Amendment No. 1 To Loan And Security Agreement

Exhibit 10.2


WAIVER AND AMENDMENT NO. 1 TO
LOAN AND SECURITY AGREEMENT


This Waiver and Amendment No. 1 to Loan and Security Agreement (this "Amendment") dated as of October 13, 2004, by and among LaSalle Business Credit, LLC, for itself, as a lender, and as Agent ("Agent") for the lenders ("Lenders") from time to time party to the Loan Agreement (as defined below), the Lenders party hereto, Easy Gardener Products, Ltd., a Texas limited Partnership ("Borrower"), EYAS International, Inc., a Texas corporation ("EYAS"), EG Product Management, L.L.C., a Texas limited liability company ("EG Product"), EG, L.L.C., a Nevada limited liability company ("EG"), Weatherly Consumer Products Group, Inc., a Delaware corporation ("WCP Group"), Weatherly Consumer Products, Inc., a Delaware corporation ("WCP"), and NBU Group, LLC, a Texas limited liability company ("NBU"; Borrower, EYAS, EG Product, EG, WCP Group, WCP and NBU are collectively referred to herein as the "Credit Parties" and each individually as a "Credit Party").


Preliminary Statements


Agent, Lenders and Credit Parties entered into that certain Loan and Security Agreement dated as of April 27, 2004 (as amended, restated or otherwise modified from time to time, the "Loan Agreement"). Capitalized terms used but not defined in this Amendment shall have the meanings ascribed to such terms in the Loan Agreement.


The Credit Parties have requested that Agent and Lenders waive the Events of Default that exist under the Loan Agreement as a result of Borrower's failure to (i) deliver to Agent, within ninety (90) days after the end of Borrower's Fiscal Year ending June 30, 2004, the audited, consolidated financial statements of Borrower for such Fiscal Year, constituting a breach of subsection 9(c) of the Loan Agreement and an Event of Default pursuant to subsection 15(b) of the Loan Agreement, (ii) have EBITDA of at least $10,000,000 for (x) the twelve months ending July 31, 2004 and (y) the twelve months ending August 31, 2004, in each case constituting a breach of subsection 14(b) of the Loan Agreement and an Event of Default pursuant to subsection 15(b) of the Loan Agreement, and (iii) have a ratio of (a) the sum of its average daily outstanding Revolving Loans for the month of June, 2004, plus the amount of indebtedness owing by Borrower to CapitalSource Finance LLC under the CapitalSource Agreements as of June 30, 2004 to (b) EBITDA for the twelve month period ending June 30, 2004, of less than or equal to 3.25:1.0, constituting a breach of subsection 14(c) of the Loan Agreement and an Event of Default pursuant to subsection 15(b) of the Loan Agreement, (collectively, the "Existing Events of Default");


The Credit Parties have further requested that Agent and Lenders amend the Loan Agreement in certain respects, as set forth below.


NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:


1. Waiver. Subject to the satisfaction of the conditions set forth herein, Agent and Lenders hereby waive the Existing Events of Default. The foregoing waiver shall not constitute a waiver of any other Events of Default that may exist, or a waiver of any future Events of Default that may occur (including, without limitation, any Event of Default arising from any other breach of (x) subsection 9(c) of the Loan Agreement after the date of this Amendment, (y) subsection 14(b) of the Loan Agreement as of any date after August 31, 2004 and (z) subsection 14(c) of the Loan Agreement as of any date after June 30, 2004).


2. Amendments to Loan Agreement. Subject to the satisfaction of the conditions set forth herein, the Loan Agreement hereby is amended as follows:


(a) The defined term "First Amendment" is hereby added to Section 1 of the Loan Agreement, in appropriate alphabetical order, as follows:


""First Amendment" shall mean that certain Waiver and Amendment No.
1 to Loan and Security Agreement dated as of October 13, 2004, among
Agent, Lenders, Borrower and the Credit Parties."


(b) The defined term "EBITDA" set forth in Section 1 of the Loan Agreement is hereby amended and restated in its entirety, as follows:


""EBITDA" shall mean, with respect to any period, Borrower's and its
Subsidiaries' net income after taxes for such period (excluding any
after-tax gains or losses on the sale of assets (other than the sale
of Inventory in the ordinary course of business) and excluding other
after-tax extraordinary gains or non-cash losses) plus interest
expense, income tax expense, depreciation and amortization for such
period, plus or minus any other non-cash charges or gains which have
been subtracted or added in calculating net income after taxes for
such period, plus an amendment fee in the amount of $30,000 charged
by Agent and Lenders in connection with the execution and delivery
of the First Amendment, plus the amendment fee in the amount of
$20,000 charged by CapitalSource Finance LLC in connection with the
execution and delivery of a waiver and amendment to the
CapitalSource Agreements on or about the date of the First
Amendment, all on a consolidated basis; provided, however, that
notwithstanding the foregoing, for any calculation of EBITDA
pursuant to this Agreement that includes the months ending May 31,
2003, June 30, 2003, July 31, 2003, August 31, 2003 ...