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FIRST AMENDMENT
TO
ASSET PURCHASE AGREEMENT
BY AND AMONG
THE CLOROX COMPANY,
A&M PRODUCTS MANUFACTURING COMPANY,
THE CLOROX PET PRODUCTS COMPANY,
THE CLOROX SALES COMPANY,
THE CLOROX COMPANY OF CANADA, LTD.,
AND
OIL-DRI CORPORATION OF AMERICA
THIS FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT, is made as of December
13, 2002 (this "Amendment"), by and among The Clorox Company, a Delaware
corporation ("CLOROX"), A&M Products Manufacturing Company, a Delaware
corporation ("A&M"), The Clorox Pet Products Company, a Texas corporation
("CPP"), The Clorox Sales Company, a Delaware corporation ("CSC"), and The
Clorox Company of Canada, Ltd., a Canadian corporation ("CCC" and, together with
Clorox, A&M, CPP and CSC, "SELLERS"), and Oil-Dri Corporation of America, a
Delaware corporation ("BUYER").
W I T N E S S E T H:
WHEREAS, Buyer and Sellers have previously entered into that certain Asset
Purchase Agreement dated as of November 19, 2002 (the "Agreement"); and
WHEREAS, Buyer and Sellers desire to amend the Agreement in certain
respects, as provided herein.
NOW, THEREFORE, in consideration of the premises and the other agreements
contained herein and in the Agreement, the parties hereto hereby agree as
follows:
Section 1. AMENDMENT TO AGREEMENT.
1.1 The date of December 10, 2002 referred to in Sections 1.2(a), 4.4,
7.1(D), and 7.1(F) of the Agreement is hereby changed in each such
section to December 13, 2002.
1.2 The following is hereby added to the Agreement as new paragraph (d)
of Section 1.1:
"(d) Payments from Customers, Customer Deductions and
Unsaleables.
(1) PAYMENTS FROM CUSTOMERS. The parties recognize that any Seller
or Buyer (or Buyer's Designees) may receive customer payments
intended for the other party. Payments from customers shall be
credited to the party who issued the invoice(s) in question. If
the underlying invoice(s) pertaining to a particular payment
cannot be determined, they will be applied first to amounts
outstanding under Sellers' outstanding invoices and the
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remainder to Buyer's if received prior to January 15, 2003 and
they will be applied first to Buyer's outstanding invoices and
the remainder to Sellers' thereafter.
(2) CUSTOMER DEDUCTIONS. Similarly, deductions taken by a customer
shall be the responsibility of the party to whose invoice(s) the
deduction relates. The parties will endeavor to determine which
invoice(s) a given deduction relates to if it is not clear. If
the underlying invoice(s) pertaining to a particular deduction
cannot be determined, the responsibility for such deductions
will be borne by Sellers if the deduction is received prior to
January 15, 2003 and by Buyer thereafter.
(3) UNSALEABLES. Unsaleable claims made by a customer shall be the
responsibility of the party to whose invoice(s) the claim
relates. The parties will endeavor to determine which invoice(s)
a given claim relates to if it is not clear. For those claims
not readily identifiable, the parties agree that such claims
made by customers prior to January 15, 2003 shall be the
responsibility of Sellers and such claims made thereafter shall
be the responsibility of Buyer. After January 15, 2003, Buyer
will submit one statement per month to the Sellers verifying
unsaleable claims that are the responsibility of the Sellers and
that, individually or in the aggregate, exceed $10,000.
(4) BASKET. The adjustments and payments made and costs incurred
under this Section shall not be subject to nor charged against
the $120,000 indemnification basket in Section 8.2(b) hereof.
(5) ADJUSTING PAYMENTS. The parties will make adjusting payments to
one another as necessary to carry out the purposes of this
Section.
(6) GOOD FAITH DEALING. Neither party will invite or induce
customers to take deductions or make claims for unsaleables.
1.3 Sub-paragraph (viii) of Section 1.2(b) is hereby amended and restated
to read in its entirety as follows:
"(viii) A&M, CPP, CSC and CCC each shall deliver to Buyer a certified
copy of the resolutions duly adopted by its Board of Directors (or,
in the case of CCC, a certified copy of the resolutions duly adopted
by its shareholder) authorizing the execution, delivery and
performance of this Agreement and each of the other Transactional
Agreements to which it is a party, and the consummation of the
transactions contemplated by this Agreement and the Transactional
Agreements to which it is a party;"
Sub-paragraph (xv) of Section 1.2(b) is hereby amended to replace the
reference to "A&M" therein with "Clorox".
1.4 The following sub-paragraph is hereby added to Section 1.2(b):
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"(xvi) A&M and Buyer shall enter into an agreement relating to
purchase of Blue Clay Chip for Fresh Step Coarse Clay Cat Litter from
Buyer."
1.5 SECTIONS 2.9(A)-(C) of the Agreement are hereby amended and restated
to read in their entirety as follows:
"2.9 UNPATENTED MINING CLAIMS, MILL SITES, SURFACE
RIGHTS AND WATER RIGHTS.
(a) The Unpatented Mining Claims and Mill Sites identified on SCHEDULE
2.9(A) contain the information specified below for each such
Unpatented Mining Claim and Mill Site and are, to the knowledge of
Sellers, all of the Unpatented Mining Claims and Mill Sites owned by
Sellers in the vicinity of the Xxxx Facility.
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Name of Date of County Recording BLM Serial
Claim Location Data No.
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Date Book Page
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(b) With respect to the Unpatented Mining Claims and the Mill
Sites, subject only to the paramount title of the
United States, to the knowledge of Sellers: (i) the
Unpatented Mining Claims and Mill Sites were laid out
and monumented consistent with industry practices on
federal lands which were open to entry under the Mining
Law of 1872 at the time of location; (ii) location
notices and certificates were properly recorded and
filed with appropriate governmental authorities; (iii)
(with respect to the Unpatented Mining Claims only)
affidavits of assessment work, notices of intent to
hold, or verified reports were timely and duly recorded
and filed with appropriate agencies for each of the
Unpatented Mining Claims for each year for all
assessment years during which the performance of
assessment work was required by law and for which such
affidavit, notice or report was required to be filed,
except as set forth in Schedule 2.9(b); (iv) payments
of rental fees or maintenance fees in lieu of
assessment work were timely paid for each assessment
year when such payments were required by Law and
affidavits thereof were timely filed with and recorded
in the local offices of the appropriate Governmental
Body insofar as required or allowed by applicable Law,
except as set forth in Schedule 2.9(b); (v) the work
and expenditures described in said affidavits, notices
and reports were in fact made and performed in a good
faith effort to satisfy assessment work requirements;
(vi) the Unpatented Mining Claims and Mill Sites are
free and clear of liens, production royalties, advance
royalties, rents, bonuses or bonus payments or finder's
fees in favor of any Person; (vii) Sellers have no
knowledge of conflicting claims or activities or
possession by third parties in anticipation of such
claims, except as set forth in SCHEDULE 2.9(B); and
(viii) a predecessor-in-interest of one or more of
Sellers located each such Unpatented Mining Claim and
Mill Site under the Mining Law of 1872.
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(c) To Sellers' knowledge, Sellers have not received any notice
stating that A&M does not have surface rights of ingress
and egress and use of the surface of the Unpatented Mining
Claims for mining and related purposes."
1.6 Section 2.10(a) of the Agreement is hereby amended by deleting the
reference to "June 30, 2002" therein and replacing it with "June 25,
2002."
1.7 SECTION 2.11 of the Agreement is hereby amended by deleting the
second sentence thereof and replacing it with the following:
"The amount and value of Inventory being sold hereunder is at a level
in amount and fair market value at least equal to one million two
hundred thousand dollars ($1,200,000), with a three percent (3%)
allowance for unsalable or slow-moving Inventory, as determined by a
count as of the Closing Date."
1.8 SECTION 4.3(J) of the Agreement is hereby amended and
restated to read in its entirety as follows:
"Sellers shall cause the accrued benefits of each Transferring
Employee under Sellers' qualified retirement plans as of the Closing
Date to become fully vested. In no event would Buyer, during the
ninety (90) day period following the Closing, terminate without cause
more than twenty-five (25) Transferring Employees."
1.9 Section 5.10 of the Agreement is hereby amended to delete item 1 from
the list of optional Table A items therein.
1.10 SECTION 8.3(A) of the Agreement is hereby amended and restated to
read in its entirety as follows:
"Buyer shall hold harmless and indemnify the Seller Indemnitees from
and against, and shall compensate and reimburse the Seller
Indemnitees for, any Damages that are suffered or incurred by the
Seller Indemnitees or to which the Seller Indemnitees may otherwise
become subject at any time (regardless of whether or not such Damages
relate to any Third Party Claim) and that arise directly or
indirectly from (i) any Breach of any of the representations or
warranties made by Buyer in this Agreement or in the Closing
Certificate of Buyer, (ii) any Breach of any covenant or agreement of
Buyer, or any Buyer Designee, contained in this Agreement or any
other Transactional Agreement (other than the Jonny Cat Copack
Termination Agreement and the Fresh Step Coarse Clay Amendment) to
the extent not waived by Sellers, (iii) any claims for severance with
respect to Transferring Employees arising out of Buyer's termination
of any Transferring Employee after the Closing Date, or (iv) any
Third Party Claims or threatened claims against Sellers arising out
of the actions or inactions of Buyer or any Buyer Designee after the
Closing Date with respect to the Assets or the operation of the
Business after the Closing Date."
1.11 SECTION 11.4(A) of the Agreement is hereby amended and
restated to add the following to said Section:
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"Subject to the sharing requirement above, Buyer shall pay Xxxx
County real property transfer taxes at Closing, and Sellers shall pay
all California personal property transfer and use taxes at Closing.
It is anticipated that, on or prior to the Closing, Sellers will pay
in excess of their share of Transfer Taxes hereunder and will pay in
excess of their portion of real property taxes with respect to the
Real Property and the Mining Claims; accordingly, Buyer agrees to
reimburse Sellers for such overpayment promptly after Closing. Buyer
and each Buyer Designee that will acquire inventory from Sellers
pursuant to this Agreement shall deliver to Sellers a copy of its
California sales or use tax resale or exemption certificates
indicating Buyer and each such Buyer Designee is exempt from sales or
use tax that may become payable in connection with the sale of
inventory from Sellers to Buyer or such Buyer Designee, as well as
the resale registration numbers of Buyer and each applicable Buyer
Designee from each state in which Inventory is located. The Canadian
Buyer Designee and Buyer each shall provide Sellers with such
Canadian Goods and Services registration evidence and Ontario resale
registration evidence as Sellers may reasonably require.
Notwithstanding anything herein to the contrary, Buyer shall be
solely liable for payment of all sales and/or use tax payable on the
purchase of Inventory from Sellers in each state for which such
certificates and registration numbers are not provided to Seller at
Closing, and Buyer shall be solely liable for any taxes payable as a
result of the failure of Buyer and/or any Buyer Designee to have any
of the above-referenced Canadian registrations."
1.12 SECTION 12.6 of the Agreement is hereby amended and restated
to read in its entirety as follows:
"This Agreement shall be binding upon, and inure to the benefit of,
the parties hereto and their respective successors and assigns. No
party may assign its rights or delegate its duties and obligations
under this Agreement without the prior written consent of the other
parties, which may be withheld in the sole and absolute discretion of
such party; provided, however, Buyer shall have the right at any time
prior to the Closing to assign this Agreement (and all, or any
portion, of its rights, remedies, duties and obligations hereunder),
without the consent of Sellers, to one or two Affiliates of Buyer
under Buyer's Control (each a "BUYER DESIGNEE"). Any permitted
assignment by a party of its rights under this Agreement shall not
relieve such party of its covenants and obligations hereunder. Any
reference to Buyer in this Agreement shall, to the extent applicable,
also be deemed a reference to the applicable Buyer Designee, except
where in the context of this Agreement such use would not be
appropriate. Except for the provisions of SECTION 8 hereof and
Buyer's acknowledgment and agreement regarding manufacturing,
know-how, processes and formula in SECTION 1.1, none of the
provisions of this Agreement is intended to provide any rights or
remedies to any Person other than the parties to this Agreement and
their respective successors and permitted assigns (if any). Without
limiting the generality of the foregoing, no employee or creditor of
Clorox or any Clorox Subsidiary shall have any rights under this
Agreement or under any of the other Transactional Agreements."
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1.13 The definition of "Assumed Contracts" in EXHIBIT A is hereby amended
and restated to read in its entirety as follows:
"ASSUMED CONTRACTS. "Assumed Contracts" shall mean (a) the Contracts
identified in SCHEDULE 2.13, as supplemented, (b) all purchase orders
existing as of the Closing and relating to goods ordered by Sellers
for use exclusively at the Xxxx Facility in connection with the
Business, and (c) all obligations of continued performance under
executory sales orders for Jonny Cat Product existing as of the
Closing."
1.14 The definition of "Encumbrance" in EXHIBIT A is hereby amended and
restated to read in its entirety as follows:
"ENCUMBRANCE. "Encumbrance" shall mean any lien, pledge,
hypothecation, charge, mortgage, deed of trust, or security
interest."
1.15 The definition of "Mining Claims" in EXHIBIT A is hereby amended and
restated to read in its entirety as follows:
"MINING CLAIMS. "Mining Claims" shall mean (a) all BLM and other
governmental and third party claims and leases identified on EXHIBIT
C attached hereto and made a part hereof, whether or not located and
held by Sellers under the Mining Law of 1872, as amended, 30 U.S.C.
ss.21 et seq. (the "MINING LAW OF 1872"), which relate to the Assets
(collectively, the "UNPATENTED MINING CLAIMS"), (b) all mill site
claims or reductions related thereto (the "MILL SITES") and (c) all
related claims, refunds, causes of action, choses in action, rights
of recovery and rights of set-off of every kind and nature arising as
of or by reason of events occurring subsequent to Closing."
1.16 The parties hereby agree to the Asset Allocation Statement set forth
hereto as Exhibit "A."
Section 2. MISCELLANEOUS.
2.1 The Agreement is incorporated herein by this reference.
2.2 Except as otherwise set forth herein, the Agreement shall remain in
full force and effect and the parties shall have all the rights and
remedies provided thereunder.
2.3 The provisions hereof shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns.
2.4 This Amendment may be executed and delivered in several counterparts
with the intention that all such counterparts, when taken together,
shall constitute one and the same instrument.
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2.5 One or more counterparts of this Amendment may be delivered by
facsimile, with the intention that delivery by such means shall have
the same effect as delivery of an original counterpart thereof.
2.6 The section headings contained in this Amendment are for convenience
of reference only and in no way shall modify any of the terms or
provisions hereof or of the Agreement.
2.7 Capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have entered into this Amendment as
of the day and year first above written.
BUYER SELLERS
OIL-DRI CORPORATION OF AMERICA, a THE CLOROX COMPANY, a Delaware
Delaware corporation corporation
By: By:
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Name: Name:
-------------------------- ---------------------
Title: Title:
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A&M PRODUCTS MANUFACTURING
COMPANY, a Delaware corporation
By:
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Name:
---------------------
Title:
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THE CLOROX PET PRODUCTS COMPANY,
A Texas corporation
By:
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Name:
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Title:
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THE CLOROX SALES COMPANY, a
Delaware corporation
By:
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Name:
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Title:
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THE CLOROX COMPANY OF CANADA,
LTD., a Canadian corporation
By:
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Name:
---------------------
Title:
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