Document:

Exhibit 10.14

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                                                                  EXECUTION COPY

                             $14,315,000 Term A Loan
                             $9,713,750 Term B Loan

                        TERM LOAN AND SECURITY AGREEMENT

                                  by and among

                          EASY GARDENER PRODUCTS, LTD.
                                   as Borrower

EYAS International, Inc., E G Product Management, L.L.C., EG, L.L.C., Weatherly
Consumer Products Group, Inc., Weatherly Consumer Products, Inc. and NBU Group,
                             LLC, each as Guarantor

                                       and

                           CAPITALSOURCE FINANCE LLC,
                               as Agent and Lender

                                   Dated as of
                                October 29, 2003

================================================================================

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

I. DEFINITIONS                                                                 1

         1.1    Intercreditor Agreement and Subordination                      1

         1.2    General Terms                                                  1

II. LOANS, PAYMENTS, AND INTEREST AND COLLATERAL                               2

         2.1    Term A Loan; Term A Loan Notes                                 2

         2.2    Term B Loan; Term B Loan Notes                                 2

         2.3    Interest on Loans                                              3

         2.4    Repayment of Term A Loan; Maturity                             4

         2.5    Repayment of Term B Loan; Maturity                             5

         2.6    Promise to Pay; Manner of Payment                              5

         2.7    Other Mandatory Prepayments                                    5

         2.8    Payments by Agent                                              8

         2.9    Grant of Security Interest; Collateral                         8

         2.10   Collateral Administration                                     10

         2.11   Power of Attorney                                             11

         2.12   Notes                                                         11

         2.13   Replacement of Lost Notes                                     11

III. FEES AND OTHER CHARGES                                                   12

         3.1    Commitment Fee                                                12

         3.2    Termination Fee                                               12

         3.3    Computation of Fees; Lawful Limits                            12

         3.4    Default Rate of Interest                                      13

         3.5    Acknowledgement of Joint and Several Liability,
                Cross-Guaranty and Contribution Rights; Guaranty
                Enforcement                                                   13

IV. CONDITIONS PRECEDENT                                                      16

         4.1    Conditions to Funding the Loans and Closing                   16

V. REPRESENTATIONS AND WARRANTIES                                             21

         5.1    Organization and Authority                                    21

         5.2    Loan Documents and Acquisition Documents                      21

                                       i
<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

                                                                            Page
                                                                            ----

         5.3    Subsidiaries, Capitalization and Ownership Interests .........22

         5.4    Properties ...................................................22

         5.5    Other Agreements .............................................22

         5.6    Litigation ...................................................23

         5.7    Hazardous Materials ..........................................23

         5.8    Tax Returns; Governmental Reports ............................23

         5.9    Financial Statements and Reports .............................23

         5.10   Compliance with Law; Business ................................24

         5.11   Intellectual Property ........................................24

         5.12   Licenses and Permits; Labor ..................................25

         5.13   No Default; Solvency .........................................25

         5.14   Disclosure ...................................................25

         5.15   Existing Indebtedness; Investments, Guarantees and
                Certain Contracts ............................................26

         5.16   Affiliated Agreements ........................................26

         5.17   Insurance ....................................................26

         5.18   Names; Location of Offices, Records and Collateral;
                Deposit Accounts and Investment Property .....................26

         5.19   Non-Subordination ............................................27

         5.20   Legal Investments; Use of Proceeds ...........................27

         5.21   Broker's or Finder's Commissions .............................27

         5.22   Survival .....................................................27

VI. AFFIRMATIVE COVENANTS ....................................................28

         6.1    Financial Statements, Reports and Other Information ..........28

         6.2    Payment of Obligations .......................................31

         6.3    Conduct of Business and Maintenance of Existence and Assets ..31

         6.4    Compliance with Legal and Other Obligations ..................32

         6.5    Insurance ....................................................32

         6.6    True Books ...................................................32

         6.7    Inspection; Periodic Audits ..................................32

         6.8    Further Assurances; Post Closing .............................33

                                       ii
<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

                                                                            Page
                                                                            ----

         6.9    Payment of Indebtedness ......................................33

         6.10   Lien Searches ................................................34

         6.11   Use of Proceeds ..............................................34

         6.12   Collateral Documents; Security Interest in Collateral ........34

         6.13   Taxes and Other Charges ......................................35

         6.14   Board Meetings; Board of Directors ...........................36

VII. NEGATIVE COVENANTS ......................................................37

         7.1    Financial Covenants ..........................................37

         7.2    Indebtedness .................................................37

         7.3    Liens ........................................................38

         7.4    Investments; Investment Property; New Facilities or
                Collateral; Subsidiaries .....................................38

         7.5    Dividends; Redemptions; Equity ...............................39

         7.6    Transactions with Affiliates .................................40

         7.7    Charter Documents; Fiscal Year; Dissolution; Use of
                Proceeds; Insurance Policies; Disposition of
                Collateral; Taxes; Trade Names ...............................41

         7.8    Transfer of Assets ...........................................41

         7.9    Contingent Obligations and Risks .............................42

         7.10   Truth of Statements ..........................................42

         7.11   Payment on Subordinated Debt .................................42

         7.12   Modifications of Agreements ..................................43

         7.13   Negative Pledge ..............................................43

VIII. EVENTS OF DEFAULT ......................................................43

IX. RIGHTS AND REMEDIES AFTER DEFAULT ........................................46

         9.1    Rights and Remedies ..........................................46

         9.2    Application of Proceeds ......................................47

         9.3    Rights to Appoint Receiver ...................................48

         9.4    Blocked Accounts .............................................48

         9.5    Rights and Remedies not Exclusive ............................48

X. WAIVERS AND JUDICIAL PROCEEDINGS ..........................................49

         10.1   Waivers ......................................................49

                                      iii
<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

                                                                            Page
                                                                            ----

         10.2   Delay; No Waiver of Defaults .................................49

         10.3   Jury Waiver ..................................................49

         10.4   Amendment and Waivers ........................................49

XI. EFFECTIVE DATE AND TERMINATION ...........................................50

         11.1   Effectiveness and Termination ................................50

         11.2   Survival .....................................................51

XII. AGENCY PROVISIONS .......................................................51

         12.1   Agent ........................................................51

         12.2   Consents .....................................................56

         12.3   Set Off and Sharing of Payments ..............................56

         12.4   Settlements; Payments and Information ........................57

         12.5   Dissemination of Information .................................58

XIII. MISCELLANEOUS ..........................................................58

         13.1   Governing Law; Jurisdiction; Service of Process; Venue .......58

         13.2   Successors and Assigns; Assignments and Participations .......58

         13.3   Application of Payments ......................................61

         13.4   Indemnity ....................................................61

         13.5   Notice .......................................................62

         13.6   Severability; Captions; Counterparts; Facsimile Signatures ...63

         13.7   Expenses .....................................................63

         13.8   Entire Agreement .............................................64

         13.9   Approvals and Duties .........................................64

         13.10  Confidentiality and Publicity ................................64

         13.11  Release of Collateral ........................................66

                                       iv
<PAGE>

                        TERM LOAN AND SECURITY AGREEMENT

            THIS TERM LOAN AND SECURITY AGREEMENT (the "Agreement") dated as of
October 29, 2003, is entered into by and among EASY GARDENER PRODUCTS, LTD., a
Texas limited partnership (the ("Borrower"), EYAS INTERNATIONAL, INC., a Texas
corporation, EG, L.L.C., a Nevada limited liability company, E G PRODUCT
MANAGEMENT, L.L.C., a Texas limited liability company, WEATHERLY CONSUMER
PRODUCTS GROUP, INC., a Delaware corporation, WEATHERLY CONSUMER PRODUCTS, INC.,
a Delaware corporation, and NBU GROUP, LLC, a Texas limited liability company
(each a "Guarantor", and collectively with the Borrower, the "Credit Parties"),
and CAPITALSOURCE FINANCE LLC, a Delaware limited liability company
("CapitalSource"), as administrative, payment and collateral agent for the
Lenders (in such capacities, the "Agent"), and the Lenders.

            WHEREAS, Borrower has requested that Lenders make available to
Borrower the Term A Loan and the Term B Loan, the proceeds of which Loans shall
be used by the Borrower to fund a portion of the purchase price of the
Acquisition and costs and expenses related thereto, to refinance certain of
Borrower's existing obligations and indebtedness and to finance the working
capital needs of Borrower in connection with their consumer lawn and garden
products business (the "Business"); and

            WHEREAS, Lenders are willing to make the Term Loans available to
Borrower upon the terms and subject to the conditions set forth herein.

            NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and adequacy of which hereby are
acknowledged, the Credit Parties, Agent and Lenders hereby agree as follows:

I. DEFINITIONS

      1.1 Intercreditor Agreement and Subordination

      Notwithstanding anything herein to the contrary, this Agreement is subject
in its entirety to the terms and conditions of the Intercreditor Agreement, and
all of the Lenders' rights hereunder are subordinated pursuant to the terms
thereof.

      1.2 General Terms

      For purposes of the Loan Documents and all Annexes thereto, in addition to
the definitions above and elsewhere in this Agreement or the other Loan
Documents, the terms listed in Appendix A hereto shall have the meanings given
such terms in Appendix A, which is incorporated herein and made a part hereof.
All capitalized terms used which are not specifically defined shall have
meanings provided in Article 9 of the UCC in effect on the date hereof to the
extent the same are used or defined therein. Unless otherwise specified herein
or in Appendix A, this Agreement and any agreement or contract referred to
herein or in Appendix A shall mean such agreement as modified, amended or
supplemented from time to time. Unless otherwise specified, as used in the Loan
Documents or in any certificate, report, instrument or other document made or
delivered pursuant to any of the Loan Documents, all accounting terms not
defined in Appendix A or elsewhere in this Agreement shall have the meanings
given to such

Term Loan and Security Agreement
<PAGE>

terms in and shall be interpreted in accordance with GAAP and references to
fiscal periods are to those of the Borrower.

II. LOANS, PAYMENTS, AND INTEREST AND COLLATERAL

      2.1 Term A Loan; Term A Loan Notes

            Subject to the terms and conditions set forth in this Agreement,
each Term A Loan Lender agrees to loan to the Borrower on the Closing Date its
Pro Rata Share of a portion of the Term A Loan, in an amount equal to Fourteen
Million and No/100 Dollars ($14,000,000) (the "Closing Date Term A Advance").
The Term A Loan is not a revolving credit facility and may not be drawn, repaid
and redrawn. Subject to Sections 3.2 and 2.7(d) and the other terms and
conditions set forth in this Agreement, the Term A Loan may be prepaid in whole
or in part at any time or from time to time. Any repayments of principal on the
Term A Loan shall be applied to permanently reduce such Term A Loan. The
obligations of the Term A Loan Lenders hereunder are several and not joint or
joint and several. The Term A Loan shall be evidenced by Term A Loan Notes,
payable to the order of each Term A Loan Lender in the principal amount of the
Commitment of the applicable Term A Loan Lender, duly executed and delivered by
the Borrower. The Term A Loan Notes shall evidence the aggregate Indebtedness of
the Borrower to the Term A Loan Lenders under the Term A Loan. Each Term A Loan
Lender is hereby authorized, but is not obligated, to enter the amount of such
Term A Loan Lender's Pro Rata Share of outstanding principal of the Term A Loan
and the amount of each payment or prepayment of principal and interest thereon
on the reverse of or on an attachment to such Term A Loan Lender's Term A Loan
Note. On the Closing Date, the Borrower irrevocably authorizes Agent and Term A
Loan Lenders to disburse the proceeds of the Closing Date Term A Advance to the
applicable account(s) of the Borrower set forth on Schedule 2.4, in all cases
for credit to the Borrower (or to such other account as to which the Borrower
shall instruct Agent in writing) via Federal funds wire transfer no later than
3:00 p.m. (New York City time). After the Closing Date, the Lenders may, from
time to time in the sole discretion of Agent upon the failure of Borrower to pay
interest pursuant to Section 2.3 when due, utilize the Term A Interest Reserve,
which utilization of Term A Interest Reserve shall for all purposes hereunder be
treated as Term A Loans and may be subject to additional terms and conditions
determined by the Agent in its sole discretion. No Event of Default for failure
of Borrower to pay interest pursuant to Section 2.3 when due shall be cured by
utilization of Term A Interest Reserve.

      2.2 Term B Loan; Term B Loan Notes

            Subject to the terms and conditions set forth in this Agreement,
each Term B Loan Lender agrees to loan to the Borrower on the Closing Date its
Pro Rata Share of a portion of the Term B Loan, in an amount equal to Nine
Million Five Hundred Thousand and No/100 Dollars ($9,500,000) (the "Closing Date
Term B Advance"). The Term B Loan is not a revolving credit facility and may not
be drawn, repaid and redrawn. At anytime after all Obligations relating to the
Term A Loan have been indefeasibly repaid in full and subject to Sections 3.2
and 2.7(d) and the other terms and conditions set forth in this Agreement, the
Term B Loans may be prepaid in whole or in part at any time or from time to
time. Any repayments of principal on the Term B Loan shall be applied to
permanently reduce such Term B Loan. The obligations of the Term B Loan Lenders
hereunder are several and not joint or joint and several. The Term B Loan shall
be evidenced by Term B Loan Notes, payable to the order of each Term

                                      -2-

Term Loan and Security Agreement
<PAGE>

B Loan Lender in the principal amount of the Commitment of the applicable Term B
Loan Lender, duly executed and delivered by the Borrower. The Term B Loan Notes
shall evidence the aggregate Indebtedness of the Borrower to the Term B Loan
Lenders under the Term B Loan. Each Term B Loan Lender is hereby authorized, but
is not obligated, to enter the amount of such Term B Loan Lender's Pro Rata
Share of outstanding principal of the Term B Loan and the amount of each payment
or prepayment of principal and interest thereon on the reverse of or on an
attachment to such Term B Loan Lender's Term B Loan Note. On the Closing Date,
the Borrower irrevocably authorizes Agent and Term B Loan Lenders to disburse
the proceeds of the Closing Date Term B Advance to the applicable account(s) of
the Borrower set forth on Schedule 2.4, in all cases for credit to the Borrower
(or to such other account as to which the Borrower shall instruct Agent in
writing) via Federal funds wire transfer no later than 3:00 p.m. (New York City
time). After the Closing Date, the Lenders may, from time to time in the sole
discretion of Agent upon the failure of Borrower to pay interest pursuant to
Section 2.3 when due, utilize the Term B Interest Reserve, which utilization of
Term B Interest Reserve shall for all purposes hereunder be treated as Term B
Loans and may be subject to additional terms and conditions determined by the
Agent in its sole discretion.. No Event of Default for failure of Borrower to
pay interest pursuant to Section 2.3 when due shall be cured by utilization of
Term B Interest Reserve.

      2.3 Interest on Loans

            (a) Interest on the outstanding balance of the Term A Loan under the
Term A Loan Notes shall be payable monthly in arrears on the first day of each
calendar month at an annual rate equal to the greater of (i) the Prime Rate plus
five and three-quarter percent (5.75%) and (ii) ten percent (10%), calculated on
the basis of a 360-day year and for the actual number of calendar days elapsed
in each interest calculation period. Interest accrued on the Term A Loan shall
be due and payable in cash on the first day of each calendar month commencing on
November 1, 2003, and continuing until the later of the expiration of the Term
and the full performance and indefeasible payment in full in cash of the Term A
Loan and all Obligations related thereto and termination of this Agreement.

            (b) Interest on the outstanding balance of the Term B Loan under the
Term B Loan Notes shall be payable monthly in arrears on the first day of each
calendar month at an annual rate equal to the greater of (i) the Prime Rate plus
eight and three-quarter percent (8.75%) and (ii) thirteen percent (13%),
calculated on the basis of a 360-day year and for the actual number of calendar
days elapsed in each interest calculation period. Interest accrued on the Term B
Loan shall be due and payable in cash on the first day of each calendar month
commencing on November 1, 2003, and continuing until the later of the expiration
of the Term and the full performance and indefeasible payment in full in cash of
the Term B Loan and all Obligations related thereto and termination of this
Agreement.

            (c) In addition to the interest payable pursuant to Sections 2.3(a)
and (b) hereof, Borrower covenants and agrees to pay interest payable-in-kind
("PIK Interest") on the outstanding balance of the Term B Loan under the Term B
Loan Notes and the PIK Notes at an annual rate of seven percent (7.00%),
calculated on the basis of a 360-day year and for the actual number of calendar
days elapsed in each interest calculation period. PIK Interest shall be
evidenced by the PIK Notes, payable to the order of each Term B Loan Lender,
duly executed and delivered by Borrower. Such PIK Interest shall be related to
the Term B Loan and shall

                                      -3-

Term Loan and Security Agreement
<PAGE>

accrue and be added and applied to the principal outstanding balance of the PIK
Notes on a monthly basis on the first Business Day of each month commencing on
November 1, 2003. Accrued PIK Interest shall be due and payable on the earlier
of (i) the proportional amount of such accrued PIK Interest applicable to the
amount of the Term B Loan being prepaid, redeemed or terminated, Borrower's
early prepayment (in whole or in part), redemption or termination of the Term B
Loan and all Obligations related thereto, (ii) Agent's demand or acceleration of
the Term B Loan and all Obligations related thereto pursuant to this Agreement
upon the occurrence and continuance of an Event of Default, and (iii) the
Maturity Date. Each Term B Loan Lender is hereby authorized, but is not
obligated, to enter the amount of such Term B Loan Lender's Pro Rata Share of
PIK Interest and the amount of each payment or prepayment of PIK Interest and
interest thereon on the reverse of, or on an attachment to, such Term B Loan
Lender's PIK Note. In addition to the interest payable pursuant to Section
2.3(b) hereof, interest on the outstanding balance of the PIK Notes shall be
payable monthly in cash in arrears on the first day of each subsequent calendar
month at the annual rate provided in Section 2.3(b) hereof, calculated on the
basis of a 360-day year and for the actual number of calendar days elapsed in
each interest calculation period.

      2.4 Repayment of Term A Loan; Maturity

            Payment of the outstanding principal balance under the Term A Loan
(in addition to the interest payments in Section 2.3 hereof) and all other
amounts (other than interest) outstanding under the Term A Loan shall be made as
follows:

            (a) On each of the monthly payment dates indicated below in the
amounts set forth below:

<TABLE>
<CAPTION>
                            Payment Date                                  Monthly Principal Payment
                            ------------                                  -------------------------
<S>                                                                              <C>
             On the first day of each month commencing                           $104,166.67
             on November 1, 2003 through and including
             October 1, 2004

             On the first day of each month commencing                           $166,666.67
             on November 1, 2004 through and
             including October 1, 2005

             On the first day of each month commencing                           $291,666.67
             on November 1, 2005 through and
             including October 1, 2006

             On the first day of each month commencing                           $291,666.67
             on November 1, 2006 through and including
             October 1, 2007
</TABLE>

                                      -4-

Term Loan and Security Agreement
<PAGE>

<TABLE>
<CAPTION>
                            Payment Date                                  Monthly Principal Payment
                            ------------                                  -------------------------
<S>                                                                              <C>
                  On the first day of each month commencing                           $312,500.00
                  on November 1, 2007 through and including
                  October 1, 2008

</TABLE>

            (b) The unpaid principal amount of the Term A Loan and all other
Obligations under the Term A Loan shall be due and payable in full, and the Term
A Loan Notes shall mature, if not earlier in accordance with this Agreement, on
the Maturity Date.

      2.5 Repayment of Term B Loan; Maturity

      The unpaid principal amount of the Term B Loan and all other Obligations
under the Term B Loan (including, without limitation, the PIK Notes and PIK
Interest) shall be due and payable in full, and the Term B Loan Notes shall
mature, if not earlier in accordance with this Agreement, on the Maturity Date.

      2.6 Promise to Pay; Manner of Payment

            The Borrower absolutely and unconditionally promises to pay, when
due and payable pursuant hereto, principal, interest and all other amounts and
Obligations payable hereunder or under any other Loan Document, without any
right of rescission and without any deduction whatsoever, including any
deduction for set-off, recoupment or counterclaim, notwithstanding any damage
to, defects in or destruction of the Collateral or any other event, including
obsolescence of any property or improvements. Any payments made by the Borrower,
shall be made only by wire transfer on the date when due, without offset,
deduction or counterclaim, in Dollars, in immediately available funds to such
account as may be indicated in writing by Agent to the Borrower from time to
time. Any such payment received after 2:00 p.m. New York City time on any date
shall be deemed received on the following Business Day. Whenever any payment
hereunder shall be stated to be due or shall become due and payable on a day
other than a Business Day, the due date thereof shall be extended to, and such
payment shall be made on, the next succeeding Business Day, and such extension
of time in such case shall be included in the computation of payment of any
interest (at the interest rate then in effect during such extension) and/or
fees, as the case may be.

      2.7 Other Mandatory Prepayments; Optional Prepayments

            In addition to and without limiting any provision of any Loan
Document:

            (a) if a Change of Control occurs that has not been consented to in
writing by Agent prior to the consummation thereof, on or prior to the first
Business Day following the date of such Change of Control, the Borrower shall
prepay the Loans and all other Obligations in full in cash together with accrued
interest thereon (including, without limitation, PIK Interest) to the date of
prepayment and all other amounts owing to Agent and Lenders under the Loan
Documents;

            (b) if the Borrower or any of Borrower's Subsidiaries, in any
transaction or series of related transactions, (i) sells any material assets or
other material properties (other than

                                      -5-

Term Loan and Security Agreement
<PAGE>

sales of assets that are promptly (and in any event within 180 days) replaced
with similar assets or assets which serve the same function as the sold assets
or sales of inventory in the ordinary course of business), (ii) sells or issues
any equity or debt securities, capital stock or ownership interests, including,
but not limited to, any sale or issuance undertaken in connection with or as
part of a Public Offering, but specifically excluding, for the avoidance of
doubt, any contributions received by the Borrower in connection with the sale or
issuance of any Permitted Securities, (iii) receives any property damage
insurance award or any other insurance proceeds of any kind in excess of
$250,000 in the aggregate for the term of this Agreement that are not used
promptly (and in any event within 180 days) after receipt to repair or replace
the property or assets covered thereby, (iv) incurs any Indebtedness except for
Permitted Indebtedness, then it shall apply 100% (or such lesser amount as is
required to indefeasibly pay in cash in full the Obligations) of the proceeds
thereof to the prepayment of the Loans together with accrued interest
(including, without limitation, PIK Interest) and all other Obligations, such
payment to be applied first, to all then unpaid fees and expenses; second, to
all accrued and unpaid interest (other than the PIK Interest) on the Loans;
third, pro rata to the principal payments set forth under the Term A Loan
pursuant to Section 2.4(a); and fourth, to the principal amount of the Term B
Loan; provided however, that the reduction of the principal balance of the Loans
shall not affect the amount or timing of principal payments (other than the
extent to which reductions have been made with respect to such principal
payments as allocated pursuant to this paragraph) required under this Agreement
until the balance of such Loans is reduced to zero; and

            (c) In addition to and notwithstanding any other provision of this
Agreement or any Loan Document, until such time as the Loans and Obligations
relating to the Loans are indefeasibly paid in full in cash and performed:

                  (i) Commencing on October 8, 2004 (or, if earlier, ten days
after delivery of the annual audited financial statements for the period ending
June 30, 2004), and on each October 8th thereafter (or, if the Borrower changes
its fiscal year on the 100th day following the end of each fiscal year) or, if
earlier, ten days after delivery of the annual audited financial statements for
such fiscal year, except as otherwise set forth in this Section 2.7, the
Borrower shall make a repayment of the Loans in an amount equal to fifty percent
(50%) of the Borrower's Excess Cash Flow (after giving effect to any payments
made pursuant to Section 2.7(c)(ii)) for the immediately preceding fiscal year,
to be applied by the Agent to the Loans then outstanding for the ratable account
of the Lenders;

                  (ii) Notwithstanding the foregoing, if a PIK Event (not
otherwise corrected pursuant to the terms hereof) shall have occurred or if the
Borrower otherwise elects or is required to pay interest on the Subordinated
Debentures in kind, on the 40th day following the end of the quarter in which
(or for which) such event has occurred (or, if earlier, ten days after delivery
of the quarterly financial statements) and continuing on the 40th day following
each successive quarter (or, if earlier, ten days after delivery of the
quarterly financial statements) until such time as the Borrower has been in full
compliance with the terms of this Agreement for two consecutive quarters, the
Borrower shall make a repayment of the Loans in an amount equal to seventy-five
percent (75%) of the Borrower's Excess Cash Flow for the immediately preceding
fiscal quarter, for the ratable benefit of the Lenders; provided, however, that
the payments pursuant to this Section 2.7(c)(ii) for the last fiscal quarter of
each fiscal year shall be due and payable on the 100th day following the end of
such fiscal quarter (or, if earlier, ten days after the date of delivery of the
annual audited financial statements) and shall be in an amount

                                      -6-

Term Loan and Security Agreement
<PAGE>

necessary (after giving effect to all other payments under this Section) to
cause the payment hereunder to equal 75% of the Borrower's Excess Cash Flow for
the immediately preceding fiscal year;

                  (iii) If a Makewell Investment is made with respect to any
fiscal year, on October 13th following such fiscal year (or, if the Borrower
changes its fiscal year on the 105th day following the end of such fiscal year)
or, if earlier, fifteen days after delivery of the annual audited financial
statements for such fiscal year, the Borrower shall make a repayment of the
Loans in an amount equal to seventy-five percent (75%) of the Borrower's Excess
Cash Flow (after giving effect to any payments made pursuant to Section
2.7(c)(ii)) for the fiscal year then ended, to be applied by the Agent to the
Loans then outstanding for the ratable account of the Lenders;

                  (iv) All amounts payable pursuant to this Section 2.7(c) shall
be applied first, to all then unpaid fees and expenses; second, to all accrued
and unpaid interest (other than PIK Interest) on the Loans; third, pro rata to
the principal payments set forth under the Term A Loan pursuant to Section
2.4(a); and fourth, to the principal amount of the Term B Loan; provided
however, that the reduction of the principal balance of the Term A Loan shall
not affect the amount or timing of principal payments (other than the extent to
which reductions have been made with respect to such principal payments as
allocated pursuant to this paragraph) required under this Agreement until the
balance of such Term A Loan is reduced to zero;

                  (v) If, upon receipt of the Borrower's annual audited
financial statements, the Agent determines in its sole discretion that payments
from Excess Cash Flow made in the first three fiscal quarters of such fiscal
year exceed the required payment amount from Excess Cash Flow for such fiscal
year, then the difference shall be applied to the next payment required from
Excess Cash Flow; provided, that, upon Agent's receipt of Borrower's written
request, Agent shall pay such difference to the Borrower within ten (10) days of
Agent's receipt of the written request, so long as no Default or Event of
Default under Section 8(a) hereof or with respect to Section 7.1(a) hereof
exists or would be caused thereby, provided, further, that if there exists any
Default or Event of Default under Section 8(a) hereof, such difference shall be
applied to cure such Default or Event of Default in the order specified in
Section 2.7(c)(ii) above; and

                  (vi) If a Makewell Investment is made in cash to meet the ECF
Threshold for any period during a Makewell Year and at the end of such Makewell
Year, the EBITDA plus the amount of all Makewell Investments made with respect
to periods ending during such Makewell Year is greater than the ECF Threshold
required for such Makewell Year, then the lesser of (x) the amount of such
excess and (y) the aggregate amount of Makewell Investments made during such
Makewell Year shall be deemed a "Makewell Investment Credit". Any Makewell
Investment Credit may be applied to reduce the cash amount of any future
Makewell Investment(s) until fully utilized.

            (d) Subject to the terms of this Section 2.7 and Sections 3.2 and
11.1, Borrower may prepay to Agent, for the ratable benefit of the Lenders, the
outstanding principal amount of the Loans and all other Obligations under the
Loans (including PIK Interest), in whole or in part in multiples of $100,000,
unless a lesser amount is then outstanding, in which case Borrower may prepay
such lesser amount. All such prepayments shall be applied first, to all then

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unpaid fees and expenses; second, to all accrued and unpaid interest (other than
PIK Interest) on the Loans; third, pro rata to the principal payments set forth
under the Term A Loan pursuant to Section 2.5(a); fourth, to the principal
amount of the Term B Loan. If Borrower elects to make any prepayment pursuant to
this Section 2.7(d), Borrower shall give notice of such prepayment to the Agent
not less than five (5) days or more than sixty (60) days prior to the date fixed
for prepayment, specifying (i) the date on which such prepayment is to be made,
(ii) the total amount of the Loans and other Obligations related thereto to be
prepaid on such date, and (iii) the Termination Fee, if any, and accrued
interest applicable to the prepayment. Such notice shall be accompanied by a
certificate of the chief financial officer, controller or chief executive
officer of the Borrower that such payment is being made in compliance with this
Section 2.7(d). Notice of prepayment having been so given, the aggregate
principal amount of the Loans to be prepaid, together with accrued interest and
the applicable Termination Fee, if any, thereon shall be due and payable on the
prepayment date set forth in such notice. All prepayments made pursuant to this
Section 2.7(d) shall be made in accordance with Section 2.6 and shall be
designated as a prepayment pursuant to this Section 2.7(d) on such wire.

      2.8 Payments by Agent

            Should any amount required to be paid under any Loan Document be
unpaid beyond any applicable cure period, such amount may be paid by Agent, for
the account of Lenders, and the Borrower irrevocably authorizes disbursement of
any such funds to Agent, for the benefit of Lenders, by way of direct payment of
the relevant amount, interest or Obligations without necessity of any demand in
accordance with Section 2.6 whether or not a Default or Event of Default has
occurred or is continuing. No payment or prepayment of any amount by Agent,
Lenders or any other Person shall entitle any Person to be subrogated to the
rights of Agent and/or Lenders under any Loan Document unless and until the
Obligations have been fully performed and paid indefeasibly in cash and this
Agreement has been terminated. Any sums expended or amounts paid by Agent and/or
Lenders as a result of the Borrower's or any Guarantor's failure to pay, perform
or comply with any Loan Document or any of the Obligations may be added to the
Obligations.

      2.9 Grant of Security Interest; Collateral

            (a) To secure the payment and performance of the Obligations, each
of the Credit Parties hereby grants to Agent, for the benefit of itself and the
Lenders, a valid, perfected, continuing first priority (other than with respect
to property or assets covered by Priority Permitted Liens) security interest in
and Lien upon, and pledges to Agent, for the benefit of itself and the Lenders,
all of its right, title and interest in and to and upon all of the Credit
Parties' assets, now owned or hereafter acquired, including, without limitation,
all of the following property and interests in property of such Credit Party:

                  (i) all of such Credit Party's tangible personal property,
including without limitation all present and future Goods, Inventory and
Equipment (including items of equipment which are or become Fixtures), Computer
Hardware and Software, now owned or hereafter acquired;

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Term Loan and Security Agreement
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                  (ii) all of such Credit Party's intangible personal property,
including without limitation all present and future Accounts, securities,
Contract Rights, Permits, General Intangibles, Chattel Paper, Investment
Property, Intellectual Property, Documents, Instruments, Deposit Accounts,
Letter-of-Credit Rights and Supporting Obligations, rights to the payment of
money or other forms of consideration of any kind, tax refunds, insurance
proceeds (including, without limitation, proceeds of any life insurance policy),
now owned or hereafter acquired, and all intangible and tangible personal
property relating to or arising out of any of the foregoing;

                  (iii) all of such Credit Party's present and future Government
Contracts and rights thereunder and the related Government Accounts and proceeds
thereof, now or hereafter owned or acquired by such Credit Party; provided,
however, that Agent shall not have a security interest in any rights under any
Government Contract of such Credit Party or in the related Government Account
where the taking of such security interest would be a violation of an express
prohibition contained in the Government Contract (for purposes of this
limitation, the fact that a Government Contract is subject to, or otherwise
refers to, Title 31, ss. 203 or Title 41, ss. 15 of the United States Code shall
not be deemed an express prohibition against assignment thereof) or is
prohibited by applicable law; and

                  (iv) any and all additions to any of the foregoing, and any
and all replacements, products and proceeds (including insurance proceeds) of
any of the foregoing.

            (b) In addition to the foregoing, to secure the payment and
performance of the Obligations, each Credit Party has pledged or shall pledge to
Agent, for its benefit and the benefit of the Lenders, all of its ownership
interests in any Subsidiary, provided that the Borrower shall only be required
to pledge sixty-six and two-thirds (66 2/3%) of its ownership interests in EGUK,
each pursuant to the Pledge Agreement to which it is a party.

            (c) Concurrently with the delivery of the Financial Reports required
pursuant to Section 6.1(a)(ii), each Credit Party shall notify the Agent of any
Commercial Tort Claims in which such Credit Party has an interest arising after
the Closing Date and shall provide all necessary information concerning each
such Commercial Tort Claim and make all necessary filings with respect thereto
to perfect Agent's (for its benefit and the benefit of the Lenders) first
priority security interest therein.

            (d) Each Credit Party has full right and power to grant to Agent,
for the benefit of itself and the Lenders, a perfected, first priority (other
than with respect to property or assets covered by Priority Permitted Liens)
security interest and Lien in its respective Collateral pursuant to this
Agreement, subject to the following sentence. Upon the execution and delivery of
this Agreement, and upon the filing of the necessary financing statements and/or
appropriate filings and/or delivery of the necessary certificates or agreements
or acknowledgments evidencing an equity interest, control and/or possession, as
applicable, without any further action, Agent, for the benefit of itself and the
Lenders, will have a good, valid and first priority (other than with respect to
property or assets covered by Priority Permitted Liens) and perfected Lien and
security interest in substantially all of the Collateral, and with respect to
the ownership interests in the Borrower, EG and EG Product Management, a good,
valid, first priority Lien and security interest subject to no prior Liens, all
subject to no transfer or other restrictions or Liens of any kind in favor of
any other Person except for Permitted Liens. No financing statement relating to
any of the Collateral is on file in any public office except those (i) on behalf
of Agent,

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Term Loan and Security Agreement
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for the benefit of itself and the Lenders, and/or (ii) in connection with
Permitted Liens. No Credit Party is party to any agreement, document or
instrument that conflicts with this Section 2.9.

            (e) The Credit Parties shall obtain a blocked account, control or
similar agreement with each bank or financial institution holding a Deposit
Account for each of the Credit Parties, which agreement shall be in form and
substance satisfactory to the Agent in its Permitted Discretion.

      2.10 Collateral Administration

            (a) All Collateral (except Deposit Accounts and Collateral in the
possession of Agent) will at all times be kept by the Credit Parties at the
locations set forth on Schedule 5.18B hereto, and shall not, other than sales of
Inventory in the ordinary course of business, without thirty (30) calendar days
prior written notice to Agent, be moved therefrom other than to another such
location, and in any case shall not be moved outside the continental United
States, other than Inventory sold or transferred to EGUK in accordance with
Section 7.4. Whether or not an Event of Default has occurred, any of Agent's
officers, employees, representatives or agents shall have the right, at any time
during normal business hours, in the name of Agent, or any designee of Agent or
the Credit Parties, to verify the validity, amount or any other matter relating
to the Collateral; provided, however, that if no Default or Event of Default has
occurred, then five (5) Business Days prior written notice shall be required for
such verification pursuant to this Section 2.10(a). The Credit Parties shall
cooperate fully with Agent in an effort to facilitate and promptly conclude such
verification process. In addition to and notwithstanding any provision of any
Loan Document, Agent shall have the right at all times after the occurrence and
during the continuance of an Event of Default to notify Persons owing Accounts
to any Credit Party that their Accounts have been assigned to Agent and to
collect such Accounts directly in its own name and to charge collection costs
and expenses, including reasonable attorney's fees, to the Credit Parties. The
Credit Parties shall endeavor in the first instance to make collection of their
respective Accounts for the Agent, for the account of the Lenders.

            (b) As and when determined by Agent in its Permitted Discretion,
Agent will perform the searches described in clauses (i) and (ii) below against
the Credit Parties (the results of which are to be consistent with the Credit
Parties' representations and warranties under this Agreement), all at Borrower's
expense: (i) UCC searches with the Secretary of State and local filing offices
of each jurisdiction where any Credit Party is organized and/or maintains its
respective executive offices, a place of business or assets, and (ii) judgment,
federal tax lien and corporate and partnership tax lien searches, in each
jurisdiction above.

            (c) Upon Agent's request, the Credit Parties shall promptly deliver
to Agent all items for which Agent must receive possession to obtain a perfected
Lien and security interest and all notes, certificates, and documents of title,
Chattel Paper, warehouse receipts, Instruments, and any other similar
instruments constituting Collateral, in each case to the extent not already in
possession of Agent.

            (d) The Credit Parties shall, and shall cause their Subsidiaries to,
keep accurate and complete records of the Collateral and all payments and
collections thereon and

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Term Loan and Security Agreement
<PAGE>

shall submit such records to Agent on such periodic bases as Agent may request
in its Permitted Discretion.

      2.11 Power of Attorney

            Agent is hereby irrevocably made, constituted and appointed the true
and lawful attorney for the Credit Parties (without requiring Agent to act as
such) with full power of substitution and said appointment shall create in
Agent, for its benefit and the benefit of Lenders, a power coupled with an
interest, to do the following: (i) following the occurrence and during the
continuance of an Event of Default, endorse the name of any such Person upon any
and all checks, drafts, money orders and other instruments for the payment of
money that are payable to such Person and constitute collections on such
Person's Accounts; (ii) execute and/or file in the name of any Credit Party any
financing statements, amendments to financing statements, schedules to financing
statements, releases or terminations thereof (and such Credit Party hereby
waives any right to file any of the foregoing until the Obligations are
indefeasibly paid in full in cash and this Agreement is terminated or with prior
written consent of Agent, in its Permitted Discretion), (iii) execute and/or
file in the name of each Credit Party assignments, instruments, documents,
schedules and statements that it is obligated to give Agent under any of the
Loan Documents (to the extent such Credit Party fails to so execute and/or file
any of the foregoing in two (2) Business Days of Agent's request or the time
when such Credit Party is otherwise obligated to do so); (iv) execute and/or
file such documents as may be necessary to register and/or otherwise perfect
Agent's (for the benefit of the Lenders) Lien on such Credit Party's owned motor
vehicles, and (v) do such other and further acts and deeds in the name of any
Credit Party that Agent may deem necessary or desirable in its Permitted
Discretion to enforce, make, create, maintain, continue or enforce or perfect
Agent's, for the benefit of itself and Lenders, security interest or lien or
rights in any Collateral.

      2.12 Notes

            Upon Agent's or any Lender's request, and in any event within three
(3) Business Days of any such request, the Borrower shall execute and deliver to
Agent new Notes and/or divide the Notes in exchange for then existing Notes in
such smaller amounts or denominations as Agent or such Lender shall specify in
their respective sole and absolute discretion, provided that the aggregate
principal amount of such new Notes does not exceed the aggregate principal
amount of the Notes outstanding at the time such request is made.

      2.13 Replacement of Lost Notes

            Upon receipt of evidence reasonably satisfactory to the Borrower of
the mutilation, destruction, loss or theft of any Notes and the ownership
thereof, the Borrower shall, upon the written request of the holder of such
Notes, execute and deliver in replacement thereof new Notes in the same form, in
the same original principal amount and dated the same date as the Notes so
mutilated, destroyed, lost or stolen; and such Notes so mutilated, destroyed,
lost or stolen shall then be deemed no longer outstanding hereunder. If the
Notes being replaced have been mutilated, they shall be surrendered to the
Borrower after Agent's receipt of the replacement Notes; and if such replaced
Notes have been destroyed, lost or stolen, such holder shall furnish the
Borrower with an indemnity in writing reasonably acceptable to the Borrower to
hold them harmless for all costs, losses, expenses and claims in respect of such
replaced Note.

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Term Loan and Security Agreement
<PAGE>

III. FEES AND OTHER CHARGES

      3.1 Commitment Fee

            On the Closing Date, the Borrower shall pay to Agent, for the
ratable benefit of the Term A Loan Lenders, a nonrefundable commitment fee equal
to Two Hundred Ten Thousand Dollars ($210,000). On the Closing Date, Borrower
shall pay to Agent, for the ratable benefit of Term B Loan Lenders, a
nonrefundable commitment fee equal to One Hundred Ninety Thousand Dollars
($190,000). The Commitment Fees payable hereunder shall be fully earned when due
and non-refundable when paid; provided that the Term A Loans and Term B Loans
shall have been made (subject to the terms and conditions of this Agreement).

      3.2 Termination Fee

            If (i) Borrower terminates this Agreement under Section 11.1 hereof
or otherwise makes final payment of any Loan, (ii) a Change of Control occurs
that has not been consented to in writing by Agent prior to the consummation
thereof, and/or final payment of all outstanding Obligations pursuant to Section
2.7 occurs or is required to occur (other than as a result of any mandatory
prepayment under Section 2.7(c)), (iii) any prepayment (whether partial or full)
of Obligations occurs (other than as a result of any mandatory prepayment under
Section 2.7(b) or (c)), whether by virtue of Agent's exercising its right of
set-off or otherwise, or (iv) any automatic acceleration of the Obligations or
cessation of lending on account of or during a payment or reduction of any
outstanding Loan or Obligations is made on account of or during a bankruptcy,
reorganization or other proceeding or liquidation or pursuant to any Debtor
Relief Law (each, a "Termination"), then, at the effective date of any such
Termination, Borrower shall pay Agent, for the ratable benefit of Lenders (in
addition to the then outstanding principal, accrued interest and other
Obligations owing pursuant to the terms of this Agreement and any other Loan
Document), as yield maintenance for the loss of bargain and not as a penalty, an
amount equal to the applicable Termination Fee.

      3.3 Computation of Fees; Lawful Limits

            All fees hereunder shall be computed on the basis of a year of 360
days and for the actual number of days elapsed in each calculation period, as
applicable. In no contingency or event whatsoever, whether by reason of
acceleration or otherwise, shall the interest and other charges paid or agreed
to be paid to Agent, for the benefit of Lenders, for the use, forbearance or
detention of money hereunder exceed the maximum rate permissible under
applicable law which a court of competent jurisdiction shall, in a final
determination, deem applicable hereto. If, due to any circumstance whatsoever,
fulfillment of any provision hereof, at the time performance of such provision
shall be due, shall exceed any such limit, then, the obligation to be so
fulfilled shall be reduced to such lawful limit, and, if Agent or Lenders shall
have received interest or any other charges of any kind which might be deemed to
be interest under applicable law in excess of the maximum lawful rate, then such
excess shall be applied first to any unpaid fees and charges hereunder, then to
unpaid principal balance owed by the Borrower hereunder, and if the then
remaining excess interest is greater than the previously unpaid principal
balance, Agent and Lenders shall promptly refund such excess amount to the
Borrower and the provisions hereof

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Term Loan and Security Agreement
<PAGE>

shall be deemed amended to provide for such permissible rate. The terms and
provisions of this Section 3.3 shall control to the extent any other provision
of any Loan Document is inconsistent herewith.

      3.4 Default Rate of Interest

            Upon the occurrence and during the continuation of an Event of
Default, the Applicable Rate of interest in effect at such time with respect to
the Obligations shall be increased by two percent (2.0%) per annum (the "Default
Rate") automatically, if such Event of Default exists pursuant to either Section
8(g) or (h), and otherwise upon written notice of such increase given by Agent
to the Borrower.

      3.5 Acknowledgement of Joint and Several Liability, Cross-Guaranty and
Contribution Rights; Guaranty Enforcement

            (a) Each Credit Party acknowledges that it is jointly and severally
liable for all of the Obligations under the Loan Documents. Each Credit Party
expressly understands, agrees and acknowledges that (i) the Credit Parties are
all Affiliated entities by common ownership, (ii) each Credit Party has
requested that the Lenders extend a common credit facility on the terms herein
provided, (iii) the Lenders will be lending against, and relying on a lien upon,
all of the Credit Parties' assets even though the proceeds of any particular
loan made hereunder may not be advanced directly to a particular Credit Party,
(v) each Credit Party will nonetheless benefit by the making of all such loans
by each Lender and the availability of a single credit facility of a size
greater than each could independently warrant, (vi) all of the representations,
warranties, covenants, obligations, conditions, agreements and other terms
contained in the Loan Documents shall be applicable to and shall be binding upon
each Credit Party, and (vii) the Borrower has executed the Notes and that it
would not be able to obtain the credit provided by the Lenders hereunder without
the financial support provided by the other Credit Parties.

            (b) Each Credit Party hereby guarantees the prompt payment and
performance in full of all Obligations. Such guarantee constitutes a guarantee
of payment and not of collection. Each Credit Party's obligations under this
Agreement shall, to the fullest extent permitted by law, be unconditional
irrespective of (i) the validity or enforceability, avoidance, or subordination
of the Obligations of any other Credit Party or of any promissory note or other
document evidencing all or any part of the Obligations of any other Credit
Party, (ii) the absence of any attempt to collect the Obligations from any other
Credit Party, any other Guarantor, if any, or any other security therefor, or
the absence of any other action to enforce the same, (iii) the waiver, consent,
extension, forbearance, or granting of any indulgence by the Agent and/or any
Lender with respect to any provision of any instrument evidencing the
Obligations of any other Credit Party or other Guarantor, if any, or any part
thereof, or any other agreement now or hereafter executed by any other Credit
Party or other Guarantor, if any, and delivered to the Agent and/or any Lender,
(iv) the failure by the Agent and/or any Lender to take any steps to perfect and
maintain its security interest in, or to preserve its rights to, any security or
collateral for the Obligations of any other Credit Party or other Guarantor, if
any, (v) the Agent's and/or any Lender's election, in any proceeding instituted
under the United States Bankruptcy Code (the "Bankruptcy Code"), of the
application of Section 1111(b)(2) of the Bankruptcy Code, (vi) any borrowing or
grant of a security interest by any other Credit Party, as debtor-in-possession
under Section 364 of the Bankruptcy Code, (vii) the disallowance of all or any
portion of the Agent's

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and/or any Lender's claim(s) for the repayment of the Obligations of any other
Credit Party under Section 502 of the Bankruptcy Code, or (viii) any other
circumstances which might constitute a legal or equitable discharge or defense
of a guarantor or of any other Credit Party (other than actual indefeasible
payment in full in cash). With respect to any Credit Party's Obligations arising
as a result of the joint and several liability of the Credit Parties hereunder
with respect to extensions of credit made to the Borrower hereunder, such Credit
Party waives, until the Obligations (other than indemnity obligations under the
Loan Documents not then due and payable for any events of claims that would give
rise thereto that are not then pending) shall have been indefeasibly paid in
full and this Agreement shall have been terminated, any right to enforce any
right of subrogation or any remedy which the Agent and/or any Lender now has or
may hereafter have against any other Credit Party, any endorser or any other
Guarantor, if any, of all or any part of the Obligations, and any benefit of,
and any right to participate in, any security or collateral given to the Agent
and/or any Lender to secure payment of the Obligations or any other liability of
any Credit Party to the Agent and/or any Lender. During the occurrence and
continuance of any Event of Default, the Agent may proceed directly and at once,
without notice, against any Credit Party to collect and recover the full amount,
or any portion of the Obligations, without first proceeding against any other
Credit Party or any other Person, or against any security or collateral for the
Obligations. Each Credit Party consents and agrees that the Agent shall be under
no obligation to marshal any assets in favor of any Credit Party or against or
in payment of any or all of the Obligations.

            (c) Each Credit Party is obligated to repay the Obligations as joint
and several obligors under this Agreement. To the extent that any Credit Party
shall, under this Agreement as a joint and several obligor, repay any of the
Obligations constituting Obligations incurred directly and primarily by any
other Credit Party (an "Accommodation Payment"), then the Credit Party making
such Accommodation Payment shall be entitled to contribution and indemnification
from, and be reimbursed by, each of the other Credit Parties in an amount, for
each of such other Credit Parties, equal to a fraction of such Accommodation
Payment, the numerator of which fraction is such other Credit Party's Allocable
Amount and the denominator of which is the sum of the Allocable Amounts of all
of the Credit Parties. As of any date of determination, the "Allocable Amount"
of each Credit Party shall be equal to the maximum amount of liability for
Accommodation Payments which could be asserted against such Credit Party
hereunder without (i) rendering such Credit Party "insolvent" within the meaning
of Section 101 (31) of the Bankruptcy Code, Section 2 of the Uniform Fraudulent
Transfer Act ("UFTA") or Section 2 of the Uniform Fraudulent Conveyance Act
("UFCA"), (ii) leaving such Credit Party with unreasonably small capital or
assets, within the meaning of Section 548 of the Bankruptcy Code, Section 4 of
the UFTA, or Section 5 of the UFCA, or (iii) leaving such Credit Party unable to
pay its debts as they become due within the meaning of Section 548 of the
Bankruptcy Code or Section 4 of the UFTA, or Section 5 of the UFCA. All rights
and claims of contribution, indemnification, and reimbursement under this
Section 3.5 shall be subordinate in right of payment to the prior payment in
full of the Obligations. The provisions of this Section 3.5 shall, to the extent
inconsistent with any provision in any Loan Document, supersede such
inconsistent provision.

            (d) If (i) any court holds that the Credit Parties are guarantors
and not jointly and severally liable or (ii) bankruptcy or reorganization
proceedings at any time are instituted by or against any Credit Party under any
Debtor Relief Law, each Credit Party hereby: (A) until

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indefeasible payment in full of the Obligations, expressly and irrevocably
waives, to the fullest extent possible, on behalf of such Credit Party, any and
all rights at law or in equity to subrogation, to reimbursement, to exoneration,
to contribution, to indemnification, to set off or to any other rights that
could accrue to a surety against a principal, to a guarantor against a maker or
obligor, to an accommodation party against the party accommodated, to a holder
or transferee against a maker, or to the holder of a claim against any Person,
and which such Credit Party may have or hereafter acquire against any Person in
connection with or as a result of such Credit Party's execution, delivery and/or
performance of this Agreement, or any other documents to which such Credit Party
is a party or otherwise; (B) until indefeasible payment in full of the
Obligations, expressly and irrevocably waives any "claim" (as such term is
defined in the Bankruptcy Code) of any kind against any other Credit Party, and
further agrees that it shall not have or assert any such rights against any
Person (including any surety), either directly or as an attempted set off to any
action commenced against such Credit Party by the Agent or a Lender or any other
Person; and (C) acknowledges and agrees (I) that this waiver is intended to
benefit the Agent and the Lenders and shall not limit or otherwise affect such
Credit Party's liability hereunder or the enforceability of this Agreement, and
(II) that the Agent and the Lenders and their successors and assigns are
intended beneficiaries of this waiver, and agreements set forth in this Section
3.5 and their rights under this Section 3.5 shall survive payment in full of the
Obligations.

            (e) This Agreement shall in all respects be continuing, absolute and
unconditional, and shall remain in full force and effect with respect to each
Credit Party until all Obligations created or existing before receipt of such
notice shall have been indefeasibly fully paid. No compromise, settlement,
release or discharge of, or indulgence with respect to, or failure, neglect or
omission to enforce or exercise any right against, any one or more Credit
Parties shall release or discharge the other Credit Parties.

            (f) EACH CREDIT PARTY WAIVES THE FILING OF A CLAIM WITH A COURT IN
THE EVENT OF RECEIVERSHIP OR BANKRUPTCY OF ANY CREDIT PARTY. AS FURTHER
SECURITY, ANY AND ALL DEBTS AND LIABILITIES NOW OR HEREAFTER ARISING AND OWING
TO ANY CREDIT PARTY BY ANY OTHER CREDIT PARTY, OR TO ANY OTHER PARTY LIABLE TO
THE AGENT OR ANY LENDER, ARE HEREBY SUBORDINATED TO THE AGENT'S AND ANY SUCH
LENDER'S CLAIMS AND UPON THE OCCURRENCE AND CONTINUANCE OF AN EVENT OF DEFAULT
ARE ASSIGNED TO THE AGENT FOR THE BENEFIT OF THE LENDERS. EACH CREDIT PARTY
HEREBY AGREES THAT IT MAY BE JOINED AS A PARTY DEFENDANT IN ANY LEGAL PROCEEDING
(INCLUDING, BUT NOT LIMITED TO, A FORECLOSURE PROCEEDING) INSTITUTED BY THE
AGENT OR ANY LENDER AGAINST ANY OTHER CREDIT PARTY.

            (g) Should a claim be made upon the Agent or any Lender at any time
for repayment of any amount received by the Agent or any Lender in payment of
the Obligations, or any part thereof, whether received from any Credit Party or
received by the Agent or any Lender as the proceeds of Collateral, by reason of:
(1) any judgment, decree or order of any court or administrative body having
jurisdiction over the Agent or any Lender or any of their property, or (2) any
settlement or compromise of any such claim effected by the Agent or any Lender,
in its sole discretion, with the claimant (including a Credit Party), each
Credit Party shall remain liable to the Agent or any such Lender for the amount
so repaid to the same extent as if such amount

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had never originally been received by the Agent or any such Lender,
notwithstanding any termination hereof or the cancellation of any note or other
instrument evidencing any of the indebtedness. To the extent the Agent is
required to repay any such amount, each Lender shall, to the extent the Agent
previously paid to such Lender a portion of the amount which must be repaid,
upon demand of the Agent, return to the Agent the amount which had previously
been paid by the Agent to such Lender.

            (h) To the extent that any payment to, or realization by, the Lender
or the Agent on the Obligations exceeds the limitations of this Section 3.5 and
is otherwise subject to avoidance and recovery in any such proceeding, the
amount subject to avoidance shall in all events be limited to the amount by
which such actual payment or realization exceeds such limitation, and this
Agreement as limited shall in all events remain in full force and effect and be
fully enforceable against such Credit Party. This Section 3.5 is intended solely
to reserve the rights of the Lenders and the Agent hereunder against each Credit
Party, in such proceeding to the maximum extent permitted by applicable Debtor
Relief Laws and neither the Credit Parties, any guarantor of the Obligations nor
any other Person shall have any right, claim or defense under this Section 3.5
that would not otherwise be available under applicable Debtor Relief Laws in
such proceeding.

IV. CONDITIONS PRECEDENT

      4.1 Conditions to Funding the Loans and Closing

            The obligations of Lenders to consummate the transactions
contemplated herein and to fund the Loans are subject, in each case, to the
satisfaction, in the sole judgment of Agent, of the following:

            (a) (i) the Borrower shall have delivered to Agent (A) the Loan
Documents to which it is a party, each duly executed by an authorized officer of
the Borrower and the other parties thereto, and (ii) each Guarantor shall have
delivered to Agent the Loan Documents to which such Guarantor is a party, each
duly executed and delivered by such Guarantor or an authorized officer of such
Guarantor, as applicable, and the other parties thereto;

            (b) all in form and substance satisfactory to Agent in its Permitted
Discretion, Agent shall have received (i) a report of Uniform Commercial Code
financing statement, tax and judgment lien searches performed with respect to
the Credit Parties in each jurisdiction determined by Agent in its Permitted
Discretion, and such report shall show no Liens on the Collateral (other than
Permitted Liens and Liens to be terminated at Closing), (ii) each document
(including, without limitation, any Uniform Commercial Code financing statement)
required by any Loan Document or under law or requested by Agent to be filed,
registered or recorded to create, in favor of Agent, for the benefit of Lenders,
a first priority (other than with respect to property or assets covered by
Priority Permitted Liens) and perfected security interest upon the Collateral,
and (iii) evidence of each such filing, registration or recordation and of the
payment by the Credit Parties of any necessary fee, tax or expense relating
thereto;

            (c) Agent shall have received (i) the Charter and Good Standing
Documents, all in form and substance acceptable to Agent in its Permitted
Discretion, provided that Agent shall have no power to reject the form of
certificates of good standing issued by the applicable

                                      -16-

Term Loan and Security Agreement
<PAGE>

Governmental Authority, (ii) a certificate of the secretary or assistant
secretary of each Credit Party dated the Closing Date, as to the incumbency and
signature of the Persons executing the Loan Documents on behalf of such Credit
Party, as applicable, in form and substance acceptable to Agent in its Permitted
Discretion, (iii) the written legal opinions of counsel and/or special counsel
for each Credit Party, in each case in form and substance satisfactory to Agent
in its Permitted Discretion and its counsel and usual and customary for
transactions of this type, and (iv) a certificate executed by an authorized
officer of each Credit Party, which shall constitute a representation and
warranty by each Credit Party as of the Closing Date that the conditions
contained in this Agreement have been satisfied;

            (d) Agent shall have received a certificate of the chief financial
officer (or, in the absence of a chief financial officer, the chief executive
officer) of the Credit Parties, in form and substance satisfactory to Agent in
its Permitted Discretion (each, a "Solvency Certificate"), certifying (i) the
solvency of the Credit Parties, on a consolidated basis, after giving effect to
the transactions and the Indebtedness contemplated by the Loan Documents, and
(ii) as to the Credit Parties' financial resources and anticipated ability to
meet their obligations and liabilities as they become due, to the effect that as
of the Closing Date, and after giving effect to such transactions and
Indebtedness: (A) the assets of the Credit Parties, at a Fair Valuation, exceed
the total liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities) of the Credit Parties, and (B) no unreasonably small
capital base with which to engage in its anticipated business exists with
respect to the Credit Parties;

            (e) Agent shall have completed examinations, the results of which
shall be satisfactory in form and substance to Agent, of the Collateral, the
financial statements and the books, records, business, obligations, financial
condition and operational state of the Credit Parties, and the Credit Parties
shall have demonstrated to Agent's satisfaction in its Permitted Discretion that
(i) their operations comply, in all respects deemed material by Agent, in its
Permitted Discretion, with all applicable federal, state, foreign and local
laws, statutes and regulations, (ii) their operations are not the subject of any
governmental investigation, evaluation or any remedial action which could result
in any expenditure or liability deemed material by Agent, in its Permitted
Discretion, and (iii) they have no liabilities or obligations (whether
contingent or otherwise) that are deemed material by Agent, in its Permitted
Discretion;

            (f) Agent shall have received (or is satisfied in its Permitted
Discretion that it will receive simultaneously with the funding of the Loans)
all fees, charges and expenses due and payable to Agent and Lenders on or prior
to the Closing Date pursuant to the Loan Documents;

            (g) all in form and substance satisfactory to Agent in its Permitted
Discretion, Agent shall have received such consents, approvals and agreements
from such third parties as Agent and its counsel shall determine in their
Permitted Discretion are necessary or desirable with respect to (i) the Loan
Documents and/or the transactions contemplated thereby, (ii) claims against any
Credit Party or the Collateral, and/or (iii) agreements, documents or
instruments to which any Credit Party is a party or by which any of its
respective properties or assets are bound or subject, including, without
limitation, Landlord Waivers and Consents with respect to each property leased
by any Credit Party;

                                      -17-

Term Loan and Security Agreement
<PAGE>

            (h) Each Credit Party shall be in compliance with Section 7.7 and
Section 6.5, and Agent shall have received original certificates of all such
required insurance policies confirming that they are in effect and that the
premiums due and owing with respect thereto have been paid in full and naming
only the Agent, for the benefit of itself and Lenders, as sole beneficiary or
loss payee and additional insured, as appropriate;

            (i) all partnership and other proceedings, documents, instruments
and other legal matters in connection with the transactions contemplated by the
Loan Documents (including, but not limited to, those relating to corporate,
partnership and capital structures of Borrower) shall be satisfactory to Agent
in its Permitted Discretion;

            (j) no default shall exist pursuant to any obligations of any Credit
Party, under any material contract, and each Credit Party shall be in compliance
with applicable laws and there shall exist no fact, condition or circumstance
which, with the passage of time, the giving of notice or both, could reasonably
be expected to constitute or become a default under any material contract to
which any Credit Party is a party or any law to which any Credit Party is
subject;

            (k) no Credit Party or principal or key management personnel of any
Borrower shall have been indicted or under active investigation by a U.S.
Attorney for a felony crime;

            (l) Agent shall have received the duly executed blocked account,
control or similar agreement with each bank or financial institution holding a
Deposit Account for each of the Credit Parties;

            (m) Agent shall have received copies of all Permits required for
each of the Credit Parties to conduct the business in which it is currently
engaged or is contemplated pursuant to the Loan Documents the absence of which
to have could reasonably be expected to be, have or result in a Material Adverse
Effect;

            (n) Agent shall have completed its due diligence examinations of the
Credit Parties, including, without limitation, (i) an examination of the terms
and conditions of all obligations owed by the Credit Parties and their
Subsidiaries deemed material by Agent, the results of which shall be
satisfactory in form and substance to Agent, (ii) customer reference checks and
calls, credit checks, and background checks with respect to the relevant key
management and principals of each Credit Party, and (iii) diligence regarding
the Subordinated Debentures;

            (o) Agent shall have received evidence (i) of repayment in full and
termination of all liabilities and obligations of Borrower to Ableco Finance
LLC, and all related documents, agreements and instruments and of all Liens and
Uniform Commercial Code financing statements relating thereto, including,
without limitation, any Liens and/or Uniform Commercial Code financing
statements covering or relating to any assets or properties of any shareholder
of the Borrower, and (ii) of release and termination of, or Agent's authority to
release and terminate, any and all Liens and/or Uniform Commercial Code
financing statements in, on, against or with respect to any of the Collateral
(other than Permitted Liens);

                                      -18-

Term Loan and Security Agreement
<PAGE>

            (p) there shall not have occurred any Material Adverse Change or
Material Adverse Effect from the date which was reflected on the audited
financial statements provided to Agent or any liabilities or obligations of any
nature with respect to any Credit Party which could reasonably be likely to have
a Material Adverse Effect;

            (q) (i) Agent shall have received the unaudited financial statements
of the Credit Parties on a consolidated, consolidating and pro-forma basis for
and as of August 2003, in form and substance satisfactory to the Agent, (ii)
Agent shall have received a "flash" sales report of the Credit Parties for the
month of September 2003; and (iii) the Credit Parties shall have implemented a
cash collection system in form and substance satisfactory to the Agent in its
Permitted Discretion;

            (r) Agent shall have received from the Credit Parties a completed
IRS Form 8821;

            (s) Agent shall have received, each duly executed and in form and
substance satisfactory to the Agent in its Permitted Discretion (i) the Seller
Note Subordination Agreement, (ii) the Central Garden Note Subordination
Agreement, (iii) the Tredegar Agreement, (iv) copies of all other intercompany
agreements, and all material management agreements, documents relating to
borrowed money, Capital Leases, occupancy leases and other material contracts,
and (vi) such other documents or materials as Agent shall deem necessary or
appropriate;

            (t) Agent shall have received evidence satisfactory to Agent in its
Permitted Discretion that the EBITDA (as defined in Annex I) of the Borrower for
the twelve-month period ending August 31, 2003 shall be at least Nine Million
Dollars ($9,000,000);

            (u) Agent shall have received copies of all documents reasonably
requested by Agent that evidence the completed equity investment in EYAS
International, Inc. by the Easy Gardener Investors, and a corresponding equity
investment in Borrower by EYAS International, Inc., in an amount not less than
Two Million Five Hundred Fifty Thousand Dollars ($2,550,000), in each case all
in form and substance satisfactory to Agent in its Permitted Discretion;

            (v) Agent shall have received an update of the on-site due diligence
audit through the Closing Date;

            (w) Agent shall have received copies of all duly executed documents
reasonably requested by Agent that evidence (i) Borrower's receipt of proceeds
from subordinated indebtedness, on terms and conditions satisfactory to the
Agent in its sole discretion, of not less than $2,675,000 from Central Garden,
including but not limited to the Central Garden Note, and (ii) the $1,600,000
partial consideration for the Acquisition in the form of the Subordinated Seller
Note;

            (x) the Credit Parties shall have entered into that certain Amended
and Restated Loan and Security Agreement dated as of the Closing Date with
Foothill and the lenders party thereto, together with all other agreements,
documents and instruments contemplated therein, all in form and substance
satisfactory to the Agent in its Permitted Discretion;

                                      -19-

Term Loan and Security Agreement
<PAGE>

            (y) Agent shall be satisfied, as determined in its sole and absolute
discretion, with the results of its financial and operational audit of the
Credit Parties;

            (z) regarding the Acquisition and the transactions contemplated
thereby:

                  (i) Agent shall have received from the Credit Parties
certified copies of the applicable Acquisition Documents and all other requested
information agreements, instruments, certificates or evidence, in form and
substance satisfactory to Agent, that all conditions precedent to the completion
of the Acquisition shall have been satisfied and as additional security for the
Obligations, the Credit Parties shall have assigned to Agent all of their
respective rights and remedies under the applicable Acquisition Documents;

                  (ii) Agent shall have received evidence satisfactory to Agent
that the Acquisition shall have been consummated (or will be consummated
simultaneously with the funding of the Loans) in form and substance satisfactory
to Agent by the execution, delivery, performance and recordation of the
applicable Acquisition Documents and other definitive agreements, instruments,
and documents related to the Acquisition; and

                  (iii) Agent shall have completed its due diligence and audits
in connection with the Acquisition the result of which shall be satisfactory to
Agent, including, without limitation, review of all material contracts and
Permits of the Credit Parties and evidence that (A) all consents necessary for
the assignment, sale and transfer of the assets of the Sellers to the Buyers, as
described and defined in the Acquisition Agreement, have been received by the
appropriate Credit Party and (B) all Permits required for the operation of the
Business have been obtained by the appropriate Credit Party and that they are
valid and in full force and effect;

            (aa) each of the representations and warranties made by the Credit
Parties in or pursuant to the Loan Documents shall be accurate in all material
respects before and after giving effect to funding of the Loans, the Credit
Parties shall be in compliance with all covenants, agreements and obligations
under the Loan Documents, and no Default or Event of Default shall have occurred
or be continuing or would exist after giving effect to the Loans on such date;

            (bb) there shall be no liabilities or obligations with respect to
any Credit Party of any nature whatsoever which, either individually or in the
aggregate, could reasonably be likely to have or result in a Material Adverse
Effect;

            (cc) Agent shall have received satisfactory evidence (including a
certificate of the Secretary of the Borrower) that the terms of the Golub
Settlement Agreement have been completed and satisfied, including, without
limitation, the payment of the amounts owed to the Golub Settlement Parties
which amount shall not exceed $400,000; and

            (dd) Agent shall have received from Golub Settlement Parties a
certificate, in form and substance satisfactory to Agent, stating that (i) the
Golub Settlement Parties consent to the Acquisition and all the transactions
contemplated thereby, and (ii) no defaults under the Golub Settlement Agreement
exist as of the date of such certificate or would result after giving effect to
the Acquisition and all the transaction contemplated thereby.

                                      -20-

Term Loan and Security Agreement
<PAGE>

V. REPRESENTATIONS AND WARRANTIES

            Each Credit Party, jointly and severally, represents and warrants as
of the date hereof as follows:

      5.1 Organization and Authority

            Each Credit Party is a corporation, limited liability company or
partnership duly organized, validly existing and in good standing under the laws
of its state of formation. Each Credit Party (a) has all requisite power and
authority to own its properties and assets (including, without limitation, the
Collateral) and to carry on its business as now being conducted or as
contemplated in the Loan Documents, (b) is duly qualified to do business in the
jurisdictions set forth on Schedule 5.1, which are all of the jurisdictions in
which failure so to qualify could reasonably be likely to have or result in a
Material Adverse Effect, and (c) has all requisite power and authority (i) to
execute, deliver and perform the Loan Documents and the Acquisition Documents to
which it is a party, (ii) to borrow hereunder, (iii) to consummate the
transactions contemplated under the Loan Documents, and (iv) to grant the Liens
with regard to the Collateral pursuant to the Security Documents to which it is
a party. No Credit Party is an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended, or is
controlled by such an "investment company."

      5.2 Loan Documents and Acquisition Documents

            The execution, delivery and performance by the Credit Parties of the
Loan Documents to which they are a party, and the consummation of the
transactions contemplated thereby, (a) have been duly authorized by all
requisite action of such Credit Party and have been duly executed and delivered
by or on behalf of such Credit Party; (b) do not violate any provisions of (i)
any applicable law, statute, rule, regulation, ordinance or tariff, (ii) any
order of any Governmental Authority binding on such Credit Party or any of its
properties, or (iii) the certificate of incorporation or bylaws (or any other
equivalent governing agreement or document) of such Credit Party, or any
agreement between such Credit Party and its shareholders, members, partners or
equity owners or among any such shareholders, members, partners or equity
owners; (c) are not in conflict with, and do not result in a breach or default
of or constitute an event of default, or an event, fact, condition or
circumstance which, with notice or passage of time, or both, would constitute or
result in a conflict, breach, default or event of default under, any indenture,
agreement or other instrument to which such Credit Party is a party, or by which
the properties or assets of such Credit Party are bound, the effect of which
could reasonably be expected to be, have or result in a Material Adverse Effect;
(d) except as set forth herein or therein, will not result in the creation or
imposition of any Lien of any nature upon any of the properties or assets of any
Credit Party, and (e) except as set forth on Schedule 5.2 and except for filings
in connection with the perfection of Agent's Liens, do not require the consent,
approval or authorization of, or filing, registration or qualification with, any
Governmental Authority or any other Person. When executed and delivered, each of
the Loan Documents to which such Credit Party is a party will constitute the
legal, valid and binding obligation of each Credit Party, enforceable against
each Credit Party in accordance with its terms, subject to the effect of any
applicable bankruptcy, moratorium, insolvency, reorganization or other similar
law

                                      -21-

Term Loan and Security Agreement
<PAGE>

affecting the enforceability of creditors' rights generally and to the effect of
general principles of equity which may limit the availability of equitable
remedies (whether in a proceeding at law or in equity).

      5.3 Subsidiaries, Capitalization and Ownership Interests

            No Credit Party has any Subsidiaries other than those Persons listed
as Subsidiaries on Schedule 5.3 as of the Closing Date. Schedule 5.3 states the
authorized and issued capitalization of each Credit Party, and the number and
class of equity securities and/or ownership, voting or partnership interests
issued and outstanding of such Credit Party and the beneficial and record owners
thereof (including options, warrants and other rights to acquire any of the
foregoing) as of the Closing Date. The outstanding equity securities and/or
ownership, voting or partnership interests of each Credit Party have been duly
authorized and validly issued and are fully paid and nonassessable and each
Person listed on Schedule 5.3 as of the Closing Date owns beneficially and of
record all of the equity securities it has listed as owning free and clear of
any Liens other than Liens created by the Loan Documents. Schedule 5.3 also
lists the directors, members, managers and/or partners of each Credit Party as
of the Closing Date. Except as listed on Schedule 5.3 as of the Closing Date, no
Credit Party (i) owns any material Investment Property nor (ii) owns any
interest or participates or engages in any joint venture, partnership or similar
arrangements with any Person.

      5.4 Properties

            Each Credit Party (a) is the sole owner and has good, valid and
marketable title to, or a valid leasehold interest in, license of, or right to
use, all of its material properties and assets, including the Collateral,
whether personal or real, subject to no transfer restrictions or Liens of any
kind except for Permitted Liens, and (b) is in compliance with each lease or
license to which it is a party or otherwise bound the failure of which to be in
compliance with would have a Material Adverse Effect. Schedule 5.4 lists all
real properties (and their locations) owned or leased by or to, and all other
material assets or property that are leased or licensed by, any Credit Party and
all leases (including leases of leased real property) covering or with respect
to such properties and assets. Each Credit Party enjoys peaceful and undisturbed
possession under all such leases and such leases are all the leases necessary
for the operation of such properties and assets, are valid and subsisting and
are in full force and effect. All material personal property and assets of each
Credit Party are in good repair, working order and condition (normal wear and
tear excepted) and are suitable and adequate for the uses for which they are
being used or are intended.

      5.5 Other Agreements

            No Credit Party is (a) a party to any judgment, order or decree or
any agreement, document or instrument, or subject to any restriction, which
could materially adversely affect its ability to execute and deliver, or perform
under, any Loan Document or to pay the Obligations, (b) in default in the
performance, observance or fulfillment of any obligation, covenant or condition
contained in any agreement, document or instrument to which it is a party or to
which any of its properties or assets are subject, which default, if not
remedied within any applicable grace or cure period, could reasonably be
expected to be, have or result in a Material Adverse Effect, nor is there any
event, fact, condition or circumstance which, with notice or passage of

                                      -22-

Term Loan and Security Agreement
<PAGE>

time or both, would constitute or result in a conflict, breach, default or event
of default under, any of the foregoing which, if not remedied within any
applicable grace or cure period could reasonably be expected to be, have or
result in a Material Adverse Effect, or (c) a party or subject to any agreement,
document or instrument with respect to, or obligation to pay any, service or
management fee with respect to, the ownership, operation, leasing or performance
of any of its business.

      5.6 Litigation

            Except as set forth on Schedule 5.6, there is no action, suit,
proceeding or investigation pending or, to its knowledge, threatened against any
Credit Party that (a) questions or could reasonably be expected to prevent the
validity of any of the Loan Documents or the right of such Credit Party to enter
into any Loan Document or to consummate the transactions contemplated thereby,
(b) could reasonably be expected to be, have or result in, either individually
or in the aggregate, any Material Adverse Change or Material Adverse Effect, or
(c) could reasonably be expected to result in any Change of Control or other
change in the current ownership, control or management of such Credit Party. No
Credit Party is aware that there is any basis for the foregoing. No Credit Party
is a party or subject to any order, writ, injunction, judgment or decree of any
Governmental Authority. There is no action, suit, proceeding or investigation
initiated by any Credit Party currently pending.

      5.7 Hazardous Materials

            Each Credit Party is in compliance in all material respects with all
applicable Environmental Laws. No Credit Party has been notified of any action,
suit, proceeding or investigation which adversely affects any Credit Party and
(a) relating in any way to compliance by or liability of any Credit Party under
any Environmental Laws, (b) which otherwise deals with any Hazardous Substance
or any Environmental Law, or (c) which seeks to suspend, revoke or terminate any
license, permit or approval necessary for the generation, handling, storage,
treatment or disposal of any Hazardous Substance.

      5.8 Tax Returns; Governmental Reports

            Except as set forth on Schedule 5.8, each Credit Party (a) has filed
all federal, state, foreign (if applicable) and local tax returns and other
reports which are required by law to be filed by such Credit Party, and (b) has
paid all taxes, assessments, fees and other governmental charges, including,
without limitation, payroll and other employment related taxes, in each case
that are due and payable, except only for items that such Credit Party is
currently contesting in good faith and that are described on Schedule 5.8.

      5.9 Financial Statements and Reports

            All financial statements and financial information relating to the
Credit Parties that have been or may hereafter be delivered to Agent by the
Credit Parties are (a) accurate and complete in accordance with GAAP, (b)
consistent with the books of account and records of the Credit Parties, (c) have
been prepared in accordance with GAAP on a consistent basis throughout the
indicated periods, except that the unaudited financial statements contain no
footnotes or year-end adjustments, and (d) present fairly in all material
respects the consolidated and consolidating

                                      -23-

Term Loan and Security Agreement
<PAGE>

financial condition, assets and liabilities and results of operations of the
Credit Parties at the dates and for the relevant periods indicated in accordance
with GAAP on a basis consistently applied. The Credit Parties have no material
obligations or liabilities of any kind not disclosed in such audited financial
information or statements, and since the date of the most recent financial
statements submitted to Agent, there has not occurred any Material Adverse
Change or Material Adverse Effect or, to the Credit Parties' knowledge, any
other event or condition that could reasonably be expected to be, have or result
in a Material Adverse Effect.

      5.10 Compliance with Law; Business

            Each Credit Party (a) is in compliance with all laws, statutes,
rules, regulations, ordinances and tariffs of any Governmental Authority
applicable to such Credit Party, the Business and/or such Credit Party's assets
or operations, including, without limitation, ERISA and any laws or regulations
pertaining to the Business, and (b) is not in violation of any order of any
Governmental Authority or other board or tribunal, except, in the case of both
(a) and (b), where noncompliance or violation could not reasonably be expected
to be, have or result in a Material Adverse Effect. There is no event, fact,
condition or circumstance which, with notice or passage of time, or both, would
constitute or result in any noncompliance with, or any violation of, any of the
foregoing, in each case except where noncompliance or violation could not
reasonably be expected to be, have or result in a Material Adverse Effect. No
Credit Party has received any notice that any Credit Party is not in material
compliance in any respect with any of the requirements of any of the foregoing.
No Credit Party has (i) engaged in any Prohibited Transactions as defined in
Section 406 of ERISA and Section 4975 of the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder, (ii) failed to
meet any applicable minimum funding requirements under Section 302 of ERISA in
respect of its plans and no funding requirements have been postponed or delayed,
(iii) knowledge of any event or occurrence which would cause the Pension Benefit
Guaranty Corporation to institute proceedings under Title IV of ERISA to
terminate any of the employee benefit plans, (iv) any fiduciary responsibility
under ERISA for investments with respect to any plan existing for the benefit of
Persons other than its employees or former employees, or (v) withdrawn,
completely or partially, from any multi-employer pension plans so as to incur
liability under the MultiEmployer Pension Plan Amendments of 1980. With respect
to each Credit Party, there exists no event described in Section 4043 of ERISA,
excluding Subsections 4043(b)(2) and 4043(b)(3) thereof, for which the thirty
(30) day notice period contained in 12 C.F.R. ss. 2615.3 has not been waived.
Each Credit Party has maintained in all material respects all records required
to be maintained by any applicable Governmental Authority. None of the Credit
Parties nor their respective predecessors have engaged, or do not engage,
directly or indirectly, in any business other than the Business.

      5.11 Intellectual Property

            Except as set forth on Schedule 5.11, no Credit Party owns, licenses
or utilizes, and is not a party to, any patents, patent applications,
trademarks, trademark applications, service marks, service mark applications,
registered copyrights, copyright applications, copyrights, trade secrets, trade
names, software or licenses. The items listed on Schedule 5.11 constitute all of
the Intellectual Property necessary or required for the operation of the Credit
Parties' businesses as of the Closing Date and as proposed to be conducted and
the Credit Parties own or have a valid and enforceable right to use all such
Intellectual Property, except where such Credit Party's

                                      -24-

Term Loan and Security Agreement
<PAGE>

failure to have rights therein could reasonably be expected to be, have or
result in a Material Adverse Effect. All such items are in full force and effect
and not in known conflict with the rights of others. No Credit Party is in
breach of or default under the provisions of any of the foregoing, nor is there
any event, fact, condition or circumstance which, with notice or passage of time
or both, would constitute or result in a conflict, breach, default or event of
default under, any of the foregoing which, if not remedied within any applicable
grace or cure period could reasonably be expected to be, have or result in a
Material Adverse Effect.

      5.12 Licenses and Permits; Labor

            Each Credit Party is in compliance with and has all Permits and
Intellectual Property necessary or required by applicable law or Governmental
Authority for the operation of its Businesses as presently conducted and as
proposed to be conducted except where noncompliance, violation or lack thereof
could not reasonably be expected to be, have or result in a Material Adverse
Effect. Schedule 5.12 lists all Permits necessary or required by applicable law
or Governmental Authority for the operation of the Credit Parties' businesses as
of the Closing Date and as proposed to be conducted except where noncompliance,
violation or lack thereof could not reasonably be expected to be, have or result
in a Material Adverse Effect. All Permits necessary or required by applicable
law or Governmental Authority for the operation of the Credit Parties'
businesses are in full force and effect and not in known conflict with the
rights of others, except where such conflict or lack of being in full force and
effect could not reasonably be expected to be, have or result in a Material
Adverse Effect. No Credit Party (a) is in breach of or default under the
provisions of any of the foregoing, nor is there any event, fact, condition or
circumstance which, with notice or passage of time or both, would constitute or
result in a conflict, breach, default or event of default under, any of the
foregoing which, if not remedied within any applicable grace or cure period
could reasonably be expected to be, have or result in a Material Adverse Effect,
and (b) is nor has been involved in any labor dispute, strike, walkout or union
organization.

      5.13 No Default; Solvency

            There does not exist any Default or Event of Default or any event,
fact, condition or circumstance which, with the giving of notice or passage of
time or both, would likely constitute or result in a Default or Event of
Default. The Credit Parties are and, after giving effect to the transactions and
the Indebtedness contemplated by the Loan Documents, will be, on a consolidated
basis, solvent and able to meet their obligations and liabilities as they become
due, and the assets of the Credit Parties, at a Fair Valuation and on a
consolidated basis, exceed the total liabilities (including contingent,
subordinated, unmatured and unliquidated liabilities) of the Credit Parties, and
no unreasonably small capital base with which to engage in their anticipated
businesses exists with respect to the Credit Parties.

      5.14 Disclosure

            No Loan Document nor any other agreement, document, certificate, or
statement furnished to Agent by or on behalf of any Credit Party in connection
with the transactions contemplated by the Loan Documents, nor any representation
or warranty made by any Credit Party in any Loan Document, contains any untrue
statement of material fact or omits to state any fact necessary to make the
factual statements therein taken as a whole not materially misleading

                                      -25-

Term Loan and Security Agreement
<PAGE>

in light of the circumstances under which it was furnished. There is no fact
known to any Credit Party which has not been disclosed to Agent in writing which
could reasonably be expected to be, have or result in a Material Adverse Effect.

      5.15 Existing Indebtedness; Investments, Guarantees and Certain Contracts

            Except for Permitted Indebtedness or as contemplated by the Loan
Documents, no Credit Party (a) has outstanding Indebtedness, (b) is subject or
party to any mortgage, note, indenture, indemnity or guarantee of, with respect
to or evidencing any Indebtedness of any other Person, and/or (c) owns or holds
any equity or long-term debt investments in, nor has any outstanding advances to
or any outstanding guarantees for, the obligations of, or any outstanding
borrowings from, any other Person. Each Credit Party has performed all material
obligations required to be performed by such Credit Party pursuant to or in
connection with any Permitted Indebtedness and there has occurred no breach,
default or event of default under any document evidencing any such items or any
fact, circumstance, condition or event which, with the giving of notice or
passage of time or both, would constitute or result in a breach, default or
event of default thereunder. Except for Permitted Indebtedness and actions
permitted under Section 7.4, no Credit Party, directly or indirectly, has made,
and there does not exist, any loans, advances or guarantees to or for the
benefit of any Person or agreements to assume, guarantee, endorse, contingently
agree to purchase or otherwise become liable for or upon or incur any obligation
of any Person.

      5.16 Affiliated Agreements

            Except as set forth on Schedule 5.16 and in Section 7.6, (i) there
are no existing or proposed agreements, arrangements, understandings or
transactions between any Credit Party and any of such Credit Party's officers,
members, managers, directors, stockholders, partners, other interest holders,
employees, or Affiliates or any members of their respective families, and (ii)
to each Credit Party's knowledge, none of the foregoing Persons are directly or
indirectly, indebted to or have any direct/or indirect ownership, partnership or
voting interest in, any Affiliate of any Credit Party or any Person with which
any Credit Party has a business relationship or which competes with any Credit
Party (except that any such Persons may own stock in (but not exceeding two (2%)
percent of the outstanding capital stock of) any publicly traded company that
may compete with any Credit Party.

      5.17 Insurance

            Each Credit Party has in full force and effect such insurance
policies as are customary in its industry and as may be required pursuant to
Section 6.5 hereof. All such insurance policies as of the Closing Date are
listed and described on Schedule 5.17. No Credit Party has assumed or is subject
to any risks or liabilities other than those relating to its Business.

      5.18 Names; Location of Offices, Records and Collateral; Deposit Accounts
and Investment Property

            During the preceding five (5) years, none of the Credit Parties, nor
any of their respective predecessors, have conducted business under or used any
name (whether corporate, partnership or assumed) other than as shown on Schedule
5.18A. Each Credit Party is (or such

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Credit Party's predecessors were) the sole owner(s) of all of its names listed
on Schedule 5.18A, and any and all business done and invoices issued in such
names are such Credit Party's (or any such predecessors') sales, business and
invoices. Each trade name of each Credit Party represents a division or trading
style of such Credit Party. Each Credit Party maintains, and such Credit Party's
predecessors maintained, their respective places of business and chief executive
offices only at the locations set forth on Schedule 5.18B or, after the Closing
Date, as additionally disclosed to Agent in writing in accordance with Section
7.4, and all Accounts of such Credit Party arise, originate and are located, and
all of the Collateral and all books and records in connection therewith or in
any way relating thereto or evidencing the Collateral are located and shall be
only, in and at such locations. All of the Collateral is located only in the
continental United States, except as otherwise permitted pursuant to Section
7.4(A) hereof. Schedule 5.18C lists all of each Credit Party's Deposit Accounts
and Investment Property as of the Closing Date.

      5.19 Non-Subordination

            The Obligations are not subordinated in any way to any other
obligations of any Credit Party or to the rights of any other Person, except as
set forth in Section 1.1 hereof or as otherwise agreed to by the Lenders.

      5.20 Legal Investments; Use of Proceeds

            The Credit Parties are not engaged in the business of extending
credit for the purpose of purchasing or carrying any "margin stock" or "margin
security" (within the meaning of Regulations T, U or X issued by the Board of
Governors of the Federal Reserve System), and no proceeds of the Loans will be
used to purchase or carry any margin stock or margin security or to extend
credit to others for the purpose of purchasing or carrying any margin stock or
margin security.

      5.21 Broker's or Finder's Commissions

            Except as set forth on the "Broker Schedule," attached hereto as
Schedule 5.22 no broker's or finder's or placement fee or commission will be
payable to any broker or agent engaged by the Credit Parties or any of its
current officers, directors or agents with respect to the issue of the Notes, or
the transactions contemplated by this Agreement except for fees payable to Agent
and the Lenders. The Credit Parties agree to indemnify Agent and Lenders and
hold them harmless from against any claim, demand or liability for broker's or
finder's or placement fees or similar commissions, whether or not payable by the
Credit Parties, alleged to have been incurred in connection with such
transactions, other than any broker's or finder's fees payable to Persons
engaged by Agent or Lenders without the knowledge of the Credit Parties.

      5.22 Survival

            Each Credit Party makes the representations and warranties contained
herein with the knowledge and intention that Agent and Lenders are relying and
will rely thereon. All such representations and warranties will survive the
execution and delivery of this Agreement, the Closing and the funding of the
Loans.

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VI. AFFIRMATIVE COVENANTS

            Each Credit Party, jointly and severally, covenants and agrees that,
until full performance and satisfaction, and indefeasible payment in full in
cash, of all the Obligations and termination of this Agreement:

      6.1 Financial Statements, Reports and Other Information

            (a) Financial Reports. The Credit Parties shall furnish to Agent (i)
as soon as available and in any event within ninety (90) calendar days after the
end of each fiscal year of Borrower, audited annual consolidated and
consolidating financial statements of the Credit Parties and EGUK, including the
notes thereto, consisting of a consolidated and consolidating balance sheet at
the end of such completed fiscal year and the related consolidated and
consolidating statements of income, retained earnings, cash flows and owners'
equity for such completed fiscal year, which financial statements shall be
prepared and certified without qualification by an independent certified public
accounting firm satisfactory to Agent in its Permitted Discretion and
accompanied by related management letters, if available (provided that the
consolidating statements may be internally prepared), (ii) as soon as available
and in any event within forty-five (45) calendar days after the end of each
fiscal quarter of the Borrower (other than the last fiscal quarter of each
fiscal year), unaudited consolidated and consolidating financial statements of
the Credit Parties consisting of a balance sheet and statements of income,
retained earnings and cash flows and owners' equity as of the end of the
immediately preceding fiscal quarter, (iii) as soon as available and in any
event within thirty (30) calendar days after the end of each calendar month
(other than the last calendar month of a fiscal quarter), unaudited consolidated
and consolidating financial statements of the Credit Parties, consisting of a
balance sheet and statements of income, retained earnings, cash flows and
owners' equity as of the end of the immediately preceding calendar month, and
(iv) within thirty (30) calendar days after the end of each calendar month, a
listing of all proposed non-recurring adjustments to EBITDA during such calendar
month. All such financial statements shall be prepared in accordance with GAAP
consistently applied with prior periods (subject, as to interim statements, to
lack of footnotes and year-end adjustments). With each quarterly and annual
financial statement, the Borrower shall also deliver (x) a Compliance
Certificate of its chief financial officer in the form of Exhibit A attached
hereto and otherwise satisfactory to Agent stating that (A) such person has
reviewed the relevant terms of the Loan Documents and the condition of the
Credit Parties, (B) no Default or Event of Default has occurred or is
continuing, or, if any of the foregoing has occurred or is continuing,
specifying the nature and status and period of existence thereof and the steps
taken or proposed to be taken with respect thereto, and (C) the Borrower is in
compliance with all financial covenants in this Agreement attached as Annex I
hereto and (y) a description, in form and substance satisfactory to the Agent,
of each new material agreement or arrangement entered into with any Affiliate or
holder of the Existing Warrant, including an estimate of cost savings to the
Borrower and or increase to the Borrower's EBITDA resulting from such agreement
or arrangement, or of any modifications to existing material agreements or
arrangements with any Affiliate or holder of the Existing Warrant, that occurred
during the applicable fiscal quarter. With each annual financial statement,
Borrower shall also deliver the calculation of the estimated level of
distributions by Borrower to its partners for the payment of all applicable
federal, and state income taxes in connection with Borrower's income for such
fiscal year. Such certificate shall be accompanied by the calculations necessary
to show compliance with the financial covenants in a form satisfactory to the
Agent in its Permitted Discretion.

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Term Loan and Security Agreement
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            (b) Other Materials. The Credit Parties shall furnish to Agent as
soon as available, and in any event within ten (10) calendar days after the
preparation or issuance thereof or such other time as set forth below, as
applicable: (i) copies of such financial statements (other than those required
to be delivered pursuant to Section 6.1(a)) prepared by, for or on behalf of the
Credit Parties and any other notes and reports related thereto, including,
without limitation, any pro forma financial statements and monthly board
reports, (ii) any material reports, returns, information, notices and other
materials that any Credit Party shall send to its stockholders, members,
partners and/or other equity owners and/or directors or managers by class in
their capacity as such equity owner at any time together with any and all
supporting documentation related thereto, (iii) within ten (10) calendar days
after the end of each fiscal quarter, a report listing and describing material
details about any and all new contracts entered into by any Credit Party during
the fiscal quarter then ended, (iv) within ten (10) calendar days after the end
of each calendar month, a monthly operating report for each Credit Party, which
report shall include a detailed comparison of the actual year-to-date operating
results against (A) the projected operating budget for such period and (B) the
actual operating results for the same period during the prior calendar year, in
each case inclusive of profit and loss statements, (v) copies of any reports
submitted to the Credit Parties by their independent accountants in connection
with any interim audit of the books of such Person or any of its Affiliates and
copies of each management control letter provided by such independent
accountants, (vi) copies of any and all materials, documents, instruments and
other items that relate to, secure, evidence, give rise to or generate or
otherwise relate to the Collateral, (vii) such reports as set forth on Annex II
attached hereto which annex is incorporated herein and made a part hereof, and
(viii) such additional information, documents, statements, reports and other
materials as Agent may request in its Permitted Discretion from time to time.
The Credit Parties shall furnish to Agent not less than thirty (30) calendar
days prior to the commencement of each fiscal year in the Term, a list setting
forth the location of the Collateral. The Credit Parties shall furnish to Agent
within ten (10) calendar days after the end of each calendar month a report
specifying all unpaid amounts, fees, payables and balances owing to any
Governmental Authority (other than for taxes) as of the last day of such ended
calendar month.

            (c) Notices. Upon obtaining knowledge thereof, the Credit Parties
shall promptly, and in any event within three (3) Business Days thereof, notify
Agent in writing of (i) any pending or threatened litigation, suit,
investigation, arbitration, dispute resolution proceeding or administrative or
regulatory proceeding brought or initiated by or against any Credit Party or
otherwise affecting or involving or relating to any Credit Party or any of
Credit Parties' property or assets to the extent (A) the amount in controversy
exceeds $50,000 individually or $150,000 in the aggregate for all such events,
or (B) to the extent any of the foregoing seeks injunctive relief, (ii) any
Default or Event of Default, which notice shall specify the nature and status
thereof, the period of existence thereof and what action is proposed to be taken
with respect thereto, (iii) any other development, event, fact, circumstance or
condition that could reasonably be expected to be, have or result in a Material
Adverse Effect, in each case describing the nature and status thereof and the
action proposed to be taken with respect thereto, (iv) any notice received by
any Credit Party from any payor of a claim, suit or other action such payor has,
claims or has filed against any Credit Party for an amount in excess of $250,000
individually or $500,000 in the aggregate, (v) any matter(s), outside the
ordinary course of business, in the amount of $50,000, individually or $150,000
in the aggregate, in existence at any one time adversely affecting the value,
enforceability or collectability of any of the Collateral, (vi) any

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Term Loan and Security Agreement
<PAGE>

notice given by any Credit Party to any other lender of any Credit Party and
shall furnish to Agent a copy of such notice, (vii) receipt of any notice or
request from any Governmental Authority regarding any liability or claim of
liability in the amount equal to or exceeding $25,000 individually or $100,000
in the aggregate, (viii) receipt of any notice by any Credit Party regarding
termination of any lease of real property (other than by expiration of the term)
or any senior executive, (ix) if any Account or other Collateral becomes
evidenced or secured by an Instrument or Chattel Paper, (x) the filing,
recording or assessment of any federal, state, material local or foreign tax
lien against the Collateral or any Credit Party, (xi) any action taken or
threatened to be taken by any Governmental Authority (or any notice of any of
the foregoing) with respect to any Credit Party which could reasonably be
expected to be, have or result in a Material Adverse Effect or with respect to
any Collateral, (xii) any change in the corporate name of any Credit Party,
and/or (xiii) the loss, termination or expiration of any material contract to
which any Credit Party is a party or by which its properties or assets are
subject or bound.

            (d) Consents. The Credit Parties shall obtain and deliver to Agent
from time to time all required consents, approvals and agreements from such
third parties as Agent shall determine are necessary or desirable in its
Permitted Discretion and that are satisfactory to Agent in its Permitted
Discretion with respect to (i) the Loan Documents and the transactions
contemplated thereby, (ii) claims against any Credit Party, or the Collateral,
and/or (iii) any agreements, consents, documents or instruments to which any
Credit Party is a party or by which any properties or assets of any Credit Party
or any of the Collateral is or are bound or subject, including, without
limitation, Landlord Waivers and Consents with respect to leases.

            (e) Operating Budget. The Credit Parties shall furnish to Agent on
or prior to the Closing Date and for each fiscal year of the Credit Parties
thereafter within five (5) days of the approval thereof by the Borrower's
general partner, but in any event no later than thirty (30) days after
commencement of such fiscal year, consolidated and consolidating month-by-month
projected operating budgets, projections, profit and loss statements, income
statements, balance sheets and cash flow reports of and for the Credit Parties
for such upcoming fiscal year (including an income statement for and a balance
sheet as at the end of each month), and annual projections for the fiscal years
remaining in the Term, in each case prepared in accordance with GAAP
consistently applied with prior periods (subject to lack of footnotes and
year-end adjustments).

            (f) Shareholder Reports and Government Filings. Borrower shall
furnish to Agent, concurrently with the sending or filing thereof, a copy of any
proxy statements, financial statements or reports which the Credit Parties have
made available to their shareholders or other equity owners in their capacity as
such shareholders or equity owners, as a class or any class or series of
shareholders or other equity owners as a class or series and a copy of any
regular, periodic and special reports or registration statements which the
Credit Parties file with the Securities and Exchange Commission, any stock
exchange or any Governmental Authority.

            (g) Deposit Accounts, Other Accounts and Investment Property. The
Credit Parties shall (i) promptly, and in any event within five (5) Business
Days after any Credit Party (A) establishes any Deposit Account, securities
account, money market account or any similar account, or (B) becomes the owner
of any Investment Property, in excess of $50,000 in the aggregate, on and with
respect to which Agent, for itself and the benefit of the Lenders, does not have
a perfected, first priority Lien, notify Agent of such, and thereafter (ii)
deliver to Agent,

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within ten (10) Business Days, documentation to perfect Agent's, for its benefit
and the benefit of the Lenders, Lien thereon, in each case in form and substance
acceptable to Agent in its Permitted Discretion.

            (h) Intellectual Property. The Borrower on behalf of the Credit
Parties shall furnish to Agent within five (5) Business Days after June 30 and
December 31 of each year, a report specifying any Intellectual Property
interests acquired by, obtained by, or licensed to the Credit Parties during the
six-month period then ended, and shall deliver to Agent, within ten (10)
Business Days, documentation, if any, necessary to perfect Agent's, for its
benefit and the benefit of the Lenders, Lien in such Intellectual Property, in
each case in form and substance acceptable to Agent in its Permitted Discretion.

            (i) Payroll Taxes. Without limiting or being limited by any other
provision of any Loan Document, the Credit Parties shall retain and use a
third-party acceptable to Agent in its Permitted Discretion to process, manage
and pay the payroll taxes of the Credit Parties and shall cause to be delivered
to Agent within thirty (30) calendar days after the end of each calendar month a
report of such payroll taxes of the Credit Parties for the immediately preceding
calendar month and evidence of payment thereof.

      6.2 Payment of Obligations

            The Credit Parties shall make full and timely indefeasible payment
in cash of the principal of and interest on the Loans and all other Obligations.

      6.3 Conduct of Business and Maintenance of Existence and Assets

            Each Credit Party shall (a) conduct its business in accordance with
good business practices customary to its industry, (b) engage principally in the
same or similar lines of business substantially as heretofore conducted, (c)
collect its Accounts in the ordinary course of business, (d) maintain all of its
material properties, assets and equipment used or useful in its business in good
repair, working order and condition (normal wear and tear excepted and except as
may be disposed of in the ordinary course of business and in accordance with the
terms of the Loan Documents), (e) from time to time make all customary repairs,
renewals and replacements thereof, (f) maintain and keep in full force and
effect its existence and all material Permits and qualifications to do business
and good standing in its jurisdiction of formation and each other jurisdiction
in which the ownership or lease of property or the nature of its business makes
such Permits or qualification necessary and in which failure to maintain such
Permits or qualification could reasonably be expected to be, have or result in a
Material Adverse Effect; (g) remain in good standing and maintain operations in
all jurisdictions in which currently located, except where the failure to remain
in good standing or maintain operations could not reasonably be expected to be,
have or result in a Material Adverse Effect, and (h) maintain, comply with and
keep in full force and effect its existence and all Intellectual Property and
Permits necessary to conduct the Business the loss of which or failure to
maintain could reasonably be expected to be, have or result in a Material
Adverse Effect.

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Term Loan and Security Agreement
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      6.4 Compliance with Legal and Other Obligations

            Each Credit Party shall (a) comply with all laws, statutes, rules,
regulations, ordinances and tariffs of all Governmental Authorities applicable
to it or its business, assets or operations, (b) pay all taxes, assessments,
fees, governmental charges, claims for labor, supplies, rent and all other
obligations or liabilities of any kind, except liabilities being contested in
good faith and against which adequate reserves have been established, (c)
perform in accordance with its terms each contract, agreement or other
arrangement to which it is a party or by which it or any of the Collateral is
bound, and (d) properly file all reports required to be filed with any
Governmental Authority, except under clauses (a), (b), (c), and/or (d) where the
failure to comply, pay, file or perform would not reasonably be expected to be,
have or result in a Material Adverse Effect.

      6.5 Insurance

            Each Credit Party shall (a) keep all of its insurable properties and
assets adequately insured in all material respects against losses, damages and
hazards as are customarily insured against by businesses engaging in similar
activities or lines of business or owning similar assets or properties and at
least the minimum amount required by this Agreement, applicable law and any
agreement to which such Credit Party is a party or pursuant to which such Credit
Party provides any services, including, without limitation, liability, errors
and omissions and property and business interruption insurance, as applicable;
and maintain general liability insurance at all times against liability on
account of damage to persons and property having such limits, deductibles,
exclusions and co-insurance and other provisions as are customary for a business
engaged in activities similar to those of such Credit Party; and (b) maintain
insurance under all applicable workers' compensation laws; all of the foregoing
insurance policies and coverage levels to (i) be satisfactory in form and
substance to Agent in its Permitted Discretion, (ii) name Agent, for the benefit
of itself and Lenders, as loss payee and additional insured thereunder, as
applicable, and (iii) expressly provide that they cannot be altered, amended or
modified or canceled or terminated without thirty (30) Business Days prior
written notice to Agent, and that they inure to the benefit of Agent, for the
benefit of itself and Lenders, notwithstanding any action or omission or
negligence of or by such Credit Party, or any insured thereunder.

      6.6 True Books

            Each Credit Party shall (a) keep true, complete and accurate (in
accordance with GAAP) books of record and account in accordance with
commercially reasonable business practices in which true and correct entries are
made of all of its dealings and transactions in all material respects; and (b)
set up and maintain on its books such reserves as may be required by GAAP with
respect to doubtful accounts and all taxes, assessments, charges, levies and
claims and with respect to its business, and include such reserves in its
quarterly as well as year end financial statements.

      6.7 Inspection; Periodic Audits

            Each Credit Party shall permit the representatives of Agent, at the
expense of the Credit Parties, from time to time during normal business hours
upon reasonable notice, to (a)

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<PAGE>

visit and inspect any of such Credit Party's offices or properties or any other
place where Collateral is located to inspect the Collateral and/or to examine
and/or audit all of such Credit Party's books of account, records, reports and
other papers, (b) make copies and extracts therefrom, and (c) discuss such
Credit Party's business, operations, prospects, properties, assets, liabilities,
condition and/or Accounts with its officers and independent public accountants
(and by this provision such officers and accountants are authorized to discuss
the foregoing), provided, however, that (x) so long as no Default or Event of
Default has occurred and is continuing, such visits and inspections in excess of
three (3) in any fiscal year shall be at the expense of the Agent, unless any
Credit Party requests such visit and inspection, requests the Agent to refrain
from such visit and inspection or requests an action or inaction by the Agent
which necessitates a visit or inspection as determined by the Agent in its
Permitted Discretion, and (y) upon the occurrence and during the continuance of
a Default or Event of Default, no such notice shall be required to do any of the
foregoing and any such visits and inspections shall be at the expense of the
Credit Parties.

      6.8 Further Assurances; Post Closing

            At Borrower's cost and expense, each Credit Party shall (a) within
five (5) Business Days (or such longer period in the case of actions involving
third parties as determined by Agent in its Permitted Discretion) after Agent's
demand, take such further actions, obtain such consents and approvals and duly
execute and deliver such further agreements, assignments, instructions or
documents as Agent may request in its Permitted Discretion with respect to the
purposes, terms and conditions of the Loan Documents and the consummation of the
transactions contemplated thereby, whether before, at or after the performance
and/or consummation of the transactions contemplated hereby or the occurrence of
a Default or Event of Default, (b) without limiting and notwithstanding any
other provision of any Loan Document, execute and deliver, or cause to be
executed and delivered, such agreements and documents, and take or cause to be
taken such actions, and otherwise perform, observe and comply with such
obligations, as are set forth on Schedule 6.8, and (c) upon the exercise by
Agent, any Lender or any of their Affiliates of any power, right, privilege or
remedy pursuant to any Loan Document or under applicable law or at equity which
requires any consent, approval, registration, qualification or authorization of
any Person (including, without limitation, any Governmental Authority), execute
and deliver, or cause the execution and delivery of, all applications,
certificates, instruments and other documents that may be so required for such
consent, approval, registration, qualification or authorization. Without
limiting the foregoing, upon the exercise by Agent, any Lender or any of their
Affiliates of any right or remedy under any Loan Document which requires any
consent, approval or registration with, consent, qualification or authorization
by, any Person, each Credit Party shall execute and deliver, or cause the
execution and delivery of, all applications, certificates, instruments and other
documents that Agent, any Lender or such Affiliate may be required to obtain for
itself or on its behalf for such consent, approval, registration, qualification
or authorization.

      6.9 Payment of Indebtedness

            Except as otherwise prescribed in the Loan Documents, the Credit
Parties shall pay, discharge or otherwise satisfy at or before maturity (subject
to applicable grace periods and, in the case of trade payables, to ordinary
course payment practices) all of their material obligations and liabilities,
except when the amount or validity thereof is being contested in good

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<PAGE>

faith by appropriate proceedings and such reserves as Agent may deem proper and
necessary in its Permitted Discretion shall have been made.

      6.10 Lien Searches

            If Liens other than Permitted Liens exist, the Credit Parties
immediately shall take, execute and deliver all actions, documents and
instruments necessary to release and terminate such Liens.

      6.11 Use of Proceeds

            The Borrower shall use the proceeds from the Loans only for the
purposes set forth in the recitals to this Agreement.

      6.12 Collateral Documents; Security Interest in Collateral

            (a) On demand of Agent in its Permitted Discretion, each Credit
Party shall make available to Agent copies of any and all documents,
instruments, materials and other items that relate to, secure, evidence, give
rise to or generate or otherwise involve Collateral, including, without
limitation, Accounts and Inventory of such Credit Party. Each Credit Party shall
(i) execute, obtain, deliver, file, register and/or record any and all financing
statements, continuation statements, stock powers, instruments and other
documents, or cause the execution, filing, registration, recording or delivery
of any and all of the foregoing, that are necessary or required under law or
otherwise or reasonably requested by Agent to be executed, filed, registered,
obtained, delivered or recorded to create, maintain, perfect, preserve, validate
or otherwise protect the pledge of the Collateral to Agent and Agent's, for its
benefit and the benefit of the Lenders, perfected first priority (other than
with respect to property or assets covered by Priority Permitted Liens) Lien on
the Collateral (and each Credit Party irrevocably grants Agent the right, at
Agent's option, to file any or all of the foregoing), (ii) maintain, or cause to
be maintained, at all times, the pledge of the Collateral to Agent and Agent's,
for its benefit and the benefit of the Lenders, first priority (other than with
respect to property or assets covered by Priority Permitted Liens) and perfected
Lien on the Collateral, (iii) immediately upon learning thereof, report to Agent
any reclamation, return or repossession of goods in excess of $50,000
individually or $100,000 in the aggregate, and (iv) defend the Collateral and
Agent's, for its benefit and the benefit of the Lenders, first priority (other
than with respect to property or assets covered by Priority Permitted Liens) and
perfected Lien thereon against all claims and demands of all Persons at any time
claiming the same or any interest therein adverse to Agent, and pay all costs
and expenses (including, without limitation, in-house documentation and
diligence fees and legal expenses and reasonable attorneys' fees and expenses)
in connection with such defense, which may at Agent's discretion be added to the
Obligations.

            (b) If, after the date hereof, any Credit Party shall (i) obtain any
registered Trademark, Patent or Copyright, or apply for any such registration in
the United States Patent and Trademark Office or the United States Copyright
Office, as applicable, or in any similar office or agency in the United States,
any State thereof, any political subdivision thereof or in any other country, or
(ii) becomes the owner of any Trademark, Patent or Copyright registrations or
applications for Trademark, Patent or Copyright registration used in the United
States or any State thereof, political subdivision thereof or in any other
country, the provisions of Section 2.10

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hereof shall automatically apply thereto. Upon the request of Agent, the Credit
Parties shall promptly execute and deliver to Agent any and all assignments,
agreements, instruments, documents and such other papers as may be requested by
Agent in its Permitted Discretion to evidence the security interest in and
collateral assignment of such Trademark, Patent or Copyright, as the case may
be, in favor of Agent (for the benefit of the Lenders). The Credit Parties
shall: (i) prosecute diligently any Trademark, Patent or Copyright application
that is required for the Credit Parties to conduct their Business; (ii) make
application for registration or issuance of all new Trademarks, Patents and
Copyrights as reasonably deemed appropriate by the Credit Parties; (iii)
preserve and maintain all rights in the Intellectual Property that is required
for the Credit Parties to conduct their Business; and (iv) use their best
efforts to obtain any consents, waivers or agreements necessary to enable Agent
to exercise its remedies with respect to such Intellectual Property. The Credit
Parties shall not abandon any material right to file a Trademark, Patent or
Copyright application nor shall the Credit Parties abandon any material pending
Trademark, Patent or Copyright application, or material Trademark, Patent or
Copyright without the prior written consent of Agent.

            (c) Without limiting the generality of the foregoing and except as
otherwise approved in writing by Agent, (i) each Credit Party shall guaranty the
Obligations of Borrower and each Credit Party shall and shall cause each of its
Subsidiaries (excluding EGUK and Easy Gardener Trust) to grant to Agent, for the
benefit of itself and Lenders, a security interest in all of such Subsidiary's
property to secure such guaranty, (ii) the Credit Parties shall cause any Person
who holds any direct or indirect ownership interests and other equity interests
in Borrower to pledge such ownership interests to the Agent as a first priority
interest without prior liens, for the benefit of itself and Lenders, to secure
the Obligations, and (iii) each Credit Party shall pledge the stock and other
equity interest and securities of each of its Subsidiaries to Agent, for the
benefit of itself and Lenders, to secure the Obligations; provided, that the
Borrower shall only be required to pledge sixty-six and two thirds percent
(66-2/3%) of its ownership interests in EGUK. In furtherance thereof, each
Credit Party shall execute a Joinder Agreement and become a party to such of the
Loan Documents, including this Agreement, as Agent shall determine.

      6.13 Taxes and Other Charges

            All payments and reimbursements to Agent, for its own account and/or
for the benefit of Lenders, made under any Loan Document shall be free and clear
of and without deduction for all taxes, levies, imposts, deductions,
assessments, charges or withholdings, and all liabilities with respect thereto
of any nature whatsoever, excluding taxes to the extent imposed on each Lender's
net income. If any Credit Party shall be required by law to deduct any such
amounts from or in respect of any sum payable under any Loan Document to Agent,
for its own account and/or for the benefit of Lenders, then the sum payable to
Agent, for its own account and/or for the benefit of Lenders, shall be increased
as may be necessary so that, after making all required deductions, each Lender
receives an amount equal to the sum it would have received had no such
deductions been made. Notwithstanding any other provision of any Loan Document,
if at any time after the Closing or funding of the Loans (a) any change in any
existing law, regulation, treaty or directive or in the interpretation or
application thereof, (b) any new law, regulation, treaty or directive enacted or
any interpretation or application thereof, or (c) compliance by Agent or any
Lender with any request or directive (whether or not having the force of law)
from any Governmental Authority: (i) subjects Agent or such Lender to any tax,

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levy, impost, deduction, assessment, charge or withholding of any kind
whatsoever with respect to any Loan Document, or changes the basis of taxation
of payments to Agent, for its own account and/or for the benefit of Lenders, of
any amount payable thereunder (except for net income taxes, or franchise taxes
imposed in lieu of net income taxes, imposed generally by federal, state or
local taxing authorities with respect to interest or commitment fees or other
fees payable hereunder or changes in the rate of tax on the overall net income
of Agent and/or each Lender), or (ii) imposes on Agent or Lenders any other
condition or increased cost in connection with the transactions contemplated
thereby or participations therein; and the result of any of the foregoing is to
increase the cost to Agent or Lenders of making or continuing or maintaining any
Loan hereunder or to reduce any amount receivable hereunder, then, in any such
case, the Credit Parties shall promptly pay to Agent, for its own account and/or
for the benefit of Lenders, any additional amounts necessary to compensate Agent
and each Lender, on an after-tax basis, for such additional cost or reduced
amount as determined by Agent and/or such Lender. If Agent or any Lender becomes
entitled to claim any additional amounts pursuant to this Section 6.13 it shall
promptly notify the Credit Parties of the event by reason of which Agent or such
Lender has become so entitled, and each such notice of additional amounts
payable pursuant to this Section 6.13 submitted by Agent or such Lender to the
Credit Parties shall, absent manifest error, be final, conclusive and binding
for all purposes. Notwithstanding anything in this Section 6.13 to the contrary,
the Credit Parties shall only be obligated to compensate the Agent or such
Lender, as applicable, for any amounts arising under this Section 6.13 if the
notification to the Credit Parties occurs within one hundred and eighty (180)
days of Agent or such Lender obtaining knowledge thereof.

      6.14 Board Meetings; Board of Directors

            (a) Each Credit Party shall provide written notice of each regular
meeting of such Person's Board of Directors, as applicable, and any committee or
subcommittee thereof, at least thirty (30) days in advance of such meeting and,
as soon as practicable (but not less than five (5) Business Days prior), written
or telephonic notice of each special meeting of such Person's Board of Directors
and any committee or subcommittee thereof. In addition, each Credit Party will
as soon as practicable, send, and shall cause each of its Subsidiaries to send,
Agent copies of all reports and materials provided to members of its respective
Board of Directors at meetings or otherwise.

            (b) The Credit Parties' Board of Directors taken as a whole shall
meet at least once per fiscal quarter.

            (c) Agent may designate an observer, without voting rights, who will
be entitled to attend not more than one (1) meeting of each Credit Party and
each of their respective Subsidiaries' Board of Directors (including committees)
and stockholders per fiscal quarter. Any observer designated by Agent shall be
entitled to notice of all meetings of the Credit Parties' and each of their
respective Subsidiaries' Boards of Directors (including committee meetings) and
to information provided to the directors of each such Person. Such observer
shall receive reimbursement for reasonable out-of-pocket expenses from the
Credit Parties and/or their respective Subsidiaries incurred in connection with
attendance at such Boards of Directors, committee and stockholder meetings.

            (d) All rights of Agent under this Section 6.14 shall be exercised
by Agent.

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VII. NEGATIVE COVENANTS

            Each Credit Party, as applicable, jointly and severally, covenants
and agrees that, until full performance and satisfaction, and indefeasible
payment in full in cash, of all the Obligations and termination of this
Agreement:

      7.1 Financial Covenants

            (a) The Borrower shall not violate, and the Borrower shall fully
comply with, the financial covenants set forth in Part A of Annex I to this
Agreement, which annex is incorporated herein and made a part hereof.

            (b) Upon the occurrence of a Recalculation Event, the Borrower shall
(i) notify the Agent immediately of such Recalculation Event, setting forth a
description of such Recalculation Event, and (ii) contemporaneously with
delivery of the notice set forth in Section 7.1(b)(i), a re-calculation, in form
and substance satisfactory to the Agent, showing compliance with the financial
covenants and ECF Threshold set forth in Annex I to this Agreement (taking into
account the loss of cost or tax savings, as applicable) for the most recently
ended twelve month period as if such Recalculation Event occurred at the
beginning of such twelve (12) month period.

      7.2 Indebtedness

            No Credit Party shall create, incur, assume or suffer to exist any
Indebtedness, except the following (collectively, "Permitted Indebtedness"): (a)
Indebtedness under the Loan Documents, (b) the Foothill Loans, provided that the
aggregate principal amount thereof outstanding at any time shall not exceed
$27,500,000, (c) the Subordinated Debentures, (d) Subordinated Debt provided the
aggregate amount of such Subordinated Debt outstanding at any one time shall not
exceed $10,000,000, (e) the Subordinated Seller Note, (f) any Indebtedness set
forth on Schedule 7.2 and replacements thereof, (g) Capitalized Lease
Obligations incurred after the Closing Date provided the aggregate amount
outstanding at any one time shall not exceed $50,000, (h) Indebtedness incurred
after the Closing Date pursuant to purchase money Liens permitted by Section
7.3(f); provided, that the aggregate amount thereof outstanding at any time
shall not exceed $50,000, (i) accounts payable to trade creditors and current
operating expenses (other than for borrowed money) which are not aged more than
seventy-five (75) calendar days from the billing date or forty-five (45) days
from the due date, in each case incurred in the ordinary course of business and
paid within such time period, unless the same are being contested in good faith
and by appropriate and lawful proceedings and such reserves, if any, with
respect thereto as are required by GAAP and (j) unsecured Indebtedness owed by
any Credit Party to any other Credit Party evidenced by an Instrument pledged to
the Agent on behalf of the Lenders as additional Collateral hereunder and upon
which the Agent has a first priority, perfected security interest (subject only
to Priority Permitted Liens). No Credit Party shall make prepayments on any
existing or future Indebtedness to any Person other than to Agent, for its own
account and/or for the benefit of Lenders, or to the extent specifically
permitted by this Agreement or the applicable Subordination Agreement.

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      7.3 Liens

            No Credit Party shall create, incur, assume or suffer to exist any
Lien upon, in or against, or pledge of, any of the Collateral or any of its
properties or assets or any of its shares, securities or other equity or
ownership or partnership interests, whether now owned or hereafter acquired,
except the following (collectively, "Permitted Liens"): (a) Liens under the Loan
Documents or otherwise arising in favor of Agent, for the benefit of itself and
Lenders, (b) Liens arising under the Foothill Loans, (c) Liens imposed by law
for taxes, assessments or charges of any Governmental Authority for claims not
yet due or which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves or other appropriate provisions are
being maintained by such Person in accordance with GAAP, (d) (i) statutory Liens
of landlords (provided that any such landlord has executed a Landlord Waiver and
Consent in form and substance satisfactory to Agent in its Permitted
Discretion), and of carriers, warehousemen, mechanics and/or materialmen, and
(ii) other Liens imposed by law or that arise by operation of law in the
ordinary course of business from the date of creation thereof, in each case only
for amounts not yet due or which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves or other
appropriate provisions are being maintained by such Person in accordance with
GAAP, (e) Liens incurred or deposits made in the ordinary course of business
(including, without limitation, surety bonds and appeal bonds) in connection
with workers' compensation, unemployment insurance and other types of social
security benefits or to secure the performance of tenders, bids, leases,
contracts (other than for the repayment of Indebtedness), statutory obligations
and other similar obligations, (f) purchase money Liens (i) securing
Indebtedness permitted under Section 7.2(h), or (ii) in connection with the
purchase by such Person of equipment in the normal course of business; provided,
that such payables, Indebtedness and amounts shall not exceed any limits on
Indebtedness provided for herein and shall otherwise be Permitted Indebtedness
hereunder, (g) Liens necessary and desirable for the operation of such Person's
business, provided, that with respect to this clause (g) Agent has consented to
such Liens in writing before their creation and existence, the priority of such
Liens and the debt secured thereby are both subject and subordinate in right of
repayment, liens, security and remedies and in all other respects to the Liens
securing the Collateral and to the Obligations and all of the rights and
remedies of Agent and each Lender, all in form and substance satisfactory to
Agent in its sole discretion, (h) Liens on the property of any Credit Party
securing obligations owed to the Borrower, and (i) Liens disclosed on Schedule
7.3 as of the Closing Date.

      7.4 Investments; Investment Property; New Facilities or Collateral;
Subsidiaries

            No Credit Party, directly or indirectly, shall (a) merge with,
purchase, own, hold, invest in or otherwise acquire any obligations or stock or
securities of, or any other interest in, or all or substantially all of the
assets of, any Person or any joint venture, (b) purchase, own, hold, invest in
or otherwise acquire any Investment Property (except those set forth on Schedule
5.3 as of the Closing Date and Cash Equivalents with respect to which Agent, for
itself and the benefit of the Lenders, has a perfected, first priority Lien in
form and substance satisfactory to Agent in its Permitted Discretion), or (c)
make or permit to exist any loans, advances or guarantees to or for the benefit
of any Person or assume, guarantee, endorse, contingently agree to purchase or
otherwise become liable for or upon or incur any obligation of any Person (other
than (i) those created by the Loan Documents, (ii) Permitted Indebtedness
described in Section 7.2 or set forth on Schedule 7.2, (iii) trade credit
extended in the ordinary course of business, (iv) advances for

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business travel, relocation expenses and similar advances made in the ordinary
course of business to officers, directors, employees, and consultants, (v) the
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business), and (vi) unsecured loans and
advances between the Credit Parties evidenced by Instruments pledged to the
Agent on behalf of the Lenders as additional Collateral hereunder and upon which
the Agent has a first priority, perfected security interest (subject only to
Priority Permitted Liens). No Credit Party, directly or indirectly, shall
purchase, lease, own, operate, hold, invest in or otherwise acquire (A) any
property or asset or any Collateral that is located outside of the continental
United States other than EGUK and its assets and investments in or advances to
EGUK in an amount not to exceed $150,000 in the aggregate during any fiscal year
and immaterial amounts of packaging material located in Shanghai, China and in
San Luis Patosi, Mexico, or (B) any Collateral that is located at locations
other than those set forth on Schedule 5.18B, unless such Credit Party shall
provide to Agent at least thirty (30) Business Days prior written notice. No
Credit Party shall have any Subsidiaries other than (i) the Subsidiaries listed
on Schedule 5.3 or (ii) such Subsidiaries which execute a Joinder Agreement and
become a party to such Loan Documents as Agent shall determine in its Permitted
Discretion, and such other documents as may be necessary to comply with the
terms hereof, including but not limited to, Section 6.12(c) hereof.

      7.5 Dividends; Redemptions; Equity

            Notwithstanding any provision of any Loan Document, no Credit Party
shall (a) declare, pay or make any dividend or distribution on any shares of
capital stock or other securities or ownership interests (other than dividends
or distributions payable in its stock, or split-ups or reclassifications of its
stock), (b) apply any of its funds, property or assets to the acquisition,
redemption or other retirement of any capital stock or other securities or
interests or of any options to purchase or acquire any of the foregoing
(provided, however, that such Credit Party may redeem its capital stock from
terminated employees, non-employee directors and consultants pursuant to, but
only to the extent required under, the terms of the related employment or other
compensation-related agreements as long as no Default or Event of Default has
occurred and is continuing or would be caused by or result therefrom), (c)
otherwise make any payments, dividends or Distributions to any stockholder,
director, member, partner or other equity owner in such Person's capacity as
such (other than payments or Distributions from Guarantor to Borrower), (d) make
any payment of any management or related similar fee to any Person, or (e)
issue, sell or create any capital stock or other equity securities other than
Permitted Securities. Notwithstanding the foregoing, so long as Borrower is
treated as a partnership for tax purposes, Borrower may make cash distributions
("Tax Distributions") to each of its partners from time to time in accordance
with Section 5.1 of the Borrower Limited Partnership Agreement as in effect on
the Closing Date in amounts not exceeding the amount of income taxes deemed
payable by its partners with respect to the net income of Borrower (taking into
account losses of Borrower from prior periods utilized in calculating such
amount of income taxes to be paid or actually paid by such partners). If the
aggregate Tax Distributions paid to any such partner with respect to any year
paid on or prior to the date of filing of Borrower's federal income tax return
for such year exceeds the amount permitted to be paid to such partner hereunder,
an Event of Default shall occur if Borrower does not receive a capital
contribution equal to such excess within thirty (30) days of the receipt of
notice of such partner of such excess. If the amounts included in taxable income
of Borrower for any year are decreased as a

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result of an audit, amended return or otherwise, and the amount of Tax
Distributions paid with respect to such year exceed the amount of Tax
Distributions that would have been permitted with respect to such year based
upon such reduced taxable income of Borrower, an Event of Default shall occur if
Borrower does not receive a capital contribution equal to such excess within
thirty (30) days after the earliest to occur of (i) a final determination by the
Internal Revenue Service establishing Borrower's taxable income for such year,
(ii) the date an amended return is filed and (iii) with respect to any such
partner, the date of receipt by such partner of a tax refund attributable to
such excess Tax Distribution received by such partner.

      7.6 Transactions with Affiliates

            Notwithstanding any provision of any Loan Document, no Credit Party
shall enter into or consummate any transaction of any kind with any of its
Affiliates (other than another Credit Party) other than: (a) salary, bonus,
employee stock option and other compensation and employment arrangements with
directors or employees in the ordinary course of business; provided, that no
payments of any bonus, compensation or remuneration or otherwise (except normal
salaries and bonuses consistent with past practices) shall be permitted if a
Default or Event of Default has occurred and remains in effect or would be
caused by or result from such payment, (b) distributions and dividends permitted
pursuant to Section 7.5, (c) transactions with Agent or any Affiliate of Agent,
or (d) other transactions and payments under and pursuant to agreements or other
arrangements entered into by and between a Credit Party and one or more of its
Affiliates or a holder or holders of the Existing Warrant that both (i) reflect
and constitute transactions and payments on overall terms at least as favorable
to such Credit Party as would be the case in an arm's length transaction between
unrelated parties of equal bargaining power, and (ii) if Agent requests, are
subject to such subordination terms and conditions as determined by Agent in its
Permitted Discretion; provided, that notwithstanding the foregoing or any
provision of any Loan Document, no Credit Party shall (A) enter into or
consummate any transaction or agreement pursuant to which it becomes a party to
any mortgage, note, indenture or guarantee evidencing any Indebtedness of any of
its Affiliates or otherwise to become responsible or liable, as a guarantor,
surety or otherwise, pursuant to agreement for any Indebtedness of any such
Affiliate (other than another Credit Party), (B) notwithstanding Section 7.6(A)
hereof, make any payment to any of its Affiliates in excess of $10,000
individually or $50,000 in the aggregate without the prior written consent of
Agent (other than payments pursuant to transactions permitted under clauses (a),
(b) or (d) of this Section 7.6) or (C) notwithstanding Sections 7.6(A) and
7.6(B) hereof, enter into or consummate any transaction or agreement with
respect to intercompany receivables, including any cash advances or transfers of
inventory, with EGUK, having an aggregate net dollar value at any time
outstanding in excess of $3,300,000 less any amounts advanced to EGUK pursuant
to Section 7.4(A) except on terms and conditions satisfactory to the Agent.
Notwithstanding any other provision of any Loan Document, no Credit Party shall
enter into, make, take or do any transaction, payment or action permitted under
Section 7.6 or make any payment to an Affiliate if a Default or Event of Default
has occurred and remains in effect or would be caused by or result therefrom
(other than payments specifically permitted under clause (a) of this Section
7.6).

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      7.7 Charter Documents; Fiscal Year; Dissolution; Use of Proceeds;
Insurance Policies; Disposition of Collateral; Taxes; Trade Names

            No Credit Party shall (a) amend, modify, restate or change its
certificate of incorporation or bylaws or partnership agreement or operating
agreement or similar charter documents in a manner that would be materially
adverse to Agent or any Lender, as determined by the Administrative Agent in its
Permitted Discretion, (b) change its state of organization or change its
corporate name without thirty (30) Business Days prior written notice to Agent,
(c) change its fiscal year, (d) amend, alter or suspend or terminate or make
provisional in any material way, any Permit the suspension, amendment,
alteration or termination of which could reasonably be expected to be, have or
result in a Material Adverse Effect without the prior written consent of Agent,
which consent shall not be unreasonably withheld, (e) wind up, liquidate or
dissolve (voluntarily or involuntarily) or commence or suffer any proceedings
seeking or that would result in any of the foregoing, (f) use any proceeds of
any Loans for "purchasing" or "carrying" "margin stock" as defined in
Regulations T, U or X of the Board of Governors of the Federal Reserve System
for any use not contemplated or permitted by this Agreement, (g) amend, modify,
restate or change any insurance policy in any material respect (including,
without limitation, any material increase in the amount of any deductibles
payable by the Credit Parties under any such insurance policy or any material
change in the coverage, coverage amount, beneficiaries, loss payees and/or
additional insureds), (h) sell, lease, transfer, pledge, assign or otherwise
dispose of any Collateral or any interest therein (except as permitted under
this Agreement), (i) engage, directly or indirectly, in any business other than
the Business, (j) change its federal tax employer identification number or
establish new or additional trade names without providing not less than thirty
(30) days advance written notice to Agent, or (k) revoke, alter or amend any Tax
Information Authorization (on IRS Form 8821 or otherwise) given to Agent.

            Anything contained in this Agreement or any other Loan Document to
the contrary notwithstanding, neither the general partner nor any limited
partner (other than Central Garden) of the Borrower shall (i) engage in any
business or other activities, or enter into or execute any business transaction,
(ii) own any material asset, assets or property, other than its respective
equity interests in Borrower and general intangibles resulting from the Loan
Documents, (iii) incur any Indebtedness or Contingent Obligations (other than
Indebtedness and Contingent Obligations arising from the Loan Documents to which
they are a party and, with respect to the general partner of the Borrower,
Indebtedness or Contingent Obligations by operation of law due to its status as
the general partner of the Borrower), or (iv) grant any Liens in any of its
Property (other than Liens granted to Agent, for the benefit of itself and
Lender, under the Loan Documents and Permitted Liens).

      7.8 Transfer of Assets

            (a) No Credit Party shall sell, lease, transfer, pledge, assign or
otherwise dispose of any Collateral or any interest therein, or agree to do any
of the foregoing, except that:

                  (i) any Credit Party may lease (other than by a sale-leaseback
transaction) as lessee real or personal property or surrender all or a portion
of a lease of the same, in each case in the ordinary course of business (so long
as such lease does not create or result in and is not otherwise a Capitalized
Lease Obligation prohibited under this Agreement), provided

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that such Landlord Waivers and Consents as are required by Agent in its
Permitted Discretion are signed and delivered to Agent with respect to any lease
of real property;

                  (ii) any Credit Party may sell obsolete, worn out or replaced
equipment or excess equipment no longer needed in the ordinary course of
business;

                  (iii) any Credit Party may sell Inventory in the ordinary
course of business;

                  (iv) any Credit Party may sell material assets or properties
only so long as the Borrower complies with the mandatory prepayment provisions
of Section 2.7 in connection therewith; and

                  (v) any Credit Party may transfer assets to the Borrower.

            (b) The Credit Parties shall not transfer any material Collateral,
whether in one transaction or a series of transactions, to any location for
which a Landlord Waiver and Consent has not been obtained.

      7.9 Contingent Obligations and Risks

            No Credit Party shall enter into any Contingent Obligations or
assume, guarantee, endorse, contingently agree to purchase or otherwise become
liable for or upon or incur any obligation of any Person (other than any other
Credit Party); provided, however, that nothing contained in this Section 7.9
shall prohibit any Credit Party from endorsing checks in the ordinary course of
its business. No Credit Party shall assume or become subject to any risks or
liabilities other than those relating to its respective Business.

      7.10 Truth of Statements

            No Credit Party shall furnish to Agent or any Lender any certificate
or other document that contains any untrue statement of a material fact or that
omits to state a material fact necessary to make it not misleading in light of
the circumstances under which it was furnished.

      7.11 Payment on Subordinated Debt

            Except to the extent permitted pursuant to applicable Subordination
Agreements, no Credit Party shall (a) make any payment of any part or all of any
Subordinated Debt, including, without limitation, any prepayments, (b)
repurchase, redeem, prepay or retire any instrument evidencing any such
Subordinated Debt prior to maturity, or (c) enter into any agreement (oral or
written) which could in any way be construed to amend, modify or alter in a
manner adverse to Agent or any Lender, as determined by Agent in its Permitted
Discretion, or to terminate any one or more instruments or agreements evidencing
or relating to any Subordinated Debt; provided, that the Borrower may make
regularly scheduled payments of interest on account of the Subordinated
Debentures so long as no PIK Event shall have occurred and remain in existence
pursuant to the terms hereof. From the Closing Date through October __, 2006, a
Makewell Investment may be made in order to meet the applicable ECF Threshold
within fifteen (15) days from the date required under Section 6.1(a) for the
delivery of quarterly

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or annual financial statements or the delivery of the notice under Section
7.1(b), as applicable. Upon the occurrence of a PIK Event, the Borrower may not
make regularly scheduled payments of interest on account of the Subordinated
Debentures until such time as the Borrower has been in compliance with the terms
and conditions of this Agreement for two (2) consecutive fiscal quarters and the
Borrower has delivered to the Agent calculations (in form and substance
satisfactory to the Agent in its Permitted Discretion) showing pro forma
compliance with the applicable ECF Threshold herein calculated assuming interest
on the Subordinated Debentures was paid in cash. In addition to the foregoing,
for any period in which the Borrower is otherwise permitted to make payments of
interest on the Subordinated Debentures, the Borrower may make payments of any
deferred interest on the Subordinated Debentures so long as (1) such payment
would not result in a violation of financial covenants or the applicable ECF
Threshold on a pro forma basis (including any liquidity restriction in the
agreements relating to the Foothill Loans) and (2) the difference between (x)
Excess Cash Flow (calculated for the immediately preceding twelve (12) calendar
months) and (y) the amount of deferred interest payments, is positive.

      7.12 Modifications of Agreements

            No Credit Party shall make, or agree to make, any modification,
amendment or waiver of any of the terms or provisions of, and will not fail to
enforce or diligently pursue its remedies under, and any and all documents
and/or certificates executed in connection with the Subordinated Debt, in each
case as and from in existence on the Closing Date, in a manner adverse to Agent
or any Lender as determined by Agent in its Permitted Discretion.

      7.13 Negative Pledge

            (a) Except for Permitted Liens of type described in clauses (b),
(c), (d), (f), (g) and (h) of Section 7.3 hereof, no Credit Party shall pledge
or grant a Lien on any real property which it owns at any time to any Person
other than Agent for itself and the benefit of Lenders.

            (b) Except for Permitted Liens, no Credit Party shall pledge or
grant a Lien on any motor vehicles which it owns at any time to any Person other
than Agent for itself and the benefit of Lenders.

VIII. EVENTS OF DEFAULT

            The occurrence of any one or more of the following shall constitute
an "Event of Default":

            (a) The Credit Parties shall fail to pay any amount on the
Obligations or provided for in any Loan Document within four (4) days of the
date when due (in all cases, whether on any payment date, at maturity, by reason
of acceleration, by notice of intention to prepay, by required prepayment or
otherwise);

            (b) any representation, statement or warranty made or deemed made by
any Credit Party in any Loan Document or in any other certificate, document,
report or opinion delivered in conjunction with any Loan Document to which it is
a party, shall not be true and correct in all material respects or shall have
been false or misleading in any material respect on

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the date when made or deemed to have been made (except to the extent already
qualified by materiality, in which case it shall be true and correct in all
respects and shall not be false or misleading in any respect) except those made
as of a specific date;

            (c) any Credit Party or other party thereto, other than Agent or any
Lender, shall be in violation, breach or default of, or shall fail to perform,
observe or comply with any covenant, obligation or agreement set forth in, or
any event of default occurs under, any Loan Document and such violation, breach,
default, event of default or failure shall not be cured within the applicable
period set forth in the applicable Loan Document; provided that, with respect to
the affirmative covenants set forth in Article VI (other than Sections 6.3(b),
(f), (g) and (h), 6.8(c), 6.9 and 6.11 for which there shall be no cure period
and Section 6.2 for which there shall be a cure period to the extent indicated
in subsection (a) above), there shall be a thirty (30) calendar day cure period
(other than Section 6.1 for which there shall be a five (5) calendar day cure
period) commencing from the earlier of (i) Receipt by such Person of written
notice of such breach, default, violation or failure, and (ii) the time at which
such Person or any authorized officer thereof knew or became aware, or should
reasonably have known or been aware, of such failure, violation, breach or
default.

            (d) (i) any of the Loan Documents ceases to be binding and
enforceable, or (ii) any Lien created thereunder ceases to constitute a valid
first priority (other than with respect to property or assets covered by
Priority Permitted Liens) perfected Lien on the Collateral in accordance with
the terms thereof, or Agent, for the benefit of itself and Lenders, ceases to
have a valid perfected first priority security interest in (subject to Priority
Permitted Liens) any of the Collateral or any securities pledged to Agent, for
the benefit of itself and Lenders, pursuant to the Security Documents;

            (e) (i) one or more judgments or decrees is rendered against any
Credit Party in an amount in excess of $250,000 individually or $500,000 in the
aggregate (excluding judgments to the extent covered by insurance of such
Person), which is/are not satisfied, stayed, vacated or discharged of record
within thirty (30) calendar days of being rendered;

            (f) (i) any default or breach occurs, which is not cured within any
applicable grace period or waived, (x) in the payment of any amount with respect
to any Indebtedness (other than the Obligations) of any Credit Party in excess
of $100,000 individually or $250,000 in the aggregate, (y) in the performance,
observance or fulfillment of any provision contained in any agreement, contract,
document or instrument to which any Credit Party is a party or to which any of
their properties or assets are subject or bound (1) that is a material (as
determined by Agent in its Permitted Discretion) agreement of such Credit Party
and such default or breach continues for more than any applicable grace period
or permits the other party thereto to terminate such agreement, setoff any
amounts or otherwise reduce or limit any amounts owed by such other party
thereunder, (2) under or pursuant to which any Indebtedness in excess of
$100,000 individually or $250,000 in the aggregate was issued, created, assumed,
guaranteed or secured and such default or breach continues for more than any
applicable grace period or permits the holder of any such Indebtedness to
accelerate the maturity thereof, or (3) that is between any Credit Party and
Agent or any Lender or Affiliate of Agent or any Lender (other than the Loan
Documents), (ii) any Indebtedness of any Credit Party in excess of $100,000
individually or $250,000 in the aggregate is declared to be due and payable or
is required to be prepaid (other than by a regularly scheduled payment) prior to
the stated maturity thereof, or any

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obligation of such Person for the payment of Indebtedness in excess of $100,000
individually or $250,000 in the aggregate (other than the Obligations) is not
paid when due or within any applicable grace period, or any such obligation
becomes or is declared to be due and payable before the expressed maturity
thereof, or there occurs any event which would cause any such obligation to
become, or allow any such obligation to be declared, due and payable, or (iii)
an Event of Default has occurred and is continuing under the Subordinated
Debentures (for the avoidance of doubt, non-payment of interest under the
Subordinated Debentures when the Borrower has elected to pay such interest
in-kind pursuant to the terms of the related Junior Subordinated Indenture shall
not constitute an Event of Default);

            (g) any Credit Party shall (i) be unable to pay its debts generally
as they become due, (ii) file a petition under any insolvency statute, (iii)
make a general assignment for the benefit of its creditors, (iv) commence a
proceeding for the appointment of a receiver, trustee, liquidator or conservator
of itself or of the whole or any substantial part of its property or shall
otherwise be dissolved or liquidated, or (v) file a petition seeking
reorganization or liquidation or similar relief under any Debtor Relief Law or
any other applicable law or statute;

            (h) (i) a court of competent jurisdiction shall (A) enter an order,
judgment or decree appointing a custodian, receiver, trustee, liquidator or
conservator of any Credit Party or the whole or any substantial part of any such
Person's properties, which shall continue unstayed and in effect for a period of
sixty (60) calendar days, (B) shall approve a petition filed against any Credit
Party seeking reorganization, liquidation or similar relief under the any Debtor
Relief Law or any other applicable law or statute, which is not dismissed within
sixty (60) calendar days or, (C) under the provisions of any Debtor Relief Law
or other applicable law or statute, assume custody or control of any Credit
Party or of the whole or any substantial part of any such Person's properties,
which is not irrevocably relinquished within sixty (60) calendar days, or (ii)
there is commenced against any Credit Party any proceeding or petition seeking
reorganization, liquidation or similar relief under any Debtor Relief Law or any
other applicable law or statute, which (A) is not unconditionally dismissed
within sixty (60) calendar days after the date of commencement, or (B) is with
respect to which any Credit Party takes any action to indicate its approval of
or consent;

            (i) (i) any Change of Control occurs or (ii) any Material Adverse
Effect or Material Adverse Change occurs;

            (j) Agent or any Lender receives any indication or evidence that any
Credit Party may have directly or indirectly been engaged in any type of
activity which, in Agent's Permitted Discretion, might reasonably result in
forfeiture of any material (as determined by Agent in its Permitted Discretion)
Collateral to any Governmental Authority which shall have continued unremedied
for a period of twenty (20) calendar days after written notice from Agent;

            (k) uninsured damage to, or loss, theft or destruction of, any
portion of the Collateral occurs that exceeds $250,000 in the aggregate;

            (l) any Credit Party or any of its directors or senior officers is
criminally indicted or convicted of or under (a) a felony, or (b) any law that
could lead to a forfeiture of any material (as determined by Agent in its
Permitted Discretion) Collateral;

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            (m) the issuance of any process for levy, attachment or garnishment
or execution upon or prior to any judgment against any Credit Party or any of
its or their material property or assets or against any of the Collateral, in
each case which is/are not satisfied, stayed, vacated, dismissed or discharged
within thirty (30) calendar days of being issued or executed; or

            (n) any Credit Party, as applicable, does, or enters into or becomes
a party to any agreement or commitment to do, or cause to be done, any of the
things described in this Article VIII or otherwise prohibited by any Loan
Document (subject to any cure periods set forth therein);

then, and in any such event, notwithstanding any other provision of any Loan
Document (I) Agent may (and at the request of Requisite Lenders, shall), by
notice to the Borrower (i) terminate Lenders' obligations hereunder, whereupon
the same shall immediately terminate, and (ii) declare all or any of the Loans
and/or Notes, all interest thereon and all other Obligations to be due and
payable immediately (except in the case of an Event of Default under Section
8(d), (g), or (h) (other than an Event of Default under Section 8(g) or (h) with
respect to any Guarantor), in which event all of the foregoing shall
automatically and without further act by Agent or any Lender be due and payable
and Lenders obligations hereunder shall terminate; provided, that, with respect
to non-material breaches or violations that constitute Events of Default under
clause (ii) of Section 8(d), there shall be a five (5) Business Day cure period
commencing from the earlier of (A) Receipt by the applicable Person of written
notice of such breach or violation or of any event, fact or circumstance
constituting or resulting in any of the foregoing, and (B) the time at which
such Person or any authorized officer thereof knew or became aware, or should
have known or been aware, of such breach or violation and resulting Event of
Default or of any event, fact or circumstance constituting or resulting in any
of the foregoing)), in each case without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Credit
Parties, and (II) effective immediately upon Receipt of notice from Agent
(unless specifically prohibited and provided for in Article VII, in which case
effective immediately upon an Event of Default without any action of Agent or
Lenders), no action permitted to be taken under Article VII hereof may be taken.

IX. RIGHTS AND REMEDIES AFTER DEFAULT

      9.1 Rights and Remedies

            (a) In addition to the acceleration provisions set forth in Article
VIII above, upon the occurrence and continuation of an Event of Default, Agent
shall have the right to (and at the request of Requisite Lenders, shall)
exercise any and all rights, options and remedies provided for in any Loan
Document, under the UCC or at law or in equity, including, without limitation,
the right to (i) apply any property of any Credit Party held by Agent, for the
benefit of Lenders, or Lenders to reduce the Obligations, (ii) foreclose the
Liens created under the Loan Documents, (iii) realize upon, take possession of
and/or sell any Collateral or securities pledged, with or without judicial
process, (iv) exercise all rights and powers with respect to the Collateral as
any Credit Party, as applicable, might exercise, (v) collect and send notices
regarding the Collateral, with or without judicial process, (vi) by its own
means or with judicial assistance, enter any premises at which Collateral and/or
pledged securities are located, or render any of the foregoing unusable or
dispose of the Collateral and/or pledged securities on such premises

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without any liability for rent, storage, utilities, or other sums, and no Credit
Party shall resist or interfere with such action, (vii) at the Borrower's
expense, require that all or any part of the Collateral be assembled and made
available to Agent at any place designated by Agent in its Permitted Discretion,
and/or (viii) relinquish or abandon any Collateral or securities pledged or any
Lien thereon. Notwithstanding any provision of any Loan Document, Agent, in its
Permitted Discretion, shall have the right, at any time that any Credit Party
fails to do so, and from time to time, without prior notice, to: (i) obtain
insurance covering any of the Collateral to the extent required hereunder; (ii)
pay for the performance of any of the Obligations; (iii) discharge taxes, levies
and/or Liens on any of the Collateral that are in violation of any Loan Document
unless such Credit Party is in good faith with due diligence by appropriate
proceedings contesting those items; and (iv) pay for the maintenance, repair
and/or preservation of the Collateral. Such expenses and advances shall be added
to the Obligations until reimbursed to Agent and shall be secured by the
Collateral, and such payments by Agent shall not be construed as a waiver by
Agent or Lenders of any Event of Default or any other rights or remedies of
Agent and Lenders.

            (b) The Credit Parties agree that notice received by any of them at
least ten (10) calendar days before the time of any intended public sale, or the
time after which any private sale or other disposition of Collateral is to be
made, shall be deemed to be reasonable notice of such sale or other disposition.
If permitted by applicable law, any perishable Collateral which threatens to
speedily decline in value or which is sold on a recognized market may be sold
immediately by Agent without prior notice to the Credit Parties. At any sale or
disposition of Collateral or securities pledged, Agent may (to the extent
permitted by applicable law) purchase all or any part thereof free from any
right of redemption by any Credit Party which right is hereby waived and
released. The Credit Parties jointly and severally covenant and agree not to,
and not to permit or cause any of their Subsidiaries to, interfere with or
impose any obstacle to Agent's exercise of its rights and remedies with respect
to the Collateral. In dealing with or disposing of the Collateral or any part
thereof, Agent and Lenders shall not be required to give priority or preference
to any item of Collateral or otherwise to marshal assets or to take possession
or sell any Collateral with judicial process.

      9.2 Application of Proceeds

            In addition to any other rights, options and remedies Agent and
Lenders have under the Loan Documents, the UCC, at law or in equity, all
dividends, interest, rents, issues, profits, fees, revenues, income and other
proceeds collected or received from collecting, holding, managing, renting,
selling, or otherwise disposing of all or any part of the Collateral or any
proceeds thereof upon exercise of its remedies hereunder upon the occurrence and
continuation of an Event of Default shall be applied in the following order of
priority: (i) first, to the payment of all costs and expenses of such
collection, storage, lease, holding, operation, management, sale, disposition or
delivery and of conducting the Credit Parties' business and of maintenance,
repairs, replacements, alterations, additions and improvements of or to the
Collateral, and to the payment of all sums which Agent or Lenders may be
required or may elect to pay, if any, for taxes, assessments, insurance and
other charges upon the Collateral or any part thereof, and all other payments
that Agent or Lenders may be required or authorized to make under any provision
of this Agreement (including, without limitation, in each such case, in-house
documentation and diligence fees and legal expenses, search, audit, recording,
professional and filing fees and expenses and reasonable attorneys' fees and all
expenses, liabilities and advances made or incurred in connection therewith);
(ii) second, to the payment of all Obligations in such

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order as determined by Agent in its sole discretion; (iii) third, to the
satisfaction of indebtedness secured by any subordinate security interest of
record in the Collateral if written notification of demand therefor is received
before distribution of the proceeds is completed, provided, that, if requested
by Agent, the holder of a subordinate security interest shall furnish reasonable
proof of its interest, and unless it does so, Agent and Lenders need not address
their claims; and (iv) fourth, to the payment of any surplus then remaining to
the Borrower, unless otherwise provided by law or directed by a court of
competent jurisdiction, provided that the Credit Parties shall be liable for any
deficiency if such proceeds are insufficient to satisfy the Obligations or any
of the other items referred to in this Section (other than Section 9.2(iii) to
the extent the Obligations have been indefeasibly paid in full in cash).

      9.3 Rights to Appoint Receiver

            Without limiting and in addition to any other rights, options and
remedies Agent and Lenders have under the Loan Documents, the UCC, at law or in
equity, upon the occurrence and continuation of an Event of Default, Agent and
Lenders shall have the right to apply for the appointment of a receiver by a
court of competent jurisdiction in any action taken by Agent to enforce its and
Lenders' rights and remedies in order to manage, protect and preserve the
Collateral and continue the operation of the business of the Credit Parties and
to collect all revenues and profits thereof and apply the same to the payment of
all expenses and other charges of such receivership including the compensation
of the receiver and to the payments as aforesaid until a sale or other
disposition of such Collateral shall be finally made and consummated.

      9.4 Blocked Accounts

            Without limiting any other provision of any Loan Document and in
addition to any other rights, options and remedies, Agent and Lenders have under
the Loan Documents, the UCC, at law or in equity, upon the occurrence and
continuation of any Event of Default, Agent shall have the right to require that
all amounts in all Deposit Accounts of any Credit Party and that all cash
payments received by such Credit Party is paid and delivered directly into a
blocked account under the sole dominion and control of Agent and that all such
amounts are immediately transferred into a depository account or accounts
maintained by Agent or an Affiliate of Agent at such bank as Agent may determine
in its sole discretion.

      9.5 Rights and Remedies not Exclusive

            Agent shall have the right in its sole discretion to determine which
rights, Liens and/or remedies Agent or Lenders may at any time pursue,
relinquish, subordinate or modify, and such determination will not in any way
modify or affect any of Agent's or Lenders' rights, Liens or remedies under any
Loan Document, applicable law or equity. The enumeration of any rights and
remedies in any Loan Document is not intended to be exhaustive, and all rights
and remedies of Agent described in any Loan Document are cumulative and are not
alternative to or exclusive of any other rights or remedies which Agent
otherwise may have. The partial or complete exercise of any right or remedy
shall not preclude any other further exercise of such or any other right or
remedy.

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X. WAIVERS AND JUDICIAL PROCEEDINGS

      10.1 Waivers

            Except as expressly provided for herein, each Credit Party hereby
waives set off, counterclaim, demand, presentment, protest, all defenses with
respect to any and all instruments and all notices and demands of any
description, and the pleading of any statute of limitations as a defense to any
demand under any Loan Document. Each Credit Party hereby waives any and all
defenses and counterclaims it may have or could interpose in any action or
procedure brought by Agent or any Lender to obtain an order of court recognizing
the assignment of, or Lien of Agent, for the benefit of itself and Lenders, in
and to, any Collateral.

      10.2 Delay; No Waiver of Defaults

            No course of action or dealing, renewal, release or extension of any
provision of any Loan Document, or single or partial exercise of any such
provision, or delay, failure or omission on Agent's or Lenders' part in
enforcing any such provision shall affect the liability of any Credit Party or
operate as a waiver of such provision or affect the liability of any Credit
Party or preclude any other or further exercise of such provision. No waiver by
any party to any Loan Document of any one or more defaults by any other party in
the performance of any of the provisions of any Loan Document shall operate or
be construed as a waiver of any future default, whether of a like or different
nature, and each such waiver shall be limited solely to the express terms and
provisions of such waiver. Notwithstanding any other provision of any Loan
Document, by completing the Closing under this Agreement and/or funding the
Loans, neither Agent nor any Lender waives any breach of any representation or
warranty of under any Loan Document, and all of Agent's and Lenders' claims and
rights resulting from any such breach or misrepresentation are specifically
reserved.

      10.3 Jury Waiver

            EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION ARISING UNDER THE LOAN DOCUMENTS
OR IN ANY WAY CONNECTED WITH OR INCIDENTAL TO THE DEALINGS OF THE PARTIES WITH
RESPECT TO THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY, WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE. EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENTS OF THE PARTIES TO THE WAIVER OF
THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY.

      10.4 Amendment and Waivers

            (a) Except as otherwise provided herein, no amendment, modification,
termination, or waiver of any provision of this Agreement or any Loan Document,
or consent to any departure by the Credit Parties therefrom, shall in any event
be effective unless the same

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shall be in writing and signed by Requisite Lenders, Agent and the Credit
Parties; provided, that no amendment, modification, termination, or waiver
shall, unless in writing and signed by each Lender directly affected thereby, do
any of the following and that the agreement of the Credit Parties shall not be
required for any amendment, modification, termination, or waiver that does any
of the following (other than item (vi) below to the extent adverse to the Credit
Parties and unless any of the following would increase any commitment fee owing
by the Borrower): (i) increase the Commitment of any individual Lender (which
action shall be deemed to directly affect all Lenders); (ii) reduce the
principal of, rate of interest on or fees payable with respect to any Loan;
(iii) extend the scheduled due date, or reduce the amount due on any scheduled
due date, of any installment of principal, interest, or fees payable with
respect to any Loan, or waive, forgive, extend, defer or postpone the payment
thereof; (iv) change the percentage of the Commitments, of the aggregate unpaid
principal amount of the Loans, or of Lenders which shall be required for Lenders
or any of them to take any action hereunder (which action shall be deemed to
directly affect all Lenders) or alter, as between or among the Lenders, the
amount payable to each hereunder; (v) except as otherwise permitted herein
(including, without limitation, under Section 7.8 hereof) or in the other Loan
Documents, release any Guaranty or release any of the Collateral which has an
aggregate value in excess of $500,000 (which action shall be deemed to directly
affect all Lenders) (provided, that consent to such release shall not be
required if such release is made after and during the continuance of an Event of
Default in connection with the sale or disposition of the Collateral by Agent);
(vi) amend, modify or waive this Section 10.4 or the definitions of the terms
used in this Section 10.4 insofar as the definitions affect the substance of
this Section 10.4 (which action shall be deemed to directly affect all Lenders);
(vii) consent to the assignment or other transfer by any Credit Party or any
other party (other than Agent or any Lender) to any Loan Documents of any of
their rights and obligations under any Loan Document; and, provided, further,
that no amendment, modification, termination or waiver affecting the rights or
duties of Agent under any Loan Document shall in any event be effective, unless
in writing and signed by Agent, in addition to Lenders required herein above to
take such action.

            (b) Each amendment, modification, termination or waiver shall be
effective only in the specific instance and for the specific purpose for which
it was given. No amendment, modification, termination or waiver shall be
required for Agent, for the benefit of itself and the benefit of Lenders, to
take additional Collateral pursuant to any Loan Document.

            (c) Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 10.4 shall be binding upon Agent, each
Lender and the Credit Parties.

XI. EFFECTIVE DATE AND TERMINATION

      11.1 Effectiveness and Termination

            Subject to Agent's and Lenders rights to accelerate the Loans upon
or after any Event of Default, this Agreement shall continue in full force and
effect until the Maturity Date, unless terminated sooner as provided in this
Section 11.1. The Credit Parties may not terminate this Agreement or any Loan
without terminating the entire Agreement and all Loans. The Borrower may
terminate this Agreement at any time upon not less than thirty (30) calendar
days' prior written notice to Agent and upon full performance and indefeasible
payment in full in cash

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Term Loan and Security Agreement
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of all Obligations on or prior to such 30th calendar day after Receipt by Agent
of such written notice. All of the Obligations shall be immediately due and
payable upon the earlier of the Maturity Date or any such termination on the
Maturity Date or the termination date stated in any notice of termination, as
applicable (the "Termination Date"); provided, that, notwithstanding any other
provision of any Loan Document, a Termination Date voluntarily caused by the
Borrower shall be effective no earlier than the first Business Day of the month
following the expiration of the thirty (30) calendar days' prior written notice
period. Notwithstanding the foregoing, any termination notice by the Borrower
pursuant to this Section 11.1 shall be revocable; provided, that any revocation
shall be by written notice by the Borrower to Agent and to the extent the
Borrower wishes to terminate this Agreement after any such revocation it shall
do so only in compliance with the time periods and other requirements of this
Section 11.1 (i.e., once a termination notice is revoked, any subsequent
termination notice shall be subject to the full advance notice and effectiveness
requirements of this Section 11.1). Notwithstanding any other provision of any
Loan Document, no termination of this Agreement shall affect any Lender's or
Agent's rights or any of the Obligations existing as of the effective date of
such termination, and the provisions of the Loan Documents shall continue to be
fully operative until the Obligations have been fully performed and indefeasibly
paid in cash in full. The Liens granted to Agent, for the benefit of itself and
Lenders, under the Security Documents and the financing statements filed
pursuant thereto and the rights and powers of Agent and Lenders shall continue
in full force and effect notwithstanding the fact that the Borrower's borrowings
hereunder may from time to time be in a zero or credit position until all of the
Obligations have been fully performed and indefeasibly paid in full in cash.

      11.2 Survival

            All obligations, covenants, agreements, representations, warranties,
waivers and indemnities made by the Borrower or any Guarantor in any Loan
Document shall survive the execution and delivery of the Loan Documents, the
Closing, the making and funding of the Loans and any termination of this
Agreement until all Obligations are fully performed and indefeasibly paid in
full in cash. The obligations and provisions of Sections 3.2, 3.4, 6.13, 10.1,
10.3, 11.1, 11.2, 13.3, 13.4, 13.7, 13.9, 13.10 and 13.11 and Article XII shall
survive termination of the Loan Documents and any payment, in full or in part,
of the Obligations.

XII. AGENCY PROVISIONS

      12.1 Agent

            (a) Appointment. Each Lender hereby designates and appoints
CapitalSource as the administrative agent, payment agent and collateral agent,
under this Agreement and the other Loan Documents, and each Lender hereby
irrevocably authorizes CapitalSource, as the administrative agent, payment agent
and collateral agent for such Lender, to take such action or to refrain from
taking such action on its behalf under the provisions of this Agreement and the
other Loan Documents and to exercise such powers and perform such duties as are
delegated to the Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Agent agrees to act as such on the conditions contained in this Article XII. The
provisions of this Article XII are solely for the benefit of Agent and Lenders,
and the Credit Parties shall have no rights as a third-party beneficiary of any
of the provisions of this Article XII other than the second sentence of Section

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Term Loan and Security Agreement
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12.1(h)(iii). Agent may perform any of its duties hereunder, or under the Loan
Documents, by or through its agents or employees.

            (b) Nature of Duties. In performing its functions and duties under
this Agreement, Agent is acting solely on behalf of Lenders and its duties are
administrative in nature and does not assume and shall not be deemed to have
assumed any obligation toward or relationship of agency or trust with or for
Lenders, other than as expressly set forth herein and in the other Loan
Documents, or the Credit Parties. Agent shall have no duties, obligations or
responsibilities except those expressly set forth in this Agreement or in the
other Loan Documents. Agent shall not have by reason of this Agreement or any
other Loan Document a fiduciary relationship in respect of any Lender. Except
for information, notices, reports, and other documents expressly required to be
furnished to Lenders by the Agent hereunder or given to the Agent for the
account of or with copies for Lenders, each Lender shall make its own
independent investigation of the financial condition and affairs of the Credit
Parties in connection with the extension of credit hereunder and shall make its
own appraisal of the creditworthiness of the Credit Parties, and Agent shall
have no duty or responsibility, either initially or on a continuing basis, to
provide any Lender with any credit or other information with respect thereto,
whether coming into its possession before the Closing Date or at any time or
times thereafter. If Agent seeks the consent or approval of any Lenders to the
taking or refraining from taking any action hereunder, then Agent shall send
prior written notice thereof to each Lender. Agent shall promptly notify (in
writing) each Lender any time that the applicable percentage of Lenders have
instructed Agent to act or refrain from acting pursuant hereto.

            (c) Rights, Exculpation, Etc. Neither Agent nor any of its officers,
directors, managers, members, equity owners, employees or agents shall be liable
to any Lender for any action lawfully taken or omitted by them hereunder or
under any of the other Loan Documents, or in connection herewith or therewith.
Notwithstanding the foregoing, Agent shall be obligated on the terms set forth
herein for performance of its express duties and obligations hereunder, and
Agent shall be liable with respect to its own gross negligence or willful
misconduct. Agent shall not be liable for any apportionment or distribution of
payments made by it in good faith, and if any such apportionment or distribution
is subsequently determined to have been made in error, the sole recourse of any
Lender to whom payment was due but not made shall be to recover from other
Lenders any payment in excess of the amount to which they are determined to be
entitled (and such other Lenders hereby agree to return to such Lender any such
erroneous payments received by them). In performing its functions and duties
hereunder, Agent shall exercise the same care which it would in dealing with
loans for its own account. Agent shall not be responsible to any Lender for any
recitals, statements, representations or warranties made by the Credit Parties
herein or for the execution, effectiveness, genuineness, validity,
enforceability, collectability, or sufficiency of this Agreement or any of the
other Loan Documents or the transactions contemplated thereby, or for the
financial condition of the Credit Parties. Agent shall not be required to make
any inquiry concerning either the performance or observance of any of the terms,
provisions, or conditions of this Agreement or any of the Loan Documents or the
financial condition of the Credit Parties, or the existence or possible
existence of any Default or Event of Default. Agent may at any time request
instructions from Lenders with respect to any actions or approvals which by the
terms of this Agreement or of any of the other Loan Documents Agent is permitted
or required to take or to grant, and Agent shall be absolutely entitled to
refrain from taking any action or to withhold any approval and shall not be
under any

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liability whatsoever to any Person for refraining from taking any action or
withholding any approval under any of the Loan Documents until it shall have
received such instructions from the applicable percentage of Lenders. Without
limiting the foregoing, no Lender shall have any right of action whatsoever
against Agent as a result of Agent acting or refraining from acting under this
Agreement or any of the other Loan Documents in accordance with the instructions
of the applicable percentage of Lenders and notwithstanding the instructions of
Lenders, Agent shall have no obligation to take any action if it, in good faith
believes that such action exposes Agent or any of its officers, directors,
managers, members, equity owners, employees or agents to any personal liability
unless Agent receives an indemnification reasonably satisfactory to it from
Lenders with respect to such action.

            (d) Reliance. Agent shall be entitled to rely upon any written
notices, statements, certificates, orders or other documents or any telephone
message or other communication (including any writing, telex, telecopy or
telegram) believed by it in good faith to be genuine and correct and to have
been signed, sent or made by the proper Person, and with respect to all matters
pertaining to this Agreement or any of the other Loan Documents and its duties
hereunder or thereunder, upon advice of legal counsel, independent accountants,
and other experts selected by Agent in its sole discretion.

            (e) Indemnification. Each Lender, severally and not (i) jointly or
(ii) jointly and severally, agrees to reimburse and indemnify and hold harmless
Agent and its officers, directors, managers, members, equity owners, employees
and agents (to the extent not reimbursed by the Credit Parties), ratably
according to their respective Pro Rata Share in effect on the date on which
indemnification is sought under this subsection of the total outstanding
obligations (or, if indemnification is sought after the date upon which the
Commitments shall have terminated and the Loans shall have been paid in full,
ratably in accordance with their Pro Rata Share immediately prior to such date
of the total outstanding obligations), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, advances, or disbursements of any kind or nature whatsoever which may
be imposed on, incurred by, or asserted against Agent or any of its officers,
directors, managers, members, equity owners, employees or agents in any way
relating to or arising out of this Agreement or any of the other Loan Documents
or any action taken or omitted by Agent under this Agreement or any of the other
Loan Documents; provided, however, that no Lender shall be liable for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, advances or disbursements
resulting from Agent's gross negligence or willful misconduct. The obligations
of Lenders under this Article XII shall survive the payment in full of the
Obligations and the termination of this Agreement.

            (f) CapitalSource Individually. With respect to the Loans made by
it, and the Notes issued to it, CapitalSource shall have and may exercise the
same rights and powers hereunder and under the other Loan Documents and is
subject to the same obligations and liabilities as and to the extent set forth
herein and the other Loan Documents as any other Lender. The terms "Lenders" or
"Requisite Lenders" or any similar terms shall, unless the context clearly
otherwise indicates, include CapitalSource in its individual capacity as a
Lender or one of the Requisite Lenders. CapitalSource may lend money to, and
generally engage in any kind of banking, trust or other business with any Credit
Party or any Subsidiary or Affiliates of any Credit Party as if it were not
acting as Agent pursuant hereto.

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            (g) Successor Agent.

                  (i) Resignation. Agent may resign from the performance of all
or part of its functions and duties hereunder at any time by giving at least
thirty (30) days' prior written notice to the Borrower and Lenders. Such
resignation shall take effect upon the acceptance by a successor Agent of
appointment pursuant to clause (ii) below or as otherwise provided below.

                  (ii) Appointment of Successor. Upon any such notice of
resignation pursuant to clause (g)(i) above, Requisite Lenders shall appoint a
successor Agent reasonably acceptable to the Borrower, which consent shall not
be unreasonably withheld, delayed or conditioned. If a successor Agent shall not
have been so appointed within said thirty (30) day period, the retiring Agent,
upon notice to the Borrower, may, on behalf of Lenders, then appoint a successor
Agent reasonably acceptable to the Borrower, which consent shall not be
unreasonably withheld, delayed or conditioned, who shall serve as Agent until
such time, as Requisite Lenders, appoint a successor Agent as provided above. If
no successor Agent has been appointed pursuant to the foregoing within said
thirty (30) day period, the resignation shall become effective and Requisite
Lenders shall thereafter perform all the duties of Agent hereunder, until such
time, if any, as Requisite Lenders appoint a successor Agent as provided above.

                  (iii) Successor Agent. Upon the acceptance of any appointment
as Agent under the Loan Documents by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and, upon the earlier of such
acceptance or the effective date of the retiring Agent's resignation, the
retiring Agent shall be discharged from its duties and obligations under the
Loan Documents, except that any indemnity rights or other rights in favor of
such retiring Agent shall continue. After any retiring Agent's resignation as
Agent under the Loan Documents, the provisions of this Article XII shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Agent under the Loan Documents.

            (h) Collateral Matters.

                  (i) Collateral. Each Lender agrees that any action taken by
the Agent or the Requisite Lenders (or, where required by the express terms of
this Agreement, a greater proportion of Lenders) in accordance with the
provisions of this Agreement or of the other Loan Documents relating to the
Collateral, and the exercise by the Agent or the Requisite Lenders (or, where so
required, such greater proportion) of the powers set forth herein or therein,
together with such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of Lenders and the Agent. Without limiting the
generality of the foregoing, the Agent shall have the sole and exclusive right
and authority to (i) act as the disbursing and collecting agent for Lenders with
respect to all payments and collections arising in connection herewith and with
the Loan Documents in connection with the Collateral; (ii) execute and deliver
each Loan Document relating to the Collateral and accept delivery of each such
agreement delivered by the Credit Parties or any of their Subsidiaries; (iii)
act as collateral agent for Lenders for purposes of the perfection of all
security interests and Liens created by such agreements and all other purposes
stated therein; (iv) manage, supervise and otherwise deal with the Collateral;
(v) take such action as is necessary or desirable to maintain the perfection and
priority of the security interests and

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Liens created or purported to be created by the Loan Documents relating to the
Collateral, and (vi) except as may be otherwise specifically restricted by the
terms hereof or of any other Loan Document, exercise all remedies given to such
Agent and Lenders with respect to the Collateral under the Loan Documents
relating thereto, applicable law or otherwise.

                  (ii) Release of Collateral. Lenders hereby irrevocably
authorize Agent, at its option and in its discretion, to release any Lien
granted to or held by Agent for the benefit of Lenders upon any property covered
by the Loan Documents (A) upon termination of this Agreement and payment and
satisfaction in full of all Obligations; (B) constituting property being sold or
disposed of if the Credit Parties certify to Agent that the sale or disposition
is made in compliance with the provisions of the Loan Documents (and Agent may
rely in good faith conclusively on any such certificate, without further
inquiry); or (C) constituting property leased to any Credit Party under a lease
which has expired or been terminated in a transaction permitted under this
Agreement or is about to expire and which has not been, and is not intended by
such Credit Party to be, renewed or extended.

                  (iii) Confirmation of Authority; Execution of Releases.
Without in any manner limiting Agent's authority to act without any specific or
further authorization or consent by Lenders (as set forth in Section 12.1(h)(i)
and (ii)), each Lender agrees to confirm in writing, upon request by the Credit
Parties, the authority to release any property covered by this Agreement or the
Loan Documents conferred upon Agent under Section 12.1(h)(ii). So long as no
Event of Default is then continuing, upon receipt by Agent of confirmation from
the requisite percentage of Lenders, of its authority to release any particular
item or types of property covered by this Agreement or the Loan Documents, and
upon at least five (5) Business Days prior written request by the Credit
Parties, Agent shall (and is hereby irrevocably authorized by Lenders to)
execute such documents as may be necessary to evidence the release of the Liens
granted to Agent for the benefit of Lenders herein or pursuant hereto upon such
Collateral; provided, however, that (A) Agent shall not be required to execute
any such document on terms which, in Agent's opinion, would expose Agent to
liability or create any obligation or entail any consequence other than the
release of such Liens without recourse or warranty (other than that such
Collateral is free and clear, on the date of such delivery, of any and all Liens
arising from such Person's own acts), and (B) such release shall not in any
manner discharge, affect or impair the Obligations or any Liens upon (or
obligations of the Credit Parties or any Subsidiary of the Credit Parties, in
respect of), all interests retained by the Credit Parties or any Subsidiary of
the Credit Parties, including, without limitation, the proceeds of any sale, all
of which shall continue to constitute part of the property covered by this
Agreement or the Loan Documents.

                  (iv) Absence of Duty. Agent shall have no obligation
whatsoever to any Lender or any other Person to assure that the property covered
by this Agreement or the Loan Documents exists or is owned by the Credit Parties
or is cared for, protected or insured or has been encumbered or that the Liens
granted to Agent on behalf of Lenders herein or pursuant hereto have been
properly or sufficiently or lawfully created, perfected, protected, enforced or
maintained or are entitled to any particular priority, or to exercise at all or
in any particular manner or under any duty of care, disclosure, or fidelity, or
to continue exercising, any of the rights, authorities and powers granted or
available to Agent in this Section 12.1(h) or in any of the Loan Documents, it
being understood and agreed that in respect of the property covered by this
Agreement or the Loan Documents or any act, omission, or event related thereto,
Agent may act in any manner it may deem appropriate, in its discretion, given
Agent's own interest in

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property covered by this Agreement or the Loan Documents as one of the Lenders
and that Agent shall have no duty or liability whatsoever to any of the other
Lenders; provided, that Agent shall exercise the same care which it would in
dealing with loans for its own account. Notwithstanding the foregoing, Agent
shall be liable with respect to its own gross negligence or willful misconduct.

            (i) Agency for Perfection. Each Lender hereby appoints Agent as
agent for the purpose of perfecting Lenders' security interest in Collateral
which, in accordance with Article 9 of the UCC in any applicable jurisdiction,
can be perfected only by possession. Should any Lender (other than Agent) obtain
possession of any such Collateral, such Lender shall notify Agent thereof, and,
promptly upon Agent's request therefor, shall deliver such Collateral to Agent
or in accordance with Agent's instructions.

            (j) Exercise of Remedies. Except as set forth in Section 12.3, each
Lender agrees that it will not have any right individually to enforce or seek to
enforce this Agreement or any Loan Document or to realize upon any collateral
security for the Loans, it being understood and agreed that such rights and
remedies may be exercised only by Agent.

      12.2 Consents

            (a) In the event Agent requests the consent of a Lender and does not
receive a written denial thereof within five (5) Business Days after such
Lender's receipt of such request, then such Lender will be deemed to have given
such consent so long as such request contained a notice stating that such
failure to respond within five (5) Business Days would be deemed to be a consent
by such Lender.

            (b) In the event Agent requests the consent of a Lender in a
situation where such Lender's consent would be required and such consent is
denied, then Agent may, at its option, require such Lender to assign its
interest in the Loans to Agent for a price equal to the then outstanding
principal amount thereof due such Lender plus accrued and unpaid interest
(including, without limitation, PIK Interest) and fees due such Lender, which
principal, interest and fees will be paid to the Lender when collected from the
Borrower. In the event that Agent elects to require any Lender to assign its
interest to Agent pursuant to this Section 12.2, Agent will so notify such
Lender in writing within forty-five (45) days following such Lender's denial,
and such Lender will assign its interest to Agent no later than five (5)
calendar days following receipt of such notice.

      12.3 Set Off and Sharing of Payments

            In addition to any rights and remedies now or hereafter granted
under applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of any Event of Default, each Lender is
hereby authorized by the Credit Parties at any time or from time to time, to the
fullest extent permitted by law, with reasonably prompt subsequent notice to the
Borrower or to any other Person (any prior or contemporaneous notice being
hereby expressly waived) to set off and to appropriate and to apply any and all
(a) balances (general or special, time or demand, provisional or final) held by
such Lender or such holder at any of its offices for the account of the Credit
Parties or any of their Subsidiaries (regardless of whether such balances are
then due to the Credit Parties or their Subsidiaries), and (b) other

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property at any time held or owing by such Lender or such holder to or for the
credit or for the account of the Credit Parties or any of their Subsidiaries,
against and on account of any of the Obligations which are not paid when due;
except that no Lender or any such holder shall exercise any such right without
prior written notice to Agent; provided, however, that the failure to give
notice to the Borrower or to any other Person shall not affect the validity of
such set-off and application. Any Lender which has exercised its right to set
off or otherwise has received any payment on account of the Obligations shall,
to the extent the amount of any such set off or payment exceeds its Pro Rata
Share of payments obtained by all of the Lenders on account of such Obligations,
purchase for cash (and the other Lenders or holders of the Loans shall sell)
participations in each such other Lender's or holder's Pro Rata Share of
Obligations as would be necessary to cause such Lender to share such excess with
each other Lenders or holders in accordance with their respective Pro Rata
Shares; provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such purchasing Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery. Each Credit Party agrees, to the fullest extent permitted by
law, that (a) any Lender or holder may exercise its right to set off with
respect to amounts in excess of its Pro Rata Share of the Obligations and may
sell participations in such excess to other Lenders and holders, and (b) any
Lender or holder so purchasing a participation in the Loans made or other
Obligations held by other Lenders or holders may exercise all rights of set-off,
bankers' lien, counterclaim or similar rights with respect to such participation
as fully as if such Lender or holder were a direct holder of Loans and other
Obligations in the amount of such participation.

      12.4 Settlements; Payments and Information

            (a) Payments; Interest and Fee Payments. On the first Business Day
of each month ("Interest Settlement Date"), Agent will advise each Lender by
telephone or facsimile of the amount of interest and fees charged to and
collected from the Borrower for the proceeding month in respect of the
applicable Loans. Provided that such Lender has made all payments required to be
made by it under this Agreement, Agent will pay to such Lender, by wire transfer
to such Lender's account (as specified by such Lender on Schedule A of this
Agreement as amended by such Lender from time to time after the date hereof
pursuant to the notice provisions contained herein or in the applicable Lender
Addition Agreement) not later than 3:00 p.m. (New York City time) on the next
Business Day following the Interest Settlement Date such Lender's share of such
interest and fees.

            (b) Return of Payments.

                  (i) If Agent pays an amount to a Lender under this Agreement
in the belief or expectation that a related payment has been or will be received
by Agent from the Borrower and such related payment is not received by Agent,
then Agent will be entitled to recover such amount from such Lender without
set-off, counterclaim or deduction of any kind.

                  (ii) If Agent determines at any time that any amount received
by Agent under this Agreement must be returned to the Borrower or paid to any
other Person pursuant to any solvency law or otherwise, then, notwithstanding
any other term or condition of this Agreement, Agent will not be required to
distribute any portion thereof to any Lender. In addition, each Lender will
repay to Agent on demand any portion of such amount that Agent has

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Term Loan and Security Agreement
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distributed to such Lender, together with interest at such rate, if any, as
Agent is required to pay to the Borrower or such other Person, without set-off,
counterclaim or deduction of any kind.

      12.5 Dissemination of Information

            Upon request by each Lender, the Agent will distribute promptly to
such Lender, unless previously provided by any Credit Party to such Lender,
copies of all notices, schedules, reports, projections, financial statements,
agreements and other material and other information, including, but not limited
to, financial and reporting information received from the Credit Parties or
their Subsidiaries or generated by a third party (and excluding only internal
information generated by CapitalSource for its own use as a Lender or as Agent),
as provided for in this Agreement and the other Loan Documents as received by
Agent. Agent shall not be liable to Lenders for any failure to comply with its
obligations under this Section 12.6, except to the extent that such failure is
attributable to Agent's gross negligence or willful misconduct.

XIII. MISCELLANEOUS

      13.1 Governing Law; Jurisdiction; Service of Process; Venue

            The Loan Documents shall be governed by and construed in accordance
with the internal laws of the State of New York without giving effect to its
choice of law provisions. Any judicial proceeding against the Credit Parties
with respect to the Obligations, any Loan Document or any related agreement may
be brought in any federal or state court of competent jurisdiction located in
the State of New York. By execution and delivery of each Loan Document to which
it is a party, each Credit Party (i) accepts the non-exclusive jurisdiction of
the aforesaid courts and irrevocably agrees to be bound by any judgment rendered
thereby, (ii) agrees that service of process upon it may be made by certified or
registered mail, return receipt requested, pursuant to Section 13.5 hereof, and
(iii) waives any objection to jurisdiction and venue of any action instituted
hereunder and agrees not to assert any defense based on lack of jurisdiction,
venue, convenience or forum non conveniens. Nothing shall affect the right of
Agent or any Lender to serve process in any manner permitted by law or shall
limit the right of Agent or any Lender to bring proceedings against any Credit
Party in the courts of any other jurisdiction having jurisdiction. Any judicial
proceedings against Agent or any Lender involving, directly or indirectly, the
Obligations, any Loan Document or any related agreement shall be brought only in
a federal or state court located in the State of New York. All parties
acknowledge that they participated in the negotiation and drafting of this
Agreement with the assistance of counsel and that, accordingly, no party shall
move or petition a court construing this Agreement to construe it more
stringently against one party than against any other.

      13.2 Successors and Assigns; Assignments and Participations

            (a) Each Lender may at any time sell, transfer or assign all or a
portion of its rights and delegate all or a portion of its rights and/or
obligations under the Loan Documents (including all its rights and obligations
with respect to the Loans, Obligations and/or Collateral) to one or more Persons
(a "Transferee"); provided, however, that notwithstanding anything to the
contrary in this Section 13.2(a), CapitalSource hereby agrees that so long as
any Obligations (other than indemnity obligations under the Loan Documents that
are not then due and payable or for which any events or claims that would give
rise thereto are not then pending) remain

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outstanding and no Event of Default has occurred and is continuing, (x) its
aggregate Commitments shall equal at least fifty-one percent (51%) of the total
aggregate Commitments and (y) it shall remain as the Agent hereunder. In
addition, so long as no Event of Default exists, no Lender shall sell any
portion of the Loans to a Competitor. Notwithstanding anything to the contrary
in this Agreement (including, without limitation, any limitation set forth in
this Section 13.2(a), there shall be no limitation or restriction on
CapitalSource's ability to assign, pledge or otherwise transfer any Note,
Obligation or Loan Document pursuant to Section 13.2(f)). The Transferee and
such assigning Lender shall execute and deliver to Agent a Lender Addition
Agreement. Upon such execution, delivery, acceptance and recording of and, from
and after the effective date determined pursuant to such Lender Addition
Agreement, (i) the Transferee thereunder shall be a party hereto as a Lender
and, to the extent provided in such Lender Addition Agreement, have the same
rights, benefits and obligations as a Lender hereunder, (ii) the assigning
Lender shall be relieved of its obligations hereunder with respect to its
Commitment or assigned portion thereof, as the case may be, to the extent that
such obligations shall have been expressly assumed by the Transferee pursuant to
such Lender Addition Agreement (and, in the case of a Lender Addition Agreement
covering all or the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such assigning Lender shall cease to be a
party hereto but shall nevertheless continue to be entitled to the benefits of
Sections 13.4 and 13.7). The Credit Parties hereby acknowledge and agree that
any assignment will give rise to a direct obligation of the Credit Parties to
the Transferee and that the Transferee shall be considered to be a "Lender"
hereunder. The Credit Parties may not sell, assign or transfer any interest in
this Agreement, any of the other Loan Documents, or any of the Obligations, or
any portion thereof, including the Credit Parties' rights, title, interests,
remedies, powers, and duties hereunder or thereunder. If applicable, each Lender
shall, and shall cause each of its assignees to, provide to the Agent on or
prior to the effective date of any assignment an appropriate Internal Revenue
Service form supporting such Lender's or assignee's position that no withholding
by any Credit Party or the Agent for United States income tax payable by such
Lender or assignee in respect of amounts received by it hereunder is required.
For purposes of this Agreement, an appropriate Internal Revenue Service form
shall mean Internal Revenue Service Form W-8BEN or W-8ECI, or any successor or
related forms adopted by the relevant United States taxing authorities.

            (b) In addition to assignments, transfers and/or sales pursuant to
Section 13.2(a), each Lender may at any time sell participations in all or any
part of its rights and obligations under the Loan Documents (including all its
rights and obligations with respect to the Loans, Obligations and/or Collateral)
to one or more Persons (each, a "Participant"). In the event of any such sale by
a Lender of a participation to a Participant, such Lender's obligations under
this Agreement to the other parties to this Agreement shall remain unchanged,
such Lender shall remain solely responsible for the performance thereof, such
Lender shall remain the holder of any such Loan (and any Note evidencing such
Loan) for all purposes under the Loan Documents and the Borrower and Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under the Loan Documents. Any agreement pursuant
to which any Lender shall sell any such participation shall provide that such
Lender shall retain the sole right and responsibility to exercise such Lender's
rights and enforce each of the Credit Parties' obligations under the Loan
Documents, including the right to consent to any amendment, supplement,
modification or waiver of any provision of any of the Loan Documents; provided,
that such participation agreement may provide that such Lender will not

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agree, without the consent of the Participant, to any amendment, supplement,
modification or waiver of: (i) any reduction in the principal amount, interest
rate or fees payable with respect to any Loan in which such holder participates;
(ii) any extension of the termination date of this Agreement or the date fixed
for any payment of principal, interest or fees payable with respect to any Loan
in which such holder participates; and (iii) any release of all or substantially
all of the Collateral (other than in accordance with the terms of the Loan
Documents).

            (c) The Agent shall maintain a copy of each Lender Addition
Agreement delivered to it and a written or electronic register (the "Register")
for the recordation of the names and addresses of the Lenders and the
commitments of, and the principal amounts of the Loans owing to, and the Notes
evidencing such Loans owned by, each Lender from time to time. Notwithstanding
anything in this Agreement to the contrary, each party hereto shall treat each
Person whose name is recorded in the Register as the owner of the Loans, the
Notes and the Commitment recorded therein for all purposes of this Agreement.
The register shall be available for inspection by the Borrower or any Lender at
any reasonably time and from time to time upon reasonable prior notice. Upon its
receipt of a Lender Addition Agreement executed by an assigning Lender and a
Transferee, the Agent shall (i) promptly accept such Lender Addition Agreement
and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give prompt notice of such
acceptance and recordation to the Lenders and the Borrower. The assigning Lender
shall surrender any outstanding Notes held by it all or a portion of which are
being assigned, and the Borrower, at their own expense, shall, upon the request
of the Agent by the assigning Lender or the Transferee, as applicable, execute
and deliver to the Agent, within five (5) Business Days of any request, new
Notes to reflect the interest held by the assigning Lender and its Transferee.

            (d) Except as otherwise provided in this Section 13.2 no Lender
shall, as between the Borrower and that Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment, transfer or
negotiation of, or granting of participation in, all or any part of the Loans or
other Obligations owed to such Lender. Each Lender may furnish any information
concerning the Credit Parties and their Subsidiaries in the possession of that
Lender from time to time to assignees and participants (including prospective
assignees and participants), subject to confidentiality requirements hereunder.

            (e) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion of
its rights under this Agreement, including, without limitation, the Loans owing
to it and the Notes held by it and the other Loan Documents and Collateral.

            (f) Notwithstanding anything in the Loan Documents to the contrary,
(i) CapitalSource and its Affiliates shall not be required to execute and
deliver a Lender Addition Agreement in connection with any transaction involving
its Affiliates, lenders, or financing or funding sources, (ii) no lender to or
financing or funding source of CapitalSource or its Affiliates shall be
considered a Transferee, (iii) there shall be no limitation or restriction on
CapitalSource's ability to assign or otherwise transfer any Loan Document or
Obligation to any such Affiliate or lender or financing or funding source, and
(iv) there shall be no limitation or restriction on such Affiliates' or lenders'
or financing or funding sources' ability to assign or otherwise transfer any
Loan Document or Obligation; provided, however, CapitalSource shall continue to
be liable as a "Lender" under the Loan Documents unless such Affiliate or lender

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executes a Lender Addition Agreement and thereby becomes a "Lender". The Credit
Parties agree to use commercially reasonable efforts to assist CapitalSource and
its Affiliates in assigning or selling participations in all or any part of any
Loans in order to consummate any of the transactions contemplated in this
Section 13.2(f).

            (g) The Loan Documents shall inure to the benefit of each Lender,
Agent, Transferees, Participants (to the extent expressly provided therein only)
and all future holders of the Note, the Obligations and/or any of the
Collateral, and each of their respective successors and assigns. Each Loan
Document shall be binding upon the Persons other than Lender and Agent that are
parties thereto and their respective successors and assigns, and no such Person
may assign, delegate or transfer any Loan Document or any of its rights or
obligations thereunder without the prior written consent of Agent. No rights are
intended to be created under any Loan Document for the benefit of any third
party donee, creditor or incidental beneficiary of the Borrower or any
Guarantor. Nothing contained in any Loan Document shall be construed as a
delegation to Agent or any Lender of any other Person's duty of performance. THE
BORROWER ACKNOWLEDGES AND AGREES THAT AGENT OR ANY LENDER AT ANY TIME AND FROM
TIME TO TIME MAY DIVIDE AND REISSUE (WITHOUT SUBSTANTIVE CHANGES OTHER THAN
THOSE RESULTING FROM SUCH DIVISION) THE NOTES.

      13.3 Application of Payments

            To the extent that any payment made or received with respect to the
Obligations is subsequently invalidated, determined to be fraudulent or
preferential, set aside, defeased or required to be repaid to a trustee, debtor
in possession, receiver, custodian or any other Person under any Debtor Relief
Law, common law or equitable cause or any other law, then the Obligations
intended to be satisfied by such payment shall be revived and shall continue as
if such payment had not been received by Agent of any Lender and the Liens
created hereby shall be revived automatically without any action on the part of
any party hereto and shall continue as if such payment had not been received by
Agent or any Lender. Except as specifically provided in this Agreement, any
payments with respect to the Obligations received shall be credited and applied
in such manner and order as Agent shall decide in its sole discretion.

      13.4 Indemnity

            The Credit Parties, jointly and severally, shall indemnify Agent and
each Lender, their respective Affiliates and managers, members, officers,
employees, Affiliates, agents, representatives, successors, assigns, accountants
and attorneys (collectively, the "Indemnified Persons") from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses and disbursements of any kind or nature whatsoever
(including, without limitation, reasonable fees and disbursements of counsel and
in-house documentation and diligence fees and legal expenses) which may be
imposed on, incurred by or asserted against any Indemnified Person with respect
to or arising out of, or in any litigation, proceeding or investigation
instituted or conducted by any Person with respect to any aspect of, or any
transaction contemplated by, or any matter related to, any Loan Document or any
agreement, document or transaction contemplated thereby, whether or not such
Indemnified Person is a party thereto, except to the extent that a final and
nonappealable order of judgment binding on such Indemnified Person of a court of
competent jurisdiction determines that any of

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the foregoing arises out of the gross negligence or willful misconduct of such
Indemnified Person. If any Indemnified Person uses in-house counsel for any
purpose for which the Credit Parties are responsible to pay or indemnify, the
Credit Parties expressly agree that their indemnification obligations include
reasonable charges for such work commensurate with the fees that would otherwise
be charged by outside legal counsel selected by such Indemnified Person in its
sole discretion for the work performed. Agent agrees to give the Borrower
reasonable notice of any event of which Agent becomes aware for which
indemnification may be required under this Section 13.4, and Agent may elect
(but is not obligated) to direct the defense thereof; provided, that the
selection of counsel shall be subject to the Borrower's consent, which consent
shall not be unreasonably withheld or delayed, and the Borrower shall be
entitled to participate in the defense of any matter for which indemnification
may be required under this Section 13.4 and to employ counsel at its own expense
to assist in the handling of such matter. Any Indemnified Person may, in its
reasonable discretion, take such actions as it deems necessary and appropriate
to investigate, defend or settle any event or take other remedial or corrective
actions with respect thereto as may be necessary for the protection of such
Indemnified Person or the Collateral, subject to the Borrower's prior approval
of any settlement, which shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, if any insurer agrees to undertake the defense of
an event (an "Insured Event"), Agent agrees not to exercise its right to select
counsel to defend the event if that would cause the Credit Parties' insurer to
deny coverage; provided, however, that Agent reserves the right to retain
counsel to represent any Indemnified Person with respect to an Insured Event at
its sole cost and expense. To the extent that Agent or any Lender obtains
recovery from a third party other than an Indemnified Person of any of the
amounts that the Borrower has paid to Agent or any Lender pursuant to the
indemnity set forth in this Section 13.4, then Agent and/or Lender shall
promptly pay to the Borrower the amount of such recovery. Without limiting any
of the foregoing, the Credit Parties, jointly and severally, indemnifies the
Indemnified Parties for all claims for brokerage fees or commissions (other than
claims of a broker with whom such Indemnified Party has directly contracted in
writing) which may be made in connection with respect to any aspect of, or any
transaction contemplated by or referred to in, or any matter related to, any
Loan Document, Acquisition Document or any agreement, document or transaction
contemplated thereby.

      13.5 Notice

            Any notice or request under any Loan Document shall be given to any
party to this Agreement at such party's address set forth beneath its signature
on the signature page to this Agreement, or at such other address as such party
may hereafter specify in a notice given in the manner required under this
Section 13.5. Any notice or request hereunder shall be given only by, and shall
be deemed to have been received upon (each, a "Receipt"): (i) registered or
certified mail, return receipt requested, on the date on which such received as
indicated in such return receipt, (ii) delivery by a nationally recognized
overnight courier, one (1) Business Day after deposit with such courier, or
(iii) facsimile or electronic transmission, in each case upon telephone or
further electronic communication from the recipient acknowledging receipt
(whether automatic or manual from recipient), as applicable.

                                      -62-

Term Loan and Security Agreement
<PAGE>

      13.6 Severability; Captions; Counterparts; Facsimile Signatures

            If any provision of any Loan Document is adjudicated to be invalid
under applicable laws or regulations, such provision shall be inapplicable to
the extent of such invalidity without affecting the validity or enforceability
of the remainder of the Loan Documents which shall be given effect so far as
possible. The captions in the Loan Documents are intended for convenience and
reference only and shall not affect the meaning or interpretation of the Loan
Documents. The Loan Documents may be executed in one or more counterparts (which
taken together, as applicable, shall constitute one and the same instrument) and
by facsimile transmission, which facsimile signatures shall be considered
original executed counterparts. Each party to this Agreement agrees that it will
be bound by its own facsimile signature and that it accepts the facsimile
signature of each other party.

      13.7 Expenses

            The Credit Parties shall pay, whether or not the Closing occurs, all
reasonable costs and expenses incurred by Agent, Lenders and/or their
Affiliates, including, without limitation, documentation and diligence fees and
expenses, all search, audit, appraisal, recording, professional and filing fees
and expenses and all other out-of-pocket charges and expenses (including,
without limitation, UCC and judgment and tax lien searches and UCC filings and
fees for post-Closing UCC and judgment and tax lien searches and wire transfer
fees and audit expenses), and reasonable attorneys' fees and expenses, (i) in
any effort to enforce, protect or collect payment of any Obligation or to
enforce any Loan Document or any related agreement, document or instrument, (ii)
in connection with entering into, negotiating, preparing, reviewing and
executing the Loan Documents and/or any related agreements, documents or
instruments, (iii) arising in any way out of administration of the Obligations
or the taking or refraining from taking by Agent or Lender of any action
requested by the Credit Parties, (iv) in connection with instituting,
maintaining, preserving, enforcing and/or foreclosing on Agent's, for the
benefit of itself and Lenders, Liens in any of the Collateral or securities
pledged under the Loan Documents, whether through judicial proceedings or
otherwise, (v) in defending or prosecuting any actions, claims or proceedings
arising out of or relating to Agent's and/or Lenders' transactions with the
Credit Parties, (vi) in seeking, obtaining or receiving any advice with respect
to its rights and obligations under any Loan Document and any related agreement,
document or instrument, (vii) arising out of or relating to any Default or Event
of Default or occurring thereafter or as a result thereof, (viii) in connection
with all actions, visits, audits and inspections undertaken by Agent or Lenders
or their Affiliates pursuant to the Loan Documents, and/or (ix) in connection
with any modification, restatement, supplement, amendment, waiver or extension
of any Loan Document and/or any related agreement, document or instrument. All
of the foregoing shall be charged to the Borrower's account and shall be part of
the Obligations. If Agent, any Lender or any of their Affiliates uses in-house
counsel for any purpose under any Loan Document for which the Credit Parties are
responsible to pay or indemnify, the Credit Parties expressly agree that their
Obligations include reasonable charges for such work commensurate with the fees
that would otherwise be charged by outside legal counsel selected by Agent, such
Lender or such Affiliate in its sole discretion for the work performed. Without
limiting the foregoing, the Credit Parties shall pay all taxes (other than taxes
based upon or measured by each Lender's income or revenues or any personal
property tax), if any, in connection with the issuance of any Note and the
filing and/or recording of any documents and/or financing statements.

                                      -63-

Term Loan and Security Agreement
<PAGE>

      13.8 Entire Agreement

            This Agreement and the other Loan Documents to which the Credit
Parties are parties constitute the entire agreement between the Credit Parties,
Agent and Lenders with respect to the subject matter hereof and thereof, and
supersede all prior agreements and understandings (including but not limited to
the term sheet dated on or about January 22, 2003, if any, relating to the
subject matter hereof or thereof). Any promises, representations, warranties or
guarantees not herein contained and hereinafter made shall have no force and
effect unless in writing signed by the Credit Parties, Agent and Lenders or
Requisite Lenders, as appropriate. Except as set forth in and subject to Section
10.4, no provision of any Loan Document may be changed, modified, amended,
restated, waived, supplemented, discharged, canceled or terminated orally or by
any course of dealing or in any other manner other than by an agreement in
writing signed by the Credit Parties, Agent and Requisite Lenders; provided,
that no consent or agreement by the Credit Parties shall be required to amend,
modify, change, restate, waive, supplement, discharge, cancel or terminate any
provision of Article XII so long as no additional duties are required to be
assumed by the Credit Parties. Each party hereto acknowledges that it has been
advised by counsel in connection with the negotiation and execution of this
Agreement and is not relying upon oral representations or statements
inconsistent with the terms and provisions hereof. The schedules attached hereto
may be amended or supplemented by the Credit Parties upon delivery to Agent of
such amendments or supplements and, except as expressly provided otherwise in
this Agreement, the written approval thereof by Agent.

      13.9 Approvals and Duties

            Unless expressly provided herein to the contrary, any approval,
consent, waiver or satisfaction of Agent or Lenders with respect to any matter
that is subject of any Loan Document may be granted or withheld by Agent or
Lenders, as applicable, in their sole and absolute discretion. Other than
Agent's duty of reasonable care with respect to Collateral delivered pursuant to
the Pledge Agreements, Agent and Lenders shall have no responsibility for or
obligation or duty with respect to any of the Collateral or any matter or
proceeding arising out of or relating thereto, including, without limitation,
any obligation or duty to collect any sums due in respect thereof or to protect
or preserve any rights pertaining thereto.

      13.10 Confidentiality and Publicity

            The Credit Parties shall not, and shall not permit any of their
Affiliates to, use either Agent's or any Lender's name (or the name of any of
Agent's or any Lenders' Affiliates) in connection with any of its business
operations, provided, that the Credit Parties may disclose the Lenders' names,
the aggregate principal amount of the Loans outstanding and other principal
terms of such Loans to its shareholders and other equity owners and prospective
purchasers of debt or equity securities of the Credit Parties so long as the
Credit Parties inform such prospective purchasers of the confidential nature of
such information and such Persons agree in writing not to disclose the same to
any other Person and to be bound by the confidentiality provisions of this
Agreement. Nothing contained in any Loan Document is intended to permit or
authorize any Credit Party or any of its Affiliates to contract on behalf of
Agent or any Lender.

            For the purposes of this Section 13.10, "Confidential Information"
means information delivered to Agent or any Lender (each, a "Recipient") by or
on behalf of any Credit

                                      -64-

Term Loan and Security Agreement
<PAGE>

Party or any of its Subsidiaries or Affiliates in connection with the
transactions contemplated by or otherwise pursuant to this Agreement that is
proprietary in nature and that was clearly marked or labeled or otherwise
adequately identified when received by the Recipient as being confidential
information of the Credit Party or such Subsidiary or Affiliate; provided that
such term does not include information that (a) was publicly known or otherwise
known to the Recipient prior to the time of such disclosure, provided that the
source of that information was not known by the Recipient to be bound by a
confidentiality agreement with, or other contractual, legal or fiduciary
obligations of confidentiality to, the Credit Party or any of its Subsidiaries
or Affiliates, (b) subsequently becomes publicly known through no act or
omission by the Recipient or any person acting on the Recipient's behalf, (c)
otherwise becomes known to the Recipient other than through disclosure by the
Credit Parties or any Subsidiary or Affiliate without breach of any obligations
to the Credit Parties or any of its Subsidiaries or Affiliates, or (d)
constitutes financial statements delivered to a Recipient that are otherwise
publicly available. Each Recipient agrees that it will not disclose any of the
Confidential Information in any manner whatsoever, except as provided herein,
and will maintain the confidentiality of such Confidential Information in
accordance with procedures adopted by it in good faith to protect confidential
information of third parties delivered to it provided that each Recipient may
deliver or disclose Confidential Information to (1) its directors, officers,
employees, agents, financial, legal and other professional advisors
("Representatives") and its Affiliates, lenders, or financing or funding sources
who agree to hold confidential the Confidential Information in accordance with
the terms of this Section 13.10 or otherwise or are bound by such
Representative's code of professional responsibility, (2) any prospective or
potential assignee, transferee or participant of any of its rights or
obligations under this Agreement (but in each case only if such Person has
agreed in writing prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 13.10), (3) any federal or state
regulatory authority having jurisdiction over the Recipient, (4) the National
Association of Insurance Commissioners or any similar organization, or any
nationally recognized rating agency that requires access to information about
the Recipient's investment portfolio, or (5) any other Person to which such
delivery or disclosure may be necessary or appropriate (i) to effect compliance
with any law, rule, regulation or order applicable to such Recipient, (ii) in
response to any subpoena or other legal process, provided that, to the extent
permitted by law, the Recipient promptly notifies the Credit Parties thereof,
(iii) in connection with any litigation between the Recipient and any Credit
Party or any of its Subsidiaries or Affiliates or (iv) if an Event of Default
has occurred and is continuing, to the extent a Recipient may reasonably
determine such delivery and disclosure to be necessary or appropriate in the
enforcement or for the protection of the rights and remedies under the Loan
Documents. Notwithstanding any other provision of this Section 13.10,
CapitalSource may, without restriction or limitation, disclose all information
it is required to disclose under the agreements with its Representatives and
Affiliates (and its Affiliates'), investors, members, managers, shareholders,
general or limited partners, directors, lenders, and/or existing or future
funding sources, and to their respective advisors and consultants and rating
agencies, and none of the foregoing Persons shall be subject to the provisions
of this Section 13.10; provided, however, CapitalSource shall continue to be
subject to the foregoing as Agent and a Lender hereunder. CapitalSource
represents and warrants to Borrower that it has, or will have, and will be
responsible for the enforcement of, commercially reasonable confidentiality
arrangements with each of the Persons described in the immediately preceding
sentence requiring such Persons to maintain the confidentiality of any
confidential information of Borrower that is provided to such Persons. Nothing
herein shall be construed as granting any rights to any Recipient, by license or

                                      -65-

Term Loan and Security Agreement
<PAGE>

otherwise, to any Confidential Information. Notwithstanding anything contained
herein, it is expressly acknowledged and agreed by Agent and each Lender that
Confidential Information will only be delivered or disclosed to the
Representatives with a bona fide need to know such information, but only to the
extent necessary to evaluate or carry out the transactions contemplated hereby.
In the event that a Recipient requests that Confidential Information be
disclosed to a Person other than one listed in clauses (1) through (5) above (an
"Outside Party"), the applicable Credit Party must approve the identity of the
Outside Party and the Recipient shall agree in writing to be bound by the terms
set forth in this Section 13.10 before such Confidential Information is made
available to the Outside Party. The agreements in this Section 13.10 shall
continue in full force and effect and shall survive the termination of this
Agreement. Any Person required to maintain the confidentiality of Information as
provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information. Notwithstanding anything herein to the
contrary, any party to this Agreement (and any employee, representative, or
other agent of any party to this Agreement) may disclose to any and all persons,
without limitation of any kind, the tax treatment and tax structure of the
transactions contemplated by this Agreement and all materials of any kind
(including opinions or other tax analyses) that are provided to it relating to
such tax treatment and tax structure; provided however, that no party shall be
permitted to disclose such tax treatment or tax structure to the extent that
such disclosure would constitute a violation of federal or state securities
laws. For the purposes of the foregoing sentence, (i) the "tax treatment" of a
transaction means the purported or claimed federal income tax treatment of the
transaction, and (ii) the "tax structure" of a transaction means any fact that
may be relevant to understanding the purported or claimed federal income tax
treatment of the transaction. Thus, for the avoidance of doubt, the parties
acknowledge and agree that the tax treatment and tax structure of any
transaction does not include the name of any party to a transaction or any
sensitive business information (including specific information about the Credit
Parties' suppliers, distributors, customers or Affiliates, the Credit Parties'
operations or assets, including any proprietary assets, or the results,
including the financial results, of the Credit Parties' operations) unless such
information may be related or relevant to the purported or claimed federal
income tax treatment of the transaction.

      13.11 Release of Collateral

            Subject to Section 12.3, promptly following full performance and
satisfaction and indefeasible payment in full in cash of all Obligations and the
termination of this Agreement, the Liens created hereby shall terminate and
Agent and Lenders shall execute and deliver such documents, at the Borrower's
expense, as are necessary to release Lenders' Liens in the Collateral and shall
return the Collateral to the Credit Parties; provided, however, that the parties
agree that, notwithstanding any such termination or release or the execution,
delivery or filing of any such documents or the return of any Collateral, if and
to the extent that any such payment made or received with respect to the
Obligations is subsequently invalidated, determined to be fraudulent or
preferential, set aside, defeased or required to be repaid to a trustee, debtor
in possession, receiver, custodian or any other Person under any Debtor Relief
Law, common law or equitable cause or any other law, then the Obligations
intended to be satisfied by such payment shall be revived and shall continue as
if such payment had not been received by Agent or any Lender and the Liens
created hereby shall be revived automatically without any action on

                                      -66-

Term Loan and Security Agreement
<PAGE>

the part of any party hereto and shall continue as if such payment had not been
received by Agent or any Lender. Agent and Lenders shall not be deemed to have
made any representation or warranty with respect to any Collateral so delivered
except that such Collateral is free and clear, on the date of such delivery, of
any and all Liens arising from such Person's own acts.

      13.12 Senior Debt

            The Obligations are secured by the Security Documents and are
intended by the parties hereto to be senior in right of payment to the
Subordinated Debentures, the Central Garden Note and the Subordinated Seller
Note (subject to the Subordination Agreements, as applicable).

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -67-

Term Loan and Security Agreement
<PAGE>

            IN WITNESS WHEREOF, each of the parties has duly executed this Term
Loan and Security Agreement as of the date first written above.

BORROWER:               EASY GARDENER PRODUCTS, LTD., a Texas limited
                        partnership

                        By: E G Product Management, L.L.C.
                        its General Partner

                        By: /s/ Richard Grandy
                            ----------------------
                        Name: Richard Grandy
                              --------------------
                        Title: Manger
                              --------------------
                        3022 Franklin Avenue
                        Waco, Texas 76710
                        Attn: Richard Kurz, Chief Financial Officer
                        Telephone: (254) 753-5353
                        FAX: (254) 753-0468
                        E-MAIL: dickk@easygardener.net

GUARANTORS:             EYAS INTERNATIONAL, INC.

                        By: /s/ Richard Grandy
                            ----------------------
                        Name: Richard Grandy
                             ---------------------
                        Title: President
                              --------------------
                        3022 Franklin Avenue
                        Waco, Texas 76710
                        Attn: Richard Kurz, Chief Financial Officer
                        Telephone: (254) 753-5353
                        FAX: (254) 753-0468
                        E-MAIL: dickk@easygardener.net

                        EG, L.L.C.

                        By: /s/ Richard Grandy
                             ---------------------
                        Name: Richard Grandy
                             ---------------------
                        Title: Manager
                             ---------------------
                        3022 Franklin Avenue
                        Waco, Texas 76710
                        Attn: Richard Kurz, Chief Financial Officer
                        Telephone: (254) 753-5353
                        FAX: (254) 753-0468
                        E-MAIL: dickk@easygardener.net

                                      -68-

Term Loan and Security Agreement
<PAGE>

                        E G PRODUCT MANAGEMENT, L.L.C.

                        By: /s/ Richard Grandy
                            ----------------------
                        Name: Richard Grandy
                              --------------------
                        Title: Manager
                              --------------------
                        3022 Franklin Avenue
                        Waco, Texas 76710
                        Attn: Richard Kurz, Chief Financial Officer
                        Telephone: (254) 753-5353
                        FAX: (254) 753-0468
                        E-MAIL: dickk@easygardener.net

                        WEATHERLY CONSUMER PRODUCTS, INC.

                        By: /s/ Richard Grandy
                            ----------------------
                        Name: Richard Grandy
                              --------------------
                        Title: President
                              --------------------
                        3022 Franklin Avenue
                        Waco, Texas 76710
                        Attn: Richard Kurz, Chief Financial Officer
                        Telephone: (254) 753-5353
                        FAX: (254) 753-0468
                        E-MAIL: dickk@easygardener.net

                        WEATHERLY CONSUMER PRODUCTS GROUP, INC.

                        By: /s/ Richard Grandy
                            ----------------------
                        Name: Richard Grandy
                              --------------------
                        Title: President
                              --------------------
                        3022 Franklin Avenue
                        Waco, Texas 76710
                        Attn: Richard Kurz, Chief Financial Officer
                        Telephone: (254) 753-5353
                        FAX: (254) 753-0468
                        E-MAIL: dickk@easygardener.net

                        NBU GROUP, LLC

                        By: /s/ Richard Grandy
                            ----------------------
                        Name: Richard Grandy
                              --------------------
                        Title: President
                              --------------------
                        3022 Franklin Avenue
                        Waco, Texas 76710
                        Attn: Richard Kurz, Chief Financial Officer
                        Telephone: (254) 753-5353
                        FAX:  (254) 753-0468
                        E-MAIL: dickk@easygardener.net

                                      -69-

Term Loan and Security Agreement
<PAGE>

AGENT AND LENDER:       CAPITALSOURCE FINANCE LLC

                        By: /s/ Joseph Turitz
                            -----------------------------
                        Name: Joseph Turitz
                              ---------------------------
                        Title: Associate General Counsel
                              ---------------------------
                        CapitalSource Finance LLC
                        4445 Willard Avenue, 12th Floor
                        Chevy Chase, MD 20815
                        Attention: Corporate Finance Group, Portfolio Manager
                        Telephone: (301) 841-2700
                        FAX: (301) 841-2360
                        E-MAIL: kelias@capitalsource.com

                                      -70-

Term Loan and Security Agreement
<PAGE>

                                     ANNEXES

Annex I         Financial Covenants

Annex II        Reporting Requirements

Annex III       Adjustments to EBITDA

                                  EXHIBITS

Exhibit A       Form of Compliance Certificate

Exhibit B       Form of Subordination Agreement

                                  SCHEDULES

Schedule A      Lenders/Commitments
Schedule 2.4    Borrower' Accounts
Schedule 5.1    Organization and Authority
Schedule 5.2    Consents, Approvals/Authorizations Required
Schedule 5.3    Subsidiaries, Capitalization and Ownership Interests
Schedule 5.4    Properties
Schedule 5.6    Litigation
Schedule 5.8    Tax Returns; Governmental Reports
Schedule 5.11   Intellectual Property
Schedule 5.12   Licenses and Permits; Labor
Schedule 5.15   Existing Indebtedness; Investments, Guaranties and
                Certain Contracts
Schedule 5.16   Affiliated Agreements
Schedule 5.17   Insurance
Schedule 5.18A  Names
Schedule 5.18B  Location of Offices, Records and Collateral
Schedule 5.18C  Deposit Accounts and Investment Property
Schedule 5.22   "Brokers Schedule" - Broker's, Finder's or Placement Fees
Schedule 6.8    Further Assurances and Post Closing Deliverables
Schedule 7.2    Permitted Indebtedness
Schedule 7.3    Permitted Liens

Term Loan and Security Agreement
<PAGE>

                                  Schedule 6.8

                Further Assurances and Post Closing Deliverables

            In accordance with and in furtherance of the provisions of Section
6.8 of the Agreement, the following actions, items and deliverables will be
completed, taken and/or delivered to Agent's satisfaction on or before the date
specified below. The failure to take, comply with or provide any of the actions
or items referred to herein on or before such date shall constitute and be
deemed an Event of Default under the Agreement. Nothing in this Schedule 6.8
shall limit the effect of any provision of the Agreement or Credit Parties'
obligations thereunder. Capitalized terms not otherwise defined in this Schedule
6.8 shall have the same meaning as in the Agreement.

            1. On the Closing Date, the Credit Parties shall provide Agent with
evidence satisfactory to Agent in its sole discretion that the proceeds of the
Loans funded at Closing have been remitted by the Credit Parties to the
appropriate accounts to be used to finance the Acquisitions pursuant to the
Acquisition Documents. Any failure to comply with the provisions of this
paragraph 1 shall be an Event of Default and result in the Obligations
(including without limitation, the Early Termination Fee) automatically and
without further act by Agent or any Lender becoming due and payable and Lenders
obligations under the Agreement terminating.

            2. On or before January 27, 2004, the Borrower shall be registered
with the appropriate Governmental Authorities as the owner of all Intellectual
Property transferred pursuant to the Acquisition Documents.

            3. On or before November 28, 2003, Landlord Waivers and Consents
with respect to any equipment (including but not limited to molds) located at
the following vendor sites: Rosti Dallas Inc., 2109 Vanco Drive, Irving, Texas
75061, and; Innovated Molding, 201 Sentry Drive, Mansfield, Texas 76063.

Term Loan and Security Agreement
<PAGE>
                                     ANNEX I

                               FINANCIAL COVENANTS

A.    General Financial Covenants

1)    Senior Leverage Ratio

            As measured on each of the following test dates, the Senior Leverage
Ratio shall not exceed the following:

--------------------------------------------------------------------------------
Test Date:                                        Maximum Senior Leverage Ratio:
--------------------------------------------------------------------------------
December 31, 2003                                 3.60:1.00
--------------------------------------------------------------------------------
March 31, 2004                                    3.70:1.00
--------------------------------------------------------------------------------
June 30, 2004; September 30, 2004;                3.25:1.00
December 31, 2004; and March 31, 2005
--------------------------------------------------------------------------------
June 30, 2005; September 30, 2005;                3.00:1.00
December 31, 2005; March 31, 2006
and June 30, 2006
--------------------------------------------------------------------------------
September 30, 2006 and the last day of            2.75:1.00
each fiscal quarter thereafter
--------------------------------------------------------------------------------

2)    Minimum EBITDA

            As measured on each of the following test dates for the twelve (12)
months then ending taken as one accounting period, EBITDA for the Credit Parties
on a consolidated basis shall not be less than the following:

--------------------------------------------------------------------------------
Test Date:                                                     Minimum EBITDA
--------------------------------------------------------------------------------
October 31, 2003 and November 30, 2003                          $ 9,000,000
--------------------------------------------------------------------------------
December 31, 2003                                               $ 8,000,000
--------------------------------------------------------------------------------
January 31, 2004 and February 29, 2004                          $ 8,750,000
--------------------------------------------------------------------------------
March 31, 2004                                                  $ 9,000,000
--------------------------------------------------------------------------------
April 30, 2004; May 31, 2004; June 30,                          $10,000,000
2004; July 31, 2004; August 31, 2004;
September 30, 2004; December 31, 2004
and March 31, 2005
--------------------------------------------------------------------------------
June 30, 2005; September 30, 2005;                              $11,500,000
December 31, 2005 and March 31, 2006
--------------------------------------------------------------------------------
June 30, 2006; September 30, 2006;                              $12,500,000
December 31, 2006 and March 31, 2007
--------------------------------------------------------------------------------

Term Loan and Security Agreement
<PAGE>

--------------------------------------------------------------------------------
Test Date:                                                     Minimum EBITDA
--------------------------------------------------------------------------------
December 31, 2006 and March 31, 2007
--------------------------------------------------------------------------------
June 30, 2007 and at each fiscal quarter                        $13,500,000
end thereafter
--------------------------------------------------------------------------------

3)    Fixed Charge Coverage Ratio

            As measured on the last day of each fiscal quarter during the Term,
the Fixed Charge Coverage Ratio (which for each quarter through September 30,
2004 shall be calculated on a pro forma basis in a manner acceptable to Agent in
its Permitted Discretion) shall not be less than 1.00 to 1.00.

4)    Capital Expenditure

            The Credit Parties shall not permit their consolidated Capital
Expenditures in the aggregate to exceed the following amounts at any time during
the corresponding periods set forth below:

--------------------------------------------------------------------------------
Test Date:                                   Maximum Capital Expenditures
--------------------------------------------------------------------------------
July 1, 2003 through June 30, 2004           $1,500,000, not to exceed $500,000
                                             in any fiscal quarter
--------------------------------------------------------------------------------
July 1, 2004 through June 30, 2005           $1,800,000, not to exceed $600,000
                                             in any fiscal quarter
--------------------------------------------------------------------------------
July 1, 2005 through June 30, 2006           $2,300,000, not to exceed $700,000
                                             in any fiscal quarter
--------------------------------------------------------------------------------
July 1, 2006 through June 30, 2007           $2,800,000, not to exceed $800,000
                                             in any fiscal quarter
--------------------------------------------------------------------------------
July 1, 2007 through the end of the Term     $3,000,000, not to exceed $800,000
                                             in any fiscal quarter
--------------------------------------------------------------------------------

B.    ECF Threshold

            As measured on each of the following test dates for the twelve (12)
months then ending taken as one accounting period, Makewell Cash Flow for the
Credit Parties on a consolidated basis shall not be less than the following:

--------------------------------------------------------------------------------
Test Date:                                            Minimum Makewell Cash Flow
--------------------------------------------------------------------------------
October 31, 2003 and November 30, 2003                       $ 9,500,000
--------------------------------------------------------------------------------
December 31, 2003                                            $ 8,250,000
--------------------------------------------------------------------------------
January 31, 2004                                             $ 9,000,000
--------------------------------------------------------------------------------
February 29, 2004                                            $ 9,250,000
--------------------------------------------------------------------------------

                                      -2-

Term Loan and Security Agreement
<PAGE>

--------------------------------------------------------------------------------
Test Date:                                            Minimum Makewell Cash Flow
--------------------------------------------------------------------------------
March 31, 2004                                               $10,000,000
--------------------------------------------------------------------------------
April 30, 2004 and May 31, 2004                              $10,500,000
--------------------------------------------------------------------------------
June 30, 2004, July 31, 2004, August 31, 2004 and            $13,000,000
September 30, 2004, December 31, 2004 and
March 31, 2005
--------------------------------------------------------------------------------
June 30, 2005, September 30, 2005, December 31, 2005         $14,500,000
and March 31, 2006
--------------------------------------------------------------------------------
June 30, 2006, September 30, 2006, December 31, 2006         $15,500,000
and March 31, 2007
--------------------------------------------------------------------------------
June 30, 2007 and at each fiscal quarter end                 $16,500,000
thereafter
--------------------------------------------------------------------------------

C.    Defined Terms

                  For purposes of the covenants set forth in this Annex I, the
terms listed below shall have the following meanings:

            "Capital Expenditures" shall mean the sum (without duplication) of
all expenditures (whether paid in cash or accrued as liabilities) that are or
are required to be treated as capital expenditures under GAAP, including
capitalized packaging expense.

            "EBITDA" shall mean the sum, without duplication, of the following:
Net Income plus, (a) Interest Expense, (b) taxes on income, (c) depreciation
expense, (d) amortization expense, (e) all other non-cash and/or non-recurring
documented charges and expenses approved by Agent in its Permitted Discretion,
excluding accruals for cash expenses made in the ordinary course of business,
and (f) loss from any sale of assets, other than sales in the ordinary course of
business less (x) gain from any sale of assets, other than sales in the ordinary
course of business and (y) all non-cash and/or non-recurring income, all of the
foregoing determined in accordance with GAAP. Notwithstanding the foregoing,
"EBITDA" shall be set in the amount set forth on Annex III attached hereto for
the corresponding periods set forth therein.

            "Fixed Charge Coverage Ratio" shall mean, for the Credit Parties on
a consolidated basis, at any date of determination, the ratio of (a) EBITDA,
minus Capital Expenditures, minus income taxes paid in cash, to (b) Fixed
Charges, in each case for the twelve (12) months then ending taken as one
accounting period.

            "Fixed Charges" shall mean, the sum, without duplication, of the
following for the Credit Parties on a consolidated basis: (a) Total Debt
Service, (b) dividends and/or distributions paid in cash, and (c) cash paid for
stock repurchases and/or redemptions.

            "Interest Expense" shall mean total interest expense generated
during the period in question (including attributable to conditional sales
contracts, Capital Leases and other title retention agreements in accordance
with GAAP) of the Credit Parties on a consolidated basis

                                      -3-

Term Loan and Security Agreement
<PAGE>

with respect to all outstanding Indebtedness including accrued interest and
interest paid in kind and capitalized interest but excluding commissions,
discounts and other fees owed with respect to letters of credit and bankers'
acceptance financing, and net costs under Interest Rate Agreements.

            "Interest Rate Agreement" shall mean any interest rate swap, cap or
collar agreement or other similar agreement or arrangement designed to hedge the
position with respect to interest rates.

            "Makewell Cash Flow" shall mean the sum of (a) EBITDA for such
period plus (b) the amount of any Makewell Investments made in cash to meet the
applicable ECF Threshold plus (c) the amount of any Makewell Investment Credit
existing on the date of determination.

            "Net Income" shall mean the net income (or loss) of the Credit
Parties on a consolidated basis for such period taken as a single accounting
period determined in conformity with GAAP; provided, that there shall be
excluded (i) the income (or loss) of any Person in which any other Person (other
than the Credit Party) has a joint interest, except to the extent of the amount
of dividends or other distributions actually paid to the Credit Parties by such
Person during such period, (ii) the income (or loss) of any Person accrued prior
to the date it becomes a Credit Party or is merged into or consolidated with any
Credit Party or that Person's assets are acquired by a Credit Party, (iii) the
income of any Subsidiary of any Credit Party to the extent that the declaration
or payment of dividends or similar distributions of that income by that
Subsidiary is not at the time permitted by operation of the terms of the charter
or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary, (iv) compensation expense
resulting from the issuance of capital stock, stock options or stock
appreciation rights issued to former or current employees, including officers,
of the Credit Parties, or the exercise of such options or rights, in each case
to the extent the obligation (if any) associated therewith is not expected to be
settled by the payment of cash by any Credit Party or any Affiliate thereof, and
(v) compensation expense resulting from the repurchase of capital stock, options
and rights described in clause (iv) of this definition of Net Income.

            "Senior Debt" shall mean, at any date of determination (a) the
Indebtedness under the Loan Documents plus (b) the average of the daily
outstanding amounts under the Foothill Loans for the thirty (30) days ending on
such date.

            "Senior Leverage Ratio" shall mean, for the Credit Parties on a
consolidated basis, at any date of determination, the ratio of (a) Senior Debt
outstanding on such date, to (b) EBITDA for the twelve (12) months then ending
taken as one accounting period.

            "Total Debt" shall mean, at any date of determination, the total
Indebtedness of the Credit Parties, on a consolidated basis, including, without
limitation, all Indebtedness under the Loan Documents and all Subordinated Debt
and all accrued interest on the foregoing (including, without limitation, all
interest paid in kind) and all Capital Leases, but excluding current operating
liabilities. For all purposes of this Agreement, the term "Total Debt" shall be
calculated to include (i.e., not net of) discounts, deductions or allocations
relating or applicable to or arising from any equity or equity participation or
fees, whether under GAAP or otherwise.

                                      -4-

Term Loan and Security Agreement
<PAGE>

            "Total Debt Service" shall mean for any period the sum of (i)
scheduled or other required payments of principal on Total Debt, (ii) any other
cash fees due or payable with respect to, in connection with or on Total Debt,
and (iii) cash Interest Expense.

                                      -5-

Term Loan and Security Agreement
<PAGE>

                                    ANNEX II

                             REPORTING REQUIREMENTS

1.    Copies of all Borrowing Bases submitted to Foothill.

2.    Monthly (or more frequently if calculated more frequently) Foothill
      ineligible calculation.

3.    The monthly consolidated and consolidating financial statements delivered
      pursuant to Section 6.1(a)(iii) shall be delivered on a monthly and
      year-to-date basis, and should also include comparative figures for the
      corresponding period set forth in the budget and for the prior year.

4.    Concurrently with delivery of the monthly financial reports set forth in
      Section 6.1(a)(iii), monthly accounts payable aging.

5.    Concurrently with delivery of the quarterly financial reports set forth in
      Section 6.1(a)(ii), quarterly reports showing sales by customer and gross
      margin by customer for such quarter and on a year-to-date basis.

6.    Concurrently with delivery of the quarterly financial reports set forth in
      Section 6.1(a)(ii), quarterly reports showing sales by product and gross
      margin by product for the quarter and on a year-to-date basis.

7.    Concurrently with delivery of the quarterly financial reports set forth in
      Section 6.1(a)(ii), quarterly reports showing the cost savings and/or
      sales synergies with Central Garden on a year-to-date basis.

                                      -6-
Term Loan and Security Agreement
<PAGE>

                                    ANNEX III

                              ADJUSTMENTS TO EBITDA

            For any fiscal period ending on or prior to October 29, 2004, to the
extent the calculation set forth in this Agreement is measured based upon a
fiscal period which includes a period prior to the Closing Date, the amounts set
forth in the following table shall apply for the applicable period set forth
opposite thereto:

        -----------------------------------------------------------------
                   EBITDA                      Applicable Period
        -----------------------------------------------------------------
                 <$86,000>                     November 30, 2002
        -----------------------------------------------------------------
                 $1,663,000                    December 31, 2002
        -----------------------------------------------------------------
                 $1,221,000                     January 31, 2003
        -----------------------------------------------------------------
                 $1,218,000                    February 28, 2003
        -----------------------------------------------------------------
                 $2,390,000                      March 31, 2003
        -----------------------------------------------------------------
                 $2,018,000                      April 30, 2003
        -----------------------------------------------------------------
                 $1,900,000                       May 31, 2003
        -----------------------------------------------------------------
                 $1,135,000                      June 30, 2003
        -----------------------------------------------------------------
                  $458,000                       July 31, 2003
        -----------------------------------------------------------------
                 <$16,000>                      August 31, 2003
        -----------------------------------------------------------------
                 <$386,000>                    September 30, 2003
        -----------------------------------------------------------------

                                      -7-

Term Loan and Security Agreement
<PAGE>

                                   APPENDIX A

                                   DEFINITIONS

            "Account Debtor" shall mean any Person who is obligated under an
Account.

            "Accounts" shall mean all "accounts" (as defined in the UCC) of the
Credit Parties (or, if referring to another Person, of such other Person),
including without limitation, accounts, accounts receivables, monies due or to
become due and obligations in any form (whether arising in connection with
contracts, Contract Rights, Instruments, General Intangibles or Chattel Paper),
in each case whether arising out of goods sold or services rendered or from any
other transaction and whether or not earned by performance, now or hereafter in
existence, and all documents of title or other documents representing any of the
foregoing, and all collateral security and guaranties of any kind, now or
hereafter in existence, given by any Person with respect to any of the
foregoing.

            "Acquisition" shall mean the purchase of substantially all of the
assets and liabilities of Easy Gardener, Inc. and Ampro Industries, Inc. and
certain assets of U.S. Home & Garden Inc. by Borrower pursuant to the
Acquisition Agreement.

            "Acquisition Agreement" shall mean the Asset Purchase Agreement
including all schedules and exhibits thereto dated as of December 11, 2003, by
and among Borrower, EYAS International, Inc., U.S. Home & Garden Inc., Easy
Gardener, Inc., Ampro Industries, Inc. and Weed Wizard Acquisition Corp.

            "Acquisition Documents" shall mean the Acquisition Agreement and all
other agreements, certificates and instruments executed in connection therewith.

            "Affiliate" or "affiliate" shall mean, as to any Person, any other
Person (a) that, directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such Person, (b)
who is a director or officer (i) of such Person, (ii) of any Subsidiary of such
Person, or (iii) of any Person described in clause (a) above with respect to
such Person, or (c) which, directly or indirectly through one or more
intermediaries, is the beneficial or record owner (as defined in Rule 13d-3 of
the Securities Exchange Act of 1934, as amended, as the same is in effect on the
date hereof) of five percent (5%) or more of any class of the outstanding voting
stock, securities or other equity or ownership interests of such Person. For
purposes of this definition, the term "control" (and the correlative terms,
"controlled by" and "under common control with") shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies, whether through ownership of securities or other
interests, by contract or otherwise.

            "Agreement" shall have the meaning assigned to it in the
introductory paragraph hereof.

            "Allocable Amount" shall have the meaning assigned to it in Section
3.7(c) hereof.

Term Loan and Security Agreement
<PAGE>

            "Applicable Rate" shall mean the interest rates applicable from time
to time to Loans under this Agreement.

            "Bankruptcy Code" shall have the meaning assigned to it in Section
3.7(b) hereof.

            "Borrower Limited Partnership Agreement" shall mean that certain
Limited Partnership Agreement of the Borrower dated as of October 27, 2003, as
in effect on the date hereof.

            "Business" shall have the meaning given such term in the recitals of
this Agreement.

            "Business Day" shall mean any day other than a Saturday, Sunday or
other day on which the Federal Reserve or Agent is closed.

            "Capital Lease" shall mean, as to any Person, a lease of any
interest in any kind of property or asset by that Person as lessee that is,
should be or should have been recorded as a "capital lease" in accordance with
GAAP.

            "Capitalized Lease Obligations" shall mean all obligations of any
Person under Capital Leases, in each case, taken at the amount thereof accounted
for as a liability in accordance with GAAP.

            "Cash Equivalents" shall mean (a) securities issued, or directly and
fully guaranteed or insured, by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than six
months from the date of acquisition, (b) U.S. dollar denominated time deposits,
certificates of deposit and bankers' acceptances of (i) any domestic commercial
bank of recognized standing having capital and surplus in excess of
$500,000,000, or (ii) any bank (or the parent company of such bank) whose
short-term commercial paper rating from Standard & Poor's Ratings Services
("S&P") is at least A-2 or the equivalent thereof or from Moody's Investors
Service, Inc. ("Moody's") is at least P-2 or the equivalent thereof in each case
with maturities of not more than six months from the date of acquisition (any
bank meeting the qualifications specified in clauses (b)(i) or (ii), an
"Approved Bank"), (c) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clause (a), above,
entered into with any Approved Bank, (d) commercial paper issued by any Approved
Bank or by the parent company of any Approved Bank and commercial paper issued
by, or guaranteed by, any industrial or financial company with a short-term
commercial paper rating of at least A-2 or the equivalent thereof by S&P or at
least P-2 or the equivalent thereof by Moody's, or guaranteed by any industrial
company with a long term unsecured debt rating of at least A or A2, or the
equivalent of each thereof, from S&P or Moody's, as the case may be, and in each
case maturing within six months after the date of acquisition and (e)
investments in money market funds substantially all of whose assets are
comprised of securities of the type described in clauses (a) through (d) above.

            "Central Garden" shall mean Central Garden & Pet Company, a Delaware
corporation.

                                      -2-

Term Loan and Security Agreement
<PAGE>

            "Central Garden Note" shall mean that certain Subordinated
Promissory Note dated as of the date hereof issued by the Borrower to Central
Garden, in form and substance satisfactory to the Agent in its Permitted
Discretion.

            "Central Garden Subordination Agreement" shall mean that certain
Subordination Agreement dated as of the Closing Date by and among the Borrower,
Central Garden, Foothill and the Agent, in form and substance satisfactory to
the Agent.

            "Change of Control" shall mean, with respect to the Credit Parties,
individually and/or collectively, the occurrence of any of the following (other
than the Acquisition): (a) a merger, consolidation, reorganization,
recapitalization or share or interest exchange, sale or transfer or any other
transaction or series of transactions in which its stockholders, managers,
partners, owners or interest holders immediately prior to such transaction or
series of transactions receive, in exchange for the stock or interests owned by
them, cash, property or securities of the resulting or surviving entity or any
Affiliate thereof, and, as a result thereof, Persons, including Central Garden,
who, individually or in the aggregate, were holders of 50% or more of its voting
stock, securities or equity, partnership or ownership interests immediately
prior to such transaction or series of transactions, calculated on a fully
diluted basis, hold less than 50% of the voting stock, securities or other
equity, partnership or ownership interests of the resulting or surviving entity
or such Affiliate thereof, calculated on a fully diluted basis, (b) a direct or
indirect sale, transfer or other conveyance or disposition, in any single
transaction or series of transactions, of all or substantially all of its
assets, (c) the Borrower shall fail to own one hundred percent (100%) of EGUK,
Weatherly Group, Weatherly Products or NBU, in any such case, free and clear of
all Liens other than Liens in favor of Agent, for the benefit of itself and the
Lenders, and Priority Permitted Liens, (d) the consummation of an initial Public
Offering, (e) E G Product Management ceases to beneficially and of record own
and control, directly, for any reason at any time all of the general partnership
interests in Borrower or otherwise ceases to be the sole general partner of
Borrower, in any such case, free and clear of all Liens other than Liens in
favor of Agent, for the benefit of itself and the Lenders; (f) EG ceases to
beneficially and of record own and control, directly, for any reason at any time
all of the limited partnership interests in Borrower or otherwise ceases to be
the sole limited partner of Borrower, in any such case, free and clear of all
Liens other than Liens in favor of Agent, for the benefit of itself and the
Lenders (g) EYAS ceases to be the record owner of 100% of the voting power of
both E G Product Management and EG, in any such case, free and clear of all
Liens other than Liens in favor of Agent, for the benefit of itself and the
Lenders (h) the Easy Gardener Investors cease to be the record owner of at least
51% of the voting power of EYAS, calculated on a fully diluted basis, or ceases
to have the right to appoint or elect a majority of the board of directors of
EYAS, or (i) Richard M. Grandy ceases to be employed as President of the
Borrower or he otherwise becomes disabled and, in each case, he is not replaced
within thirty (30) calendar days by an interim President, and within 180 days by
a permanent President, each to Agent's satisfaction as determined in its
Permitted Discretion, or any such replacement President ceases such employment
or otherwise becomes disabled unless replaced in the same time period and to
Agent's satisfaction as determined in its Permitted Discretion.

            "Charter and Good Standing Documents" shall mean, for each of the
Credit Parties, (a) a copy of the certificate of incorporation or formation (or
other applicable charter document) certified as of a date not more than thirty
(30) Business Days before the Closing Date

                                      -3-

Term Loan and Security Agreement
<PAGE>

by the applicable Governmental Authority of the jurisdiction of incorporation or
organization of such Credit Party, as applicable, (b) a copy of the bylaws or
similar organizational documents of such Credit Party, as applicable, certified
as of a date not more than thirty (30) Business Days before the Closing Date by
the secretary or assistant secretary of such Credit Party (or its general
partner, as the case may be), as applicable, (c) an original certificate of good
standing as of a date acceptable to Agent issued by the applicable Governmental
Authority of the jurisdiction of incorporation or organization of such Credit
Party, as applicable, and of every other jurisdiction in which such Credit
Party, as applicable, has an office or conducts business or is otherwise
required to be in good standing, and (d) copies of the resolutions of the Board
of Directors or managers (or other applicable governing body) and, if required,
stockholders, members or other equity owners authorizing the execution, delivery
and performance of the Loan Documents to which such Credit Party, as applicable,
is a party, certified by an authorized officer of such Person as of the Closing
Date.

            "Closing" shall mean the satisfaction, or written waiver by Agent,
of all of the conditions precedent set forth in this Agreement required to be
satisfied prior to the consummation of the transactions contemplated hereby.

            "Closing Date" shall mean the date of this Agreement.

            "Closing Date Term A Advance" shall have the meaning assigned to it
in Section 2.1 hereof.

            "Closing Date Term B Advance" shall have the meaning assigned to it
in Section 2.2 hereof.

            "Collateral" shall mean, collectively and each individually, all
collateral and/or security granted and/or securities pledged to Agent, for the
benefit of itself and Lenders, by the Credit Parties, if any, pursuant to the
Loan Documents including, without limitation, the items set forth in Section 2.9
of this Agreement; provided that the term "Collateral" does not include any
property of EGUK.

            "Collateral Assignment of Acquisition Agreement" shall mean a
collateral assignment of the Acquisition Agreement whereby the Borrower (prior
to giving effect to the Acquisition) shall collaterally assign all of the Credit
Parties' rights in the Acquisition Agreement to Agent for the benefit of Lenders
in form and substance satisfactory to Agent in its sole discretion.

            "Commitment" or "Commitments" shall mean, (a) with respect to the
Term A Loan, as to any Term A Loan Lender, the aggregate commitment of such Term
A Loan Lender to fund the Term A Loan, as set forth on Schedule A or in the most
recent Lender Addition Agreement executed by such Term A Loan Lender, (b) as to
all Term A Loan Lenders, the aggregate commitment of all Term A Loan Lenders to
fund the Term A Loan, (c) with respect to the Term B Loan, as to any Term B Loan
Lender, the aggregate commitment of such Term B Loan Lender to fund the Term B
Loan, as set forth on Schedule A or in the most recent Lender Addition Agreement
executed by such Term B Loan Lender, (d) as to all Term B Loan Lenders, the
aggregate commitment of all Term B Loan Lenders to fund the Term B Loan, and (e)
as to all

                                      -4-

Term Loan and Security Agreement
<PAGE>

Lenders, the aggregate commitments of all Lenders to fund the Loans, in each
case as the same may be reduced, modified or terminated pursuant to this
Agreement.

            "Competitor" means, unless the Borrower otherwise consents, The
Scotts Company, BBA Nonwovens, Freudenberg Nonwoven, Dupont, Dalen Products,
Kimberly Clark, Exxon, Green Light Company, Sterling International, Bayer,
Reemay, Gardentech, Gulfstream, Jiffy Products, Chem Lab Products, Gilmour
Manufacturing, Reckett & Benckiser, United Horticultural, SC Johnson, CFM
Keanall Products, Ames True Temper, Senoret Chemical, California Plastic, Perky
Pet, Union Tools, Lebanon Seaboard, Summit Chemical, Flexrake, Control
Solutions, Ironite, Bonide, Rod McClellan, Colorite, Woodstream, Corona Clipper,
Rubbermaid, Arnold Corporation, Lawnware, Raindrip, Enviroworks, Collier
Manufacturing, LR Nelson, Clorox, Value Garden Supply, Enforcer Products, Exhart
Environmental Systems, Grow More, Duraco Products, Misto, Little Giant, Beckett,
United Industries, New England Pottery, Proctor and Gamble, Lewis Lifetime
Tools, Artline Inc., Stone Container, Waupaca Northwoods, Medina Agricultural
Products, C and S Products, Southern Ag, Opus, PIC Corporation, Dramm
Corporation, Bond Manufacturing, HD Hudson, Bull Outdoor, VIT Products, American
Designer Pottery, Applica, Delta Industries, Walter E Clark & Son, Cobraco
Manufacturing, Envirepel, EB Stone & Son, Lamplight Farms, Liquinox Fertilizer,
Liquid Fence, Motomco Ltd, PBI Gordon, Woodburn Fertilizer, JRM Chemical, Chapin
Maunfacturing, Nestle USA, Enviroedge Products, Supersoil, Whitney Farms,
Cedarcide Industries.

            "Computer Hardware and Software" shall mean all of any Credit
Party's rights (including rights as licensee and lessee) with respect to (a)
computer and other electronic data processing hardware, including all integrated
computer systems, central processing units, memory units, display terminals,
printers, computer elements, card readers, tape drives, hard and soft disk
drives, cables, electrical supply hardware, generators, power equalizers,
accessories, peripheral devices and other related computer hardware; (b) all
software and all software programs designed for use on the computers and
electronic data processing hardware described in clause (a) above, including all
operating system software, utilities and application programs in any form
(source code and object code in magnetic tape, disk or hard copy format or any
other listings whatsoever) and any other software; (c) any firmware associated
with any of the foregoing; (d) any other software; and (e) any documentation for
or related to hardware, software and firmware described in clauses (a), (b), (c)
and (d) above, including flow charts, logic diagrams, manuals, specifications,
training materials, charts and pseudo codes.

            "Contingent Obligations" shall mean, as to any Person, any
obligation of such Person guaranteeing or intending to guaranty any
Indebtedness, leases, dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation, or (d) otherwise to assure or to
hold harmless the owner of such primary obligation against loss in respect
thereof; provided, however, that the term "Contingent

                                      -5-

Term Loan and Security Agreement

<PAGE>

Obligation" shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith.

            "Contract Right" shall mean any right of any Credit Party to payment
under a contract for the sale or lease of goods or the rendering of services,
which right is at the time not yet earned by performance.

            "Copyrights" shall mean all of any Credit Party's now existing or
hereafter acquired right, title, and interest in and to: (a) copyrights, rights
and interests in copyrights, works protectable by copyright, all applications,
registrations and recordings relating to the foregoing as may at any time be
filed in the United States Copyright Office or in any similar office or agency
of the United States, any State thereof, any political subdivision thereof or in
any other country, and all research and development relating to the foregoing;
and (b) all renewals of any of the foregoing.

            "Credit Parties" shall mean the Borrower and each Guarantor, and
does not include EGUK and Easy Gardener Trust.

            "Debtor Relief Law" shall mean, collectively, the Bankruptcy Code of
the United States of America and all other applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization or similar debtor relief laws from time to time in
effect affecting the rights of creditors generally, as amended from time to
time.

            "Default" shall mean any event, fact, circumstance or condition
that, with the giving of applicable notice or passage of time or both, would
constitute or be or result in an Event of Default.

            "Default Rate" shall have the meaning assigned to it in Section 3.4
hereof.

            "Deposit Account" shall mean, individually and collectively, all
bank or other depository accounts of any Credit Party.

            "Distribution" shall mean any fee, payment, bonus or other
remuneration of any kind, and any repayment of or debt service on loans or other
indebtedness.

            "Dollars" and "$" shall mean lawful money of the United States of
America.

            "Easy Gardener Investors" shall mean, collectively, Richard M.
Grandy, Grandy Partnership Ltd., Wayne Fethke, Andrew C. Loberger, Sheila B.
Jones, Richard Kurz, Jan Grandy, Paul T. Logue, Jr., Frances M. Keating, David
Harper, Daniel Boxser, Thomas E. Bensberg, Jr., Douglas E. Austin, Paul McCray,
Rob Raissle, Gene O'Neil, Christi Baughman, John Roach, Clemente Conde, Nick
Formica, and Kathy A. Winters.

                                      -6-

Term Loan and Security Agreement
<PAGE>

            "Easy Gardener Trust" shall mean Easy Gardener Products Trust I, a
Delaware statutory trust.

            "ECF Threshold shall mean the financial target set forth in Annex I
attached hereto under the heading "ECF Threshold".

            "EG" means EG, L.L.C., a Nevada limited liability company.

            "E G Product Management" means E G Product Management, L.L.C., a
Texas limited liability company.

            "EGUK shall mean Easy Gardener U.K. Ltd., a company organized under
the laws of England and Wales.

            "Environmental Laws" shall mean, collectively and each individually,
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, the Superfund Amendment and Reauthorization Act of 1986, the Resource
Conservation and Recovery Act, the Toxic Substances Control Act, the Clean Air
Act, the Clean Water Act, any other "Superfund" or "Superlien" law and all other
federal, state and local and foreign environmental, land use, zoning, health,
chemical use, safety and sanitation laws, statutes, ordinances and codes
relating to the protection of the environment and/or governing the use, storage,
treatment, generation, transportation, processing, handling, production or
disposal of Hazardous Substances, in each case, as amended, and the
legally-binding rules, regulations, policies, guidelines, interpretations,
decisions, orders and directives of Governmental Authorities with respect
thereto.

            "Equipment" shall mean all "equipment" (as defined in the UCC) of
any Credit Party (or, if referring to another Person, of such other Person), now
owned or hereafter acquired, and all documents of title or other documents
representing any of the foregoing, and all collateral security and guaranties of
any kind, now or hereafter in existence, given by any Person with respect to any
of the foregoing.

            "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and the regulations thereunder.

            "Event of Default" shall mean the occurrence of any event set forth
in Article VIII.

            "Excess Availability" shall mean the availability under the
revolving credit facilities from Foothill after deducting any Foothill Loans.

            "Excess Cash Flow" shall mean, for any fiscal period, without
duplication, an amount equal to the sum of (a) EBITDA for such period plus the
amount of any cash Makewell Investments made to meet the applicable ECF
Threshold for such period, plus (b) an amount equal to the aggregate net cash
proceeds of the sale, lease, transfer or other disposition of assets by the
Borrower and its Subsidiaries during such period (such net cash proceeds to be
determined only after deducting all transaction costs, expenses, debt repayments
and taxes in connection with such sale, lease, transfer or other disposition) to
the extent not required to be

                                      -7-

Term Loan and Security Agreement
<PAGE>

applied to mandatory prepayments or payments on the Loans or not otherwise
reinvested pursuant to Section 2.7 hereof, plus (c) the amount of any cash tax
refunds received by Borrower and its Subsidiaries during such period, less (d)
an amount equal to the aggregate amount of all prepayments of the Loans in
excess of required repayments, less (e) an amount equal to Capital Expenditures
of Borrower and its Subsidiaries for such period, less (f) an amount equal to
the sum of all regularly scheduled payments and optional and/or mandatory
payments of principal on Indebtedness of Borrower and its Subsidiaries actually
made during such period to the extent permitted hereunder, less (g) cash tax
expenses actually paid during such period, less (h) cash Interest Expense
actually paid during such period, less (i) any Tax Distributions made during
such period.

            "Existing Warrant" shall mean the warrant issued to Central Garden
in connection with the Central Garden Note providing for the option to exercise
ownership of 49% of the limited partnership interests in the Borrower.

            "EYAS" shall mean EYAS International, Inc., a Texas corporation.

            "Fair Valuation" shall mean the determination of the value of the
consolidated assets of a Person on the basis of the amount which may be realized
by a willing seller within a reasonable time through collection or sale of such
assets at market value on a going concern basis to an interested buyer who is
willing to purchase under ordinary selling conditions in an arm's length
transaction.

            "Foothill" shall mean Wells Fargo Foothill, Inc., a California
corporation.

            "Foothill Loans" shall mean the obligations of the Borrower and the
Guarantors under that certain Amended and Restated Loan and Security Agreement
dated as of the date hereof by and among the Borrower, the Guarantors, Foothill
and the lenders party thereto.

            "GAAP" shall mean generally accepted accounting principles in the
United States of America in effect from time to time as applied by nationally
recognized accounting firms.

            "Golub Settlement Agreement" means that certain settlement agreement
dated as of November 1, 2002, and entered into by and among USHG, Easy Gardener
and the Golub Settlement Parties.

            "Golub Settlement Parties" means LEG Partners Debenture SBIC, L.P.,
a Delaware limited partnership, LEG Partners III SBIC, L.P., a Delaware limited
partnership, LEG Co-Investors, LLC, a Delaware limited liability company, 555
Madison Investors II LLC f/k/a LEG Co-Investors II, LLC, a Delaware limited
liability company, 555 Madison Investors, LLC, a Delaware limited liability
company, Golub Associates, LLC, a New York limited liability company and Golub
Associates Incorporated, a New York corporation.

            "Governmental Authority" shall mean any federal, state, municipal,
national, local or other governmental department, court, commission, board,
bureau, agency or instrumentality or political subdivision thereof, or any
entity or officer exercising executive, legislative or judicial, regulatory or
administrative functions of or pertaining to any government

                                      -8-

Term Loan and Security Agreement
<PAGE>

or any court, in each case, whether of the United States or a state, territory
or possession thereof, a foreign sovereign entity or country or jurisdiction or
the District of Columbia.

            "Government Account" shall be defined to mean all Accounts arising
out of or with respect to any Government Contract.

            "Government Contracts" shall mean with respect to any Person all
contracts with the United States government or any other Governmental Authority
or any agency of any of the foregoing, and all amendments, modifications and
supplements thereto.

            "Guarantor" shall mean, collectively and each individually, EYAS,
EG, E G Product Management, Weatherly Group, Weatherly Products, NBU, all other
Subsidiaries of the Borrower (excluding EGUK and Easy Gardener Trust) and all
other Credit Parties, and all other Persons who execute a Guaranty; provided
that in no case does the term "Guarantor" include Central Garden.

            "Guaranty" shall mean, collectively and each individually, all
guarantees executed by any Guarantors, if any, including, without limitation,
any guarantees set forth in any Pledge Agreement executed by any Person relating
to the securities of Borrower or any of its Subsidiaries.

            "Hazardous Substances" shall mean, without limitation, any flammable
explosives, radon, radioactive materials, asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls, petroleum and petroleum products,
methane, hazardous materials, hazardous wastes, hazardous or toxic substances or
related materials as defined in or subject to any applicable Environmental Law.

            "Indebtedness" of any Person shall mean, without duplication, (a)
all items which, in accordance with GAAP, would be included in determining total
liabilities as shown on the liability side of the balance sheet of such Person
as of the date as of which Indebtedness is to be determined, including any lease
which, in accordance with GAAP would constitute Indebtedness, (b) all
indebtedness secured by any mortgage, pledge, security, Lien or conditional sale
or other title retention agreement to which any property or asset owned or held
by such Person is subject, whether or not the indebtedness secured thereby shall
have been assumed but with respect to Indebtedness that is non-recourse to the
Credit Parties and has not been assumed, only to the extent of the lesser of the
amount of such Indebtedness or the value of the property that is encumbered by
such Lien, (c) all indebtedness of others which such Person has directly or
indirectly guaranteed, endorsed (otherwise than for collection or deposit in the
ordinary course of business), discounted or sold with recourse or agreed
(contingently or otherwise) to purchase or repurchase or otherwise acquire, or
in respect of which such Person has agreed to supply or advance funds (whether
by way of loan, stock, equity or other ownership interest purchase, capital
contribution or otherwise) or otherwise to become directly or indirectly liable.

            "Insured Event" shall have the meaning assigned to it in Section
13.4 hereof.

            "Intercreditor Agreement" shall mean that certain Subordination and
Intercreditor Agreement dated as of the date hereof by and among Foothill, the
Lender and the Borrower.

                                      -9-

Term Loan and Security Agreement
<PAGE>

            "Intellectual Property" shall mean all present and future: trade
secrets, know-how and other proprietary information; Trademarks, internet domain
names, service marks, trade dress, trade names, business names, designs, logos,
slogans (and all translations, adaptations, derivations and combinations of the
foregoing) indicia and other source and/or business identifiers, and the
goodwill of the business relating thereto and all registrations or applications
for registrations which have heretofore been or may hereafter be issued thereon
throughout the world; Copyrights (including Copyrights for computer programs)
and all tangible and intangible property embodying the Copyrights, unpatented
inventions (whether or not patentable); Patents; industrial design applications
and registered industrial designs; license agreements related to any of the
foregoing and income therefrom; books, records, writings, computer tapes or
disks, flow diagrams, specification sheets, computer software, source codes,
object codes, executable code, data, databases and other physical
manifestations, embodiments or incorporations of any of the foregoing; the right
to sue for all past, present and future infringements of any of the foregoing;
all other intellectual property; and all common law and other rights throughout
the world in and to all of the foregoing.

            "Intellectual Property Security Agreement" shall mean that certain
Acknowledgment of Intellectual Property Collateral Lien executed by the Credit
Parties, in favor of Agent, for the benefit of itself and Lenders, as such may
be modified, amended or supplemented from time to time.

            "Inventory" shall mean all "inventory" (as defined in the UCC) of
any Credit Party (or, if referring to another Person, of such other Person), now
owned or hereafter acquired, and all documents of title or other documents
representing any of the foregoing, and all collateral security and guaranties of
any kind, now or hereafter in existence, given by any Person with respect to any
of the foregoing.

            "Joinder Agreement" shall mean an agreement in form and substance
acceptable to Agent in its Permitted Discretion, the material terms of which
shall provide that a Person shall become a party to and become bound by the
terms of this Agreement and/or the other Loan Documents in the same capacity and
to the same extent as a Borrower.

            "Landlord Waiver and Consent" shall mean a waiver/consent in form
and substance satisfactory to Agent in its Permitted Discretion from the
owner/lessor of any premises not owned by any Credit Party at which any of the
Collateral having a fair market value of at least $25,000 individually and
$100,000 in the aggregate (at any one time) is now or hereafter located for the
purpose of providing Agent access to such Collateral, in each case as such may
be modified, amended or supplemented from time to time, and shall include such
waiver/consent relating to (a) 3022 Franklin Avenue, Waco, Texas, (b) 1123 129th
Avenue, Bradley, Michigan, (c) 1750 17th Street, Paris, Kentucky, (d) 901 South
Jason Street, Denver, Colorado; (e) 6455 Vipond Drive, Mississauga, Ontario,
Canada; (f) 110 N.E. 1st Street, McGregor, Texas; (g) 655 Montgomery Street,
Suite 500, San Francisco, California; and (h) 1714 Main Street, Paris, Kentucky.

            "Lender Addition Agreement" shall mean an agreement among Agent, a
Lender and such Lender's assignee regarding their respective rights and
obligations with respect to assignments of the Loans and other interests under
this Agreement and the other Loan

                                      -10-

Term Loan and Security Agreement
<PAGE>

Documents, in form and substance acceptable to Agent in its Permitted
Discretion, it being agreed and understood that the consent or approval of
Borrower shall not be required in connection with any Lender Addition Agreement
but may be obtained and shall be given by Borrower upon request of Agent.

            "Lenders" shall mean the financial institutions, from time to time
named on Schedule A under the headings "Term A Loan Lenders" and "Term B Loan
Lenders", their respective successors and permitted assigns (but not, except as
expressly set forth herein, any Participant that is not otherwise a party to
this Agreement).

            "Lien" shall mean any mortgage, pledge, security interest,
encumbrance, transfer or other restriction, lien or charge of any kind
(including any agreement to give any of the foregoing, any conditional sale or
other title retention agreement or any lease in the nature thereof), or any
other arrangement pursuant to which title to the property is retained by or
vested in some other Person for security purposes.

            "Loan Documents" shall mean, collectively and each individually,
this Agreement, the Notes, the Security Documents, the Landlord Waiver and
Consents, the Borrowing Certificates and all other agreements, documents,
instruments and certificates heretofore or hereafter executed or delivered to
Agent or Lenders in connection with any of the foregoing or the Loans, as the
same may be amended, modified or supplemented from time to time.

            "Loans" shall mean the Term A Loan and the Term B Loan.

            "Makewell Investment" shall mean one or more investments in EYAS by
any Person in the form of Permitted Securities which is contributed to the
Borrower or Subordinated Debt which investment is made in order to meet the
applicable ECF Threshold, as further described in Sections 7.11 and 7.1(b)
hereof; provided, however, such investment must be in an amount equal to (x)
from the Closing Date through June 30, 2004, one hundred percent (100%) of the
amount by which the ECF Threshold for the relevant period exceeds EBITDA for the
relevant period, and (y) on July 1, 2004 and thereafter, one hundred twenty-five
percent (125%) of the amount by which the ECF Threshold for the relevant period
exceeds EBITDA for the relevant period.

            "Makewell Investment Credit" shall have the meaning given such term
in Section 2.7(c)(vi) hereof.

            "Makewell Year" shall mean the period from October 1st of any year
through September 30th of the following year.

            "Material Adverse Effect" or "Material Adverse Change" shall mean
any event, condition, obligation, liability or circumstance or set of events,
conditions, obligations, liabilities or circumstances or any change(s) which (a)
has, had or would reasonably be expected to have any material adverse effect
upon or change in the validity or enforceability of any Loan Document, (b) has
been or would reasonably be expected to be material and adverse to the value of
any of the Collateral or to the business, operations, prospects, properties,
assets, liabilities or condition of the Credit Parties, either individually or
taken as a whole, or (c) has materially

                                      -11-

Term Loan and Security Agreement
<PAGE>

impaired or would reasonably be expected to materially impair the ability of the
Credit Parties to perform the Obligations or to consummate the transactions
under the Loan Documents executed by such Persons.

            "Maturity Date" shall mean the earlier of (a) the occurrence of an
Event of Default if amounts outstanding under the Loan Documents and other
Obligations shall be due and payable in connection therewith or as a result
thereof as required by this Agreement, (b) Agent's demand upon an Event of
Default of payment of amounts outstanding under the Loan Documents and other
Obligations, and (c) the last day of the Term.

            "NBU" shall mean NBU Group, LLC, a Texas limited liability company.

            "Note" shall mean, collectively and each individually, the Term A
Loan Notes, the Term B Loan Notes and the PIK Notes, as the same may be amended,
modified, divided, supplemented and/or restated from time to time.

            "Obligations" shall mean, without double counting, all present and
future obligations, Indebtedness and liabilities of Borrower and/or Guarantors
to Agent and/or Lenders at any time and from time to time of every kind, nature
and description, direct or indirect, secured or unsecured, joint and several,
absolute or contingent, due or to become due, matured or unmatured, now existing
or hereafter arising, contractual or tortious, liquidated or unliquidated,
including, without limitation, all of the foregoing under any of the Loan
Documents or otherwise relating to Notes and/or Loans, including, without
limitation, interest, all applicable fees, charges and expenses and/or all
amounts paid or advanced by Agent or Lenders on behalf of or for the benefit of
the Borrower and/or any Guarantor for any reason at any time, including in each
case obligations of performance as well as obligations of payment and interest
that accrue after the commencement of any proceeding under any Debtor Relief Law
by or against any such Person.

            "Participant" shall have the meaning assigned to it in Section
13.2(b) hereof.

            "Patents" shall mean all of any Credit Party's now existing or
hereafter acquired right, title and interest in and to: (a) all patents, patent
applications, inventions, invention disclosures and improvements, and all
applications, registrations and recordings relating to the foregoing as may at
any time be filed in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof, any political
subdivision thereof or in any other country, and all research and development
relating to the foregoing; and (b) the reissues, divisions, continuations,
renewals, extensions and continuations-in-part of any of the foregoing.

            "Payment Office" shall mean initially the address set forth beneath
the Agent's name on the signature page of this Agreement, and thereafter, such
other office of Agent, if any, which it may designate by notice to Borrower to
be the Payment Office.

            "Permit" shall mean with respect to any Person collectively all
licenses, leases, powers, permits, franchises, certificates, authorizations and
approvals.

                                      -12-

Term Loan and Security Agreement
<PAGE>

            "Permitted Discretion" shall mean a determination or judgment made
in good faith in the exercise of reasonable (from the perspective of a secured
lender) credit or business judgment.

            "Permitted Indebtedness" shall mean Indebtedness of the Credit
Parties permitted under Section 7.2.

            "Permitted Liens" shall mean Liens permitted under Section 7.3.

            "Permitted Securities" shall mean any shares, units or interests of
equity securities or ownership interests of EYAS that by their terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable) or upon the happening of any event or otherwise (a) are not
convertible or exchangeable for Indebtedness or any securities that are not
Permitted Securities, (b) (i) do not mature and (ii) are not putable or
redeemable at the option of the holder thereof, in each case under clause (i) or
(ii) in whole or in part on or prior to the date six (6) months after the
earlier of the end of the Term or the actual payment in full in cash of the
Obligations, (c) do not have payments of dividends on or prior to the date six
(6) months after the earlier of the end of the Term or the actual payment in
full of the Obligations, (d) are unsecured and by operation of law or by legally
binding agreement are subordinated in right of repayment, liens, security and
remedies to all of the Obligations and to all of Agent's and Lenders' rights,
Liens and remedies, (e) do not have any contractual veto or supermajority voting
rights or approval rights with respect to any issues, (f) are not sold, issued
or otherwise transferred in connection with or as a part of a Public Offering
and (g) the proceeds from the sale or issuance of which shall have been
contributed to the Borrower. "Permitted Securities" shall also include any
options to acquire Permitted Securities of EYAS issued to employees,
non-employee directors, consultants and other advisors pursuant to the terms of
the related employment or other compensation-related agreements and/or incentive
stock plans adopted and approved by the Board of Directors or Managers/Advisors
of EYAS or the Borrower.

            "Person" shall mean an individual, a partnership, a corporation, a
limited liability company, a business trust, a joint stock company, a trust, an
unincorporated association, a joint venture, a Governmental Authority or any
other entity of whatever nature.

            "PIK Event" shall mean either (a) a Default under Section 8(a)
hereof or (b) the failure of the Credit Parties to meet the ECF Threshold in
accordance with the provisions of Sections 7.11 and 7.1(b) hereof.

            "PIK Interest" shall have the meaning assigned to such term in
Section 2.3(c) hereof and shall be considered interest for all purposes under
the Loan Documents except as otherwise stated or treated in this Agreement.

            "PIK Note(s)" shall mean, individually and collectively, one or more
PIK Notes and any additional promissory note(s) payable to the order of each
Term B Loan Lender executed by Borrower evidencing the aggregate amount of PIK
Interest accrued during the Term on the Term B Loans the same may be amended,
modified, divided, supplemented or restated from time to time.

                                      -13-

Term Loan and Security Agreement
<PAGE>

            "Pledge Agreement" shall mean, collectively and individually, if
applicable, all pledge agreements, charge over shares or any similar documents
executed by and between Agent and the Borrower, each Guarantor, or any other
Person having an ownership interest in any Credit Party (excluding EYAS), in
each case as such may be modified, amended or supplemented from time to time.

            "Prime Rate" shall mean a fluctuating interest rate per annum equal
at all times to the rate of interest announced publicly from time to time by
Citibank, N.A. as its base rate; provided, that such rate is not necessarily the
best rate offered to its customers, and, should Agent be unable to determine
such rate, such other indication of the prevailing prime rate of interest as may
reasonably be chosen by Agent; provided, further, that each change in the
fluctuating interest rate shall take effect simultaneously with the
corresponding change in the Prime Rate.

            "Priority Permitted Liens" shall mean Permitted Liens contemplated
by and permitted pursuant to Sections 7.3(b), (c), (d), (e), (f) and/or, to the
extent identified on Schedule 7.3 as Priority Permitted Liens, (g).

            "Pro Rata Share" shall mean (a) with respect to matters relating to
a particular Term A Loan of a Term A Loan Lender, the percentage obtained by
dividing (i) the aggregate amount of the portion of the outstanding Term A Loan
made by such Lender by (ii) the aggregate amount of the outstanding Term A Loan;
(b) with respect to matters relating to a particular Term B Loan of a Term B
Loan Lender, the percentage obtained by dividing (i) the aggregate amount of the
portion of the outstanding Term B Loan made by such Lender by (ii) the aggregate
amount of the outstanding Term B Loan; and (c) with respect to all other
matters, the percentage obtained by dividing (i) the aggregate amount of a
Lender's Loans outstanding and such Lender's Commitment by (ii) the aggregate
amount of all Lenders' Loans outstanding and all Lenders' Commitments; in any
case as such percentage may be adjusted by assignments permitted pursuant to
Section 13.2.

            "Public Offering" shall mean any offer or sale of securities
pursuant to any registration statement filed and effective with the Securities
and Exchange Commission or any other Governmental Authority.

            "Recalculation Event" shall mean either (a) the receipt by any
Credit Party of notice from the Internal Revenue Service that the tax treatment
of the Subordinated Debentures as of the Agreement Date shall have changed in a
manner such that any Credit Party is subject to additional tax liability as a
result thereof, or (b) any of the agreements or arrangements with any Affiliate
or holder of the Existing Warrant as described in Section 7.6 hereof, or as
reported to the Agent in accordance with Section 6.1(a), shall have been
terminated or modified in a manner resulting in the increase of costs to the
Credit Parties (as measured by the increase in costs for the four fiscal quarter
period most recently ended from the four fiscal quarter period ended immediately
prior to the most recently ended four fiscal quarter period) in an amount equal
to the greater of (i) 25% of the total annual savings prior to the termination
or modification, as applicable, and (ii) $200,000.

            "Receipt" shall have the meaning given such term in Section 13.5.

                                      -14-

Term Loan and Security Agreement
<PAGE>

            "Requisite Lenders" shall mean (a) with respect to matters relating
to Term A Loan Lenders, Term A Loan Lenders holding or being responsible for 51%
or more of the sum of all outstanding Term A Loan, (b) with respect to matters
relating to Term B Loan Lenders, Term B Loan Lenders holding or being
responsible for 51% or more of the sum of the outstanding Term B Loan, and (c)
with respect to all other matters, Lenders holding or being responsible for 51%
or more of all outstanding Loans.

            "Securities Act" shall mean the Securities Act of 1933, as amended.

            "Security Documents" shall mean this Agreement, the Notes, the
Intercreditor Agreement, the Mortgages, Intellectual Property Security
Agreements, Guarantees, Pledge Agreements, the Collateral Assignment of
Acquisition Agreement, UCC financing statements, Subordination Agreements,
agreements related to Accounts, and all other documents or instruments necessary
to create or perfect the Liens in the Collateral, as such may be modified,
amended or supplemented from time to time.

            "Seller Note Subordination Agreement" shall mean that certain
Subordination Agreement dated as of the Closing Date by and among the Borrower,
USHG, Foothill and the Agent, in form and substance satisfactory to the Agent.

            "Solvency Certificate" shall have the meaning assigned to it in
Section 4.1(d) hereof.

            "Subordinated Debentures" shall mean the Indebtedness of Borrower
evidenced by that certain Junior Subordinated Indenture governing the 9.4%
Junior Subordinated Debentures Due 2028 issued by the Borrower to its
subsidiary, Easy Gardener Trust.

            "Subordinated Debt" shall mean, collectively, (a) Indebtedness
evidenced by the Central Garden Note and other Indebtedness owed to Central
Garden which is subject to the terms of the Central Garden Subordination
Agreement, (b) the Subordinated Seller Note, and (c) any Indebtedness,
contingent equity, earnout or other obligations of the Credit Parties that is
unsecured, subordinated in right of repayment, liens, security and remedies to
all of the Obligations and to all of Agent's and Lenders' rights, Liens and
remedies and on terms no less favorable to the Agent and Lenders as those
contained in the Subordination Agreement attached hereto as Exhibit B or
otherwise in form and substance satisfactory to Agent in its Permitted
Discretion.

            "Subordinated Seller Note" shall mean that certain Subordinated
Promissory Note in the amount of $1,600,000 dated as of the date hereof issued
by the Borrower to USHG, in form and substance satisfactory to the Agent in its
Permitted Discretion.

            "Subordination Agreement" shall mean, individually and collectively,
(a) the Central Garden Subordination Agreement, (b) the Seller Note
Subordination Agreement, and (c) any other agreements between the Agent and
holders of Subordinated Debt relating to Subordinated Debt, in each case as the
same may be modified, amended, restated and/or supplemented from time to time,
in each case in form and substance satisfactory to Agent in its Permitted
Discretion.

                                      -15-

Term Loan and Security Agreement
<PAGE>

            "Subsidiary" shall mean, (a) as to the Borrower, any Person in which
more than 50% of all equity, membership, partnership or other ownership
interests is owned directly or indirectly by the Borrower or one or more of its
Subsidiaries, and (b) as to any other Person, any Person in which more than 50%
of all equity, membership, partnership or other ownership interests is owned
directly or indirectly by such Person or by one or more of such Person's
Subsidiaries.

            "Tax Distributions" shall have the meaning assigned to it in Section
7.5 hereof.

            "Term" shall mean the period commencing on the Closing Date and
ending on October 29, 2008.

            "Term A Interest Reserve" shall mean, as of any date, an amount
equal to (a) two and one quarter of one percent (2.25%) multiplied by (b) the
principal outstanding amount of the Closing Date Term A Advance, as it may be
reduced from time to time minus (c) any utilization under the Term A Interest
Reserve made by Lenders after the Closing Date.

            "Term B Interest Reserve" shall mean, as of any date, an amount
equal to (a) two and one quarter of one percent (2.25%) multiplied by (b) the
principal outstanding amount of the Closing Date Term B Advance, as it may be
reduced from time to time minus (c) any utiilization under the Term B Interest
Reserve made by Lenders after the Closing Date.

            "Term A Loan" shall mean collectively, the term loan made by Term A
Loan Lenders to Borrower on the Closing Date in the aggregate principal amount
of Fourteen Million Dollars ($14,000,000), any utilization of the Term A
Interest Reserve by Term A Loan Lenders to Borrower in Agent's sole discretion
after the Closing Date (which shall not, when aggregated with the Closing Date
Term A Advance exceed Fourteen Million Three Hundred Fifteen Thousand Dollars
($14,315,000)) and all Obligations related thereto.

            "Term A Loan Lenders" shall mean the financial institutions from
time to time named on Schedule A under the heading "Term A Loan Lenders", their
respective successors and permitted assigns (but not, except as expressly set
forth herein, any Participant that is not otherwise a party to this Agreement.

            "Term A Loan Note(s)" shall mean, individually and collectively, one
or more Term A Loan Notes and any additional promissory note(s) payable to the
order of each Term A Loan Lender executed by Borrower evidencing the Term A
Loan, as the same may be amended, modified, split, divided, supplemented and/or
restated from time to time.

            "Term B Loan Lenders" shall mean the financial institutions from
time to time named on Schedule A under the heading "Term B Loan Lenders", their
respective successors and permitted assigns (but not, except as expressly set
forth herein, any Participant that is not otherwise a party to this Agreement.

            "Term B Loan" shall mean collectively, the term loan made by Term B
Loan Lenders to Borrower on the Closing Date in the aggregate principal amount
of Nine Million Five Hundred Thousand Dollars ($9,500,000), any utilization of
the Term B Interest Reserve by Term

                                      -16-

Term Loan and Security Agreement
<PAGE>

B Loan Lenders to Borrower in Agent's sole discretion after the Closing Date
(which shall not, when aggregated with the Closing Date Term B Advance exceed
Nine Million Seven Hundred Thirteen Thousand Seven Hundred Fifty Dollars
($9,713,750)) and all Obligations related thereto.

            "Term B Loan Note(s)" shall mean, individually and collectively, one
or more Term B Loan Notes and any additional promissory note(s) payable to the
order of each Term B Loan Lender executed by Borrower evidencing the Term B
Loan, as the same may be amended, modified, split, divided, supplemented and/or
restated from time to time.

            "Term Loans" shall mean the Term A Loan and the Term B Loan.

            "Termination" shall have the meaning assigned to it in Section 3.2
hereof.

            "Termination Date" shall have the meaning assigned to in Section
11.1 hereof.

            "Termination Fee" shall mean an amount equal to:

            (i) if the Termination occurs as a result of a Change of Control (A)
from the Closing Date through October 29, 2004, the Yield Maintenance Fee, (B)
from October 30, 2004 through October 29, 2005, two percent (2%) of the amount
of the Obligations terminated or prepaid in accordance with this Agreement and
(C) at all other times, zero (0);

            (ii) if the Termination results from any event other than a Change
of Control (A) from the Closing Date through October 29, 2005, the Yield
Maintenance Fee, (B) from October 30, 2005 through October 29, 2006, two percent
(2%) of the amount of the Obligations terminated or prepaid in accordance with
this Agreement and (C) at all other times, zero (0).

            "Trademarks" shall mean all of each Credit Party's now existing or
hereafter acquired right, title, and interest in and to: (a) all of each Credit
Party's trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos, other business
identifiers, prints and labels on which any of the foregoing have appeared or
appear, all applications, registrations and recordings relating to the foregoing
as may at any time be filed in the United States Patent and Trademark Office or
in any similar office or agency of the United States, any State thereof, any
political subdivision thereof or in any other country, and all research and
development relating to the foregoing; (b) all renewals thereof; and (iii) all
designs and general intangibles of a like nature.

            "Tredegar Agreement" shall mean that certain Agreement dated as of
September 24, 2003 between the Borrower and Tredegar Film Products Corporation
regarding the purchase and sale of certain film products supplies.

            "UCC" shall mean the Uniform Commercial Code as in effect in the
State of New York from time to time.

            "UFCA" shall have the meaning assigned to it in Section 3.7(c)
hereof.

            "UFTA" shall have the meaning assigned to it in Section 3.7(c)
hereof.

                                      -17-

Term Loan and Security Agreement
<PAGE>

            "USHG" shall mean U.S. Home & Garden Inc., a Delaware corporation.

            "Weatherly Group" shall mean Weatherly Consumer Products Group,
Inc., a Delaware corporation.

            "Weatherly Products" shall mean Weatherly Consumer Products, Inc., a
Delaware corporation.

            "Yield Maintenance Fee" shall mean, for any period, an amount equal
to the difference between (x) the maximum total interest and fees which could be
earned on the Loans being prepaid or terminated from the effective date of any
prepayment or termination through the end of such period, and (y) the total
amount of interest which would accrue on an amount equal to the amount being
prepaid or terminated from the date of such prepayment through and including the
second anniversary of the Closing Date calculated at an interest rate per annum
equal to the latest published (as published in the Wall Street Journal) rate
preceding the later of the effective date of any prepayment for United States
Treasury Notes or Bills (Bills on a discounted basis shall be converted to a
bond equivalent) with a maturity date closest to the last day of the Term.

                                      -18-

Term Loan and Security Agreement
<PAGE>

                                   SCHEDULE A

                               Lenders/Commitments

Term A Loan Lenders                                       Term A Loan Commitment
--------------------------------------------------------------------------------

CapitalSource Finance LLC                                        $14,315,000
4445 Willard Avenue, 12th Floor
Chevy Chase, Maryland 20815
Attention: Corporate Finance Group, Portfolio Manager
Telephone: (301) 841-2700
FAX: (301) 841-2360
E-Mail: kelias@capitalsource.com

Wire Instructions:

Bank: Bank of America, Baltimore, MD
Account Number: 003939396662
ABA Number: 052001633
Account Name: CapitalSource Funding LLC - CFG
Reference: Easy Gardener Products, Ltd.

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Term B Loan Lenders                                       Term B Loan Commitment
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CapitalSource Finance LLC                                      $9,713,750
4445 Willard Avenue, 12th Floor
Chevy Chase, Maryland 20815
Attention: Corporate Finance Group, Portfolio Manager
Telephone: (301) 841-2700
FAX: (301) 841-2360
E-Mail: kelias@capitalsource.com

Wire Instructions:

Bank: Bank of America, Baltimore, MD
Account Number: 003939396662
ABA Number: 052001633
Account Name: CapitalSource Funding LLC - CFG
Reference: Easy Gardener Products, Ltd.
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Term Loan and Security AgreementExhibit 10.15
                                TERM A LOAN NOTE

U.S. $14,315,000.00                                             October 29, 2003

      FOR VALUE RECEIVED, the undersigned, EASY GARDENER PRODUCTS, LTD., a Texas
limited partnership (the "Borrower"), hereby promises to pay to CAPITALSOURCE
FINANCE LLC, a Delaware limited liability company (the "Lender"), the aggregate
principal amount at any time outstanding of the Term A Loan made by Lender to
Borrower pursuant to the Loan Agreement, which amount shall not exceed Fourteen
Million Three Hundred Fifteen Thousand Dollars ($14,315,000.00), in lawful money
of the United States of America in immediately available funds, with interest
thereon, and all other Obligations related thereto under and pursuant to the
Term Loan and Security Agreement dated as of the date hereof among Borrower, the
other Credit Parties, Lender (in its capacity as a Lender and as administrative,
payment and collateral agent for the Lenders), and other Lenders party thereto
from time to time (as it may be amended, supplemented or otherwise modified from
time to time, the "Loan Agreement"), all at the times and in the manner set
forth in the Loan Agreement. Capitalized terms used but not defined herein shall
have the meanings given them in the Loan Agreement.

      1. Interest and Payments.

            (a) Borrower promises to pay interest on the outstanding principal
amount of this Term A Loan Note from the date of funding of the Term A Loan
until such principal amount is indefeasibly paid in full in cash. Interest on
the outstanding principal amount of this Term A Loan Note shall be due and
payable monthly in arrears on the first calendar day of each calendar month,
commencing with the month of November, 2003, at an annual rate equal to the
greater of (i) the Prime Rate plus five and three-quarter percent (5.75%) and
(ii) ten percent (10%), calculated on the basis of a 360-day year and for the
actual number of calendar days elapsed in each interest calculation period.

            (b) Payments of interest on the Term A Loan and other Obligations
related to the Term A Loan shall be made only by wire transfer on the date when
due, without offset or counterclaim, in U.S. dollars, in immediately available
funds as required in the Loan Agreement. Notwithstanding and without limiting or
being limited by any other provision of this Term A Loan Note or any other Loan
Document, any payments or prepayments received under this Term A Loan Note shall
be credited and applied in such manner and order as described in the Loan
Agreement.

      2. Maturity and Principal Payments. Unless earlier due and payable in
accordance with the Loan Agreement or accelerated under the Loan Documents, this
Term A Loan Note and the Term A Loan shall mature, and all amounts outstanding
hereunder and all other Obligations under the Loan Documents relating to the
Term A Loan, shall become due and payable in full on the Maturity Date. Borrower
shall make payments on the principal amount of the Term A Loan outstanding
hereunder as required pursuant to the Loan Agreement.

      3. Default Rate. Notwithstanding any other provision of this Term A Loan
Note, the late fee, if any, and default rates set forth in the Loan Agreement
shall apply to this Term A Loan Note.

<PAGE>

      4. Loan Agreement. This Term A Loan Note is referred to in, made pursuant
to, and entitled to the benefits of, the Loan Agreement. The Loan Agreement,
among other things, (i) provides for the making of the Term A Loan by Lender to
Borrower in the aggregate maximum dollar amount first mentioned above, (ii)
contains provisions for acceleration of the maturity hereof upon the happening
of certain stated events upon the terms and conditions therein specified, and
(iii) contains provisions defining an Event of Default and the rights and
remedies of the parties thereto. This Term A Loan Note is a secured note,
entitled to the benefits of and security interests granted in, among other
things, the Loan Agreement and the other Loan Documents.

      5. Prepayments. This Term A Loan Note may be prepaid in whole or in part
only as permitted in the Loan Agreement and shall be prepaid, in each case as
provided or required in the Loan Agreement. No payment or prepayment of any
amount shall entitle any Person to be subrogated to the rights of Lender
hereunder or under the Loan Documents unless and until the Obligations have been
performed in full and indefeasibly paid in full in cash and the Loan Agreement
has been terminated.

      6. Payments Due on a Day other than a Business Day. If any payment to be
made on or under this Term A Loan Note is stated to be due or becomes due and
payable on a day other than a Business Day, the due date thereof shall be
extended to, and such payment shall be made on, the next succeeding Business
Day, and such extension of time in such case shall be included in the
computation of payment of any interest (at the interest rate then in effect
during such extension) and/or fees, as the case may be.

      7. Waivers. Borrower hereby agrees that the provisions of the Loan
Agreement relating to waivers and rights and remedies shall apply to this Term A
Loan Note.

      8. Lawful Limits. In no contingency or event whatsoever, whether by reason
of acceleration or otherwise, shall the interest and other charges paid or
agreed to be paid by Borrower for the use, forbearance or detention of money
hereunder exceed the maximum rate permissible under applicable law which a court
of competent jurisdiction shall, in a final determination, deem applicable
hereto. If, due to any circumstance whatsoever, fulfillment of any provision
hereof, at the time performance of such provision shall be due, shall exceed any
such limit, then, the obligation to be so fulfilled shall be reduced to such
lawful limit, and any interest or any other charges of any kind received which
might be deemed to be interest under applicable law in excess of the maximum
lawful rate shall be applied in accordance with the Loan Agreement.

      9. Governing Law. This Term A Loan Note shall be governed by and construed
in accordance with the internal laws of the State of Maryland without giving
effect to its choice of laws provisions.

                  [Remainder of Page Intentionally Left Blank]

                                       2
<PAGE>

This Term A Loan Note is executed as of the date first written above.

                                         EASY GARDENER PRODUCTS, LTD.,
                                         a Texas limited partnership

                                         By:  E G Product Management, L.L.C.,
                                              its General Partner

                                         By:  /s/ Richard Grandy
                                              -------------------------------
                                         Name: Richard Grandy
                                              -------------------------------
                                         Title: Manager
                                              -------------------------------

                                                    EASY GARDENER PRODUCTS, LTD.
                                                                TERM A LOAN NOTE
                                                                  Signature page

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