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1.	Third Amended and Restated Exclusive Agency and Marketing Agreement (the “Agency Agreement”);

2.	Brand Extension Agreement Asset Purchase Agreement (the “BEA Asset Purchase Agreement”);

3.	Termination Agreement regarding the Amended and Restated Lawn and Garden Brand Extension Agreement - Americas between Monsanto and the Company (the “BEA Termination Agreement”); and

4.	Termination Agreement regarding the Commercialization and Technology Agreement between Monsanto and the Company (the “Commercialization and Technology Termination Agreement”).

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coordinating and staffing annual physical inventory for all Roundup Products (including raw materials, packaging- when the Agent shall formulate under the Formulation Agreement- and finished goods). Physical inventories shall be conducted by September 30 of every calendar year and Monsanto shall have the right to request physical counts on specific product at any time upon reasonable request (which shall be at Monsanto’s cost if there are more than two such counts in any Program Year) and to observe or conduct physical counts with Monsanto’s representatives;

•	reconciling the physical inventory to perpetual records;

•	physically moving the Roundup Products out of the warehouse by following a First In, First Out (“FIFO”) policy; and

•	arranging for warehousing of adequate inventory levels of Roundup Products in sufficient quantities to satisfy the criteria set forth in the Annual Business Plan.

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1)	Mission Statement and Explanation: Answers questions: What business are we in? Why does the business exist?

2)	Category Definition/Growth Trend: Also need to address related categories and their potential interaction with the target category

3)	Business Review: Summary of a process that will occur in each preceding January

4)	Brand Positioning:

5)	Key Business Goals

6)	Major Strategies to achieve Key Goals (some examples include...)

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7)	Functional Operating Plans: This is a lengthy section that lays out a detailed annual operating plan for each functional area in the business (including rationale where appropriate) and that pays particular attention to changes in that plan from the prior year’s plans and results. Each section will contain a detailed budget with direct and assigned expenses shown.

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8)	Detailed Financials - Prior Year, Current Year, Future Year

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9)	Approved amendments: This section will show any amendments approved by senior management (or the Steering Committee)

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A.	Buyer has previously granted the Seller certain licenses relating to the Business and the Brand Extension Products.

B.	Buyer and Seller desire that such licenses be terminated pursuant to the BEA Termination Agreement in substantially the form attached hereto as Exhibit E.

C.

The Seller owns the Purchased Assets and desires to: (i) sell, and, to the extent necessary, cause its applicable Affiliates, to sell to the Buyer the Purchased Assets; and (ii) assign, and to the extent necessary cause the Seller and/or its applicable Affiliates to assign to the Buyer the Assumed Liabilities, all on the terms and conditions set forth in this Agreement and the other Transaction Documents.

D.	The Buyer desires to: (i) purchase from the Seller the Purchased Assets; and (ii) assume from the Seller the Assumed Liabilities, all on the terms and conditions set forth in this Agreement and the other Transaction Documents.

E.	Following the Closing, the Seller and Buyer desire that the Seller serve as an agent to Buyer with respect to the Brand Extension Products pursuant to the terms and conditions set forth in the Agency Agreement.

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(a)	this Agreement;

(b)	[Intentionally Omitted];

(c)	the Bill of Sale;

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(d)	the Trademark License Agreement;

(e)	the Intellectual Property License Agreement;

(f)	the Intellectual Property Assignment Agreements;

(g)	the BEA Termination Agreement; and

(h)	the Second Amended and Restated Formulation Agreement.

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1.	The common law and unregistered trademarks identified below:

•	BUG DESTROYER (jurisdiction: United States; goods/services: insecticide);

•	CRABGRASS DESTROYER (jurisdiction: United States; goods/services: herbicide);

•	LANDSCAPE WEED PREVENTER (jurisdiction: United States; goods/services: herbicide); and

•	WEEDING WISELY (jurisdiction: United States; goods/services: herbicide).

2.	The common law or unregistered copyrights in the tangible works of expression identified below:

•	All images associated with the Brand Extension Products on the webpage available at www.roundup.com.

•	Packaging graphics for Roundup for Lawns Bug Destroyer.

•	Packaging graphics for Roundup for Lawns Bug Destroyer.

•	Packaging graphics for Roundup for Lawns Crabgrass Destroyer.

•	Packaging graphics for Roundup for Lawns Crabgrass Destroyer.

•	Packaging graphics for Roundup for Lawns – Northern.

•	Packaging graphics or Roundup for Lawns – Concentrate Northern.

•	Packaging graphics for Roundup for Lawns – Extend Wand Northern.

•	Packaging graphics for Roundup for Lawns – Refill Northern.

•	Packaging graphics for Roundup for Lawns – Southern.

•	Packaging graphics for Roundup for Lawns – Concentrate Southern.

•	Packaging graphics for Roundup for Lawns – Extend Wand Southern.

•	Packaging graphics for Roundup for Lawns – Refill Southern.

•	Packaging graphics for Roundup for Lawns Landscape Weed Preventer, with the exception of those stock images licensed by Seller.

•	Packaging graphics for Roundup for Lawns Landscape Weed Preventer, with the exception of those stock images licensed by Seller.

3.	Trade dress elements of the following Related Packaging, including as depicted on Annex 1.99:

•	Packaging for Roundup for Lawns Bug Destroyer.

•	Packaging for Roundup for Lawns Bug Destroyer.

•	Packaging for Roundup for Lawns Crabgrass Destroyer.

•	Packaging for Roundup for Lawns Crabgrass Destroyer.

•	Packaging for Roundup for Lawns – Northern.

•	Packaging or Roundup for Lawns – Concentrate Northern.

•	Packaging for Roundup for Lawns – Extend Wand Northern.

•	Packaging for Roundup for Lawns – Refill Northern.

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•	Packaging for Roundup for Lawns – Southern.

•	Packaging for Roundup for Lawns – Concentrate Southern.

•	Packaging for Roundup for Lawns – Extend Wand Southern.

•	Packaging for Roundup for Lawns – Refill Southern.

•	Packaging for Roundup for Lawns Landscape Weed Preventer.

•	Packaging for Roundup for Lawns Landscape Weed Preventer.

4.	Registration for the domain name weedingwisely.com.

5.	YouTube account used for publishing commercial cuts and product demo videos.

6.	Social Media Accounts related to Roundup generally, that are not exclusive or specific to the Brand Extension Products:

•	Instagram: https://www.instagram.com/roundup/

o	Private account not actively used (for posting or engagement)

•	Twitter: https://twitter.com/Roundup

o	Public, but the tweets on this account are protected

•	YouTube: https://www.youtube.com/channel/UC81dhuAg9rXwuk9jjxRlBYQ?view_as=subscriber

o	Used for publishing commercial cuts and product demo videos here

o	Actively monitored and consumer services does respond to questions

•	Facebook: https://www.facebook.com/roundup/

o	Page is unpublished and not accessible to users

•	Pinterest: https://www.pinterest.com/roundup1438/

o	All Pinterest accounts are public, but this account is not used for publishing content

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1.	“Scotts Data”, for purposes of this Letter of Authorization, means, certain registration data that includes [INSERT DESCRIPTION OF DATA].

2.	This authorization is granted solely to allow Company to support the registration of [PRODUCT NAME] with [EPA] for manufacture and sale within the U.S. only for [uses]. No other uses are permitted or authorized.

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1.0	Definitions

1.1	“Actual Quantities” is defined in Section 4.1.

1.2	“Amended and Restated Formulation Agreement” is defined in the introductory paragraph above.

1.3	“Agency Agreement” is defined in the recitals above.

1.4	“Annual Business Plan” has the meaning set forth in the Agency Agreement.

1.5

“Annual Plant Budget” means the annual fiscal operating plan of the Plants applicable to all products manufactured at the Plants, which includes (i) annual expenses based upon a given production budget, (ii) annual expenses by cost center, (iii) the method of allocation of Overhead Costs and Production Lines to direct cost centers, (iv) Direct Labor Hours, (v) Machine Hours, (vi) the ratio of Product hours to total hours, (vii) production volumes by SKU by month and (viii) the budgeted formulation fee. The Annual Plant Budget does not include the annual plan for component costs or inventory levels, as Formulator and Monsanto have agreed to track that information separately.

1.6	“Asset Base” is defined in Section 9.1.1.

1.7	“Asset Purchase Agreement” is defined in the recitals above.

1.8	“BEA Products” means, initially, those products set forth on Schedule A hereto, which may be updated from time to time in accordance with the Annual Business Plan or Quality Assurance Manual under the Agency Agreement.

1.9	“BEA Products Capital Charge” is defined in Section 9.1.3.

1.10	“Capital Charge” is defined in Section 9.1.3.

1.11	“Closing” has the meaning set forth in the Asset Purchase Agreement.

1.12	“Closing Date” has the meaning set forth in the Asset Purchase Agreement.

1.13	“Direct Labor Costs” is defined in Section 9.1.4.

1.14	“Direct Labor Hours” is defined in Section 9.1.5.

1.15	“Documents” is defined in Section 5.6.

1.16	“Effective Date” means January 21, 1999.

1.17	“Final Determination Date” is defined in Section 9.3.4.

1.18	“First Amendment Date” means February, 24, 2012.

1.19	“Formulating Services” is defined in Section 2.1.

1.20	“Formulation Agreement” is defined in the introductory paragraph above.

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1.21	“Formulation Fee” is defined in Section 9.1.4.

1.22	“Formulator” is defined in the introductory paragraph above.

1.23	“Global Support Team” has the meaning set forth in the Agency Agreement.

1.24	“Glyphosate” means N-phosphonomethylglycine, in any form, including, but not limited to, its acid, esters and salts.

1.25	“Independent Accounting Firm” is defined in Section 9.3.4.

1.26	“Input Materials” means all materials necessary for the Preparation of Products, such as Surfactants, other active ingredients, inert ingredients, and Packaging Materials.

1.27	“Invoiced Amounts” is defined in Section 9.3.2.

1.28	“Labels” means the labels to be attached to Products, the text of which labels has been approved by Monsanto and supplied to and approved by the U.S. Environmental Protection Agency or other applicable regulatory authority.

1.29	“Latent Defect” is defined in Section 5.3.

1.30	“Lawn and Garden Channels” has the meaning set forth in the Agency Agreement.

1.31	“Legacy Products” means all Products other than BEA Products.

1.32	“Loss Standard” is defined in Section 9.3.5.

1.33	“Machine Hours” is defined in Section 9.1.7.

1.34	“Monsanto” is defined in the introductory paragraph above.

1.35	“Monsanto’s Materials” is defined in Section 10.1.

1.36	“Notice of Disagreement” is defined in Section 9.3.4.

1.37	“Original Agency Agreement” is defined in the recitals above.

1.38	“Original Formulation Agreement” is defined in the recitals above.

1.39	“Overhead Costs” is defined in Section 9.1.8.

1.40	“Packaging Materials” means all containers, including but not limited to boxes, bottles, pallets, corrugated packing materials, caps and Labels meeting the applicable Specifications, necessary to Prepare Products in their final packaged form.

1.41	“Plant” or “Plants,” as applicable, means those portions of the plant and other facilities of Formulator located at Ft. Madison, Iowa; and such other location(s) as are mutually agreed upon in writing by Monsanto and Formulator, which are to be used for the receipt, storage and handling of Salt and Input Materials and for the Preparation of Product.

1.42	“Prepare” or any variation thereof as used in this Formulation Agreement means and includes all operations necessary to formulate, test, package, label, mark, handle, store, arrange for shipping and ship a Product that

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1.43	“Product” means the product(s) to be Prepared for Monsanto by Formulator hereunder as set forth from time to time in the Annual Business Plan or, in the event of the termination of the Agency Agreement and after the effective date of such termination, the Quality Assurance Manual. Following the Second Amendment Date, the Products shall also include the BEA Products.

1.44	“Production Line” is defined in Section 9.1.9.

1.45	“Production Run” is defined in Section 9.1.10.

1.46	“Program Year” has the meaning set forth in the Agency Agreement.

1.47

“Quality Assurance Manual” means that manual created by Monsanto for the Preparation of each Product. Revision number 9 of the Quality Assurance Manual, which is in effect as of the First Amendment Date, is attached hereto in Appendix B. In the event of any inconsistency between the Quality Assurance Manual and the specific terms of this Formulation Agreement, the terms of this Formulation Agreement shall control. Monsanto and Formulator completed the Quality Assurance Manual after the Closing Date, and Monsanto and Formulator agree to keep the Quality Assurance Manual current. Monsanto may change and update any portion or all of the Quality Assurance Manual at any time upon giving prior written notice to Formulator, if such change is (i) required to comply with applicable law, statutes, rule or regulation (including registration and label requirements), (ii) necessary to reflect new Products agreed to pursuant to the Annual Business Plan or otherwise by and between the parties in writing, (iii) necessary to change the Specifications due to environmental, health or safety concerns, (iv) if a third party patent may be asserted against Monsanto or Formulator as described in Section 13.0 hereof, or (v) for such other reason as the parties hereto may agree in writing. In the event that Formulator reasonably believes that the standards set forth in the Quality Assurance Manual could adversely affect Formulator, Monsanto shall change such standards in the manner Formulator reasonably requests and to the extent Monsanto consents to such changes, which consent is not to be unreasonably withheld.

1.48	“Salt” means salt of Glyphosate necessary for the Preparation of the applicable Product as set forth in the Quality Assurance Manual.

1.49	“Second Amended and Restated Agency Agreement” is defined in the recitals above.

1.50	“Second Amendment Date” is defined in the introductory paragraph above.

1.51	“SKU” means “Stock Keeping Unit” and refers to any individual item that is included among the Products to be Prepared by Formulator.

1.52

“Specifications” means the standards of quality and purity and composition of a Product, Salt, Surfactant, other Input Materials and Packaging Materials therefore as set forth in the Quality Assurance Manual or, with respect to BEA Products, as provided by Monsanto to the Formulator until such BEA Product has been added to the Quality Assurance Manual. The term also means the standards of quality, and criteria and methodology for formulating, producing, handling and storing, as well as any other factor established by Monsanto and set forth in the Quality Assurance Manual for such Product or, with respect to BEA Products, as provided by Monsanto to the Formulator until such BEA Products have been added to the Quality Assurance Manual, and relating to Formulator’s Formulating Services under this Formulation Agreement. Monsanto reserves the right to change any portion or all of the Specifications set forth in the Quality Assurance Manual, at any time, including, in connection with the BEA Products, as such BEA Products are added to the Quality Assurance Manual. Any such changes in the Specifications made by Monsanto which could adversely impact costs or adversely affect the Formulating Services or Plant operations shall be subject to prior discussions between

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1.53	“Standard Analytical Methods” has the meaning set forth in the Quality Assurance Manual.

1.54	“Statement of Actual Results” means each report prepared and submitted by Formulator to Monsanto no later than November 15 of each year during the term of this Formulation Agreement, setting forth the Formulation Fee for the preceding Program Year.

1.55	“Steering Committee” has the meaning set forth in the Agency Agreement.

1.56	“Support Ratio” is defined in Section 9.1.11.

1.57	“Surfactant” shall mean any wetting agent added to the formulation for the applicable Product as specified in the Quality Assurance Manual.

1.58	“Total RU Labor Hours” is defined in Section 9.1.12. 1.51 “Total RU Machine Hours” is defined in Section 9.1.13.

1.59	“Volume” means the number of cases of Product (or particular SKUs of Product) actually Prepared at the Plants each Program Year, where “cases” means cases having specifications not materially different than those that are the standard of the Plants as of the Second Amendment Date.

2.1

Monsanto hereby engages Formulator, on an exclusive basis with respect to Products to be sold in Lawn and Garden Channels in the United States and Canada during the term of this Formulation Agreement, and Formulator hereby undertakes, to (a) receive, unload and store Salt for each Product as supplied by Monsanto; (b) subject to the terms of Section 5.0 hereof, provide all Input Materials and other materials and services necessary to Prepare Product; (c) Prepare each Product; (d) store and ship each Product to and for the account of Monsanto; and (e) perform all other operations ancillary to such activities, such as waste management and disposal, all of such activities upon the terms, conditions and provisions set forth in the Quality Assurance Manual and this Formulation Agreement (all of such activities of Formulator being sometimes hereinafter collectively called “Formulating Services”).

2.2	Notwithstanding Section 2.1, following the notice by a party to terminate this Formulation Agreement or to terminate the Formulating Services with respect to any given Product, Monsanto shall not be obligated to engage Formulator on an exclusive basis as set forth in the Section 2.1 during the final three (3) months for such Products during which Formulator is to provide Formulating Services.

2.3

Formulator shall, for a period not less than eighteen (18) months after the Second Amendment Date, supply to Monsanto finished and packaged BEA Products to Monsanto under Formulator’s own registrations and labels. All such BEA Products supplied under Formulator’s own registrations and labels shall comply with applicable specifications and be produced in accordance with applicable law, and Monsanto and its Affiliates shall have the right to distribute such supplied BEA Products in accordance with applicable law. Title and risk of loss for such supplied BEA Products shall transfer from Formulator to Monsanto Ex Works Plant (Incoterms 2010). Monsanto hereby grants to Formulator, and Formulator hereby accepts, a non-exclusive, sublicensable, non-transferable, royalty-free, and fully paid-up license in accordance with the terms set forth in Schedule 2.3.

2.4	Notwithstanding Section 2.1, purchases under any New Agreement shall be deemed to not violate Monsanto’s obligation to engage Formulator on an exclusive basis with respect to Products as set forth in the Section 2.1.

3.0	Term and Termination

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3.1	Subject to the provisions herein, this Formulation Agreement shall be effective from the Effective Date through September 30, 2022. Thereafter, this Formulation Agreement shall automatically renew for additional, consecutive terms of one Program Year each. Notwithstanding the foregoing, this Formulation Agreement shall not terminate so long as the Formulator is providing Formulation Services.

3.2

Monsanto may terminate this Formulation Agreement, without liability, at any time, by written notice to Formulator if (i) Formulator has failed to comply in any material respect with its obligations under this Formulation Agreement; (ii) Monsanto determines that Formulator’s providing Formulating Services hereunder violates, in whole or in part, in any material respect, any law, decree, order, rule, regulation, ordinance, action or request of any court or governmental unit; (iii) Monsanto determines that it is necessary to discontinue such Formulating Services in order to prevent hazard to humans, animals, aquatic life or the environment; (iv) any of the representations, warranties or covenants of Formulator set forth in Section 6.1 hereof are or become untrue in any material respect or are not complied with in any material respect; or (v) except as otherwise approved by Monsanto in writing, Formulator does not own any of the Plants; provided that for items of the type described in clauses (i) through (iv) above, such condition continues unremedied for thirty (30) days after written notice thereof by Monsanto; provided, further, that, if during such 30-day period Formulator shall have commenced action to remedy such condition and thereafter diligently and in good faith prosecutes such action to the remediation of such condition, there shall be no such termination if such condition is remedied to the reasonable satisfaction of Monsanto within ninety (90) days following the delivery of written notice to Formulator pursuant to this Section 3.2, and, provided, further, that, for the items described in clauses (ii) and (iii) above, if such condition is a result of or is caused by Formulator’s adherence to the Specifications and if it is commercially reasonable to modify such Specifications to eliminate such condition, then Monsanto shall not be entitled to terminate this Formulation Agreement pursuant to such clauses (ii) and (iii).

3.3

Formulator may terminate this Formulation Agreement, without liability, by written notice to Monsanto, if (i) Monsanto has failed to comply in any material respect with its obligations under this Formulation Agreement, (ii) Formulator determines that Formulator’s providing Formulating Services hereunder violates, in whole or in part, in any material respect, any law, decree, order, rule, regulation, ordinance, action or request of any court or governmental unit, (iii) Formulator determines that it is necessary to discontinue such Formulating Services in order to prevent hazard to humans, animals, aquatic life or the environment, or (iv) any of the representations, warranties or covenants of Monsanto set forth in Section 6.2 hereof are or become untrue in any material respect or are not complied with in any material respect; provided that for items of the type described in clauses (i) through (iv) above, such condition continues unremedied for thirty (30) days after written notice thereof by Formulator; provided, further, that, if during such 30-day period Monsanto shall have commenced action to remedy such condition and thereafter diligently and in good faith prosecutes such action to the remediation of such condition, there shall be no such termination if such condition is remedied to the reasonable satisfaction of Formulator within ninety (90) days following the delivery of written notice delivered

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3.4

In the event of the termination of the Agency Agreement, then: (i) if such termination is pursuant to Section 10.5(a) of the Agency Agreement, then Formulator may terminate this Formulation Agreement upon six (6) months prior written notice to Monsanto, which notice may not be sent prior to the issuance of the notice of the termination of the Agency Agreement; (ii) if such termination is pursuant to Section 10.4(b) (except Sections 10.4(b)(7) and 10.4(b)(8)) of the Agency Agreement, then Monsanto may terminate this Formulation Agreement upon six (6) months prior written notice to Formulator, which notice may not be sent prior to the issuance of the notice of the termination of the Agency Agreement; or (iii) if such termination is pursuant to any other provision of the Agency Agreement, including but not limited to Sections 10.4(a)(2), 10.4(b)(7), 10.4(b)(8) and 10.5(b) of the Agency Agreement, then the termination of the Agency Agreement shall in no way affect the term of this Formulation Agreement; provided, however, that the right of a non-breaching party to terminate this Formulation Agreement pursuant to the provisions of this Section 3.4 shall expire ninety (90) days after the effective date of the termination of the Agency Agreement.

3.5

In the event that Monsanto or Formulator terminate Formulator as the provider of the BEA Agent Services (as such term is defined in the Agency Agreement) under the Agency Agreement, Monsanto shall have the right to terminate all Formulating Services with respect to the BEA Products under this Formulation Agreement, with such termination to be effective as of the date that is eighteen (18) months following such notice of termination.

3.6	[Deleted]

3.7	Input Transition

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3.8	[Deleted]

3.9

Termination by either party hereto under any circumstances shall not (i) terminate any continuing obligations of Formulator and its employees or agents, including, but not limited to, those set forth in Sections 3.8, 6.0, 10.0, 16.0, 17.0, and 18.0, and shall in no way be deemed to be or construed as a restriction, limitation or waiver of Monsanto’s rights to pursue any additional available remedy at law or in equity or (ii) terminate any continuing obligations of Monsanto and its employees or agents, including, but not limited to, those set forth

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3.10

Termination of this Formulation Agreement under any circumstances shall be without prejudice to any rights or diminution of any obligations or liabilities of the parties hereto that may have accrued prior to the effective date of termination (including, but not limited to, the payment of any and all fees and amounts due and owing to Formulator for Formulating Services performed on or prior to the date of termination).

4.0	Quantity, Storage, Delivery, Transportation and Shipment

4.1

Monsanto and Formulator shall compile estimates of the quantity of each Product to be Prepared by Formulator for Monsanto for each Program Year to be included in the Annual Business Plan. Such quantities shall be used by Formulator in the preparation of its Annual Plant Budget. Thereafter, Formulator shall determine, based on point of sale data and other available information, the actual amount of each Product to Prepare in order to maintain appropriate stock levels throughout Formulator’s distribution network to support customer demand (the “Actual Quantities”). No later than the tenth (10th) working day of each calendar month, Formulator shall provide to Monsanto written notice of the Actual Quantities of Product that are scheduled to be Prepared for the immediately following month. This notice shall be deemed Monsanto’s definitive order for each Product to be Prepared for the month immediately following the notice. Formulator shall Prepare Product each month in accordance with the Actual Quantities for the applicable month. In addition, no later than the tenth (10th) working day of each calendar month, Formulator shall provide to Monsanto written notice of the estimated quantity of each Product to be Prepared for the remainder of the then-current Program Year.

4.2

Formulator shall determine the shipping schedule of each Product from the Plants in accordance with Formulator’s evaluation of customer demand and appropriate stocking levels and shall ship each Product in accordance with such schedule and with such arrangements as Formulator shall make from time to time. Formulator shall prepare all appropriate bills of lading and other shipping papers and provide copies to Monsanto upon request. Shipper’s weights shall govern unless shown to be in error. All freight charges for shipment of a Product shall be borne by Monsanto.

4.3

When storing a Product and shipping a Product from a Plant, Formulator shall use reasonable care to insure that the equipment used in transporting the Product is appropriate for transporting the Product, as well as suitable for the climatic conditions that might be expected or exist along the route of shipment and the destination. As used in this Section 4.3, “reasonable care” means the care, skill, prudence and diligence under the circumstances then prevailing, that a prudent person acting in a like capacity and familiar with such matters would use in making such a determination.

4.4	Formulator shall Prepare and distribute Product no less efficiently than any other product or product line that Formulator prepares and/or distributes. At Monsanto’s request, Formulator shall provide documentation of shipping efficiencies and logistics cost reports.

5.0	Materials, Quality and Analysis

5.1

Monsanto, at its own expense, shall supply Formulator with Salt that the parties have agreed in this Formulation Agreement or shall otherwise agree in writing that Monsanto supply Formulator, at the Plants, at such times and in such quantities as will enable Formulator to Prepare each Product in such Actual Quantities as are required by customers from time to time pursuant to Section 4.1 hereof Monsanto shall make all necessary arrangements for carriers and shall pay all costs of shipping and delivery of Salt to the Plants. Shipper’s weights shall govern unless shown to be in error. Such Salt shall remain at all times the property of Monsanto (as shall the containers in which such Salt is shipped unless otherwise agreed to in writing) and shall be used by Formulator only for the Preparation of Product.

5.2

With respect to Input Materials, Monsanto and Formulator shall work together to negotiate the terms upon which such materials will be supplied. As the parties determine to be best for purposes of maintaining the quality and cost competitiveness of the Products, the parties hereto may jointly or individually negotiate the agreements related to the Input Materials. Where one party has negotiated the supply terms for Input Materials,

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5.3

Formulator shall analyze all Salt in accordance with the procedures specified in the Quality Assurance Manual for the applicable Product. With respect to any Salt not meeting the Specifications therefor, Formulator shall have the right to reject same if Formulator gives Monsanto written notice thereof within sixty (60) working days after receipt thereof by Formulator; provided that, with respect to any defect in the Salt that Formulator could not have reasonably discovered within such 60-working day period using reasonable care consistent with industry practice (a “Latent Defect”), Formulator shall have the right to reject same within five (5) working days after the discovery of such Latent Defect; otherwise, all such Salt shall be deemed to have met such Specifications. If Formulator shall give notice of the rejection of Salt to Monsanto, then, at the election and expense of Monsanto, Formulator shall either return such Salt to Monsanto in accordance with Monsanto’s instructions or make such other disposition thereof as may be requested by Monsanto. Any dispute as to whether any Salt meets the applicable Specifications shall be determined by an independent laboratory appointed by both parties. All costs and fees of such determination shall be paid by the party against whom such determination is made.

5.4

Each lot of Product formulated hereunder shall be analyzed by Formulator in accordance with procedures specified by Monsanto in the Quality Assurance Manual or otherwise approved by Monsanto in writing for the applicable Product. Formulator shall promptly notify Monsanto in writing of the results of every such analysis on the forms set forth in the Quality Assurance Manual or as otherwise approved by Monsanto in writing.

5.5

All Product formulated hereunder shall meet the applicable Specifications therefor and be formulated in accordance with a quality system that is equal to or exceeds the guidelines set forth in the Quality Assurance Manual. In the event that Product has been formulated by Formulator that does not conform to said Specifications and if said Product can be reworked or reprocessed to produce Product that does conform to said Specifications, Formulator shall have the option of either reworking or reprocessing the Product within thirty (30) working days after discovery of the defect. In either case, Formulator shall bear all costs and expenses in connection therewith, including, but not limited to, the Direct Labor Costs, Input Materials and the cost of Salt. All non-Specification Product that is not capable of being reworked or reprocessed into Specification-meeting Product shall be disposed of by Formulator only in accordance with the express written instructions of Monsanto. Formulator shall assume and bear all costs and expenses associated with such disposal of non-Specification Product, as well as all costs and expenses incurred in connection with the formulation of said non-Specification Product, including, without limitation, the Direct Labor Costs, Input Materials and the cost of Salt. Any dispute as to whether any Product meets the Specifications or whether it is capable of being reworked or reprocessed shall be determined by an independent laboratory or other third party appointed by both parties. All costs and fees of such determination shall be paid by the party against whom such determination is made. Anything contained in this Section 5.5 to the contrary notwithstanding, if the Product does not conform to said Specifications due to a Latent Defect in the Salt or otherwise due to the fault of Monsanto, then the costs and expenses (including, but not limited to, the cost of additional labor and Salt) of reworking or reprocessing the Product or the costs and expenses (including, but not limited to the

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5.6

Formulator shall retain samples of each lot of Product formulated hereunder and of each lot of Salt delivered to the Plants in accordance with the specifications and procedures set forth in the Quality Assurance Manual or otherwise approved by Monsanto in writing. Formulator shall store samples of inert raw materials, Salt and Product, in a manner consistent with the specifications and procedures set forth in the Quality Assurance Manual or otherwise approved by Monsanto in writing. All laboratory data, notebooks, gas or liquid chromatograph tapes and traces, production records, and all other documents relating to Salt and Products, including, but not limited to analytical results (hereinafter referred to as “Documents”), shall also be retained by Formulator for periods that are in accordance with the specifications and procedures set forth in the Quality Assurance Manual or otherwise approved by Monsanto in writing. At the end of such respective periods, unless otherwise requested by Monsanto in writing, all such samples and Documents shall be properly and promptly disposed of by Formulator; provided, that if this Formulation Agreement is terminated, Formulator shall send all samples to Monsanto in accordance with Section 10.2 of this Formulation Agreement. Monsanto shall have the right to inspect such samples and Documents upon prior written notice at any time during business hours, and Formulator shall provide access and cooperation in assisting Monsanto’s inspection. Formulator shall ship samples of Salt or Product to Monsanto at such times as Monsanto may request.

5.7

Any and all costs and expenses incurred by or for the account of Formulator in performing the above described Product and Salt sampling, analysis and storage shall be borne by Formulator and all Product and Input Materials shall be received, stored, handled and utilized in accordance with manufacturer’s instructions, if any, such that the quality of such Product, Salt and Input Materials is maintained.

6.0	Representations, Warranties, Covenants and Liabilities

6.1	Formulator represents, warrants and covenants to Monsanto that:

6.1.1

All Product formulated hereunder will meet the Specifications therefor and will be Prepared in a safe and lawful manner (except with respect to Latent Defects in the Salt or any Input Materials provided directly by Monsanto that Formulator could not have reasonably discovered prior to the formulation of Product using reasonable care consistent with industry practices as to which Formulator makes no representation, warranty or covenant);

6.1.2	It is capable of Preparing and will Prepare said Product from time to time at a rate sufficient to meet the reasonable requirements of customers in accordance with Section 4.1 hereof;

6.1.3	In order to prevent cross-contamination, it will clean and maintain the formulation equipment used hereunder in accordance with the Standard Analytical Methods;

6.1.4	It will use in the Preparation of a Product only the applicable Salt that meets the Specifications therefor;

6.1.5	It has complied and will comply in all material respects with all laws, decrees, rules, regulations, orders, ordinances, actions and requests of national and local courts and governmental units from which liability may accrue to Monsanto under this Formulation Agreement because of noncompliance by Formulator;

6.1.6	It has obtained and will maintain in effect all permits, licenses and other documentation required now or hereafter to be obtained and maintained by Formulator in order to comply with all applicable laws, ordinances, rules, orders, regulations and actions, and will furnish copies of same at its expense to Monsanto upon Monsanto’s request;

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6.1.7	It will dispose of all wastes generated as a result of this Formulation Agreement in a safe and lawful manner and in accordance with the Quality Assurance Manual and at a disposal site approved by Monsanto;

6.1.8	Except as contemplated by Section 5.5 hereof, it will not in any way salvage, recycle, reclaim, sell, use or distribute any non-Specification Product, by-products, wastes or residues resulting from Formulator’s activities hereunder; and

6.1.9	In its performance of this Formulation Agreement it will comply with the requirements of the Fair Labor Standards Act of 1938, as amended, and with Executive Order 11246 and the rules, regulations and relevant orders of the Secretary of Labor, if applicable. Section 202 of Executive Order 11246 is incorporated herein by specific reference.

6.2	Monsanto represents, warrants and covenants to Formulator that:

6.2.1	Monsanto shall provide Salt to Formulator from time to time in sufficient quantities to meet the quantity requirements of customers in accordance with Section 4.1 hereof;

6.2.2	It has complied and will comply in all material respects with all laws, decrees, rules, regulations, orders, ordinances, actions and requests of national and local courts and governmental units, from which liability may accrue to Formulator under this Formulation Agreement because of noncompliance by Monsanto;

6.2.3	It has obtained and will maintain in effect all permits, licenses and other documentation required now or hereafter to be obtained or maintained by Monsanto in order to comply with all laws, ordinances, rules, orders, regulations and actions applicable to its supply of Salt hereunder, and will furnish copies of same at its expense to Formulator upon Formulator’s request; and

6.2.4	In its performance of this Formulation Agreement it will comply with the requirements of the Fair Labor Standards Act of 1938, as amended, and with Executive Order 11246 and the rules, regulations and relevant orders of the Secretary of Labor, if applicable. Section 202 of Executive Order 11246 is incorporated herein by specific reference.

6.3

Without limiting any of Formulator’s obligations under this Formulation Agreement, Formulator shall assume full responsibility for and shall indemnify and hold harmless Monsanto, Monsanto’s past, present and future directors, officers, employees and agents and all persons acting on their behalf, from and against any and all losses, claims, obligations, liens, encumbrances, liabilities, penalties, causes of action, damages, costs and expenses (including, without limitation, costs and expenses of defense, orders, judgments, fines, amounts paid in settlement and reasonable attorneys’ fees and expenses), whether the foregoing are based in contract, warranty, negligence (except to the extent due to the negligence of Monsanto), strict liability, other tort, or any other legal theory, in connection with any of the activities contemplated or encompassed under this Formulation Agreement, including, without limitation, injury to or death of persons (including, without limitation, employees or agents of Monsanto or Formulator) and/or damage to or loss (including, without limitation, loss of use of) or destruction of any property (including, without limitation, property of Monsanto or Formulator, or their respective employees or agents) or contamination of, injury or damage to, or adverse effect on humans, animals, aquatic and wildlife, vegetation, air, water, land or the environment, caused by or connected with: (i) the failure of any Product formulated by Formulator hereunder to meet the Specifications therefor or the failure of any Product to be fully Prepared, except insofar as the same shall be caused by any Latent Defect in the Salt or any Input Materials provided directly by Monsanto that Formulator could not have reasonably discovered prior to the formulation of the product or as otherwise caused by Monsanto; (ii) the disposal by Formulator of any liquid and/or solid waste generated, produced or resulting from Formulator’s activities hereunder, including, but not limited to, non-Specification Product and waste water or solids resulting from cleaning of equipment or from spills and/or leakage; (iii) any failure by Formulator or any of its employees to observe or comply with any applicable laws, decrees, ordinances, codes, rules, regulations or orders, actions

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6.4

Without limiting any of Monsanto’s obligations under this Formulation Agreement, Monsanto shall assume full responsibility for and shall indemnify and hold harmless Formulator, Formulator’s past, present and future directors, officers, employees and agents and all persons acting on their behalf, from and against any and all losses, claims, obligations, liens, encumbrances, liabilities, penalties, causes of action, damages, costs and expenses (including, without limitation, costs and expenses of defense, orders, judgments, fines, amounts paid in settlement and reasonable attorneys’ fees and expenses), whether the foregoing are based in contract, warranty, negligence (except to the extent due to the negligence of Formulator), strict liability, other tort, or any other legal theory, in connection with any of the activities contemplated or encompassed under this Formulation Agreement, including, without limitation, injury to or death of persons (including, without limitation, employees or agents of Monsanto or Formulator) and/or damage to or loss (including, without limitation, toss of use of) or destruction of any property (including, without limitation, property of Monsanto or Formulator, or their respective employees or agents) or contamination of, injury or damage to, or adverse effect on humans, animals, aquatic and wildlife, vegetation, air, water, land or the environment, caused by or connected with: (i) any breach by Monsanto of any of the terms or provisions of this Formulation Agreement; (ii) any failure by Monsanto or any of its employees to observe or comply in any material respect with any applicable laws, decrees, ordinances, codes, rules, regulations or orders, actions or requests of any governmental unit or entity or a court with respect to any matter arising hereunder, (iii) the handling, possession, transportation, processing, manufacture, other use or disposition hereunder by Monsanto of Salt or Product; or (iv) any negligent act or omission of Monsanto, its officers, employees, agents or contractors. In case any action, suit or proceeding (whether civil, criminal, administrative or investigative) is brought against any party indemnified by Monsanto under this Formulation Agreement, Monsanto, upon the request of said indemnified party, will, at Monsanto’s expense, cause such action, suit or proceeding to be defended by counsel mutually agreed upon by Monsanto and Formulator and under the direction of Monsanto, and Formulator shall have the right, at Formulator’s expense, to participate in the investigation, settlement and/or compromise of same.

6.5

The indemnification provided pursuant to Section 6.4 hereof shall be Formulator’s sole and exclusive remedy against Monsanto for any losses due to third party claims against Formulator which are a result of, with respect to or arising out of this Formulation Agreement. The indemnification provided pursuant to Section 6.3 hereof shall be Monsanto’s sole and exclusive remedy against Formulator for any losses due to third party claims against Monsanto which are a result of, with respect to, or arising out of this Formulation Agreement.

6.6

Formulator knows and understands the potential health, safety and/or environmental considerations associated with the Salt and each Product and any toxic or hazardous properties connected with the Salt, each Product and all wastes generated therefrom. Information concerning the foregoing and recommended precautions for exposure to, handling and storage of the Salt and Product has been provided to Formulator by Monsanto as set forth in the Quality Assurance Manual for the applicable Product. Formulator agrees that the information referred to in this paragraph has been and will be transmitted to Formulator’s employees, agents and representatives prior to their employment in connection with the services to be performed under this Formulation Agreement and shall see that all appropriate safety, handling and storage precautions are followed to ensure the safety and well-being of persons, property and the environment in the performance of such services.

7.0	Records and Inspection

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7.1

Formulator shall: (i) keep appropriate and complete records and submit periodic reports, as so directed by Monsanto, of all Formulating Services provided hereunder; (ii) after Monsanto’s prior request, make all such records available to Monsanto for inspection at all reasonable times; and (iii), at its expense, provide copies thereof as requested by Monsanto, except insofar as the same are protected by any legal privilege. Formulator shall submit to Monsanto, at such times and on a form as required in the Quality Assurance Manual or otherwise approved in writing by Monsanto, a production and shipping report, which report shall include a detailed explanation of all production, Preparation and shipment of each Product, as well as any problems encountered regarding the same. In addition, Formulator shall, on a form as set forth in the Quality Assurance Manual or otherwise approved in writing by Monsanto, make written reports to Monsanto at the end of each calendar month or at such other interval as approved by Monsanto in writing, detailing the status of all inventories and usage of Salt, Product-in-process, and finished Product produced.

7.2

Monsanto or its designated representatives shall be given access at all reasonable times to the Plants with prior reasonable notice to observe and inspect all phases of Formulator’s Formulating Services performed hereunder and as further defined in the Quality Assurance Manual, subject to such reasonable limitations as may be imposed by Formulator consistent with the dictates of orderly management, Plant efficiency and Plant safety.

8.0	Labeling

8.1	Appropriate Labels shall be supplied by Formulator for the packaging of each Product. Formulator shall use said Labels only for such packages and shall not use them in any other manner. Formulator shall not apply other labels to any Product packages unless specifically authorized in writing by Monsanto.

9.0	Financial Practices

9.1	Financial Definitions

9.1.1	“Actual Amounts” is defined in Section 9.3.2.

9.1.2	“Asset Base” for any Program Year means the Product-related net book value of the Plants as of the last day of each Program Year. The Asset Base shall exclude the net book value of any entire Production Line that does not engage in the Preparation of Product or support in the Preparation of Product in any way.

9.1.3

“Capital Charge” equals, with respect to all Products other than the BEA Products, nine percent (9%) of the Asset Base multiplied by the Support Ratio (excluding the Support Ratio applicable to the BEA Products). For the avoidance of doubt, for purposes of calculation of the Capital Charge, the BEA Products shall be excluded from such calculation. The “BEA Products Capital Charge”, equals, with respect solely to the BEA Products, three percent (3%) of the Asset Base multiplied by the Support Ratio applicable to the BEA Products.

9.1.4

“Direct Labor Costs” means the actual costs associated with the Direct Labor Hours that are spent on a Production Run. If a Production Line is unscheduled, or down for scheduled or major maintenance, then such hours are not associated with any particular production order and, hence, not included in the calculation of Labor Costs for a particular Production Run. As of the First Amendment Date but subject to change from time to time, the Direct Labor Costs consist of the following cost elements identified in Formulator’s cost center report: “Direct Labor,” “Overtime Direct,” “D/L Contracted Labor,” and “Contracted D/L - Overtime.”

9.1.5	“Direct Labor Hours” means the total hours of actual labor, as recorded in Formulator’s software systems, used by a Production Line to execute a specific Production Run, including all downtime and machine changeover time associated with such Production Run, but excluding any hours of labor associated with scheduled down time.

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9.1.6	“Formulation Fee” means the sum of the total labor costs and total overhead costs of all Production Lines used in Preparing Product during a Program Year, determined in accordance with the formula set forth below:

9.1.7	“Machine Hours” means the period of time, in hours, used by a Production Line to execute a specific Production Run, including all downtime and machine changeover time associated with such Production Run, but excluding any hours of scheduled downtime.

9.1.8

“Overhead Costs” means the actual overhead costs at the Plants, as recorded in Formulator’s systems and as defined by the cost centers in Appendix A, which may be amended from time to time by the written agreement of the parties. One hundred percent (100%) of the Overhead Costs incurred by the Plants will be allocated among the individual Production Lines at the Plants. Overhead Costs directly associated with a particular Production Line, including maintenance costs and equipment depreciation, will be charged directly to that particular Production Line’s cost center. All other Overhead Costs will be allocated to each Production Line’s cost center in accordance with the applicable cost drivers for each type of Overhead Cost as set forth in Appendix A. The anticipated allocation of Overhead Costs to each Production Line for each Program Year will be reviewed by the parties as part of the Annual Plant Budget review process for such Program Year in accordance with Section 9.2.

9.1.9	“Production Line” means the equipment used to de-palletize, sort, fill, cap, label, and case pack bottles or used to create display units during a Production Run.

9.1.10	“Production Run” means the discreet production of a single Product on a specific Production Line to fulfill a production order, including all downtime and machine changeover time associated with producing such Product, but excluding any scheduled downtime.

9.1.11	“Support Ratio” means the sum of Machine Hours used in the Preparation of Product at the Plants, divided by the aggregate Machine Hours for all Production Lines used in the Preparation or support of Product at the Plants, excluding any Machine Hours on Production Lines excluded from the Asset Base.

9.1.12	“Total RU Labor Hours” means the total Direct Labor Hours used to execute all Production Runs for Products on a Production Line in a Program Year.

9.1.13	“Total RU Machine Hours” means the total Machine Hours used to execute all Production Runs on a Production Line in a Program Year.

9.2

During the term of this agreement, Formulator shall be responsible for submitting an Annual Plant Budget to Monsanto for each Program Year. The Annual Plant Budget for each Program Year must be finalized by Formulator and submitted to Monsanto in accordance with the notice provisions set forth herein no later than September 15 of each year during the term of this Formulation Agreement. Prior to finalizing the Annual Plant Budget for each Program Year, Formulator shall use its commercially reasonable efforts to review and discuss the Annual Plant Budget, the budgeted formulation fee, the budgeted capital charge and the methodologies used to establish the Annual Plant Budget, the budgeted formulation fee and the budgeted capital charge with the Global Support Team.

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9.3	Payment Terms and Cash Settlement

9.3.1

During the term of this Formulation Agreement, Monsanto shall pay Formulator on a monthly basis for the prior month’s Formulation Fee, Capital Charge and BEA Products Capital Charge through the monthly cash settlement process. For purposes of the settlement process as described hereto, the Formulation Fee, the Capital Charge and the BEA Products Capital Charge will be calculated based on actual costs for each given month in accordance with Section 9.1.4.

9.3.2

At the end of each Program Year during the term of this Formulation Agreement, upon the submission by Formulator to Monsanto of the Statement of Actual Results, the parties shall reconcile the Formulation Fee, the Capital Charges and the BEA Products Capital Charges set forth in the Statement of Actual Results for such Program Year (the “Actual Amounts”) against the Formulation Fee, Capital Charges and BEA Products Capital Charges invoiced pursuant to Section 9.3.1 for such Program Year (the “Invoiced Amounts”) such that (i) if and to the extent the Invoiced Amounts exceed the Actual Amounts, then Formulator shall pay Monsanto the amount of the difference, and (ii) if and to the extent the Actual Amounts exceed the Invoiced Amounts, then Monsanto shall pay Formulator the amount of the difference.

9.3.3	The comparison set forth in Section 9.3.2 will be estimated and completed at the end of the Monsanto fiscal year, August 31st, and finalized at the end of Formulator’s fiscal year, September 30th, for each Program Year.

9.3.4

During the thirty (30) days immediately following the receipt of the Statement of Actual Results by Monsanto, Monsanto and its representatives shall, at Monsanto’s expense, be entitled to review the Statement of Actual Results and any working papers, trial balances and similar materials relating to the Statement of Actual Results prepared by Formulator. During such 30-day period, Formulator will provide Monsanto and its representatives with access, not unreasonably interfering with the operations of the Plants, during normal business hours, to the personnel, properties, books and records of the Plants. The Statement of Actual Results shall become final and binding upon the parties on the thirty-first (31st) day following receipt thereof unless Monsanto gives written notice to Formulator of its disagreement with the Statement of Actual Results (a “Notice of Disagreement”) prior to such date. Any Notice of Disagreement shall specify in reasonable detail the nature of any disagreement so asserted. If a timely Notice of Disagreement is delivered by Monsanto, then the Statement of Actual Results shall become final and binding upon the parties on the earlier of (a) the date the parties hereto resolve in writing all differences they have with respect to any matter specified in the Notice of Disagreement or (b) the date all matters in dispute are finally resolved by the Independent Accounting Firm. The date on which the Statement of Actual Results becomes final and binding upon the parties in accordance with this Section 9.3.4 is referred to herein as the “Final Determination Date.” During the thirty (30) days immediately following the delivery of any Notice of Disagreement, Monsanto and Formulator shall seek in good faith to resolve in writing any differences that they may have with respect to any matters specified in such Notice of Disagreement. During such period, Monsanto and Formulator shall have access to the other’s working papers, trial balances and similar materials prepared in connection with the Statement of Actual Results and the Notice of Disagreement, as the case may be. At the end of such 30-day period, Monsanto and Formulator shall submit to an independent, national public accounting firm that has no prior relationship with Formulator or Monsanto (the “Independent Accounting Firm”) for review and resolution of any and all matters that remain in dispute and that are included in the Notice of Disagreement. The Independent Accounting Firm shall reach a final resolution of all matters and shall furnish such resolution in writing to Monsanto and Formulator as soon as practicable, but in no event more than thirty (30) days, after such matters have been referred to the Independent Accounting Finn. Such resolution shall be made in accordance with this Formulation Agreement and will be conclusive and binding upon Monsanto and Formulator. The costs related to the engagement of the Independent Accounting Firm shall be shared equally between the parties hereto.

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9.3.5

Formulator acknowledges that the quantities of Salt and other Input Materials set forth for each Product in the Quality Assurance Manual constitute the quantities of such items normally used in Preparing Product. The loss factors for Input Materials shall be two percent (2%) (the “Loss Standard”). Commencing with the twelve (12) month period beginning October 1, 1999, with respect to each Input Material, if Formulator exceeds the greater of 125% of (i) the applicable quantity set forth in the Quality Assurance Manual, or (ii) the Loss Standard, for any reason (including, but not limited to, conversion, loss, theft, destruction or damage), Formulator shall reimburse Monsanto for the value of the loss of such Input Materials to the extent such losses exceed the thresholds established in either clause (i) or (ii) above, as applicable; provided, however, that Input Materials with Latent Defects shall not be included in determining Formulator’s losses. Any such reimbursement will be based, at Monsanto’s option, upon either the then-current United States market list price, if any, for the Salt or other Input Material, or Monsanto’s then-current United States replacement cost of the Salt or other Input Material, including insurance, duties, importing costs, broker’s fees and other charges, if any. Said reimbursement will be paid by Formulator to Monsanto within thirty (30) days after Monsanto notifies Formulator of each such excess Salt or other Input Material usage.

9.3.6	Prior to Formulator undertaking capital improvements at the Plants that relate to or affect the Preparation of the Products, Formulator shall use its commercially reasonable efforts to provide Monsanto with a description of such improvements and an estimate of the anticipated expenses related thereto.

9.4

In the event that the Formulation Fee as set forth in the Statement of Actual Results for any completed Program Year exceeds the Formulation Fee from the previous Program Year by more than ten percent (10%) (exclusive of increases agreed upon during such completed Program Year, increases in Volume at Monsanto’s request, modifications as to the particular SKUs budgeted to be Prepared, and changes at Monsanto’s request to Product Specifications during the course of such completed Program Year), then Formulator shall reimburse Monsanto for the difference between such Formulation Fee and one hundred ten percent (110%) of the Formulation Fee for the previous Program Year within 30 (thirty) days after the conclusion of the completed Program Year.

10.0	Title

10.1

Except as otherwise provided in this Formulation Agreement, title to and all other incidents of ownership of all Salt, Input Materials and Product (said Salt, Input Materials and Product being hereinafter sometimes collectively referred to as “Monsanto’s Materials”) shall be in Monsanto at all times. Formulator shall label or identify Monsanto’s Materials in such a way as to put creditors and others on notice that Monsanto retains title thereto. Formulator shall not sell or otherwise dispose of Monsanto’s Materials, or use Monsanto’s Materials in any way other than as provided in this Formulation Agreement. Monsanto’s Materials shall not be subject to distress or lien for payments or other encumbrances made, done or suffered by Formulator, and Formulator shall not directly or indirectly create, assume or permit to exist any mortgage, lien, charge or encumbrance on or pledge or security interest of any kind or character on Monsanto’s Materials or any part thereof, nor take, nor permit to be taken, any action that might result in a mortgage, lien, charge, encumbrance, pledge or security interest on the same. In the event that any of the foregoing shall exist against Monsanto’s Materials, or in the event any notice of attachment, levy or garnishment shall be served on Formulator in connection with Monsanto’s Materials, Formulator shall promptly remove or discharge the same by bonding, payment or otherwise, but in no event more than fifteen (15) days after the date on which Formulator has been served or received notice of the same.

10.2

All of Monsanto’s Materials remaining in Formulator’s possession or custody upon termination or expiration of this Formulation Agreement shall be returned by Formulator to Monsanto loaded aboard a carrier at the applicable Plant within thirty (30) days after the effective date of such termination, with Formulator bearing all packing and loading costs unless the termination of this Formulation Agreement was caused by Monsanto’s breach hereof or was a result of Monsanto providing notice of termination pursuant to Section 3.1 hereof in which case such costs shall be borne by Monsanto; provided, however, that at Monsanto’s option, if said termination is due to Monsanto terminating this Formulation Agreement as a result of Formulator’s breach of its obligations, warranties or representations under this Formulation Agreement, including, but not limited to

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10.3

While any and all of Monsanto’s Materials are in the possession, custody or control of Formulator, Formulator agrees to bear the risk of any loss or damage to same. Monsanto’s Materials shall be deemed to be in the possession, custody or control of Formulator upon arrival at the Plant (with respect to Salt) or Preparation by Formulator (with respect to Product), as the case may be, and shall remain in Formulator’s possession, custody and control until physical delivery to the carrier for delivery to Monsanto.

11.0	Taxes

11.1

Monsanto shall bear all tangible personal property taxes on Salt and each Product and all taxes or governmental charges (other than taxes measured by or placed upon gross receipts or net income) upon the transportation and delivery of each Product to Monsanto, whether such taxes or charges are now in effect or hereafter become effective during the term of this Formulation Agreement. Formulator shall bear all other taxes or other governmental charges arising out of this Formulation Agreement.

12.0	Force Majeure

12.1

Except for (i) Formulator’s obligations under Sections 6.0, 10.0 (other than as provided therein), 13.1.3, 16.0, 17.0 and 18.0, and (ii) Monsanto’s obligations under Sections 6.0, 10.0 (other than as provided therein), 13, 16.0, 17.0 and 18.0, performance of any obligation under this Formulation Agreement may be suspended by either party, in whole or in part, without liability to the other party, by promptly notifying the other party of the nature and estimated duration of the suspension period in the event of: an act of God, war, riot, fire, explosion, accident, flood, sabotage; lack of adequate fuel, power, labor, containers or transportation facilities; compliance with governmental requests, laws, regulations, orders or actions; breakage or failure of machinery or apparatus, which breakage or failure was beyond the reasonable control of the affected party or could not have been prevented by reasonable maintenance; national defense requirements or any other event, whether or not of the class enumerated herein, beyond the reasonable control of such party; or in the event of labor trouble, strike, lockout or injunction (provided that neither party shall be required to settle a labor dispute against its own best judgment); which event prevents the manufacture, Preparation or shipment, or the acceptance, use, sale or distribution of any Product or Salt, as the case may be, or any product manufactured or processed therefrom or therewith. At Monsanto’s option, the period specified for delivery of any Product hereunder may be extended by the period of delay occasioned by any such suspension and deliveries omitted or portions thereof shall be made during such extension, or the total quantity ordered hereunder shall be reduced by the deliveries affected by the suspension of such performance, but this Formulation Agreement shall otherwise remain unaffected. Nothing in this Section 12.0 shall excuse Formulator from performance of its obligations under this Formulation Agreement by reason of its failure or inability to observe or comply with Section 6.1.5 or Section 6.1.6 of this Formulation Agreement or excuse Monsanto from performance of its obligations under this Formulation Agreement by reason of its failure or inability to observe or comply with Section 6.2.2 or Section 6.2.3 of this Formulation Agreement or excuse Monsanto from paying any and all fees due in accordance with Section 9.0 hereof to Formulator for Formulating Services performed to the date of suspension.

13.0	Patent Indemnity

13.1

Monsanto agrees to indemnify Formulator for any and all claims, losses, liabilities, damages, costs and expenses (including reasonable attorneys’ fees, court costs and settlement costs) incurred by Formulator as a result of, with respect to, or arising out of the use of Salt or any Product, other than a BEA Product, by Formulator in accordance with this Formulation Agreement which constitutes an infringement or an alleged infringement of a patent in the U.S. or any foreign country, provided that:

13.1.1	Monsanto is promptly notified in writing by Formulator of any such claim;

13.1.2	No attempt to settle said claim is made without Monsanto’s prior written consent;

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13.1.3	In the event of a suit, Monsanto shall, at Monsanto’s election, have sole charge and direction thereof, in which event Formulator shall render such reasonable assistance in the defense thereof as Monsanto may require (all at Monsanto’s expense); and

13.1.4	If Monsanto determines that any third party patents may be asserted against Monsanto or Formulator with respect to any Product, Monsanto may change the Quality Assurance Manual with respect to such Product, notwithstanding the provisions of the definition of “Quality Assurance Manual” in Section 1.41 hereof, upon thirty (30) days advance written notice to Formulator.

13.1.5	For clarity, in no event shall Monsanto’s obligations under this Section 13.1 apply or otherwise extend to any BEA Product.

14.0	Insurance

14.1	Formulator shall not begin performance under this Formulation Agreement until it has obtained all the insurance hereinafter required.

14.2

Every contract of insurance providing the coverages required herein shall provide that such coverage shall not be terminated, reduced or substantially altered without the insurance carrier first giving Monsanto at least thirty (30) days prior written notice thereof, and Formulator shall make such arrangements as are reasonably necessary to ensure that no termination, reduction, cancellation or substantial alteration of the insurance required herein becomes effective until thirty (30) days after Monsanto receives such notice. If there is any material reduction in Formulator’s insurance coverage as required by Section 14.3 hereof, then Monsanto may exercise its rights pursuant to clause (i) of Section 3.2 hereof.

14.3	Formulator shall take out and maintain, at its expense, during the term of this Formulation Agreement, and for a minimum of two (2) years following the expiration or termination of this Formulation Agreement, at least the following insurance with insurance companies reasonably satisfactory to Monsanto and Formulator and with deductibles not in excess of $2,000,000;

14.3.1	Workers’ Compensation Insurance in compliance with the laws of the States of Iowa and any other states in which a Plant is located, including, if the Plant and Formulating Services involve navigable waters, coverage for United States Longshoremen’s and Harbor Waters Act;

14.3.2	Employer’s Liability Insurance, of not less than $1,000,000 including, if the Plant and Formulating Services involve navigable waters, coverage for Maritime (Jones Act);

14.3.3	Comprehensive General Liability and Comprehensive Automobile Liability, including all owned, hired and non-owned vehicles with limits of $5,000,000 each occurrence; and

14.3.4	Fire and extended coverage insurance in customary form and amount covering the Plant.

14.4	The insurance certificate evidencing the required coverage shall include a certification that the above-described insurance coverages include contractual coverage for Formulator’s liability under this Formulation Agreement, and contain a waiver of subrogation by Formulator and its insurance carrier against Monsanto. Monsanto shall be named as an additional insured on all such insurance policies.

14.5	Formulator hereby waives any and all claims, rights of action or rights of recovery against Monsanto for any loss or damage which may occur to the Plant on which Formulator has in effect fire and extended coverage insurance or similar types of insurance, to the extent that such loss or damage is insured and regardless of whether or not any such loss or damage is caused by Monsanto’s negligence.

14.6	The insurance described herein sets forth minimum amounts and coverages and is not to be construed in any way as a limitation on Formulator’s liability.

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15.0	Independent Contractor

15.1

Formulator is and shall always remain an independent contractor in its performance of this Formulation Agreement. The provisions of this Formulation Agreement shall not be construed as authorizing or reserving to Monsanto any right to exercise any control or direction over the operations, activities, officers, employees, or agents of Formulator in connection with this Formulation Agreement, it being understood and agreed that the entire control and direction of such operations, activities, employees, or agents shall remain with Formulator. Neither party to this Formulation Agreement shall have any authority to employ any person as an employee or agent for or on behalf of the other party to this Formulation Agreement for any purpose, and neither party to this Formulation Agreement, nor any person performing any duties or engaging in any work at the request of such party, shall be deemed to be an employee or agent of the other party to this Formulation Agreement. In addition, Formulator is not and shall not act or purport to act as a commercial agent for Monsanto.

16.0	Confidential Information

16.1

The parties hereto may not, at any time during the period beginning with the date of receipt of any confidential information of the other party and ending five (5) years after the termination of this Formulation Agreement, disclose to any other person any confidential information that has been disclosed to it by the other party, except with the prior written consent of such party or as provided in Section 16.2.

16.2	Except as otherwise provided in any agreement by and between the parties hereto or any of their affiliates, any confidential information that is disclosed by a party to the other party may be:

16.2.1	Disclosed to any directors, officers, employees, agents or contractors of such other party, to such extent only as is reasonably necessary for fulfillment of the party’s obligations under this Formulation Agreement;

16.2.2

Disclosed to any governmental or other authority or regulatory body to the extent required by law, provided that the disclosing party must take all reasonable measures to ensure that such authority or body keeps the same confidential and does not use the same except for the purpose for which such disclosure is made, and further provided that the party proposing to so disclose must give prior notice of that intent to the other party and permit the other party, at its option, to contest said requirement and to seek confidential treatment of such information;

16.2.3

Disclosed to a court or litigant, to the extent such disclosure is ordered by a court or government agency of competent jurisdiction, provided that the disclosing party must take all reasonable measures to ensure that the court, other litigants, or government agency keep the same confidential and do not use the same except for the purpose for which such disclosure is made, and further provided that the disclosing party must give prior notice of that intent to the other party and permit the other party, at its option to contest said requirement and to seek confidential treatment of such information; and

16.2.4	Used for any purpose, or disclosed to any other person, to the extent only that it is on the Effective Date or thereafter becomes, public knowledge through no fault of the party proposing disclosure, or is disclosed to such party by a third party as a matter of right, or can be shown by such party to have been known to such party prior to such disclosure by written records.

16.3

Monsanto shall supply Formulator with sufficient technical information to enable Formulator to Prepare each Product. Monsanto hereby gives Formulator the right to use such technical information solely for the purposes, and solely during the term, of this Formulation Agreement. Notwithstanding any other provision of this Formulation Agreement, the parties agree that such information is the confidential property and trade secret of Monsanto and shall be governed by the provisions of this Section 16.0.

16.4	Each party hereto shall restrict the knowledge of all information regarding the Formulating Services hereunder to as few as possible of its officers and employees, and in all cases shall restrict such knowledge to only those officers and employees who are directly connected with the performance of this Formulation Agreement. Each

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16.5	No right or license, express or implied, is granted or is intended to be granted by Monsanto to Formulator under this Formulation Agreement under any patent or application of Monsanto or any of its subsidiaries except permission to Prepare each Product for Monsanto.

17.0	Assignment

17.1

This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that Formulator shall not (by operation of law or otherwise) transfer or assign its rights or delegate its performance hereunder without the prior written consent of Monsanto and any such transfer, assignment or delegation without such consent, shall be void and of no effect. Notwithstanding the foregoing, Formulator may at any time transfer its rights hereunder to any one or more of its subsidiaries or other affiliates so long as Formulator remains liable for all of its obligations hereunder, and so long as Formulator provides Monsanto with reasonable prior written notice of such transfer.

18.0	Notices

18.1

Any notice, request, instruction or other document to be given hereunder by any party hereto to any other party hereto must be in writing and delivered personally (including by overnight courier or express mail service) or sent by registered or certified mail, or be transmitted by facsimile or other means of electronic data transmission, confirmed by express mail or overnight courier service, in each case with postage or fees prepaid,

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19.0	Governing Law; Jurisdiction

19.1

THE VALIDITY, INTERPRETATION AND PERFORMANCE OF THIS AGREEMENT AND ANY DISPUTE CONNECTED WITH THIS AGREEMENT SHALL BE GOVERNED BY AND DETERMINED IN ACCORDANCE WITH THE STATUTORY, REGULATORY AND DECISIONAL LAW OF THE STATE OF DELAWARE (EXCLUSIVE OF SUCH STATE’S CHOICE OR CONFLICTS OF LAWS RULES) AND, TO THE EXTENT APPLICABLE, THE FEDERAL STATUTORY, REGULATORY AND DECISIONAL LAW OF THE UNITED STATES (EXCEPT FOR THE U.N. CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS, APRIL 10, 1980, U.N. DOC. A/CONF. 97/18, 19 I.L.M. 668,671 (1980) REPRINTED IN PUBLIC NOTICE, 52 FED. REG. 662-80 (1987), WHICH IS HEREBY SPECIFICALLY DISCLAIMED AND EXCLUDED).

19.2

Subject to Section 19.1 hereof, any suit, action or proceeding against any party hereto with respect to the subject matter of this Formulation Agreement, or any judgment entered by any court in respect thereof, shall be brought or entered in the United States District Court for the District of Delaware, if such court has jurisdiction over the subject matter of such proceeding or, if such jurisdiction is not available, in the Court of

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20.0	Miscellaneous

20.1

Entire Agreement. This Formulation Agreement (including the Exhibits), the Agency Agreement and all other agreements signed or delivered at Closing constitute a complete and exclusive statement of the terms and conditions of their agreement relating to the subject matter hereof and supersede any all prior agreements, whether written or oral, that may exist between the parties with respect thereto. Except as otherwise specifically provided in this Formulation Agreement, no conditions, usage of trade, course of dealing or performance, understanding or agreement purporting to modify, vary, explain or supplement the terms or conditions of this Formulation Agreement will be binding unless hereafter made in writing and signed by the party to be bound, and no modification will be effected by the acknowledgment or acceptance of documents containing terms or conditions at variance with or in addition to those set forth in this Formulation Agreement, except as the parties specifically agree otherwise in writing.

20.2	Employees. As used in this Formulation Agreement, employees or agents of a party hereto shall be deemed to include such party’s past, present and future officers and directors.

20.3	Headings. Section headings are for convenience of the parties only and are in no way to be construed as part of this Formulation Agreement or as a limitation of the scope of the particular Section to which they refer.

20.4	Holidays. If any date, or the last day of any period, set forth in this Formulation Agreement is a Saturday, Sunday or legal holiday in the United States or the States of Missouri, or Ohio such date or period shall be extended to the next business day.

20.5

Severability. The invalidity or unenforceability for any reason of any part of this Formulation Agreement shall not prejudice or affect the validity or enforceability of the remainder. The invalidity or unenforceability of this Formulation Agreement or any part hereof in any country or countries shall not prejudice or affect the validity or enforceability of this Formulation Agreement or any part thereof in any other country or countries.

20.6	Relationship of Parties. Nothing in this Formulation Agreement creates, or may be deemed to create, a partnership, joint venture or the relationship of principal and agent among the parties. Neither party is authorized or empowered to act as agent for the other for any purpose and shall not on behalf of the other party either enter into any contract, undertaking or agreement of any kind whatever.

20.7	Waivers. No waiver by a party with respect to any breach or default or of any right or remedy and no course of dealing or performance, will be deemed to constitute a continuing waiver of any other breach or default or

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20.8	Counterparts. This Agreement may be executed in one or more counterparts, each of which will for all purposes be deemed to be an original and all of which will constitute the same instrument.

20.9	Public Announcements. The parties agree to make no press releases or public announcements relating to the subject matter of this Formulation Agreement without first obtaining the written consent of the other party.

20.10

Construction. Whenever examples are used in this Formulation Agreement with the words “including,” “for example,” “e.g.,” “such as,” “etc.” or any derivation of such words, such examples are intended to be illustrative and not limiting. For purposes of this Formulation Agreement, (i) the word “or” is not exclusive, (ii) the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Formulation Agreement as a whole, (iii) each definition shall be equally applicable to the singular and plural forms of the terms defined, as well as the past and present tense and any nominalized form of any defined verb, and (iv) words importing the masculine gender shall also include the feminine and neutral genders, and vice versa. Unless the context otherwise requires, references herein: (a) to Sections and attachments mean the sections of and schedules to this Formulation Agreement; (b) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and by this Formulation Agreement; and (c) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. The attachments referred to herein shall be construed with and as an integral part of this Formulation Agreement to the same extent as if they were set forth verbatim herein.

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1.1.	Monsanto is the owner of the copyright-protected labels and trademark(s) for the Products as identified in Exhibit A hereto (collectively, the “Monsanto IP”, and the trademarks, the “Monsanto Trademarks”) in the Territory.

1.2.	Formulator desires to obtain a license to use the Monsanto IP in order to perform its obligations hereunder in connection with the Products as set forth in Section 2.3 herein.

1.3.	Monsanto hereby grants to Formulator, subject to all of the terms and conditions herein, a non-exclusive, non-transferable, royalty-free license to use, with a right to sublicense, the Monsanto IP for the sole and express purpose to perform its obligations hereunder on and in connection with the Products.

1.4.	Formulator agrees that it will use the Monsanto IP only on and in order to perform its obligations hereunder in connection with the Products in accordance with the terms of this Agreement. Formulator agrees to use the Monsanto IP only in the manner directed and approved by Monsanto.

1.5.

During the Term, and for as long as Monsanto retains and maintains rights in and to the Monsanto IP, Formulator shall not: (a) use the Monsanto IP either alone or as part of Formulator’s trade or corporate name; (b) attempt to register or register the Monsanto IP in any manner, and with respect to the Monsanto Trademarks, as a trademark, trade name, corporate name, domain name, or social media account name; or (c) use the Monsanto IP in any manner which, in the commercially reasonable opinion of Monsanto, tends to indicate, suggest, imply or permit the inference from such manner of use that the Monsanto IP is not solely and exclusively the property of Monsanto.

1.6.

No right, title or interest of any kind in or to the Monsanto IP or the respective application(s)/registration(s) thereof is transferred by this Agreement to Formulator except an exclusive, non-transferable, royalty-free license to use the Monsanto IP on and in connection with the Products during the Term. The license to use the Monsanto IP is limited to the Territory. Monsanto reserves the unqualified right to use the Monsanto IP and to license other parties to use the Monsanto IP.

1.7.	Formulator agrees that the Monsanto IP listed in Exhibit C is the exclusive property of Monsanto, and that Formulator’s use of the Monsanto Trademarks in the Territory in accordance with this Agreement accrues and inures to the benefit of and constitutes use of the Monsanto Trademarks by Monsanto.

1.8.	Formulator shall not have the right to assign its license to the Monsanto IP hereunder this Agreement. Any attempted assignment of Formulator’s license to Monsanto’s IP shall be void and of no effect.

1.9.

The license for the Monsanto IP granted by Monsanto to Formulator under this Agreement shall terminate automatically upon the expiration or termination of this Agreement. Except as required by this Agreement, Formulator agrees that it will, upon expiration or termination of this Agreement for any reason whatsoever, discontinue all use of the Monsanto IP immediately, and deliver to Monsanto all copies, in any format now known or developed in the future, of all labels and other materials bearing or containing the Monsanto IP for the Products, including, but not limited to PDF(s) of the final label(s). Formulator agrees that it shall not thereafter adopt or use the Monsanto IP or any colorable imitation thereof or any trademark confusingly similar to or likely to conflict with or dilute the Monsanto Trademarks, either alone or in combination with any other words, letters, symbols, designs, or logos, and that it shall execute and file whatever documents and perform whatever other act are deemed necessary and desirable by Monsanto to fully return to Monsanto or its Affiliates, as applicable, all rights and licenses granted under this Agreement.

1.10.	Nothing in this Schedule 2.3 shall amend or supersede the parties’ respective rights and obligations under Section 6.14 of the Agency Agreement.

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1.	The common law and unregistered Marks identified below:

•	BUG DESTROYER (jurisdiction: United States; goods/services: insecticide);

•	CRABGRASS DESTROYER (jurisdiction: United States; goods/services: herbicide);

•	LANDSCAPE WEED PREVENTER (jurisdiction: United States; goods/services: herbicide);

•	WEEDING WISELY (jurisdiction: United States; goods/services: herbicide).

2.	Common law or unregistered copyrights in the tangible works of expression identified below:

•	All images associated with the Brand Extension Products on the webpage available at www.roundup.com.

•	Packaging graphics for Roundup for Lawns Bug Destroyer.

•	Packaging graphics for Roundup for Lawns Bug Destroyer.

•	Packaging graphics for Roundup for Lawns Crabgrass Destroyer.

•	Packaging graphics for Roundup for Lawns Crabgrass Destroyer.

•	Packaging graphics for Roundup for Lawns – Northern.

•	Packaging graphics or Roundup for Lawns – Concentrate Northern.

•	Packaging graphics for Roundup for Lawns – Extend Wand Northern.

•	Packaging graphics for Roundup for Lawns – Refill Northern.

•	Packaging graphics for Roundup for Lawns – Southern.

•	Packaging graphics for Roundup for Lawns – Concentrate Southern.

•	Packaging graphics for Roundup for Lawns – Extend Wand Southern.

•	Packaging graphics for Roundup for Lawns – Refill Southern.

•	Packaging graphics for Roundup for Lawns Landscape Weed Preventer, with the exception of those stock images licensed by Seller.

•	Packaging graphics for Roundup for Lawns Landscape Weed Preventer, with the exception of those stock images licensed by Seller.

3.	Trade dress elements of the following Related Packaging:

•	Packaging for Roundup for Lawns Bug Destroyer.

•	Packaging for Roundup for Lawns Bug Destroyer.

•	Packaging for Roundup for Lawns Crabgrass Destroyer.

•	Packaging for Roundup for Lawns Crabgrass Destroyer.

•	Packaging for Roundup for Lawns – Northern.

•	Packaging or Roundup for Lawns – Concentrate Northern.

•	Packaging for Roundup for Lawns – Extend Wand Northern.

•	Packaging for Roundup for Lawns – Refill Northern.

•	Packaging for Roundup for Lawns – Southern.

•	Packaging for Roundup for Lawns – Concentrate Southern.

•	Packaging for Roundup for Lawns – Extend Wand Southern.

•	Packaging for Roundup for Lawns – Refill Southern.

•	Packaging for Roundup for Lawns Landscape Weed Preventer.

•	Packaging for Roundup for Lawns Landscape Weed Preventer.

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1.	Buddy’s Plant Plus Corporation

2.	The Andersons

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Class I:	$0

Class II:	$0

Class III:	$0

Class IV:	Final Inventory Value

Class V:	$0

Class VI and VII:	$112,000,000 plus Assumed Liabilities (to the extent, if any, included in “amount realized” for U.S. federal income Tax purposes) and subject to any adjustments to the Purchase Price and any expenses

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•	U.S. Consumer segment sales increase 10% in Q3, up 9% year-to-date

•	Point-of-sale data shows consumer purchases up 4 percent entering August

•	Hawthorne sales increase 138% in Q3 driven by acquisition of Sunlight Supply

•	GAAP earnings of $3.15 per share in Q3, $8.78 year-to-date

•	Non-GAAP adjusted earnings of $3.11 per share in Q3, $5.39 year-to-date

•	Fiscal 2019 non-GAAP adjusted EPS guidance increased to $4.35 to $4.50 on expected sales growth of 16 to 17%

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•	Compliance with environmental and other public health regulations could increase the Company’s costs of doing business or limit the Company’s ability to market all of its products;

•	Damage to the Company’s reputation or the reputation of its products or products it markets on behalf of third parties could have an adverse effect on its business;

•	The highly competitive nature of the Company’s markets could adversely affect its ability to maintain or grow revenues;

•	Because of the concentration of the Company’s sales to a small number of retail customers, the loss of one or more of, or significant reduction in orders from, its top customers could adversely affect the Company’s financial results;

•	Climate change and unfavorable weather conditions could adversely impact financial results;

•	Certain of the Company’s products may be purchased for use in new or emerging industries or segments and/or be subject to varying, inconsistent, and rapidly changing laws, regulations, administrative practices, enforcement approaches, judicial interpretations and consumer perceptions;

•	The Company may not be able to adequately protect its intellectual property and other proprietary rights that are material to the Company’s business;

•	In the event the Restated Marketing Agreement for consumer Roundup products terminates, or Monsanto’s consumer Roundup business materially declines the Company would lose a substantial source of future earnings and overhead expenses absorption;

•	Hagedorn Partnership, L.P. beneficially owns approximately 27% of the Company’s common shares and can significantly influence decisions that require the approval of shareholders;

•	Acquisitions, other strategic alliances and investments could result in operating difficulties, dilution and other harmful consequences that may adversely impact the Company’s business and results of operations.

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(1)	Basic income (loss) per common share amounts are calculated by dividing income (loss) from continuing operations, income (loss) from discontinued operations and net income (loss) attributable to controlling interest by the weighted average number of common shares outstanding during the period.

(2)

Diluted income (loss) per common share amounts are calculated by dividing income (loss) from continuing operations, income (loss) from discontinued operations and net income (loss) attributable to controlling interest by the weighted average number of common shares, plus all potential dilutive securities (common stock options, performance shares, performance units, restricted stock and restricted stock units) outstanding during the period.

(3)	Reconciliation of Non-GAAP Measures

•	Impairments, which are excluded because they do not occur in or reflect the ordinary course of the Company’s ongoing business operations and their exclusion results in a metric that provides supplemental information about the sustainability of operating performance.

•	Restructuring and employee severance costs, which include charges for discrete projects or transactions that fundamentally change the Company’s operations and are excluded because they are not part of the ongoing operations of its underlying business, which includes normal levels of reinvestment in the business.

•	Costs related to refinancing, which are excluded because they do not typically occur in the normal course of business and may obscure analysis of trends and financial performance. Additionally, the amount and frequency of these types of charges is not consistent and is significantly impacted by the timing and size of debt financing transactions.

•	Charges or credits incurred by the Company’s joint venture with TruGreen Holding Corporation (the “TruGreen Joint Venture”) that are apart from and not indicative of the results of its ongoing operations, including transaction related costs, refinancing costs, restructurings and other discrete projects or transactions including a non-cash

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•	Discontinued operations and other unusual items, which include costs or gains related to discrete projects or transactions and are excluded because they are not comparable from one period to the next and are not part of the ongoing operations of the Company’s underlying business.

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•

On April 1, 2019, the Company sold all of its noncontrolling equity interest in a joint venture with products supporting the professional U.S. industrial, turf and ornamental market for cash proceeds of $36.6 million. During the three and nine months ended June 29, 2019, the Company recognized a pre-tax gain of $2.9 million related to this sale in the “Other non-operating (income) expense, net” line in the Condensed Consolidated Statements of Operations.

•

On March 19, 2019, the Company entered into an agreement under which it sold, to TruGreen Companies L.L.C., a subsidiary of TruGreen Holding Corporation, all of its approximately 30% equity interest in Outdoor Home Services Holdings LLC, a lawn services joint venture between the Company and TruGreen Holding Corporation (the “TruGreen Joint Venture”). Under the terms of the agreement, the Company received cash proceeds of $234.2 million related to the sale of its equity interest in the TruGreen Joint Venture and $18.4 million related to the payoff of second lien term loan financing. During the three and nine months ended June 29, 2019, the Company recognized a pre-tax gain of zero and $259.8 million, respectively, related to this sale in the “Other non-operating (income) expense, net” line in the Condensed Consolidated Statement of Operations.

•

In connection with the acquisition of Sunlight Supply during the third quarter of fiscal 2018, the Company announced the launch of an initiative called Project Catalyst, which is a company-wide restructuring effort to reduce operating costs throughout the U.S. Consumer, Hawthorne and Other segments and drive synergies from recent acquisitions within the Hawthorne segment. During the three and nine months ended June 29, 2019, the Company continued to execute on its planned facility closures and consolidations which resulted in charges of $0.4 million and $8.0 million, respectively, related to Project Catalyst. During the three and nine months ended June 29, 2019, the Company recognized charges of $(0.1) million and $3.4 million, respectively, in the “Cost of sales—impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations related to employee termination benefits, facility closure costs and impairment of property, plant and equipment. During the three and nine months ended June 29, 2019, the Company recognized charges of $0.5 million and $4.6 million, respectively, in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations related to employee termination benefits and facility closure costs. The Company also recognized a charge of zero and $2.5 million for the three and nine months ended June 29, 2019, respectively, in the “Other non-operating (income) expense, net” line in the Condensed Consolidated Statements of Operations related to the write-off of accumulated foreign currency translation loss adjustments of a foreign subsidiary that was substantially liquidated.

•	During the three and nine months ended June 29, 2019, the Company recognized favorable adjustments of zero and $0.4 million, respectively, related to the previously disclosed legal matter In re Scotts EZ Seed Litigation in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations.

•

During the three and nine months ended June 29, 2019, the Company recognized a favorable adjustment of $22.5 million related to the previously disclosed legal matter In re Morning Song Bird Food Litigation in the “Income (loss) from discontinued operations, net of tax” line in the Condensed Consolidated Statements of Operations as a result of the final resolution of the previously disclosed settlement agreement. In addition, during the three and nine months ended June 29, 2019, the Company recognized insurance recoveries of $8.4 million and $13.4 million, respectively, related to this matter in the “Income (loss) from discontinued operations, net of tax” line in the Condensed Consolidated Statements of Operations.

•

The Company recognized charges of $30.4 million related to Project Catalyst for the three and nine months ended June 30, 2018. This included employee termination benefits of $1.4 million, impairment of property, plant and equipment of $5.9 million, and facility closure costs of $3.8 million recognized in the “Cost of sales—impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations. The Company also recognized a non-cash impairment charge of $17.5 million related to the write-off of previously acquired customer relationship intangible assets due to the acquisition of Sunlight Supply, and employee termination benefits of $1.8 million in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations. Additionally, the Company reduced the value of deferred tax liabilities associated with the above write-off of previously acquired customer relationship intangible assets by $7.3 million, which was recognized in the “Income tax expense from continuing operations” line in the Condensed Consolidated Statement of Operations for the three and nine months ended June 30, 2018.

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•	The Company recognized a charge of $65.0 million for a probable loss related to the previously disclosed legal matter In re Morning Song Bird Food Litigation for the three and nine months ended June 30, 2018 in the “Income (loss) from discontinued operations, net of tax” line in the Condensed Consolidated Statements of Operations.

•	The Company recognized adjustments to previously recognized employee termination benefits related to Project Focus activity of zero and $0.1 million for the three and nine months ended June 30, 2018 in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations.

•	The Company recognized charges of zero and $10.2 million for a probable loss on a previously disclosed legal matter for the three and nine months ended June 30, 2018 in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations.

•

On December 22, 2017, H.R.1 (the “Act,” formerly known as the “Tax Cuts and Jobs Act”) was signed into law. The Act provides for significant changes to the U.S. Internal Revenue Code of 1986, as amended. Among other items, the Act implements a territorial tax system, imposes a one-time transition tax on deemed repatriated earnings of foreign subsidiaries, and reduces the federal corporate statutory tax rate to 21% effective January 1, 2018. As the Company’s fiscal year end falls on September 30, the federal corporate statutory tax rate for fiscal 2018 was prorated to 24.5%, with the statutory rate for 2019 and beyond at 21%. Included in the effective tax rate for the three and nine months ended June 30, 2018 are one-time impacts related to the tax law change of $45.7 million. These include a one-time $45.9 million net tax benefit adjustment reflecting the revaluation of the Company’s net deferred tax liability at the lower tax rate. In addition, as part of the Act, the Company recognized a one-time tax expense on deemed repatriated earnings and cash of foreign subsidiaries as required by the Act of $14.0 million, partially offset by the recognition and application of foreign tax credits associated with these foreign subsidiaries of $13.9 million.

•

As a result of the enactment of the Act, the Company repatriated cash from a foreign subsidiary during the second quarter of fiscal 2018 resulting in the liquidation of substantially all of the assets of the subsidiary and the write-off of accumulated foreign currency translation loss adjustments of zero and $11.7 million for the three and nine months ended June 30, 2018 in the “Other non-operating (income) expense, net” line in the Condensed Consolidated Statements of Operations.