections with respect to such Purchased
Receivable include any such corresponding Trade Credit Amount, the amount
thereof shall be attributable to and paid to the Company.

       

      Section 4.2.   
Until the Termination Date, with the prior consent of the Bank in
accordance with Section 3.2(a) if such purchase is to occur on a Settlement
Date, and/or without consent if such purchase is to occur between two Settlement
Dates, Collections may be used by the Company, as servicer, and as agent for and
on account of the Bank, to purchase from the Company Receivables of Approved
Debtors that meet all of the requirements contained herein applicable to the
initial Purchased Receivables (“Replacement Receivables”),
which Replacement Receivables shall be held for the exclusive benefit and
account of the Bank to the same extent as the original Purchased Receivables and
shall constitute Purchased Receivables for all purposes of the
Agreement.  For purposes of maintaining the perfection of the Bank’s
interest in any Purchased Receivables and the proceeds thereof, the Bank hereby
appoints the Company as its agent in respect of any Collections prior to such
Collections being used to purchase Replacement Receivables, provided that the Company’s
sole duty as such agent shall be to hold such Collections in trust for the
benefit of the Bank or to purchase Replacement Receivables as
aforesaid.  

       

      Section 4.3.   
(a) The Company will instruct all Debtors under the Purchased
Receivables to make all payments on account thereof to the relevant Blocked
Accounts.  Each Invoice shall also require that payments be made to
the relevant Blocked Accounts.  All Collections will be received and
held in the Blocked Accounts in the name of and for the Bank as the owner
thereof and, except as otherwise provided in this Agreement, will be applied in
the manner set forth in (b) below.  The Bank may suspend or terminate
all of the Company’s right, power and interest in a Blocked Account at any time
upon the occurrence and during the continuance of a Termination
Event.


      
        
           


        

        
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      (b)     Prior
to the Termination Date, all of the Collections deposited into the Blocked
Accounts shall be swept daily and transferred into the Company’s operating
account, as designated by the Company to the financial institution maintaining
such Blocked Accounts and the Bank hereby directs the Company to, no later than
on the Business Day following the day on which Collections are received in such
operating account, pay, apply or reserve for payment, as the case may be, such
Collections as follows:

       

      (i)     first,
reserve for payment to the Bank at the next Settlement Date the amount equal to
the difference between the Agreed Base Value and the Purchase Price of the
Purchased Receivables (other than Defaulted Receivables);

       

      (ii)  
 second, reserve for payment to the Bank at the next Settlement Date the
amount of any Dilutions which may have accrued or been granted in relation to
the relevant Purchased Receivables that were not otherwise accounted for in the
calculation of Purchase Price;

       

      (iii) 
 third, reserve for payment to the Bank on the next Settlement Date (A) the
Purchase Price of the Purchased Receivables (other than Defaulted Receivables),
except for such amounts as may be used to purchase Replacement Receivables for
the time remaining in the applicable Settlement Period by the Company on the
Bank’s behalf (“Net Daily
Collections”) at the price determined in accordance with
Section 4.1, and (B) all other amounts which may be owing to the Bank under
this Agreement or any other Transaction Document with respect to any Collections
of Purchased Receivables; and

       

      (iv) 
fourth, with respect to any Collections of Purchased Receivables which include
any Trade Credit Amounts owing to the Company, reserve for payment to the
Company such corresponding Trade Credit Amounts subject to the last sentence of
the following paragraph.

       

      If on any
Settlement Date the Bank decides in its sole discretion (but subject to the
requirements of Section 4.4(e)), not to purchase Replacement Receivables title
to which has not yet transferred to the Bank pursuant hereto with Collections,
the Company shall remit and hold all Collections (including, without limitation,
Collections received relating to Trade Credit Amounts) in the Blocked Accounts
until the next Settlement Date, whereupon it shall follow the procedures set
forth in Section 4.4(d) and (e), provided, however, that if a Termination Event
has occurred or the Termination Date has been declared, on the applicable Final
Collection Date the Company shall follow the procedures set forth in
Section 18.  The Company shall comply in all respects with each
such direction of the Bank.  The Company’s interest in any Collections
relating to Trade Credit Amounts or that it would otherwise receive as its
servicing fee shall at all times following the occurrence of a Termination Event
be subordinate to the Bank’s interest in the Collections until the Final
Collection Date.

       

      (c)While
the Company is acting in the capacity of Servicer, any amounts in respect of the
payment of Net Daily Collections shall be deemed to have been paid to the
Company and deposited into the Blocked Account immediately upon receipt thereof
by the Company.


      
        
           


        

        
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      (d)     The
Company agrees to give and grant all conveyances, assignments and transfers, by
way of sale of title to and ownership in the Purchased Receivables as may be
necessary to give effect to the purchases hereunder.  Except as set
forth in Sections 4.4(e) and 21, at no time shall the Company have any right,
title or interest in or to, or be the owner of, any Purchased
Receivable.  If any action is required to be taken to effect such
conveyances, assignments and transfers, such action shall be taken at the
expense of the Company.  For the avoidance of doubt, it is hereby
confirmed that the sale, assignment and transfer of Purchased Receivables
pursuant hereto is intended to be absolute and unconditional and is not intended
by the parties to be and should not be construed as a loan or the grant of
collateral security for a loan.

       

      (e)     The
Bank agrees that at no time shall the Bank have any rights or interest in any
Monsanto Receivables and that the Company shall at all times be entitled to any
collections deposited into the Blocked Accounts related to Monsanto Receivables;
provided, however, that
if at any time after the Termination Date, an Approved Debtor does not make a
full payment on the Purchased Receivables and the Monsanto Receivables and the
Approved Debtor shall have not otherwise stated to which accounts receivable the
payment should be applied and the Company has notified the Bank that the Company
has not determined pursuant to the terms of this Agreement and the Monsanto
Agreement as to which accounts receivable the payment should be applied, the
Bank agrees that such payment shall be applied on a pro rata basis to the
Purchased Receivables and the Monsanto Receivables of such Approved Debtor.


       

      Section 4.4.    
(a) The Company and the Bank shall settle amounts owing as between
them hereunder on each Settlement Date.

       

      (b)     The
Company shall deliver to the Bank prior to the Closing Date the initial
Portfolio Report, in the form of a hard copy or electronically in a manner
acceptable to the Bank, as at the last day of the immediately preceding
week.

       

      (c)     Thereafter:

       

      (i)     by
12:00 p.m. New York time three Business Days prior to each Settlement Date;
and

       

      (ii)     within five
Business Days following the Termination Date,

       

      the
Company shall deliver to the Bank, in the form of a hard copy or electronically
in a manner acceptable to the Bank, a Portfolio Report as at the following dates
(or on the date otherwise agreed between the Company and the Bank):

       

      (iii)     as
at the last day of the immediately preceding Settlement Period (in the case of
paragraph (i) above);

       

      (iv)     as at
the Company’s close of business on the day immediately preceding the Termination
Date (in the case of paragraph (ii) above).


      
        
           


        

        
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      (d)     On
each Settlement Date by 10:00 a.m. New York time, to the extent available from
Collections:

       

      (i)     the
Company shall pay to the Bank by deposit to the Bank’s account the amounts set
forth in Section 4.3(b)(i) and (ii) in respect of Purchased Receivables (other
than Defaulted Receivables), to the extent any part thereof has not been
previously paid;

       

      (ii)     If
the difference between the amount reserved pursuant to Section 4.3(b)(iii) and
the Purchase Price for Replacement Receivables in accordance with Section 4.2 is
positive, then the Company shall pay to the Bank by deposit to the Bank’s
account such difference.

       

      (iii)    If the
difference between the amount reserved pursuant to Section 4.3(b)(iii) and the
Purchase Price for Replacement Receivables in accordance with Section 4.2 is
negative, then the Bank shall pay to the Company such difference, or at the
Bank’s discretion, the Company shall deduct from the amounts due to the Bank
pursuant to clause (d)(i) above such difference.

       

      (iv)   to the extent that the
Bank has received any Collections directly, so long as no Termination Event has
occurred, the Bank shall pay to the Company by deposit to the Company’s
operating account (as designated by the Company), such amounts as may be used to
purchase Replacement Receivables that the Bank has consented to purchase, as
well as an amount equal to the aggregate amount of all Trade Credit Amounts that
the Company is entitled to receive that have been received by the Bank from such
Collections.

       

      (e)  
On each Settlement Date, (i) the Company shall purchase from the Bank all
Purchased Receivables other than Defaulted Receivables for a purchase price
equal to the Agreed Base Value of such receivables minus any amounts received by
the Bank as repayment of such Purchased Receivables and (ii) the Bank (x) shall
repurchase any Receivables previously purchased by the Bank in accordance with
Section 3.2 and any Replacement Receivables which have been purchased with the
Bank’s consent in accordance with Section 4.2, in each case to the extent such
Receivables have not yet been paid as of such Settlement Date, and (y) may in
its sole discretion purchase such Replacement Receivables which have been
purchased by the Company without the Bank’s consent during the period between
the previous Settlement Date and the current Settlement Date in accordance with
Section 4.2; in all cases the Company may use the purchase price that it would
have paid the Bank for the Purchased Receivables in accordance with clause (i)
above to purchase Replacement Receivables in accordance with clause (ii) above,
provided in each case that the Agreement Amount, the Debtor Sublimits and all
other limits provided herein are respected in accordance with Section
2.1.

       

      Section 4.5.  
(a) On each Settlement Date in respect of which the Bank has agreed
or been required in accordance with Section 4.4(e) to purchase Receivables,
title to all currently existing Receivables of the Approved Debtors set forth in
each Portfolio Report originated by the Company shall, ipso facto, and without
any further action on the part of the Company or the Bank transfer to the Bank
to the extent necessary so that the Purchase Price of all Purchased Receivables
is equal to the Funded Amount of such Purchased Receivables.


      
        
           


        

        
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      (b)     If at
any time the sale of all of the Receivables by the Company hereunder is limited
by the Agreement Amount, the applicable Debtor Sublimit, or any other applicable
limit set forth herein, the Receivables of such Approved Debtor originated by
the Company that are otherwise purchased and sold hereunder up to such
limitations shall be deemed to be the Receivables of such Approved Debtor with
the earliest due date (based upon their net invoice value excluding all accruals
for any discounts).

       

      Section 4.6.    
(a) The Company will from time to time within five days following
any request, furnish the Bank with a calculation of the amounts paid or held for
or in trust for the Bank by the Company under this Agreement.

       

      (b)     The
Company will provide the Bank with such other reports, information, documents,
books and records as the Bank may reasonably request and which may be lawfully
disclosed or provided to the Bank, including, without limitation, a certificate
signed by its officers attesting to (i) the balance owing on each Purchased
Receivable, (ii) the Maturity Date of each Purchased Receivable and the fact
that the goods sold and/or services provided under the terms of the relevant
Contracts were shipped in accordance with the terms of such Contracts, (iii) a
copy of the purchase order or sales order and invoices relating to each
Purchased Receivable, (iv) a copy of the bill of lading and any other shipping
document relating to the Purchased Receivable and all billings, statements,
correspondence and memoranda directed to the customer in relation to each
Purchased Receivable, and (v) after the Termination Date, a full accounting of
daily Collections received.

       

      Section 4.7.    
The Bank may keep records of all purchases, which records shall be
consistent with all information set forth in the Portfolio Reports delivered to
the Bank, and evidence the dates and amounts of purchases and the applicable
Discount in effect from time to time.  Such records shall be
presumptive evidence but the failure to record any purchase shall not limit or
otherwise affect any obligations of the Company hereunder or the Debtors’
obligations to make payments on the Purchased Receivables when due.

       

      Section 4.8.    
The Company
will, from time to time, at its expense, promptly execute and deliver all
instruments and documents and take all action that may be reasonably necessary
and that the Bank may reasonably request, in order to perfect, protect or more
fully evidence the Bank’s ownership of the Purchased Receivables, or to enable
the Bank to exercise or enforce any of its rights hereunder.

       

      Section 4.9.    
By effecting each payment under Section 4.1 and Section 4.2,
the Bank shall complete the purchase of all right, title and interest, whether
now owned or hereafter acquired and wherever located, in, to and under such
Purchased Receivables, without recourse, except as set forth in
Sections 4.4(e), 5.2, 7.2, 7.4, 8, 15 and 18.5.  By accepting
such payment, the Company shall be conclusively deemed to sell, set over,
assign, transfer and convey to the Bank and its successors and assigns, without
recourse, except as set forth in Sections 4.4(e), 5.2, 7.2, 7.4, 8, 15 and 18.5,
all of its right, title and interest in, to and under such Purchased
Receivable.


      
        
           


        

        
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      Section 4.10.  
Any payment by a Debtor in respect of any indebtedness owed by it to the
Company in respect of Purchased Receivables shall, except as otherwise specified
by such Debtor or required by the related Contract or law, be applied, first, as
a Collection of any Purchased Receivables then outstanding of such Debtor in the
order of the age of such Purchased Receivables, starting with the oldest of such
Purchased Receivables and, second, to any other indebtedness of such Debtor to
the Company in respect of Purchased Receivables.

       

      
        
          
            	
                    Section
      5.

                  	
                    Limited
      Liability.

                  


          

        

      

       

      Section 5.1.    Except
as set forth in Sections 4.4(e), 5.2, 7.2, 7.4, 8, 15 and 18.5, the purchase and
sale of Purchased Receivables under this Agreement shall be without recourse to
the Company.  The Company and the Bank intend the transactions
hereunder to constitute true sales of Purchased Receivables, providing the Bank
with the full risks and benefits of ownership of the Purchased Receivables (such
that the Purchased Receivables would not be property of the Company’s estate in
the event of its bankruptcy).

       

      Section 5.2.    Deemed
Collections/Repurchase Obligation.

       

      5.2.1     If a
Repurchase Event with respect to a Purchased Receivable occurs under clause (ii)
of the definition thereof and the related reduction, adjustment, cancellation or
setoff relates only to a portion of the aggregate Original Amount and not the
entire aggregate Original Amount, the Company shall be deemed to have received
on such day a Collection on such Purchased Receivable in the amount of such
reduction, adjustment, cancellation or setoff.  All such Collections
deemed received by the Company under this Section 5.2.1 shall be remitted
by the Company to such account as shall be directed by the Bank in accordance
with Section 6.1.  On receipt of all amounts referred to above,
the Bank shall (at the cost and expense of the Company) execute such documents
as may be necessary to re-assign that portion of the applicable Purchased
Receivables which represents the amounts so paid, without recourse,
representation or warranty (except as to the title thereto by the Bank), to the
Company.

       

      5.2.2    
Except as set forth in Section 5.2.1 with respect to partial reductions,
adjustments, cancellations or setoffs of any Original Amount, if a Purchased
Receivable remains unpaid and a Repurchase Event with respect to such Purchased
Receivable has occurred, the Bank may, by written notice, require the Company to
pay to the Bank in respect of such Purchased Receivable, as directed by the
Bank, an amount equal to the Agreed Base Value of such Purchased Receivable (or
so much of it as was paid by the Bank to the Company and remains unpaid as
Collections), and if such Purchased Receivable is being repurchased by the
Company after the Maturity Date of such Purchased Receivable, together with
interest thereon at the interest rate specified in Section 7.6 from the due date
to the date of the Company’ payment in full thereof, and any other amounts then
payable by the Company hereunder including breakage costs under
Section 7.4, whereupon such amount shall become due and payable from the
Company to the Bank on the date specified in such notice and shall be paid into
an account specified by the Bank.  On receipt of all amounts referred
to above, the Bank shall (at the cost and expense of the Company) execute such
documents as may be necessary to re-assign the applicable Purchased Receivables
without recourse, representation or warranty (except as to the title thereto by
the Bank), to the applicable account of the Company.


      
        
           


        

        
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      Section 5.3.    
True
Sale.  It is the intention of the parties hereto that such
purchase made hereunder shall constitute a sale and assignment of the related
Purchased Receivable (and not merely a pledge), which sale and assignment is
absolute, irrevocable and without recourse except as set forth in
Sections 4.4(e), 5.2, 7.2, 7.4, 8, 15 and 18.5 and shall provide the Bank
with the full benefits of ownership of such Purchased Receivable.  In
the event that, notwithstanding the intent of the parties, such purchase is
deemed by a court of competent jurisdiction to constitute a pledge rather than a
sale and assignment, the Company does hereby grant to the Bank, in order to
secure all the obligations of the Company to the Bank hereunder, a first
priority security interest in, to and on, the Purchased Receivables and the
products and proceeds thereof including, without limitation, all Collections,
all Trade Credit Amounts, all Related Assets and all other monies, instruments,
securities, documents, investment property, financial assets and other property
related to the Purchased Receivables from time to time on deposit in or credited
to the Blocked Accounts or any other accounts and all other such property
relating to the Purchased Receivables or any of them.

       

      
        
          	
                  Section
      6.

                	
                  The
      Company as Servicer and Agent of
Bank.

                


        

      

       

      Section 6.1.    
Appointment of
Servicer.  Notwithstanding the sale of Purchased Receivables
pursuant to this Agreement, the Company shall continue to be responsible for the
servicing and administration of the Purchased Receivables sold by it as agent
and trustee for the Bank, all on the terms set out in this Agreement and,
subject to the right of the Bank to terminate the Company as servicer, agent and
trustee pursuant to this Agreement at any time following the occurrence of a
Termination Event, subject to the termination provisions of
Section 6.3.  In its capacity as servicer, the Company
shall:

       

      (a)     direct
each Debtor of the Purchased Receivables to make all payments thereon to the
Blocked Accounts;

       

      (b)     immediately
pay over to the Blocked Accounts any Collections of Purchased Receivables
received by the Company which shall be received in trust for the
Bank;

       

      (c)     promptly upon
becoming aware thereof, to notify the Bank in the event that all or any part of
any Purchased Receivable is not paid in full on the Maturity Date
thereof;

       

      (d)     comply
with the terms and provisions of Section 4 hereof with regard to
Collections, actions to be taken at each Settlement Date and the purchase at the
Bank’s option of Replacement Receivables; and

       

      (e)     provide the
Bank with a weekly reconciliation and Portfolio Report setting forth the list of
Purchased Receivables and reconciling Collections made to the Blocked Accounts
pursuant to paragraph (a) above in form and in substance as agreed upon between
the Bank and the Company.


      
        
           


        

        
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      Section 6.2.    Effect of
Agency.  The possession by the Company or its transferee or
agent of products or proceeds (including Collections) of any Purchased
Receivable shall be deemed to be “possession by the secured party” for purposes
of perfecting such security interest pursuant to the UCC or other applicable
law.  Notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed to be notifications to, or acknowledgments, receipts or
confirmations from, bailees or agents (as applicable) of, the Bank or its
transferee for the purpose of perfecting such security interest under the UCC as
in force in the relevant jurisdiction and other applicable law.

       

      Section 6.3.    Termination of
Appointment.  The Bank may at any time following the occurrence
of a Termination Event, or, immediately if upon the bankruptcy or insolvency of
the Company or the Parent (however evidenced), (i) at its discretion give
notice to each Debtor and take any lawful action to collect any Purchased
Receivable sold from the Company directly from the respective Debtor and
(ii) by notice in writing terminate the appointment of the Company as its
servicer and agent for the servicing of Purchased Receivables, in which case the
Company undertakes to the Bank not to interfere with such servicing or
collection of any Purchased Receivable nor attempt to receive, nor itself make
collection from the Debtor in respect of such Purchased
Receivables.  The Company shall have the option to repurchase all, or
any portion of, Purchased Receivables sold by it upon any termination of the
Company as servicer at the Repurchase Price as set forth in Section 21.1,
provided no bankruptcy
or insolvency (however evidenced) has occurred with respect to the Company or
the Parent.  The Company hereby grants and conveys to the Bank an
irrevocable power of attorney (coupled with an interest) authorizing and
permitting the Bank, at its option, with or without notice to the Company, to do
any one of the following:  (a) endorsing the name of the Company
upon any checks or other Receivables, (b) endorsing the name of the Company
on any freight or express bill or bill of lading relating to any Purchased
Receivables; (c) taking all action as the Bank deems appropriate,
including, without limitation, the execution and filing of financing statements
in the name of and on behalf of the Company to perfect any of the security
interests granted to the Bank herein.  The Company agrees that neither
the Bank nor the attorney-in-fact will be liable for any acts of commission or
omission nor for any error of judgment or mistake of fact or law except to the
extent the same constitutes gross negligence or willful misconduct.

       

      Section 6.4.    Company Books and
Records.  The Company shall maintain its applicable books and
records, including but not limited to any computer files and master data
processing records, or written records thereof, so that such records that refer
to Purchased Receivables sold hereunder shall indicate clearly that the
Company’s right, title and interest in such Receivables have been sold to the
Bank.  Indication of the Bank’s ownership of Purchased Receivables
shall be deleted from or modified on the Company’s records when, and only when,
the Purchased Receivables shall have been paid in full or the Bank’s ownership
of such Receivables shall have been repurchased by the Company from the
Bank.


      
        
           


        

        
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                  Section
      7.

                	
                  Payments.

                


        

      

       

      Section 7.1.    Place
and Time.

       

      7.1.1.     All
payments to be made by the Company to the Bank pursuant to this Agreement shall
be made on the date such amount is due by not later than 12:00 p.m. noon New
York time to the account of the Bank listed on the signature page thereof, or
such other account as may be specified by the Bank.

       

      7.1.2.     All
payments to be made by the Bank pursuant to this Agreement shall be made on the
date such amount is due by not later than 3:00 p.m. New York Time to the account
of the Company notified to the Bank by the Company.

       

      Section 7.2.    
Deduction; Withholding; Grossing Up.

       

      7.2.1.    
Subject to Section 7.2.2, all sums payable by the Company to the
Bank pursuant to or in connection with any Transaction Document shall be paid in
full, free and clear of all deductions, set-off or withholdings whatsoever
except only as may be required by law.

       

      7.2.2.     If
any deduction or withholding is required by law in respect of any payment due
from the Company to the Bank pursuant to or in connection with any Transaction
Document, the Company shall:

       

      (a)     ensure
that the deduction or withholding is made and that it does not exceed the
minimum legal requirement;

       

      (b)     pay,
or procure the payment of, the full amount deducted or withheld to the relevant
taxation or other authority in accordance with the applicable law;

       

      (c)     increase the
payment in respect of which the deduction or withholding is required so that the
net amount received by the Bank after the deduction or withholding (and after
taking account of any further deduction or withholding which is required to be
made as a consequence of the increase) shall be equal to the amount which the
payee would have been entitled to receive in the absence of any requirement to
make any deduction or withholding; and

       

      (d)     promptly
deliver or procure the delivery to the Bank of receipts evidencing each
deduction or withholding which has been made.

       

      Section 7.3.    
Payments in
Dollars.  All payments to be made by the Company and the
Debtors in respect of a Purchased Receivable, whether of interest, principal, or
otherwise, shall be made in Dollars.

       

      Section 7.4.    
Breakage Cost
Indemnity.  The Company agrees to indemnify the Bank on demand
against any loss or expense (including, but not limited to, any loss of the
Applicable Margin or any other loss or expense sustained or incurred or to be
sustained or incurred by the Bank in liquidating or employing deposits acquired
or contracted for to effect or maintain its acquisition of Purchased Receivables
or any part thereof) which the Bank has sustained or incurred as a consequence
of (i) a purchase of Receivables not being made following the delivery of
any Purchase Request to the Bank by reason of the non-fulfillment of any of the
conditions precedent or otherwise or (ii) a repurchase of Purchased
Receivables by the Company prior to the end of the applicable Settlement
Period.


      
        
           


        

        
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      Section 7.5.    
Business
Days.  Any amounts which but for this Section 7.5 would
fall due for payment under this Agreement on a day other than a Business Day
shall be payable on the succeeding Business Day unless such Business Day would
fall into a new calendar month, in which case such payment shall be due on the
preceding Business Day.  Interest calculations shall, where necessary,
be adjusted accordingly.

       

      Section 7.6.    
Default Interest.

       

      7.6.1.     In
the event that any amount payable by the Company hereunder or under any of the
other Transaction Documents (including, without limitation, payment of
Collections not paid to the Bank when received) remains unpaid for five (5)
Business Days after the Bank provides notice to the Company that such amounts
are past due, the Bank shall charge, and the Company shall pay, interest (“Default Interest”) from time
to time on any such unpaid amount due from the Company to the Bank during the
period from (and including) the due date thereof to, but excluding the date
payment is received by the Bank in full, at a rate equal to the aggregate of (i)
the prime commercial rate as from time to time quoted by the Bank, and (ii)
3.25% per annum.

       

      7.6.2.     Such
Default Interest shall be payable ON DEMAND and, if no prior demand is made, on
the last Business Day of each calendar month.  The Bank is authorized
to charge any such amount of Default Interest due to any account of the Company
on the books of the Bank or any affiliate thereof and to deduct any such amount
from any amount which would otherwise be due from the Bank to the Company from
time to time under this Agreement.

       

      
        
          	
                  Section
      8.

                	
                  Changes
      in Circumstances.

                


        

      

       

      Section 8.1.     Increased
Costs.

       

      8.1.1.     The
Company, shall, within three Business Days of a demand by the Bank, pay the
amount of any Increased Costs incurred by the Bank as a result of (i) the
introduction of or any change in (or in the interpretation, administration or
application of) any law or regulation or (ii) compliance with any law or
regulation made after the date of this Agreement.

       

      8.1.2.     In
this Agreement “Increased Costs” means (i) a reduction in the rate of return for
the Bank from the transactions contemplated in the Transaction Documents or on
the Bank’s overall capital; (ii) an additional or increased cost imposed by
regulatory or administrative action; or (iii) a reduction of any amount due and
payable under any Transaction Document or by the Debtor under the Purchased
Receivables, which in each case is incurred or suffered by the Bank to the
extent that it is attributable to the Bank having entered into any Transaction
Document or funding any purchase of Purchased Receivables or being exposed to
any Debtor in respect of Purchased Receivables and/or performing any of its
obligations under any Transaction Document.


      
        
           


        

        
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      Section 8.2.    
Increased Cost Claims.

       

      8.2.1.     If
the Bank intends to make a claim pursuant to Section 8.1 (“Increased Costs”) it shall notify the
Company of the event giving rise to such claim and provide a certificate
confirming the amount of its Increased Costs.

       

      Section 8.3.    
Exceptions.

       

      8.3.1.    
Section 8.2 does not apply to the extent any Increased Cost is (i)
attributable to a Tax Deduction required by law to be made by the Company, (ii)
compensated for by Section 7.2; or (iii) attributable to the willful breach
by the Bank of any law or regulation; or (iv) attributable to increased costs as
a result of the income tax, franchise tax or similar obligations of the
Bank.

       

      In this
Section 8.3 a “Tax Deduction” means a deduction or withholding for or on
account of Tax from a payment under a Transaction Document.

       

      
        
          	
                  Section
      9.

                	
                  Further
      Assurances.

                


        

      

       

      Section 9.1.    
The Company agrees that from time to time, at its expense, it will
promptly execute and deliver all further instruments and documents, and take all
further action, that the Bank may reasonably request in order to perfect,
protect or more fully evidence the transactions contemplated hereby, or to
enable the Bank to exercise or enforce any of its rights with respect to the
Purchased Receivables.  Without limiting the generality of the
foregoing, upon the request of the Bank, the Company will file such financing or
continuation statements, or amendments thereto or assignments thereof, or
termination statements in respect of any outstanding Liens, and such other
instruments or notices as required under U.S. or local law, as may be necessary
or appropriate to perfect and preserve the interests of the Bank in the
Purchased Receivables, free and clear of Adverse Claims.

       

      Section 9.2.    
The Company hereby authorizes the Bank or its designee to file one or
more financing or continuation statements, and amendments thereto and
assignments thereof and such other instruments or notices as referred to in
Section 9.1, relative to all or any of the Purchased Receivables now
existing or hereafter arising in the name of the Company.

       

      
        
          	
                  Section
      10.

                	
                  Representations
      and Warranties.

                


        

      

       

      Section 10.    
General Representations
and Warranties.  The Company hereby makes, and on each purchase
date and Settlement Date shall be deemed to make, the following representations
and warranties for the benefit of the Bank as of the Closing Date and each
subsequent purchase date and Settlement Date with reference to the facts and
circumstances then existing (with the understanding that, with respect to any
such representation or warranty which relates to any Purchased Receivable, such
representations and warranties are deemed to have been made by the Company only
as of the date of the purchase of such Purchased Receivable by the
Bank):


      
        
           


        

        
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      (a)     It is
duly organized and validly existing and registered under the laws of its
jurisdiction of organization and has the full right, power and authority to own
its property and assets and carry on its business as it is now being conducted,
to enter into the Transaction Documents, to perform and observe all of the
matters and things provided for therein, including the sale to the Bank of the
Purchased Receivables and it has taken all necessary steps to duly authorize the
execution of this Agreement and the other Transaction Documents and the
transactions contemplated hereby.

       

      (b)     This
Agreement and each other Transaction Document has been duly authorized by the
Company and executed and delivered by the proper officer(s) of the Company and
constitute or, as the case may be, will, when made, constitute its legal, valid
and binding obligations enforceable in accordance with its terms.

       

      (c)     The
Company is the legal and beneficial owner of each Purchased Receivable sold by
it and, on the date of the sale of the Purchased Receivables to the Bank, the
Purchased Receivables shall be transferred to the Bank free and clear as of the
date of such sale, of any Adverse Claim.

       

      (d)     Each
Purchased Receivable is generated from a sale to an Approved Debtor and shall be
freely assignable and shall constitute amounts due and payable by the Debtor on
the relevant Maturity Date (which shall not exceed 90 days from the earliest of
(i) the date of sale or (ii) dispatch of the goods by the Company) and
each Contract, Purchased Receivable and Invoice complies in all material
respects with all applicable laws and regulations.

       

      (e)     The
making and performance of this Agreement and each Transaction Document and the
transactions contemplated hereby will not (as to the best of the Company’s
knowledge as to (i)) violate any provision of (i) any law, regulation,
order or decree of any governmental authority, agency or court or (ii) its
organizational documents or (iii) any agreement, mortgage, indenture or other
agreement to which it is a party or affecting the Company or any of its assets
or properties nor will such making and performance with or without the passage
of time or the giving of notice or other conditions, constitute an event of
default or termination event (howsoever described) under any of the foregoing or
result in the creation, imposition or enforceability of any Encumbrance over any
of its assets, except in favor of the Bank.

       

      (f)     Each
Invoice as issued in respect of each Purchased Receivable sold by it was
properly issued in accordance with the Contract and evidences that the amount
specified in such invoice will be due and payable to the Company in Dollars on
and as of the Purchase Date without the need for any other action, delivery of
goods or performance of services by the Company with respect to the Original
Amount set forth in such Invoice.

       

      (g)     Each
Contract and Receivable was originated in the ordinary course of the Company’s
business and in accordance with the Company’s credit and collection
policy.


      
        
           


        

        
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      (h)     The
Company has performed all of its material obligations under the Contract
relating to Purchased Receivables and in particular and without limitation it
has delivered all goods and services to the country of the Debtor as are due and
required under such Contract with respect to the face amount set forth in such
Invoice.

       

      (i)     The
obligations of the Debtor in respect of each Purchased Receivable have not, as
of the date of the Bank’s purchase thereof, been prepaid in whole or in
part.

       

      (j)     As of
the date the sale of such Receivable to the Bank, the goods supplied under the
Contract giving rise thereto are not subject to any retention of title or
equivalent clauses exercisable by the Company or, to the Company’s knowledge,
any third parties, which may adversely affect the interests of the Bank and at
the time of sale by the Company to the Bank, no Purchased Receivable is subject
to a volume or other discount (except to the extent that the amount of any Trade
Credit Amount has already been taken into account in determining the Funded
Amount of the Purchased Receivable as set forth in the Portfolio Report) or
subject to any claim by, or dispute with, the Debtor.

       

      (k)     As of
the date the sale of such Receivable to the Bank, each applicable Contract
giving rise thereto is in full force and effect as of such date, and the Company
is not in breach thereof or in default thereunder in a manner that would result
in the Debtor being entitled to exercise any set off rights or counterclaim or
to withhold, extend or delay payment on any Purchased Receivable; and, as of
such date, there are no disputes, offsets, counterclaims or defenses of the
Debtor known to the Company with respect to any Purchased Receivable (if any
Purchased Receivable is more than 60 days past due, other than as a result
of a Debtor’s Financial Inability to Pay, it shall be presumed that the Debtor
has asserted a contractual claim or dispute).

       

      (l)     Under  the
laws of or applicable to the jurisdiction of its organization in force as at the
date hereof, the claims of the Bank against the Company in relation to each
Purchased Receivable will rank at least pari passu with the
claims of all its other unsecured creditors save those whose claims are
preferred solely by any bankruptcy, insolvency, liquidation or other similar
laws of general application.

       

      (m)     Under
the laws of or applicable to the jurisdiction of organization in force as at the
date hereof, the Company will not be required to make any deduction or
withholding from any payment it makes to the Bank in respect of any Purchased
Receivable or the Contract giving rise thereto, and the Company has all consents
and licenses necessary to perform its obligations thereunder.

       

      (n)     As of
the date of the sale of such Purchased Receivable to the Bank, neither the
Company nor, to the actual knowledge of the Company, any Approved Debtor, is
insolvent nor has any insolvency or bankruptcy event occurred with respect to
the Company or such Debtor, nor is the Debtor past due under any payment
obligation to the Company with respect to any related Purchased Receivable nor
has the Debtor rescheduled or extended the Maturity Date of any such Purchased
Receivable.


      
        
           


        

        
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    (o)     The
Company has indicated, or will indicate as of the date of such sale, on its
books and records, as appropriate, that the Purchased Receivables have been sold
by the Company to the Bank (or its successors and assigns).

     

    (p)     The
transactions contemplated by this Agreement are being consummated by the Company
in order to raise capital to carry out the Company’s ordinary business, with no
contemplation of being or becoming insolvent and with no intent to hinder, delay
or defraud any of its present or future creditors.  By virtue of the
Company’s right to receive any payment of the Purchase Price for each Purchased
Receivable as provided in Section 4 hereof, the Company has received reasonably
equivalent value for the Purchased Receivables sold by it.

     

    (q)     On the
date of the sale of each Purchased Receivable by the Bank, the Bank shall
acquire a valid ownership interest or a first perfected security interest in
each Purchased Receivable free and clear of any Adverse Claim; and, upon
transfer of ownership of such Purchased Receivable from the Company to the Bank,
no financing statement or other similar instrument or other filing or
recordation covering any such Purchased Receivable or any interest therein, is
on file in any recording office except such as may be filed pursuant to this
Agreement or except as to which a release or disclaimer in form satisfactory to
the Bank has been provided, or as to which the Bank has consented.

     

    (r)     The
Company’s jurisdiction of organization and “location” for purposes of the UCC,
or other relevant local law, is the State of Ohio (or at such other location,
notified to the Bank in accordance with Section 11.1(m)), in a jurisdiction
where all actions required by Section 9.1 have been completed). Except as
described in Schedule 3, (i) the Company has no trade names, fictitious
names, assumed names or “doing business as” names and (ii) the Company has not
changed its jurisdiction of organization or location or its name, identity or
corporate structure within the four months prior to the date of this
Agreement.  The Company’s federal taxpayer identification number or
other registration number is as set forth in Schedule 3.

     

    (s)     All
information provided by the Company to the Bank with respect to the Purchased
Receivables (including without limitation relating to the applicable Debtor’s
past payment history and commercial relationship with such Debtor) is true and
accurate in all material respects and nothing has been given or withheld that
would result in the information provided being untrue or misleading in any
material respect.

     

    (t)     The
representations made or deemed to be made by the Company in each Transaction
Document are and remain correct in all material respects as of the date
made.

     

    (u)     With
respect to the Company’s obligations hereunder, no consent, license,
authorization, registration, legalization, notification to, declaration with,
approval or permit of, any governmental authority, agency or instrumentality
(including any central banking or other monetary authority) is required by the
Company in connection with its execution, delivery and performance, and the
validity or enforceability of the Company’s obligations under the Transaction
Documents, the Company’s sale of the Purchased Receivables, or the transactions
contemplated thereby.


    
      
         


      

      
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    (v)     The
sale of the Purchased Receivables by the Company to the Bank under the
Transaction Documents would, under the law applicable to the Company as of the
date of the sale thereof, constitute a true sale or other absolute transfer of
the Purchased Receivables by the Company (except to the extent set forth in this
Agreement) to the Bank and upon each purchase by the Bank, the Bank shall
acquire a legally valid ownership interest or a first perfected security
interest in each Purchased Receivable, free and clear of any lien, claim or
other encumbrance without any need on the part of the Company or the Bank to
(i) except as may be required under the applicable Contracts, notify the
account debtors on the Purchased Receivables or (ii) except as may be
required under applicable disclosure requirements, file, register or record the
Transaction Documents or the sale of the Purchased Receivables under the laws
applicable to the Company.

     

    (w)     The
obligation of the Company to remit payments received from the Debtors on the
Purchased Receivables in U.S. dollars to the Bank in the United States, either
directly or through the Blocked Accounts as designated by the Bank is legally
valid under the laws applicable to the Company and no foreign exchange
registrations or approvals are necessary to effectuate such U.S. dollar
payments.

     

    
      
        	
                Section
      11.

              	
                Covenants.

              


      

    

     

    Section 11.     General
Covenants.  The Company hereby agrees, at all times prior to
the Final Collection Date:

     

    (a)     to
duly perform all its obligations under the relevant Contract in respect of each
Purchased Receivable, so that each such Receivable remains a legal, valid and
binding obligation of the Debtor enforceable against the Debtor in accordance
with its terms, to inform the Bank of any material breach or default by the
Company or the Debtor, within five Business Days after it becomes aware of any
such breach or default and to take all measures necessary and consistent with
the terms of the Contract to minimize or prevent any loss which may be incurred
by the Bank in the event of nonperformance of the Contract or nonpayment of an
invoice by the Company or the Debtor arising out of a dispute between the
Company and the Debtor thereunder;

     

    (b)     after
the date of the Company’s sale of the related Purchased Receivable, not to amend
any applicable Contract related thereto in any manner or have any dealing or
other arrangement with the Debtor that, as between the Company and the Debtor,
is intended to, or will, affect the collectability of the Purchased Receivable
or the Original Amount or the Maturity Date for payment of any Purchased
Receivable, cancel or terminate such Contract and not to, or purport to,
terminate, revoke or vary any term or condition of or extend the Maturity Date
by more than 30 days (so long as in no event shall the Maturity Date be
extended beyond 90 days from the date of purchase of such Purchased Receivable)
of any Purchased Receivable without the prior consent in writing of the Bank, if
the same could adversely affect the financial value or economic return to the
Bank in respect of the Purchased Receivable;


    
      
         


      

      
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        Execution
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    (c)     not to
create or suffer to exist any Adverse Claim over all or any of the Company’s
rights, title and interest in and to any Purchased Receivable or the Contract in
respect of such Purchased Receivable or any lock-box or other account to which
any Collections of any Purchased Receivables are sent (unless otherwise agreed
to by the Bank) and not to, or purport to, assign, transfer or otherwise deal
with any of its rights in respect of any such Contract or any Purchased
Receivable other than in favor of the Bank, and Company shall provide the Bank
with a release or disclaimer of any Adverse Claim purportedly created by any
other Person over any Purchased Receivable;

     

    (d)     to
ensure that it has shipped all goods in respect of each Purchased Receivable in
conformity with all applicable laws and regulations (including without
limitation import and export laws and regulations);

     

    (e)     to
keep and maintain proper accounts and Sales Records and Invoices in connection
with each Purchased Receivable in an up to date form (including details of each
Invoice specified in the Portfolio Report) and ensure that they are retained in
suitable storage and that they indicate:

     

    (i)     which
Receivables are Purchased Receivables;

     

    (ii)     details of
all Purchased Receivables which are specified in the Portfolio Reports;
and

     

    (iii)     that
such Purchased Receivables have been sold to the Bank, and to provide the Bank
with a quarterly report regarding a receivables aging, delinquency, write-offs,
Receivables rolled forward and dilution report in the form attached as Schedule
4 as to the Purchased Receivables, showing a loss to liquidation ratio (monthly
write-offs over collections), delinquency ratio (Receivables more than 90 days
past due over closing Receivables balance) and dilution ratio (monthly credit
memos over sales) within 5 days of the close of each month in a form
satisfactory to the Bank, or as may otherwise be approved by the
Bank;

     

    (f)     to
devote and assure that there is devoted to the servicing of Purchased
Receivables at least the same amount of time and attention and that there is
exercised at least the same level of skill, care and diligence in their
servicing, as if it were servicing those receivables legally and beneficially
owned by it;

     

    (g)     to
comply with any reasonable directions, orders and instructions (including any
procedures for the administration and commencement and continuation of legal or
other proceedings against the Debtor to enforce payment of Purchased
Receivables) given by the Bank and to take such action on the Bank’s behalf as
the Bank may request to procure the ordinary course collection of such accounts
as directed by the Bank;


    
      
         


      

      
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    (h)     to
use all reasonable efforts to recover and enforce payment of any or all
Purchased Receivables and provide such reasonably requested information as to
assist the Bank to recover and enforce payment of any or all Purchased
Receivables (including at the request of the Bank joining in and being a party
to any legal or other action which the Bank has taken or wishes to take against
the Debtor with the Bank being entitled to full control of such
action);

     

    (i)     to
take such action as may reasonably be required by applicable law to perfect a
full legal assignment to the Bank of such Purchased Receivable, such that, among
other things, the Bank shall be entitled to receive or take action to recover
all Purchased Receivables outstanding from the Debtor without the Company being
required to join in, being a party to or taking in its own name legal action
against the Debtor;

     

    (j)     upon
the reasonable request of the Bank, to mark its accounting records evidencing or
relating to the Purchased Receivables with a legend evidencing that the
Purchased Receivables have been sold in accordance with this
Agreement;

     

    (k)     to
provide information and reports as reasonably requested by the Bank reasonably
related to the transactions contemplated by this Agreement, of which information
and reports shall be complete and accurate in all material respects, including
without limitation, annual audited financial statements for the Company and its
consolidated subsidiaries within 120 days after the end of each fiscal year or
as soon as available if earlier and unaudited financial statements for the
Company and its consolidated subsidiaries within 60 days after the end of each
fiscal quarter or as soon as available if earlier;

     

    (l)     (i)
at any time during regular business hours and upon reasonable prior notice, to
permit the Bank or any of its agents or representatives, (A) to examine and make
copies of and abstracts from the Company’s records relating to Purchased
Receivables, including the Contracts and Sales Records, and (B) to visit the
offices and properties of the Company for the purpose of examining such records
and to discuss matters relating to Purchased Receivables or the Company’
performance hereunder with any of the officers or employees of the Company
having knowledge of such matters; and (ii) without limiting the provisions of
clause (i), from time to time on request of the Bank, permit certified public
accountants or other auditors acceptable to the Bank to conduct, at the
Company’s expense, a review of the Company’s books and records; provided that such
examinations, visits and reviews by the Bank or accountants shall occur no more
than once a year during any period of time that there is no default by the
Company of its obligations hereunder; and

     

    (m)     to
keep its jurisdiction of organization and chief executive office at the location
referred to in Schedule 3 or, upon 30 days’ prior written notice to the
Bank, at such other location in a jurisdiction where all action required by
Section 9.1 shall have been completed; and not change its name except upon like
notice and after all action required by Section 9.1 shall have been
completed.


    
      
         


      

      
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                Section
      12.

              	
                Partial
      Invalidity

              


      

    

     

    If at any
time any provision of the Transaction Documents shall be adjudged by any court
or other competent tribunal to be illegal, invalid or unenforceable, the
validity, legality, and enforceability of the remaining provisions hereof shall
not in any way be affected or impaired nor shall the legality, validity or
enforceability of such provisions under the law of any other jurisdiction be in
any way affected or impaired thereby and the parties hereto will use their best
efforts to revise the invalid provision so as to render it enforceable in
accordance with the intention expressed in this Agreement.

     

    
      
        	
                Section
      13.

              	
                No
      Bank Liability for Contract

              


      

    

     

    The
Company hereby acknowledges and agrees that the Bank shall not be in any way
responsible for the performance of any Contract and the Bank shall not have any
obligation to intervene in any dispute arising out of the performance of any
Contract.  Any claim which the Company may have against any Debtor or
any other party, including any successors or assignees, and/or the failure of
the Debtor to fulfill its respective obligations under each Contract shall not
affect the obligations of the Company to perform its obligations and make
payments under this Agreement and shall not be used as a defense or as set-off,
counterclaim or cross-complaint as against the performance or payment of any of
its obligations.

     

    
      
        	
                Section14. 

              	
                Notices,
      Addresses, Language

              


      

    

     

    Section 14.1     Notices, Addresses.
(a) All notices, requests and demands given or made under the Transaction
Documents shall be given or made in writing and unless otherwise stated shall be
made by telefax or letter using the address as specified below or such other
address as the party may designate to the other party:

    


    
      
        
          	
                  To
      the Company

                  or the
      Parent:

                	 
      	
                  The
      Scotts Company LLC

                
	
                  Attention:

                	 
      	
                  Treasurer

                
	
                  Street
      Address:

                	 
      	
                  14111
      Scottslawn Road

                  Marysville,
      Ohio 43041

                
	
                  Facsimile:

                	 
      	
                  937-578-5754

                
	 
      	 
      	 
      
	
                  To the
      Bank:

                	 
      	
                  Calyon
      New York Branch

                
	
                  Attention:

                	 
      	
                  Export
      & Trade Finance

                
	
                  Street
      Address:

                	 
      	
                  1301
      Avenue of the Americas

                  New
      York, NY 10019

                
	
                  Email

                	 
      	
                  Thibault.berger@us.calyon.com
      with a copy to etf@us.calyon.com

                


        

      

    

     

    
      
         


      

      
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    (b)     All
notices, requests and demands shall be deemed to have been duly given or made
when dispatched by telefax when the confirmation showing the completed
transmission received or, if mailed via a reputable international courier, when
it has been left at the relevant address or five (5) Business Days after being
delivered to such reputable international courier, in an envelope addressed to
the applicable person at that address and to the attention of the person(s) set
forth above.

     

    (c)   
The Company and the Bank shall promptly inform each other of any changes in
their respective addresses, facsimile numbers and/or email addresses specified
above.

     

    Section 14.2.     English
Language.  Each communication and document made or delivered by
one party to another pursuant to this Agreement shall be in the English language
or accompanied by a translation thereof into English (certified by an officer of
the person making or delivering the same) as being a true and accurate
translation thereof.

     

    
      
        	
                Section
      15.

              	
                Fees,
      Costs and Indemnity.

              


      

    

     

    Section 15.1.     Fees.  (a)     The
Company shall pay to the Bank on or before the Closing Date such fees as are set
forth in the Fee Letter.

     

    (b)     If
the Bank agrees that on the last day of a Relevant Quarter the relevant Funded
Amount may exceed $10,000,000 at such time (determined as provided in Section
2.1(c), the Company shall pay to the Bank an excess fee (the “Excess Fee”) equal to the
product of the rate listed below and the amount by which Funded Amount on the
Settlement Date immediately prior to such last day of such Relevant Quarter
exceeds $10,000,000 (the “Excess Amount”), such Excess
Fee to be payable  in arrears on each such Settlement Date beginning on the
Settlement Date immediately prior to June 30, 2009:

    


    
      
        
          
            
              	
                      Excess
      Amounts

                    	 	
                      Excess
      Fee

                    
	 
      	 	 
      
	
                      Up
      to $5 million

                    	 	
                      20
      basis points

                    
	 
      	 	 
      
	
                      $5
      million  to $10 million

                    	 	
                      30
      basis points

                    
	 
      	 	 
      
	
                      $10
      million and above

                    	 	
                      50
      basis
points

                    


            

          

        

      

    

     

    Section 15.2.     Costs and
Expenses.  All costs, charges and expenses, including
reasonable fees and expenses of legal counsel, audit and due diligence expenses,
in relation to the preparation, execution and enforcement of the Transaction
Documents and each Purchased Receivable by the Bank shall be paid by the Company
to the Bank on demand on a full indemnity basis whether or not any Receivables
are purchased hereunder.


    
      
         


      

      
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    Section 15.3.     Duties and
Taxes.  All stamp, documentary, registration or other like
Taxes (excluding taxes upon or measured by the net income of the Bank),
including withholding taxes and any penalties, additions, fines, surcharges or
interest relating thereto, or any notarial fees which are imposed or chargeable
on or in connection with this Agreement or any other Transaction Document or any
other document executed pursuant hereto or thereto shall be paid by the Company,
it being understood and agreed that the Bank shall be entitled but not obliged
to pay any such Taxes (whether or not they are its primary responsibility), and
the Company, jointly and severally, shall on demand indemnify the Bank against
those Taxes and against any costs and expenses so incurred by it in discharging
them.

     

    Section 15.4.     Indemnity.  The
Company agrees to indemnify, defend and save harmless the Bank (including each
of its branches, affiliates, officers, directors, employees or other agents, the
“Indemnified Party”), other than for such
Indemnified Party’s own gross negligence or willful misconduct, forthwith on
demand, from and against any and all related losses, claims, damages,
liabilities, costs and expenses (including, without limitation, all attorneys’
fees and expenses, expenses incurred by their respective credit recovery groups
(or any successors thereto) and expenses of settlement, litigation or
preparation therefor) which any Indemnified Party may incur or which may be
asserted against any Indemnified Party by any person (including, without
limitation, any Debtor or any other person whether on its own behalf or
derivatively on behalf of the Company) arising from or incurred in connection
with any of the following events:

     

    (i)     the
failure to vest in the Bank a first priority perfected ownership interest or
security interest in each Purchased Receivable, free and clear of any Adverse
Claim;

     

    (ii)     the
commingling by the Company of Collections of Purchased Receivables at any time
with other funds of the Company or other Person, provided that the Bank hereby
acknowledges the lien on the Collections deposited in the Blocked Accounts of
Receivables not sold under this Agreement of JPMorgan Chase Bank, N.A., as
Administration Agent under the terms of the Credit Agreement, or the failure of
the Company to direct any Debtor to make payment on Purchased Receivables to the
Blocked Account;

     

    (iii)     any
representation or warranty made by the Company pursuant to this Agreement is
inaccurate, incorrect or untrue in any material respect;

     

    (iv)     any
failure of the Company to perform any of its duties or obligations hereunder; or
the violation of any applicable law, rule or regulation with respect to any
Purchased Receivable or the related Contract;

     

    (v)     any
failure to promptly execute when reasonably requested to do so by the Bank, of
any document or instrument confirming the sale to the Bank under applicable law
with respect to the Purchased Receivables;


    
      
         


      

      
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    (vi)     (1) any
claim or dispute resulting from the sale of the merchandise or services related
to any Purchased Receivable or the furnishing or failure to furnish such
merchandise or services including, without limitation, any discount (other than
a discount already taken into account in determining the Purchase Price of a
Purchased Receivable as set forth in a Portfolio Report), (2) any
adjustment, offset, withholding tax, deduction, counterclaim, warranty issue or
refusal of an Approved Debtor to pay not arising from the Financial Inability to
Pay of such Debtor; or (3) any products liability claim arising out of or
in connection with merchandise or services that are the subject of any Purchased
Receivable (if any Receivable is more than 60 days past due, other than as
a result of the Financial Inability to Pay of the Debtor, it shall be presumed
that such Debtor has asserted a contractual claim or dispute);

     

    (vii)     any
tax or governmental fee or charge (but not including taxes upon or measured by
net income of the Bank), all interest and penalties thereon or with respect
thereto, and all out-of-pocket costs and expenses, including the reasonable fees
and expenses of counsel in defending against the same, which may arise by reason
of any act or omission by the Company with respect to the purchase or ownership
of any Purchased Receivable or in any goods which secure any Purchased
Receivable;

     

    (viii)     any
investigation, litigation or proceeding related to any act or omission by the
Company with respect to this Agreement or the transactions contemplated hereby
except to the extent that such investigation, litigation or proceeding arises
due to the Bank’s gross negligence or willful misconduct;

     

    (ix)     any
material defect in authenticity or any material discrepancy between the records
at the Company in respect of the Purchased Receivables or the documents issued
by the Company supporting the Purchased Receivables and the information provided
to the Bank by the Company or any failure by the Company to provide the Bank
with information regarding the Purchased Receivables;

     

    (x)     any
claim or dispute arising out of or in connection with the Monsanto Agreement;
and

     

    (xi)     any
and all reasonable out-of-pocket costs and expenses, including reasonable legal
fees and court costs, incurred by the Bank in enforcing the obligations of the
Company under this Agreement and the other Transaction Documents;

     

    provided that nothing in this
Section 15.4 shall be deemed to provide indemnity to the Bank for credit
losses resulting from the Financial Inability to Pay of any Debtor.

     

    
      
        	
                Section
      16.

              	
                Calculations
      and Certificate.

              


      

    

     

    Section 16.1.    
Accounts.  Absent
manifest error in any litigation or arbitration proceedings arising out of or in
connection with a Transaction Document or a Purchased Receivable, the entries
made in the accounts maintained by the Bank are presumptive evidence of the
matters to which they relate.


    
      
         


      

      
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    Section 16.2.     Certificates and
Determinations.  Any certification or determination by the Bank
of a rate or amount under any Transaction Document is, in the absence of
manifest error, conclusive evidence of the matters to which it
relates.

     

    
      
        	
                Section
      17.

              	
                Set-Off.

              


      

    

     

    The
Company hereby authorizes the Bank to apply any credit balance (in whatever
currency denominated) on any account of the Company with the Bank or any
affiliate of the Bank in satisfaction of any sum due and payable by the Company
pursuant to the terms of this Agreement.  For this purpose the Bank is
authorized to purchase at its spot rate of exchange with the moneys standing to
the credit of any such account Dollars or such other currencies as may be
necessary to effect such application.

     

    
      
        	
                Section
      18.

              	
                Termination.

              


      

    

     

    
      
        	
              	
                Section
      18.1. 

              	
                 The
      following events or occurrences shall constitute Termination
      Events:

              


      

    

     

    (a)     the
Company or the Parent shall fail to pay (i) any amount due by it pursuant to
Section 4.4(e) or (ii) within five (5) calendar days of the date when due,
any amount greater than $100,000 under this Agreement, including, without
limitation, amounts payable by the Company in its capacity as servicer or under
the indemnity for breaches of any warranties or covenants contained in this
Agreement;

     

    (b)     the
Company or the Parent is in default (i) beyond the period of grace, if any,
in the payment of any indebtedness exceeding $25,000,000, or (ii) under any
agreement or instrument relating to any such indebtedness the result of which
would allow the holder thereof to accelerate the payment of such indebtedness
prior to its stated maturity;

     

    (c)     the
Company or the Parent (i) shall generally fail to pay its debts as they
become due, (ii) has commenced against it any bankruptcy or insolvency
proceeding which is not dismissed within 60 days or commences any
bankruptcy or insolvency proceeding, (iii) has any receiver, trustee,
liquidator or other similar person appointed for itself or a substantial portion
of its property or (iv) takes any action to effectuate or authorize any of
the foregoing;

     

    (d)     any
Adverse Claim shall occur as to any of the Purchased Receivables or proceeds
thereof, which results in Collections thereof being reduced by an amount in
excess of 10% of the Funded Amount thereof;


    
      
         


      

      
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    (e)     (i) the
Company or Parent, as applicable,  breaches any covenant set forth in
Section 4 (other than as provided in Section 18.1(a)(i)), 5.2, 6.1, 9.1,
15.4 or 22(a) of this Agreement and such breach shall continue for fifteen (15)
calendar days after a responsible officer of the Company has knowledge thereof,
(ii) the Company breaches any covenant set forth
in  Section 11(c), (g), (i), (k), (l), or (m) of this Agreement
and such breach shall continue for thirty (30) calendar days after a responsible
officer of the Company has knowledge thereof or (iii) the Company breaches any
covenant set forth in Section 11(h) of this Agreement or any similar
covenant which requires, or upon the request of the Bank would require, the
Company to file or join in any lawsuit against, or take any other legal action
against, any Approved Debtor and such breach shall continue for thirty (30)
calendar days after a responsible officer of the Company has knowledge
thereof;

     

    (f)     the
failure of the Company and the Bank to mutually agree to a more frequent
Settlement Period within five (5) calendar days of the Company’s receipt of
written request from the Bank;

     

    (g)     the
failure by the Parent to own 100% of the outstanding equity interests of the
Company;

     

    (h)     default
in the due observance or performance by the Parent of the covenant set forth in
Section 22(b) of this Agreement;

     

    (i)     the
final termination of any blocked account agreement relating to a Blocked Account
without the Bank’s prior written consent; and

     

    (j)     an
Approved Debtor is in default due to a Financial Inability to Pay of an amount
equal to or greater than $3,000,000 with respect to its payment of any prior
Purchased Receivables.

     

    Section 18.2.     Upon
the occurrence of any Termination Event, the Bank may immediately terminate any
agreement it had made at such time to purchase additional Receivables and any
authority it had given the Company to purchase Replacement
Receivables.  Notwithstanding any other provision hereof, this
Agreement shall continue in full force and effect with respect to Purchased
Receivables already purchased and all other rights, benefits and entitlements of
the Bank expressed or implied to continue after such termination until the Final
Collection Date.

     

    Section 18.3.     Upon
the termination of this Agreement, the Bank will have, in addition to its rights
and remedies hereunder and under the other Transaction Documents, all other
rights and remedies under applicable laws and otherwise, which rights and
remedies will be cumulative.

     

    Section
18.4.     Without limiting the rights of the
Bank, on the Termination Date, and on each day thereafter, the Company, subject
to the terms and conditions of this Agreement, will hold or deposit in trust in
the Blocked Accounts, for the benefit of the Bank, the Collections of Purchased
Receivables received by the Company on each such day and the Bank may withdraw
all such amounts from the Blocked Account upon giving the notice required under
the relevant Blocked Account Agreement.  After the Bank has delivered
any notice of termination under Section 18.1, Company shall not exercise
any right of set-off or compensation with respect to any sum owing to the
Bank.


    
      
         


      

      
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    Section
18.5.          On the
Termination Date, and at all times thereafter, all Purchased Receivables
described in Section 4.5, inclusive of those Purchased Receivables which
are identified as Purchased Receivables in the Portfolio Report delivered by the
Company, and which the Bank has funded the Purchase Price thereof as of the
Company’s close of business on the day immediately preceding the Termination
Date, shall, subject to verification and approval by the Bank and this
Section 18.5, be the Total Purchased Receivables (the “Total Purchased
Receivables”) for all purposes of this Agreement.

     

    On the
Termination Date other than one designated by the Bank in accordance with clause
(iii) of the definition of Termination Date (“Bank Termination”), unless a
Termination Event occurs following such Bank Termination, in which case the
terms of this paragraph shall apply, and upon the identification of the Total
Purchased Receivables, the Company shall immediately pay to the Bank the sum of
the Agreed Base Value of the Total Purchased Receivables (other than Defaulted
Receivables), the Termination Interest and applicable Dilutions which have not
otherwise been taken into account, in each case as determined by the Bank absent
manifest error, and the Bank shall sell, set over, assign, transfer and convey
to the Company, without recourse, all of its right, title and interest in, to
and under such Total Purchased Receivable.  

     

    In the
event of a Bank Termination, beginning on the Termination Date, the Bank shall
no longer purchase Purchased Receivables or Replacement Receivables except to
the extent provided in Section 4.4(e)(ii)(x), the Company shall cease to
purchase Replacement Receivables from Collections but shall continue to purchase
Receivables pursuant to Section 4.4(e)(i), and the terms of this Agreement will
continue in effect until the Purchased Receivables other than Defaulted
Receivables then held by the Bank have been paid or become Defaulted
Receivables, or a Termination Event occurs.

     

    If the
Company fails to pay such amount, the list of the Total Purchased Receivables
(other than Defaulted Receivables) shall be amended to include such amount of
additional Receivables from the Approved Debtors as is necessary to make the
Funded Amount of the Total Purchased Receivables (other than Defaulted
Receivables) equal to the aggregate Purchase Price thereof as at the Termination
Date.

     

    
      
        	
                Section
      19.

              	
                Miscellaneous

              


      

    

     

    Section 19.1.     Assignments and
Transfers.  (a) The Bank may at any time assign, transfer
or participate (including by way of novation) any of its rights and obligations
under the Transaction Documents to another bank or financial institution; provided that the Bank shall
notify the Company in writing at least fifteen days prior to such assignment and
obtain the Company’s written consent thereto (so long as no Termination Event
has occurred and is continuing and has not otherwise been waived or cured),
which consent shall not be unreasonably withheld or delayed, and, if the Company
so elects, the Company shall have fifteen days from the date of such notice to
repurchase any outstanding Purchased Receivables from the Bank at the Purchase
Price as set forth in Section 21.1 with respect to any amounts outstanding
from each Debtor in relation to each Purchased Receivable, plus any other
amounts outstanding from the Company to the Bank under this Agreement, including
breakage costs under Section 7.4.  The Bank agrees that it shall
not (i) assign, transfer or participate any of its rights or obligations
hereunder after the date hereof in any manner that allows any such assignee,
transferee or participant to directly enforce any rights or remedies of the Bank
hereunder against the Company or the Parent, or (ii) permit or agree to any
amendments or modifications to any participation agreement entered into with any
such participants which change any of the voting rights and percentages in
Section 11 thereof.


    
      
         


      

      
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    (b)     The
Company may not assign or otherwise transfer its rights, benefits or obligations
or any of them under the Transaction Documents.

     

    (c)     Subject
to the foregoing, this Agreement shall be binding on and shall inure to the
benefit of each party hereto and its successors and assigns.

     

    Section 19.2.     Waivers, Remedies
Cumulative.  No failure to exercise, nor any delay in
exercising, on the part of the Bank, any right or remedy under the Transaction
Documents shall operate as a waiver thereof, nor shall any single or partial
exercise of any right or remedy prevent any further or other exercise thereof or
the exercise of any other right or remedy.  The rights and remedies
herein provided are cumulative and not exclusive of any rights or remedies
provided by law.

     

    Section 19.3.     Accounting
Treatment.  The Company agrees and acknowledges that it is a
sophisticated party in relation to this Agreement and that it has taken
independent legal and accounting advice in relation to the accounting treatment
to be applied to this Agreement.  It is agreed that the Company has
not relied on any representation of the Bank in this regard.

     

    Section 19.4.     Third Party
Rights.  Other than as approved in this Agreement, no person
not a party to this Agreement shall be deemed a third party beneficiary
hereof.

     

    Section 19.5.     Counterparts.  Each
Transaction Document may be executed in any number of counterparts, and by the
different parties thereto on separate counterparts; each such counterpart shall
be deemed an original and all of such counterparts taken together shall be
deemed to constitute one and the same instrument.  A facsimile or
electronic copy of an executed counterpart of this Agreement shall be effective
as an original for all purposes.

     

    Section 19.6.     Entire
Agreement.  This Agreement constitutes the entire Agreement
between the parties hereto in relation to the Agreement and supersedes all
previous proposals, agreements and other written and oral communications in
relation thereto.

     

    Section 19.7.     Exclusion of
Liability.  In no event shall the Bank be liable for any loss
of profits, business, data or information or for any remote, incidental,
indirect, special or consequential damages.


     

    Section 19.8.     Continuing
Obligations.  The Company shall remain liable to perform all
obligations assumed by it under each Contract, and the Bank shall be under no
obligation of any kind whatsoever thereunder or be under any liability
whatsoever in the event of any failure by the Company to perform its obligations
thereunder.


    
      
         


      

      
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    Section 19.9.          USA
Patriot Act; OFAC and Anti-Terrorism.

     

    (a)               The
Bank hereby notifies the Company that pursuant to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Act”), it is
required to obtain, verify, and record information that identifies the Company,
which information includes the name and address of the Company and other
information that will allow the Bank to identify the Company in accordance with
the Act.

     

    (b)               Neither
the Company, nor the Parent, nor, to the best of their knowledge, any Persons
holding any legal or beneficial interest whatsoever in the Company or the Parent
(whether directly or indirectly) (i) are named on the list of Specially
Designated Nationals and Blocked Persons maintained by OFAC or any list of
Persons issued by OFAC pursuant to Executive Order 13224 – Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support
Terrorism, as in effect on the date hereof, or any similar list issued by OFAC
(collectively, the “OFAC Lists”); (ii) are Persons
determined by the Secretary of the Treasury of the United States to be owned by,
controlled by, acting for or on behalf of, providing assistance, support,
sponsorship, or services of any kind to, or otherwise associated with any of the
Persons referred to or described in the OFAC Lists; or (iii) have conducted
business with or engaged in any transaction with any Person identified in (i) or
(ii) above.

     

    (c)               (i)
Neither the Company nor the Parent will knowingly conduct business with or
engage in any transaction with any Person named on any of the OFAC Lists or any
Persons determined by the Secretary of the Treasury of the United States
pursuant to Executive Order 13224 to be owned by, controlled by, acting for or
on behalf of, providing assistance, support, sponsorship, or services of any
kind to, or otherwise associated with any of the Persons referred to or
described in the OFAC Lists; (ii) if the Company or the Parent obtains actual
knowledge or receives any written notice that it or any Person holding any legal
or beneficial interest whatsoever therein (whether directly or indirectly), is
named on any of the OFAC Lists (such occurrence, an “OFAC Violation”), the Company or
the Parent will immediately (A) give written notice to the Bank  of
such OFAC Violation, and (B) comply with all applicable laws with respect to
such OFAC Violation (regardless of whether the party included on any of the OFAC
Lists is located within the jurisdiction of the United States of America),
including, without limitation, the Economic and Trade Sanctions and
Anti-Terrorism Laws. The Company and the Parent hereby authorize and consent to
the Bank taking any and all steps they deem necessary, in its sole discretion,
to comply with all applicable laws with respect to any such OFAC Violation,
including, without limitation, the requirements of the Economic and Trade
Sanctions and Anti-Terrorism Laws (including the “freezing” and/or “blocking” of
assets); and (iii) the Company and the Parent will comply at all times with the
requirements of all Economic and Trade Sanctions and Anti-Terrorism Laws, and
will, upon the Bank’s request from time to time during the term of this
Agreement, deliver a certification confirming its compliance with the covenants
set forth in this Section 19.9.


    
      
         


      

      
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                Section
      20.

              	
                Governing
      Law

              


      

    

     

    Section 20.1.     This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York without regard to the principles of conflicts of law
thereof (other than Section 5-1401 of the New York General Obligations
Law).

     

    Section 20.2.     Any
litigation based hereon, or arising out of, under or in connection with this
Agreement, may be brought and maintained in the courts of the State of
New York sitting in New York County, New York or in the United
States district court for the Southern District of New York; provided that any suit
seeking enforcement against any receivables or other property may be brought, at
the Bank’s option, in the courts of any jurisdiction where such receivables or
other property may be found.  The Company and the Parent hereby
expressly and irrevocably submit to the jurisdiction of the courts of the State
of New York sitting in New York County, New York and of the
United States district court for the Southern District of New York for the
purpose of any such litigation.  The Company and the Parent further
irrevocably consent to the service of process by registered mail, postage
prepaid, to the address specified in Section 14.1 of this Agreement (or
such other address as they shall have specified in writing to the Bank as their
address for notices hereunder) or by personal service within or without the
State of New York.  The Company, the Parent and the Bank
expressly and irrevocably waive, to the fullest extent permitted by law, any
objection which they may now or hereafter have to the laying of venue of any
such litigation brought in any such court and any claim that any such litigation
has been brought in an inconvenient forum.

     

    Section 20.3.     The
Company, the Parent and the Bank hereby waive any right to a trial by jury in
any action or proceeding to enforce or defend any rights under this Agreement or
any application, instrument, document, amendment or agreement delivered or which
may in the future be delivered in connection herewith or arising from any
banking relationship existing in connection with this Agreement, and agree that
any such action or proceeding shall be tried before a court and not before a
jury.

     

    
      
        	
                Section
      21. 

              	
                Optional
      Repurchase

              


      

    

     

    Section 21.1.     In
the event that (i) the Bank gives notice to the Company of its intention to
replace the Company as servicer and agent, (ii) the Bank informs the
Company that it will not purchase any other Receivables due to a Termination
Event, (iii) a Purchased Receivable is past due, or (iv) any
bankruptcy or insolvency (however evidenced) of the Company or the Parent shall
occur, the Company may, at its option, repurchase all of the outstanding
Purchased Receivables from the Bank for an amount equal to the Agreed Base Value
of such Purchased Receivables (or so much of it as was paid by the Bank to the
Company and remains unpaid), less an amount equal to the product of such Agreed
Base Value and Discount, where the numerator included in the calculation
of  Discount is the number of days from the repurchase date to the
next following Settlement Date, and if such Purchased Receivable is being
repurchased by the Company after the Maturity Date of such Purchased Receivable,
together with interest thereon at the interest rate specified in
Section 7.6 from the due date to the date of the Company’s payment in full
thereof, and any other amounts then payable by the Company hereunder, including,
breakage costs under Section 7.4, whereupon such amount shall become due
and payable from the Company to the Bank on the date specified in such notice
and shall be paid into such account specified by the Bank.


    
      
         


      

      
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    Section 21.2.     In
addition to the foregoing, the Company shall have the right at any time before
or after a Termination Event, at its option, to repurchase all or a portion of
the outstanding Purchased Receivables from the Bank for an amount equal to the
Agreed Base Value of such Purchased Receivables (or so much of it as was paid by
the Bank to the Company and remains unpaid), less an amount equal to the product
of such Agreed Base Value and Discount, where the numerator included in the
calculation of  Discount is the number of days from the repurchase
date to the next following Settlement Date, and if such Purchased Receivable is
being repurchased by the Company after the Maturity Date of such Purchased
Receivable, together with interest thereon at the interest rate specified in
Section 7.6 from the relevant Maturity Date to the date of the Company’s
payment in full thereof, and any other amounts then payable by the Company
hereunder, including, breakage costs under Section 7.4, whereupon such
amount shall become due and payable from the Company to the Bank on the date
specified in such notice and shall be paid into such account specified by the
Bank.

     

    
      
        	
                Section
      22.

              	
                Guaranty;
      Parent Covenant.

              


      

    

     

    (a)     Parent
is the owner of the Company.  Parent hereby unconditionally and
irrevocably guarantees to the Bank the due and punctual payment, performance and
observance by the Company of all of the terms, covenants, conditions,
agreements, representations, warranties, indemnities and undertakings on the
part of the Company to be performed or observed under this Agreement, including,
without limitation, the punctual payment when due of all obligations of the
Company now or hereafter existing under this Agreement, whether for
indemnification payments, fees, expenses, repurchase obligations or otherwise
(all of the foregoing being collectively referred to as the “Obligations”).  In
the event that the Company shall fail in any manner whatsoever to perform or
observe any of the Obligations when the same shall be required to be performed
or observed under this Agreement (subject to any applicable cure periods), then
upon the written demand of the Bank, Parent shall perform, cause to be performed
or make payment to allow such Obligations to be performed.

     

    Parent
further agrees that nothing contained herein shall prevent the Bank from
foreclosing on its security interest in or lien on any asset, if any, or from
exercising any other rights available to it under this Agreement or any other
instrument of security, if any, and the exercise of any of the aforesaid rights
and the completion of any foreclosure proceedings shall not constitute a
discharge of any of Parent’s obligations hereunder; it being the purpose and
intent of Parent that its obligations hereunder shall be absolute, independent
and unconditional under any and all circumstances.  Neither Parent’s
obligations hereunder nor any remedy for the enforcement thereof shall be
impaired, modified, changed, released or limited in any manner whatsoever by an
impairment, modification, change, release or limitation of the liability of the
Company or by reason of the bankruptcy or insolvency of the
Company.  Parent waives any and all notices of the creation, renewal,
extension or accrual of or increase in any of the Obligations and notice of or
proof of reliance by Bank upon this Section 22(a) or acceptance of this
Section 22(a).  This Agreement shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended, amended or
waived, in reliance upon this Section 22(a).  All dealings
between the Company and Parent, on the one hand, and the Bank, on the other
hand, likewise shall be conclusively presumed to have been had or consummated in
reliance upon this Section 22(a).


    
      
         


      

      
        -37-

        
          

        

      

      
         


        Execution
Version

      

    

     

    Parent
hereby waives any and all presentments, demands, notices, and protests against
Parent, and any requirement that the Bank commence or exhaust any remedies
against the Company or any collateral securing the
Obligations.  Parent’s liability hereunder shall be unconditional
irrespective of (i) any lack of enforceability of the Obligations,
(ii) any law, regulation rights with respect thereto, and (iii) any
other circumstance which might otherwise constitute a defense available to, or
discharge of, the Company or Parent.  This guarantee is a guarantee of
payment and performance and not of collection and shall remain in full force and
effect until payment in full of the Obligations.  The Obligations of
Parent under this Section 22(a) does rank and will rank pari passu in priority
of payment with all other unsecured and unsubordinated obligations for borrowed
money of Parent.  

     

    All
payments under this Section 22(a) by Parent shall be made by Parent on the
date when due and shall be made in lawful currency of the United States of
America and in immediately available and freely transferable funds at the
payment office of the Bank in the United States of America as from time to time
specified in writing by the Bank.

     

    (b)     From
and after the date hereof and so long as this Agreement is in effect, except to
the extent compliance in any case or cases is waived in writing by the Bank, the
Parent agrees that it will, for the benefit of the Bank, comply with, abide by,
and be restricted by all the agreements, covenants, obligations and undertakings
of the Parent contained in the provisions of Section 6.10 of the Credit
Agreement, inclusive, regardless of whether any indebtedness is now or hereafter
remains outstanding thereunder, or the Credit Agreement shall have terminated,
all of which provisions, together with the related definitions, exhibits and
ancillary provisions, are incorporated herein by reference, mutatis mutandis, and made a
part hereof to the same extent and with the same force and effect as if the same
had been herein set forth in their entirety, and will be deemed to continue in
effect for the benefit of the Bank irrespective of whether the Credit Agreement
remains in effect, and without regard or giving effect
to any amendment or modification of such provisions or any waiver of compliance
therewith, no such amendment, modification or waiver to in any manner constitute
an amendment, modification or waiver of the provisions thereof as incorporated
herein unless consented to in writing by the Bank; provided, that said
provisions for purposes of the incorporation described herein shall be amended
in the following respects:

     

    (i)     the
term “Borrower”
appearing in said provisions shall mean and refer to the Parent;

     

    (ii)     the
term “Lenders” or “Administrative Agent”
appearing in said provisions shall mean and refer to Bank as defined in this
Agreement;


    
      
         


      

      
        -38-

        
          

        

      

      
         


        Execution
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    (iii)     the
term “Agreement”
appearing in said provisions shall mean and refer to this Agreement;
and

     

    (iv)     the
term “herein” or “hereof” appearing in said
provisions shall mean and refer to this Agreement.

     

    Other
than as hereinabove amended, any terms contained in the provisions of the Credit
Agreement incorporated herein which are defined in the Credit Agreement shall
have the same meaning herein as in the Credit Agreement.

     

    
      
        	
                Section
      23.

              	
                [Intentionally
      Omitted].

              


      

    

     

    
      
        	
                Section
      24.

              	
                Confidentiality.

              


      

    

     

    Each
party hereto agrees to hold the Transaction Documents and all non-public
information received by it in connection therewith from any other party hereto
or its agents or representatives in confidence and agrees not to provide any
Person with copies of any Transaction Document or such non-public information
other than to (i) any officers, directors, members, managers, employees or
outside accountants, auditors or attorneys thereof, (ii) any prospective or
actual assignee or participant which (in each case) has signed a confidentiality
agreement containing provisions substantively identical to this Section 24 or
has agreed to be subject to the terms of this Section 24, and
(iii) Governmental Authorities with appropriate jurisdiction (including
filings required under securities laws).  Notwithstanding the above
stated obligations, provided that the other
parties hereto are given notice of the intended disclosure or use, the parties
hereto will not be liable for disclosure or use of such information which such
Person can establish by tangible evidence: (i) was required by law, including
pursuant to a valid subpoena or other legal process, (ii) was in such Person’s
possession or known to such Person prior to receipt or (iii) is or becomes known
to the public through disclosure in a printed publication (without breach of any
of such Person’s obligations hereunder).

     

    [Remainder
of Page Intentionally Left Blank]


    
      
         


      

      
        -39-

        
          

        

      

      
         


        Execution
Version

      

    

     

    In
Witness Whereof, the parties have executed this Agreement by their
undersigned, duly authorized officers on the date first above
written:

    


    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  	
                                          CALYON
      NEW YORK BRANCH

                                        
	 
      	 
      
	
                                          By:

                                        	
                                          /s/
      Andre Gazal

                                        
	
                                          Title:

                                        	
                                          Managing
      Director

                                        
	 
      	 
      
	
                                          By:

                                        	
                                          /s/
      S. Estival

                                        
	
                                          Title:

                                        	
                                          Director

                                        
	 
      	 
      
	
                                          Bank’s
      Account:  Calyon New York Branch, New York, NY

                                          ABA
      026-008-073

                                        
	
                                          A/C
      No. 01-88179-3701, A/C Name: Loan Settlement

                                        
	 
      	 
      
	
                                          THE
      SCOTTS COMPANY LLC

                                        
	 
      	 
      
	
                                          By:

                                        	
                                          /s/
      Scott M. Haefke

                                        
	
                                          Title:

                                        	
                                          Vice
      President and Treasurer

                                        
	 
      	 
      
	
                                          THE
      SCOTTS MIRACLE-GRO COMPANY

                                        
	 
      	 
      
	
                                          By:

                                        	
                                          /s/
      Scott M. Haefke

                                        
	
                                          Title:

                                        	
                                          Vice
      President and
Treasurer