EXHIBIT 10.21
EXCHANGE AGREEMENT
Agreement dated as of __________, 1998, by and between Verdant Brands, Inc.
a Minnesota corporation ("Verdant") and Norwest Bank Minnesota, National
Association (the "Exchange Agent").
WHEREAS, pursuant to an Agreement and Plan of Merger dated as of September
8, 1998 (the "Merger Agreement"), Consep Acquisition, Inc., an Oregon
corporation and a wholly-owned subsidiary of Verdant merged with and into
Consep, Inc. an Oregon corporation ("Consep") (the "Merger"), effective as of
__________ (the "Time of Merger").
WHEREAS, the Exchange Agent is the transfer agent for the common stock,
$.01 par value per share, of Verdant ("Verdant Common Stock"); and
WHEREAS, Verdant desires that the Exchange Agent act as its special agent
for the purpose of effecting the distribution of Verdant Common Stock to the
holders of certificates formerly representing shares of common stock, $.01 par
value per share, of Consep ("Consep Common Stock") pursuant to the terms of the
Merger Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
ARTICLE I
1. Verdant hereby instructs the Exchange Agent, in its capacity as transfer
agent for Verdant Common Stock, to issue as of ________________, (i) 10,127,069
shares from authorized but heretofore unissued stock , and, in its capacity as
Exchange Agent, to hold the certificate or certificates for 10,127,069 shares of
Verdant Common Stock, representing the aggregate number of shares of Verdant
Common Stock into which outstanding shares of Consep Common Stock were
converted, and (ii) 25,000 shares from authorized but heretofore unissued stock,
and, in its capacity as Exchange Agent, to hold the certificate or certificates
for 25,000 shares of Verdant Common Stock, representing the number of shares
issued to Xxxxx Xxxxxxx Inc.("Xxxxx"), financial advisor to Verdant in the
Merger, representing a portion of the fee paid to Piper in consideration for its
role as financial advisor.
2. A complete and correct list of the shareholders of Consep as of the
close of business on October 15, 1998, identifying each shareholder by name,
address, and the number of shares owned, has been previously transmitted to the
Exchange Agent.
ARTICLE II
The Exchange Agent covenant and agrees that:
1. As soon as practicable after the Time of the Merger, the Exchange Agent
shall send a Letter of Transmittal, in substantially the form attached hereto as
Exhibit A, together with a return envelope addressed to the Exchange Agent, to
each record holder (a "Record Holder") of an outstanding certificate or
certificates which immediately prior to the time of the Merger evidenced shares
of Consep Common Stock which shall have been converted into Verdant Common Stock
pursuant to the provisions of the Merger Agreement, advising such Record Holder
of the terms of such conversion and the procedure for surrendering to the
Exchange Agent such certificate or certificates in exchange for a certificate or
certificates evidencing Verdant Common Stock.
2. Upon receipt by the Exchange Agent from a Record Holder of a certificate
or certificates representing Consep Common Stock, accompanied by the appropriate
Letter of Transmittal duly completed and executed in accordance with the
instructions appearing therein, the Exchange Agent shall deliver to such Record
Holder (or to a transferee specified in such Letter of Transmittal) a
certificate or certificates representing full shares of Verdant Common Stock on
the basis of 0.95 of one share of Verdant Common Stock for each share of Consep
Common Stock.
3. Certificates representing shares of Verdant Common Stock issued to the
following Record Holders or their transferees:
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shall bear the following legend on the back of each certificate:
The shares represented by this certificate were issued in a
transaction to which Rule 145 under the Securities Act of 1933, as
amended (the "Act"), applies, have been delivered in reliance upon the
representation of the registered holder hereof that they have been
acquired for such holder's account, and may be sold, transferred, or
otherwise disposed of, in whole or in part, except in compliance with
applicable requirements of Rule 145 or pursuant to a registration
statement under the Act or an exemption from such registration.
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4. No certificate or scrip for such fractional shares of Verdant Common
Stock shall be issued. In lieu of such fractional shares, any Record Holder or
transferee who would otherwise be entitled to fractional shares of Verdant
Common Stock shall, upon surrender of his or her certificate or certificates
representing Consep Common Stock, be paid the cash value of each such fraction,
which shall be equal to the fraction multiplied by the closing price of Verdant
Common Stock on the closing date of the Merger.
5. If any Record Holder shall report that his or her failure to surrender
any certificate or certificates representing shares of Consep Common Stock
registered in his or her name is due to the loss, misplacement or destruction of
such certificate or certificates, the Exchange Agent shall require such Record
Holder to furnish a Bond of Indemnity Agreement in form satisfactory to the
Exchange Agent and Verdant before delivering to such Record Holder or his or her
transferee the certificate or certificates for the shares of Verdant Common
Stock to which he or she is entitled.
6. The Exchange Agent shall cancel and return to Verdant the certificates
for shares of Consep Common Stock delivered for exchange after a period of one
year.
7. The Exchange Agent shall receive and hold, for distribution without
interest to the first record holder of the certificate or certificates
representing shares of Consep Common Stock, all dividends and other
distributions paid on shares of Verdant Common Stock held in the Exchange
Agent's name as agent.
ARTICLE III
1. The Exchange Agent:
(a) shall not be obligated to take any legal action hereunder which
might in its judgment involve any expense or liability unless it shall have
been furnished with reasonable indemnity from Verdant;
(b) may rely on and shall be protected in acting upon any certificate,
instrument, opinion, notice, letter, telegram, or other document or
security delivered to it and believed by it to be genuine and to have been
signed by the proper party or parties;
(c) may rely on and shall be protected in acting upon the written
instructions of the Secretary, Assistant Secretary or any Vice President of
Verdant; and
(d) may consult counsel satisfactory to it, who may be counsel to
Verdant, and the opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with the opinion of
such counsel.
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2. Verdant agrees to indemnify and hold the Exchange Agent harmless against
any loss, claim, liability or expense (including, without limitation, the costs
and expenses of defending against such loss, claim or liability) incurred
without gross negligence on its part arising out of or in connection with:
(a) the performance of its duties hereunder; or
(b) reliance by the Exchange Agent upon the information relating to
the Consep Common Stock furnished to the Exchange Agent by Verdant provided
that, in any case in which there is a discrepancy between such information
and the information contained in the certificate or certificates
surrendered to the Exchange Agent by a former shareholder of Consep for
exchange under the terms hereof, the Exchange Agent shall have a duty to
inquire as to the reason for such discrepancy.
3. Verdant agrees to pay the reasonable and customary fees of the Exchange
Agent for the services of the Exchange Agent hereunder or in connection herewith
and to reimburse the Exchange Agent for all reasonable out-of-pocket expenses
incurred by it pursuant to or in connection with its services hereunder.
4. This Agreement shall be construed and enforced in accordance with the
laws of the State of Minnesota and shall inure to the benefit of, and the
obligations crated hereby shall be binding upon, the successors and assigns of
the parties hereto.
5. Verdant and the Exchange Agent agree that, unless terminated or extended
in writing by Verdant this agreement shall terminate one year from the date of
this agreement.
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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date and year first above written.
VERDANT BRANDS, INC.
By:
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Its:
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NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By:
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Its:
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