Loan And Security Agreement

WAIVER AND AMENDMENT NO. 3 TO
LOAN AND SECURITY AGREEMENT

This Waiver and Amendment No. 3 to Loan and Security Agreement (this " Amendment" ) dated as of October 20, 2005, 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" ), E G Product Management, L.L.C., a Texas limited liability company (" E G Product" ), E G, L.L.C., a Nevada limited liability company (" E G" ), 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, E G Product, E G, 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 comply with subsection 9(c) with respect to the timely delivery of its audited financial statements, and filing of 10-K report for the fiscal year ending June 30, 2005 (the " Fiscal Year 2005 Reporting Default" ) subsection 14(b) of the Loan Agreement for the 12 month period ending June 30, 2005 (the " June 2005 EBITDA Default" ) and subsection 14(c) of the Loan Agreement for the 12 month period ending June 30, 2005 (the " June 2005 Leverage Default" ; the Fiscal Year 2005 Reporting Default, the June 2005 EBITDA Default and the June 2005 Leverage Default are collectively, the " Existing Defaults" ).

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 Defaults. 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 subsection 14(b) or 14(c) of the Loan Agreement as of any period ending after June 30, 2005).

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 term " EBITDA" set forth in Section 1 of the Loan Agreement is 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, all on a consolidated basis; provided , that (A) for any calculation of EBITDA pursuant to this Agreement, Permitted Transaction Costs shall be added to EBITDA to the extent such Permitted Transaction Costs are accrued by Borrower; (B) solely for the period ended June 30, 2005, the Credit Parties' " EBITDA" shall be increased by the amount of the Fred Meyer Loss recognized during such period; (C) solely for the period ended September 30, 2005, the Credit Parties' " EBITDA" shall be decreased by the amount of the Fred Meyer Gain recognized during such period; and (D) for any calculation of EBITDA pursuant to this Agreement, installments of the " Performance Fee" that are accrued by the Borrower in accordance with the terms and provisions of Section 6 of the Third Amendment to Term Loan and Security Agreement and Waiver with respect to the CapitalSource Agreements (the " CapitalSource Third Amendment" ) shall be added to EBITDA. " Permitted Transaction Costs" shall mean the $50,000 amendment fee charged by Agent in connection with the execution and delivery of the Waiver and Amendment, No. 3 to Loan and Security Agreement (the " Third Amendment" ), legal fees and expenses incurred by the Borrower in connection with the negotiation and documentation of the CapitalSource Third Amendment and the consummation of a Repayment Event (as that term is defined in the CapitalSource Third Amendment) and any other reasonable expenses payable by the Borrower related to consultants, investment bankers or appraisers engaged on behalf of the Borrower, CapitalSource or the CapitalSource' s counsel, as the case may be; provided , however , that such consultants, investment bankers or appraisers have been requested by the CapitalSource and the lenders under the CapitalSource Agreements; and provided , however , further that the fees and expenses covered by this definition of " Permitted Transaction Costs" shall not exceed $500,000 in the aggregate. " Fred Meyer Loss" shall mean, for any period, the amount of the loss incurred during such period in connection with the reversal of sales made to Fred Meyer and the treatment thereof as deferred income, provided , that

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such loss shall not exceed $309,000. " Fred Meyer Gain" shall mean, for any period, the amount of the gain incurred during such period in connection with the recognition of sales made to Fred Meyer that were previously treated as deferred income, provided that such gain shall not exceed $309,000.


(b) Subsection 4(a) of the Loan Agreement is amended and restated in its entirety as follows:


(a) Interest Rate .


Subject to the terms and conditions set forth below, effective October 1, 2005, the Loans shall bear interest at the per annum rate of interest set forth in subsection (i) , (ii) or (iii) below:


(i) one percent (1.0%) per annum in excess of the Prime Rate in effect from time to time ( provided , however , that such per annum rate shall be reduced to one-half of one percent (0.50%) per annum in excess of the Prime Rate in effect from time to time if Borrower and its Subsidiaries achieve a ratio of EBITDA to Fixed Charges in excess of 1.0 for the twelve month period ending on the last day of a fiscal quarter ending on or after December 31, 2005, as evidenced by the financial statements to be delivered to Agent for the twelve month period ending on such date in accordance with subsection 9(c) of this Agreement, from and following the date on which Agent receives such financial statements), payable on the last Business Day of each month in arrears. Said rate of interest shall increase or decrease by an amount equal to each increase or decrease in the Prime Rate effective on the effective date of each such change in the Prime Rate.


(ii) three hundred seventy-five (375) basis points in excess of the LIBOR Rate for the applicable Interest Period, such rate to remain fixed for such Interest Period ( provided , however , that such rate shall be reduced to three hundred twenty-five (325) basis points in excess of the LIBOR Rate for any new Interest Periods, such rate to remain fixed for such Interest Periods, if Borrower and its Subsidiaries achieve a ratio of EBITDA to Fixed Charges in excess of 1.0 for the twelve month period ending on the last day of a fiscal quarter ending on or after December 31, 2005, as evidenced by the financial statements to be delivered to Agent for the twelve month period ending on such date in accordance with subsection 9(c) of this Agreement, from and following the date on which Agent receives such financial statements). " Interest Period" shall mean any continuous period of (1) one, two (2) or three (3) months, as selected from time to time by Borrower by irrevocable notice (in writing, by telecopy, telex, electronic mail or cable) given to Agent not less than three (3) Business Days prior to the first day of each respectiv ...