<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
---------
Sunbelt Nursery Group, Inc.
--------------------------------------------------------
(Name of Issuer)
Common Stock, $.01 par value per share
--------------------------------------------------------
(Title of Class of Securities)
866925 10 0
--------------------------------------------------------
(CUSIP Number)
Rodney P. Burwell, 7901 Xerxes Ave. So., Suite 201,
Minneapolis, MN 55431 - 612-887-1815
--------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
June 24, 1997
--------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box / /.
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
(Continued on following page(s))
Page 1 of 9 Pages
---
<PAGE>
CUSIP No. 866925 10 0 13D Page 2 of 9 Pages
----------- --- ---
- -------------------------------------------------------------------------------
(1) Names of Reporting Persons. S.S. or I.R.S. Identification Nos. of Above
Persons
Healthy American Products, Inc.
41-1704472
- -------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member (a) /X/
of a Group* (b) / /
- -------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------
(4) Source of Funds*
WC
- -------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
- -------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
Minnesota
- -------------------------------------------------------------------------------
Number of Shares (7) Sole Voting
Beneficially Owned Power
by Each Reporting --------------------------------------------------
Person With (8) Shared Voting
Power 1,000,000
--------------------------------------------------
(9) Sole Dispositive
Power
--------------------------------------------------
(10) Shared Dispositive
Power 1,000,000
- -------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
1,000,000
- -------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares*
- -------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
11.76%
- -------------------------------------------------------------------------------
(14) Type of Reporting Person*
CO
- -------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
CUSIP No. 866925 10 0 13D Page 3 of 9 Pages
----------- --- ---
- -------------------------------------------------------------------------------
(1) Names of Reporting Persons. S.S. or I.R.S. Identification Nos. of Above
Persons
Rodney P. Burwell
###-##-####
- -------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member (a) / /
of a Group* (b) /X/
- -------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------
(4) Source of Funds*
PF
- -------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
- -------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
United States
- -------------------------------------------------------------------------------
Number of Shares (7) Sole Voting
Beneficially Owned Power 82,800
by Each Reporting --------------------------------------------------
Person With (8) Shared Voting
Power 1,000,000
--------------------------------------------------
(9) Sole Dispositive
Power 82,800
--------------------------------------------------
(10) Shared Dispositive
Power 1,000,000
- -------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
1,082,800
- -------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares*
- -------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
12.739%
- -------------------------------------------------------------------------------
(14) Type of Reporting Person*
IN
- -------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
CUSIP No. 866925 10 0 13D Page 4 of 9 Pages
----------- --- ---
- -------------------------------------------------------------------------------
(1) Names of Reporting Persons. S.S. or I.R.S. Identification Nos. of Above
Persons
Todd D. Peterson
###-##-####
- -------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member (a) / /
of a Group* (b) /X/
- -------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------
(4) Source of Funds*
N/A
- -------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
- -------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
United States
- -------------------------------------------------------------------------------
Number of Shares (7) Sole Voting
Beneficially Owned Power 0
by Each Reporting --------------------------------------------------
Person With (8) Shared Voting
Power 1,000,000
--------------------------------------------------
(9) Sole Dispositive
Power 0
--------------------------------------------------
(10) Shared Dispositive
Power 1,000,000
- -------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
1,000,000
- -------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares*
- -------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
11.76%
- -------------------------------------------------------------------------------
(14) Type of Reporting Person*
IN
- -------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
Item 1.Security and Issuer.
This statement relates to the Common Stock, par value $.01 per share of
Sunbelt Nursery Group, Inc., a Delaware corporation ("Issuer"). The
names of the principal executive officers are Timothy Duoos, Chairman,
and Richard Dwyer, President and Chief Executive Officer and the
Issuer's principal executive office is located at 500 Terminal Road,
Fort Worth, Texas, 76106.
Item 2.Identity and Background.
A. (a) The name of the reporting person is Healthy American Products Inc.
("Reporting Person 1").
(b) Reporting Person 1's principal executive and business office is
located at 7901 Xerxes Avenue South, Suite 201, Minneapolis,
Minnesota 55431.
(c) Reporting Person 1 is a corporation which is a holding company.
(d) Reporting Person 1 has not, during the last five years, been
convicted in a criminal proceeding.
(e) Reporting Person 1 has not, during the past five years, been a
party to a civil proceeding of a judicial or administrative body
of competent jurisdiction and as a result of such proceeding was
or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any
violation with respect to such laws.
(f) Reporting Person 1 was incorporated under the laws of the State of
Minnesota.
B. (a) The name of the reporting person is Rodney P. Burwell ("Reporting
Person 2").
(b) Reporting Person 2's business address is 7901 Xerxes Avenue South,
Suite 201, Minneapolis, Minnesota, 55431.
(c) Reporting Person 2 is Chairman of Healthy American Products Inc.
identified in Item 2A as Reporting Person 1.
(d) Reporting Person 2 has not, during the last five years, been
convicted in a criminal proceeding.
(e) Reporting Person 2 has not, during the past five years, been a
party to a civil proceeding of a judicial or administrative body
of competent jurisdiction and as a result of such proceeding was
or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any
violation with respect to such laws.
(f) Reporting Person 2 is a citizen of the United States.
C. (a) The name of the reporting person is Todd D. Peterson ("Reporting
Person 3").
(b) Reporting Person 3's business address is 7901 Xerxes Avenue South,
Suite 201, Minneapolis, Minnesota, 55431.
(c) Reporting Person 3 is President of Healthy American Products Inc.
identified in Item 2A as Reporting Person 1.
(d) Reporting Person 3 has not, during the last five years, been
convicted in a criminal proceeding.
5 of 9
<PAGE>
(e) Reporting Person 3 has not, during the past five years, been a
party to a civil proceeding of a judicial or administrative body
of competent jurisdiction and as a result of such proceeding was
or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any
violation with respect to such laws.
(f) Reporting Person 3 is a citizen of the United States
Item 3.Source and Amount of Funds or Other Consideration.
The shares of the Issuer acquired by Reporting Person 1 were acquired
with working capital in the total aggregate amount of approximately
$1,125,000. The shares of the Issuer acquired by Reporting Person 2
were acquired with personal funds in the total aggregate amount of
approximately $166,000 not including the shares of the Issuer in which
Reporting Person 2 has an interest as an executive officer of Reporting
Person 1. Reporting Person 3 owns no shares of the Issuer except those
shares in which Reporting Person 3 has an interest as an executive
officer of Reporting Person 1.
Item 4.Purpose of Transaction
Reporting Persons 1, 2 and 3 hold the Issuer's common stock for
investment purposes. The Reporting Persons may, in the future, acquire
shares of the Issuer's common stock and will report any such
acquisitions as required by Rule 13d-2(a) under the Securities Exchange
Act of 1934 ("Exchange Act").
The Reporting Persons do not have any plans or proposals which relate to
or would result in extraordinary corporate transactions affecting the
Issuer (such as a merger, reorganization or liquidation), the sale or
transfer of a material amount of its assets, any material change in its
capitalization or dividend policy, any other material change in the
Issuer's business or corporate structure, any change in its charter or
bylaws or any other actions which may impede the acquisition of control
of the Issuer by any person, causing a class of the Issuer's securities
to cease to be quoted in an inter-dealer quotation system, the
termination of registration of the Issuer's securities under the
Exchange Act, or similar actions or events.
Reporting Person 2 currently is a member of the Board of Directors of
the Issuer.
Item 5.Interest in Securities of the Issuer.
(a) According to the information provided by the Issuer in its
Quarterly Report on Form 10-Q for the quarter ended December 29,
1996, there were 8,500,000 shares of the Issuer's common stock
outstanding. At the present time:
(1) Reporting Person 1 beneficially owns an aggregate of
1,000,000 shares of the Issuer's common stock constituting
approximately 11.76% of the Issuer's outstanding shares;
6 of 9
<PAGE>
(2) Reporting Person 2 beneficially owns an aggregate of
1,082,800 shares of the Issuer's common stock constituting
approximately 12.739% of the Issuer's outstanding shares,
(3) Reporting Person 3 beneficially owns an aggregate of
1,000,000 shares of the Issuer's common stock constituting
approximately 11.76% of the Issuer's outstanding shares.
(b) (1) Reporting Person 1 has shared voting and shared dispositive
power with respect to 1,000,000 shares;
(2) Reporting Person 2 has sole voting and sole dispositive
power with respect to 82,800 shares held by him directly and
shared voting and shared dispositive power with respect to
1,000,000 shares,
(3) Reporting Person 3 has shared voting and shared dispositive
power with respect to 1,000,000 shares,
The filing of this statement shall not be construed as an admission that
Reporting Persons 2 and 3 are, for the purpose of Section 13(d) or 13(g)
of the Exchange Act or for any other purposes, the beneficial owners of
securities held by or for the benefit of their spouses or children, and
any ownership interest in said securities is disclaimed.
(c) The following table sets forth the transactions effected by each
of the Reporting Persons during the last sixty days. Each of the
transactions set forth below reflects a purchase effected (unless
otherwise noted) by means of trades on the American Stock
Exchange.
Shares Acquired or
------------------
Reporting Person Date Disposed Of Price Per Share
- ---------------- ---- ----------- ---------------
1 June 24, 1997 1,000,000 Acquired * $1.125
2 June 25, 1997 1,000 Acquired $1.125
2 June 17, 1997 2,600 Acquired $1.125
*Direct purchase from Timothy Duoos
(d) No one, other than the Reporting Persons, has the right to receive
dividends from, or the proceeds from the sale of, the shares held by
the Reporting Persons or for their benefit.
(e) Not Applicable
7 of 9
<PAGE>
Item 6.Contracts, Arrangements, Understandings or Relationships With Respect to
Securities of the Issuer.
The acquisition of the securities of the Issuer by Reporting Person 1 is
subject to a Stock Purchase Agreement dated June 20, 1997 and a
Registration Rights Agreement dated June 20, 1997. Said Agreements are
attached hereto as exhibits to Item 7.
Item 7.Material to Be Filed as Exhibits.
Exhibit A Stock Purchase Agreement dated June 20, 1997 by and between
Healthy American Products Inc. and Timothy R. Duoos
Exhibit B Registration Rights Agreement dated June 20, 1997 by and
between Sunbelt Nursery Group, Inc. and Healthy American
Products Inc.
8 of 9
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of our knowledge and belief, we
certify that the information set forth in this statement is true, complete and
correct.
Date: July 1, 1997 HEALTHY AMERICAN PRODUCTS INC.
By:/s/Rodney P. Burwell
---------------------------------
Rodney P. Burwell, CEO
Date: July 1, 1997 /s/Rodney P. Burwell
------------------------------------
Rodney P. Burwell
Date: July 1, 1997 /s/ Todd D. Peterson
------------------------------------
Todd D. Peterson
9 of 9
<PAGE>
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into as of the 20th day of June, 1997,
by and between Healthy American Products, Inc., a Minnesota corporation (the
"Purchaser") and Timothy R. Duoos (the "Seller").
WHEREAS, Seller is the owner of 4,200,000 shares of Common Stock, $.01 par
value per share (the "Stock"), of Sunbelt Nursery Group, Inc., a Delaware
corporation (the "Company"); and
WHEREAS, Purchaser desires to purchase and acquire 1,000,000 shares of the
Stock (the "Shares") from Seller and Seller desires to sell, assign and transfer
the Shares to Purchaser, on the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. SALE AND PURCHASE OF SHARES. At the Closing (as hereinafter defined),
Purchaser shall purchase the Shares from Seller and Seller shall sell, transfer,
assign and deliver the Shares to Purchaser free and clear of all security
interests, liens, claims, charges, encumbrances, or legends of any kind, except
for the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH
SECURITIES MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH
SECURITIES UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT.
2.PURCHASE PRICE. In exchange for the Shares, Purchaser shall pay
$1,125,000, which shall be delivered to Seller at the Closing by certified check
or bank draft, payable jointly to Seller and the bank holding the Shares as
collateral for Seller's loan, at which time the bank shall release its lien on
the Shares.
3.DELIVERY OF STOCK CERTIFICATE. The sale and purchase of the Shares
contemplated by this Agreement shall be effectuated by Seller's delivering to
Purchaser at the Closing the certificate(s) representing the Shares, which
certificate(s) shall be duly endorsed in blank or accompanied by an appropriate
Assignment Separate from Certificate duly executed in blank and appropriate
releases from the holder of any lien.
<PAGE>
4.REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby represents and
warrants to Purchaser as follows:
a.Seller is the lawful owner of record and beneficially of the Shares
and will transfer the Shares to Purchaser at the Closing free and clear of
all security interests, liens, claims, charges, options, encumbrances and
restrictions.
b.Seller has not granted any options or other rights to purchase all
or any part of the Shares to any third party which will not be duly
terminated on or before the Closing.
c.Seller has the full power and authority to execute, deliver and
perform this Agreement.
d.This Agreement constitutes the legal, valid and binding obligation
of Seller enforceable in accordance with its terms.
e.No consent, approval or authorization of or permit or license from
or registration with or notice to any governmental or public body or
authority or any third party is required to be obtained or given by Seller
in connection with the making or performance of this Agreement or any
document or instrument related hereto, or, if so required, such consent,
approval, authorization, permit or license will have been requested and
obtained or such registration will have been made or such notice will have
been given or such other appropriate action will have been taken on or
prior to the Closing.
f.The execution and delivery of this Agreement does not and the
consummation of the transaction contemplated hereby will not (i) violate
any provision of the Articles of Incorporation or Bylaws of the Company,
(ii) violate any provision of or result in the termination of or the
acceleration of the obligation under any mortgage, lien, lease, franchise,
license, permit, agreement, instrument, indenture, order, arbitration or
judgment or decree to which Seller or the Company is a party or by which
Seller or the Company is obligated, or (iii) violate or conflict with any
other restriction of any kind or character to which Seller or the Company
is subject.
g.Neither this Agreement nor any exhibit or other instrument furnished
to Purchaser pursuant to this Agreement or in connection with the
transactions contemplated by this Agreement contains or will contain any
false statement of a material fact or omits or will omit to state a
material fact necessary in order to make statements contained therein not
misleading.
5.REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby warrants
and represents to Seller as follows:
a.This Agreement has been duly and validly executed and delivered by
Purchaser and constitutes the valid and legally binding obligation of
Purchaser, enforceable in accordance with its terms.
2
<PAGE>
b.Purchaser has the full power and authority to execute, deliver and
perform this Agreement.
c.Neither this Agreement nor any exhibit or other instrument furnished
by Purchaser pursuant to this Agreement or in connection with the
transactions contemplated hereby contains or will contain any false
statements of a material fact or omits or will omit to state a material
fact necessary in order to make the statements therein not misleading.
d.Purchaser is aware that the Shares represent a speculative
investment, and Purchaser is generally knowledgeable regarding the past and
present operations of the Company and the terms of this Agreement and
Purchaser acknowledges that his investment is made without reliance on any
representations, warranties or statements of Seller except as made herein.
e.Purchaser understands that the Shares have not been registered under
the laws of any state or the Securities Act of 1933, as amended
(hereinafter referred to as the "Act"), and that Seller is transferring the
Shares to Purchaser in reliance upon exemptions from registration
requirements of the Act.
f.Purchaser is acquiring the Shares for investment and not for the
purpose of or with a view to the sale or other distribution thereof, and
Seller is transferring the Shares to Purchaser in reliance upon the truth
of Purchaser's representations and warranties.
6.REGISTRATION AGREEMENT. Concurrently with the Closing of the purchase of
the Shares and as a condition precedent thereto, the Company will enter into a
registration agreement (the "Registration Agreement") with Purchaser providing
for demand registration rights in favor of Purchaser pursuant to which Purchaser
will be permitted to demand that the Company register the Shares for sale at any
time, but not to exceed two registrations within the seven-year period following
Closing, and participatory registration rights during the same period. Such
registration agreement shall contain customary indemnity and other provisions.
7.CO-SALE RIGHT. Seller agrees with Purchaser that in the event that
Seller sells any of his remaining shares of the Stock, other than on the open
market, Seller will give Purchaser written notice of the price and terms of such
sale at least ten (10) business days prior to the closing, and Purchaser shall
be entitled to participate in such sale on a pro rata basis. In addition, in
the event that Seller determines to sell his shares of Stock pursuant to a
registration under the Act, Seller shall provide advance notice to Purchaser so
as to allow Purchaser to participate in such registration. Notwithstanding any
provision of this Agreement to the contrary, Purchaser's co-sale rights under
this paragraph 7 shall not apply to the pending transfer by Seller of 1,000,000
of his shares to Pier I at any time during the next six (6) months hereafter nor
to the registration of said 1,000,000 shares as a precondition to and part of
said transfer to Pier I.
8.DIRECTOR POSITION. Seller agrees to use his best efforts to cause a
representative of the Purchaser to be elected as one of the members of the Board
of Directors of the Company
3
<PAGE>
so long as the Purchaser holds at least 500,000 shares of Stock. The election
of Rodney P. Burwell to the Board of Directors satisfies this requirement.
9.CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER. Unless waived in
writing by Purchaser, each and every obligation and agreement of Purchaser under
this Agreement to be performed at or before the Closing shall be subject to the
satisfaction at or prior to the Closing of each and all of the following
conditions precedent, which conditions Seller will in good faith endeavor to
satisfy:
a.The representations and warranties by Seller set forth in this
Agreement shall be true and correct in all material respects at and as of
the Closing to the same extent and with the same effect as if such
representations and warranties were made as of the Closing.
b.No administrative or judicial suit or proceeding shall be threatened
or pending in which it will be or which it is sought, by anyone, to
restrain, prohibit, challenge or obtain damages or other relief in
connection with this Agreement or the consummation of the transactions
contemplated hereby.
c.All actions, proceedings, instruments and documents required of
Seller to carry out the transactions contemplated by this Agreement or
incidental thereto and all other related legal matters shall have been
reasonably satisfactory to and approved by counsel for Purchaser, and such
counsel shall have been furnished with such documents as counsel shall have
reasonably requested.
d.Seller shall have performed and complied with all of the agreements,
covenants and conditions required by this Agreement to be performed or
complied with by him at or prior to the Closing.
e.The Company, pursuant to authority conferred by a resolution adopted
by disinterested members of its board of directors, shall have executed and
delivered the Registration Agreement described in Section 6 hereof.
10.CLOSING. The Closing of the purchase and sale of the Shares
contemplated by this Agreement shall be at 9:30 a.m., _________________________,
1997 at ________________________________________________________________________
or on such other day and at such other time and place as may be mutually agreed
upon in writing by the parties hereto. Such time and date are referred to in
this Agreement as the "Closing."
11.SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The statements,
representations, warranties, covenants, agreements and indemnities of Purchaser
and Seller contained in this Agreement and in any certificate, instrument or
document delivered by or on behalf of any of the parties hereto pursuant to this
Agreement and the transactions contemplated hereby shall survive the Closing and
the consummation of the transactions contemplated hereby.
INDEMNIFICATION. Seller hereby covenants and agrees with Purchaser that he
shall pay and perform, and shall defend and indemnify Purchaser and its
successors and assigns (collectively the
4
<PAGE>
"Indemnified Parties"), and hold the Indemnified Parties harmless from, against
and in respect of any and all costs, losses, claims, liabilities, fines,
penalties, damages and expenses (including, without limitation, interest which
may be incurred in connection therewith and court costs and reasonable fees and
disbursements of counsel) resulting from, arising out of or incurred by any of
them in connection with any breach of the representations, warranties, covenants
or agreements of Seller contained in this Agreement.
Seller shall be deemed to have a period of thirty (30) days after written notice
from Purchaser of any claim under this paragraph 11 within which to remedy, take
appropriate responsibility for or cure any such claim before a default or an
event of default is deemed to exist hereunder.
12.BROKERS. Purchaser and Seller each hereby warrant and represent to the
other that all negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on without the introduction or involvement
of any broker, finder or other third person (other than their respective
attorneys) employed by either Purchaser or Seller and no such person or entity
has or will have any valid claim against any of the parties hereto for any
brokerage commission or other like payment.
13.FURTHER ACTS. Purchaser and Seller shall each, without further
consideration, execute such additional documents as may be reasonably required
in order to carry out the purposes and intent of this Agreement and to fulfill
the obligations of the respective parties hereto.
14.NOTICES. All notices and other communications provided for hereunder
shall be in writing and shall be personally delivered or mailed to each party at
the address as set forth below or at such other address or in such other manner
as may be designated by such party in a written notice to the other party. All
such notices and communications shall be effective when delivered in person or
transmitted by confirmed telex or similar means or upon receipt after dispatch
by certified or registered first class mail, postage prepaid, return receipt
requested, to the party to whom the same is given or made:
If to Purchaser: Healthy American Products, Inc.
c/o Burwell Enterprises
7901 Xerxes Avenue South, Suite 201
Minneapolis, Minnesota 55431
5
<PAGE>
With a copy to: Richard J. Kelber, Esq.
Moss & Barnett
A Professional Association
Norwest Center
South Seventh St.
Minneapolis, MN 55402-4119
If to Seller: Timothy R. Duoos
500 Terminal Road
Fort Worth, TX 76106
With a copy to: Michael McGrath, Esq.
4545 IDS Center
80 South Eighth Street
Minneapolis, MN 55127
15.ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties hereto relating to the subject matter hereof and supersedes all prior or
contemporaneous agreements and understandings, oral or written, between the
parties hereto with respect to the subject matter hereof.
16.NO WAIVER; REMEDIES CUMULATIVE. No failure on the part of a party
hereunder to exercise and no delay in exercising any rights hereunder shall
operate as a waiver thereof nor shall any single or partial exercise of any
rights hereunder preclude any other or further exercise thereof or the exercise
of any other right. Remedies herein provided are cumulative and not exclusive
of any other remedy provided by law.
17.AMENDMENT. No amendment or modification of any provision of this
Agreement shall be effective unless the same shall be in writing and signed by
both of the parties hereto.
18.HEIRS, REPRESENTATIVES AND ASSIGNS. This Agreement, and the terms,
covenants and conditions hereof, shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, personal representatives,
successors and assigns.
19.GOVERNING LAW. This Agreement shall be deemed to be a contract made
under and shall be construed, interpreted governed by and enforced in accordance
with the internal laws (but not the laws of conflict) of the State of Minnesota.
20.COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same agreement.
6
<PAGE>
21.HEADINGS. The headings to the paragraphs of this Agreement are intended
for the convenience of the parties only and shall in no way be held to explain,
modify, amplify or aid in the interpretation of the provisions hereof.
22.SEVERABILITY. The provisions of this Agreement shall be deemed
severable and if any portion hereof shall be held invalid, illegal or
unenforceable for any reason, the remainder shall not thereby be invalidated but
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
SELLER: PURCHASER:
HEALTHY AMERICAN PRODUCTS, INC.
/S/TIMOTHY R. DUOOS________ By /S/RODNEY P. BURWELL________________
Timothy R. Duoos Rodney P. Burwell
Its CHAIRMAN_____________________
7
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement") is made as of June 20,
1997 between SUNBELT NURSERY GROUP, INC., a Delaware corporation (the
"Company"), and HEALTHY AMERICAN PRODUCTS, INC., a Minnesota corporation (the
"Holder").
RECITALS
WHEREAS, pursuant to the terms of a Stock Purchase Agreement dated as of
June 20, 1997 (the "Stock Purchase Agreement"), by and among the Holder and
Timothy Duoos, the Holder has agreed to purchase 1,000,000 shares of the
Company's Common Stock, $.01 par value per share (the "Shares"), from Mr. Duoos;
and
WHEREAS, in connection therewith the Company has agreed to register the
Shares on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein set forth, it is hereby agreed between the
Company and the Holder as follows:
ARTICLE I
REGISTRATION RIGHTS
Section 1.1. PARTICIPATION IN REGISTRATION. (a) If, at any time or from
time to time after June ____, 1997, the Company shall determine to register any
of its securities, either for its own account or the account of another security
holder or holders, other than (i) a registration relating solely to employee
benefit plans on Form S-8 or similar form which may be promulgated in the
future, or (ii) a registration on Form S-4 or similar form which may be
promulgated in the future relating to an SEC Rule 145 transaction, the Company
will:
(i) promptly give to the Holder written notice thereof (which shall
include a list of the jurisdictions in which the Company intends to attempt to
qualify such securities under the applicable blue sky or other state securities
laws); and
(ii) include in such registration (and any related qualification under blue
sky laws or other compliance), and in any underwriting involved therein, all
Shares specified in a written request or requests, made within 30 days after
receipt of such written notice from the Company, by the Holder.
(b) If the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the Company shall so
advise the Holder as a part of the written notice given pursuant to Section
1.1(a)(i). In such event, the right of the Holder to
<PAGE>
registration pursuant to Section 1.1 shall be conditioned upon the Holder's
agreeing to participate in such underwriting and in the inclusion of such the
Holder's Shares in the underwriting to the extent provided herein. The Holder
shall (together with the Company and any other holder distributing securities
through such underwriting) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such underwriting by the
Company or by any other holder exercising demand registration rights.
Notwithstanding any other provision of this Section 1.1, if the underwriter
determines that marketing factors require a limitation of the number of shares
to be underwritten, the underwriter may limit the number of shares to be
included in the registration and underwritten public offering on a pro rata
basis based on the respective amounts of Shares owned by the Holder and the
securities of the Company owned by each other holder seeking to distribute
securities through the public offering; PROVIDED, HOWEVER, that the Company
shall not exclude more than that number of shares which, in the reasonable
opinion of such underwriter, must reasonably be excluded in light of such
marketing factors. The Company shall so advise the Holder and any other holder
distributing securities through such underwriting, and the number of Shares and
other securities that may be included in the registration shall be allocated
among all holders thereof (other than holders who are exercising demand
registration rights) in proportion, as nearly as practicable, to the respective
amounts of securities entitled to inclusion in such registration held by the
Holder at the time of filing the registration statement. If the Holder
disapproves of the terms of any such underwriting, it may elect to withdraw
therefrom by written notice to the Company and the underwriter, which notice, to
be effective, must be received by the Company at least two business days before
the anticipated effective date of the registration statement. The Company may
at any time withdraw or abandon any registration statement which triggers the
provisions of this Section 1.1 without any liability to the Holder. Any
securities excluded or withdrawn from such underwriting shall be withdrawn from
such registration.
Section 1.2. DEMAND REGISTRATION RIGHTS. On and after the Date hereof and
for a period of seven (7) years hereafter, the Holder, by written notice, may
demand that the Company file a registration statement under the Securities Act
to permit resale of these Shares. Any such registration shall be subject to the
following limitations:
(a) The Company shall not be required to effect more than two (2)
registrations pursuant to this Section 1.2;
(b) The Company shall not be required to prepare or effect any
registration pursuant to this Section 1.2 unless the Shares to be sold by the
Holder represent not less than 40% of the total Shares; and
(c) If the Company shall furnish to the Holder a certificate, signed by
the Company's president or chief executive officer, stating that (i) the Company
is conducting or is about to conduct an offering of its securities and is
advised by its managing underwriter that such offering might be affected
adversely by the registration on behalf of the Holder or (ii) in the good faith
judgment of the Board of Directors of the Company the offering would interfere
with a pending or contemplated financing, merger, sale of assets,
recapitalization or other similar corporate action
2
<PAGE>
of the Company if such registration statement would be filed on or before the
date filing would be required and it is therefore essential to defer the filing
of such registration statement, the Company shall have the right, exercisable
only once during any period of twelve consecutive months, to defer filing the
registration statement for a period of not more than 120 days; provided,
however, that the time period set forth in Section 1.2 with respect to the
exercise by the Holder of its Registration Rights shall be extended by the
number of days by which any registration is deferred under the terms of this
paragraph (c).
Section 1.3. EXPENSE OF REGISTRATION. All Registration Expenses incurred
in connection with any registration, qualification or compliance pursuant to
Article I shall be borne by the Company. All Selling Expenses relating to
securities registered by the Holder shall be borne by the Holder.
Section 1.4. REGISTRATION PROCEDURES. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Article I,
the Company will keep the Holder advised in writing as to the initiation of each
registration, qualification and compliance and as to the completion thereof. At
its expense, the Company will in good faith use its best efforts to:
(a) Keep such registration, qualification or compliance effective until
the Holder has completed the distribution described in the registration
statement relating thereto;
(b) Furnish such number of prospectuses and other documents incident
thereto as Holder from time to time may reasonably request, but only during the
period that the Company would be required to keep the registration effective;
(c) Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement;
(d) Register and qualify the securities covered by such registration
statement under such other securities or Blue Sky laws of such jurisdictions as
shall be reasonably requested by the Holder, provided that the Company shall not
be required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such states
or jurisdictions;
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. The Holder shall also
enter into and perform its obligations under such agreement;
(f) Notify the Holder at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement
3
<PAGE>
of material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing; and
(g) Provide the Holder with an opinion of Company's counsel and a letter
from the Company's independent auditors in the form customary to those delivered
to an underwriter of a registered public offering and satisfactory in form and
substance to Holder's counsel.
Notwithstanding any provision of this Agreement to the contrary, the Company
shall have no liability to Holder for failure to comply with any registration
procedure set forth in this Section 1.4 provided Company has used its best
efforts in good faith to perform its obligation under this Section 1.4
Section 1.5. INDEMNIFICATION. (a) The Company will indemnify the Holder
and its officers, directors, shareholders and agents and each underwriter, if
any, and each person who controls any underwriter within the meaning of Section
15 of the Securities Act, against all expenses, claims, losses, damages and
liabilities (or actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or threatened, arising out
of or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any registration statement, prospectus, offering circular or
other document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances in
which they were made, not misleading, or any violation by the Company of any
rule or regulation promulgated under the Securities Act applicable to the
Company and relating to action or inaction required of the Company in connection
with any such registration, qualification or compliance, and will pay to the
Holder, its officers, directors, shareholders and agents, each such underwriter
and each person who controls any such underwriter, as incurred, any legal and
any other expenses reasonably incurred in connection with investigating,
preparing or defending any such claim, loss, damage, liability or action,
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or is based on
any untrue statement or omission or alleged untrue statement or omission, made
in reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by such Holder or underwriter and stated
to be specifically for use therein.
(b) The Holder will, if Shares held by such Holder are included in the
securities as to which such registration, qualification or compliance is being
effected, indemnify the Company, each of its directors and officers, each
underwriter, if any, of the Company's securities covered by such a registration
statement, each person who controls the Company or such underwriter within the
meaning of Section 15 of the Securities Act, and each other holders of
securities covered by the registration statement, each of its officers,
directors or partners and each person controlling such holder within the meaning
of Section 15 of the Securities Act, against all expenses, claims, losses,
damages and liabilities (or actions in respect thereof) including any of the
foregoing incurred in settlement of any litigation commenced or threatened,
arising out of or based on any untrue statement (or alleged untrue statement) by
the Holder of a material fact contained in any
4
<PAGE>
such registration statement, prospectus, offering circular or other document, or
any amendment or supplement thereto, incident to any such registration,
qualification or compliance or based on any omission (or alleged omission) by
the Holder to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances in
which they were made, not misleading, or any violation by the Holder of any rule
or regulation promulgated under the Securities Act applicable solely to the
Holder (which is not otherwise applicable to or violated by the Company) and
relating to action or inaction required solely of the Holder (and not relating
to or required of the Company) in connection with such registration,
qualification or compliance, and will pay to the Company, any such holder, such
directors, officers, partners, persons, underwriters or control persons, as
incurred, any legal or any other expenses reasonably incurred in connection with
investigating, preparing or defending any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement, prospectus, offering circular or other
document or any amendment or supplement thereto in reliance upon and in
conformity with written information relating to the Holder which shall have been
furnished to the Company by an instrument duly executed by the Holder and stated
to be specifically for use therein; provided, however, that the obligations of
the Holder hereunder shall be limited to an amount equal to the net proceeds to
the Holder of Shares sold as contemplated herein.
(c) Each party entitled to indemnification under this Section 1.5 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld), and the Indemnified Party may participate in such defense at its own
expense, and PROVIDED, FURTHER, that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 1.5 unless and then only to the extent that such
failure resulted in actual detriment to the Indemnifying Party. Notwithstanding
the above, however, if representation of one or more Indemnified Parties by the
counsel retained by the Indemnifying Party would be inappropriate due to
conflicting interests between such Indemnified Parties (the "Conflicting
Indemnified Parties") and any other party represented by such counsel in such
proceeding, then such Conflicting Indemnified Parties shall have the right to
retain separate counsel, chosen by the holder of a majority of the shares
included in the registration, at the expense of the Indemnifying Party. No
Indemnifying Party, (i) in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation, or (ii)
shall be liable for amounts paid in any settlement if such settlement is
effected without the consent of the Indemnifying Party.
5
<PAGE>
Section 1.6. INFORMATION BY HOLDER. The Holder shall furnish to the
Company such information regarding the Holder and the distribution proposed by
the Holder as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification or
compliance referred to in this Article I.
Section 1.7. RULE 144 REPORTING. With a view to making available the
benefits of certain rules and regulations of the Commission which may at any
time permit the sale of restricted securities to the public without
registration, the Company agrees to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the date hereof;
(b) File with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Securities
Exchange Act of 1934, as amended (at any time it is subject to such reporting
requirements);and
(c) So long as the Holder owns any restricted securities, furnish to the
Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 and of the
Securities Act and the Securities Exchange Act of 1934 and a copy of the most
recent annual or quarterly report of the Company.
Section 1.8. TRANSFER OF REGISTRATION RIGHTS. The rights to cause the
Company to register securities granted under Article I may be assigned by the
Holder, provided that written notice is given to the Company in each instance.
No transferee, assignee or other person purporting to exercise rights under this
Article I who is not a signatory to this Agreement shall be entitled to do so
unless and until such person agrees to be bound by the terms of this Article I.
Section 1.9. "MARKET STAND OFF" AGREEMENT. The Holder hereby agrees that
it shall not, to the extent required by the Company and an underwriter of Common
Stock (or other securities) of the Company, sell or otherwise transfer or
dispose (other than to donees who agree to be similarly bound) of any Shares
during the ninety (90) day period following the effective date of a registration
statement of the Company filed under the Securities Act; PROVIDED, HOWEVER, that
such agreement shall not apply to Shares being registered and sold pursuant to
such registration statement.
In order to enforce the foregoing covenant, the Company may impose stop-
transfer instructions with respect to the Shares of the Holder until the end of
such ninety (90) day period.
Section 1.10. PLAN OF DISTRIBUTION. To preserve an orderly market in any
publicly traded securities of the Company, in the event that the aggregate
number of Shares to be registered pursuant to a registration statement under
Section 1.2 exceeds 5% of the Company's outstanding securities, the Holder will
provide advance notice to the Company of its intended marketing and distribution
arrangements in connection with the registration, including information with
respect
6
<PAGE>
to any investment banking firm or broker-dealer retained by the Holder to manage
the distribution.
ARTICLE II
MISCELLANEOUS
Section 2.1. GOVERNING LAW. This Agreement shall be governed in all
respects by the laws of the State of Minnesota.
Section 2.2. SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors and permitted assigns of the parties hereto. Except as otherwise
provided herein, no assignment of this Agreement may be made by either party at
any time, without the other party's prior written consent.
Section 2.3. ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the
full and entire understanding and agreement between the parties with regard to
the subjects hereof. Except as expressly provided herein, neither this
Agreement nor any term hereof may be amended, waived, discharged or terminated
other than by a written instrument signed by the party against whom enforcement
of any such amendment, waiver, discharge or termination is sought.
Section 2.4. NOTICES, ETC. All notices and other communications required
or permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand or by messenger
addressed (a) if to the Company, at 500 Terminal Road, Fort Worth, TX 76106, or
at such other address as the Company shall have furnished to the Holder in
writing and (b) if to the Holder, at such address as is set forth on the
signature page hereto, or at such other address as the Holder shall have
furnished to the Company in writing. Each such notice or other communication
shall for all purposes of this Agreement be treated as effective or having been
given when delivered if delivered personally, or, if sent by mail, upon its
receipt.
Section 2.5. DELAYS OR OMISSIONS. Except as expressly provided herein, no
delay or omission to exercise any right, power or remedy accruing to the Company
or the Holder upon any breach or default of any party under this Agreement shall
impair any such right, power or remedy of the Company or the Holder nor shall it
be construed to be a waiver of any such breach or default, or any acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of the Company or the
Holder of any breach or default under this Agreement, or any waiver on the part
of any such party of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement or by law or otherwise
afforded to the Company or the Holder, shall be cumulative and not alternative.
7
<PAGE>
Section 2.6. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which may be executed by only one of the parties
hereto, each of which shall be enforceable against the party actually executing
such counterpart, and all of which together shall constitute one instrument.
Section 2.7. SEVERABILITY. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided that no such severability shall be
effective if it materially changes the economic benefit of this Agreement to any
party.
Section 2.8. TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
Section 2.9. DEFINITIONS. As used in this Agreement, the following terms
have the meanings specified or referred to in this Section 2.9:
"AGREEMENT" has the meaning specified in the first paragraph of this
Agreement.
"COMMISSION" or "SEC" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
"COMPANY" has the meaning specified in the first paragraph of this
Agreement.
"FORM S-4 and FORM S-8" shall mean such forms, as currently identified, for
registration of securities under the Securities Act, or any substantially
similar, equivalent or successor forms under the Securities Act.
"HOLDER" shall mean the person named on the signature page hereof and any
permitted transferee of registration rights.
"REGISTRATION EXPENSES" shall mean all expenses incurred by the Company in
complying with Article I hereof, including, without limitation, all
registration, qualification and filing fees, printing expenses, escrow fees,
fees and disbursements of counsel for the Company, blue sky fees and expenses,
and the expense of any special audits incident to or required by any such
registration (but excluding the compensation of regular employees of the
Company, which shall be paid in any event by the Company).
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or any
similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"SELLING EXPENSES" shall mean all underwriting discounts and selling
commissions applicable to the sale and all fees and disbursements of counsel for
any holder.
8
<PAGE>
IN WITNESS WHEREOF, the Company and the Holder have each caused the
foregoing Agreement to be executed by one of its duly authorized officers as of
the date first above written.
SUNBELT NURSERY GROUP, INC.
By /s/Timothy R. Duoos
-----------------------------
Its Chairman and CEO
-----------------------------
HEALTHY AMERICAN PRODUCTS, INC.
By /s/Rodney P. Burwell
-----------------------------
Rodney P. Burwell, CEO
Address: c/o Burwell Enterprises
7901 Xerxes Avenue South,
Suite 201
Minneapolis, Minnesota 55431
9
