EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
Agreement entered into on December 11, 2002, by and between Easy
Gardener Products, Ltd., a Texas limited partnership (the "Buyer"), EYAS
International, Inc., a Texas corporation and an affiliate of Buyer ("EYAS"),
U.S. Home & Garden Inc., a Delaware corporation (the "Parent"), Easy Gardener,
Inc., a Delaware corporation and wholly-owned subsidiary of Parent ("Easy
Gardener"), Ampro Industries, Inc., a Michigan corporation and wholly-owned
subsidiary of Parent ("Ampro") (each of Easy Gardener and Ampro is sometimes
referred to herein as a "Seller" and collectively, as the "Sellers") and Weed
Wizard Acquisition Corp., a wholly-owned subsidiary of Easy Gardener ("Weed
Wizard"). The Buyer, the Sellers, Parent, Weed Wizard and EYAS are referred to
collectively herein as the "Parties."
This Agreement contemplates a transaction in which the Buyer will
purchase substantially all of the assets of Sellers and certain assets of Parent
and Weed Wizard and assume all liabilities of the Sellers (other than the
Excluded Liabilities as herein defined) and certain liabilities of Parent in
return for cash and other consideration.
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows.
1. Definitions.
"Acquired Assets" means all right, title, and interest in and to
(i) all of the assets of the Sellers, other than the Excluded Assets (defined
below), including Sellers' (a) real property, leaseholds and sublease holds
therein, improvements, fixtures, and fittings thereon, and easements,
rights-of-way, and other rights appurtenant thereto (such as appurtenant rights
in and to public streets), (b) tangible personal property (such as machinery,
equipment, inventories of raw materials and supplies, manufactured and purchased
parts, goods in process and finished goods, furniture, automobiles, trucks,
tractors, trailers, tools, jigs and dies), (c) Intellectual Property, goodwill
associated therewith, licenses and sublicenses granted and obtained with respect
thereto, and rights thereunder, remedies against infringements thereof, and
rights to protection of interests therein under the laws of all jurisdictions,
(d) leases, subleases, and rights thereunder, (e) agreements, contracts,
indentures, mortgages, instruments, guaranties, other similar arrangements, and
rights thereunder, (f) accounts, notes, and other receivables, (g) the capital
stock of Easy Gardener UK Ltd., a company organized under the laws of England
and wholly-owned subsidiary of Easy Gardener ("Easy Gardener UK"), and of
Xxxxxxxxx Consumer Products Group, Inc., a Delaware corporation and wholly-owned
subsidiary of Easy Gardener ("Xxxxxxxxx Group"), which corporation has as its
wholly-owned subsidiary Xxxxxxxxx Consumer Products, Inc., a Delaware
corporation ("Xxxxxxxxx Sub") (each of Xxxxxxxxx Group and Xxxxxxxxx Sub is
sometimes referred to herein as an "Acquired Subsidiary" and collectively as the
"Acquired Subsidiaries"), (h) claims, deposits, prepayments, refunds, causes of
action, causes in action, rights of recovery, rights of set off, and rights of
recoupment (excluding any such item relating to the payment of Taxes), (i)
franchises, approvals, permits, licenses, orders, registrations, certificates,
variances, and similar rights obtained from governments and
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governmental agencies, (j) books, records, ledgers, files, documents,
correspondence, lists, architectural plans, drawings, and specifications,
creative materials, advertising and promotional materials, studies, reports, and
other printed or written materials which are not included in the Excluded Assets
and (k) Cash; (ii) the 251,981 Trust Preferred Securities owned by Parent and
all of the Trust Common Securities of U.S. Home and Garden Trust I, a Delaware
business trust and wholly-owned subsidiary of Parent ("Trust"), and (iii) the
accounts receivable of Weed Wizard.
"Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act of 1934, as amended.
"Assumed Liabilities" means (i) all of the Liabilities of Sellers
other than the Excluded Liabilities and (ii) those Liabilities set forth on
Exhibit A.
"Buyer" has the meaning set forth in the preface above.
"Cash" means cash and cash equivalents, held by Sellers on the
Closing Date hereof (including marketable securities and short term investments)
calculated in accordance with GAAP applied on a basis consistent with the
preparation of the Financial Statements.
"Closing" has the meaning set forth in Section 2(d) below.
"Closing Date" means the date upon which the Closing is effected,
which shall be the date of the Closing unless the Parties mutually agree upon a
different effective date.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means any information concerning the
businesses and affairs of the Sellers that is not already generally available to
the public.
"Excluded Assets" shall mean (i) the Sellers' corporate charters,
qualifications to conduct business as a foreign corporation, arrangements with
registered agents relating to foreign qualifications, taxpayer and other
identification numbers, seals, minute books, stock transfer books, blank stock
certificates, and other documents relating to the organization, maintenance, and
existence of Sellers as corporations or other entities, (ii) any of the rights
of the Sellers under this Agreement (or under any agreement between the Sellers
and/or Parent on the one hand and the Buyer on the other hand entered into on or
after the date of this Agreement), (iii) the assets of the Parent, other than
the Trust Common Securities and the Trust Preferred Securities owned by Parent,
(iv) all agreements, including distribution agreements, between a Seller and
Weed Wizard, and (v) all stock of Easy Gardener in Weed Wizard.
"Excluded Liabilities" shall mean those liabilities set forth on
Exhibit B.
"Financial Statements" has the meaning set forth in Section 3(f)
below.
"GAAP" means United States generally accepted accounting
principles as in effect from time to time.
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"Xxxxx Option" means the option issued by Parent to the Xxxxx
Purchasers on November 15, 2001, as amended by the Settlement Agreement, to
purchase 94,875 of the Trust Preferred Securities owned by Parent.
"Xxxx-Xxxxx-Xxxxxx Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
"Indemnified Party" has the meaning set forth in Section 8(d)
below.
"Indemnifying Party" has the meaning set forth in Section 8(d)
below.
"Intellectual Property" means (a) all inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and patent
disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions, and reexaminations thereof, (b)
all trademarks, service marks, trade dress, logos, trade names, and corporate
names, together with all translations, adaptations, derivation, and combinations
thereof and including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith, (c) all copyrightable
works, all copyrights, and all applications, registrations, and renewals in
connection therewith, (d) all mask works and all applications, registrations,
and renewals in connection therewith, (e) all trade secrets and confidential
business information (including ideas, research and development, know-how,
formulas, compositions, manufacturing and production processes and techniques,
technical data, designs, drawings, specifications, customer and supplier lists,
pricing and cost information, and business and marketing plans and proposals),
(f) all computer software (including data and related documentation), and (g)
all copies and tangible embodiments thereof (in whatever form or medium).
"Junior Subordinated Debentures" means the Parent's 9.4% Junior
Subordinated Deferrable Interest Debentures due April 15, 2028 in the original
principal sum of $65.2 Million.
"Knowledge of Buyer" means the actual knowledge of Xxxxxxx Xxxxxx
or Xxxxxxx Xxxx, without independent investigation; provided, however, nothing
contained in this Agreement shall be deemed to make either of such individuals
personally liable hereunder.
"Knowledge of Sellers" means the actual knowledge of Xxxxxx Xxxxxx
or Xxxxx Xxxxxx, without independent investigation; provided, however, nothing
contained in this Agreement shall be deemed to make either of such individuals
personally liable hereunder.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes. When such liabilities are referred to
herein in the plural, they are referred to as "Liabilities."
"Ordinary Course of Business" means the ordinary course of
business consistent with past custom and practice (including with respect to
quantity and frequency).
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"Parent" has the meaning set forth in the preface above.
"Party" has the meaning set forth in the preface above.
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
"Purchase Price" has the meaning set forth in Section 2(c) below.
"Registration Statement" shall have the meaning set forth in
Section 5(g) hereof.
"Retained Subsidiaries" means Weed Wizard, Egarden, Inc., and
Golden West Agri-Products, Inc.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's, materialmen's and
similar liens, (b) liens for Taxes not yet due and payable or for Taxes that the
taxpayer is contesting in good faith through appropriate proceedings, (c)
purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.
"Sellers" has the meaning set forth in the preface above.
"Subsidiary" means any corporation with respect to which a
specified Person (or a Subsidiary thereof) owns a majority of the common stock
or has the power to vote or direct the voting of sufficient securities to elect
a majority of the directors.
"Settlement Agreement" shall mean the Settlement Agreement dated
November 1, 2002 by and among Parent, Easy Gardener, LEG Partners Debenture
SBIC, L.P., LEG Partners III SBIC, L.P., LEG Co. - Investors, LLC, 555 Madison
Investors II LLC and 555 Madison Investors, LLC (the "Xxxxx Purchasers"), Xxxxx
Associates LLC and Xxxxx Associates Incorporated (together with the Xxxxx
Purchasers, the "Xxxxx Parties").
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Sec. 59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
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"Third Party Claims" has the meaning set forth in Section 8(d)
below.
"Trust Common Securities" means the Common Securities issued to
the Parent pursuant to the Trust Agreement.
"Trust Preferred Securities" means the 9.40% Cumulative Trust
Preferred Securities issued to the several holders thereof pursuant to the Trust
Agreement.
"Trust Preferred Documents" means the Amended and Restated Trust
Agreement, dated as of April 17, 1998, among the Parent, as Depositor,
Wilmington Trust Company ("Wilmington Trust"), as Property Trustee and Delaware
Trustee, and the Administrative Trustees named therein (the "Trust Agreement");
the Junior Subordinated Indenture, dated as of April 17, 1998, between the
Parent and Wilmington Trust, as trustee (the "Indenture"); the Junior
Subordinated Debentures; and the Guarantee Agreement, dated as of April 17,
1998, between the Parent and the Wilmington Trust, as trustee (the "Guarantee").
2. Basic Transaction.
(a) Purchase and Sale of Assets. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to purchase from the Sellers.
Parent and Weed Wizard, and the Sellers, Parent and Weed Wizard agree to sell,
transfer, convey, and deliver to the Buyer, all of the Acquired Assets for the
consideration specified below.
(b) Assumption of Liabilities. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to assume and become responsible
for all of the Assumed Liabilities. The Buyer will not assume or have any
responsibility, for the Excluded Liabilities.
(c) Purchase Price. The purchase price for the Acquired Assets
shall consist of (i) $18,772,500 payable to the Sellers and Parent by delivery
of cash payable by wire transfer or delivery of other immediately available
funds as instructed by Sellers and Parent at the Closing (the "Cash Purchase
Price"); (ii) cash in an amount equal to $500,000 plus the legal fees of Parent
outstanding on the Closing Date not to exceed $300,000 (the "Deferred Purchase
Price"), payable to Parent upon a mutually agreed upon timetable which shall be
agreed upon prior to the Closing (the "Deferred Payment Schedule"), but in no
event paid later than December 31, 2003 and (iii) the Assumed Liabilities (the
Cash Purchase Price, the Deferred Purchase Price and the Assumed Liabilities are
collectively referred to herein as the "Purchase Price").
(d) The Closing. The closing of the purchase and sale of the
Acquired Assets (the "Closing") shall take place at the offices of Blank Rome
LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other place as the
Parties may mutually determine on or before the second business day after the
satisfaction or waiver of the conditions to Closing set forth in Section 6, or
at such other time as the Parties mutually agree.
(e) Closing Deliveries by the Parties. At the Closing,
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(i) the Sellers, Parent or Weed Wizard, as the case may be, will
execute, acknowledge (if appropriate), and deliver (or cause to be executed and
delivered) to the Buyer (A) a Xxxx of Sale covering the sale of the Acquired
Assets in the form attached hereto as Exhibit D, (B) the Releases in the form
attached hereto as Exhibit E, (C) the Assignment and Assumption Agreement
described in (ii) below and such other documents as are required to assign
Parent's obligations under the Trust Preferred Documents, (D) such other
instruments of sale, transfer, conveyance, and assignment as the Buyer and its
counsel reasonably may request; (E) an opinion of counsel to Sellers and Parent
in the form attached hereto as Exhibit F; and (F) a Non-Competition Agreement in
the form attached hereto as Exhibit H and a Consulting Agreement in the form
attached hereto as Exhibit J, each executed by Xxxxxx Xxxxxx, Chief Executive
Officer of Parent and Sellers; and (G) Sellers and Parent shall deliver to the
Xxxxx Purchasers 50% of the outstanding amounts due under the Settlement
Agreement, including the Deferred Prepayment Amount, the Expenses and the
Default Interest, as such terms are defined in the Settlement Agreement.
(ii) the Buyer will execute, acknowledge and deliver to the
Sellers or at Seller's direction (A) an Assignment and Assumption Agreement
covering all of the Assumed Liabilities in the form attached hereto as Exhibit
G; (B) a Supplemental Indenture entered into pursuant to the Indenture and such
other documents as are required for the assumption by the Buyer of all of the
Parent's obligations under the Indenture, the Debentures, the Guarantee and the
Trust Agreement, (C) a guaranty by EYAS of Buyer's obligations under the Trust
Preferred Documents, (D) such documents as are required for the Parent to
transfer the Trust Common Securities to the Buyer, (E) such other instruments of
assumption as the Sellers and Parent and their counsel reasonably may request;
(F) the Cash Purchase Price specified in Section 2(c) above; (G) a
Non-Competition Agreement in the form attached hereto as Exhibit H and a
Consulting Agreement in the form attached hereto as Exhibit J; and (H) the
consideration to be placed into escrow pursuant to Exhibit H and (I) Buyer shall
deliver to Xxxxx Purchasers 50% of the outstanding amounts due under the
Settlement Agreement, including the Deferred Prepayment Amount, the Expenses and
the Default Interest, as such terms are defined in the Settlement Agreement.
(f) Allocation. The Parties agree to allocate the Purchase Price (and
all other capitalizable costs) among the Acquired Assets for all purposes
(including financial accounting and tax purposes) in accordance with an
allocation schedule to be mutually agreed upon by the Parties prior to the
Closing Date.
3. Representations and Warranties of the Sellers and Parent. The
Sellers and Parent hereby represent and warrant to the Buyer that, except as set
forth in the disclosure schedule accompanying this Agreement and initialed by
the Parties (the "Disclosure Schedule"), the statements contained in this
Section 3 are correct and complete in all material respects as of the date of
this Agreement and will be correct and complete in all material respects as of
the Closing Date. The Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained in this Section
3.
(a) Organization of Parent and the Sellers. Each of Parent, Sellers,
Xxxxxxxxx Group, Xxxxxxxxx Sub and Trust is a corporation or business trust duly
organized, validly
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existing, and in good standing under the laws of the jurisdiction of its
incorporation or formation. The entire authorized capital stock of Xxxxxxxxx
Group consists of 11,765 shares of Class A Common Stock and 1,765 shares of
Class B Common Stock, $.01 par value, of which 10,000 shares of Class A Common
Stock are issued and outstanding. The entire authorized capital stock of
Xxxxxxxxx Sub consists of 1,000 shares of Common Stock and 1,000 shares of
Preferred Stock, no par value, of which 1,000 shares of Common Stock are issued
and outstanding. All of the issued and outstanding shares of each Acquired
Subsidiary have been duly authorized, are validly issued, fully paid, and
nonassessable, and are held of record by Easy Gardener, in the case of Xxxxxxxxx
Group, and by Xxxxxxxxx Group, in the case of Xxxxxxxxx Sub. There are no
outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or commitments
that could require either of the Acquired Subsidiaries to issue, sell, or
otherwise cause to become outstanding any of its capital stock.
(b) Authorization of Transaction. Parent and each Seller has full power
and authority (including full corporate power and authority) to execute and
deliver this Agreement and to perform its obligations hereunder. Without
limiting the generality of the foregoing, the board of directors of the Parent
and the board of directors of each Seller, has duly authorized the execution,
delivery, and performance of this Agreement by the Parent and each Seller, and
except for the approval referred to in Section 6(b)(vii), no other authorization
of the board of directors or shareholders and no consent or other approval is
necessary for the Parent and each Seller to consummate the transactions
contemplated by this Agreement. This Agreement constitutes the valid and legally
binding obligation of the Parent and each Seller, enforceable in accordance with
its terms and conditions.
(c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in Section 2 above), will
(i) violate any provision of the charter or bylaws of any of the Sellers and the
Parent, (ii) to the Knowledge of Seller (A) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which any of the
Sellers and the Parent is subject or (B) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, or create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which any of the Sellers, the Acquired Subsidiaries or the Parent
is a party or by which any of them is bound or to which any of their assets is
subject (or result in the imposition of any Security Interest upon any of their
assets). To the Knowledge of Sellers, neither Sellers, the Acquired Subsidiaries
nor Parent need to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated by this
Agreement (including the assignments and assumptions referred to in Section 2
above).
(d) Brokers' Fees. Other than amounts due to Xxxx Capital Partners LLC
from the Parent (which are included in the Assumed Liabilities), neither
Sellers, Parent nor the Acquired Subsidiaries have any Liability or obligation
to pay any fees or commissions to any broker,
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finder, or agent with respect to the transactions contemplated by this Agreement
for which the Buyer could become liable or obligated.
(e) Title to Assets. To the Knowledge of Sellers, the Sellers have good
and marketable title to all of the Acquired Assets described in clause (i) of
the definition of "Acquired Assets" above, the Acquired Subsidiaries have good
and marketable title to their respective assets and Weed Wizard has good and
marketable title to its accounts receivable, in each case free and clear of any
Security Interests. The Parent has good and marketable title to the Acquired
Assets described in clause (ii) of the definition of "Acquired Assets" above, in
each case free and clear of any Security Interest other than the Xxxxx Option
which applies to 94,875 shares of the Trust Preferred Securities owned by
Parent.
(f) Financial Statements. Parent has delivered or made available to
Buyer copies of the following financial statements of Parent included in its
Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, as filed with
the Securities and Exchange Commission (the "SEC") (collectively the "Financial
Statements"): (i) Parent's audited consolidated balance sheets and statements of
operation, changes in stockholders' equity, and cash flow as of and for the
fiscal years ended June 30, 1999, June 30, 2000, June 30, 2001 and June 30,
2002; and (ii) Parent's unaudited consolidated balance sheets and statements of
income, changes in stockholders' equity, and cash flow as of and for the three
(3) months ended September 30, 2002. To the Knowledge of Sellers, the Financial
Statements (including the Notes thereto) have been prepared in accordance with
GAAP applied on a consistent basis throughout the periods covered thereby,
present fairly the financial condition of the Parent as of such dates and the
results of operations of the Parent for such periods, are correct and complete,
and are consistent with the books and records of the Parent and its Subsidiaries
(which books and records are correct and complete); provided, however, that the
unaudited Financial Statements are subject to normal year-end adjustments and
lack footnotes and other presentation items.
(g) Events Subsequent to September 30, 2002. To the Knowledge of
Sellers, since September 30, 2002, there has not been any material adverse
change in the business, financial condition, operations, or results of
operations of the Sellers or the Acquired Subsidiaries.
(h) Undisclosed Liabilities. To the Knowledge of Sellers, Sellers and
the Acquired Subsidiaries have no Liability, except for (i) Liabilities set
forth on the September 30, 2002 Balance Sheet and (ii) Liabilities which have
arisen after September 30, 2002 in the Ordinary Course of Business (none of
which results from, arises out of, relates to, is in the nature of, or was
caused by any breach of contract, breach of warranty, tort, infringement, or
violation of law).
(i) Legal Compliance. To the Knowledge of Sellers, with respect to the
Acquired Assets, each of the Sellers and the Acquired Subsidiaries (since the
respective dates of acquisition of such Sellers by Parent or an Affiliate of
Parent) has complied in all material respects with all applicable laws
(including rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings, and charges thereunder) of federal, state, local, and foreign
governments (and all agencies thereof), and to the Knowledge of Sellers, no
action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or
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commenced against any of them relating to the Acquired Assets alleging any
failure so to comply.
(j) Tax Matters.
(i) To the Knowledge of Sellers, (A) each of the Sellers and the
Acquired Subsidiaries, since the respective dates of acquisition of such Sellers
and the Acquired Subsidiaries by Parent or an Affiliate of Parent, has filed all
Tax Returns that it was required to file, (B) all such Tax Returns were correct
and complete in all material respects and (C) all Taxes owed by any of the
Sellers or Acquired Subsidiaries since such respective dates (whether or not
shown on any Tax Return) have been paid unless they are being contested in good
faith or are not yet due and payable. To the Knowledge of Sellers, since such
respective dates no claim has been made by an authority in a jurisdiction where
any of the Sellers or Acquired Subsidiaries does not file Tax Returns that it is
or may be subject to taxation by that jurisdiction. To the Knowledge of Sellers,
there are no Security Interests on any of the assets of any of the Sellers or
Acquired Subsidiaries that arose in connection with any failure (or alleged
failure) to pay any Tax.
(ii) To the Knowledge of Sellers, since the respective dates set
forth in (j)(i) each of the Sellers and the Acquired Subsidiaries has withheld
and paid all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor,
stockholder, or other third party.
(iii) To the Knowledge of Sellers, there is no dispute or claim
concerning any Tax Liability of any of the Sellers or the Acquired Subsidiaries
either claimed or raised by any authority in writing.
(k) Intellectual Property. To the Knowledge of Sellers:
(i) The Sellers and the Acquired Subsidiaries own or have the
right to use pursuant to license, sublicense, agreement, or permission all
Intellectual Property necessary for the operation of the business of the Sellers
and the Acquired Subsidiaries as presently conducted. Each item of Intellectual
Property owned or used by any of the Sellers or Acquired Subsidiaries
immediately prior to the Closing hereunder will be owned or available for use by
the Buyer on identical terms and conditions immediately subsequent to the
Closing hereunder. Each of the Sellers and the Acquired Subsidiaries has taken
all necessary action to maintain and protect each item of Intellectual Property
owned or used by the Sellers and the Acquired Subsidiaries.
(ii) None of the Sellers or Acquired Subsidiaries has interfered
with, infringed upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of third parties, and there is not pending against
any of the Sellers or the Acquired Subsidiaries any charge, complaint, claim,
demand, or notice alleging any such interference, infringement,
misappropriation, or violation (including any claim that any of the Sellers or
Acquired Subsidiaries must license or refrain from using any Intellectual
Property rights of any third party). No third party has interfered with,
infringed upon, misappropriated, or otherwise come
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into conflict with any Intellectual Property rights of any of the Sellers or the
Acquired Subsidiaries.
(l) Powers of Attorney. To the Knowledge of Sellers, there are no
outstanding powers of attorney executed on behalf of any of the Sellers or
Acquired Subsidiaries.
(m) Insurance. To the Knowledge of Sellers, each insurance policy
(including policies providing property, casualty, liability, and workers'
compensation coverage and bond and surety arrangements) to which any of the
Sellers or the Acquired Subsidiaries has been a party, a named insured, or
otherwise the beneficiary of coverage at any time within the past one year is
legal, valid, binding, enforceable, and in full force and effect; will, subject
to obtaining consent to assignment to Buyer, continue to be legal, valid,
binding, enforceable, and in full force and effect on identical terms following
the consummation of the transactions contemplated hereby (including the
assignments and assumptions referred to in Section 2 above); is not in material
breach or default (including with respect to the payment of premiums or the
giving of notices), and no event has occurred which, with notice or the lapse of
time, would constitute such a material breach or default, or permit termination,
modification, or acceleration, under the policy; and no party to the policy has
repudiated any provision thereof. To the Knowledge of Sellers, each of the
Sellers and the Acquired Subsidiaries has been covered during the past one year
by insurance in scope and amount customary and reasonable for the businesses in
which it has engaged during the aforementioned period.
(n) Litigation. Section 3(n) of the Disclosure Schedule sets forth each
instance in which any of the Sellers or Acquired Subsidiaries (i) is named in
any outstanding injunction, judgment, order, decree, ruling, or charge or (ii)
is a party or, to the Knowledge of Sellers, is threatened to be made a party to
any action, suit, proceeding, hearing, or investigation of, in, or before any
court or quasi-judicial or administrative agency of any federal, state, local,
or foreign jurisdiction or before any arbitrator. None of the actions, suits,
proceedings, hearings, and investigations could result in any material adverse
change in the business, financial condition, operations, results of operations,
of any of the Sellers or Acquired Subsidiaries.
(o) Guaranties. To the Knowledge of Sellers, other than the obligations
of Parent under the Junior Subordinated Debentures, none of the Sellers or
Acquired Subsidiaries is a guarantor for any Liability or obligation (including
indebtedness) of any other Person.
(p) Property Owned by Affiliates. To the Knowledge of Sellers, none of
the Parent or the Retained Subsidiaries owns any asset, tangible or intangible,
which is used in the business of any of the Sellers or the Acquired
Subsidiaries.
(q) Disclosure. The representations and warranties contained in this
Section 3 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Section 3 not misleading.
4. Representations and Warranties of the Buyer and EYAS. The Buyer and
EYAS represent and warrant to the Sellers and Parent that, except as set forth
in the Disclosure Schedule, the statements contained in this Section 4 are
correct and complete in all material respects as
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of the date of this Agreement and will be correct and complete in all material
respects as of the Closing Date. The Disclosure Schedule will be arranged in
paragraphs corresponding to the lettered and numbered paragraphs contained in
this Section 4.
(a) Organization of the Buyer. The Buyer is a limited partnership duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its formation. EYAS is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation.
(b) Authorization of Transaction. Each of the Buyer and EYAS has full
power and authority (including full corporate or partnership power and
authority, as the case may be) to execute and deliver this Agreement and to
perform its obligations hereunder. The execution, delivery and performance of
this Agreement and any Exhibits attached hereto have been duly authorized by
each of Buyer and EYAS. This Agreement constitutes the valid and legally binding
obligation of the Buyer and EYAS, enforceable in accordance with its terms and
condition.
(c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in Section 2 above), will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Buyer or EYAS is subject or any
provision of its organizational documents or (ii) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, or create
in any party the right to accelerate, terminate, modify, or cancel, or require
any notice under, any agreement, contract, lease, license, instrument, or other
arrangement to which the Buyer or EYAS is a party or by which either of them is
bound or to which any of their assets is subject (or result in the imposition of
any Security Interest upon any of Buyer's or EYAS' assets other than any
Security Interest necessary for them to secure financing from the Sellers'
current senior lender needed to consummate the transactions contemplated
hereby). To the Knowledge of Buyer, the Buyer does not need to give any notice
to, make any filing with, or obtain any authorization, consent, or approval of,
any government or governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement (including the assignments and
assumptions referred to in Section 2 above).
(d) Xxxx-Xxxxx-Xxxxxx Act. Buyer is its own ultimate "parent entity"
(as defined in 16 C.F.R. Section 801.1(a)(3) and does not have "annual net
sales" or "total assets" (each as defined in 16 C.F.R. Section 801.11) of $10
Million or more.
(e) Brokers' Fees. Except for amounts due Xxxx Capital LLC, the Buyer
has no Liability or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated by this Agreement
for which the Sellers could become liable or obligated.
(f) Deferral of Interest. The Buyer has no current intention to
exercise, after the Closing Date, the rights of the obligor under the Indenture
to defer any interest payments.
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(g) Disclosure. The representations and warranties contained in this
Section 4 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Section 4 not misleading. Buyer is comprised of
the current management of Sellers, and as a result thereof, is fully familiar
with the financial statements, customer, vendor, employee and other business
relationships and business operations of Sellers and the Acquired Subsidiaries
and is fully aware of the condition of the Acquired Assets and Assumed
Liabilities. Neither Xxxxxxx Xxxxxx nor Xxxx Xxxx (i) has knowledge of any
material fact or circumstance relating to the business, operations, financial
condition or prospects of Sellers or the Acquired Subsidiaries that has not been
disclosed to the Chief Executive Officer of Parent or (ii) is aware of any
material fact or circumstance which would make any of the representations and
warranties of Sellers and Parent made in Section 3 hereof incorrect or
incomplete. To the Knowledge of Buyer, Parent has no Liability except for
Liabilities set forth on the September 30, 2002 Balance Sheet (including the
footnotes thereto) and Liabilities which have arisen after September 30, 2002 in
the Ordinary Course of Business.
5. Pre-Closing Covenants. The Parties agree as follows from and after
the date hereof and until the earlier to occur of (i) the Closing or (ii)
termination of this Agreement pursuant to Section 9 hereof:
(a) General. Each of the Parties will use commercially reasonable
efforts to take all action and to do all things necessary, proper, or advisable
in order to consummate and make effective the transactions contemplated by this
Agreement including, but not limited to, satisfaction, but not waiver, of the
closing conditions set forth in Section 6 below.
(b) Notices and Consents. Other than the consents and approvals
required in order to assign the Trust Preferred Documents, which shall be the
responsibility of both Parent and Buyer, as set forth in Article 5 hereof, the
Buyer will give all notices to third parties, and the Buyer will use
commercially reasonable efforts to obtain all third party consents required to
transfer the Acquired Assets in connection with this Agreement including, but
not limited to, obtaining the consent of Foothill Capital Corporation
("Foothill") to the assignment and assumption of the Loan and Security Agreement
dated October 30, 2002 by and among Foothill, Parent, Sellers and the other
lenders identified therein (the "Refinancing Documents"). Each of the Parties
will (and the Parent and Sellers will cause each of their Subsidiaries to)
cooperate and assist the other Parties in obtaining such consents and approvals.
(c) Operation of Business. The Sellers and Parent on the one hand, and
the Buyer on the other hand, agree that except as otherwise contemplated by this
Agreement or the Settlement Agreement they will not (and will not cause or
permit any of their Subsidiaries (other than the Retained Subsidiaries),
stockholders, officers, directors or employees to) engage in any practice, take
any action, or enter into any transaction outside the Ordinary Course of
Business and will keep (and will cause each of their Subsidiaries, stockholders,
officers, directors or employees to keep) its business and properties
substantially intact, including its present operations, physical facilities,
working conditions, and relationships with lessors, licensors, suppliers,
customers, and employees. Without limiting the generality of the foregoing, the
Parent and the Sellers will not (and will not cause or permit any of the
Acquired Subsidiaries to) (i) declare, set aside, or pay any dividend or make
any distribution with respect to its capital stock or redeem, purchase, or
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otherwise acquire any of its capital stock or (ii) other than as specifically
contemplated by this Agreement, pay any amount to any third party with respect
to any Liability or obligation which would constitute an Excluded Liability or
an Acquired Subsidiary Excluded Liability listed on Exhibit K if in existence as
of the Closing.
(d) Full Access. The Sellers and Parent will continue to permit (and
will cause each of their Subsidiaries to continue to permit) representatives of
the Buyer to have full access at reasonable times, and in a manner so as not to
interfere with the normal business operations of the Sellers, to all premises,
properties, personnel, books, records (including Tax records), contracts, and
documents of or pertaining to each of the Sellers.
(e) Notice of Development. Each Party will give prompt written notice
to the other Party of any material adverse development causing a breach of any
of its own representations and warranties in Section 3 and Section 4 above. No
disclosure by any Party pursuant to this Section 5(e), however, shall be deemed
to amend or supplement the Disclosure Schedule or to prevent or cure any
misrepresentation, breach of warranty, or breach of covenant.
(f) Exclusivity. Subject to the fiduciary duties of the Boards of
Directors of Parent and Sellers under applicable law, the Parent and Sellers
will not (and the Parent and Sellers will not cause or permit any of their
Subsidiaries to) (i) solicit, initiate, or encourage the submission of any
proposal or offer from any Person relating to the acquisition of any capital
stock or other voting securities, or any substantial portion of the assets, of
any of the Sellers or the Parent, (other than the Retained Subsidiaries)
(including any acquisition structured as a merger, consolidation, or share
exchange) or (ii) participate in any discussions or negotiations regarding,
furnish any information with respect to, assist or participate in, or facilitate
in any other manner any effort or attempt by any Person to do or seek any of the
foregoing; provided, however, notwithstanding the foregoing provisions, if the
Board of Directors of Parent or Sellers determines in good faith, after
consultation with outside counsel who is experienced in corporate and securities
laws matters of the type contemplated by this transaction, that not doing so
would violate its fiduciary duties to its stockholders under applicable law,
Parent or Sellers, in response to an Acquisition Proposal that was unsolicited
and is reasonably likely to lead to a Superior Proposal, may furnish non-public
information with respect to Parent and Sellers to the person who made such
Acquisition Proposal pursuant to a customary confidentiality agreement and
participate in negotiations or discussions regarding, or otherwise facilitate,
any such Acquisition Proposal. Parent and Sellers will promptly notify Buyer of
the receipt by Parent and Sellers of any such Acquisition Proposal and the terms
thereof.
For purposes of this Agreement: (a) an "Acquisition Proposal" shall
mean a proposal for (i) a merger, reorganization, share exchange, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving Parent and Sellers or any of their respective significant
subsidiaries, other than the Retained Subsidiaries, or any material part
thereof; or (ii) any sale, exchange, merger, consolidation, business combination
or other transaction involving one or more of the businesses of Parent and
Sellers, other than the Retained Subsidiaries, that are the subject of this
transaction or the sale of any material portion of their assets; and (b)
"Superior Proposal" shall mean any Acquisition Proposal which in the good faith
judgment of the Parent and Sellers' directors is (i) superior to this
transaction from a financial
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point of view to Parent and Sellers and the stockholders of Parent and Sellers,
(ii) is reasonably capable of being consummated and (iii) to the extent
financing is required is reasonably capable of being financed. The Parent and
Sellers will notify the Buyer immediately if any Person makes any proposal,
offer, inquiry, or contact with respect to any of the foregoing.
In the event that Parent or Sellers terminate this Agreement and enter
into a definitive agreement within six months after the date of this Agreement
as a result of an Acquisition Proposal received prior to the termination of this
Agreement with any person or entity other than Buyer or Affiliate of Buyer, then
promptly after consummation of the transaction set forth in such definitive
agreement, upon demand by Buyer, Parent will pay Buyer a termination fee equal
to $1,000,000.
(g) Registration and Proxy Statement Filing. Promptly after the date
hereof, Buyer shall file with the SEC a registration statement on Form S-4 or
other appropriate form under the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations thereunder, relating to the
amendment of the Trust Preferred Documents (the "Registration Statement"). The
Registration Statement shall contain (i) a proxy statement of Parent, together
with a form of proxy, with respect to the meeting of the holders of the Trust
Preferred Securities, at which meeting the holders of the Trust Preferred
Securities will vote upon the amendment to the Trust Preferred Documents and the
transfer of the Parent's obligations thereunder to Buyer (the "Proxy
Statement"), (ii) a prospectus of Buyer relating to the offering of securities
which may be deemed to be made by Buyer by virtue of the foregoing amendments of
the Trust Preferred Documents (the "Prospectus"), and (iii) such documentation
as shall be required to qualify the Indenture, Guarantee and Trust Agreement
under the Trust Indenture Act of 1939, as amended. Buyer shall use commercially
reasonable efforts to have the Registration Statement declared effective under
the Securities Act, and Parent shall use commercially reasonable efforts to have
the Proxy Statement cleared by the SEC, as promptly as practicable. The Parties
shall cooperate with each other to promptly thereafter mail the Proxy
Statement/Prospectus to the holders of the Trust Preferred Securities. Buyer
shall take any action required to be taken under state blue sky or securities
laws in connection with the foregoing. Each of Buyer and Parent shall cooperate
with the other in providing information required for the Registration Statement.
(h) Expenses. By virtue of the agreement of the Parties in Exhibit A to
share Securities Expenses and Closing Accounting and Legal Fees through a Cash
Purchase Price adjustment if the aggregate of such expenses exceed the amount
set forth in Exhibit A and the rights of the Parties under Section 9(a)(iv) to
terminate this Agreement if such amount is exceeded, (a) Parent and the Buyer
agree that they will consult with each other regularly after the date hereof
with regard to estimates of Securities Expenses and Closing Accounting and Legal
Fees being incurred and after receipt of each invoice for such expenses Parent
or Sellers will promptly furnish a copy of the invoice to Buyer or advise Buyer
in writing of the amount of the expense. To the extent commercially reasonable,
Parent or Sellers, prior to incurring Securities Expenses or Closing Accounting
and Legal Fees, shall request from the service provider an estimate of the
charges that will be involved and communicate such estimate to the Buyer. The
principals of Buyer shall cooperate with Parent in notifying Parent of any
additional expenses which are incurred by the principals of Buyer on behalf of
Parent and Sellers.
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6. Conditions to Obligation to Close.
(a) Conditions to Obligation of the Buyer. The obligation of the Buyer
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 3
above shall be true and correct in all material respects at and as of the
Closing Date;
(ii) the Parent and Sellers shall have performed and complied with
all of their covenants hereunder in all material respects through the Closing;
(iii) all consents required in connection with the assignment of
the Trust Preferred Documents shall have been obtained;
(iv) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by this Agreement,
(B) cause any of the transactions contemplated by this Agreement to be rescinded
following consummation, or (C) affect adversely the right of the Buyer to own
the Acquired Assets, or to operate the former businesses of the Sellers (and no
such injunction, judgment, order, decree, ruling, or charge shall be in effect);
(v) the Parent and Sellers shall have delivered to the Buyer a
certificate to the effect that each of the conditions specified above in Section
6(a)(i)-(iv) is satisfied in all respects;
(vi) Xxxxxx Xxxxxx shall have executed the Non Competition
Agreement attached in the form of Exhibit H and the Consulting Agreement
attached in the form of Exhibit J;
(vii) Parent and Sellers shall have executed and delivered all of
the documents required under Section 2(e)(i) hereof including, but not limited
to, those documents necessary to (A) assign all of the obligations of Parent
under the Trust Agreement, the Indenture, the Junior Subordinated Debentures and
the Guarantee and (B) to transfer the 251,981 shares of Trust Preferred
Securities owned by Parent to Buyer;
(viii) the Buyer shall have received from counsel to the Sellers
and Parent an opinion in form and substance as set forth in Exhibit F attached
hereto, addressed to the Buyer, and dated as of the Closing Date;
(ix) under terms reasonably satisfactory to Buyer, the Buyer shall
have obtained the consent of Foothill to the assignment of the Refinancing
Documents and shall have obtained the additional financing required in order to
consummate the transactions contemplated hereby;
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(x) the terms and conditions of the documents referred to in
Section 2(e)(ii)(D) will be reasonably satisfactory to the Buyer;
(xi) the Registration Statement shall have become effective and no
stop order suspending such effectiveness or qualification shall have been issued
or proceedings for such purpose shall have been instituted or threatened; and
(xii) the Buyer and Parent shall have agreed upon and delivered
the Deferred Payment Schedule and the Allocation Schedule.
The Buyer may waive any condition specified in this Section 6(a) other than the
conditions specified in 6(a)(iii), (vii) and (xi) if it executes a writing so
stating at or prior to the Closing.
(b) Conditions to Obligation of the Sellers, Parent and Weed Wizard.
The obligation of the Sellers, Parent and Weed Wizard to consummate the
transactions to be performed by them in connection with the Closing is subject
to satisfaction of the following conditions:
(i) the representation and warranties set forth in Section 4 above
shall be true and correct in all material respects at and as of the Closing
Date;
(ii) the Buyer shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) the Buyer shall have procured all of the third party
consents specified in Section 5(b) above;
(iv) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by this Agreement
or (B) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation (and no such injunction, judgment, order,
decree, ruling, or charge shall be in effect);
(v) the Buyer shall have delivered to the Seller a certificate to
the effect that each of the conditions specified above in Section 6(b)(i)-(iv)
is satisfied in all respects;
(vi) Buyer and EYAS shall have executed and delivered all of the
documents required pursuant to Section 2(e)(ii) hereof;
(vii) the Parent shall have obtained the favorable vote of holders
of a majority of the outstanding Trust Preferred Securities to such amendment of
the Trust Preferred Documents as shall be required to permit the transfer of the
Parent's obligations thereunder to, and the assumption of such obligations by,
the Buyer, such that the Parent's obligations thereunder shall be extinguished,
and the transfer by the Parent of the Trust Common Securities to the Buyer (the
"Trust Preferred Vote") and all of the Parent's obligations under the Junior
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Subordinated Debentures and Parent's guaranty of the Trust's obligations to
holders of the Trust Preferred Securities shall have been assumed by Buyer
hereunder such that Parent's guaranty shall be extinguished;
(viii) the Registration Statement shall have become effective and
no stop order suspending such effectiveness or qualification shall have been
issued or proceedings for such purpose shall have been instituted or threatened;
(ix) the Board of Directors of the Parent shall have received from
Xxxx Capital Partners LLC an affirmation or "bring-down" of each of the July 24,
2002 fairness opinion and the July 24, 2002 financial viability opinion
previously given to the Board by Xxxx, which give consideration and effect to,
for purposes of such bring down opinions, the terms of this Agreement;
(x) Sellers and Parent shall have received the consent of Foothill
to the assignment and assumption of the Refinancing Documents and obtained
releases from Foothill from all of their respective obligations, including any
liens or pledges on their respective assets thereunder (the "Releases") or the
Buyer shall have paid in full all amounts due from Parent and Sellers under the
Refinancing Documents and obtained the Releases;
(xi) The Parent and Buyer shall have agreed upon and delivered the
Deferred Payment Schedule and the Allocation Schedule; and
(xii) $250,000 of the legal fees of Parent and Sellers outstanding
as of November 15, 2002, due to Blank Rome Xxxxxx Xxxxxxxxxx LLP shall have been
paid out of the operations of the Acquired Assets prior December 31, 2002 and
thereafter their outstanding legal fees shall have been paid at the rate of
$60,000 per month until the Closing Date.
The Seller may waive any condition specified in this Section 6(b) other than the
conditions specified in 6(b)(vi), (vii) and (viii) if it executes a writing so
stating at or prior to the Closing.
(c) Conditions to Obligation of both the Buyer on the one hand, and the
Parent, Sellers and Weed Wizard, on the other hand. The obligation of the Buyer,
Parent and Sellers to consummate the transactions to be performed by them,
respectively, in connection with the Closing is subject to satisfaction of the
following conditions:
All of the conditions set forth in Sections 1.1(a) and 1.2 of the
Settlement Agreement that are required by the terms of the Settlement Agreement
to be conditions precedent to the obligations of the Buyer hereunder shall have
been satisfied; including but not limited to the following: (A) the Settlement
Closing shall have occurred; (B) Buyer shall have delivered to the Xxxxx
Purchasers the Amended and Restated Option Agreement-A, the Option Agreement-B,
and the Settlement Options; (C) all amounts payable to the Xxxxx Purchasers
under the Settlement Agreement shall have been paid in accordance with Section
2(e)(i)(G) and Section 2(e)(ii)(I); (D) the Xxxxx Parties shall have received
the Deferred Prepayment Amount; (E) Parent shall have delivered to the Xxxxx
Purchasers a fully executed Amended and Restated Warrant Agreement (together
with the Amended and Restated Warrants); (F) the Xxxxx Purchasers shall have
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received the balance of the Expenses; (G) the Xxxxx Purchasers shall have
received all of the Default Interest; (H) all parties to the Settlement
Agreement shall have exchanged the Settlement Closing Releases; and (I) the
Parent shall have received no less than $16.5 million of immediately available
cash proceeds (less any adverse effect of the Weed Wizard litigation and the
U.S. Products Safety Commission complaint, less any default interest payments or
other expenses paid to the Xxxxx Purchasers or their affiliates under the
Settlement Agreement) upon consummation of the transactions contemplated by this
Agreement. To the extent terms referred to in this Subparagraph 6(c) are not
defined herein, they shall have the meanings given to them in the Settlement
Agreement.
7. Post-Closing Covenants. The Parties agree as follows with respect to
the period following the Closing.
(a) General. In case at any time after the Closing any further action
is necessary or desirable to carry out the purposes of this Agreement, each of
the Parties will take such further action (including the execution and delivery
of such further instruments and documents) as any other Party reasonably may
request, at the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under Section 8 below).
The Sellers and Parent acknowledge and agree that from and after the Closing the
Buyer will be entitled to possession of all documents, books, records,
agreements, and financial data of any sort relating to the Sellers, other than
as set forth in the definition of Excluded Assets.
(b) Litigation Support. In the event and for so long as any Party
actively is prosecuting, contesting or defending any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing involving any of the Parties, each of the other Parties will
provide reasonable cooperation to the prosecuting, contesting or defending Party
and its counsel in the prosecution contest or defense, make available its
personnel to the extent reasonable and provide such reasonable access to its
books and records as shall be necessary in connection with the contest, defense
or prosecution, all at the sole cost and expense of the contesting or defending
Party (unless the prosecuting, contesting or defending Party is entitled to
indemnification therefor under Section 8 below). With regard to the Xxxxxx
litigation, which is included in Assumed Liabilities, such litigation shall be
handled after Closing by Buyer in the manner set forth below in Section 8(d) as
a Third Party Claim in which Buyer is the Indemnifying Party.
(c) Transaction. The Sellers and Parent will not take any action that
is designed or intended to have the effect of discouraging any lessor, licensor,
customer, supplier, or other business associate of the Sellers or the Acquired
Subsidiaries from maintaining the same business relationships with the Buyer
after the Closing as it maintained with the Sellers and the Acquired
Subsidiaries prior to the Closing. The Sellers and Parent will refer all
customer inquiries relating to the businesses of the Sellers and the Acquired
Subsidiaries to the Buyer from and after the Closing.
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(d) Confidentiality. The Sellers and Parent will treat and hold as such
all of the Confidential Information, refrain from using any of the Confidential
Information except in connection with this Agreement, and deliver promptly to
the Buyer or destroy, at the request and option of the Buyer, all tangible
embodiments (and all copies, other than copies to be retained for archival
purposes) of the Confidential Information which are in its possession. In the
event that the Sellers or Parent are requested or required (by oral question or
request for information or documents in any legal proceeding, interrogatory,
subpoena, civil investigative demand, or similar process) to disclose any
Confidential Information, the Sellers and Parent will notify the Buyer promptly
of the request or requirement so that the Buyer may seek an appropriate
protective order or waive compliance with the provisions of this Section 7(d).
If, in the absence of a protective order or the receipt of a waiver hereunder,
the Sellers or Parent are, on the advice of counsel, compelled to disclose any
Confidential Information to any tribunal or else stand liable for contempt, the
Sellers or Parent may disclose the Confidential Information to the tribunal;
provided, however, that the Sellers or Parent shall use commercially reasonable
efforts to obtain, at the reasonable request of the Buyer, an order or other
assurance that confidential treatment will be accorded to such portion of the
Confidential Information required to be disclosed.
(e) Trust Preferred Securities. From and after the Closing Date and
until the later of (i) the maturity date of the Junior Subordinated Debentures
and (ii) such date as the Indenture, as supplemented, ceases to be in effect,
the Buyer shall perform all payment and other obligations under the Trust
Preferred Documents in accordance with their respective terms and EYAS shall
guaranty Buyer's performance and payment obligations thereunder. In addition,
for so long as the Trust Preferred Securities are outstanding, Buyer shall use
its best efforts to maintain the Trust Preferred Securities listing on the
American Stock Exchange.
(f) Settlement Options. Buyer agrees to honor the Settlement Options
pursuant to their terms and conditions and agrees that it shall not transfer,
sell or encumber the shares of the Trust Preferred Securities subject to the
Settlement Options in any manner until such options have either been exercised
or expired by their respective terms.
(g) Reports. For so long as the Purchasers (as such term is defined in
the Settlement Agreement) own the Settlement Options (as defined in the
Settlement Agreement) or Options Securities (as defined in the Settlement
Agreement), Buyer shall provide Purchasers, upon request, with copies of all
Forms 10-K, 10-Q and 8-K, if any, filed by Buyer with the SEC, provided that if
Buyer is not or ceases to be a reporting company, it shall provide Purchasers
with copies of quarterly and annual financial statements and management
commentary thereon identical to that provided to its senior lenders, subject to
any confidentiality obligations of the Purchasers set forth in the Note Purchase
Agreement (as defined in the Settlement Agreement).
(h) Sales and Other Taxes. Buyer will be responsible for and pay in
full any Taxes that may be incurred in connection with the sale of the Acquired
Assets contemplated by this Agreement including any transfer, sales, use and
excise Taxes, but excluding any Taxes based on the income of the Sellers or
Parent.
(i) Use of Names. Except as agreed to in writing by the Buyer, the
Parent and its Affiliates shall cease after Closing using all Intellectual
Property acquired by Buyer from Sellers
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as part of the Acquired Assets, including use of the name "Easy Gardener" alone
or in combination with other words and Easy Gardener shall promptly after the
Closing either liquidate or change its name in Delaware.
(j) Weed Wizard Recall. Notwithstanding anything to the contrary in
this Agreement, the Parties agree that in the event of a recall after the date
hereof of any of the products listed below (a "Recall"), all the costs and
expenses of such Recall up to an aggregate of $240,000, shall be divided equally
by the Buyer on the one hand, and the Sellers and Parent on the other hand. Any
costs in excess thereof, shall be the responsibility of Parent and Sellers. The
items covered by this paragraph shall include the Weed Wizard "EZ Trim" and
"Flexi Trim" and the "Easy Gardener For Grass" and "Easy Gardener For Weed and
Grass" products.
(k) Certain Acquired Subsidiary Obligations. Parent agrees that neither
Buyer nor any Acquired Subsidiary will after the Closing be responsible for any
of the obligations of the Acquired Subsidiaries listed on Exhibit K hereto.
Consequently, at the Closing those obligations listed on Exhibit K that are owed
to Parent or any Retained Subsidiary shall be deemed canceled.
8. Remedies for Breaches of This Agreement.
(a) Survival of Representations and Warranties. All of the
representations and warranties of the Buyer, the Parent and the Sellers
contained in this Agreement shall survive the Closing for a period of one (1)
year.
(b) Indemnification Provisions for Benefit of the Buyer.
(i) The Sellers and Parent, jointly and severally, agree to
indemnify the Buyer, its officers, directors, agents, employees, stockholders
and Affiliates, and hold them harmless from, against, for and in respect of, and
shall pay any and all damages, losses, obligations, liabilities, claims,
encumbrances, deficiencies, costs and expenses, including without limitation
reasonable attorney's fees, and other costs and expenses incident to any action,
investigation, claim or proceeding (collectively, "Damages") suffered,
sustained, incurred or required to be paid by any of them as a result of (A) a
breach of any representation or warranty made by Parent or Sellers in this
Agreement; (B) a breach of any covenant of Parent or Sellers made in this
Agreement; (C) any Excluded Liability; (D) any Liability of Parent or any of the
Retained Subsidiaries other than those Liabilities of Parent or any of the
Retained Subsidiaries set forth on Exhibit A; and (E) any Acquired Subsidiaries
Excluded Liabilities as set forth on Exhibit K.
(ii) The indemnification by Sellers and Parent (A) under Article
8(b) will not apply to any Damages which result from breaches of any
representations and warranties of Sellers and Parent, if Buyer, or any member or
partner thereof had knowledge, prior to the date hereof, of a fact or
circumstance that existed which would cause the respective representation or
warranty made by Sellers or Parent to be incomplete or incorrect; and (B) under
8(b)(i)(A) will not apply unless and until the aggregate Damages from breaches
to which 8(b)(i)(A) applies exceed a cumulative aggregate of $500,000, in which
event Sellers and Parent shall be liable to
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indemnify Buyer for all Damages in excess of $500,000. Furthermore, in no event
shall the indemnification to Buyer under Section 8(b) exceed the Cash Purchase
Price.
(c) Indemnification Provisions for Benefit of the Sellers and Parent.
(i) The Buyer agrees to indemnify the Sellers and Parent and each
of their respective officers, directors, agents, employees, stockholders and
Affiliates and hold them harmless, from, against, for and in respect of, and
shall pay all Damages suffered, sustained, incurred or required to be paid by
any of them as a result of (A) a breach of any representation or warranty made
by Buyer in this Agreement; (B) a breach of any covenant made by Buyer in this
Agreement; (C) any Assumed Liability; and (D) the operation of the Acquired
Assets after the date hereof.
(ii) The indemnification by Buyer under Section 8(c)(i)(A) will
not apply unless and until the aggregate Damages from breaches to which
8(c)(i)(A) applies exceeds a cumulative aggregate of $500,000, in which event
Buyer shall be liable to indemnify Seller and/or Parent for all Damages in
excess of $500,000.
(d) Matters Involving Third Parties.
(i) If any third party shall notify any Party (the "Indemnified
Party") with respect to any matter (a "Third Party Claim") which may give rise
to a claim for indemnification against any other Party (the "Indemnifying
Party") under this Section 8, then the Indemnified Party shall promptly notify
each Indemnifying Party thereof in writing; provided, however, that no delay on
the part of the Indemnified Party in notifying any Indemnifying Party shall
relieve the Indemnifying Party from any obligation hereunder unless (and then
solely to the extent) the Indemnifying Party thereby is prejudiced.
(ii) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party so long as (A) the Indemnifying
Party notifies the Indemnified Party in writing within 15 days after the
Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will indemnify the Indemnified Party hereunder with respect
to such Third Party Claim, (B) the Indemnifying Party provides the Indemnified
Party with evidence reasonably acceptable to the Indemnified Party that the
Indemnifying Party will have the financial resources to defend against the Third
Party Claim and fulfill its indemnification obligation hereunder, (C) the Third
Party Claim involves only money damages and does not seek an injunction or other
equitable relief and (D) the Indemnifying Party conducts the defense of the
Third Party claim actively and diligently.
(iii) So long as the Indemnifying Party is conducting the defense
of the Third Party Claim in accordance with Section 8(d)(ii) above, (A) the
Indemnified Party may retain separate co-counsel at its sole cost and expense
and participate in the defense of the Third Party Claim, (B) the Indemnified
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnifying Party (not to be withheld unreasonably), and (C) the Indemnifying
Party will not
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consent to the entry of any judgment or enter into any settlement with respect
to the Third Party Claim without the prior written consent of the Indemnified
Party (not to be withheld unreasonably).
(iv) In the event any of the conditions in Section 8(d)(ii) above
is or becomes unsatisfied, however, (A) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any settlement
with respect to, the Third Party Claim in any manner it reasonably may deem
appropriate (and the Indemnified Party need not consult with, or obtain any
consent from, any Indemnifying Party in connection therewith), (B) the
Indemnifying Parties will reimburse the Indemnified Party promptly and
periodically for the costs of defending against the Third Party Claim (including
reasonable attorneys' fees and expenses), and (C) the Indemnifying Parties will
remain responsible for any Damages the Indemnified Party may suffer resulting
from, arising out of, relating to, in the nature of, or caused by the Third
Party Claim to the fullest extent provided in this Section 8.
9. Termination.
(a) Termination of Agreement. The Parties may terminate this Agreement
as provided below:
(i) the Buyer and the Sellers and Parent may terminate this
Agreement by mutual written consent at any time prior to the Closing;
(ii) the Buyer may terminate this Agreement by giving written
notice to the Sellers and Parent at any time prior to the Closing (A) in the
event the Sellers or Parent has breached any material representation, warranty,
or covenant contained in this Agreement in any material respect, the Buyer has
notified the Parent or Seller in writing of the breach, and the breach has
continued without cure for a period of 30 days after the notice of breach or (B)
if the Closing shall not have occurred on or before June 30, 2003, by reason of
the failure of any condition precedent under Section 6(a) or 6(c) hereof (unless
the failure results primarily from the Buyer itself breaching any
representation, warranty, or covenant contained in this Agreement); and
(iii) the Sellers or Parent may terminate this Agreement by giving
written notice to the Buyer at any time prior to the Closing (A) in the event
the Buyer has breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, the Seller has notified the
Buyer of the breach, and the breach has continued without cure for a period of
30 days after the notice of breach (B) if the Closing shall not have occurred on
or before June 30, 2003, by reason of the failure of any condition precedent
under Section 6(b) or 6(c) hereof (unless the failure results primarily from the
Seller itself breaching any representation, warranty, or covenant contained in
this Agreement) or (C) Parent has not obtained a favorable Trust Preferred Vote.
For purposes of this Section 9, only the Chief Executive Officer of Sellers and
Parent shall have the authority to terminate the Agreement on behalf of Sellers
or Parent.
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(iv) If Securities Expenses and Closing Accounting and Legal Fees
reach an amount that will result in a Cash Purchase Price adjustment under
Exhibit A, then Parent or Sellers, prior to incurring additional expenses that
will result in such an adjustment, shall give written notice to the Buyer
detailing such additional expenses. Within two (2) days after receipt from
Sellers and Parent of such notice, Buyer shall either (A) give written notice to
Sellers and Parent that it is unwilling to pay its half of such additional
expenses and is electing to terminate this Agreement or (B) give written notice
to the Sellers and Parent that it will pay its half of such additional expenses.
If Parent or Sellers incur such additional expenses without giving a notice
required by this Section 9(a)(iv), it shall be solely responsible for such
expenses.
(b) Effect of Termination. If any Party terminates this Agreement
pursuant to Section 9(a) above, (i) all rights and obligations of the Parties
hereunder shall terminate without any Liability of any Party to any other Party
(except for any Liability of any Party then in breach) except for the
obligations and agreements set forth in Sections 7(d), this Section 9(b) and all
of Article 10 (other than Section 10(k)), each of which shall survive the
termination hereof and (ii) each of the Parties shall bear their own expenses in
connection with this Agreement and the transactions contemplated hereby.
Notwithstanding the foregoing, for purposes of this Section 9(b) in the event of
such a termination hereunder, the expenses incurred by the Parties in connection
with the Registration Statement and the Proxy Statement shall be shared as
follows: (A) Parent and Seller shall be responsible for 80% of the expenses
incurred or billed after November 15, 2002 and (B) Buyer shall be responsible
for 20% of those expenses incurred or billed after November 15, 2002, provided
however, that Buyer's portion of such expenses shall not exceed $30,000 unless
the Buyer and Seller shall have agreed pursuant to Section 9(a)(iv) hereof to
incur additional expenses in connection with the Registration Statement and
Proxy Statement, in which case Buyer shall be responsible for 20% of such
additional expenses and Seller shall be responsible for 80% of such additional
expenses.
10. Miscellaneous.
(a) Press Releases and Public Announcements. Except as may be required
by law or as disclosed in any public filing made by Parent or Buyer with the
Securities and Exchange Commission, no Party shall issue any press release or
make any public announcement relating to the subject matter of this Agreement
without the prior consent of the other Party which shall not be unreasonably
withheld.
(b) No Third-Party Beneficiaries. Except as specifically set forth
herein, this Agreement shall not confer any rights or remedies upon any Person
other than the Parties and their respective successors and permitted assigns.
(c) Entire Agreement. This Agreement (together with the exhibits and
schedules attached hereto) constitutes the entire agreement between the Parties
and supersedes any prior understandings, agreements, or representations by or
between the Parties, written or oral, to the extent they related in any way to
the subject matter hereof.
(d) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No
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Party may assign either this Agreement or any of its rights, interests, or
obligations hereunder without the prior written approval of the other Party.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) Headings. The section headings contained in this Agreement and the
Disclosure Schedule are inserted for convenience only and shall not affect in
any way the meaning or interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed effective upon receipt and
shall be addressed to the intended recipient as set forth below:
If to the Sellers and Parent: c/o US Home & Garden, Inc.
Suite 830
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Copy to: Blank Rome LLP
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
If to the Buyer: Easy Gardener Products, Ltd.
0000 Xxxxxxxx Xxxxxx
P. O. Xxx 00000
Xxxx, Xxxxx 00000 (Street) 76702 (Box)
Tel: (000) 000-0000
Fax: (000) 000-0000
Copy to: Naman, Xxxxxx Xxxxx & Xxx P.C.
000 Xxxxxxxxxx, Xxxxx 000
X.X. Xxx 0000
Xxxx, Xxxxx 00000 (Street) 76703 (Box)
Attention: Xxxxxx X. Xxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
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Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using the
following means: certified or registered mail, return receipt requested, postage
prepaid; personal delivery; expedited courier; messenger service; or telecopy,
but no such notice, request, demand, claim, or other communication shall be
deemed to have been duly given unless and until it actually is received by the
intended recipient. Any Party may change the address to which notices, requests,
demands, claims, and other communications hereunder are to be delivered by
giving the other Party notice in the manner herein set forth.
(h) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to any
choice or conflict of law provision or rule (whether of the State of Delaware or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.
(i) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Sellers and Parent. For purposes of this section 10(i), only the
Chief Executive Officer of Sellers and Parent shall have the authority to amend
the Agreement on behalf of Sellers and Parent. No waiver by any Party of any
default, misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(j) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) Expenses. Other than for Taxes based on the income of the Sellers
or Parent as set forth in Section 7(h), and other than as specifically set forth
in this Agreement, the Buyer will bear all costs and expenses (including legal
fees and expenses) of all of the parties hereto incurred in connection with this
Agreement and the transactions contemplated hereby, including, but not limited
to, legal fees of counsel to the Trust in connection with the assumption by
Buyer of the Parent's obligations under the Debentures and the transfer of the
Trust Preferred Securities and any transfer, continued or new listing fees
required by the American Stock Exchange or any other governmental or regulatory
agency at the time of Closing.
(l) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.
A-25
(m) Disclosure Schedule. Information which is necessary to make a given
section of the Disclosure Schedule complete and accurate, but is omitted
therefrom, shall nevertheless be deemed to be contained therein if it is
contained in any other section of the Disclosure Schedule, but only if such
information appears on such other section of the Disclosure Schedule in such
form and detail that is responsive to the requirements of such given section of
the Disclosure Schedule.
(n) Incorporation of Exhibits and Schedules. The Exhibits and
Disclosure Schedule identified in this Agreement are incorporated herein by
reference and made a part hereof.
(o) Specific Performance. Each of the Parties acknowledges and agrees
that the other Party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Party shall be entitled to an injunction or injunctions to prevent
breaches of the covenants and other provisions of this Agreement and to enforce
specifically this Agreement and the terms and covenants and other provisions
hereof in any action instituted in any court of the United States or any state
thereof having jurisdiction over the Parties and the matter, in addition to any
other remedy to which it may he entitled, at law or in equity.
(p) Submission to Jurisdiction. Each of the Parties submits to the
jurisdiction of any state or federal court sitting in Wilmington, Delaware, in
any action or proceeding arising out of or relating to this Agreement and agrees
that all claims in respect of the action or proceeding may be heard and
determined in any such court. Each party also agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other court. Each
of the Parties waives any defense of inconvenient forum to the maintenance of
any action or proceeding so brought and waives any bond, surety, or other
security that might be required of any other Party with respect thereto.
A-26
IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement on the date first above written.
BUYER
EASY GARDENER PRODUCTS, LTD.
By: E G PRODUCT MANAGEMENT, L.L.C.,
GENERAL PARTNER
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------------
Title: Manager
-------------------------------------
EYAS INTERNATIONAL, INC.
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------------
Title: President
-------------------------------------
SELLERS
EASY GARDENER, INC.
By: /s/ Xxxxxx Xxxxxx
-----------------------------------------
Title: Chief Executive Officer
-------------------------------------
AMPRO INDUSTRIES, INC.
By: /s/ Xxxxxx Xxxxxx
-----------------------------------------
Title: Chief Executive Officer
-------------------------------------
WEED WIZARD ACQUISITION CORP.
By: /s/ Xxxxxx Xxxxxx
-----------------------------------------
Title: Chief Executive Officer
-------------------------------------
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PARENT
U.S. HOME & GARDEN INC.
By: /s/ Xxxxxx Xxxxxx
-----------------------------------------
Title: /s/ Chief Executive Officer
-------------------------------------
A-28
SECOND AMENDMENT TO
ASSET PURCHASE AGREEMENT
Amendment to Asset Purchase Agreement entered into on July 31, 2003, by
and among Easy Gardener Products, Ltd., a Texas limited partnership, EYAS
International, Inc., a Texas corporation, U.S. Home & Garden Inc., a Delaware
corporation, Easy Gardener, Inc., a Delaware corporation, Ampro Industries,
Inc., a Michigan corporation, and Weed Wizard Acquisition Corp.
The parties entered into an Asset Purchase Agreement (herein so called)
dated December 11, 2002. The parties amended the Asset Purchase Agreement by an
Amendment dated May 23, 2003 (the "First Amendment"). The parties now wish to
further amend the Asset Purchase Agreement and to replace the First Amendment in
its entirety by this Second Amendment.
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the covenants herein contained,
the parties agree as follows.
1. Section 2(c) of the Asset Purchase Agreement is hereby amended to
provide as follows:
(c) Purchase Price. The purchase price for the Acquired Assets shall
consist of (i) $10,350,000 plus 50% of the outstanding amounts due the Xxxxx
Purchasers, such 50% being the amount payable by Sellers and Parent to the Xxxxx
Purchasers under Section 2(e)(i)(G), payable to the Sellers and Parent by
delivery of cash payable by wire transfer or delivery of other immediately
available funds as instructed by Sellers and Parent at the Closing (the "Cash
Purchase Price"); (ii) execution and delivery by the Buyer to the Parent at the
Closing of a subordinated promissory note in the principal amount of $1,600,000,
in the form attached hereto as Exhibit L (the "Subordinated Promissory Note")
and a promissory note in a principal amount equal to the legal fees of Parent
outstanding on the Closing Date not to exceed $300,000, in the form attached
hereto as Exhibit M (the "Additional Promissory Note") and (iii) the Assumed
Liabilities (the Cash Purchase Price, the Subordinated Promissory Note, the
Additional Promissory Note and the Assumed Liabilities are collectively referred
to herein as the "Purchase Price").
2. Section 3(d) of the Asset Purchase Agreement is hereby amended to
provide as follows:
(d) Brokers' Fees. Neither Sellers, Parent nor the Acquired
Subsidiaries have any Liability or obligation to pay any fees or commissions to
any broker, finder, or agent with respect to the transactions contemplated by
this Agreement for which the Buyer could become liable or obligated.
A-29
3. Section 4(e) of the Asset Purchase Agreement is hereby amended to
provide as follows:
(e) Brokers' Fees. The Buyer has no Liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Sellers could become
liable or obligated.
4. Exhibit A to the Asset Purchase Agreement is hereby amended to
delete the following:
The $700,000 fee owed by Parent to Xxxx Capital Partners, LLC.
5. Exhibit B to the Asset Purchase Agreement is hereby amended to add
the following:
All amounts owed by Parent to Xxxx Capital Partners LLC.
6. Section 4(f) of the Asset Purchase Agreement is hereby amended to
provide as follows:
(f) Deferral of Interest. The Buyer has no current intention to
exercise, after the Closing Date, the rights of the obligor
under the Indenture to defer any interest payments, except as
may be required by circumstances not now known by Buyer or as
a result of an unanticipated default under the financing
arrangements entered into in connection with the purchase of
the Acquired Assets.
7. Section 6(a)(xii) and Section 6(b)(xi) of the Asset Purchase
Agreement are each hereby amended to delete from each the words "the Deferred
Payment Schedule and."
8. Section 9(a)(ii)(B) and Section 9(a)(iii)(B) of the Asset Purchase
Agreement are hereby amended to change the date in each from June 30, 2003, to
October 31, 2003.
9. Exhibit H, Section 1 of the Asset Purchase Agreement is hereby
amended to provide as follows:
Consideration. As consideration for the Non-Compete and Nondisclosure
Covenants contained in Paragraphs 3 and 4 hereof, the Company is simultaneously
with the execution of this Agreement, paying to Kassel the total sum of one
million two hundred fifty thousand dollars ($1,250,000) which shall be placed by
the Company into an escrow account established for the benefit of Kassel
pursuant to paragraph 7 hereof.
10. Upon each exercise of the Amended and Restated Warrants referred to
in Section 6(c)(E) of the Asset Purchase Agreement, Buyer will pay to Parent
$.06 per share of Common Stock issued upon such exercise (such number to be
subject to the same adjustments as the exercise price of the Amended and
Restated Warrants are subject to
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pursuant to the Amended and Restated Warrant Agreement), such payment to be made
not later than five days after Parent gives Buyer notice of such exercise.
11. Except as changed above, the provisions of the Asset Purchase
Agreement remain effective.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on
the date first above written.
BUYER
EASY GARDENER PRODUCTS, LTD.
By: E G PRODUCT MANAGEMENT, L.L.C.,
GENERAL PARTNER
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Title: Manager
-----------------------------
EYAS INTERNATIONAL, INC.
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Title: President
-----------------------------
SELLERS
EASY GARDENER, INC.
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Title: Chief Executive Officer
-----------------------------
AMPRO INDUSTRIES, INC.
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Title: Chief Executive Officer
-----------------------------
A-31
WEED WIZARD ACQUISITION CORP.
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Title: Chief Executive Officer
-----------------------------
PARENT
U.S. HOME & GARDEN INC.
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Title: Chief Executive Officer
-----------------------------
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EXHIBITS AND SCHEDULE TO ASSET PURCHASE AGREEMENT
Exhibit A - List of certain liabilities of Sellers.
Exhibit B - List of certain excluded liabilities of Sellers.
Exhibit D - Xxxx of Sale covering the sale of assets
Exhibit E - Releases by Sellers and Parent
Exhibit F - Opinion of counsel to Sellers and Parent
Exhibit H - Non-Competition Agreement of Xxxxxx Xxxxxxx
Exhibit J - Consulting Agreement of Xxxxxx Xxxxxx
Exhibit G - Assignment and Assumption Agreement by Buyer covering all
of the Assumed Liabilities.
Exhibit K - List of acquired subsidiary excluded liabilities.
Exhibit L - Subordinated promissory note of Buyer in the principal
amount of $1,600,000.
Exhibit M - Promissory note of Buyer in a principal amount equal to the
legal fees of Parent outstanding on the Closing Date not to exceed $300,000
Disclosure Schedule--List of exceptions to representations and
warranties.
The Registrant agrees to furnish supplementally a copy of these
exhibits and schedules to the Commission upon request.
A-33
