STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into as of the 20th day of June, 1997,
by and between Healthy American Products, Inc., a Minnesota corporation (the
"Purchaser") and Xxxxxxx X. Xxxxx (the "Seller").
WHEREAS, Seller is the owner of 4,200,000 shares of Common Stock, $.01 par
value per share (the "Stock"), of Sunbelt Nursery Group, Inc., a Delaware
corporation (the "Company"); and
WHEREAS, Purchaser desires to purchase and acquire 1,000,000 shares of the
Stock (the "Shares") from Seller and Seller desires to sell, assign and transfer
the Shares to Purchaser, on the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. SALE AND PURCHASE OF SHARES. At the Closing (as hereinafter defined),
Purchaser shall purchase the Shares from Seller and Seller shall sell, transfer,
assign and deliver the Shares to Purchaser free and clear of all security
interests, liens, claims, charges, encumbrances, or legends of any kind, except
for the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH
SECURITIES MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH
SECURITIES UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT.
2.PURCHASE PRICE. In exchange for the Shares, Purchaser shall pay
$1,125,000, which shall be delivered to Seller at the Closing by certified check
or bank draft, payable jointly to Seller and the bank holding the Shares as
collateral for Seller's loan, at which time the bank shall release its lien on
the Shares.
0.XXXXXXXX OF STOCK CERTIFICATE. The sale and purchase of the Shares
contemplated by this Agreement shall be effectuated by Seller's delivering to
Purchaser at the Closing the certificate(s) representing the Shares, which
certificate(s) shall be duly endorsed in blank or accompanied by an appropriate
Assignment Separate from Certificate duly executed in blank and appropriate
releases from the holder of any lien.
4.REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby represents and
warrants to Purchaser as follows:
a.Seller is the lawful owner of record and beneficially of the Shares
and will transfer the Shares to Purchaser at the Closing free and clear of
all security interests, liens, claims, charges, options, encumbrances and
restrictions.
b.Seller has not granted any options or other rights to purchase all
or any part of the Shares to any third party which will not be duly
terminated on or before the Closing.
c.Seller has the full power and authority to execute, deliver and
perform this Agreement.
d.This Agreement constitutes the legal, valid and binding obligation
of Seller enforceable in accordance with its terms.
x.Xx consent, approval or authorization of or permit or license from
or registration with or notice to any governmental or public body or
authority or any third party is required to be obtained or given by Seller
in connection with the making or performance of this Agreement or any
document or instrument related hereto, or, if so required, such consent,
approval, authorization, permit or license will have been requested and
obtained or such registration will have been made or such notice will have
been given or such other appropriate action will have been taken on or
prior to the Closing.
f.The execution and delivery of this Agreement does not and the
consummation of the transaction contemplated hereby will not (i) violate
any provision of the Articles of Incorporation or Bylaws of the Company,
(ii) violate any provision of or result in the termination of or the
acceleration of the obligation under any mortgage, lien, lease, franchise,
license, permit, agreement, instrument, indenture, order, arbitration or
judgment or decree to which Seller or the Company is a party or by which
Seller or the Company is obligated, or (iii) violate or conflict with any
other restriction of any kind or character to which Seller or the Company
is subject.
g.Neither this Agreement nor any exhibit or other instrument furnished
to Purchaser pursuant to this Agreement or in connection with the
transactions contemplated by this Agreement contains or will contain any
false statement of a material fact or omits or will omit to state a
material fact necessary in order to make statements contained therein not
misleading.
5.REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby warrants
and represents to Seller as follows:
a.This Agreement has been duly and validly executed and delivered by
Purchaser and constitutes the valid and legally binding obligation of
Purchaser, enforceable in accordance with its terms.
2
b.Purchaser has the full power and authority to execute, deliver and
perform this Agreement.
c.Neither this Agreement nor any exhibit or other instrument furnished
by Purchaser pursuant to this Agreement or in connection with the
transactions contemplated hereby contains or will contain any false
statements of a material fact or omits or will omit to state a material
fact necessary in order to make the statements therein not misleading.
d.Purchaser is aware that the Shares represent a speculative
investment, and Purchaser is generally knowledgeable regarding the past and
present operations of the Company and the terms of this Agreement and
Purchaser acknowledges that his investment is made without reliance on any
representations, warranties or statements of Seller except as made herein.
e.Purchaser understands that the Shares have not been registered under
the laws of any state or the Securities Act of 1933, as amended
(hereinafter referred to as the "Act"), and that Seller is transferring the
Shares to Purchaser in reliance upon exemptions from registration
requirements of the Act.
f.Purchaser is acquiring the Shares for investment and not for the
purpose of or with a view to the sale or other distribution thereof, and
Seller is transferring the Shares to Purchaser in reliance upon the truth
of Purchaser's representations and warranties.
6.REGISTRATION AGREEMENT. Concurrently with the Closing of the purchase of
the Shares and as a condition precedent thereto, the Company will enter into a
registration agreement (the "Registration Agreement") with Purchaser providing
for demand registration rights in favor of Purchaser pursuant to which Purchaser
will be permitted to demand that the Company register the Shares for sale at any
time, but not to exceed two registrations within the seven-year period following
Closing, and participatory registration rights during the same period. Such
registration agreement shall contain customary indemnity and other provisions.
7.CO-SALE RIGHT. Seller agrees with Purchaser that in the event that
Seller sells any of his remaining shares of the Stock, other than on the open
market, Seller will give Purchaser written notice of the price and terms of such
sale at least ten (10) business days prior to the closing, and Purchaser shall
be entitled to participate in such sale on a pro rata basis. In addition, in
the event that Seller determines to sell his shares of Stock pursuant to a
registration under the Act, Seller shall provide advance notice to Purchaser so
as to allow Purchaser to participate in such registration. Notwithstanding any
provision of this Agreement to the contrary, Purchaser's co-sale rights under
this paragraph 7 shall not apply to the pending transfer by Seller of 1,000,000
of his shares to Pier I at any time during the next six (6) months hereafter nor
to the registration of said 1,000,000 shares as a precondition to and part of
said transfer to Pier I.
8.DIRECTOR POSITION. Seller agrees to use his best efforts to cause a
representative of the Purchaser to be elected as one of the members of the Board
of Directors of the Company
3
so long as the Purchaser holds at least 500,000 shares of Stock. The election
of Xxxxxx X. Xxxxxxx to the Board of Directors satisfies this requirement.
9.CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER. Unless waived in
writing by Purchaser, each and every obligation and agreement of Purchaser under
this Agreement to be performed at or before the Closing shall be subject to the
satisfaction at or prior to the Closing of each and all of the following
conditions precedent, which conditions Seller will in good faith endeavor to
satisfy:
a.The representations and warranties by Seller set forth in this
Agreement shall be true and correct in all material respects at and as of
the Closing to the same extent and with the same effect as if such
representations and warranties were made as of the Closing.
x.Xx administrative or judicial suit or proceeding shall be threatened
or pending in which it will be or which it is sought, by anyone, to
restrain, prohibit, challenge or obtain damages or other relief in
connection with this Agreement or the consummation of the transactions
contemplated hereby.
c.All actions, proceedings, instruments and documents required of
Seller to carry out the transactions contemplated by this Agreement or
incidental thereto and all other related legal matters shall have been
reasonably satisfactory to and approved by counsel for Purchaser, and such
counsel shall have been furnished with such documents as counsel shall have
reasonably requested.
d.Seller shall have performed and complied with all of the agreements,
covenants and conditions required by this Agreement to be performed or
complied with by him at or prior to the Closing.
e.The Company, pursuant to authority conferred by a resolution adopted
by disinterested members of its board of directors, shall have executed and
delivered the Registration Agreement described in Section 6 hereof.
10.CLOSING. The Closing of the purchase and sale of the Shares
contemplated by this Agreement shall be at 9:30 a.m., _________________________,
1997 at ________________________________________________________________________
or on such other day and at such other time and place as may be mutually agreed
upon in writing by the parties hereto. Such time and date are referred to in
this Agreement as the "Closing."
11.SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The statements,
representations, warranties, covenants, agreements and indemnities of Purchaser
and Seller contained in this Agreement and in any certificate, instrument or
document delivered by or on behalf of any of the parties hereto pursuant to this
Agreement and the transactions contemplated hereby shall survive the Closing and
the consummation of the transactions contemplated hereby.
INDEMNIFICATION. Seller hereby covenants and agrees with Purchaser that he
shall pay and perform, and shall defend and indemnify Purchaser and its
successors and assigns (collectively the
4
"Indemnified Parties"), and hold the Indemnified Parties harmless from, against
and in respect of any and all costs, losses, claims, liabilities, fines,
penalties, damages and expenses (including, without limitation, interest which
may be incurred in connection therewith and court costs and reasonable fees and
disbursements of counsel) resulting from, arising out of or incurred by any of
them in connection with any breach of the representations, warranties, covenants
or agreements of Seller contained in this Agreement.
Seller shall be deemed to have a period of thirty (30) days after written notice
from Purchaser of any claim under this paragraph 11 within which to remedy, take
appropriate responsibility for or cure any such claim before a default or an
event of default is deemed to exist hereunder.
12.BROKERS. Purchaser and Seller each hereby warrant and represent to the
other that all negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on without the introduction or involvement
of any broker, finder or other third person (other than their respective
attorneys) employed by either Purchaser or Seller and no such person or entity
has or will have any valid claim against any of the parties hereto for any
brokerage commission or other like payment.
13.FURTHER ACTS. Purchaser and Seller shall each, without further
consideration, execute such additional documents as may be reasonably required
in order to carry out the purposes and intent of this Agreement and to fulfill
the obligations of the respective parties hereto.
14.NOTICES. All notices and other communications provided for hereunder
shall be in writing and shall be personally delivered or mailed to each party at
the address as set forth below or at such other address or in such other manner
as may be designated by such party in a written notice to the other party. All
such notices and communications shall be effective when delivered in person or
transmitted by confirmed telex or similar means or upon receipt after dispatch
by certified or registered first class mail, postage prepaid, return receipt
requested, to the party to whom the same is given or made:
If to Purchaser: Healthy American Products, Inc.
c/o Burwell Enterprises
0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
5
With a copy to: Xxxxxxx X. Xxxxxx, Esq.
Xxxx & Xxxxxxx
A Professional Association
Xxxxxxx Xxxxxx
Xxxxx Xxxxxxx Xx.
Xxxxxxxxxxx, XX 00000-0000
If to Seller: Xxxxxxx X. Xxxxx
000 Xxxxxxxx Xxxx
Xxxx Xxxxx, XX 00000
With a copy to: Xxxxxxx XxXxxxx, Esq.
4545 IDS Center
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
15.ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties hereto relating to the subject matter hereof and supersedes all prior or
contemporaneous agreements and understandings, oral or written, between the
parties hereto with respect to the subject matter hereof.
00.XX WAIVER; REMEDIES CUMULATIVE. No failure on the part of a party
hereunder to exercise and no delay in exercising any rights hereunder shall
operate as a waiver thereof nor shall any single or partial exercise of any
rights hereunder preclude any other or further exercise thereof or the exercise
of any other right. Remedies herein provided are cumulative and not exclusive
of any other remedy provided by law.
17.AMENDMENT. No amendment or modification of any provision of this
Agreement shall be effective unless the same shall be in writing and signed by
both of the parties hereto.
18.HEIRS, REPRESENTATIVES AND ASSIGNS. This Agreement, and the terms,
covenants and conditions hereof, shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, personal representatives,
successors and assigns.
19.GOVERNING LAW. This Agreement shall be deemed to be a contract made
under and shall be construed, interpreted governed by and enforced in accordance
with the internal laws (but not the laws of conflict) of the State of Minnesota.
20.COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same agreement.
6
21.HEADINGS. The headings to the paragraphs of this Agreement are intended
for the convenience of the parties only and shall in no way be held to explain,
modify, amplify or aid in the interpretation of the provisions hereof.
22.SEVERABILITY. The provisions of this Agreement shall be deemed
severable and if any portion hereof shall be held invalid, illegal or
unenforceable for any reason, the remainder shall not thereby be invalidated but
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
SELLER: PURCHASER:
HEALTHY AMERICAN PRODUCTS, INC.
/S/XXXXXXX X. DUOOS________ By /S/XXXXXX X. BURWELL________________
Xxxxxxx X. Xxxxx Xxxxxx X. Xxxxxxx
Its CHAIRMAN_____________________
7
