Document:

Exhibit 4.3

 

	 	 	 	 	 

Exhibit 4.3

Execution Copy

SECOND SUPPLEMENTAL INDENTURE

               THIS SECOND SUPPLEMENTAL INDENTURE (this “Second Supplemental Indenture”) dated as of March
18, 2005, is among The Scotts Company, an Ohio corporation (the “Company”), The Scotts Miracle-Gro
Company, an Ohio corporation (the “Holding Company”), The Scotts Company LLC, an Ohio limited
liability company (the “Guaranteeing Subsidiary”), the subsidiary guarantors named on the signature
pages hereto (collectively, the “Guarantors”) and U.S. Bank National Association, as trustee under
the Indenture (as defined below) (the “Trustee”).

WITNESSETH

               WHEREAS, the Company and the Guarantors have heretofore executed and delivered to the Trustee
and the Trustee has heretofore executed and delivered an indenture, dated as of October 8, 2003, as
amended by that certain Supplemental Indenture, dated as of October 15, 2004 (as so amended, the
“Indenture”), providing for the issuance of an unlimited aggregate principal amount of 6.625%
Senior Subordinated Notes due 2013 (the “Notes”);

               WHEREAS, the Company desires to restructure its corporate structure into a holding company
structure (the “Restructuring”), as permitted by Section 5.01(b) of the Indenture;

               WHEREAS, in connection with the Restructuring, the Company has incorporated the Holding
Company as a new, wholly owned direct subsidiary of the Company, and the Holding Company has in
turn formed the Guaranteeing Subsidiary as a new, wholly owned direct subsidiary of the Holding
Company and a second-tier subsidiary of the Company;

               WHEREAS, to effectuate the Restructuring, the Company, the Holding Company and the
Guaranteeing Subsidiary have executed and delivered an Agreement and Plan of Merger, dated December
13, 2004, pursuant to which the Company will be merged with and into the Guaranteeing Subsidiary
(the “Merger”), with the Guaranteeing Subsidiary surviving the Merger as a wholly owned first-tier
subsidiary of the Holding Company;

               WHEREAS, immediately upon the effective time of the Merger (the “Effective Time”), each of the
Company’s common shares will be converted automatically into one common share of the Holding
Company, and the Guaranteeing Subsidiary will be the successor to the Company;

               WHEREAS, pursuant to this Second Supplemental Indenture, the Holding Company shall assume and
agree to perform all of the covenants, agreements, rights, obligations and liabilities of the
Company under the Notes and the Indenture as of the Effective Time;

               WHEREAS, pursuant to this Second Supplemental Indenture, the Guaranteeing Subsidiary shall
unconditionally guarantee all of the Holding Company’s obligations under the Notes and the
Indenture (the “Subsidiary Guarantee”) as of the Effective Time; and

 

 

               WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and
deliver this Second Supplemental Indenture.

               NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto covenant and agree
for the equal and ratable benefit of the Holders of the Notes as follows:

               1. Capitalized Terms. Capitalized terms used herein without definition shall have the
meanings assigned to them in the Indenture.

               2. Assignment of Rights and Obligations under the Notes and Indenture. Pursuant to Section
5.01(b) of the Indenture, as of the Effective Time, (a) the Holding Company hereby assumes and
agrees to perform and discharge all covenants, agreements, rights, obligations and liabilities of
the Company under and with respect to the Notes and the Indenture; (b) the Holding Company shall
succeed to, and be substituted for, the Company and may exercise every right and power of the
Company under and with respect to the Notes and the Indenture with the same effect as if the
Holding Company had been named as the Company therein; and (c) all references in the Notes and the
Indenture to the defined term “Company” shall refer to the Holding Company.

               3. Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees as follows as of the
Effective Time:

	 	(a)  	Along with all Guarantors named in the Indenture, to jointly
and severally Guarantee to each Holder of a Note authenticated and delivered by
the Trustee and to the Trustee and its successors and assigns, irrespective of
the validity and enforceability of the Indenture, the Notes or the obligations
of the Holding Company hereunder or thereunder, that:

	 	(i)  	the principal of and interest on the Notes and
Registration Default Damages, if any, will be promptly paid in full
when due, whether at maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal of and interest on the
Notes, if any, if lawful, and all other obligations of the Holding
Company to the Holders or the Trustees hereunder or thereunder will be
promptly paid in full or performed, all in accordance with the terms
hereof and thereof; and
	 
	 	(ii)  	in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, that same will
be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise. Failing payment when due of any amount so
guaranteed or any performance so guaranteed for

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	 	   	whatever reason, the Guarantors shall be jointly and severally
obligated to pay the same immediately.

	 	(b)  	The obligations hereunder shall be unconditional, irrespective
of the validity, regularity or enforceability of the Notes or the Indenture,
the absence of any action to enforce the same, any waiver or consent by any
Holder of the Notes with respect to any provisions hereof or thereof, the
recovery of any judgment against the Holding Company, any action to enforce the
same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor.
	 
	 	(c)  	The following is hereby waived: diligence, presentment, demand
of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Holding Company, any right to require a proceeding first
against the Holding Company, protest, notice and all demands whatsoever.
	 
	 	(d)  	This Subsidiary Guarantee shall not be discharged except by
complete performance of the obligations contained in the Notes and the
Indenture.
	 
	 	(e)  	If any Holder or the Trustee is required by any court or
otherwise to return to the Holding Company, the Guarantors, or any Custodian,
Trustee, liquidator or other similar official acting in relation to either the
Holding Company or the Guarantors, any amount paid by either to the Trustee or
such Holder, this Subsidiary Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect.
	 
	 	(f)  	The Guaranteeing Subsidiary shall not be entitled to any right
of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
	 
	 	(g)  	As between the Guarantors, on the one hand, and the Holders and
the Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article 6 of the Indenture for the
purposes of this Subsidiary Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article 6 of the Indenture, such obligations
(whether or not due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Subsidiary Guarantee.
	 
	 	(h)  	The Guarantors shall have the right to seek contribution from
any non-paying Guarantor so long as the exercise of such right does not impair
the rights of the Holders under the Guarantee.

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	 	(i)  	The obligations hereunder shall be subject to the subordination
provisions of the Indenture.

               4. Execution and Delivery. Each Guaranteeing Subsidiary agrees that the Subsidiary Guarantees
shall remain in full force and effect notwithstanding any failure to endorse on each Note a
notation of such Subsidiary Guarantee.

               5. Guaranteeing Subsidiary May Consolidate, Etc. on Certain Terms.

	 	(a)  	The Guaranteeing Subsidiary may not consolidate with or merge
with or into (whether or not such Guarantor is the surviving Person) another
corporation, Person or entity whether or not affiliated with such Guarantor
unless:

	 	(i)  	subject to Section 11.05 of the Indenture, the
Person formed by or surviving any such consolidation or merger (if
other than a Guarantor) unconditionally assumes all the obligations of
such Guarantor, pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee, under the Notes, the
Indenture, the Registration Rights Agreement and the Subsidiary
Guarantee on the terms set forth herein or therein; and
	 
	 	(ii)  	immediately after giving effect to such
transaction, no Default or Event of Default exists.

	 	(b)  	In case of any such consolidation, merger, sale or conveyance
and upon the assumption by the successor Person, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form to the Trustee,
of the Subsidiary Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of the Indenture to be
performed by the Guarantor, such successor Person shall succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor Person thereupon may cause to be signed
any or all of the Subsidiary Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore shall not have been signed by the Holding
Company and delivered to the Trustee. All the Subsidiary Guarantees so issued
shall in all respects have the same legal rank and benefit under the Indenture
as the Subsidiary Guarantees theretofore and thereafter issued in accordance
with the terms of the Indenture as though all of such Subsidiary Guarantees had
been issued at the date of the execution hereof.
	 
	 	(c)  	Except as set forth in Articles 4 and 5 of the Indenture, and
notwithstanding clauses (a) and (b) above, nothing contained in the Indenture
or in any of the Notes shall prevent any consolidation or merger

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	 	 	of a Guarantor with or into the Holding Company or another Guarantor, or
shall prevent any sale or conveyance of the property of a Guarantor as an
entirety or substantially as an entirety to the Holding Company or another
Guarantor.

               6. Releases.

	 	(a)  	In the event of a sale or other disposition of all of the
assets of any Guarantor, by way of merger, consolidation or otherwise, or a
sale or other disposition of all to the capital stock of any Guarantor, then
such Guarantor (in the event of a sale or other disposition, by way of merger,
consolidation or otherwise, of all of the capital stock of such Guarantor) or
the corporation acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of such Guarantor) will
be released and relieved of any obligations under its Subsidiary Guarantee;
provided that the Net Proceeds of such sale or other disposition are applied in
accordance with the applicable provisions of the Indenture, including without
limitation Section 4.10 of the Indenture. Upon delivery by the Holding Company
to the Trustee of an Officers’ Certificate and an Opinion of Counsel to the
effect that such sale or other disposition was made by the Holding Company in
accordance with the provisions of the Indenture, including without limitation
Section 4.10 of the Indenture, the Trustee shall execute any documents
reasonably required in order to evidence the release of any Guarantor from its
obligations under its Subsidiary Guarantee.
	 
	 	(b)  	Any Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of principal of
and interest on the Notes and for the other obligations of any Guarantor under
the Indenture as provided in Article 11 of the Indenture.

               7. No Recourse Against Others. No past, present or future director, officer, employee,
incorporator or stockholder of the Guaranteeing Subsidiary, as such, shall have any liability for
any obligations of the Holding Company or any Guaranteeing Subsidiary under the Notes, any
Subsidiary Guarantees, the Registration Rights Agreement, the Indenture or this Supplemental
Indenture or for any claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of the Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Notes.

               8. NEW YORK LAW TO GOVERN. SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.

               9. Counterparts. The parties may sign any number of copies of this Second Supplemental
Indenture. Each signed copy shall be an original, but all of them together represent the same
agreement.

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               10. Effect of Headings. The Section headings herein are for convenience only and shall not
affect the construction thereof.

               11. The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in
respect of the validity or sufficiency of this Second Supplemental Indenture or for or in respect
of the recitals contained herein, all of which recitals are made solely by the Company, the
Guarantors, the Holding Company and the Guaranteeing Subsidiary.

[Remainder of page left blank intentionally; signature page follows]

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     IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be
duly executed and attested, all as of the date first above written.

	 	 	 	 	 
	Dated as of March 18, 2005 	THE SCOTTS COMPANY

 	 
	 	By:  	/s/ James Hagedorn
 	 
	 	 	Name:  	James Hagedorn 	 
	 	 	Title:  	Chairman, President and Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                /s/ Michael P. Kelty
 	 
	 	 	Name:  	Michael P. Kelty 	 
	 	 	Title:  	Executive Vice President 	 
	 

	 	 	 	 	 
	 	THE SCOTTS MIRACLE-GRO COMPANY

 	 
	 	By:  	/s/ James Hagedorn
 	 
	 	 	Name:  	James Hagedorn 	 
	 	 	Title:  	Chairman, President and Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                /s/ Michael P.  Kelty
 	 
	 	 	Name:  	Michael P. Kelty 	 
	 	 	Title:  	Executive Vice President 	 
	 

	 	 	 	 	 
	 	THE SCOTTS COMPANY LLC

 	 
	 	By:  	/s/ James Hagedorn
 	 
	 	 	Name:  	James Hagedorn 	 
	 	 	Title:  	Chairman, President and Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                /s/ Michael P. Kelty
 	 
	 	 	Name:  	Michael P. Kelty 	 
	 	 	Title:  	Executive Vice President 	 
	 

	 	 	 	 	 
	 	SCOTTS MANUFACTURING COMPANY

 	 
	 	By:  	/s/ Michael P. Kelty
 	 
	 	 	Name:  	Michael P. Kelty 	 
	 	 	Title:  	Executive Vice President 	 

7

 

	 	 	 	 	 

	 	 	 	 	 
	 	SCOTTS PROFESSIONAL PRODUCTS CO.

 	 
	 	By:  	/s/ Michael P. Kelty
 	 
	 	 	Name:  	Michael P. Kelty 	 
	 	 	Title:  	Executive Vice President 	 
	 

	 	 	 	 	 
	 	SCOTTS PRODUCTS CO.

 	 
	 	By:  	/s/ Michael P. Kelty
 	 
	 	 	Name:  	Michael P. Kelty 	 
	 	 	Title:  	Executive Vice President 	 
	 

	 	 	 	 	 
	 	SCOTTS-SIERRA HORTICULTURAL PRODUCTS COMPANY

 	 
	 	By:  	/s/ Michael P. Kelty
 	 
	 	 	Name:  	Michael P. Kelty 	 
	 	 	Title:  	Executive Vice President 	 
	 

	 	 	 	 	 
	 	OMS INVESTMENTS, INC.

 	 
	 	By:  	/s/ David M. Aronowitz
 	 
	 	 	Name:  	David M. Aronowitz 	 
	 	 	Title:  	Executive Vice President and Secretary 	 
	 

	 	 	 	 	 
	 	HYPONEX CORPORATION

 	 
	 	By:  	/s/ Michael P. Kelty
 	 
	 	 	Name:  	Michael P. Kelty 	 
	 	 	Title:  	Executive Vice President 	 
	 

	 	 	 	 	 
	 	SWISS FARMS PRODUCTS, INC.

 	 
	 	By:  	/s/ David M. Aronowitz
 	 
	 	 	Name:  	David M. Aronowitz 	 
	 	 	Title:  	Executive Vice President and Secretary 	 

8

 

	 	 	 	 	 

	 	 	 	 	 
	 	SCOTTS TEMECULA OPERATIONS, LLC

 	 
	 	By:  	/s/ Michael P. Kelty
 	 
	 	 	Name:  	Michael P. Kelty 	 
	 	 	Title:  	Executive Vice President 	 
	 

	 	 	 	 	 
	 	SCOTTS-SIERRA INVESTMENTS, INC.

 	 
	 	By:  	/s/ David M. Aronowitz
 	 
	 	 	Name:  	David M. Aronowitz 	 
	 	 	Title:  	Executive Vice President and Secretary 	 
	 

	 	 	 	 	 
	 	SCOTTS-SIERRA CROP PROTECTION COMPANY

 	 
	 	By:  	/s/ Michael P. Kelty
 	 
	 	 	Name:  	Michael P. Kelty 	 
	 	 	Title:  	Executive Vice President 	 
	 

	 	 	 	 	 
	 	MIRACLE-GRO LAWN PRODUCTS, INC.

 	 
	 	By:  	/s/ Michael P. Kelty
 	 
	 	 	Name:  	Michael P. Kelty 	 
	 	 	Title:  	Executive Vice President 	 
	 

	 	 	 	 	 
	 	EG SYSTEMS, INC. (D/B/A SCOTTS LAWNSERVICE)

 	 
	 	By:  	/s/ Michael P. Kelty
 	 
	 	 	Name:  	Michael P. Kelty 	 
	 	 	Title:  	Executive Vice President 	 
	 

	 	 	 	 	 
	 	SMITH & HAWKEN, LTD.

 	 
	 	By:  	/s/ Andrew B. Coogle
 	 
	 	 	Name:  	Andrew B. Coogle 	 
	 	 	Title:  	Vice President 	 

9

 

	 	 	 	 	 

	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION,

as Trustee

 	 
	 	By:  	/s/ Cauna M. Silva
 	 
	 	 	Name:  	Cauna M. Silva 	 
	 	 	Title:  	Vice President 	 

10

 

	 	 	 	 	 

Schedule 1

	(1)  	SCOTTS MANUFACTURING COMPANY
	 
	(2)  	SCOTTS PROFESSIONAL PRODUCTS CO.
	 
	(3)  	SCOTTS PRODUCTS CO.
	 
	(4)  	SCOTTS-SIERRA HORTICULTURAL PRODUCTS COMPANY
	 
	(5)  	OMS INVESTMENTS, INC.
	 
	(6)  	HYPONEX CORPORATION
	 
	(7)  	SWISS FARMS PRODUCTS, INC.
	 
	(8)  	SCOTTS TEMECULA OPERATIONS, LLC
	 
	(9)  	SCOTTS-SIERRA INVESTMENTS, INC.
	 
	(10)  	SCOTTS-SIERRA CROP PROTECTION COMPANY
	 
	(11)  	MIRACLE-GRO LAWN PRODUCTS, INC.
	 
	(12)  	EG SYSTEMS, INC. (D/B/A SCOTTS LAWNSERVICE)
	 
	(13)  	SMITH & HAWKEN, LTD.

11Exhibit 10.1

 

Exhibit 10.1

BORROWER AND DOMESTIC SUBSIDIARY

GUARANTEE AND COLLATERAL AGREEMENT

     THIS BORROWER AND DOMESTIC SUBSIDIARY GUARANTEE AND COLLATERAL
AGREEMENT, dated as of December 4, 1998, made by each of the signatories hereto (together with any
other entity that may become a party hereto as provided herein, the “Grantors”), in favor
of THE CHASE MANHATTAN BANK, as Administrative Agent (in such capacity, the “Administrative
Agent”) for the banks and other financial institutions (the “Lenders”) from time to
time parties to the Credit Agreement, dated as of December 4, 1998 (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among The Scotts Company, an
Ohio corporation (the “Borrower”), the Subsidiary Borrowers, the Lenders, the
Administrative Agent, Credit Lyonnais Chicago Branch, as Co-Documentation Agent, NBD Bank, as
Co-Documentation Agent, and Salomon Smith Barney Inc., as Syndication Agent.

W I T N E S S E T H:

             WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to make
extensions of credit to the Borrower and the Subsidiary Borrowers upon the terms and subject to the
conditions set forth therein;

             WHEREAS, the Borrower and each Subsidiary Borrower is a member of an affiliated group of
companies that includes each other Grantor;

             WHEREAS, the proceeds of the extensions of credit under the Credit Agreement will be used in
part to enable the Borrower and each Subsidiary Borrower to make valuable transfers to one or more
of the other Grantors in connection with the operation of their respective businesses;

             WHEREAS, the Borrower, each Subsidiary Borrower and the other Grantors are engaged in related
businesses, and each Grantor will derive substantial direct and indirect benefit from the making of
the extensions of credit under the Credit Agreement; and

             WHEREAS, it is a condition precedent to the obligation of the Lenders to make their respective
extensions of credit to the Borrower and any Subsidiary Borrower under the Credit Agreement that
the Grantors shall have executed and delivered this Agreement to the Administrative Agent for the
ratable benefit of the Lenders;

             NOW, THEREFORE, in consideration of the premises and to induce the Administrative Agent and
the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Borrower and each Subsidiary Borrower thereunder, each Grantor hereby
agrees with the Administrative Agent, for the ratable benefit of the Lenders, as follows:

 

 

SECTION 1. DEFINED TERMS

             1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit Agreement, and the
following terms are used herein as defined in the New York UCC: Certificated Security, Chattel
Paper, Documents, Equipment, Farm Products, Instruments and Inventory.

             (b) The following terms shall have the following meanings:

      “Agreement”: this Borrower and Domestic Subsidiary Guarantee and Collateral
Agreement, as the same may be amended, supplemented or otherwise modified from time to time.

      “Borrower Obligations”: the collective reference to the unpaid principal of and
interest on the Loans and Reimbursement Obligations and all other obligations and
liabilities of the Borrower (including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of the Loans and
Reimbursement Obligations and interest accruing at the then applicable rate provided in the
Credit Agreement after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding) to the
Administrative Agent or any Lender (or, in the case of any Lender Hedge Agreement, any
Affiliate of any Lender), whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out of, or in
connection with, the Credit Agreement, this Agreement, the other Loan Documents, any Letter
of Credit, any Lender Hedge Agreement or any other document made, delivered or given in
connection with any of the foregoing, in each case whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to the Administrative
Agent or to the Lenders that are required to be paid by the Borrower pursuant to the terms
of any of the foregoing agreements).

      “Borrower’s Guarantor Obligations”: without duplicating any Borrower
Obligations, all obligations and liabilities of the Borrower which may arise under or in
connection with this Agreement (including, without limitation, Section 2) or any other Loan
Document to which the Borrower is a party, whether on account of guarantee obligations,
reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including,
without limitation, all fees and disbursements of counsel to the Administrative Agent or to
the Lenders that are required to be paid by the Borrower pursuant to the terms of this
Agreement or any other Loan Document).

      “Collateral”: as defined in Section 4, provided that “Collateral”
shall in no event include any present or future property wholly or partially situated in
Australia as of the date hereof or at any time following the date hereof.

      “Collateral Account”: any collateral account established by the
Administrative Agent as provided in Section 6.1 or 6.4.

 

 

3

      “Copyrights”: (i) all copyrights arising under the laws of the United States,
any other country or any political subdivision thereof, whether registered or unregistered
and whether published or unpublished (including, without limitation, those listed in
Schedule 6), all registrations and recordings thereof, and all applications in
connection therewith, including, without limitation, all registrations, recordings and
applications in the United States Copyright Office, and (ii) the right to obtain all
renewals thereof.

      “Copyright Licenses”: any written agreement naming any Grantor as licensor or
licensee (including, without limitation, those listed in Schedule 6), granting any
right under any Copyright, including, without limitation, the grant of rights to
manufacture, distribute, exploit and sell materials derived from any Copyright.

      “Deposit Account”: as defined in the Uniform Commercial Code of any
applicable jurisdiction and, in any event, including, without limitation, any demand, time,
savings, passbook or like account maintained with a depositary institution.

      “Foreign Subsidiary”: any Subsidiary organized under the laws of any
jurisdiction outside the United States of America.

      “Foreign Subsidiary Capital Stock”: the Capital Stock of any Foreign
Subsidiary.

      “General Intangibles”: all “general intangibles” as such term is
defined in Section 9-106 of the New York UCC and, in any event, including, without
limitation, with respect to any Grantor, all contracts, agreements, instruments and
indentures in any form, and portions thereof, to which such Grantor is a party or under
which such Grantor has any right, title or interest or to which such Grantor or any property
of such Grantor is subject, as the same may from time to time be amended, supplemented or
otherwise modified, including, without limitation, (i) all rights of such Grantor to receive
moneys due and to become due to it thereunder or in connection therewith, (ii) all rights of
such Grantor to damages arising thereunder and (iii) all rights of such Grantor to perform
and to exercise all remedies thereunder, in each case to the extent the grant by such
Grantor of a security interest pursuant to this Agreement in its right, title and interest
in such contract, agreement, instrument or indenture is not prohibited by such contract,
agreement, instrument or indenture without the consent of any other party thereto, would not
give any other party to such contract, agreement, instrument or indenture the right to
terminate its obligations thereunder, or is permitted with consent if all necessary consents
to such grant of a security interest have been obtained from the other parties thereto (it
being understood that the foregoing shall not be deemed to obligate such Grantor to obtain
such consents); provided, that the foregoing limitation shall not affect, limit,
restrict or impair the grant by such Grantor of a security interest pursuant to this
Agreement in any Receivable or any money or other amounts due or to become due under any
such contract, agreement, instrument or indenture.

 

 

4

      “Guarantor Obligations”: with respect to any Guarantor, without duplicating
any Subsidiary Borrower Obligations, all obligations and liabilities of such Guarantor which
may arise under or in connection with this Agreement (including, without limitation, Section
3) or any other Loan Document to which such Guarantor is a party, in each case whether on
account of guarantee obligations, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and disbursements of counsel
to the Administrative Agent or to the Lenders that are required to be paid by such Guarantor
pursuant to the terms of this Agreement or any other Loan Document).

      “Guarantors”: the collective reference to each Grantor other than the
Borrower. For the avoidance of doubt, notwithstanding any other provision of this
Agreement, the parties hereto expressly agree that no Foreign Subsidiary shall be a
Guarantor.

      “Intellectual Property”: (a) the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including, without limitation, the
Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and the
Trademark Licenses, and all rights to sue at law or in equity for any infringement or other
impairment thereof, including the right to receive all proceeds and damages therefrom.

      “Intercompany Note”: any promissory note evidencing loans made by any Grantor
to the Borrower or any of its Subsidiaries.

      “Investment Property”: the collective reference to (i) all “investment
property” as such term is defined in Section 9-115 of the New York UCC (other than any
Foreign Subsidiary Capital Stock) and (ii) whether or not constituting “investment property”
as so defined, all Pledged Notes and all Pledged Stock.

      “Issuers”: the collective reference to each issuer of any Investment Property.

      “Lender Hedge Agreements”: all interest rate swaps, caps or collar agreements
or similar arrangements entered into by the Borrower with any Lender (or any Affiliate of
any Lender) providing for protection against fluctuations in interest rates, currency
exchange rates or commodity prices or the exchange of nominal interest obligations, either
generally or under specific contingencies.

      “Monsanto Receivables”: all Receivables collected, received and/or held by any
Grantor for the benefit of the Monsanto Company in connection with the Roundup Agreement or
the Ortho Acquisition.

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

 

 

5

      “Obligations”: (i) in the case of the Borrower, the Borrower Obligations and
the Borrower’s Guarantor Obligations, (ii) in the case of each Guarantor which is also a
Domestic Subsidiary Borrower, its Subsidiary Borrower Obligations, and (iii) in the case of
each Guarantor (whether or not a Domestic Subsidiary Borrower), its Guarantor Obligations.

      “Patents”: (i) all letters patent of the United States, any other country or
any political subdivision thereof, all reissues and extensions thereof and all goodwill
associated therewith, including, without limitation, any of the foregoing referred to in
Schedule 6, (ii) all applications for letters patent of the United States or any
other country and all divisions, continuations and continuations-in-part thereof, including,
without limitation, any of the foregoing referred to in Schedule 6, and (iii) all
rights to obtain any reissues or extensions of the foregoing.

      “Patent License”: all agreements, whether written or oral, providing for the
grant by or to any Grantor of any right to manufacture, use or sell any invention covered in
whole or in part by a Patent, including, without limitation, any of the foregoing referred
to in Schedule 6.

      “Pledged Notes”: all promissory notes listed on Schedule 2, all
Intercompany Notes at any time issued to any Grantor and all other promissory notes issued
to or held by any Grantor (other than promissory notes issued in connection with extensions
of trade credit by any Grantor in the ordinary course of business).

      “Pledged Stock”: the shares of Capital Stock listed on Schedule 2,
together with any other shares, stock certificates, options or rights of any nature
whatsoever in respect of the Capital Stock of any Person that may be issued or granted to,
or held by, any Grantor while this Agreement is in effect excluding any Foreign Subsidiary
Capital Stock.

      “Proceeds”: all “proceeds” as such term is defined in Section 9-306(1) of the
New York UCC and, in any event, shall include, without limitation, all dividends or other
income from the Investment Property, collections thereon or distributions or payments with
respect thereto.

      “Receivable”: any “account” (as defined in the New York UCC) and any other
right to payment for goods sold or leased or for services rendered, whether or not such
right is evidenced by an Instrument or Chattel Paper and whether or not it has been earned
by performance, except for the Monsanto Receivables and the Sold Receivables.

      “Securities Act”: the Securities Act of 1933, as amended.

      “Subsidiary Borrower Obligations”: with respect to each Subsidiary
Borrower, without duplicating any Guarantor Obligations, the collective reference to the
unpaid principal of and interest on the Loans and all other obligations and liabilities of
such

 

 

6

Subsidiary Borrower (including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of the Loans and
interest accruing at the then applicable rate provided in the Credit Agreement after the
filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization
or like proceeding, relating to such Subsidiary Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) to the Administrative
Agent or any Lender (or, in the case of any Lender Hedge Agreement, any Affiliate of any
Lender), whether direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection with, the
Credit Agreement, this Agreement, the other Loan Documents, any Letter of Credit, any Lender
Hedge Agreement or any other document made, delivered or given in connection with any of the
foregoing, in each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation,
all fees and disbursements of counsel to the Administrative Agent or to the Lenders that are
required to be paid by such Subsidiary Borrower pursuant to the terms of any of the
foregoing agreements).

      “Trademarks”: (i) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks, logos and other
source or business identifiers, and all goodwill associated therewith, now existing or
hereafter adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any State thereof or any
other country or any political subdivision thereof, or otherwise, and all common-law rights
related thereto, including, without limitation, any of the foregoing referred to in
Schedule 6, and (ii) the right to obtain all renewals thereof.

      “Trademark License”: any agreement, whether written or oral, providing for the
grant by or to any Grantor of any right to use any Trademark, including, without limitation,
any of the foregoing referred to in Schedule 6.

             1.2 Other Definitional Provisions. (a) The words “hereof,” “herein”, “hereto” and
“hereunder” and words of similar import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement, and Section and Schedule
references are to this Agreement unless otherwise specified.

             (b) The meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.

             (c) Where the context requires, terms relating to the Collateral or any part thereof,
when used in relation to a Grantor, shall refer to such Grantor’s Collateral or the relevant part
thereof.

 

 

7

SECTION 2. BORROWER GUARANTEE

             2.1 Borrower Guarantee. (a) The Borrower hereby, unconditionally and irrevocably,
guarantees to the Administrative Agent, for the ratable benefit of the Lenders and their respective
successors, indorsees, transferees and assigns, the prompt and complete payment and performance by
each Subsidiary Borrower when due (whether at the stated maturity, by acceleration or otherwise) of
its Subsidiary Borrower Obligations.

             (b) Anything herein or in any other Loan Document to the contrary notwithstanding, the
maximum liability of the Borrower hereunder and under the other Loan Documents shall in no event
exceed the amount which can be guaranteed by the Borrower under applicable federal and state laws
relating to the insolvency of debtors (after giving effect to the right of contribution established
in Section 2.2).

             (c) The guarantee contained in this Section 2 shall remain in full force and effect until all
the Subsidiary Borrower Obligations and the obligations of the Borrower under the guarantee
contained in this Section 2 shall have been satisfied by payment in full, no Letter of Credit shall
be outstanding and the Commitments and Loans shall be terminated, notwithstanding that from time to
time during the term of the Credit Agreement each Subsidiary Borrower may be free from any
Subsidiary Borrower Obligations.

             (d) No payment made by any Subsidiary Borrower, any of the other Guarantors, any other
guarantor or any other Person or received or collected by the Administrative Agent or any Lender
from any Subsidiary Borrower, any of the other Guarantors, any other guarantor or any other Person
by virtue of any action or proceeding or any set-off or appropriation or application at any time or
from time to time in reduction of or in payment of the Subsidiary Borrower Obligations shall be
deemed to modify, reduce, release or otherwise affect the liability of the Borrower hereunder which
shall, notwithstanding any such payment (other than any payment made by the Borrower in respect of
the Subsidiary Borrower Obligations or any payment received or collected from the Borrower in
respect of the Subsidiary Borrower Obligations), remain liable for the Subsidiary Borrower
Obligations up to the maximum liability of the Borrower hereunder until the Subsidiary Borrower
Obligations are paid in full, no Letter of Credit shall be outstanding and the Commitments are
terminated.

             2.2 No Subrogation. Notwithstanding any payment or payments made by the
Borrower hereunder, or any set-off or application of funds of the Borrower by the Administrative
Agent or any Lender, the Borrower shall not be entitled to be subrogated to any of the rights of
the Administrative Agent or any Lender against the Subsidiary Borrowers or against any collateral
security or guarantee or right of offset held by the Administrative Agent or any Lender for the
payment of the Subsidiary Borrower Obligations, nor shall the Borrower seek or be entitled to seek
any contribution or reimbursement from the Subsidiary Borrowers in respect of payments made by the
Borrower hereunder, until all amounts owing to the Administrative Agent and the Lenders by the
Subsidiary Borrowers on account of the Subsidiary Borrower Obligations are paid in full and the
Commitments and Loans are terminated. If any amount shall be paid to

 

 

8

the Borrower on account of such subrogation rights at any time when all of the
Subsidiary Borrower Obligations shall not have been paid in full, such amount shall be held by the
Borrower in trust for the Administrative Agent and the Lenders, segregated from other funds of the
Borrower, and shall, forthwith upon receipt by the Borrower, be turned over to the Administrative
Agent in the exact form received by the Borrower (duly indorsed by the Borrower to the
Administrative Agent, if required), to be applied against the Subsidiary Borrower Obligations,
whether matured or unmatured, in such order as the Administrative Agent may determine.

             2.3 Amendments, etc. with respect to the Subsidiary Borrower Obligations. The
Borrower shall remain obligated hereunder notwithstanding that, without any reservation of rights
against the Borrower and without notice to or further assent by the Borrower, any demand for
payment of any of the Subsidiary Borrower Obligations made by the Administrative Agent or any
Lender may be rescinded by the Administrative Agent or such Lender and any of the Subsidiary
Borrower Obligations continued, and the Subsidiary Borrower Obligations, or the liability of any
other Person upon or for any part thereof, or any collateral security or guarantee therefor or
right of offset with respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or released by the
Administrative Agent or any Lender, and the Credit Agreement and the other Loan Documents and any
other documents executed and delivered in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the Administrative Agent (or the Majority
Facility Lenders, Supermajority Lenders, the Required Lenders or all Lenders, as the case may be)
may deem advisable from time to time, and any collateral security, guarantee or right of offset at
any time held by the Administrative Agent or any Lender for the payment of the Subsidiary Borrower
Obligations may be sold, exchanged, waived, surrendered or released. Neither the Administrative
Agent nor any Lender shall have any obligation to protect, secure, perfect or insure any Lien at
any time held by it as security for the Subsidiary Borrower Obligations or for the guarantee
contained in this Section 2 or any property subject thereto.

             2.4 Guarantee Absolute and Unconditional. The Borrower waives any and all
notice of the creation, renewal, extension or accrual of any of the Subsidiary Borrower Obligations
and notice of or proof of reliance by the Administrative Agent or any Lender upon the guarantee
contained in this Section 2 or acceptance of the guarantee contained in this Section 2; the
Subsidiary Borrower Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the
guarantee contained in this Section 2; and all dealings between the Borrower and the Subsidiary
Borrowers, on the one hand, and the Administrative Agent and the Lenders, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 2. The Borrower waives diligence, presentment, protest, demand
for payment and notice of default or nonpayment to or upon the Borrower or the applicable
Subsidiary Borrower with respect to the Subsidiary Borrower Obligations. The Borrower understands
and agrees that the guarantee contained in this Section 2 shall be construed as a continuing,
absolute and unconditional guarantee of payment without
regard to (a) the validity or enforceability of the Credit Agreement or any other Loan
Document,

 

 

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any of the Subsidiary Borrower Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to time held by the
Administrative Agent or any Lender, (b) any defense, set-off or counterclaim (other than a defense
of payment or performance) which may at any time be available to or be asserted by any Subsidiary
Borrower or any other Person against the Administrative Agent or any Lender, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the Borrower or any Subsidiary
Borrower) which constitutes, or might be construed to constitute, an equitable or legal discharge
of the Subsidiary Borrowers for the Subsidiary Borrower Obligations, or of the Borrower under the
guarantee contained in this Section 2, in bankruptcy or in any other instance. When making any
demand hereunder or otherwise pursuing its rights and remedies hereunder against the Borrower, the
Administrative Agent or any Lender may, but shall be under no obligation to, make a similar demand
on or otherwise pursue such rights and remedies as it may have against the Subsidiary Borrowers or
any other Person or against any collateral security or guarantee for the Subsidiary Borrower
Obligations or any right of offset with respect thereto, and any failure by the Administrative
Agent or any Lender to make any such demand, to pursue such other rights or remedies or to collect
any payments from the Borrower, any Subsidiary Borrower, or any other Person or to realize upon any
such collateral security or guarantee or to exercise any such right of offset, or any release of
the Borrower, any Subsidiary Borrower or any other Person or any such collateral security,
guarantee or right of offset, shall not relieve the Borrower of any obligation or liability
hereunder, and shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Administrative Agent or any Lender against the Borrower. For
the purposes hereof, “demand” shall include the commencement and continuance of any legal
proceedings.

             2.5 Reinstatement. The guarantee contained in this Section 2 shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Subsidiary Borrower Obligations is rescinded or must otherwise be restored or returned
by the Administrative Agent or any Lender upon the insolvency, bankruptcy, dissolution, liquidation
or reorganization of the Borrower, any Subsidiary Borrower or any other Guarantor, or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower, any Subsidiary Borrower or any other Guarantor or any substantial part
of its property, or otherwise, all as though such payments had not been made.

             2.6 Payments. The Borrower hereby guarantees that payments hereunder will be paid to
the Administrative Agent without set-off or counterclaim in Dollars or the applicable Optional
Currency or Tranche A Subtranche Currency at the office of the Administrative Agent located at 270
Park Avenue, New York, New York 10017 or at such other place and time specified by the
Administrative Agent.

SECTION 3. DOMESTIC SUBSIDIARY GUARANTEE

             3.1 Domestic Subsidiary Guarantee. (a) Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees to the Administrative Agent, for the

 

 

10

ratable
benefit of the Lenders and their respective successors, indorsees, transferees and assigns, the
prompt and complete payment and performance by the Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of the Borrower Obligations and the Borrower’s Guarantor
Obligations.

             (b) [Intentionally Omitted]

             (c) [Intentionally Omitted]

             (d) Anything herein or in any other Loan Document to the contrary notwithstanding, the
maximum liability of each Guarantor hereunder and under the other Loan Documents shall in no event
exceed the amount which can be guaranteed by such Guarantor under applicable federal and state laws
relating to the insolvency of debtors (after giving effect to the right of contribution established
in Section 3.2).

             (e) Each Guarantor agrees that the Borrower Obligations and the Borrower’s Guarantor
Obligations either solely or collectively, may at any time and from time to time exceed the amount
of the liability of such Guarantor hereunder without impairing the guarantee contained in this
Section 3 or affecting the rights and remedies of the Administrative Agent or any Lender hereunder.

             (f) The guarantees contained in this Section 3 shall remain in full force and effect until
all the Borrower Obligations and the Borrower’s Guarantor Obligations and the obligations of each
Guarantor under the guarantees contained in this Section 3 shall have been satisfied by payment in
full, no Letter of Credit shall be outstanding and the Commitments and Loans shall be terminated,
notwithstanding that from time to time during the term of the Credit Agreement, the Borrower may be
free from any Borrower Obligations and any Borrower’s Guarantor Obligations.

             (g) No payment made by the Borrower, any of the Guarantors, any other guarantor or any
other Person or received or collected by the Administrative Agent or any Lender from the Borrower,
any of the Guarantors, any other guarantor or any other Person by virtue of any action or
proceeding or any set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Borrower Obligations or the Borrower’s Guarantor Obligations
shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment made by such
Guarantor in respect of the Borrower Obligations or the Borrower’s Guarantor Obligations or any
payment received or collected from such Guarantor in respect of the Borrower Obligations or the
Borrower’s Guarantor Obligations) remain liable for the Borrower Obligations and the Borrower’s
Guarantor Obligations up to the maximum liability of such Guarantor hereunder until the Borrower
Obligations and the Borrower’s Guarantor
Obligations are paid in full, no Letter of Credit shall be outstanding and the Commitments and
Loans are terminated.

 

 

11

             3.2 Right of Contribution. Each Guarantor hereby agrees that to the extent that a
Guarantor shall have paid more than its proportionate share of any payment made hereunder, such
Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor
hereunder and which has not paid its proportionate share of such payment. Each Guarantor’s right
of contribution shall be subject to the terms and conditions of Section 3.3. The provisions of
this Section 3.2 shall in no respect limit the obligations and liabilities of any Guarantor to the
Administrative Agent and the Lenders, and each Guarantor shall remain liable to the Administrative
Agent and the Lenders for the full amount guaranteed by such Guarantor hereunder.

             3.3 No Subrogation. Notwithstanding any payment made by any Guarantor hereunder or
any set-off or application of funds of any Guarantor by the Administrative Agent or any Lender, no
Guarantor shall be entitled to be subrogated to any of the rights of the Administrative Agent or
any Lender against the Borrower or any other Guarantor or any collateral security or guarantee or
right of offset held by the Administrative Agent or any Lender for the payment of the Borrower
Obligations or the Borrower’s Guarantor Obligations nor shall any Guarantor seek or be entitled to
seek any contribution or reimbursement from the Borrower or any other Guarantor in respect of
payments made by such Guarantor hereunder, until all amounts owing to the Administrative Agent and
the Lenders by the Borrower on account of the Borrower Obligations and the Borrower’s Guarantor
Obligations are paid in full, no Letter of Credit shall be outstanding and the Commitments and
Loans are terminated. If any amount shall be paid to any Guarantor on account of such subrogation
rights at any time when all of the Borrower Obligations and the Borrower’s Guarantor Obligations
shall not have been paid in full, such amount shall be held by such Guarantor in trust for the
Administrative Agent and the Lenders, segregated from other funds of such Guarantor, and shall,
forthwith upon receipt by such Guarantor, be turned over to the Administrative Agent in the exact
form received by such Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if
required), to be applied against the Borrower Obligations and the Borrower’s Guarantor Obligations,
whether matured or unmatured, in such order as the Administrative Agent may determine.

             3.4 Amendments, etc. with respect to the Borrower Obligations and the Borrower’s
Guarantor Obligations. Each Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against any Guarantor and without notice to or further assent by
any Guarantor, any demand for payment of any of the Borrower Obligations or the Borrower’s
Guarantor Obligations made by the Administrative Agent or any Lender may be rescinded by the
Administrative Agent or such Lender and any of the Borrower Obligations and the Borrower’s
Guarantor Obligations continued, and the Borrower Obligations and the Borrower’s Guarantor
Obligations or the liability of any other Person upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any
Lender, and the Credit Agreement and the other Loan Documents and any other documents executed
and delivered in connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the Administrative Agent (or the Majority Facility Lenders, the

 

 

12

Supermajority
Lenders, the Required Lenders or all Lenders, as the case may be) may deem advisable from time to
time, and any collateral security, guarantee or right of offset at any time held by the
Administrative Agent or any Lender for the payment of the Borrower Obligations or the Borrower’s
Guarantor Obligations may be sold, exchanged, waived, surrendered or released. Neither the
Administrative Agent nor any Lender shall have any obligation to protect, secure, perfect or insure
any Lien at any time held by it as security for the Borrower Obligations or the Borrower’s
Guarantor Obligations or for the guarantee contained in this Section 3 or any property subject
thereto.

             3.5 Guarantees Absolute and Unconditional. Each Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Borrower Obligations or
Borrower’s Guarantor Obligations and notice of or proof of reliance by the Administrative Agent or
any Lender upon any of the guarantees contained in this Section 3 or acceptance of the guarantees
contained in this Section 3; the Borrower Obligations and the Borrower’s Guarantor Obligations and
any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guarantee contained in this Section 3; and all
dealings between the Borrower and any of the Guarantors, on the one hand, and the Administrative
Agent and the Lenders, on the other hand, likewise shall be conclusively presumed to have been had
or consummated in reliance upon the guarantee contained in this Section 3. Each Guarantor waives
diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon
the Borrower or any of the Guarantors with respect to the Borrower Obligations and the Borrower’s
Guarantor Obligations. Each Guarantor understands and agrees that the guarantees contained in this
Section 3 shall be construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity or enforceability of the Credit Agreement or any other Loan
Document, any of the Borrower Obligations or the Borrower’s Guarantor Obligations or any other
collateral security therefor or guarantee or right of offset with respect thereto at any time or
from time to time held by the Administrative Agent or any Lender, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any time be available to
or be asserted by the Borrower or any other Person against the Administrative Agent or any Lender,
or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Borrower or
such Guarantor) which constitutes, or might be construed to constitute, an equitable or legal
discharge of the Borrower for the Borrower Obligations or the Borrower’s Guarantor Obligations, or
of such Guarantor under the guarantee contained in this Section 3, in bankruptcy or in any other
instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder
against any Guarantor, the Administrative Agent or any Lender may, but shall be under no obligation
to, make a similar demand on or otherwise pursue such rights and remedies as it may have against
the Borrower, any other Guarantor or any other Person or against any collateral security or
guarantee for the Borrower Obligations or the Borrower’s Guarantor Obligations or any right of
offset with respect thereto, and any failure by the Administrative Agent or any Lender to make any
such demand, to pursue such other rights or remedies or to
collect any payments from the Borrower, any other Guarantor or any other Person or to realize
upon any such collateral security or guarantee or to exercise any such right of offset, or any
release of the Borrower, any other Guarantor or any other Person or any such collateral security,

 

 

13

guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability
hereunder, and shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Administrative Agent or any Lender against any Guarantor. For
the purposes hereof “demand” shall include the commencement and continuance of any legal
proceedings.

             3.6 Reinstatement. The guarantees contained in this Section 3 shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Borrower Obligations or the Borrower’s Guarantor Obligations, is rescinded or must
otherwise be restored or returned by the Administrative Agent or any Lender upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower or any Guarantor, or upon or
as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.

             3.7 Payments. Each Guarantor hereby guarantees that payments hereunder will be paid
to the Administrative Agent without set-off or counterclaim in Dollars or the applicable Optional
Currency or Tranche A Subtranche Currency at the office of the Administrative Agent located at 270
Park Avenue, New York, New York 10017 or at such other place and time specified by the
Administrative Agent.

SECTION 4. GRANT OF SECURITY INTEREST

             Each Grantor hereby assigns and transfers to the Administrative Agent, and hereby grants to
the Administrative Agent, for the ratable benefit of the Lenders, a security interest in, all of
the following property now owned or at any time hereafter acquired by such Grantor or in which such
Grantor now has or at any time in the future may acquire any right, title or interest
(collectively, the “Collateral”), as collateral security for the prompt and complete
payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of
such Grantor’s Obligations:

      (a) all Receivables;

      (b) all Chattel Paper;

      (c) all Deposit Account;

      (d) all Documents;

      (e) all Equipment;

      (f) all General Intangibles;

 

 

14

      (g) all Instruments;

      (h) all Intellectual Property;

      (i) all Inventory;

      (j) all Investment Property;

      (k) all books and records pertaining to the Collateral; and

      (l) to the extent not otherwise included, all Proceeds and products of any and all of
the foregoing and all collateral security and guarantees given by any Person with respect to
any of the foregoing.

SECTION 5. REPRESENTATIONS AND WARRANTIES

             To induce the Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the Borrower and each
Subsidiary Borrower thereunder, each Grantor hereby represents and warrants to the Administrative
Agent and each Lender that:

             5.1 Title; No Other Liens. Except for the security interest granted to the
Administrative Agent for the ratable benefit of the Lenders pursuant to this Agreement and the
other Liens permitted to exist on the Collateral by the Credit Agreement and as otherwise noted in
Section 5.8(a), such Grantor owns each item of the Collateral free and clear of any and all Liens
or claims of others, except, with respect to material Intellectual Property, as set forth on Schedule 6 and except that no representation is made as to any other Intellectual Property.
No financing statement or other public notice with respect to all or any part of the Collateral is
on file or of record in any public office, except such as have been filed in favor of the
Administrative Agent, for the ratable benefit of the Lenders, pursuant to this Agreement or as are
permitted by the Credit Agreement.

             5.2 Perfected First Priority Liens. The security interests granted pursuant
to this Agreement (a) upon completion of the filings and other actions specified on Schedule
3 (which, in the case of all filings and other documents referred to on said Schedule, have
been delivered to the Administrative Agent in completed and duly executed form) will constitute
valid perfected security interests in all of the Collateral (or, with respect to Inventory and
Equipment, in Inventory and Equipment kept at the locations set forth on Schedule 5) in
favor of the Administrative Agent, for the ratable benefit of the Lenders, as collateral security
for such Grantor’s Obligations, enforceable in accordance with the terms hereof against all
creditors of
such Grantor and any Persons purporting to purchase any Collateral from such Grantor (other
than Inventory sold by such Grantor in the ordinary course of business), to the extent that
perfection or enforceability against third parties is obtainable by completion of the filings and

 

 

15

other actions set forth on Schedule 3 or any similar filings or other actions in other
jurisdictions in the United States of America and (b) are prior to all other Liens on the
Collateral in existence on the date hereof except for (i) unrecorded Liens permitted by the Credit
Agreement which have priority over the Liens on the Collateral by operation of law and (ii) other
Liens on the Collateral permitted by the Credit Agreement.

             5.3 Chief Executive Office. On the date hereof, such Grantor’s jurisdiction of
organization and the location of such Grantor’s chief executive office or sole place of business
are specified on Schedule 4.

             5.4 Inventory and Equipment. On the date hereof, the Inventory and the Equipment
(other than mobile goods) (except for Inventory and Equipment not material in relation to the
Inventory and Equipment of the Borrower and its Domestic Subsidiaries as a whole) are kept at the
locations listed on Schedule 5.

             5.5 Farm Products. None of the Collateral constitutes, or is the Proceeds of, Farm
Products.

             5.6 Investment Property. (a) The shares of Pledged Stock pledged by such Grantor
hereunder constitute all the issued and outstanding shares of all classes of the Capital Stock of
each Issuer, which is a direct or an indirect Domestic Subsidiary of any Grantor, owned by such
Grantor.

             (b) All the shares of the Pledged Stock have been duly and validly issued and are fully paid
and nonassessable.

             (c) Each of the Pledged Notes constitutes the legal, valid and binding obligation of the
obligor with respect thereto, enforceable in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.

             (d) Such Grantor is the record and beneficial owner of, and has good and marketable title to,
the Investment Property pledged by it hereunder, free of any and all Liens or options in favor of,
or claims of, any other Person, except the security interest created by this Agreement and except
as permitted under subsection 7.1(k) of the Credit Agreement.

             5.7 Receivables. (a) No amount payable to such Grantor under or in
connection with any Receivable is evidenced by any Instrument or Chattel Paper which has not been
delivered to the Administrative Agent.

             (b) None of the obligors on any Receivables is a Governmental Authority.

 

 

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             (c) The amounts represented by such Grantor to the Lenders from time to time as owing to such
Grantor in respect of the Receivables will at such times be accurate.

             5.8 Intellectual Property. (a) Schedule 6 lists all material United States
Intellectual Property owned by such Grantor in its own name on the date hereof. To the knowledge
of such Grantor, all material foreign Intellectual Property owned by such Grantor is owned in its
own name on the date hereof.

             (b) Except as otherwise identified on Schedule 6, on the date hereof, all material
Intellectual Property listed on Schedule 6 is valid, unexpired and does not infringe the
intellectual property rights of any other Person.

             (c) On the date hereof, none of the Intellectual Property listed on Schedule 6 is the
subject of any licensing or franchise agreement pursuant to which such Grantor is the licensor or
franchisor, other than the Scotts trademark for the franchising of lawn care services to EG
Systems, Inc. and the Miracle-Gro trademark for the franchising of tree and shrub services to EG
Systems, Inc., which in turn grants local franchises in the United States of America to tree and
shrub service operators, respectively.

             (d) No final judgment has been rendered by any Governmental Authority which would limit or
cancel such Grantor’s rights in, any Intellectual Property listed on Schedule 6 in any
respect that could reasonably be expected to have a Material Adverse Effect.

             (e) No action or proceeding is pending, or, to the knowledge of such Grantor, threatened, on
the date hereof (i) seeking to limit or cancel any Intellectual Property listed on Schedule
6 or such Grantor’s ownership interest therein, or (ii) which, if adversely determined, would
have a material adverse effect on the value of any Intellectual Property listed on Schedule 6.

SECTION 6. COVENANTS

             Each Grantor covenants and agrees with the Administrative Agent and the Lenders that, from and
after the date of this Agreement until the Obligations shall have been paid in full, no Letter of
Credit shall be outstanding and the Commitments and Loans shall have terminated:

             6.1 Delivery of Instruments, Certificated Securities and Chattel Paper. If
any amount payable under or in connection with any of the Collateral shall be or become evidenced
by any Instrument, Certificated Security or Chattel Paper, such Instrument, Certificated Security
or Chattel Paper shall be immediately delivered to the Administrative Agent, duly indorsed
(including by delivery of related stock or bond powers) in a manner satisfactory to the
Administrative Agent, to be held as Collateral pursuant to this Agreement.

 

 

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             6.2 Maintenance of Insurance. (a) Such Grantor will maintain, with financially
sound and reputable companies, insurance policies (i) insuring the Inventory and Equipment against
loss by fire, explosion, theft and such other casualties as may be reasonably satisfactory to the
Administrative Agent and (ii) to the extent requested by the Administrative Agent, insuring such
Grantor, the Administrative Agent and the Lenders against liability for personal injury and
property damage relating to such Inventory and Equipment, such policies to be in such form and
amounts and having such coverage as may be reasonably satisfactory to the Administrative Agent and
the Lenders.

             (b) All such insurance shall (i) provide that no cancellation, material reduction in amount
or material change in coverage thereof shall be effective until at least 30 days after receipt by
the Administrative Agent of written notice thereof, (ii) name the Administrative Agent as insured
party or loss payee, (iii) if reasonably requested by the Administrative Agent, include a breach of
warranty clause and (iv) be reasonably satisfactory in all other respects to the Administrative
Agent.

             (c) The Borrower shall deliver to the Administrative Agent and the Lenders a report of a
reputable insurance broker with respect to such insurance substantially concurrently with each
delivery of the Borrower’s audited annual financial statements and such supplemental reports with
respect thereto as the Administrative Agent may from time to time reasonably request.

             6.3 Payment of Obligations. Such Grantor will pay and discharge or otherwise satisfy
at or before maturity or before they become delinquent, as the case may be, all taxes, assessments
and governmental charges or levies imposed upon the Collateral or in respect of income or profits
therefrom, as well as all claims of any kind (including, without limitation, claims for labor,
materials and supplies) against or with respect to the Collateral, except that no such charge need
be paid if the amount or validity thereof is currently being contested in good faith by appropriate
proceedings, reserves in conformity with GAAP with respect thereto have been provided on the books
of such Grantor and such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest therein.

             6.4 Maintenance of Perfected Security Interest; Further Documentation. (a) Such
Grantor shall maintain the security interest created by this Agreement as a perfected security
interest having at least the priority described in Section 5.2 and shall defend such security
interest against the claims and demands of all Persons whomsoever.

             (b) Such Grantor will furnish to the Administrative Agent and the Lenders from time to
time statements and schedules further identifying and describing the assets and property of such
Grantor and such other reports in connection therewith as the Administrative Agent may reasonably
request, all in reasonable detail.

             (c) At any time and from time to time, upon the written request of the Administrative Agent,
and at the sole expense of such Grantor, such Grantor will promptly and

 

 

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duly execute and deliver,
and have recorded, such further instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted, including, without
limitation, (i) filing any financing or continuation statements under the Uniform Commercial Code
(or other similar laws) in effect in any jurisdiction with respect to the security interests
created hereby and (ii) in the case of Investment Property, Deposit Accounts and any other relevant
Collateral, taking any actions necessary to enable the Administrative Agent to obtain “control”
(within the meaning of the applicable Uniform Commercial Code) with respect thereto.

             6.5 Changes in Locations, Name, etc. Such Grantor will not, except upon 15 days’
prior written notice to the Administrative Agent and delivery to the Administrative Agent of (a)
all additional executed financing statements and other documents reasonably requested by the
Administrative Agent to maintain the validity, perfection and priority of the security interests
provided for herein and (b) if applicable, a written supplement to Schedule 5 showing any
additional location at which Inventory or Equipment shall be kept:

      (i) permit any of the Inventory or Equipment to be kept at a location other than those
listed on Schedule 5;

      (ii) change its jurisdiction of organization or the location of its chief executive
office or sole place of business from that referred to in Section 5.3; or

      (iii) change its name, identity or corporate structure to such an extent that any
financing statement filed by the Administrative Agent in connection with this Agreement
would become misleading without 45 days prior written notice to the Administrative Agent.

             6.6 Notices. Such Grantor will advise the Administrative Agent and the Lenders
promptly, in reasonable detail, of:

             (a) any Lien (other than security interests created hereby or Liens permitted under the Credit
Agreement) on any of the Collateral which would adversely affect the ability of the Administrative
Agent to exercise any of its remedies hereunder; and

             (b) of the occurrence of any other event which could reasonably be expected to have a
material adverse effect on the aggregate value of the Collateral or on the security interests
created hereby.

             6.7 Investment Property. (a) If such Grantor shall become entitled to receive or
shall receive any stock certificate (including, without limitation, any certificate representing a
stock dividend or a distribution in connection with any reclassification, increase or
reduction of capital or any certificate issued in connection with any reorganization), option or
rights in respect of the Capital Stock of any Issuer which is a direct or indirect Domestic
Subsidiary of such

 

 

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Grantor, whether in addition to, in substitution of, as a conversion of, or in
exchange for, any shares of the Pledged Stock, or otherwise in respect thereof, such Grantor shall
accept the same as the agent of the Administrative Agent and the Lenders, hold the same in trust
for the Administrative Agent and the Lenders and deliver the same forthwith to the Administrative
Agent in the exact form received, duly indorsed (including by delivery of related stock or bond
powers) by such Grantor to the Administrative Agent, if required, together with an undated stock
power covering such certificate duly executed in blank by such Grantor to be held by the
Administrative Agent, subject to the terms hereof, as additional collateral security for such
Grantor’s Obligations. Any sums paid upon or in respect of the Investment Property upon the
liquidation or dissolution of any Issuer shall be paid over to the Administrative Agent to be held
by it hereunder as additional collateral security for the applicable Grantor’s Obligations, and in
case any distribution of capital shall be made on or in respect of the Investment Property or any
property shall be distributed upon or with respect to the Investment Property pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization
thereof, the property so distributed shall, unless otherwise subject to a perfected security
interest in favor of the Administrative Agent, be delivered to the Administrative Agent to be held
by it hereunder as additional collateral security for such Obligations except to the extent
permitted under Subsection 6.3. If any sums of money or property so paid or distributed in respect
of the Investment Property shall be received by such Grantor, such Grantor shall, until such money
or property is paid or delivered to the Administrative Agent, hold such money or property in trust
for the Lenders, segregated from other funds of such Grantor, as additional collateral security for
the Obligations.

             (b) Without the prior written consent of the Administrative Agent or unless expressly
permitted by the Credit Agreement, such Grantor will not (i) vote to enable, or take any other
action to permit, any Issuer to issue any stock or other equity securities of any nature or to
issue any other securities convertible into or granting the right to purchase or exchange for any
stock or other equity securities of any nature of any Issuer, (ii) sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect to, the Investment Property or
Proceeds thereof (except pursuant to a transaction expressly permitted by the Credit Agreement),
(iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person
with respect to, any of the Investment Property or Proceeds thereof, or any interest therein,
except for the security interests created by this Agreement or (iv) enter into any agreement or
undertaking restricting the right or ability of such Grantor or the Administrative Agent to sell,
assign or transfer any of the Investment Property or Proceeds thereof.

             (c) In the case of each Grantor which is an Issuer, such Issuer agrees that (i) it
will be bound by the terms of this Agreement relating to the Investment Property issued by it and
will comply with such terms insofar as such terms are applicable to it, (ii) it will notify the
Administrative Agent promptly in writing of the occurrence of any of the events described in
Section 6.7(a) with respect to the Investment Property issued by it and (iii) the terms of Sections 7.3(c) and 7.7 shall apply to it, mutatis mutandis, with respect to all
actions that may be required of it pursuant to Section 7.3(c) or 7.7 with respect to the Investment
Property issued by it.

 

 

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             6.8 Receivables. (a) Other than in the ordinary course of business consistent with
its past practice, such Grantor will not (i) grant any extension of the time of payment of any
Receivable, (ii) compromise or settle any Receivable for less than the full amount thereof, (iii)
release, wholly or partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable or (v) amend, supplement or modify any Receivable
in any manner that could materially adversely affect the value thereof.

             (b) Such Grantor will deliver to the Administrative Agent a copy of each material demand,
notice or document received by it that questions or calls into doubt the validity or enforceability
of more than 5% of the aggregate amount of the then outstanding Receivables.

             (c) Anything contained in this Agreement to the contrary notwithstanding, the Grantors, or
any of them, shall have the right to enter into one or more Receivables Purchase Facilities, as
contemplated by the Credit Agreement, and the Administrative Agent shall execute any and all
documents reasonably necessary to release its security interest in the Receivables which become
Sold Receivables upon the consummation of such Receivables Purchase Facility(ies).

             6.9 Intellectual Property. (a) Such Grantor (either itself or through licensees)
will (i) continue to use each material Trademark in the ordinary course of business, (ii) maintain
as in the past the quality of products and services offered under such Trademark, (iii) wherever
practical, use such Trademark with the appropriate notice of registration if required by applicable
Requirements of Law, and (iv) not knowingly do any act whereby such Trademark may become
invalidated.

             (b) Such Grantor (either itself or through licensees) will not knowingly do any act, or omit
to do any act, in Grantor’s reasonable business judgment, whereby any material Patent may become
forfeited, abandoned or dedicated to the public.

             (c) Such Grantor (either itself or through licensees) (i) will, in Grantor’s reasonable
business judgment, employ each material Copyright and (ii) will not (and will not permit any
licensee or sublicensee thereof to) knowingly do any act or knowingly omit to do any act whereby
any material portion of the Copyrights may become invalidated or otherwise impaired. Such Grantor
will not (either itself or through Licensees) knowingly do any act whereby any material portion of
the Copyrights may fall into the public domain.

             (d) Such Grantor (either itself or through licensees) will not knowingly use any
material Intellectual Property to infringe the intellectual property rights of any other Person.

             (e) Such Grantor will notify the Administrative Agent and the Lenders immediately if it knows
that any registration relating to any material Intellectual Property may
become abandoned or of any final adverse determination in any proceeding in the United States
Patent and Trademark Office or any U.S. court regarding such Grantor’s ownership of, or the
validity of, any material Intellectual Property.

 

 

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             (f) Whenever such Grantor, either by itself or through any agent, employee, licensee or
designee, shall file an application for the registration of any Intellectual Property with the
United States Patent and Trademark Office, such Grantor shall report such filing to the
Administrative Agent within five Business Days after the last day of the fiscal year in which such
filing occurs. Upon request of the Administrative Agent, such Grantor shall execute and deliver,
and have recorded, any and all agreements, instruments, documents, and papers as the Administrative
Agent may reasonably request to evidence the Administrative Agent’s and the Lenders’ security
interest in any U.S. Trademark and the goodwill and general intangibles of such Grantor relating
thereto or represented thereby.

             (g) Such Grantor will in its reasonable business judgment including, without limitation, in
any proceeding before the United States Patent and Trademark Office, maintain and pursue each
application (and obtain the relevant registration) and to maintain each registration of the
material Intellectual Property, including, without limitation, filing of applications for renewal,
affidavits of use and affidavits of incontestability.

             (h) In the event that any material Intellectual Property is infringed, misappropriated or
diluted by a third party, such Grantor shall take such actions as such Grantor shall reasonably
deem appropriate under the circumstances to protect such Intellectual Property.

SECTION 7. REMEDIAL PROVISIONS

             7.1 Certain Matters Relating to Receivables. (a) The Administrative Agent shall
have the right after the occurrence and during the continuance of an Event of Default to make test
verifications of the Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information as the Administrative
Agent may require in connection with such test verifications. At any time and from time to time,
upon the Administrative Agent’s request and at the expense of the relevant Grantor, such Grantor
shall cause independent public accountants or others satisfactory to the Administrative Agent to
furnish to the Administrative Agent reports showing reconciliations, aging and test verifications
of, and trial balances for, the Receivables.

             (b) The Administrative Agent hereby authorizes each Grantor to collect such Grantor’s
Receivables, and the Administrative Agent may curtail or terminate said authority at any time after
the occurrence and during the continuance of an Event of Default. If required by the
Administrative Agent at any time after the occurrence and during the continuance of an Event of
Default, any payments of Receivables, when collected by any Grantor, (i) shall be forthwith (and,
in any event, within two Business Days) deposited by such Grantor in the exact form received, duly
indorsed by such Grantor to the Administrative Agent if required, in a
Collateral Account maintained under the sole dominion and control of the Administrative Agent,
subject to withdrawal by the Administrative Agent for the account of the Lenders only as provided
in Section 7, and (ii) until so turned over, shall be held by such Grantor in trust for the

 

 

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Administrative Agent and the Lenders, segregated from other funds of such Grantor. Each such
deposit of Proceeds of Receivables shall be accompanied by a report identifying in reasonable
detail the nature and source of the payments included in the deposit.

             (c) At the Administrative Agent’s request, each Grantor shall deliver to the Administrative
Agent all original and other documents evidencing, and relating to, the agreements and transactions
which gave rise to the Receivables, including, without limitation, all original orders, invoices
and shipping receipts.

             7.2 Communications with Obligors; Grantors Remain Liable. (a) The Administrative
Agent in its own name or in the name of others may at any time after the occurrence and during the
continuance of an Event of Default communicate with obligors under the Receivables to verify with
them to the Administrative Agent’s satisfaction the existence, amount and terms of any Receivables.

             (b) Upon the written request of the Administrative Agent at any time after the occurrence and
during the continuance of an Event of Default, each Grantor shall notify obligors on its
Receivables that the Receivables have been assigned to the Administrative Agent for the ratable
benefit of the Lenders and that payments in respect thereof shall be made directly to the
Administrative Agent.

             (c) Anything herein to the contrary notwithstanding, each Grantor shall remain liable under
each of its Receivables to observe and perform all the conditions and obligations to be observed
and performed by it thereunder, all in accordance with the terms of any agreement giving rise
thereto. Neither the Administrative Agent nor any Lender shall have any obligation or liability
under any Receivable (or any agreement giving rise thereto) by reason of or arising out of this
Agreement or the receipt by the Administrative Agent or any Lender of any payment relating thereto,
nor shall the Administrative Agent or any Lender be obligated in any manner to perform any of the
obligations of any Grantor under or pursuant to any Receivable (or any agreement giving rise
thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any
payment received by it or as to the sufficiency of any performance by any party thereunder, to
present or file any claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be entitled at any time or
times.

             7.3 Pledged Stock. (a) Unless an Event of Default shall have occurred and be
continuing and the Administrative Agent shall have given notice to the relevant Grantor of the
Administrative Agent’s intent to exercise its corresponding rights pursuant to Section 7.3(b), each
Grantor shall be permitted to receive all cash dividends paid in respect of the Pledged Stock and
all payments made in respect of the Pledged Notes, in each case paid in the normal course of
business of the relevant Issuer and consistent with past practice, to the extent permitted in the
Credit Agreement, to pay and declare dividends to the extent permitted by the Credit Agreement
and to exercise all voting and corporate rights with respect to the Investment Property;
provided, however, that no vote shall be cast or corporate right exercised or other
action taken which, in the

 

 

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Administrative Agent’s reasonable judgment, would impair the Collateral
or which would be inconsistent with or result in any violation of any provision of the Credit
Agreement, this Agreement or any other Loan Document.

             (b) If an Event of Default shall occur and be continuing and the Administrative Agent shall
give written notice of its intent to exercise such rights to the relevant Grantor or Grantors, (i)
the Administrative Agent shall have the right to receive any and all cash dividends, payments or
other Proceeds paid in respect of the Investment Property and make application thereof to the
Obligations in such order as the Administrative Agent may determine, and (ii) any or all of the
Investment Property shall be registered in the name of the Administrative Agent or its nominee, and
the Administrative Agent or its nominee may thereafter exercise (x) all voting, corporate and other
rights pertaining to such Investment Property at any meeting of shareholders of the relevant Issuer
or Issuers or otherwise and (y) any and all rights of conversion, exchange and subscription and any
other rights, privileges or options pertaining to such Investment Property as if it were the
absolute owner thereof (including, without limitation, the right to exchange at its discretion any
and all of the Investment Property upon the merger, consolidation, reorganization, recapitalization
or other fundamental change in the corporate structure of any Issuer, or upon the exercise by any
Grantor or the Administrative Agent of any right, privilege or option pertaining to such Investment
Property, and in connection therewith, the right to deposit and deliver any and all of the
Investment Property with any committee, depositary, transfer agent, registrar or other designated
agency upon such terms and conditions as the Administrative Agent may determine), all without
liability except to account for property actually received by it, but the Administrative Agent
shall have no duty to any Grantor to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.

             (c) Each Grantor hereby authorizes and instructs each Issuer of any Investment Property
pledged by such Grantor hereunder to (i) comply with any instruction received by it from the
Administrative Agent in writing that (x) states that an Event of Default has occurred and is
continuing and (y) is otherwise in accordance with the terms of this Agreement, without any other
or further instructions from such Grantor, and each Grantor agrees that each Issuer shall be fully
protected in so complying, and (ii) unless otherwise expressly permitted hereby, pay any dividends
or other payments with respect to the Investment Property directly to the Administrative Agent.

             7.4 Proceeds to be Turned Over To Administrative Agent. In addition to the
rights of the Administrative Agent and the Lenders specified in Section 7.1 with respect to
payments of Receivables, if an Event of Default shall occur and be continuing, all Proceeds
received by any Grantor consisting of cash, checks and other near-cash items shall be held by such
Grantor in trust for the Administrative Agent and the Lenders, segregated from other funds of such
Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to the Administrative
Agent in the exact form received by such Grantor (duly indorsed by such Grantor
to the Administrative Agent, if required). All Proceeds received by the Administrative Agent
hereunder shall be held by the Administrative Agent in a Collateral Account maintained under its
sole dominion and control. All Proceeds while held by the Administrative Agent in a Collateral

 

 

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Account (or by such Grantor in trust for the Administrative Agent and the Lenders) shall continue
to be held as collateral security for all the Obligations and shall not constitute payment thereof
until applied as provided in Section 7.5.

             7.5 Application of Proceeds. At such intervals as may be agreed upon by the Grantors
and the Administrative Agent, or, if an Event of Default shall have occurred and be continuing, at
any time at the Administrative Agent’s election, the Administrative Agent may apply all or any part
of Proceeds held in any Collateral Account in payment of the Obligations in such order as the
Administrative Agent may elect, and any part of such funds which the Administrative Agent elects
not so to apply and deems not required as collateral security for the Obligations shall be paid
over from time to time by the Administrative Agent to the Grantors or to whomsoever may be lawfully
entitled to receive the same. Any balance of such Proceeds remaining after the Obligations shall
have been paid in full, no Letters of Credit shall be outstanding and the Commitments shall have
terminated shall be paid over to the Grantors or to whomsoever may be lawfully entitled to receive
the same.

             7.6 Code and Other Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Lenders, may exercise, in addition to all
other rights and remedies granted to them in this Agreement and in any other instrument or
agreement securing, evidencing or relating to the Obligations, all rights and remedies of a secured
party under the New York UCC or any other applicable law. Without limiting the generality of the
foregoing, the Administrative Agent, without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except any notice required by law referred to below)
to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements
and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate
and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign,
give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale
or sales, at any exchange, broker’s board or office of the Administrative Agent or any Lender or
elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any credit risk. The
Administrative Agent or any Lender shall have the right upon any such public sale or sales, and, to
the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part
of the Collateral so sold, free of any right or equity of redemption in any Grantor, which right or
equity is hereby waived and released. Each Grantor further agrees, at the Administrative Agent’s
request, to assemble the Collateral and make it available to the Administrative Agent at places
which the Administrative Agent shall reasonably select, whether at such Grantor’s premises or
elsewhere. The Administrative Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 6.6, after deducting all reasonable costs and expenses of every kind
incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral
or in any way relating to the Collateral or the
rights of the Administrative Agent and the Lenders hereunder, including, without limitation,
reasonable attorneys’ fees and disbursements, to the payment in whole or in part of the
Obligations, in such order as the Administrative Agent may elect, and only after such application

 

 

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and after the payment by the Administrative Agent of any other amount required by any provision of
law, including, without limitation, Section 9-504(1)(c) of the New York UCC, need the
Administrative Agent account for the surplus, if any, to any Grantor. To the extent permitted by
applicable law, each Grantor waives all claims, damages and demands it may acquire against the
Administrative Agent or any Lender arising out of the exercise by them of any rights hereunder. If
any notice of a proposed sale or other disposition of Collateral shall be required by law, such
notice shall be deemed reasonable and proper if given at least 10 days before such sale or other
disposition.

             7.7 Registration Rights. (a) If the Administrative Agent shall determine to
exercise its right to sell any or all of the Pledged Stock pursuant to Section 7.6, and if in the
opinion of the Administrative Agent it is necessary or advisable to have the Pledged Stock, or that
portion thereof to be sold, registered under the provisions of the Securities Act, the relevant
Grantor will cause the Issuer thereof to (i) execute and deliver, and cause the directors and
officers of such Issuer to execute and deliver, all such instruments and documents, and do or cause
to be done all such other acts as may be, in the opinion of the Administrative Agent, necessary or
advisable to register the Pledged Stock, or that portion thereof to be sold, under the provisions
of the Securities Act, (ii) use its best efforts to cause the registration statement relating
thereto to become effective and to remain effective for a period of one year from the date of the
first public offering of the Pledged Stock, or that portion thereof to be sold, and (iii) make all
amendments thereto and/or to the related prospectus which, in the opinion of the Administrative
Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act
and the rules and regulations of the Securities and Exchange Commission applicable thereto. Each
Grantor agrees to cause such Issuer to comply with the provisions of the securities or “Blue Sky”
laws of any and all jurisdictions which the Administrative Agent shall designate and to make
available to its security holders, as soon as practicable, an earnings statement (which need not be
audited) which will satisfy the provisions of Section 11(a) of the Securities Act.

             (b) Each Grantor recognizes that the Administrative Agent may be unable to effect a
public sale of any or all the Pledged Stock, by reason of certain prohibitions contained in the
Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to
one or more private sales thereof to a restricted group of purchasers which will be obliged to
agree, among other things, to acquire such securities for their own account, for investment and not
with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Administrative Agent shall be
under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to
permit the Issuer thereof to register such securities for public sale
under the Securities Act, or under applicable state securities laws, even if such Issuer would
agree to do so.

             (c) Each Grantor agrees to use its best efforts to do or cause to be done all such other acts
as may be necessary to make such sale or sales of all or any portion of the Pledged

 

 

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Stock pursuant
to this Section 7.7 valid and binding and in compliance with any and all other applicable
Requirements of Law. Each Grantor further agrees that a breach of any of the covenants contained
in this Section 7.7 will cause irreparable injury to the Administrative Agent and the Lenders, that
the Administrative Agent and the Lenders have no adequate remedy at law in respect of such breach
and, as a consequence, that each and every covenant contained in this Section 6.7 shall be
specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to
assert any defenses against an action for specific performance of such covenants except for a
defense that no Event of Default has occurred under the Credit Agreement.

             7.8 Waiver; Deficiency. Each Grantor waives and agrees not to assert any rights or
privileges which it may acquire under Section 9-112 of the New York UCC. Each Grantor shall remain
liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are
insufficient to pay its Obligations and the fees and disbursements of any attorneys employed by the
Administrative Agent or any Lender to collect such deficiency.

SECTION 8. THE ADMINISTRATIVE AGENT

             8.1 Administrative Agent’s Appointment as Attorney-in-Fact, etc. (a) Each Grantor
hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent
thereof, with full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Grantor and in the name of such
Grantor or in its own name, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the
generality of the foregoing, each Grantor hereby gives the Administrative Agent the power and
right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any or all of
the following:

      (i) in the name of such Grantor or its own name, or otherwise, take possession
of and indorse and collect any checks, drafts, notes, acceptances or other instruments for
the payment of moneys due under any Receivable or with respect to any other Collateral and
file any claim or take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Administrative Agent for the purpose of collecting any
and all such moneys due under any Receivable or with respect to any other Collateral
whenever payable;

      (ii) in the case of any Intellectual Property, execute and deliver, and have recorded,
any and all agreements, instruments, documents and papers as the Administrative Agent may
request to evidence the Administrative Agent’s and the Lenders’ security interest in such
Intellectual Property and the goodwill and general intangibles of such Grantor relating
thereto or represented thereby;

 

 

27

      (iii) pay or discharge taxes and Liens levied or placed on or threatened against the
Collateral, effect any repairs or any insurance called for by the terms of this Agreement
and pay all or any part of the premiums therefor and the costs thereof;

      (iv) execute, in connection with any sale provided for in Section 7.6 or 7.7, any
indorsements, assignments or other instruments of conveyance or transfer with respect to the
Collateral; and

      (v) (1) direct any party liable for any payment under any of the Collateral to make
payment of any and all moneys due or to become due thereunder directly to the Administrative
Agent or as the Administrative Agent shall direct; (2) ask or demand for, collect, and
receive payment of and receipt for, any and all moneys, claims and other amounts due or to
become due at any time in respect of or arising out of any Collateral; (3) sign and indorse
any invoices, freight or express bills, bills of lading, storage or warehouse receipts,
drafts against debtors, assignments, verifications, notices and other documents in
connection with any of the Collateral; (4) commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in respect of any
Collateral; (5) defend any suit, action or proceeding brought against such Grantor with
respect to any Collateral; (6) settle, compromise or adjust any such suit, action or
proceeding and, in connection therewith, give such discharges or releases as the
Administrative Agent may deem appropriate; (7) assign any Copyright, Patent or Trademark
(along with the goodwill of the business to which any such Copyright, Patent or Trademark
pertains), throughout the world for such term or terms, on such conditions, and in such
manner, as the Administrative Agent shall in its sole discretion determine; and (8)
generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the Administrative Agent were
the absolute owner thereof for all purposes, and do, at the Administrative Agent’s option
and such Grantor’s expense, at any time, or from time to time, all acts and things which the
Administrative Agent deems necessary to protect, preserve or realize upon the Collateral and
the Administrative Agent’s and the Lenders’ security interests therein and to effect the
intent of this Agreement, all as fully and effectively as such Grantor might do.

     Anything in this Section 8.1(a) to the contrary notwithstanding, the Administrative
Agent agrees that it will not exercise any rights under the power of attorney provided for in this
Section 8.1(a) unless an Event of Default shall have occurred and be continuing.

             (b) If any Grantor fails to perform or comply with any of its agreements contained herein,
the Administrative Agent, at its option, but without any obligation so to do, may perform or
comply, or otherwise cause performance or compliance, with such agreement.

             (c) The expenses of the Administrative Agent incurred in connection with actions undertaken
as provided in this Section 8.1, together with interest thereon at a rate per annum

 

 

28

equal to the
highest rate per annum at which interest would then be payable on any category of past due ABR
Loans under the Credit Agreement, from the date of payment by the Administrative Agent to the date
reimbursed by the relevant Grantor, shall be payable by such Grantor to the Administrative Agent on
demand.

             (d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be
done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are
coupled with an interest and are irrevocable until this Agreement is terminated and the security
interests created hereby are released.

             8.2 Duty of Administrative Agent. The Administrative Agent’s sole duty with respect
to the custody, safekeeping and physical preservation of the Collateral in its possession, under
Section 9-207 of the New York UCC or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar property for its own account. Neither the Administrative
Agent, any Lender nor any of their respective officers, directors, employees or agents shall be
liable for failure to demand, collect or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Grantor or any other Person or to take any other action whatsoever with regard to
the Collateral or any part thereof. The powers conferred on the Administrative Agent and the
Lenders hereunder are solely to protect the Administrative Agent’s and the Lenders’ interests in
the Collateral and shall not impose any duty upon the Administrative Agent or any Lender to
exercise any such powers. The Administrative Agent and the Lenders shall be accountable only for
amounts that they actually receive as a result of the exercise of such powers, and neither they nor
any of their officers, directors, employees or agents shall be responsible to any Grantor for any
act or failure to act hereunder, except for their own gross negligence or willful misconduct.

             8.3 Execution of Financing Statements. Pursuant to Section 9-402 of the New
York UCC and any other applicable law, each Grantor authorizes the Administrative Agent to file or
record financing statements and other filing or recording documents or instruments with respect to
the Collateral without the signature of such Grantor in such form and in such offices as the
Administrative Agent determines appropriate to perfect the security interests of the Administrative
Agent under this Agreement. A photographic or other reproduction of this Agreement shall be
sufficient as a financing statement or other filing or recording document or instrument for filing
or recording in any jurisdiction.

             8.4 Authority of Administrative Agent. Each Grantor acknowledges that the rights and
responsibilities of the Administrative Agent under this Agreement with respect to any
action taken by the Administrative Agent or the exercise or non-exercise by the Administrative
Agent of any option, voting right, request, judgment or other right or remedy provided for herein
or resulting or arising out of this Agreement shall, as between the Administrative Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with respect thereto as
may exist from time to time among them, but, as between the Administrative Agent and the Grantors,
the Administrative Agent shall be conclusively presumed to be acting as agent for the

 

 

29

Lenders with
full and valid authority so to act or refrain from acting, and no Grantor shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.

SECTION 9. MISCELLANEOUS

             9.1 Amendments in Writing. None of the terms or provisions of this Agreement may be
waived, amended, supplemented or otherwise modified except in accordance with subsection 10.1 of
the Credit Agreement.

             9.2 Notices. All notices, requests and demands to or upon the Administrative Agent
or any Grantor hereunder shall be effected in the manner provided for in subsection 10.2 of the
Credit Agreement; provided that any such notice, request or demand to or upon any Guarantor
shall be addressed to such Guarantor at its notice address set forth on Schedule 1.

             9.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Administrative
Agent nor any Lender shall by any act (except by a written instrument pursuant to Section 8.1),
delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Lender, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or
privilege hereunder shall preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. A waiver by the Administrative Agent or any Lender of any right
or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy
which the Administrative Agent or such Lender would otherwise have on any future occasion. The
rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are
not exclusive of any other rights or remedies provided by law.

             9.4 Enforcement Expenses; Indemnification. (a) Each Guarantor agrees to pay
or reimburse each Lender and the Administrative Agent for all its costs and expenses incurred in
collecting against such Guarantor under the guarantees contained in Section 2 or 3, as applicable,
or otherwise enforcing or preserving any rights under this Agreement and the other Loan Documents
to which such Guarantor is a party, including, without limitation, the reasonable fees and
disbursements of counsel (including the allocated fees and expenses of in-house counsel) to each
Lender and of counsel to the Administrative Agent.

             (b) Each Guarantor agrees to pay, and to save the Administrative Agent and the Lenders
harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any
and all stamp, excise, sales or other taxes which may be payable or determined to be payable with
respect to any of the Collateral or in connection with any of the transactions contemplated by this
Agreement.

 

 

30

             (c) Each Guarantor agrees to pay, and to save the Administrative Agent and the Lenders
harmless from, any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to
the execution, delivery, enforcement, performance and administration of this Agreement to the
extent the Borrower would be required to do so pursuant to subsection 10.5 of the Credit Agreement.

             (d) The agreements in this Section 9.4 shall survive repayment of the Obligations and all
other amounts payable under the Credit Agreement and the other Loan Documents.

             9.5 Successors and Assigns. This Agreement shall be binding upon the successors and
assigns of each Grantor and shall inure to the benefit of the Administrative Agent and the Lenders
and their successors and assigns; provided that no Grantor may assign, transfer or delegate
any of its rights or obligations under this Agreement without the prior written consent of the
Administrative Agent.

             9.6 Set-Off. Each Grantor hereby irrevocably authorizes the Administrative
Agent and each Lender at any time and from time to time while an Event of Default shall have
occurred and be continuing, without notice to such Grantor or any other Grantor, any such notice
being expressly waived by each Grantor, to set-off and appropriate and apply any and all deposits
(general or special, time or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by the Administrative Agent or such
Lender to or for the credit or the account of such Grantor, or any part thereof in such amounts as
the Administrative Agent or such Lender may elect, against and on account of the obligations and
liabilities of such Grantor to the Administrative Agent or such Lender hereunder and claims of
every nature and description of the Administrative Agent or such Lender against such Grantor, in
any currency, whether arising hereunder, under the Credit Agreement, any other Loan Document or
otherwise, as the Administrative Agent or such Lender may elect, whether or not the Administrative
Agent or any Lender has made any demand for payment and although such obligations, liabilities and
claims may be contingent or unmatured. The Administrative Agent and each Lender shall notify such
Grantor promptly of any such set-off and the application made by the Administrative Agent or such
Lender of the proceeds thereof, provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of the Administrative Agent and
each Lender under this Section 9.6 are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Administrative Agent or such Lender may have.

             9.7 Counterparts. This Agreement may be executed by one or more of the parties to
this Agreement on any number of separate counterparts (including by telecopy), and all of said
counterparts taken together shall be deemed to constitute one and the same instrument.

             9.8 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such

 

 

31

prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

             9.9 Section Headings. The Section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or be taken into
consideration in the interpretation hereof.

             9.10 Integration. This Agreement and the other Loan Documents represent the
agreement of the Grantors, the Administrative Agent and the Lenders with respect to the subject
matter hereof and thereof, and there are no promises, undertakings, representations or warranties
by the Administrative Agent or any Lender relative to subject matter hereof and thereof not
expressly set forth or referred to herein or in the other Loan Documents.

             9.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

             9.12 Submission To Jurisdiction; Waivers. Each Grantor hereby irrevocably and
unconditionally:

      (a) submits for itself and its property in any legal action or proceeding relating to
this Agreement and the other Loan Documents to which it is a party, or for recognition and
enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of
the Courts of the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;

      (b) consents that any such action or proceeding may be brought in such courts and
waives any objection that it may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;

      (c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to such Grantor at its address referred to in
Section 9.2 or at such other address of which the Administrative Agent shall have been
notified pursuant thereto;

      (d) agrees that nothing herein shall affect the right to effect service of process in
any other manner permitted by law or shall limit the right to sue in any other jurisdiction;
and

 

 

32

      (e) waives, to the maximum extent not prohibited by law, any right it may have to
claim or recover in any legal action or proceeding referred to in this Section any special,
exemplary, punitive or consequential damages.

             9.13 Acknowledgments. Each Grantor hereby acknowledges that:

      (a) it has been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Loan Documents to which it is a party;

      (b) neither the Administrative Agent nor any Lender has any fiduciary relationship
with or duty to any Grantor arising out of or in connection with this Agreement or any of
the other Loan Documents, and the relationship between the Grantors, on the one hand, and
the Administrative Agent and Lenders, on the other hand, in connection herewith or therewith
is solely that of debtor and creditor; and

      (c) no joint venture is created hereby or by the other Loan Documents or otherwise
exists by virtue of the transactions contemplated hereby among the Lenders or among the
Grantors and the Lenders.

             9.14 Additional Grantors. Each Domestic Subsidiary Borrower that is required to
become a party to this Agreement pursuant to subsection 10.1(b) of the Credit Agreement shall
become a Grantor for all purposes of this Agreement upon execution and delivery by such Domestic
Subsidiary Borrower of an Assumption Agreement in the form of Annex 1 hereto.

             9.15 Releases. (a) At such time as the Loans, the Reimbursement Obligations and the
other Obligations shall have been paid in full, the Commitments have been terminated and no Letters
of Credit shall be outstanding, the Collateral shall be released from the Liens created hereby, and
this Agreement and all obligations (other than those expressly stated to survive such termination)
of the Administrative Agent and each Grantor hereunder shall terminate, all without delivery of any
instrument or performance of any act by any party, and all rights to the Collateral shall revert to
the applicable Grantors. At the request and sole expense of any Grantor following any such
termination, the Administrative Agent shall deliver to such Grantor any Collateral held by the
Administrative Agent hereunder, and execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence such termination.

             (b) If any of the Collateral shall be sold, transferred or otherwise disposed of by
any Grantor in a transaction permitted by the Credit Agreement, then the Administrative Agent, at
the request and sole expense of such Grantor, shall execute and deliver to such Grantor all
releases or other documents reasonably necessary or desirable for the release of the Liens created
hereby on such Collateral. At the request and sole expense of the Borrower, a Subsidiary
Guarantor shall be released from its obligations hereunder in the event that all the Capital Stock
of such Subsidiary Guarantor shall be sold, transferred or otherwise disposed of in a transaction
permitted by the Credit Agreement; provided that the Borrower shall have delivered to the

 

 

33

Administrative Agent, at least ten Business Days prior to the date of the proposed release, a
written request for release identifying the relevant Subsidiary Guarantor and the terms of the sale
or other disposition in reasonable detail, including the price thereof and any expenses in
connection therewith, together with a certification by the Borrower stating that such transaction
is in compliance with the Credit Agreement and the other Loan Documents.

             9.16 Conflict of Laws. Notwithstanding anything to the contrary herein, in the event
that any provision of any pledge, charge or foreign equivalent executed by any Foreign Subsidiary
and governed by the laws of the applicable foreign jurisdiction is inconsistent with any
corresponding provision in this Agreement, the provision in such pledge, charge or foreign
equivalent shall govern.

             9.17 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

 

34

             IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and Collateral Agreement
to be duly executed and delivered as of the date first above written.

	 	 	 	 	 	 	 	 	 	 	 	 
	THE CHASE MANHATTAN BANK,
	 	THE SCOTTS COMPANY
	as Administrative Agent

	

	 	 	 	 	 	 	 	 	 	 
	By:
	 	/s/ Thomas H. Kozlark	 	By:	 	/s/ G. Robert Lucas
	

	 	 	 	 	 	 
	

	 	Title:
	 	Vice President
	 	 	 	Title:
	 	 Senior Vice President,
	

	 	 	 	 	 	 	 	 	 	General Counsel and Secretary

	 	 	 	 	 
	 	HYPONEX CORPORATION

 	 
	 	By:  	/s/ Rebecca J. Bruening
 	 
	 	 	Title:  Vice President 	 
	 	 	 	 
	 
	 	SCOTTS’ MIRACLE-GRO PRODUCTS, INC.

 	 
	 	By:  	/s/ Rebecca J. Bruening
 	 
	 	 	Title:  Vice President 	 
	 	 	 	 
	 
	 	SCOTTS-SIERRA HORTICULTURAL PRODUCTS COMPANY

 	 
	 	By:  	/s/ Rebecca J. Bruening
 	 
	 	 	Title:  Vice President 	 
	 	 	 	 
	 
	 	REPUBLIC TOOL & MANUFACTURING CORP.

 	 
	 	By:  	/s/ Rebecca J. Bruening
 	 
	 	 	Title:  Vice President 	 
	 	 	 	 
	 

 

 

	 	 	 	 	 
	 	SCOTTS-SIERRA INVESTMENTS, INC.

 	 
	 	By:  	/s/ Rebecca J. Bruening
 	 
	 	 	Title:  Vice President 	 
	 	 	 	 
	 
	 	SCOTTS PROFESSIONAL PRODUCTS CO.

 	 
	 	By:  	/s/ Rebecca J. Bruening
 	 
	 	 	Title:  Vice President 	 
	 	 	 	 
	 
	 	SCOTTS PRODUCTS CO.

 	 
	 	By:  	/s/ Rebecca J. Bruening
 	 
	 	 	Title:  Vice President 	 
	 	 	 	 
	 
	 	OMS INVESTMENTS, INC.

 	 
	 	By:  	/s/ Rebecca J. Bruening
 	 
	 	 	Title:  Vice President 	 
	 	 	 	 
	 
	 	MIRACLE-GRO LAWN PRODUCTS, INC.

 	 
	 	By:  	/s/ Rebecca J. Bruening
 	 
	 	 	Title:  Vice President 	 
	 	 	 	 
	 

 

 

	 	 	 	 	 
	 	MIRACLE-GRO PRODUCTS LTD.

 	 
	 	By:  	/s/ Rebecca J. Bruening
 	 
	 	 	Title:  Vice President 	 
	 	 	 	 
	 
	 	SCOTTS-SIERRA CROP PROTECTION COMPANY

 	 
	 	By:  	/s/ Rebecca J. Bruening
 	 
	 	 	Title:  Vice President 	 
	 	 	 	 
	 
	 	OLD FORT FINANCIAL CORP.

 	 
	 	By:  	/s/ Rebecca J. Bruening
 	 
	 	 	Title:  Treasurer 	 
	 	 	 	 
	 
	 	EARTHGRO, INC.

 	 
	 	By:  	/s/ Rebecca J. Bruening
 	 
	 	 	Title:  Vice President 	 
	 	 	 	 
	 
	 	SANFORD SCIENTIFIC, INC.

 	 
	 	By:  	/s/ Rebecca J. Bruening
 	 
	 	 	Title:  Vice President 	 
	 	 	 	 
	 

 

 

	 	 	 	 	 
	 	EG SYSTEMS, INC.

 	 
	 	By:  	/s/ Rebecca J. Bruening
 	 
	 	 	Title:  Vice President

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