Document:

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                                                                     EXHIBIT 4.1

                                                               EXECUTION VERSION

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                           REVOLVING CREDIT AGREEMENT

                                      among

                         THE SCOTTS MIRACLE-GRO COMPANY,
                                   as Borrower

            The Subsidiary Borrowers From Time to Time Party Hereto,

               The Several Lenders From Time to Time Party Hereto,

                           JPMORGAN CHASE BANK, N.A.,
                            as Administrative Agent,

             BANK OF AMERICA, N.A. AND CITICORP NORTH AMERICA, INC.,
                             as Syndication Agents,

                                       and

        BANK OF TOKYO-MITSUBISHI TRUST COMPANY, BNP PARIBAS, COBANK, ACB,
             HARRIS, N.A., RABOBANK INTERNATIONAL and SUNTRUST BANK,
                             as Documentation Agents

                           --------------------------

                            Dated as of July 21, 2005

                           --------------------------

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

                         J.P. MORGAN SECURITIES INC., as
                    Sole Lead Arranger and as Sole Bookrunner

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                                TABLE OF CONTENTS

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SECTION 1.  DEFINITIONS......................................................................................       1
     1.1    Defined Terms....................................................................................       1
     1.2    Other Definitional Provisions....................................................................      22

SECTION 2.  AMOUNT AND TERMS OF LOANS........................................................................      23
     2.1    Revolving Credit Commitment......................................................................      23
     2.2    Procedure for Revolving Credit Borrowing.........................................................      24
     2.3    Swing Line Commitments...........................................................................      25
     2.4    Participation....................................................................................      27
     2.5    Repayment of Revolving Credit Loans; Evidence of Debt............................................      27
     2.6    Facility Fee, etc................................................................................      28
     2.7    Termination or Reduction of Revolving Credit Commitments.........................................      28
     2.8    Optional and Mandatory Prepayments...............................................................      29
     2.9    Cash Collateralization of Letters of Credit......................................................      30
     2.10   Conversion Options...............................................................................      30
     2.11   Interest Rate and Payment Dates..................................................................      31
     2.12   Computation of Interest and Fees.................................................................      31
     2.13   Inability to Determine Interest Rate.............................................................      31
     2.14   Pro Rata Treatment and Payments..................................................................      32
     2.15   Illegality.......................................................................................      33
     2.16   Requirements of Law..............................................................................      33
     2.17   Indemnity........................................................................................      35
     2.18   Taxes............................................................................................      35
     2.19   Use of Proceeds..................................................................................      37
     2.20   Controls on Prepayment if Aggregate Revolving Extensions of Credit Exceed Aggregate Revolving
              Credit Commitments.............................................................................      37
     2.21   Lending Installations............................................................................      38
     2.22   Notices to Lenders...............................................................................      39
     2.23   Revolving Credit Commitment Increases and Changes................................................      39

SECTION 3.  LETTER OF CREDIT FACILITIES......................................................................      40
     3.1    L/C Commitment...................................................................................      40
     3.2    Procedure for Issuance of Letters of Credit......................................................      41
     3.3    Fees, Commissions and Other Charges..............................................................      41
     3.4    L/C Participation................................................................................      41
     3.5    Reimbursement Obligation of the Borrower.........................................................      42
     3.6    Obligations Absolute.............................................................................      43
     3.7    Increased Costs..................................................................................      43
     3.8    Letter of Credit Payments........................................................................      44

SECTION 4.  REPRESENTATIONS AND WARRANTIES...................................................................      44
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     4.1    Financial Condition..............................................................................      44
     4.2    Corporate Existence; Compliance with Law.........................................................      45
     4.3    Corporate Power; Authorization; Enforceable Obligations..........................................      45
     4.4    No Legal Bar.....................................................................................      45
     4.5    No Material Litigation...........................................................................      45
     4.6    No Burdensome Restrictions.......................................................................      46
     4.7    No Default.......................................................................................      46
     4.8    Subsidiaries.....................................................................................      46
     4.9    Disclosure.......................................................................................      46
     4.10   Schedules........................................................................................      46
     4.11   Federal Regulations..............................................................................      46
     4.12   Investment Company Act; Other Regulations........................................................      46
     4.13   Labor Matters....................................................................................      46
     4.14   ERISA............................................................................................      47
     4.15   Title to Real Property, Etc......................................................................      47
     4.16   Taxes............................................................................................      47
     4.17   Environmental Matters............................................................................      47
     4.18   Intellectual Property............................................................................      48
     4.19   Security Documents...............................................................................      48
     4.20   Solvency.........................................................................................      49
     4.21   Senior Indebtedness..............................................................................      49

SECTION 5.  CONDITIONS PRECEDENT.............................................................................      49
     5.1    Conditions to Effectiveness of this Agreement....................................................      49
     5.2    Conditions to All Extensions of Credit...........................................................      52
     5.3    Additional Conditions Applicable to Foreign Subsidiary Borrowers.................................      52

SECTION 6.  AFFIRMATIVE COVENANTS............................................................................      54
     6.1    Financial Statements.............................................................................      54
     6.2    Certificates; Other Information..................................................................      55
     6.3    Payment of Obligations...........................................................................      56
     6.4    Compliance with Laws.............................................................................      56
     6.5    Conduct of Business and Maintenance of Existence.................................................      56
     6.6    Maintenance of Property, Insurance...............................................................      56
     6.7    Inspection of Property; Books and Records; Discussions...........................................      56
     6.8    Notices..........................................................................................      56
     6.9    Interest Coverage................................................................................      57
     6.10   Maintenance of Leverage Ratio....................................................................      58
     6.11   Additional Collateral, etc.......................................................................      58
     6.12   Environmental, Health and Safety Matters.........................................................      60
     6.13   Foreign Pledge Agreements........................................................................      60

SECTION 7.  NEGATIVE COVENANTS...............................................................................      61
     7.1    Limitation on Liens..............................................................................      61
     7.2    Limitation on Contingent Obligations.............................................................      62
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     7.3    Limitation on Fundamental Changes................................................................      62
     7.4    Limitation on Acquisitions, Investments, Loans and Advances......................................      63
     7.5    Limitation on Indebtedness.......................................................................      64
     7.6    Limitation on Restrictions on Subsidiary Distributions...........................................      65
     7.7    Transactions with Affiliates and Officers........................................................      66
     7.8    Limitation on Sale of Assets.....................................................................      66
     7.9    Sale and Leaseback...............................................................................      66
     7.10   Fiscal Year......................................................................................      66
     7.11   Modifications of Certain Debt Instruments........................................................      67
     7.12   Negative Pledge Clauses..........................................................................      67
     7.13   Lines of Business................................................................................      67
     7.14   Restricted Payments..............................................................................      67
     7.15   Limitation of Redemptions of Certain Indebtedness................................................      68

SECTION 8.  EVENTS OF DEFAULT................................................................................      68

SECTION 9.  THE ADMINISTRATIVE AGENT.........................................................................      71
     9.1    Appointment......................................................................................      71
     9.2    Delegation of Duties.............................................................................      72
     9.3    Exculpatory Provisions...........................................................................      72
     9.4    Reliance by Administrative Agent.................................................................      72
     9.5    Notice of Default................................................................................      73
     9.6    Non-Reliance on Administrative Agent, Other Lenders and JPMCB....................................      73
     9.7    Indemnification..................................................................................      73
     9.8    Administrative Agent in Its Individual Capacity..................................................      74
     9.9    Parallel Debt....................................................................................      74
     9.10   Successor Administrative Agent...................................................................      74
     9.11   The Syndication Agent and the Documentation Agents...............................................      75

SECTION 10. MISCELLANEOUS....................................................................................      75
     10.1   Amendments and Waivers...........................................................................      75
     10.2   Notices..........................................................................................      76
     10.3   No Waiver; Cumulative Remedies...................................................................      78
     10.4   Survival of Representations, Warranties and Indemnities..........................................      78
     10.5   Payment of Expenses and Taxes....................................................................      78
     10.6   Successors and Assigns; Participations and Assignments...........................................      79
     10.7   Adjustments; Set-off.............................................................................      81
     10.8   Enforceability; Usury............................................................................      82
     10.9   Judgment.........................................................................................      83
     10.10  Counterparts.....................................................................................      83
     10.11  Governing Law; No Third Party Rights.............................................................      83
     10.12  Headings.........................................................................................      84
     10.13  Submission To Jurisdiction; Waivers..............................................................      84
     10.14  Acknowledgments..................................................................................      85
     10.15  Confidentiality..................................................................................      85
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     10.16   WAIVERS OF JURY TRIAL...........................................................................      86
     10.17   Severability....................................................................................      86
     10.18   USA PATRIOT Act.................................................................................      86
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ANNEXES

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<S>                     <C>
Annex A                 Pricing Grid
Annex B                 Sterling Borrower Provisions
Annex C                 Australia Borrower Provisions
Annex D                 Canadian Borrower Provisions

SCHEDULES

Schedule 1              Lenders; Revolving Credit Commitments
Schedule 1.2            Non-Guarantor Domestic Subsidiaries
Schedule 4.1            Certain Financial Information
Schedule 4.5            Litigation
Schedule 4.8            Subsidiaries
Schedule 4.11           Certain Transactions
Schedule 4.19(ii)       Certain Filings
Schedule 4.19(iii)      Perfection of Foreign Stock Pledges
Schedule 5.1(b)         Foreign Subsidiary Pledges
Schedule 5.1(g)         Proceedings
Schedule 5.3(iii)       Certain Filings
Schedule 6.13           Foreign Pledge Agreements
Schedule 7.1(i)         Existing Liens and Encumbrances
Schedule 7.9            Sale and Leaseback
Schedule 7.2(iii)       Existing Guarantees
Schedule 7.5(c)         Existing Indebtedness
Schedule 10.2           Notices

EXHIBITS

Exhibit A               Form of Assignment and Acceptance
Exhibit B               Form of Guarantee and Collateral Agreement
Exhibit C               Form of Swing Line Loan Participation Certificate
Exhibit D               Form of U.S. Tax Compliance Certificate
Exhibit E               Form of Commitment Increase Supplement
Exhibit F               Form of New Lender Supplement
Exhibit G               Form of Opinion of Vorys, Sater, Seymour and Pease LLP
Exhibit H               Form of Opinion of Counsel to Foreign Subsidiary Borrowers
Exhibit I               Form of Borrowing Certificate
Exhibit J               Form of New Domestic Subsidiary Certificate
Exhibit K               Form of Joinder Agreement
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            REVOLVING CREDIT AGREEMENT, dated as of July 21, 2005, by and among
THE SCOTTS MIRACLE-GRO COMPANY, an Ohio corporation (the "Borrower"), the
Subsidiary Borrowers (as defined herein) from time to time parties to this
agreement, the several banks and other financial institutions from time to time
parties to this Agreement (the "Lenders"), Bank of America, N.A. and CITICORP
NORTH AMERICA, Inc., as Syndication Agents, Bank of Tokyo-Mitsubishi Trust
Company, BNP Paribas, COBANK, ACB, HARRIS, N.A., RABOBANK INTERNATIONAL and
SUNTRUST BANK, as Documentation Agents, and JPMORGAN CHASE BANK, N.A., (together
with its banking affiliates, "JPMCB"), as agent for the Lenders hereunder (in
such capacity, the "Administrative Agent").

                              W I T N E S S E T H :

            WHEREAS, the parties hereto agree as follows:

            SECTION 1. DEFINITIONS

            1.1 Defined Terms. As used in this Agreement, the following terms
have the following meanings:

            "ABR" shall mean for any day, a rate per annum (rounded upwards, if
      necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime
      Rate in effect on such day and (b) the Federal Funds Effective Rate in
      effect on such day plus -1/2 of 1%. For purposes hereof: "Prime Rate"
      shall mean the rate of interest per annum publicly announced from time to
      time by the Administrative Agent as its prime rate in effect at its
      principal office in New York City (the Prime Rate not being intended to be
      the lowest rate of interest charged by JPMCB in connection with extensions
      of credit to debtors); and "Federal Funds Effective Rate" shall mean, for
      any day, the weighted average of the rates on overnight federal funds
      transactions with members of the Federal Reserve System arranged by
      federal funds brokers, as published on the next succeeding Business Day by
      the Federal Reserve Bank of New York, or, if such rate is not so published
      for any day which is a Business Day, the average of the quotations for the
      day of such transactions received by the Administrative Agent from three
      federal funds brokers of recognized standing selected by it. Any change in
      the ABR due to a change in the Prime Rate or the Federal Funds Effective
      Rate shall be effective as of the opening of business on the effective day
      of such change in the Prime Rate or the Federal Funds Effective Rate, as
      applicable.

            "ABR Loans" shall mean the Loans at such time as they are made
      and/or being maintained at a rate of interest based upon the ABR.

            "Adjustment Date" shall have the meaning set forth in the Pricing
      Grid.

            "Affiliate" shall mean (a) any Person (other than a Subsidiary of
      the Borrower) which, directly or indirectly, controls, is controlled by or
      is under common control with, the Borrower or (b) any Person who is a
      director or executive officer of the Borrower, any Subsidiary of the
      Borrower or any Person described in clause (a) of this definition. For
      purposes of this definition, "control" of a Person means the power, direct
      or indirect, to vote 20% or more of the Capital Stock having voting power
      for the election of directors of such Person or otherwise to direct or

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                                                                               2

      cause the direction of the management and policies of such Person, whether
      by contract or otherwise.

            "Aggregate Exposure" shall mean, with respect to any Lender at any
      time, an amount equal to (a) until the Closing Date, the aggregate amount
      of such Lender's Revolving Credit Commitment at such time and (b)
      thereafter, the amount of such Lender's Revolving Credit Commitment then
      in effect or, if the Revolving Credit Commitments have been terminated,
      the amount of such Lender's Revolving Extensions of Credit then
      outstanding.

            "Aggregate Exposure Percentage" shall mean, with respect to any
      Lender at any time, the ratio (expressed as a percentage) of such Lender's
      Aggregate Exposure at such time to the Aggregate Exposure of all Lenders
      at such time.

            "Aggregate Australian Revolving Extensions of Credit" shall mean an
      amount equal to the sum of (a) the aggregate principal amount of all
      Australian Dollar Loans (including, without limitation, Australian Dollar
      Swing Line Loans borrowed under Australian Commitments) then outstanding
      and (b) the aggregate amount of all Australian L/C Obligations then
      outstanding.

            "Aggregate Canadian Revolving Extensions of Credit" shall mean an
      amount equal to the sum of (a) the aggregate principal amount of all
      Canadian Dollar Loans (including, without limitation, Canadian Dollar
      Swing Line Loans borrowed under Canadian Commitments) then outstanding and
      (b) the aggregate amount of all Canadian L/C Obligations then outstanding.

            "Aggregate Facility A Revolving Extensions of Credit" shall mean an
      amount equal to the sum of (a) the aggregate principal amount of all
      Facility A Loans (including, without limitation, Swing Line Loans borrowed
      under Facility A Commitments) then outstanding and (b) the aggregate
      amount of all L/C Obligations then outstanding in respect of Letters of
      Credit issued under the Facility A Commitments.

            "Aggregate Facility B Revolving Extensions of Credit" shall mean an
      amount equal to the sum of (a) the aggregate principal amount of all
      Facility B Loans (including, without limitation, Swing Line Loans borrowed
      under Facility B Commitments) then outstanding and (b) the aggregate
      amount of all L/C Obligations then outstanding in respect of Letters of
      Credit issued under the Facility B Commitments.

            "Aggregate Facility C Revolving Extensions of Credit" shall mean an
      amount equal to the sum of (a) the aggregate principal amount of all
      Facility C Loans (including, without limitation, Swing Line Loans borrowed
      under Facility C Commitments) then outstanding and (b) the aggregate
      amount of all L/C Obligations then outstanding in respect of Letters of
      Credit issued under the Facility C Commitments.

            "Aggregate Facility D Revolving Extensions of Credit" shall mean an
      amount equal to the sum of (a) the aggregate principal amount of all
      Facility D Loans (including, without limitation, Swing Line Loans borrowed
      under Facility D Commitments) then outstanding and (b) the aggregate
      amount of all L/C Obligations then outstanding in respect of Letters of
      Credit issued under the Facility D Commitments.

            "Aggregate Sterling Revolving Extensions of Credit" shall mean an
      amount equal to the sum of (a) the aggregate principal amount of all
      Sterling Loans (including, without limitation, Sterling Swing Line Loans
      borrowed under Sterling Commitments) then outstanding and (b) the
      aggregate amount of all Sterling L/C Obligations then outstanding.

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                                                                               3

            "Aggregate Revolving Extensions of Credit" shall mean, without
      duplication, the Aggregate Facility A Revolving Extensions of Credit, the
      Aggregate Facility B Revolving Extensions of Credit, the Aggregate
      Facility C Revolving Extensions of Credit, the Aggregate Facility D
      Revolving Extensions of Credit, the Aggregate Sterling Revolving
      Extensions of Credit, the Aggregate Australian Dollar Revolving Extensions
      of Credit and the Aggregate Canadian Dollar Revolving Extensions of
      Credit.

            "Agreement" shall mean this Revolving Credit Agreement, as amended,
      supplemented or otherwise modified from time to time.

            "Applicable Margin" shall mean for each Type of Loan, the rate per
      annum set forth under the relevant column heading in the Pricing Grid.

            "Application" shall mean an application, in such form as the Issuing
      Lender may specify from time to time, requesting such Issuing Lender to
      open a Letter of Credit.

            "Assignment and Acceptance" shall mean an Assignment and Acceptance,
      substantially in the form of Exhibit A hereto.

            "Australian Commitments" shall have the meaning assigned to such
      term in Annex C hereto.

            "Australian Dollars" shall mean the lawful currency of the
      Commonwealth of Australia.

            "Australian Dollar Lender" shall mean each Lender that has an
      Australian Commitment or that holds Australian Dollar Loans; collectively,
      the "Australian Dollar Lenders". Each Australian Dollar Lender on the date
      hereof and on each date on which a payment or prepayment of interest is
      made represents that it is an Eligible Australian Bank.

            "Australian Dollar Loan" shall mean any Australian Dollar Loan made
      pursuant to Annex C hereto; collectively, the "Australian Dollar Loans".

            "Australian Dollar Swing Line Lenders" shall have the meaning
      assigned to such term in Annex C hereto.

            "Australian Dollar Swing Line Loans" shall have the meaning assigned
      to such term in Annex C hereto.

            "Australian L/C Obligations" shall have the meaning assigned to such
      term in Annex C hereto.

            "Australian Subsidiary Borrower" shall mean Scotts Australia Pty
      Ltd. or any other Foreign Subsidiary Borrower organized under the laws of
      the Commonwealth of Australia and designated as such by the Borrower in a
      notice to the Administrative Agent, which shall notify each Australian
      Lender thereof.

            "Available Australian Commitment" shall mean, as to any Lender at
      any time, the amount equal to the excess, if any, of (a) such Lender's
      Australian Commitment over (b) the sum of such Lender's (i) ratable
      portion of the Aggregate Facility C Revolving Extensions of Credit and
      (ii) ratable portion of the Aggregate Australian Revolving Extensions of
      Credit. The Available Australian Commitment may be calculated as being
      negative at any time.

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                                                                               4

            "Available Canadian Commitment" shall mean, as to any Lender at any
      time, the amount equal to the excess, if any, of (a) such Lender's
      Canadian Commitment over (b) the sum of such Lender's (i) ratable portion
      of the Aggregate Facility D Revolving Extensions of Credit and (ii)
      ratable portion of the Aggregate Canadian Revolving Extensions of Credit.
      The Available Canadian Commitment may be calculated as being negative at
      any time.

            "Available Facility A Commitment" shall mean, as to any Lender at
      any time, the amount equal to the excess, if any, of (a) such Lender's
      Facility A Commitment over (b) such Lender's ratable portion of the
      Aggregate Facility A Revolving Extensions of Credit. The Available
      Facility A Commitment may be calculated as being negative at any time.

            "Available Facility B Commitment" shall mean, as to any Lender at
      any time, the amount equal to the excess, if any, of (a) such Lender's
      Facility B Commitment over (b) the sum of such Lender's (i) ratable
      portion of the Aggregate Facility B Revolving Extensions of Credit and
      (ii) ratable portion of the Aggregate Sterling Revolving Extensions of
      Credit. The Available Facility B Commitment may be calculated as being
      negative at any time.

            "Available Facility C Commitment" shall mean, as to any Lender at
      any time, the amount equal to the excess, if any, of (a) such Lender's
      Facility C Commitment over (b) the sum of such Lender's (i) ratable
      portion of the Aggregate Facility C Revolving Extensions of Credit and
      (ii) ratable portion of the Aggregate Australian Revolving Extensions of
      Credit. The Available Facility C Commitment may be calculated as being
      negative at any time.

            "Available Facility D Commitment" shall mean, as to any Lender at
      any time, the amount equal to the excess, if any, of (a) such Lender's
      Facility D Commitment over (b) the sum of such Lender's (i) ratable
      portion of the Aggregate Facility D Revolving Extensions of Credit and
      (ii) ratable portion of the Aggregate Canadian Revolving Extensions of
      Credit. The Available Facility D Commitment may be calculated as being
      negative at any time.

            "Available Sterling Commitment" shall mean, as to any Lender at any
      time, the amount equal to the excess, if any, of (a) such Lender's
      Sterling Commitment over (b) the sum of such Lender's (i) ratable portion
      of the Aggregate Facility B Revolving Extensions of Credit and (ii)
      ratable portion of the Aggregate Sterling Revolving Extensions of Credit.
      The Available Sterling Commitment may be calculated as being negative at
      any time.

            "Average Total Indebtedness" shall mean the average of the Total
      Indebtedness of the Borrower at the end of each of the four most recent
      consecutive fiscal quarters.

            "Borrowing Date" shall mean, as to any Lender, any Business Day
      specified in a notice transmitted pursuant to subsection 2.2 or 2.3 as a
      date on which such Lender has been requested by the Borrower or any
      Subsidiary Borrower to make Loans hereunder.

            "Business Day" shall mean a day other than a Saturday, Sunday or
      other day on which commercial banks in New York City are authorized or
      required by law to close; provided, however, that when used to describe
      the date of any borrowing of, or any payment or interest rate
      determination in respect of a LIBOR Loan, the term "Business Day" shall
      also exclude any day on which (i) commercial banks are not open for
      dealings in deposits in the relevant currency in the London Interbank
      Market and in the financial center for such currency and (ii) in the case
      of Loans denominated in euros, the Trans-European Automated Real-time
      Gross Settlement Express Transfer payment system is not open for
      settlement of payments in euros.

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                                                                               5

            "Canadian Commitments" shall have the meaning assigned to such term
      in Annex D hereto.

            "Canadian Dollars" shall mean the lawful currency of Canada.

            "Canadian Dollar Lender" shall mean each Lender that has a Canadian
      Commitment or that holds Canadian Dollar Loans; collectively, the
      "Canadian Dollar Lenders". Each Canadian Dollar Lender on the date hereof
      and on each date on which a payment or prepayment of interest is made
      represents that it is an Eligible Canadian Bank.

            "Canadian Dollar Loan" shall mean any Canadian Dollar Loan made
      pursuant to Annex D hereto; collectively, the "Canadian Dollar Loans".

            "Canadian Dollar Swing Line Lenders" shall have the meaning assigned
      to such term in Annex D hereto.

            "Canadian Dollar Swing Line Loans" shall have the meaning assigned
      to such term in Annex D hereto.

            "Canadian L/C Obligations" shall have the meaning assigned to such
      term in Annex D hereto.

            "Canadian Subsidiary Borrower" shall mean Scotts Canada Ltd. or any
      other Foreign Subsidiary Borrower organized under the laws of Canada and
      designated as such by the Borrower in a notice to the Administrative
      Agent, which shall notify each Canadian Lender thereof.

            "Capital Stock" shall mean any and all shares, interests,
      participations or other equivalents (however designated) of capital stock
      of a corporation, any and all equivalent ownership interests in a Person
      (other than a corporation) and any and all warrants or options to purchase
      any of the foregoing.

            "Cash Equivalents" shall mean (a) marketable direct obligations
      issued by, or unconditionally guaranteed by, the United States Government
      or issued by any agency thereof and backed by the full faith and credit of
      the United States, in each case maturing within one year from the date of
      acquisition; (b) certificates of deposit, time deposits, eurodollar time
      deposits or overnight bank deposits having maturities of one year or less
      from the date of acquisition issued by any Lender or by any commercial
      bank organized under the laws of the United States or any state thereof
      having combined capital and surplus of not less than $300,000,000; (c)
      commercial paper of an issuer rated at least A-1 by S&P or P-1 by Moody's,
      or carrying an equivalent rating by a nationally recognized rating agency,
      if both of the two named rating agencies cease publishing ratings of
      commercial paper issuers generally, and maturing within one year from the
      date of acquisition; (d) repurchase obligations of any Lender or of any
      commercial bank satisfying the requirements of clause (b) of this
      definition, having a term of not more than 30 days, with respect to
      securities issued or fully guaranteed or insured by the United States
      government; (e) securities with maturities of one year or less from the
      date of acquisition issued or fully guaranteed by any state, commonwealth
      or territory of the United States, by any political subdivision or taxing
      authority of any such state, commonwealth or territory or by any foreign
      government, the securities of which state, commonwealth, territory,
      political subdivision, taxing authority or foreign government (as the case
      may be) are rated at least A by S&P or A by Moody's; (f) securities with
      maturities of one year or less from the date of acquisition backed by
      standby letters of credit issued by any Lender or any commercial bank
      satisfying the requirements

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                                                                               6

      of clause (b) of this definition; (g) auction rate securities of an issuer
      rated at least AA by S&P or Aa2 by Moody's, regardless of the stated
      maturity, so long as such securities have a liquidity mechanism permitting
      the Disposition at par within one year from the issuance of such
      securities or from the date of the immediately preceding permitted
      Disposition of such securities (h) money market mutual or similar funds
      that invest exclusively in assets satisfying the requirements of clauses
      (a) through (f) of this definition; or (i) money market funds that (i)
      comply with the criteria set forth in SEC Rule 2a-7 under the Investment
      Company Act of 1940, as amended, (ii) are rated AAA by S&P and Aaa by
      Moody's and (iii) have portfolio assets of at least $5,000,000,000.

            "Closing Date" shall mean the date upon which all of the conditions
      precedent to the effectiveness of this Agreement contained in subsection
      5.1 are satisfied or waived by the Administrative Agent and each of the
      Lenders.

            "Code" shall mean the Internal Revenue Code of 1986, as amended from
      time to time.

            "Collateral" shall mean the shares of Capital Stock, now owned or
      hereafter acquired, upon which a Lien is purported to be created by any
      Security Document.

            "Collateral Release Date" shall have the meaning specified in the
      Guarantee and Collateral Agreement.

            "Collateral Reinstatement Date" shall have the meaning specified in
      the Guarantee and Collateral Agreement.

            "Commonly Controlled Entity" shall mean an entity, whether or not
      incorporated, which is under common control with the Borrower within the
      meaning of Section 4001 of ERISA.

            "Confidential Information Memorandum" shall mean the confidential
      information memorandum distributed to the Lenders, dated June 2005.

            "Consolidated Interest Expense" shall mean, for any period of
      determination thereof, the interest expense of the Borrower and its
      Subsidiaries for such period, as determined in accordance with GAAP;
      provided that non-cash interest costs and expenses arising out of the
      Refinancing shall not be considered for the purpose of determining
      Consolidated Interest Expense for any period during the fiscal year of the
      Borrower ending September 30, 2005.

            "Consolidated Net Income" shall mean, for any period of
      determination thereof, net income of the Borrower and its Subsidiaries for
      such period, as determined in accordance with GAAP.

            "Consolidated Net Worth" shall mean, in respect of any Person at a
      particular date, all amounts which, in conformity with GAAP, would be
      included under the caption "total shareholders' equity" (or any like
      caption) on a consolidated balance sheet of such Person and its
      Subsidiaries at such date.

            "Consolidated Total Assets" shall mean, at any date, all amounts
      that would, in conformity with GAAP, be set forth opposite the caption
      "total assets" (or any like caption) on a consolidated balance sheet of
      the Borrower and its Subsidiaries at such date.

<PAGE>

                                                                               7

            "Contingent Obligation" shall mean as to any Person, the outstanding
      amount of letters of credit (other than the Letters of Credit) with
      respect to which such Person is the account party that have not been drawn
      upon and any obligation of such Person guaranteeing or in effect
      guaranteeing any Indebtedness, leases, dividends or other obligations
      primarily to pay money ("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 obligee under any such primary
      obligation of the ability of the primary obligor to make payment of such
      primary obligation or (d) otherwise to assure or hold harmless the obligee
      under such primary obligation against loss in respect thereof; provided,
      however, that the term Contingent Obligation shall not include
      endorsements of instruments for deposit or collection in the ordinary
      course of business.

            "Contractual Obligation" shall mean, as to any Person, any material
      provision of any material security issued by such Person or of any
      material agreement, instrument or undertaking to which such Person is a
      party or by which it or any of its property is bound.

            "Control Group" shall mean the Hagedorn Partnership, L.P., the
      general partners of the Hagedorn Partnership, L.P. and, in the case of
      such individuals, their respective executors, administrators and heirs and
      their families and trusts for their benefit.

            "Default" shall mean any of the events specified in Section 8,
      whether or not any requirement for the giving of notice, the lapse of
      time, or both, or any other condition, has been satisfied.

            "Disposition" shall mean with respect to any property, any sale,
      lease, sale and leaseback, assignment, conveyance, transfer or other
      disposition thereof; provided that any such sale, lease, sale and
      leaseback, assignment, conveyance, transfer or other disposition of
      property to, in, by or between the Borrower and any Subsidiary or between
      any two or more Subsidiaries shall not constitute a "Disposition". The
      terms "Dispose" and "Disposed of" shall have correlative meanings.

            "Dollar Equivalent" shall mean, on any Business Day with respect to
      any amount denominated in euros or any other currency, the amount of
      Dollars that would be required to purchase such amount of euros or such
      other currency, as the case may be, based upon the spot selling rate at
      which JPMCB London offers to sell each for Dollars in the London foreign
      exchange market at approximately 11:00 a.m. London time on such Business
      Day for delivery two Business Days later.

            "Dollars", "$" and "U.S.$" shall mean dollars in lawful currency of
      the United States of America.

            "Domestic Assets" shall mean the assets of the Borrower and any
      Domestic Subsidiary, wherever located, and the assets of any Foreign
      Subsidiary located or domiciled in any jurisdiction within the United
      States.

            "Domestic Subsidiary" shall mean any Subsidiary incorporated under
      the laws of the United States or any political subdivision thereof.

<PAGE>

                                                                               8

            "Domestic Subsidiary Borrower" shall mean any Domestic Subsidiary
      which (a) is a Subsidiary Borrower hereunder on the Closing Date or (b)
      which is designated by the Borrower to be a Subsidiary Borrower pursuant
      to subsection 10.1(b).

            "EBITDA" shall mean without duplication, for any fiscal period, the
      sum of the amounts for such fiscal period of (i) Consolidated Net Income,
      (ii) provision for taxes based on income, (iii) depreciation expense, (iv)
      Consolidated Interest Expense, (v) amortization expense, (vi) expenses in
      an aggregate amount not to exceed $10,000,000 incurred in connection with
      Project Excellence and (vii) other non-recurring, non-cash items reducing
      Consolidated Net Income (reduced by any non-recurring, non-cash items
      increasing Consolidated Net Income), all as determined on a consolidated
      basis for the Borrower and its Subsidiaries in conformity with GAAP.

            "Effective Interbank Rate" shall have the meaning specified in
      subsection 2.14(d).

            "Eligible Australian Bank" shall mean (a) a resident of Australia
      which does not make Australian Dollar Loans as part of carrying on
      business outside of Australia at or through a permanent establishment
      outside of Australia; or (b) a non-resident of Australia which makes Swing
      Line Loans or Revolving Credit Loans as part of carrying on business in
      Australia at or through a permanent establishment of the non-resident in
      Australia. In this definition, words and expressions used shall have the
      meaning ascribed to them for the purposes of S. 128B of the Australian
      Income Tax Assessment Act of 1936.

            "Eligible Canadian Bank" shall mean (a) those banks listed on
      Schedules I, II or III to the Bank Act (Canada), (b) any (i) trust
      company, savings bank, savings and loan association or similar financial
      institution, or (ii) insurance company engaged in the business of writing
      insurance which, in either case (A) has total assets of $10,000,000,000 or
      more, (B) is engaged in the business of lending money and extending credit
      under credit facilities substantially similar to those extended under this
      Agreement, (C) is operationally and procedurally able to meet the
      obligations of a Lender hereunder to the same degree as a commercial bank,
      and (c) any other financial institution (including a mutual fund or other
      fund) having total assets of $10,000,000,000 or more which meets the
      requirements set forth in subclauses (B) and (C) of clause (b) above;
      provided that each Eligible Canadian Bank must be organized under the laws
      of either Canada or a political subdivision thereof or, if not, it must
      (i) act hereunder through a branch, agency or funding office located in
      Canada and (ii) be exempt from withholding of tax on interest payments.

            "Eligible U.K. Bank" shall mean a Person that is both (i) a bank as
      defined in Section 840A of the United Kingdom Income and Corporation Taxes
      Act 1988, and (ii) a Person within the charge to United Kingdom
      corporation tax (i.e., a United Kingdom resident company or a non-resident
      company which is carrying on a trade in the United Kingdom through a
      permanent establishment in the United Kingdom to which the beneficial
      interest in interest accrued under Loans made to the Borrower or a
      Subsidiary Borrower is attributable and which is not entitled to exemption
      from tax in respect of that interest).

            "Environmental Laws" shall mean any and all foreign, Federal, state,
      local or municipal laws, rules, orders, regulations, statutes, ordinances,
      codes, decrees, requirements of any Governmental Authority or requirements
      of law (including common law) regulating, relating to or imposing
      liability or standards of conduct concerning protection of human health or
      the environment, as now or may at any time hereafter be in effect.

<PAGE>

                                                                               9

            "ERISA" shall mean the Employee Retirement Income Security Act of
      1974, as amended from time to time.

            "euro" and "(euro)" shall mean the single currency of Participating
      Member States.

            "Event of Default" shall mean any of the events specified in Section
      8, provided that any requirement for the giving of notice, the lapse of
      time, or both, or any other condition, has been satisfied.

            "Excluded Foreign Subsidiary" shall mean any Foreign Subsidiary a
      guarantee from which, a pledge of the assets of which, or the pledge of 66
      2/3% or more of the Capital Stock of which under the applicable Security
      Document would have adverse tax consequences on the Borrower, any of its
      Subsidiaries or such Foreign Subsidiary or would reasonably be deemed an
      unlawful act of such Foreign Subsidiary or any of its officers or
      directors under the laws of the applicable foreign jurisdiction.

            "Existing Credit Agreement" shall mean the Second Amended and
      Restated Credit Agreement dated as of October 22, 2003, as amended, among
      the Borrower, the Subsidiary Borrowers, the several banks and other
      financial institutions parties thereto and JPMCB, as administrative agent.

            "Extension of Credit" shall mean (i) all Loans or advances made to
      the Borrower and the Subsidiary Borrowers hereunder and (ii) all Letters
      of Credit issued for the account of the Borrower and the Subsidiary
      Borrowers and any unreimbursed drawings hereunder.

            "Facility A Commitment" shall mean, as to each Facility A Lender,
      the obligation of such Lender, if any, to make Facility A Loans and
      participate in Swing Line Loans or Letters of Credit made under the
      Facility A Commitments in an aggregate principal and/or face amount not to
      exceed the amount set forth under the heading "Facility A Commitment"
      opposite such Facility A Lender's name on Schedule 1 or in the Assignment
      and Acceptance pursuant to which such Facility A Lender became a party
      hereto, as the same may be changed from time to time pursuant to the terms
      hereof. The original amount of the Facility A Commitments is $640,000,000.

            "Facility A Lenders" shall mean each Lender that has a Facility A
      Commitment or that holds Facility A Loans; collectively, the "Facility A
      Lenders".

            "Facility A Loan" shall mean any Loan made under the Facility A
      Commitments pursuant to subsection 2.1; collectively, the "Facility A
      Loans".

            "Facility B Commitment" shall mean, as to each Facility B Lender,
      the obligation of such Lender, if any, to make Facility B Loans and
      participate in Swing Line Loans and Letters of Credit issued under the
      Facility B Commitments in an aggregate principal and/or face amount not to
      exceed the amount set forth under the heading "Facility B Commitment"
      opposite such Facility B Lender's name on Schedule 1 or in the Assignment
      and Acceptance pursuant to which such Facility B Lender became a party
      hereto, as the same may be changed from time to time pursuant to the terms
      hereof. The original amount of the Facility B Commitments is $300,000,000.

            "Facility B Lender" shall mean each Lender that has a Facility B
      Commitment or that holds Facility B Loans; collectively, the "Facility B
      Lenders".

<PAGE>

                                                                              10

            "Facility B Loan" shall mean any Loan made under the Facility B
      Commitments pursuant to subsection 2.1; collectively, the "Facility B
      Loans".

            "Facility C Commitment" shall mean, as to each Facility C Lender,
      the obligation of such Lender, if any, to make Facility C Loans and
      participate in Swing Line Loans and Letters of Credit issued under the
      Facility C Commitments in an aggregate principal and/or face amount not to
      exceed the amount set forth under the heading "Facility C Commitment"
      opposite such Facility C Lender's name on Schedule 1 or in the Assignment
      and Acceptance pursuant to which such Lender became a party hereto, as the
      same may be changed from time to time pursuant to the terms hereof. The
      original amount of the Facility C Commitments is $25,000,000.

            "Facility C Lender" shall mean each Lender that has a Facility C
      Commitment or that holds Facility C Loans; collectively, the "Facility C
      Lenders".

            "Facility C Loan" shall mean any Loan made under the Facility C
      Commitments pursuant to subsection 2.1; collectively, the "Facility C
      Loans".

            "Facility D Commitment" shall mean, as to each Facility D Lender,
      the obligation of such Lender, if any, to make Facility D Loans and
      participate in Swing Line Loans and Letters of Credit issued under the
      Facility D Commitments in an aggregate principal and/or face amount not to
      exceed the amount set forth under the heading "Facility D Commitment"
      opposite such Facility D Lender's name on Schedule 1 or in the Assignment
      and Acceptance pursuant to which such Lender became a party hereto, as the
      same may be changed from time to time pursuant to the terms hereof. The
      original amount of the Facility D Commitments is $35,000,000.

            "Facility D Lender" shall mean each Lender that has a Facility D
      Commitment or that holds Facility D Loans; collectively, the "Facility D
      Lenders".

            "Facility D Loan" shall mean any Loan made under the Facility D
      Commitments pursuant to subsection 2.1; collectively, the "Facility D
      Loans".

            "Facility Fee Rate" shall mean the rate per annum set forth under
      the relevant column heading in the Pricing Grid.

            "Foreign Pledge Agreements" shall mean each pledge agreement, charge
      or collateral security instrument creating a security interest in the
      Capital Stock of the Foreign Subsidiary Borrowers (other than Scotts
      Treasury EEIG) and certain other Foreign Subsidiaries of the Borrower, in
      each case, in form and substance reasonably satisfactory to the
      Administrative Agent, as such agreements may be amended, supplemented or
      otherwise modified from time to time.

            "Foreign Subsidiary" shall mean any Subsidiary of the Borrower which
      is organized under the laws of any jurisdiction outside of the United
      States of America.

            "Foreign Subsidiary Borrower" shall mean any Sterling Subsidiary
      Borrower, Australian Subsidiary Borrower or Canadian Subsidiary Borrower
      (a) which is a Subsidiary Borrower hereunder on the Closing Date or (b)
      which is designated by the Borrower pursuant to subsection 10.1(b).

            "Funded Debt" shall mean, as to any Person, all Indebtedness of such
      Person that matures more than one year from the date of its creation or
      matures within one year from such date but is

<PAGE>

                                                                              11

      renewable or extendible, at the option of such Person, to a date more than
      one year from such date or arises under a revolving credit or similar
      agreement that obligates the lender or lenders to extend credit during a
      period of more than one year from such date, including all current
      maturities and current sinking fund payments in respect of such
      Indebtedness whether or not required to be paid within one year from the
      date of its creation and, in the case of the Borrower and the Subsidiary
      Borrowers, Indebtedness in respect of the Loans.

            "GAAP" shall mean generally accepted accounting principles in the
      United States of America as in effect from time to time; provided,
      however, that if any modifications in GAAP after the Closing Date change
      any calculation of any financial covenants under this Agreement, the
      Administrative Agent and the Lenders agree to amend this Agreement to the
      effect that each such financial covenant is no more restrictive than such
      covenant was prior to such modification in GAAP (and until such agreement,
      such covenants shall be calculated in accordance with GAAP before such
      modification).

            "Governmental Authority" shall mean any nation or government, any
      state or other political subdivision thereof and any entity exercising
      executive, legislative, judicial, regulatory or administrative functions
      of or pertaining to government (including the National Association of
      Insurance Commissioners).

            "Guarantee and Collateral Agreement" shall mean the Guarantee and
      Collateral Agreement, executed and delivered by the Borrower and the
      Subsidiary Guarantors, substantially in the form of Exhibit B, and as
      amended, supplemented or otherwise modified from time to time.

            "Hedging Agreements" shall mean any interest rate protection
      agreement, interest rate future, interest rate option, interest rate swap,
      interest rate cap, interest rate exchange (from fixed to floating rates,
      from one floating rate to another floating rate or otherwise) or other
      interest rate hedge or arrangement under which the Borrower is a party or
      a beneficiary and (b) any agreement or arrangement designed to limit or
      eliminate the risk and/or exposure of the Borrower to fluctuations in
      currency exchange rates or in commodity prices.

            "Hedging Lender" shall mean any Lender or affiliate thereof which
      from time to time enters into a Hedging Agreement with the Borrower.

            "Hostile Take-Over Bid" shall mean an offer to purchase a
      controlling interest in any Person by the Borrower or any of its
      Subsidiaries or in which the Borrower or any of its Subsidiaries is
      involved, in respect of which the board of directors (or equivalent
      governing body for such entity) of the target entity has recommended
      against acceptance of such offer to the target entity's shareholders or
      equity holders or which is similarly opposed or contested.

            "Indebtedness" shall mean, as to any Person, at a particular time,
      (a) indebtedness of such Person for borrowed money or for the deferred
      purchase price of property or services (including, without limitation, any
      such indebtedness which is non-recourse to the credit of such Person but
      is secured by assets of such Person, but excluding current amounts payable
      incurred in the ordinary course of business), (b) obligations of such
      Person under leases which shall have been or should be, in accordance with
      GAAP, recorded as capitalized leases, (c) indebtedness of such Person
      arising under acceptance facilities, (d) indebtedness of such Person
      arising under unpaid reimbursement obligations in respect of all drafts
      drawn under letters of credit issued for the account of such Person, (e)
      the incurrence of withdrawal liability under Title IV of ERISA by such
      Person or a Commonly Controlled Entity to a Multi-employer Plan, (f)
      liabilities arising

<PAGE>

                                                                              12

      under Hedging Agreements of such Person and (g) indebtedness of such
      Person under any synthetic lease.

            "Insolvency" shall mean, with respect to any Multi-employer Plan,
      the condition that such Plan is insolvent within the meaning of such term
      as used in Section 4245 of ERISA.

            "Interest Payment Date" shall mean (a) as to any ABR Loan, the last
      day of each March, June, September and December, commencing on the first
      of such days to occur after such ABR Loan is made or any LIBOR Loan is
      converted to such ABR Loan, (b) as to any LIBOR Loan in respect of which
      the Borrower or applicable Subsidiary Borrower has selected an Interest
      Period of one month, two months or three months, the last day of such
      Interest Period and (c) as to any LIBOR Loan in respect of which the
      Borrower or applicable Subsidiary Borrower has selected a longer Interest
      Period than the periods described in preceding clause (b), the day three
      months after the commencement of such Interest Period and the last day of
      such Interest Period.

            "Interest Period" shall mean with respect to any LIBOR Loan, (i)
      initially, the period commencing on, as the case may be, the borrowing or
      conversion date with respect to a LIBOR Loan, and ending one, two, three
      or six months thereafter, as selected by the Borrower or applicable
      Subsidiary Borrower, as the case may be, in its irrevocable written notice
      of borrowing as provided in subsection 2.2 and, in the case of LIBOR
      Loans, 2.2 or 2.3 or, in the case of LIBOR Loans, its written irrevocable
      notice of conversion as provided in subsection 2.10 and (ii) thereafter,
      each period commencing on the last day of the next preceding Interest
      Period applicable to such LIBOR Loan and ending one, two, three or six
      months thereafter, as selected by the Borrower or applicable Subsidiary
      Borrower by irrevocable written notice to the Administrative Agent not
      less than three Business Days prior to the last day of the then current
      Interest Period with respect to such Loan; provided that all of the
      foregoing provisions relating to Interest Periods are subject to the
      following:

                  (A) if any Interest Period pertaining to a LIBOR Loan would
            otherwise end on a day which is not a Business Day, that Interest
            Period shall be extended to the next succeeding Business Day unless
            the result of such extension would be to carry such Interest Period
            into another calendar month in which event such Interest Period
            shall end on the next preceding Business Day;

                  (B) (1) if the Borrower or applicable Subsidiary Borrower
            shall fail to give notice as provided in clauses (i) and (ii) in
            this definition with respect to a LIBOR Loan denominated in Dollars,
            the Borrower or applicable Subsidiary Borrower shall be deemed to
            have requested conversion of the affected LIBOR Loan to an ABR Loan
            on the last day of the then current Interest Period with respect
            thereto; and (2) if the Borrower or applicable Subsidiary Borrower
            shall fail to give notice as provided in clauses(i) and (ii) in this
            definition with respect to a Loan denominated in a currency other
            than Dollars, the Borrower or applicable Subsidiary Borrower shall
            be deemed to have requested a continuation of the affected Loan for
            a period commencing on the last day of the next preceding Interest
            Period applicable to such Loan and ending one month thereafter;

                  (C) any Interest Period that would otherwise extend beyond the
            applicable Termination Date shall end on the applicable Termination
            Date; and

                  (D) any Interest Period pertaining to a LIBOR Loan that begins
            on the last Business Day of a calendar month (or on day for which
            there is no numerically

<PAGE>

                                                                              13

            corresponding day in the calendar month at the end of such Interest
            Period) shall end on the last Business Day of a calendar month.

            "International Standby Practices" shall mean the International
      Standby Practices, International Chamber of Commerce Publication No.
      ISP98, as the same may be effectively replaced in whole or in part or
      amended from time to time.

            "Issuing Lender" shall mean, in respect of any Letter of Credit,
      JPMCB or, at the option of JPMCB, any affiliate of JPMCB, or with the
      consent of the Borrower and the Administrative Agent, any other Lender, in
      each case in its capacity as the issuer of such Letter of Credit.

            "JPMCB" shall have the meaning assigned to such term in the preamble
      hereto.

            "L/C Commitment" shall mean the amount of $65,000,000.

            "L/C Obligations" shall mean, at any time, an amount equal to the
      sum of (a) the aggregate then undrawn and unexpired amount of the then
      outstanding Letters of Credit and (b) the aggregate amount of drawings
      under Letters of Credit which have not then been reimbursed pursuant to
      Section 3.

            "L/C Participants" shall mean, with respect to any Revolving
      Facility under which a Letter of Credit is issued, the collective
      reference to all the Revolving Credit Lenders under such Revolving
      Facility other than the Issuing Lender.

            "Lending Installation" shall mean, with respect to a Lender, the
      office, branch, subsidiary or affiliate of such Lender listed on the
      signature pages hereof or on a Schedule or otherwise selected by such
      Lender pursuant to subsection 2.21.

            "Letter of Credit" shall mean any Standby L/C or Trade L/C.

            "Lenders" shall have the meaning assigned to such term in the
      preamble hereto. As the context shall require, a Lender shall include any
      of its affiliates that is a Sterling Lender, an Australian Dollar Lender,
      or a Canadian Dollar Lender.

            "Leverage Ratio" shall mean, as at the last day of any fiscal
      quarter of the Borrower, the ratio of (i) Average Total Indebtedness of
      the Borrower and its Subsidiaries on such day to (ii) EBITDA for the four
      consecutive fiscal quarters ending on such day; provided any calculation
      of the above ratio following any acquisition made during the twelve-month
      period covered by such calculation, by purchase or otherwise, of all or
      substantially all of the business or assets of, any Person or of any line
      of business of any Person shall be determined on a pro forma basis without
      duplication, including (y) in Average Total Indebtedness and in the amount
      of preferred stock accruals, an annualization of the actual indebtedness
      or preferred stock accruals relating to such acquisition for the portion
      of such twelve-month period prior to the date of such acquisition (or, if
      such acquisition occurred on the last day of a fiscal quarter, an
      annualization estimate of the daily indebtedness or preferred stock
      accruals relating to such acquisition based on the indebtedness incurred
      and based on the current Interest Rates for such indebtedness or preferred
      stock issued on such date) and (z) in EBITDA the EBITDA of the acquired
      Person for any portion of such twelve-month period prior to such
      acquisition.

            "LIBOR Base Rate" shall mean, with respect to any LIBOR Loan in
      Dollars, euros or any Optional Currency for any Interest Period therefor:

<PAGE>

                                                                              14

                  (a) the rate per annum (rounded to the nearest 1/16 of 1%)
            appearing on the Screen for such currency as the London Interbank
            Offered Rate for deposits in such currency at approximately 11:00
            a.m. London time (or as soon thereafter as practicable) on (in the
            case of any LIBOR Loan in Sterling), or two Business Days prior to
            (in the case of any LIBOR Loan in Dollars, euros or any other
            Optional Currency), the first day of such Interest Period as the
            London Interbank Offered Rate for such currency having a term
            comparable to such Interest Period and in an amount of $1,000,000 or
            the Non-Dollar Currency Equivalent thereof; or

                  (b) if such rate does not appear on the Screen (or, if the
            Screen shall cease to be publicly available or if the information
            contained on the Screen, in the Administrative Agent's reasonable
            judgment, shall cease accurately to reflect such LIBOR Base Rate, as
            reported by any publicly available source of similar market data
            selected by the Administrative Agent that, in the Administrative
            Agent's reasonable judgment, accurately reflects such LIBOR Base
            Rate), the LIBOR Base Rate shall mean, with respect to any LIBOR
            Loan for any Interest Period, the arithmetic mean, as determined by
            the Administrative Agent, of the rate per annum (rounded to the
            nearest 1/16 of 1%) quoted by each relevant Reference Lender at
            approximately 11:00 a.m. London time (or as soon thereafter as
            practicable) on (in the case of any LIBOR Loan in Sterling), or two
            Business Days prior to (in the case of any LIBOR Loan in Dollars,
            euros or any other Optional Currency), the first day of the Interest
            Period for such Loan for the offering by such Reference Lender to
            leading banks in the London interbank market of deposits in such
            currency having a term comparable to such Interest Period and in an
            amount comparable to the principal amount of the LIBOR Loan to be
            made by such Reference Lender (or its relevant applicable Lending
            Installation, as the case may be) for such Interest Period.

            "LIBOR Loans" shall mean the Loans hereunder at such time as they
      are made and/or being maintained at a rate of interest based upon the
      applicable LIBOR Rate.

            "LIBOR Rate" shall mean (a) with respect to a LIBOR Loan denominated
      in Dollars, euros or any Optional Currency for each day during each
      Interest Period pertaining thereto, the rate per annum equal to the LIBOR
      Base Rate or, to the extent such reserve requirements are generally
      applicable with respect to loans to the relevant Borrower or Subsidiary
      Borrower, the quotient (rounded upward to the nearest 1/100 of 1%) of (A)
      the LIBOR Base Rate, divided by (B) a number equal to 1.00 minus the
      aggregate of the rates (expressed as a decimal fraction) of reserve
      requirements current on such day (including, without limitation, basic,
      supplemental, marginal and emergency reserves under any regulations of the
      Board of Governors of the Federal Reserve System or other Governmental
      Authority having jurisdiction with respect thereto), as now and from time
      to time hereafter in effect, dealing with reserve requirements prescribed
      for eurocurrency funding (currently referred to as "Eurocurrency
      liabilities" in Regulation D of such Board) maintained by a member of such
      System or (b) to the extent applicable with respect to a LIBOR Loan
      denominated in Sterling for each day during each Interest Period
      pertaining thereto, the sum of the LIBOR Base Rate plus, to the extent
      generally applicable to loans to the relevant Borrower or Subsidiary
      Borrower, the Financial Services Authority charges for such day.

            "Lien" shall mean any mortgage, deed of trust, pledge,
      hypothecation, assignment, deposit arrangement, charge, encumbrance, lien
      (statutory or other), or preference, priority or other security agreement
      or preferential arrangement of any kind or nature whatsoever (including,
      without limitation, any conditional sale or other title retention
      agreement, any financing lease having substantially the same economic
      effect as any of the foregoing, and the authorized filing

<PAGE>

                                                                              15

      by or against a Person of any financing statement as debtor under the
      Uniform Commercial Code or comparable law of any jurisdiction).

            "Loan" shall mean any Revolving Credit Loan or Swing Line Loan, as
      the context shall require; collectively, the "Loans".

            "Loan Parties" shall mean the Borrower, each Subsidiary Borrower and
      each other Subsidiary of the Borrower which is a party to any Loan
      Document.

            "Loan Documents" shall mean, collectively, this Agreement, any
      Notes, the Applications, the Letters of Credit and the Security Documents.

            "Material Adverse Effect" shall mean a material adverse effect on
      (a) the business, operations, property, financial condition or prospects
      of the Borrower and its Subsidiaries taken as a whole or (b) the validity
      or enforceability of any material term of this Agreement or any of the
      other Loan Documents or the rights or remedies of the Administrative Agent
      or the Lenders hereunder or thereunder.

            "Material Environmental Amount" shall mean (a) an amount payable by
      the Borrower or any of its Subsidiaries for investigative and remedial
      costs, compliance costs, compensatory damages, natural resource damages,
      punitive damages, fines, and penalties, in the aggregate, that exceeds
      $20,000,000 (net of insurance), or (b) any other impact on the Borrower or
      any of its Subsidiaries arising out of any of the Environmental Laws
      which, in the aggregate, could reasonably be anticipated to exceed
      $20,000,000 (net of insurance).

            "Material Subsidiary" shall mean at any time (a) any Subsidiary
      Borrower, (b) any Subsidiary of the Borrower created or acquired after the
      Closing Date which has a Total Capitalization of more than $20,000,000,
      (c) any Subsidiary of the Borrower with assets greater than or equal to 5%
      of all assets of the Borrower and its Subsidiaries, computed and
      consolidated in accordance with GAAP ("Consolidated Assets"), (d) any
      Subsidiary with revenues greater than or equal to 5% of the revenues of
      the Borrower and its Subsidiaries, computed and consolidated in accordance
      with GAAP ("Net Revenues") or (e) any Subsidiary designated in writing by
      the Borrower as a Material Subsidiary, which designation shall be
      irrevocable; provided that if at any time (i) the aggregate Total
      Capitalization of all Subsidiaries that are not Material Subsidiaries
      shall exceed 10% of the Total Capitalization of the Borrower and its
      Subsidiaries, computed and consolidated in accordance with GAAP, (ii) the
      aggregate assets of all Subsidiaries that are not Material Subsidiaries
      shall exceed 10% of Consolidated Assets or (iii) the aggregate revenues of
      all Subsidiaries that are not Material Subsidiaries shall exceed 10% of
      Net Revenues, then, in any such case, the term Material Subsidiary shall
      be deemed to include such Subsidiaries (as determined pursuant to the next
      following sentence) of the Borrower as may be required so that none of
      preceding clauses (i), (ii) or (iii) shall continue to be true. For
      purposes of the proviso to the next preceding sentence, the Subsidiaries
      which shall be deemed to be Material Subsidiaries shall be determined
      based on the percentage that the assets of each such Subsidiary are of
      Consolidated Assets, with the Subsidiary with the highest such percentage
      being selected first, and each other Subsidiary required to satisfy the
      requirements set forth in such proviso being selected in descending order
      of such respective percentages.

            "Materials of Environmental Concern" shall mean any gasoline or
      petroleum (including crude oil or any fraction thereof) or petroleum
      products or any hazardous or toxic substances, materials or wastes,
      defined or regulated as such in or under any Environmental Law, including,

<PAGE>

                                                                              16

      without limitation, asbestos, polychlorinated biphenyls, and
      urea-formaldehyde insulation; and any other substance that could give rise
      to liability under any Environmental Law.

            "Minimum Interest Coverage" shall mean for each fiscal quarter of
      the Borrower the ratio of (a) the sum of EBITDA as of the end of such
      fiscal quarter for the preceding twelve months to (b) the Consolidated
      Interest Expense as of the end of such fiscal quarter for the preceding
      twelve months.

            "Moody's" shall mean Moody's Investors Service, Inc.

            "Multi-employer Plan" shall mean a Plan which is a multi-employer
      plan as defined in Section 4001(a)(3) of ERISA.

            "New Lender Supplement" shall have the meaning set forth in
      subsection 2.23(a).

            "New Revolving Credit Lender" shall have the meaning set forth in
      subsection 2.23(a).

            "Non-Dollar Currency Equivalent" shall mean, on any Business Day
      with respect to any amount in Dollars, the amount of euros or the relevant
      Optional Currency that could be purchased with such amount of Dollars
      using the foreign exchange rate for such Business Day specified in the
      definition of "Dollar Equivalent".

            "Non-Excluded Taxes" shall have the meaning set forth in subsection
      2.18.

            "Note" shall have the meaning set forth in subsection 10.6(e).

            "Obligations" shall mean the unpaid principal of and interest on
      (including, without limitation, interest accruing after the maturity of
      the Loans and interest thereon accruing after the filing of any petition
      in bankruptcy, or the commencement of any insolvency, reorganization or
      like proceeding, relating to the Borrower or any Subsidiary Borrower,
      whether or not a claim for post-filing or post-petition interest is
      allowed in such proceeding) and all other obligations and liabilities
      (including all obligations in respect of overdrafts and related
      liabilities owed to any Lender or affiliate of a Lender or the
      Administrative Agent arising from treasury, depositary and cash management
      services or in connection with any automated clearinghouse transfer of
      funds) of the Borrower or any Subsidiary Borrower to the Administrative
      Agent or the Lenders, whether direct or indirect, absolute or contingent,
      due or to become due, now existing or hereafter incurred, which may arise
      under, out of, or in connection with, this Agreement, the other Loan
      Documents, any Hedge Agreement or cash management arrangement entered into
      with a Lender or an affiliate thereof or any other document made,
      delivered or given in connection herewith or therewith, whether on account
      of principal, interest, reimbursement obligations, fees, indemnities,
      costs, expenses (including, without limitation, all fees and disbursements
      of counsel to the Administrative Agent or any Lender) or otherwise.

            "Optional Currency" shall mean euros and any other freely tradable
      currency readily available in the London interbank market and approved by
      the Administrative Agent.

            "Participants" shall mean one or more banks or other entities to
      which one or more Lenders have sold, in the ordinary course of business
      and in accordance with applicable law, participating interests in any
      Loan, Note, Revolving Credit Commitment or any other interest hereunder
      owing to such Lender.

<PAGE>

                                                                              17

            "Participating Member State" shall mean a member state of the
      European Communities that adopts or has adopted the euro as its lawful
      currency in accordance with legislation of the European Community relating
      to Economic and Monetary Union.

            "PBGC" shall mean the Pension Benefit Guaranty Corporation
      established pursuant to Subtitle A of Title IV of ERISA.

            "Permitted Acquisition" shall mean any acquisition of all or
      substantially all the assets of, or shares or other equity interests in, a
      Person or division or line of business of a Person or other significant
      assets of a Person (other than inventory, leases, materials and equipment
      and other assets in the ordinary course of business) if immediately after
      giving effect thereto: (i) no Default or Event of Default shall have
      occurred and be continuing or would result therefrom, (ii) such acquired
      subsidiary or newly formed subsidiary owning the acquired assets shall be
      a Subsidiary of the Borrower or a wholly-owned Subsidiary and all actions
      required to be taken, if any, with respect to such acquired or newly
      formed subsidiary under subsection 6.11 shall have been taken or shall be
      planned to be taken in a manner reasonably satisfactory to the
      Administrative Agent, (iii) no Material Adverse Effect would be likely to
      result therefrom and (iv)(I) the Borrower shall be in compliance, on a pro
      forma basis after giving effect to such acquisition or formation, with the
      covenants contained in subsections 6.9 and 6.10 recomputed as at the last
      day of the most recently ended fiscal quarter of the Borrower as if such
      acquisition had occurred on the first day of each relevant period for
      testing such compliance and any savings associated with such acquisition
      had been achieved on the first day of such relevant period, and, in the
      case of an acquisition involving consideration in excess of $10,000,000,
      the Borrower shall have delivered to the Administrative Agent an officers'
      certificate to such effect, together with all relevant financial
      information for such subsidiary or assets (to the extent reasonably
      available), and (II) after giving effect to such transaction, any acquired
      or newly formed subsidiary shall not be liable for any Indebtedness
      (except for Indebtedness permitted by subsection 7.5).

            "Permitted Foreign Debt" shall have the meaning specified in
      subsection 7.5(k).

            "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.

            "Plan" shall mean, at any particular time, any employee benefit plan
      which is covered by ERISA and in respect of which the Borrower or a
      Commonly Controlled Entity is (or if such plan were terminated at such
      time, would under Section 4069 of ERISA be deemed to be) an "employer" as
      defined in Section 3(5) of ERISA.

            "Pricing Grid" shall mean the pricing grid attached hereto as Annex
      A.

            "Project Excellence" shall mean the Borrower's one-time management
      restructuring event occurring between June 2005 and December 2005.

            "Properties" shall mean the real property listed on Schedule
      4.19(b).

            "Receivable" shall mean any account and any other right to payment
      for goods sold or leased or for services rendered, whether or not such
      right is evidenced by an instrument or chattel paper and whether or not it
      has been earned by performance. The terms "account", "instrument" and
      "chattel paper" as used herein shall have the meaning assigned to such
      terms in the Uniform Commercial Code in effect from time to time in the
      State of New York.

<PAGE>

                                                                              18

            "Receivables Subsidiary" shall mean a Subsidiary of the Borrower
      created to purchase and finance Sold Receivables.

            "Receivables Purchase Facility" shall mean any receivables purchase
      facility with terms and conditions reasonably satisfactory to the
      Administrative Agent and pursuant to which ownership interests in, or
      notes, commercial paper, certificates or other debt instruments in respect
      of which, are secured by the Sold Receivables.

            "Reference Lenders" shall mean JPMCB, Citicorp North America, Inc.
      and Bank of America, N.A.

            "Refinancing" shall be as defined in subsection 2.19(a).

            "Refunded Swing Line Loans" shall have the meaning assigned to such
      term in subsection 2.3(b).

            "Register" shall have the meaning specified in subsection
      10.6(b)(iv).

            "Regular Subsidiary Borrower" shall mean Scotts Treasury EEIG, any
      Domestic Subsidiary Borrower, any Foreign Subsidiary Borrower which is
      designated by the Borrower as a "Regular Subsidiary Borrower" in a notice
      to the Administrative Agent (which shall notify each Revolving Credit
      Lender of such designation), and any Foreign Subsidiary designated by the
      Borrower as a Regular Subsidiary Borrower after the Closing Date pursuant
      to subsection 10.1(b); provided that so long as any such Foreign
      Subsidiary Borrower is so designated, it is not required under the laws or
      regulations of any Governmental Authority to deduct or withhold any
      Excluded Taxes from any payment made by it under Section 2 or otherwise
      pursuant to this Agreement. The Borrower may rescind any such designation
      at any time by notice to the Administrative Agent, which shall notify each
      Revolving Credit Lender of such rescission.

            "Reimbursement Obligation" shall mean the Borrower's obligation to
      reimburse the Administrative Agent or any other Issuing Lender on account
      of the Letters of Credit as provided in Section 3.

            "Reorganization" shall mean, with respect to any Multi-employer
      Plan, the condition that such Plan is in reorganization within the meaning
      of such term as used in Section 4241 of ERISA.

            "Reportable Event" shall mean any of the events set forth in Section
      4043(b) of ERISA or the regulations thereunder (with respect to which the
      PBGC has not, by regulation, waived the 30-day notice requirement).

            "Required Lenders" shall mean at any time, the holders of more than
      50% of the Total Revolving Credit Commitments then in effect or, if the
      Revolving Credit Commitments have been terminated, the Aggregate Revolving
      Extensions of Credit then outstanding.

            "Requirement of Law" shall mean, as to any Person, the Certificate
      of Incorporation or Articles of Incorporation, as the case may be, and
      Code of Regulations and/or By-Laws or other organizational or governing
      documents of such Person, and any law, treaty, rule or regulation, or
      determination of an arbitrator or a court or other Governmental Authority,
      in each case applicable to or binding upon such Person or any of its
      property or to which such Person or any of its property is subject.

<PAGE>

                                                                              19

            "Responsible Officer" shall mean, as to any Person, the Chairman,
      President or an Executive, Senior or other Vice President (or, in the case
      of any Foreign Subsidiary, any analogous title) of such Person and, with
      respect to financial matters, the Chief Financial Officer, the Treasurer
      or the Controller (or, in the case of any Foreign Subsidiary, any
      analogous title) of such Person.

            "Revolving Credit Commitments" shall mean, as to any Lender, such
      Lender's Facility A Commitments, Facility B Commitments, Facility C
      Commitments, Facility D Commitments, for all purposes other than Section 2
      (other than subsections 2.1 and 2.23) and Section 3, Sterling Commitments,
      Australian Commitments and Canadian Commitments, if any, and such other
      Commitments under any new Revolving Facility established in accordance
      with subsection 2.23(b). The original amount of the Total Revolving Credit
      Commitments is $1,000,000,000.

            "Revolving Credit Commitment Period" shall mean the period from and
      including the Closing Date to, but not including, the Revolving Credit
      Termination Date or such earlier date as the Revolving Credit Commitments
      may terminate as provided herein.

            "Revolving Credit Lender" shall mean each of the Facility A Lenders,
      the Facility B Lenders, the Facility C Lenders, the Facility D Lenders
      and, for all purposes other than Section 2 (other than subsections 2.1 and
      2.23) and Section 3, the Australian Dollar Lenders, the Canadian Dollar
      Lenders and the Sterling Lenders.

            "Revolving Credit Loan" shall mean each Facility A Loan, Facility B
      Loan, Facility C Loan, Facility D Loan and, for all purposes other than
      Section 2 (other than subsections 2.1 and 2.23) and Section 3, each
      Sterling Loan, Australian Dollar Loan and Canadian Dollar Loan;
      collectively, the "Revolving Credit Loans".

            "Revolving Credit Termination Date" shall be July 21, 2010 or such
      earlier date on which the Revolving Credit Commitments shall be terminated
      in accordance with this Agreement.

            "Revolving Extensions of Credit" shall mean, as to any Revolving
      Credit Lender at any time, an amount equal to the sum of (a) the aggregate
      principal amount of all Revolving Credit Loans held by such Lender then
      outstanding, (b) such Lender's Revolving Percentage of the L/C Obligations
      then outstanding and (c) such Lender's Revolving Percentage of the
      aggregate principal amount of Swing Line Loans then outstanding.

            "Revolving Facilities" shall mean, without duplication, (a) the
      Facility A Commitments together with the Aggregate Facility A Revolving
      Extensions of Credit ("Facility A"); the Facility B Commitments together
      with the Aggregate Facility B Revolving Extensions of Credit ("Facility
      B"); the Facility C Commitments together with the Aggregate Facility C
      Revolving Extensions of Credit ("Facility C"); the Facility D Commitments
      together with the Aggregate Facility D Revolving Extensions of Credit
      ("Facility D"); and, for all purposes other than Section 2 (other than
      subsections 2.4 and 2.23) and Section 3, the Sterling Commitments together
      with the Aggregate Sterling Revolving Extensions of Credit (the "Sterling
      Facility"); the Australian Commitments together with the Aggregate
      Australian Revolving Extensions of Credit (the "Australian Facility"); the
      Canadian Commitments together with the Aggregate Canadian Revolving
      Extensions of Credit (the "Canadian Facility"), or any other Revolving
      Facility established pursuant to subsection 2.23(b).

            "Revolving Percentage" shall mean, as to any Revolving Credit Lender
      in respect of any Revolving Facility at any time, the percentage which
      such Lender's Revolving Credit

<PAGE>

                                                                              20

      Commitment under such Revolving Facility then constitutes of the aggregate
      Revolving Credit Commitments in respect of such Revolving Facility (or, at
      any time after the Revolving Credit Commitments shall have expired or
      terminated, the percentage which the aggregate principal amount of such
      Lender's Revolving Extension of Credit under any Revolving Facility then
      outstanding constitutes of the aggregate principal amount of the Revolving
      Extension of Credit in respect of such Revolving Facility then
      outstanding).

            "S&P" shall mean Standard & Poor's Ratings Services.

            "Screen" shall mean, with respect to any currency, the relevant
      Telerate Page on which appears the LIBOR Base Rate for deposits in such
      currency; provided that, if there is no such Telerate Page, the relevant
      Bloomberg Financial Markets Service page will be substituted.

            "Security Document" shall mean each of (a) the Guarantee and
      Collateral Agreement and (b) the Foreign Pledge Agreements.

            "Senior Subordinated Note Indenture" shall mean the Indenture
      entered into by the Borrower on October 8, 2003 together with all
      instruments and other agreements to be entered into by the Borrower and
      its Subsidiaries in connection therewith, as the same may be amended,
      supplemented or otherwise modified from time to time in accordance with
      subsection 7.11.

            "Senior Subordinated Notes" shall mean senior subordinated notes of
      the Borrower issued under the Senior Subordinated Note Indenture.

            "Single Employer Plan" shall mean any Plan which is covered by Title
      IV of ERISA but which is not a Multi-employer Plan.

            "Sold Receivables" shall mean Receivables, originated by the
      Borrower or its Subsidiaries and in an aggregate amount not to exceed
      $200,000,000 at any time outstanding, sold to the Receivables Subsidiary
      or any other Person pursuant to and securing obligations under any
      Receivables Purchase Facility.

            "Solvent", when used with respect to any Person, shall mean that, as
      of any date of determination, (a) the amount of the "present fair saleable
      value" of the assets of such Person will, as of such date, exceed the
      amount of all "liabilities of such Person, contingent or otherwise", as of
      such date, as such quoted terms are determined in accordance with
      applicable federal and state laws governing determinations of the
      insolvency of debtors, (b) the present fair saleable value of the assets
      of such Person will, as of such date, be greater than the amount that will
      be required to pay the liability of such Person on its debts as such debts
      become absolute and matured, (c) such Person will not have, as of such
      date, an unreasonably small amount of capital with which to conduct its
      business, and (d) such Person will be able to pay its debts as they
      mature. For purposes of this definition, (i) "debt" means liability on a
      "claim", and (ii) "claim" means any (x) right to payment, whether or not
      such a right is reduced to judgment, liquidated, unliquidated, fixed,
      contingent, matured, unmatured, disputed, undisputed, legal, equitable,
      secured or unsecured or (y) right to an equitable remedy for breach of
      performance if such breach gives rise to a right to payment, whether or
      not such right to an equitable remedy is reduced to judgment, fixed,
      contingent, matured or unmatured, disputed, undisputed, secured or
      unsecured.

            "Standby L/C" and "Standby L/Cs" shall each have the meaning
      specified in subsection 3.1(a).

<PAGE>

                                                                              21

            "Sterling" shall have the meaning assigned to such term in Annex B
      hereto.

            "Sterling Commitments" shall have the meaning assigned to such term
      in Annex B hereto.

            "Sterling L/C Obligations" shall have the meaning assigned to such
      term in Annex B hereto.

            "Sterling Lender" shall mean each Lender that has a Sterling
      Commitment or that holds Sterling Loans; collectively, the "Sterling
      Lenders". Each Sterling Lender on the date hereof represents that it is an
      Eligible U.K. Bank.

            "Sterling Loan" shall mean any Sterling Loan made pursuant to Annex
      B hereto; collectively, the "Sterling Loans".

            "Sterling Subsidiary Borrower" shall mean, Scotts Holdings Limited,
      Scotts Treasury EEIG and The Scotts Company (UK) Ltd. or any other Foreign
      Subsidiary Borrower organized under the laws of the United Kingdom and
      designated as such by the Borrower in a notice to the Administrative
      Agent, which shall notify each Sterling Lender thereof.

            "Sterling Swing Line Lenders" shall have the meaning assigned to
      such term in Annex B hereto.

            "Sterling Swing Line Loans" shall have the meaning assigned to such
      term in Annex B hereto.

            "Subordinated Debt" shall mean the Indebtedness of the Borrower
      pursuant to the Senior Subordinated Note Indenture and the Senior
      Subordinated Notes and the Subordinated Debt permitted under subsections
      7.5(e), (f) and 7.5(g).

            "Subsidiary" shall mean, as to any Person, a corporation,
      partnership, limited liability company, business trust, joint stock
      company, trust, unincorporated association, joint venture or the European
      equivalent thereof of which shares of Capital Stock having ordinary voting
      power (other than Capital Stock having such power only by reason of the
      happening of a contingency) to elect a majority of the board of directors
      or equivalent are at the time owned, or the management of which is
      otherwise controlled, directly, or indirectly, through one or more
      intermediaries, or both, by such Person. Unless otherwise qualified, all
      references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall
      refer to a Subsidiary or Subsidiaries of the Borrower.

            "Subsidiary Borrowers" shall mean EG Systems, Inc., Hyponex
      Corporation, Scotts Australia Pty. Ltd., Scotts Canada Ltd., The Scotts
      Company LLC, The Scotts Company (UK) Ltd., Scotts Holdings Limited, Scotts
      Manufacturing Company, Scotts Temecula Operations, LLC, Scotts Treasury
      EEIG, Smith & Hawken, Ltd. and all existing or future, Domestic or
      Foreign, Subsidiaries then designated by the Borrower pursuant to
      subsection 10.1(b).

            "Subsidiary Guarantors" shall mean (a) each Domestic Subsidiary of
      the Borrower executing the Guarantee and Collateral Agreement and (b) each
      Domestic Subsidiary acquired or organized subsequent to the Closing Date,
      except as otherwise provided in subsection 6.11(c).

            "Supported Foreign Indebtedness" shall have the meaning specified in
      subsection 7.5(m).

<PAGE>

                                                                              22

            "Swing Line Commitment" shall mean the obligation of the Swing Line
      Lenders, at any date, to make a Swing Line Loan pursuant to subsection
      2.3(a) in the amount referred to therein.

            "Swing Line Loan Participation Certificate" shall mean a
      certificate, substantially in the form of Exhibit C hereto.

            "Swing Line Lenders" shall mean JPMCB or such other Revolving Credit
      Lenders as may be requested by the Borrower or the Administrative Agent to
      make Swing Line Loans from time to time.

            "Swing Line Loan" shall mean any Swing Line Loan made under the
      Facility A Commitments, the Facility B Commitments, the Facility C
      Commitments and the Facility D Commitments pursuant to subsection 2.3;
      collectively, the "Swing Line Loans".

            "Telerate Page" shall mean the "British Bankers Assoc. Interest
      Settlement Rates Page" display designated at Page 3750 (or such other page
      on which euros or any Optional Currency then appears) on the Moneyline
      Telerate (or such other page as may replace such page on such service for
      the purpose of displaying the rates at which Dollar deposits or deposits
      in euros or any Optional Currency are offered by leading banks in the
      London interbank deposit market).

            "Total Capitalization" shall mean, in respect of any Person at a
      particular date, the sum at such date of the Total Indebtedness of such
      Person and the Consolidated Net Worth of such Person.

            "Total Indebtedness" shall mean, in respect of any Person at a
      particular date, the sum at such date of (a) the aggregate outstanding
      principal amount of all Indebtedness for borrowed money of such Person,
      (b) all other items which would properly be included as indebtedness,
      determined in accordance with GAAP, on a consolidated balance sheet of
      such Person and its Subsidiaries and (c) the aggregate outstanding
      principal amount of the obligations secured by Sold Receivables; provided
      that, for the purpose of calculating the Leverage Ratio for any period,
      Total Indebtedness shall be reduced by cash and Cash Equivalents set forth
      on the balance sheet of such Person as at such date.

            "Total Revolving Credit Commitments" shall mean, at any time, the
      aggregate amount of the Revolving Credit Commitments then in effect
      (without duplication for the Sterling Commitments, the Australian
      Commitments and the Canadian Commitments).

            "Trade L/C" shall have the meaning assigned to such term in
      subsection 3.1(a).

            "Type" shall mean as to any Loan, its nature as an ABR Loan or a
      LIBOR Loan.

            "Uniform Customs" shall mean the Uniform Customs and Practice for
      Documentary Credits (1993 Revision), International Chamber of Commerce
      Publication No. 500, as the same may be effectively replaced in whole or
      in part or amended from time to time.

            "wholly owned Subsidiary" or "wholly-owned Subsidiary" shall mean
      any subsidiary of any Person all of the Capital Stock of which (other than
      directors' qualifying shares required by law) is owned by such Person
      directly and/or through other wholly owned Subsidiaries.

            1.2 Other Definitional Provisions.

<PAGE>

                                                                              23

            (a) All terms defined in this Agreement shall have the defined
meanings when used in any of the other Loan Documents or in any certificate or
other document made or delivered pursuant hereto or thereto unless otherwise
defined therein.

            (b) As used herein, in any of the other Loan Documents, or in any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms, to the extent not otherwise defined in subsection 1.1, shall
have the respective meanings given to them under GAAP.

            (c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and section,
subsection, schedule and exhibit references are to this Agreement unless
otherwise specified.

            (d) An "affiliate" of a Lender includes, in the case of a Lender
which is an investment fund, the investment adviser thereof and any other
investment fund having the same investment adviser.

            SECTION 2. AMOUNT AND TERMS OF LOANS

            2.1 Revolving Credit Commitment.

            (a) Subject to and upon the terms and conditions of this Agreement:

            (i) each Facility A Lender severally (but not jointly) agrees to
      make Facility A Loans in Dollars, euros and any Optional Currency to the
      Borrower and/or the Regular Subsidiary Borrowers from time to time during
      the Revolving Credit Commitment Period in an aggregate principal amount
      not to exceed at any one time the Available Facility A Commitment of such
      Facility A Lender; provided that, after giving effect to the making of
      such Facility A Loans, the Aggregate Facility A Revolving Extensions of
      Credit will not exceed the Facility A Commitments;

            (ii) each Facility B Lender severally (but not jointly) agrees to
      make Facility B Loans in Dollars, euros, and any Optional Currency to the
      Borrower and/or the Regular Subsidiary Borrowers from time to time during
      the Revolving Credit Commitment Period in an aggregate principal amount
      not to exceed the Available Facility B Commitment of such Facility B
      Lender (which for this purpose shall be computed as though the amount in
      subclause (b)(i) in the definition thereof is $0); provided that, after
      giving effect to the making of such Facility B Loans, the Aggregate
      Facility B Revolving Extensions of Credit will not exceed the Facility B
      Commitments;

            (iii) each Facility C Lender severally (but not jointly) agrees to
      make Facility C Loans in Dollars, euros, and any Optional Currency to the
      Borrower and/or the Regular Subsidiary Borrowers from time to time during
      the Revolving Credit Commitment Period in an aggregate principal amount
      not to exceed the Available Facility C Commitment of such Facility C
      Lender; provided that, after giving effect to the making of such Facility
      C Loans, the Aggregate Facility C Revolving Extensions of Credit will not
      exceed the Facility C Commitments (which for this purpose shall be
      computed as though the amount in subclause (b)(i) in the definition
      thereof is $0);

            (iv) each Facility D Lender severally (but not jointly) agrees to
      make Facility D Loans in Dollars, euros, and any Optional Currency to the
      Borrower and/or the Regular Subsidiary

<PAGE>

                                                                              24

      Borrowers from time to time during the Revolving Credit Commitment Period
      in an aggregate principal amount not to exceed the Available Facility D
      Commitment of such Facility D Lender (which for this purpose shall be
      computed as though the amount in subclause (b)(i) in the definition
      thereof is $0); provided that, after giving effect to the making of such
      Facility D Loans, the Aggregate Facility D Revolving Extensions of Credit
      will not exceed the Facility D Commitments;

            (v) each Sterling Lender, which shall also be a Facility B Lender or
      an affiliate thereof, severally (but not jointly) agrees to make Sterling
      Loans in Sterling or euros to each Sterling Subsidiary Borrower from time
      to time during the Revolving Credit Commitment Period in an aggregate
      principal amount not to exceed the Available Sterling Commitment of such
      Sterling Lender in accordance with the terms of Annex B hereto (which for
      this purpose shall be computed as though the amount in subclause (b)(i) in
      the definition thereof is $0); provided that, after giving effect to the
      making of such Sterling Loans, the Aggregate Sterling Revolving Extensions
      of Credit will not exceed the Sterling Commitments;

            (vi) each Australian Dollar Lender, which shall be a Facility C
      Lender or an affiliate thereof, severally (but not jointly) agrees to make
      Australian Dollar Loans in Australian Dollars to each Australian
      Subsidiary Borrower from time to time during the Revolving Credit
      Commitment Period in an aggregate principal amount not to exceed the
      Available Australian Commitment of such Australian Dollar Lender in
      accordance with the terms of Annex C hereto (which for this purpose shall
      be computed as though the amount in subclause (b)(i) in the definition
      thereof is $0); provided that, after giving effect to the making of such
      Australian Dollar Loans, the Aggregate Australian Revolving Extensions of
      Credit will not exceed the Australian Commitments; and

            (vii) each Canadian Dollar Lender, which shall be a Facility D
      Lender or an affiliate thereof, severally (but not jointly) agrees to
      make, Canadian Dollar Loans in Canadian Dollars to each Canadian
      Subsidiary Borrower from time to time during the Revolving Credit
      Commitment Period in an aggregate principal amount not to exceed the
      Available Canadian Commitment of such Canadian Dollar Lender in accordance
      with the terms of Annex D hereto (which for this purpose shall be computed
      as though the amount in subclause (b)(i) in the definition thereof is $0);
      provided that, after giving effect to the making of such Canadian Dollar
      Loans, the Aggregate Canadian Revolving Extensions of Credit will not
      exceed the Canadian Commitment.

            (b) During the Revolving Credit Commitment Period the Borrower and
the Subsidiary Borrowers may use the Revolving Credit Commitments by borrowing,
repaying the Revolving Credit Loans in whole or in part, and reborrowing, all in
accordance with the terms and conditions hereof. Except as provided in Annex B,
Annex C or Annex D, each Revolving Credit Lender shall only be required to make
Revolving Credit Loans (x) in Dollars, (y) in euros and (z) in Optional
Currencies. The Borrower and Regular Subsidiary Borrowers may make ABR Loan and
LIBOR Loan borrowings in Dollars and may make LIBOR Loan borrowings in euros and
any Optional Currency under any Revolving Facility. Foreign Subsidiary Borrowers
may make borrowings under the Revolving Facilities as provided for in Annex B,
Annex C or Annex D. Each Facility B Lender, in respect of Sterling Loans,
Facility C Lender, in respect of Australian Dollar Loans, and Facility D Lender
in respect of Canadian Dollar Loans, agrees that each of its Lending
Installations making or holding Sterling Loans, Australian Dollar Loans or
Canadian Dollar Loans hereunder shall be on the date hereof, on the date any
such Loans are made hereunder and, after giving effect to an assignment pursuant
to subsection 10.6 hereof, an Eligible U.K. Bank, an Eligible Australian Bank or
an Eligible Canadian Bank, as the case may be.

            2.2 Procedure for Revolving Credit Borrowing.
<PAGE>

                                                                              25

            (a) The Borrower and the Regular Subsidiary Borrowers may borrow
under any Revolving Facility during the Revolving Credit Commitment Period on
any Business Day; provided that the Borrower or the relevant Regular Subsidiary
Borrower shall give the Administrative Agent irrevocable notice (which notice
may be made by telephone and confirmed in writing promptly thereafter) (1) on
the requested Borrowing Date, in the case of ABR Loans (which notice must be
received by the Administrative Agent prior to 11:00 A.M., New York City time),
(2) three Business Days prior to the requested Borrowing Date, in the case of
LIBOR Loans in Dollars (which notice must be received by the Administrative
Agent prior to 11:00 A.M., New York City time) and (3) three Business Days prior
to the requested Borrowing Date, in the case of LIBOR Loans in euros or an
Optional Currency (which notice must be received by 11:00 A.M. London time),
specifying (i) the identity of the Borrower or Regular Subsidiary Borrower
borrowing and the amount and currency to be borrowed, (ii) the requested
Borrowing Date, (iii) the Revolving Facility under which the borrowing is to be
made, (iv) whether the borrowing is to be an ABR Loan (in the case of Revolving
Credit Loans in Dollars) or a LIBOR Loan or a combination thereof, and (v) if
the borrowing is to be entirely or partly a LIBOR Loan, the amount to be a LIBOR
Loan and the length of the Interest Period for such LIBOR Loan. Each ABR
borrowing by the Borrower or any Regular Subsidiary Borrower pursuant to the
Revolving Credit Commitments shall be in an aggregate principal amount equal to
$1,000,000 or a whole multiple of $250,000 in excess thereof. Each LIBOR
borrowing in Dollars by the Borrower or any Regular Subsidiary Borrower pursuant
to the Revolving Credit Commitments shall be in an aggregate principal amount
equal to $1,000,000 or a whole multiple of $1,000,000 in excess thereof. Each
LIBOR borrowing in euros or an Optional Currency by the Borrower or any Regular
Subsidiary Borrower pursuant to the Revolving Credit Commitments shall be in an
aggregate principal amount equal to $2,500,000 or a whole multiple of $1,000,000
in excess thereof in the Non-Dollar Currency Equivalent thereof.

            (b) Upon receipt of any notice from the Borrower or a Regular
Subsidiary Borrower pursuant to this subsection 2.2, the Administrative Agent
shall promptly notify each Revolving Credit Lender under the relevant Revolving
Facility thereof. Each such Revolving Credit Lender will make the amount of its
ratable share (subject to subsection 2.1) of each borrowing available to the
Administrative Agent for the account of the Borrower or such Regular Subsidiary
Borrower at the office of the Administrative Agent specified in subsection 10.2
prior to 2:00 P.M., New York City time (or in the case of any borrowing in an
Optional Currency, at the place and time specified by the Administrative Agent
from time to time), on the Borrowing Date requested by the Borrower or such
Regular Subsidiary Borrower in funds immediately available to the Administrative
Agent. Such borrowing will then be made available to the Borrower or such
Regular Subsidiary Borrower by the Administrative Agent crediting the account of
the Borrower or such Regular Subsidiary Borrower on the books of such office
with the aggregate of the amounts made available to the Administrative Agent by
such Revolving Credit Lenders and in like funds as received by the
Administrative Agent.

            2.3 Swing Line Commitments.

            (a) Subject to the terms and conditions hereof, from time to time
prior to the Revolving Credit Termination Date and to the Borrower or any
Regular Subsidiary Borrower (i) each Swing Line Lender severally (but not
jointly) agrees to make Swing Line Loans in Dollars or euros in an aggregate
principal amount not to exceed $30,000,000 at any one time outstanding (each of
the foregoing individually, a "Swing Line Loan"; collectively the "Swing Line
Loans"), which Swing Line Loans may be borrowed under any of the Facility A
Commitments, the Facility B Commitments, the Facility C Commitments or the
Facility D Commitments; provided that, after giving effect to the making of such
Swing Line Loans, the aggregate principal amount of Swing Line Loans (including
any Sterling Swing Line Loans, Australian Dollar Swing Line Loans and Canadian
Dollar Swing Line Loans) made under any Revolving Facility (including the
Sterling Facility, Australian Facility and Canadian Facility) at any one time
outstanding shall not exceed $100,000,000 or the Non-Dollar Currency Equivalent
thereof and

<PAGE>
                                                                              26

the Aggregate Facility A Revolving Extensions of Credit shall not exceed the
Facility A Commitments, the Aggregate Facility B Revolving Extensions of Credit
shall not exceed the Facility B Commitments, the Aggregate Facility C Revolving
Extensions of Credit shall not exceed the Facility C Commitments and the
Aggregate Facility D Revolving Extensions of Credit shall not exceed the
Facility D Commitments. All Swing Line Loans shall be made on terms agreed upon
by the relevant Swing Line Lender and the Borrower or applicable Regular
Subsidiary Borrower. The Borrower or applicable Regular Subsidiary Borrower
shall give the Administrative Agent irrevocable notice (which notice may be made
by telephone (and confirmed in writing promptly thereafter) and must be received
by the Administrative Agent at or prior to 1:00 P.M., New York City time, on the
requested Borrowing Date), specifying the amount of each requested Swing Line
Loan, which shall be greater than or equal to a minimum amount to be agreed upon
by the Borrower or applicable Regular Subsidiary Borrower and the relevant Swing
Line Lender, and the Revolving Facility under which it is to be borrowed. In
giving irrevocable notice, the Borrower or the applicable Regular Subsidiary
Borrower shall designate, at its option, one or two Swing Line Lenders to make
one or more Swing Line Loans in the relevant currency. Upon such notice, the
Administrative Agent shall promptly notify each applicable Swing Line Lender
thereof. Each Swing Line Lender which has been designated by the Borrower or the
applicable Regular Subsidiary Borrower in its irrevocable notice shall make the
amount of its ratable share of each borrowing in the currency requested
available to the Borrower or applicable Regular Subsidiary Borrower in the
manner directed by the Administrative Agent on the requested Borrowing Date.

            (b) The Swing Line Lenders or any of them at any time and in their
or its sole and absolute discretion, may, on behalf of the Borrower or
applicable Regular Subsidiary Borrower (which hereby irrevocably directs the
Swing Line Lenders to act on its behalf), request each Revolving Credit Lender
under the applicable Revolving Facility, including each Swing Line Lender, with
respect to all other Swing Line Loans, to make a Revolving Credit Loan under
such Revolving Facility, in the currency of the Swing Line Loan(s) made by such
Swing Line Lender(s) in an amount equal to such Lender's Revolving Percentage
under such Revolving Facility of the amount of the Swing Line Loans (the
"Refunded Swing Line Loans") outstanding on the date such notice is given.
Unless any of the events described in paragraph (f) of Section 8 shall have
occurred (in which event the procedures of paragraph (c) of this subsection 2.3
shall apply), each Revolving Credit Lender shall make the proceeds of its
Revolving Credit Loan available to the Administrative Agent for the account of
the Swing Line Lenders, at the office of the Administrative Agent prior to 12:00
Noon (New York City time) in funds immediately available on the Business Day
next succeeding the date such notice is given. The proceeds of such Revolving
Credit Loans shall be immediately applied to repay the Refunded Swing Line
Loans.

            (c) If, prior to the making of a Revolving Credit Loan pursuant to
paragraph (b) of subsection 2.3, one of the events described in paragraph (f) of
Section 8 shall have occurred, each Revolving Credit Lender under the applicable
Revolving Facility hereby agrees to and will, on the date such Revolving Credit
Loan was to have been made, purchase an undivided participating interest in each
Refunded Swing Line Loan in an amount equal to its Revolving Percentage under
such Revolving Facility of such Refunded Swing Line Loan. Such Revolving Credit
Lender will immediately transfer to the Administrative Agent for the account of
the Swing Line Lenders, in immediately available funds denominated in Dollars,
the Dollar Equivalent (if applicable) of the amount of its participations and,
upon its receipt of its ratable share thereof, each Swing Line Lender will
deliver to such Revolving Credit Lender a Swing Line Loan Participation
Certificate dated the date of receipt of such funds and in such amount. On such
date, any Swing Line Loans not denominated in Dollars shall, without any further
action or notice being required, be converted to and become denominated in
Dollars in an amount equal to the Dollar Equivalent of the amount thereof on
such date.

            (d) Whenever, at any time after any Swing Line Lender has received
from any Revolving Credit Lender such Revolving Credit Lender's participating
interest in a Refunded Swing Line Loan and

<PAGE>
                                                                              27

such Swing Line Lender receives any payment on account thereof, such Swing Line
Lender will distribute to such Revolving Credit Lender through the
Administrative Agent its participating interest in such Dollar Equivalent amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Revolving Credit Lender's participating interest was
outstanding and funded) in funds denominated in Dollars; provided, however, that
in the event that such payment received by such Swing Line Lender is required to
be returned, such Revolving Credit Lender will return to such Swing Line Lender
through the Administrative Agent any portion thereof previously distributed by
such Swing Line Lender to it in like funds as such payment is required to be
returned by such Swing Line Lender.

            2.4 Participation. Each Revolving Credit Lender's obligation to
purchase participating interests pursuant to paragraph (c) of subsection 2.3
shall be absolute and unconditional and shall not be affected by any
circumstances, including, without limitation, (a) any set-off, counterclaim,
recoupment, defense or other right which such Revolving Credit Lender may have
against the Swing Line Lender, the Borrower, any Regular Subsidiary Borrower or
any other Person for any reason whatsoever; (b) the occurrence or continuance of
an Event of Default; (c) any adverse change in the condition (financial or
otherwise) of the Borrower or any Subsidiary; (d) any breach of this Agreement
by the Borrower, any Regular Subsidiary Borrower or any other Revolving Credit
Lender; or (e) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing. Notwithstanding the foregoing, no Revolving
Credit Lender shall have any obligation to purchase participating interests
pursuant to paragraph (c) of subsection 2.3 or to make any Refunded Swing Line
Loans in respect of any Swing Line Loan which was made at any time following
receipt by the Administrative Agent of a notice from any Revolving Credit Lender
specifying that (x) a Default or Event of Default has occurred and is continuing
and (y) explicitly stating that such Revolving Credit Lender will not purchase
such participating interests or make Refunded Swing Line Loans with respect to
Swing Line Loans made after the date of receipt of such notice.

            2.5 Repayment of Revolving Credit Loans; Evidence of Debt.

            (a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender (i) the then unpaid
principal amount of each Revolving Credit Loan of such Lender on the Revolving
Credit Termination Date (or such earlier date on which the Loans become due and
payable pursuant to Section 8) and (ii) the then unpaid principal amount of the
Swing Line Loans of the Swing Line Lender on the Revolving Credit Termination
Date (or such earlier date on which the Swing Line Loans become due and payable
pursuant to Section 8). Each of the Regular Subsidiary Borrowers hereby
unconditionally promises to pay to the Administrative Agent for the account of
such Lender (i) the then unpaid principal amount of each Loan to such Subsidiary
Borrower on the Revolving Credit Termination Date (or such earlier date on which
the Revolving Credit Loans become due and payable pursuant to Section 8) and
(ii) the then unpaid principal amount of the Swing Line Loans to such Subsidiary
Borrower of the Swing Line Lender on the Revolving Credit Termination Date (or
such earlier date on which the Swing Line Loans became due and payable pursuant
to Section 8). Each of the Borrower and the relevant Subsidiary Borrowers hereby
further agrees to pay interest on the unpaid principal amount of the Loans from
time to time outstanding to the Borrower or such Subsidiary Borrower, as
applicable, from the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in subsection 2.11.

            (b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrower and the
Subsidiary Borrowers to such Lender resulting from each Loan of such Lender from
time to time, including the amounts of principal and interest payable and paid
to such Lender from time to time under this Agreement.

<PAGE>
                                                                              28

            (c) The Administrative Agent shall maintain the Register pursuant to
subsection 10.6(b)(iv), and a subaccount therein for each Lender, in which shall
be recorded (i) the amount of each Loan made hereunder, the Type thereof and
each Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower or a
Regular Subsidiary Borrower to each Lender hereunder and (iii) both the amount
of any sum received by the Administrative Agent hereunder from the Borrower or
such Regular Subsidiary Borrower and each Lender's share thereof.

            (d) The entries made in the Register and the accounts of each Lender
maintained pursuant to subsection 2.5(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower and each Regular Subsidiary Borrower therein
recorded; provided, however, that the failure of any Lender or the
Administrative Agent to maintain the Register or any such account, or any error
therein, shall not in any manner affect the obligation of the Borrower or such
Regular Subsidiary Borrower to repay (with applicable interest) the Loans made
to such Borrower or such Regular Subsidiary Borrower by such Lender in
accordance with the terms of this Agreement.

            (e) No Loan to Scotts Treasury EEIG may remain outstanding for more
than 11.5 months and, after any such Loan is repaid, there shall be a period of
at least two weeks during which Scotts Treasury EEIG has no Loan or other amount
outstanding under any Revolving Facility; provided that the Borrower may deliver
a notice to the Administrative Agent at any time directing that the restriction
in this subsection 2.5(e) shall cease to apply with respect to such Loan or such
period as are mentioned in any such notice.

            2.6 Facility Fee, etc.

            (a) The Borrower agrees to pay to the Administrative Agent, for the
account of each Revolving Credit Lender, a facility fee in Dollars for the
period from and including the Closing Date to the date that the Revolving Credit
Commitments are terminated (or if later, the date that the Loans and L/C
Obligations shall be repaid in full), calculated as an amount equal to the
product of (a) the Facility Fee Rate and (b) the average daily amount of the
Revolving Credit Commitment of such Lender (regardless of usage) during the
period for which such facility fee is calculated, payable quarterly in arrears
on the last day of each March, June, September and December and on the Revolving
Credit Termination Date (or if later, the date that the Loans and L/C
Obligations shall be repaid in full).

            (b) The Borrower agrees to pay to the Administrative Agent the fees
in the amounts and on the dates as set forth in any fee agreements with the
Administrative Agent and to perform any other obligations contained therein.

            2.7 Termination or Reduction of Revolving Credit Commitments.

            (a) Optional. The Borrower shall have the right, upon not less than
five Business Days' written notice to the Administrative Agent, to terminate the
Revolving Credit Commitments or, from time to time, reduce the amount of the
Revolving Credit Commitments, provided that (i) any such reduction shall be
applied ratably across the Facility A, Facility B, Facility C and Facility D
(with corresponding reductions across the Sterling Facility, the Australian
Facility and the Canadian Facility), (ii) any such reduction shall be
accompanied by prepayment of the Revolving Credit Loans under the applicable
Revolving Facility by the Borrower and/or any Regular Subsidiary Borrower, as
applicable, together with accrued interest on the amount so prepaid to the date
of such prepayment, to the extent, if any, the Available Facility A Commitments,
the Available Facility B Commitments, Available Facility C Commitments or the
Available Facility D Commitments would be negative, (iii) any such termination
of

<PAGE>
                                                                              29

the Revolving Credit Commitments shall be accompanied by (A) prepayment in full
of the Revolving Credit Loans then outstanding hereunder, (B) cash
collateralization of all L/C Obligations then outstanding in accordance with the
provisions of subsection 2.9, and (C) payment of accrued interest thereon to the
date of such prepayment and the payment of any unpaid fees then accrued
hereunder (including, without limitation, in respect of any Letters of Credit)
and (iii) any termination of the Revolving Credit Commitments while LIBOR Loans
are outstanding under the Revolving Credit Commitments and any reduction of the
aggregate amount of the Revolving Credit Commitments that reduces the amount of
the Revolving Credit Commitments under any Revolving Facility below the
principal amount of the LIBOR Loans then outstanding thereunder may be made only
on the last day of the respective Interest Periods for such LIBOR Loans. Upon
receipt of such notice, the Administrative Agent shall promptly notify each
Lender thereof. Any such reduction shall be in an amount of $1,000,000 or a
whole multiple of $1,000,000 in excess thereof (or in the case of a LIBOR
borrowing in euros, an Optional Currency, the Dollar Equivalent thereof) and
shall reduce permanently the amount of the Revolving Credit Commitments then in
effect.

            (b) Mandatory. The Revolving Credit Commitments shall automatically
terminate on the Revolving Credit Termination Date and all Revolving Credit
Loans shall be repaid and to the extent any Letter of Credit remains outstanding
after the Revolving Credit Termination Date, the Borrower shall cash
collateralize such L/C Obligations (and the fees thereon) in accordance with the
provisions of subsection 2.9.

            2.8 Optional and Mandatory Prepayments(a) .

            (a) Optional Prepayments. The Borrower or any Regular Subsidiary
Borrower may, at any time and from time to time prepay Loans under any Revolving
Facility made to it hereunder, in whole or in part, without premium or penalty,
upon irrevocable notice to the Administrative Agent (which notice may be made by
telephone and confirmed in writing promptly thereafter): (1) on the date of such
prepayment, in the case of ABR Loans (which notice must be received by the
Administrative Agent prior to 12:00 Noon, New York City time), (2) three
Business Days prior to the date of such prepayment, in the case of LIBOR Loans
in Dollars (which notice must be received by the Administrative Agent prior to
12:00 Noon, New York City time) and (3) three Business Days prior to the date of
such prepayment, in the case of LIBOR Loans in euros or an Optional Currency
(which notice must be received by 12:00 Noon, London time), specifying the date
and amount of prepayment, the relevant Revolving Facility and whether the
prepayment is of LIBOR Loans, ABR Loans or a combination thereof, and, if a
combination thereof, the amount of prepayment allocable to each. If such notice
is given, the Borrower or the relevant Regular Subsidiary Borrower shall make
such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to such
date on the amount prepaid. Partial prepayments shall be in an aggregate
principal amount of $1,000,000 or a whole multiple of $250,000 in excess thereof
(or in the case of a LIBOR borrowing in euros or an Optional Currency, the
Dollar Equivalent thereof), provided that unless a LIBOR Loan is prepaid in
full, no prepayment shall be made if, after giving effect to such prepayment,
the aggregate principal amount of LIBOR Loans in Dollars outstanding with
respect to which a common Interest Period has been selected shall be less than
$1,000,000 or, in the case of LIBOR Loans in euros or an Optional Currency,
after giving effect to such prepayment, the aggregate principal amount of LIBOR
Loans in euros or an Optional Currency outstanding with respect to which a
common Interest Period has been selected shall be less than $2,500,000 or the
Non-Dollar Currency Equivalent thereof.

            (b) Mandatory Prepayments. The Borrower, without notice or demand,
shall immediately prepay the Revolving Credit Loans under any Revolving
Facility, or cause such Loans to be prepaid by the Regular Subsidiary Borrowers,
to the extent, if any, that the Available Facility A Commitments, the Available
Facility B Commitments, the Available Facility C Commitments or the

<PAGE>
                                                                              30

Available Facility D Commitments, as the case may be, are negative, together
with accrued interest to the date of such prepayment on the amount so prepaid;
provided that if such prepayment is required solely as a result of a change in
the aggregate Dollar Equivalent of the Revolving Credit Loans in euros or an
Optional Currency, no prepayment shall be made unless such prepayment is
required pursuant to subsection 2.20 under the applicable Revolving Facility.

            2.9 Cash Collateralization of Letters of Credit. To the extent that
at any time and from time to time, the L/C Obligations exceed the amount of the
L/C Commitments or the L/C Obligations under any Revolving Facility exceed the
Revolving Credit Commitments under such Revolving Facility (whether pursuant to
subsections 2.7, 2.8 or otherwise), the Borrower shall cash collateralize (in a
manner reasonably satisfactory to the Administrative Agent) such portion of the
L/C Obligations (and the fees thereon through the stated expiration date of the
Letters of Credit giving rise to such L/C Obligations) which is in excess of the
L/C Commitments or such Revolving Credit Commitments, as applicable.

            2.10 Conversion Options. (a) The Borrower or any Regular Subsidiary
Borrower may elect from time to time to convert LIBOR Loans in Dollars under any
Revolving Facility to ABR Loans under such Revolving Facility, and may elect
from time to time to convert ABR Loans in Dollars under any Revolving Facility
to LIBOR Loans under such Revolving Facility, by giving the Administrative Agent
at least three Business Days' prior irrevocable written notice of such election
to convert (which date shall be a Business Day and in the case of any conversion
of any LIBOR Loans to ABR Loans, the last day of an Interest Period therefor),
the amount and type of conversion and, in the case of any conversion of ABR
Loans to LIBOR Loans, the Interest Period selected with respect thereto;
provided, however, that (i) ABR Loans may not be converted to LIBOR Loans when
any Default or Event of Default has occurred and is continuing without the
consent of the Administrative Agent and (ii) Swing Line Loans may not, at any
time, be converted to LIBOR Loans. All or any part of outstanding LIBOR Loans or
ABR Loans may be converted as provided herein, provided that partial conversions
of LIBOR Loans to ABR Loans shall be in an aggregate principal amount of
$2,500,000 or a whole multiple thereof and partial conversions of ABR Loans to
LIBOR Loans with respect to which a common Interest Period has been selected
shall be in an aggregate principal amount of $5,000,000 or a whole multiple of
$2,500,000 in excess thereof, and provided, further, that in the case of a
partial conversion of LIBOR Loans to ABR Loans, after giving effect to such
conversion, the aggregate principal amount of the LIBOR Loans outstanding with
respect to which a common Interest Period has been selected shall be not less
than $5,000,000.

            (b) Any LIBOR Loans may be continued as such upon the expiration of
an Interest Period by compliance by the Borrower or the Regular Subsidiary
Borrowers with the notice provisions contained in the definition of Interest
Period, provided that no LIBOR Loan in Dollars may be continued as such when any
Default or Event of Default has occurred and is continuing, but shall be
automatically converted to an ABR Loan on the last day of the last Interest
Period for which a LIBOR Rate was determined by the Administrative Agent on or
prior to the Administrative Agent's obtaining knowledge of such Default or Event
of Default.

            (c) No conversion or continuation of any Revolving Credit Loans
under any Revolving Facility shall be made pursuant to this subsection 2.10 if,
after giving effect to such conversion or continuation the amount of the
Available Facility A Commitments, the Available Facility B Commitments, the
Available Facility C Commitments or the Available Facility D Commitments, as the
case may be, would be negative.

            (d) Conversions of Revolving Credit Loans in any currency to another
currency shall be made by repaying such Revolving Credit Loans and reborrowing
in such other currency in compliance with the provisions hereof.

<PAGE>
                                                                              31

            2.11 Interest Rate and Payment Dates.

            (a) Each LIBOR Loan shall bear interest for each day during each
Interest Period with respect thereto at a rate per annum equal to the LIBOR Rate
determined for such Interest Period plus the Applicable Margin.

            (b) Each ABR Loan shall bear interest for the period from and
including the date thereof until maturity at a rate per annum equal to the ABR
plus the Applicable Margin.

            (c) If all or a portion of (i) the principal amount of any Loan or
any reimbursement obligation, (ii) any interest payable thereon or (iii) any
facility fee, commission or other amount payable hereunder shall not be paid
when due (whether at the stated maturity, by acceleration or otherwise), such
overdue amount shall bear interest at a rate per annum which is (A) the rate
pursuant to paragraph (a) of this subsection plus 2% or (B) in the case of
amounts in Dollars, if higher, the rate described in paragraph (b) of this
subsection 2.11 plus 2%, in each case from the date of such non-payment until
such amount is paid in full (as well after as before judgment). The
Administrative Agent may choose any Interest Period from time to time (including
one Interest Period of shorter than one month) with respect to any overdue
amount bearing interest based upon paragraph (a) of this subsection.

            (d) Interest shall be payable in arrears on each Interest Payment
Date, except that interest payable pursuant to subsection 2.11(c) shall be
payable upon demand.

            2.12 Computation of Interest and Fees.

            (a) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Regular Subsidiary Borrowers absent manifest
error.

            (b) Interest (other than interest based on the Prime Rate) shall be
calculated on the basis of a 360-day year for the actual days elapsed (subject,
in the case of any LIBOR Loan in an Optional Currency, to any market convention
for a different basis as determined by the Administrative Agent); and facility
fees and interest based on the Prime Rate shall be calculated on the basis of a
365- (366-, as the case may be) day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Borrower and the
affected Lenders of each determination of the LIBOR Rate. Any change in the
interest rate on a Loan resulting from a change in the ABR, any LIBOR reserve
requirements, the C/D Assessment Rate or the C/D Reserve Percentage shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the affected Lenders of the Closing Date and the amount of such
change in interest rate.

            (c) The Administrative Agent shall, at the request of the Borrower
or a Regular Subsidiary Borrower or any Lender, deliver to the Borrower or a
Regular Subsidiary Borrower or such Lender a statement showing in reasonable
detail the calculations used by the Administrative Agent in determining any
interest rate pursuant to subsection 2.11, excluding any LIBOR Base Rate which
is based upon the British Bankers Assoc. Interest Settlement Rates Page.

            2.13 Inability to Determine Interest Rate. In the event that the
Reference Lenders shall have reasonably determined (which determination shall be
conclusive and binding upon the Borrower and the Regular Subsidiary Borrowers
absent manifest error) that by reason of circumstances affecting the interbank
eurocurrency market, adequate and reasonable means do not exist for ascertaining
the LIBOR Rate applicable pursuant to subsection 2.11(a) for any Interest Period
with respect to (a) a proposed Loan

<PAGE>
                                                                              32

that has been requested be made as a LIBOR Loan, (b) a LIBOR Loan that will
result from the requested conversion of an ABR Loan into a LIBOR Loan or (c) the
continuation of LIBOR Loans beyond the expiration of the then current Interest
Period with respect thereto, the Administrative Agent shall forthwith give
telecopy or telephonic notice of such determination, confirmed in writing, to
the Borrower and the Lenders at least one Business Day prior to, as the case may
be, the requested Borrowing Date for such LIBOR Loan, the conversion date of
such ABR Loan or the last day of such Interest Period. If such notice is given
(i) any requested LIBOR Loan in Dollars shall be made as an ABR Loan, (ii) any
ABR Loan that was to have been converted to a LIBOR Loan shall be continued as
an ABR Loan, (iii) any outstanding LIBOR Loan in Dollars shall be converted, on
the last day of the then current Interest Period with respect thereto, to an ABR
Loan and (iv) the LIBOR Rate for such Interest Period for any affected LIBOR
Loans in euros or any Optional Currency shall bear interest for such Interest
Period at a rate reasonably determined by the Administrative Agent as
representing the cost to Lenders generally holding such LIBOR Loans of funding
such LIBOR Loans for such Interest Period plus the Applicable Margin. Until such
notice has been withdrawn by the Administrative Agent, no further LIBOR Loans
shall be made nor shall the Borrower have the right to convert an ABR Loan to a
LIBOR Loan. Such notice shall be withdrawn by the Administrative Agent when the
Administrative Agent shall reasonably determine that adequate and reasonable
means exist for ascertaining the LIBOR Rate.

            2.14 Pro Rata Treatment and Payments.

            (a) Each borrowing from the Revolving Credit Lenders hereunder shall
be made under the Revolving Facility specified by the Borrower in accordance
with subsections 2.1 and 2.2. The reduction of the Revolving Credit Commitments
under any Revolving Facility of the Lenders shall be made ratably.

            (b) Each payment (including each prepayment) on account of principal
of and interest on the Revolving Credit Loans in any currency shall be made
ratably according to the respective outstanding principal amounts of such Loans
then held by the Revolving Credit Lenders, subject in the case of prepayments of
principal to any designation of the Administrative Agent pursuant to subsection
2.1. The Borrower or a Regular Subsidiary Borrower may select the currency or
currencies of any optional or mandatory prepayment of the Revolving Credit
Loans.

            (c) All payments (including prepayments) to be made by the Borrower
or any Regular Subsidiary Borrower hereunder, whether on account of principal,
interest, fees or otherwise, shall be made without set off or counterclaim and
shall be made prior to 12:00 Noon, New York City time, on the due date thereof
to the Administrative Agent, for the account of the relevant Lenders, at the
Administrative Agent's office specified in subsection 10.2, in Dollars or euros,
as applicable, and in immediately available funds (or in the case of any payment
in an Optional Currency, in the relevant Optional Currency and at the place and
time specified by the Administrative Agent from time to time). The
Administrative Agent shall distribute such payments to the relevant Lenders
promptly upon receipt in like funds as received. If any payment hereunder (other
than payments on LIBOR Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding Business Day
and such extension of time shall in such case be included in the computation of
the amount payable hereunder. If any payment on a LIBOR Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day.

            (d) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a Borrowing Date that such Lender will not make
the amount that would constitute its share of the borrowing on such date
available to the Administrative Agent, the Administrative Agent may assume that

<PAGE>
                                                                              33

such Lender has made such amount available to the Administrative Agent on such
Borrowing Date, and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower or the relevant Regular Subsidiary
Borrower a corresponding amount. If such amount is made available to the
Administrative Agent on a date after such Borrowing Date, such Lender shall pay
to the Administrative Agent on demand an amount equal to the product of (i) the
daily average Federal funds rate (or, in the case of any borrowing in euros or
an Optional Currency, the customary rate as selected by the Administrative Agent
for the settlement of obligations between banks) during such period as quoted by
the Administrative Agent, times (ii) the amount of such Lender's share of such
borrowing, times (iii) a fraction the numerator of which is the number of days
that elapse from and including such Borrowing Date to the date on which such
Lender's Revolving Percentage or Term Percentage of such borrowing shall have
become immediately available to the Administrative Agent and the denominator of
which is 360 (the "Effective Interbank Rate"). A certificate of the
Administrative Agent submitted to any Lender with respect to any amounts owing
under this subsection shall be conclusive in the absence of manifest error. If
such amount is so made available, such payment to the Administrative Agent shall
constitute such Lender's Loan on such Borrowing Date for all purposes of this
Agreement. If such amount is not so made available to the Administrative Agent,
then the Administrative Agent shall notify the Borrower or the relevant Regular
Subsidiary Borrower of such failure and on the fourth Business Day following
such Borrowing Date, the Borrower or such Regular Subsidiary Borrower shall pay
to the Administrative Agent such ratable portion, together with interest thereon
for each day that the Borrower or such Regular Subsidiary Borrower had the use
of such ratable portion, at the Effective Interbank Rate. Nothing contained in
this subsection 2.14(d) shall relieve any Lender which has failed to make
available its ratable portion of any borrowing hereunder from its obligation to
do so in accordance with the terms hereof.

            (e) The failure of any Lender to make the Loan to be made by it on
any Borrowing Date shall not relieve any other Lender of its obligation, if any,
hereunder to make its Loan on such Borrowing Date, but no Lender shall be
responsible for the failure of any other Lender to make the Loan to be made by
such other Lender on such Borrowing Date.

            2.15 Illegality. Notwithstanding any other provisions herein, if any
introduction of or change in any law, regulation, treaty or directive or in the
interpretation or application thereof occurring after the date hereof shall make
it unlawful for any Lender to make or maintain LIBOR Loans as contemplated by
this Agreement, (a) such Lender shall forthwith give telecopy or telephonic
notice of such circumstances, confirmed in writing, to the Borrower or the
relevant Regular Subsidiary Borrower (which notice shall be withdrawn by such
Lender when such Lender shall reasonably determine that it shall no longer be
illegal for such Lender to make or maintain LIBOR Loans or to convert ABR Loans
to LIBOR Loans), (b) the commitment of such Lender hereunder to make LIBOR Loans
or to convert ABR Loans to LIBOR Loans shall forthwith be canceled and (c) such
Lender's Loans then outstanding as LIBOR Loans, if any, shall be, in the case of
Loans in Dollars, converted automatically to ABR Loans based upon the ABR on the
last day of the then current Interest Period with respect to such Loans or
within such earlier period as may be required by law and in the case of Loans in
euros or any Optional Currency, shall be prepaid on the last day of the then
current Interest Period with respect to such Loans or within such earlier period
as may be required by law. The Borrower and each Regular Subsidiary Borrower
hereby agrees promptly to pay the Administrative Agent for the account of each
Lender, upon demand by the Administrative Agent, any additional amounts
necessary to compensate the Lenders for any costs incurred by the Lenders in
making any conversion in accordance with this subsection 2.15, including, but
not limited to, any interest or fees payable by the Lenders to lenders of funds
obtained by them in order to make or maintain their LIBOR Loans hereunder (the
Administrative Agent's notice of such costs, as certified to the Borrower or
such Regular Subsidiary Borrower, to be conclusive, absent manifest error).

            2.16 Requirements of Law.

<PAGE>
                                                                              34

            (a) In the event that any introduction of or change in any law,
regulation, treaty or directive or in the interpretation or application thereof
occurring after the date hereof or compliance by any Lender with any request or
directive (whether or not having the force of law) from any central bank or
other governmental authority, agency or instrumentality (including the National
Association of Insurance Commissioners):

                  (i) shall subject such Lender to any tax of any kind,
      whatsoever with respect to this Agreement, any Letter of Credit, any
      Application, any Loan or any LIBOR Loans made by it or its obligation to
      make LIBOR Loans or change the basis of taxation of payments to such
      Lender of principal, facility fee, interest or any other amount payable
      hereunder (other than Non-Excluded Taxes or changes in the rate of tax on
      the overall net income of such Lender)

                  (ii) shall impose, modify or hold applicable any reserve,
      special deposit, compulsory loan or similar requirement against assets
      held by, or deposits or other liabilities in or for the account of,
      advances or loans by, or other credit extended by, or any other
      acquisition of funds by, any office of such Lender which are not otherwise
      included in the determination of the LIBOR Rate hereunder, or

                  (iii) shall impose on such Lender or the eurocurrency market
      any other condition;

and the result of any of the foregoing is to increase the cost to such Lender
(which increase in cost shall be the result of such Lender's reasonable
allocation of the aggregate of such cost increases resulting from such events),
of making, renewing or maintaining LIBOR Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable thereunder then, in any
such case, the Borrower or the relevant Regular Subsidiary Borrower shall, upon
notice to it from such Lender (with a copy to the Administrative Agent)
certifying that (x) one of the events described in this subsection 2.16(a) has
occurred and the nature of such event, (y) the increased cost or reduced amount
resulting from such event and (z) the additional amounts demanded by such Lender
and a reasonably detailed explanation of the calculation thereof, promptly pay
to the Administrative Agent for the account of the applicable Lender, upon
demand by the Administrative Agent, without duplication, any additional amounts
necessary to compensate such Lender for such increased cost or reduced amount
receivable which such Lender deems to be material as determined in good faith by
such Lender with respect to this Agreement or the Loans made hereunder, provided
that, in any such case, the Borrower or the relevant Regular Subsidiary Borrower
(if otherwise not prohibited hereunder) may elect to convert the LIBOR Loans in
Dollars made hereunder to ABR Loans by giving such Lender and the Administrative
Agent at least one Business Day's prior irrevocable notice of such election in
which case the Borrower or relevant Regular Subsidiary Borrower shall promptly
pay the Administrative Agent for the account of the applicable Lender, upon
demand by the Administrative Agent, without duplication, any loss or expense
incurred by such Lender in liquidating or re-employing the deposits from which
the funds were obtained by such Lender for the purpose of making and/or
maintaining such LIBOR Loans, together with any amount due under this subsection
2.16(a) in respect of the period prior to such conversion. If such Lender
becomes entitled to claim any additional amounts pursuant to this subsection, it
shall promptly notify the Borrower or the relevant Regular Subsidiary Borrower
of the event by reason of which it has become so entitled.

            (b) In the event that any Lender shall have determined that any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof does or shall have the effect of
reducing the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under any Letters

<PAGE>
                                                                              35

of Credit to a level below that which such Lender or such corporation could have
achieved but for such change or compliance (taking into consideration such
Lender's or such corporation's policies with respect to capital adequacy) by an
amount deemed by such Lender to be material, then from time to time, within 15
days after submission by such Lender to the Borrower (with a copy to the
Administrative Agent) of a written request therefor certifying that (x) one of
the events described in this subsection 2.16(b) has occurred and the nature of
such event, (y) the increased cost or reduced amount resulting from such event
and (z) the additional amounts demanded by such Lender and a reasonably detailed
explanation of the calculation thereof, the Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender for such
reduction.

            (c) A certificate as to any additional amounts payable pursuant to
paragraphs (a) and (b) above submitted by any Lender to the Borrower or a
Regular Subsidiary Borrower shall be conclusive absent manifest error.

            2.17 Indemnity. The Borrower and each Regular Subsidiary Borrower
agrees to indemnify each Lender and to hold each Lender harmless from any loss
or expense which such Lender may sustain or incur as a consequence of (a)
default by the Borrower or such Regular Subsidiary Borrower in payment of the
principal amount of or interest on any LIBOR Loans including, but not limited
to, any such loss or expense arising from interest or fees payable by such
Lender to lenders of funds obtained by them in order to maintain their LIBOR
Loans, (b) default by the Borrower or such Regular Subsidiary Borrower in making
LIBOR Loans or conversion after the Borrower or such Regular Subsidiary Borrower
has given a notice in accordance with subsection 2.2 or 2.10, (c) default by the
Borrower or such Regular Subsidiary Borrower in making any prepayment of a LIBOR
Loan after the Borrower or such Regular Subsidiary Borrower has given a notice
in accordance with subsection 2.8(a), and (d) the making of any payment or
conversion of LIBOR Loans on a day which is not the last day of the applicable
Interest Period with respect thereto, including, but not limited to, any such
loss or expense arising from interest or fees payable by the Lenders to lenders
of funds obtained by them in order to maintain their LIBOR Loans hereunder. This
covenant shall survive termination of this Agreement and payment of the
outstanding Notes. The obligations of indemnity of each of the respective
Regular Subsidiary Borrowers hereunder are limited only to the loss and expense
described herein arising from or as a result of any act or omission by such
Regular Subsidiary Borrower, and are not, and shall not be deemed to be, the
joint and several obligations of each such Regular Subsidiary Borrower as to any
loss or expense arising from or as a result of any act or omission by the
Borrower or the other Regular Subsidiary Borrower.

            2.18 Taxes.

            (a) Except as provided below in this subsection or in any Annex
hereto, all payments made by the Borrower or any Subsidiary Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding the following taxes ("Excluded Taxes") (x) taxes measured
by or imposed upon the overall net income of any Lender or its applicable
lending office, or any branch or affiliate thereof, and (y) all franchise taxes
or branch taxes imposed upon any Lender or its applicable lending office, or any
branch or affiliate thereof, in each case imposed: (i) by the jurisdiction under
the laws of which such Lender, applicable lending office, branch or affiliate is
organized or is located, or in which its principal executive office is located,
or any nation within which such jurisdiction is located or any political
subdivision thereof; or (ii) by reason of any connection between the
jurisdiction imposing such tax and such Lender, applicable lending office,
branch or affiliate other than a connection arising solely from such Lender
having executed, delivered or performed its obligations under, or received
payment under or enforced, this Agreement. If any such non-excluded

<PAGE>
                                                                              36

taxes, levies, imposts, duties, charges, fees, deductions or withholdings
("Non-Excluded Taxes") are required to be withheld from any amounts payable to
the Administrative Agent or any Lender hereunder, the amounts so payable to the
Administrative Agent or such Lender shall be increased to the extent necessary
to yield to the Administrative Agent or such Lender (after payment of all
Non-Excluded Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement, provided, however, that the
Borrower and/or such Subsidiary Borrower shall be entitled to deduct and
withhold any Non-Excluded Taxes and shall not be required to increase any such
amounts payable to any Lender that are attributable to (i) such Lender's failure
to comply with the requirements of paragraph (b) of this subsection or (ii) the
Lender's failure at all times during which it is a party to this Agreement to
comply with the requirements of subsection 2.1 or 2.3 unless such failure is due
to a change in treaty, law or regulation or any application or interpretation
thereof. Whenever any Non-Excluded Taxes are payable by the Borrower or any
Subsidiary Borrower, as promptly as possible thereafter the applicable Borrower
or Subsidiary Borrower shall send to the Administrative Agent for its own
account or for the account of such Lender, as the case may be, a certified copy
of an original official receipt received by such Borrower or such Subsidiary
Borrower showing payment thereof. If the Borrower or any Subsidiary Borrower
fails to pay any Non-Excluded Taxes when due to the appropriate taxing authority
or fails to remit to the Administrative Agent the required receipts or other
required documentary evidence, such Borrower or Subsidiary Borrower shall
indemnify the Administrative Agent and the Lenders for any incremental taxes,
interest or penalties that may become payable by the Administrative Agent or any
Lender as a result of any such failure. The agreements in this subsection shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.

            (b) (1) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof shall:

            (X)   (i) on or before the date of any payment by the Borrower or
      any Regular Subsidiary Borrower under this Agreement or any Notes to such
      Lender, deliver to the Borrower and the Administrative Agent two duly
      completed copies of United States Internal Revenue Service Form W-8BEN or
      W-8ECI, as applicable, or such successor applicable form, statement or
      certificate, as the case may be, certifying that it is entitled to an
      exemption from United States backup withholding tax or is entitled receive
      payments under this Agreement and any Notes without deduction or
      withholding (or, upon the prior written consent of the Borrower, at a
      reduced rate of withholding) of any United States federal income taxes;

                  (ii) deliver to the Borrower and the Administrative Agent two
      further copies of any such form or certification on or before the date
      that any such form or certification expires or becomes obsolete and after
      the occurrence of any event requiring a change in the most recent form
      previously delivered by it to the Borrower or such Domestic Subsidiary
      Borrower; and

                  (iii) obtain such extensions of time for filing and complete
      such forms or certifications as may reasonably be requested by the
      Borrower or the Administrative Agent;

            (Y) in the case of any such Lender that is not a "bank" within the
      meaning of Section 881(c)(3)(A) of the Code, (i) represent to the Borrower
      (for the benefit of each of the Borrower, the relevant Subsidiary
      Borrowers and the Administrative Agent) that it is not a bank within the
      meaning of Section 881(c)(3)(A) of the Code, (ii) agree to furnish to the
      Borrower on or before the date of any payment by the Borrower or any
      Domestic Subsidiary Borrower, with a copy to the Administrative Agent, (A)
      a certificate substantially in the form of Exhibit D (any such certificate
      a "U.S. Tax Compliance Certificate") and (B) two accurate and complete
      original signed copies of Internal Revenue Service Form W-8 BEN or W-8
      ECI, as applicable, or successor applicable form certifying to such
      Lender's legal entitlement at the date of such

<PAGE>
                                                                              37

      certificate to an exemption from U.S. withholding tax under the provisions
      of Sections 871(h), 881(c) and 1441(c)(9) of the Code with respect to
      payments to be made under this Agreement and any Notes (and to deliver to
      the Borrower and the Administrative Agent two further copies of such form
      on or before the date it expires or becomes obsolete and after the
      occurrence of any event requiring a change in the most recently provided
      form and, if necessary, obtain any extensions of time reasonably requested
      by the Borrower or the Administrative Agent for filing and completing such
      forms), and (iii) agree, to the extent legally entitled to do so, upon
      reasonable request by the Borrower, to provide to the Borrower (for the
      benefit of each of the Borrower, the Domestic Subsidiary Borrowers and the
      Administrative Agent) such other forms as may be reasonably required in
      order to establish the legal entitlement of such lender to an exemption
      from withholding with respect to payments under this Agreement and any
      Notes, provided that in determining the reasonableness of a request under
      this clause (iii) such Lender shall be entitled to consider the cost (to
      the extent unreimbursed by the Borrower) which would be imposed on such
      Lender of complying with such request;

unless in any such case any change in treaty, law or regulation has occurred
after the date such Person becomes a Lender hereunder which renders all such
forms inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender so advises the
Borrower and the Administrative Agent.

            (2) Each Lender that is not incorporated or organized under the laws
of the jurisdiction under which a Foreign Subsidiary Borrower is incorporated or
organized or is not a resident for taxation purposes of such Foreign Subsidiary
Borrower's country of tax residence, shall upon written request by such Foreign
Subsidiary Borrower, deliver to such Foreign Subsidiary Borrower or the
applicable Governmental Authority or taxing authority, as the case may be, any
form or certificate required in order that any payment by such Foreign
Subsidiary Borrower under this Agreement or any Notes to such Lender may be made
free and clear of, and without deduction or withholding for or on account of any
tax (or to allow any such deduction or withholding to be at a reduced rate)
imposed on such payment under the laws of the jurisdiction under which such
Foreign Subsidiary Borrower is incorporated or organized or is otherwise a
resident for taxation purposes, provided that such Lender is legally entitled to
complete, execute and deliver such form or certificate and such completion,
execution or submission would not materially prejudice the legal position of
such Lender.

            2.19 Use of Proceeds. The Revolving Facilities and the proceeds of
the Revolving Credit Loans shall be used (a) for the repayment in full of the
loans under the Existing Credit Agreement and the payment in full of any and all
other amounts owing to the lenders thereunder (the "Refinancing") and (b) for
working capital and other general corporate purposes (which shall include any
purpose expressly permitted by this Agreement) of the Borrower and its
Subsidiaries; provided that, notwithstanding the foregoing, none of the proceeds
of the Revolving Credit Loans may be used to finance any Hostile Take-Over Bid.

            2.20 Controls on Prepayment if Aggregate Revolving Extensions of
Credit Exceed Aggregate Revolving Credit Commitments.

            (a) The Borrower will implement and maintain internal controls to
monitor the borrowings and repayments of Revolving Credit Loans by both the
Borrower and the relevant Regular Subsidiary Borrowers and the issuance of and
drawings under Letters of Credit, with the object of preventing any request for
an Extension of Credit that would result in the Available Facility A
Commitments, the Available Facility B Commitments the Available Facility C
Commitments or the Available Facility D Commitments becoming negative by more
than 5% of the Revolving Credit

<PAGE>
                                                                              38

Commitments under the relevant Revolving Facility, and, if such Commitments are
negative by more than 5%, the Borrower will promptly notify the Administrative
Agent.

            (b) The Administrative Agent will calculate the Available Facility A
Commitments, the Available Facility B Commitments the Available Facility C
Commitments or the Available Facility D Commitments from time to time, and in
any event not less frequently than once during each calendar quarter. In making
such calculations, the Administrative Agent will rely on the information most
recently received by it from the Swing Line Lenders in respect of outstanding
Swing Line Loans and from the Issuing Lenders in respect of outstanding L/C
Obligations.

            (c) In the event that on any date the Administrative Agent
calculates that the Available Facility A Commitments, the Available Facility B
Commitments the Available Facility C Commitments or the Available Facility D
Commitments have become negative solely as a result of a change in the aggregate
Dollar Equivalent of the Revolving Credit Loans under such Revolving Facility in
euros or in Optional Currencies, by more than 5%, the Administrative Agent will
give notice to such effect to the Borrower or any such Regular Subsidiary
Borrower and the Lenders. Within five Business Days of receipt of any such
notice, the Borrower or any such Regular Subsidiary Borrower will, as soon as
practicable but in any event within five Business Days of receipt of such
notice, first, make such repayments or prepayments of Revolving Credit Loans
under the relevant Revolving Facility (together with interest accrued to the
date of such repayment or prepayment), second, pay any Reimbursement Obligations
under such Revolving Facility then outstanding and, third, cash collateralize
any outstanding L/C Obligations under such Revolving Facility on terms
reasonably satisfactory to the Administrative Agent as shall be necessary to
cause the Available Facility A Commitments, the Available Facility B Commitments
the Available Facility C Commitments or the Available Facility D Commitments, as
applicable, not to be negative. If any such repayment or prepayment of a LIBOR
Loan pursuant to this subsection occurs on a day which is not the last day of
the then current Interest Period with respect thereto, the Borrower shall pay to
the Lenders such amounts, if any, as may be required pursuant to subsection
2.17.

            2.21 Lending Installations.

            (a) Subject to subsection 2.1 and 2.3 each Lender may book its Loans
at any Lending Installation selected by such Lender and may change its Lending
Installation from time to time, provided that (i) in the case of a Facility C
Lender, that Lending Installation is an Eligible Australian Bank and (ii) in the
case of a Facility D Lender, that Lending Installation is an Eligible Canadian
Bank. All terms of this Agreement shall apply to any such Lending Installation
and the Loans made hereunder shall be deemed held by each Lender for the benefit
of such Lending Installation. Each Lender may, by written notice to the
Administrative Agent and the Borrower in accordance with subsection 10.2 and
subject always to subsection 2.1 and 2.3 designate replacement or additional
Lending Installations through which Loans will be made by it and for whose
account Loan payments are to be made.

            (b) Each Lender agrees that, upon the occurrence of any event giving
rise to the operation of subsection 2.16 or 2.18(a) with respect to such Lender,
it will, if requested by the Borrower, use reasonable efforts (subject to
overall policy considerations of such Lender) to designate another Lending
Installation for any Loans affected by such event with the object of avoiding
the consequences of such event; provided, that such designation is made on terms
that, in the sole judgment of such Lender, cause such Lender and any of its
Lending Installations to suffer no economic, legal or regulatory disadvantage,
and provided, further, that nothing in this subsection 2.21(b) shall affect or
postpone any of the obligations of the Borrower or any Regular Subsidiary
Borrower or the rights of any Lender pursuant to subsection 2.16 or 2.18(a).

<PAGE>
                                                                              39

            2.22 Notices to Lenders. All notices under this Section 2 to Lenders
by the Borrower, any Regular Subsidiary Borrower or the Administrative Agent,
and all payments by the Administrative Agent to the Lenders, shall be made to
the respective Lending Installations of the Lenders maintaining the relevant
Loans or Commitments.

            2.23 Revolving Credit Commitment Increases and Changes.

            (a) From time to time the Borrower may, with the consent of the
Administrative Agent and the Issuing Lender and one or more (i) of the Revolving
Credit Lenders and/or (ii) banks or other financial institutions to be added to
this Agreement (each such entity a "New Revolving Credit Lender"), increase the
Total Revolving Credit Commitments, which increase shall be provided by such
Revolving Credit Lenders and/or New Revolving Credit Lenders and which may be
applied to each of or any of the Revolving Facilities as agreed by the Borrower
and the Administrative Agent. Any such increase in the Total Revolving Credit
Commitments shall be evidenced by (x) in the case of clause (i) above, the
execution and delivery by the Borrower, the Regular Subsidiary Borrowers, the
Administrative Agent and such Revolving Credit Lender of a Commitment Increase
Supplement, substantially in the form of Exhibit E (a "Commitment Increase
Supplement") and (y) in the case of clause (ii) above, the execution and
delivery by the Borrower, the Subsidiary Borrowers, the Administrative Agent and
such New Revolving Credit Lender of a New Lender Supplement, substantially in
the form of Exhibit F (a "New Lender Supplement"), and shall be effective as of
the date specified for effectiveness in such Commitment Increase Supplement or
New Lender Supplement, as the case may be, whereupon such Revolving Credit
Lender or New Revolving Credit Lender shall be bound by and entitled to the
benefits of this Agreement with respect to the full amount of its Revolving
Credit Commitment in respect of each such Revolving Facility as so increased or
provided, and Schedule 1 shall be deemed to be amended to so increase the
Revolving Credit Commitment under each such Revolving Facility and/or add the
name and Revolving Credit Commitment of such New Revolving Credit Lender.

            (b) At the request of the Borrower and with the consent of the
Administrative Agent (which consent shall not be unreasonably withheld), a
Revolving Credit Lender may from time to time either (i) increase (including
from zero) its Facility B Commitment, Facility C Commitment or Facility D
Commitment (with a concomitant increase as appropriate in its Sterling
Commitment, Canadian Dollar Commitment or Australian Dollar Commitment) or (ii)
establish a new Revolving Facility (such as a "Facility E" or "Facility F") and
a related local facility with a commitment thereunder and, in either case,
equivalently reduce its commitment under one of its other Revolving Facilities
which is Facility A, Facility B, Facility C or Facility D (with a concomitant
reduction as appropriate in its Sterling Commitment, Canadian Dollar Commitment
or Australian Dollar Commitment). Any such increase or establishment and
equivalent reduction shall be evidenced by the execution and delivery by the
Borrower, the Subsidiary Borrowers, the Administrative Agent and such Revolving
Credit Lenders of documentation satisfactory to such parties providing for such
increase or establishment and equivalent reduction and any amendments to this
Section 2 and to the relevant annexes hereto (including the inclusion of a new
annex) as are necessary or appropriate to afford such parties with the benefits
of this Agreement and the rights and remedies hereunder for such increase or
such new Revolving Facility and any related local facility as are comparable to
the benefits hereof and the rights and remedies hereunder for the existing
Revolving Facilities.

            (c) If, on the date upon which the Revolving Credit Commitment of
any Revolving Credit Lender under any Revolving Facility is increased pursuant
to subsection 2.23(a) or there is an increase in or establishment of a Revolving
Facility and an equivalent reduction in any other Revolving Facility pursuant to
subsection 2.23(b), there is an unpaid principal amount of Revolving Credit
Loans under any Revolving Facility affected thereby the Borrower or any Regular
Subsidiary Borrower in which such Revolving Credit Lender has agreed to
participate, the principal outstanding amount of all such

<PAGE>
                                                                              40

Revolving Credit Loans shall (A) in the case of such Revolving Credit Loans
which are ABR Loans, be immediately prepaid by the Borrower or Subsidiary
Borrower (but all such Revolving Credit Loans may, on the terms and conditions
hereof, be reborrowed on such date on a ratable basis, based on the revised
Revolving Credit Commitments as then in effect under the relevant Revolving
Facilities) and (B) in the case of such Revolving Credit Loans which are LIBOR
Loans, continue to remain outstanding (notwithstanding any other requirement in
this Agreement that such Revolving Credit Loans be held ratably based on the
revised Commitments under the relevant Revolving Facilities as then in effect)
until the end of the then current Interest Period therefor, at which time such
LIBOR Loans shall be paid by the Borrower or Subsidiary Borrower (but all such
Revolving Credit Loans may, on the terms and conditions hereof, be reborrowed on
such date on a ratable basis, based on the Revolving Facilities as then in
effect).

            (d) Notwithstanding anything to the contrary in this subsection
2.23, (i) in no event shall any transaction effected pursuant to this subsection
2.23 cause the aggregate Revolving Credit Commitments to exceed $1,150,000,000
and (ii) no Lender shall have any obligation to increase its Revolving Credit
Commitment under any Revolving Facility unless it agrees to do so in its sole
discretion. Each Commitment Increase Supplement shall be deemed to be a
supplement to this Agreement.

            SECTION 3. LETTER OF CREDIT FACILITIES

            3.1 L/C Commitment.

            (a) Subject to the terms and conditions hereof, the Issuing Lender,
in reliance on the agreements of the other Lenders set forth in subsection
3.4(a), agrees to issue letters of credit ("Letters of Credit") under any
Revolving Facility for the account of the Borrower or any Regular Subsidiary
Borrower on any Business Day during the Revolving Credit Commitment Period in
such form as may be approved from time to time by the Issuing Lender; provided
that the Issuing Lender shall not have any obligation to issue any Letter of
Credit if, after giving effect to such issuance, (i) the L/C Obligations would
exceed the L/C Commitment or (ii) the Available Facility A Commitments, the
Available Facility B Commitments the Available Facility C Commitments or the
Available Facility D Commitments would be negative. Each Letter of Credit shall
(i) be denominated in Dollars, euros or in any Optional Currency, (ii) be either
(x) a standby letter of credit (a "Standby L/C") issued to support obligations
of the Borrower or any Regular Subsidiary Borrower, contingent or otherwise,
with an expiry date occurring not later than one year after such standby L/C was
issued (which expiry date may be subject to one or more automatic extensions of
one year or less unless 60-day notice, or such other notice as is satisfactory
to the Borrower and the Issuing Lender, is given that any such extension shall
not be effective) or (y) a documentary letter of credit in respect of the
purchase of goods or services by the Borrower and its Subsidiaries in the
ordinary course of business with an expiry date occurring not later than one
year after such documentary letter of credit was issued and, in the case of any
such documentary letter of credit which is to be accepted by the Issuing Lender
pending payment at a date after presentation of sight drafts, with a payment
date no more than one year after such drafts were presented for acceptance (a
"Trade L/C") and (iii) expire no later than five days before the Revolving
Credit Termination Date.

            (b) Each Standby L/C shall be subject to the International Standby
Practices and each Trade L/C shall be subject to the Uniform Customs and, in
each case, to the extent not inconsistent therewith, the laws of the State of
New York.

<PAGE>
                                                                              41

            (c) The Issuing Lender shall at no time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause the
Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.

            (d) Notwithstanding anything to the contrary contained herein, each
Letter of Credit outstanding under the Existing Credit Agreement on the Closing
Date shall be deemed to be issued and outstanding under this Agreement as of the
Closing Date.

            3.2 Procedure for Issuance of Letters of Credit. The Borrower or any
Regular Subsidiary Borrower may from time to time request that the Issuing
Lender issue a Letter of Credit under any Revolving Facility by delivering to
the Issuing Lender (with a copy to the Administrative Agent) at its address for
notices specified herein an Application therefor, completed to the satisfaction
of the Issuing Lender, and such other certificates, documents and other papers
and information as the Issuing Lender may reasonably request. Upon receipt of
any Application, the Issuing Lender will process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby (but in no event shall the
Issuing Lender be required to issue any Letter of Credit earlier than four
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed by the Issuing Lender and the Borrower or any relevant
Regular Subsidiary Borrower. The Issuing Lender shall furnish a copy of such
Letter of Credit to the Borrower, to the Administrative Agent and to any
relevant Regular Subsidiary Borrower promptly following the issuance thereof.

            3.3 Fees, Commissions and Other Charges.

            (a) The Borrower or the relevant Regular Subsidiary Borrower shall
pay to the Administrative Agent, for the ratable account of the Issuing Lender
and the L/C Participants under the relevant Revolving Facility, a letter of
credit commission in Dollars with respect to each Letter of Credit issued by the
Issuing Lender (i) in an amount equal to the Dollar Equivalent of such issuance
and payment fees as have been agreed upon by the Borrower and the Issuing Lender
and (ii) in an amount equal to the product of, on the date on which such
commission is calculated, (A) the rate per annum equal to the Applicable Margin
in respect of LIBOR Loans that are Revolving Credit Loans and (B) the Dollar
Equivalent of the aggregate amount available to be drawn under each Letter of
Credit (plus an additional 1/8 of 1% per annum which shall be payable for the
account of the Issuing Lender). Such letter of credit commissions shall be
payable in arrears on the last day of each March, June, September and December
and shall be nonrefundable.

            (b) In addition to the foregoing fees and commissions, the Borrower
or the relevant Regular Subsidiary Borrower shall pay or reimburse the Issuing
Lender for such normal and customary costs and expenses as are incurred or
charged by the Issuing Lender in issuing, effecting payment under, amending or
otherwise administering any Letter of Credit issued by it.

            (c) The Administrative Agent shall, promptly following its receipt
thereof, distribute to the Issuing Lender and the L/C Participants under the
relevant Revolving Facility all fees and commissions received by the
Administrative Agent for their respective accounts pursuant to this subsection
3.3.

            3.4 L/C Participation.

<PAGE>
                                                                              42

            (a) The Issuing Lender irrevocably agrees to grant and hereby grants
to each L/C Participant under the relevant Revolving Facility, and, to induce
the Issuing Lender to issue Letters of Credit hereunder, each such L/C
Participant irrevocably agrees to accept and purchase and hereby accepts and
purchases from the Issuing Lender, on the terms and conditions hereinafter
stated, for such L/C Participant's own account and risk an undivided interest
equal to such L/C Participant's ratable share of the Revolving Facility under
which such Letter of Credit is to be issued in the Issuing Lender's obligations
and rights under each Letter of Credit issued hereunder under such Revolving
Facility and the amount of each draft paid by the Issuing Lender thereunder.
Each such L/C Participant unconditionally and irrevocably agrees with the
Issuing Lender that, if a draft is paid under any such Letter of Credit for
which the Issuing Lender is not reimbursed in full by the Borrower or the
relevant Regular Subsidiary Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Issuing Lender upon demand at
the Issuing Lender's address for notices specified herein an amount equal to
such L/C Participant's ratable share of the Revolving Facility under which such
Letter of Credit was issued of the amount of such draft, or any part thereof,
which is not so reimbursed.

            (b) If any amount required to be paid by any L/C Participant under
any Revolving Facility to the Issuing Lender pursuant to subsection 3.4(a) in
respect of any unreimbursed portion of any payment made by the Issuing Lender
under any Letter of Credit issued under such Revolving Facility is not paid to
the Issuing Lender within three Business Days after the date such payment is
due, such L/C Participant shall pay to the Issuing Lender on demand an amount
equal to the product of (i) such amount, times (ii) the daily average Federal
funds rate, as quoted by the Issuing Lender, during the period from and
including the date such payment is required to the date on which such payment is
immediately available to the Issuing Lender, times (iii) a fraction the
numerator of which is the number of days that elapse during such period and the
denominator of which is 360. If any such amount required to be paid by any such
L/C Participant pursuant to subsection 3.4(a) is not in fact made available to
the Issuing Lender by such L/C Participant within three Business Days after the
date such payment is due, the Issuing Lender shall be entitled to recover from
such L/C Participant, on demand, such amount with interest thereon calculated
from such due date at the rate per annum applicable to ABR Loans that are
Revolving Credit Loans hereunder. A certificate of the Issuing Lender submitted
to any L/C Participant with respect to any amounts owing under this subsection
shall be conclusive in the absence of manifest error.

            (c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit issued under any Revolving Facility and has received
from any L/C Participant its ratable share of such payment in accordance with
subsection 3.4(a), the Issuing Lender receives any payment related to such
Letter of Credit (whether directly from the Borrower, the relevant Regular
Subsidiary Borrower or otherwise), or any payment of interest on account
thereof, the Issuing Lender will distribute to such L/C Participant its ratable
share thereof; provided, however, that in the event that any such payment
received by the Issuing Lender shall be required to be returned by the Issuing
Lender, such L/C Participant shall return to the Issuing Lender the portion
thereof previously distributed by the Issuing Lender to it.

            3.5 Reimbursement Obligation of the Borrower. The Borrower or the
relevant Regular Subsidiary Borrower agrees to reimburse the Issuing Lender on
each date on which the Issuing Lender notifies the Borrower or the relevant
Regular Subsidiary Borrower of the date and amount of a draft presented under
any Letter of Credit and paid by the Issuing Lender for the amount of (a) such
draft so paid and (b) any taxes (other than Excluded Taxes), fees, charges or
other costs or expenses incurred by the Issuing Lender in connection with such
payment; provided that upon the acceleration of such reimbursement obligations
in accordance with Section 8, the Borrower or the relevant Regular Subsidiary
Borrower agrees to reimburse the Issuing Lender for the amount equal to the then
maximum liability (whether direct or contingent) of the Issuing Lender and the
L/C Participants under such Letter of Credit. Each such payment shall be made to
the Issuing Lender, at its address for notices specified herein in the currency
in which such Letter of Credit is denominated (except that, in the case of any
Letter of Credit

<PAGE>
                                                                              43

denominated in euros or any Optional Currency, in the event that such payment is
not made to the Issuing Lender within three Business Days of the date of receipt
by the Borrower or any relevant Regular Subsidiary Borrower of such notice, upon
notice by the Issuing Lender to the Borrower or the relevant Regular Subsidiary
Borrower, such payment shall be made in Dollars, in an amount equal to the
Dollar Equivalent of the amount of such payment converted on the date of such
notice into Dollars at the spot rate of exchange on such date) and in
immediately available funds, on the date on which the Borrower or any relevant
Regular Subsidiary Borrower (on behalf of itself or such Regular Subsidiary
Borrower, as the case may be) receives such notice, if received prior to 11:00
A.M., New York City time, on a Business Day and otherwise on the next succeeding
Business Day. Any conversion by the Issuing Lender of any payment to be made by
the Borrower or any Regular Subsidiary Borrower in respect of any Letter of
Credit denominated in euros or any Optional Currency into Dollars in accordance
with this subsection 3.5 shall be conclusive and binding upon such Borrower or
such relevant Regular Subsidiary Borrower and the Lenders in the absence of
manifest error; provided that upon the request of any Lender, the Issuing Lender
shall provide to such Lender a certificate including reasonably detailed
information as to the calculation of such conversion.

            3.6 Obligations Absolute. The Borrower's and any relevant Regular
Subsidiary Borrower's obligations under this Section 3 shall be absolute and
unconditional under any and all circumstances and irrespective of any set-off,
counterclaim or defense to payment which the Borrower or any relevant Regular
Subsidiary Borrower may have or have had against the Issuing Lender or any
beneficiary of a Letter of Credit. The Borrower also agrees with the Issuing
Lender that the Issuing Lender shall not be responsible for, and the Borrower's
or such relevant Regular Subsidiary Borrower's Reimbursement Obligations under
subsection 3.5 shall not be affected by, among other things, the validity or
genuineness of documents or of any endorsements thereon, even though such
documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower, any relevant Regular Subsidiary Borrower
and any beneficiary of any Letter of Credit or any other party to which such
Letter of Credit may be transferred or any claims whatsoever of the Borrower or
relevant Regular Subsidiary Borrower against any beneficiary of such Letter of
Credit or any such transferee. The Issuing Lender shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit issued by it, except for errors or omissions caused by the Issuing
Lender's gross negligence or willful misconduct. The Borrower and any relevant
Regular Subsidiary Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit issued by it or
the related drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards of care specified in the
Uniform Commercial Code of the State of New York, shall be binding on the
Borrower or any relevant Regular Subsidiary Borrower and shall not result in any
liability of the Issuing Lender to the Borrower or any relevant Regular
Subsidiary Borrower.

            3.7 Increased Costs. If the adoption of or any change in any law or
regulation or in the interpretation thereof after the date hereof by any court
or administrative or Governmental Authority charged with the administration
thereof shall either (i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against Letters of Credit issued by the Issuing
Lender or participated in by the Lenders or (ii) impose on any Lender any other
condition regarding any Letter of Credit, and the result of any event referred
to in clauses (i) or (ii) above shall be to increase the cost to the Issuing
Lender or any Lender of issuing or maintaining such Letter of Credit (or its
participation therein, as the case may be) (which increase in cost shall be the
result of the Issuing Lender's or such Lender's reasonable allocation of the
aggregate of such cost increases resulting from such events), then, upon notice
to it from the Issuing Lender or such Lender (with a copy to the Administrative
Agent) certifying that (x) one of the events herein above described has occurred
and the nature of such event, (y) the increased cost or reduced amount resulting
from such event and (z) the additional amounts demanded by the Issuing Lender or
such Lender, as the case may be, and a reasonably detailed explanation of the

<PAGE>
                                                                              44

calculation thereof, the Borrower shall immediately pay to such Issuing Lender
or such Lender, as the case may be, from time to time as specified by the
Administrative Agent or such Lender, additional amounts which shall be
sufficient to compensate such Issuing Lender or such Lender for such increased
cost, together with interest on each such amount from the date demanded until
payment in full thereof at the rate provided in subsection 3.3. A certificate as
to the fact and amount of such increased cost incurred by the Issuing Lender or
such Lender as a result of any event mentioned in clauses (i) or (ii) above,
submitted by the Issuing Lender or such Lender to the Borrower, shall be
conclusive, absent manifest error.

            3.8 Letter of Credit Payments. If any draft in Dollars, euros or in
any Optional Currency shall be presented for payment under any Letter of Credit,
the Issuing Lender shall promptly notify the Borrower and the Administrative
Agent of the date and amount of the Dollars, euros or the Optional Currency
thereof. The responsibility of the Issuing Lender to the Borrower in connection
with any draft presented for payment under any Letter of Credit shall, in
addition to any payment obligation expressly provided for in such Letter of
Credit, be limited to determining that the documents (including each draft)
delivered under such Letter of Credit in connection with such presentment are in
conformity with such Letter of Credit.

            (a) Application. To the extent that any provision of any Application
      related to any Letter of Credit is inconsistent with the provisions of
      this Agreement, the provisions of this Agreement shall apply.

            (b) Purpose of the Letters of Credit. The Letters of Credit shall be
      used for any lawful purposes requested by the Borrower or any Regular
      Subsidiary Borrower.

            SECTION 4. REPRESENTATIONS AND WARRANTIES

            In order to induce the Lenders and the Administrative Agent to enter
into this Agreement and to make the Loans and issue or participate in the
Letters of Credit herein provided for, the Borrower hereby represents and
warrants to the Administrative Agent and to each Lender that:

            4.1 Financial Condition.

            (a) The unaudited pro forma consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at April 2, 2005 (including the
notes thereto) (the "Pro Forma Balance Sheet"), copies of which have heretofore
been furnished to each Lender, has been prepared giving effect (as if such
events had occurred on such date) to (i) the consummation of the Refinancing and
(ii) the payment of fees and expenses in connection with the Refinancing. The
Pro Forma Balance Sheet has been prepared based on the best information
available to the Borrower as of the date of delivery thereof, and presents
fairly on a pro forma basis the estimated financial position of Borrower and its
consolidated Subsidiaries as at April 2, 2005, assuming that the events
specified in the preceding sentence had actually occurred at such date.

            (b) The consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at September 30, 2004 and the related consolidated
statements of income and of cash flows for the fiscal year ended on such date,
reported on by Deloitte & Touche LLP and the unaudited consolidated statements
of income and of cash flows for the three consecutive fiscal quarters ended
since September 30, 2004, copies of which have heretofore been delivered to each
of the Lenders, are complete and correct and present fairly in all material
respects the consolidated financial condition of the Borrower and its

<PAGE>
                                                                              45

consolidated Subsidiaries as at such respective dates, and the consolidated
results of their operations and their consolidated cash flows for the fiscal
year or fiscal period then ended. All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by such
accountants and as disclosed therein). Neither the Borrower nor any of its
consolidated Subsidiaries had, at the date of the balance sheet referred to
above, any material obligation, contingent liability or liability for taxes, or
any long-term lease or unusual forward or long-term commitment, including
without limitation, any interest rate or foreign currency swap or exchange
transaction, which is not reflected in the foregoing statements or in Schedule
4.1. Since September 30, 2004 there has been no development or event which has
had or could reasonably be expected to have a Material Adverse Effect.

            4.2 Corporate Existence; Compliance with Law. Each of the Borrower
and its Material Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, (b) has
the corporate or other power and authority and the legal right to own and
operate its property, to lease the property it leases and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation or other applicable entity and in good standing under the laws of
any jurisdiction where its ownership, lease or operation of property or the
conduct or proposed conduct of its business requires such qualification, except
where the failure to so qualify would not, in any instance or in the aggregate,
reasonably be expected to have a Material Adverse Effect and (d) is in
compliance with all material Requirements of Law applicable to it or its
business, provided that the provisions of this clause (d) do not restrict or
limit the applicability of any knowledge or other qualification which is given
in this Agreement in any other matter which constitutes a "Requirement of Law".

            4.3 Corporate Power; Authorization; Enforceable Obligations. Each of
the Borrower and its Subsidiaries has the corporate or other power and authority
and the legal right to make, deliver and perform this Agreement and the other
Loan Documents to which it is a party and to borrow hereunder (in the case of
the Borrower and any Subsidiary Borrower) and has taken all corporate or other
action necessary to be taken by it to authorize such actions. No consent, waiver
or authorization of, filing with, or other act by or in respect of, any
Governmental Authority or any other Person is required to be made or obtained by
the Borrower or its Subsidiaries in connection with the borrowings hereunder or
the execution, delivery, performance, validity or enforceability of this
Agreement and the other Loan Documents to which it is a party. This Agreement
constitutes, and the other Loan Documents to which the Borrower or any
Subsidiary is a party when executed and delivered hereunder will constitute, a
legal, valid and binding obligation of the Borrower and such Subsidiary,
enforceable against the Borrower and such Subsidiary in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).

            4.4 No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents, the borrowings hereunder and the use of
the proceeds thereof or of any Subordinated Debt do not violate any usury law
applicable to the Borrower or any Subsidiary Borrower or any other Requirement
of Law or Contractual Obligation of the Borrower or any of its Material
Subsidiaries and do not result in, or require, the creation or imposition of any
Lien on any of its or their respective properties or revenues pursuant to any
such Requirement of Law or Contractual Obligation which could reasonably be
expected to have a Material Adverse Effect except for Liens which may be
required by the Senior Subordinated Note Indenture.

            4.5 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the best knowledge of the Borrower, threatened by

<PAGE>
                                                                              46

or against the Borrower or any of its Subsidiaries or against any of its or
their respective properties or revenues (a) with respect to this Agreement, any
of the other Loan Documents or any of the transactions contemplated hereby or
thereby except as set forth on Schedule 4.5 or (b) which could reasonably be
expected to have a Material Adverse Effect.

            4.6 No Burdensome Restrictions. No Requirement of Law or Contractual
Obligation of the Borrower or any of its Subsidiaries could reasonably be
expected to have a Material Adverse Effect.

            4.7 No Default. Neither the Borrower nor any of its Subsidiaries is
in default under or with respect to any of its Contractual Obligations in any
respect which would reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing. Neither the Borrower
nor any of its Subsidiaries is in default under any order, award or decree of
any arbitrator or Governmental Authority binding upon or affecting it or by
which any of its properties or assets may be bound or affected, where such
default would reasonably be expected to have a Material Adverse Effect.

            4.8 Subsidiaries. The Subsidiaries listed on Schedule 4.8 constitute
all of the Subsidiaries of the Borrower in existence on the date hereof.

            4.9 Disclosure. No representations or warranties made by, or
information supplied by, the Borrower or any of its Subsidiaries in this
Agreement, any other Loan Document or in any other document, including without
limitation the Confidential Information Memorandum, furnished to the Lenders
from time to time in connection herewith or therewith (as such other documents
may be supplemented from time to time) contains or will contain any untrue
statement of a material fact or omits or will omit to state any material fact
necessary to make the statements herein or therein, in light of the
circumstances under which they were made, not misleading. Except as disclosed in
the Loan Documents or as otherwise disclosed in writing to the Lenders, there is
no fact known to the Borrower or any of its Subsidiaries which has, or which
would reasonably be expected to have, in the Borrower's or such Subsidiary's
reasonable judgment, a Material Adverse Effect.

            4.10 Schedules. Each of the Schedules to this Agreement contains
true, complete and correct information in all material respects.

            4.11 Federal Regulations. No part of the proceeds of any Loans will
be used for (i) any purpose which violates, or which would be inconsistent with,
the provisions of the Regulations of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect, and if deemed
necessary in the reasonable judgment of the Administrative Agent or its counsel,
the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G-3 or FR Form U-1, as applicable, referred to in Regulation U of said Board or
(ii) except as set forth on Schedule 4.11, purchasing any security in any
transaction which is subject to Sections 13 and 14 of the Securities Exchange
Act of 1934, as amended.

            4.12 Investment Company Act; Other Regulations. Neither the Borrower
nor any of its Subsidiaries is an "investment company", or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended. Neither the Borrower nor any of its
Subsidiaries is subject to regulation under any U.S. federal or state statute or
regulation which limits its ability to incur indebtedness.

            4.13 Labor Matters. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect: (a) there are no
strikes or other labor disputes against the Borrower or any of its Subsidiaries
pending or, to the knowledge of the Borrower, threatened; (b) hours worked by
and payment made to employees of the Borrower and its Subsidiaries have not been
in violation of the Fair

<PAGE>
                                                                              47

Labor Standards Act or any other applicable Requirement of Law dealing with such
matters; and (c) all payments due from the Borrower or any of its Subsidiaries
on account of employee health and welfare insurance have been paid or accrued as
a liability on the books of the Borrower or the relevant Subsidiary.

            4.14 ERISA. No "prohibited transaction" or "accumulated funding
deficiency" (each as defined in Section 8 hereof) or Reportable Event has
occurred within the applicable statute of limitations in effect as of the date
hereof which has not been cured with respect to any Single Employer Plan. The
present value of all benefits vested under all Single Employer Plans maintained
by the Borrower or a Commonly Controlled Entity (based on those assumptions used
to fund such Plans in accordance with Section 412 of the Code) did not, as of
the last annual valuation date, exceed the value of the assets of such Plan
determined in accordance with Section 412 of the Code allocable to such vested
benefits. The liability to which the Borrower or any Commonly Controlled Entity
would become subject under ERISA if the Borrower or any such Commonly Controlled
Entity were to withdraw completely (as defined in Section 4203 of ERISA) from
all Multi-employer Plans as of the valuation date most closely preceding the
date hereof is not in excess of $3,000,000. The Borrower does not currently
participate in any Multi-employer Plans.

            4.15 Title to Real Property, Etc. Each of the Borrower and its
Subsidiaries has good and marketable title in fee simple to, or a valid and
subsisting leasehold interest in, all its real property and good title to all
its other property, except where the failure to have such good and marketable
title would not reasonably be expected to have a Material Adverse Effect, and
none of such property is subject to any Lien, except as permitted by subsection
7.1 of this Agreement.

            4.16 Taxes. Each of the Borrower and its Subsidiaries has filed or
caused to be filed all tax returns which are required to be filed and has paid
all taxes shown to be due and payable on said returns or on any assessments made
against it or any of its property and all other taxes, fees or other charges
imposed on it or any of its property by any Governmental Authority (other than
any the amount or validity of which are currently being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of the Borrower or its Subsidiaries, as the
case may be) except where the failure to file such returns or pay such taxes
and/or assessments would not reasonably be expected to have a Material Adverse
Effect; no tax Lien has been filed, and, to the knowledge of the Borrower, no
claim is being asserted, with respect to any such tax, fee or other charge.

            4.17 Environmental Matters. Each of the following is true and
correct as of the date hereof, other than exceptions to any of the following
that, in the aggregate, would not reasonably be expected by the Borrower to have
a Material Adverse Effect:

            (a) Each of the properties owned or operated by the Borrower or any
      of its Subsidiaries does not contain, and has not previously contained,
      any Materials of Environmental Concern in amounts or concentrations which
      (i) constitute or constituted a violation of, or (ii) could reasonably
      give rise to liability under, Environmental Laws.

            (b) The Borrower and its Subsidiaries are and have been in
      compliance with all applicable Environmental Laws, and there is no
      contamination or violation of any Environmental Law which, in the
      aggregate with all other contaminations and violations, would interfere
      with the continued operations or the business of the Borrower and its
      Subsidiaries, in each case taken as a whole or impair the fair saleable
      value thereof.

            (c) Neither the Borrower nor any of its Subsidiaries has received
      any notice of violation, alleged violation, non-compliance, liability or
      potential liability regarding environmental matters

<PAGE>
                                                                              48

      or compliance with Environmental Laws nor does the Borrower have knowledge
      or reason to believe that any such notice will be received or is being
      threatened.

            (d) With respect to the Borrower and its Subsidiaries, Materials of
      Environmental Concern have not been transported or disposed of in
      violation of, or in a manner or to a location which would reasonably give
      rise to liability under, Environmental Laws, nor have any Materials of
      Environmental Concern been generated, treated, stored or disposed of at,
      on or under any of the Properties in violation of, or in a manner that
      would reasonably give rise to liability under, any applicable
      Environmental Laws.

            (e) No judicial proceedings or governmental or administrative action
      is pending, or, to the knowledge of the Borrower, threatened, under any
      Environmental Law to which the Borrower or any of its Subsidiaries is or
      will be named as a party or which will adversely affect the ability of the
      Borrower or any of its Subsidiaries to conduct any part of their business
      nor are there any consent decrees or other decrees, consent orders,
      administrative orders or other orders, or other administrative or judicial
      requirements outstanding under any Environmental Law with respect to the
      Borrower or any of its Subsidiaries.

            (f) There has been no release or threat of release of Materials of
      Environmental Concern at any location for which the Borrower or any of its
      Subsidiaries is liable by contract or operation of law, in violation of or
      in amounts or in a manner that would reasonably give rise to liability
      under Environmental Laws.

            4.18 Intellectual Property. The Borrower and each of its
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted except for those the failure of which to own or
license would not reasonably be expected to have a Material Adverse Effect (the
"Intellectual Property"). No claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, and the
Borrower does not know of any valid basis for any such claim, except for such
claims which have previously been disclosed to the Lenders and would not
reasonably be expected to have a Material Adverse Effect. The use of such
Intellectual Property by the Borrower and its Subsidiaries does not infringe on
the rights of any Person, except for such claims and infringements that, in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.

            4.19 Security Documents. Except to the extent otherwise noted
therein, each Security Document is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders (or, where required by law,
in favor of each Lender), a legal, valid and enforceable security interest in
the Collateral described therein. When (i) stock certificates representing the
Collateral are delivered to the Administrative Agent, (ii) the financing
statements specified on Schedule 4.19(ii) in appropriate form are filed in the
offices specified on Schedule 4.19(ii) and (iii) the filings and other actions
are made in respect of the Foreign Pledge Agreements specified on Schedule
4.19(iii), each Security Document shall constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the Loan Parties in
such Collateral and the proceeds thereof, as security for the Obligations (as
defined in the Security Documents), in each case prior and superior in right to
any other Person. The pledge of the Capital Stock of any Excluded Foreign
Subsidiary will be limited to 65% of the Capital Stock of such Excluded Foreign
Subsidiary. The obligations of a Foreign Subsidiary Borrower (other than Scotts
Treasury EEIG) shall be secured by 100% of the Capital Stock of such Foreign
Subsidiary Borrower (except with respect to Scotts Australia Pty Ltd., which
shall be secured by 65% of the Capital Stock of such Subsidiary), 100% of the
Capital Stock of each first-tier Subsidiary of such Foreign

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                                                                              49

Subsidiary Borrower that is not an Excluded Foreign Subsidiary and 65% of the
Capital Stock of the each first-tier Subsidiary of such Foreign Subsidiary
Borrower that is an Excluded Foreign Subsidiary, but no other assets of Foreign
Subsidiaries of the Borrower shall be pledged as collateral security.

            4.20 Solvency.

            (a) The Borrower and each of its Subsidiaries is, and after giving
effect to the Refinancing and the incurrence of all Indebtedness and obligations
being incurred in connection herewith and therewith will be and will continue to
be, Solvent.

            (b) Each Subsidiary Borrower is in compliance with all material
Requirements of Law applicable to it with respect to capitalization and, to the
knowledge of the Borrower or such Subsidiary Borrower, has sufficient capital
with which to conduct its business in accordance with past practice. No
Subsidiary Borrower is undercapitalized to such an extent that, solely as a
result of such undercapitalization, any Lender would be deemed under the laws of
the relevant jurisdiction to owe a fiduciary duty to any other creditor of such
Subsidiary Borrower or the Loans made by relevant Lenders to such Subsidiary
Borrower would be subordinated to any obligations of such Subsidiary Borrower
owing to any other Person.

            4.21 Senior Indebtedness. The Obligations constitute "Senior
Indebtedness" or "Senior Debt" of the Borrower and each Subsidiary Borrower
under and as defined in the Senior Subordinated Note Indenture. The obligations
of each Subsidiary Guarantor under the Guarantee and Collateral Agreement
constitute "Guarantor Senior Indebtedness" of such Subsidiary Guarantor under
and as defined in the Senior Subordinated Note Indenture.

            SECTION 5. CONDITIONS PRECEDENT

            5.1 Conditions to Effectiveness of this Agreement. The agreement of
each Lender to make the initial Extension of Credit requested to be made by it
is subject to the satisfaction, prior to or concurrently with the making of such
Extension of Credit on the Closing Date, of the following conditions precedent:

            (a) Execution of Agreement. The Administrative Agent shall have
      received this Agreement, duly executed and delivered by the Borrower and
      each of the Subsidiary Borrowers party to this Agreement as of the Closing
      Date and by each of the Lenders listed on Schedule 1.

            (b) Execution of Guarantee and Collateral Agreement. The
      Administrative Agent shall have received the Guarantee and Collateral
      Agreement, duly executed and delivered by the Borrower and each of the
      Subsidiary Guarantors party thereto as of the Closing Date.

            (c) Pro Forma Balance Sheet; Financial Statements. The Lenders shall
      have received the financial statements described in subsections 4.1(a) and
      (b) and such financial statements shall not, in the reasonable judgment of
      the Lenders, reflect any material adverse change in the consolidated
      financial condition of the Borrower or its Subsidiaries, as reflected in
      the financial statements or projections contained in the Confidential
      Information Memorandum.

            (d) Fees. The Lenders and the Administrative Agent shall have
      received all fees required to be paid, and all expenses for which invoices
      have been presented by the Administrative Agent (including the reasonable
      fees and expenses of legal counsel), on or before the Closing Date. All
      such amounts will be paid with proceeds of Loans made on the Closing Date
      and will be reflected

<PAGE>
                                                                              50

      in the funding instructions given by the Borrower to the Administrative
      Agent on or before the Closing Date.

            (e) Legal Opinion of Counsel to the Borrower and the Subsidiary
      Borrowers. The Administrative Agent and each Lender shall have received:

                  (i) an executed legal opinion of Vorys, Sater, Seymour and
            Pease LLP, special counsel to the Borrower, dated the Closing Date
            and addressed to the Administrative Agent and the Lenders
            substantially in the form of Exhibit G. The Administrative Agent and
            each Lender shall have received an executed legal opinion of Vorys,
            Sater, Seymour and Pease LLP, or such other counsel reasonably
            satisfactory to the Administrative Agent, as counsel to each
            Domestic Subsidiary Borrower, dated the Closing Date and addressed
            to the Administrative Agent and the Lenders;

                  (ii) an executed legal opinion of Clifford Chance, as counsel
            to each Foreign Subsidiary Borrower (or such other counsel to any
            Foreign Subsidiary Borrower as may be selected by the Borrower and
            reasonably satisfactory to the Administrative Agent), dated the
            Closing Date and addressed to the Administrative Agent and the
            Lenders substantially in the form required by subsection 5.3; and

                  (iii) an executed legal opinion from such special or local
            counsel as the Administrative Agent shall reasonably request, in
            each case, in form and substance reasonably satisfactory to the
            Administrative Agent.

            (f) Corporate Proceedings of the Borrower and its Subsidiaries. The
      Administrative Agent shall have received a copy of the resolutions (in
      form and substance reasonably satisfactory to the Administrative Agent and
      its counsel) of the Board of Directors of each of the Borrower and each of
      its Subsidiaries executing any Loan Document authorizing on or within 30
      days prior to the Closing Date (i) the execution, delivery and performance
      of each of the Loan Documents to which it is a party, (ii) the
      consummation of the transactions contemplated hereby and thereby and (iii)
      the borrowings herein provided for, all certified by the Secretary or the
      Assistant Secretary (or equivalent Person for Subsidiaries which are not
      corporations) of the Borrower or such Subsidiary, as the case may be. Each
      such certificate shall (A) state that the resolutions set forth therein
      have not been amended, modified, revoked or rescinded as of the date of
      such certificate, (B) specify the names and titles of the officers of the
      Borrower or such Subsidiary, as the case may be, authorized to sign the
      Loan Documents to which it is a party and (C) contain specimens of the
      signatures of such officers.

            (g) No Proceeding or Litigation; No Injunctive Relief. No action,
      suit, investigation or other proceeding (including, without limitation,
      the enactment or promulgation of a statute or rule) by or before any
      arbitrator or any Governmental Authority shall be threatened or pending
      and no preliminary or permanent injunction or order by a state or federal
      court shall have been entered (i) in connection with this Agreement or any
      transaction contemplated hereby except as set forth in Schedule 5.1(g) or
      (ii) which, in any case, in the reasonable judgment of the Administrative
      Agent, could reasonably be expected to have a Material Adverse Effect.

            (h) Consents, Licenses, Approvals, etc. The Administrative Agent
      shall have received true copies (certified to be such by the Borrower or
      other appropriate party) of all material consents, licenses and approvals
      required in accordance with applicable law in connection with the
      execution, delivery, performance, validity and enforceability of this
      Agreement and the other Loan Documents to be delivered on or before the
      Closing Date, and the Borrower and its Material

<PAGE>
                                                                              51

      Subsidiaries shall have all such material consents, licenses and approvals
      required in connection with the continued operation of the Borrower and
      its Material Subsidiaries, and such approvals shall be in full force and
      effect, and all applicable waiting periods shall have expired without any
      action being taken or threatened by any competent authority which would
      restrain, prevent or otherwise impose adverse conditions on this Agreement
      and the actions contemplated hereby.

            (i) Representations and Warranties. Each of the representations and
      warranties made by the Borrower and its Subsidiaries in or pursuant to
      this Agreement and any other Loan Document to which it is a party and the
      representations of the Borrower and its Subsidiaries which are contained
      in any certificate, document or financial or other statement furnished
      pursuant hereto or thereto on or before the Closing Date shall be true and
      correct in all material respects on and as of the Closing Date as if made
      on and as of such date both before and after giving effect to the making
      of the Loans hereunder.

            (j) No Default or Event of Default. No Default or Event of Default
      shall have occurred and be continuing hereunder after giving effect to the
      making of any Extension of Credit hereunder.

            (k) Borrowing Certificate. The Administrative Agent shall have
      received, with a counterpart for each Lender, a Borrowing Certificate,
      dated the Closing Date, substantially in the form of Exhibit I hereto,
      with appropriate insertions, executed by a duly authorized Responsible
      Officer of the Borrower.

            (l) Pledged Stock; Stock Powers. Except as set forth on Schedule
      5.1(b) or contemplated in subsection 6.11(a), the Administrative Agent
      shall have received (i) the certificates representing the shares of
      Capital Stock pledged pursuant to the Guarantee and Collateral Agreement,
      together with an undated stock power for each such certificate executed in
      blank by a duly authorized officer of the pledgor thereof.

            (m) Filings, Registrations and Recordings. Each document (including
      any Uniform Commercial Code financing statement or foreign equivalent)
      required by the Loan Documents or under law or reasonably requested by the
      Administrative Agent to be filed, registered or recorded in order to
      create in favor of the Administrative Agent, for the benefit of the
      Lenders, a perfected Lien on the Collateral described therein, prior and
      superior in right to any other Person (other than with respect to Liens
      expressly permitted by subsection 7.1), shall be in proper form for
      filing, registration or recordation in the applicable jurisdiction.

            (n) Repayment and Termination of Existing Credit Agreement. The
      loans under the Existing Credit Agreement shall have been repaid, or
      arrangements satisfactory to the Administrative Agent for the repayment
      thereof, the letters of credit outstanding thereunder shall have been
      returned or shall be deemed to be outstanding hereunder pursuant to
      subsection 3.1(d), the commitments under the Existing Credit Agreement
      shall have been terminated, all accrued interest and fees thereunder shall
      have been paid and, except as set forth on Schedule 7.1(i), the liens
      granted as collateral security in respect thereof shall have been
      released.

            (o) Business Plan; Projections. The Administrative Agent and the
      Lenders shall have received a satisfactory business plan and projections
      for fiscal years 2005 through 2009 and a satisfactory written analysis of
      the business and prospects of the Borrower and its Subsidiaries for the
      period from the Closing Date through the Revolving Credit Termination
      Date.

<PAGE>
                                                                              52

            (p) Additional Matters. All corporate and other proceedings and all
      other documents and legal matters in connection with the transactions
      contemplated by this Agreement and the other Loan Documents, including,
      without limitation, documentation concerning the status of all labor, tax,
      employee benefit and health and safety matters involving the Borrower and
      its Subsidiaries shall be reasonably satisfactory in form and substance to
      the Administrative Agent and its counsel.

            (q) Additional Information. The Administrative Agent shall have
      received such additional information which the Administrative Agent shall
      have reasonably requested, including, without limitation, copies of any
      debt agreements, security agreements, tax sharing agreements, employment
      agreements, management compensation arrangements, financing arrangements
      and other material contracts, and such agreements or arrangements shall be
      reasonably satisfactory in form and substance to the Administrative Agent
      and its counsel.

            5.2 Conditions to All Extensions of Credit. The obligation of each
Lender to make any Loan (other than any Loan the proceeds of which are to be
used exclusively to repay Refunded Swing Line Loans) or of the Issuing Lender to
issue, increase or extend any Letter of Credit requested to be issued, increased
or extended by it hereunder on any date (including, without limitation, the
Closing Date) is subject to the satisfaction of the following conditions
precedent as of such date:

            (a) Representations and Warranties. The representations and
      warranties made by the Borrower or any of its Subsidiaries in the Loan
      Documents to which it is a party and any representations and warranties
      made by the Borrower or any of its Subsidiaries which are contained in any
      certificate, document or financial or other statement furnished at any
      time pursuant hereto or thereto shall be true and correct in all material
      respects on and as of the date thereof as if made on and as of such date
      unless stated to relate to a specific earlier date (in which case the same
      shall be true and correct in all material respects on and as of such
      specific earlier date).

            (b) No Default or Event of Default. No Default or Event of Default
      shall have occurred and be continuing on such date or after giving effect
      to the Extension of Credit to be made on such date.

            (c) Subsidiary Borrower Borrowing. With respect to any borrowing
      made by any Subsidiary Borrower, a certificate of the Borrower to the
      effect that such borrowing will not give rise to an Event of Default under
      the Senior Subordinated Note Indenture or under any other Subordinated
      Debt permitted hereunder and dated as of the date of such borrowing shall
      have been delivered to the Administrative Agent.

            Each borrowing by the Borrower under this Agreement, each conversion
of any Loan pursuant to subsection 2.10 of this Agreement and each issuance,
increase or extension of any Letter of Credit hereunder shall constitute a
representation and warranty by the Borrower as of the date of such borrowing,
conversion or issuance, increase or extension that the conditions contained in
the foregoing paragraphs (a) and (b) of this subsection 5.2 have been satisfied.

            5.3 Additional Conditions Applicable to Foreign Subsidiary
Borrowers. The agreement of each Lender to make any Extension of Credit
requested to be made by it to any Foreign Subsidiary Borrower on any date
(including, without limitation, the initial Extension of Credit and each Swing
Line Loan, if requested to be made to any Foreign Subsidiary Borrower) is
subject to satisfaction or waiver of, in addition to the conditions precedent
set forth in subsections 5.1 (in the case of the initial Extension of Credit)
and 5.2, the following conditions precedent: (a) in the case of the making of
any Extension of

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                                                                              53

Credit to any Foreign Subsidiary Borrower for the first time, the delivery to
the Administrative Agent, with a copy for each Lender, of the executed legal
opinion of counsel to such Foreign Subsidiary Borrower addressed to the
Administrative Agent and the Lenders, as to the matters set forth in Exhibit H
and otherwise in form and substance reasonably satisfactory to the
Administrative Agent and (b) the truthfulness and correctness in all material
respects on and as of such date of the following additional representations and
warranties:

                  (i) Pari Passu. The obligations of such Foreign Subsidiary
      Borrower under this Agreement, when executed and delivered by such Foreign
      Subsidiary Borrower, will rank at least pari passu with all unsecured
      Indebtedness of such Foreign Subsidiary Borrower.

                  (ii) No Immunities, etc. Such Foreign Subsidiary Borrower is
      subject to civil and commercial law with respect to its obligations under
      this Agreement and any Note, and the execution, delivery and performance
      by such Foreign Subsidiary Borrower of this Agreement constitute and will
      constitute private and commercial acts and not public or governmental
      acts. Neither such Foreign Subsidiary Borrower nor any of its property,
      whether or not held for its own account, has any immunity (sovereign or
      other similar immunity) from any suit or proceeding, from jurisdiction of
      any court or from set-off or any legal process (whether service or notice,
      attachment prior to judgment, attachment in aid of execution of judgment,
      execution of judgment or other similar immunity) under laws of the
      jurisdiction in which such Foreign Subsidiary Borrower is organized and
      existing in respect of its obligations under this Agreement or any Note.
      Such Foreign Subsidiary Borrower has waived every immunity (sovereign or
      otherwise) to which it or any of its properties would otherwise be
      entitled from any legal action, suit or proceeding, from jurisdiction of
      any court and from set-off or any legal process (whether service or
      notice, attachment prior to judgment, attachment in aid of execution of
      judgment, execution of judgment or otherwise) under the laws of the
      jurisdiction in which such Foreign Subsidiary Borrower is organized and
      existing in respect of its obligations under this Agreement and any Note.
      The waiver by such Foreign Subsidiary Borrower described in the
      immediately preceding sentence is the legal, valid and binding obligation
      of such Foreign Subsidiary Borrower.

                  (iii) No Recordation Necessary. Except as otherwise noted on
      Schedule 5.3(iii), this Agreement and each Note, if any, is in proper
      legal form under the law of the jurisdiction in which such Foreign
      Subsidiary Borrower is organized and existing for the enforcement hereof
      or thereof against such Foreign Subsidiary Borrower under the law of such
      jurisdiction, and to ensure the legality, validity, enforceability,
      priority or admissibility in evidence of this Agreement and any such Note.
      It is not necessary to ensure the legality, validity, enforceability,
      priority or admissibility in evidence of this Agreement and any such Note
      that this Agreement, any Note or any other document be filed, registered
      or recorded with, or executed or notarized before, any court or other
      authority in the jurisdiction in which such Foreign Subsidiary Borrower is
      organized and existing or that any registration charge or stamp or similar
      tax be paid on or in respect of this Agreement, any Note or any other
      document, except for any such filing, registration or recording, or
      execution or notarization, as has been made or is not required to be made
      until this Agreement, any Note or any other document is sought to be
      enforced and for any charge or tax as has been timely paid.

                  (iv) Exchange Controls. The execution, delivery and
      performance by such Foreign Subsidiary Borrower of this Agreement, any
      Note or the other Loan Documents is, under applicable foreign exchange
      control regulations of the jurisdiction in which such Foreign Subsidiary
      Borrower is organized and existing, not subject to any notification or
      authorization except (i) such as have been made or obtained or (ii) such
      as cannot be made or obtained until a

<PAGE>
                                                                              54

      later date (provided any notification or authorization described in
      immediately preceding clause (ii) shall be made or obtained as soon as is
      reasonably practicable).

            Each borrowing by, and Letter of Credit issued for the account of,
any Foreign Subsidiary Borrower hereunder shall constitute a representation and
warranty by each of the Borrower and such Foreign Subsidiary Borrower as of the
date of such borrowing or such issuance that the conditions contained in this
subsection 5.3 have been satisfied.

            SECTION 6. AFFIRMATIVE COVENANTS

            The Borrower hereby agrees that, so long as the Revolving Credit
Commitments remain in effect, any Letter of Credit is outstanding or any amount
is owing to any Lender or the Administrative Agent hereunder or under any other
Loan Document, the Borrower shall, and in the case of the agreements set forth
in subsections 6.3, 6.4, 6.5, 6.6, 6.7, 6.11 and 6.12, shall cause each of its
Material Subsidiaries to:

            6.1 Financial Statements. Furnish to the Administrative Agent and
each Lender:

            (a) as soon as available, but in any event within ninety days after
      the end of each fiscal year of the Borrower, a copy of the consolidated
      balance sheet of the Borrower and its Subsidiaries as at the end of such
      year and the related statements of consolidated income and retained
      earnings and of cash flows for such year, setting forth in each case in
      comparative form the figures for the previous year; provided that the
      consolidated statements shall be certified without a "going concern" or
      like qualification or exception or qualification arising out of the scope
      of the audit by independent certified public accountants of nationally
      recognized standing; and

            (b) as soon as available, but in any event not later than forty-five
      days after the end of each of the first three quarterly periods of each
      fiscal year of the Borrower, a copy of the unaudited consolidated balance
      sheet of the Borrower and its Subsidiaries as at the end of each such
      quarter and the related unaudited statements of consolidated income and
      retained earnings and of cash flows for such quarter and the portion of
      the fiscal year through such date setting forth in each case in
      comparative form the figures for the previous year, certified by a
      Responsible Officer as being fairly stated in all material respects;

all such financial statements to be complete and correct in all material
respects and prepared in reasonable detail and in accordance with GAAP (except,
in the case of the financial statements referred to in subparagraph (b), such
financial statements need not contain notes and shall be prepared substantially
in accordance with GAAP) applied consistently throughout the periods reflected
therein, except as otherwise disclosed in the notes thereto.

            Any financial statement required to be delivered pursuant to this
Section 6.1 shall be deemed to have been delivered on the date on which the
Borrower posts such financial statement on its website on the Internet at
www.scotts.com or when such financial statement is posted on the SEC's website
on the Internet at www.sec.gov; provided that the Borrower shall give notice of
any such posting to the Administrative Agent (who shall then give notice of any
such posting to the Lenders); provided, further, that the Borrower shall deliver
paper copies of any financial statement referred to in this Section 6.1 to the
Administrative Agent if the Administrative Agent or any Lender requests the
Borrower to deliver such paper copies until written notice to cease delivering
such paper copies is given by the Administrative Agent.
<PAGE>

                                                                              55

            6.2 Certificates; Other Information. Furnish to the Administrative
Agent and each Lender:

            (a) concurrently with the delivery of the financial statements
      referred to in subsection 6.1(a) above, a certificate of the independent
      certified public accountants certifying such financial statements (i)
      stating that in making the examination necessary therefor no knowledge was
      obtained of any Default or Event of Default, except as specified in such
      certificate and (ii) showing in detail the calculations supporting such
      statement in respect of subsections 6.9, 6.10, 7.4 and 7.5;

            (b) concurrently with the delivery of the financial statements
      referred to above, a certificate from the auditing accountants (for the
      year-end statements) or a Responsible Officer of the Borrower (for all
      statements) stating that, to the best of such Responsible Officer's
      knowledge, the Borrower and each of its Material Subsidiaries during such
      period has observed or performed in all material respects all of its
      material covenants and other agreements, and satisfied every condition
      contained in this Agreement, any Notes and the Security Documents to be
      observed, performed or satisfied by it, and that such Officer has obtained
      no knowledge of any Default or Event of Default except as specified in
      such certificate, and showing in detail the calculations supporting such
      statement in respect of subsections 6.9, 6.10, 7.4 and 7.5;

            (c) as soon as available, and in any event no later than 90 days
      after the end of each fiscal year of the Borrower, a detailed consolidated
      budget for the following fiscal year (including a projected consolidated
      balance sheet of the Borrower and its Subsidiaries as of the end of the
      following fiscal year, the related consolidated statements of projected
      cash flow, projected changes in financial position and projected income
      and a description of the underlying assumptions applicable thereto), and,
      as soon as available, significant revisions, if any, of such budget and
      projections with respect to such fiscal year (collectively, the
      "Projections"), which Projections shall in each case be accompanied by a
      certificate of a Responsible Officer stating that such Projections are
      based on reasonable estimates, information and assumptions and that such
      Responsible Officer has no reason to believe that such Projections are
      incorrect or misleading in any material respect;

            (d) concurrently with the delivery of the financial statements
      referred to in subsection 6.1(a) and (b) above, a written discussion and
      analysis (in a form and detail substantially similar to that contained in
      the Form 10-K or Form 10-Q filed by the Borrower with the Securities and
      Exchange Commission for the period covered by such financial statements)
      by the Borrower with respect to the period covered by such financial
      statements;

            (e) promptly after the same are sent and received, copies of all
      financial statements, reports and notices which the Borrower or any of its
      Subsidiaries sends to its shareholders and promptly after the same are
      filed and received, copies of all financial statements and reports which
      the Borrower or any of its Subsidiaries may make to, or file with, and
      copies of all material notices the Borrower or any such Subsidiary
      receives from, the Securities and Exchange Commission or any public body
      succeeding to any or all of the functions of the Securities and Exchange
      Commission;

            (f) promptly upon receipt thereof, copies of all final reports
      submitted to the Borrower by independent certified public accountants in
      connection with each annual, interim or special audit of the books of the
      Borrower or any of its Subsidiaries made by such accountants, including,
      without limitation, any final comment letter submitted by such accountants
      to management in connection with their annual audit; and

<PAGE>

                                                                              56

            (g) promptly, on reasonable notice to the Borrower, such additional
      financial and other information as the Administrative Agent or any Lender
      may from time to time reasonably request.

            6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
Indebtedness and other material obligations of whatever nature, except, without
prejudice to the effectiveness of paragraph (e) of Section 8 hereof for any
Indebtedness or other obligations (including any obligations for taxes), when
the amount or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of the Borrower or its Subsidiaries, as
the case may be, and except for trade accounts payable incurred in the ordinary
course of business which are paid in accordance with normal industry practice.

            6.4 Compliance with Laws. Comply with all laws, rules, regulations
and orders of any Governmental Authority and any Contractual Obligations
applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

            6.5 Conduct of Business and Maintenance of Existence. Continue to
engage in business of the same general type as now conducted by it and, except
as may be permitted under subsection 7.3, preserve, renew and keep in full force
and effect its corporate existence and take all reasonable action to maintain
all material rights, privileges, contracts, copyrights, patents, trademarks,
tradenames and franchises necessary or desirable in the normal conduct of its
business; and comply with all of its Contractual Obligations and Requirements of
Law except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.

            6.6 Maintenance of Property, Insurance. Keep all property useful and
necessary in its business in good working order and condition; maintain with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks (but including
in any event public liability, product liability and business interruption
insurance) as are usually insured against in the same general area by companies
engaged in the same or a similar business; and furnish to each Lender, upon
written request, reasonable information as to the insurance carried.

            6.7 Inspection of Property; Books and Records; Discussions. Keep
proper books of record and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of the Administrative Agent or upon the occurrence and during
the continuance of an Event of Default, the Lenders to visit and inspect any of
its properties, and examine and make abstracts from any of its books and records
at the Borrower's expense, at any reasonable time and as often as may reasonably
be requested, and to discuss the business, operations, properties and financial
and other condition of the Borrower and its Subsidiaries with officers and
employees of the Borrower and its Subsidiaries and with its independent
certified public accountants.

            6.8 Notices. Promptly give notice to the Administrative Agent and
each Lender (and, in the case of clauses (a), (b) and (c), in any event within
five Business Days after learning thereof):

            (a) of the occurrence of any Default or Event of Default;

            (b) of any (i) default or event of default under any material
      Contractual Obligation of the Borrower or any of its Material Subsidiaries
      or (ii) litigation, investigation or proceeding which may exist at any
      time between the Borrower or any of its Subsidiaries and any Governmental

<PAGE>

                                                                              57

      Authority, which, if adversely determined, would reasonably be expected to
      have a Material Adverse Effect;

            (c) of any litigation or proceeding affecting the Borrower or any of
      its Subsidiaries (i) (A) in which the amount of liability asserted against
      the Borrower and its Subsidiaries is $5,000,000 or more and not covered by
      insurance and (B) which, in the reasonable opinion of a Responsible
      Officer of the Borrower, if adversely determined, would reasonably be
      expected to have a Material Adverse Effect or (ii) in which injunctive or
      similar relief is sought and which, in the reasonable opinion of a
      Responsible Officer of the Borrower, if adversely determined, would
      reasonably be expected to have a Material Adverse Effect;

            (d) of the following events, as soon as possible and in any event
      within 30 days after the Borrower knows or has reason to know thereof: (i)
      the occurrence of any Reportable Event with respect to any Plan, or (ii)
      the institution of proceedings or the taking or expected taking of any
      other action by PBGC or the Borrower or any Commonly Controlled Entity to
      terminate or withdraw or partially withdraw from any Plan under
      circumstances which could lead to material liability to the PBGC or, with
      respect to a Multi-employer Plan, the Reorganization or Insolvency (as
      each such term is defined in ERISA) of the Plan and in addition to such
      notice, deliver to the Administrative Agent and each Lender whichever of
      the following may be applicable: (A) a certificate of a Responsible
      Officer of the Borrower setting forth details as to such Reportable Event
      and the action that the Borrower or a Commonly Controlled Entity proposes
      to take with respect thereto, together with a copy of any notice of such
      Reportable Event that may be required to be filed with PBGC, or (B) any
      notice delivered by PBGC evidencing its intent to institute such
      proceedings or any notice to PBGC that such Plan is to be terminated, as
      the case may be; and

            (e) any decision or other action of any Governmental Authority which
      cancels, limits, or otherwise restricts the use or sale of any of the
      products (including any of the material active ingredients in any of the
      products) of the Borrower or any of its Subsidiaries; and

            (f) of any event, act or omission which would reasonably be expected
      to have a Material Adverse Effect.

Each notice pursuant to subsections (a) through (e) of this subsection 6.8 shall
be accompanied by a statement of the Chief Executive Officer or Chief Financial
Officer or other Responsible Officer of the Borrower setting forth details of
the occurrence referred to therein and stating what action the Borrower proposes
to take with respect thereto. For all purposes of clause (d) of this subsection
6.8, the Borrower shall be deemed to have knowledge of all facts attributable to
the administrator of such Plan.

            6.9 Interest Coverage. At each quarterly date set forth below with
      respect to the fiscal quarter of the Borrower then ending maintain the
      Minimum Interest Coverage of the Borrower at not less than the applicable
      ratio set forth opposite each such date:

<TABLE>
<CAPTION>
Fiscal Quarter                              Ratio
--------------                              -----
<S>                                     <C>
June 30, 2005                           3.25 to 1.00
September 30, 2005                      3.25 to 1.00

December 31, 2005                       3.25 to 1.00
March 31, 2006 and thereafter           3.50 to 1.00
</TABLE>

<PAGE>

                                                                              58

Covenant calculations shall be made on the date that is the nearest to each
quarterly date listed above, to the extent the last day for the relevant fiscal
quarter of the Borrower falls on a day other than on the corresponding covenant
test date.

            6.10 Maintenance of Leverage Ratio. At each quarterly date set forth
below with respect to the fiscal quarter of the Borrower then ending maintain
the Leverage Ratio of the Borrower at not greater than the applicable ratio set
forth opposite each such date:

<TABLE>
<CAPTION>
Fiscal Quarter                                Ratio
--------------                                -----
<S>                                       <C>
June 30, 2005                             4.00 to 1.00
September 30, 2005                        4.00 to 1.00

December 31, 2005                         4.00 to 1.00
March 31, 2006                            3.75 to 1.00
June 30, 2006                             3.75 to 1.00
September 30, 2006                        3.75 to 1.00

December 31, 2006                         3.75 to 1.00
March 31, 2007                            3.50 to 1.00
June 30, 2007                             3.50 to 1.00
September 30, 2007                        3.50 to 1.00

December 31, 2007                         3.50 to 1.00
March 31, 2008 and thereafter             3.25 to 1.00
</TABLE>

Covenant calculations shall be made on the date that is the nearest to each
quarterly date listed above, to the extent the last day for the relevant fiscal
quarter of the Borrower falls on a day other than on the corresponding covenant
test date.

            6.11 Additional Collateral, etc.(a) Prior to the Collateral Release
Date (and after the Collateral Reinstatement Date):

            (a) with respect to any new Domestic Subsidiary (other than a
Domestic Subsidiary that is a Receivables Subsidiary) created or acquired after
the Closing Date by the Borrower or any of its Subsidiaries, promptly (i)
execute and deliver to the Administrative Agent such amendments to the Guarantee
and Collateral Agreement as the Administrative Agent deems necessary or
advisable to grant to the Administrative Agent, for the benefit of the Lenders,
a perfected first priority security interest in the Capital Stock of such new
Domestic Subsidiary that is owned by the Borrower or any of its Subsidiaries,
(ii) deliver to the Administrative Agent the certificates representing such
Capital Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of the Borrower or such Subsidiary, as
the case may be, (iii) cause such new Domestic Subsidiary (A) to become a party
to the Guarantee and Collateral Agreement and such other Security Documents, as
applicable, (B) to take such actions necessary or advisable to grant to the
Administrative Agent for the benefit of the Lenders a perfected first priority
security interest in the Collateral described in the Guarantee and Collateral
Agreement or such other Security Document, as applicable, with respect to such
new Domestic Subsidiary (however, in the case of a pledge by the new Domestic
Subsidiary of Capital Stock of an Excluded Foreign Subsidiary, such pledge shall
be limited to 65% of voting Capital Stock of such

<PAGE>

                                                                              59

Excluded Foreign Subsidiary), including the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by applicable
Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent and (C) to deliver to the Administrative Agent a
certificate of such new Domestic Subsidiary, substantially in the form of
Exhibit J, with appropriate insertions and attachments, and (iv) if requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent, provided that, if the initial investment in or purchase price of such new
Domestic Subsidiary is less than $5,000,000, the obligations of the Borrower
discussed in clauses (i) through (iv) of this subsection 6.11(a) shall not take
effect unless and until the financial statements delivered to the Administrative
Agent following each fiscal year of the Borrower pursuant to subsection 6.1(a)
show the tangible net worth of such new Domestic Subsidiary to be more than
$5,000,000.

            (b) with respect to any new Foreign Subsidiary (other than an
Excluded Foreign Subsidiary) created or acquired after the Closing Date by the
Borrower or any of its Subsidiaries and with respect to each new Foreign
Subsidiary Borrower, promptly (i) execute and deliver to the Administrative
Agent such amendments to the applicable Security Document or execute such
additional Security Documents as the Administrative Agent deems necessary or
advisable to grant to the Administrative Agent, for the benefit of the Lenders,
a perfected first priority security interest in the Capital Stock of such new
Foreign Subsidiary or Foreign Subsidiary Borrower that is owned by the Borrower
or any of its Domestic Subsidiaries or any Foreign Subsidiary Borrower (in the
case of such Foreign Subsidiary Borrower or first-tier Subsidiaries of any
Foreign Subsidiary Borrower, to secure the obligations of such Foreign
Subsidiary Borrower hereunder), (ii) deliver to the Administrative Agent the
certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
Borrower or such Subsidiary, as the case may be, (iii) in the case of a new
Foreign Subsidiary Borrower, cause such new Foreign Subsidiary Borrower (A) to
become a party to the applicable Security Document, and (B) to take such actions
necessary or advisable to grant to the Administrative Agent for the benefit of
the Lenders a perfected first priority security interest in the Capital Stock of
its Subsidiaries (other than Excluded Foreign Subsidiaries) if such Foreign
Subsidiary Borrower is a check the box entity or a similar pass through entity,
and (iv) if requested by the Administrative Agent, deliver to the Administrative
Agent legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent, provided that, if the initial investment in or purchase
price of such new Foreign Subsidiary or Foreign Subsidiary Borrower (as
applicable) is less than $5,000,000, the obligations of the Borrower discussed
in clauses (i) through (iv) of this subsection 6.11(b) shall not take effect
unless and until the financial statements delivered to the Administrative Agent
following the end of each fiscal year of the Borrower pursuant to subsection
6.1(a) show the tangible net worth of such new Foreign Subsidiary or Foreign
Subsidiary Borrower (as applicable) to be more than $5,000,000. For purposes of
this Agreement, (i) a check the box entity shall mean an entity that has elected
to be, or is by default, an entity that is disregarded as a separate entity from
its U.S. parent or owner for U.S. federal income tax consequences, and (ii) a
"pass through entity" shall mean an entity that has elected to be, or is by
default, treated as a partnership for U.S. federal income tax consequences.

            (c) With respect to any new Excluded Foreign Subsidiary owned by the
Borrower or any of its Domestic Subsidiaries or by any Foreign Subsidiary
Borrower that is a check the box entity or a pass through entity created or
acquired after the Closing Date by the Borrower or any of its Subsidiaries,
promptly (i) execute and deliver to the Administrative Agent such amendments to
the applicable Security Document as the Administrative Agent deems necessary or
advisable to grant to the Administrative Agent, for the benefit of the Lenders,
a perfected first priority security interest in the Capital Stock of such new
Subsidiary that is owned by the Borrower or any of its Domestic Subsidiaries or
by such a Foreign Subsidiary Borrower (provided that in no event shall more than
65% of the total outstanding

<PAGE>

                                                                              60

voting Capital Stock of any such new Subsidiary be required to be so pledged),
(ii) deliver to the Administrative Agent the certificates representing such
voting Capital Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of the Borrower or such Subsidiary, as
the case may be, and take such other action as may be necessary or, in the
opinion of the Administrative Agent, desirable to perfect the Administrative
Agent's security interest therein, and (iii) if requested by the Administrative
Agent, deliver to the Administrative Agent legal opinions relating to the
matters described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent, provided that, if
the initial investment in or purchase price of such new Excluded Foreign
Subsidiary is less than $5,000,000, the obligations of the Borrower discussed in
clauses (i) through (iii) of this subsection 6.11(c) shall not take effect
unless and until the financial statements delivered to the Administrative Agent
following the end of each fiscal year of the Borrower pursuant to subsection
6.1(a) show the tangible net worth of such new Excluded Foreign Subsidiary to be
more than $5,000,000.

            6.12 Environmental, Health and Safety Matters.

            (a) Comply with, and ensure compliance by all tenants and
subtenants, if any, with, all applicable Environmental Laws, including, without
limitation, obtaining and complying with and maintaining, and ensuring that all
tenants and subtenants obtain and comply with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws. For purposes of this 6.12 (a), noncompliance by
the Borrower or any of its Subsidiaries with any applicable Environmental Law
shall be deemed not to constitute a breach of this covenant provided that, upon
learning of any actual or suspected noncompliance, the Borrower and the relevant
Subsidiaries shall promptly undertake all reasonable efforts to achieve
compliance (or contest in good faith by appropriate proceedings the applicable
Environmental Law at issue and (to the extent required by GAAP) provide on the
books of the Borrower or any of its Subsidiaries, as the case may be, reserves
in conformity with GAAP with respect thereto), and provided further that, in any
case, such non-compliance, and any other noncompliance with Environmental Law,
individually or in the aggregate, could not reasonably be expected to result in
a Material Environmental Amount.

            (b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and directives of
all Governmental Authorities regarding Environmental Laws, except to the extent
that the amount or validity thereof is currently being contested in good faith
by appropriate proceedings and (to the extent required by GAAP) reserves in
conformity with GAAP with respect thereto have been provided on the books of the
Borrower or any of its Subsidiaries, as the case may be.

            (c) Defend, indemnify and hold harmless the Administrative Agent and
the Lenders, and their respective parents, subsidiaries, affiliates, employees,
agents, officers and directors, from and against any claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses of whatever kind or
nature known or unknown, contingent or otherwise, arising out of, or in any way
relating to the violation of, noncompliance with or liability under any
Environmental Laws applicable to the Borrower or any of its Subsidiaries or any
of their respective operations or Properties, or any orders, requirements or
demands of Governmental Authorities related thereto, including, without
limitation, attorney's and consultant's fees, investigation and laboratory fees,
response costs, court costs and litigation expenses, except to the extent that
any of the foregoing arise out of the gross negligence or willful misconduct of
the party seeking indemnification therefor. This indemnity shall continue in
full force and effect regardless of the termination of this Agreement.

            6.13 Foreign Pledge Agreements. Use commercially reasonable efforts
to, within 60 days after the Closing Date, deliver to the Administrative Agent
(i) the duly executed Foreign Pledge

<PAGE>

                                                                              61

Agreements described in Schedule 6.13 granting to the Administrative Agent, for
the benefit of the Lenders, a perfected first priority security interest in the
Capital Stock of such Foreign Subsidiaries or Foreign Subsidiary Borrowers
(other than Scotts Treasury EEIG), (ii) the certificates representing such
Capital Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of the Borrower or relevant Subsidiary
and (iii) legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.

            Section 7. NEGATIVE COVENANTS

            The Borrower hereby agrees that, from the Closing Date and so long
as the Revolving Credit Commitments remain in effect, any Letter of Credit is
outstanding or any amount is owing to any Lender or the Administrative Agent
hereunder or under any other Loan Document, the Borrower shall not, nor shall it
permit any of its Subsidiaries to, directly or indirectly:

            7.1 Limitation on Liens. Create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except:

            (a) Liens securing Indebtedness in an aggregate amount not exceeding
      $75,000,000 at any time outstanding in respect of (i) capitalized lease
      obligations and purchase money obligations for fixed or capital assets;
      provided that (x) such Liens do not at any time encumber any property
      other than the property financed by such Indebtedness and (y) the
      Indebtedness secured thereby shall not exceed the cost or fair market
      value, whichever is lower, of the property being acquired on the date of
      acquisition and (ii) Indebtedness permitted pursuant to subsection 7.5(l);

            (b) Liens on assets of a Foreign Subsidiary which is not a Foreign
      Subsidiary Borrower to secure Permitted Foreign Debt of such Foreign
      Subsidiary; provided that such Permitted Foreign Debt is not guaranteed by
      the Borrower;

            (c) Liens for taxes and special assessments not yet due or which are
      being contested in good faith and by appropriate proceedings if adequate
      reserves with respect thereto are maintained on the books of the Borrower
      and its Subsidiaries in accordance with GAAP;

            (d) carriers', warehousemen's, mechanics', materialmen's,
      repairmen's, or other like Liens arising in the ordinary course of
      business which are not overdue for a period of more than 30 days or which
      are being contested in good faith and by appropriate proceedings;

            (e) pledges or deposits in connection with workmen's compensation,
      unemployment insurance and other social security legislation;

            (f) deposits to secure the performance of bids, trade contracts
      (other than for borrowed money), leases, statutory and other obligations
      required by law, surety and appeal bonds, performance bonds and other
      obligations of a like nature incurred in the ordinary course of business;

            (g) easements, rights-of-way, restrictions and other similar
      encumbrances incurred in the ordinary course of business and other Liens
      incurred in the ordinary course of business which, in the aggregate, are
      not substantial in amount, and which do not in any case materially detract
      from

<PAGE>

                                                                              62

      the value of the property subject thereto or interfere with the ordinary
      conduct of the business of the Borrower or its Subsidiaries;

            (h) Liens resulting from judgments of any court or governmental
      proceeding, provided such Liens in the aggregate do not constitute an
      Event of Default under subsection 8(h);

            (i) Liens in existence on the Closing Date described in Schedule
      7.1(i);

            (j) Liens of landlords or of mortgagees of landlords, arising solely
      by operation of law, on fixtures located on premises leased in the
      ordinary course of business, provided that the rental payments secured
      thereby are not yet due;

            (k) Liens contemplated under Section 4.12 of the Senior Subordinated
      Note Indenture;

            (l) Liens on Sold Receivables created under any Receivables Purchase
      Facility;

            (m) Liens created by or pursuant to this Agreement or the other Loan
      Documents;

            (n) Liens on assets of Foreign Subsidiaries arising by operation of
      law or pursuant to customary business practice and not known to the
      Borrower to materially affect the value of such assets; and

            (o) purchase money Liens on assets acquired with seller-financed
      Indebtedness permitted pursuant to subsection 7.5(o), so long as such
      Liens encumber only assets (and proceeds thereof) acquired with such
      Indebtedness and do not secure any other Indebtedness.

            7.2 Limitation on Contingent Obligations. Agree to or assume,
guarantee, indorse or otherwise in any way be or become responsible or liable
for, directly or indirectly, any Contingent Obligation except for (i) the
guarantees contemplated by the Security Documents, (ii)(x) guarantees by the
Borrower of Indebtedness of Foreign Subsidiary Borrowers in an aggregate amount
not to exceed $75,000,000 at any one time outstanding and (y) guarantees by the
Borrower of Permitted Foreign Debt of any Foreign Subsidiary, provided that such
Permitted Foreign Debt is not secured by any Liens, (iii) guarantees in
existence on the Closing Date as described in Schedule 7.2(iii), (iv) Contingent
Obligations in an aggregate amount not to exceed $100,000,000 at any one time
outstanding, (v) Contingent Obligations of any Subsidiary Guarantor in respect
of Indebtedness permitted under subsections 7.5(e)-(g), provided that such
Contingent Obligations are subordinated to the same extent as the obligations of
the Borrower in respect of the related Indebtedness, (vi) any guarantees of the
Borrower or any of its Subsidiaries under subsection 5.1(b), (vii) any guarantee
of the obligations of the Borrower by its Subsidiaries of Indebtedness in
respect of the Senior Subordinated Notes or (viii) guarantees by the Borrower of
operating lease obligations of any Domestic Subsidiary incurred in connection
with "build to suit" real property improvements in an aggregate amount not to
exceed $60,000,000; provided that such Contingent Obligations are subordinated
to the same extent as the obligations of the Borrower in respect of the related
Indebtedness.

            7.3 Limitation on Fundamental Changes. Except as permitted or
contemplated by this Agreement or any other Loan Document, enter into any
transaction of merger or consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), convey, sell, lease,
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any material part of its business or assets, whether now
owned or hereafter acquired, or acquire by purchase or otherwise all or
substantially all the business or assets of, or stock or other evidence of
beneficial

<PAGE>

                                                                              63

ownership of, any Person, or make any material change in the method by which it
conducts business, except that:

            (a) any Subsidiary of the Borrower may be merged, amalgamated or
      consolidated with or into the Borrower or any wholly owned Subsidiary of
      the Borrower (provided that in the case of each such merger or
      consolidation, the Borrower or such wholly owned Subsidiary, as the case
      may be, shall be the continuing or surviving corporation);

            (b) any Subsidiary of the Borrower may be liquidated, wound up or
      dissolved into, or all or substantially all, or such lesser amount thereof
      as the Borrower shall determine, of its business, property or assets may
      be conveyed, sold, leased, transferred or otherwise disposed of, in one
      transaction or a series of transactions, to, (i) the Borrower or any
      wholly owned Subsidiary of the Borrower (provided that such wholly owned
      Subsidiary shall be a Subsidiary Guarantor) or (ii) to any other Person in
      compliance with subsection 7.8; and

            (c) the Borrower or any Subsidiary of the Borrower may acquire by
      purchase or otherwise all or substantially all the business or assets of,
      or stock or other evidence of beneficial ownership of, any Person
      (including, without limitation, any Affiliate of the Borrower), provided
      that such acquisition shall be a Permitted Acquisition.

            7.4 Limitation on Acquisitions, Investments, Loans and Advances.
Make or commit to make any advance, loan, extension of credit or capital
contribution to, or purchase of stock, bonds, notes, debentures or other
securities of any Person, or make any other investment in any Person, except:

            (a) investments in Cash Equivalents;

            (b) loans and advances to officers and directors of the Borrower or
      any of its Subsidiaries (or employees thereof or manufacturers'
      representatives provided such loans and advances are approved by an
      officer of the Borrower) for travel, entertainment and relocation expenses
      in the ordinary course of business in an aggregate amount not to exceed
      $5,000,000 at any one time outstanding;

            (c) loans and advances to and investments in the Borrower or its
      Subsidiaries including loans made by Scotts Treasury EEIG to any Foreign
      Subsidiary;

            (d) investments in notes and other securities received in the
      settlement of overdue debts and accounts payable in the ordinary course of
      business and for amounts which, individually or in the aggregate, are not
      material to the Borrower and its Subsidiaries taken as a whole;

            (e) Permitted Acquisitions;

            (f) insofar as not otherwise permitted pursuant to preceding clauses
      (a) through (e), loans to or investments in Affiliates in an aggregate
      amount not to exceed $20,000,000 at any one time outstanding;

            (g) investments in the Capital Stock of a joint venture entity that
      is a United States Person in an aggregate amount not to exceed the greater
      of (x) $250,000,000 and (y) 7.5% of Consolidated Total Assets; provided
      that the amount of such investments permitted pursuant to this subsection
      7.4(g) shall be reduced by the aggregate amount of non-cash consideration
      received in respect of Dispositions permitted pursuant to subsection 7.8;

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                                                                              64

            (h) investments in the Capital Stock of a joint venture entity that
      is not a United States Person;

            (i) investments in the nature of seller financing of or other
      consideration received in any Disposition by the Borrower or any of its
      Subsidiaries of any assets permitted by subsection 7.8; and

            (j) insofar as not otherwise permitted pursuant to preceding clauses
      (a) through (i), investments in an aggregate amount not to exceed
      $50,000,000 at any one time outstanding.

            7.5 Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness except:

            (a) Indebtedness of any Loan Party pursuant to any Loan Document;

            (b) Indebtedness of the Borrower to any Subsidiary and of any
      Subsidiary to the Borrower or any other Subsidiary;

            (c) Indebtedness outstanding on the date hereof and listed on
      Schedule 7.5(c) (including the Senior Subordinated Notes) and any
      refinancings, refundings, renewals or extensions thereof (without
      increasing, or shortening the maturity of, the principal amount thereof);

            (d) Indebtedness (including, without limitation, Capital Lease
      Obligations) secured by Liens permitted by subsection 7.1(a) in an
      aggregate principal amount not to exceed $75,000,000 at any one time
      outstanding;

            (e) unsecured Indebtedness of the Borrower under subordinated notes
      pursuant to one or more subordinated note indentures having subordination
      provisions as favorable to the Lenders as those in the Senior Subordinated
      Note Indenture and having no scheduled principal payments or prepayments
      prior to the Revolving Credit Termination Date which may be used to
      repurchase or redeem the Senior Subordinated Notes;

            (f) unsecured Indebtedness of the Borrower in an aggregate principal
      amount not to exceed $200,000,000 under subordinated notes pursuant to one
      or more subordinated note indentures having subordination provisions as
      favorable to the Lenders as those in the Senior Subordinated Note
      Indenture and having no scheduled principal payments or prepayments prior
      to the Revolving Credit Termination Date; provided any such Indebtedness
      permitted under this subsection 7.5(f) may be incurred only if the
      Borrower shall be in compliance, on a pro forma basis after giving effect
      to such incurrence, with the covenant contained in subsection 6.10
      recomputed as at the last day of the most recently ended fiscal quarter of
      the Borrower as if such incurrence had occurred on such day;

            (g) unsecured or subordinated Indebtedness of the Borrower having no
      scheduled principal payments or prepayments prior to the Revolving Credit
      Termination Date and which Indebtedness shall be used for Permitted
      Acquisitions; provided any such Indebtedness permitted under this
      subsection 7.5(g) may be incurred only if the Borrower shall be in
      compliance, on a pro forma basis after giving effect to such incurrence,
      with the covenant contained in subsection 6.10 recomputed as at the last
      day of the most recently ended fiscal quarter of the Borrower as if such
      incurrence had occurred on such day; provided further that any such
      subordinated Indebtedness permitted under this subsection 7.5(g) shall be
      under subordinated notes pursuant to

<PAGE>

                                                                              65

      one or more subordinated note indentures having subordination provisions
      as favorable to the Lenders as those in the Senior Subordinated Note
      Indenture of the Borrower;

            (h) additional Indebtedness of the Borrower or any of its
      Subsidiaries in an aggregate principal amount (for the Borrower and all
      Subsidiaries) not to exceed $50,000,000 at any one time outstanding;

            (i) Indebtedness under Hedging Agreements entered into with any
      Hedging Lender in the ordinary course of business, provided that such
      Hedging Agreements are entered into in the ordinary course of business to
      hedge or mitigate risks as to which the Borrower or any of its
      Subsidiaries reasonably believes it is exposed in the conduct of its
      business or the management of its liabilities;

            (j) Indebtedness contemplated by subsection 7.4(c);

            (k) Indebtedness incurred by any Foreign Subsidiary, provided that
      the aggregate principal amount of all such Indebtedness of all Foreign
      Subsidiaries which are not Subsidiary Guarantors or Foreign Subsidiary
      Borrowers shall not exceed $60,000,000 or the equivalent thereof at any
      one time outstanding (any Indebtedness incurred pursuant to this
      subsection 7.5(k), "Permitted Foreign Debt"); and

            (l) Indebtedness of any Person that becomes a Subsidiary of the
      Borrower in a Permitted Acquisition or Indebtedness otherwise assumed by
      the Borrower or any of its subsidiaries in connection with a Permitted
      Acquisition in an aggregate principal amount for all such Indebtedness at
      any time outstanding of up to $30,000,000;

            (m) Indebtedness incurred by any Foreign Subsidiary supported by a
      Letter of Credit ("Supported Foreign Indebtedness"), provided that the
      aggregate principal amount of all such Indebtedness shall not exceed
      $65,000,000 at any one time outstanding;

            (n) to the extent that the Receivables Subsidiary's or any other
      Person's obligation to purchase or acquire Sold Receivables under the
      Receivables Purchase Facility is deemed to be an obligation to lend money
      to the Borrower or such Receivables Subsidiary, any Indebtedness of the
      Borrower or such Receivables Subsidiary under the Receivables Purchase
      Facility; and

            (o) seller-financed Indebtedness incurred by the Borrower or any of
      its Subsidiaries in an aggregate principal amount not to exceed
      $100,000,000 at any one time outstanding.

            7.6 Limitation on Restrictions on Subsidiary Distributions. Enter
into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary of the Borrower which is not a
Subsidiary Guarantor to (a) pay dividends or make any other distributions in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Subsidiary of the Borrower, (b) pay dividends
or make any other distributions from a Foreign Subsidiary which is not a
Subsidiary Guarantor or a Subsidiary Borrower except in agreements governing
Permitted Foreign Debt, (c) make loans or advances to the Borrower or any other
Subsidiary of the Borrower or (d) transfer any of its assets to the Borrower or
any other Subsidiary of the Borrower, except for such encumbrances or
restrictions existing under or by reason of any restrictions with respect to
such Subsidiary imposed pursuant to an agreement which has been entered into in
connection with the sale or disposition of all or substantially all of the
Capital Stock or assets of such Subsidiary.

<PAGE>

                                                                              66

            7.7 Transactions with Affiliates and Officers. Except for
transactions associated with the relocation expenses of officers of the Borrower
in the ordinary course of business, (a) enter into any transaction, including,
without limitation, the purchase, sale or exchange of property or the rendering
of any services, with any Affiliate or any executive officer or director
thereof, or enter into, assume or suffer to exist any employment or consulting
contract with any Affiliate or any executive officer or director thereof, except
any transaction or contract which is in the ordinary course of the Borrower's or
such Subsidiary's business and which is upon fair and reasonable terms no less
favorable to the Borrower or such Subsidiary than it would obtain in a
comparable arm's length transaction with a Person not an Affiliate, (b) make any
advance or loan to any Affiliate (except as otherwise made pursuant to
subsection 7.4) or any director or executive officer thereof or to any trust of
which any of the foregoing is a beneficiary, or to any Person on the guarantee
of any of the foregoing or (c) pay any fees (other than reasonable directors'
fees or expenses) or expenses to, or reimburse or assume any obligation for the
reimbursement of any expenses incurred by, any Affiliate or any executive
officer or director thereof.

            7.8 Limitation on Sale of Assets. Except as permitted or
contemplated by this Agreement or any other Loan Document, Dispose of any of its
Domestic Assets (including, without limitation, receivables and leasehold
interests, but excluding obsolete or worn out property or property (including
inventory) Disposed of in the ordinary course of business) with a fair market
value (in combination with any other Domestic Assets sold in the same or any
related transaction) in excess of $5,000,000, whether now owned or hereafter
acquired, except that the Borrower or any of its Subsidiaries may Dispose of:

            (a) Domestic Assets, provided that the aggregate fair market value
      of all such Domestic Assets in all such transactions after giving pro
      forma effect to such Disposal shall not exceed 10% of Consolidated Total
      Assets (calculated by aggregating the percentage of Consolidated Total
      Assets represented by each Disposal at the time of such Disposal); and

            (b) Sold Receivables pursuant to any Receivables Purchase Facility;

provided that, in the case of any such Disposition (including, without
limitation, any Disposition for which the Borrower received as consideration the
Capital Stock of a joint venture entity), the Borrower shall receive cash
consideration equal to at least 80% of the fair market value of the Disposed
assets except to the extent that the non-cash consideration received in such
Disposition in excess of 20% of the aggregate total consideration received in
such Disposition, together with the aggregate value of the non-cash
consideration received in any prior Disposition in excess of 20% of the total
consideration therefor and the aggregate amount of other investments in joint
venture interests permitted pursuant to subsection 7.4(g) since the date hereof
(valued as of the date of receipt thereof) shall not exceed 7.5% of Consolidated
Total Assets.

            7.9 Sale and Leaseback. Enter into any arrangement with any Person
providing for the leasing by the Borrower or any of its Subsidiaries of real or
personal property which has been or is to be sold or transferred by the Borrower
or any such Subsidiary to such Person or to any other Person to whom funds have
been or are to be advanced by such Person on the security of such property or
rental obligations of the Borrower or any such Subsidiary, except with respect
to (i) such transactions described on Schedule 7.9 and (ii) any other such
transactions which shall not have an aggregate fair market value in excess of
(A) $30,000,000 in any fiscal year and (B) $75,000,000 since the Closing Date.

            7.10 Fiscal Year. Permit the fiscal year of the Borrower and its
Subsidiaries to end on a day other than September 30; provided, that after the
Closing Date, the Borrower may, on one occasion, permanently change the date on
which the fiscal year of the Borrower and its Subsidiaries ends upon 30 days
prior written notice to the Administrative Agent.

<PAGE>

                                                                              67

            7.11 Modifications of Certain Debt Instruments. (a) Amend, modify,
waive or otherwise change, or consent or agree to any amendment, modification,
waiver or other change to, any of the terms of the Senior Subordinated Notes or
any other unsecured or subordinated notes (or any refinancing thereof) issued
pursuant to subsections 7.5(e), (f) or (g) or unsecured notes issued pursuant to
subsection 7.5(f) (other than any such amendment, modification, waiver or other
change that (i)(x) would extend the maturity or reduce the amount of any payment
of principal thereof or reduce the rate or extend any date for payment of
interest thereon and (y) does not involve the payment of a consent fee material
in proportion to the outstanding principal amount thereof or (ii) provides for
actions which (x) are expressly permitted under this Agreement and (y) do not
require the consent of any of the holders of the applicable Senior Subordinated
Notes or subordinated notes (or refinancing thereof) issued pursuant to
subsections 7.5(e), (f) or (g) or unsecured notes issued pursuant to subsection
7.5(f) or (g)); or (c) designate any Indebtedness (other than obligations of the
Loan Parties pursuant to the Loan Documents) as "Designated Senior Indebtedness"
for the purposes of the Senior Subordinated Note Indenture.

            7.12 Negative Pledge Clauses. Enter into or suffer to exist or
become effective any agreement that prohibits or limits the ability of the
Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist
any Lien upon any of its property or revenues, whether now owned or hereafter
acquired, to secure its obligations under the Loan Documents to which it is a
party other than (a) this Agreement and the other Loan Documents; (b) any
agreements governing any purchase money Liens or Capital Lease Obligations
otherwise permitted hereby (in which case, any prohibition or limitation shall
only be effective against the assets financed thereby) and (c) any agreements
governing any Receivables Purchase Facility provided that such limitation shall
only be effective against the Sold Receivables.

            7.13 Lines of Business. Engage to any material extent in any
business activities other than in the respective primary lines of business of
the Borrower and its Subsidiaries (which shall include any evolution or
extension of business activities and any business activities reasonably related
to such primary lines of business conducted on the Closing Date).

            7.14 Restricted Payments. Declare or pay any dividend (other than
dividends payable solely in common stock of the Person making such dividend) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any of its Capital Stock, whether now or hereafter outstanding,
or make any other distribution in respect thereof, either directly or
indirectly, whether in cash or property or in obligations (collectively,
"Restricted Payments"), except that any Subsidiary may make Restricted Payments
to the Borrower or any Subsidiary and that, so long as no Default or Event of
Default has occurred and is continuing or would result therefrom:

            (a) the Borrower may declare and pay dividends on its Capital Stock
      (including its preferred stock) in an aggregate amount of up to
      $55,000,000 in each fiscal year of the Borrower; provided, that, if after
      giving effect to any such dividend the Leverage Ratio (calculated on a pro
      forma basis as of the last day of the most recently completed fiscal
      quarter, but including in the calculation thereof the Indebtedness of the
      Borrower and its consolidated Subsidiaries after giving effect to the
      payment of such dividends) is less than 2.5 to 1.0, the Borrower may
      declare and pay dividends on its Capital Stock in an aggregate amount of
      up to $75,000,000 in each fiscal year, and

            (b) the Borrower may make a repurchase or redemption of shares of
      its Capital Stock, so long as after giving effect to such repurchase or
      redemption the aggregate cost of all such repurchases and redemptions in
      the fiscal year during which such repurchase or redemption is to

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                                                                              68

      occur is not greater than the amount set forth below opposite such fiscal
      year:

<TABLE>
<CAPTION>
Fiscal Year                            Repurchase/Redemption Amount
-----------                            ----------------------------
<S>                                    <C>
   2005                                        $125,000,000
   2006                                        $150,000,000
   2007 and in each
   fiscal year thereafter                      $175,000,000
</TABLE>

      provided, that any originally permitted amounts not used for repurchases
      or redemptions in any fiscal period listed above may be carried over to be
      used in the next succeeding fiscal period; provided further, that
      transactions permitted by subsection 7.15 effected prior to January 1,
      2007 shall reduce the amount available for repurchases or redemptions of
      shares of the Borrower's Capital Stock in the fiscal year in which such
      transaction occurs by an amount equal to the Indebtedness prepaid,
      retired, redeemed, purchased, defeased or exchanged.

            7.15 Limitation of Redemptions of Certain Indebtedness. Prior to
January 1, 2007, optionally prepay, retire, redeem, purchase, defease or
exchange, or make or arrange for any mandatory prepayment, retirement,
redemption, purchase or defeasance of Indebtedness outstanding pursuant to
subsection 7.5(c), (e), (f) or (g); provided that (a) Indebtedness permitted
pursuant to subsection 7.5(c) may be refinanced, refunded, renewed or extended
in accordance with the provisions of such subsection and (b) Indebtedness
permitted pursuant to subsection 7.5(c), (e), (f) or (g) may be redeemed by the
Borrower (i) on any date when the Leverage Ratio would not exceed 2.50 to 1.00,
on a pro forma basis after giving effect to such redemption, recomputed as at
the last day of the most recently ended fiscal quarter of the Borrower as if
such redemption had occurred on such date, for aggregate consideration
(including any premium paid in connection with such redemption) not in excess of
the lesser of (x) $100,000,000 (less the aggregate consideration for all prior
redemptions of such Indebtedness during such fiscal year) and (y) the amount
available for redemptions or repurchases of the Borrower's Capital Stock
pursuant to subsection 7.14(b) for the fiscal year in which such date falls and
(ii) with consideration consisting of the proceeds of the issuance of shares of
the Borrower's Capital Stock.

            Section 8. EVENTS OF DEFAULT

            Upon the occurrence of any of the following events:

            (a) Payments. The Borrower or the relevant Subsidiary Borrower shall
      fail to pay any principal of any Loan or any Reimbursement Obligation when
      any such amount becomes due in accordance with the terms thereof or hereof
      (including, without limitation, all amounts of L/C Obligations, whether or
      not the beneficiaries of the then outstanding Letters of Credit shall have
      presented the documents required thereunder); or the Borrower or the
      relevant Subsidiary Borrower shall fail to pay any interest on any Loan or
      any fee or other amount payable hereunder, within five days after any such
      interest, fee or amount becomes due in accordance with the terms thereof
      or hereof (including, without limitation, all amounts of L/C Obligations,
      whether or not the beneficiaries of the then outstanding Letters of Credit
      shall have presented the documents required thereunder); or

            (b) Representations and Warranties. Any representation or warranty
      made or deemed made by the Borrower or any of its Subsidiaries in any of
      the Loan Documents to which it is a party or which is contained in any
      certificate, document or financial or other statement furnished

<PAGE>

                                                                              69

      at any time under or in connection herewith or therewith shall prove to
      have been incorrect in any material respect on or as of the date made or
      deemed made; or

            (c) Certain Covenants. The Borrower shall default in the observance
      or performance of any covenant or agreement contained in subsection 6.9 or
      6.10; or

            (d) Other Covenants. The Borrower or any of its Subsidiaries shall
      default in the observance or performance of any covenant or agreement (i)
      contained in subsections 7.3, 7.5, 7.8, 7.9 or 7.14 and such default shall
      continue unremedied for a period of 10 days or (ii) contained in this
      Agreement or in any other Loan Document not referred to in preceding
      clause (i) or subsection 8(c) and such default shall continue unremedied
      for a period of 30 days; or

            (e) Cross-Default. The Borrower or any of its Material Subsidiaries
      shall (i) default in any payment of principal of or interest on any
      Indebtedness (other than the Loans) or in the payment of any Contingent
      Obligation, the aggregate principal amount of which exceeds $50,000,000,
      beyond the period of grace (not to exceed 30 days), if any, provided in
      the instrument or agreement under which such Indebtedness or Contingent
      Obligation was created; or (ii) default in the observance or performance
      of any other agreement or condition relating to any such Indebtedness or
      Contingent Obligation or contained in any instrument or agreement
      evidencing, securing or relating thereto, or any other event shall occur
      or condition exist, the effect of which default or other event or
      condition is to cause, or to permit the holder or holders of such
      Indebtedness or beneficiary or beneficiaries of such Contingent Obligation
      (or a trustee or agent on behalf of such holder or holders or beneficiary
      or beneficiaries) to cause, with the giving of notice if required, such
      Indebtedness to become due prior to its stated maturity or such Contingent
      Obligation to become payable; or (iii) any such Indebtedness or Contingent
      Obligation shall be declared to be due and payable, or required to be
      prepaid (other than by a regularly scheduled required prepayment) prior to
      the stated maturity thereof; or

            (f) Commencement of Bankruptcy or Reorganization Proceedings. (i)
      The Borrower or any of its Material Subsidiaries shall commence any case,
      proceeding or other action (A) under any existing or future law of any
      jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
      reorganization or relief of debtors, seeking to have an order for relief
      entered with respect to it, or seeking to adjudicate it a bankrupt or
      insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
      liquidation, dissolution, composition or other relief with respect to it
      or its debts, or (B) seeking appointment of a receiver, trustee, custodian
      or other similar official for it or for all or any substantial part of its
      assets, or the Borrower or any of its Subsidiaries shall make a general
      assignment for the benefit of its creditors; or (ii) there shall be
      commenced against the Borrower or any of its Material Subsidiaries any
      case, proceeding or other action of a nature referred to in clause (i)
      above which (A) results in the entry of an order for relief or any such
      adjudication or appointment or (B) remains undismissed, undischarged or
      unbonded for a period of 60 days; or (iii) there shall be commenced
      against the Borrower or any of its Material Subsidiaries any case,
      proceeding or other action seeking issuance of a warrant of attachment,
      execution, distraint or similar process against all or any substantial
      part of its assets which results in the entry of an order for any such
      relief which shall not have been vacated, discharged, or stayed or bonded
      pending appeal within 60 days from the entry thereof; or (iv) the Borrower
      or any of its Material Subsidiaries shall take any action in furtherance
      of, or indicating its consent to, approval of, or acquiescence in, any of
      the acts set forth in clause (i), (ii) or (iii) above; or (v) the Borrower
      or any of its Material Subsidiaries shall generally not, or shall be
      unable to, or shall admit in writing its inability to, pay its debts as
      they become due; or

<PAGE>

                                                                              70

            (g) ERISA. (i) Any Person shall engage in any "prohibited
      transaction" (as defined in Section 406 of ERISA or Section 4975 of the
      Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
      defined in Section 302 of ERISA), whether or not waived, shall exist with
      respect to any Plan, (iii) a Reportable Event shall occur with respect to,
      or proceedings shall commence to have a trustee appointed, or a trustee
      shall be appointed, to administer or to terminate, any Single Employer
      Plan, which Reportable Event or institution of proceedings is, in the
      reasonable opinion of the Required Lenders, likely to result in the
      termination of such Plan for purposes of Title IV of ERISA in a "distress
      termination" (within the meaning of Section 4041(c) of ERISA), and, in the
      case of a Reportable Event, the continuance of such Reportable Event
      unremedied for ten days after notice of such Reportable Event pursuant to
      Section 4043(a), (c) or (d) of ERISA is given or, in the case of
      institution of proceedings, the continuance of such proceedings for ten
      days after commencement thereof, (iv) any Single Employer Plan shall
      terminate for purposes of Title IV of ERISA in a "distress termination"
      (within the meaning of Section 4041(c) of ERISA), (v) the Borrower or any
      Commonly Controlled Entity shall, or is, in the reasonable opinion of the
      Required Lenders, likely to, incur any liability in connection with a
      withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
      Plan or (vi) any other event or condition shall occur or exist with
      respect to a Single Employer Plan; and in each case in clauses (i) through
      (vi) above, such event or condition, together with all other such events
      or conditions, if any, is reasonably likely to subject the Borrower or any
      of its Subsidiaries to any tax, penalty or other liabilities in the
      aggregate material in relation to the business, operations, property or
      financial or other condition of the Borrower and its Subsidiaries taken as
      a whole; or

            (h) Material Judgments. One or more judgments or decrees shall be
      entered against the Borrower or any of its Material Subsidiaries involving
      in the aggregate a liability (not covered by insurance) of $50,000,000 or
      more and all such judgments or decrees shall not have been vacated,
      satisfied, discharged, or stayed or bonded pending appeal within 60 days
      from the entry thereof; or

            (i) Change in Control. (i) Any Person (other than one or more
      members of the Control Group) shall at any time own, directly or
      indirectly shares representing more than 30% of the aggregate ordinary
      voting power represented by the issued and outstanding Capital Stock of
      the Borrower or (ii) a "Change of Control" as defined in the Senior
      Subordinated Notes Indenture or any "Change of Control" as defined in any
      other subordinated note indenture or any event described with similar
      terminology thereunder shall occur; or

            (j) Effectiveness of the Security Documents. Any Security Document
      shall cease for any reason to be in full force and effect in accordance
      with its terms or any party thereto shall so assert in writing or any Lien
      on any material Collateral created by any of the Guarantee and Collateral
      Agreements shall cease to be enforceable and of the same effect and
      priority purported to be created thereby (other than pursuant to the terms
      and conditions of this Agreement or the other Loan Documents); or

then, and in any such event, (a) if such event is an Event of Default specified
in paragraph (f) above with respect to the Borrower or any Subsidiary Borrower,
automatically the Revolving Credit Commitments, the Swing Line Commitment and
the L/C Commitment shall immediately terminate and the Swing Line Loans, the
Revolving Credit Loans and the Reimbursement Obligations hereunder (with accrued
interest thereon), the maximum amount available to be drawn under all
outstanding Letters of Credit and all other amounts owing by the Borrower or
such Subsidiary Borrower, as the case may be, under this Agreement shall
immediately become due and payable, and (b) if such event is any Event of
Default and is continuing, either or both of the following actions may be taken
(to the extent not already automatically taken pursuant to the foregoing clause
(a)): (i) with the consent of the Required Lenders, the

<PAGE>

                                                                              71

Administrative Agent may or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower, declare the Revolving
Credit Commitments, the Swing Line Commitment and the L/C Commitment to be
terminated forthwith, whereupon the Revolving Credit Commitments, the Swing Line
Commitment and the L/C Commitment shall immediately terminate; and (ii) with the
consent of the Required Lenders, the Administrative Agent may or upon the
request of the Required Lenders, the Administrative Agent shall, by notice of
default to the Borrower, the Swing Line Loans, the Revolving Credit Loans and
the Reimbursement Obligations hereunder (with accrued interest thereon), the
maximum amount available to be drawn under all outstanding Letters of Credit and
all other amounts owing under this Agreement to be due and payable forthwith,
whereupon the same shall immediately become due and payable. Any amounts paid by
the Borrower in respect of such undrawn Letters of Credit shall be returned to
the Borrower after the last expiry date of the Letters of Credit and after all
Obligations under the Loan Documents have been paid in full.

            With respect to all Letters of Credit for which presentment for
honor shall not have occurred at the time of an acceleration pursuant to the
preceding paragraph, the Borrower or the relevant Subsidiary Borrower, as the
case may be, shall at such time deposit in a cash collateral account opened by
the Administrative Agent an amount equal to the aggregate then undrawn and
unexpired amount of such Letters of Credit. Amounts held in such cash collateral
account shall be applied by the Administrative Agent to the payments of drafts
drawn under such Letters of Credit, and the unused portion thereof after all
such Letters of Credit shall have expired or been fully drawn upon, if any,
shall be applied to repay other Obligations. After all such Letters of Credit
shall have expired or been fully drawn upon, all Reimbursement Obligations shall
have been satisfied and all other Obligations shall have been paid in full, the
balance, if any, in such cash collateral account shall be returned to the
Borrower or such Subsidiary Borrower, as the case may be.

            Except as expressly provided above in this Section 8, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.

            Section 9. THE ADMINISTRATIVE AGENT

            9.1 Appointment.

            (a) Each Lender hereby irrevocably designates and appoints JPMCB as
the Administrative Agent of such Lender under this Agreement and the other Loan
Documents, and each such Lender hereby irrevocably authorizes JPMCB, as the
Administrative Agent for such Lender, to take 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 expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement or the
other Loan Documents, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or the other Loan Documents or otherwise exist against the
Administrative Agent.

            (b) Any proceeds received by the Administrative Agent pursuant to
the terms of any Guarantee and Collateral Agreement shall be applied as provided
in such Guarantee and Collateral Agreement. Each Hedging Lender agrees that (i)
if at any time it shall receive any proceeds pursuant to the terms of either
Guarantee and Collateral Agreement (other than through application by the
Administrative Agent in accordance with this subsection 9.1(b)), it shall
promptly turn the same over to

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                                                                              72

the Administrative Agent for application in accordance with the provisions
hereof and (ii) it will not take or cause to be taken any action, including,
without limitation, the commencement of any legal or equitable proceedings, the
purpose of which is or could be to give such Hedging Lender any preference or
priority against the other Lenders with respect to such proceeds.

            9.2 Delegation of Duties. The Administrative Agent may execute any
of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.

            9.3 Exculpatory Provisions. Neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or the other Loan
Documents (except for its or such Person's own gross negligence or wilful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower or any
relevant Subsidiary Borrower or any officer thereof contained in this Agreement
or the other Loan Documents or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative Agent
under or in connection with, this Agreement or the other Loan Documents or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement, any Notes or the other Loan Documents or for any failure of
the Borrower or any relevant Subsidiary Borrower to perform its obligations
hereunder or thereunder. The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or the other Loan Documents, or to inspect the properties, books or
records of the Borrower or any Subsidiary Borrower.

            9.4 Reliance by Administrative Agent. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any Note,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy or teletype message, statement, order or other document or
conversation reasonably believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless (a) a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent and (b) the Administrative Agent shall have received the
written agreement of such assignee that such assignee is bound hereby as it
would have been had it been an original Lender party hereto, in each case in
form and substance satisfactory to the Administrative Agent. The Administrative
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or the other Loan Documents unless it shall first receive such
advice or concurrence of the Required Lenders as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
and the other Loan Documents in accordance with a request of the Required
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Loans. The Administrative Agent and the Issuing Lender shall not be required to
give any notice to any Person other than the Borrower or the applicable
Subsidiary Borrower that an automatic extension of a Letter of Credit shall not
be effective, unless the Required Lenders otherwise direct.

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                                                                              73

            9.5 Notice of Default. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Borrower or any Subsidiary Borrower referring to this Agreement, describing
such Default or Event of Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives such a notice, the
Administrative Agent promptly shall give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders;
provided that, unless and until the Administrative Agent shall have received
such directions, the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests of
the Lenders.

            9.6 Non-Reliance on Administrative Agent, Other Lenders and JPMCB.
Each Lender expressly acknowledges that neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates
(including, without limitation, JPMCB) has made any representations or
warranties to it and that no act by the Administrative Agent hereinafter taken,
including any review of the affairs of the Borrower or any Subsidiary Borrower,
shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender. Each Lender represents to the Administrative
Agent and JPMCB that it has, independently and without reliance upon the
Administrative Agent or any other Lender or JPMCB, and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own decision to make
its extensions of credit hereunder and enter into this Agreement. Each Lender
also represents that it will, independently and without reliance upon the
Administrative Agent, JPMCB or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement or the other Loan Documents, and to make such investigation as it
deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent hereunder, the Administrative Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, financial and
other condition or creditworthiness of the Borrower which may come into the
possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.

            9.7 Indemnification. The Lenders agree to indemnify each of the
Administrative Agent and JPMCB in its capacity as such (to the extent not
reimbursed by the Borrower or any Subsidiary Borrower and without limiting the
obligation of the Borrower or any Subsidiary Borrower to do so), ratably
according to the respective amounts of their Aggregate Exposure in effect on the
date on which indemnification is sought (or, if indemnification is sought after
the date upon which the Revolving Credit Commitments shall have terminated and
the Loans shall have been paid in full, ratably according to their Aggregate
Exposure Percentage immediately prior to such date), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Loans) be imposed on, incurred by or asserted against the Administrative Agent
or JPMCB in any way relating to or arising out of this Agreement, any of the
other Loan Documents, or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by the Administrative Agent or JPMCB under or in connection with any
of the foregoing; provided that no Lender shall be liable for any payment of any
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements to the extent that they result from the
Administrative Agent's or JPMCB's gross negligence or willful misconduct. The

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                                                                              74

agreements in this subsection shall survive the payment of the Loans and all
other amounts payable hereunder.

            9.8 Administrative Agent in Its Individual Capacity. The
Administrative Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower or any Subsidiary
Borrower as though the Administrative Agent were not the Administrative Agent
hereunder. With respect to its Loans made or renewed by it and any Note issued
to it and with respect to any Letter of Credit issued or participated in by it,
the Administrative Agent shall have the same rights and powers under this
Agreement as any Lender and may exercise the same as though it were not the
Administrative Agent, and the terms "Lender" and "Lenders" shall include the
Administrative Agent in its individual capacity.

            9.9 Parallel Debt. (a) (i) Notwithstanding any other provision of
this Agreement, the Borrower and each Subsidiary Borrower hereby irrevocably and
unconditionally undertakes to pay to the Administrative Agent, as creditor in
its own right and not as representative of the other Lenders, sums equal to and
in the currency of each amount payable by the Borrower or such Subsidiary
Borrower to each of the Lenders under each of the Loan Documents as and when
that amount falls due for payment under the relevant Loan Document or would have
fallen due but for any discharge resulting from failure of another Lender to
take appropriate steps, in insolvency proceedings affecting the Borrower or such
Subsidiary Borrower, to preserve its entitlement to be paid that amount.

            (ii) The Administrative Agent shall have its own independent right
      to demand payment of the amounts payable by the Borrower and each
      Subsidiary Borrower under this subsection 9.9(a), irrespective of any
      discharge of the Borrower's or a Subsidiary Borrower's obligation to pay
      those amounts to the other Lenders resulting from failure by them to take
      appropriate steps, in insolvency proceedings affecting the Borrower or
      such Subsidiary Borrower, to preserve their entitlement to be paid those
      amounts.

            (iii) Any amount due and payable by the Borrower or a Subsidiary
      Borrower to the Administrative Agent under this subsection 9.9(a) shall be
      decreased to the extent that the other Lenders have received (and are able
      to retain) payment in full of the corresponding amount under the other
      provisions of the Loan Documents and any amount due and payable by the
      Borrower or a Subsidiary Borrower to the other Lenders under those
      provisions shall be decreased to the extent that the Administrative Agent
      has received (and is able to retain) payment in full of the corresponding
      amount under this subsection 9.9(a).

            (iv) The rights of the Lenders (other than the Administrative Agent)
      to receive payment of amounts payable by the Borrower and each Subsidiary
      Borrower under the Loan Documents are several and are separate and
      independent from, and without prejudice to, the rights of the
      Administrative Agent to receive payment under this subsection 9.9(a).

            (b) All amounts from time to time received or recovered by the
Administrative Agent under subsection 9.9(a) and/or in connection with the
realization and enforcement of all or any part of the Security Documents shall
be held by the Administrative Agent in trust to apply in accordance with the
terms of the Loan Documents.

            9.10 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement,
then the Required Lenders shall appoint from among the Lenders a successor agent
for the Lenders (with, as long as no Event of Default has occurred and is
continuing, the approval of the Borrower, which approval shall not be
unreasonably withheld). Upon the

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                                                                              75

acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon its appointment, and the former Administrative
Agent's rights, powers and duties as Administrative Agent shall be terminated,
without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement or any holders of
the Loans. Any appointed successor agent shall act as Administrative Agent only
through a branch in the United States in respect of Facility A, Facility B,
Facility C or Facility D. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Section 9 shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.

            9.11 The Syndication Agent and the Documentation Agents. The
Syndication Agent and the Documentation Agents do not assume any responsibility
or obligation under this Agreement or any of the other Loan Documents or any
duties as agents for the Lenders. The titles "Syndication Agent" and
"Documentation Agent" imply no fiduciary responsibility on the part of either of
the Syndication Agent or the Documentation Agents to any Person and the use of
such title does not impose on the Syndication Agent or the Documentation Agents
any duties or obligations under this Agreement or any of the other Loan
Documents.

            Section 10. MISCELLANEOUS

            10.1 Amendments and Waivers.

            (a) The Administrative Agent, the Borrower and the Subsidiary
Borrowers may, from time to time, with the written consent of the Required
Lenders, enter into written amendments, supplements or modifications for the
purpose of adding any provisions to this Agreement, the Guarantee and Collateral
Agreements or any other Loan Document or changing in any manner the rights of
the Lenders or the Borrower or any Subsidiary Borrower hereunder or thereunder,
and, with the consent of the Required Lenders, the Administrative Agent, on
behalf of the Lenders, may execute and deliver to the Borrower a written
instrument waiving, on such terms and conditions as the Administrative Agent may
specify in such instrument, any of the requirements of this Agreement or any
other Loan Document or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, supplement or
modification shall (i) extend the final maturity of any Loan or reduce the rate
or extend the time of payment of interest or fees thereon, or reduce the
principal amount thereof, or change the amount or terms of any Lender's
Revolving Credit Commitment (including the Optional Currencies applicable to
such Lender) or reduce any outstanding L/C Obligation, or amend, modify or waive
any provision of this subsection (except as expressly provided herein), or
reduce the percentage specified in the definition of Required Lenders, or
consent to the assignment or transfer by the Borrower or any Subsidiary Borrower
of any of its rights and obligations under this Agreement or any other Loan
Document (except to the extent otherwise provided therein), or release the
guarantee obligations of any significant Guarantor (including, without
limitation, the Borrower) or all or substantially all of the collateral under
the Guarantee and Collateral Agreements, in each case without the written
consent of each Lender affected thereby, (ii) amend, modify or waive any other
provision hereof if the effect is to subordinate one of the Revolving Facilities
in right of payment to any other of the Revolving Facilities without the consent
of each Lender adversely affected thereby, (iii) amend, modify or waive any
provision of Section 9 without the written consent of the then Administrative
Agent, or (iv) amend, modify or waive the provisions of any Letters of Credit or
Reimbursement Obligation, without the written consent of the Borrower or the
relevant Subsidiary Borrower and the Issuing Lender, or the provisions
applicable to the Swing Line Loans without the consent of each Swing Loan
Lender. Any such waiver

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                                                                              76

and any such amendment, supplement or modification shall be binding upon the
Borrower, the Subsidiary Borrowers, the Lenders and all future holders of the
Loans. In the case of any waiver, the Borrower and the Lenders shall be restored
to their former position and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon.

            (b) This Agreement may be amended without consent of the Lenders, so
long as no Default or Event of Default shall have occurred and be continuing, as
follows:

                  (i) This Agreement will be amended to add Subsidiaries as
            additional Subsidiary Borrowers (which in the case of a Foreign
            Subsidiary, may at such time be designated by the Borrower as a
            Regular Subsidiary Borrower) upon (x) execution and delivery by the
            Borrower, such additional Subsidiary Borrowers and the
            Administrative Agent, of a Joinder Agreement, substantially in the
            form of Exhibit K (a "Joinder Agreement"), providing for such
            Subsidiaries to become Subsidiary Borrowers, (y) agreement and
            acknowledgment by the Borrower and such additional Subsidiaries that
            the Guarantee and Collateral Agreement covers the obligations of
            such additional Subsidiaries and (z) delivery to the Administrative
            Agent of (1) corporate or other applicable resolutions, other
            corporate or other applicable documents, certificates and legal
            opinions in respect of such additional Subsidiary Borrowers
            substantially equivalent to comparable documents delivered on the
            Closing Date and (2) such other documents with respect thereto as
            the Administrative Agent shall reasonably request.

                  (ii) This Agreement will be amended to remove any Subsidiary
            as a Subsidiary Borrower upon execution and delivery by the Borrower
            to the Administrative Agent of a written notification to such effect
            and repayment in full of all Loans made to such Subsidiary Borrower,
            cash collateralization of all L/C Obligations in respect of Letters
            of Credit issued for the account of such Subsidiary Borrower and
            repayment in full of all other amounts owing by such Subsidiary
            Borrower under this Agreement and the other Loan Documents (it being
            agreed that any such repayment shall be in accordance with the other
            terms of this Agreement).

                  (iii) This Agreement may be amended as contemplated by
            subsection 2.23(b).

            (c) The Lenders (and each of their respective successors, assigns
and transferees) hereby authorize the Administrative Agent to release any
Collateral or the obligations of any Subsidiary under any Guarantee and
Collateral Agreement on their behalf in the event of a sale or other transfer of
such Collateral or such Subsidiary permitted under this Agreement.

            (d) Notwithstanding any other provision herein, the terms and
provisions of Annex B, C or D may be amended, supplemented, modified or waived
in any manner which could not reasonably be considered as adversely affecting in
any material respect the benefits hereof and the rights and remedies hereunder
of the other Lenders with the consent of the Borrower, the Administrative Agent
and the Sterling Lenders, the Australian Dollar Lenders or the Canadian Dollar
Lenders, as the case may be.

            10.2 Notices. Except as provided in subsections 2.2 and 2.3, all
notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing or by telecopy and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made when delivered
by hand, or when deposited in the mail, postage prepaid, or, in the case of
telecopy notice, when received, addressed as follows in the case of the Borrower
and each of the Subsidiary Borrowers and the

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                                                                              77

Administrative Agent, and as set forth in Schedule 10.2 in the case of the
Lenders, or to such address or other address as may be hereafter notified by the
respective parties hereto and any future holders of the Loans:

The Borrower and
each Subsidiary Borrower:             The Scotts Miracle-Gro Company
                                      14111 Scottslawn Road
                                      Marysville, Ohio 43041
                                      Attention: Treasurer
                                      Telephone: (937) 664-7221
                                      Telecopy: (937) 578-5754

                 With a copy sent to: Vorys, Sater, Seymour and Pease LLP
                                      52 East Gay Street
                                      Columbus, Ohio 43215
                                      Attention: John B. Weimer, Esq. and
                                      Stephen D. Browning, Esq.
                                      Telephone: (614) 464-8343
                                      Telecopy: (614) 719-5086

The Administrative Agent:             JPMorgan Chase Bank, N.A.
                                      270 Park Avenue
                                      New York, New York 10017
                                      Attention.: Randolph E. Cates
                                      Telephone: (212) 270-8997
                                      Telecopy: (212) 270-6041

                 With a copy sent to: J.P. Morgan Europe Limited
                                      125 London Wall
                                      London EC2Y 5AJ  England
                                      Attention: Maxine Graves/Stephen Gillies,
                                       Agency Department
                                      Telephone: +44 207 325 5424
                                      Telecopy: +44 207 777 2360

                                      JPMorgan Chase Bank, N.A.
                                      Loan and Agency Services
                                      1111 Fannin Street
                                      10th Floor
                                      Houston, Texas 77002
                                      Attention: Vaughan D. Nguyen
                                      Telephone: (713) 750-3550
                                      Telecopy: (713) 750-2932

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                                                                              78

The Australian Administrative Agent:  J.P. Morgan Australia Limited
                                      Level 32, Grosvenor Place
                                      225 George Street
                                      Sydney NSW 2000  Australia
                                      Attention: Jason M. Lock/Graham McKinley,
                                       Agency
                                      Telephone: +61-(2)-9220-3162/1907
                                      Telecopy: +61-(2)-9247-7698

                 With a copy sent to: JPMorgan Chase Bank, N.A., Mumbai Mahakali
                                      Caves Road, Chakala Junction
                                      Floor 3
                                      Mumbai 400093  India
                                      Attention: Preetam D. Dalvi, Asia Loan
                                       Operations
                                      Telephone: (91-22) 56953625
                                      Telecopy: (91-22) 56954361

The Canadian Administrative Agent:    J.P. Morgan Bank, N.A., Toronto Branch
                                      200 Bay Street
                                      Royal Bank Plaza, Floor 18
                                      Toronto M57 2J2  Canada
                                      Attention: Amanda Vidulich
                                      Telephone: (416) 981-9235
                                      Telecopy: (416) 982-9128

provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.

            10.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.

            10.4 Survival of Representations, Warranties and Indemnities. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement and the making of the Loans
hereunder. The obligation of the Borrower to make payments or to provide
indemnities as provided for in this Agreement shall survive payment in full of
the Loans, expiration of all Letters of Credit and termination of the Revolving
Credit Commitments and this Agreement.

            10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay
or reimburse the Administrative Agent for all its reasonable and documented
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement, the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements of counsel to the Administrative Agent, (b) to pay or
reimburse each Lender and the Administrative Agent for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the reasonable fees and disbursements
of counsel (including, without limitation, in-house counsel) to the

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                                                                              79

Administrative Agent and to the several Lenders, (c) to pay, indemnify and hold
each Lender and the Administrative Agent harmless from any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other similar non-income taxes (and, for the
avoidance of doubt, other than Excluded Taxes), if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents provided
that and notwithstanding any other provision of this Agreement to the contrary,
the Borrower and/or any Subsidiary Borrower shall only be liable to make any
payment to the Administrative Agent or any Lender regarding any UK stamp duty or
SDRT in respect of any transfer if such transfer is effected by an Assignment
and Acceptance which operates as a novation, i.e., if the original rights and
obligations as between the relevant Borrower and the transferor Lender are
extinguished and new rights and obligations between the relevant Borrower and
the transferee Lender are created, and (d) to pay, indemnify, and hold each
Lender and the Administrative Agent and their respective officers, directors,
trustees, employees, advisers and agents harmless from and against any and all
other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
(including the reasonable legal fees and expenses of each Lender and the
Administrative Agent with respect to third party enforcement actions arising out
of the transactions contemplated under this Agreement and the other Loan
Documents) with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan Documents and any such other
documents; provided, however, that with respect to subparagraphs (c) and (d),
the Borrower shall not be liable for the payment of any losses, costs,
penalties, judgments, suits, liabilities, damages, penalties, actions, expenses
or disbursements resulting solely from the gross negligence or willful
misconduct of any such Lender. The agreements in this subsection shall survive
repayment of the Loans, the Reimbursement Obligations and all other amounts
payable hereunder.

            10.6 Successors and Assigns; Participations and Assignments. (a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby
(including any affiliate of the Issuing Lender that issues any Letter of
Credit), except that (i) the Borrower may not assign or otherwise transfer any
of its rights or obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by the Borrower without such
consent shall be null and void) and (ii) no Lender may assign or otherwise
transfer its rights or obligations hereunder except in accordance with this
Section.

            (b) (i) Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more assignees (each, an "Assignee") all
or a portion of its rights and obligations under this Agreement (including all
or a portion of its Commitments and the Loans at the time owing to it) with the
prior written consent (such consent not to be unreasonably withheld or delayed)
of:

            (A) the Borrower, provided that no consent of the Borrower shall be
      required for an assignment to a Lender, an affiliate of a Lender, an
      Approved Fund (as defined below) or, if an Event of Default under Section
      8(a) or (f) has occurred and is continuing, any other Person;

            (B) the Administrative Agent, provided that no consent of the
      Administrative Agent shall be required for an assignment of any Revolving
      Commitment to an assignee that is a Lender with a Revolving Commitment
      immediately prior to giving effect to such assignment; and

            (C) the Issuing Lender.

            (ii) Assignments shall be subject to the following additional
conditions:

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                                                                              80

            (A) except in the case of an assignment to a Lender, an affiliate of
      a Lender or an Approved Fund or an assignment of the entire remaining
      amount of the assigning Lender's Revolving Credit Commitments or Loans
      under any Revolving Facility, the amount of the Revolving Credit
      Commitments or Loans of the assigning Lender subject to each such
      assignment (determined as of the date the Assignment and Acceptance with
      respect to such assignment is delivered to the Administrative Agent) shall
      not be less than $5,000,000, or the Non-Dollar Currency Equivalent
      thereof, unless each of the Borrower and the Administrative Agent
      otherwise consent, provided that (y) no such consent of the Borrower shall
      be required if an Event of Default under Section 8(a) or (f) has occurred
      and is continuing and (z) such amounts shall be aggregated in respect of
      each Lender and its affiliates or Approved Funds, if any; provided
      further, that no such assignment of less than all of an assigning Lender's
      Commitments under a Revolving Facility shall reduce the assigning Lender's
      Revolving Credit Commitment to less than $5,000,000 or the Non-Dollar
      Currency Equivalent thereof or such other amount as agreed upon by the
      Administrative Agent and the Borrower.

            (B) the parties to each assignment shall execute and deliver to the
      Administrative Agent an Assignment and Acceptance, together with a
      processing and recordation fee of $3,500;

            (C) the Assignee, if it shall not be a Lender, shall deliver to the
      Administrative Agent an administrative questionnaire; and

            (D) the Assignee shall not be entitled to the benefits of Section
      2.18 unless the Assignee complies with the applicable requirements set
      forth in Section 2.18(b).

            For the purposes of this Section 10.6, "Approved Fund" means any
Person (other than a natural person) that is engaged in making, purchasing,
holding or investing in bank loans and similar extensions of credit in the
ordinary course of its business and that is administered or managed by (a) a
Lender, (b) an affiliate of a Lender or (c) an entity or an affiliate of an
entity that administers or manages a Lender.

            (iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) below, from and after the effective date specified in each
Assignment and Acceptance the Assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.16, 2.17, 2.18 and 10.5). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 10.6
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.

            (iv) The Administrative Agent, acting for this purpose as an agent
of the Borrower, shall maintain at one of its offices a copy of each Assignment
and Acceptance delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Revolving Credit Commitments of, and
principal amount of the Loans and L/C Obligations owing to, each Lender pursuant
to the terms hereof from time to time (the "Register"). The entries in the
Register shall, in the absence of manifest error, be conclusive, and the
Borrower, the Administrative Agent, the Issuing Lender and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The

<PAGE>

                                                                              81

Register shall be available for inspection by the Borrower, the Issuing Lender
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.

            (v) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an Assignee, the Assignee's completed
administrative questionnaire (unless the Assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.

            (c) (i) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a "Participant") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of its Commitments and the
Loans owing to it); provided that (A) such Lender's obligations under this
Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrower, the Administrative Agent, the Issuing Lender and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, modification or
waiver that (1) requires the consent of each Lender directly affected thereby
pursuant to the proviso to the second sentence of Section 10.1 and (2) directly
affects such Participant. Subject to paragraph (c)(ii) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.14, 2.15, 2.16 and 2.18 to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to paragraph (b) of this
Section. To the extent permitted by law, each Participant also shall be entitled
to the benefits of Section 10.7(b) as though it were a Lender.

            (ii) A Participant shall not be entitled to receive any greater
payment under Section 2.17 or 2.18 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. Any Participant shall not be entitled to the
benefits of Section 2.18 unless such Participant complies with the applicable
requirements set forth in Section 2.18(b).

            (d) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or Assignee for such Lender as a party hereto.

            (e) The Borrower, upon receipt of written notice from the relevant
Lender, agrees to issue a promissory note (a "Note") to any Lender requiring
Notes to facilitate transactions of the type described in paragraph (d) above.

            10.7 Adjustments; Set-off.

            (a) Except to the extent that this Agreement expressly provides for
payments to be allocated to a particular Lender or to the Lenders under a
particular Revolving Facility, if any Lender (a

<PAGE>

                                                                              82

"Benefitted Lender") shall, at any time after the Loans and other amounts
payable hereunder shall immediately become due and payable pursuant to Section
8, receive any payment of all or part of the Obligations owing to it, or receive
any collateral in respect thereof (whether voluntarily or involuntarily, by
set-off, pursuant to events or proceedings of the nature referred to in Section
8(f), or otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of the Obligations
owing to such other Lender, such Benefitted Lender shall purchase for cash from
the other Lenders a participating interest in such portion of the Obligations
owing to each such other Lender, or shall provide such other Lenders with the
benefits of any such collateral, as shall be necessary to cause such Benefitted
Lender to share the excess payment or benefits of such collateral ratably with
each of the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefitted Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest.

            (b) In addition to any rights and remedies of the Lenders provided
by law, upon the occurrence of an Event of Default and acceleration of the
obligations owing in connection with this Agreement, each Lender shall have the
right, without prior notice to the Borrower or any Subsidiary Borrower, any such
notice being expressly waived by the Borrower to the extent permitted by
applicable law, to set off, appropriate and apply against any indebtedness,
whether matured or unmatured, of the Borrower or such Subsidiary Borrower to
such Lender, any amount held by or owing from such Lender to or for the credit
or the account of the Borrower or such Subsidiary Borrower at, or at any time
after, the happening of any of the above mentioned events, and the aforesaid
right of set-off may be exercised by such Lender against the Borrower or such
Subsidiary Borrower or against any trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, receiver, custodian or execution,
judgment or attachment creditor of the Borrower or such Subsidiary Borrower, or
against anyone else claiming through or against the Borrower or such Subsidiary
Borrower or such trustee in bankruptcy, debtor in possession, assignee for the
benefit of creditors, receiver, custodian or execution, judgment or attachment
creditor, notwithstanding the fact that such right of set-off shall not have
been exercised by such Lender prior to the making, filing or issuance of, or
service upon such Lender of, or of notice of, any such petition, assignment for
the benefit of creditors, appointment or application for the appointment of a
receiver, or issuance of execution, subpoena, order or warrant. Each Lender
agrees promptly to notify the Borrower or such Subsidiary Borrower after any
such set-off and application made by such Lender, provided that the failure to
give such notice shall not affect the validity of such set-off and application.
Any set-off pursuant to this paragraph may be effected notwithstanding that the
currencies of the offsetting indebtedness may be different, and any such set-off
shall be done by reference to the spot exchange rate for such currencies on the
date of such set-off. Each Lender agrees that it will promptly pay to the
Administrative Agent the amount of any set-off by it against the obligations
hereunder as contemplated above for distribution by the Administrative Agent in
accordance with the provisions of this Agreement.

            (c) In calculating the amount of Commitments, Loans or Obligations
for any purpose under this Agreement and the other Loan Documents, including,
without limitation, voting or distribution purposes, the amount of any thereof
which is denominated in a currency other than Dollars shall be converted into
Dollars at the Dollar Equivalent thereof on the date on which such calculation
is to be made.

            10.8 Enforceability; Usury. In no event shall any provision of this
Agreement or any other instrument evidencing or securing the indebtedness of the
Borrower or any Subsidiary Borrower hereunder ever obligate the Borrower or any
of the Subsidiary Borrowers to pay or allow any Lender to collect interest on
the Loans or any other indebtedness of the Borrower or any of the Subsidiary
Borrowers hereunder at a rate greater than the maximum non-usurious rate
permitted by applicable law (herein referred to as the "Highest Lawful Rate"),
or obligate the Borrower or any of the Subsidiary

<PAGE>

                                                                              83

Borrowers to pay any taxes, assessments, charges, insurance premiums or other
amounts to the extent that such payments, when added to the interest payable on
the Loans or any other indebtedness hereunder, would be held to constitute the
payment by the Borrower or such Subsidiary Borrower of interest at a rate
greater than the Highest Lawful Rate; and this provision shall control over any
provision to the contrary.

            Without limiting the generality of the foregoing, in the event the
maturity of all or any part of the principal amount of the indebtedness of the
Borrower or any of the Subsidiary Borrowers hereunder shall be accelerated for
any reason, then such principal amount so accelerated shall be credited with any
interest theretofore paid thereon in advance and remaining unearned at the time
of such acceleration. If, pursuant to the terms of this Agreement, any funds are
applied to the payment of any part of the principal amount of the indebtedness
of the Borrower or any of the Subsidiary Borrowers hereunder prior to the
maturity thereof, then (a) any interest which would otherwise thereafter accrue
on the principal amount so paid by such application shall be canceled, and (b)
the indebtedness of the Borrower or such Subsidiary Borrower hereunder remaining
unpaid after such application shall be credited with the amount of all interest,
if any, theretofore collected on the principal amount so paid by such
application and remaining unearned at the date of said application; and if the
funds so applied shall be sufficient to pay in full all the indebtedness of the
Borrower or such Subsidiary Borrower hereunder, then the Lenders shall refund to
the Borrower or such Subsidiary Borrower all interest theretofore paid thereon
in advance and remaining unearned at the time of such acceleration. Regardless
of any other provision in this Agreement, or in any of the written evidences of
the indebtedness of the Borrower or any of the Subsidiary Borrowers hereunder,
neither the Borrower nor any of the Subsidiary Borrowers shall be required to
pay any unearned interest on such indebtedness or any portion thereof, or be
required to pay interest thereon at a rate in excess of the Highest Lawful Rate
construed by courts having competent jurisdiction thereof.

            10.9 Judgment. The obligations of the Borrower or any Subsidiary
Borrower in respect of this Agreement and any Note due to any party hereto or
any holder of any bond shall, notwithstanding any judgment in a currency (the
"judgment currency") other than the currency in which the sum originally due to
such party or such holder is denominated (the "original currency"), be
discharged only to the extent that on the Business Day following receipt by such
party or such holder (as the case may be) of any sum adjudged to be so due in
the judgment currency such party or such holder (as the case may be) may in
accordance with normal banking procedures purchase the original currency with
the judgment currency; if the amount of the original currency so purchased is
less than the sum originally due to such party or such holder (as the case may
be) in the original currency, the Borrower or such Subsidiary Borrower, as the
case may be, agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify such party or such holder (as the case may be) against
such loss, and if the amount of the original currency so purchased exceeds the
sum originally due to any party to this Agreement or any holder of Notes (as the
case may be), such party or such holder (as the case may be), agrees to remit to
the Borrower or such Subsidiary Borrower, as the case may be, such excess. This
covenant shall survive the termination of this Agreement and payment of the
Loans and all other amounts payable hereunder.

            10.10 Counterparts. This Agreement may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
hereto shall be delivered to the Borrower and the Administrative Agent. Delivery
of an executed counterpart of a signature page of this Agreement by telecopy
shall be effective as delivery of a manually executed counterpart of this
Agreement.

            10.11 Governing Law; No Third Party Rights. This Agreement and the
rights and obligations of the parties under this Agreement shall be governed by,
and construed and interpreted in accordance with, the law of the State of New
York. This Agreement is solely for the benefit of the parties

<PAGE>

                                                                              84

hereto and their respective successors and assigns, and no other Person shall
have any right, benefit, priority or interest under, or because of the existence
of, this Agreement. If any amendment to this Agreement provides for (a) the
payment in full of all the Loans of a Lender outstanding under this Agreement,
together with any accrued interest thereon and any accrued fees payable to such
Lender under this Agreement, and (b) the termination of all Commitments of such
Lender under this Agreement, then (i) such amendment shall not require the
consent of such Lender (but shall in any event require the consent of each
continuing Lender with Loans or a Commitment under the same Revolving Facility),
and (ii) concurrently with the effectiveness of such amendment, such Lender
shall cease to be a party to this Agreement and shall cease to have any rights
under this Agreement (other than rights hereunder expressly stated to survive
the termination of this Agreement and any rights hereunder and under the other
Loan Documents with respect to any Hedge Agreement entered into by such Lender
or any of its affiliates prior to the date such amendment becomes effective).

            10.12 Headings. The headings of the Sections and subsections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute a part hereof.

            10.13 Submission To Jurisdiction; Waivers. Each of the Borrower and
the Subsidiary Borrowers hereby irrevocably and unconditionally:

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

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

            (c) agrees that service of process in any such action or proceeding
      may be effected by mailing a copy thereof by registered or certified mail
      (or any substantially similar form of mail), postage prepaid, to the
      Borrower and the Subsidiary Borrowers at their respective addresses set
      forth in subsection 10.2 or at such other address of which the
      Administrative Agent shall have been notified pursuant thereto;

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

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

            (f) Upon any Foreign Subsidiary becoming a Foreign Subsidiary
      Borrower, such Foreign Subsidiary Borrower hereby agrees to irrevocably
      and unconditionally appoint the Borrower or an agent for service of
      process located in The City of New York (the "New York Process
      Administrative Agent"), reasonably satisfactory to the Administrative
      Agent, as its agent to receive on behalf of such Foreign Subsidiary
      Borrower and its property service of copies of the summons and complaint
      and any other process which may be served in any action or proceeding in
      any such New York State or Federal court described in paragraph (a) of
      this subsection and agrees promptly to appoint a successor New York
      Process Administrative Agent in The City of

<PAGE>

                                                                              85

      New York (which successor New York Process Administrative Agent shall
      accept such appointment in a writing reasonably satisfactory to the
      Administrative Agent) prior to the termination for any reason of the
      appointment of the initial New York Process Administrative Agent. In any
      such action or proceeding in such New York State or Federal court, such
      service may be made on such Foreign Subsidiary Borrower by delivering a
      copy of such process to such Foreign Subsidiary Borrower in care of the
      New York Process Administrative Agent at the New York Process
      Administrative Agent's address and by depositing a copy of such process in
      the mails by certified or registered air mail, addressed to such Foreign
      Subsidiary Borrower at its address specified in subsection 10.2 (such
      service to be effective upon such receipt by the New York Process
      Administrative Agent and the depositing of such process in the mails as
      aforesaid). Each of the Foreign Subsidiary Borrowers hereby irrevocably
      and unconditionally authorizes and directs the New York Process
      Administrative Agent to accept such service on its behalf. As an alternate
      method of service, each of the Foreign Subsidiary Borrowers irrevocably
      and unconditionally consents to the service of any and all process in any
      such action or proceeding in such New York State or Federal court by
      mailing of copies of such process to such Foreign Subsidiary Borrower by
      certified or registered air mail at its address specified in subsection
      10.2. Each of the Foreign Subsidiary Borrowers agrees that, to the fullest
      extent permitted by applicable law, a final judgment in any such action or
      proceeding shall be conclusive and may be enforced in other jurisdictions
      by suit on the judgment or in any other manner provided by law.

            (g) To the extent that any Foreign Subsidiary Borrower has or
      hereafter may acquire any immunity (sovereign or otherwise) from any legal
      action, suit or proceeding, from jurisdiction of any court or from set-off
      or any legal process (whether service or notice, attachment prior to
      judgment, attachment in aid of execution of judgment, execution of
      judgment or otherwise) with respect to itself or any of its property, such
      Foreign Subsidiary Borrower hereby irrevocably waives and agrees not to
      plead or claim such immunity in respect of its obligations under this
      Agreement and any Note.

            10.14 Acknowledgments. Each of the Borrower and the Subsidiary
Borrowers hereby acknowledges that:

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

            (b) neither the Administrative Agent nor any Lender has any
      fiduciary relationship to the Borrower or any Subsidiary Borrower, and the
      relationship between Administrative Agent and Lenders, on one hand, and
      the Borrower or any Subsidiary Borrower, on the other hand, is solely that
      of debtor and creditor; and

            (c) no joint venture exists among the Lenders or among the Borrower
      or any Subsidiary Borrower and the Lenders.

            10.15 Confidentiality. Each of the Administrative Agent and each
Lender agrees to keep confidential all non-public information provided to it by
any Loan Party, the Administrative Agent or any Lender pursuant to or in
connection with this Agreement that is designated by the provider thereof as
confidential; provided that nothing herein shall prevent the Administrative
Agent or any Lender from disclosing any such information (a) to the
Administrative Agent, any other Lender or any affiliate thereof, (b) subject to
an agreement to comply with the provisions of this subsection 10.15, to any
actual or prospective transferee or any direct or indirect counterparty to any
Hedging Agreement (or any professional advisor to such counterparty), (c) to its
employees, directors, agents, attorneys, accountants and other professional
advisors or those of any of its affiliates (it being understood that the Persons
to

<PAGE>

                                                                              86

whom such disclosure is made will be informed of the confidential nature of such
information and instructed to keep such information confidential), (d) upon the
request or demand of any Governmental Authority, (e) in response to any order of
any court or other Governmental Authority or as may otherwise be required
pursuant to any Requirement of Law, (f) if requested or required to do so in
connection with any litigation or similar proceeding, (g) that has been publicly
disclosed, (h) to the National Association of Insurance Commissioners or any
similar organization or any nationally recognized rating agency that requires
access to information about a Lender's investment portfolio in connection with
ratings issued with respect to such Lender, or (i) in connection with the
exercise of any remedy hereunder or under any other Loan Document.

            10.16 WAIVERS OF JURY TRIAL. THE BORROWER, THE SUBSIDIARY BORROWERS,
THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

            10.17 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

            10.18 USA PATRIOT Act. Each Lender hereby notifies the Borrower that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the "Act"), it is required to obtain,
verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will
allow such Lender to identify the Borrower in accordance with the Act. The
Borrower shall promptly provide such information upon request by any Lender.

<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in New York, New York by their proper and duly
authorized officers as of the day and year first above written.

                                   THE SCOTTS MIRACLE-GRO COMPANY

                                   By:/s/ Christopher L. Nagel
                                      -----------------------------------------
                                    Name: Christopher L. Nagel
                                    Title: Executive Vice President and CFO

                                   HYPONEX CORPORATION

                                   By:/s/ Christopher L. Nagel
                                      -----------------------------------------
                                    Name: Christopher L. Nagel
                                    Title: Executive Vice President and CFO

                                   SCOTTS AUSTRALIA PTY. LTD.

                                   By: /s/ Edward R. Claggett
                                       ----------------------------------------
                                      Name:  Edward R. Claggett
                                      Title: Director

                                   SCOTTS CANADA LTD.

                                   By: /s/ Edward R. Claggett
                                       ----------------------------------------
                                    Name: Edward R. Claggett
                                    Title: Vice President & Assistant Secretary

                                   SCOTTS HOLDINGS LIMITED

                                   By: /s/ Edward R. Claggett
                                       ----------------------------------------
                                    Name: Edward R. Claggett
                                    Title: Director

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                   SCOTTS MANUFACTURING COMPANY

                                   By: /s/ Paul DeSantis
                                       ----------------------------------------
                                    Name: Paul DeSantis
                                    Title: Vice President and Treasurer

                                   EG Systems, Inc.

                                   By: /s/ Paul DeSantis
                                       ----------------------------------------
                                    Name: Paul DeSantis
                                    Title: Vice President and Treasurer

                                   SCOTTS TEMECULA OPERATIONS, LLC

                                   By: /s/ Paul DeSantis
                                       ----------------------------------------
                                    Name: Paul DeSantis
                                    Title: Vice President and Treasurer

                                   THE SCOTTS COMPANY (UK) LTD.

                                   By: /s/ Edward R. Claggett
                                       ----------------------------------------
                                    Name: Edward R. Claggett
                                    Title: Director

                                   SCOTTS TREASURY EEIG

                                   By: /s/ Paul DeSantis
                                       ----------------------------------------
                                    Name: Paul DeSantis
                                    Title: Authorized Signatory

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                   THE SCOTTS COMPANY LLC

                                   By: /s/ Paul DeSantis
                                       ----------------------------------------
                                    Name: Paul DeSantis
                                    Title: Vice President and Treasurer

                                   SMITH & HAWKEN, LTD.

                                   By: /s/ Christopher L. Nagel
                                       ----------------------------------------
                                    Name: Christopher L. Nagel
                                    Title: Executive Vice President and CFO

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                   JPMORGAN CHASE BANK, N.A.,
                                   as Administrative Agent and as a Lender

                                   By: /s/ Randolph Cates
                                      -----------------------------------------
                                    Name: Randolph Cates
                                    Title: Vice President

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                   JPMORGAN EUROPE LIMITED
                                   as Sterling Administrative Agent

                                   By: /s/ M. Graves
                                       ----------------------------------------
                                    Name: M. Graves
                                    Title: Associate

                                   By: /s/ Ching Loh
                                       ----------------------------------------
                                    Name: Ching Loh
                                    Title: Associate

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                   J.P. MORGAN AUSTRALIA LIMITED

                                   By: /s/ Randolph Cates
                                       ----------------------------------------
                                    Name: Randolph Cates
                                    Title: Vice President, JPMorgan Chase Bank,
                                           N.A.

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                   BANK OF AMERICA, N.A.,
                                   as Syndication Agent and as a Lender

                                   By: /s/ Sharon Burkes Horos
                                       ----------------------------------------
                                    Name: Sharon Burkes Horos
                                    Title: Vice President

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE
<PAGE>

                                            CITICORP NORTH AMERICA, INC.,
                                            as Syndication Agent and as a Lender

                                            By: /s/ William S. Timmons, III
                                                --------------------------------
                                                Name: William S. Timmons, III
                                                Title: Vice President

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                            BANK OF TOKYO-MITSUBISHI TRUST
                                            COMPANY,
                                            as Document Agent and as a Lender

                                            By: /s/ Spencer Hughes
                                                ---------------------------
                                                Name: Spencer Hughes
                                                Title: Vice President

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                          BNP PARIBAS,
                                          as Documentation Agent and as a Lender

                                          By: /s/ Curt Price
                                              ----------------------------
                                              Name: Curt Price
                                              Title: Managing Director

                                          By: /s/ Gaye Plunkett
                                              ----------------------------
                                              Name: Gaye Plunkett
                                              Title: Vice President

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                          COOPERATIEVE CENTRALE RAIFFEISEN-
                                          BOERENLEENBANK, B.A. "RABOBANK
                                          INTERNATIONAL" New York Branch,
                                          as Documentation Agent and as a Lender

                                          By: /s/ Eric Hurshman
                                              ---------------------------
                                              Name: Eric Hurshman
                                              Title: Managing Director

                                          By: /s/ Brett Delfino
                                              ---------------------------
                                              Name: Brett Delfino
                                              Title: Executive Director

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                          HARRIS N.A.,
                                          as Documentation Agent and as a Lender

                                          By: /s/ Jennifer Wendrow
                                              ---------------------------
                                              Name: Jennifer Wendrow
                                              Title: Vice President

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                          SUNTRUST BANK,
                                          as Documentation Agent and as a Lender

                                          By: /s/ Molly J. Drennan
                                              ---------------------------
                                              Name: Molly J. Drennan
                                              Title: Director

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                          1 ST FARM CREDIT SERVICES, PCA

                                          By: /s/ Dale A. Richardson
                                              ----------------------------------
                                              Name: Dale A. Richardson
                                              Title: VP-Capital Markets

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                          BANK OF MONTREAL

                                          By: /s/ Ben Ciallella
                                              ---------------------------
                                              Name: Ben Ciallella
                                              Title: Vice President

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                          CALYON NEW YORK BRANCH

                                          By: /s/ Joseph A. Philbin
                                              --------------------------
                                              Name: Joseph A. Philbin
                                              Title: Director

                                          By: /s/ Lee E. Greve
                                              --------------------------
                                              Name: Lee E. Greve
                                              Title: Managing Director

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                          CITIZENS BANK OF PENNSYLVANIA

                                          By: /s/ Dwayne R. Finney
                                              ----------------------------
                                              Name: Dwayne R. Finney
                                              Title: Senior Vice President

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                          COBANK, ACB,
                                          as Documentation Agent and as a Lender

                                          By: /s/ S. Richard Dill
                                              ------------------------
                                              Name: S. Richard Dill
                                              Title: Vice President

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                          COMERICA

                                          By: /s/ Scott M. Kowalski
                                              ----------------------------------

                                              Name: Scott M. Kowalski
                                              Title: Assistant Vice President

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                          FARM CREDIT BANK OF TEXAS

                                          By: /s/ Luis M. H. Requejo
                                              ----------------------------
                                              Name: Luis M. H. Requejo
                                              Title: Vice President

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                          FIFTH THIRD BANK, an Ohio banking
                                          Corporation

                                          By: /s/ Christopher D. Jones
                                              -------------------------------
                                              Name: Christopher D. Jones
                                              Title: Vice President

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                          FORTIS CAPITAL CORP.

                                          By: /s/ John W. Deegan
                                              -------------------------------
                                              Name: John W. Deegan
                                              Title: Senior Vice President

                                          By: /s/ Kathleen de Lathauwer
                                              -------------------------------
                                              Name: Kathleen de Lathauwer
                                              Title: Senior Vice President

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                          LASALLE BANK, N.A.

                                          By: /s/ Warren F. Weber
                                              ------------------------
                                              Name: Warren F. Weber
                                              Title: Senior Vice President

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                          MIZUHO CORPORATE BANK, LTD.

                                          By: /s/ Raymond Ventura
                                              ----------------------------
                                              Name: Raymond Ventura
                                              Title: Senior Vice President

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                          NATIONAL CITY BANK

                                          By: /s/ Thomas E. Redmond
                                              ----------------------------
                                              Name: Thomas E. Redmond
                                              Title: Senior Vice President

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                          PEOPLE'S BANK

                                          By: /s/ George F. Paik
                                              --------------------------
                                              Name: George F. Paik
                                              Title: Vice President

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                          SUMITOMO MITSUI BANKING CORPORATION

                                          By: /s/ Yoshihiro Hyakutome
                                              ------------------------------
                                              Name: Yoshihiro Hyakutome
                                              Title: Joint General Manager

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                          THE BANK OF NEW YORK

                                          By: /s/ Kenneth R. McDonnell
                                              -----------------------------
                                              Name: Kenneth R. McDonnell
                                              Title: Vice President

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                          SCOTIABANC INC.

                                          By: /s/ N. Bell
                                              ------------------------
                                              Name: N. Bell
                                              Title: Sr. Manager

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                          THE NORTHERN TRUST COMPANY

                                          By: /s/ David J. Sullivan
                                              -------------------------
                                              Name: David J. Sullivan
                                              Title: Vice President

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                          UFJ BANK LIMITED

                                          By: /s/ Russell Bohner
                                              ------------------------
                                              Name: Russell Bohner
                                              Title: Vice President

              SCOTTS CREDIT AGREEMENT (JULY 2005) - SIGNATURE PAGE

<PAGE>

                                          U.S BANK NATIONAL ASSOCIATION

                                          By: /s/ Robert H. Friend
                                              ---------------------------
                                              Name: Robert H. Friend
                                              Title: Vice President

<PAGE>

                                                                         Annex A

                                  PRICING GRID

<TABLE>
<CAPTION>
      Leverage          Applicable      Facility
       Ratio              Margin          Fee
-------------------   ---------------   --------
                       LIBOR    ABR
                      ------   ------
<S>                   <C>      <C>      <C>
> or = 3.25 to 1.00   1.200%   0.200%    0.300%

> or = 2.75 to 1.00   1.000%   0.000%    0.250%

> or = 2.25 to 1.00   0.750%   0.000%    0.250%

> or = 1.75 to 1.00   0.625%   0.000%    0.250%

> or = 1.25 to 1.00   0.550%   0.000%    0.200%

< 1.25 to 1.00        0.450%   0.000%    0.175%
</TABLE>

Changes in the Applicable Margin or in the Facility Fee Rate resulting from
changes in the Leverage Ratio shall become effective on the date (the
"Adjustment Date") on which financial statements are delivered to the Lenders
pursuant to subsection 6.1 (but in any event not later than the 45th day after
the end of each of the first three quarterly periods of each fiscal year of the
Borrower or the 90th day after the end of each fiscal year of the Borrower, as
the case may be) and shall remain in effect until the next change to be effected
pursuant to this paragraph. If any financial statements referred to above are
not delivered within the time periods specified above, then, until such
financial statements are delivered, the Leverage Ratio as at the end of the
fiscal period that would have been covered thereby shall for the purposes of
this definition be deemed to be greater than or equal to 3.25 to 1.00. In
addition, at all times while an Event of Default shall have occurred and be
continuing, the Leverage Ratio shall for the purposes of this definition be
deemed to be greater than 3.25 to 1.00. Each determination of the Leverage Ratio
pursuant to this pricing grid shall be made with respect to (or, in the case of
Average Total Indebtedness, as at the end of) the period of four consecutive
fiscal quarters of the Borrower ending at the end of the period covered by the
relevant financial statements.
<PAGE>

                                                                         ANNEX B

                             SECTION 1. DEFINITIONS

            Defined Terms. Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement, and the following terms shall have the following meanings:

            "Aggregate Sterling Revolving Extensions of Credit" shall mean an
      amount equal to the sum of (a) the aggregate principal amount of all
      Sterling Loans (including, without limitation, Sterling Swing Line Loans
      borrowed under Sterling Commitments) then outstanding and (b) the
      aggregate amount of all Sterling L/C Obligations then outstanding.

            "Aggregate Facility B Revolving Extensions of Credit" shall mean an
      amount equal to the sum of (a) the aggregate principal amount of all
      Facility B Loans (including, without limitation, Sterling Swing Line Loans
      borrowed under Facility B Commitments) then outstanding and (b) the
      aggregate amount of all Sterling L/C Obligations then outstanding in
      respect of Letters of Credit issued under the Facility B Commitments.

            "Applicable Margin for Sterling Borrowing" shall mean for each type
      of Sterling Loan, the rate per annum set forth under the relevant column
      heading in the pricing grid attached as Appendix I hereto.

            "Application" shall mean an application, in such form as the
      Sterling Issuing Lender may specify from time to time, requesting such
      Sterling Issuing Lender to open a Sterling Letter of Credit.

            "Available Sterling Commitment" shall mean, as to any Lender at any
      time, the amount equal to the excess, if any, of (a) such Lender's
      Sterling Commitment over (b) the sum of such Lender's (i) ratable portion
      of the Aggregate Facility B Revolving Extensions of Credit and (ii)
      ratable portion of the Aggregate Sterling Revolving Extensions of Credit.
      The Available Sterling Commitment may be calculated as being negative at
      any time.

            "Borrowing Date (U.K.)" shall mean any Business Day (U.K.) specified
      in a notice as a date on which the Sterling Subsidiary Borrower requests
      the relevant Sterling Lenders to make Sterling Loans under this Annex B to
      the Credit Agreement.

            "Business Day (U.K.)" shall mean a day on which banks are open for
      business in London but excludes Saturday, Sunday and any other day which
      is a legal holiday in London.

            "Eligible U.K. Bank" shall mean a Person that is both (i) a bank as
      defined in Section 840A of the United Kingdom Income and Corporation Taxes
      Act 1988, and (ii) a Person within the charge to United Kingdom
      corporation tax (i.e., a United Kingdom resident company or a non-resident
      company which is carrying on a trade in the United Kingdom through a
      permanent establishment in the United Kingdom to which the beneficial
      interest in interest accrued under Loans made to the Borrower or a
      Subsidiary Borrower is attributable and which is not entitled to exemption
      from tax in respect of that interest).

            "Facility Fee Rate" shall mean the rate per annum set forth under
      the relevant column heading in the pricing grid attached as Appendix I
      hereto.

<PAGE>
                                                                               2

            "Interest Payment Date" shall mean (a) as to any Reference Rate
      Loan, the last day of each March, June, September and December, commencing
      on the first of such days to occur after such Reference Rate Loan is made
      or any LIBOR Loan is converted to such Reference Rate Loan, (b) as to any
      LIBOR Loan in respect of which the relevant Sterling Subsidiary Borrower
      has selected an Interest Period of one month, two months or three months,
      the last day of such Interest Period and (c) as to any LIBOR Loan in
      respect of which the relevant Sterling Subsidiary Borrower has selected a
      longer Interest Period than the periods described in preceding clause (b),
      the day three months after the commencement of such Interest Period and
      the last day of such Interest Period.

            "Interest Period" shall mean with respect to any LIBOR Loan, (i)
      initially, the period commencing on, as the case may be, the borrowing or
      conversion date with respect to a LIBOR Loan, and ending one, two, three
      or six months thereafter, as selected by the relevant Sterling Subsidiary
      Borrower in its irrevocable written notice of borrowing as provided in
      subsection 2.2 or its written irrevocable notice of conversion as provided
      in subsection 2.11 and (ii) thereafter, each period commencing on the last
      day of the next preceding Interest Period applicable to such LIBOR Loan
      and ending one, two, three or six months thereafter, as selected by the
      relevant Sterling Subsidiary Borrower by irrevocable written notice to the
      Sterling Administrative Agent not less than three Business Days (U.K.)
      prior to the last day of then current Interest Period with respect to such
      Sterling Loan; provided that all of the foregoing provisions relating to
      Interest Periods are subject to the following:

                  1. if any Interest Period pertaining to a LIBOR Loan would
            otherwise end on a day which is not a Business Day (U.K.), that
            Interest Period shall be extended to the next succeeding Business
            Day (U.K.) unless the result of such extension would be to carry
            such Interest Period into another calendar month in which event such
            Interest Period shall end on the next preceding Business Day (U.K.);

                  2. if the relevant Sterling Subsidiary Borrower shall fail to
            give notice as provided in clauses (i) and (ii) in this definition,
            the relevant Sterling Subsidiary Borrower shall be deemed to have
            requested conversion of the affected LIBOR Loan to a Reference Rate
            Loan on the last day of then current Interest Period with respect
            thereto;

                  3. any Interest Period that would otherwise extend beyond the
            Revolving Credit Termination Date shall end on the Revolving Credit
            Termination Date; and

                  4. any Interest Period pertaining to a LIBOR Loan that begins
            on the last Business Day (U.K.) of a calendar month (or on day a for
            which there is no numerically corresponding day in the calendar
            month at the end of such Interest Period) shall end on the last
            Business Day (U.K.) of a calendar month.

            "LIBOR Base Rate" shall mean, with respect to any LIBOR Loan for any
      Interest Period therefor:

                  1. the rate per annum (rounded to the nearest 1/16 of 1%)
            appearing on the Screen for such currency as the London Interbank
            Offered Rate for deposits in such currency at approximately 11:00
            a.m. London time (or as soon thereafter as practicable) on (in the
            case of any LIBOR Loan in Sterling) or two Business Days prior to
            (in the case of any LIBOR Loan in euros) the first day of such
            Interest Period as the London Interbank Offered Rate for such
            currency having a term comparable to such Interest

<PAGE>
                                                                               3

            Period and in an amount equal to the Sterling or euro equivalent, as
            the case may be, of U.S.$1,000,000; or

                  2. if such rate does not appear on the Screen (or, if the
            Screen shall cease to be publicly available or if the information
            contained on the Screen, in the Sterling Administrative Agent's
            reasonable judgment, shall cease accurately to reflect such LIBOR
            Base Rate, as reported by any publicly available source of similar
            market data selected by the Sterling Administrative Agent that, in
            the Sterling Administrative Agent's reasonable judgment, accurately
            reflects such LIBOR Base Rate), the LIBOR Base Rate shall mean, with
            respect to any LIBOR Loan for any Interest Period, the arithmetic
            mean, as determined by the Sterling Administrative Agent, of the
            rate per annum (rounded to the nearest 1/16 of 1%) quoted by each
            relevant Reference Bank at approximately 11:00 a.m. London time (or
            as soon thereafter as practicable) on the first day of the Interest
            Period for such Loan for the offering by such Reference Bank to
            leading banks in the London interbank market of deposits in such
            currency having a term comparable to such Interest Period and in an
            amount comparable to the principal amount of the LIBOR Loan to be
            made by such Reference Bank (or its applicable Lending Installation,
            as the case may be) for such Interest Period.

            "LIBOR Loans" shall mean the Sterling Loans hereunder at such time
      as they are made and/or being maintained at a rate of interest based upon
      the applicable LIBOR Rate.

            "LIBOR Rate" shall mean with respect to a LIBOR Loan for each day
      during each Interest Period pertaining thereto, the sum of the LIBOR Base
      Rate plus, to the extent generally applicable to loans to the relevant
      Borrower or Subsidiary Borrower, the Financial Services Authority charges
      for such day.

            "Post-Default Rate" shall mean a rate equal to the sum or 2% plus
      the rate of interest otherwise applicable to such Sterling Loan.

            "Reference Banks": JPMorgan Chase Bank, N.A., Citicorp North
      America, Inc. and Bank of America, N.A. or such other Sterling Lenders, as
      determined by the Sterling Administrative Agent, from time to time.

            "Reference Rate": the rates of interest publicly announced by the
      Reference Banks from time to time as their respective reference or prime
      rates, which such rates may not be the lowest rate of interest charged by
      such Reference Banks.

            "Reference Rate Loans": Sterling Loans hereunder at such time as
      they are made or being maintained at a rate of interest based upon the
      Reference Rate.

            "Requirement of Law" shall mean, as to any Person, the Certificate
      of Incorporation or Articles of Incorporation, as the case may be, and
      Code of Regulations and/or By-Laws or other organizational or governing
      documents of such Person, and any law, treaty, rule or regulation, or
      determination of an arbitrator or a court or other Governmental Authority,
      in each case applicable to or binding upon such Person or any of its
      property or to which such Person or any of its property is subject.

            "Screen" shall mean the Telerate Page on which appears the LIBOR
      Base Rate for deposits in Sterling or euros, as applicable; provided that,
      if there is no such Telerate Page, the relevant Bloomberg Financial
      Markets Service page will be substituted.

<PAGE>
                                                                               4

            "Sterling" or "(pound)" shall mean pounds sterling in the lawful
      currency of the United Kingdom.

            "Sterling Administrative Agent" shall mean J.P. Morgan Europe
      Limited, together with its affiliates, as the agent for the Sterling
      Lenders under the Credit Agreement.

            "Sterling Administrative Office" shall mean the Sterling
      Administrative Agent's office located at 125 London Wall, London England
      EC2 5AJ, telecopy: +44-207-777-2360, attention: Maxine Graves/Stephen
      Gillies, Agency Department, or such other office in the United Kingdom as
      may be designated as such by the Sterling Administrative Agent by written
      notice to the Sterling Subsidiary Borrowers and the Sterling Lenders.

            "Sterling Commitment" shall mean, as to any Sterling Lender, the
      obligation of such Sterling Lender to make Sterling Loans and participate
      in Sterling Swing Line Loans or Sterling Letters of Credit hereunder in an
      aggregate principal or face amount at any one time outstanding up to but
      not exceeding the amount set forth opposite such Sterling Lender's name on
      Schedule 1 to the Credit Agreement under the caption "Sterling Commitment"
      or in the Assignment and Acceptance pursuant to which such Sterling Lender
      became party to the Credit Agreement, as the same may be changed from time
      to time pursuant to the terms hereof. The original aggregate principal
      amount of the Sterling Commitments is the Sterling or euro equivalent of
      U.S.$300,000,000.

            "Sterling Commitment Percentage" shall mean as to any Sterling
      Lender at any time, the percentage of the aggregate Sterling Commitments
      then constituted by such Sterling Lender's Sterling Commitment.

            "Sterling Facility" shall mean the Sterling Commitments together
      with the Aggregate Sterling Revolving Extensions of Credit.

            "Sterling Issuing Lender" shall mean J.P. Morgan Europe Limited.

            "Sterling L/C Commitment" shall mean the amount equal to the
      Sterling or euro equivalent of U.S.$65,000,000.

            "Sterling L/C Obligations" shall mean, at any time, an amount equal
      to the sum of (a) the aggregate then undrawn and unexpired amount of then
      outstanding Sterling Letters of Credit and (b) the aggregate amount of
      drawings under Sterling Letters of Credit which have not then been
      reimbursed pursuant to Section 3.

            "Sterling L/C Participants" shall mean the collective reference to
      all the Sterling Lenders other than the Issuing Lender.

            "Sterling Lender" shall mean each Lender that has a Sterling
      Commitment or that holds Sterling Loans; collectively, the "Sterling
      Lenders". Each Sterling Lender on the date hereof represents that it is an
      Eligible U.K. Bank.

            "Sterling Letter of Credit" shall mean any Sterling Standby L/C or
      Sterling Trade L/C, as each term is defined in subsection 3.1.

            "Sterling Loan" shall mean any Loan made under the Sterling
      Commitments pursuant to subsection 2.1; collectively, the "Sterling
      Loans".

<PAGE>
                                                                               5

            "Sterling Lending Office" shall mean for each Sterling Lender, the
      lending office for such Sterling Lender (or of an affiliate of such
      Sterling Lender) designated for each type of Sterling Loan in the
      Administrative Questionnaire of such Sterling Lender or such other lending
      office of such Sterling Lender (or of an affiliate of such Sterling
      Lender) as such Sterling Lender may from time to time specify to the
      Sterling Administrative Agent and the Sterling Subsidiary Borrowers as the
      office by which its Sterling Loans of such type are to be made and
      maintained.

            "Sterling Swing Line Commitment" shall mean the obligation of the
      Sterling Swing Line Lender, at any date, to make a Sterling Swing Line
      Loan pursuant to subsection 2.3(a) in the amount referred to therein.

            "Sterling Swing Line Lender" shall mean J.P. Morgan Europe Limited.

            "Sterling Swing Line Loan" shall mean any Sterling Swing Line Loan
      made pursuant to subsection 2.3 hereof.

            "Telerate Page" shall mean the "British Bankers Assoc. Interest
      Settlement Rates Page" display designated on the Moneyline Telerate for
      the purpose of displaying the rates at which Sterling or euro deposits, as
      applicable, are offered by leading banks in the London interbank deposit
      market.

                      SECTION 2. THE STERLING COMMITMENTS

            2.1. The Sterling Commitments. Subject to the terms and conditions
hereof, each Sterling Lender severally (but not jointly) agrees to make Sterling
Loans in Sterling or euros to each Sterling Subsidiary Borrower from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount not to exceed the Available Sterling Commitment of such Sterling Lender
in accordance with the terms hereof (which for this purpose shall be computed as
though the amount in subclause (b)(i) in the definition thereof is U.S.$0);
provided that, after giving effect to the making of such Sterling Loans, the
Aggregate Sterling Revolving Extensions of Credit will not exceed the Sterling
Commitment. During the Revolving Credit Commitment Period, the Sterling
Subsidiary Borrowers may use the Sterling Commitments by borrowing, repaying the
Sterling Loans in whole or in part, and reborrowing, all in accordance with the
terms and conditions hereof. Each Sterling Lender agrees that each of its
Lending Installations listed on Schedule 1 and subsequently agreed from time to
time in the United Kingdom shall be on the date hereof or the date of such
agreement an Eligible U.K. Bank.

            2.2. Procedure for Sterling Loan Borrowing. (a) The Sterling
Subsidiary Borrowers may borrow under the Sterling Facility during the Revolving
Credit Commitment Period on any Business Day (U.K.); provided that the relevant
Sterling Subsidiary Borrower shall give the Sterling Administrative Agent
irrevocable notice (1) on the requested Borrowing Date (U.K.), in the case of
Reference Rate Loans (which notice must be received by the Sterling
Administrative Agent prior to 11:00 A.M., London time) and (2) two Business Days
(U.K.) prior to the requested Borrowing Date (U.K.), in the case of LIBOR Loans
in Sterling (which notice must be received by the Sterling Administrative Agent
prior to 11:00 A.M., London time), and (3) three Business Days (U.K.) prior to
the requested Borrowing Date (U.K.), in the case of LIBOR Loans in euros (which
notice must be received by the Sterling Administrative Agent prior to 11:00
A.M., London time), specifying (i) the identity of the Sterling Subsidiary
Borrower borrowing and the amount and currency to be borrowed, (ii) the
requested Borrowing Date (U.K.), (iii) whether the borrowing is to be a
Reference Rate Loan (in the case of Sterling Loans in Sterling) or a LIBOR Loan
or a combination thereof, and (iv) if the borrowing is to be entirely or partly
a LIBOR Loan, the amount to be a LIBOR Loan and the length of the Interest
Period for such LIBOR Loan. Each Reference Rate borrowing by any Sterling
Subsidiary Borrower pursuant to the

<PAGE>
                                                                               6

Sterling Commitments shall be in an aggregate principal amount equal to the
Sterling equivalent of U.S.$1,000,000 or a whole multiple of the Sterling
equivalent of U.S.$500,000 in excess thereof. Each LIBOR borrowing by any
Sterling Subsidiary Borrower pursuant to the Sterling Commitments shall be in an
aggregate principal amount equal to the Sterling or euro equivalent, as the case
may be, of U.S.$1,000,000 or a whole multiple of the Sterling or euro
equivalent, as the case may be, of U.S.$500,000 in excess thereof.

            (b) Upon receipt of any notice from a Sterling Subsidiary Borrower
pursuant to this subsection 2.2, the Sterling Administrative Agent shall
promptly notify each Sterling Lender thereof. Each such Sterling Lender will
make the amount of its ratable share (subject to subsection 2.1) of each
borrowing available to the Sterling Administrative Agent for the account of the
such Sterling Subsidiary Borrower at the Sterling Administrative Office prior to
2:00 P.M., London time, on the Borrowing Date (U.K.) requested by the such
Sterling Subsidiary Borrower in funds immediately available to the Sterling
Administrative Agent. Such borrowing will then be made available to such
Sterling Subsidiary Borrower by the Sterling Administrative Agent crediting the
account of such Sterling Subsidiary Borrower on the books of such office with
the aggregate of the amounts made available to the Sterling Administrative Agent
by such Sterling Lenders.

            2.3. Swing Line Commitments. (a) Subject to the terms and conditions
hereof, from time to time prior to the Revolving Credit Termination Date and to
the Sterling Subsidiary Borrowers (i) the Sterling Swing Line Lender agrees to
make Sterling Swing Line Loans in Sterling in an aggregate principal amount not
to exceed the Sterling equivalent of U.S.$20,000,000 at any one time outstanding
(each of the foregoing individually, a "Sterling Swing Line Loan"; collectively
the "Sterling Swing Line Loans"); provided that, after giving effect to the
making of such Sterling Swing Line Loans, the aggregate principal amount of
Swing Line Loans under any Revolving Facility at any one time outstanding shall
not exceed U.S.$100,000,000 and the Aggregate Sterling Revolving Extensions of
Credit shall not exceed the Sterling Commitments. All Sterling Swing Line Loans
shall be made as Reference Rate Loans. The relevant Sterling Subsidiary
Borrowers shall give the Sterling Administrative Agent irrevocable notice (which
notice must be received by the Sterling Administrative Agent at or prior to 1:00
P.M., London time, on the requested Borrowing Date (U.K.)), specifying the
amount of each requested Sterling Swing Line Loan, which shall be greater than
or equal to a minimum amount to be agreed upon by such Sterling Subsidiary
Borrowers and the relevant Sterling Swing Line Lender. Upon such notice, the
Sterling Administrative Agent shall promptly notify the Sterling Swing Line
Lender thereof. The Sterling Swing Line Lender shall make the amount of each
borrowing available to the relevant Sterling Subsidiary Borrowers in the manner
directed by the Sterling Administrative Agent on the requested Borrowing Date.

            (b) The Sterling Swing Line Lender in its sole and absolute
discretion, may, on behalf of the relevant Sterling Subsidiary Borrower (which
hereby irrevocably directs the Sterling Swing Line Lender to act on its behalf),
request each Sterling Lender, including the Sterling Swing Line Lender, with
respect to all other Sterling Swing Line Loans, to make a Sterling Loan, in an
amount equal to such Sterling Lender's Revolving Percentage under the Sterling
Facility of the amount of the Sterling Swing Line Loans (the "Refunded Sterling
Swing Line Loans") outstanding on the date such notice is given. Unless any of
the events described in paragraph (f) of Section 8 of the Credit Agreement shall
have occurred (in which event the procedures of paragraph (c) of this subsection
2.3 shall apply), each Sterling Lender shall make the proceeds of its Sterling
Loan available to the Sterling Administrative Agent for the account of the
Sterling Swing Line Lender, at the office of the Sterling Administrative Agent
prior to 12:00 Noon (London time) in funds immediately available on the Business
Day (U.K.) next succeeding the date such notice is given. The proceeds of such
Sterling Loans shall be immediately applied to repay the Refunded Sterling Swing
Line Loans.

<PAGE>
                                                                               7

            (c) If, prior to the making of a Sterling Swing Line Loan pursuant
to paragraph (b) of this subsection 2.3, one of the events described in
paragraph (f) of Section 8 of the Credit Agreement shall have occurred, each
Sterling Lender hereby agrees to and will, on the date such Sterling Swing Line
Loan was to have been made, purchase an undivided participating interest in each
Refunded Sterling Swing Line Loan in an amount equal to its Revolving Percentage
under the Sterling Facility of such Refunded Sterling Swing Line Loan. Such
Revolving Credit Lender will immediately transfer to the Sterling Administrative
Agent for the account of the Sterling Swing Line Lender, in immediately
available funds of the amount of its participations and, upon its receipt of its
ratable share thereof, the Sterling Swing Line Lender will deliver to such
Sterling Lender a Swing Line Loan Participation Certificate dated the date of
receipt of such funds and in such amount.

            (d) Whenever, at any time after the Sterling Swing Line Lender has
received from any Sterling Lender such Sterling Lender's participating interest
in a Refunded Sterling Swing Line Loan and the Sterling Swing Line Lender
receives any payment on account thereof, the Sterling Swing Line Lender will
distribute to such Sterling Lender through the Sterling Administrative Agent its
participating interest; provided, however, that in the event that such payment
received by the Sterling Swing Line Lender is required to be returned, such
Sterling Lender will return to the Sterling Swing Line Lender through the
Sterling Administrative Agent any portion thereof previously distributed by the
Sterling Swing Line Lender to it.

            2.4. Participation. Each Sterling Lender's obligation to purchase
participating interests pursuant to paragraph (c) of this subsection 2.3 shall
be absolute and unconditional and shall not be affected by any circumstances,
including, without limitation, (a) any set-off, counterclaim, recoupment,
defense or other right which such Sterling Lender may have against the Sterling
Swing Line Lender, any Sterling Subsidiary Borrower or any other Person for any
reason whatsoever; (b) the occurrence or continuance of an Event of Default; (c)
any adverse change in the condition (financial or otherwise) of the Borrower or
any Sterling Subsidiary Borrower; (d) any breach of the Credit Agreement by the
Borrower, any Subsidiary Borrower or any other Revolving Credit Lender; or (e)
any other circumstance, happening or event whatsoever, whether or not similar to
any of the foregoing. Notwithstanding the foregoing, no Sterling Lender shall
have any obligation to purchase participating interests pursuant to paragraph
(c) of this subsection 2.3 or to make any Refunded Sterling Swing Line Loans in
respect of any Sterling Swing Line Loan which was made at any time following
receipt by the Sterling Administrative Agent of a notice from any Sterling
Lender specifying that (x) a Default or Event of Default has occurred and is
continuing and (y) explicitly stating that such Sterling Lender will not
purchase such participating interests or make Refunded Sterling Swing Line Loans
with respect to Sterling Swing Line Loans made after the date of receipt of such
notice.

            2.5. Repayment of Sterling Loans; Evidence of Debt. (a) Each
Sterling Subsidiary Borrower hereby unconditionally promises to pay to the
Sterling Administrative Agent for the account of each Sterling Lender (i) then
unpaid principal amount of each Sterling Loan of such Sterling Lender on the
Revolving Credit Termination Date (or such earlier date on which the Loans
become due and payable pursuant to Section 8 of the Credit Agreement) and (ii)
then unpaid principal amount of the Sterling Swing Line Loans of the Sterling
Swing Line Lender on the Revolving Credit Termination Date (or such earlier date
on which the Sterling Swing Line Loans become due and payable pursuant to
Section 8 of the Credit Agreement). Each Sterling Subsidiary Borrower hereby
unconditionally promises to pay to the Sterling Administrative Agent for the
account of such Lender (i) then unpaid principal amount of each Loan to such
Subsidiary Borrower on the Revolving Credit Termination Date (or such earlier
date on which the Revolving Credit Loans become due and payable pursuant to
Section 8 of the Credit Agreement) and (ii) then unpaid principal amount of the
Sterling Swing Line Loans to such Subsidiary Borrower of the Sterling Swing Line
Lender on the Revolving Credit Termination Date (or such earlier date on which
the Sterling Swing Line Loans became due and payable pursuant to Section 8 of
the Credit

<PAGE>
                                                                               8

Agreement). Each Sterling Subsidiary Borrower hereby further agrees to pay
interest on the unpaid principal amount of the Sterling Loans from time to time
outstanding to such Sterling Subsidiary Borrower from the date hereof until
payment in full thereof at the rates per annum, and on the dates, set forth in
subsection 2.12.

            (a) Each Sterling Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Sterling
Subsidiary Borrowers to such Sterling Lender resulting from each Sterling Loan
of such Sterling Lender from time to time, including the amounts of principal
and interest payable and paid to such Sterling Lender from time to time under
the Credit Agreement.

            (b) The Sterling Administrative Agent shall maintain a register (the
"Sterling Register") in respect of the Sterling Facility in a manner similar to
the Register described in Section 10.6(b)(iv) of the Credit Agreement, and a
subaccount therein for each Sterling Lender, in which shall be recorded (i) the
amount of each Sterling Loan made hereunder and the type thereof, (ii) the
amount of any principal or interest due and payable or to become due and payable
from any Sterling Subsidiary Borrower to each Sterling Lender hereunder and
(iii) both the amount of any sum received by the Sterling Administrative Agent
hereunder from any Sterling Subsidiary Borrower and each Sterling Lender's share
thereof.

            (c) The entries made in the Sterling Register and the accounts of
each Sterling Lender maintained pursuant to subsection 2.5(b) shall, to the
extent permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of each Sterling Subsidiary Borrower therein
recorded; provided, however, that the failure of any Sterling Lender or the
Sterling Administrative Agent to maintain the Sterling Register or any such
account, or any error therein, shall not in any manner affect the obligation of
any Sterling Subsidiary Borrower to repay (with applicable interest) the
Sterling Loans made to such Sterling Subsidiary Borrower by such Sterling Lender
in accordance with the terms of the Credit Agreement.

            2.6. Facility Fee. Each Sterling Subsidiary Borrower agrees to pay
to the Sterling Administrative Agent, for the account of each Sterling Lender, a
facility fee for the period from and including the Closing Date to the Revolving
Credit Termination Date, calculated as an amount equal to the product of (a) the
Facility Fee Rate and (b) the average daily amount of the Sterling Commitment of
such Lender (regardless of usage) during the period for which such facility fee
is calculated, payable quarterly in arrears on the last day of each March, June,
September and December and on the Revolving Credit Termination Date.

            2.7. Termination or Reduction of the Sterling Commitments. (a)
Optional. The Sterling Subsidiary Borrowers shall have the right, upon not less
than five Business Days' (U.K.) written notice to the Sterling Administrative
Agent, to terminate the Sterling Commitments or, from time to time, reduce the
amount of the Sterling Commitments, provided that (i) any such reduction shall
be accompanied by prepayment of the Sterling Loans by the relevant Sterling
Subsidiary Borrower, together with accrued interest on the amount so prepaid to
the date of such prepayment, to the extent, if any, the Available Sterling
Commitments would be negative and (ii) any such termination of the Sterling
Commitments shall be accompanied by (A) prepayment in full of the Sterling Loans
then outstanding hereunder, (B) cash collateralization of all Sterling L/C
Obligations then outstanding in accordance with the provisions of subsection
2.10, and (C) payment of accrued interest thereon to the date of such prepayment
and the payment of any unpaid fees then accrued hereunder (including, without
limitation, in respect of any Sterling Letters of Credit). Upon receipt of such
notice, the Sterling Administrative Agent shall promptly notify each Lender
thereof. Any such reduction shall be in an amount equal to the Sterling or euro
equivalent, as the case may be, of U.S.$1,000,000 or a whole multiple of the
Sterling or euro equivalent,

<PAGE>
                                                                               9

as the case may be, of U.S.$500,000 in excess thereof and shall reduce
permanently the amount of the Sterling Commitments then in effect.

            (b) Mandatory. The Revolving Credit Commitments shall automatically
terminate on the Revolving Credit Termination Date and all Sterling Loans shall
be repaid and to the extent any Sterling Letter of Credit remains outstanding
after the Revolving Credit Termination Date, the relevant Sterling Subsidiary
Borrower shall cash collateralize such Sterling L/C Obligations (and the fees
thereon) in accordance with the provisions of subsection 2.10. The Revolving
Credit Commitments shall also be reduced in accordance with subsection 2.9.

            2.8. Optional Prepayments. Any Sterling Subsidiary Borrower may,
at any time and from time to time, prepay the Sterling Loans made to it
hereunder, in each case in whole or in part, without premium or penalty, upon at
least one Business Day's (U.K.) irrevocable notice to the Sterling
Administrative Agent, specifying the date and amount of prepayment. If such
notice is given, the relevant Sterling Subsidiary Borrower shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to such
date on the amount prepaid. Partial prepayments shall be in an aggregate
principal amount of the Sterling or euro equivalent, as the case may be, of
U.S.$1,000,000 or a whole multiple of the Sterling or euro equivalent, as the
case may be, of U.S.$500,000 in excess thereof.

            2.9. Mandatory Prepayments. The Sterling Subsidiary Borrowers,
without notice or demand, shall immediately prepay the Sterling Loans, to the
extent, if any, that the Available Sterling Commitments are negative, together
with accrued interest to the date of such prepayment on the amount so prepaid;
provided that if such prepayment is required solely as a result of a change in
the aggregate Dollar Equivalent of the Sterling Loans, no prepayment shall be
made unless such prepayment is required pursuant to subsection 2.21.

            2.10. Cash Collateralization of Sterling Letters of Credit. To the
extent that at any time and from time to time, the Sterling L/C Obligations
exceed the amount of the Sterling L/C Commitments or the Sterling L/C
Obligations exceed the Sterling Commitments (whether pursuant to subsections
2.7, 2.8, 2.9 or otherwise), the Sterling Subsidiary Borrowers shall cash
collateralize (in a manner reasonably satisfactory to the Sterling
Administrative Agent) such portion of the Sterling L/C Obligations (and the fees
thereon through the stated expiration date of the Sterling Letters of Credit
giving rise to such Sterling L/C Obligations) which is in excess of the Sterling
L/C Commitments or such Sterling Commitments, as applicable.

            2.11. Conversion Options. Any Sterling Subsidiary Borrower may
elect from time to time to convert LIBOR Loans in Sterling to Reference Rate
Loans, and may elect from time to time to convert Reference Rate Loans to LIBOR
Loans, by giving the Sterling Administrative Agent at least three Business Days'
(U.K.) prior irrevocable written notice of such election to convert (which date
shall be a Business Day (U.K.) and in the case of any conversion of any LIBOR
Loans in Sterling to Reference Rate Loans, the last day of an Interest Period
therefor), the amount and type of conversion and, in the case of any conversion
of Reference Rate Loans to LIBOR Loans, the Interest Period selected with
respect thereto; provided, however, that (i) Reference Rate Loans may not be
converted to LIBOR Loans when any Default or Event of Default has occurred and
is continuing without the consent of the Administrative Agent and (ii) Swing
Line Loans may not, at any time, be converted to LIBOR Loans. All or any part of
outstanding LIBOR Loans or Reference Rate Loans may be converted as provided
herein, provided that partial conversions of LIBOR Loans in Sterling to
Reference Rate Loans shall be in an aggregate principal amount of the Sterling
equivalent of U.S.$1,000,000 or a whole multiple thereof and partial conversions
of Reference Rate Loans to LIBOR Loans with respect to which a common Interest
Period has been selected shall be in an aggregate principal amount of the
Sterling or euro equivalent, as the case

<PAGE>
                                                                              10

may be, of U.S.$1,000,000 or a whole multiple thereof and provided, further,
that in the case of a partial conversion of LIBOR Loans in Sterling to Reference
Rate Loans, after giving effect to such conversion, the aggregate principal
amount of the LIBOR Loans outstanding with respect to which a common Interest
Period has been selected shall be not less than the Sterling or euro equivalent,
as the case may be, of U.S.$5,000,000.

            (b) Any LIBOR Loans may be continued as such upon the expiration of
an Interest Period by compliance by the Sterling Subsidiary Borrowers with the
notice provisions contained in the definition of Interest Period, provided that
no LIBOR Loan may be continued as such when any Default or Event of Default has
occurred and is continuing, but shall be automatically converted to a Reference
Rate Loan on the last day of the last Interest Period for which a LIBOR Rate was
determined by the Sterling Administrative Agent on or prior to the Sterling
Administrative Agent's obtaining knowledge of such Default or Event of Default.

            (c) No conversion or continuation of any Sterling Loans shall be
made pursuant to this subsection 2.11 if, after giving effect to such conversion
or continuation the amount of the Available Sterling Commitments would be
negative.

            2.12. Interest Rate and Payment Dates.

            (a) Each LIBOR Loan shall bear interest for each day during each
Interest Period with respect thereto at a rate per annum equal to the LIBOR Rate
determined for such Interest Period plus the Applicable Margin.

            (b) Each Reference Rate Loan shall bear interest for the period from
and including the date thereof until maturity at a rate per annum equal to the
Reference Rate plus the Applicable Margin.

            (c) If all or a portion of (i) the principal amount of any Sterling
Loan or any reimbursement obligation, (ii) any interest payable thereon or (iii)
any facility fee, commission or other amount payable hereunder shall not be paid
when due (whether at the stated maturity, by acceleration or otherwise), such
overdue amount shall bear interest at a rate per annum which is (A) the rate
pursuant to paragraph (a) of this subsection plus 2% or (B) the rate described
in paragraph (b) of this subsection 2.12 plus 2%, in each case from the date of
such non-payment until such amount is paid in full (as well after as before
judgment). The Sterling Administrative Agent may choose any Interest Period from
time to time (including one Interest Period of shorter than one month) with
respect to any overdue amount bearing interest based upon paragraph (a) of this
subsection.

            (d) Interest shall be payable in arrears on each Interest Payment
Date, except that interest payable pursuant to subsection 2.12(c) shall be
payable upon demand.

            2.13. Computation of Interest and Fees. Each determination of an
interest rate by the Sterling Administrative Agent pursuant to any provision of
this Annex B shall be conclusive and binding on the Sterling Subsidiary
Borrowers absent manifest error.

            (b) Interest (other than interest based on the Reference Rate) shall
be calculated on the basis of a 360-day year for the actual days elapsed; and
facility fees and interest based on the Reference Rate shall be calculated on
the basis of a 365- (366-, as the case may be) day year for the actual days
elapsed. The Sterling Administrative Agent shall as soon as practicable notify
the affected Sterling Lenders of each determination of the LIBOR Rate. Any
change in the interest rate on a Sterling Loan resulting from a change in the
Reference Rate or any LIBOR reserve requirements shall become effective as of
the opening of business on the day on which such change becomes effective. The
Sterling

<PAGE>
                                                                              11

Administrative Agent shall as soon as practicable notify the affected Sterling
Lenders of the Closing Date and the amount of such change in interest rate.

            (c) The Sterling Administrative Agent shall, at the request of the
Sterling Subsidiary Borrowers or any Sterling Lender, deliver to the Sterling
Subsidiary Borrowers or such Sterling Lender a statement showing in reasonable
detail the calculations used by the Sterling Administrative Agent in determining
any interest rate pursuant to subsection 2.12, excluding any LIBOR Base Rate
which is based upon the British Bankers Assoc. Interest Settlement Rates Page.

            2.14. Inability to Determine Interest Rate. In the event that the
Reference Banks shall have reasonably determined (which determination shall be
conclusive and binding upon the Sterling Subsidiary Borrowers absent manifest
error) that by reason of circumstances affecting the interbank eurocurrency
market, adequate and reasonable means do not exist for ascertaining the LIBOR
Rate applicable pursuant to subsection 2.12(a) for any Interest Period with
respect to (a) a proposed Sterling Loan that has been requested be made as a
LIBOR Loan, (b) a LIBOR Loan that will result from the requested conversion of a
Reference Rate Loan into a LIBOR Loan or (c) the continuation of LIBOR Loans
beyond the expiration of then current Interest Period with respect thereto, the
Sterling Administrative Agent shall forthwith give telecopy or telephonic notice
of such determination, confirmed in writing, to the relevant Sterling Subsidiary
Borrowers and the Sterling Lenders at least one Business Day (U.K.) prior to, as
the case may be, the requested Borrowing Date (U.K.) for such LIBOR Loan, the
conversion date of such Reference Rate Loan or the last day of such Interest
Period. If such notice is given (i) any requested LIBOR Loan shall be made as a
Reference Rate Loan, (ii) any Reference Rate Loan that was to have been
converted to a LIBOR Loan shall be continued as a Reference Rate Loan and (iii)
any outstanding LIBOR Loan shall be converted, on the last day of then current
Interest Period with respect thereto, to a Reference Rate Loan. Until such
notice has been withdrawn by the Sterling Administrative Agent, no further LIBOR
Loans shall be made nor shall the Sterling Subsidiary Borrowers have the right
to convert a Reference Rate Loan to a LIBOR Loan. Such notice shall be withdrawn
by the Sterling Administrative Agent when the Sterling Administrative Agent
shall reasonably determine that adequate and reasonable means exist for
ascertaining the LIBOR Rate.

            2.15. Pro Rata Treatment and Payments. Each borrowing under and
any reduction of the Sterling Commitments shall be made ratably according to
each Sterling Lender's share of the Sterling Commitments.

            (b) Each payment (including each prepayment) on account of principal
of and interest on the Sterling Loans shall be made ratably according to the
respective outstanding principal amounts of such Loans then held by the Sterling
Lenders.

            (c) All payments (including prepayments) to be made by any Sterling
Subsidiary Borrower hereunder, whether on account of principal, interest, fees
or otherwise, shall be made without set off or counterclaim and shall be made
prior to 12:00 Noon, London time, on the due date thereof to the Sterling
Administrative Agent, for the account of the relevant Sterling Lenders, at the
Sterling Administrative Office office, in Sterling, and in immediately available
funds. The Sterling Administrative Agent shall distribute such payments to the
relevant Sterling Lenders promptly upon receipt in like funds as received. If
any payment hereunder (other than payments on LIBOR Loans) becomes due and
payable on a day other than a Business Day (U.K.), such payment shall be
extended to the next succeeding Business Day (U.K.) and such extension of time
shall in such case be included in the computation of the amount payable
hereunder. If any payment on a LIBOR Loan becomes due and payable on a day other
than a Business Day (U.K.), the maturity thereof shall be extended to the next
succeeding Business Day (U.K.) unless the result of such extension would be to
extend such payment into

<PAGE>
                                                                              12

another calendar month, in which event such payment shall be made on the
immediately preceding Business Day (U.K.).

            (d) Unless the Sterling Administrative Agent shall have been
notified in writing by any Sterling Lender prior to a Borrowing Date (U.K.) that
such Sterling Lender will not make the amount that would constitute its share of
the borrowing on such date available to the Sterling Administrative Agent, the
Sterling Administrative Agent may assume that such Sterling Lender has made such
amount available to the Sterling Administrative Agent on such Borrowing Date
(U.K.), and the Sterling Administrative Agent may, in reliance upon such
assumption, make available to the relevant Sterling Subsidiary Borrower a
corresponding amount. If such amount is made available to the Sterling
Administrative Agent on a date after such Borrowing Date (U.K.), such Sterling
Lender shall pay to the Sterling Administrative Agent on demand an amount equal
to the product of (i) the customary rate as selected by the Sterling
Administrative Agent for the settlement of obligations between banks during such
period as quoted by the Sterling Administrative Agent, times (ii) the amount of
such Sterling Lender's share of such borrowing, times (iii) a fraction the
numerator of which is the number of days that elapse from and including such
Borrowing Date (U.K.) to the date on which such Sterling Lender's Revolving
Percentage of such borrowing shall have become immediately available to the
Sterling Administrative Agent and the denominator of which is 360 (the
"Effective Interbank Rate"). A certificate of the Sterling Administrative Agent
submitted to any Sterling Lender with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error. If such amount
is so made available, such payment to the Sterling Administrative Agent shall
constitute such Sterling Lender's Loan on such Borrowing Date (U.K.) for all
purposes of this Agreement. If such amount is not so made available to the
Sterling Administrative Agent, then the Sterling Administrative Agent shall
notify the relevant Sterling Subsidiary Borrower of such failure and on the
fourth Business Day (U.K.) following such Borrowing Date (U.K.), such Sterling
Subsidiary Borrower shall pay to the Sterling Administrative Agent such ratable
portion, together with interest thereon for each day that such Sterling
Subsidiary Borrower had the use of such ratable portion, at the Effective
Interbank Rate. Nothing contained in this subsection 2.15(d) shall relieve any
Sterling Lender which has failed to make available its ratable portion of any
borrowing hereunder from its obligation to do so in accordance with the terms
hereof.

            (e) The failure of any Sterling Lender to make the Sterling Loan to
be made by it on any Borrowing Date (U.K.) shall not relieve any other Sterling
Lender of its obligation, if any, hereunder to make its Sterling Loan on such
Borrowing Date (U.K.), but no Sterling Lender shall be responsible for the
failure of any other Sterling Lender to make the Sterling Loan to be made by
such other Sterling Lender on such Borrowing Date (U.K.).

            2.16. Illegality. Notwithstanding any other provisions herein, if
any introduction of or change in any law, regulation, treaty or directive or in
the interpretation or application thereof occurring after the date hereof shall
make it unlawful for any Sterling Lender to make or maintain LIBOR Loans as
contemplated by this Annex B, (a) such Sterling Lender shall forthwith give
telecopy or telephonic notice of such circumstances, confirmed in writing, to
the relevant Sterling Subsidiary Borrower (which notice shall be withdrawn by
such Sterling Lender when such Sterling Lender shall reasonably determine that
it shall no longer be illegal for such Sterling Lender to make or maintain LIBOR
Loans or to convert Reference Rate Loans to LIBOR Loans), (b) the commitment of
such Sterling Lender hereunder to make LIBOR Loans or to convert Reference Rate
Loans to LIBOR Loans shall forthwith be canceled and (c) such Sterling Lender's
Sterling Loans then outstanding as LIBOR Loans, if any, shall be converted
automatically to Reference Rate Loans based upon the Reference Rate on the last
day of then current Interest Period with respect to such Loans or within such
earlier period as may be required by law. Each Sterling Subsidiary Borrower
hereby agrees promptly to pay the Sterling Administrative Agent for the account
of each Sterling Lender, upon demand by the Sterling Administrative Agent, any
additional amounts necessary to compensate the Sterling Lenders for any costs
incurred by the Sterling Lenders in

<PAGE>
                                                                              13

making any conversion in accordance with this subsection 2.16, including, but
not limited to, any interest or fees payable by the Sterling Lenders to lenders
of funds obtained by them in order to make or maintain their LIBOR Loans
hereunder (the Sterling Administrative Agent's notice of such costs, as
certified to such Sterling Subsidiary Borrower, to be conclusive, absent
manifest error).

            2.17. Requirements of Law. (a) In the event that any introduction of
or change in any law, regulation, treaty or directive or in the interpretation
or application thereof occurring after the date hereof or compliance by any
Sterling Lender with any request or directive (whether or not having the force
of law) from any central bank or other governmental authority, agency or
instrumentality:

            (i) shall subject such Sterling Lender to any tax of any kind,
whatsoever with respect to the Credit Agreement, including this Annex B, any
Sterling Letter of Credit, any Application, or any Sterling Loan made by it or
its obligation to make Sterling Loans or change the basis of taxation of
payments to such Sterling Lender of principal, facility fee, interest or any
other amount payable hereunder (other than Non-Excluded Taxes (as defined in
subsection 2.19) or changes in the rate of tax on the overall net income of such
Sterling Lender)

            (ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by, or
deposits or other liabilities in or for the account of, advances or loans by, or
other credit extended by, or any other acquisition of funds by, any office of
such Sterling Lender which are not otherwise included in the determination of
the LIBOR Rate hereunder, or

            (iii) shall impose on such Sterling Lender or the eurocurrency
market any other condition;

and the result of any of the foregoing is to increase the cost to such Sterling
Lender (which increase in cost shall be the result of such Sterling Lender's
reasonable allocation of the aggregate of such cost increases resulting from
such events), of making, renewing or maintaining LIBOR Loans or issuing or
participating in Sterling Letters of Credit or to reduce any amount receivable
thereunder then, in any such case, the relevant Sterling Subsidiary Borrower
shall, upon notice to it from such Sterling Lender (with a copy to the
Administrative Agent) certifying that (x) one of the events described in this
subsection 2.17(a) has occurred and the nature of such event, (y) the increased
cost or reduced amount resulting from such event and (z) the additional amounts
demanded by such Sterling Lender and a reasonably detailed explanation of the
calculation thereof, promptly pay to the Sterling Administrative Agent for the
account of the relevant Sterling Lender, upon demand by the Sterling
Administrative Agent, without duplication, any additional amounts necessary to
compensate such Sterling Lender for such increased cost or reduced amount
receivable which such Sterling Lender deems to be material as determined in good
faith by such Sterling Lender with respect to the Credit Agreement, including
this Annex B, or the Sterling Loans made hereunder, provided that, in any such
case, the relevant Sterling Subsidiary Borrower (if otherwise not prohibited
hereunder) may elect to convert the LIBOR Loans made hereunder to Reference Rate
Loans by giving such Sterling Lender and the Sterling Administrative Agent at
least one Business Day's (U.K.) prior irrevocable notice of such election in
which case the relevant Sterling Subsidiary Borrower shall promptly pay the
Sterling Administrative Agent for the account of the relevant Sterling Lender,
upon demand by the Sterling Administrative Agent, without duplication, any loss
or expense incurred by such Sterling Lender in liquidating or re-employing the
deposits from which the funds were obtained by such Sterling Lender for the
purpose of making and/or maintaining such LIBOR Loans, together with any amount
due under this subsection 2.17(a) in respect of the period prior to such
conversion. If such Sterling Lender becomes entitled to claim any additional
amounts pursuant to this subsection, it shall promptly notify the relevant
Sterling Subsidiary Borrower of the event by reason of which it has become so
entitled.

<PAGE>
                                                                              14

            (b) In the event that any Sterling Lender shall have determined that
any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Sterling Lender or
any corporation controlling such Sterling Lender with any request or directive
regarding capital adequacy (whether or not having the force of law) from any
Governmental Authority made subsequent to the date hereof does or shall have the
effect of reducing the rate of return on such Sterling Lender's or such
corporation's capital as a consequence of its obligations hereunder or under any
Letters of Credit to a level below that which such Sterling Lender or such
corporation could have achieved but for such change or compliance (taking into
consideration such Sterling Lender's or such corporation's policies with respect
to capital adequacy) by an amount deemed by such Sterling Lender to be material,
then from time to time, within 15 days after submission by such Sterling Lender
to the Sterling Subsidiary Borrowers (with a copy to the Sterling Administrative
Agent) of a written request therefor certifying that (x) one of the events
described in this subsection 2.17(b) has occurred and the nature of such event,
(y) the increased cost or reduced amount resulting from such event and (z) the
additional amounts demanded by such Sterling Lender and a reasonably detailed
explanation of the calculation thereof, the Sterling Subsidiary Borrowers shall
pay to such Sterling Lender such additional amount or amounts as will compensate
such Sterling Lender for such reduction.

            (c) A certificate as to any additional amounts payable pursuant to
paragraphs (a) and (b) above submitted by any Sterling Lender to a Sterling
Subsidiary Borrower shall be conclusive absent manifest error.

            2.18. Indemnity. Each Sterling Subsidiary Borrower agrees to
indemnify each Sterling Lender and to hold each Sterling Lender harmless from
any loss or expense which such Sterling Lender may sustain or incur as a
consequence of (a) default by such Sterling Subsidiary Borrower in payment of
the principal amount of or interest on any LIBOR Loans including, but not
limited to, any such loss or expense arising from interest or fees payable by
such Sterling Lender to lenders of funds obtained by them in order to maintain
their LIBOR Loans, (b) default by such Sterling Subsidiary Borrower in making
LIBOR Loans or conversion after such Sterling Subsidiary Borrower has given a
notice in accordance with subsection 2.2 or 2.11, (c) default by such Sterling
Subsidiary Borrower in making any prepayment of a LIBOR Loan after such Sterling
Subsidiary Borrower has given a notice in accordance with subsection 2.8, and
(d) the making of any payment or conversion of LIBOR Loans on a day which is not
the last day of the applicable Interest Period with respect thereto, including,
but not limited to, any such loss or expense arising from interest or fees
payable by the Sterling Lenders to lenders of funds obtained by them in order to
maintain their LIBOR Loans hereunder. This covenant shall survive termination of
the Credit Agreement. The obligations of indemnity of each of the respective
Sterling Subsidiary Borrowers hereunder are limited only to the loss and expense
described herein arising from or as a result of any act or omission by such
Sterling Subsidiary Borrower, and are not, and shall not be deemed to be, the
joint and several obligations of each such Sterling Subsidiary Borrower as to
any loss or expense arising from or as a result of any act or omission by the
other Sterling Subsidiary Borrowers.

            2.19. Taxes. All payments made by the Sterling Subsidiary Borrowers
in respect of amounts owing under this Annex B shall be made free and clear of,
and without deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions
or withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, excluding gross or net income or gross
receipts taxes, ad valorem taxes, personal property and/or sales taxes and
franchise taxes (imposed in lieu of net income taxes) imposed on the Sterling
Administrative Agent or any Sterling Lender as a result of a present or former
connection between the Sterling Administrative Agent or such Sterling Lender and
the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Sterling Administrative Agent or such
Sterling Lender having executed, delivered or performed its obligations or
received a payment under, or

<PAGE>
                                                                              15

enforced, this Annex B). If any such non-excluded taxes, levies, imposts,
duties, charges, fees deductions or withholdings ("Non-Excluded Taxes") are
required to be withheld from any amounts payable to the Sterling Administrative
Agent or any Sterling Lender hereunder, the amounts so payable to the Sterling
Administrative Agent or such Sterling Lender shall be increased to the extent
necessary to yield to the Sterling Administrative Agent or such Sterling Lender
(after payment of all Non-Excluded Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Annex B,
provided, however, that none of the Sterling Subsidiary Borrowers shall be
required to increase any such amounts payable to the Sterling Administrative
Agent or any Sterling Lender if such increased amount arises as a result of the
failure of such Sterling Lender or the Sterling Administrative Agent to be an
Eligible U.K. Bank. The Sterling Subsidiary Borrowers shall also indemnify the
Sterling Administrative Agent and each Sterling Lender on an after-tax basis for
any additional taxes on net income which the Sterling Administrative Agent or
such Sterling Lender, as the case may be, may be obligated to pay as a result of
the receipt of additional amounts under this subsection 2.19. Whenever any
Non-Excluded Taxes are payable by any Sterling Subsidiary Borrower, as promptly
as possible thereafter but in any event within 45 days after the date of payment
such Sterling Subsidiary Borrower shall send to the Sterling Administrative
Agent for its own account or for the account of such Sterling Lender, as the
case may be, a certified copy of an original official receipt received by such
Sterling Subsidiary Borrower showing payment thereof. If any Sterling Subsidiary
Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing
authority or fails to remit to the Sterling Administrative Agent the required
receipts or other required documentary evidence, such Sterling Subsidiary
Borrower shall indemnify the Sterling Administrative Agent and the Sterling
Lenders for any incremental taxes, interest or penalties that may become payable
by the Sterling Administrative Agent or any Sterling Lender as a result of any
such failure. The agreements in this subsection shall survive the termination of
this Annex B and the payment of the Sterling Loans and all other amounts payable
hereunder.

            2.20. Use of Proceeds. The Sterling Facility and the proceeds of the
Sterling Loans shall be used by the Sterling Subsidiary Borrowers for working
capital and other general corporate purposes (which shall include any purpose
expressly permitted by the Credit Agreement) of the Sterling Subsidiary
Borrowers; provided that, notwithstanding the foregoing, none of the proceeds of
the Sterling Loans may be used to finance any Hostile Take-Over Bid.

            2.21. Controls on Prepayment if Aggregate Revolving Extensions of
Credit Exceed Aggregate Revolving Credit Commitments. (a) The Sterling
Subsidiary Borrowers will implement and maintain internal controls to monitor
the borrowings and repayments of Sterling Loans by the relevant Sterling
Subsidiary Borrowers and the issuance of and drawings under Sterling Letters of
Credit, with the object of preventing any request for an Extension of Credit
that would result in the Available Sterling Commitments becoming negative by
more than 5% of the Sterling Commitments, if such Commitments are negative by
more than 5%, the Sterling Subsidiary Borrowers will promptly notify the
Sterling Administrative Agent.

            (b) The Sterling Administrative Agent will calculate the Available
Sterling Commitments from time to time, and in any event not less frequently
than once during each calendar quarter. In making such calculations, the
Sterling Administrative Agent will rely on the information most recently
received by it from the Sterling Swing Line Lender in respect of outstanding
Sterling Swing Line Loans and from the Sterling Issuing Lender in respect of
outstanding Sterling L/C Obligations.

            (c) In the event that on any date the Sterling Administrative Agent
calculates that (i) the Available Sterling Commitments have become negative
solely as a result of a change in the aggregate Dollar Equivalent of the
Sterling Loans by more than 5%, the Sterling Administrative Agent will give
notice to such effect to the relevant Sterling Subsidiary Borrowers and the
Sterling Lenders. Within five Business Days (U.K.) of receipt of any such
notice, such Sterling Subsidiary Borrower will, as soon as

<PAGE>
                                                                              16

practicable but in any event within five Business Days (U.K.) of receipt of such
notice, first, make such repayments or prepayments of Sterling Loans (together
with interest accrued to the date of such repayment or prepayment), second, pay
any Reimbursement Obligations under the Sterling Facility then outstanding and
third, cash collateralize any outstanding Sterling L/C Obligations on terms
reasonably satisfactory to the Sterling Administrative Agent as shall be
necessary to cause the Available Sterling Commitments not to be negative.

            2.22. Lending Installations. (a) Subject to subsection 2.4 of the
Credit Agreement and subsections 2.1 and 2.3 of this Annex B, each Sterling
Lender may book its Sterling Loans at any Lending Installation selected by such
Sterling Lender and may change its Lending Installation from time to time. All
terms of the Credit Agreement shall apply to any such Lending Installation and
the Sterling Loans made hereunder shall be deemed held by each Sterling Lender
for the benefit of such Lending Installation. Each Sterling Lender may, by
written notice to the Sterling Administrative Agent and the Sterling Subsidiary
Borrowers in accordance with subsection 10.2 of the Credit Agreement and subject
always to subsection 2.4 of the Credit Agreement and subsections 2.13 and 2.3 of
this Annex B designate replacement or additional Lending Installations through
which Sterling Loans will be made by it and for whose account Sterling Loan
payments are to be made.

            (b) Each Sterling Lender agrees that, upon the occurrence of any
event giving rise to the operation of subsection 2.17 or 2.19 with respect to
such Sterling Lender, it will, if requested by the Sterling Subsidiary Borrower,
use reasonable efforts (subject to overall policy considerations of such
Sterling Lender) to designate another Lending Installation for any Sterling
Loans affected by such event with the object of avoiding the consequences of
such event; provided, that such designation is made on terms that, in the sole
judgment of such Sterling Lender, cause such Sterling Lender and any of its
Lending Installations to suffer no economic, legal or regulatory disadvantage,
and provided, further, that nothing in this subsection 2.22(b) shall affect or
postpone any of the obligations of the Sterling Subsidiary Borrowers or the
rights of any Sterling Lender pursuant to subsection 2.17 or 2.19.

            2.23. Notices to Lenders. All notices under this Section 2 to
Sterling Lenders by the Sterling Subsidiary Borrowers or the Sterling
Administrative Agent, and all payments by the Sterling Administrative Agent to
the Sterling Lenders, shall be made to the respective Lending Installations of
the Sterling Lenders maintaining the relevant Sterling Loans or Sterling
Commitments.

                     SECTION 3. LETTER OF CREDIT FACILITIES

            3.1. Sterling L/C Commitment. (a) Subject to the terms and
conditions hereof, the Sterling Issuing Lender, in reliance on the agreements of
the other Lenders set forth in subsection 3.4(a), agrees to issue letters of
credit ("Sterling Letters of Credit") under the Sterling Commitments for the
account of any Sterling Subsidiary Borrower on any Business Day (U.K.) during
the Revolving Credit Commitment Period in such form as may be approved from time
to time by the Sterling Issuing Lender; provided that the Sterling Issuing
Lender shall not have any obligation to issue any Sterling Letter of Credit if,
after giving effect to such issuance, (i) the Sterling L/C Obligations would
exceed the Sterling L/C Commitment or (ii) the Available Sterling Commitments
would be negative. Each Sterling Letter of Credit shall (i) be denominated in
Sterling, (ii) be either (x) a standby letter of credit (a "Sterling Standby
L/C") issued to support obligations of any Sterling Subsidiary Borrower,
contingent or otherwise, with an expiry date occurring not later than one year
after such standby Sterling L/C was issued (which expiry date may be subject to
one or more automatic extensions of one year or less unless 60-day notice, or
such other notice as is satisfactory to the relevant Sterling Subsidiary
Borrower and the Sterling Issuing Lender, is given that any such extension shall
not be effective) or (y) a documentary letter of credit in respect of the
purchase of goods or services by any Sterling Subsidiary Borrower in the
ordinary course of business with an expiry date occurring not later than one
year after such documentary letter of credit was

<PAGE>
                                                                              17

issued and, in the case of any such documentary letter of credit which is to be
accepted by the Sterling Issuing Lender pending payment at a date after
presentation of sight drafts, with a payment date no more than one year after
such drafts were presented for acceptance (a "Sterling Trade L/C") and (iii)
expire no later than five days before the Revolving Credit Termination Date.

            (b) Each Sterling Standby L/C shall be subject to the International
Standby Practices and each Sterling Trade L/C shall be subject to the Uniform
Customs and, in each case, to the extent not inconsistent therewith, the laws of
the State of New York.

            (c) The Sterling Issuing Lender shall at no time be obligated to
issue any Sterling Letter of Credit hereunder if such issuance would conflict
with, or cause the Sterling Issuing Lender or any Sterling L/C Participant to
exceed any limits imposed by, any applicable Requirement of Law.

            3.2. Procedure for Issuance of Letters of Credit. Any Sterling
Subsidiary Borrower may from time to time request that the Sterling Issuing
Lender issue a Sterling Letter of Credit by delivering to the Sterling Issuing
Lender (with a copy to the Sterling Administrative Agent) at its address for
notices specified herein an Application therefor, completed to the satisfaction
of the Sterling Issuing Lender, and such other certificates, documents and other
papers and information as the Sterling Issuing Lender may reasonably request.
Upon receipt of any Application, the Sterling Issuing Lender will process such
Application and the certificates, documents and other papers and information
delivered to it in connection therewith in accordance with its customary
procedures and shall promptly issue the Sterling Letter of Credit requested
thereby (but in no event shall the Sterling Issuing Lender be required to issue
any Sterling Letter of Credit earlier than four Business Days (U.K.) after its
receipt of the Application therefor and all such other certificates, documents
and other papers and information relating thereto) by issuing the original of
such Sterling Letter of Credit to the beneficiary thereof or as otherwise may be
agreed by the Sterling Issuing Lender and any relevant Sterling Subsidiary
Borrower. The Sterling Issuing Lender shall furnish a copy of such Sterling
Letter of Credit to the relevant Sterling Subsidiary Borrower, to the Sterling
Administrative Agent promptly following the issuance thereof.

            3.3. Fees, Commissions and Other Charges. (a) The relevant Sterling
Subsidiary Borrower shall pay to the Sterling Administrative Agent, for the
ratable account of the Sterling Issuing Lender and the Sterling L/C
Participants, a letter of credit commission in Sterling with respect to each
Sterling Trade L/C issued by the Sterling Issuing Lender (i) in an amount equal
to the Dollar Equivalent of such issuance and payment fees as have been agreed
upon by the relevant Sterling Subsidiary Borrower and the Sterling Issuing
Lender and (ii) in an amount equal to the product of, on the date on which such
commission is calculated, (A) the rate per annum equal to the Applicable Margin
in respect of LIBOR Loans and (B) the Dollar Equivalent of the aggregate amount
available to be drawn under each Sterling Letter of Credit (plus an additional
-1/4 of 1% per annum which shall be payable for the account of the Sterling
Issuing Lender). Such letter of credit commissions shall be payable in arrears
on the last day of each March, June, September and December and shall be
nonrefundable.

            (b) The relevant Sterling Subsidiary Borrower shall pay to the
Sterling Administrative Agent, for the ratable account of the Sterling Issuing
Lender and the Sterling L/C Participants, a letter of credit commission in
Sterling with respect to each Sterling Standby L/C issued by the Sterling
Issuing Lender, computed for the period from the date of such payment to the
date upon which the next such payment is due hereunder in an amount equal to the
product of (i) the rate equal to the Applicable Margin in respect of LIBOR in
effect on the date on which such commission is calculated and (ii) the Sterling
Equivalent of the aggregate amount available to be drawn under such Sterling
Standby L/C on the date on which such commission is calculated (plus an
additional -1/4 of 1% per annum which shall be payable for the account of the
Sterling Issuing Lender). The relevant Sterling Subsidiary Borrower shall also
pay to the Sterling Administrative Agent, for the account of the Sterling
Issuing Lender, such issuance fees as

<PAGE>
                                                                              18

have been agreed upon by the relevant Sterling Subsidiary Borrower and the
Sterling Issuing Lender. Such letter of credit commissions shall be payable in
arrears on the last day of each March, June, September and December and shall be
nonrefundable.

            (c) In addition to the foregoing fees and commissions, the relevant
Sterling Subsidiary Borrower shall pay or reimburse the Sterling Issuing Lender
for such normal and customary costs and expenses as are incurred or charged by
the Sterling Issuing Lender in issuing, effecting payment under, amending or
otherwise administering any Sterling Letter of Credit issued by it.

            (d) The Sterling Administrative Agent shall, promptly following its
receipt thereof, distribute to the Sterling Issuing Lender and the Sterling L/C
Participants all fees and commissions received by the Sterling Administrative
Agent for their respective accounts pursuant to this subsection 3.3.

            3.4. Sterling L/C Participation. (a) The Sterling Issuing Lender
irrevocably agrees to grant and hereby grants to each Sterling L/C Participant,
and, to induce the Sterling Issuing Lender to issue Sterling Letters of Credit
hereunder, each such Sterling L/C Participant irrevocably agrees to accept and
purchase and hereby accepts and purchases from the Sterling Issuing Lender, on
the terms and conditions hereinafter stated, for such Sterling L/C Participant's
own account and risk an undivided interest equal to such Sterling L/C
Participant's ratable share of the Sterling Facility in the Sterling Issuing
Lender's obligations and rights under each Sterling Letter of Credit issued
hereunder and the amount of each draft paid by the Sterling Issuing Lender
thereunder. Each such Sterling L/C Participant unconditionally and irrevocably
agrees with the Sterling Issuing Lender that, if a draft is paid under any such
Sterling Letter of Credit for which the Sterling Issuing Lender is not
reimbursed in full by the relevant Sterling Subsidiary Borrower in accordance
with the terms of the Credit Agreement (including this Annex B), such Sterling
L/C Participant shall pay to the Sterling Issuing Lender upon demand at the
Sterling Issuing Lender's address for notices specified herein an amount equal
to such Sterling L/C Participant's ratable share of the Sterling Facility of the
amount of such draft, or any part thereof, which is not so reimbursed.

            (b) If any amount required to be paid by any Sterling L/C
Participant to the Sterling Issuing Lender pursuant to subsection 3.4(a) in
respect of any unreimbursed portion of any payment made by the Sterling Issuing
Lender under any Sterling Letter of Credit is not paid to the Sterling Issuing
Lender within three Business Days (U.K.) after the date such payment is due,
such Sterling L/C Participant shall pay to the Sterling Issuing Lender on demand
an amount equal to the product of (i) such amount, times (ii) the customary rate
as selected by the Sterling Issuing Lender for the settlement of obligations
between banks during the period from and including the date such payment is
required to the date on which such payment is immediately available to the
Sterling Issuing Lender, times (iii) a fraction the numerator of which is the
number of days that elapse during such period and the denominator of which is
360. If any such amount required to be paid by any such Sterling L/C Participant
pursuant to subsection 3.4(a) is not in fact made available to the Sterling
Issuing Lender by such Sterling L/C Participant within three Business Days
(U.K.) after the date such payment is due, the Sterling Issuing Lender shall be
entitled to recover from such Sterling L/C Participant, on demand, such amount
with interest thereon calculated from such due date at the rate per annum
applicable to LIBOR hereunder. A certificate of the Sterling Issuing Lender
submitted to any Sterling L/C Participant with respect to any amounts owing
under this subsection shall be conclusive in the absence of manifest error.

            (c) Whenever, at any time after the Sterling Issuing Lender has made
payment under any Sterling Letter of Credit and has received from any Sterling
L/C Participant its ratable share of such payment in accordance with subsection
3.4(a), the Sterling Issuing Lender receives any payment related to such
Sterling Letter of Credit (whether directly from the relevant Sterling
Subsidiary Borrower or

<PAGE>
                                                                              19

otherwise), or any payment of interest on account thereof, the Sterling Issuing
Lender will distribute to such Sterling L/C Participant its ratable share
thereof; provided, however, that in the event that any such payment received by
the Sterling Issuing Lender shall be required to be returned by the Sterling
Issuing Lender, such Sterling L/C Participant shall return to the Sterling
Issuing Lender the portion thereof previously distributed by the Sterling
Issuing Lender to it.

            3.5. Reimbursement Obligation of the Sterling Subsidiary Borrowers.
The relevant Sterling Subsidiary Borrower agrees to reimburse the Sterling
Issuing Lender on each date on which the Sterling Issuing Lender notifies such
Sterling Subsidiary Borrower of the date and amount of a draft presented under
any Sterling Letter of Credit and paid by the Sterling Issuing Lender for the
amount of (a) such draft so paid and (b) any taxes (other than Excluded Taxes),
fees, charges or other costs or expenses incurred by the Sterling Issuing Lender
in connection with such payment; provided that upon the acceleration of such
reimbursement obligations in accordance with Section 8 of the Credit Agreement,
the relevant Sterling Subsidiary Borrower agrees to reimburse the Sterling
Issuing Lender for the amount equal to then maximum liability (whether direct or
contingent) of the Sterling Issuing Lender and the Sterling L/C Participants
under such Sterling Letter of Credit. Each such payment shall be made to the
Sterling Issuing Lender, at its address for notices specified herein in Sterling
and in immediately available funds, on the date on which the relevant Sterling
Subsidiary Borrower receives such notice, if received prior to 11:00 A.M.,
London time, on a Business Day (U.K.) and otherwise on the next succeeding
Business Day (U.K.).

            3.6. Obligations Absolute. Any relevant Sterling Subsidiary
Borrower's obligations under this Section 3 shall be absolute and unconditional
under any and all circumstances and irrespective of any set-off, counterclaim or
defense to payment which any relevant Sterling Subsidiary Borrower may have or
have had against the Sterling Issuing Lender or any beneficiary of a Sterling
Letter of Credit. Each Sterling Subsidiary Borrower also agrees with the
Sterling Issuing Lender that the Sterling Issuing Lender shall not be
responsible for, such relevant Sterling Subsidiary Borrower's Reimbursement
Obligations under subsection 3.5 shall not be affected by, among other things,
the validity or genuineness of documents or of any endorsements thereon, even
though such documents shall in fact prove to be invalid, fraudulent or forged,
or any dispute between or among any relevant Sterling Subsidiary Borrower and
any beneficiary of any Sterling Letter of Credit or any other party to which
such Sterling Letter of Credit may be transferred or any claims whatsoever of
the relevant Sterling Subsidiary Borrower against any beneficiary of such
Sterling Letter of Credit or any such transferee. The Sterling Issuing Lender
shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Sterling Letter of Credit issued by it,
except for errors or omissions caused by the Sterling Issuing Lender's gross
negligence or willful misconduct. Each Sterling Subsidiary Borrower agrees that
any action taken or omitted by the Sterling Issuing Lender under or in
connection with any Sterling Letter of Credit issued by it or the related drafts
or documents, if done in the absence of gross negligence or willful misconduct
and in accordance with the standards of care specified in the Uniform Commercial
Code of the State of New York, shall be binding on the relevant Sterling
Subsidiary Borrower and shall not result in any liability of the Sterling
Issuing Lender to any relevant Sterling Subsidiary Borrower.

            3.7. Increased Costs. If the adoption of or any change in any law or
regulation or in the interpretation thereof after the date hereof by any court
or administrative or Governmental Authority charged with the administration
thereof shall either (i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against Sterling Letters of Credit issued by the
Sterling Issuing Lender or participated in by the Lenders or (ii) impose on any
Sterling Lender any other condition regarding any Sterling Letter of Credit, and
the result of any event referred to in clauses (i) or (ii) above shall be to
increase the cost to the Sterling Issuing Lender or any Sterling Lender of
issuing or maintaining such Sterling Letter of Credit (or its participation
therein, as the case may be) (which increase

<PAGE>
                                                                              20

in cost shall be the result of the Sterling Issuing Lender's or such Lender's
reasonable allocation of the aggregate of such cost increases resulting from
such events), then, upon notice to it from the Sterling Issuing Lender or such
Lender (with a copy to the Sterling Administrative Agent) certifying that (x)
one of the events herein above described has occurred and the nature of such
event, (y) the increased cost or reduced amount resulting from such event and
(z) the additional amounts demanded by the Sterling Issuing Lender or such
Lender, as the case may be, and a reasonably detailed explanation of the
calculation thereof, the relevant Sterling Subsidiary Borrower shall immediately
pay to such Sterling Issuing Lender or such Lender, as the case may be, from
time to time as specified by the Sterling Administrative Agent or such Sterling
Lender, additional amounts which shall be sufficient to compensate such Sterling
Issuing Lender or such Sterling Lender for such increased cost, together with
interest on each such amount from the date demanded until payment in full
thereof at the rate provided in subsection 3.3. A certificate as to the fact and
amount of such increased cost incurred by the Sterling Issuing Lender or such
Sterling Lender as a result of any event mentioned in clauses (i) or (ii) above,
submitted by the Sterling Issuing Lender or such Lender to such Sterling
Subsidiary Borrower, shall be conclusive, absent manifest error.

            3.8. Sterling Letter of Credit Payments. If any draft in Sterling
shall be presented for payment under any Sterling Letter of Credit, the Sterling
Issuing Lender shall promptly notify the relevant Sterling Subsidiary Borrower
and the Sterling Administrative Agent of the date and amount of the Sterling
thereof. The responsibility of the Sterling Issuing Lender to the Sterling
Subsidiary Borrowers in connection with any draft presented for payment under
any Sterling Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Sterling Letter of Credit, be limited to
determining that the documents (including each draft) delivered under such
Sterling Letter of Credit in connection with such presentment are in conformity
with such Sterling Letter of Credit.

            (a) Application. To the extent that any provision of any Application
related to any Sterling Letter of Credit is inconsistent with the provisions of
the Credit Agreement, the provisions of the Credit Agreement shall apply.

            (b) Purpose of the Letters of Credit. The Sterling Letters of Credit
shall be used for any lawful purposes requested by the Sterling Subsidiary
Borrowers.

<PAGE>

                                                                      APPENDIX I

                PRICING GRID FOR STERLING LOANS AND FACILITY FEE

                                  PRICING GRID

<TABLE>
<CAPTION>
                             Applicable  Margin
                            -------------------
Leverage Ratio            LIBOR            Reference Rate           Facility Fee
--------------            -----            --------------           ------------
<S>                       <C>              <C>                      <C>
> or = 3.25 to 1.00       1.200%             0.200%                   0.300%

> or = 2.75 to 1.00       1.000%             0.000%                   0.250%

> or = 2.25 to 1.00       0.750%             0.000%                   0.250%

> or = 1.75 to 1.00       0.625%             0.000%                   0.250%

> or =1.25 to 1.00        0.550%             0.000%                   0.200%

< 1.25 to 1.00            0.450%             0.000%                   0.175%
</TABLE>

Changes in the Applicable Margin or in the Facility Fee Rate resulting from
changes in the Leverage Ratio shall become effective on the date (the
"Adjustment Date") on which financial statements are delivered to the Lenders
pursuant to subsection 6.1 (but in any event not later than the 45th day after
the end of each of the first three quarterly periods of each fiscal year of the
Borrower or the 90th day after the end of each fiscal year of the Borrower, as
the case may be) and shall remain in effect until the next change to be effected
pursuant to this paragraph. If any financial statements referred to above are
not delivered within the time periods specified above, then, until such
financial statements are delivered, the Leverage Ratio as at the end of the
fiscal period that would have been covered thereby shall for the purposes of
this definition be deemed to be greater than or equal to 3.25 to 1.00. In
addition, at all times while an Event of Default shall have occurred and be
continuing, the Leverage Ratio shall for the purposes of this definition be
deemed to be greater than 3.25 to 1.00. Each determination of the Leverage Ratio
pursuant to this pricing grid shall be made with respect to (or, in the case of
Average Total Indebtedness, as at the end of) the period of four consecutive
fiscal quarters of the Borrower ending at the end of the period covered by the
relevant financial statements.
<PAGE>
                                                                         ANNEX C

                             SECTION 1. DEFINITIONS

            Defined Terms. Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement, and the following terms shall have the following meanings:

            "Administrative Questionnaire" shall mean the administrative
      questionnaire of each Lender referred to in subsection 10.6 of the Credit
      Agreement.

            "Aggregate Australian Revolving Extensions of Credit" shall mean an
      amount equal to the sum of (a) the aggregate principal amount of all
      Australian Dollar Loans (including, without limitation, Australian Dollar
      Swing Line Loans borrowed under Australian Commitments) then outstanding
      and (b) the aggregate amount of all Australian L/C Obligations then
      outstanding.

            "Aggregate Facility C Revolving Extensions of Credit" shall mean an
      amount equal to the sum of (a) the aggregate principal amount of all
      Facility C Loans (including, without limitation, Australian Dollar Swing
      Line Loans borrowed under Facility C Commitments) then outstanding and (b)
      the aggregate amount of all Australian L/C Obligations then outstanding in
      respect of Letters of Credit issued under the Facility C Commitments.

            "Applicable Margin for Australian Borrowing" shall mean the rate per
      annum set forth in the pricing grid attached as Appendix I hereto.

            "Application" shall mean an application, in such form as the
      Australian Issuing Lender may specify from time to time, requesting such
      Australian Issuing Lender to open an Australian Letter of Credit.

            "Australian Dollars" or "A$" shall mean the lawful currency of the
      Commonwealth of Australia.

            "Australian Administrative Agent" shall mean J.P. Morgan Australia
      Limited, together with its affiliates, as the agent for the Australian
      Dollar Lenders under the Credit Agreement.

            "Australian Administrative Office" shall mean the Australian
      Administrative Agent's office located at Level 32, Grosvenor Place, 225
      George Street, Sydney NSW 2000 Australia, telecopy: +61-(2)-9247-7698,
      attention: Yvonne Blunt/Jason M. Lock/Graham McKinley, Agency, or such
      other office in Australia as may be designated as such by the Australian
      Administrative Agent by written notice to the Australian Subsidiary
      Borrowers and the Australian Dollar Lenders.

            "Australian Commitment" shall mean, as to any Australian Dollar
      Lender, the obligation of such Australian Dollar Lender to make Australian
      Dollar Loans and participate in Australian Dollar Swing Line Loans or
      Australian Letters of Credit hereunder in an aggregate principal or face
      amount at any one time outstanding up to but not exceeding the amount set
      forth opposite such Australian Dollar Lender's name on Schedule 1 to the
      Credit Agreement under the caption "Australian Commitment" or in the
      Assignment and Acceptance pursuant to which such Australian Dollar Lender
      became party to the Credit Agreement, as the same may be changed from time
      to time pursuant to the terms hereof. The original aggregate principal
      amount of the Australian Commitments is the Australian Dollar equivalent
      of U.S.$25,000,000.

<PAGE>

                                                                               2

            "Australian Commitment Percentage" shall mean as to any Australian
      Dollar Lender at any time, the percentage of the aggregate Australian
      Commitments then constituted by such Australian Dollar Lender's Australian
      Commitment.

            "Australian Dollar Lender" shall mean each Lender that has an
      Australian Commitment or that holds Australian Dollar Loans; collectively,
      the "Australian Dollar Lenders". Each Australian Dollar Lender on the date
      hereof and on each date on which a payment or prepayment of interest is
      made represents that it is an Eligible Australian Bank.

            "Australian Dollar Loan" shall mean any Loan made under the
      Australian Commitments pursuant to subsection 2.1; collectively, the
      "Australian Dollar Loans".

            "Australian Dollar Swing Line Commitment" shall mean the obligation
      of the Australian Dollar Swing Line Lender, at any date, to make an
      Australian Dollar Swing Line Loan pursuant to subsection 2.3(a) in the
      amount referred to therein.

            "Australian Dollar Swing Line Lender" shall mean JPMorgan Chase
      Bank, N.A., Sydney Branch.

            "Australian Dollar Swing Line Loan" shall mean any Australian Dollar
      Swing Line Loan made pursuant to subsection 2.3 hereof.

            "Australian Facility" shall mean the Australian Commitments together
      with the Aggregate Australian Revolving Extensions of Credit.

            "Australian Issuing Lender" shall mean JPMorgan Chase Bank, N.A.,
      Sydney Branch.

            "Australian L/C Commitment" shall mean the Australian Dollar
      equivalent of U.S.$25,000,000.

            "Australian L/C Obligations" shall mean, at any time, an amount
      equal to the sum of (a) the aggregate then undrawn and unexpired amount of
      then outstanding Australian Letters of Credit and (b) the aggregate amount
      of drawings under Australian Letters of Credit which have not then been
      reimbursed pursuant to Section 3.

            "Australian L/C Participants" shall mean the collective reference to
      all the Australian Dollar Lenders other than the Australian Issuing
      Lender.

            "Australian Lending Office" shall mean for each Australian Dollar
      Lender, the lending office for such Australian Dollar Lender (or of an
      affiliate of such Australian Dollar Lender) designated for each type of
      Australian Dollar Loan in the Administrative Questionnaire of such
      Australian Dollar Lender or such other lending office of such Australian
      Dollar Lender (or of an affiliate of such Australian Dollar Lender) as
      such Australian Dollar Lender may from time to time specify to the
      Australian Administrative Agent and the Australian Subsidiary Borrowers as
      the office by which its Australian Dollar Loans of such type are to be
      made and maintained.

            "Australian Letter of Credit" shall mean any Australian Standby L/C
      or Australian Trade L/C, as each term is defined in subsection 3.1.

            "Available Australian Commitment" shall mean, as to any Lender at
      any time, the amount equal to the excess, if any, of (a) such Lender's
      Australian Commitment over (b) the sum

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                                                                               3

      of such Lender's (i) ratable portion of the Aggregate Facility C Revolving
      Extensions of Credit and (ii) ratable portion of the Aggregate Australian
      Revolving Extensions of Credit. The Available Australian Commitment may be
      calculated as being negative at any time.

            "BBR Loans" shall mean the Loans hereunder at such time as they are
      made and/or being maintained at a rate of interest based upon the
      applicable Bank Bill Rate.

            "Bank Bill Rate" shall mean, for an Interest Period, the average bid
      rate for Bills having a tenor closest to the Interest Period as displayed
      on the "BBSY" page of the Reuters Monitor System on the first day of that
      Interest Period. However, if the average bid rate is not displayed by
      10:30 a.m. Sydney time on that day, or if it is displayed but there is an
      obvious error in that rate, "Bank Bill Rate" shall mean the rate set by
      the Australian Administrative Agent in good faith at approximately 10:30
      a.m. Sydney time on that day, having regard, to the extent possible, to
      the rates otherwise bid for Bills of that tenor at or around that time
      (including any displayed on the "BBSW" page of the Reuters Monitor
      System).

            "Bill" shall have the meaning given such term in the Bills of
      Exchange Act 1909 (Cwlth) and a reference to the drawing, acceptance or
      endorsement of, or other dealing with, a Bill is to be interpreted in
      accordance with that Act.

            "Borrowing Date (Australia)" shall mean any Business Day (Australia)
      specified in a notice as a date on which an Australian Subsidiary Borrower
      requests the relevant Australian Dollar Lenders to make Australian Dollar
      Loans under this Annex C to the Credit Agreement.

            "Business Day (Australia)" shall mean a day on which banks are open
      for business in Sydney but excludes Saturday, Sunday and any other day
      which is a public holiday in Sydney.

            "Dollar Equivalent (Australia)" shall mean, on any Business Day
      (Australia) with respect to any amount denominated in Australian Dollars,
      the amount of U.S. Dollars that would be required to purchase such amount
      of Australian Dollars based upon the spot selling rate at which JPMorgan
      Chase Bank offers to sell Australian Dollars for U.S. Dollars in the
      Sydney foreign exchange market at approximately 11:00 A.M. Sydney time on
      such Business Day (Australia) for delivery two Business Days (Australia)
      later.

            "Eligible Australian Bank" shall mean (a) a resident of Australia
      which does not make Australian Dollar Loans as part of carrying on
      business outside of Australia at or through a permanent establishment
      outside of Australia; or (b) a non-resident of Australia which makes Swing
      Line Loans or Revolving Credit Loans as part of carrying on business in
      Australia at or through a permanent establishment of the non-resident in
      Australia. In this definition, words and expressions used shall have the
      meaning ascribed to them for the purposes of S. 128B of the Australian
      Income Tax Assessment Act of 1936.

            "Facility Fee Rate" shall mean the rate per annum set forth under
      the relevant column heading in the pricing grid attached as Appendix I
      hereto.

            "Interest Payment Date" shall mean (i) for an Interest Period of 3
      months or less, the last day of that Interest Period or (ii) for an
      Interest Period which is greater than 3 months, the last day of each 3
      month period (or the next following Business Day (Australia) if such day
      is not a Business Day (Australia)) within that Interest Period and the
      last day of, that Interest Period.

<PAGE>

                                                                               4

            "Interest Period" shall mean with respect to any Australian Dollar
      Loan, (i) initially, the period commencing on the date on which such
      Australian Dollar Loan is made and ending one, two, three or six months or
      such other period as agreed by the Australian Administrative Agent
      thereafter, as selected by the relevant Australian Subsidiary Borrower in
      its irrevocable written notice of borrowing as provided in subsection 2.2
      and (ii) thereafter, each period commencing on the last day of the next
      preceding Interest Period applicable to such Australian Dollar Loan and
      ending one, two, three or six months thereafter, as selected by the
      relevant Australian Subsidiary Borrower by irrevocable written notice to
      the Australian Administrative Agent not less than three Business Days
      (Australia) prior to the last day of then current Interest Period with
      respect to such Australian Dollar Loan; provided that all of the foregoing
      provisions relating to Interest Periods are subject to the following:

                  1. if any Interest Period would otherwise end on a day which
            is not a Business Day (Australia), that Interest Period shall be
            extended to the next succeeding Business Day (Australia) unless the
            result of such extension would be to carry such Interest Period into
            another calendar month in which event such Interest Period shall end
            on the next preceding Business Day (Australia);

                  2. if the relevant Australian Subsidiary Borrower shall fail
            to give notice as provided in clause (ii) in this definition, the
            relevant Australian Subsidiary Borrower shall be deemed to have
            requested continuation of the affected Australian Dollar Loan as
            provided in subsection 2.11;

                  3. any Interest Period that would otherwise extend beyond the
            Revolving Credit Termination Date shall end on the Revolving Credit
            Termination Date; and

                  4. any Interest Period pertaining to an Australian Dollar Loan
            that begins on the last Business Day (Australia) of a calendar month
            (or on a day for which there is no numerically corresponding day in
            the calendar month at the end of such Interest Period) shall end on
            the last Business Day (Australia) of a calendar month.

            "Overnight Rate" shall mean, with respect to any day:

                  (1) the Reserve Bank of Australia Official Cash Rate
            (expressed as a percentage yield per annum rounded up to the nearest
            two decimal places) published at or about 10:00 a.m. Sydney time on
            the Reuters Monitor System screen under the heading "RBA" or, at the
            discretion of the Swing Line Lender or Australian Dollar Lender
            making Australian Dollar Loans to any Australian Subsidiary
            Borrower, the bank bill swap rate (expressed as a percentage yield
            per annum rounded up to the nearest two decimal places) published at
            or about 10:00 a.m. Sydney time;

                  (2) if the rate under clause (1) is not published at the
            relevant time, the rate (expressed as a percentage yield per annum)
            determined by the Australian Administrative Agent to be the
            prevailing buying rate for Australian Dollar cash deposits.

            "Post-Default Rate" shall mean a rate equal to the sum or 2% plus
      the rate of interest otherwise applicable to such Australian Dollar Loan.

            "Requirement of Law" shall mean, as to any Person, the Certificate
      of Incorporation, constitution or Articles of Incorporation, as the case
      may be, and Code of Regulations and/or By-Laws or other organizational or
      governing documents of such Person, and any law, treaty,

<PAGE>
                                                                               5

      rule or regulation, or determination of an arbitrator or a court or other
      Governmental Authority, in each case applicable to or binding upon such
      Person or any of its property or to which such Person or any of its
      property is subject.

                     SECTION 2. THE AUSTRALIAN COMMITMENTS

            2.1. The Australian Commitments. Subject to the terms and conditions
hereof, each Australian Dollar Lender severally (but not jointly) agrees to make
Australian Dollar Loans in Australian Dollars to each Australian Subsidiary
Borrower from time to time during the Revolving Credit Commitment Period in an
aggregate principal amount not to exceed the Available Australian Commitment of
such Australian Dollar Lender in accordance with the terms hereof (which for
this purpose shall be computed as though the amount in subclause (b)(i) in the
definition thereof is $0); provided that, after giving effect to the making of
such Australian Dollar Loans, the Aggregate Australian Revolving Extensions of
Credit will not exceed the Australian Commitment. During the Revolving Credit
Commitment Period the Australian Subsidiary Borrowers may use the Australian
Commitments by borrowing, repaying the Australian Dollar Loans in whole or in
part, and reborrowing, all in accordance with the terms and conditions hereof.
Each Australian Dollar Lender agrees that each of its Lending Installations
listed on Schedule 1 and subsequently agreed from time to time in Australia
shall be on the date hereof or the date of such agreement an Eligible Australian
Bank.

            2.2. Procedure for Australian Dollar Loan Borrowing. (a) The
Australian Subsidiary Borrowers may borrow under the Australian Facility during
the Revolving Credit Commitment Period on any Business Day (Australia); provided
that the relevant Australian Subsidiary Borrower shall give the Australian
Administrative Agent irrevocable notice three Business Days (Australia) prior to
the requested Borrowing Date (Australia) (which notice must be received by the
Australian Administrative Agent prior to 11:00 A.M., Sydney time), specifying
(i) the identity of the Australian Subsidiary Borrower borrowing and the amount
to be borrowed, (ii) the requested Borrowing Date (Australia) and (iii) the
length of the Interest Period for such Australian Dollar Loan. Each borrowing by
any Australian Subsidiary Borrower pursuant to the Australian Commitments shall
be in an aggregate principal amount equal to the Australian Dollar equivalent of
U.S.$1,000,000 or a whole multiple of the Australian Dollar equivalent of
U.S.$500,000 in excess thereof.

            (b) Upon receipt of any notice from an Australian Subsidiary
Borrower pursuant to this subsection 2.2, the Australian Administrative Agent
shall promptly notify each Australian Dollar Lender thereof. Each such
Australian Dollar Lender will make the amount of its ratable share (subject to
subsection 2.1) of such borrowing available to the Australian Administrative
Agent for the account of such Australian Subsidiary Borrower at the Australian
Administrative Office prior to 2:00 P.M., Sydney time, on the Borrowing Date
(Australia) requested by the such Australian Subsidiary Borrower in funds
immediately available to the Australian Administrative Agent. Such borrowing
will then be made available to such Australian Subsidiary Borrower by the
Australian Administrative Agent crediting the account of such Australian
Subsidiary Borrower on the books of the Australian Administrative Office with
the aggregate of the amounts made available to the Australian Administrative
Agent by such Australian Dollar Lenders.

            2.3. Swing Line Commitments. (a) Subject to the terms and conditions
hereof, from time to time prior to the Revolving Credit Termination Date and to
the Australian Subsidiary Borrowers (i) the Australian Dollar Swing Line Lender
severally (but not jointly) agrees to make Australian Dollar Swing Line Loans in
Australian Dollars in an aggregate principal amount not to exceed the Australian
Dollar equivalent of U.S.$ 15,000,000 at any one time outstanding (each of the
foregoing individually, a "Australian Dollar Swing Line Loan"; collectively the
"Australian Dollar Swing Line Loans"); provided that, after giving effect to the
making of such Australian Dollar Swing Line Loans, the aggregate principal

<PAGE>

                                                                               6

amount of Swing Line Loans under any Revolving Facility at any one time
outstanding shall not exceed U.S.$100,000,000 and the Aggregate Australian
Revolving Extensions of Credit shall not exceed the Australian Commitments. All
Australian Dollar Swing Line Loans shall be made on terms agreed upon by the
Australian Dollar Swing Line Lender and the applicable Australian Subsidiary
Borrowers. The relevant Australian Subsidiary Borrowers shall give the
Australian Administrative Agent irrevocable notice (which notice must be
received by the Australian Administrative Agent at or prior to 1:00 p.m., Sydney
time, on the requested Borrowing Date (Australia)), specifying the amount of
each requested Australian Dollar Swing Line Loan, which shall be greater than or
equal to a minimum amount to be agreed upon by such Australian Subsidiary
Borrowers and the relevant Australian Dollar Swing Line Lender. Upon such
notice, the Australian Administrative Agent shall promptly notify the Australian
Dollar Swing Line Lender thereof. The Australian Dollar Swing Line Lender shall
make the amount of each requested Australian Dollar Swing Line Loan available to
the relevant Australian Subsidiary Borrowers in the manner directed by the
Australian Administrative Agent on the requested Borrowing Date (Australia).

            (b) The Australian Dollar Swing Line Lender in its sole and absolute
discretion, may, on behalf of the relevant Australian Subsidiary Borrower (which
hereby irrevocably directs the Australian Dollar Swing Line Lender to act on its
behalf), request each Australian Dollar Lender, including the Australian Dollar
Swing Line Lender, with respect to all other Australian Dollar Swing Line Loans,
to make an Australian Dollar Loan, in an amount equal to such Australian Dollar
Lender's Revolving Percentage under the Australian Facility of the amount of the
Australian Dollar Swing Line Loans (the "Refunded Australian Dollar Swing Line
Loans") outstanding on the date such notice is given. Unless any of the events
described in paragraph (f) of Section 8 of the Credit Agreement shall have
occurred (in which event the procedures of paragraph (c) of this subsection 2.3
shall apply), each Australian Dollar Lender shall make the proceeds of its
Australian Dollar Loan available to the Australian Administrative Agent for the
account of the Australian Dollar Swing Line Lender, at the office of the
Australian Administrative Agent prior to 11:00 a.m. (Sydney time) in funds
immediately available on the third Business Day (Australia) following the date
such notice is given. The proceeds of such Australian Dollar Loans shall be
immediately applied to repay the Refunded Australian Dollar Swing Line Loans.

            (c) If, prior to the making of an Australian Dollar Swing Line Loan
pursuant to paragraph (b) of subsection 2.3, one of the events described in
paragraph (f) of Section 8 of the Credit Agreement shall have occurred, each
Australian Dollar Lender hereby agrees to and will, on the date such Australian
Dollar Swing Line Loan was to have been made, purchase an undivided
participating interest in each Refunded Australian Dollar Swing Line Loan in an
amount equal to its Revolving Percentage under the Australian Facility of such
Refunded Australian Dollar Swing Line Loan. Such Revolving Credit Lender will
immediately transfer to the Australian Administrative Agent for the account of
the Australian Dollar Swing Line Lender, in immediately available funds of the
amount of its participations and, upon its receipt of its ratable share thereof,
the Australian Dollar Swing Line Lender will deliver to such Australian Dollar
Lender a Swing Line Loan Participation Certificate dated the date of receipt of
such funds and in such amount.

            (d) Whenever, at any time after the Australian Dollar Swing Line
Lender has received from any Australian Dollar Lender such Australian Dollar
Lender's participating interest in a Refunded Australian Dollar Swing Line Loan
and the Australian Dollar Swing Line Lender receives any payment on account
thereof, the Australian Dollar Swing Line Lender will distribute to such
Australian Dollar Lender through the Australian Administrative Agent its
participating interest; provided, however, that in the event that such payment
received by the Australian Dollar Swing Line Lender is required to be returned,
such Australian Dollar Lender will return to the Australian Dollar Swing Line
Lender through the Australian Administrative Agent any portion thereof
previously distributed by the Australian Dollar Swing Line Lender to it.

<PAGE>

                                                                               7

            2.4. Participation. Each Australian Dollar Lender's obligation to
purchase participating interests pursuant to paragraph (c) of subsection 2.3
shall be absolute and unconditional and shall not be affected by any
circumstances, including, without limitation, (a) any set-off, counterclaim,
recoupment, defense or other right which such Australian Dollar Lender may have
against the Australian Dollar Swing Line Lender, any Australian Subsidiary
Borrower or any other Person for any reason whatsoever; (b) the occurrence or
continuance of an Event of Default; (c) any adverse change in the condition
(financial or otherwise) of the Borrower or any Australian Subsidiary Borrower;
(d) any breach of the Credit Agreement by the Borrower, any Subsidiary Borrower
or any other Revolving Credit Lender; or (e) any other circumstance, happening
or event whatsoever, whether or not similar to any of the foregoing.
Notwithstanding the foregoing, no Australian Dollar Lender shall have any
obligation to purchase participating interests pursuant to paragraph (c) of
subsection 2.3 or to make any Refunded Australian Dollar Swing Line Loans in
respect of any Australian Dollar Swing Line Loan which was made at any time
following receipt by the Australian Administrative Agent of a notice from any
Australian Dollar Lender specifying that (x) a Default or Event of Default has
occurred and is continuing and (y) explicitly stating that such Australian
Dollar Lender will not purchase such participating interests or make Refunded
Australian Dollar Swing Line Loans with respect to Australian Dollar Swing Line
Loans made after the date of receipt of such notice.

            2.5. Repayment of Australian Dollar Loans; Evidence of Debt. (a)
Each Australian Subsidiary Borrower hereby unconditionally promises to pay to
the Australian Administrative Agent for the account of each Australian Dollar
Lender (i) then unpaid principal amount of each Australian Dollar Loan of such
Australian Dollar Lender on the Revolving Credit Termination Date (or such
earlier date on which the Loans become due and payable pursuant to Section 8 of
the Credit Agreement) and (ii) then unpaid principal amount of the Australian
Dollar Swing Line Loans of the Australian Dollar Swing Line Lender on the
Revolving Credit Termination Date (or such earlier date on which the Australian
Dollar Swing Line Loans become due and payable pursuant to Section 8 of the
Credit Agreement). Each Australian Subsidiary Borrower hereby unconditionally
promises to pay to the Australian Administrative Agent for the account of such
Lender (i) then unpaid principal amount of each Loan to such Subsidiary Borrower
on the Revolving Credit Termination Date (or such earlier date on which the
Revolving Credit Loans become due and payable pursuant to Section 8 of the
Credit Agreement) and (ii) then unpaid principal amount of the Australian Dollar
Swing Line Loans to such Subsidiary Borrower of the Australian Dollar Swing Line
Lender on the Revolving Credit Termination Date (or such earlier date on which
the Australian Dollar Swing Line Loans became due and payable pursuant to
Section 8 of the Credit Agreement). Each of the Australian Subsidiary Borrowers
hereby further agrees to pay interest on the unpaid principal amount of the
Australian Dollar Loans from time to time outstanding to such Australian
Subsidiary Borrower from the date hereof until payment in full thereof at the
rates per annum, and on the dates, set forth in subsection 2.12.

            (a) Each Australian Dollar Lender shall maintain in accordance with
its usual practice an account or accounts evidencing indebtedness of the
Australian Subsidiary Borrowers to such Australian Dollar Lender resulting from
each Australian Dollar Loan of such Australian Dollar Lender from time to time,
including the amounts of principal and interest payable and paid to such
Australian Dollar Lender from time to time under the Credit Agreement.

            (b) The Australian Administrative Agent shall maintain a register
(the "Australian Register") in respect of the Australian Facility in a manner
similar to the Register described in Section 10.6(b)(iv) of the Credit
Agreement, and a subaccount therein for each Australian Dollar Lender, in which
shall be recorded (i) the amount of each Australian Dollar Loan made hereunder
and the type thereof, (ii) the amount of any principal or interest due and
payable or to become due and payable from any Australian Subsidiary Borrower to
each Australian Dollar Lender hereunder and (iii) both the amount of

<PAGE>

                                                                               8

any sum received by the Australian Administrative Agent hereunder from any
Australian Subsidiary Borrower and each Australian Dollar Lender's share
thereof.

            (c) The entries made in the Australian Register and the accounts of
each Australian Dollar Lender maintained pursuant to subsection 2.5(b) shall, to
the extent permitted by applicable law, be prima facie evidence of the existence
and amounts of the obligations of each Australian Subsidiary Borrower therein
recorded; provided, however, that the failure of any Australian Dollar Lender or
the Australian Administrative Agent to maintain the Australian Register or any
such account, or any error therein, shall not in any manner affect the
obligation of any Australian Subsidiary Borrower to repay (with applicable
interest) the Australian Dollar Loans made to such Australian Subsidiary
Borrower by such Australian Dollar Lender in accordance with the terms of the
Credit Agreement.

            2.6. Facility Fee. The Australian Subsidiary Borrowers agree to pay
to the Australian Administrative Agent, for the account of each Australian
Dollar Lender, a facility fee for the period from and including the Closing Date
to the Revolving Credit Termination Date, calculated as an amount equal to the
product of (a) the Facility Fee Rate and (b) the average daily amount of the
Australian Commitment of such Lender (regardless of usage) during the period for
which such facility fee is calculated, payable quarterly in arrears on the last
day of each March, June, September and December and on the Revolving Credit
Termination Date.

            2.7. Termination or Reduction of the Australian Commitments.

            (a) Optional. The Australian Subsidiary Borrowers shall have the
right, upon not less than five Business Days' (Australia) written notice to the
Australian Administrative Agent, to terminate the Australian Commitments or,
from time to time, reduce the amount of the Australian Commitments, provided
that (i) any such reduction shall be accompanied by prepayment of the Australian
Dollar Loans by the relevant Australian Subsidiary Borrower, together with
accrued interest on the amount so prepaid to the date of such prepayment, to the
extent, if any, the Available Australian Commitments would be negative as a
result of such reduction and (ii) any such termination of the Australian
Commitments shall be accompanied by (A) prepayment in full of the Australian
Dollar Loans then outstanding hereunder, (B) cash collateralization of all
Australian L/C Obligations then outstanding in accordance with the provisions of
subsection 2.10, and (C) payment of accrued interest thereon to the date of such
prepayment and the payment of any unpaid fees then accrued hereunder (including,
without limitation, in respect of any Australian Letters of Credit). Upon
receipt of such notice, the Australian Administrative Agent shall promptly
notify each Lender thereof. Any such reduction shall be in an amount equal to
the Australian Dollar equivalent of U.S.$500,000 or a whole multiple of the
Australian Dollar equivalent of U.S.$250,000 in excess thereof and shall reduce
permanently the amount of the Australian Commitments then in effect.

            (b) Mandatory. The Revolving Credit Commitments shall automatically
terminate on the Revolving Credit Termination Date and all Australian Dollar
Loans shall be repaid and to the extent any Australian Letter of Credit remains
outstanding after the Revolving Credit Termination Date, the relevant Australian
Subsidiary Borrower shall cash collateralize such Australian L/C Obligations
(and the fees thereon) in accordance with the provisions of subsection 2.10. The
Revolving Credit Commitments shall also be reduced in accordance with subsection
2.9.

            2.8. Optional Prepayments. Any Australian Subsidiary Borrower
may, at any time and from time to time, prepay the Australian Dollar Loans made
to it hereunder, in each case in whole or in part, without premium or penalty,
upon at least three Business Days' (Australia), in the case of BBR Loans, and on
one Business Day's (Australia), in the case of Loans bearing interest at the
Overnight Rate, irrevocable notice to the Australian Administrative Agent,
specifying the date and amount of prepayment.

<PAGE>

                                                                               9

If such notice is given, the relevant Australian Subsidiary Borrower shall make
such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to such
date on the amount prepaid. Partial prepayments shall be in an aggregate
principal amount of the Australian Dollar equivalent of U.S.$500,000 or a whole
multiple of the Australian Dollar equivalent of U.S.$250,000 in excess thereof.

            2.9. Mandatory Prepayments. The Australian Subsidiary Borrowers,
without notice or demand, shall immediately prepay the Australian Dollar Loans,
to the extent, if any, that the Available Australian Commitments are negative,
together with accrued interest to the date of such prepayment on the amount so
prepaid; provided that if such prepayment is required solely as a result of a
change in the aggregate Dollar Equivalent (Australia) of the Australian Dollar
Loans, no prepayment shall be made unless such prepayment is required pursuant
to subsection 2.21.

            2.10. Cash Collateralization of Australian Letters of Credit. To the
extent that at any time and from time to time, the Australian L/C Obligations
exceed the amount of the Australian L/C Commitments or the Australian L/C
Obligations exceed the Australian Commitments (whether pursuant to subsections
2.7, 2.8, 2.9 or otherwise), the Australian Subsidiary Borrowers shall cash
collateralize (in a manner reasonably satisfactory to the Australian
Administrative Agent) such portion of the Australian L/C Obligations (and the
fees thereon through the stated expiration date of the Australian Letters of
Credit giving rise to such Australian L/C Obligations) which is in excess of the
Australian L/C Commitments or such Australian Commitments, as applicable.

            2.11. Continuation Options. (a) Any Australian Dollar Loan may be
continued as such upon the expiration of an Interest Period by compliance by the
Australian Subsidiary Borrowers with the notice provisions contained in the
definition of Interest Period, provided that no Australian Dollar Loan may be
continued as such when any Default or Event of Default has occurred and is
continuing.

            (b) No continuation of any Australian Dollar Loans shall be made
pursuant to this subsection 2.11 if, after giving effect to such continuation
the amount of the Available Australian Commitments would be negative.

            2.12. Interest Rate and Payment Dates.

            (a) Each Australian Dollar Loan shall bear interest for each day
during each Interest Period with respect thereto at a rate per annum equal to
the Bank Bill Rate determined for such Interest Period (or, as applicable, the
Overnight Rate), plus the Applicable Margin.

            (b) If all or a portion of (i) the principal amount of any
Australian Dollar Loan or any reimbursement obligation, (ii) any interest
payable thereon or (iii) any facility fee, commission or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum which is (A) the rate pursuant to paragraph (a) of this subsection
plus 2% from the date of such non-payment until such amount is paid in full (as
well after as before judgment). The Australian Administrative Agent may choose
any Interest Period from time to time (including one Interest Period of shorter
than one month) with respect to any overdue amount bearing interest based upon
paragraph (a) of this subsection.

            (c) Interest shall be payable in arrears on each Interest Payment
Date, except that interest payable pursuant to subsection 2.12(b) shall be
payable upon demand.

<PAGE>

                                                                              10

            2.13. Computation of Interest and Fees. Each determination of an
interest rate by the Australian Administrative Agent pursuant to any provision
of this Annex C shall be conclusive and binding on the Australian Subsidiary
Borrowers absent manifest error.

            (b) Interest shall be calculated on the basis of a 365- (366-, as
the case may be) day year for the actual days elapsed. The Australian
Administrative Agent shall as soon as practicable notify the affected Australian
Dollar Lenders of each determination of the Bank Bill Rate. Any change in the
interest rate on an Australian Dollar Loan resulting from a change in any
reserve requirements shall become effective as of the opening of business on the
day on which such change in reserve requirements becomes effective. The
Australian Administrative Agent shall as soon as practicable notify the affected
Australian Dollar Lenders of the Closing Date and the amount of such change in
interest rate.

            (c) The Australian Administrative Agent shall, at the request of the
Australian Subsidiary Borrowers or any Australian Dollar Lender, deliver to the
Australian Subsidiary Borrowers or such Australian Dollar Lender a statement
showing in reasonable detail the calculations used by the Australian
Administrative Agent in determining any interest rate pursuant to subsection
2.12, excluding any Bank Bill Rate which is based upon the "BBSW" page of the
Reuters Monitor System.

            2.14. Inability to Determine Interest Rate. In the event that the
Australian Administrative Agent has reasonably determined (which determination
shall be conclusive and binding upon the Australian Subsidiary Borrowers absent
manifest error) that by reason of circumstances affecting the interbank
depositary market, adequate and reasonable means do not exist for ascertaining
the Bank Bill Rate applicable pursuant to subsection 2.12(a) for any Interest
Period with respect to (a) a proposed Australian Dollar Loan or (b) the
continuation of an Australian Dollar Loan beyond the expiration of then current
Interest Period with respect thereto, the Australian Administrative Agent shall
forthwith give telecopy or telephonic notice of such determination, confirmed in
writing, to the relevant Australian Subsidiary Borrowers and the Australian
Dollar Lenders at least one Business Days (Australia) prior to, as the case may
be, the requested Borrowing Date (Australia) for such Australian Dollar Loan or
the last day of such Interest Period. If such notice is given (i) any requested
Australian Dollar Loan shall bear interest at the Overnight Rate plus the
Applicable Margin and (ii) any outstanding Australian Dollar Loan shall, at the
end of such Interest Period, be continued at the Overnight Rate plus the
Applicable Margin. Until such notice has been withdrawn by the Australian
Administrative Agent, no further Bank Bill Rate Australian Dollar Loans shall be
made. Such notice shall be withdrawn by the Australian Administrative Agent when
the Australian Administrative Agent shall reasonably determine that adequate and
reasonable means exist for ascertaining the Bank Bill Rate.

            2.15. Pro Rata Treatment and Payments. Each borrowing under and any
reduction of the Australian Commitments shall be made ratably according to each
Australian Dollar Lenders' share of the Australian Commitments.

            (b) Each payment (including each prepayment) on account of principal
of and interest on the Australian Dollar Loans shall be made ratably according
to the respective outstanding principal amounts of such Loans then held by the
Australian Dollar Lenders.

            (c) All payments (including prepayments) to be made by any
Australian Subsidiary Borrower hereunder, whether on account of principal,
interest, fees or otherwise, shall be made without set off or counterclaim and
shall be made prior to 12:00 Noon, Sydney time, on the due date thereof to the
Australian Administrative Agent, for the account of the relevant Australian
Dollar Lenders, at the Australian Administrative Office, in Australian Dollars,
and in immediately available funds. The Australian Administrative Agent shall
distribute such payments to the relevant Australian Dollar Lenders promptly upon
receipt in like funds as received. If any payment on an Australian Dollar Loan
becomes

<PAGE>

                                                                              11

due and payable on a day other than a Business Day (Australia), the maturity
thereof shall be extended to the next succeeding Business Day (Australia) unless
the result of such extension would be to extend such payment into another
calendar month, in which event such payment shall be made on the immediately
preceding Business Day (Australia).

            (d) Unless the Australian Administrative Agent shall have been
notified in writing by any Australian Dollar Lender prior to a Borrowing Date
(Australia) that such Australian Dollar Lender will not make the amount that
would constitute its share of the borrowing on such date available to the
Australian Administrative Agent, the Australian Administrative Agent may assume
that such Australian Dollar Lender has made such amount available to the
Australian Administrative Agent on such Borrowing Date (Australia), and the
Australian Administrative Agent may, in reliance upon such assumption, make
available to the relevant Australian Subsidiary Borrower a corresponding amount.
If such amount is made available to the Australian Administrative Agent on a
date after such Borrowing Date (Australia), such Australian Dollar Lender shall
pay to the Australian Administrative Agent on demand an amount equal to the
product of (i) the Overnight Rate during such period as quoted by the Australian
Administrative Agent, times (ii) the amount of such Australian Dollar Lender's
share of such borrowing, times (iii) a fraction the numerator of which is the
number of days that elapse from and including such Borrowing Date (Australia) to
the date on which such Australian Dollar Lender's Revolving Percentage of such
borrowing shall have become immediately available to the Australian
Administrative Agent and the denominator of which is 360 (the "Effective
Interbank Rate"). A certificate of the Australian Administrative Agent submitted
to any Australian Dollar Lender with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error. If such amount
is so made available, such payment to the Australian Administrative Agent shall
constitute such Australian Dollar Lender's Loan on such Borrowing Date
(Australia) for all purposes of this Agreement. If such amount is not so made
available to the Australian Administrative Agent, then the Australian
Administrative Agent shall notify the relevant Australian Subsidiary Borrower of
such failure and on the fourth Business Days (Australia) following such
Borrowing Date (Australia), such Australian Subsidiary Borrower shall pay to the
Australian Administrative Agent such ratable portion, together with interest
thereon for each day that such Australian Subsidiary Borrower had the use of
such ratable portion, at the Effective Interbank Rate. Nothing contained in this
subsection 2.15(d) shall relieve any Australian Dollar Lender which has failed
to make available its ratable portion of any borrowing hereunder from its
obligation to do so in accordance with the terms hereof.

            (e) The failure of any Australian Dollar Lender to make the
Australian Dollar Loan to be made by it on any Borrowing Date (Australia) shall
not relieve any other Australian Dollar Lender of its obligation, if any,
hereunder to make its Australian Dollar Loan on such Borrowing Date (Australia),
but no Australian Dollar Lender shall be responsible for the failure of any
other Australian Dollar Lender to make the Australian Dollar Loan to be made by
such other Australian Dollar Lender on such Borrowing Date (Australia).

            2.16. Illegality. Notwithstanding any other provisions herein, if
any introduction of or change in any law, regulation, treaty or directive or in
the interpretation or application thereof occurring after the date hereof shall
make it unlawful for any Australian Dollar Lender to make or maintain BBR Loans
as contemplated by this Annex C, (a) such Australian Dollar Lender shall
forthwith give telecopy or telephonic notice of such circumstances, confirmed in
writing, to the relevant Australian Subsidiary Borrower (which notice shall be
withdrawn by such Australian Dollar Lender when such Australian Dollar Lender
shall reasonably determine that it shall no longer be illegal for such
Australian Dollar Lender to make or maintain BBR Loans), (b) the commitment of
such Australian Dollar Lender hereunder to make BBR Loans shall forthwith be
canceled and (c) such Australian Dollar Lender's Australian Dollar Loans then
outstanding, if any, shall be converted automatically to bear interest at the
Overnight Rate plus the Applicable Margin on the last day of then current
Interest Period with respect to such BBR

<PAGE>

                                                                              12

Loans or within such earlier period as may be required by law. Each Australian
Subsidiary Borrower hereby agrees promptly to pay the Australian Administrative
Agent for the account of each Australian Dollar Lender, upon demand by the
Australian Administrative Agent, any additional amounts necessary to compensate
the Australian Dollar Lenders for any costs incurred by the Australian Dollar
Lenders in making any conversion in accordance with this subsection 2.16,
including, but not limited to, any interest or fees payable by the Australian
Dollar Lenders to lenders of funds obtained by them in order to make or maintain
their BBR Loans hereunder (the Australian Administrative Agent's notice of such
costs, as certified to such Australian Subsidiary Borrower, to be conclusive,
absent manifest error).

            2.17. Requirements of Law. (a) In the event that any introduction of
or change in any law, regulation, treaty or directive or in the interpretation
or application thereof occurring after the date hereof or compliance by any
Australian Dollar Lender with any request or directive (whether or not having
the force of law) from any central bank or other governmental authority, agency
or instrumentality:

            (i) shall subject such Australian Dollar Lender to any tax of any
kind, whatsoever with respect to the Credit Agreement, including this Annex C,
any Australian Letter of Credit, any Application, or any Australian Dollar Loan
made by it or its obligation to make Australian Dollar Loans or change the basis
of taxation of payments to such Australian Dollar Lender of principal, facility
fee, interest or any other amount payable hereunder (other than Non-Excluded
Taxes (as defined in subsection 2.19) or changes in the rate of tax on the
overall net income of such Australian Dollar Lender)

            (ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by, or
deposits or other liabilities in or for the account of, advances or loans by, or
other credit extended by, or any other acquisition of funds by, any office of
such Australian Dollar Lender which are not otherwise included in the
determination of the Bank Bill Rate hereunder, or

            (iii) shall impose on such Australian Dollar Lender or the interbank
depositary market any other condition;

and the result of any of the foregoing is to increase the cost to such
Australian Dollar Lender (which increase in cost shall be the result of such
Australian Dollar Lender's reasonable allocation of the aggregate of such cost
increases resulting from such events), of making, renewing or maintaining
Australian Dollar Loans or issuing or participating in Australian Letters of
Credit or to reduce any amount receivable thereunder then, in any such case, the
relevant Australian Subsidiary Borrower shall, upon notice to it from such
Australian Dollar Lender (with a copy to the Administrative Agent) certifying
that (x) one of the events described in this subsection 2.17(a) has occurred and
the nature of such event, (y) the increased cost or reduced amount resulting
from such event and (z) the additional amounts demanded by such Australian
Dollar Lender and a reasonably detailed explanation of the calculation thereof,
promptly pay to the Australian Administrative Agent for the account of the
relevant Australian Dollar Lender, upon demand by the Australian Administrative
Agent, without duplication, any additional amounts necessary to compensate such
Australian Dollar Lender for such increased cost or reduced amount receivable
which such Australian Dollar Lender deems to be material as determined in good
faith by such Australian Dollar Lender with respect to the Credit Agreement,
including this Annex C, or the Australian Dollar Loans made hereunder.

            (b) In the event that any Australian Dollar Lender shall have
determined that any change in any Requirement of Law regarding capital adequacy
or in the interpretation or application thereof or compliance by such Australian
Dollar Lender or any corporation controlling such Australian Dollar Lender with
any request or directive regarding capital adequacy (whether or not having the
force of law)

<PAGE>

                                                                              13

from any Governmental Authority made subsequent to the date hereof does or shall
have the effect of reducing the rate of return on such Australian Dollar
Lender's or such corporation's capital as a consequence of its obligations
hereunder or under any Letters of Credit to a level below that which such
Australian Dollar Lender or such corporation could have achieved but for such
change or compliance (taking into consideration such Australian Dollar Lender's
or such corporation's policies with respect to capital adequacy) by an amount
deemed by such Australian Dollar Lender to be material, then from time to time,
within 15 days after submission by such Australian Dollar Lender to the
Australian Subsidiary Borrowers (with a copy to the Australian Administrative
Agent) of a written request therefor certifying that (x) one of the events
described in this subsection 2.17(b) has occurred and the nature of such event,
(y) the increased cost or reduced amount resulting from such event and (z) the
additional amounts demanded by such Australian Dollar Lender and a reasonably
detailed explanation of the calculation thereof, the Australian Subsidiary
Borrowers shall pay to such Australian Dollar Lender such additional amount or
amounts as will compensate such Australian Dollar Lender for such reduction.

            (c) Such Lender who has submitted a certificate as to additional
amounts payable pursuant to paragraphs (a) and (b) above agrees to use
reasonable efforts for a period of 90 days following the submission of such
certificate to make the Australian Dollar Loans available by some other means
(including changing its Lending Installation).

            (d) A certificate as to any additional amounts payable pursuant to
paragraphs (a) and (b) above submitted by any Australian Dollar Lender to an
Australian Subsidiary Borrower shall be conclusive absent manifest error.

            2.18. Indemnity. Each Australian Subsidiary Borrower agrees to
indemnify each Australian Dollar Lender and to hold each Australian Dollar
Lender harmless from any loss or expense which such Australian Dollar Lender may
sustain or incur as a consequence of (a) default by such Australian Subsidiary
Borrower in payment of the principal amount of or interest on any Australian
Dollar Loans including, but not limited to, any such loss or expense arising
from interest or fees payable by such Australian Dollar Lender to lenders of
funds obtained by them in order to maintain their Australian Dollar Loans, (b)
default by such Australian Subsidiary Borrower in borrowing Australian Dollar
Loans after such Australian Subsidiary Borrower has given a notice in accordance
with subsection 2.2, (c) default by such Australian Subsidiary Borrower in
making any prepayment of an Australian Dollar Loan after such Australian
Subsidiary Borrower has given a notice in accordance with subsection 2.8, and
(d) the making of any payment of Australian Dollar Loans on a day which is not
the last day of the applicable Interest Period with respect thereto, including,
but not limited to, any such loss or expense arising from interest or fees
payable by the Australian Dollar Lenders to lenders of funds obtained by them in
order to maintain their Australian Dollar Loans hereunder. This covenant shall
survive termination of the Credit Agreement. The obligations of indemnity of
each of the respective Australian Subsidiary Borrowers hereunder are limited
only to the loss and expense described herein arising from or as a result of any
act or omission by such Australian Subsidiary Borrower, and are not, and shall
not be deemed to be, the joint and several obligations of each such Australian
Subsidiary Borrower as to any loss or expense arising from or as a result of any
act or omission by the other Australian Subsidiary Borrowers.

            2.19. Taxes. All payments made by the Australian Subsidiary
Borrowers in respect of amounts owing under this Annex C shall be made free and
clear of, and without deduction or withholding for or on account of, any present
or future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding gross or net
income or gross receipts taxes, ad valorem taxes, personal property and/or sales
taxes and franchise taxes (imposed in lieu of net income taxes) imposed on the
Australian Administrative Agent or any Australian Dollar Lender as a result of a
present or former

<PAGE>

                                                                              14

connection between the Australian Administrative Agent or such Australian Dollar
Lender and the jurisdiction of the Governmental Authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Australian Administrative Agent or such
Australian Dollar Lender having executed, delivered or performed its obligations
or received a payment under, or enforced, this Annex C). If any such
non-excluded taxes, levies, imposts, duties, charges, fees deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Australian Administrative Agent or any Australian Dollar Lender
hereunder, the amounts so payable to the Australian Administrative Agent or such
Australian Dollar Lender shall be increased to the extent necessary to yield to
the Australian Administrative Agent or such Australian Dollar Lender (after
payment of all Non-Excluded Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Annex C, provided,
however, that none of the Australian Subsidiary Borrowers shall be required to
increase any such amounts payable to the Australian Administrative Agent or any
Australian Dollar Lender if such increased amount arises as a result of the
failure of such Australian Dollar Lender or the Australian Administrative Agent
to be an Eligible Australian Bank or as a result of the failure of the
Australian Administrative Agent or such Australian Dollar Lender to provide its
tax file number, ABN or similar information to the Australian Subsidiary
Borrowers. The Australian Subsidiary Borrowers shall also indemnify the
Australian Administrative Agent and each Australian Dollar Lender on an
after-tax basis for any additional taxes on net income which the Australian
Administrative Agent or such Australian Dollar Lender, as the case may be, may
be obligated to pay as a result of the receipt of additional amounts under this
subsection 2.19. Whenever any Non-Excluded Taxes are payable by any Australian
Subsidiary Borrower, as promptly as possible thereafter but in any event within
45 days after the date of payment such Australian Subsidiary Borrower shall send
to the Australian Administrative Agent for its own account or for the account of
such Australian Dollar Lender, as the case may be, a certified copy of an
original official receipt received by such Australian Subsidiary Borrower
showing payment thereof. If any Australian Subsidiary Borrower fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Australian Administrative Agent the required receipts or other
required documentary evidence, such Australian Subsidiary Borrower shall
indemnify the Australian Administrative Agent and the Australian Dollar Lenders
for any incremental taxes, interest or penalties that may become payable by the
Australian Administrative Agent or any Australian Dollar Lender as a result of
any such failure. The agreements in this subsection shall survive the
termination of this Annex C and the payment of the Australian Dollar Loans and
all other amounts payable hereunder.

            2.20. Use of Proceeds. The Australian Facility and the proceeds of
the Australian Dollar Loans shall be used by the Australian Subsidiary Borrowers
for working capital and other general corporate purposes (which shall include
any purpose expressly permitted by the Credit Agreement) of the Australian
Subsidiary Borrowers; provided that, notwithstanding the foregoing, none of the
proceeds of the Australian Dollar Loans may be used to finance any Hostile
Take-Over Bid.

            2.21. Controls on Prepayment if Aggregate Revolving Extensions of
Credit Exceed Aggregate Revolving Credit Commitments. (a) The Australian
Subsidiary Borrowers will implement and maintain internal controls to monitor
the borrowings and repayments of Australian Dollar Loans by the relevant
Australian Subsidiary Borrowers and the issuance of and drawings under
Australian Letters of Credit, with the object of preventing any request for an
Extension of Credit that would result in the Available Australian Commitments
becoming negative by more than 5% of the Australian Commitments, if such
Commitments are negative by more than 5%, the Australian Subsidiary Borrowers
will promptly notify the Australian Administrative Agent.

            (b) The Australian Administrative Agent will calculate the Available
Australian Commitments from time to time, and in any event not less frequently
than once during each calendar quarter. In making such calculations, the
Australian Administrative Agent will rely on the information

<PAGE>

                                                                              15

most recently received by it from the Australian Dollar Swing Line Lender in
respect of outstanding Australian Dollar Swing Line Loans and from the
Australian Issuing Lender in respect of outstanding Australian L/C Obligations.

            (c) In the event that on any date the Australian Administrative
Agent calculates that (i) the Available Australian Commitments have become
negative solely as a result of a change in the aggregate Dollar Equivalent
(Australia) of the Australian Dollar Loans by more than 5%, the Australian
Administrative Agent will give notice to such effect to the relevant Australian
Subsidiary Borrowers and the Australian Dollar Lenders. Within five Business
Days (Australia) of receipt of any such notice, such Australian Subsidiary
Borrower will, as soon as practicable but in any event within five Business Days
(Australia) of receipt of such notice, first, make such repayments or
prepayments of Australian Dollar Loans (together with interest accrued to the
date of such repayment or prepayment), second, pay any Reimbursement Obligations
under the Australian Facility then outstanding and third, cash collateralize any
outstanding Australian L/C Obligations on terms reasonably satisfactory to the
Australian Administrative Agent as shall be necessary to cause the Available
Australian Commitments not to be negative.

            2.22. Lending Installations. (a) Subject to subsection 2.4 of the
Credit Agreement and subsections 2.1 and 2.3 of this Annex C each Australian
Dollar Lender may book its Australian Dollar Loans at any Lending Installation
selected by such Australian Dollar Lender and may change its Lending
Installation from time to time. All terms of the Credit Agreement shall apply to
any such Lending Installation and the Australian Dollar Loans made hereunder
shall be deemed held by each Australian Dollar Lender for the benefit of such
Lending Installation, provided that such Lending Installation is an Eligible
Australian Bank. Each Australian Dollar Lender may, by written notice to the
Australian Administrative Agent and the Australian Subsidiary Borrowers in
accordance with subsection 10.2 of the Credit Agreement and subject always to
subsection 2.4 of the Credit Agreement and subsections 2.1 and 2.3 of this Annex
C designate replacement or additional Lending Installations through which
Australian Dollar Loans will be made by it and for whose account Australian
Dollar Loan payments are to be made.

            (b) Each Australian Dollar Lender agrees that, upon the occurrence
of any event giving rise to the operation of subsection 2.17 or 2.19 with
respect to such Australian Dollar Lender, it will, if requested by the
Australian Subsidiary Borrower, use reasonable efforts (subject to overall
policy considerations of such Australian Dollar Lender) to designate another
Lending Installation for any Australian Dollar Loans affected by such event with
the object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the sole judgment of such Australian
Dollar Lender, cause such Australian Dollar Lender and any of its Lending
Installations to suffer no economic, legal or regulatory disadvantage, and
provided, further, that nothing in this subsection 2.22(b) shall affect or
postpone any of the obligations of the Australian Subsidiary Borrowers or the
rights of any Australian Dollar Lender pursuant to subsection 2.17 or 2.19.

            2.23. Notices to Lenders. All notices under this Section 2 to
Australian Dollar Lenders by the Australian Subsidiary Borrowers or the
Australian Administrative Agent, and all payments by the Australian
Administrative Agent to the Australian Dollar Lenders, shall be made to the
respective Lending Installations of the Australian Dollar Lenders maintaining
the relevant Australian Dollar Loans or Australian Commitments.

                     SECTION 3. LETTER OF CREDIT FACILITIES

            3.1. Australian L/C Commitment. (a) Subject to the terms and
conditions hereof, the Australian Issuing Lender, in reliance on the agreements
of the other Lenders set forth in subsection 3.4(a), agrees to issue letters of
credit ("Australian Letters of Credit") under the Australian Commitments

<PAGE>

                                                                              16

for the account of any Australian Subsidiary Borrower on any Business Day
(Australia) during the Revolving Credit Commitment Period in such form as may be
approved from time to time by the Australian Issuing Lender; provided that the
Australian Issuing Lender shall not have any obligation to issue any Australian
Letter of Credit if, after giving effect to such issuance, (i) the Australian
L/C Obligations would exceed the Australian L/C Commitment or (ii) the Available
Australian Commitments would be negative. Each Australian Letter of Credit shall
(i) be denominated in Australian Dollars, (ii) be either (x) a standby letter of
credit (a "Australian Standby L/C") issued to support obligations of any
Australian Subsidiary Borrower, contingent or otherwise, with an expiry date
occurring not later than one year after such standby Australian L/C was issued
(which expiry date may be subject to one or more automatic extensions of one
year or less unless 60-day notice, or such other notice as is satisfactory to
the relevant Australian Subsidiary Borrower and the Australian Issuing Lender,
is given that any such extension shall not be effective) or (y) a documentary
letter of credit in respect of the purchase of goods or services by any
Australian Subsidiary Borrower in the ordinary course of business with an expiry
date occurring not later than one year after such documentary letter of credit
was issued and, in the case of any such documentary letter of credit which is to
be accepted by the Australian Issuing Lender pending payment at a date after
presentation of sight drafts, with a payment date no more than one year after
such drafts were presented for acceptance (a "Australian Trade L/C") and (iii)
expire no later than five days before the Revolving Credit Termination Date.

            (b) Each Australian Standby L/C shall be subject to the
International Standby Practices and each Australian Trade L/C shall be subject
to the Uniform Customs and, in each case, to the extent not inconsistent
therewith, the laws of the State of New York.

            (c) The Australian Issuing Lender shall at no time be obligated to
issue any Australian Letter of Credit hereunder if such issuance would conflict
with, or cause the Australian Issuing Lender or any Australian L/C Participant
to exceed any limits imposed by, any applicable Requirement of Law.

            3.2. Procedure for Issuance of Letters of Credit. Any Australian
Subsidiary Borrower may from time to time request that the Australian Issuing
Lender issue an Australian Letter of Credit by delivering to the Australian
Issuing Lender (with a copy to the Australian Administrative Agent) at its
address for notices specified herein an Application therefor, completed to the
satisfaction of the Australian Issuing Lender, and such other certificates,
documents and other papers and information as the Australian Issuing Lender may
reasonably request. Upon receipt of any Application, the Australian Issuing
Lender will process such Application and the certificates, documents and other
papers and information delivered to it in connection therewith in accordance
with its customary procedures and shall promptly issue the Australian Letter of
Credit requested thereby (but in no event shall the Australian Issuing Lender be
required to issue any Australian Letter of Credit earlier than four Business
Days (Australia) after its receipt of the Application therefor and all such
other certificates, documents and other papers and information relating thereto)
by issuing the original of such Australian Letter of Credit to the beneficiary
thereof or as otherwise may be agreed by the Australian Issuing Lender and any
relevant Australian Subsidiary Borrower. The Australian Issuing Lender shall
furnish a copy of such Australian Letter of Credit to the relevant Australian
Subsidiary Borrower, to the Australian Administrative Agent promptly following
the issuance thereof.

            3.3. Fees, Commissions and Other Charges. (a) The relevant
Australian Subsidiary Borrower shall pay to the Australian Administrative Agent,
for the ratable account of the Australian Issuing Lender and the Australian L/C
Participants, a letter of credit commission in Australian Dollars with respect
to each Australian Trade L/C issued by the Australian Issuing Lender (i) in an
amount equal to the Dollar Equivalent (Australia) of such issuance and payment
fees as have been agreed upon by relevant Australian Subsidiary Borrower and the
Australian Issuing Lender and (ii) in an amount equal to the product of, on the
date on which such commission is calculated, (A) the rate per annum equal to the

<PAGE>

                                                                              17

Applicable Margin in respect of BBR Loans and (B) the Dollar Equivalent
(Australia) of the aggregate amount available to be drawn under each Australian
Letter of Credit (plus an additional 1/4 of 1% per annum which shall be payable
for the account of the Australian Issuing Lender). Such letter of credit
commissions shall be payable in arrears on the last day of each March, June,
September and December and shall be nonrefundable.

            (b) The relevant Australian Subsidiary Borrower shall pay to the
Australian Administrative Agent, for the ratable account of the Australian
Issuing Lender and the Australian L/C Participants, a letter of credit
commission in Australian Dollars with respect to each Australian Standby L/C
issued by the Australian Issuing Lender, computed for the period from the date
of such payment to the date upon which the next such payment is due hereunder in
an amount equal to the product of (i) the rate equal to the Applicable Margin in
respect of BBR Loans in effect on the date on which such commission is
calculated and (ii) the Australian Dollar equivalent of the aggregate amount
available to be drawn under such Australian Standby L/C on the date on which
such commission is calculated (plus an additional 1/4 of 1% per annum which
shall be payable for the account of the Australian Issuing Lender). The relevant
Australian Subsidiary Borrower shall also pay to the Australian Administrative
Agent, for the account of the Australian Issuing Lender, such issuance fees as
have been agreed upon by the relevant Australian Subsidiary Borrower and the
Australian Issuing Lender. Such letter of credit commissions shall be payable in
arrears on the last day of each March, June, September and December and shall be
nonrefundable.

            (c) In addition to the foregoing fees and commissions, the relevant
Australian Subsidiary Borrower shall pay or reimburse the Australian Issuing
Lender for such normal and customary costs and expenses as are incurred or
charged by the Australian Issuing Lender in issuing, effecting payment under,
amending or otherwise administering any Australian Letter of Credit issued by
it.

            (d) The Australian Administrative Agent shall, promptly following
its receipt thereof, distribute to the Australian Issuing Lender and the
Australian L/C Participants all fees and commissions received by the Australian
Administrative Agent for their respective accounts pursuant to this subsection
3.3.

            3.4. Australian L/C Participation. (a) The Australian Issuing Lender
irrevocably agrees to grant and hereby grants to each Australian L/C
Participant, and, to induce the Australian Issuing Lender to issue Australian
Letters of Credit hereunder, each such Australian L/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases from the
Australian Issuing Lender, on the terms and conditions hereinafter stated, for
such Australian L/C Participant's own account and risk an undivided interest
equal to such Australian L/C Participant's ratable share of the Australian
Facility in the Australian Issuing Lender's obligations and rights under each
Australian Letter of Credit issued hereunder and the amount of each draft paid
by the Australian Issuing Lender thereunder. Each such Australian L/C
Participant unconditionally and irrevocably agrees with the Australian Issuing
Lender that, if a draft is paid under any such Australian Letter of Credit for
which the Australian Issuing Lender is not reimbursed in full by the relevant
Australian Subsidiary Borrower in accordance with the terms of the Credit
Agreement (including this Annex C), such Australian L/C Participant shall pay to
the Australian Issuing Lender upon demand at the Australian Issuing Lender's
address for notices specified herein an amount equal to such Australian L/C
Participant's ratable share of the Australian Facility of the amount of such
draft, or any part thereof, which is not so reimbursed.

            (b) If any amount required to be paid by any Australian L/C
Participant to the Australian Issuing Lender pursuant to subsection 3.4(a) in
respect of any unreimbursed portion of any payment made by the Australian
Issuing Lender under any Australian Letter of Credit is not paid to the
Australian Issuing Lender within three Business Days (Australia) after the date
such payment is due, such Australian

<PAGE>

                                                                              18

L/C Participant shall pay to the Australian Issuing Lender on demand an amount
equal to the product of (i) such amount, times (ii) the customary rate as
selected by the Australian Issuing Lender for the settlement of obligations
between banks during the period from and including the date such payment is
required to the date on which such payment is immediately available to the
Australian Issuing Lender, times (iii) a fraction the numerator of which is the
number of days that elapse during such period and the denominator of which is
360. If any such amount required to be paid by any such Australian L/C
Participant pursuant to subsection 3.4(a) is not in fact made available to the
Australian Issuing Lender by such Australian L/C Participant within three
Business Days (Australia) after the date such payment is due, the Australian
Issuing Lender shall be entitled to recover from such Australian L/C
Participant, on demand, such amount with interest thereon calculated from such
due date at the rate per annum applicable to BBR Loans hereunder. A certificate
of the Australian Issuing Lender submitted to any Australian L/C Participant
with respect to any amounts owing under this subsection shall be conclusive in
the absence of manifest error.

            (c) Whenever, at any time after the Australian Issuing Lender has
made payment under any Australian Letter of Credit and has received from any
Australian L/C Participant its ratable share of such payment in accordance with
subsection 3.4(a), the Australian Issuing Lender receives any payment related to
such Australian Letter of Credit (whether directly from the relevant Australian
Subsidiary Borrower or otherwise), or any payment of interest on account
thereof, the Australian Issuing Lender will distribute to such Australian L/C
Participant its ratable share thereof; provided, however, that in the event that
any such payment received by the Australian Issuing Lender shall be required to
be returned by the Australian Issuing Lender, such Australian L/C Participant
shall return to the Australian Issuing Lender the portion thereof previously
distributed by the Australian Issuing Lender to it.

            3.5. Reimbursement Obligation of the Australian Subsidiary
Borrowers. The relevant Australian Subsidiary Borrower agrees to reimburse the
Australian Issuing Lender on each date on which the Australian Issuing Lender
notifies such Australian Subsidiary Borrower of the date and amount of a draft
presented under any Australian Letter of Credit and paid by the Australian
Issuing Lender for the amount of (a) such draft so paid and (b) any taxes (other
than Excluded Taxes), fees, charges or other costs or expenses incurred by the
Australian Issuing Lender in connection with such payment; provided that upon
the acceleration of such reimbursement obligations in accordance with Section 8
of the Credit Agreement, the relevant Australian Subsidiary Borrower agrees to
reimburse the Australian Issuing Lender for the amount equal to then maximum
liability (whether direct or contingent) of the Australian Issuing Lender and
the Australian L/C Participants under such Australian Letter of Credit. Each
such payment shall be made to the Australian Issuing Lender, at its address for
notices specified herein in Australian Dollars and in immediately available
funds, on the date on which the relevant Australian Subsidiary Borrower receives
such notice, if received prior to 11:00 A.M., Sydney time, on a Business Day
(Australia) and otherwise on the next succeeding Business Day (Australia).

            3.6. Obligations Absolute. Any relevant Australian Subsidiary
Borrower's obligations under this Section 3 shall be absolute and unconditional
under any and all circumstances and irrespective of any set-off, counterclaim or
defense to payment which any relevant Australian Subsidiary Borrower may have or
have had against the Australian Issuing Lender or any beneficiary of an
Australian Letter of Credit. Each Australian Subsidiary Borrower also agrees
with the Australian Issuing Lender that the Australian Issuing Lender shall not
be responsible for, such relevant Australian Subsidiary Borrower's Reimbursement
Obligations under subsection 3.5 shall not be affected by, among other things,
the validity or genuineness of documents or of any endorsements thereon, even
though such documents shall in fact prove to be invalid, fraudulent or forged,
or any dispute between or among any relevant Australian Subsidiary Borrower and
any beneficiary of any Australian Letter of Credit or any other party to which
such Australian Letter of Credit may be transferred or any claims whatsoever of
the relevant Australian Subsidiary Borrower against any beneficiary of such
Australian Letter of Credit or any such transferee.

<PAGE>

                                                                              19

The Australian Issuing Lender shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Australian Letter of Credit
issued by it, except for errors or omissions caused by the Australian Issuing
Lender's gross negligence or willful misconduct. Each Australian Subsidiary
Borrower agrees that any action taken or omitted by the Australian Issuing
Lender under or in connection with any Australian Letter of Credit issued by it
or the related drafts or documents, if done in the absence of gross negligence
or willful misconduct and in accordance with the standards of care specified in
the Uniform Commercial Code of the State of New York, shall be binding on the
any relevant Australian Subsidiary Borrower and shall not result in any
liability of the Australian Issuing Lender to any relevant Australian Subsidiary
Borrower.

            3.7. Increased Costs. If the adoption of or any change in any law or
regulation or in the interpretation thereof after the date hereof by any court
or administrative or Governmental Authority charged with the administration
thereof shall either (i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against Australian Letters of Credit issued by
the Australian Issuing Lender or participated in by the Lenders or (ii) impose
on any Australian Dollar Lender any other condition regarding any Australian
Letter of Credit, and the result of any event referred to in clauses (i) or (ii)
above shall be to increase the cost to the Australian Issuing Lender or any
Australian Dollar Lender of issuing or maintaining such Australian Letter of
Credit (or its participation therein, as the case may be) (which increase in
cost shall be the result of the Australian Issuing Lender's or such Lender's
reasonable allocation of the aggregate of such cost increases resulting from
such events), then, upon notice to it from the Australian Issuing Lender or such
Lender (with a copy to the Australian Administrative Agent) certifying that (x)
one of the events herein above described has occurred and the nature of such
event, (y) the increased cost or reduced amount resulting from such event and
(z) the additional amounts demanded by the Australian Issuing Lender or such
Lender, as the case may be, and a reasonably detailed explanation of the
calculation thereof, the relevant Australian Subsidiary Borrower shall
immediately pay to such Australian Issuing Lender or such Lender, as the case
may be, from time to time as specified by the Australian Administrative Agent or
such Australian Dollar Lender, additional amounts which shall be sufficient to
compensate such Australian Issuing Lender or such Australian Dollar Lender for
such increased cost, together with interest on each such amount from the date
demanded until payment in full thereof at the rate provided in subsection 3.3. A
certificate as to the fact and amount of such increased cost incurred by the
Australian Issuing Lender or such Australian Dollar Lender as a result of any
event mentioned in clauses (i) or (ii) above, submitted by the Australian
Issuing Lender or such Lender to such Australian Subsidiary Borrower, shall be
conclusive, absent manifest error.

            3.8. Australian Letter of Credit Payments. If any draft in
Australian Dollars shall be presented for payment under any Australian Letter of
Credit, the Australian Issuing Lender shall promptly notify the relevant
Australian Subsidiary Borrower and the Australian Administrative Agent of the
date and amount of the Australian thereof. The responsibility of the Australian
Issuing Lender to the Australian Subsidiary Borrowers in connection with any
draft presented for payment under any Australian Letter of Credit shall, in
addition to any payment obligation expressly provided for in such Australian
Letter of Credit, be limited to determining that the documents (including each
draft) delivered under such Australian Letter of Credit in connection with such
presentment are in conformity with such Australian Letter of Credit.

            (a) Application. To the extent that any provision of any Application
related to any Australian Letter of Credit is inconsistent with the provisions
of the Credit Agreement, the provisions of the Credit Agreement shall apply.

            (b) Purpose of the Letters of Credit. The Australian Letters of
Credit shall be used for any lawful purposes requested by the Australian
Subsidiary Borrowers.

<PAGE>

                                                                      APPENDIX I

            PRICING GRID FOR AUSTRALIAN DOLLAR LOANS AND FACILITY FEE

                                  PRICING GRID

<TABLE>
<CAPTION>
                                 Applicable
                                   Margin
     Leverage       -------------------------------------     Facility
       Ratio         Bank Bill Rate      Overnight Rate          Fee
  --------------     --------------      --------------       ---------
<S>                  <C>                 <C>                  <C>
> or = 3.25 to 1.00       1.200%              0.200%            0.300%

> or = 2.75 to 1.00       1.000%              0.000%            0.250%

> or = 2.25 to 1.00       0.750%              0.000%            0.250%

> or = 1.75 to 1.00       0.625%              0.000%            0.250%

> or = 1.25 to 1.00       0.550%              0.000%            0.200%

< 1.25 to 1.00            0.450%              0.000%            0.175%
</TABLE>

Changes in the Applicable Margin or in the Facility Fee Rate resulting from
changes in the Leverage Ratio shall become effective on the date (the
"Adjustment Date") on which financial statements are delivered to the Lenders
pursuant to subsection 6.1 (but in any event not later than the 45th day after
the end of each of the first three quarterly periods of each fiscal year of the
Borrower or the 90th day after the end of each fiscal year of the Borrower, as
the case may be) and shall remain in effect until the next change to be effected
pursuant to this paragraph. If any financial statements referred to above are
not delivered within the time periods specified above, then, until such
financial statements are delivered, the Leverage Ratio as at the end of the
fiscal period that would have been covered thereby shall for the purposes of
this definition be deemed to be greater than or equal to 3.25 to 1.00. In
addition, at all times while an Event of Default shall have occurred and be
continuing, the Leverage Ratio shall for the purposes of this definition be
deemed to be greater than 3.25 to 1.00. Each determination of the Leverage Ratio
pursuant to this pricing grid shall be made with respect to (or, in the case of
Average Total Indebtedness, as at the end of) the period of four consecutive
fiscal quarters of the Borrower ending at the end of the period covered by the
relevant financial statements.
<PAGE>

                                                                         ANNEX D

                             SECTION 1. DEFINITIONS

            Defined Terms. Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement, and the following terms shall have the following meanings:

            "Acceptance Fee" shall mean the fee payable in Canadian Dollars to
      each Canadian Dollar Lender in respect of Bankers' Acceptances computed in
      accordance with subsection 2.3(g).

            "Aggregate Canadian Revolving Extensions of Credit" shall mean an
      amount equal to the sum of (a) the aggregate principal amount of all
      Canadian Dollar Loans (including, without limitation, Canadian Dollar
      Swing Line Loans borrowed under Canadian Commitments) then outstanding and
      (b) the aggregate amount of all Canadian L/C Obligations then outstanding.

            "Aggregate Facility D Revolving Extensions of Credit" shall mean an
      amount equal to the sum of (a) the aggregate principal amount of all
      Facility D Loans (including, without limitation, Canadian Dollar Swing
      Line Loans borrowed under Facility D Commitments) then outstanding and (b)
      the aggregate amount of all Canadian L/C Obligations then outstanding in
      respect of Letters of Credit issued under the Facility D Commitments.

            "Applicable BA Discount Rate" shall mean (i) with respect to any
      Schedule I Canadian Dollar Lender, as applicable to a Bankers' Acceptance
      being purchased by such Schedule I Canadian Dollar Lender on any day, the
      CDOR Rate on such day (or, if no CDOR Rate is quoted for such day, the
      average (as determined by the Canadian Administrative Agent) of the
      respective percentage discount rates (expressed to two decimal places and
      rounded upward, if necessary, to the nearest 1/100th of 1%) quoted to the
      Canadian Administrative Agent by each Schedule I Canadian Dollar Reference
      Lender as the percentage discount rate at which such Schedule I Canadian
      Dollar Reference Lender would, in accordance with its normal practices, at
      or about 10:00 A.M. (Toronto time) on such day, be prepared to purchase
      bankers' acceptances accepted by such Schedule I Canadian Dollar Reference
      Lender having a term and face amount comparable to the term and face
      amount of such Bankers' Acceptance) and (ii) with respect to any
      Non-Schedule I Canadian Dollar Lender, as applicable to a Bankers'
      Acceptance being purchased by such Non-Schedule I Canadian Dollar Lender
      on any day, the lesser of (x) the average (as determined by the Canadian
      Administrative Agent) of the respective percentage discount rates
      (expressed to two decimal places and rounded upward, if necessary, to the
      nearest 1/100th of 1%) quoted to the Canadian Administrative Agent by the
      Non-Schedule I Canadian Dollar Reference Lender as the percentage discount
      rate at which such Non-Schedule I Canadian Dollar Reference Lender would,
      in accordance with its normal practices, at or about 10:00 A.M. (Toronto
      time) on such day, be prepared to purchase bankers' acceptances accepted
      by such Non-Schedule I Canadian Dollar Lender Reference having a term and
      a face amount comparable to the term and face amount of such Bankers'
      Acceptance and (y) the rate that is 0.10% per annum in excess of the rate
      determined pursuant to clause (i) of this definition in connection with
      the relevant issuance of Bankers' Acceptances.

            "Applicable Margin for Canadian Borrowing" shall mean for each type
      of Canadian Dollar Loan, the rate per annum set forth under the relevant
      column heading in the pricing grid attached as Appendix I hereto.

<PAGE>

                                                                               2

            "Application" shall mean an application, in such form as the
      Canadian Issuing Lender may specify from time to time, requesting such
      Canadian Issuing Lender to open a Canadian Letter of Credit.

            "Available Canadian Commitment" shall mean, as to any Lender at any
      time, the amount equal to the excess, if any, of (a) such Lender's
      Canadian Commitment over (b) the sum of such Lender's (i) ratable portion
      of the Aggregate Facility D Revolving Extensions of Credit and (ii)
      ratable portion of the Aggregate Canadian Revolving Extensions of Credit.
      The Available Canadian Commitment may be calculated as being negative at
      any time.

            "BA Equivalent Loan" shall have the meaning assigned such term in
      subsection 2.3(c).

            "BA Discount Proceeds" shall mean in respect of any Bankers'
      Acceptance to be purchased by a Canadian Dollar Lender on any day under
      subsection 2.3, an amount (rounded to the nearest whole Canadian cent, and
      with one-half of one Canadian cent being rounded up) calculated on such
      day by dividing:

            (a) the face amount of such Bankers' Acceptance; by

            (b) the sum of one plus the product of:

                  (i)   the Applicable BA Discount Rate (expressed as a decimal)
                        applicable to such Bankers' Acceptance; and

                  (ii)  a fraction, the numerator of which is the number of days
                        remaining in the term of such Bankers' Acceptance and
                        the denominator of which is 365;

                        with such product being rounded up or down to the fifth
                        decimal place and .000005 being rounded up.

            "Bankers' Acceptance" shall mean a bill of exchange or a depository
      bill governed by the Depository Bills and Notes Act (Canada) denominated
      in Canadian Dollars drawn by the Canadian Subsidiary Borrowers and
      accepted by a Canadian Dollar Lender pursuant to subsection 2.3.

            "Borrowing Date (Canada)" shall mean any Business Day (Canada)
      specified in a notice as a date on which any Canadian Subsidiary Borrower
      requests the relevant Canadian Dollar Lenders to make Canadian Dollar
      Loans under this Annex D to the Credit Agreement.

            "Business Day (Canada)" shall mean a day on which banks are open for
      business in Toronto, Ontario, Canada but excludes Saturday, Sunday and any
      other day which is a legal holiday in Toronto, Ontario, Canada.

            "Canadian Administrative Agent" shall mean JPMorgan Chase Bank,
      N.A., Toronto Branch, together with its affiliates, as the agent for the
      Canadian Dollar Lenders under the Credit Agreement.

            "Canadian Administrative Office" shall mean the Canadian
      Administrative Agent's office located at 200 Bay Street, Royal Bank Plaza,
      South Tower, Suite 1800, Toronto, Ontario M5J 2J2, or such other office in
      Canada as may be designated as such by the Canadian

<PAGE>

                                                                               3

      Administrative Agent by written notice to the Canadian Subsidiary
      Borrowers and the Canadian Dollar Lenders.

            "Canadian Commitment" shall mean, as to any Canadian Dollar Lender,
      the obligation of such Canadian Dollar Lender to make Canadian Dollar
      Prime Loans to and purchase Bankers' Acceptances from the Canadian
      Subsidiary Borrowers and participate in Canadian Dollar Swing Line Loans
      or Canadian Letters of Credit hereunder in an aggregate principal or face
      amount at any one time outstanding up to but not exceeding the amount set
      forth opposite such Canadian Dollar Lender's name on Schedule 1 to the
      Credit Agreement under the caption "Canadian Commitment" or in the
      Assignment and Acceptance pursuant to which such Canadian Dollar Lender
      became party to the Credit Agreement, as the same may be changed from time
      to time pursuant to the terms hereof. The original aggregate principal
      amount of the Canadian Commitments is the Canadian Dollar equivalent of
      U.S.$35,000,000.

            "Canadian Dollars" or "C$" shall mean dollars in lawful currency of
      Canada.

            "Canadian Dollar Commitment Percentage" shall mean as to any
      Canadian Dollar Lender at any time, the percentage of the aggregate
      Canadian Commitments then constituted by such Canadian Dollar Lender's
      Canadian Commitment.

            "Canadian Dollar Lender" shall mean each Lender that has a Canadian
      Commitment or that holds Canadian Dollar Loans; collectively, the
      "Canadian Dollar Lenders". Each Canadian Dollar Lender on the date hereof
      and on each date on which a payment or prepayment of interest is made
      represents that it is an Eligible Canadian Bank.

            "Canadian Dollar Loans" shall mean the collective reference to
      Canadian Dollar Prime Loans and Bankers' Acceptances; for the purposes of
      the Credit Agreement, the principal amount of any Canadian Dollar Loan
      constituting a Bankers' Acceptance shall be deemed to be the undiscounted
      face amount of such Bankers' Acceptance.

            "Canadian Dollar Swing Line Commitment" shall mean the obligation of
      the Canadian Dollar Swing Line Lender, at any date, to make a Canadian
      Dollar Swing Line Loan pursuant to subsection 2.6(a) in the amount
      referred to therein.

            "Canadian Dollar Swing Line Lender" shall mean the Bank of Montreal.

            "Canadian Dollar Swing Line Loan" shall mean any Canadian Dollar
      Swing Line Loan made pursuant to subsection 2.6 hereof.

            "Canadian Dollar Prime Loans" shall mean advances denominated in
      Canadian Dollars that bear interest at a rate based upon the Canadian
      Dollar Prime Rate.

            "Canadian Dollar Prime Rate" shall mean with respect to a Canadian
      Dollar Prime Loan, on any day, the greater of (a) the annual rate of
      interest announced from time to time by the Canadian Administrative Agent
      as its reference rate then in effect for determining interest rates on
      Canadian Dollar denominated commercial loans in Canada and (b) the annual
      rate of interest equal to the sum of (i) the 30-day CDOR Rate and (ii)
      0.50% per annum.

            "Canadian Facility" shall mean the Canadian Commitments together
      with the Aggregate Canadian Revolving Extensions of Credit.

<PAGE>

                                                                               4

            "Canadian Issuing Lender" shall mean the Bank of Montreal.

            "Canadian L/C Commitment" shall mean the Canadian Dollar equivalent
      of U.S.$35,000,000.

            "Canadian L/C Obligations" shall mean, at any time, an amount equal
      to the sum of (a) the aggregate then undrawn and unexpired amount of then
      outstanding Canadian Letters of Credit and (b) the aggregate amount of
      drawings under Canadian Letters of Credit which have not then been
      reimbursed pursuant to Section 3.

            "Canadian L/C Participants" shall mean the collective reference to
      all the Canadian Dollar Lenders other than the Canadian Issuing Lender.

            "Canadian Lending Office" shall mean for each Canadian Dollar
      Lender, the lending office for such Canadian Dollar Lender (or of an
      affiliate of such Canadian Dollar Lender) designated for each type of
      Canadian Dollar Loan in the Administrative Questionnaire of such Canadian
      Dollar Lender or such other lending office of such Canadian Dollar Lender
      (or of an affiliate of such Canadian Dollar Lender) as such Canadian
      Dollar Lender may from time to time specify to the Canadian Administrative
      Agent and the Canadian Subsidiary Borrowers as the office by which its
      Canadian Dollar Loans of such type are to be made and maintained.

            "Canadian Letter of Credit" shall mean any Canadian Standby L/C or
      Canadian Trade L/C, as each term is defined in subsection 3.1.

            "CDOR Rate" shall mean on any date, the per annum rate of interest
      which is the rate based on the rate applicable to Canadian Dollar bankers'
      acceptances for the applicable term appearing on the "Reuters Screen CDOR
      Page" (as defined in the International Swap Dealer Association, Inc.
      definitions, as modified and amended from time to time) on such date, or
      if such date is not a Business Day (Canada), then on the immediately
      preceding Business Day (Canada); provided, however, that if no such rate
      appears on the Reuters Screen CDOR Page as contemplated, then the CDOR
      Rate on any date shall be calculated as the arithmetic mean of the rates
      for the term and amount referred to above applicable to Canadian Dollar
      bankers' acceptances quoted by the Schedule I Canadian Dollar Reference
      Lenders as of 10:00 A.M., Toronto time, on such date or, if such date is
      not a Business Day (Canada), then on the immediately preceding Business
      Day (Canada).

            "Dollar Equivalent (Canada)" shall mean, on any Business Day
      (Canada) with respect to any amount denominated in Canadian Dollars, the
      amount of U.S. Dollars that would be required to purchase such amount of
      Canadian Dollars based upon the spot selling rate at which JPMorgan Chase
      Bank, N.A., Toronto Branch offers to sell Canadian Dollars for U.S.
      Dollars in the Toronto foreign exchange market at approximately 11:00 A.M.
      Toronto time on such Business Day (Canada) for delivery two Business Days
      (Canada) later.

            "Draft" shall mean a blank bill of exchange, within the meaning of
      the Bills of Exchange Act (Canada), in substantially the form set forth in
      Exhibit A to this Annex D, drawn by the Canadian Subsidiary Borrowers on a
      Canadian Dollar Lender, denominated in Canadian Dollars and bearing such
      distinguishing letters and numbers as such Lender may determine, but which
      at such time, except as otherwise provided herein, has not been completed
      or accepted by such Lender.

<PAGE>

                                                                               5

            "Drawing" shall mean the creation and purchase of Bankers'
      Acceptances and/or the purchase of completed Drafts, by the Canadian
      Dollar Lenders pursuant to subsection 2.3.

            "Eligible Canadian Bank" shall mean (a) those banks listed on
      Schedules I, II or III to the Bank Act (Canada), (b) any (i) trust
      company, savings bank, savings and loan association or similar financial
      institution, or (ii) insurance company engaged in the business of writing
      insurance which, in either case (A) has total assets of
      U.S.$10,000,000,000 or more, (B) is engaged in the business of lending
      money and extending credit under credit facilities substantially similar
      to those extended under this Agreement, (C) is operationally and
      procedurally able to meet the obligations of a Lender hereunder to the
      same degree as a commercial bank, and (c) any other financial institution
      (including a mutual fund or other fund) having total assets of
      U.S.$10,000,000,000 or more which meets the requirements set forth in
      subclauses (B) and (C) of clause (b) above, and in each case, which agree
      to make Canadian Dollar Loans hereunder; provided that each Eligible
      Canadian Bank must be organized under the laws of either Canada or a
      political subdivision thereof or, if not, it must (i) act hereunder
      through a branch, agency or funding office located in Canada and (ii) be
      exempt from withholding of tax on interest payments made to it by
      residents of Canada.

            "Facility Fee Rate" shall mean the rate per annum set forth under
      the relevant column heading in the pricing grid attached as Appendix I
      hereto.

            "Non-Schedule I Canadian Dollar Lender" shall mean each Canadian
      Dollar Lender which is not a Schedule I Canadian Dollar Lender.

            "Non-Schedule I Canadian Dollar Reference Lender" shall mean
      JPMorgan Chase Bank, N.A., Toronto Branch.

            "Post-Default Rate" shall mean a rate equal to the sum of 2% plus
      the rate of interest otherwise applicable to such Canadian Dollar Loan.

            "Requirement of Law" shall mean, as to any Person, the Certificate
      of Incorporation or Articles of Incorporation, as the case may be, and
      Code of Regulations and/or By-Laws or other organizational or governing
      documents of such Person, and any law, treaty, rule or regulation, or
      determination of an arbitrator or a court or other Governmental Authority,
      in each case applicable to or binding upon such Person or any of its
      property or to which such Person or any of its property is subject.

            "Schedule I Canadian Dollar Lender" shall mean any Canadian bank
      named on Schedule I to the Bank Act (Canada).

            "Schedule I Canadian Dollar Reference Lender" shall mean the Bank of
      Montreal.

                       SECTION 2. THE CANADIAN COMMITMENTS

            2.1. The Canadian Commitments. Subject to the terms and conditions
hereof, each Canadian Dollar Lender severally (but not jointly) agrees to make
Canadian Dollar Loans in Canadian Dollars to each Canadian Subsidiary Borrower
from time to time during the Revolving Credit Commitment Period in an aggregate
principal amount not to exceed the Available Canadian Commitment of such
Canadian Dollar Lender in accordance with the terms hereof (which for this
purpose shall be computed as though the amount in subclause (b)(i) in the
definition thereof is $0); provided that, after giving effect to the making of
such Canadian Dollar Loans, the Aggregate Canadian Revolving

<PAGE>

                                                                               6

Extensions of Credit will not exceed the Canadian Commitment. During the
Revolving Credit Commitment Period the Canadian Subsidiary Borrowers may use the
Canadian Commitments by borrowing, repaying the Canadian Dollar Loans in whole
or in part, and reborrowing, all in accordance with the terms and conditions
hereof. Each Canadian Dollar Lender agrees that each of its Lending
Installations listed on Schedule 1 and subsequently agreed from time to time in
Canada shall be on the date hereof or the date of such agreement an Eligible
Canadian Bank.

            2.2. Procedure for Canadian Dollar Prime Loan Borrowing. The
Canadian Subsidiary Borrowers may borrow Canadian Dollar Prime Loans during the
Commitment Period on any Business Day (Canada), provided that the Canadian
Subsidiary Borrowers shall give the Canadian Administrative Agent irrevocable
written or telephonic notice (in the case of telephonic notice, to be promptly
confirmed in writing) one Business Day (Canada) prior to the requested Borrowing
Date (Canada) (which notice must be received by the Canadian Administrative
Agent prior to 10:00 A.M., Toronto time), specifying (a) the amount to be
borrowed and (b) the requested Borrowing Date (Canada). Each borrowing of
Canadian Dollar Prime Loans shall be in an amount equal to C$300,000 or a whole
multiple of C$100,000 in excess thereof. Upon receipt of any such irrevocable
notice from the Canadian Subsidiary Borrower, the Canadian Administrative Agent
shall promptly notify each Canadian Dollar Lender thereof. Each Canadian Dollar
Lender will make the amount of its ratable share of each such borrowing
available to the Canadian Administrative Agent for the account of the Canadian
Subsidiary Borrowers at the Canadian Administrative Office prior to 11:00 A.M.,
Toronto time, on the Borrowing Date (Canada) requested by the Canadian
Subsidiary Borrowers in funds immediately available to the Canadian
Administrative Agent. Such borrowing will then be made available on such date to
the Canadian Subsidiary Borrowers by the Canadian Administrative Agent crediting
the account(s) designated by the Canadian Subsidiary Borrowers with the
aggregate of the amounts made available to the Canadian Administrative Agent by
the Canadian Dollar Lenders and in like funds as received by the Canadian
Administrative Agent.

            2.3. Bankers' Acceptances.

            (a) The Canadian Subsidiary Borrowers may issue Bankers' Acceptances
denominated in Canadian Dollars, for acceptance and, at the Canadian Subsidiary
Borrowers' option, purchase by the Canadian Dollar Lenders, each in accordance
with the provisions of this subsection 2.3.

            (b) Procedures.

            (1) Notice. The Canadian Subsidiary Borrowers shall notify the
      Canadian Administrative Agent by irrevocable written or telephonic notice
      (in the case of telephonic notice, to be promptly confirmed in writing) by
      10:00 A.M., Toronto time, two Business Days (Canada) prior to the date of
      the relevant borrowing in respect of any borrowing by way of Bankers'
      Acceptances.

            (2) Minimum Borrowing Amount. Each borrowing by way of Bankers'
      Acceptances shall be in a minimum aggregate face amount of C$1,000,000 or
      a whole multiple of C$100,000 in excess thereof.

            (3) Face Amounts. The face amount of each Bankers' Acceptance shall
      be C$100,000 or any whole multiple thereof.

            (4) Term. Bankers' Acceptances shall be issued and shall mature on a
      Business Day (Canada). Each Bankers' Acceptance shall have a term of 30,
      60, 90 or 180 days (or such shorter or longer term as shall be agreed to
      by all of the Canadian Dollar Lenders), shall mature on or

<PAGE>

                                                                               7

      before the Revolving Commitment Termination Date and shall be in form and
      substance reasonably satisfactory to each Canadian Dollar Lender.

            (5) Bankers' Acceptances in Blank. To facilitate the acceptance of
      Bankers' Acceptances under the Credit Agreement, the Canadian Subsidiary
      Borrowers shall, from time to time as required, provide to the Canadian
      Administrative Agent Drafts duly executed and endorsed in blank by the
      Canadian Subsidiary Borrowers in quantities sufficient for each Canadian
      Dollar Lender to fulfill its obligations hereunder. In addition, the
      Canadian Subsidiary Borrowers hereby appoint each Canadian Dollar Lender
      as its attorney, with respect to Bankers' Acceptances for which the
      Canadian Subsidiary Borrowers have provided a Bankers' Acceptance notice:

                  (i) to complete and sign on behalf of the Canadian Subsidiary
            Borrower, either manually or by facsimile or mechanical signature,
            the Drafts to create the Bankers' Acceptances (with, in each
            Canadian Dollar Lender's discretion, the inscription "This is a
            depository bill subject to the Depository Bills and Notes Act
            (Canada)");

                  (ii) after the acceptance thereof by any Canadian Dollar
            Lender, to endorse on behalf of the Canadian Subsidiary Borrower,
            either manually or by facsimile or mechanical signature, such
            Bankers' Acceptance in favor of the applicable purchaser or endorsee
            thereof including, in such Canadian Dollar Lender's discretion, such
            Canadian Dollar Lender or a clearing house (as defined by the
            Depository Bills and Notes Act (Canada));

                  (iii) to deliver such Bankers' Acceptances to such purchaser
            or to deposit such Bankers' Acceptances with such clearing house;
            and

                  (iv) to comply with the procedures and requirements
            established from time to time by such Canadian Dollar Lender or such
            clearing house in respect of the delivery, transfer and collection
            of Bankers' Acceptances and depository bills.

      The Canadian Subsidiary Borrowers recognize and agree that all Bankers'
      Acceptances signed, endorsed, delivered or deposited on its behalf by a
      Canadian Dollar Lender shall bind the Canadian Subsidiary Borrowers as
      fully and effectually as if signed in the handwriting of and duly issued,
      delivered or deposited by the proper signing officer of the Canadian
      Subsidiary Borrower. Each Canadian Dollar Lender is hereby authorized to
      accept such Drafts or issue such Bankers' Acceptances endorsed in blank in
      such face amounts as may be determined by such Canadian Dollar Lender in
      accordance with the terms of the Credit Agreement, provided that the
      aggregate amount thereof is less than or equal to the aggregate amount of
      Bankers' Acceptances required to be accepted by such Canadian Dollar
      Lender. No Canadian Dollar Lender shall be responsible or liable for its
      failure to accept a Bankers' Acceptance if the cause of such failure is,
      in whole or in part, due to the failure of the Canadian Subsidiary
      Borrowers to provide duly executed and endorsed Drafts to the Canadian
      Administrative Agent on a timely basis, nor shall any Canadian Dollar
      Lender be liable for any damage, loss or other claim arising by reason of
      any loss or improper use of any such instrument except loss or improper
      use arising by reason of the gross negligence or willful misconduct of
      such Canadian Dollar Lender, its officers, employees, agents or
      representatives. The Canadian Administrative Agent and each Canadian
      Dollar Lender shall exercise such care in the custody and safekeeping of
      Drafts as it would exercise in the custody and safekeeping of similar
      property owned by it. Each Canadian Dollar Lender will, upon the request
      of the Canadian Subsidiary Borrower, promptly advise the Canadian
      Subsidiary Borrowers of the number and designation, if any, of Drafts then
      held by it for the Canadian

<PAGE>

                                                                               8

      Subsidiary Borrower. Each Canadian Dollar Lender shall maintain a record
      with respect to Drafts and Bankers' Acceptances (i) received by it from
      the Canadian Administrative Agent in blank hereunder, (ii) voided by it
      for any reason, (iii) accepted by it hereunder, (iv) purchased by it
      hereunder and (v) canceled at their respective maturities. Each Canadian
      Dollar Lender further agrees to retain such records in the manner and for
      the statutory periods provided in the various Canadian provincial or
      federal statutes and regulations which apply to such Canadian Dollar
      Lender.

            (6) Execution of Bankers' Acceptances. Drafts of the Canadian
      Subsidiary Borrowers to be accepted as Bankers' Acceptances hereunder
      shall be duly executed on behalf of the Canadian Subsidiary Borrower.
      Notwithstanding that any person whose signature appears on any Bankers'
      Acceptance as a signatory for the Canadian Subsidiary Borrowers may no
      longer be an authorized signatory for the Canadian Subsidiary Borrowers at
      the date of issuance of a Bankers' Acceptance, such signature shall
      nevertheless be valid and sufficient for all purposes as if such authority
      had remained in force at the time of such issuance, and any such Bankers'
      Acceptance so signed shall be binding on the Canadian Subsidiary Borrower.

            (7) Issuance of Bankers' Acceptances. Promptly following receipt of
      a notice of borrowing by way of Bankers' Acceptances, the Canadian
      Administrative Agent shall so advise the Canadian Dollar Lenders and shall
      advise each Canadian Dollar Lender of the face amount of each Draft to be
      accepted by it and the term thereof. The aggregate face amount of Drafts
      to be accepted by a Canadian Dollar Lender shall be determined by the
      Canadian Administrative Agent on a ratable basis by reference to the
      respective Canadian Commitments of the Canadian Dollar Lenders, except
      that, if the face amount of a Draft which would otherwise be accepted by a
      Canadian Dollar Lender would not be C$100,000 or a whole multiple thereof,
      such face amount shall be increased or reduced by the Canadian
      Administrative Agent in its sole and unfettered discretion to the nearest
      whole multiple of C$100,000.

            (8) Acceptance of Bankers' Acceptances. Each Draft to be accepted by
      a Canadian Dollar Lender shall be accepted at such Canadian Dollar
      Lender's Canadian Lending Office.

            (9) Purchase of Bankers' Acceptances. Each Canadian Dollar Lender
      shall be required to purchase from the Canadian Subsidiary Borrowers on
      the Borrowing Date (Canada), at the Applicable BA Discount Rate, the
      Bankers' Acceptances accepted by it on such date and to provide to the
      Canadian Administrative Agent the BA Discount Proceeds thereof not later
      than 12:00 Noon, Toronto time, on such Borrowing Date (Canada) for the
      account of the Canadian Subsidiary Borrower. The Acceptance Fee payable by
      the Canadian Subsidiary Borrowers to such Canadian Dollar Lender under
      subsection 2.3(f) in respect of each Bankers' Acceptance accepted and
      purchased by such Canadian Dollar Lender from the Canadian Subsidiary
      Borrowers shall be set off against the BA Discount Proceeds payable by
      such Canadian Dollar Lender under this subsection 2.3(b)(9). Not later
      than 2:00 P.M., Toronto time, on such Borrowing Date (Canada), the
      Canadian Administrative Agent shall make such BA Discount Proceeds
      available to the Canadian Subsidiary Borrowers by crediting the account(s)
      designated by the Canadian Subsidiary Borrowers with the aggregate of the
      amounts made available to the Canadian Administrative Agent by the
      Canadian Dollar Lenders and in like funds as received by the Canadian
      Administrative Agent.

            (10) Sale of Bankers' Acceptances. Each Canadian Dollar Lender may
      at any time and from time to time hold, sell, rediscount or otherwise
      dispose of any or all Bankers' Acceptances accepted and purchased by it.

<PAGE>

                                                                               9

            (11) Waiver of Presentment and Other Conditions. To the extent
      permitted by applicable law, each Canadian Subsidiary Borrower waives
      presentment for payment and any other defense to payment of any amounts
      due to a Canadian Dollar Lender in respect of a Bankers' Acceptance
      accepted by it pursuant to the Credit Agreement which might exist solely
      by reason of such Bankers' Acceptance being held, at the maturity thereof,
      by such Canadian Dollar Lender in its own right, and each Canadian
      Subsidiary Borrower agrees not to claim any days of grace if such Canadian
      Dollar Lender as holder sues any Canadian Subsidiary Borrower on the
      Bankers' Acceptances for payment of the amount payable by any Canadian
      Subsidiary Borrower thereunder.

            (c) If a Canadian Dollar Lender is not a chartered bank under the
Bank Act (Canada) or if a Lender notifies the Canadian Administrative Agent in
writing that it is otherwise unable to accept Bankers' Acceptances, such
Canadian Dollar Lender will, instead of accepting and purchasing Bankers'
Acceptances, make a Loan (a "BA Equivalent Loan") (which shall be a Canadian
Dollar Loan) to the applicable Canadian Subsidiary Borrower in the amount and
for the same term as the draft which such Canadian Dollar Lender would otherwise
have been required to accept and purchase hereunder. Each such Canadian Dollar
Lender will provide to the Canadian Administrative Agent the BA Discount
Proceeds of such BA Equivalent Loan for the account of the applicable Canadian
Subsidiary Borrower. Each such BA Equivalent Loan will bear interest at the same
rate which would result if such Canadian Dollar Lender had accepted (and been
paid an Acceptance Fee) and purchased if such Canadian Dollar Lender had
accepted (and been paid an Acceptance Fee) and purchased (on a discounted basis)
a Bankers' Acceptance for the relevant term (it being the intention of the
parties that each such BA Equivalent Loan shall have the same economic
consequences for the parties that each such BA Equivalent Loan replaces). All
such interest shall be paid in advance on the date such BA Equivalent Loan is
made, and will be deducted from the principal amount of such BA Equivalent Loan
in the same manner in which the BA Discount Proceeds of a Bankers' Acceptance
would be deducted from the face amount of the Bankers' Acceptance. Subject to
repayment requirements, on the last day of the relevant term for such BA
Equivalent Loan, the applicable Canadian Subsidiary Borrower shall be entitled
to convert each such BA Equivalent Loan into another type of Loan, or to roll
over each such BA Equivalent Loan into another BA Equivalent Loan, all in
accordance with the applicable provisions of the Credit Agreement and this Annex
D. The Canadian Subsidiary Borrowers shall pay, indemnify and hold the Canadian
Administrative Agent and each Canadian Dollar Lender harmless from any and all
liabilities (on an after-tax basis) with respect to any Non-Excluded Taxes which
the Canadian Administrative Agent or any Canadian Dollar Lender, as the case may
be, may be obligated to pay to any Governmental Authority as a result of the
receipt of amounts owing under this Annex D, provided however, that none of the
Canadian Subsidiary Borrowers shall be required to make an indemnification
payment to the Canadian Administrative Agent, any Canadian Dollar Lender or any
holder of Bankers' Acceptances if such indemnification payment arises as a
result of a failure of such Canadian Dollar Lender, the Canadian Administrative
Agent or any holder of Bankers' Acceptances to be a Person resident in Canada
for the purposes of the Income Tax Act (Canada) or an "authorized foreign bank"
under Section 2 of the Bank Act (Canada).

            (d) The Canadian Subsidiary Borrowers shall reimburse each
applicable Canadian Dollar Lender for, and there shall become due and payable at
4:00 A.M., Toronto time, on the maturity date for each Bankers' Acceptance, an
amount in Canadian Dollars in same day funds equal to the face amount of such
Bankers' Acceptance. The Canadian Subsidiary Borrowers shall make each such
reimbursement payment (i) by causing any proceeds of a Refunding Bankers'
Acceptance (as defined in subsection 2.3(f) below) issued in accordance with
subsection 2.3(f) or conversion of such Bankers' Acceptance in accordance with
subsection 2.4 to be applied in reduction of such reimbursement payment; and
(ii) by depositing the amount of such reimbursement payment (or any portion
thereof remaining unpaid after application of any proceeds referred to in clause
(i)) with the Canadian Administrative Office in accordance with subsection 2.15.
The Canadian Subsidiary Borrowers' payment in accordance with this

<PAGE>

                                                                              10

subsection shall satisfy its obligations under any Bankers' Acceptance to which
it relates, and the Canadian Dollar Lender which has accepted such Bankers'
Acceptance shall thereafter be solely responsible for the payment of such
Bankers' Acceptance.

            (e) The Canadian Subsidiary Borrowers shall give irrevocable written
or telephonic notice (in the case of telephonic notice, to be promptly confirmed
in writing) (or such other method of notification as may be agreed upon between
the Canadian Administrative Agent and the Canadian Subsidiary Borrowers) to the
Canadian Administrative Agent at or before 10:00 A.M., Toronto time, two
Business Days (Canada) prior to the maturity date of each Bankers' Acceptance of
the Canadian Subsidiary Borrowers' intention to issue a Bankers' Acceptance on
such maturity date (a "Refunding Bankers' Acceptance") to provide for the
payment of such maturing Bankers' Acceptance (it being understood that payments
by the Canadian Subsidiary Borrowers and fundings by the Canadian Dollar Lenders
in respect of each maturing Bankers' Acceptance and the related Refunding
Bankers' Acceptance shall be made on a net basis reflecting the difference
between the face amount of such maturing Bankers' Acceptance and the BA Discount
Proceeds (net of the applicable Acceptance Fee) of such Refunding Bankers'
Acceptance). If the Canadian Subsidiary Borrowers fail to give such notice or do
not have sufficient funds on deposit in the amount of reimbursement payment in
accordance with subsection 2.3(e)(ii), the Canadian Subsidiary Borrowers shall
be deemed to have requested that such maturing Bankers' Acceptances be repaid
with the proceeds of Canadian Dollar Prime Loans (without any requirement to
give notice with respect thereto), commencing on the maturity date of such
maturing Bankers' Acceptances.

            (f) An Acceptance Fee shall be payable by the Canadian Subsidiary
Borrowers to each Canadian Dollar Lender in advance (in the manner specified in
subsection 2.3(b)(9) hereof) upon the issuance of a Bankers' Acceptance to be
accepted by such Canadian Dollar Lender calculated at the rate per annum equal
to the Applicable Margin for Canadian Borrowing, such Acceptance Fee to be
calculated on the face amount of such Bankers' Acceptance and to be computed on
the basis of the number of days in the term of such Bankers' Acceptance and a
year of 365 days.

            (g) Upon the occurrence of any Event of Default which is continuing,
the Canadian Subsidiary Borrowers shall, forthwith, without any demand or the
taking of any action by the Canadian Administrative Agent, provide cover for all
outstanding Bankers' Acceptances by paying to the Canadian Administrative Agent
immediately available funds in an amount equal to then aggregate face amount of
all outstanding Bankers' Acceptances, which funds shall be held by the Canadian
Administrative Agent in an account as collateral security, and in addition to
any other rights or remedies of any Canadian Dollar Lender and the Canadian
Administrative Agent hereunder, any Canadian Dollar Lender or the Canadian
Administrative Agent (or such alternate arrangement as may be agreed upon by the
Canadian Subsidiary Borrowers and such Canadian Dollar Lender or the Canadian
Administrative Agent, as applicable) shall be entitled to deposit and retain in
an account to be maintained by the Canadian Administrative Agent (bearing
interest at the Canadian Administrative Agent's rates as may be applicable in
respect of other deposits of similar amounts for similar terms), for the ratable
benefit of the Canadian Dollar Lenders, amounts which are received by such
Canadian Dollar Lender or the Canadian Administrative Agent from the Canadian
Subsidiary Borrowers hereunder or as proceeds of the exercise of any rights or
remedies of any Canadian Dollar Lender or the Canadian Administrative Agent
hereunder against the Canadian Subsidiary Borrowers, to the extent such amounts
may be required to satisfy any contingent or unmatured obligations or
liabilities of the Canadian Subsidiary Borrowers to the Canadian Dollar Lenders
or the Canadian Administrative Agent, or any of them hereunder.

            2.4. Conversion Option. Subject to the provisions of the Credit
Agreement, the Canadian Subsidiary Borrowers may, prior to the Revolving
Commitment Termination Date, effective on any Business Day (Canada), convert, in
whole or in part, Canadian Dollar Prime Loans into Bankers'

<PAGE>

                                                                              11

Acceptances or vice versa upon giving to the Canadian Administrative Agent prior
irrevocable written or telephonic notice (in the case of telephonic notice, to
be promptly confirmed in writing) within the notice period and in the form which
would be required to be given to the Canadian Administrative Agent in respect of
the category of Canadian Dollar Loan into which the outstanding Canadian Dollar
Loan is to be converted in accordance with the provisions of subsection 2.2 or
2.3, as applicable, provided that:

            (a)   no Canadian Dollar Prime Loan may be converted into a Bankers'
                  Acceptance when any Event of Default has occurred and is
                  continuing;

            (b)   each conversion to Bankers' Acceptances shall be for an
                  aggregate amount of C$1,000,000 (and whole multiples of
                  C$100,000 in excess thereof), and each conversion to Canadian
                  Dollar Prime Loans shall be in a minimum aggregate amount of
                  C$300,000; and

            (c)   Bankers' Acceptances may be converted only on the maturity
                  date of such Bankers' Acceptances and, provided that, if less
                  than all Bankers' Acceptances are converted, then after such
                  conversion not less than C$1,000,000 (and whole multiples of
                  C$100,000 in excess thereof) shall remain as Bankers'
                  Acceptances.

            2.5. Circumstances Making Bankers' Acceptances Unavailable.

            (a) If the Canadian Administrative Agent determines in good faith,
which determination shall be final, conclusive and binding upon the Canadian
Subsidiary Borrowers, and notifies the Canadian Subsidiary Borrowers that, by
reason of circumstances affecting the money market, there is no market for
Bankers' Acceptances, then:

            (i) the right of the Canadian Subsidiary Borrowers to request a
      borrowing by way of Bankers' Acceptance shall be suspended until the
      Canadian Administrative Agent determines that the circumstances causing
      such suspension no longer exist and the Canadian Administrative Agent so
      notifies the Canadian Subsidiary Borrowers; and

            (ii) any notice relating to a borrowing by way of Bankers'
      Acceptance which is outstanding at such time shall be deemed to be a
      notice requesting a borrowing by way of Canadian Dollar Prime Loans (all
      as if it were a notice given pursuant to subsection 2.2).

            (b) The Canadian Administrative Agent shall promptly notify the
Canadian Subsidiary Borrowers and the Canadian Dollar Lenders of the suspension
of the Canadian Subsidiary Borrowers' right to request a borrowing by way of
Bankers' Acceptance and of the termination of such suspension.

            2.6. Swing Line Commitments. (a) Subject to the terms and
conditions hereof, from time to time prior to the Revolving Credit Termination
Date (i) the Canadian Dollar Swing Line Lender severally (but not jointly)
agrees to make Canadian Dollar Swing Line Loans to the Canadian Subsidiary
Borrowers in Canadian Dollars in an aggregate principal amount not to exceed the
Canadian Dollar equivalent of U.S.$15,000,000 at any one time outstanding (each
of the foregoing individually, a "Canadian Dollar Swing Line Loan"; collectively
the "Canadian Dollar Swing Line Loans"); provided that, after giving effect to
the making of any such Canadian Dollar Swing Line Loans, the aggregate principal
amount of Swing Line Loans under any Revolving Facility at any one time
outstanding shall not exceed U.S.$100,000,000 and the Aggregate Canadian
Revolving Extensions of Credit shall not exceed the Canadian Commitments. All
Canadian Dollar Swing Line Loans shall be made as Canadian Dollar Prime Loans.
The relevant Canadian Subsidiary Borrowers shall give the Canadian
Administrative Agent irrevocable notice (which notice must be received by the
Canadian Administrative Agent at or prior to

<PAGE>

                                                                              12

1:00 P.M., Toronto time, on the requested Borrowing Date), specifying the amount
of each requested Canadian Dollar Swing Line Loan, which shall be greater than
or equal to a minimum amount to be agreed upon by such Canadian Subsidiary
Borrowers and the relevant Canadian Dollar Swing Line Lender. Upon such notice,
the Canadian Administrative Agent shall promptly notify the Canadian Dollar
Swing Line Lender thereof. The Canadian Dollar Swing Line Lender shall make the
amount of each borrowing available to the applicable Canadian Subsidiary
Borrowers in the manner directed by the Canadian Administrative Agent on the
requested Borrowing Date.

            (b) The Canadian Dollar Swing Line Lender in its sole and absolute
discretion, may, on behalf of the applicable Canadian Subsidiary Borrower (which
hereby irrevocably directs the Canadian Dollar Swing Line Lender to act on its
behalf), request each Canadian Dollar Lender, including the Canadian Dollar
Swing Line Lender, with respect to all other Canadian Dollar Swing Line Loans,
to make a Canadian Dollar Prime Loan, in an amount equal to such Canadian Dollar
Lender's Revolving Percentage under the Canadian Facility of the amount of the
Canadian Dollar Swing Line Loans (the "Refunded Canadian Dollar Swing Line
Loans") outstanding on the date such notice is given. Unless any of the events
described in paragraph (f) of Section 8 of the Credit Agreement shall have
occurred (in which event the procedures of paragraph (c) of this subsection 2.6
shall apply), each Canadian Dollar Lender shall make the proceeds of its
Canadian Dollar Prime Loan available to the Canadian Administrative Agent for
the account of the Canadian Dollar Swing Line Lender, at the office of the
Canadian Administrative Agent prior to 12:00 Noon (Toronto time) in funds
immediately available on the Business Day (Canada) next succeeding the date such
notice is given. The proceeds of such Canadian Dollar Prime Loans shall be
immediately applied to repay the Refunded Canadian Dollar Swing Line Loans.

            (c) If, prior to the making of a Canadian Swing Line Loan pursuant
to paragraph (b) of subsection 2.6, one of the events described in paragraph (f)
of Section 8 of the Credit Agreement shall have occurred, each Canadian Dollar
Lender hereby agrees to and will, on the date such Canadian Swing Line Loan was
to have been made, purchase an undivided participating interest in each Refunded
Canadian Dollar Swing Line Loan in an amount equal to its Revolving Percentage
under the Canadian Facility of such Refunded Canadian Dollar Swing Line Loan.
Such Revolving Credit Lender will immediately transfer to the Canadian
Administrative Agent for the account of the Canadian Dollar Swing Line Lender,
in immediately available funds of the amount of its participations and, upon its
receipt of its ratable share thereof, the Canadian Dollar Swing Line Lender will
deliver to such Canadian Dollar Lender a Swing Line Loan Participation
Certificate dated the date of receipt of such funds and in such amount.

            (d) Whenever, at any time after the Canadian Dollar Swing Line
Lender has received from any Canadian Dollar Lender such Canadian Dollar
Lender's participating interest in a Refunded Canadian Dollar Swing Line Loan
and the Canadian Dollar Swing Line Lender receives any payment on account
thereof, the Canadian Dollar Swing Line Lender will distribute to such Canadian
Dollar Lender through the Canadian Administrative Agent its participating
interest; provided, however, that in the event that such payment received by the
Canadian Dollar Swing Line Lender is required to be returned, such Canadian
Dollar Lender will return to the Canadian Dollar Swing Line Lender through the
Canadian Administrative Agent any portion thereof previously distributed by the
Canadian Dollar Swing Line Lender to it.

            2.7. Participation. Each Canadian Dollar Lender's obligation to
purchase participating interests pursuant to paragraph (c) of subsection 2.6
shall be absolute and unconditional and shall not be affected by any
circumstances, including, without limitation, (a) any set-off, counterclaim,
recoupment, defense or other right which such Canadian Dollar Lender may have
against the Canadian Dollar Swing Line Lender, any Canadian Subsidiary Borrower
or any other Person for any reason whatsoever; (b) the occurrence or continuance
of an Event of Default; (c) any adverse change in the condition (financial or

<PAGE>

                                                                              13

otherwise) of the Borrower or any Canadian Subsidiary Borrower; (d) any breach
of the Credit Agreement by the Borrower, any Subsidiary Borrower or any other
Revolving Credit Lender; or (e) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing. Notwithstanding the
foregoing, no Canadian Dollar Lender shall have any obligation to purchase
participating interests pursuant to paragraph (c) of subsection 2.6 or to make
any Refunded Canadian Dollar Swing Line Loans in respect of any Canadian Dollar
Swing Line Loan which was made at any time following receipt by the Canadian
Administrative Agent of a notice from any Canadian Dollar Lender specifying that
(x) a Default or Event of Default has occurred and is continuing and (y)
explicitly stating that such Canadian Dollar Lender will not purchase such
participating interests or make Refunded Canadian Dollar Swing Line Loans with
respect to Canadian Dollar Swing Line Loans made after the date of receipt of
such notice.

            2.8. Repayment of Canadian Dollar Loans; Evidence of Debt. (a) Each
Canadian Dollar Subsidiary Borrower hereby unconditionally promises to pay to
the Canadian Administrative Agent for the account of each Canadian Dollar Lender
(i) then unpaid principal amount of each Canadian Dollar Loan of such Canadian
Dollar Lender on the Revolving Credit Termination Date (or such earlier date on
which the Loans become due and payable pursuant to Section 8 of the Credit
Agreement) and (ii) then unpaid principal amount of the Canadian Dollar Swing
Line Loans of the Canadian Dollar Swing Line Lender on the Revolving Credit
Termination Date (or such earlier date on which the Canadian Dollar Swing Line
Loans become due and payable pursuant to Section 8 of the Credit Agreement).
Each Canadian Subsidiary Borrower hereby unconditionally promises to pay to the
Canadian Administrative Agent for the account of such Lender (i) then unpaid
principal amount of each Loan to such Subsidiary Borrower on the Revolving
Credit Termination Date (or such earlier date on which the Revolving Credit
Loans become due and payable pursuant to Section 8 of the Credit Agreement) and
(ii) then unpaid principal amount of the Canadian Dollar Swing Line Loans to
such Subsidiary Borrower of the Canadian Dollar Swing Line Lender on the
Revolving Credit Termination Date (or such earlier date on which the Canadian
Dollar Swing Line Loans became due and payable pursuant to Section 8 of the
Credit Agreement). Each Canadian Subsidiary Borrower hereby further agrees to
pay interest on the unpaid principal amount of the Canadian Dollar Loans from
time to time outstanding to such Canadian Subsidiary Borrower from the date
hereof until payment in full thereof at the rates per annum, and on the dates,
set forth in subsection 2.14.

            (b) Each Canadian Dollar Lender shall maintain in accordance with
its usual practice an account or accounts evidencing indebtedness of the
Canadian Subsidiary Borrowers to such Canadian Dollar Lender resulting from each
Canadian Dollar Loan of such Canadian Dollar Lender from time to time, including
the amounts of principal and interest payable and paid to such Canadian Dollar
Lender from time to time under the Credit Agreement.

            (c) The Canadian Administrative Agent shall maintain a register (the
"Canadian Register") in respect of the Canadian Facility in a manner similar to
the Register described in Section 10.6(b)(iv) of the Credit Agreement, and a
subaccount therein for each Canadian Dollar Lender, in which shall be recorded
(i) the amount of each Canadian Dollar Loan made hereunder and the type thereof,
(ii) the amount of any principal or interest due and payable or to become due
and payable from any Canadian Subsidiary Borrower to each Canadian Dollar Lender
hereunder and (iii) both the amount of any sum received by the Canadian
Administrative Agent hereunder from any Canadian Subsidiary Borrower and each
Canadian Dollar Lender's share thereof.

            (d) The entries made in the Canadian Register and the accounts of
each Canadian Dollar Lender maintained pursuant to subsection 2.8(b) shall, to
the extent permitted by applicable law, be prima facie evidence of the existence
and amounts of the obligations of each Canadian Subsidiary Borrower therein
recorded; provided, however, that the failure of any Canadian Dollar Lender or
the Canadian

<PAGE>

                                                                              14

Administrative Agent to maintain the Canadian Register or any such account, or
any error therein, shall not in any manner affect the obligation of any Canadian
Subsidiary Borrower to repay (with applicable interest) the Canadian Dollar
Loans made to such Canadian Subsidiary Borrower by such Canadian Dollar Lender
in accordance with the terms of the Credit Agreement.

            2.9. Facility Fee.

            (a) Each Canadian Subsidiary Borrower agrees to pay to the Canadian
Administrative Agent, for the account of each Canadian Dollar Lender, a facility
fee for the period from and including the Closing Date to the Revolving Credit
Termination Date, calculated as an amount equal to the product of (a) the
Facility Fee Rate and (b) the average daily amount of the Canadian Commitment of
such Lender (regardless of usage) during the period for which such facility fee
is calculated, payable quarterly in arrears on the last day of each March, June,
September and December and on the Revolving Credit Termination Date. Termination
or Reduction of the Canadian Commitments.

            (b) Optional. The Canadian Subsidiary Borrowers shall have the
right, upon not less than five Business Days' (Canada) written notice to the
Canadian Administrative Agent, to terminate the Canadian Commitments or, from
time to time, reduce the amount of the Canadian Commitments, provided that (i)
any such reduction shall be accompanied by prepayment of the Canadian Dollar
Loans by the relevant Canadian Subsidiary Borrower, together with accrued
interest on the amount so prepaid to the date of such prepayment, to the extent,
if any, the Available Canadian Commitments would be negative, (ii) any such
termination of the Canadian Commitments shall be accompanied by (A) prepayment
in full of the Canadian Dollar Loans then outstanding hereunder, (B) cash
collateralization of all Canadian L/C Obligations then outstanding in accordance
with the provisions of subsection 2.13, and (C) payment of accrued interest
thereon to the date of such prepayment and the payment of any unpaid fees then
accrued hereunder (including, without limitation, in respect of any Canadian
Letters of Credit) and (iii) any termination of the Canadian Commitments while
Bankers' Acceptances are outstanding under the Canadian Commitments and any
reduction of the aggregate amount of the Canadian Commitments that reduces the
amount of the Canadian Commitments below the principal amount of the Bankers'
Acceptances then outstanding may be made only on the maturity date of any such
Bankers' Acceptance. Upon receipt of such notice, the Canadian Administrative
Agent shall promptly notify each Canadian Dollar Lender thereof. Any such
reduction shall be in an amount of C$300,000 or a whole multiple of C$100,000 in
excess thereof and shall reduce permanently the amount of the Canadian
Commitments then in effect.

            (c) Mandatory. The Revolving Credit Commitments shall automatically
terminate on the Revolving Credit Termination Date and all Canadian Dollar Loans
shall be repaid and to the extent any Canadian Letter of Credit remains
outstanding after the Revolving Credit Termination Date, the Canadian Subsidiary
Borrowers shall cash collateralize such Canadian L/C Obligations (and the fees
thereon) in accordance with the provisions of subsection 2.13. The Revolving
Credit Commitments shall also be reduced in accordance with subsection 2.12.

            2.10. Optional Prepayments. Any Canadian Subsidiary Borrower
may, at any time and from time to time, prepay the Canadian Dollar Loans made to
it hereunder, in each case in whole or in part, without premium or penalty, upon
at least one Business Day's (Canada) irrevocable notice to the Canadian
Administrative Agent, specifying the date and amount of prepayment. If such
notice is given, the relevant Canadian Subsidiary Borrower shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to such
date on the amount prepaid. Partial prepayments shall be in an aggregate
principal amount of C$300,000 or a whole multiple of C$100,000 in excess
thereof. Notwithstanding anything to

<PAGE>

                                                                              15

the contrary above, Canadian Dollar Loans consisting of Bankers' Acceptances may
not be prepaid pursuant to this subsection.

            2.11. Mandatory Prepayments. The Canadian Subsidiary Borrowers,
without notice or demand, shall immediately prepay the Canadian Dollar Loans
(or, in the case of Bankers' Acceptances, cash collateralize such Bankers'
Acceptances), to the extent, if any, that the Available Canadian Commitments are
negative, together with accrued interest to the date of such prepayment on the
amount so prepaid; provided that if such prepayment is required solely as a
result of a change in the aggregate Dollar Equivalent (Canada) of the Canadian
Dollar Loans, no prepayment shall be made unless such prepayment is required
pursuant to subsection 2.19.

            2.12. Cash Collateralization of Canadian Letters of Credit. To the
extent that at any time and from time to time, the Canadian L/C Obligations
exceed the amount of the Canadian L/C Commitments or the Canadian L/C
Obligations exceed the Canadian Commitments (whether pursuant to subsections
2.10, 2.11, 2.12 or otherwise), the Canadian Subsidiary Borrowers shall cash
collateralize (in a manner reasonably satisfactory to the Canadian
Administrative Agent) such portion of the Canadian L/C Obligations (and the fees
thereon through the stated expiration date of the Canadian Letters of Credit
giving rise to such Canadian L/C Obligations) which is in excess of the Canadian
L/C Commitments or such Canadian Commitments, as applicable.

            2.13. Interest Rate and Payment Dates.

            (a) Subject to subsection 2.13(b) below, each Canadian Dollar Prime
Loan shall bear interest at a rate per annum equal to the Canadian Dollar Prime
Rate plus the Applicable Margin for Canadian Borrowing.

            (b) Each Canadian Subsidiary Borrower hereby promises to pay to the
Canadian Administrative Agent for the account of each applicable Canadian Dollar
Lender interest at the applicable Post-Default Rate (x) on any principal of any
Canadian Dollar Loan made by such Canadian Dollar Lender and on any other amount
payable by such Canadian Subsidiary Borrower hereunder to or for account of such
Canadian Dollar Lender, that shall not be paid in full when due (whether at
stated maturity, by acceleration, by mandatory prepayment or otherwise), for the
period from and including the due date thereof but excluding the date the same
is paid in full and (y) during any period when an Event of Default shall have
occurred under Section 8(a) of the Credit Agreement and for so long as such
Event of Default shall be continuing, on any principal of any Canadian Dollar
Loan made by such Canadian Dollar Lender.

            (c) Accrued interest on each Canadian Dollar Prime Loan shall be
calculated monthly and payable quarterly in arrears, and in any event, upon the
payment or prepayment thereof, but only on the principal so paid or prepaid;
provided that interest payable after the occurrence of a Default at the
Post-Default Rate shall be payable from time to time on demand of the Canadian
Administrative Agent or the Canadian Dollar Lenders having greater than 50% of
the aggregate amount of the Canadian Commitments. Promptly after the
determination of any interest rate provided for herein or any change therein,
the Canadian Administrative Agent shall notify the Canadian Dollar Lenders and
the Canadian Borrower thereof.

            (d) Interest in respect of Canadian Dollar Prime Loans (and all
other amounts denominated in Canadian Dollars) shall be payable in Canadian
Dollars and shall be payable based upon a year of 365 days.

<PAGE>

                                                                              16

            (e) (i) If any provision of this Annex D would obligate any party to
the Credit Agreement to make any payment of interest or other amount payable to
any Canadian Dollar Lender in an amount or calculated at a rate which would be
prohibited by law or would result in a receipt by such Canadian Dollar Lender of
"interest" at a "criminal rate" (as such terms are construed under the Criminal
Code (Canada)), then notwithstanding such provision, such amount or rate shall
be deemed to have been adjusted with retroactive effect to the maximum amount or
rate of interest, as the case may be, as would not be so prohibited by law or so
result in a receipt by such Canadian Dollar Lender of "interest" at a "criminal
rate," such adjustment to be effected, to the extent necessary, as follows:

            (x)   first, by reducing the amount or rates of interest required to
                  be paid under this subsection 2.13; and

            (y)   thereafter, by reducing any fees, commissions, premiums and
                  other amounts which would constitute interest for purposes of
                  Section 347 of the Criminal Code (Canada).

            (ii) If, notwithstanding the provisions of clause (i) of this
subsection 2.13(e), and after giving effect to all adjustments contemplated
thereby, any Canadian Dollar Lender shall have received an amount in excess of
the maximum permitted by such clause, then the party having paid such amount
shall be entitled, by notice in writing to such Canadian Dollar Lender, to
obtain reimbursement from such Canadian Dollar Lender of an amount equal to such
excess, and, pending such reimbursement, such amount shall be deemed to be an
amount payable by such Canadian Dollar Lender to such party.

            (f) Any amount or rate of interest referred to in this subsection
2.13(e) shall be determined in accordance with generally accepted actuarial
practices and principles as an effective annual rate of interest over the term
of any Canadian Dollar Loan on the assumption that any charges, fees or expenses
that fall within the meaning of "interest" (as defined in the Criminal Code
(Canada)) shall, if they relate to a specific period of time, be prorated over
that period of time and otherwise be prorated over the period from the Closing
Date to the Revolving Credit Commitment Termination Date and, in the event of
dispute, a certificate of a Fellow of the Canadian Institute of Actuaries
appointed by the Canadian Administrative Agent shall be conclusive for the
purposes of such determination absent manifest error.

            2.14. Computation of Interest and Fees. For the purposes of the
Interest Act (Canada), in any case in which an interest rate is stated in this
Annex D to be calculated on the basis of a year of 360 days or 365 days, as the
case may be, the yearly rate of interest to which such interest rate is
equivalent is equal to such interest rate multiplied by the number of days in
the year in which the relevant interest payment accrues and divided by 360 or
365, respectively. In addition, the principles of deemed investment of interest
do not apply to any interest calculations under this Annex D and the rates of
interest stipulated in this Annex D are intended to be nominal rates and not
effective rates or yields.

            2.15. Pro Rata Treatment and Payments. (a) Each borrowing by any
Canadian Subsidiary Borrower from the Canadian Dollar Lenders hereunder, each
payment by any Canadian Subsidiary Borrower on account of any commitment fee or
Acceptance Fee hereunder and any reduction of the Canadian Commitments of the
Canadian Dollar Lenders shall be made ratably according to each Lender's
respective share of the Canadian Commitments. Each payment by any Canadian
Subsidiary Borrower on account of principal of and interest on the Canadian
Dollar Loans shall be made ratably according to the respective outstanding
principal amounts of the relevant Canadian Dollar Loans then held by the
relevant Canadian Dollar Lenders. All payments (including prepayments) to be
made by any Canadian Subsidiary Borrower hereunder, whether on account of
principal, interest, fees or otherwise, shall be made without set off or
counterclaim and shall be made prior to 11:00 A.M., Toronto time, on the

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                                                                              17

due date thereof to the Canadian Administrative Agent, for the account of the
Canadian Dollar Lenders, at the Canadian Administrative Office in Canadian
Dollars and in immediately available funds. The Canadian Administrative Agent
shall distribute such payments to the Canadian Dollar Lenders promptly upon
receipt in like funds as received, but the relevant Canadian Subsidiary Borrower
shall have satisfied its payment obligation hereunder upon payment to the
Canadian Administrative Agent, regardless of whether such Canadian
Administrative Agent distributes such payments as required hereunder. If any
payment hereunder becomes due and payable on a day other than a Business Day
(Canada), such payment shall be extended to the next succeeding Business Day
(Canada), and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension.

            (b) Unless the Canadian Administrative Agent shall have received
notice from a Canadian Dollar Lender prior to 11:00 A.M., Toronto time, on any
Borrowing Date (Canada) that such Lender will not make available to the Canadian
Administrative Agent such Canadian Dollar Lender's share of the borrowing
requested to be made on such Borrowing Date (Canada), the Canadian
Administrative Agent may assume that such Canadian Dollar Lender has made its
share of such borrowing available to the Canadian Administrative Agent on such
Borrowing Date (Canada), and the Canadian Administrative Agent may, in reliance
upon such assumption, make available to the relevant Canadian Subsidiary
Borrower on such Borrowing Date (Canada) a corresponding amount. If such amount
is not so made available to the Canadian Administrative Agent by such Canadian
Dollar Lender on such Borrowing Date (Canada), the Canadian Administrative Agent
shall also be entitled to recover such amount with interest thereon at the rate
per annum applicable to the Canadian Dollar Prime Rate determined for such day
plus 1%, on demand, from the relevant Canadian Dollar Lender. Nothing contained
in this subsection 2.15(b) shall relieve any Canadian Dollar Lender which has
failed to make available its share of any borrowing hereunder from its
obligation to do so in accordance with the terms hereof or prejudice any rights
which any Canadian Subsidiary Borrower may have against any Canadian Dollar
Lender as a result of any default by such Canadian Dollar Lender to make
Canadian Dollar Loans.

            (c) The failure of any Canadian Dollar Lender to make the Canadian
Dollar Loan to be made by it on any Borrowing Date (Canada) shall not relieve
any other Canadian Dollar Lender of its obligation, if any, hereunder to make
its Canadian Dollar Loan on such Borrowing Date (Canada), but no Canadian Dollar
Lender shall be responsible for the failure of any other Canadian Dollar Lender
to make the Canadian Dollar Loan to be made by such other Canadian Dollar Lender
on such Borrowing Date (Canada).

            2.16. Requirements of Law.

            (a) If the adoption of or any change in any Requirement of Law
regarding capital adequacy or in the interpretation or application thereof by
any Governmental Authority or compliance by any Canadian Dollar Lender or any
corporation controlling such Canadian Dollar Lender with any request or
directive regarding capital adequacy (whether or not having the force of law)
from any Governmental Authority made subsequent to the date hereof shall have
the effect of reducing the rate of return on such Canadian Dollar Lender's or
such corporation's capital as a consequence of its obligations hereunder to a
level below that which such Canadian Dollar Lender or such corporation could
have achieved but for such adoption, change or compliance (taking into
consideration such Lender's or such corporation's policies with respect to
capital adequacy) by an amount deemed by such Canadian Dollar Lender to be
material, then from time to time, the relevant Canadian Subsidiary Borrower
shall promptly pay to such Canadian Dollar Lender, upon written demand therefor,
such additional amount or amounts as will compensate such Canadian Dollar Lender
for such reduced rate of return. In determining such additional amounts, each
Canadian Dollar Lender will act reasonably and in good faith and will use
averaging and attribution methods which are reasonable and which will, to the
extent the reduced rate of return relates to such Canadian Dollar Lender's loans
or commitments in general and are not specifically attributable to

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                                                                              18

Canadian Dollar Loans or Canadian Commitments hereunder, be calculated with
respect to all loans or commitments similar to the Canadian Dollar Loans or
Canadian Commitments made by such Canadian Dollar Lender hereunder whether or
not the loan documentation for such other loans or commitments permits the
Canadian Dollar Lender to charge the respective borrower on a basis similar to
that provided in this subsection 2.16.

            (b) If any Canadian Dollar Lender becomes entitled to claim any
additional amounts pursuant to this subsection, it shall promptly notify the
relevant Canadian Subsidiary Borrower (with a copy to the Canadian
Administrative Agent) of the event by reason of which it has become so entitled.
A certificate as to any additional amounts payable pursuant to this subsection
submitted by such Canadian Dollar Lender to the relevant Canadian Subsidiary
Borrower (with a copy to the Canadian Administrative Agent), showing in
reasonable detail the basis for the calculation thereof, shall be prima facie
evidence of such additional amounts payable. The agreements in this subsection
shall survive the termination of the Credit Agreement and the payment of the
Canadian Dollar Loans and all other amounts payable thereunder.

            2.17. Taxes. All payments made by any Canadian Subsidiary Borrower
in respect of amounts owing under this Annex D shall be made free and clear of,
and without deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions
or withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, excluding gross or net income or gross
receipts taxes, ad valorem taxes, personal property and/or sales taxes and
franchise taxes (imposed in lieu of net income taxes) imposed on the Canadian
Administrative Agent or any Canadian Dollar Lender as a result of a present or
former connection between the Canadian Administrative Agent or such Canadian
Dollar Lender and the jurisdiction of the Governmental Authority imposing such
tax or any political subdivision or taxing authority thereof or therein (other
than any such connection arising solely from the Canadian Administrative Agent
or such Canadian Dollar Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, this Annex D). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Canadian Administrative Agent or any Canadian Dollar Lender
hereunder, the amounts so payable to the Canadian Administrative Agent or such
Canadian Dollar Lender shall be increased to the extent necessary to yield to
the Canadian Administrative Agent or such Canadian Dollar Lender (after payment
of all Non-Excluded Taxes) interest or any such other amounts payable hereunder
at the rates or in the amounts specified in this Annex D, provided, however,
that none of the Canadian Subsidiary Borrowers shall be required to increase any
such amounts payable to the Canadian Administrative Agent, any Canadian Dollar
Lender or any holder of Bankers' Acceptances if such increased amount arises as
a result of the failure of such Canadian Dollar Lender, the Canadian
Administrative Agent or any holder of Bankers' Acceptances to be a Person
resident in Canada for the purposes of the Income Tax Act (Canada) or an
"authorized foreign bank" under Section 2 of the Bank Act (Canada). The Canadian
Subsidiary Borrowers shall also indemnify the Canadian Administrative Agent and
each Canadian Dollar Lender on an after-tax basis for any additional taxes on
net income which the Canadian Administrative Agent or such Canadian Dollar
Lender, as the case may be, may be obligated to pay as a result of the receipt
of additional amounts under this subsection 2.17. Whenever any Non-Excluded
Taxes are payable by any Canadian Subsidiary Borrower, as promptly as possible
thereafter but in any event within 45 days after the date of payment such
Canadian Subsidiary Borrower shall send to the Canadian Administrative Agent for
its own account or for the account of such Canadian Dollar Lender, as the case
may be, a certified copy of an original official receipt received by such
Canadian Subsidiary Borrower showing payment thereof. If any Canadian Subsidiary
Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing
authority or fails to remit to the Canadian Administrative Agent the required
receipts or other required documentary evidence, such Canadian Subsidiary
Borrower shall indemnify the Canadian Administrative Agent and the Canadian

<PAGE>

                                                                              19

Dollar Lenders for any incremental taxes, interest or penalties that may become
payable by the Canadian Administrative Agent or any Canadian Dollar Lender as a
result of any such failure. The agreements in this subsection shall survive the
termination of this Annex D and the payment of the Canadian Dollar Loans and all
other amounts payable hereunder.

            2.18. Use of Proceeds. The Canadian Facility and the proceeds of the
Canadian Dollar Loans shall be used by the Canadian Subsidiary Borrowers for
working capital and other general corporate purposes (which shall include any
purpose expressly permitted by the Credit Agreement) of the Canadian Subsidiary
Borrowers; provided that, notwithstanding the foregoing, none of the proceeds of
the Canadian Dollar Loans may be used to finance any Hostile Take-Over Bid.

            2.19. Controls on Prepayment if Aggregate Revolving Extensions of
Credit Exceed Aggregate Revolving Credit Commitments. (a) The Canadian
Subsidiary Borrowers will implement and maintain internal controls to monitor
the borrowings and repayments of Canadian Dollar Loans by the relevant Canadian
Subsidiary Borrowers and the issuance of and drawings under Canadian Letters of
Credit, with the object of preventing any request for an Extension of Credit
that would result in the Available Canadian Commitments becoming negative by
more than 5% of the Canadian Commitments, if such Commitments are negative by
more than 5%, the Canadian Subsidiary Borrowers will promptly notify the
Canadian Administrative Agent.

            (b) The Canadian Administrative Agent will calculate the Available
Canadian Commitments from time to time, and in any event not less frequently
than once during each calendar quarter. In making such calculations, the
Canadian Administrative Agent will rely on the information most recently
received by it from the Canadian Dollar Swing Line Lender in respect of
outstanding Canadian Dollar Swing Line Loans and from the Canadian Issuing
Lender in respect of outstanding Canadian L/C Obligations.

            (c) In the event that on any date the Canadian Administrative Agent
calculates that (i) the Available Canadian Commitments have become negative
solely as a result of a change in the aggregate Dollar Equivalent (Canada) of
the Canadian Dollar Loans by more than 5%, the Canadian Administrative Agent
will give notice to such effect to the relevant Canadian Subsidiary Borrowers
and the Canadian Dollar Lenders. Within five Business Days (Canada) of receipt
of any such notice, such Canadian Subsidiary Borrower will, as soon as
practicable but in any event within five Business Days (Canada) of receipt of
such notice, first, make such repayments or prepayments of Canadian Dollar Prime
Loans (together with interest accrued to the date of such repayment or
prepayment), second, pay any Reimbursement Obligations under the Canadian
Facility then outstanding, third, cash collateralize any outstanding Bankers'
Acceptances, and fourth, cash collateralize any outstanding Canadian L/C
Obligations on terms reasonably satisfactory to the Canadian Administrative
Agent as shall be necessary to cause the Available Canadian Commitments not to
be negative.

            2.20. Lending Installations. (a) Subject to subsection 2.4 of the
Credit Agreement and subsections 2.1 and 2.6 of this Annex D, each Canadian
Dollar Lender may book its Canadian Dollar Loans at any Lending Installation
selected by such Canadian Dollar Lender and may change its Lending Installation
from time to time; provided that such Lending Installation is an Eligible
Canadian Bank. All terms of the Credit Agreement shall apply to any such Lending
Installation and the Canadian Dollar Loans made hereunder shall be deemed held
by each Canadian Dollar Lender for the benefit of such Lending Installation.
Each Canadian Dollar Lender may, by written notice to the Canadian
Administrative Agent and the Canadian Subsidiary Borrowers in accordance with
subsection 10.2 of the Credit Agreement and subject always to subsection 2.4 of
the Credit Agreement and subsections 2.1 and 2.6 of this Annex D designate
replacement or additional Lending Installations through which Canadian Dollar
Loans will be made by it and for whose account Canadian Dollar Loan payments are
to be made.

<PAGE>

                                                                              20

            (b) Each Canadian Dollar Lender agrees that, upon the occurrence of
any event giving rise to the operation of subsection 2.16 or 2.17 with respect
to such Canadian Dollar Lender, it will, if requested by the Canadian Subsidiary
Borrower, use reasonable efforts (subject to overall policy considerations of
such Canadian Dollar Lender) to designate another Lending Installation for any
Canadian Dollar Loans affected by such event with the object of avoiding the
consequences of such event; provided, that such designation is made on terms
that, in the sole judgment of such Canadian Dollar Lender, cause such Canadian
Dollar Lender and any of its Lending Installations to suffer no economic, legal
or regulatory disadvantage, and provided, further, that nothing in this
subsection 2.20(b) shall affect or postpone any of the obligations of the
Canadian Subsidiary Borrowers or the rights of any Canadian Dollar Lender
pursuant to subsection 2.16 or 2.17.

            2.21. Notices to Lenders. All notices under this Section 2 to
Canadian Dollar Lenders by the Canadian Subsidiary Borrowers or the Canadian
Administrative Agent, and all payments by the Canadian Administrative Agent to
the Canadian Dollar Lenders, shall be made to the respective Lending
Installations of the Canadian Dollar Lenders maintaining the relevant Canadian
Dollar Loans or Canadian Commitments.

                     SECTION 3. LETTER OF CREDIT FACILITIES

            3.1. Canadian L/C Commitment. (a) Subject to the terms and
conditions hereof, the Canadian Issuing Lender, in reliance on the agreements of
the other Lenders set forth in subsection 3.4(a), agrees to issue letters of
credit ("Canadian Letters of Credit") under the Canadian Commitments for the
account of any Canadian Subsidiary Borrower on any Business Day (Canada) during
the Revolving Credit Commitment Period in such form as may be approved from time
to time by the Canadian Issuing Lender; provided that the Canadian Issuing
Lender shall not have any obligation to issue any Canadian Letter of Credit if,
after giving effect to such issuance, (i) the Canadian L/C Obligations would
exceed the Canadian L/C Commitment or (ii) the Available Canadian Commitments
would be negative. Each Canadian Letter of Credit shall (i) be denominated in
Canadian Dollars, (ii) be either (x) a standby letter of credit (a "Canadian
Standby L/C") issued to support obligations of any Canadian Subsidiary Borrower,
contingent or otherwise, with an expiry date occurring not later than one year
after such standby Canadian L/C was issued (which expiry date may be subject to
one or more automatic extensions of one year or less unless 60-day notice, or
such other notice as is satisfactory to the relevant Canadian Subsidiary
Borrower and the Canadian Issuing Lender, is given that any such extension shall
not be effective) or (y) a documentary letter of credit in respect of the
purchase of goods or services by any Canadian Subsidiary Borrower in the
ordinary course of business with an expiry date occurring not later than one
year after such documentary letter of credit was issued and, in the case of any
such documentary letter of credit which is to be accepted by the Canadian
Issuing Lender pending payment at a date after presentation of sight Drafts,
with a payment date no more than one year after such Drafts were presented for
acceptance (a "Canadian Trade L/C") and (iii) expire no later than five days
before the Revolving Credit Termination Date.

            (b) Each Canadian Standby L/C shall be subject to the International
Standby Practices and each Canadian Trade L/C shall be subject to the Uniform
Customs and, in each case, to the extent not inconsistent therewith, the laws of
the State of New York.

            (c) The Canadian Issuing Lender shall at no time be obligated to
issue any Canadian Letter of Credit hereunder if such issuance would conflict
with, or cause the Canadian Issuing Lender or any Canadian L/C Participant to
exceed any limits imposed by, any applicable Requirement of Law.

            3.2. Procedure for Issuance of Letters of Credit. Any Canadian
Subsidiary Borrower may from time to time request that the Canadian Issuing
Lender issue a Canadian Letter of Credit by

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                                                                              21

delivering to the Canadian Issuing Lender (with a copy to the Canadian
Administrative Agent) at its address for notices specified herein an Application
therefor, completed to the satisfaction of the Canadian Issuing Lender, and such
other certificates, documents and other papers and information as the Canadian
Issuing Lender may reasonably request. Upon receipt of any Application, the
Canadian Issuing Lender will process such Application and the certificates,
documents and other papers and information delivered to it in connection
therewith in accordance with its customary procedures and shall promptly issue
the Canadian Letter of Credit requested thereby (but in no event shall the
Canadian Issuing Lender be required to issue any Canadian Letter of Credit
earlier than four Business Days (Canada) after its receipt of the Application
therefor and all such other certificates, documents and other papers and
information relating thereto) by issuing the original of such Canadian Letter of
Credit to the beneficiary thereof or as otherwise may be agreed by the Canadian
Issuing Lender and any relevant Canadian Subsidiary Borrower. The Canadian
Issuing Lender shall furnish a copy of such Canadian Letter of Credit to the
relevant Canadian Subsidiary Borrower and to the Canadian Administrative Agent
promptly following the issuance thereof.

            3.3. Fees, Commissions and Other Charges. (a) The relevant Canadian
Subsidiary Borrower shall pay to the Canadian Administrative Agent, for the
ratable account of the Canadian Issuing Lender and the Canadian L/C
Participants, a letter of credit commission in Canadian Dollars with respect to
each Canadian Trade L/C issued by the Canadian Issuing Lender (i) in an amount
equal to the Dollar Equivalent (Canada) of such issuance and payment fees as
have been agreed upon by the relevant Canadian Subsidiary Borrower and the
Canadian Issuing Lender and (ii) in an amount equal to the product of, on the
date on which such commission is calculated, (A) the rate per annum equal to the
Applicable Margin in respect of Canadian Dollar Prime Loans and (B) the
aggregate amount available to be drawn under each Canadian Letter of Credit
(plus an additional -1/4 of 1% per annum which shall be payable for the account
of the Canadian Issuing Lender). Such letter of credit commissions shall be
payable in arrears on the last day of each March, June, September and December
and shall be nonrefundable.

            (b) The relevant Canadian Subsidiary Borrower shall pay to the
Canadian Administrative Agent, for the ratable account of the Canadian Issuing
Lender and the Canadian L/C Participants, a letter of credit commission in
Canadian Dollars with respect to each Canadian Standby L/C issued by the
Canadian Issuing Lender, computed for the period from the date of such payment
to the date upon which the next such payment is due hereunder in an amount equal
to the product of (i) the rate equal to the Applicable Margin in respect of
Canadian Dollar Prime Loans in effect on the date on which such commission is
calculated and (ii) the aggregate amount available to be drawn under such
Canadian Standby L/C on the date on which such commission is calculated (plus an
additional -1/4 of 1% per annum which shall be payable for the account of the
Canadian Issuing Lender). The relevant Canadian Subsidiary Borrower shall also
pay to the Canadian Administrative Agent, for the account of the Canadian
Issuing Lender, such issuance fees as have been agreed upon by the relevant
Canadian Subsidiary Borrower and the Canadian Issuing Lender. Such letter of
credit commissions shall be payable in arrears on the last day of each March,
June, September and December and shall be nonrefundable.

            (c) In addition to the foregoing fees and commissions, the relevant
Canadian Subsidiary Borrower shall pay or reimburse the Canadian Issuing Lender
for such normal and customary costs and expenses as are incurred or charged by
the Canadian Issuing Lender in issuing, effecting payment under, amending or
otherwise administering any Canadian Letter of Credit issued by it.

            (d) The Canadian Administrative Agent shall, promptly following its
receipt thereof, distribute to the Canadian Issuing Lender and the Canadian L/C
Participants all fees and commissions

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                                                                              22

received by the Canadian Administrative Agent for their respective accounts
pursuant to this subsection 3.3.

            3.4. Canadian L/C Participation. (a) The Canadian Issuing Lender
irrevocably agrees to grant and hereby grants to each Canadian L/C Participant,
and, to induce the Canadian Issuing Lender to issue Canadian Letters of Credit
hereunder, each such Canadian L/C Participant irrevocably agrees to accept and
purchase and hereby accepts and purchases from the Canadian Issuing Lender, on
the terms and conditions hereinafter stated, for such Canadian L/C Participant's
own account and risk an undivided interest equal to such Canadian L/C
Participant's ratable share of the Canadian Facility in the Canadian Issuing
Lender's obligations and rights under each Canadian Letter of Credit issued
hereunder and the amount of each Draft paid by the Canadian Issuing Lender
thereunder. Each such Canadian L/C Participant unconditionally and irrevocably
agrees with the Canadian Issuing Lender that, if a Draft is paid under any such
Canadian Letter of Credit for which the Canadian Issuing Lender is not
reimbursed in full by the relevant Canadian Subsidiary Borrower in accordance
with the terms of the Credit Agreement (including this Annex D), such Canadian
L/C Participant shall pay to the Canadian Issuing Lender upon demand at the
Canadian Issuing Lender's address for notices specified herein an amount equal
to such Canadian L/C Participant's ratable share of the Canadian Facility of the
amount of such Draft, or any part thereof, which is not so reimbursed.

            (b) If any amount required to be paid by any Canadian L/C
Participant to the Canadian Issuing Lender pursuant to subsection 3.4(a) in
respect of any unreimbursed portion of any payment made by the Canadian Issuing
Lender under any Canadian Letter of Credit is not paid to the Canadian Issuing
Lender within three Business Days (Canada) after the date such payment is due,
such Canadian L/C Participant shall pay to the Canadian Issuing Lender on demand
an amount equal to the product of (i) such amount, times (ii) the prevailing
customary rate for Canadian interbank transactions, as quoted by the Canadian
Issuing Lender, during the period from and including the date such payment is
required to the date on which such payment is immediately available to the
Canadian Issuing Lender, times (iii) a fraction the numerator of which is the
number of days that elapse during such period and the denominator of which is
365. If any such amount required to be paid by any such Canadian L/C Participant
pursuant to subsection 3.4(a) is not in fact made available to the Canadian
Issuing Lender by such Canadian L/C Participant within three Business Days
(Canada) after the date such payment is due, the Canadian Issuing Lender shall
be entitled to recover from such Canadian L/C Participant, on demand, such
amount with interest thereon calculated from such due date at the rate per annum
applicable to the prevailing customary rate for Canadian interbank transactions,
as quoted by the Canadian Issuing Lender. A certificate of the Canadian Issuing
Lender submitted to any Canadian L/C Participant with respect to any amounts
owing under this subsection shall be conclusive in the absence of manifest
error.

            (c) Whenever, at any time after the Canadian Issuing Lender has made
payment under any Canadian Letter of Credit and has received from any Canadian
L/C Participant its ratable share of such payment in accordance with subsection
3.4(a), the Canadian Issuing Lender receives any payment related to such
Canadian Letter of Credit (whether directly from the relevant Canadian
Subsidiary Borrower or otherwise), or any payment of interest on account
thereof, the Canadian Issuing Lender will distribute to such Canadian L/C
Participant its ratable share thereof; provided, however, that in the event that
any such payment received by the Canadian Issuing Lender shall be required to be
returned by the Canadian Issuing Lender, such Canadian L/C Participant shall
return to the Canadian Issuing Lender the portion thereof previously distributed
by the Canadian Issuing Lender to it.

            3.5. Reimbursement Obligation of the Canadian Subsidiary Borrowers.
The relevant Canadian Subsidiary Borrower agrees to reimburse the Canadian
Issuing Lender on each date on which the Canadian Issuing Lender notifies such
Canadian Subsidiary Borrower of the date and amount of a Draft presented under
any Canadian Letter of Credit and paid by the Canadian Issuing Lender for the

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                                                                              23

amount of (a) such Draft so paid and (b) any taxes (other than Excluded Taxes),
fees, charges or other costs or expenses incurred by the Canadian Issuing Lender
in connection with such payment; provided that upon the acceleration of such
reimbursement obligations in accordance with Section 8 of the Credit Agreement,
the relevant Canadian Subsidiary Borrower agrees to reimburse the Canadian
Issuing Lender for the amount equal to then maximum liability (whether direct or
contingent) of the Canadian Issuing Lender and the Canadian L/C Participants
under such Canadian Letter of Credit. Each such payment shall be made to the
Canadian Issuing Lender, at its address for notices specified herein in Canadian
Dollars and in immediately available funds, on the date on which the relevant
Canadian Subsidiary Borrower receives such notice, if received prior to 11:00
A.M., Toronto time, on a Business Day (Canada) and otherwise on the next
succeeding Business Day (Canada).

            3.6. Obligations Absolute. Any relevant Canadian Subsidiary
Borrower's obligations under this Section 3 shall be absolute and unconditional
under any and all circumstances and irrespective of any set-off, counterclaim or
defense to payment which any relevant Canadian Subsidiary Borrower may have or
have had against the Canadian Issuing Lender or any beneficiary of a Canadian
Letter of Credit. Each Canadian Subsidiary Borrower also agrees with the
Canadian Issuing Lender that the Canadian Issuing Lender shall not be
responsible for, and such relevant Canadian Subsidiary Borrower's Reimbursement
Obligations under subsection 3.5 shall not be affected by, among other things,
the validity or genuineness of documents or of any endorsements thereon, even
though such documents shall in fact prove to be invalid, fraudulent or forged,
or any dispute between or among any relevant Canadian Subsidiary Borrower and
any beneficiary of any Canadian Letter of Credit or any other party to which
such Canadian Letter of Credit may be transferred or any claims whatsoever of
the relevant Canadian Subsidiary Borrower against any beneficiary of such
Canadian Letter of Credit or any such transferee. The Canadian Issuing Lender
shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Canadian Letter of Credit issued by it,
except for errors or omissions caused by the Canadian Issuing Lender's gross
negligence or willful misconduct. Each Canadian Subsidiary Borrower agrees that
any action taken or omitted by the Canadian Issuing Lender under or in
connection with any Canadian Letter of Credit issued by it or the related Drafts
or documents, if done in the absence of gross negligence or willful misconduct
and in accordance with the standards of care specified in the Uniform Commercial
Code of the State of New York, shall be binding on each Canadian Subsidiary
Borrower and shall not result in any liability of the Canadian Issuing Lender to
any Canadian Subsidiary Borrower.

            3.7. Increased Costs. If the adoption of or any change in any law or
regulation or in the interpretation thereof after the date hereof by any court
or administrative or Governmental Authority charged with the administration
thereof shall either (i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against Canadian Letters of Credit issued by the
Canadian Issuing Lender or participated in by the Lenders or (ii) impose on any
Canadian Dollar Lender any other condition regarding any Canadian Letter of
Credit, and the result of any event referred to in clauses (i) or (ii) above
shall be to increase the cost to the Canadian Issuing Lender or any Canadian
Dollar Lender of issuing or maintaining such Canadian Letter of Credit (or its
participation therein, as the case may be) (which increase in cost shall be the
result of the Canadian Issuing Lender's or such Lender's reasonable allocation
of the aggregate of such cost increases resulting from such events), then, upon
notice to it from the Canadian Issuing Lender or such Lender (with a copy to the
Canadian Administrative Agent) certifying that (x) one of the events herein
above described has occurred and the nature of such event, (y) the increased
cost or reduced amount resulting from such event and (z) the additional amounts
demanded by the Canadian Issuing Lender or such Lender, as the case may be, and
a reasonably detailed explanation of the calculation thereof, the relevant
Canadian Subsidiary Borrower shall immediately pay to such Canadian Issuing
Lender or such Lender, as the case may be, from time to time as specified by the
Canadian Administrative Agent or such Canadian Dollar Lender, additional amounts
which shall be sufficient to compensate such Canadian Issuing Lender or such
Canadian Dollar Lender for such

<PAGE>

                                                                              24

increased cost, together with interest on each such amount from the date
demanded until payment in full thereof at the rate provided in subsection 3.3. A
certificate as to the fact and amount of such increased cost incurred by the
Canadian Issuing Lender or such Canadian Dollar Lender as a result of any event
mentioned in clauses (i) or (ii) above, submitted by the Canadian Issuing Lender
or such Lender to such Canadian Subsidiary Borrower, shall be conclusive, absent
manifest error.

            3.8. Canadian Letter of Credit Payments. If any Draft in Canadian
Dollars shall be presented for payment under any Canadian Letter of Credit, the
Canadian Issuing Lender shall promptly notify the relevant Canadian Subsidiary
Borrower and the Canadian Administrative Agent of the date and amount of the
Canadian Dollars thereof. The responsibility of the Canadian Issuing Lender to
the Canadian Subsidiary Borrowers in connection with any Draft presented for
payment under any Canadian Letter of Credit shall, in addition to any payment
obligation expressly provided for in such Canadian Letter of Credit, be limited
to determining that the documents (including each Draft) delivered under such
Canadian Letter of Credit in connection with such presentment are in conformity
with such Canadian Letter of Credit.

            (a) Application. To the extent that any provision of any Application
related to any Canadian Letter of Credit is inconsistent with the provisions of
the Credit Agreement, the provisions of the Credit Agreement shall apply.

            (b) Purpose of the Letters of Credit. The Canadian Letters of Credit
shall be used for any lawful purposes requested by the Canadian Subsidiary
Borrowers.

<PAGE>

                                                                      APPENDIX I

             PRICING GRID FOR CANADIAN DOLLAR LOANS AND FACILITY FEE

<TABLE>
<CAPTION>
                                 Applicable
                                   Margin
                     ----------------------------------
     Leverage          Bankers'        Canadian Dollar          Facility
       Ratio         Acceptances       Prime Rate Loans           Fee
     --------        -----------       ----------------         --------
<S>                  <C>               <C>                      <C>
> or = 3.25 to 1.00      1.200%             0.200%                0.300%

> or = 2.75 to 1.00      1.000%             0.000%                0.250%

> or = 2.25 to 1.00      0.750%             0.000%                0.250%

> or = 1.75 to 1.00      0.625%             0.000%                0.250%

> or = 1.25 to 1.00      0.550%             0.000%                0.200%

> 1.25 to 1.00           0.450%             0.000%                0.175%
</TABLE>

Changes in the Applicable Margin or in the Facility Fee Rate resulting from
changes in the Leverage Ratio shall become effective on the date (the
"Adjustment Date") on which financial statements are delivered to the Lenders
pursuant to subsection 6.1 (but in any event not later than the 45th day after
the end of each of the first three quarterly periods of each fiscal year of the
Borrower or the 90th day after the end of each fiscal year of the Borrower, as
the case may be) and shall remain in effect until the next change to be effected
pursuant to this paragraph. If any financial statements referred to above are
not delivered within the time periods specified above, then, until such
financial statements are delivered, the Leverage Ratio as at the end of the
fiscal period that would have been covered thereby shall for the purposes of
this definition be deemed to be greater than or equal to 3.25 to 1.00. In
addition, at all times while an Event of Default shall have occurred and be
continuing, the Leverage Ratio shall for the purposes of this definition be
deemed to be greater than 3.25 to 1.00. Each determination of the Leverage Ratio
pursuant to this pricing grid shall be made with respect to (or, in the case of
Average Total Indebtedness, as at the end of) the period of four consecutive
fiscal quarters of the Borrower ending at the end of the period covered by the
relevant financial statements.
<PAGE>

                                   Schedule 1
  Lenders; Revolving Credit Commitments; Revolving Credit Commitment Percentage

Revolving Credit Commitments (in US$)

<TABLE>
<CAPTION>
                                                                                              Revolving
                                           Facility B/  Facility C/  Facility D/                Credit
                             Facility A    Sterling     Australian   Canadian                 Commitment
        Lender               Commitment    Commitment   Commitment   Commitment      Total    Percentage
--------------------------  ------------  ------------  -----------  -----------  ----------  ----------
<S>                         <C>           <C>           <C>          <C>          <C>         <C>
Bank of America, N.A.          5,000,000    50,000,000            0            0  55,000,000     5.50%

The Bank of New York          32,500,000             0            0            0  32,500,000     3.25%

Bank of                       55,000,000             0            0            0  55,000,000     5.50%
Tokyo-Mitsubishi Trust
Company

Bank of Montreal/Harris       30,000,000             0            0   25,000,000  55,000,000     5.50%
N.A.

BNP Paribas                   20,000,000    35,000,000            0            0  55,000,000     5.50%

Calyon New York Branch        17,500,000    15,000,000            0            0  32,500,000     3.25%

Citicorp North America,        5,000,000    50,000,000            0            0  55,000,000     5.50%
Inc.

Citizens Bank of              17,500,000    15,000,000            0            0  32,500,000     3.25%
Pennsylvania

Comerica                      15,000,000    7,500,000             0            0  22,500,000     2.25%

CoBank, ACB                   55,000,000             0            0            0  55,000,000     5.50%

Farm Credit Bank of           32,500,000             0            0            0  32,500,000     3.25%
Texas

Fifth Third Bank              32,500,000             0            0            0  32,500,000     3.25%

1st  Farm Credit              22,500,000             0            0            0  22,500,000     2.25%
Services, PCA

Fortis Capital Corp.          32,500,000             0            0            0  32,500,000     3.25%

JPMorgan Chase Bank,                   0    45,000,000   25,000,000            0  70,000,000     7.00%
N.A.

LaSalle Bank, N.A.            22,500,000             0            0            0  22,500,000     2.25%

Mizuho Corporate Bank,        22,500,000    10,000,000            0            0  32,500,000     3.25%
Ltd.

National City Bank            32,500,000                          0            0  32,500,000     3.25%

The Northern Trust            10,000,000    5,000,000             0            0  15,000,000     1.50%
Company

People's Bank                 15,000,000             0            0            0  15,000,000     1.50%

Cooperatieve Centrale         30,000,000    25,000,000            0            0  55,000,000     5.50%
Raiffeisen-Boerenleenbank,
B.A. "Rabobank
International" New York
Branch

The Bank of Nova Scotia        5,000,000    17,500,000            0   10,000,000  32,500,000     3.25%

Sumitomo Mitsui Banking       32,500,000             0            0            0  32,500,000     3.25%
Corporation

SunTrust Bank                 30,000,000    25,000,000            0            0  55,000,000     5.50%

UFJ Bank Limited             22,500,000              0            0            0  22,500,000     2.25%

U.S. Bank National            45,000,000             0            0            0  45,000,000     4.50%
Association
                            ------------  ------------  -----------  -----------  ----------      ---
TOTAL                       $640,000,000  $300,000,000  $25,000,000  $35,000,000  $1,000 (MM)     100%
                            ------------  ------------  -----------  -----------  ----------      ---
</TABLE>

<PAGE>

                                  Schedule 1.2
                       Non-Guarantor Domestic Subsidiaries

Scotts Global Services, Inc., a Nevada corporation
SMGM LLC, an Ohio limited liability company
SMG Brands, Inc., a Delaware corporation
Custom Lawn Care Service, Inc., a Pennsylvania corporation

<PAGE>

                                  Schedule 4.1
                          Certain Financial Information

SUMMARY OF CURRENT CURRENCY SWAPS OF THE SCOTTS MIRACLE-GRO COMPANY

<TABLE>
<CAPTION>
                          USD AMOUNT   LOCAL CURRENCY    INCEPTION  SWAP MATURITY     INSTITUTION
                         -----------  -----------------  ---------  -------------  ------------------
<S>                      <C>          <C>                <C>        <C>            <C>

Scotts Treasury EEIG     $21,659,454  (euro) 17,947,841  21-Jul-05    22-Aug-05    National City Bank
Scotts Treasury EEIG      12,684,557  (euro) 10,521,364  21-Jul-05    11-Aug-05    Fifth Third Bank
Scotts Treasury EEIG      13,836,796  (euro) 11,471,394  21-Jul-05    22-Aug-05    Fifth Third Bank
Scotts Treasury EEIG       6,019,293  (euro)  4,990,295  21-Jul-05    22-Aug-05    Fifth Third Bank
Scotts Treasury EEIG       6,377,761  (euro)  5,288,052  21-Jul-05    22-Aug-05    Citizens Bank
                         -----------  -----------------
            Total        $60,577,861  (euro) 50,218,946

Scotts Holdings Limited  $17,722,888  (pound)10,122,737  21-Jul-05    22-Aug-05    Fifth Third Bank
Scotts Holdings Limited    7,041,966  (pound) 4,022,142  21-Jul-05    22-Aug-05    Fifth Third Bank
Scotts Holdings Limited   17,930,471  (pound)10,246,276  21-Jul-05    22-Aug-05    National City Bank
Scotts Holdings Limited   15,885,737  (pound) 9,076,527  21-Jul-05    11-Aug-05    Citizens Bank
Scotts Holdings Limited   15,897,000  (pound) 9,078,293  21-Jul-05    22-Aug-05    Citizens Bank
                         -----------  -----------------
            Total        $74,478,062  (pound)42,545,975
</TABLE>

EUR to USD currency swaps totaling approximately $150,000,000 mature on July 21,
2005 as part of the inception of the Revolving Credit Agreement.

GBP to USD currency swaps totaling approximately $50,000,000 mature on July 21,
2005 as part of the inception of the Revolving Credit Agreement.

SUMMARY OF CURRENCY FORWARDS OF THE SCOTTS MIRACLE-GRO COMPANY

            None

<PAGE>

SUMMARY OF CURRENT INTEREST RATE SWAPS OF THE SCOTTS MIRACLE-GRO COMPANY

<TABLE>
<CAPTION>
  INSTITUTION         AMOUNT    START DATE   END DATE  RATE FIXING
----------------  ------------  ----------  ---------  -----------
<S>               <C>           <C>         <C>        <C>
Bank of Montreal    50,000,000  28-Nov-03   28-Nov-08    3.5480%
Bank of Tokyo       40,000,000  28-Nov-03   28-Nov-08    3.5650%
Fleet               10,000,000  28-Nov-03   28-Nov-08    3.5650%
BNP Paribas         10,000,000  28-Nov-03   28-Nov-07    3.2200%
JP Morgan Chase     15,000,000  28-Nov-03   28-Nov-06    2.7625%
                  ------------
          Total   $125,000,000
</TABLE>

The original counterparty to these interest rate swaps was The Scotts Company.

SUMMARY OF OUTSTANDING LETTERS OF CREDIT FOR THE SCOTTS MIRACLE-GRO COMPANY (IN
000's)

<TABLE>
<CAPTION>
LETTER'S OF CREDIT     AMOUNT    MATURITY              BENEFICIARY
------------------  -----------  ---------  ----------------------------------
<S>                 <C>          <C>        <C>
    B620440         $   420,083  30-Sep-05  ZHEJIANG CEREALS,OILS AND

    B695412             747,158  31-Oct-05  DIETHELM SCANSTYLE PTE LTD

    B695429             147,623  10-Nov-05  CV JAMRUD, JL

    B695430             507,817  12-Nov-05  HADINATA BROTHERS AND CO, PT

    B695974             350,593  15-Jan-06  PT DWIPAPURI ASRI

    B696527             72,658   08-Aug-05  PARKER INTERNATIONAL

    P200765             602,500  30-Apr-06  THE PROVIDENT BANK, AS TRUSTEE

    P218576             744,000  30-Sep-05  LUMBERMENS MUTUAL CASUALTY COMPANY

    P224253             10,302   01-May-06  OHIO ENVIRONMENTAL PROTECTION

    P234324             145,809  28-Jan-06  STATE OF FLORIDA, DEPARTMENT OF

    P238657           6,158,141  30-Sep-05  ARGONAUT INSURANCE CO.
</TABLE>

<PAGE>

<TABLE>
<S>           <C>          <C>        <C>
  TBTI672040       30,925  01-Jul-05  FUJIAN EXTERNAL LABOR SERVICES

  TBTI673183      207,843  15-Oct-05  KRISTALYA

  TBTS672219      100,000  30-Sep-05  APPLEBEE EXPORT B.V.

  T217922         450,000  30-Sep-05  CITY OF SPOKANE, SOLID WASTE

  T237913           9,000  23-Nov-05  S.C. Dept of Health

  T244095         333,240  19-Apr-06  OHIO ENVIRONMENTAL PROTECTION

  T296770         450,000  30-Sep-05  CITY OF GREENSBORO

  430736018     4,054,568  30-Sep-05  ACE American Insurance Co.
              -----------
TOTAL         $15,542,261
</TABLE>

<PAGE>

                                  Schedule 4.5
                                   Litigation

The Scotts Miracle-Gro Company (the "Company") is not presently aware of any
litigation which would constitute an exception to the representation contained
in subsection 4.5. However, the Company identifies in the Notes to its
Consolidated Financial Statements and in its filings with the Securities and
Exchange Commission the more significant of its identified contingencies,
including certain lawsuits and administrative proceedings. The following details
the contingencies that were identified in the Company's most recent Quarterly
Report on Form 10-Q filed May 12, 2005, updated through July 12, 2005. As used
herein, "we", "us" and "our" refers to the Company and its subsidiaries.

      ENVIRONMENTAL MATTERS

In June 1997, the Ohio EPA initiated an enforcement action against us with
respect to alleged surface water violations and inadequate treatment
capabilities at our Marysville, Ohio facility and seeking corrective action
under the federal Resource Conservation and Recovery Act. The action related to
discharges from on-site waste water treatment and several discontinued on-site
disposal areas. The waste water discharges were re-directed to the City of
Marysville system in 1998. The on-site disposal areas date back to the early
operations of the Marysville facility and are areas that we had already been
assessing and, in some cases, restoring, on a voluntary basis. On December 3,
2001, an agreed judicial Consent Order was submitted to the Union County Common
Pleas Court and was entered by the court on January 25, 2002.

Pursuant to the Consent Order, we paid a $275,000 fine and must satisfactorily
restore the site such that we eliminate exposure to waste materials historically
disposed of at the Marysville site. We completed an updated evaluation of our
expected liability related to this matter based on the fine paid and restoration
actions that we have taken and expect to take in the future. As a result, we
accrued an additional $3.0 million in the third quarter of fiscal 2002 to
increase our reserve based on the then latest estimates.

On October 18, 2004, an agreed judicial Consent Decree was entered by the court
as a result of not obtaining a permit from the Philadelphia District of the U.S.
Army Corps of Engineers for prior peat harvesting operations at our Lafayette,
New Jersey facility. The Consent Decree requires minor mitigation efforts and
annual monitoring through 2009 as well as payment of a $50,000 civil penalty.

We are also addressing remediation concerns raised by the Environment Agency of
the United Kingdom with respect to emissions to air and groundwater at our
Bramford (Suffolk), United Kingdom facility. We have reserved for our estimates
of probable losses to be incurred in connection with this facility.

At April 2, 2005, $5.2 million was accrued for the environmental site
remediation and regulatory matters described herein. Most of the costs accrued
as of the end of the current fiscal quarter, are expected to be paid in fiscal
2005 and 2006; however, payments could be made for a period thereafter. During
the first six months of fiscal 2005, we have expensed approximately $1.6 million
related to environmental matters, compared with approximately $3.3 million in
environmental expenditures for all of fiscal 2004.

We believe that the amounts accrued as of the end of the current fiscal quarter
are adequate to cover our known environmental exposures based on current facts
and estimates of likely outcomes. However, the adequacy of these accruals is
based on several significant assumptions:

      -- that we have identified all of the significant sites that must be
      restored;

<PAGE>

      -- that there are no significant conditions of potential contamination
      that are unknown to us; and

      -- that with respect to the agreed judicial Consent Order in Ohio, that
      historical wastes can be left in place rather than having to be removed
      and only specific stream segments will require remediation/restoration as
      opposed to the entire stream.

If there is a significant change in the facts and circumstances surrounding
these assumptions, it could have a material impact on the ultimate outcome of
these matters and our results of operations, financial position and cash flows.

      LEGAL PROCEEDINGS

As noted in the discussion above under "Environmental Matters," we are involved
in several pending environmental matters. We believe that our assessment of
contingencies is reasonable and that related reserves, in the aggregate, are
adequate; however, there can be no assurance that the final resolution of these
matters will not have a material adverse affect on our results of operations,
financial position and cash flows.

Pending material legal proceedings are as follows:

AGREVO ENVIRONMENTAL HEALTH, INC.

On June 3, 1999, AgrEvo Environmental Health, Inc. ("AgrEvo") (which
subsequently changed its name to Aventis Environmental Health Science USA LP)
filed a complaint in the U.S. District Court for the Southern District of New
York (the "New York Action"), against The Scotts Company, a subsidiary of The
Scotts Company and Monsanto seeking damages and injunctive relief for alleged
antitrust violations and breach of contract by The Scotts Company and its
subsidiary and antitrust violations and tortious interference with contract by
Monsanto. The Scotts Company purchased a consumer herbicide business from AgrEvo
in May 1998. AgrEvo claims in the suit that The Scotts Company's subsequent
agreement to become Monsanto's exclusive sales and marketing agent for
Monsanto's consumer Roundup(R) business violated the federal antitrust laws.
AgrEvo contends that Monsanto attempted to or did monopolize the market for
non-selective herbicides and conspired with The Scotts Company to eliminate the
herbicide The Scotts Company previously purchased from AgrEvo, which competes
with Monsanto's Roundup(R). AgrEvo also contends that The Scotts Company's
execution of various agreements with Monsanto, including the Roundup(R)
Marketing Agreement, as well as The Scotts Company's subsequent actions,
violated agreements between AgrEvo and The Scotts Company.

AgrEvo is requesting damages as well as affirmative injunctive relief, and
seeking to have the court invalidate the Roundup(R) Marketing Agreement as
violative of the federal antitrust laws. Under the indemnification provisions of
the Roundup(R) Marketing Agreement, Monsanto and The Scotts Company each have
requested that the other indemnify against any losses arising from this lawsuit.

On January 10, 2003, The Scotts Company filed a supplemental counterclaim
against AgrEvo for breach of contract. The Scotts Company alleges that AgrEvo
owes The Scotts Company for amounts that The Scotts Company overpaid to AgrEvo.
The Scotts Company's counterclaim is now part of the underlying litigation.
Recently, Monsanto settled with AgrEvo. The terms of that settlement are not
known.

Trial was held from May 23, 2005 to June 13, 2005. The jury rejected all of
AgrEvo's antitrust claims and all but one of AgrEvo's contract claims, a claim
for non-payment of an invoice of approximately $194,000.

<PAGE>

Scotts' counterclaim, seeking approximately $690,000 in damages from AgrEvo, was
tried to the judge without a jury, and a decision on that claim is pending. Once
the counterclaim is decided, the court will issue a final judgment.

Although The Scotts Company has prevailed extensively in the litigation with
AgrEvo, the verdicts in The Scotts Company's favor are subject to appeal and
possible further proceedings. If, upon appeal or otherwise, the above actions
are determined adversely to The Scotts Company, the result could have a material
adverse effect on The Scotts Company's results of operations, financial position
and cash flows. The Scotts Company believes that it will continue to prevail in
the AgrEvo matters and that any potential exposure that The Scotts Company may
face cannot be reasonably estimated. Therefore, no accrual has been established
related to the claims brought against The Scotts Company by AgrEvo. The Scotts
Company believes it has adequate reserves recorded for the amounts it may
ultimately be required to pay.

CENTRAL GARDEN & PET COMPANY

      THE SCOTTS COMPANY V. CENTRAL GARDEN, SOUTHERN DISTRICT OF OHIO

On June 30, 2000, The Scotts Company filed suit against Central Garden & Pet
Company ("Central Garden") in the U.S. District Court for the Southern District
of Ohio (the "Ohio Action") to recover approximately $24 million in accounts
receivable and additional damages for other breaches of duty.

On April 22, 2002, a jury returned a verdict in favor of The Scotts Company of
$22.5 million and for Central Garden on its remaining counterclaims in an amount
of approximately $12.1 million. Various post-trial motions were filed. As a
result of those motions, the trial court reduced Central Garden's verdict by
$750,000, denied Central Garden's motion for a new trial on two of its
counterclaims and granted the parties pre-judgment interest on their respective
verdicts. On September 22, 2003, the court entered a final judgment, which
provided for a net award to The Scotts Company of approximately $14 million,
together with interest at 2.31% through the date of payment. Central Garden
appealed and The Scotts Company cross-appealed from that final judgment. On
April 12, 2005, the Sixth Circuit modified in part and affirmed the trial
court's judgment. The judgment as modified and affirmed provided for a net award
of approximately $15 million to the Company, which judgment was recently
satisfied by Central.

U.S. HORTICULTURAL SUPPLY, INC. (F/K/A E.C. GEIGER, INC.)

On February 7, 2003, U.S. Horticultural Supply ("Geiger") filed suit against The
Scotts Company in the U.S. District Court for the Eastern District of
Pennsylvania. Geiger alleged claims of breach of contract, promissory estoppel,
and a violation of federal antitrust laws, and seeks an unspecified amount of
damages. Geiger's promissory estoppel claims have been dismissed. The parties
have concluded discovery on the antitrust and breach of contract claims. At the
conclusion of discovery, the Plaintiff withdrew its antitrust claim. On May 2,
2005, Scotts filed a Motion for Summary Judgment on the breach of contract
claim. The motion is pending with the Court. No trial date has been set for the
breach of contract claim.

On November 5, 2004, Geiger filed another suit against The Scotts Company in the
U.S. District Court for the Eastern District of Pennsylvania. This complaint
alleges that The Scotts Company conspired with another distributor, Griffin
Greenhouse Supplies, Inc., to restrain trade in the horticultural products
market, in violation of Sections 1 and 57 of the Sherman Antitrust Act. The
Scotts Company moved to dismiss the suit on December 2, 2004, and the Court held
oral argument on the Motion for March 18, 2005. The motion is currently pending
with the Court.

<PAGE>

The Scotts Company believes that all of Geiger's claims are without merit and
intends to vigorously defend against them. If any of the above actions are
determined adversely to The Scotts Company, the result could have a material
adverse effect on The Scotts Company's results of operations, financial position
and cash flows. Any potential exposure that The Scotts Company may face cannot
be reasonably estimated. Therefore, no accrual has been established related to
this matter.

THE SCOTTS COMPANY V. AVENTIS S.A. AND STARLINK LOGISTICS, INC.

On August 9, 2002, The Scotts Company filed suit against Aventis S.A. and its
wholly-owned subsidiary Starlink Logistics, Inc. in the U.S. District Court for
the Southern District of Ohio. In the complaint, The Scotts Company alleges it
is entitled to injunctive and monetary relief arising from Aventis' and
Starlink's interference with The Scotts Company's contractual right to purchase
a company called TechPac, L.L.C. from one of Aventis' former subsidiaries,
Aventis CropScience. The complaint alleges that pursuant to a contract between
The Scotts Company and a predecessor-in-interest to Aventis CropScience, Aventis
CropScience was obligated to make a bona fide offer to sell its interest in
TechPac to The Scotts Company. The complaint further alleges that Aventis
directed Aventis CropScience to make a belated sham offer to The Scotts Company
and that later, upon the sale of Aventis CropScience to Bayer AG, Aventis
transferred ownership of TechPac to Starlink, an act which has made it
impossible for Aventis CropScience's successor-in-interest to make a bona fide
offer to sell TechPac to The Scotts Company.

In this suit, The Scotts Company seeks to ensure that it is able to exercise its
right to receive a bona fide offer to acquire TechPac, and The Scotts Company
seeks to recover compensatory and punitive damages in an amount as yet
undetermined for Aventis' and Starlink's interference with The Scotts Company's
right to receive such an offer. On October 4, 2002, Starlink filed a motion to
dismiss the complaint on jurisdictional grounds. On December 17, 2002, Aventis
filed a similar motion. On April 23, 2004, the court dismissed the action
without prejudice.

The Scotts Company appealed the dismissal to the United States Court of Appeals
for the Sixth Circuit, where the appeal remains pending. In addition, The Scotts
Company and certain subsidiaries filed an action against Aventis, Starlink and
others, in the Court of Common Pleas of Union County, Ohio. The defendants
removed that action to the United States District Court for the Southern
District of Ohio, where it is currently pending as Civil Action No. 04-CV-352.

OTHER

The Scotts Company has been named a defendant in a number of cases alleging
injuries that the lawsuits claim resulted from exposure to asbestos-containing
products, apparently based on The Scotts Company's historic use of vermiculite
in certain of its products. The complaints in these cases are not specific about
the plaintiffs' contacts with The Scotts Company or its products. The Scotts
Company in each case is one of numerous defendants and none of the claims seeks
damages from The Scotts Company alone. The Scotts Company believes that the
claims against it are without merit and is vigorously defending them. It is not
currently possible to reasonably estimate a probable loss, if any, associated
with the cases and, accordingly, no accrual or reserves have been recorded in
The Scotts Company's consolidated financial statements. There can be no
assurance that these cases, whether as a result of adverse outcomes or as a
result of significant defense costs, will not have a material adverse effect on
The Scotts Company, its financial condition or its results of operations.

The Scotts Company is reviewing agreements and policies that may provide
insurance coverage or indemnity as to these claims and is pursuing coverage
under some of these agreements, although there can be no assurance of the
results of these efforts.

<PAGE>

We are involved in other lawsuits and claims which arise in the normal course of
our business. In our opinion, these claims individually and in the aggregate are
not expected to result in a material adverse effect on our results of
operations, financial position or cash flows.

<PAGE>

                                  Schedule 4.8
                                  Subsidiaries

                SUBSIDIARIES OF THE SCOTTS MIRACLE-GRO COMPANY(1)

SMG Brands, Inc., a Delaware corporation
SMGM LLC, an Ohio limited liability company
The Scotts Company LLC, an Ohio limited liability company
      Smith & Hawken, Ltd., a Delaware corporation
      EG Systems, Inc., an Indiana corporation
         Custom Lawn Care Service, Inc., a Pennsylvania corporation(2)
      Swiss Farms Products, Inc., a Delaware corporation
      Hyponex Corporation, a Delaware corporation
      OMS Investments, Inc., a Delaware corporation
         Scotts Temecula Operations, LLC, a Delaware limited liability company
      Sanford Scientific, Inc., a New York corporation
      Scotts Global Services, Inc., a Nevada corporation
      Scotts-Sierra Horticultural Products Company, a California corporation
         Scotts-Sierra Crop Protection Company, a California corporation
         Scotts-Sierra Investments, Inc., a Delaware corporation
                  #Scotts de Mexico SA de CV (Mexico)
                  #Scotts Australia Pty Limited (Australia)
                  #Scotts Canada Ltd. (Canada)
                  #Scotts Sweden AB (Sweden)
                  #The Scotts Company (Nordic) AS (Denmark)
                  #Scotts Norway AS (Norway)
                  #Scotts Holdings Limited (United Kingdom)
                     #Scotts Horticulture Limited (Ireland)
                     #Levington Group Limited (United Kingdom)
                         #The Scotts Company (UK) Limited (United Kingdom)
                           #The Scotts Company (Manufacturing) Limited (United
                            Kingdom)
                  #OM Scott International Investments Limited (United Kingdom)
                           *#Scotts Italia S.r.l. (Italy) (5% owned by a
                              non-voting nominated party)
                           #Corwen Home and Garden Ltd. (United Kingdom)
                           #Scotts International BV (Netherlands)
                               #Scotts Profi HGmbH. (Austria)
                               #Scotts Deutschland GmbH (Germany)
                               #Scotts O.M. Espana, SA (Spain)
                  #Scotts Finland OY (Finland)
                  *#Scotts Benelux BVBA (Belgium) (1 share owned by a non-voting
                  nominated party)
                  #ASEF BV (Netherlands)
                  #The Scotts Company Italia S.r.l. (Italy)
                  #The Scotts Company Kenya Ltd. (Kenya)
                  #Scotts France Holdings SARL (France)
                           #Scotts France SARL (France) (99.9981% ownership)
                           #Scotts  France SAS (France) (99.97% by Scotts France
                                    Holdings SARL and 0.03% by Scotts France
                                    SARL)

-------------

(1)   *     Not wholly-owned

      #     Foreign

(2)   This company is inactive and is in the process of being dissolved.

<PAGE>

                  #Scotts Poland Sp.z.o.o. (Poland)
                  #Scotts Holding GmbH (Germany)
                           #Scotts Celaflor GmbH & Co. KG (Germany)
                           #Scotts Celaflor HGmbH (Austria)
                  #Scotts PBG Malaysia Sdn. Bhd. (Malaysia)
                  #Scotts Czech s.r.o. (Czech Republic)
                  #Scotts Hungary KFT (Hungary)
                  *#Scotts Japan, Ltd. (Japan) (51% ownership)
                  #Scotts Chile Limitada (Chile)
      Scotts Products Co., an Ohio corporation
      Scotts Professional Products Co., an Ohio corporation
      Scotts Manufacturing Company, a Delaware corporation
         Miracle-Gro Lawn Products, Inc., a New York corporation

<PAGE>

                                  Schedule 4.11
                              Certain Transactions

1.    Purchases of any security as part of or in connection with a Permitted
      Acquisition.

2.    Repurchases or redemptions of the Borrower's Capital Stock and payment of
      dividends permitted by Section 7.14.

3.    Redemptions of certain Indebtedness permitted by Section 7.15.

4.    Any use of proceeds permitted by Section 2.19.

5.    Any use of proceeds otherwise contemplated or permitted by the Agreement.

<PAGE>

                                Schedule 4.19(ii)
                                 Certain Filings

The Scotts Miracle-Gro Company:

      Ohio Secretary of State

The Scotts Company LLC:

      Ohio Secretary of State

Scotts Manufacturing Company:

      Delaware Secretary of State

Scotts-Sierra Horticultural Products Company:

      California Secretary of State

OMS Investments, Inc.:

      Delaware Secretary of State

Scotts-Sierra Investments, Inc.:

      Delaware Secretary of State

<PAGE>

                               Schedule 4.19(iii)
                       Perfection of Foreign Stock Pledges

<TABLE>
<CAPTION>
                    DOCUMENT                                                ACTION
                    --------                                                ------
<S>                                                     <C>
Share Pledge granted by Scotts Sierra Investments       Execution before a notary in Amsterdam and
Inc over the shares of Asef B.V.                        registration in the shareholders register of
                                                        Asef B.V.

Share Pledge granted by Scotts Sierra Investments       Execution before a notary (in either Switzerland
Inc. over the shares of Scotts Holding GmbH             or Germany)

Share Pledge granted by Scotts Sierra Investments       Registration in the shareholders register of
Inc. over the shares of Scotts Benelux BVBA             Scotts Benelux BVBA

Share Pledge granted by Scotts Sierra Investments       Registration with the French tax authorities and
Inc. over the shares of Scotts France Holdings SARL     notification by bailiff on Scotts France Holding
                                                        SARL
</TABLE>

<PAGE>

                                 Schedule 5.1(b)
                           Foreign Subsidiary Pledges

A.    SCHEDULE OF CAPITAL STOCK OF FOREIGN SUBSIDIARIES PLEDGED BY DOMESTIC
      SUBSIDIARIES

Borrower shall use commercially reasonable efforts to effect the following
pledges within 60 days after the Closing Date.

<TABLE>
<CAPTION>
        Name of Domestic                                                        Percentage of Capital
          Subsidiaries                Name of Foreign Subsidiary                    Stock Pledged
-------------------------------  --------------------------------------  -----------------------------------
<S>                               <C>                                    <C>
Scotts-Sierra Investments, Inc.  Scotts Australia Pty Limited (provided     65% of Voting Capital Stock to
                                 that delivery of this pledge is         secure obligations of Scotts-Sierra
                                 contingent upon confirmation from         Investments, Inc./ 65% of Voting
                                 Australian tax authorities that the      Capital Stock to secure borrowings
                                 applicable Australian stamp duty will          of Foreign Subsidiary
                                 not be based on the total aggregate
                                 amount of the Facility)

                                 Scotts Canada Limited                      65% of Voting Capital Stock to
                                                                         secure obligations of Scotts-Sierra
                                                                          Investments, Inc./ 100% of Voting
                                                                          Capital Stock to secure borrowings
                                                                                of Foreign Subsidiary

                                 Scotts Holdings Limited                   100% of Capital Stock to secure
                                                                             obligations of Scotts-Sierra
                                                                                   Investments Inc.

                                 Scotts Benelux BVBA                       100% of Capital Stock to secure
                                                                             obligations of Scotts-Sierra
                                                                          Investments Inc. (one share being
                                                                              pledged separately by OMS
                                                                                  Investments, Inc.)

                                 ASEF B.V.                                 100% of Capital Stock to secure
                                                                             obligations of Scotts-Sierra
                                                                                   Investments Inc.

                                 Scotts France Holdings SARL               100% of Capital Stock to secure
                                                                             obligations of Scotts-Sierra
                                                                                   Investments Inc.

                                 Scotts Holding GmbH                       100% of Capital Stock to secure
                                                                             obligations of Scotts-Sierra
                                                                                   Investments Inc.
</TABLE>

<PAGE>

B.    SCHEDULE OF CAPITAL STOCK OF SUBSIDIARIES PLEDGED WITH RESPECT TO FOREIGN
      SUBSIDIARY BORROWERS

<TABLE>
<CAPTION>
                                   Name of Subsidiary
      Name of Foreign              Whose Capital Stock                    Percentage of Owned
    Subsidiary Borrower              is to be Pledged                     Capital Stock Pledged
----------------------------  ----------------------------  ------------------------------------------------
<S>                           <C>                           <C>
Scotts Holdings Limited       Levington Group Limited         100% of Capital Stock to secure borrowings of
                                                                         Scotts Holdings Limited

                              O M Scott International         65% of Capital Stock to secure borrowings of
                              Investments Ltd.                           Scotts Holdings Limited

The Scotts Company (UK) Ltd.  The Scotts Company            65% of Capital Stock to secure borrowings of The
                              (Manufacturing) Limited                   Scotts Company (UK) Ltd.

The Scotts Company (UK) Ltd.  The Scotts Company (UK) Ltd.     100% of Capital Stock pledged by Levington
                                                            Group Limited to secure borrowings of The Scotts
                                                                             Company (UK) Ltd.
</TABLE>

<PAGE>

                                 Schedule 5.1(g)
                                   Proceedings

              None, except as otherwise disclosed in Schedule 4.5.

<PAGE>

                                Schedule 5.3(iii)
                          Certain Required Recordations

<TABLE>
<CAPTION>
                    DOCUMENT                                         ACTION
                    --------                                         ------
<S>                                                   <C>
1.  Scotts France Holdings SARL Share Pledge          Notarisation, registration and notification
                                                      by bailiff

2.  Scotts Holding GmbH Share Pledge                  Notarisation

3.  Scotts Benelux BVBA Share Pledge                  Registration

4.  ASEF B.V. Share Pledge                            Notarisation and registration
</TABLE>

<PAGE>

                                  Schedule 6.13
                            Foreign Pledge Agreements

See Schedule 5.1(b) which lists those foreign pledges that will be delivered
post-closing.

<PAGE>

                                 Schedule 7.1(i)
                         Existing Liens and Encumbrances

1. All of the UCC filings described in the summary of lien searches provided to
   the Administrative Agent on July 20, 2005 and July 21, 2005.

2. Liens of lessors under capital leases in the amount of $.228 million, as
   described in Schedule 7.5(c).

3. The following liens on the assets of Foreign Subsidiaries:

Levington Horticulture Limited        Standard Security presented for
                                      registration in Scotland in favour of
                                      National Westminster Plc (as Security
                                      Trustee for itself and the beneficiaries)
                                      dated 22 July 1992

O.M. Scott & Sons Ltd.                Deed of Charge over Credit Balances in
                                      favour of Barclays Bank Plc dated 14
                                      December 1992

4. Liens permitted by Section 7.1(k) of the December 4, 1998 Credit Agreement;
   provided that the Indebtedness secured by such liens has been paid in full.

<PAGE>

                                Schedule 7.2(iii)
                               Existing Guarantees

      1.    Guarantee by The Scotts Company of certain obligations of E.G.
            Systems, Inc. d/b/a Scotts LawnService as described below:

<TABLE>
<S>                                                   <C>
Liqui Green - Spraying (Peoria)                       $  131,650
Liqui Green - Lawn Care Corp.                         $  550,000
Custom Care Lawn - Pittsburgh                         $  510,000
Custom Care - Reading                                 $  600,000
All Pro Enviro Services (Nutri-Lawn - Seattle)        $2,550,000
Guaranteed Scotts LawnService Leases                  $  577,947
                                                      ----------
                  Subtotal                            $4,919,597
                                                      ==========
</TABLE>

      2.    Springing guarantee in the amount of $945,000, by The Scotts Company
            for lease of manufacturing equipment used for the production and
            packaging of certain Scotts products in Europe, which equipment is
            leased by Peltracom Potgrand Divisie N.V., as lessee, from KBC Bank
            and DeLage Landen, as lessors.

      3.    Guarantees by The Scotts Company of the following foreign subsidiary
            transactions:

            Heller lease in Switzerland          $119,589

      4.    Parent guarantee supporting a euro denominated bank line of credit
            extended to Scotts France SAS. The July 19, 2005 available balance
            of such bank line of credit was U.S.$4,244,286 using a euro to
            dollars exchange rate of 1.20.

      5.    Guarantee of Performance, dated March 18, 2005, of E.G. Systems,
            Inc. under its franchise registrations in the States of California,
            Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York,
            North Dakota, Rhode Island, South Dakota, Virginia, Washington and
            Wisconsin and under its Scotts LawnService Franchise Agreements with
            franchisees, which guarantee continues in effect until E.G. Systems,
            Inc. has satisfied all of its obligations under the state franchise
            registrations and the Scotts LawnService Franchise Agreements.
            Maximum exposure at any one time is estimated to be ten franchisee
            set-ups at $10,000 per set-up, or $100,000.

Total guarantees for The Scotts Company = $10,328,472

<PAGE>

                                 Schedule 7.5(c)
                              Existing Indebtedness

      1.    All Working capital lines of credit currently available to any
            Foreign Subsidiaries, in an aggregate amount not to exceed the
            Dollar Equivalent of $25,000,000.

      2.    All outstanding letters of credit, interest rate swap hedging
            instruments, and foreign currency exchange hedging agreements that
            are listed on Schedule 4.1.

      3.    All synthetic leases described below:

<TABLE>
<CAPTION>
                         AMOUNT     TERM   MATURITY     LESSOR
                       -----------  ----  ----------  ----------
<S>                    <C>          <C>   <C>         <C>
The Scotts Company     $12,900,000  5-yr  08/30/2008  Fleet Bank
The Scotts Company     $ 5,846,230  8-yr  12/29/2009  Fleet Bank
                       -----------
         Total         $18,746,230
</TABLE>

      4.    Various capital leases totaling approximately $.228 million,
            consisting primarily of computer equipment and software.

      5.    Deferred purchase obligations totaling approximately $8.65 million
            for various acquisitions for EG Systems, Inc. d/b/a Scotts
            LawnService.

<PAGE>

                                  Schedule 7.9
                               Sale and Leaseback

As of May 1, 2000, certain real property located in Marysville including The
Scotts Miracle-Gro Company headquarters building, research building and parcel
"C" (a test plot) were transferred to The State of Ohio Department of
Development, who immediately leased it to the Community Improvement Corporation
of Union County, who then immediately subleased it to The Scotts Company. A
partial release of the JPMorgan Chase Bank mortgage was recorded releasing the
subject property.

<PAGE>

                                  Schedule 10.2
                                     Notices

1.        Bank of America, N.A.
          231 South La Salle St., 10th Floor
          Chicago, IL 60697
          Attn: Sharon Burks Horos
          312-828-2149

2.        Bank of Montreal
          4th Floor, 1 First Canadian Place
          Toronto, Ontario M5X 1H3
          Attn: Ben Ciallella
          416-359-6816

          Harris N.A.
          111 W. Monroe St., 20 West
          Chicago, IL 60603
          Attn: Bradley Pierce
          312-461-6756

3.        The Bank of New York
          One Wall Street-21st Floor
          New York, NY 10286
          Attn: Kenneth R. McDonnell
          212-635-1066

4.        Bank of Tokyo-Mitsubishi Trust Company
          1251 Avenue of the Americas
          New York, NY 10020-1104
          Attn: Andrew Green
          212-782-4303

5.        BNP Paribas
          209 South La Salle, Suite 500
          Chicago, IL 60604
          Attn: Deanna Cook
          312-977-2233

6.        Calyon Corporate and Investment Bank
          227 West Monroe St., Suite 3800
          Chicago, IL 60606
          Attn: Joseph Philbin
          312-220-7310

7.        Citicorp North America, Inc.
          233 South Wacker Drive - 86th Floor
          Chicago, IL 60606
          Attn: Rich Levin
          312-876-3260

          w/ a copy sent to:
          Citicorp North America, Inc.
          Loan Administration
          2 Penns Way
          New Castle, DE
          Attn: Carolyn Figueroa
          302-894-6089

8.        Citizens Bank of Pennsylvania
          525 William Penn Plaza, Suite 2910

<PAGE>

          Pittsburgh, PA 15259
          Attn: Dwayne Finney
          412-867-2425

9.        CoBank, ACB
          5500 South Quebec Street
          Greenwood Village, CO 80111
          Attention: Antonette C. Leflar
          303-740-4172

10.       Comerica
          500 Woodward Ave.
          Detroit, MI 48226
          MC3268
          Attn: Scott Kowalski
          313-222-9452

11.       Farm Credit Bank of Texas
          4801 Plaza on the Lake Dr.
          Austin, TX 78746
          Attn: Luis Requejo
          512-465-0774

12.       Fifth Third Bank
          21 East State St.
          MD: 468371
          Columbus, OH 43215
          Attn: Christopher Jones
          614-744-5982

13.       1st  Farm Credit Services, PCA
          1560 Wall Street, Suite 221
          Naperville, IL 60563
          Attn: Dale Richardson
          630-527-6426

14.       Fortis Capital Corp.
          301 Tressler Blvd.
          9th Floor
          Stamford, CT 06901
          Attn: John Spillane
          203-705-5802

15.       JPMorgan Chase Bank, N.A.
          270 Park Avenue
          New York, NY 10017
          Attn: Randolph Cates
          212-270-8997

16.       LaSalle Bank, N.A.
          312 Walnut Street, Suite 2450
          Cincinnati, OH 45202
          Attn: Cynthia Gray
          513-368-4641

17.       Mizuho Corporate Bank, Ltd.
          1251 Avenue of the Americas
          New York, NY 10020
          Attn: Azlan S. Ahmad
          212-282-3414

<PAGE>

18.       National City Bank
          Columbus Paza
          155 East Broad St.
          Columbus, OH 43251
          Attn: Thomas Redmond
          614-463-8540

19.       The Northern Trust Company
          50 South LaSalle Street
          Chicago, IL 60675
          Attn: Dave Sullivan
          312-444-2287

20.       People's Bank
          National Credits Department
          Bridgeport Center, 850 Main Street
          Bridgeport, CT 06604
          Attn: George Paik
          203-338-3563

21.       Rabobank International
          New York Branch - 37th Floor
          245 Park Avenue
          New York, NY 10167
          Attn: Rebecca Morrow
          212-916-3743

22.       The Bank of Nova Scotia
          600 Peachtree Street, N.E.. Suite 2700
          Atlanta, GA 30308
          Attn: George Wong
          404-877-1556

23.       Sumitomo Mitsui Banking Corporation
          277 Park Ave.
          New York, NY 10172
          Attn: Bill Vukovich
          212-224-4015

24.       SunTrust Bank
          401 North Michigan Ave.
          Suite 1200
          Chicago, IL 60611
          Attn: Molly Drennan
          312-840-7982

25.       UFJ Bank Limited
          55 East 52nd St.
          New York, NY 10055
          Attn: Russell Bohner
          212-339-6202

26.       U.S. Bank National Association
          175 South Third St. 4th Floor
          Columbus, OH 43215-5134
          Attn: Bob Friend
          614-232-2249
<PAGE>

                                                                       EXHIBIT A

                        FORM OF ASSIGNMENT AND ACCEPTANCE

            Reference is made to the Revolving Credit Agreement, dated as of
July 21, 2005, by and among The Scotts Miracle-Gro Company, an Ohio corporation
(the "Borrower" or "Scotts"), the subsidiaries of the Borrower from time to time
parties thereto (the "Subsidiary Borrowers"), the several banks and other
financial institutions from time to time parties thereto (the "Lenders"), Bank
of America, N.A. and Citicorp North America, Inc., as Syndication Agents, Bank
of Tokyo-Mitsubishi Trust Company, BNP Paribas, CoBank, ACB, Harris, N.A.,
Rabobank International, and Suntrust Bank, as Documentation Agents and JPMorgan
Chase Bank, N.A., as agent for the Lenders thereunder (in such capacity, the
"Administrative Agent"). Terms defined in the Credit Agreement are used herein
with the same meanings.

            __________ (the "Assignor") and __________ (the "Assignee") agree as
follows:

            The Assignor identified on Schedule l hereto (the "Assignor") and
the Assignee identified on Schedule l hereto (the "Assignee") agree as follows:

            1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date (as defined below), the interest described in Schedule 1 hereto
(the "Assigned Interest") in and to the Assignor's rights and obligations under
the Credit Agreement with respect to those credit facilities contained in the
Credit Agreement as are set forth on Schedule 1 (individually, an "Assigned
Facility"; collectively, the "Assigned Facilities"), in a principal amount for
each Assigned Facility as set forth on Schedule 1.

            2. The Assignor (i) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, any other Loan Document or any other instrument or document furnished
pursuant thereto, other than that it has not created any adverse claim upon the
interest being assigned by it hereunder and that such interest is free and clear
of any such adverse claim; (ii) makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Borrower, any
of its Subsidiaries or any other obligor or the performance or observance by the
Borrower, any of its Subsidiaries or any other obligor of any of their
respective obligations under the Credit Agreement or any other Loan Document or
any other instrument or document furnished pursuant hereto or thereto; and (iii)
attaches the Note(s) held by it, if any, evidencing the Assigned Facilities,
which Notes(s) the Administrative Agent promptly will return to the Borrower or
relevant Subsidiary Borrower, and, if applicable, requests that the
Administrative Agent exchange such Note(s) for a new Note or Notes payable to
the Assignee and (if the Assignor has retained any interest in the Assigned
Facility) a new Note or Notes payable to the Assignor in the respective amounts
which reflect the assignment being made hereby (and after giving effect to any
other assignments which have become effective on or after the Effective Date)
and

<PAGE>
                                                                               2

            3. The Assignee (i) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (ii) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements delivered pursuant to subsection 4.1 thereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (iii) agrees
that it will, independently and without reliance upon the Assignor, the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement, the
other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; (iv) appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under the Credit Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are
incidental thereto; and (v) agrees that it will be bound by the provisions of
the Credit Agreement and will perform in accordance with its terms all the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender.

            4. The effective date of this Assignment and Acceptance shall be
Effective Date of the Assignment described on Schedule 1 hereto (the "Effective
Date"). Following the execution of this Assignment and Acceptance, it will be
delivered to the Administrative Agent for acceptance by it and recording by the
Administrative Agent pursuant to the Credit Agreement, effective as of the
Effective Date (which shall not, unless otherwise agreed to by the
Administrative Agent, be earlier than five Business Days after the date of such
acceptance and recording by the Administrative Agent).

            5. Upon such acceptance and recording, from and after the Effective
Date, the Administrative Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignee. The Assignor and the Assignee shall make all
appropriate adjustments in payments by the Administrative Agent for periods
prior to the Effective Date or with respect to the making of this assignment
directly between themselves.

            6. From and after the Effective Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and under the
other Loan Documents and shall be bound by the provisions thereof and (ii) to
the extent provided in this Assignment and Acceptance, the rights of the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the the Credit
Agreement.

            7. This Assignment and Acceptance shall be governed by and construed
and interpreted in accordance with, the law of the State of New York.

            IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Acceptance to be executed as of the date first above written by their
respective duly authorized officers on Schedule 1 hereto.

<PAGE>

                                   Schedule 1

      to Assignment and Acceptance relating to the Revolving Credit Agreement
dated as of July 21, 2005, among the Borrower, the Subsidiary Borrowers, the
Lenders from time to time parties thereto and JPMorgan Chase Bank, N.A., as
Administrative Agent

Name of Assignor:

Name of Assignee:

      [(a) Assignee is a Lender Affiliate of: _________________](1)

      [(b) Assignee is an Approved Fund administered or managed by:
______________](2)

Effective Date of Assignment:

<TABLE>
<CAPTION>
     Credit                    Principal
Facility Assigned          Amount Assigned(3)           Commitment Percentage Assigned
-----------------          ------------------           ------------------------------
<S>                        <C>                          <C>
</TABLE>

[NAME OF ASSIGNOR],
as Assignor

By: _____________________
    Name:
    Title:

[NAME OF ASSIGNEE],
as Assignee

By: _____________________
    Name:
    Title:

-------------------

(1)   To be completed by the Assignee if applicable.

(2)   To be completed by the Assignee if applicable.

(3)   In Dollars, euros, Sterling, Canadian Dollars, Australian Dollars or
      Optional Currencies, as applicable.

<PAGE>
                                                                               2

JPMORGAN CHASE, N.A.,
as Administrative Agent [and Issuing Lender]

By: _____________________
    Name:
    Title:

[NAME OF ISSUING LENDER](4),
as Issuing Lender

By: _____________________
    Name:
    Title:

[Consented To:

THE SCOTTS MIRACLE-GRO COMPANY

By:_________________________
   Name:
   Title:](5)

------------------
(4)   Include if the Issuing Lender is a Lender other than JPMorgan Chase Bank,
      N.A.

(5)   Include if applicable.

<PAGE>

                                                                       EXHIBIT C

                FORM OF SWING LINE LOAN PARTICIPATION CERTIFICATE

                    [Letterhead of JPMorgan Chase Bank, N.A.]

[Name of Lender]
[Address of Lender]

Dear Sirs:

Pursuant to subsection 2.3(c) of the Revolving Credit Agreement, dated as of
July 21, 2005, by and among The Scotts Miracle-Gro Company, an Ohio corporation
(the "Borrower" or "Scotts"), the subsidiaries of the Borrower from time to time
parties thereto (the "Subsidiary Borrowers"), the several banks and other
financial institutions from time to time parties thereto (the "Lenders"), Bank
of America, N.A. and Citicorp North America, Inc., as Syndication Agents, Bank
of Tokyo-Mitsubishi Trust Company, BNP Paribas, CoBank, ACB, Harris, N.A.,
Rabobank International, and Suntrust Bank, as Documentation Agents and JPMorgan
Chase Bank, N.A., a New York banking corporation, as agent for the Lenders
thereunder (in such capacity, the "Administrative Agent"), the undersigned
hereby acknowledges receipt from you on the date hereof of [AMOUNT IN WORDS]
DOLLARS [OR DOLLAR EQUIVALENT] AND [AMOUNT IN WORDS] CENTS ($__________) as
payment for a participating interest in the following Swing Line Loan:

Date of Swing Line Loan: ___________________________________

Principal Amount of Swing Line Loan: _________________________

Facility to which Swing Line Loan Will Be Applied: ________________

Very truly yours,

[NAME OF SWING LINE LENDER]

By: _______________________
    Name:
    Title:

<PAGE>

                                                                       EXHIBIT D

                     FORM OF U.S. TAX COMPLIANCE CERTIFICATE

            Reference is made to the Loan(s) held by the undersigned pursuant to
the Revolving Credit Agreement (as amended, supplemented, waived or otherwise
modified from time to time, the "Credit Agreement"), dated as of July 21, 2005,
by and among The Scotts Miracle-Gro Company, an Ohio corporation (the "Borrower"
or "Scotts"), the subsidiaries of the Borrower from time to time parties thereto
(the "Subsidiary Borrowers"), the several banks and other financial institutions
from time to time parties thereto (the "Lenders"), Bank of America, N.A. and
Citicorp North America, Inc., as Syndication Agents, Bank of Tokyo-Mitsubishi
Trust Company, BNP Paribas, CoBank, ACB, Harris, N.A., Rabobank International,
and Suntrust Bank, as Documentation Agents and JPMorgan Chase Bank, N.A., a New
York banking corporation ("JPMCB"), as agent for the Lenders thereunder (in such
capacity, the "Administrative Agent"). The undersigned hereby certifies under
penalty of perjury that:

            (1) The undersigned is the beneficial owner of the Loan(s) (as well
      as any Note(s) evidencing such Loan(s)) registered in its name;

            (2) The income from the Loan(s) held by the undersigned is not
      effectively connected with the conduct of a trade or business within the
      United States;

            (3) The undersigned is not a bank (as such term is used in Section
      881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the
      "Code")), is not subject to regulatory or other legal requirements as a
      bank in any jurisdiction, and has not been treated as a bank for purposes
      of any tax, securities law or other filing or submission made to any
      governmental authority, any application made to a rating agency or any
      qualification for any exemption from any tax, securities law or other
      legal requirements;

            (4) The undersigned is not a 10-percent shareholder of the Borrower
      within the meaning of Section 881(c)(3)(B) of the Code; and

            (5) The undersigned is not a controlled foreign corporation
      receiving interest from a related person within the meaning of Section
      881(c)(3)(C) of the Code.

<PAGE>
                                                                               2

            We have furnished you with a certificate of our non-U.S. person
      status on Internal Revenue Service Form W-8BEN or W-8ECI. By executing
      this certificate, the undersigned agrees that (1) if the information
      provided on this certificate changes, the undersigned shall so inform the
      Borrower (for the benefit of each of the Borrower, the Subsidiary
      Borrowers and the Administrative Agent) in writing within thirty days of
      such change and (2) the undersigned shall furnish the Borrower (for the
      benefit of each of the Borrower, the Subsidiary Borrowers and the
      Administrative Agent) a properly completed and currently effective
      certificate in either the calendar year in which payment is to be made by
      any of the Subsidiary Borrowers to the undersigned, or in either of the
      two calendar years preceding such payment.

            Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement.

                                               [NAME OF LENDER]

                                               By:_____________________________
                                                  Name:
                                                  Title:

                                               [Address]

Dated: ____________, 200_

<PAGE>

                                                                       EXHIBIT E

                     FORM OF COMMITMENT INCREASE SUPPLEMENT

      SUPPLEMENT, dated __________ to the Revolving Credit Agreement (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), dated as of July 21, 2005, by and among The Scotts Miracle-Gro
Company, an Ohio corporation (the "Borrower"), the subsidiaries of the Borrower
from time to time parties thereto (the "Subsidiary Borrowers"), the several
banks and other financial institutions from time to time parties thereto (the
"Lenders"), Bank of America, N.A. and Citicorp North America, Inc., as
Syndication Agents, Bank of Tokyo-Mitsubishi Trust Company, BNP Paribas, CoBank,
ACB, Harris, N.A., Rabobank International, and Suntrust Bank, as Documentation
Agents and JPMorgan Chase Bank, N.A., a New York banking corporation (together
with its banking affiliates, as agent for the Lenders (in such capacity, the
"Administrative Agent").

                                  WITNESSETH:

      WHEREAS, the Credit Agreement provides in subsection 2.23(a) thereof that
any Lender to which a commitment increase is offered may increase the amount of
its Revolving Credit Commitment in respect of each or any of the Revolving
Credit Facilities by executing and delivering to the Borrower, the Subsidiary
Borrowers and the Administrative Agent a supplement to the Credit Agreement in
substantially the form of this Supplement; and

      WHEREAS, the undersigned now desires to increase the amount of its
Revolving Credit Commitment under the Credit Agreement;

      NOW, THEREFORE, the undersigned hereby agrees as follows:

            1. The undersigned agrees, subject to the terms and conditions of
      the Credit Agreement, that on the date this Supplement is accepted by the
      Borrower, the Subsidiary Borrowers and the Administrative Agent it shall
      have its Revolving Credit Commitment increased by $_________ [or Dollar
      equivalent] thereby making the amount of its Revolving Credit Commitment
      $_______ [or Dollar equivalent] in respect of [FACILITY].

            2. Terms defined in the Credit Agreement shall have their defined
      meanings when used herein.

<PAGE>
                                                                               2

      IN WITNESS WHEREOF, the undersigned has caused this Supplement to be
executed and delivered by a duly authorized officer on the date first above
written.

                                               [INSERT NAME OF REVOLVING
                                               CREDIT LENDER]

                                               By: ____________________________
                                                   Name:
                                                   Title:

<PAGE>
                                                                               3

Accepted this _____ day of
______________________, ________.

THE SCOTTS MIRACLE-GRO COMPANY

By: __________________________
    Name:
    Title:

SCOTTS TREASURY EEIG

By: __________________________
    Name:
    Title

<PAGE>
                                                                               4

Accepted this ____ day of
_______________, 200__.

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent

By: __________________________
    Name:
    Title:

<PAGE>

                                                                       EXHIBIT F

                          FORM OF NEW LENDER SUPPLEMENT

            SUPPLEMENT, dated _________________, to the Revolving Credit
Agreement dated as of July 21, 2005 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"; terms defined therein being
used herein as therein defined unless otherwise defined), by and among The
Scotts Miracle-Gro Company, an Ohio corporation (the "Borrower"), the
subsidiaries of the Borrower from time to time parties thereto (the "Subsidiary
Borrowers"), the several banks and other financial institutions from time to
time parties thereto (the "Lenders"), Bank of America, N.A. and Citicorp North
America, Inc., as Syndication Agents, Bank of Tokyo-Mitsubishi Trust Company,
BNP Paribas, CoBank, ACB, Harris, N.A., Rabobank International, and Suntrust
Bank, as Documentation Agents and JPMorgan Chase Bank, N.A., as agent for the
Lenders thereunder (in such capacity, the "Administrative Agent").

                                  WITNESSETH:

            WHEREAS, the Credit Agreement provides in Section 2.23(a) thereof
that any bank, financial institution or other entity may become a party to the
Credit Agreement with the consent of the Borrower and the Administrative Agent
by executing and delivering to the Borrower and the Administrative Agent a
supplement to the Credit Agreement in substantially the form of this Supplement;
and

            WHEREAS, the undersigned now desires to become a party to the Credit
Agreement;

            NOW, THEREFORE, the undersigned hereby agrees as follows:

            1. The undersigned agrees to be bound by the provisions of the
      Credit Agreement, and agrees that it shall, on the date this Supplement is
      accepted by the Borrower and the Administrative Agent, become a Revolving
      Credit Lender for all purposes of the Credit Agreement to the same extent
      as if originally a party thereto, with [Facility A Commitments of
      $__________________] [Facility B Commitments of $____________] [Facility C
      Commitments of $_____________] [Facility D Commitments of $_____________]
      (with a concomitant Commitment of its [Sterling Commitment][Canadian
      Dollar Commitment][Australian Dollar Commitment]).

            2. The undersigned (a) represents and warrants that it is legally
      authorized to enter into this Supplement; (b) confirms that it has
      received a copy of the Credit Agreement, together with copies of the
      financial statements referred to in Section 4.1 thereof and such other
      documents and information as it has deemed appropriate to make its own
      credit analysis and decision to enter into this Supplement; (c) agrees
      that it has made and will, independently and without reliance upon any
      Agents or any other Lender and based on such documents and information as
      it shall deem appropriate at the time, continue to make its own credit
      decisions in taking or not taking action under the Credit Agreement or any
      instrument or document furnished pursuant hereto or thereto; (d) appoints
      and authorizes the Administrative Agent to take such action as agent on
      its behalf and to exercise such powers and discretion under the Credit
      Agreement or any instrument or document furnished pursuant hereto or
      thereto as are delegated to the

<PAGE>
                                                                               2

      Administrative Agent by the terms thereof, together with such powers as
      are incidental thereto; and (e) agrees that it will be bound by the
      provisions of the Credit Agreement and will perform in accordance with its
      terms all the obligations which by the terms of the Credit Agreement are
      required to be performed by it as a Lender including, without limitation,
      if it is organized under the laws of a jurisdiction outside the United
      States, its obligation pursuant to Section 2.18(b) of the Credit
      Agreement.

            3. The undersigned's address for notices for the purposes of the
      Credit Agreement is as follows:

                   [INSERT ADDRESS OF REVOLVING CREDIT LENDER]

<PAGE>
                                                                               3

            IN WITNESS WHEREOF, the undersigned has caused this Supplement to be
executed and delivered by a duly authorized officer on the date first above
written.

                                               [INSERT NAME OF REVOLVING
                                                CREDIT LENDER]

                                               By______________________________
                                                 Name:
                                                 Title:

Accepted this _____ day of
________________, _____.

THE SCOTTS MIRACLE-GRO COMPANY

By: ____________________________
    Name:
    Title:

THE SCOTTS MIRACLE-GRO COMPANY

By: ____________________________
    Name:
    Title:

HYPONEX CORPORATION

By: ____________________________
    Name:
    Title:

SCOTTS AUSTRALIA PTY. LTD.

By: ____________________________
    Name:
    Title:

<PAGE>
                                                                               4

SCOTTS CANADA LTD.

By: ____________________________
   Name:
   Title:

SCOTTS HOLDINGS LIMITED

By: ____________________________
    Name:
    Title:

SCOTTS MANUFACTURING COMPANY

By: ____________________________
    Name:
    Title:

EG SYSTEMS, INC.

By: ____________________________
    Name:
    Title:

SCOTTS TEMECULA OPERATIONS, LLC

By: ____________________________
    Name:
    Title:

THE SCOTTS COMPANY (UK) LTD.

By: ____________________________
    Name:
    Title:

<PAGE>
                                                                               5

SCOTTS TREASURY EEIG

By: ____________________________
    Name:
    Title:

THE SCOTTS COMPANY LLC

By: ____________________________
    Name:
    Title:

SMITH & HAWKEN, LTD.

By: ____________________________
    Name:
    Title:

Accepted this _____ day of
________________, _____.

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent

By: ____________________________
    Name:
    Title:

<PAGE>

                                                                       EXHIBIT G

             FORM OF OPINION OF VORYS, SATER, SEYMOUR AND PEASE LLP

                                  July 21, 2005

JPMorgan Chase Bank, N.A., as Administrative Agent
270 Park Avenue
New York, New York 10017

and

Each of the Lenders that are parties to
the Credit Agreement (hereinafter defined)
as of the date hereof

      Ladies and Gentlemen:

      We have acted as special counsel to The Scotts Miracle-Gro Company, an
Ohio corporation ("SMG"), and certain domestic subsidiaries of SMG listed in
Annex A attached hereto (each a "Subsidiary" or, collectively, the
"Subsidiaries"), in connection with the transactions contemplated by the
Revolving Credit Agreement, dated as of July 21, 2005 (the "Credit Agreement"),
among SMG, certain of its Domestic Subsidiaries and Foreign Subsidiaries (as
each such term is defined in the Credit Agreement), including the following six
Subsidiaries: Hyponex Corporation, a Delaware corporation, Scotts Temecula
Operations, LLC, a Delaware limited liability company, Scotts Manufacturing
Company, a Delaware corporation, EG Systems, Inc., an Indiana corporation, Smith
& Hawken, Ltd., a Delaware corporation, and The Scotts Company LLC, an Ohio
limited liability company (each individually, a "Subsidiary Borrower" and
together with SMG, collectively, the "Borrowers"); the lenders parties thereto
(the "Lenders"), JPMorgan Chase Bank, N.A., as Administrative Agent (in such
capacity, the "Administrative Agent"), and the Syndication Agents and
Documentation Agents named therein. The remaining Subsidiaries, together with
the Subsidiary Borrowers and the Borrower, are executing and delivering the
Guarantee and Collateral Agreement, dated as of July 21, 2005, in favor of the
Administrative Agent for the benefit of the Lenders (the "Guarantee and
Collateral Agreement").

      The opinions expressed below are furnished to you pursuant to Section
5.1(e) of the Credit Agreement. Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.

      Uncapitalized terms used herein that are defined in Articles 8 and 9 (and
other Articles made applicable thereby) of the Uniform Commercial Code (the
"Code") as enacted in the State

<PAGE>

July 21, 2005
Page 2

of Ohio (the "Ohio UCC"), Chapters 1308 and 1309 of the Revised Code of Ohio
("R.C.") have the meanings specified in the Ohio UCC, unless otherwise defined
herein.

      In arriving at the opinions expressed below, we have examined an original
or certified, conformed or reproduction copy form identified to our
satisfaction, and, with respect to the terms set forth in clause (d) below, have
relied upon the accuracy of, without independent verification or investigation:

            (a) the Credit Agreement and the form of the Note (collectively, the
      "Credit Documents"); and the Guarantee and Collateral Agreement (each
      Borrower or Subsidiary party to the Guarantee and Collateral Agreement, a
      "Grantor"); all of the foregoing referred to hereinafter as the
      "Documents";

            (b) documents and records of SMG and each of the Subsidiaries
      consisting of their respective (i) Articles of Incorporation, Certificate
      of Incorporation, Certificate of Formation or Articles of Organization,
      (ii) Code of Regulations, By-laws, Limited Liability Company Agreement or
      Operating Agreement, and (iii) certified copies of the resolutions adopted
      by their Boards of Directors or sole member, and such other corporate or
      limited liability company documents, proceedings and records as we have
      deemed necessary or appropriate for purposes of this opinion
      (collectively, the "Company Legislation");

            (c) unfiled copies of the financing statements listed on Annex B
      hereto (collectively, the "Financing Statements"), naming the Grantors
      indicated on such Annex B as debtors and the Administrative Agent as
      secured party; we understand such Financing Statements will be filed in
      the offices listed on Annex B (collectively, the "Filing Offices");

            (d) certificate of an officer or officers of SMG and the
      Subsidiaries, and statements of other representatives of SMG and the
      Subsidiaries, as to certain factual matters, and a certificate of officers
      of SMG and the Subsidiaries as to the incumbency of the officer(s) of SMG
      and the Subsidiaries authorized to sign the Documents;

            (e) certificates from (i) the Secretary of State of the state shown
      next to the name of each of SMG and the Subsidiaries listed on Annex C
      attached hereto, dated the date indicated, with respect to the good
      standing or full force and effect, as applicable, of each of SMG and the
      Subsidiaries; and

            (f) such authorities of law as we have deemed relevant as a basis
      for the opinions expressed herein.

      With respect to each document examined we have assumed, as to all parties
thereto except, with respect to the matters referenced in clauses (a), (b), (c),
and (d) of this paragraph, as to SMG and the Subsidiaries, (a) the genuineness
of all signatures, the authenticity of all documents submitted to us as
originals, the conformity to original documents of documents submitted to us as
certified or photostatic copies, forms or drafts, and the authenticity of such
originals of such latter documents; (b) the due completion, execution, and
acknowledgment as

<PAGE>

July 21, 2005
Page 3

indicated thereon and delivery of all Documents; (c) that each of such parties
has the requisite power and authority to execute and deliver the Documents to
which it is a party and all other documents and instruments contemplated
thereby, and to perform its obligations thereunder, and that all such actions
have been duly and validly authorized by all necessary proceedings on the part
of such parties; (d) that the Documents constitute the legal, valid and binding
obligations of such parties thereto, enforceable against each of such parties in
accordance with their respective terms; (e) that each of the Documents is
supported by adequate consideration; and (f) that the laws of any jurisdiction
other than the United States, the State of Ohio, the General Corporation Law of
Delaware or the Delaware Limited Liability Company Act that may govern any of
the Documents or the Company Legislation are not inconsistent with the laws of
Ohio, the General Corporation Law of Delaware or the Delaware Limited Liability
Company Act in any matter material to this opinion.

      We have also assumed that (a) each Grantor has, or has the power to
transfer, rights in that portion of the Collateral for which it is granting a
security interest consistent with and sufficient for the purposes of R.C.
Section 1309.203, and the description of such personal property reasonably
identifies the personal property subject to the security interest granted
therein; and (b) that the Financing Statements contain the correct name of the
Administrative Agent or a representative of the Administrative Agent.

      As to all matters of fact which are material to our opinion, we have
relied, without any independent due diligence or other investigation, upon the
truth and accuracy of the representations, warranties and recitals of fact (as
opposed to conclusions of law) made or set forth in the Documents, but we have
no knowledge that any such statements are inaccurate or incomplete.

      To the extent the Documents are governed by the internal laws of New York,
we have assumed that each of the Documents constitutes the legal, valid and
binding obligation of each party thereto other than SMG and the Subsidiaries,
enforceable against each such other party in accordance with its respective
terms under the internal laws of the State of New York and under the internal
laws of the jurisdiction of incorporation or formation of each such other party.

      As used herein, the phrase "all necessary company action" means, with
respect to SMG and the Subsidiaries, all necessary corporate or limited
liability company action of SMG and the Subsidiaries under their respective
Company Legislation and the corporation law or limited liability company law of
their respective states of incorporation, formation, or organization. As used
herein, the phrase "power and authority" means, with respect to SMG and the
Subsidiaries, power and authority under their respective Company Legislation and
the corporation law or limited liability company law of their respective states
of incorporation, formation or organization. For purposes of the definitions in
this paragraph, with respect to any Subsidiary not incorporated or formed in
Ohio or Delaware, we have assumed that the corporation or limited liability
company law of each such Subsidiary's state of incorporation is not different
from the General Corporation Law of the State of Ohio, the General Corporation
Law of the State of Delaware, or the Delaware Limited Liability Company Act in
any matter material to this opinion.

<PAGE>

July 21, 2005
Page 4

      Based upon and subject to the foregoing and the further qualifications and
limitations set forth below, as of the date hereof (or as of the date of any
certificate stated to have been relied on by us), we are of the opinion that:

      1. Each of SMG and the Subsidiaries (a) is duly incorporated or formed, as
applicable, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation and (b) has the power and
authority to own and operate its property, to lease the property it operates as
lessee and to conduct the business in which it is currently engaged.

      2. Each of the Borrowers has the power and authority to make, deliver and
perform its obligations under the Documents to which it is a party and to borrow
under the Credit Agreement and each of the Grantors has the power and authority
to grant the security interests, if any, to be granted by it pursuant to the
Guarantee and Collateral Agreement. Each of the Borrowers has taken all
necessary company action to authorize the execution, delivery and performance of
the Credit Documents and each of the Grantors has taken all necessary company
action to authorize the execution, delivery and performance of the Guarantee and
Collateral Agreement. No consent or authorization of, approval by, notice to,
filing with or other act by or in respect of, any Governmental Authority or, to
our knowledge, any other Person is required in connection with the borrowings
under the Credit Agreement, the execution, delivery, performance, validity or
enforceability of the Documents, or the granting of any security interests under
the Guarantee and Collateral Agreement (except filings related to the perfection
of such security interests), except for such consents and approvals as have
already been obtained.

      3. The Credit Agreement has been duly executed and delivered on behalf of
the Borrowers and constitutes a legal, valid and binding obligation of the
Borrowers, enforceable against the Borrowers in accordance with its terms. The
Guarantee and Collateral Agreement has been duly executed and delivered on
behalf of the Grantors and constitutes a legal, valid and binding obligation of
the Grantors, enforceable against the Grantors in accordance with its terms.

      4. The execution and delivery of the Documents to which it is a party by
each of the Borrowers and Grantors, the performance by each of the Borrowers and
Grantors of its obligations thereunder, the consummation of the transactions
contemplated thereby by the Borrowers and Grantors, the compliance by each of
the Borrowers and Grantors with any of the provisions thereof as contemplated
thereby, the compliance by each of the Borrowers and Grantors with any of the
provisions thereof as contemplated as of the date hereof, the borrowings under
the Credit Agreement and the use of proceeds thereof in compliance with the
terms of the Credit Agreement, all as provided therein, (a) will not violate, or
constitute a material default under any Requirement of Law applicable to
corporations for profit or limited liability companies generally, or to our
knowledge, any material Contractual Obligation of any of the Borrowers or
Grantors and (b) will not result in, or require, the creation or imposition of
any Lien on any of the properties or revenues of any of the Borrowers or
Grantors, except as described in this opinion and as described in the Guarantee
and Collateral Agreement.

      5. None of SMG or the Subsidiaries is (a) an "investment company," or a
company "controlled" by an "investment company," within the meaning of the
Investment Company Act

<PAGE>

July 21, 2005
Page 5

of 1940, as amended, or (b) a "holding company" as defined in, or otherwise
subject to regulation under, the Public Utility Holding Company Act of 1935.

      6. To our knowledge, no litigation, investigation or proceeding of or
before, any arbitrator or Governmental Authority is pending or threatened by or
against any of the Borrowers or Grantors or against any of their respective
properties or revenues (a) with respect to any of the Documents or any of the
transactions contemplated thereby, or (b) which would have a Material Adverse
Effect.

      7. To our knowledge, none of the Borrowers or Grantors is in default under
or with respect to any Contractual Obligation in any respect which could
reasonably be expected to have a Material Adverse Effect.

      8. If the Guarantee and Collateral Agreement were stated to be governed by
and construed in accordance with the laws of the State of Ohio, (a) it will be
effective to attach a security interest in favor of the Administrative Agent
under the Ohio UCC to the Collateral and (b) the perfection of the
Administrative Agent's security interests in the Collateral (i) will, as a
general matter, and except as otherwise provided in Sections 1309.301 through
1309.307 of the Ohio UCC, be governed by the local law of the jurisdiction in
which the applicable Grantor is located (which in the case of a registered
organization is the state under the laws of which such registered organization
is organized) and (ii) which constitute certificated securities will be governed
by the local law of the jurisdiction in which the certificated securities are
located (except as to perfection by filing, which is governed by the laws
referred to in clause (b)(i) of this paragraph) as specified in Section
1309.305(A)(1) of the Ohio UCC.

      9. Under the principles described in paragraph 8(b)(i) above, the
perfection of the Administrative Agent's security interest in the Collateral
(except as to perfection by possession of certificated securities as described
in paragraph 10 below) is governed by the laws of the states of organization of
each Grantor, as set forth on Annex C attached hereto. We are licensed to
practice law only in the State of Ohio, and do not practice law in any of such
other jurisdictions, and express no opinions as to such laws; however, we have
reviewed the text of the relevant provisions of Articles 8 and 9 of the Uniform
Commercial Code, as enacted in such states (the "Jurisdiction of Organization
Codes") as displayed on Westlaw on July 20, 2005, but without regard to the
decisional or other law of such states. We confirm that, upon communication of
the Financing Statements and tender of the applicable filing fee or acceptance
of the Financing Statements in or by the Filing Offices in accordance with the
provisions of each applicable Jurisdiction of Organization Code, the security
interests created by the Guarantee and Collateral Agreement in such Collateral
described in each such Financing Statement will be perfected to the extent a
security interest can be perfected in the Collateral by the filing of a
financing statement.

      10. We understand that the stock or share certificates listed on Annex D
attached hereto and evidencing the shares of Capital Stock of each of the
Subsidiaries other than The Scotts Company LLC and Scotts Temecula Operations,
LLC (collectively, the "Stock Certificates") are to be held by the
Administrative Agent in the States of New York and Texas. We have reviewed the
text of the relevant provisions of Articles 8 and 9 of the Uniform Commercial
Code, as enacted in the States of New York and Texas (the "New York/Texas

<PAGE>

July 21, 2005
Page 6

Codes") as displayed on Westlaw on July 20, 2005, but without regard to the
decisional or other law of the States of New York and Texas. We confirm that,
assuming that the Administrative Agent has taken and retained possession of the
Stock Certificates in either the State of New York or the State of Texas, duly
indorsed to the Administrative Agent or in blank, any security interest of the
Administrative Agent in the Stock Certificates which has attached is a perfected
security interest in the Capital Stock evidenced thereby under the New
York/Texas Codes, as applicable.

      The opinions expressed above are subject to the following additional
qualifications:

      (a) Our opinions are subject to the limitations, if any, of Title 11,
U.S.C., as amended, and of any applicable insolvency, reorganization, moratorium
or other similar laws affecting creditors' rights generally and by principles of
equity. In addition, certain remedial and other provisions of the Documents may
be limited by (i) implied covenants of good faith, fair dealing and commercially
reasonable conduct; (ii) judicial discretion, in the instance of multiple or
equitable remedies; and (iii) by the public policies and laws of the State of
Ohio, the General Corporation Law of the State of Delaware, and the Delaware
Limited Liability Company Act to the extent, if any, applicable. Subject to the
qualification that we have no knowledge of the extent to which the
Administrative Agent and the Lenders consider any of the provisions of the
Documents that may be limited by the foregoing to be critical or essential, none
of the foregoing limitations will make, in our view, the remedies provided for
in the Documents, taken as a whole, inadequate for the practical realization of
the benefits of the rights provided or purported to be provided by the
Documents.

      (b) We have made no examination of, and express no opinion as to, title to
any of the real or personal property interests described in or affected by the
Documents, and, accordingly, we express no opinion as to the existence of any
liens, encumbrances, security interests or charges thereon, or the validity,
and/or perfection of the liens or security interests that may be created,
evidenced or effected by any of the Documents, except as set forth in paragraphs
8, 9 and 10. We express no opinion as to the priority of any liens or security
interests that may be created, evidenced or affected by any of the Documents. We
also express no opinion as to the enforceability against Scotts-Sierra
Investments, Inc. of any provisions of the Guarantee and Collateral Agreement
relating to, or any liens thereunder relating to, the Capital Stock of non-U.S.
subsidiaries of Scotts-Sierra Investments, Inc.

      (c) We have not conducted factual or legal examinations, and accordingly
we express no opinion as to (i) federal and state securities laws; (ii) the
effect or application, if any, of any laws or regulations (a) concerning or
promulgated by environmental agencies or authorities, or (b) industries the
operations, financial affairs or profits of which are regulated by the United
States of America or the State of Ohio; for example, banks and thrift
institutions, (iii) fraudulent dispositions or obligations; (iv) racketeer
influenced and corrupt organizations (RICO) statutes; (v) taxes or tax effects;
(vi) qualification, registration or filing requirements of the State of Ohio or
the State of Delaware; or (vii) any order of any court or other authority, of
which we do not have knowledge, directed specifically to any party to any of the
Documents.

      (d) We express no opinion as to the effect of, and the enforceability of
the Documents is subject to the effect of, general principles of equity,
including, without limitation, the discretionary nature of specific performance
and other equitable remedies, judicial limitations

<PAGE>

July 21, 2005
Page 7

that may be imposed on the availability of equitable remedies, including court
decisions and federal and state laws and interpretations thereof. We note that
certain other remedial, waiver and other provisions of the Documents may also be
limited or rendered invalid by applicable federal or state laws, rules,
regulations, court decisions and constitutional requirements in and of the State
of Ohio and the United States of America; however, in such cases, there exist
adequate remedial provisions for the practical realization of the benefits
intended to be conferred thereby. The provisions of the Documents regarding the
remedies available to the Administrative Agent and the other Lenders upon
default are subject to procedural requirements under applicable laws and
regulations.

      (e) We express no opinion as to the enforceability of rights, provisions
or interests to the extent, if any, dependent upon the enforceability of (i)
waivers of rights of debtors or others which may not be waived or which may be
waived only under certain circumstances under applicable law; (ii) provisions of
the Documents to the extent held to (a) require the payment of interest on
interest, (b) compensate any party in excess of actual loss or reasonable
expenses or constitute a penalty, (c) require reimbursement for or indemnity
against actions by the Administrative Agent or others taken in violation of
duties under the Documents or applicable law or public policy (this exception
does not include repayments of the Loans and reimbursements for amounts drawn on
Letters of Credit in accordance with the terms of the Documents), (d) require
indemnity or reimbursement by a Person for additional costs or expenses where
the party reimbursed has incurred such expense by reason in part of the effect
of activities with others not party to the Documents and has assigned or
allocated the burden of reimbursement unreasonably or arbitrarily, (e) purport
to waive or negate in favor of the Administrative Agent or others the effect of
notice of Default or Event of Default, if any, which the Administrative Agent or
others may have at closing, or (f) include an acceleration clause and a
prepayment penalty exercised with respect to the same obligation; or (iii) any
provision for the award of attorneys' fees to an opposing party.

      (f) The foregoing opinions concerning the security interests of the
Administrative Agent are subject to the qualifications that we express no
opinion as to any situation or transaction excluded from the Ohio Code by virtue
of R. C. Section 1309.109.

      (g) To the extent that the Administrative Agent elects to proceed under
the Ohio Code, the security interests created by the Guarantee and Collateral
Agreement are subject to such limitations, exceptions and rights of purchasers
and creditors as are provided for under the provisions of Sections 1309.601 to
1309.628 of the Ohio Code.

      (h) Whenever any matter is indicated to be based on our knowledge, we are
referring to the actual knowledge of the Vorys, Sater, Seymour and Pease LLP
attorneys who have represented SMG and the Subsidiaries in connection with the
transactions contemplated by the Documents. We have relied solely upon the
examinations and inquiries recited herein and we have not undertaken any other
independent investigation to determine the existence or absence of any facts,
and no inference as to our knowledge concerning such facts should be drawn.
Without limiting the generality of the foregoing, we have made no examination of
the character, organization, activities, or authority of the Administrative
Agent or any of the Lenders which might have any effect upon our opinions as
expressed herein, and we have neither examined, nor

<PAGE>

July 21, 2005
Page 8

do we opine upon, any provision or matter to the extent that the examination or
opinion would require a financial, mathematical or accounting calculation or
determination.

      This opinion is limited to the federal laws of the United States of
America, the laws of the State of Ohio, the General Corporation Law of the State
of Delaware, and the Delaware Limited Liability Company Act having effect on the
date hereof. Accordingly, we express no opinion as to the laws of any other
jurisdiction or as to any time after the date hereof. This opinion is furnished
to you solely in connection with the transactions described herein. This opinion
may not be used or relied upon by you for any other purpose and may not be
relied upon for any purpose by any other Person without our prior written
consent; provided, however, that this opinion may be delivered to your
regulators, accountants, attorneys and other professional advisers and may be
used in connection with any legal or regulatory proceeding relating to the
subject matter of this opinion for the purpose of proving this opinion's
existence.

                                         Very truly yours,

<PAGE>

                                                                         ANNEX A

                               OTHER SUBSIDIARIES

<TABLE>
<CAPTION>
SUBSIDIARY                                  STATE OF INCORPORATION OR FORMATION
----------                                  -----------------------------------
<S>                                         <C>
Scotts-Sierra Horticultural
  Products Company                          California

Scotts-Sierra Investments, Inc.             Delaware

Scotts Professional Products Co.            Ohio

OMS Investments, Inc.                       Delaware

Miracle-Gro Lawn Products, Inc.             New York

Scotts-Sierra Crop Protection Company       California

Swiss Farms Products, Inc.                  Delaware

Sanford Scientific, Inc.                    New York

Scotts Products Co.                         Ohio
</TABLE>

<PAGE>

                                                                         ANNEX B

                              FINANCING STATEMENTS

1.    UCC Financing Statement naming The Scotts Miracle-Gro Company as debtor
      and filed with the Ohio Secretary of State.

2.    UCC Financing Statement naming The Scotts Company LLC as debtor and filed
      with the Ohio Secretary of State.

3.    UCC Financing Statement naming Scotts Manufacturing Company as debtor and
      filed with the Delaware Secretary of State.

4.    UCC Financing Statement naming Scotts-Sierra Horticultural Products
      Company as debtor and filed with the California Secretary of State.

5.    UCC Financing Statement naming OMS Investments, Inc. as debtor and filed
      with the Delaware Secretary of State.

6.    UCC Financing Statement naming Scotts-Sierra Investments, Inc. as debtor
      and filed with the Delaware Secretary of State.

<PAGE>

                                                                         ANNEX C

                GOOD STANDING/FULL FORCE AND EFFECT CERTIFICATES

<TABLE>
<CAPTION>
ENTITY NAME                                            STATE ISSUING CERTIFICATE               DATE OF CERTIFICATE
-----------                                            -------------------------               -------------------
<S>                                                    <C>                                     <C>
The Scotts Miracle-Gro Company, an Ohio                Ohio Secretary of State                        7/8/05
corporation

The Scotts Company LLC, an Ohio limited                Ohio Secretary of State                        7/8/05
liability company

EG Systems, Inc., an Indiana corporation               Indiana Secretary of State                     7/7/05

Hyponex Corporation, a Delaware corporation            Delaware Secretary of State                    7/7/05

OMS Investments, Inc., a Delaware corporation          Delaware Secretary of State                    7/7/05

Scotts Temecula Operations, LLC, a Delaware            Delaware Secretary of State                    7/7/05
corporation

Sanford Scientific, Inc., a New York corporation       New York Department of State                   7/6/05

Scotts Manufacturing Company, a Delaware               Delaware Secretary of State                    7/7/05
corporation

Miracle-Gro Lawn Products, Inc., a New York            New York Department of State                   7/6/05
corporation

Scotts Products Co., an Ohio corporation               Ohio Secretary of State                        7/8/05

Scotts Professional Products Co., an Ohio              Ohio Secretary of State                        7/8/05
corporation

Scotts-Sierra Horticultural Products Company, a        California Secretary of State                 7/13/05
California corporation

Scotts-Sierra Crop Protection Company, a               California Secretary of State                 7/13/05
California corporation

Scotts-Sierra Investments, Inc., a Delaware            Delaware Secretary of State                    7/7/05
corporation

Smith & Hawken, Ltd., a Delaware corporation           Delaware Secretary of State                   7/11/05

Swiss Farms Products, Inc., a Delaware                 Delaware Secretary of State                    7/7/05
corporation
</TABLE>

<PAGE>

                                                                         ANNEX D

                           STOCK OR SHARE CERTIFICATES

<TABLE>
<CAPTION>
                   ISSUER                      CLASS OF STOCK                STOCK CERTIFICATE NO.          NO. OF SHARES
                   ------                      --------------                ---------------------          -------------
<S>        <C>                        <C>                                    <C>                            <C>
1.          SCOTTS MANUFACTURING        common shares, $.01 par value                  2                          1,000
                   COMPANY

2.            MIRACLE-GRO LAWN        voting common stock, without par                V13                         1,000
               PRODUCTS, INC.                       value

                                      non-voting common stock, without               NV11                         999.8
                                                  par value

3.          OMS INVESTMENTS, INC.               common stock,                          3                            100
                                               $.01 par value

4.           HYPONEX CORPORATION                common stock,                          3                            100
                                               $.01 par value

5.           SCOTTS PRODUCTS CO.      common shares, without par value                 3                            100

6.           SCOTTS PROFESSIONAL      common shares, without par value                 3                            100
                PRODUCTS CO.

7.              SCOTTS-SIERRA           Class A voting common shares,         Class A Cert. No. 6                   100
           HORTICULTURAL PRODUCTS              $.001 par value
                   COMPANY

                                        Class A voting common shares,         Class A Cert. No. 6                     1
                                               $.001 par value

                                      Class B non-voting common shares,       Class B Cert. No. 3                     1
                                               $.001 par value
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                   ISSUER                      CLASS OF STOCK                STOCK CERTIFICATE NO.          NO. OF SHARES
                   ------                      --------------                ---------------------          -------------
<S>       <C>                         <C>                                    <C>                            <C>
8.           SCOTTS-SIERRA CROP       common shares, without par value                 1                            100
             PROTECTION COMPANY

9.              SCOTTS-SIERRA         Class A common stock, without par               3A                            100
              INVESTMENTS, INC.                     value

                                      Class A common stock, without par               4A                              1
                                                    value

                                      Class B common stock, without par               2B                              1
                                                    value

10.         SWISS FARMS PRODUCTS,      common stock, without par value                 2                            100
                    INC.

11.         SMITH & HAWKEN, LTD.                Common stock                          18                     11,652,708

12.           EG SYSTEMS, INC.                  Common stock                          29                     36,480,458

13.       SANFORD SCIENTIFIC, INC.              Common stock                           8                             99

14.        THE SCOTTS COMPANY LLC     limited liability company interest              n/a                           n/a
                                             (not certificated)

15.           SCOTTS TEMECULA         limited liability company interest              n/a                           n/a
              OPERATIONS, LLC                (not certificated)
</TABLE>

<PAGE>

                                                                       EXHIBIT H

                   FORM OF OPINION OF CLIFFORD CHANCE US LLP

           ---------------------------------------------------------

                         CLIFFORD CHANCE OPINION LETTER
                  ISSUED IN CONNECTION WITH THE PROVISION OF A
                       REVOLVING CREDIT AGREEMENT TO THE
              SCOTTS MIRACLE-GRO COMPANY AND CERTAIN SUBSIDIARIES

            ---------------------------------------------------------

<PAGE>

                                                     [ ]

To: JPMorgan Chase Bank, N.A., as Administrative Agent for the Lenders (as
defined below) and the Lenders (as defined below)

Dear Sirs

THE SCOTTS MIRACLE-GRO COMPANY - REVOLVING CREDIT AGREEMENT

We have acted as English legal advisers to The Scotts Miracle-Gro Company
("SCOTTS") in connection with the provision of a US$1,000,000,000 loan facility
to Scotts and certain of its subsidiaries by the Lenders (the "TRANSACTION").

1.    INTRODUCTION

1.1   FINANCE DOCUMENTS

      The opinions given in this Opinion Letter relate to the following
      documents entered into in connection with the Transaction (the "FINANCE
      DOCUMENTS"):

      1.1.1 a revolving credit agreement dated [ ], 2005 between, inter alia,
            Scotts as borrower (the "BORROWER"), certain subsidiaries of the
            Borrower who are also borrowers from time to time (the "SUBSIDIARY
            BORROWERS"), the lenders from time to time parties thereto (the
            "LENDERS") and JPMorgan Chase Bank, N.A., as agent for the Lenders
            (in such capacity, the "ADMINISTRATIVE AGENT") (the "CREDIT
            AGREEMENT");

      1.1.2 a security over shares agreement dated [ ] 2005 granted by Scotts
            Holdings Limited over 100% of its shares in Levington Group Limited
            in order to secure the borrowings of Scotts Holdings Limited;

      1.1.3 a security over shares agreement dated [ ] 2005 granted by Scotts
            Holdings Limited over 65% of its shares in O M Scott International
            Investments Limited in order to secure the borrowings of Scotts
            Holdings Limited;

      1.1.4 a security over shares agreement dated [ ] 2005 granted by The
            Scotts Company (UK) Limited over 65% of its shares in The Scotts
            Company (Manufacturing) Limited in order to secure the borrowings of
            The Scotts Company (UK) Limited;

                                      -2-

<PAGE>

      1.1.5 a security over shares agreement dated [ ] 2005 granted by Scotts
            Sierra Investments, Inc. over 100% of its shares in Scotts Holdings
            Limited in order to secure the borrowings of Scotts Sierra
            Investments, Inc.; and

      1.1.6 a security over shares agreement dated [ ] 2005 granted by Levington
            Group Limited over 100% of its shares in The Scotts Company (UK)
            Limited in order to secure the borrowings of The Scotts Company (UK)
            Limited,

      the documents listed in paragraphs 1.1.2 to 1.1.6, together, the "SECURITY
      DOCUMENTS".

1.2   DEFINED TERMS

      In this Opinion Letter:

      1.2.1 "ENGLISH OBLIGORS" means Scotts Treasury EEIG (the "EEIG"), Scotts
            Holdings Limited, The Scotts Company (UK) Limited and Levington
            Group Limited;

      1.2.2 "LENDERS" means any person which is a "Lender" under the Credit
            Agreement as at the date of this Opinion Letter.

      1.2.3 terms defined or given a particular construction in the Credit
            Agreement have the same meaning in this Opinion Letter unless a
            contrary indication appears; and

      1.2.4 headings in this Opinion Letter are for ease of reference only and
            shall not affect its interpretation.

1.3   LEGAL REVIEW

      For the purpose of issuing this Opinion Letter we have reviewed only the
      documents and completed only the searches and enquiries referred to in
      Schedule 1 (Documents and Enquiries) to this Opinion Letter.

1.4   APPLICABLE LAW

      The Opinion Letter and the opinions given in it are governed by English
      law and relate only to English law as applied by the English courts as at
      today's date. We express no opinion in this Opinion Letter on the laws of
      any other jurisdiction.

1.5   ASSUMPTIONS AND RESERVATIONS

      The opinions given in this Opinion Letter are given on the basis of our
      understanding of the terms of the Finance Documents and the assumptions
      set out in Schedule 2 (Assumptions) and are subject to the reservations
      set out in Schedule 3 (Reservations) to this Opinion Letter. The opinions
      given in this Opinion Letter are strictly limited to the matters stated in
      paragraph 1.7 to 1.20 (Opinions) and do not extend to any other matters.

1.6   OPINIONS

      We are of the opinion that:

                                      -3-

<PAGE>

1.7   CORPORATE EXISTENCE

      1.7.1 Each of the English Obligors is a company or body corporate duly
            incorporated or registered in England and has the capacity and power
            to enter into each Finance Document to which it is party and to
            exercise its rights and perform its obligations under each Finance
            Document to which it is party.

      1.7.2 All corporate action required to authorise the execution by each
            English Obligor of each Finance Document to which it is party and
            the exercise by it of its rights and the performance by it of its
            obligations under each Finance Document to which it is party has
            been duly taken.

1.8   DUE EXECUTION

      Each Finance Document has been duly executed by each of the English
      Obligors to the extent that English law is applicable.

1.9   CONFLICT

      Neither the execution nor the delivery of each Finance Document to which
      it is party by the English Obligors nor the performance of the obligations
      of the English Obligors under each Finance Document to which it is party
      conflict with or will conflict with:

      1.9.1 any present law or regulation having the force of law in England and
            applicable to the English Obligors; or

      1.9.2 any term of the memorandum and articles of association or the
            constitutive documents, where applicable, of each of the English
            Obligors.

1.10  LEGAL, VALID, BINDING AND ENFORCEABLE OBLIGATIONS

      In any proceedings taken in England for the enforcement of any Finance
      Document, the obligations expressed to be assumed by each of the English
      Obligors in each Finance Document to which it is party would be recognised
      by the English courts as its legal, valid and binding obligations and
      would be enforceable in the English courts.

1.11  VALID SECURITY INTEREST

      Each English Obligor that is a party to the Security Documents has created
      a valid security interest over the assets owned by it which are expressed
      to be subject to a security interest under the Security Documents.

1.12  FURTHER ACTS

      No further acts, conditions or things are required by English law to be
      done, fulfilled or performed in order to enable any of the English
      Obligors lawfully to enter into, exercise its rights or perform its
      obligations under each Finance Document to which it is party or make each
      Finance Document to which it is party admissible in evidence in England.

                                      -4-

<PAGE>

1.13  REGISTRATION TAXES

      No United Kingdom stamp duty, stamp duty reserve tax, registration,
      documentary or similar tax is required to be paid in England on execution
      of any Finance Document.

1.14  LICENSED TO CARRY ON BUSINESS

      It is not necessary under English law (i) in order to enable any party
      (other than the English Obligors) to enforce its rights under any Finance
      Document or (ii) by reason only of the execution, delivery and performance
      of the Finance Documents that any such party to any Finance Document
      should be licensed, authorised or otherwise entitled to carry on business
      in England.

1.15  RESIDENCE

      Neither the Administrative Agent nor any Lender is or will be deemed to be
      resident, domiciled, carrying on business or subject to United Kingdom
      taxation by reason only of the execution of the Finance Documents or the
      performance by the parties to the Finance Documents of their obligations
      thereunder (save that United Kingdom income tax may be withheld at source
      from interest payments made to the Lenders).

1.16  PERFORMANCE

      The performance by the Administrative Agent or any Lender of any action
      required or permitted under the Finance Documents will not violate any law
      or regulation of England.

1.17  IMMUNITY

      In any proceedings taken in England in relation to any Finance Document,
      none of the English Obligors is entitled to claim in relation to itself or
      its assets immunity from suit, attachment, execution or other legal
      process.

1.18  GOVERNING LAW

      In any proceedings taken in England for the enforcement of the obligations
      of the relevant English Obligors under the Credit Agreement, the English
      courts would recognise the choice of the laws of New York to govern the
      Credit Agreement, subject to the provisions of the Contracts (Applicable
      Law) Act 1990.

1.19  SUBMISSION TO JURISDICTION

      The submission to the jurisdiction of the courts of New York by the
      relevant English Obligors contained in the Credit Agreement is legal,
      valid and binding.

1.20  ENFORCEMENT OF FOREIGN JUDGMENT

      The English courts will enforce by separate action a final and conclusive
      judgment for a definite sum of money (not being a sum payable in respect
      of taxes or other charges of a like nature or in respect of a fine or
      other penalty) entered against the relevant English Obligors in connection
      with the enforcement of the Credit Agreement in civil proceedings in a
      court of competent jurisdiction in New York.

                                      -5-

<PAGE>

2.    LIMITS OF OPINION

      No opinion is given or implied with regard to taxation except as expressly
      set out in paragraph 1.13 (Registration Taxes) and paragraph 1.15
      (Residence).

3.    ADDRESSEES AND PURPOSE

      This Opinion Letter is provided in connection with the satisfaction of the
      conditions precedent under the Credit Agreement and is addressed to the
      Administrative Agent and the Lenders. It may not, without our prior
      written consent, be relied on for any other purpose or be disclosed to or
      relied upon by any other person.

Yours faithfully

CLIFFORD CHANCE US LLP

                                      -6-

<PAGE>

                                   SCHEDULE 1

                             DOCUMENTS AND ENQUIRIES

1.    DOCUMENTS

      We have reviewed only the following documents for the purposes of this
      Opinion Letter.

      (a)   A faxed executed copy of the Credit Agreement.

      (b)   Faxed executed copies of each Security Document.

      (c)   A certified copy of the certificate of incorporation (and any
            certificate of change of name) and memorandum and articles of
            association of each English Obligor (apart from the EEIG).

      (d)   A certified copy of the certificate of incorporation, formation
            agreement, management agreement and operating agreement (the
            "CONSTITUTIVE DOCUMENTS") of the EEIG.

      (e)   A certified copy of the written resolutions of the board of
            directors of each English Obligor (apart from the EEIG) dated [ ]
            2005.

      (f)   A certified copy of the written resolutions of the shareholders of
            the relevant English Obligor (apart from the EEIG) dated [ ] 2005.

      (g)   A certified copy of the written resolutions of the members
            representatives of the EEIG dated [ ] 2005 ("MEMBERS'
            REPRESENTATIVES RESOLUTION").

      (h)   A closing certificate of an officer of each English Obligor (apart
            from Levington Group Limited) dated [ ] 2005.

2.    SEARCHES AND ENQUIRIES

      We have undertaken only the following searches and enquires for the
      purposes of this Opinion Letter.

      (a)   A search was conducted at the Registrar of Companies in respect of
            each English Obligor on [ ] 2005.

      (b)   An enquiry by telephone/a personal search was made at the Central
            Index of Winding Up Petitions on [ ] 2005 at [ ]am/pm GMT with
            respect to each English Obligor.

                                      -7-

<PAGE>

                                   SCHEDULE 2

                                   ASSUMPTIONS

The opinions in this Opinion Letter have been made on the following assumptions.

1.    ORIGINAL AND GENUINE DOCUMENTATION

      (a)   All signatures, stamps and seals are genuine, all original documents
            are authentic and all copy documents are complete and conform to the
            originals.

      (b)   Any certificate referred to in Schedule 1 (Documents and Enquiries)
            is correct in all respects.

      (c)   The authorised signatories executing the EEIG Members'
            Representatives Resolution delivered to the Administrative Agent
            pursuant to the Credit Agreement are so authorised by the relevant
            EEIG member.

2.    PARTIES OTHER THAN THE ENGLISH OBLIGORS

      (a)   Each party to the Finance Documents (other than the English
            Obligors) has the capacity, power and authority to enter into and to
            exercise its rights and to perform its obligations under the
            relevant Finance Documents.

      (b)   Each party to the Finance Documents (other than the English
            Obligors) has duly executed and delivered the Finance Documents.

      (c)   The Administrative Agent has complied with the Financial Services
            and Markets Act 2000 and the Financial Services and Markets Act 2000
            (Regulated Activities) Order 2001 in relation to any security taken
            over shares, securities or other investments (falling within the
            scope of the term "investment", as defined in that Act).

      (d)   The steps taken by which any person not originally a party to the
            Credit Agreement becomes a Lender under the Credit Agreement are
            effective to ensure that it is treated as a party to the Credit
            Agreement under the laws of New York and are within the capacity and
            powers of, and are duly authorised by, each of the relevant parties.

      (e)   Each of the Lenders is at all relevant times a person acting in the
            course of carrying on a business consisting wholly or to a
            significant extent of lending money or is otherwise a person of a
            kind specified in article 6 of the Financial Services and Markets
            Act 2000 (Regulated Activities) Order 2001.

3.    DOCUMENT NOT GOVERNED BY ENGLISH LAW

      (a)   The obligations expressed to be assumed by the relevant English
            Obligors to the Credit Agreement constitute their legal, valid,
            binding and enforceable obligations under the laws of New York.

      (b)   The submission to the jurisdiction of the courts of New York by the
            relevant English Obligors contained in the Credit Agreement is
            legal, valid and binding under the laws of New York.

                                      -8-

<PAGE>

4.    CORPORATE AUTHORITY OF THE ENGLISH OBLIGORS

      (a)   There have been no amendments to the form of the memorandum and
            articles of association of any English Obligor (apart from the EEIG)
            or to the constitutive documents of the EEIG referred to in Schedule
            1 (Documents and Enquiries).

      (b)   The resolutions of the board of directors of each English Obligor
            (apart from the EEIG) referred to in Schedule 1 (Documents and
            Enquiries):

            (i)   were duly passed at properly convened meetings of duly
                  appointed directors or, as the case may be, duly appointed
                  committees of directors of the relevant English Obligor; and

            (ii)  have not been amended or rescinded and are in full force and
                  effect.

      (c)   the execution and delivery of the Finance Documents by the English
            Obligors to which it is party and the exercise of its rights and
            performance of its obligations thereunder will materially benefit
            and is in the best interests of the English Obligors. In particular,
            whilst the written resolutions referred to in paragraphs 1(e) and
            1(g) of Schedule 1 state that the board of directors of the English
            Obligors and the members' representatives of the EEIG (where
            applicable) pursuant to the Finance Documents has considered whether
            the English Obligors will derive a benefit from the transaction
            referred to therein, this is a question of fact relating to the
            nature of the business and operations of the English Obligors and we
            do not express any opinion as to whether the English Courts would
            determine that the English Obligors in fact derived a benefit from
            that transaction

      (d)   The resolution of the shareholders of each English Obligor (apart
            from the EEIG) referred to in Schedule 1 was duly passed at a
            properly convened meeting of the shareholders of each English
            Obligor (apart from the EEIG) and has not been amended or rescinded
            and is in full force and effect.

      (e)   The resolutions of the members representatives of the EEIG referred
            to in Schedule 1 (Documents and Enquiries):

            (i)   were duly passed at properly convened meetings of duly
                  appointed members representatives of the EEIG; and

            (ii)  have not been amended or rescinded and are in full force and
                  effect.

      (f)   The Manager of the EEIG acted within the parameters of its powers
            and authority granted to it under and in accordance with the
            constitutive documents of the EEIG.

      (g)   Where applicable, each director has disclosed any interest which he
            may have in the transactions contemplated by the Finance Documents
            in accordance with the provisions of the Companies Act 1985 and the
            articles of association of the relevant English Obligor and none of
            the directors of that English Obligor has any interest in such
            transactions except to the extent permitted by the articles of
            association of that English Obligor.

      (h)   The Credit Agreement states that the purpose of the Facilities is to
            repay the loans under the Existing Credit Agreement and for the
            general corporate purposes of Scotts and certain of its
            subsidiaries. We assume that this does not include any financing or

                                      -9-

<PAGE>

            refinancing of an acquisition of shares in contravention of section
            151 of the Companies Act 1985.

      (i)   The directors of each English Obligor acted in good faith and in the
            interests of that English Obligor in approving the Finance Documents
            and the Transaction described in this Opinion Letter.

      (j)   Where applicable, the provisions of the articles of association or
            the consitutive documents of the English Obligor's (which limit the
            English Obligors' directors' authority to borrow) have been, and
            will be, duly observed.

5.    SEARCHES AND ENQUIRIES

      There has been no alteration in the status or condition of any English
      Obligor as disclosed by the searches and enquiries referred to in Schedule
      1 (Documents and Enquiries). However, it is our experience that the
      searches and enquiries referred to in paragraphs 2 of Schedule 1
      (Documents and Enquiries) may be unreliable. In particular, they are not
      conclusively capable of disclosing whether or not insolvency proceedings
      have been commenced.

6.    OTHER DOCUMENTS

      Save for those listed in Schedule 1 (Documents and Enquiries), there is no
      other agreement, instrument or other arrangement between any of the
      parties to any of the Finance Documents which modifies or supersedes any
      of the Finance Documents.

7.    OTHER LAWS

      All acts, conditions or things required to be fulfilled, performed or
      effected in connection with the Finance Documents under the laws of any
      jurisdiction other than England have been duly fulfilled, performed and
      effected.

                                      -10-

<PAGE>

                                   SCHEDULE 3

                                  RESERVATIONS

The opinions in this Opinion Letter are subject to the following reservations.

1.    EFFECTIVENESS OF SECURITY

      (a)   We express no opinion as to:

            (i)   whether any of the English Obligors have good legal or other
                  title to the assets or rights which are expressed to be
                  subject to a security interest under the Security Documents,
                  or as to the existence or value of any such assets or rights;

            (ii)  the priority of any security interest created under the
                  Security Document or whether any such security interest
                  constitutes a legal or equitable security interest or a fixed
                  or specific (rather than a floating) charge; or

            (iii) whether the Security Documents breach any other agreement or
                  instrument.

      (b)   The exercise by the Administrative Agent of the powers and remedies
            conferred by the Security Documents or by law is subject to general
            equitable principles regarding the enforcement of security and the
            supervisory powers of the English courts.

      (c)   Any obligation imposed on an English Obligor to hold certain moneys
            to the order of the Administrative Agent pursuant to a Security
            Document may constitute a charge which may be required to be
            registered in accordance with the Companies Act 1985. This provision
            has not been registered.

2.    LIMITATIONS ARISING FROM INSOLVENCY LAW

      (a)   The opinions set out in this Opinion Letter are subject to any
            limitations arising from insolvency, liquidation, administration,
            moratorium, reorganisation and similar laws affecting the rights of
            creditors or secured creditors generally.

      (b)   The opinion set out in paragraph 1.11 (Valid Security Interest) of
            this Opinion Letter is subject to the following:

            (x)   the security interest being held to be wholly or partly
                  invalid as a result of any of the following sections of the
                  Insolvency Act 1986 (if the circumstances described in any of
                  these sections is applicable):

                  (i)   section 127 (avoidance of property dispositions, etc.);

                  (ii)  section 178 (power to disclaim onerous property);

                  (ii)  section 186 (rescission of contracts by the court);

                  (iv)  section 238 (transactions at an undervalue);

                  (v)   section 239 (preferences);

                                      -11-

<PAGE>

                  (vi)   section 245 (avoidance of certain floating charges);

                  (vii)  section 423 (transactions defrauding creditors); or

                  (viii) section 426 (co-operation between courts exercising
                         jurisdiction in relation to insolvency);

            (y)   a security interest created by the Security Documents may be
                  held to be wholly or partly invalid as a result of the opening
                  of insolvency proceedings, within the meaning of Council
                  Regulation (EC) No 1346/2000 of 29 May 2000 on insolvency
                  proceedings against any English Obligor in another EU Member
                  State or as a result of the English courts being required,
                  under that Regulation, to give effect to the law of that EU
                  Member State or to recognise or enforce any judgment of a
                  court of that EU Member State concerning those proceedings;
                  and

            (z)   preferential debts (as defined in the Insolvency Act 1986) of
                  the English Obligors and part of the unsecured debts (as
                  determined by the Insolvency Act 1986) may be paid out of the
                  proceeds of any property subject to any floating charge
                  created by any Security Document, in priority to the claims of
                  the holder of the floating charge pursuant to section 175 or
                  176A of the Insolvency Act 1986,

                  although, if and to the extent that a security interest
                  created by the Security Documents constitutes a financial
                  collateral arrangement over cash or financial instruments (as
                  defined in the Financial Collateral Arrangements (No. 2)
                  Regulations 2003, then, inter alia, sections 127, 176A, 178
                  and 245 of the Insolvency Act 1986 may not apply to that
                  security interest.

      (c)   Any provision in the Finance Documents which confers, purports to
            confer or waives a right of set-off or similar right may be
            ineffective against a liquidator or creditor.

3.    ENFORCEABILITY OF CLAIMS

      In this Opinion Letter "ENFORCEABLE" means that an obligation is of a type
      which the English courts enforce. It does not mean that those obligations
      will be enforced in all circumstances in accordance with the terms of the
      Finance Document. In particular:

      (a)   the power of an English court to order specific performance of an
            obligation or other equitable remedy is discretionary and,
            accordingly, an English court might make an award of damages where
            specific performance of an obligation or other equitable remedy is
            sought;

      (b)   where any party to the Finance Documents is vested with a discretion
            or may determine a matter in its opinion, that party may be required
            to exercise its discretion in good faith, reasonably and for a
            proper purpose, and to form its opinion in good faith and on
            reasonable grounds;

      (c)   enforcement may be limited by the provisions of English law
            applicable to agreements held to have been frustrated by events
            happening after their execution;

      (d)   claims may become barred under the Limitation Acts or may be or
            become subject to a defence of set-off or counterclaim;

                                      -12-

<PAGE>

      (e)   an English court may stay proceedings if concurrent proceedings are
            being brought elsewhere and may decline to accept jurisdiction in
            certain cases;

      (f)   a party to a contract may be able to avoid its obligations under
            that contract (and may have other remedies) where it has been
            induced to enter into that contract by a misrepresentation and the
            English courts will generally not enforce an obligation if there has
            been fraud;

      (g)   whilst an English court has power to give judgment in a currency
            other than pounds sterling, it has the discretion to decline to do
            so; and

      (h)   any provision providing that any calculation, determination or
            certification is to be conclusive and binding may not be effective
            if such calculation, determination or certification is fraudulent or
            manifestly incorrect and an English court may regard any
            certification, determination or calculation as no more than prima
            facie evidence.

4.    GOVERNING LAW

      (a)   An English court may not apply the laws of New York if to do so
            would be contrary to public policy or mandatory rules of English
            law. Based on our review of the Credit Agreement, in our opinion,
            none of the provisions of the Credit Agreement would be contrary to
            public policy or mandatory rules of English law (except as otherwise
            stated in this Schedule).

      (b)   If all the elements relevant to the situation are connected with one
            country only, the choice of New York law will not prejudice the
            application of rules of law of that country which cannot be
            derogated from by contract.

5.    JURISDICTION

      If any proceedings are brought in the English courts, those courts may
      accept jurisdiction if there is a strong case for so doing,
      notwithstanding the provisions of the Credit Agreement providing that the
      courts of New York have exclusive jurisdiction in relation thereto.

6.    ENFORCEMENT OF FOREIGN JUDGMENT

      (a)   There are no reciprocal arrangements in force between New York and
            the United Kingdom for the recognition or enforcement of judgments.
            Accordingly, a judgment by the courts of New York is not enforceable
            directly in England but may be recognised by the English courts
            according to common law principles. A judgment by those courts will
            not be enforced by the English courts if:

            (i)   those courts had no jurisdiction, as a matter of English law,
                  over the defendant;

            (ii)  the proceedings in which the judgment was given were opposed
                  to natural justice;

            (iii) the judgment was obtained by fraud;

            (iv)  the enforcement of the judgment would be contrary to English
                  public policy;

                                      -13-

<PAGE>

            (v)   an order has been made and remains effective under section 9
                  of the Foreign Judgments (Reciprocal Enforcement) Act 1933
                  applying that section to judgments of those courts;

            (vi)  before the date on which those courts gave judgment, the
                  matter in dispute had been the subject of a final judgment of
                  another court having jurisdiction whose judgment is
                  enforceable in England;

            (vii) the judgment is for multiple damages within the meaning of
                  section 5(3) of the Protection of Trading Interests Act 1980;

           (viii) the judgment is based on a rule of law specified by the
                  Secretary of State as concerned with the prohibition of
                  restrictive trade practices;

            (ix)  the judgment is based on a rule of law which the Secretary of
                  State specifies as regulating and controlling international
                  trade and which, in so far as they apply to persons carrying
                  on business in the United Kingdom, are damaging or threaten to
                  damage the trading interests of the United Kingdom; or

            (x)   the bringing of proceedings in those courts was contrary to an
                  agreement under which the dispute in question was to be
                  settled otherwise than by proceedings in those courts.

      (b)   If the English court gives judgment for the sum payable under a
            judgment of the courts of New York, the English judgment would be
            enforceable by the methods generally available for the enforcement
            of English judgments. These give the court a discretion whether to
            allow enforcement by any particular method. In addition, it may not
            be possible to obtain an English judgment or to enforce that
            judgment if the judgment debtor is subject to any insolvency or
            similar proceedings, if there is delay, or if the judgment debtor
            has any set-off or counterclaim against the judgment creditor.

7.    APPLICATION OF FOREIGN LAW

      (a)   If any obligation is to be performed in a jurisdiction outside
            England, it may not be enforceable in England to the extent that
            performance would be illegal or contrary to public policy under the
            laws of the other jurisdiction and an English court may take into
            account the law of the place of performance in relation to the
            manner of performance and to the steps to be taken in the event of
            defective performance.

      (b)   It is uncertain whether the parties can agree in advance the
            governing law of claims connected with the contract but which are
            not claims on the contract, such as a claim in tort.

      (c)   We express no opinion as to whether any English Obligor has created
            a valid security interest over any asset or right which is situated
            outside England (including those situated outside England within the
            meaning of Council Regulation (EC) No. 1346/2000 of 29 May 2000 on
            insolvency proceedings) or governed by a foreign law
            (notwithstanding the choice of English law as the governing law of
            the Security Document).

                                      -14-

<PAGE>

8.    DEFAULT INTEREST AND INDEMNITIES BETWEEN PARTIES

      (a)   Any provision of the Finance Documents requiring any person to pay
            amounts imposed in circumstances of breach or default may be held to
            be unenforceable on the grounds that it is a penalty. If the Finance
            Documents do not provide a contractual remedy for late payment of
            any amount payable thereunder that is a substantial remedy within
            the meaning of the Late Payment of Commercial Debts (Interest) Act
            1998, the person entitled to that amount may have a right to
            statutory interest (and to payment of certain fixed sums) in respect
            of that late payment at the rate (and in the amount) from time to
            time prescribed pursuant to that Act. Any term of the Finance
            Documents may be void to the extent that it excludes or varies that
            right to statutory interest, or purports to confer a contractual
            right to interest that is not a substantial remedy for late payment
            of that amount, within the meaning of that Act.

      (b)   There is some possibility that an English court would hold that a
            judgment on any Finance Document, whether given in an English court
            or elsewhere, would supersede that Finance Document so that any
            obligations relating to the payment of interest after judgment or
            any currency indemnities would not be held to survive judgment.

      (c)   Any undertaking or indemnity given by an English Obligor in respect
            of stamp duties or registration taxes payable in the United Kingdom
            may be void.

      (d)   An English court may in its discretion decline to give effect to any
            indemnity for legal costs incurred by a litigant.

9.    OTHER QUALIFICATIONS

      (a)   The parties to a Security Document may be able to amend that
            Security Document by oral agreement despite any provision to the
            contrary.

      (b)   Any provision of the Finance Documents which constitutes, or
            purports to constitute, a restriction on the exercise of any
            statutory power by any party to the Finance Documents or any other
            person may be ineffective.

      (c)   The power of an English court to order specific performance of an
            obligation or other equitable remedy is discretionary and
            accordingly, an English court might make an award of damages where
            specific performance of an obligation or other equitable remedy is
            sought.

      (d)   To the extent that any matter is expressly to be determined by
            future agreement or negotiation, the relevant provision may be
            unenforceable or void for uncertainty.

      (e)   Any provision of the Finance Documents stating that a failure or
            delay, on the part of any Finance Party, in exercising any right or
            remedy under the Security Documents shall not operate as a waiver of
            such right or remedy may not be effective.

      (f)   The effectiveness of any provision of a Finance Document which
            allows an invalid provision to be severed in order to save the
            remainder of that Finance Document will be determined by the English
            courts in their discretion.

                                      -15-

<PAGE>

      (g)   If a party to any Finance Document is controlled by or otherwise
            connected with a person (or is itself) resident in, incorporated in
            or constituted under the laws of a country which is the subject of
            United Nations, European Community or UK sanctions implemented or
            effective in the United Kingdom under the United Nations Act 1946,
            the Emergency Laws (Re-enactments and Repeals) Act 1964 or the
            Anti-terrorism, Crime and Security Act 2001, or under the Treaty
            establishing the European Community, or is otherwise the target of
            any such sanctions, then the obligations of the English Obligors to
            that party (or if that party is an English Obligor, the obligations
            of that English Obligor) under the Finance Documents may be
            unenforceable or void.

      (h)   We express no opinion as to whether any United Kingdom stamp duty or
            stamp duty reserve tax is required to be paid on or in relation to
            any assignment or other transfer of any right or interest under the
            Finance Documents.

                                      -16-
<PAGE>

                                                                       EXHIBIT I

                          FORM OF BORROWING CERTIFICATE

            Pursuant to subsection 5.1(k) of the Revolving Credit Agreement,
dated as of July 21, 2005, by and among The Scotts Miracle-Gro Company, an Ohio
corporation (the "Borrower"), the subsidiaries of the Borrower from time to time
parties thereto (the "Subsidiary Borrowers"), the several banks and other
financial institutions from time to time parties thereto (the "Lenders"), Bank
of America, N.A. and Citicorp North America, Inc., as Syndication Agents, Bank
of Tokyo-Mitsubishi Trust Company, BNP Paribas, CoBank, ACB, Harris, N.A.,
Rabobank International, and Suntrust Bank, as Documentation Agents and JPMorgan
Chase Bank, N.A., a New York banking corporation, as agent for the Lenders
thereunder (in such capacity, the "Administrative Agent"), the undersigned
Responsible Officer of The Scotts Miracle-Gro Company hereby certifies as
follows:

            1. The representations and warranties of The Scotts Miracle-Gro
Company and each of its Subsidiaries set forth in the Credit Agreement and each
other Loan Document to which they are parties delivered today or which are
contained in any certificate, document or financial or other statement furnished
pursuant to or in connection with any of the foregoing are true and correct in
all material respects on and as of the date hereof unless stated to relate to a
specific earlier date;

            2. Immediately prior to and immediately after the making of the
Extension of Credit requested to be made on the date hereof, no Default or Event
of Default shall have occurred and be continuing under the Credit Agreement;

            3. There are no liquidation or dissolution proceedings pending or to
my knowledge threatened against the Borrower nor against any Subsidiary
Borrower, nor has any other event occurred affecting or threatening the
corporate existence of the Borrower nor the existence of any of the Subsidiary
Borrowers;

            4. The Borrower is a corporation duly incorporated, validly existing
and in good standing under the laws of Ohio. Each Domestic Subsidiary Borrower
is a corporation duly incorporated, validly existing and in good standing under
the laws of the state or political subdivision of the United States under which
each is incorporated. Each Foreign Subsidiary Borrower is a corporation duly
incorporated, validly existing and in good standing (or the equivalent thereof)
under the laws of the country of its incorporation; and

            5. [Name of Subsidiary Borrower] is a resident of [Name of Country]
for taxation purposes.

<PAGE>
                                                                               2

            IN WITNESS WHEREOF, the undersigned have hereunto set our names and
affixed the corporate seal.

                                               By: _________________________
                                                   Name:
                                                   Title:

Date: ________ __, 200_

<PAGE>

                                                                       EXHIBIT J

                   FORM OF NEW DOMESTIC SUBSIDIARY CERTIFICATE

                         DOMESTIC SUBSIDIARY CERTIFICATE

            Pursuant to subsection 6.11(a) of the Revolving Credit Agreement,
dated as of July 21, 2005 (the "Credit Agreement"), by and among The Scotts
Miracle-Gro Company, an Ohio corporation (the "Borrower"), the subsidiaries of
the Borrower from time to time parties thereto (the "Subsidiary Borrowers"), the
several banks and other financial institutions from time to time parties thereto
(the "Lenders"), Bank of America, N.A. and Citicorp North America, Inc., as
Syndication Agents, Bank of Tokyo-Mitsubishi Trust Company, BNP Paribas, CoBank,
ACB, Harris, N.A., Rabobank International, and Suntrust Bank, as Documentation
Agents and JPMorgan Chase Bank, N.A., a New York banking corporation, as agent
for the Lenders thereunder (in such capacity, the "Administrative Agent") hereby
certifies as follows (terms defined in the Credit Agreement being used herein
with their defined meanings):

            1. The representations and warranties made by the Subsidiary in each
of the Loan Documents to which it is a party are true and correct in all
material respects on and as of the date hereof as if made on and as of the date
hereof [and after giving effect to the Loans requested to be made pursuant to
the Credit Agreement] (unless stated to relate to a specific earlier date, in
which case, such representations and warranties shall be true and correct in all
material respects as of such earlier date);

            2. Immediately prior to and immediately after the making of the
Loans requested to be made pursuant to the Credit Agreement on the date hereof,
no Default or Event of Default will have occurred and will be continuing under
the Credit Agreement or any other Loan Document; and

            3. _______________ is the duly elected and qualified Secretary of
the Subsidiary and the signature set forth on the signature line for such
officer below is such officer's true and genuine signature, and the undersigned
Secretary of the Subsidiary hereby certifies as follows:

                  (a) Attached hereto as Exhibit A is a true and complete copy
            of resolutions duly adopted by the Board of Directors of the
            Subsidiary on the date thereof; such resolutions have not in any way
            been amended, modified, revoked or rescinded and have been in full
            force and effect since their adoption to and including the date
            hereof and are now in full force and effect; such resolutions are
            the only corporate proceedings of the Subsidiary now in force
            relating to or affecting the matters referred to therein; attached
            hereto as Exhibit B is a true and complete copy of the By-laws of
            the Subsidiary as in effect on the date hereof; and attached

<PAGE>
                                                                               2

            hereto as Exhibit C is a true and complete copy of the Certificate
            of Incorporation of the Subsidiary as in effect on the date hereof;

                  (b) The following persons are now duly elected and qualified
            officers of the Subsidiary, holding the offices indicated next to
            their respective names below, and the signatures appearing opposite
            their respective names below are the true and genuine signatures of
            such officers, and each of such officers is duly authorized to
            execute and deliver on behalf of the Subsidiary the Credit Documents
            to which the Subsidiary is or shall be a party and any certificate
            or other document to be delivered by the Subsidiary pursuant to the
            Credit Documents:

<TABLE>
<CAPTION>
        Name                Office             Signature
-------------------     --------------     ------------------
<S>                     <C>                <C>
 __________________     Vice President     __________________

 __________________     Secretary          __________________
</TABLE>

            IN WITNESS WHEREOF, the undersigned have executed this Certificate
on the date set forth below.

[INSERT NAME OF SUBSIDIARY]                 [INSERT NAME OF SUBSIDIARY]

By:__________________________               By:_________________________
      Name:                                       Name:
      Title: Vice President                       Title: Secretary

____________  __, 2005

<PAGE>

                                                                       Exhibit A
                                                                          to the
                                                 Domestic Subsidiary Certificate

                         Board of Directors Resolutions

<PAGE>

                                                                       Exhibit B
                                                                          to the
                                                 Domestic Subsidiary Certificate

                                     By-Laws

<PAGE>

                                                                       Exhibit C
                                                                          to the
                                                 Domestic Subsidiary Certificate

                          Certificate of Incorporation

<PAGE>
                                                                               2

                                                                       EXHIBIT K

                            FORM OF JOINDER AGREEMENT

            JOINDER AGREEMENT, dated as of ________ __, ____, made by each of
the corporations that are signatories hereto (the "Subsidiary Borrowers"), in
favor of JPMORGAN CHASE BANK, N.A., a New York banking corporation, as
administrative agent (in such capacity, the "Administrative Agent") for the
several banks and other financial institutions (the "Lenders") from time to time
parties to the Revolving Credit Agreement, dated as of July 21, 2005, by and
among The Scotts Miracle-Gro Company, an Ohio corporation (the "Borrower" or
"Scotts"), the subsidiaries of the Borrower from time to time parties thereto
(the "Subsidiary Borrowers"), the several banks and other financial institutions
from time to time parties thereto (the "Lenders"), Bank of America, N.A. and
Citicorp North America, Inc., as Syndication Agents, Bank of Tokyo-Mitsubishi
Trust Company, BNP Paribas, CoBank, ACB, Harris, N.A., Rabobank International,
and Suntrust Bank, as Documentation Agents, as the same may be amended,
supplemented, waived or otherwise modified from time to time (the "Credit
Agreement"), together with any agreement extending the maturity of, or
restructuring, refunding, refinancing or increasing, all or any portion of the
Indebtedness under such agreement or any successor agreements (as so assumed,
amended, supplemented, waived or modified).

                                   WITNESSETH:

            WHEREAS, the parties to this Joinder Agreement wish to add
Subsidiary Borrowers to the Credit Agreement in the manner hereinafter set
forth; and

            WHEREAS, this Joinder Agreement is entered into pursuant to
subsection 10.1(b)(i) of the Credit Agreement;

            NOW, THEREFORE, in consideration of the premises, the parties hereto
hereby agree as follows:

            1. Each of the undersigned Subsidiaries of Scotts, hereby
acknowledges that it has received and reviewed a copy of the Credit Agreement,
and acknowledges and agrees to: join the Credit Agreement as a Subsidiary
Borrower, as indicated with its signature below; be bound by all covenants,
agreements and acknowledgments attributable to a Subsidiary Borrower in the
Credit Agreement; and perform all obligations and duties required of it by the
Credit Agreement.

            2. Each of the undersigned Subsidiaries of Scotts hereby represents
and warrants that the representations and warranties with respect to it
contained in Section 4 of the Credit Agreement and each of the other Loan
Documents to which such Subsidiary of Scotts is a party

<PAGE>
                                                                               2

or which are contained in any certificate furnished by or on behalf of such
Subsidiary of Scotts are true and correct on the date hereof.

            3. The address and jurisdiction of incorporation of each of the
undersigned Subsidiaries of Scotts is set forth in Annex I to this Joinder
Agreement.

            4. THIS JOINDER AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

<PAGE>
                                                                               2

            IN WITNESS WHEREOF, each of the undersigned has caused this Joinder
Agreement to be duly executed and delivered in [New York, New York] by its
proper and duly authorized officer as of the date set forth below.

                                            [NAME OF SUBSIDIARY],
                                            as a Subsidiary Borrower

                                            By:__________________________
                                               Name:
                                               Title:

                                            [NAME OF SUBSIDIARY],
                                            as a Subsidiary Borrower

                                            By:__________________________
                                               Name:
                                               Title:

                                            THE SCOTTS MIRACLE-GRO COMPANY

                                            By:_______________________
                                               Name:
                                               Title:

ACKNOWLEDGED AND AGREED TO:

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent

By:_______________________
   Name:
   Title:

<PAGE>

                                                                         ANNEX I

[Insert administrative information concerning Subsidiary Borrowers]<PAGE>

                                                                     EXHIBIT 4.2

                       GUARANTEE AND COLLATERAL AGREEMENT

                                     made by

                         THE SCOTTS MIRACLE-GRO COMPANY,

                        EACH DOMESTIC SUBSIDIARY BORROWER

                   and certain of their Domestic Subsidiaries

                                   in favor of

                           JPMORGAN CHASE BANK, N.A.,
                             as Administrative Agent

                            Dated as of July 21, 2005

<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                       Page
                                                                                       ----
<S>                                                                                    <C>
SECTION 1.  DEFINED TERMS.......................................................         1

     1.1.   Definitions.........................................................         1
     1.2.   Other Definitional Provisions.......................................         4

SECTION 2.  BORROWER GUARANTEE..................................................         4

     2.1.   Borrower Guarantee..................................................         4
     2.2.   No Subrogation......................................................         5
     2.3.   Amendments, etc.....................................................         5
     2.4.   Guarantee Absolute and Unconditional................................         6
     2.5.   Reinstatement.......................................................         6
     2.6.   Payments............................................................         6

SECTION 3.  DOMESTIC SUBSIDIARY GUARANTEE.......................................         7

     3.1.   Domestic Subsidiary Guarantee.......................................         7
     3.2.   Right of Contribution...............................................         7
     3.3.   No Subrogation......................................................         7
     3.4.   Amendments, etc. with respect to the Borrower Obligations and the
            Borrower's Guarantor Obligations....................................         8
     3.5.   Guarantees Absolute and Unconditional...............................         8
     3.6.   Reinstatement.......................................................         9
     3.7.   Payments............................................................         9

SECTION 4.  GRANT OF SECURITY INTEREST..........................................         9

SECTION 5.  REPRESENTATIONS AND WARRANTIES......................................        10

     5.1.   Title; No Other Liens...............................................        10
     5.2.   Perfected First Priority Liens......................................        10
     5.3.   Jurisdiction of Organization........................................        10
     5.4.   Domestic Subsidiaries...............................................        10
     5.5.   Pledged Stock.......................................................        10

SECTION 6.  COVENANTS...........................................................        10

     6.1.   Delivery of Certificated Securities.................................        11
     6.2.   Payment of Obligations..............................................        11
     6.3.   Maintenance of Perfected Security Interest; Further Documentation...        11
     6.4.   Notices.............................................................        11
     6.5.   Pledged Stock.......................................................        11

SECTION 7.  REMEDIAL PROVISIONS.................................................        12
</TABLE>

                                        i
<PAGE>

<TABLE>
<S>                                                                                     <C>
     7.1.   Pledged Stock.......................................................        12
     7.2.   Proceeds to be Turned Over To Administrative Agent..................        13
     7.3.   Application of Proceeds.............................................        13
     7.4.   Code and Other Remedies.............................................        14
     7.5.   Registration Rights.................................................        14
     7.6.   Deficiency..........................................................        15

SECTION 8.  THE ADMINISTRATIVE AGENT............................................        15

     8.1.   Administrative Agent's Appointment as Attorney-in-Fact, etc.........        15
     8.2.   Duty of Administrative Agent........................................        16
     8.3.   Authority of Administrative Agent...................................        17

SECTION 9.  MISCELLANEOUS.......................................................        17

     9.1.   Amendments in Writing...............................................        17
     9.2.   Notices.............................................................        17
     9.3.   No Waiver by Course of Conduct; Cumulative Remedies.................        17
     9.4.   Enforcement Expenses; Indemnification...............................        17
     9.5.   Successors and Assigns..............................................        18
     9.6.   Set-Off.............................................................        18
     9.7.   Counterparts........................................................        18
     9.8.   Severability........................................................        18
     9.9.   Section Headings....................................................        19
     9.10.  Integration.........................................................        19
     9.11.  GOVERNING LAW.......................................................        19
     9.12.  Submission To Jurisdiction; Waivers.................................        19
     9.13.  Acknowledgments.....................................................        19
     9.14.  Additional Grantors.................................................        20
     9.15.  Releases; Reinstatement.............................................        20
     9.16.  Conflict of Laws....................................................        21
     9.17.  WAIVER OF JURY TRIAL................................................        21
</TABLE>

SCHEDULES

Schedule 1      Notice Addresses of Guarantors
Schedule 2      Description of Pledged Stock
Schedule 3      Jurisdiction of Incorporation
Schedule 4      Domestic Subsidiaries

                                       ii
<PAGE>

            THIS GUARANTEE AND COLLATERAL AGREEMENT, dated as of July 21, 2005,
made by each of the signatories hereto (together with any other entity that may
become a party hereto as provided herein, the "Grantors"), in favor of JPMORGAN
CHASE BANK, N.A., as Administrative Agent (in such capacity, the "Administrative
Agent") for the banks and other financial institutions (the "Lenders") from time
to time parties to the Revolving Credit Agreement, dated as of July 21, 2005 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among The Scotts Miracle-Gro Company, an Ohio corporation (the
"Borrower"), the Subsidiary Borrowers (as defined in the Credit Agreement) from
time to time parties to the Credit Agreement, Bank of America, N.A. and CITICORP
NORTH AMERICA, Inc., as Syndication Agents, Bank of Tokyo-Mitsubishi Trust
Company, BNP Paribas, COBANK, ACB, HARRIS BANK, N.A., RABOBANK INTERNATIONAL and
SUNTRUST BANK, as Documentation Agents, and the Administrative Agent.

                              W I T N E S S E T H:

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

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

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

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

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

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

            SECTION 1. DEFINED TERMS

            1.1. Definitions. (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement and the term Certificated Security is used herein as
defined in the New York UCC.

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

            "Agreement": this Guarantee and Collateral Agreement, as the same
      may be amended, supplemented or otherwise modified from time to time.

<PAGE>
                                                                               2

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

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

            "Collateral": the collective reference to any right, title or
      interest now owned or at any time hereafter acquired by such Grantor, or
      in which such Grantor now has or at any time in the future may acquire any
      right, title or interest, in (i) the Pledged Stock, all documents and
      instruments issued or delivered in respect of any Pledged Stock, the
      rights and interest of the holder or registered owner of any Pledged Stock
      in and under the Pledged Stock, such documents and instruments, any and
      all other documents and instruments that from time to time secure such
      Pledged Stock and any and all collateral from time to time subject to any
      such documents or instruments and (ii) all Proceeds of any Collateral.

            "Collateral Reinstatement Ratings Level": the condition deemed to
      occur at any time after any Collateral Release Date upon the occurrence of
      a ratings downgrade of the Borrower's senior unsecured non-credit enhanced
      long-term indebtedness by either S&P or Moody's to a level below (a)
      either BB+ by S&P or Ba1 by Moody's (so long as the Borrower would not
      then meet the Collateral Release Ratings Level) or (b) either BBB- by S&P
      or Baa3 by Moody's (so long as the Borrower would not then meet the
      Collateral Release Ratings Level). If either S&P or Moody's shall cease to
      be in the business of rating corporate debt obligations, the Borrower, the
      Administrative Agent and the Required Lenders shall negotiate in good
      faith to amend this definition to reflect the unavailability of ratings
      from such rating agency.

            "Collateral Release Ratings Level": the condition deemed to occur at
      any time after the Closing Date at which the Borrower's senior unsecured
      non-credit enhanced long-term indebtedness is rated (i) at least BB+ (with
      a stable outlook) by S&P and at least Ba1 (with a stable outlook) by
      Moody's or (ii) at least BBB- (with a stable outlook) by S&P or at least
      Baa3 (with a stable outlook) by Moody's. If either S&P or Moody's shall
      cease to be in the business of rating corporate debt obligations, the
      Borrower, the Administrative Agent and the Required

<PAGE>
                                                                               3

      Lenders shall negotiate in good faith to amend this definition to reflect
      the unavailability of ratings from such rating agency.

            "Foreign Subsidiary": any Subsidiary organized under the laws of any
      jurisdiction outside the United States of America, except for any such
      Subsidiary which is a "check-the-box" entity under Regulation section
      301.7701-3 of the Code.

            "Foreign Subsidiary Voting Stock": the voting Capital Stock of any
      Foreign Subsidiary.

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

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

            "Issuers": the collective reference to each issuer of any Pledged
      Stock.

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

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

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

            "Pledged Stock": the shares of Capital Stock listed on Schedule 2,
      together with any other shares, stock certificates, options or rights of
      any nature whatsoever in respect of the Capital Stock of any Subsidiary of
      the Borrower (to the extent required to be pledged under Section 6.11 of
      the Credit Agreement) that may be issued or granted to, or held by, any
      Grantor while this Agreement is in effect; provided that in no event shall
      more than 65% of the total outstanding Foreign Subsidiary Voting Stock of
      any Foreign Subsidiary be required to be pledged hereunder.

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

            "Securities Act": the Securities Act of 1933, as amended.

<PAGE>
                                                                               4

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

            "Unsecured Period": any time from and after any Collateral Release
      Date (if any) until the following Collateral Reinstatement Date (if any).

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

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

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

            SECTION 2. BORROWER GUARANTEE

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

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

            (c) The guarantee contained in this Section 2 shall remain in full
force and effect until all the Subsidiary Borrower Obligations and the
obligations of the Borrower under the guarantee contained in this Section 2
shall have been satisfied by payment in full, no Letter of Credit shall be
outstanding and the Revolving Credit Commitments and Loans shall be terminated,
notwithstanding that

<PAGE>
                                                                               5

from time to time during the term of the Credit Agreement each Subsidiary
Borrower may be free from any Subsidiary Borrower Obligations.

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

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

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

<PAGE>
                                                                               6

            2.4. Guarantee Absolute and Unconditional. The Borrower waives any
and all notice of the creation, renewal, extension or accrual of any of the
Subsidiary Borrower Obligations and notice of or proof of reliance by the
Administrative Agent or any Lender upon the guarantee contained in this Section
2 or acceptance of the guarantee contained in this Section 2; the Subsidiary
Borrower Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon the guarantee contained in this Section 2; and all dealings
between the Borrower and the Subsidiary Borrowers, on the one hand, and the
Administrative Agent and the Lenders, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 2. The Borrower waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower or the applicable Subsidiary Borrower with respect to the
Subsidiary Borrower Obligations. The Borrower understands and agrees that the
guarantee contained in this Section 2 shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of the Credit Agreement or any other Loan Document,
any of the Subsidiary Borrower Obligations or any other collateral security
therefor or guarantee or right of offset with respect thereto at any time or
from time to time held by the Administrative Agent or any Lender, (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by any
Subsidiary Borrower or any other Person against the Administrative Agent or any
Lender, or (c) any other circumstance whatsoever (with or without notice to or
knowledge of the Borrower or any Subsidiary Borrower) which constitutes, or
might be construed to constitute, an equitable or legal discharge of the
Subsidiary Borrowers for the Subsidiary Borrower Obligations, or of the Borrower
under the guarantee contained in this Section 2, in bankruptcy or in any other
instance. When making any demand hereunder or otherwise pursuing its rights and
remedies hereunder against the Borrower, the Administrative Agent or any Lender
may, but shall be under no obligation to, make a similar demand on or otherwise
pursue such rights and remedies as it may have against the Subsidiary Borrowers
or any other Person or against any collateral security or guarantee for the
Subsidiary Borrower Obligations or any right of offset with respect thereto, and
any failure by the Administrative Agent or any Lender to make any such demand,
to pursue such other rights or remedies or to collect any payments from the
Borrower, any Subsidiary Borrower, or any other Person or to realize upon any
such collateral security or guarantee or to exercise any such right of offset,
or any release of the Borrower, any Subsidiary Borrower or any other Person or
any such collateral security, guarantee or right of offset, shall not relieve
the Borrower of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Administrative Agent or any Lender against the Borrower.
For the purposes hereof, "demand" shall include the commencement and continuance
of any legal proceedings.

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

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

<PAGE>
                                                                               7

            SECTION 3. DOMESTIC SUBSIDIARY GUARANTEE

            3.1. Domestic Subsidiary Guarantee. (a) Each of the Guarantors
hereby, jointly and severally, unconditionally and irrevocably, guarantees to
the Administrative Agent, for the ratable benefit of the Lenders and their
respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of the Borrower Obligations and the
Borrower's Guarantor Obligations.

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

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

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

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

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

            3.3. No Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Administrative Agent or any

<PAGE>
                                                                               8

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

            3.4. Amendments, etc. with respect to the Borrower Obligations and
the Borrower's Guarantor Obligations. Each Guarantor shall remain obligated
hereunder notwithstanding that, without any reservation of rights against any
Guarantor and without notice to or further assent by any Guarantor, any demand
for payment of any of the Borrower Obligations or the Borrower's Guarantor
Obligations made by the Administrative Agent or any Lender may be rescinded by
the Administrative Agent or such Lender and any of the Borrower Obligations and
the Borrower's Guarantor Obligations continued, and the Borrower Obligations and
the Borrower's Guarantor Obligations or the liability of any other Person upon
or for any part thereof, or any collateral security or guarantee therefor or
right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any Lender, and the
Credit Agreement and the other Loan Documents and any other documents executed
and delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Required
Lenders or all Lenders, as the case may be) may deem advisable from time to
time, and any collateral security, guarantee or right of offset at any time held
by the Administrative Agent or any Lender for the payment of the Borrower
Obligations or the Borrower's Guarantor Obligations may be sold, exchanged,
waived, surrendered or released. Neither the Administrative Agent nor any Lender
shall have any obligation to protect, secure, perfect or insure any Lien at any
time held by it as security for the Borrower Obligations or the Borrower's
Guarantor Obligations or for the guarantee contained in this Section 3 or any
property subject thereto.

            3.5. Guarantees Absolute and Unconditional. Each Guarantor waives
any and all notice of the creation, renewal, extension or accrual of any of the
Borrower Obligations or Borrower's Guarantor Obligations and notice of or proof
of reliance by the Administrative Agent or any Lender upon any of the guarantees
contained in this Section 3 or acceptance of the guarantees contained in this
Section 3; the Borrower Obligations and the Borrower's Guarantor Obligations and
any of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon the
guarantee contained in this Section 3; and all dealings between the Borrower and
any of the Guarantors, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, likewise shall be conclusively presumed to have been
had or consummated in reliance upon the guarantee contained in this Section 3.
Each Guarantor waives diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon the Borrower or any of the Guarantors
with respect to the Borrower Obligations and the Borrower's Guarantor
Obligations. Each Guarantor understands and agrees that the guarantees contained
in this Section 3 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity or enforceability of the

<PAGE>
                                                                               9

Credit Agreement or any other Loan Document, any of the Borrower Obligations or
the Borrower's Guarantor Obligations or any other collateral security therefor
or guarantee or right of offset with respect thereto at any time or from time to
time held by the Administrative Agent or any Lender, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by the Borrower or any other Person against
the Administrative Agent or any Lender, or (c) any other circumstance whatsoever
(with or without notice to or knowledge of the Borrower or such Guarantor) which
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Borrower for the Borrower Obligations or the Borrower's
Guarantor Obligations, or of such Guarantor under the guarantee contained in
this Section 3, in bankruptcy or in any other instance. When making any demand
hereunder or otherwise pursuing its rights and remedies hereunder against any
Guarantor, the Administrative Agent or any Lender may, but shall be under no
obligation to, make a similar demand on or otherwise pursue such rights and
remedies as it may have against the Borrower, any other Guarantor or any other
Person or against any collateral security or guarantee for the Borrower
Obligations or the Borrower's Guarantor Obligations or any right of offset with
respect thereto, and any failure by the Administrative Agent or any Lender to
make any such demand, to pursue such other rights or remedies or to collect any
payments from the Borrower, any other Guarantor or any other Person or to
realize upon any such collateral security or guarantee or to exercise any such
right of offset, or any release of the Borrower, any other Guarantor or any
other Person or any such collateral security, guarantee or right of offset,
shall not relieve any Guarantor of any obligation or liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Administrative Agent or any Lender against
any Guarantor. For the purposes hereof "demand" shall include the commencement
and continuance of any legal proceedings.

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

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

            SECTION 4. GRANT OF SECURITY INTEREST

            Each Grantor hereby assigns and transfers to the Administrative
Agent, and hereby grants to the Administrative Agent, for the ratable benefit of
the Lenders, a security interest in all the Collateral, as collateral security
for the prompt and complete payment and performance when due (whether at the
stated maturity, by acceleration or otherwise) of such Grantor's Obligations.
Notwithstanding the limitation on the inclusion of Foreign Subsidiary Voting
Stock in the definition of Pledged Stock, the remaining 35% of the outstanding
Foreign Subsidiary Voting Stock of any Foreign Subsidiary Borrower (other than
any Foreign Subsidiary Borrower organized or incorporated under the laws of
Australia) shall be pledged and subject to a grant of a security interest
therein subject to this section 4; provided that such pledge and grant shall
only secure the obligations of such Foreign Subsidiary Borrower in its capacity
as a borrower under the Credit Agreement.

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                                                                              10

            SECTION 5. REPRESENTATIONS AND WARRANTIES

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

            5.1. Title; No Other Liens. Except for the security interest granted
to the Administrative Agent for the ratable benefit of the Lenders pursuant to
this Agreement and the other Liens permitted to exist on the Collateral by the
Credit Agreement, such Grantor owns each item of the Collateral free and clear
of any and all Liens or claims of others.

            5.2. Perfected First Priority Liens. The security interests granted
pursuant to this Agreement will constitute valid perfected security interests in
all of the Collateral in favor of the Administrative Agent, for the ratable
benefit of the Lenders, as collateral security for such Grantor's Obligations,
enforceable in accordance with the terms hereof against all creditors of such
Grantor and any Persons purporting to purchase any Collateral from such Grantor,
to the extent that perfection or enforceability against third parties is
obtainable by completion of the filings and other actions set forth on Schedule
3 or any similar filings or other actions in other jurisdictions in the United
States of America and are prior to all other Liens on the Collateral which have
priority over the Liens on the Collateral by operation of law and other Liens on
the Collateral permitted by the Credit Agreement.

            5.3. Jurisdiction of Organization. On the date hereof, such
Grantor's jurisdiction of organization and identification number from the
jurisdiction of organization (if any) are set forth on Schedule 3. Such Grantor
has furnished to the Administrative Agent a certified charter, certificate of
incorporation or other organizational document and good standing certificate as
of a date which is recent to the date hereof.

            5.4. Domestic Subsidiaries.On the date hereof, Schedule 4 sets forth
a true and complete list of the Domestic Subsidiaries.

            5.5. Pledged Stock. (a) The shares of the Pledged Stock pledged by
such Grantor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by such Grantor or, in the
case of Foreign Subsidiary Voting Stock, if less, 65% of the outstanding Foreign
Subsidiary Voting Stock of each relevant Issuer.

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

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

            SECTION 6. COVENANTS

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

<PAGE>
                                                                              11

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

            6.2. Payment of Obligations. Such Grantor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of income or profits therefrom, as well as all
claims of any kind against or with respect to the Collateral, except that no
such charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Grantor and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.

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

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

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

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

            (c) At any time and from time to time, upon the written request of
      the Administrative Agent, and at the sole expense of such Grantor, such
      Grantor will promptly and duly execute and deliver, and have recorded,
      such further instruments and documents and take such further actions as
      the Administrative Agent may reasonably request for the purpose of
      obtaining or preserving the full benefits of this Agreement and of the
      rights and powers herein granted, including, without limitation, (i)
      filing any financing or continuation statements under the Uniform
      Commercial Code (or other similar laws) in effect in any jurisdiction with
      respect to the security interests created hereby and (ii) in the case of
      Pledged Stock and any other relevant Collateral, taking any actions
      necessary to enable the Administrative Agent to obtain "control" (within
      the meaning of the applicable Uniform Commercial Code) with respect
      thereto.

            6.5. Pledged Stock. (a) If such Grantor shall become entitled to
receive or shall receive any stock certificate (including, without limitation,
any certificate representing a stock dividend or a distribution in connection
with any reclassification, increase or reduction of capital or any certificate
issued in connection with any reorganization), option or rights in respect of
the Capital Stock of any Issuer which is a direct or indirect Domestic
Subsidiary of such Grantor and which is Pledged Stock, whether in addition to,
in substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the
same as the agent of the Administrative Agent and the Lenders, hold the same in
trust for the Administrative Agent and the Lenders and deliver the same
forthwith to the Administrative Agent in the exact form received, duly

<PAGE>
                                                                              12

indorsed (including by delivery of related stock or bond powers) by such Grantor
to the Administrative Agent, if required, together with an undated stock power
covering such certificate duly executed in blank by such Grantor to be held by
the Administrative Agent, subject to the terms hereof, as additional collateral
security for such Grantor's Obligations. Any sums paid upon or in respect of the
Collateral upon the liquidation or dissolution of any Issuer shall be paid over
to the Administrative Agent to be held by it hereunder as additional collateral
security for the applicable Grantor's Obligations, and in case any distribution
of capital shall be made on or in respect of the Collateral or any property
shall be distributed upon or with respect to the Collateral pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant to
the reorganization thereof, the property so distributed shall, unless otherwise
subject to a perfected security interest in favor of the Administrative Agent,
be delivered to the Administrative Agent to be held by it hereunder as
additional collateral security for such Obligations except to the extent
permitted under Subsection 6.2. If any sums of money or property so paid or
distributed in respect of the Collateral shall be received by such Grantor, such
Grantor shall, until such money or property is paid or delivered to the
Administrative Agent, hold such money or property in trust for the Lenders,
segregated from other funds of such Grantor, as additional collateral security
for the Obligations.

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

            (c) In the case of each Grantor which is an Issuer, such Issuer
agrees that (i) it will be bound by the terms of this Agreement relating to the
Pledged Stock issued by it and will comply with such terms insofar as such terms
are applicable to it, (ii) it will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 6.3(a) with
respect to the Pledged Stock issued by it and (iii) the terms of Sections 7.1(c)
and 7.5 shall apply to it, mutatis mutandis, with respect to all actions that
may be required of it pursuant to Section 7.1(c) or 7.5 with respect to the
Pledged Stock issued by it.

            SECTION 7. REMEDIAL PROVISIONS

            7.1. Pledged Stock. (a) Unless an Event of Default shall have
occurred and be continuing and the Administrative Agent shall have given notice
to the relevant Grantor of the Administrative Agent's intent to exercise its
corresponding rights pursuant to Section 7.1(b), each Grantor shall be permitted
to receive all cash dividends paid in respect of the Pledged Stock, in each case
paid in the normal course of business of the relevant Issuer and consistent with
past practice, to the extent permitted in the Credit Agreement, to pay and
declare dividends to the extent permitted by the Credit Agreement and to
exercise all voting and corporate rights with respect to the Pledged Stock;
provided, however, that no vote shall be cast or corporate right exercised or
other action taken which, in the Administrative Agent's reasonable judgment,
would impair the Collateral or which would be inconsistent with or result in any
violation of any provision of the Credit Agreement, this Agreement or any other
Loan Document.

<PAGE>
                                                                              13

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

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

            7.2. Proceeds to be Turned Over To Administrative Agent. If an Event
of Default shall occur and be continuing, all Proceeds received by any Grantor
consisting of cash, checks and other near-cash items shall be held by such
Grantor in trust for the Administrative Agent and the Lenders, segregated from
other funds of such Grantor, and shall, forthwith upon receipt by such Grantor,
be turned over to the Administrative Agent in the exact form received by such
Grantor (duly indorsed by such Grantor to the Administrative Agent, if
required). All Proceeds received by the Administrative Agent hereunder shall be
held by the Administrative Agent in a Collateral Account maintained under its
sole dominion and control. All Proceeds while held by the Administrative Agent
in a Collateral Account (or by such Grantor in trust for the Administrative
Agent and the Lenders) shall continue to be held as collateral security for all
the Obligations and shall not constitute payment thereof until applied as
provided in Section 7.5.

            7.3. Application of Proceeds. At such intervals as may be agreed
upon by the Borrower and the Administrative Agent, or, if an Event of Default
shall have occurred and be continuing, at any time at the Administrative Agent's
election, the Administrative Agent may apply all or any part of Proceeds
constituting Collateral, whether or not held in any Collateral Account, and any
proceeds of the guarantee set forth in Section 2, in payment of the Obligations
in the following order:

            First, to pay incurred and unpaid fees and expenses of the
      Administrative Agent under the Loan Documents;

            Second, to the Administrative Agent, for application by it towards
      payment of amounts then due and owing and remaining unpaid in respect of
      the Obligations, pro rata among the

<PAGE>
                                                                              14

      Lenders according to the amounts of the Obligations then due and owing and
      remaining unpaid to the Lenders;

            Third, to the Administrative Agent, for application by it towards
      prepayment of the Obligations, pro rata among the Lenders according to the
      amounts of the Obligations then held by the Lenders; and

            Fourth, any balance remaining after the Obligations shall have been
      paid in full, no Letters of Credit shall be outstanding and the Revolving
      Credit Commitments shall have terminated shall be paid over to the
      Borrower or to whomsoever may be lawfully entitled to receive the same.

            7.4. Code and Other Remedies. If an Event of Default shall occur and
be continuing, the Administrative Agent, on behalf of the Lenders, may exercise,
in addition to all other rights and remedies granted to them in this Agreement
and in any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the New York UCC
or any other applicable law. Without limiting the generality of the foregoing,
the Administrative Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Grantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, give option or options to purchase, or otherwise dispose of and
deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any
exchange, broker's board or office of the Administrative Agent or any Lender or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Administrative Agent or any Lender shall have
the right upon any such public sale or sales, and, to the extent permitted by
law, upon any such private sale or sales, to purchase the whole or any part of
the Collateral so sold, free of any right or equity of redemption in any
Grantor, which right or equity is hereby waived and released. Each Grantor
further agrees, at the Administrative Agent's request, to assemble the
Collateral and make it available to the Administrative Agent at places which the
Administrative Agent shall reasonably select, whether at such Grantor's premises
or elsewhere. The Administrative Agent shall apply the net proceeds of any
action taken by it pursuant to this Section 7.4, after deducting all reasonable
costs and expenses of every kind incurred in connection therewith or incidental
to the care or safekeeping of any of the Collateral or in any way relating to
the Collateral or the rights of the Administrative Agent and the Lenders
hereunder, including, without limitation, reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Obligations, in such
order as the Administrative Agent may elect, and only after such application and
after the payment by the Administrative Agent of any other amount required by
any provision of law, including, without limitation, Section 9-504(1)(c) of the
New York UCC, need the Administrative Agent account for the surplus, if any, to
any Grantor. To the extent permitted by applicable law, each Grantor waives all
claims, damages and demands it may acquire against the Administrative Agent or
any Lender arising out of the exercise by them of any rights hereunder. If any
notice of a proposed sale or other disposition of Collateral shall be required
by law, such notice shall be deemed reasonable and proper if given at least 10
days before such sale or other disposition.

            7.5. Registration Rights. (a) If the Administrative Agent shall
determine to exercise its right to sell any or all of the Pledged Stock pursuant
to Section 7.4, and if in the opinion of the Administrative Agent it is
necessary or advisable to have the Pledged Stock, or that portion thereof to be
sold, registered under the provisions of the Securities Act, the relevant
Grantor will cause the Issuer thereof to (i) execute and deliver, and cause the
directors and officers of such Issuer to execute and

<PAGE>
                                                                              15

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

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

            (c) Each Grantor agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all
or any portion of the Pledged Stock pursuant to this Section 7.5 valid and
binding and in compliance with any and all other applicable Requirements of Law.
Each Grantor further agrees that a breach of any of the covenants contained in
this Section 7.5 will cause irreparable injury to the Administrative Agent and
the Lenders, that the Administrative Agent and the Lenders have no adequate
remedy at law in respect of such breach and, as a consequence, that each and
every covenant contained in this Section 7.5 shall be specifically enforceable
against such Grantor, and such Grantor hereby waives and agrees not to assert
any defenses against an action for specific performance of such covenants except
for a defense that no Event of Default has occurred under the Credit Agreement.

            7.6. Deficiency. Grantor shall remain liable for any deficiency if
the proceeds of any sale or other disposition of the Collateral are insufficient
to pay its Obligations and the fees and disbursements of any attorneys employed
by the Administrative Agent or any Lender to collect such deficiency.

            SECTION 8. THE ADMINISTRATIVE AGENT

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

<PAGE>
                                                                              16

gives the Administrative Agent the power and right, on behalf of
such Grantor, without notice to or assent by such Grantor, to do any or all of
the following:

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

            (ii) execute, in connection with any sale provided for in Section
      7.4 or 7.5, any indorsements, assignments or other instruments of
      conveyance or transfer with respect to the Collateral; and

            (iii) direct any party liable for any payment under any of the
      Collateral to make payment of any and all moneys due or to become due
      thereunder directly to the Administrative Agent or as the Administrative
      Agent shall direct; (1) ask or demand for, collect, and receive payment of
      and receipt for, any and all moneys, claims and other amounts due or to
      become due at any time in respect of or arising out of any Collateral; (2)
      commence and prosecute any suits, actions or proceedings at law or in
      equity in any court of competent jurisdiction to collect the Collateral or
      any portion thereof and to enforce any other right in respect of any
      Collateral; (3) defend any suit, action or proceeding brought against such
      Grantor with respect to any Collateral; (4) settle, compromise or adjust
      any such suit, action or proceeding and, in connection therewith, give
      such discharges or releases as the Administrative Agent may deem
      appropriate; and (5) generally, sell, transfer, pledge and make any
      agreement with respect to or otherwise deal with any of the Collateral as
      fully and completely as though the Administrative Agent were the absolute
      owner thereof for all purposes, and do, at the Administrative Agent's
      option and such Grantor's expense, at any time, or from time to time, all
      acts and things which the Administrative Agent deems necessary to protect,
      preserve or realize upon the Collateral and the Administrative Agent's and
      the Lenders' security interests therein and to effect the intent of this
      Agreement, all as fully and effectively as such Grantor might do.

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

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

            (c) The expenses of the Administrative Agent incurred in connection
with actions undertaken as provided in this Section 8.1, together with interest
thereon at a rate per annum equal to the highest rate per annum at which
interest would then be payable on any category of past due ABR Loans under the
Credit Agreement, from the date of payment by the Administrative Agent to the
date reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Administrative Agent on demand.

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

            8.2. Duty of Administrative Agent. The Administrative Agent's sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under

<PAGE>
                                                                              17

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

            8.3. Authority of Administrative Agent. Each Grantor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and the Grantors, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Lenders with full
and valid authority so to act or refrain from acting, and no Grantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.

            SECTION 9. MISCELLANEOUS

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

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

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

            9.4. Enforcement Expenses; Indemnification. (a) Each Guarantor
agrees to pay or reimburse each Lender and the Administrative Agent for all its
costs and expenses incurred in collecting

<PAGE>
                                                                              18

against such Guarantor under the guarantees contained in Section 2 or 3, as
applicable, or otherwise enforcing or preserving any rights under this Agreement
and the other Loan Documents to which such Guarantor is a party, including,
without limitation, the reasonable fees and disbursements of counsel (including
the allocated fees and expenses of in-house counsel) to each Lender and of
counsel to the Administrative Agent.

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

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

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

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

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

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

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

<PAGE>
                                                                              19

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

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

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

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

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

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

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

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

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

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

            9.13. Acknowledgments. Each Grantor hereby acknowledges that:

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

            (b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to any Grantor arising out of or in
connection with this Agreement or any of the other Loan

<PAGE>
                                                                              20

Documents, and the relationship between the Grantors, on the one hand, and the
Administrative Agent and Lenders, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and

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

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

            9.15. Releases; Reinstatement.

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

            (b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor in a transaction permitted by the Credit Agreement,
then the Administrative Agent, at the request and sole expense of such Grantor,
shall execute and deliver to such Grantor all releases or other documents
reasonably necessary or desirable for the release of the Liens created hereby on
such Collateral. At the request and sole expense of the Borrower, a Subsidiary
Guarantor shall be released from its obligations hereunder in the event that all
the Capital Stock of such Subsidiary Guarantor shall be sold, transferred or
otherwise disposed of in a transaction permitted by the Credit Agreement;
provided that the Borrower shall have delivered to the Administrative Agent, at
least ten Business Days prior to the date of the proposed release, a written
request for release identifying the relevant Subsidiary Guarantor and the terms
of the sale or other disposition in reasonable detail, including the price
thereof and any expenses in connection therewith, together with a certification
by the Borrower stating that such transaction is in compliance with the Credit
Agreement and the other Loan Documents.

            (c) At such time as the Borrower has achieved the Collateral Release
Ratings Level, the Borrower shall have the right by written notice to the
Administrative Agent to require that the Collateral be released from any
security interest created hereby. On any such date (the "Collateral Release
Date"), all rights to the Collateral shall transfer and revert to the Borrower
and the Guarantors. On any such Collateral Release Date, the Grantors shall be
authorized and the Administrative Agent hereby authorizes each Grantor, to
prepare and record UCC termination statements with respect to any financing
statements record by the Administrative Agent hereunder. At the request and sole
expense of the Borrower following the Collateral Release Date, the
Administrative Agent shall deliver to the Company any Collateral (including
certificates representing the Pledged Stock) held by the Administrative Agent
hereunder, and execute and deliver to the Borrower such documents as the
Borrower shall reasonably request to evidence such termination.

<PAGE>
                                                                              21

            (d) Notwithstanding clause (c) of this Section 9.15, at any time
during an Unsecured Period that a ratings downgrade by either S&P or Moody's
causes the Collateral Reinstatement Ratings Level to be achieved (any such date,
the "Collateral Reinstatement Date"), the Collateral shall be reinstated in full
within sixty days of such Collateral Reinstatement Date, along with any
necessary modifications to the Schedules hereto.

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

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

                  [Remainder of page intentionally left blank]

<PAGE>
                                                                              22

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

                                    JPMORGAN CHASE BANK, N.A.

                                    By: /s/ Randolph Cates
                                       -----------------------------------------
                                       Name:  Randolph Cates
                                       Title: Vice President

                                    THE SCOTTS MIRACLE-GRO COMPANY

                                    By: /s/ Christopher L. Nagel
                                       -----------------------------------------
                                       Name:  Christopher L. Nagel
                                       Title: Executive Vice President and CFO

                                    THE SCOTTS COMPANY LLC

                                    By: /s/ Paul DeSantis
                                       -----------------------------------------
                                       Name:  Paul DeSantis
                                       Title: Vice President and Treasurer

                                    MIRACLE-GRO LAWN PRODUCTS, INC.

                                    By: /s/ Paul DeSantis
                                       -----------------------------------------
                                       Name:  Paul DeSantis
                                       Title: Vice President and Treasurer

                                    OMS INVESTMENTS, INC.

                                    By: /s/ Paul DeSantis
                                       -----------------------------------------
                                       Name:  Paul DeSantis
                                       Title: Vice President and Treasurer

                                    HYPONEX CORPORATION

                                    By: /s/ Paul DeSantis
                                       -----------------------------------------
                                       Name:  Paul DeSantis
                                       Title: Vice President and Treasurer

<PAGE>

                                    SCOTTS PRODUCTS CO.

                                    By: /s/ Paul DeSantis
                                       -----------------------------------------
                                       Name:  Paul DeSantis
                                       Title: Vice President and Treasurer

                                    SCOTTS PROFESSIONAL PRODUCTS CO.

                                    By: /s/ Paul DeSantis
                                       -----------------------------------------
                                       Name:  Paul DeSantis
                                       Title: Vice President and Treasurer

                                    SCOTTS-SIERRA HORTICULTURAL PRODUCTS COMPANY

                                    By: /s/ Paul DeSantis
                                       -----------------------------------------
                                       Name:  Paul DeSantis
                                       Title: Vice President and Treasurer

                                    SCOTTS SIERRA CROP PROTECTION COMPANY

                                    By: /s/ Paul DeSantis
                                       -----------------------------------------
                                       Name:  Paul DeSantis
                                       Title: Vice President and Treasurer

                                    SCOTTS-SIERRA INVESTMENTS, INC.

                                    By: /s/ Paul DeSantis
                                       -----------------------------------------
                                       Name:  Paul DeSantis
                                       Title: Vice President and Treasurer

                                    EG SYSTEMS, INC.

                                    By: /s/ Paul DeSantis
                                       -----------------------------------------
                                       Name:  Paul DeSantis
                                       Title: Vice President and Treasurer

<PAGE>

                                    SWISS FARM PRODUCTS, INC.

                                    By: /s/ Paul DeSantis
                                       -----------------------------------------
                                       Name:  Paul DeSantis
                                       Title: Vice President and Treasurer

                                    SCOTTS MANUFACTURING COMPANY

                                    By: /s/ Paul DeSantis
                                       -----------------------------------------
                                       Name:  Paul DeSantis
                                       Title: Vice President and Treasurer

                                    SCOTTS TEMECULA OPERATIONS, LLC

                                    By: /s/ Paul DeSantis
                                       -----------------------------------------
                                       Name:  Paul DeSantis
                                       Title: Vice President and Treasurer

                                    SMITH & HAWKEN, LTD.

                                    By: /s/ Christopher L. Nagel
                                       -----------------------------------------
                                       Name:  Christopher L. Nagel
                                       Title: Executive Vice President and CFO

                                    SANFORD SCIENTIFIC, INC.

                                    By: /s/ Christopher L. Nagel
                                       -----------------------------------------
                                       Name:  Christopher L. Nagel
                                       Title: Executive Vice President and CFO

<PAGE>

                           ACKNOWLEDGMENT AND CONSENT

            The undersigned hereby acknowledges receipt of a copy of the
Guarantee and Collateral Agreement dated as of July 21, 2005 (the "Agreement"),
made by the Grantors parties thereto for the benefit of JPMorgan Chase Bank,
N.A., as Administrative Agent. The undersigned agrees for the benefit of the
Administrative Agent and the Lenders as follows:

            SECTION 1. The undersigned will be bound by the terms of the
   Agreement and will comply with such terms insofar as such terms are
   applicable to the undersigned.

            SECTION 2. The undersigned will notify the Administrative Agent
   promptly in writing of the occurrence of any of the events described in
   Section 6.5(a) of the Agreement.

            SECTION 3. The terms of Sections 7.1(c) and 7.5 of the Agreement
   shall apply to it, mutatis mutandis, with respect to all actions that may be
   required of it pursuant to Section 7.1(c) or 7.5 of the Agreement.

                                         [NAME OF ISSUER]

                                         By:____________________________________
                                            Name:
                                            Title:

                                         Address for Notices:
                                         _______________________________________
                                         _______________________________________
                                         _______________________________________

                                         Fax:___________________________________

<PAGE>

                                                                      Annex 1 to
                                              Guarantee and Collateral Agreement

            ASSUMPTION AGREEMENT, dated as of ________________, 20__, made by
______________________________, a ______________ corporation (the "Additional
Grantor"), in favor of JPMorgan Chase Bank, N.A., as administrative agent (in
such capacity, the "Administrative Agent") for the banks and other financial
institutions (the "Lenders") parties to the Credit Agreement referred to below.
All capitalized terms not defined herein shall have the meaning ascribed to them
in such Credit Agreement.

                              W I T N E S S E T H :

            WHEREAS, The Scotts Miracle-Gro Company, an Ohio corporation (the
"Borrower"), the Subsidiary Borrowers, the Lenders, the Administrative Agent,
the Documentation Agent and the Syndication Agent have entered into a Revolving
Credit Agreement, dated as of July 21, 2005 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement");

            WHEREAS, in connection with the Credit Agreement, the Borrower and
certain of its Affiliates (other than the Additional Grantor) have entered into
the Guarantee and Collateral Agreement, dated as of July 21, 2005 (as amended,
supplemented or otherwise modified from time to time, the "Guarantee and
Collateral Agreement") in favor of the Administrative Agent for the benefit of
the Lenders;

            WHEREAS, the Credit Agreement requires the Additional Grantor to
become a party to the Guarantee and Collateral Agreement; and

            WHEREAS, the Additional Grantor has agreed to execute and deliver
this Assumption Agreement in order to become a party to the Guarantee and
Collateral Agreement;

            NOW, THEREFORE, IT IS AGREED:

            1. Guarantee and Collateral Agreement. By executing and delivering
this Assumption Agreement, the Additional Grantor, as provided in Section 9.14
of the Guarantee and Collateral Agreement, hereby becomes a party to the
Guarantee and Collateral Agreement as a Grantor thereunder with the same force
and effect as if originally named therein as a Grantor and, without limiting the
generality of the foregoing, hereby expressly assumes all obligations and
liabilities of a Grantor thereunder. The information set forth in Annex 1-A
hereto is hereby added to the information set forth in the Schedules to the
Guarantee and Collateral Agreement. The Additional Grantor hereby represents and
warrants that each of the representations and warranties contained in Section 5
of the Guarantee and Collateral Agreement is true and correct on and as the date
hereof (after giving effect to this Assumption Agreement) as if made on and as
of such date.

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

                  [Remainder of page intentionally left blank]

<PAGE>
                                                                               2

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

                                         [ADDITIONAL GRANTOR]

                                         By:___________________________
                                            Name:
                                            Title:

<PAGE>

                                                                    Annex 1-A to
                                                            Assumption Agreement

                            Supplement to Schedule 1

                            Supplement to Schedule 2

                            Supplement to Schedule 3

                            Supplement to Schedule 4
<PAGE>
                                   SCHEDULE 1

                         NOTICE ADDRESSES OF GUARANTORS

1.        The Scotts Miracle-Gro Company
          14111 Scottslawn Road
          Marysville, Ohio  43041
          Attn:  David M. Aronowitz

2.        The Scotts Company LLC
          14111 Scottslawn Road
          Marysville, Ohio  43041
          Attn:  David M. Aronowitz

3.        Miracle-Gro Lawn Products, Inc.
          14111 Scottslawn Road
          Marysville, Ohio  43041
          Attn:  David M. Aronowitz

4.        OMS Investments, Inc.
          10250 Constellation Blvd.
          Suite 2800
          Los Angeles, CA  90067-6228
          Attn:  Nicole McClelland

5.        Hyponex Corporation
          14111 Scottslawn Road
          Marysville, Ohio  43041
          Attn:  David M. Aronowitz

6.        Scotts Products Co.
          14111 Scottslawn Road
          Marysville, Ohio  43041
          Attn:  David M. Aronowitz

7.        Scotts Professional Products Co.
          14111 Scottslawn Road
          Marysville, Ohio  43041
          Attn:  David M. Aronowitz

8.        Scotts-Sierra Horticultural Products Company
          14111 Scottslawn Road
          Marysville, Ohio  43041
          Attn:  David M. Aronowitz

9.        Scotts-Sierra Crop Protection Company
          14111 Scottslawn Road
          Marysville, Ohio  43041
          Attn:  David M. Aronowitz

10.       Scotts-Sierra Investments, Inc.
          Delaware Corporate Management
          1105 N. Market Street
          Wilmington, Delaware 19899
          Attn:  Susan T. Dubb

<PAGE>

11.       EG Systems, Inc.
          14111 Scottslawn Road
          Marysville, Ohio  43041
          Attn:  David M. Aronowitz

12.       Swiss Farms Products, Inc.
          3773 Howard Hughes Parkway, Suite 300 North
          Las Vegas, Nevada  89109
          Attn:  David M. Aronowitz

13.       Scotts Manufacturing Company
          14111 Scottslawn Road
          Marysville, Ohio  43041
          Attn:  David M. Aronowitz

14.       Scotts Temecula Operations, LLC
          14111 Scottslawn Road
          Marysville, Ohio  43041
          Attn:  David M. Aronowitz

15.       Smith & Hawken, Ltd.
          4 Hamilton Landing, Suite 100
          Novato, CA 94949
          Attn:  Barry Gilbert

16.       Sanford Scientific, Inc.
          14111 Scottslawn Road
          Marysville, Ohio  43041
          Attn:  David M. Aronowitz

<PAGE>

                                   SCHEDULE 2

                       DESCRIPTION OF INVESTMENT PROPERTY

<TABLE>
<CAPTION>
                   ISSUER                      CLASS OF STOCK                STOCK CERTIFICATE NO.          NO. OF SHARES
                   ------                      --------------                ---------------------          -------------
<C>       <S>                       <C>                                      <C>                          <C>
1.          SCOTTS MANUFACTURING        common shares, $.01 par value                  2                        1,000
                   COMPANY

2.            MIRACLE-GRO LAWN        voting common stock, without par                V13                       1,000
               PRODUCTS, INC.                       value

                                      non-voting common stock, without               NV11                       999.8
                                                  par value

3.          OMS INVESTMENTS, INC.               common stock,                          3                         100
                                               $.01 par value

4.           HYPONEX CORPORATION                common stock,                          3                         100
                                               $.01 par value

5.           SCOTTS PRODUCTS CO.      common shares, without par value                 3                         100

6.           SCOTTS PROFESSIONAL      common shares, without par value                 3                         100
                PRODUCTS CO.

7.              SCOTTS-SIERRA           Class A voting common shares,         Class A Cert. No. 6                100
           HORTICULTURAL PRODUCTS              $.001 par value
                   COMPANY
                                        Class A voting common shares,         Class A Cert. No. 6                 1
                                               $.001 par value
                                      Class B non-voting common shares,       Class B Cert. No. 3                 1
                                               $.001 par value

8.           SCOTTS-SIERRA CROP       common shares, without par value                 1                         100
             PROTECTION COMPANY

</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                   ISSUER                      CLASS OF STOCK                STOCK CERTIFICATE NO.          NO. OF SHARES
                   ------                      --------------                ---------------------          -------------
<C>       <S>                       <C>                                      <C>                          <C>
9.              SCOTTS-SIERRA         Class A common stock, without par               3A                         100
              INVESTMENTS, INC.                     value

                                      Class A common stock, without par               4A                          1
                                                    value

                                      Class B common stock, without par               2B                          1
                                                    value

10.         SWISS FARMS PRODUCTS,      common stock, without par value                 2                         100
                    INC.

11.         SMITH & HAWKEN, LTD.                Common stock                          18                     11,652,708

12.           EG SYSTEMS, INC.                  Common stock                          29                     36,480,458

13.       SANFORD SCIENTIFIC, INC.              Common stock                           8                         99

14.        THE SCOTTS COMPANY LLC    limited liability company interest               n/a                        n/a
                                             (not certificated)

15.            SCOTTS TEMECULA       limited liability company interest               n/a                        n/a
               OPERATIONS, LLC               (not certificated)

</TABLE>

<PAGE>

                                   SCHEDULE 3

             JURISDICTION OF ORGANIZATION AND IDENTIFICATION NUMBERS

<TABLE>
<CAPTION>
                  COMPANY                              STATE            ID #

<S>                                              <C>               <C>
       The Scotts Miracle-Gro Company                  Ohio           1501530

           The Scotts Company LLC                      Ohio           1503259

        Scotts Manufacturing Company                 Delaware         1369282

Scotts-Sierra Horticultural Products Company        California         515533

           OMS Investments, Inc.                     Delaware         2435730

      Scotts-Sierra Investments, Inc.                Delaware         2512334

</TABLE>

                      ACTIONS WITH RESPECT TO PLEDGED STOCK

     Delivery of Pledged Stock to JPMorgan Chase Bank, N.A., as Administrative
Agent, indorsed in blank by an effective indorsement or accompanied by undated
stock powers with respect thereto, duly indorsed in blank by an effective
indorsement.

<PAGE>

                                                                      SCHEDULE 4

                                                                    SUBSIDIARIES

SMGM LLC, an Ohio limited liability company
SMG Brands, Inc., a Delaware limited liability company
The Scotts Company LLC, an Ohio limited liability company
         EG Systems, Inc., dba Scotts LawnService, an Indiana corporation
                (1)Custom Lawn Care Service, Inc., a Pennsylvania corporation
         Hyponex Corporation, a Delaware corporation
         OMS Investments, Inc., a Delaware corporation
                Scotts Temecula Operations, LLC, a Delaware corporation
         Sanford Scientific, Inc., a New York corporation
         Scotts Global Services, Inc., a Nevada corporation
         Scotts Manufacturing Company, a Delaware corporation
                Miracle-Gro Lawn Products, Inc., a New York corporation
         Scotts Products Co., an Ohio corporation
         Scotts Professional Products Co., an Ohio corporation
         Scotts-Sierra Horticultural Products Company, a California corporation
                Scotts-Sierra Crop Protection Company, a California corporation
                Scotts-Sierra Investments, Inc., a Delaware corporation
         Smith & Hawken, Ltd., a Delaware corporation
         Swiss Farms Products, Inc., a Delaware corporation

--------
(1) This company is inactive and is in the process of being dissolved.

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