Document:

Exhibit 10.2

 

Exhibit 10.2

ACKNOWLEDGMENT AND CONFIRMATION OF

GUARANTEE AND COLLATERAL AGREEMENTS AND MORTGAGES

          ACKNOWLEDGMENT AND CONFIRMATION OF GUARANTEE AND COLLATERAL AGREEMENTS AND MORTGAGES, dated as
of October 22, 2003 (this “Acknowledgment”), to:

	 	(1)  	the Guarantee and Collateral Agreements;
	 
	 	(2)  	Mortgages (together with the Guarantee and
Collateral Agreements, the “Security Documents”).

W I T N E S S E T H :

          WHEREAS, the Borrower, certain subsidiary borrowers, certain Lenders and other banks and
financial institutions and JPMorgan Chase Bank, as Administrative Agent are parties to the Amended
and Restated Credit Agreement, dated as of December 5, 2000 (as amended, supplemented, amended and
restated or otherwise modified prior to the date hereof, the “Credit Agreement”).
Concurrently with the execution of this Acknowledgment, the Borrower, the Subsidiary Borrowers, the
Lenders and the Administrative Agent will enter into the Second Amended and Restated Credit
Agreement, dated as of October 22, 2003 (the “Second Amendment and Restatement”).

          WHEREAS, each of the parties to each Security Document wishes to acknowledge and confirm that
its obligations and its Liens and security interests created under such Security Document continue
in full force and effect, unimpaired and undischarged, as provided herein;

          WHEREAS, it is a condition precedent to the effectiveness of the Second Amendment and
Restatement that the parties hereto shall have executed this Acknowledgment to the Administrative
Agent for the benefit of the Lenders.

          NOW, THEREFORE, in consideration of the premises contained herein and to induce the
Administrative Agent and the Lenders to amend and restate the Credit Agreement pursuant to the
Second Amendment and Restatement and to induce the Lenders to make and continue extensions of
credit under the Second Amendment and Restatement, each of the signatories hereto hereby agrees
with the Administrative Agent, for the benefit of the Lenders, as follows:

     1. Unless otherwise defined herein, capitalized terms used herein shall have the respective
meanings assigned to them in the Second Amendment and Restatement and the other Loan Documents.

     2. References to the Credit Agreement in the Security Documents shall be references to the
Second Amendment and Restatement.

 

 

     3. Each signatory hereto consents to the execution, delivery and performance of the Second
Amendment and Restatement in accordance with its terms.

     4. Each signatory hereto hereby agrees, with respect to each Security Document to which it is
a party, that to the extent permitted by applicable law:

(a) all of its obligations, liabilities and indebtedness under such Security
Document shall remain in full force and effect on a continuous basis after giving
effect to the Second Amendment and Restatement and this Acknowledgment and its
guarantee of the obligations, liabilities and indebtedness of the other Loan Parties
under the Credit Agreement (or any predecessor agreement) shall extend to and cover
the Term Loans and Revolving Extensions of Credit made under the Second Amendment
and Restatement (including the annexes thereto) and interest thereon and fees and
expenses and other obligations in respect thereof and in respect of commitments
related thereto; and

(b) all of the Liens and security interests created and arising under such Security
Document remain in full force and effect on a continuous basis, and the perfected
status and priority of each such Lien and security interest continues in full force
and effect on a continuous basis, unimpaired, uninterrupted and undischarged, after
giving effect to the Second Amendment and Restatement, as collateral security for
its obligations, liabilities and indebtedness under the Second Amendment and
Restatement (including the annexes thereto) and under its guarantees in the Security
Documents.

     5. Each signatory hereto hereby agrees, with respect to the Borrower and Domestic Subsidiary
Guarantee and Collateral Agreement, dated as of December 4, 1998, among the Borrower, the Domestic
Subsidiary Borrowers, certain other Domestic Subsidiaries of the Borrower and the Administrative
Agent for the benefit of the Lenders, as amended, supplemented or otherwise amended from time to
time, that:

(a) the definition of “Foreign Subsidiary Capital Stock” shall be deleted its
entirety and the following definition shall be added to subsection 1.1:

“Foreign Subsidiary Voting Stock”: the voting Capital Stock of any Foreign
Subsidiary.

(b) the definition of “Foreign Subsidiary” in subsection 1.1 shall be amended such
that the following language shall be added following the word “America”:

“, except for any such Subsidiary which is a “check-the-box” entity
under Regulation section 301.7701-3 of the Code.”

(c) the definition of “Investment Property” in subsection 1.1 shall be substituted
for in its entirety by the following:

“Investment Property”: the collective reference to (i) all investment
property” as such term is defined in Section 9-102(a)(49) of the New York

 

 

UCC (other than any Foreign Subsidiary Voting Stock excluded from the
definition of “Pledged Stock”) and (ii) whether or not constituting
“investment property” as so defined, all Pledged Notes and Pledged Stock.

(d) the definition of “Pledged Stock” in subsection 1.1 shall be amended such that
the words “excluding any Foreign Subsidiary Capital Stock” are deleted and the
following words shall be substituted in lieu thereof:

“; provided that in no event shall more than 65% of the total
outstanding Foreign Subsidiary Voting Stock of any Foreign Subsidiary be
required to be pledged hereunder.”

(e) subsection 4(l) shall become a new subsection 4(m) and a new subsection 4(l)
shall be added as follows:

(l) notwithstanding the limitation on the inclusion of Foreign Subsidiary
Voting Stock in the definition of Investment Property, the remaining 35% of
the outstanding Foreign Subsidiary Voting Stock of any Foreign Subsidiary
Borrower shall be pledged and subject to a grant of a security interest
therein subject to this section 4, provided that such pledge and
grant shall only secure the obligations of such Foreign Subsidiary Borrower
in its capacity as a borrower under the Second Amendment and Restatement;

(f) Subsection 5.2 shall be substituted for in its entirety by the following:

5.2 Perfected First Priority Liens. The security interests
granted pursuant to this Agreement will constitute valid perfected security
interests in all of the Collateral in favor of the Administrative Agent, for
the ratable benefit of the Lenders, as collateral security for such
Grantor’s Obligations, enforceable in accordance with the terms hereof
against all creditors of such Grantor and any Persons purporting to purchase
any Collateral from such Grantor (other than Inventory sold by such Grantor
in the ordinary course of business), to the extent that perfection or
enforceability against third parties is obtainable by completion of the
filings and other actions set forth on Schedule 3 or any similar
filings or other actions in other jurisdictions in the United States of
America and are prior to all other Liens on the Collateral which have
priority over the Liens on the Collateral by operation of law and other
Liens on the Collateral permitted by the Second Amendment and Restatement.

(g) Subsection 5.3 shall be substituted for in its entirety by the following:

5.3 Jurisdiction of Organization. On the date hereof, such
Grantor’s jurisdiction of organization and identification number from the
jurisdiction of organization (if any) are set forth on Schedule 4.
Such Grantor has furnished to the Administrative Agent a certified charter,
certificate of

 

 

incorporation or other organizational document and long-form good standing
certificate as of a date which is recent to the date hereof.

(h) Subsection 5.4 shall be substituted for in its entirety by the following:

5.4 Domestic Subsidiaries. On the date hereof, Schedule
7 sets forth a true and complete list of the Domestic Subsidiaries.

(i) Subsection 5.6(a) shall be substituted for in its entirety by the following:

(a) The shares of the Pledged Stock pledged by such Grantor hereunder
constitute all the issued and outstanding shares of all classes of the
Capital Stock of each Issuer owned by such Grantor or, in the case of
Foreign Subsidiary Voting Stock, if less, 65% of the outstanding Foreign
Subsidiary Voting Stock of each relevant Issuer.

(j) Subsection 5.8(c) shall be substituted for in its entirety by the following:

(c) On the date hereof, none of the Intellectual Property listed on
Schedule 6 is the subject of any licensing or franchise agreement pursuant
to which such Grantor is the licensor or franchisor, other than (i) the
Scotts trademark for the franchising of lawn care services to EG Systems,
Inc., (ii) the Miracle-Gro trademark for the franchising of tree and shrub
care services to EG Systems, Inc., and (iii) the trademark for Ortho Home
Defense Foundation Insect Control for the franchising of insect control
services, to EG Systems, Inc., which in turn grants to local franchisees in
the United States of America to lawn care service, tree and shrub service
and insect control service operators, respectively.

(k) Subsection 6.5 shall be deleted in its entirety.

(l) Subsection 8.3 shall be amended such that the following two sentences
shall be added immediately prior to the last sentence of such subsection 8.3:

“Each Grantor authorizes the Administrative Agent to use the collateral
description “all personal property” in any such financing statements.
Each Grantor hereby ratifies and authorizes the filing by the
Administrative Agent of any financing statement with respect to the
Collateral made prior to the date hereof” and

(m) Schedules 3, 4 and 6 shall be substituted for in their respective entireties
with Schedules 3, 4 and 6 to this Acknowledgment and a new schedule shall be added
in the form of Schedule 7, as described above in subsection 5(h).

     6. Each signatory hereto agrees that it shall take any action reasonably requested by the
Administrative Agent in order to confirm or effect the intent of this Acknowledgment.

 

 

     7. THIS ACKNOWLEDGMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

     8. This Acknowledgment may be executed by one or more of the parties hereto on any number of
separate counterparts (including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

     9. The Borrower hereby agrees to take any and all action necessary to record Mortgages or
amendments thereto on all Mortgaged Properties.

 

 

     IN WITNESS WHEREOF, the undersigned have caused this Acknowledgment to be executed and
delivered by a duly authorized officer on the date first above written.

	 	 	 	 	 
	 	THE SCOTTS COMPANY

 	 
	 	By:  	       /s/ Rebecca J. Bruening
 	 
	 	 	Name:  	Rebecca J. Bruening 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

	 	 	 	 	 
	 	EG SYSTEMS, INC.

 	 
	 	By:  	       /s/ Rebecca J. Bruening
 	 
	 	 	Name:  	Rebecca J. Bruening 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

	 	 	 	 	 
	 	HYPONEX CORPORATION

 	 
	 	By:  	       /s/ Rebecca J. Bruening
 	 
	 	 	Name:  	Rebecca J. Bruening 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

	 	 	 	 	 
	 	MIRACLE-GRO LAWN PRODUCTS, INC.

 	 
	 	By:  	       /s/ Rebecca J. Bruening
 	 
	 	 	Name:  	Rebecca J. Bruening 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

	 	 	 	 	 
	 	OMS INVESTMENTS, INC.

 	 
	 	By:  	       /s/ Rebecca J. Bruening
 	 
	 	 	Name:  	Rebecca J. Bruening 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

	 	 	 	 	 
	 	SCOTTS MANUFACTURING COMPANY

 	 
	 	By:  	       /s/ Rebecca J. Bruening
 	 
	 	 	Name:  	Rebecca J. Bruening 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

	 	 	 	 	 
	 	SCOTTS PRODUCTS CO.

 	 
	 	By:  	       /s/ Rebecca J. Bruening
 	 
	 	 	Name:  	Rebecca J. Bruening 	 
	 	 	Title:  	Vice President and Treasurer 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	SCOTTS PROFESSIONAL PRODUCTS CO.

 	 
	 	By:  	       /s/ Rebecca J. Bruening
 	 
	 	 	Name:  	Rebecca J. Bruening 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

	 	 	 	 	 
	 	SCOTTS-SIERRA CROP PROTECTION COMPANY

 	 
	 	By:  	       /s/ Rebecca J. Bruening
 	 
	 	 	Name:  	Rebecca J. Bruening 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

	 	 	 	 	 
	 	SCOTTS-SIERRA HORTICULTURAL PRODUCTS COMPANY

 	 
	 	By:  	       /s/ Rebecca J. Bruening
 	 
	 	 	Name:  	Rebecca J. Bruening 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

	 	 	 	 	 
	 	SCOTTS-SIERRA INVESTMENTS, INC.

 	 
	 	By:  	       /s/ Rebecca J. Bruening
 	 
	 	 	Name:  	Rebecca J. Bruening 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

	 	 	 	 	 
	 	SCOTTS TEMECULA OPERATIONS, LLC

 	 
	 	By:  	       /s/ Rebecca J. Bruening
 	 
	 	 	Name:  	Rebecca J. Bruening 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

	 	 	 	 	 
	 	SWISS FARM PRODUCTS, INC.

 	 
	 	By:  	       /s/ Rebecca J. Bruening
 	 
	 	 	Name:  	Rebecca J. Bruening 	 
	 	 	Title:  	Vice President and Treasurer 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, as

Administrative Agent

 	 
	 	By:  	       /s/ Randolph Cates
 	 
	 	 	Name:  	Randolph Cates 	 
	 	 	Title:  	Vice PresidentExhibit 10.3

 

Exhibit 10.3

CONFORMED COPY

ACKNOWLEDGMENT AND CONFIRMATION

     ACKNOWLEDGMENT AND CONFIRMATION, dated as of March 18, 2005 (this “Acknowledgment”),
by THE SCOTTS COMPANY LLC, an Ohio limited liability company and successor by merger to The Scotts
Company (“Scotts LLC”), relating to the Security Documents (as defined below), in favor of
JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as administrative agent (in such
capacity, the “Administrative Agent”) for the banks and other financial institutions (the
“Lenders”) parties to the Credit Agreement referred to below.

W I T N E S S E T H :

     WHEREAS, concurrently with the execution of this Acknowledgment, The Scotts Company (the
“Existing Borrower”) will effect a corporate reorganization (the “Reorganization”),
as permitted by subsection 7.3(d) of the Credit Agreement;

     WHEREAS, in connection with the Reorganization, The Scotts Miracle-Gro Company will become the
“Borrower” under the Second Amended and Restated Credit Agreement, dated as of October
22, 2003 (as amended by the First Amendment, dated as of August 13, 2004, and the Second Amendment,
dated as of November 5, 2004, the “Credit Agreement”) by and among the Existing Borrower,
certain subsidiaries of the Existing Borrower from time to time party thereto, the Lenders and the
Administrative Agent, and each of the other Loan Documents;

     WHEREAS, Scotts LLC wishes to acknowledge and confirm that the obligations, liabilities and
indebtedness of the Existing Borrower and the Liens and security interests created by the Existing
Borrower under each of the Security Documents to which the Existing Borrower is a party (the
“Security Documents”) continue in full force and effect, unimpaired and undischarged, as
provided herein;

     WHEREAS, Scotts LLC wishes to acknowledge and confirm that as of, and after the date hereof,
it shall be a Guarantor under the Borrower and Domestic Subsidiary Guarantee and Collateral
Agreement, dated as of December 4, 1998 (as amended, supplemented or otherwise modified from time
to time, the “Guarantee and Collateral Agreement”), made by the Existing Borrower and
certain of its Affiliates in favor of the Administrative Agent for the benefit of the Lenders;

     WHEREAS, in connection with the Reorganization, the Administrative Agent has requested that
Scotts LLC shall have executed this Acknowledgment to the Administrative Agent for the benefit of
the Lenders;

     NOW, THEREFORE, in consideration of the premises, the parties hereto hereby agree as follows:

     1. Unless otherwise defined herein, capitalized terms used herein shall have the respective
meanings assigned to them in the Credit Agreement and the other Loan Documents.

 

 

     2. Scotts LLC, as successor by merger to the Existing Borrower, hereby agrees, with respect
to each Security Document, that to the extent permitted by applicable law:

     (a) all of its obligations, liabilities and indebtedness under such Security Document shall
remain in full force and effect on a continuous basis after giving effect to the Reorganization and
this Acknowledgment; and

     (b) all of the Liens and security interests created by it and arising under such Security
Document remain in full force and effect on a continuous basis, and the perfected status and
priority of each such Lien and security interest continues in full force and effect on a continuous
basis, unimpaired, uninterrupted and undischarged, after giving effect to the Reorganization and
this Acknowledgment, as collateral security for its obligations, liabilities and indebtedness under
the Loan Documents.

     3. Scotts LLC hereby agrees, that on and after the date hereof, it shall be a Guarantor under
the Guarantee and Collateral Agreement.

     4. Scotts LLC hereby further agrees that it shall take any action reasonably requested by the
Administrative Agent in order to confirm or effect the intent of this Acknowledgment.

     5. THIS ACKNOWLEDGMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

     6. This Acknowledgment may be executed by one or more of the parties hereto on any number of
separate counterparts (including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

[remainder of page intentionally left blank]

 

 

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

	 	 	 	 	 
	 	THE SCOTTS MIRACLE-GRO COMPANY

 	 
	 	By:  	/s/  James Hagedorn
 	 
	 	 	Name:  	James Hagedorn 	 
	 	 	Title:  	Chairman, President and Chief Executive Officer 	 
	 

ACKNOWLEDGED AND AGREED TO:

JPMORGAN CHASE BANK, N.A. (formerly known as JPMorgan Chase Bank), as Administrative Agent

	 	 	 	 	 
	By:

	 	/s/ Randolph Cates
	 	 
	

	 	Name: Randolph Cates	 	 
	

	 	Title: Vice President

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