<PAGE> 1
EXHIBIT 2(e)(i)
[EXECUTION COPY]
U.S. ASSET PURCHASE AGREEMENT
DATED AS OF MARCH 29, 2000
BY AND AMONG
THE ANDERSONS, INC.
AND
THE ANDERSONS AGRISERVICES, INC.
("BUYERS")
AND
THE SCOTTS COMPANY
AND
OMS INVESTMENTS, INC.
("SELLERS")
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INDEX
TO
ASSET PURCHASE AGREEMENT
------------------------
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ARTICLE I - DEFINITIONS...........................................................................................1
SECTION 1.01. TERMS...........................................................................................1
SECTION 1.02. ADDITIONAL TERMS................................................................................6
ARTICLE II - PURCHASE AND SALE OF ASSETS..........................................................................7
SECTION 2.01. PROTURF ASSETS..................................................................................7
SECTION 2.02. EXCLUDED ASSETS.................................................................................8
SECTION 2.03. CONSIDERATION...................................................................................9
SECTION 2.04. BOOK VALUE OF INVENTORY.........................................................................9
SECTION 2.05. CLOSING........................................................................................10
SECTION 2.06. PRORATIONS.....................................................................................12
SECTION 2.07. ASSUMED LIABILITIES............................................................................12
SECTION 2.08. EXCLUDED LIABILITIES...........................................................................12
SECTION 2.09. ASSIGNMENT OF CONTRACTS AND RIGHTS.............................................................13
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF SELLERS..........................................................13
SECTION 3.01. CORPORATE EXISTENCE AND POWER..................................................................13
SECTION 3.02. CORPORATE AUTHORITY............................................................................14
SECTION 3.03. CONSENTS AND APPROVALS; NO VIOLATIONS..........................................................14
SECTION 3.04. GOVERNMENTAL AUTHORIZATION.....................................................................15
SECTION 3.05. COMPLIANCE WITH LAWS...........................................................................15
SECTION 3.06. THE U.S. PROTURF ASSETS........................................................................15
SECTION 3.07. CONTRACTS......................................................................................15
SECTION 3.08. INTELLECTUAL PROPERTY..........................................................................16
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SECTION 3.09. LEGAL PROCEEDINGS..............................................................................16
SECTION 3.10. LICENSES.......................................................................................16
SECTION 3.11. EMPLOYEE AND RELATED MATTERS...................................................................16
SECTION 3.12. EMPLOYMENT BENEFIT PLANS.......................................................................17
SECTION 3.13. INVENTORY......................................................................................17
SECTION 3.14. PRODUCTS.......................................................................................17
SECTION 3.15. FINDER'S FEES..................................................................................17
SECTION 3.16. REPRESENTATIONS................................................................................17
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF BUYERS............................................................17
SECTION 4.01. CORPORATE EXISTENCE AND POWER..................................................................17
SECTION 4.02. CORPORATE AUTHORITY............................................................................18
SECTION 4.03. CONSENTS AND APPROVALS; NO VIOLATIONS..........................................................18
SECTION 4.04. GOVERNMENTAL AUTHORIZATION.....................................................................19
SECTION 4.05. LEGAL PROCEEDINGS..............................................................................19
SECTION 4.06. FINDER'S FEES..................................................................................19
SECTION 4.07. FINANCING......................................................................................19
ARTICLE V - COVENANTS OF SELLERS.................................................................................19
SECTION 5.01. CONDUCT OF BUSINESS............................................................................19
SECTION 5.02. REQUIRED APPROVALS.............................................................................20
SECTION 5.03. ACCESS TO INFORMATION..........................................................................20
SECTION 5.04. NOTICES OF CERTAIN EVENTS......................................................................20
SECTION 5.05. NON-COMPETITION................................................................................21
SECTION 5.06. TRANSFER OF REGISTRATIONS......................................................................22
ARTICLE VI - COVENANTS OF BUYERS.................................................................................23
SECTION 6.01. REQUIRED APPROVALS.............................................................................23
SECTION 6.02. NON-COMPETITION................................................................................23
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SECTION 6.03. CONFIDENTIALITY................................................................................24
ARTICLE VII - COVENANTS OF ALL PARTIES...........................................................................25
SECTION 7.01. WARRANTY DISCLAIMER............................................................................25
SECTION 7.02. EXPENSES.......................................................................................25
SECTION 7.03. FURTHER ASSURANCES.............................................................................25
SECTION 7.04. PUBLIC ANNOUNCEMENTS...........................................................................25
SECTION 7.05. COLLECTION OF ACCOUNTS RECEIVABLE..............................................................25
SECTION 7.06. INSURANCE......................................................................................26
SECTION 7.07. USE OF THE "SCOTTS" TRADEMARK..................................................................27
ARTICLE VIII - CONDITIONS TO CLOSING.............................................................................28
SECTION 8.01. CONDITIONS TO OBLIGATIONS OF ALL PARTIES.......................................................28
SECTION 8.02. CONDITIONS TO OBLIGATIONS OF BUYERS............................................................29
SECTION 8.03. CONDITIONS TO OBLIGATIONS OF SELLERS...........................................................29
ARTICLE IX - SURVIVAL; INDEMNIFICATION...........................................................................30
SECTION 9.01. SURVIVAL OF WARRANTIES; TERMINATION............................................................30
SECTION 9.02. INDEMNIFICATION................................................................................30
SECTION 9.03. PROCEDURES.....................................................................................31
ARTICLE X - TAX MATTERS..........................................................................................33
SECTION 10.01. TAX COOPERATION...............................................................................33
SECTION 10.02. ALLOCATION OF TAXES...........................................................................33
SECTION 10.03. SALES AND USE TAXES...........................................................................34
ARTICLE XI - LABOR AND EMPLOYMENT MATTERS........................................................................34
SECTION 11.01. EMPLOYEES AND OFFERS OF EMPLOYMENT............................................................34
SECTION 11.02. SELLERS' EMPLOYEE BENEFIT PLANS...............................................................35
SECTION 11.03. BUYER BENEFIT PLANS...........................................................................36
SECTION 11.04. NO THIRD PARTY BENEFICIARIES..................................................................36
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ARTICLE XII - TERMINATION........................................................................................37
SECTION 12.01. GROUNDS FOR TERMINATION.......................................................................37
SECTION 12.02. EFFECT OF TERMINATION.........................................................................37
ARTICLE XIII - MISCELLANEOUS.....................................................................................37
SECTION 13.01. NOTICES.......................................................................................37
SECTION 13.02. ASSIGNMENT....................................................................................39
SECTION 13.03. NO THIRD PARTY BENEFICIARIES..................................................................39
SECTION 13.04. COUNTERPARTS; EFFECTIVENESS...................................................................39
SECTION 13.05 ENTIRE AGREEMENT..............................................................................39
SECTION 13.06. AMENDMENTS; NO WAIVERS........................................................................40
SECTION 13.07. BULK SALES LAWS...............................................................................40
SECTION 13.08. SEVERABILITY..................................................................................40
SECTION 13.09. GOVERNING LAW.................................................................................40
SECTION 13.10. CONSENT TO JURISDICTION.......................................................................40
SECTION 13.11. CAPTIONS; EXHIBITS............................................................................40
SCHEDULES AND EXHIBITS...........................................................................................43
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U.S. ASSET PURCHASE AGREEMENT
THIS AGREEMENT (the "Agreement"), is made and entered into as of March
29, 2000 by and among The Andersons, Inc., an Ohio corporation ("Andersons"),
The Andersons Agriservices, Inc., an Illinois corporation ("TAAI" and, together
with Andersons, the "Buyers"), The Scotts Company, an Ohio corporation
("Scotts"), and OMS Investments, Inc., a Delaware corporation ("OMS" and,
together with Scotts, the "Sellers").
WITNESSETH:
WHEREAS, Sellers own and operate assets that are employed by Sellers in
the U.S. ProTurf Business (as defined below in Section 1.01);
WHEREAS, Sellers desire to sell to Buyers certain assets of the U.S.
ProTurf Business, and Buyers desire to purchase from Sellers certain assets of
the U.S. ProTurf Business;
WHEREAS, Sellers desire to license to Buyers certain Intellectual
Property Rights of the U.S. ProTurf Business for use in the Territory (as
defined in Section 1.01) pursuant to a separate License Agreement in the form
attached hereto as Exhibit A (the "U.S. ProTurf License Agreement");
WHEREAS, as of the date hereof, Sellers have entered into an agreement
with The Nu-Gro Corporation, a Canadian corporation ("Nu-Gro"), to sell to
Nu-Gro certain assets of the Canadian ProTurf Business (as defined in Section
1.01) (the "Canadian Asset Purchase Agreement"); and
WHEREAS, as of the Closing Date, Sellers will enter into a license
agreement to license to Nu-Gro certain trademarks and other Intellectual
Property Rights of the Canadian ProTurf Business for use in Canada (the
"Canadian ProTurf License Agreement").
NOW, THEREFORE, in consideration of the premises and of their mutual
agreements, covenants, representations and warranties set forth in this
Agreement, and for other good and valuable consideration received to the full
satisfaction of each of them, the parties hereto make the following agreement,
intending to be bound legally thereby:
ARTICLE I
DEFINITIONS
Section 1.01. TERMS. When used in this Agreement, the following terms
shall have the meanings specified in this Section 1.01; and the plural of any
such term means more than one thereof:
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"Accounting Date" means 11:59 p.m. (local time at Columbus, Ohio) on
the Closing Date.
"Business Day" means a day other than a Saturday or a Sunday on which
national banks in Columbus, Ohio, are open.
"Canadian ProTurf Business" means the business of selling Products in
Canada for the Canadian Professional Turf Market, including the sale of Products
directly or through distributors or agents to golf courses, sports fields,
municipal properties and professional lawn care service providers in Canada;
PROVIDED, that the Canadian ProTurf Business specifically excludes the sale of
Products through Retail Channels in Canada.
"Canadian Professional Turf Market" means the market in Canada for the
sale, marketing and/or distribution of fertilizer, pesticide, combination
fertilizer and pesticide and similar products and related services intended for
use by golf courses, sports fields, municipal properties and professional lawn
care service providers.
"Canadian Supply Agreement" means that certain Supply Agreement entered
into as of the Closing Date between Scotts and Nu-Gro relating to the
manufacture and supply of materials used in the Canadian ProTurf Business.
"CERCLA" means the Comprehensive Environmental Responses, Compensation
and Liability Act of 1980, as amended.
"Claim" means a claim, loss, damage (excluding consequential or special
damages), liability and legal or other expense (including, without limitation,
reasonable attorneys' fees, witnesses' fees, investigation fees, court
reporters' fees and other out-of-pocket expenses) arising as a result of, among
other things, any action, suit, demand, assessment, order, award, decree,
judgment, cost, fine, injunction, arbitration, mediation, adjudication, other
similar proceeding or penalty, to the extent not compensated by insurance
proceeds or by a third party.
"Claim Notice" means a notice specifying, in reasonable detail, (i) the
nature of a Claim, (ii) each applicable provision of this Agreement or other
instrument under which such Claim arises, and (iii) if then known, the amount of
such Claim or the method of computation thereof.
"Closing" means the closing of the sale and purchase of the U.S.
ProTurf Assets contemplated by this Agreement.
"Closing Date" means the date of the Closing.
"Environmental Laws" means any and all federal, state and local
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
codes, injunctions, permits and governmental restrictions, relating to human
health, the environment or to emissions, discharges or releases of pollutants,
contaminants, Hazardous Substances or wastes into the environment, including
without limitation ambient air, surface water, ground water or land, or
otherwise
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relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, Hazardous
Substances or wastes or the clean-up or other remediation thereof.
"Environmental Liability" means all liabilities of the Sellers, whether
vested or unvested, contingent or fixed, actual or potential, known or unknown,
which arise in connection with or relate to (A) a violation of any Environmental
Law arising out of operations of the U.S. ProTurf Business on or before the
Closing Date or (B) any Release of a Hazardous Substance occurring on or before
the Closing Date (whether or not disclosed or required to be disclosed pursuant
to any section of this Agreement); PROVIDED, that "Environmental Liabilities"
shall not include any liabilities which arise principally as a result of actions
taken by Buyers or the U.S. ProTurf Business after the Closing Date other than
any such action taken to address the liabilities specified in clauses (A) or (B)
above and undertaken in response to (a) any order or ruling issued, or
proceeding or other action undertaken, by any court, administrative agency or
other governmental body of competent jurisdiction, (b) any litigation or
administrative action pending or threatened on or before the Closing Date or (c)
any settlement of any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Excluded Inventory" means (i) the inventory of products of the U.S.
ProTurf Business that have not had any sales activity within the twelve-month
period ended February 29, 2000, as set forth on Schedule 2.02(e); (ii) the
obsolete inventory set forth on Schedule 2.02(e), and (iii) the inventory of
discontinued products of the U.S. ProTurf Business in excess of a 24-month
supply, based on sales activity for the twelve-month period ended February 29,
2000.
"Hazardous Substance" means any hazardous substances (as defined in
CERCLA); hazardous waste (as defined in RCRA or the regulations adopted
thereunder); polychlorinated biphenyls; petroleum and/or petroleum products; or
solid waste, except for solid waste that Sellers are authorized to manage under
any applicable Environmental Laws.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"Indemnitee" means a party hereto claiming indemnification from another
party hereto pursuant to the terms hereof.
"Indemnitor" means a party hereto from whom indemnification is claimed
pursuant to the terms hereof by an Indemnitee.
"Intellectual Property Right" means any trademark, service mark,
registration thereof or application for registration therefor, trade name,
patent, patent application, copyright, copyright registration, application for
copyright registration or any other similar type of proprietary intellectual
property right.
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"Inventory" shall mean all finished goods, including but not limited to
finished goods purchased for resale, held by the U.S. ProTurf Business for sale
or resale to others, from time to time in the ordinary course of the U.S.
ProTurf Business, as set forth on Schedule 2.01(b)(4) (with such additions
and/or deletions as occur in the ordinary course of the U.S. ProTurf Business
and consistent with the provisions of this Agreement), but excluding the
Excluded Inventory.
"Inventory Book Value" shall mean Scotts' standard cost at the time of
production (including provision for the cost of shipping from the production
facility to the distribution warehouse), as reflected in Scotts' books and
records.
"Last Twelve Month Sales" means, with respect to a particular SKU of
Inventory, the Inventory Book Value of such Inventory sold during the
twelve-month period ending at the end of the month immediately prior to the
Closing Date.
"Knowledge" means (i) in the case of Sellers, the actual knowledge of
any of the officers, directors or other employees of Scotts who have managerial
or supervisory responsibilities with respect to the U.S. ProTurf Business and
(ii) in the case of Buyers, the actual knowledge of any officers, directors or
other employees of Buyers who have managerial or supervisory responsibilities.
"Material Adverse Effect" means an effect that (i) is materially
adverse to the business, financial condition or results of operations of a
specified Person, and/or (ii) is materially adverse to the transactions
contemplated hereby, and/or (iii) materially impairs the ability of a party
hereto to consummate the transactions to be undertaken by it as contemplated
hereby.
"MU Technology" means all of Scotts' Intellectual Property Rights
relating directly or indirectly to the manufacture, formulation or assembly by,
or at the direction of, Scotts of methylene urea.
"Net Inventory Book Value" means the aggregate Inventory Book Value of
the Inventory less the following discounts: (i) 50% of Inventory Book Value with
respect to any Inventory in excess of a 24-month supply, based on Last Twelve
Month Sales; and (ii) 25% of Inventory Book Value with respect to any Inventory
in excess of an 18-month supply, but less than or equal to a 24-month supply,
based on Last Twelve Month Sales.
"Person" means an individual, corporation, partnership, limited
liability company, firm, joint venture, association, trust, unincorporated
organization, governmental or regulatory authority, or other entity.
"Product Liability" means all liabilities of the Sellers, whether
vested or unvested, contingent or fixed, actual or potential, known or unknown,
which arise in connection with or relate to the manufacture, marketing,
distribution or sale by the Seller of any product of the U.S. ProTurf Business
prior to the Closing; PROVIDED, that such liability is not primarily caused by
the action or inaction of Buyers following the Closing.
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"ProTurf License Agreements" means the Canadian ProTurf License
Agreement and the U.S. ProTurf License Agreement.
"RCRA" means the Resource Conservation and Recovery Act, as amended.
"Related Agreements" means the U.S. License Agreements and the U.S.
ProTurf Supply Agreement.
"Release" means any discharge, emission or release, including without
limitation a Release as defined in CERCLA, at 42 U.S.C. Section 9601(22). The
term "Released" has a corresponding meaning.
"Required Approval" means an approval, consent, authorization or
clearance of or filing with a governmental or regulatory authority or official
required in order to permit, authorize or entitle a specified party hereto to
execute and deliver this Agreement, to perform its obligations hereunder, or to
consummate one or more of the transactions to be undertaken by it as
contemplated hereby.
"Retail Channels" means any channel of distribution which reaches
consumer customers, including, but not limited to: (i) retail outlets; (ii)
retail nurseries and hardware co-ops; (iii) home centers (e.g., Home Depot or
Lowes); (iv) mass merchants (e.g., Wal-Mart or Kmart); (v) membership or
warehouse clubs (e.g., Sam's Club); (vi) the Internet and (vii) other current or
future channels of trade which arise or become retail channels in the lawn and
garden industry.
"Territory" shall have the meaning ascribed thereto in the U.S. ProTurf
License Agreement.
"U.S. License Agreements" means the U.S. ProTurf License Agreement, the
U.S. Poly-S(R) License Agreement, the U.S. Peters(R) and Starter(R) License
Agreement and the U.S. Patent License Agreement.
"U.S. Patent License Agreement" means that certain patent and
technology license agreement entered into as of the Closing Date in
substantially the form attached as Exhibit E hereto pursuant to which Sellers
shall grant Buyers (i) certain long-term limited rights (ownership or license)
to certain patents and patent applications and (ii) certain limited rights to
the proprietary technology processes, trade secrets and know-how relating
primarily to the U.S. ProTurf Business for the term of such agreement, after
which point such proprietary technology, processes, trade secrets and know-how
shall be transferred to Buyers for use in the U.S. Professional Turf Market in
the Territory.
"U.S. Peters(R) and Starter(R) License Agreement" means that certain
trademark ingredient license agreement entered into as of the Closing Date in
the form attached hereto as Exhibit D pursuant to which Sellers shall grant
Buyers certain long-term, limited rights to the "PETERS" and "STARTER"
trademarks in the Territory.
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"U.S. Poly-S(R) License Agreement" means that certain license agreement
entered into as of the Closing Date in the form attached hereto as Exhibit C
pursuant to which Sellers shall grant Buyers certain long-term, limited rights
to use the "POLY-S" trademark and certain other trademarks in the Territory.
"U.S. Professional Turf Market" means the market in the Territory for
the sale, marketing and/or distribution of fertilizer, pesticide, combination
fertilizer and pesticide and similar products and related services intended for
use by golf courses, sports fields, municipal properties and professional lawn
care service providers.
"U.S. ProTurf Business" means the business of marketing, distributing
and/or selling Products or related services in the Territory for the U.S.
Professional Turf Market, including, but not limited to, the marketing,
distribution and/or sale of Products directly or through distributors or agents
to golf courses, sports fields, municipal properties and professional lawn care
service providers in the Territory; PROVIDED, that the U.S. ProTurf Business
specifically excludes the marketing, distribution and/or sale of Products
through Retail Channels in the Territory.
"U.S. Supply Agreement" means that certain Supply Agreement entered
into as of the Closing Date between Scotts and Buyers in the form attached
hereto as Exhibit B and relating to the manufacture and supply of materials used
in the U.S. ProTurf Business.
Section 1.02. ADDITIONAL TERMS. When used in this Agreement, the
following terms shall have the meanings specified in that part hereof identified
in the following table:
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TERM DEFINED IN:
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AAA Rules................................................. Section 2.04(b)
Assumed Liabilities....................................... Section 2.07
Buyers.................................................... Preamble
Canadian ProTurf License Agreement........................ Preamble
Closing Receivables....................................... Section 7.05(c)
Contracts ................................................ Section 2.01(b)(7)
Exchange Act.............................................. Section 3.04
Excluded Assets........................................... Section 2.02
Excluded Liabilities...................................... Section 2.12
Inventory Book Value...................................... Section 2.04(a)
Licenses.................................................. Section 3.09
Nu-Gro.................................................... Preamble
OMS....................................................... Preamble
Product Information....................................... Section 2.01(b)(5)
Products.................................................. Section 2.01(b)(5)
ProTurf Assets............................................ Section 2.01
Purchase Price............................................ Section 2.03
Retained Registrations.................................... Section 2.01(b)(1)
Scotts.................................................... Preamble
Scotts(R)Trademarks........................................ Section 5.06(a)
Sellers................................................... Preamble
Transferred Employees..................................... Section 11.01
Transferred Registrations................................. Section 2.01(b)(1)
Turf Partners Receivables................................. Section 7.05(c)
U.S. ProTurf Assets....................................... Section 2.01(a)
U.S. ProTurf License Agreement............................ Preamble
</TABLE>
ARTICLE II
PURCHASE AND SALE OF ASSETS
Section 2.01. PROTURF ASSETS. (a) At the Closing, and upon the terms
and subject to the conditions set forth in this Agreement, Sellers shall sell,
transfer, assign and deliver to Buyers, and Buyers shall purchase from Sellers,
all of the right, title and interest in and to certain of the assets of Sellers,
tangible and intangible, owned by Sellers and used principally in the conduct of
the U.S. ProTurf Business (such assets, the "U.S. ProTurf Assets").
(b) The U.S. ProTurf Assets consist only of the following
property, plus such additions thereto and minus such deletions therefrom as
occur in the usual and ordinary course of the U.S. ProTurf Business, without
violating this Agreement, between the date of this Agreement and the Accounting
Date:
(1) the "me-too" registrations with respect to the federal
environmental registrations set forth on Schedule 2.01(b)(1) (the "Retained
Registrations"), as addressed
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pursuant to Section 5.06, and the federal and state registrations, applications,
permits and approvals of governmental authorities set forth on Schedule
2.01(b)(1) that are being transferred to Buyers (the "Transferred
Registrations");
(2) the rights to use the Intellectual Property Rights, which
are owned or licensed and used or held for use by the Sellers primarily for the
U.S. ProTurf Business, as specifically identified in Schedule 2.01(b)(2),
subject to, and only to the extent set forth in, the U.S. License Agreements;
(3) the customer list included as Schedule 2.01(b)(3);
(4) the Inventory of the U.S. ProTurf Business as of the
Closing Date;
(5) Sellers' right, title and interest in and to the
specifications for the products (the "Products") identified on Schedule
2.01(b)(5), excluding the specifications for any Product containing MU
Technology (except to the extent set forth in the U.S. Patent License Agreement)
and excluding such specifications to the extent such specifications are
addressed by the U.S. Patent License Agreement, but including the promotional
brochures and advertising and marketing materials (collectively, the "Product
Information") for the Products used by Sellers in connection with the U.S.
ProTurf Business;
(6) those books and records relating to the U.S. ProTurf
Business;
(7) all rights arising under each contract or agreement listed
individually or by category on Schedule 2.01(b)(7), including all renewals,
extensions, amendments and modifications thereof and any additional agreements,
contracts and orders made or entered into by Sellers in the usual and ordinary
course of the U.S. ProTurf Business, without violating this Agreement, after the
date hereof that are in effect at the Accounting Date (hereinafter,
collectively, the "Contracts");
(8) the non-proprietary technology processes, exclusive of any
MU Technology, relating primarily to the U.S. ProTurf Business and, to the
extent set forth in the U.S. License Agreements, the proprietary technology
processes, trade secrets and know-how relating primarily to the U.S. ProTurf
Business; and
(9) the research and development information, data and
analyses related primarily to the U.S. ProTurf Business; provided that, to the
extent that such information, data and analyses are not readily available or
ascertainable, the parties shall cooperate in good faith to provide Buyers with
as much of such information, data and analyses as reasonably practicable.
Section 2.02. EXCLUDED ASSETS. Anything contained in this Agreement or
elsewhere to the contrary notwithstanding, the U.S. ProTurf Assets will not
include any assets, properties or rights, including, but not limited to,
Intellectual Property Rights, of Sellers not currently used primarily in the
U.S. ProTurf Business, and the following property, all of which shall be
retained by Sellers and none of which shall be sold or transferred to Buyers
(the "Excluded Assets"):
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(a) he rights of Sellers under (i) this Agreement and (ii) the
contracts listed on Schedule 2.02(a) (the "Excluded Contracts");
(b) the Intellectual Property Rights and other proprietary technology
processes, trade secrets and know-how of the U.S. ProTurf Business, except to
the extent set forth in the U.S. License Agreements or otherwise hereunder;
(c) the MU Technology and all other Intellectual Property Rights that
are owned or licensed and used or held for use by the Sellers, except to the
extent specifically addressed by this Agreement or the U.S. License Agreements;
(d) the Retained Registrations;
(e) the Excluded Inventory, as set forth on Schedule 2.02(e);
(f) any of Sellers' (i) accounts receivable, (ii) cash, (iii) checking
account and savings account deposits, (iv) certificates of deposit, (v) utility,
security and other deposits, (vi) notes receivable, (vii) similar cash
equivalents, and (viii) real and personal property not used by Sellers
principally in the conduct of the U.S. ProTurf Business.
Section 2.03. CONSIDERATION. In consideration of the promises contained
herein and as consideration for the transactions contemplated by this Agreement
and the Related Agreements, at the Closing, Buyers shall pay to Sellers an
amount in cash or immediately available funds equal to the sum of:
(a) the Net Inventory Book Value as furnished by Scotts pursuant to
Section 2.04(a) below; plus
(b) $414,000 in consideration for Sellers' covenant not to compete set
forth in Section 5.05 hereof; plus
(c) $486,000 as a royalty payment in advance and in consideration of
the U.S. License Agreements.
Section 2.04. BOOK VALUE OF INVENTORY. (a) At least two business days
prior to the Closing, the Sellers shall furnish to the Buyers the Sellers' good
faith estimate of the Net Inventory Book Value as of the Closing Date.
(b) Prior to the Closing Date, Sellers agree to segregate the Inventory
within Sellers' warehouses in the U.S. and to store such Inventory in a
reasonable manner, in each case, in order to facilitate a physical inventory by
Buyers. If after conducting a physical inventory within 48 hours of the
Accounting Date and after payment at the Closing of the Net Inventory Book
Value, as contemplated by Section 2.03(a), Buyers discover discrepancies in the
amount of Inventory used in Sellers' calculation of the Net Inventory Book
Value, the Buyers shall provide written
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notice to the Sellers of such discrepancy, together with the Buyers'
recalculation of the Net Inventory Book Value, within thirty days after the
Closing Date. The Net Inventory Book Value shall become final and binding upon
the parties on the thirty-first day after the Closing Date unless such a notice
of disagreement has been delivered to Sellers. In the event that such a notice
of disagreement has been delivered, the parties agree to negotiate in good faith
for an additional thirty days to determine the Net Inventory Book Value.
(c) If the parties have not reached agreement within the thirty-day
negotiation period set forth in Section 2.04(b), they shall submit the
resolution of the determination of Net Inventory Book Value to binding
arbitration for settlement in accordance with the Commercial Arbitration Rules
of the American Arbitration Association (the "AAA Rules"). The determination of
the arbitrator selected in accordance with the AAA Rules shall be final and
conclusive, and within five business days following resolution of the matter,
Sellers shall pay to Buyers the difference between the amount paid to Sellers on
the Closing Date and the final determination of Net Inventory Book Value, if
such difference is a positive number, or Buyers shall pay to Sellers such
difference, if such difference is a negative number. The costs, fees and
expenses of the arbitration shall be borne equally by the Buyers and the
Sellers.
(d) The parties acknowledge that the adjustment process set forth in
this Section 2.04 is separate from, and in addition to, any indemnification set
forth in Section 9.02(a).
Section 2.05. CLOSING. (a) The Closing shall be held at the offices of
Vorys, Sater, Seymour and Pease LLP, 52 East Gay Street, Columbus, Ohio, and
shall take place on the date determined by Buyers as soon as reasonably
practicable after the satisfaction or, if applicable, waiver of the conditions
to Closing set forth in Article VIII hereof.
(b) At the Closing, Sellers shall cause all of the following to be
delivered to Buyers:
(i) an Assignment and Assumption Agreement, substantially
in the form attached hereto as Exhibit F, and Sellers
shall deliver to Buyers such bills of sale,
endorsements, consents, assignments and other good and
sufficient instruments of conveyance and assignment as
the parties and their respective counsel shall deem
reasonably necessary or appropriate to vest in Buyers
all right, title and interest in, to and under the U.S.
ProTurf Assets;
(ii) a copy of the U.S. ProTurf License Agreement executed
by one or both Sellers;
(iii) a copy of the U.S. Supply Agreement executed by Scotts;
(iv) a copy of the U.S. Poly-S(R) License Agreement
executed by one or both Sellers;
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(v) a copy of the U.S. Peters(R)and Starter(R)License
Agreement executed by one or both Sellers;
(vi) a copy of the U.S. Patent License Agreement executed
by one or both Sellers; and
(vii) such other documents as contemplated by this Agreement
to be delivered by the Sellers to the Buyers or as may
be reasonably requested by Buyers.
(c) At the Closing, Buyers shall cause all of the following to be
delivered to Sellers:
(i) a certified or official bank check payable to the order
of, or a wire transfer for the account of, Scotts in an
amount in immediately available funds equal to the Net
Inventory Book Value, as set forth in Section 2.04(a);
(ii) a certified or official bank check payable to the order
of, or a wire transfer for the account of, Scotts in
the amount of $414,000 in immediately available funds;
(iii) a certified or official bank check payable to the order
of, or a wire transfer for the account of, OMS in the
amount of $486,000 in immediately available funds;
(iv) a copy of the U.S. ProTurf License Agreement executed
by one or both Buyers;
(v) a copy of the U.S. Supply Agreement executed by
Andersons;
(vi) a copy of the U.S. Poly-S(R) License Agreement
executed by one or both Buyers;
(vii) a copy of the U.S. Peters(R) and Starter(R) License
Agreement executed by one or both Buyers;
(viii) a copy of the U.S. Patent License Agreement executed
by one or both Buyers;
(ix) one or more instruments of assumption, duly executed on
behalf of Buyers, as may be reasonably requested by
Sellers and their counsel and by which Buyers duly
assume those liabilities of Sellers to be assumed by
Buyers pursuant to Sections 2.06 and 2.07; and
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(x) such other documents as contemplated by this Agreement
to be delivered by the Buyers to the Sellers or as may
be reasonably requested by Sellers.
Section 2.06. PRORATIONS. All prepaid, accrued, deferred and other
revenues, and all prepaid, accrued, deferred and other normal operating
liabilities and expenses, pertaining to the U.S. ProTurf Business shall be
prorated as of the Accounting Date, so that as between Sellers and Buyers,
Sellers shall receive all such revenues and shall be responsible for all such
liabilities and expenses allocable to the period ending at the Accounting Date,
and Buyers shall receive all such revenues (exclusive of those received by
Sellers or by Buyers, on behalf of Sellers, in payment of any of Sellers'
accounts receivable) and shall be responsible (subject to the provisions of
Section 2.08) for all such liabilities and expenses allocable to the period
commencing at the Accounting Date.
Section 2.07. ASSUMED LIABILITIES. From and after the Accounting Date,
Buyers shall, subject to Section 2.06, assume and timely pay, discharge, perform
and satisfy all liabilities and obligations of Seller (i) arising after Closing
under the Contracts (other than liabilities or obligations attributable to any
failure by Sellers to comply with the terms thereof); (ii) arising out of or
related to the U.S. ProTurf Assets after the Accounting Date and (iii) arising
out of the prorated portions of those other obligations and liabilities of
Sellers for which Buyers are to be responsible pursuant to Section 2.06
(collectively, the "Assumed Liabilities").
Section 2.08. EXCLUDED LIABILITIES. Notwithstanding any provision in
this Agreement to the contrary, Buyers are assuming only the Assumed Liabilities
and are not assuming any other liability or obligation of Sellers (or any
predecessor owner of all or part of the U.S. ProTurf Business) of whatever
nature whether presently in existence or arising hereafter, vested or unvested,
contingent or fixed, actual or potential, known or unknown. All such other
liabilities and obligations shall be retained by and remain obligations and
liabilities of Sellers (all such liabilities and obligations not being assumed
being herein referred to as the "Excluded Liabilities"). Notwithstanding
anything to the contrary in this Section 2.08, and without limitation, each of
the following shall be Excluded Liabilities for purposes of this Agreement:
(i) except as contemplated by or set forth in Article IX, any
liabilities or obligations relating to employee or agent benefits,
wages, salaries, commissions, bonuses, incentives and/or other
compensation arrangements existing on or prior to the Closing Date,
including, without limitation, retirement, pension and/or unemployment
compensation, workers' compensation and/or similar type benefits;
(ii) any Product Liability;
(iii) any Environmental Liability;
(iv) any Claim against or relating to the U.S. ProTurf
Business that arose prior to the Closing Date; or
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(v) the obligations and liabilities of Sellers arising
under the Excluded Contracts.
Section 2.09. ASSIGNMENT OF CONTRACTS AND RIGHTS. Anything in this
Agreement to the contrary notwithstanding, this Agreement shall not constitute
an agreement to assign any claim, contract, license, lease, commitment, sales
order, purchase order or any claim or right or any benefit arising thereunder or
resulting therefrom if an attempted assignment thereof, without the consent of a
third party thereto, would constitute a breach or other contravention thereof or
in any way adversely affect the rights of Buyers or Sellers thereunder. The
parties hereto will use their reasonable efforts to obtain the consent of the
other parties to any such claim, contract, license, lease, commitment, sales
order, purchase order or any claim or right or any benefit arising thereunder
for the assignment thereof to Buyers as Buyers may request. If such consent is
not obtained, or if an attempted assignment thereof would be ineffective or
would adversely affect the rights of Sellers thereunder so that Buyers would not
in fact receive all such rights, Sellers and Buyers will cooperate in a mutually
agreeable arrangement under which Buyers would obtain the benefits and assume
the obligations under any such claims, contracts, licenses, leases, commitments,
sales orders or purchase orders, including subcontracting, sub-licensing, or
subleasing to Buyers, or which Sellers would enforce for the benefit of Buyers,
with Buyers' assuming Sellers' obligations, any and all rights of Sellers
against a third party thereto arising out of the breach of cancellation by such
third party or otherwise. Sellers will promptly pay to Buyers when received all
monies received by Sellers under any such claim, contract, license, lease,
commitment, sales order, purchase order or any claim or right or any benefit
arising thereunder, except to the extent the same represents an Excluded Asset.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers, jointly and severally, represent and warrant to Buyers that,
as of the date hereof:
Section 3.01. CORPORATE EXISTENCE AND POWER.
(a) OMS is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware; is duly qualified,
licensed and otherwise in good standing as a foreign corporation in each
jurisdiction where the ownership of its property or the conduct of its business
makes necessary such qualification, licensing or good standing, except to the
extent that the failure to be so qualified would not have a Material Adverse
Effect on Scotts.
(b) Scotts is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Ohio; is duly qualified, licensed
and otherwise in good standing as a foreign corporation in each jurisdiction
where the ownership of its property or the conduct of its business makes
necessary such qualification, licensing or good standing, except to the extent
that the failure to be so qualified would not have a Material Adverse Effect on
Scotts.
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Section 3.02. CORPORATE AUTHORITY.
(a) Each of OMS and Scotts has all requisite corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions to be undertaken by it as
contemplated hereby.
(b) The execution and delivery of this Agreement by each of OMS and
Scotts, the performance by it of its obligations hereunder and the consummation
by it of the transactions to be undertaken by it as contemplated hereby have
been duly and validly authorized by all necessary corporate action of each of
OMS and Scotts.
(c) This Agreement has been duly and validly executed and delivered on
behalf of each of OMS and Scotts and constitutes its valid and binding
agreement.
Section 3.03. CONSENTS AND APPROVALS; NO VIOLATIONS.
(a) Neither the execution and delivery of this Agreement by Scotts, nor
its consummation of the transactions to be undertaken by it as contemplated
hereby, will (i) violate any provision of its amended and restated articles of
incorporation or regulations; (ii) constitute (upon notice, lapse of time or
otherwise) a breach or a default (or give rise to any right of termination,
cancellation or acceleration) under any note, bond, mortgage, indenture,
franchise, lease, contract or other agreement to which Scotts is a party or by
which it may be bound or subject; (iii) violate any order, judgment, injunction,
award or decree of any court, arbitrator or governmental or regulatory authority
against, or any agreement with or condition imposed by, any governmental or
regulatory authority, binding upon it; or (iv) violate any statute, law, rule or
regulation of any federal, state, local or other governmental authority
applicable to it or its property, assets or business, excluding from the
foregoing clauses (i) to and including (iv) such breaches, defaults, rights and
violations that, in the aggregate, do not have a Material Adverse Effect with
respect to the U.S. ProTurf Business or the U.S. ProTurf Assets.
(b) Neither the execution and delivery of this Agreement by OMS, nor
its consummation of the transactions to be undertaken by it as contemplated
hereby, will (i) violate any provision of its certificate of incorporation or
by-laws; (ii) constitute (upon notice, lapse of time or otherwise) a breach or a
default (or give rise to any right of termination, cancellation or acceleration)
under any note, bond, mortgage, indenture, franchise, lease, contract or other
agreement to which OMS is a party or by which it may be bound or subject; (iii)
violate any order, judgment, injunction, award or decree of any court,
arbitrator or governmental or regulatory authority against, or any agreement
with or condition imposed by, any governmental or regulatory authority, binding
upon it; or (iv) violate any statute, law, rule or regulation of any federal,
state, local or other governmental authority applicable to it or its property,
assets or business, excluding from the foregoing clauses (i) to and including
(iv) such breaches, defaults, rights and violations that, in the aggregate, do
not have a Material Adverse Effect with respect to the U.S. ProTurf Business or
the U.S. ProTurf Assets.
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Section 3.04. GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by Sellers of this Agreement require and are subject to the Required
Approvals of any and all applicable governmental bodies, agencies, officials or
authorities, including, without limitation, (i) compliance with any applicable
requirements of the HSR Act; (ii) compliance with any applicable requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"); (iii)
compliance with any applicable environmental rules and regulations and (iv) any
other applicable rules, regulations and/or laws.
Section 3.05. COMPLIANCE WITH LAWS. (a) Neither OMS nor Scotts is in
violation of any applicable order, judgment, injunction, award, decree or other
requirement of any federal, state, local or foreign law, statute, ordinance,
rule, regulation, order, writ, injunction, or decree applicable to the U.S.
ProTurf Assets or the U.S. ProTurf Business, and Sellers have not received
notice (written or oral) from any governmental agency that any such violation is
being alleged; and (b) each of OMS and Scotts has complied in all material
respects with all laws, statutes, ordinances, rules, regulations and
requirements applicable to the conduct of the U.S. ProTurf Business and to the
U.S. ProTurf Assets, and neither Seller has received notice (written or oral)
from any governmental agency that any such violation is being alleged, excluding
from the foregoing clauses (a) and (b) such violations and failures to comply
that, in the aggregate, do not have a Material Adverse Effect on the U.S.
ProTurf Business or the U.S. ProTurf Assets.
Section 3.06. THE U.S. PROTURF ASSETS.
(a) The U.S. ProTurf Assets include all property and assets used by
Sellers primarily in the conduct of the U.S. ProTurf Business as of the date
hereof, plus such additions thereto and minus (i) such deletions therefrom as
arise in the ordinary course of the U.S. ProTurf Business, without violating
this Agreement, between the date hereof and the Accounting Date and (ii) the
Excluded Assets.
(b) Upon consummation of the transactions contemplated hereby, Buyers
will have acquired good and marketable title in and to each of the U.S. ProTurf
Assets, free and clear of all liens, security interests, pledges, charges or
other encumbrances.
Section 3.07. CONTRACTS. (a) Except as set forth on Schedule
2.01(b)(7), each of the Contracts listed therein is a valid and binding
agreement of a Seller and is in full force and effect, and neither Sellers nor,
to the Sellers' Knowledge, any other party thereto is in default in any material
respect under the terms of any such Contract.
(b) Except as described in Schedule 3.07, neither Seller is a party to
or bound by any of the types of agreements enumerated below which affects the
U.S. ProTurf Business or the U.S. ProTurf Assets:
(i) agreements or contracts not made in the ordinary
course of business;
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(ii) employee collective bargaining agreements or other
contracts with any labor union;
(iii) agreements or contracts with any shareholder,
officer, director or employee of either Seller or any
of their respective subsidiaries; or
(iv) agreements or contracts the terms of which could
reasonably be expected to have a Material Adverse
Effect on the U.S. ProTurf Business or the U.S.
ProTurf Assets.
Section 3.08. INTELLECTUAL PROPERTY. Neither Seller has infringed, or
received notice of any infringement, upon one or more of the rights of third
parties in respect of any Intellectual Property Right that is currently used
primarily in the U.S. ProTurf Business. Except to the extent set forth on
Schedule 3.08, Sellers have no Knowledge of any continuing material infringement
by any other Person of any Intellectual Property Right that is currently used
primarily in the U.S. ProTurf Business.
Section 3.09. LEGAL PROCEEDINGS. Except as set forth on Schedule 3.09,
neither Seller has received notice of nor has Knowledge of any, nor are there
any pending or outstanding, Claims or Claim Notices, by or affecting OMS or
Scotts, or any of the directors, officers or employees thereof in their
capacities as such, that could (i) prevent the performance of this Agreement or
the consummation of any of the transactions contemplated hereby, (ii) prevent
materially the use by Buyers of any of the U.S. ProTurf Assets in accordance
with past practices, (iii) affect the validity or enforceability of this
Agreement or compliance with the terms hereof by Sellers, (iv) affect materially
the business, financial condition or results of operations of the U.S. ProTurf
Business, or (v) have a Material Adverse Effect on the U.S. ProTurf Assets or
the U.S. ProTurf Business.
Section 3.10. LICENSES. Except as set forth on Schedule 3.10, there are
no licenses, permits or other governmental authorizations (collectively
hereinafter referred to as "Licenses") held by either Seller which affect the
U.S. ProTurf Business or the U.S. ProTurf Assets in any material manner. Except
as set forth on Schedule 3.10, (a) Sellers hold all Licenses which are required
for the operation of the U.S. ProTurf Business, (b) all such Licenses are in
full force and effect; and (c) all such Licenses will be effectively transferred
to Buyers at the Closing or as soon thereafter as reasonably practicable.
Section 3.11. EMPLOYEE AND RELATED MATTERS. (a) Schedule 3.11 sets
forth a true and complete list of (i) the names, titles, annual salaries and
other compensation of all employees dedicated to the U.S. ProTurf Business and
(b) the wage rates for non-salaried employees of the U.S. ProTurf Business (by
classification). None of the employees set forth on Schedule 3.11 and no other
key employee of the U.S. ProTurf Business has indicated to Sellers that he or
she intends to resign or retire as a result of the transactions contemplated by
this Agreement or otherwise within one year after the Closing Date.
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(b) Except as set forth on Schedule 3.11, there are no
employment-related claims, actions, proceedings or investigations pending or
threatened against either Seller relating to the U.S. ProTurf Business or the
U.S. ProTurf Assets before any court, governmental, regulatory or administrative
authority or body, or arbitrator or arbitration panel, except for such claims,
actions, proceedings or investigations as would not be reasonably likely to have
a Material Adverse Effect on the U.S. ProTurf Business.
Section 3.12. EMPLOYMENT BENEFIT PLANS. Except as described in Section
11.02, there are no plans of either Seller in effect for pension, profit
sharing, deferred compensation, severance pay, bonuses, stock options, stock
purchases, or any other form of retirement or deferred benefit, or for any
health, accident or other welfare plan, as to which Buyers will become liable as
a result of the transactions contemplated hereby.
Section 3.13. INVENTORY. All of the Inventory is of a quality usable
and saleable in the ordinary course of the U.S. ProTurf Business in accordance
with past practices.
Section 3.14. PRODUCTS. Except as set forth on Schedule 3.14, each of
the Products produced or sold by Sellers in connection with the U.S. ProTurf
Business (a) is, and at all times has been, in compliance in all material
respects with all applicable federal, state, local and foreign laws and
regulations and (b) is, and at all relevant times has been, fit for the ordinary
purposes for which it is intended to be used and conforms in all material
respects to any promises or affirmations of fact made on the container or label
for such product or in connection with its sale. There is no design defect with
respect to any of such Products, and each of such Products contains adequate
warnings, presented in a reasonably prominent manner, in accordance with
applicable laws and current industry practice with respect to its contents and
use.
Section 3.15. FINDER'S FEES. There is no investment banker, broker,
finder or other intermediary which has been retained by or is authorized to act
on behalf of Sellers who might be entitled to any fee or commission from Buyers
or any of its affiliates upon consummation of the transactions contemplated by
this Agreement.
Section 3.16. REPRESENTATIONS. The representations and warranties of
Sellers contained in this Agreement, disregarding all qualifications and
exceptions contained therein relating to materiality or Material Adverse Effect,
are true and correct with only such exceptions as would not in the aggregate
reasonably be expected to have a Material Adverse Effect with respect to the
U.S. ProTurf Business or the U.S. ProTurf Assets.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYERS
Buyers, jointly and severally, represent and warrant to Sellers that:
Section 4.01. CORPORATE EXISTENCE AND POWER. (a) Andersons is an Ohio
corporation duly incorporated, validly existing in good standing under the laws
of the state of Ohio and has all
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requisite corporate power and authority to purchase, own and hold the U.S.
ProTurf Assets and to conduct the U.S. ProTurf Business.
(b) TAAI is an Illinois corporation duly incorporated, validly existing
in good standing under the laws of the state of Illinois and has all requisite
corporate power and authority to purchase, own and hold the U.S. ProTurf Assets
and to conduct the U.S. ProTurf Business.
Section 4.02. CORPORATE AUTHORITY. (a) Each of Andersons and TAAI has
all requisite corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions to be undertaken by it as contemplated hereby.
(b) The execution and delivery of this Agreement by each of Andersons
and TAAI, the performance by it of its obligations hereunder and the
consummation by it of the transactions to be undertaken by it as contemplated
hereby have been duly and validly authorized by all necessary corporate action
of each of Andersons and TAAI.
(c) This Agreement has been duly and validly executed and delivered on
behalf of each of Andersons and TAAI and constitutes its valid and binding
agreement.
Section 4.03. CONSENTS AND APPROVALS; NO VIOLATIONS. (a) Neither the
execution and delivery of this Agreement by Andersons, nor its consummation of
the transactions to be undertaken by it as contemplated hereby, will (i) violate
any provision of its articles of incorporation or regulations (or any equivalent
governing documents); (ii) constitute (upon notice, lapse of time or otherwise)
a breach or a default (or give rise to any right of termination, cancellation or
acceleration) under any note, bond, mortgage, indenture, franchise, lease,
contract or other agreement to which Andersons is a party or by which it may be
bound or subject; (iii) violate any order, judgment, injunction, award or decree
of any court, arbitrator or governmental or regulatory authority against, or any
agreement with or condition imposed by, any governmental or regulatory
authority, binding upon it; or (iv) violate any statute, law, rule or regulation
of any federal, state, local or other governmental authority applicable to it or
its property, assets or business, excluding from the foregoing clauses (i) to
and including (iv) such breaches, defaults, rights and violations that, in the
aggregate, do not have a Material Adverse Effect on Andersons.
(b) Neither the execution and delivery of this Agreement by TAAI, nor
its consummation of the transactions to be undertaken by it as contemplated
hereby, will (i) violate any provision of its articles of incorporation or
regulations (or any equivalent governing documents); (ii) constitute (upon
notice, lapse of time or otherwise) a breach or a default (or give rise to any
right of termination, cancellation or acceleration) under any note, bond,
mortgage, indenture, franchise, lease, contract or other agreement to which TAAI
is a party or by which it may be bound or subject; (iii) violate any order,
judgment, injunction, award or decree of any court, arbitrator or governmental
or regulatory authority against, or any agreement with or condition imposed by,
any governmental or regulatory authority, binding upon it; or (iv) violate any
statute, law, rule or regulation of any federal, state, local or other
governmental authority applicable to it or its property, assets or business,
excluding from the foregoing clauses (i) to and including (iv)
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such breaches, defaults, rights and violations that, in the aggregate, do not
have a Material Adverse Effect on Andersons.
Section 4.04. GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by Buyers of this Agreement require and are subject to the Required
Approvals of any and all applicable governmental bodies, agencies, officials or
authorities, including, without limitation, (i) compliance with any applicable
requirements of the HSR Act; (ii) compliance with any applicable requirements of
the Exchange Act; (iii) compliance with any applicable environmental rules and
regulations and (iv) any other applicable rules, regulations and/or laws.
Section 4.05. LEGAL PROCEEDINGS. Neither Buyer has received notice of
nor has Knowledge of any, nor are there any pending or outstanding, Claims or
Claim Notices by or affecting Buyers, or any of its directors, officers or
employees in their capacities as such, that could (i) prevent the performance of
this Agreement or the consummation of any of the transactions contemplated
hereby or (ii) affect the validity or enforceability of this Agreement or
compliance with the terms hereof by Buyers, excluding from the foregoing clauses
(i) and (ii) such orders, judgments, injunctions, awards and decrees that, in
the aggregate, do not have a Material Adverse Effect on Buyers.
Section 4.06. FINDER'S FEES. There is no investment banker, broker,
finder or other intermediary which has been retained by or is authorized to act
on behalf of Buyers who might be entitled to any fee or commission from Sellers
or any of their affiliates upon consummation of the transactions contemplated by
this Agreement.
Section 4.07. FINANCING. Andersons has sufficient funds available to
make the payments set forth in Section 2.03.
ARTICLE V
COVENANTS OF SELLERS
Section 5.01. CONDUCT OF BUSINESS. Except as otherwise permitted or
required by this Agreement or as set forth on Schedule 5.01, from the date
hereof until the Closing Date:
(a) Sellers will use reasonable efforts to conduct the U.S. ProTurf
Business in the ordinary course of business consistent with past practices, use
reasonable efforts to preserve intact the business organizations and
relationships with third parties and keep available the services of the present
employees of the U.S. ProTurf Business; and
(b) without limiting the generality of the foregoing, Sellers will not,
except in the ordinary course of business:
(i) incur, create or assume any mortgage, security
interest or other encumbrance on the U.S. ProTurf
Assets;
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(ii) sell, assign, lease or otherwise transfer or dispose
of any of the U.S. ProTurf Assets;
(iii) renegotiate, modify, amend or terminate any of the
Contracts or fail to comply with the terms and
conditions of any of the Contracts in any material
respect; or
(v) agree or commit to do any of the foregoing.
Furthermore, Sellers will not take or agree or commit to take any action that
would make any of Sellers' representations and warranties contained in this
Agreement to become untrue or incorrect in any material respect at, or as of any
time prior to, the Closing Date. Notwithstanding anything to the contrary
contained herein, the parties acknowledge and agree that between the date hereof
and the Closing Date, Sellers will be actively marketing and selling the
Excluded Inventory and that such sales may be made outside of the ordinary
course of business and may be made above, at or below the standard cost of such
Excluded Inventory.
Section 5.02. REQUIRED APPROVALS. Sellers shall (a) take all reasonable
steps necessary or appropriate to obtain, as promptly as possible, all Required
Approvals required of them, (ii) cooperate reasonably with Buyers in obtaining
all Required Approvals required of Buyers and (iii) provide such information and
communications to governmental and regulatory authorities as any such authority
or Buyers reasonably requests in connection with obtaining any Required Approval
required of any party hereto.
Section 5.03. ACCESS TO INFORMATION. From the date hereof until the
Closing Date, Sellers (a) will give Buyers, their counsel, financial advisors,
auditors and other authorized representatives reasonable access to the offices,
properties, books and records of Sellers relating to the U.S. ProTurf Business;
(b) will furnish to Buyers, their counsel, financial advisors, auditors and
other authorized representatives such financial and operating data and other
information relating to the U.S. ProTurf Business as such Persons may reasonably
request and (c) will instruct the employees, counsel and financial advisors of
Sellers to cooperate with Buyers in its investigation of the U.S. ProTurf
Business; PROVIDED that no investigation pursuant to this Section shall affect
any representation or warranty given by Sellers hereunder; and, PROVIDED,
FURTHER, that any investigation pursuant to this Section shall be conducted in
such manner as not to interfere unreasonably with the conduct of the business of
Seller.
Section 5.04. NOTICES OF CERTAIN EVENTS. Sellers shall promptly notify
Buyers of:
(a) any notice or other communication from any Person alleging that the
consent of such Person is or may be required in connection with the transactions
contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
by this Agreement; and
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(c) any actions, suits, claims, investigations or proceedings commenced
or, to Sellers' Knowledge threatened against, relating to or involving or
otherwise affecting the U.S. ProTurf Business or the U.S. ProTurf Assets that,
if pending on the date of this Agreement, would have been required to have been
disclosed pursuant to Section 3.09 or that relate to the consummation of the
transactions contemplated by this Agreement.
Section 5.05. NON-COMPETITION.
(a) Sellers agree that for the period during which TAAI is paying
royalties to Sellers pursuant to the U.S. ProTurf License Agreement (or, in the
event that TAAI properly terminates the U.S. ProTurf License Agreement before
the fifth anniversary of the Closing Date, through the fifth anniversary of the
Closing Date), neither Seller shall engage, either directly or indirectly, as a
principal or for its own account or solely or jointly with others in any
business that competes with the U.S. ProTurf Business or that competes in the
U.S. Professional Turf Market, in each case, as it exists on the Closing Date;
PROVIDED, that nothing herein shall prohibit the acquisition by Scotts or any of
its affiliates of a diversified company having not more than 10% of its sales
(based on its latest published annual audited financial statements) attributable
to any business that competes with the U.S. ProTurf Business or in the U.S.
Professional Turf Market.
(b) Notwithstanding anything to the contrary contained herein, Buyers
specifically acknowledge that this Section 5.05 shall not prohibit Scotts from
engaging, directly or indirectly, in any one or more of the following
activities: (i) the manufacture, formulation, marketing, distribution and/or
sale of grass seed products in and/or for use in the Territory, whether for the
U.S. Professional Turf Market or not; (ii) the manufacture or formulation of any
product, whether it competes with a Product or not, and the marketing,
distribution and/or sale of such product through Retail Channels in the
Territory, so long as such product does not bear any of the trademarks that are
being licensed to the Buyers pursuant to the U.S. ProTurf License Agreement;
(iii) the provision of services and products, whether such products compete with
any Product or not, to residential and commercial properties (excluding golf
courses and excluding the sale of products, but not services, to the remainder
of the U.S. Professional Turf Market) through Scotts' lawn service business
(including locations owned by Scotts, those owned by Scotts' franchisees and
those owned by licensees of the "SCOTTS" trademark), so long as such services
and products do not bear any of the trademarks that are being licensed to Buyers
pursuant to the U.S. ProTurf License Agreement; (iv) the manufacture,
formulation, marketing, distribution and/or sale of any product or service
outside of the Territory or (v) the marketing, distribution and/or sale of any
or all of the Excluded Inventory at any time, or from time to time, through
August 31, 2000. Scotts agrees that, notwithstanding the definition of "Retail
Channels" and notwithstanding anything to the contrary contained herein, Scotts
shall not intentionally sell any products that compete with the Products
directly to participants in the U.S. Professional Turf Market via the Internet.
(c) If any provision contained in this Section 5.05 shall for any
reason be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Section, but this Section shall be construed as if such invalid, illegal
or unenforceable provision had never been contained herein. It is the intention
of the
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parties that if any of the restrictions or covenants contained herein is held to
cover a geographic area or to be for a length of time which is not permitted by
applicable law, or in any way construed to be too broad or to any extent
invalid, such provision shall not be construed to be null, void and of no
effect, but to the extent such provision would be valid or enforceable under
applicable law, a court of competent jurisdiction shall construe and interpret
or reform this Section 5.05 to provide for a covenant having the maximum
enforceable geographic area, time period and other provisions (not greater than
those contained herein) as shall be valid and enforceable under such applicable
law. Sellers acknowledge that Buyers would be irreparably harmed by any breach
of this Section 5.05 and that there would be no adequate remedy at law or in
damages to compensate Buyers for any such breach. Sellers agree that Buyers
shall be entitled to injunctive relief requiring specific performance by Sellers
of this Section 5.05.
Section 5.06. TRANSFER OF REGISTRATIONS. (a) The Sellers will transfer
all U.S. Environmental Protection Agency pesticide registrations primarily used
in the U.S. ProTurf Business to the Buyers as soon after the Closing Date as is
reasonable. Sellers have the option of transferring either the existing U.S.
Environmental Protection Agency registration or applying for a "me-too"
registration and transferring that "me-too" registration to the Buyers. In the
situation where a registration is not obtained by the Buyers within one year
after the Closing Date, Sellers will provide Buyers with a means of continuing
in business until such time as the registration is procured. A list of all
Scotts' U.S. Environmental Protection Agency registrations for the U.S. ProTurf
Business is included in Schedule 2.01(b)(1).
(b) Sellers acknowledge that certain of the U.S. Environmental
Protection Agency registrations included on Schedule 2.01(b)(1) are "range"
registrations, which may not be transferable to the Buyers. Under circumstances
where the U.S. Environmental Protection Agency will not allow the transfer of a
"range" registration, Sellers agree to apply for, obtain and then transfer a
sufficient number of individual U.S. Environmental Protection Agency
registrations needed to support the transfer of all the Inventory included as a
part of this transaction from the Sellers to the Buyers.
(c) All data used in support of the U.S. Environmental Protection
Agency registrations on Schedule 2.01(b)(1) are to be given to the Buyer within
sixty (60) days of the Closing Date and Buyers and Sellers agree that each
shares equally in the ownership of such data. Additionally, Sellers will provide
to Buyers all data used by Sellers to support the state registrations.
(d) Sellers agree to assist Buyers in procuring Scotts' existing
subregistrations of the U.S. Environmental Protection Agency federal
registrations.
(e) Schedule 2.01(b)(1)(i) represents the active and 1999 discontinued
U.S. ProTurf Business products, and the states in which these products are
registered. Sellers agree to manage and maintain the individual state
registrations for all the active and 1999 discontinued products included as a
part of this transaction until the federal registrations have transferred to the
Buyers and the Buyers have obtained individual state registrations. Buyers agree
to reimburse the Sellers for all state regulatory fees, including any
discontinuance fees for all active products. Unless the
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parties otherwise agree, Sellers are responsible for all regulatory fees,
including any discontinuance fees, for 1999 discontinued products represented on
Schedule 2.01(b)(1)(i) for a period of one year after Closing Date. Thereafter,
Sellers agree to continue the administration of state registration renewals for
the 1999 discontinued products at the Buyers' request on a SKU by SKU basis
provided that the Buyers have used commercially reasonable efforts to sell these
discontinued products. Buyers agree to reimburse the Sellers for any
registration and discontinuance fees related to the 1999 discontinued U.S.
ProTurf Business products beyond one year after Closing.
(f) Buyers acknowledge that products listed on Schedule 2.01(b)(4), if
not listed on Schedule 2.01(b)(1)(i), do not have operable state registrations.
Sellers agree to assist Buyers in obtaining necessary state registrations and
manage the registrations for these products. Unless the parties agree otherwise,
to the extent that Sellers pay any registration fees on Buyers' behalf, Buyers
agree to reimburse Sellers promptly.
(g) Buyers are responsible for all tonnage and inspection or millage
fees for all products sold by Buyers. Sellers are responsible for all tonnage
and inspection or millage fees for all products sold by the Sellers. Sellers
agree to manage any individual state tonnage reporting until such time as the
Buyers have obtained the appropriate state registrations. To the extent that
Sellers pay any such fees on Buyers' behalf, Buyers agree to reimburse Sellers
promptly in full.
(h) Buyers will forward any adverse effects notices, as required by
Section 6(a)(2) of FIFRA, to the Sellers for any Scotts-labeled pesticide
products sold by Buyers.
ARTICLE VI
COVENANTS OF BUYERS
Section 6.01. REQUIRED APPROVALS. Buyers shall (i) take all steps
necessary or appropriate to obtain, as promptly as is possible, all Required
Approvals required of them; (ii) cooperate reasonably with Sellers in obtaining
all Required Approvals required of them; and (iii) provide such information and
communications to governmental and regulatory authorities as any such authority
or Scotts reasonably requests in connection with obtaining each Required
Approval required of any party hereto.
Section 6.02. NON-COMPETITION.
(a) Buyers agree that for a period of five years following the Closing
Date, neither Buyer shall, either directly or indirectly, as a principal or for
its own account or solely or jointly with others, sell any Product or any other
product that bears any of the trademarks that are subject of the U.S. License
Agreements through any Retail Channel in the Territory. The parties acknowledge
and agree that communications and transactions via the Internet to purchasers,
potential purchasers or their agents in the U.S. Professional Turf Market shall
not be deemed to be a violation of this Section 6.02(a). Furthermore, the
parties acknowledge and agree that this Section 6.02(a) is not intended to
prevent, and shall not be deemed to apply to, the manufacture, formulation,
distribution, marketing or sale of any professional turf product line through
Retail
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Channels, other than any Product or product that bears any of the trademarks
subject to the U.S. License Agreements.
(b) If any provision contained in this Section 6.02 shall for any
reason be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Section, but this Section shall be construed as if such invalid, illegal
or unenforceable provision had never been contained herein. It is the intention
of the parties that if any of the restrictions or covenants contained herein is
held to cover a geographic area or to be for a length of time which is not
permitted by applicable law, or in any way construed to be too broad or to any
extent invalid, such provision shall not be construed to be null, void and of no
effect, but to the extent such provision would be valid or enforceable under
applicable law, a court of competent jurisdiction shall construe and interpret
or reform this Section 6.02 to provide for a covenant having the maximum
enforceable geographic area, time period and other provisions (not greater than
those contained herein) as shall be valid and enforceable under such applicable
law. Buyers acknowledge that Sellers would be irreparably harmed by any breach
of this Section 6.02 and that there would be no adequate remedy at law or in
damages to compensate Sellers for any such breach. Buyers agree that Sellers
shall be entitled to injunctive relief requiring specific performance by Buyers
of this Section 6.02.
Section 6.03. CONFIDENTIALITY. Prior to the Closing Date and after any
termination of this Agreement, Buyers and their affiliates will hold, and will
use their reasonable best efforts to cause their respective officers, directors,
employees, accountants, counsel, consultants, advisors and agents to hold, in
confidence, unless compelled to disclose by judicial or administrative process
or by other requirements of law, all confidential documents and information
concerning the U.S. ProTurf Business, the Canadian ProTurf Business or Sellers
furnished to Buyers or their affiliates in connection with the transactions
contemplated by this Agreement, except to the extent that such information can
be shown to have been (i) previously known on a nonconfidential basis by Buyers,
(ii) in the public domain through no fault of Buyers or (iii) later lawfully
acquired by Buyers from sources other than Sellers; PROVIDED, that Buyers may
disclose such information to their officers, directors, employees, accountants,
counsel, consultants, advisors and agents in connection with the transactions
contemplated by this Agreement so long as such Persons are informed by Buyers of
the confidential nature of such information and are directed by Buyers to treat
such information confidentially. The obligation of Buyers and their affiliates
to hold any such information in confidence shall be satisfied if they exercise
the same care with respect to such information as they would take to preserve
the confidentiality of their own similar information. If this Agreement is
terminated, Buyers and their affiliates will, and will use their reasonable best
efforts to cause their respective officers, directors, employees, accountants,
counsel, consultants, advisors and agents to, destroy or deliver to Seller, upon
request, all documents and other materials, and all copies thereof, obtained by
Buyers or their affiliates or on their behalf from Sellers in connection with
this Agreement that are subject to such confidence.
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ARTICLE VII
COVENANTS OF ALL PARTIES
------------------------
Section 7.01. WARRANTY DISCLAIMER. Except to the extent set forth under
Section 9.02(a) or otherwise as expressly provided in this Agreement, Buyers and
Sellers agree that SELLERS MAKE NO FURTHER OR OTHER REPRESENTATION OR WARRANTY
OF ANY KIND, EXPRESS OR IMPLIED, AS TO MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE OR ANY OTHER MATTER WITH RESPECT TO THE INVENTORY AND/OR ANY OTHER PART
OF THE U.S. PROTURF ASSETS, AND SELLERS SPECIFICALLY DISCLAIM ANY LIABILITY FOR
INCIDENTAL, CONSEQUENTIAL OR OTHER DAMAGES.
Section 7.02. EXPENSES. Except as otherwise expressly provided herein,
each party to this Agreement shall bear its own expenses incurred in connection
with the preparation, execution and performance of this Agreement and the
consummation of the transactions contemplated hereby, including, without
limitation, all fees of agents, representatives, legal counsel and accountants,
whether or not the transactions contemplated hereby shall be consummated.
Section 7.03. FURTHER ASSURANCES. Subject to the terms and conditions
of this Agreement, each party will use its reasonable efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary or
desirable under applicable laws and regulations to consummate the transactions
contemplated by this Agreement. Each party agrees to execute and deliver such
other documents, certificates, agreements and other writings and to take such
other actions as may be necessary or desirable in order to consummate or
implement expeditiously the transactions contemplated by this Agreement and to
vest in Buyers good and marketable title to the U.S. ProTurf Assets.
Section 7.04. PUBLIC ANNOUNCEMENTS. Except as may be required by law,
no party to this Agreement shall make, encourage or permit disclosure of any
kind or form in respect of this Agreement or the transactions contemplated
hereby unless Scotts and Buyers mutually agree in advance on the form, timing
and content of any such disclosure, whether to the financial community, a
governmental agency, the public generally or otherwise. Each party agrees to
promptly review any disclosure provided by the other party pursuant to this
Section 7.04 and shall not unreasonably withhold, delay or condition its consent
to any such disclosure.
Section 7.05. COLLECTION OF ACCOUNTS RECEIVABLE.
(a) As of the date hereof, there are outstanding accounts receivable
owing from Turf Partners, Inc. Buyers and Sellers specifically acknowledge and
agree that none of the accounts receivable of the U.S. ProTurf Business are
included among the U.S. ProTurf Assets and that such accounts receivable shall
remain the property of Sellers.
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(b) Between the date hereof and the Closing Date, Sellers agree to use
their reasonable efforts, consistent with past practices, to collect all of such
accounts receivable, including those from Turf Partners, Inc.
(c) In connection with the Closing, the parties shall mutually prepare
a statement setting forth (i) the amount of accounts receivable of the U.S.
ProTurf Business as of the Closing Date (the "Closing Receivables") and (ii) the
amount of such accounts receivable attributable to Turf Partners, Inc. (the
"Turf Partners Receivable"), including, without limitation, to the extent
available, a schedule of all invoices for the Turf Partners Receivable.
(d) From and after the Closing Date, Buyers and Sellers agree to use
their reasonable efforts to collect the Closing Receivables on behalf of
Sellers. Any monies received by Buyers after the Closing Date in connection with
such Closing Receivables shall be for the benefit and account of Sellers and
shall be promptly remitted to Sellers. Scotts and Buyers agree to reasonably
cooperate in the collection of the Closing Receivables.
(e) From time to time after the Closing Date, Buyers and Scotts shall
consult with respect to the status of any uncollected Closing Receivables
generally, and specifically with respect to the Turf Partners Receivable. If,
and to the extent that, Buyers and Scotts determine in good faith that all or
any portion of the Turf Partners Receivable is uncollectible, Buyers agree to
promptly reimburse Scotts for 33.75% of the portion of the Turf Partners
Receivable deemed uncollectible, up to an aggregate amount of $2,700,000;
PROVIDED, that, for purposes of the foregoing, any portion of the Turf Partners
Receivable that has not been collected within 120 days of its due date, shall
automatically be deemed to be uncollectible, unless Buyers and Scotts mutually
agree otherwise. If, and to the extent that Scotts or Buyers collect any portion
of the Turf Partners Receivable after it has been deemed uncollectible, Buyers
shall be reimbursed for 33.75% of such portion so collected (net of any
reasonable, out-of-pocket costs of collection) up to an aggregate amount of
$2,700,000.
Section 7.06. INSURANCE. As of the Closing Date, (i) Buyers agree to
furnish insurance certificates naming the Sellers as additional insureds under
its general and automobile liability policies with limits of at least $2,000,000
per occurrence and (ii) Sellers agree to furnish insurance certificates naming
the Buyers as an additional insured under its general and automobile liability
policies with limits of at least $2,000,000 per occurrence. The specified limits
of insurance may be satisfied by any combination of a self-insured retention and
primary or excess/umbrella liability insurance policies. For purposes of this
Section 7.06, "self-insured" means that the party is itself acting as though it
were the insurance company providing the insurance required under the provisions
hereof and shall pay any amounts due in lieu of insurance proceeds which would
have been payable if the insurance policies had been carried by a third party
insurance company, which amounts shall be treated as insurance proceeds for all
purposes under this Agreement.
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Section 7.07. USE OF THE "SCOTTS" TRADEMARK.
(a) Except as set forth in the other subsections of this Section 7.07,
after the Closing, neither Buyers nor any of their affiliates shall use any of
the following names or marks that were used in the U.S. ProTurf Business:
"SCOTTS" and "Scotts and Oval Design," as set forth on Schedule 7.07. Such names
shall be referred to, collectively or individually as the context requires, as
the "Scotts(R) Trademarks."
(b) After the Closing, Buyers shall have the right to sell existing
Inventory bearing any Scotts(R) Trademarks, and to use existing packaging,
labeling, containers, supplies, advertising materials, technical data sheets and
any similar materials with respect to such Inventory, until the earlier of (i)
August 31, 2001, and (ii) the date existing stocks are exhausted. Buyers shall
also have the right to continue to use existing brochures relating to the
Inventory, including technical data sheets bearing the Scotts(R) Trademarks,
until the earlier of (i) August 31, 2001 and (ii) the date existing stocks are
exhausted. Notwithstanding the foregoing, in the event that Buyers are unable to
exhaust the existing stocks of one or more SKUs of Inventory by August 31, 2001
so long as Buyers have used commercially reasonable efforts to do so, Scotts
shall consent in writing to extend such date, on a SKU by SKU basis, for a
reasonable period of time, as negotiated in good faith by Scotts and Andersons,
to permit the exhaustion of such SKUs of Inventory.
(c) Sellers agree to and do hereby grant to Buyers, for the period and
upon the terms and conditions set forth in this Section 7.07, the right and
license: (i) to use the Scotts(R) Trademarks solely within the Territory in the
sale of existing Inventory using existing packaging, labels, containers and
supplies and (ii) to produce advertising and promotional materials subject to
the terms herein. Buyers acknowledge and agree that Sellers are the sole and
exclusive owners of the Scotts(R) Trademarks in any form or embodiment thereof
and are also the owners of the goodwill attached or which shall become attached
to the Scotts(R) Trademarks in connection with the business and goods in
relation of which the same has, is or shall be used. Buyers' rights to use the
Scotts(R) Trademarks shall be governed exclusively by this Agreement, and all
use of the Scotts(R) Trademarks by Buyers shall inure to the benefit of Sellers.
Any sales of Inventory bearing a Scotts(R) Trademark shall be deemed to have
been made by Sellers for purposes of trademark registration. All rights in the
Scotts(R) Trademarks other than those specifically granted in this Agreement are
reserved by Sellers for their own use and benefit.
(d) Buyers shall sell the Inventory in accordance with all applicable
laws, rules and regulations. Upon Sellers' reasonable request, Buyers will
provide samples of any batch of packaged Inventory or other inventory bearing a
Scotts(R) Trademark to enable Sellers to determine if Buyers are complying with
the Sellers' standards of quality control. Scotts shall approve or disapprove
(specifying the reasons for any disapproval) in writing within 30 days of
receipt of such sample. Failure to give notice of disapproval within such period
shall constitute Scotts' approval for that Inventory or other inventory bearing
a Scotts(R) Trademark.
(e) In addition to the foregoing, until no later than February 28,
2001, Buyers shall have the right to use the Scotts(R) Trademarks in advertising
and other promotional materials
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prepared by Buyers for the sole purpose of transitioning the U.S. ProTurf
Business from Sellers to Buyers. In connection with such advertising and
promotion, Buyers shall comply with all applicable laws and regulations. Buyers
agree not to use the Scotts(R) Trademarks, trade dress or any reproduction
thereof in any advertising, promotion or display material without prior written
approval from Scotts. All copy and material utilizing the Scotts(R) Trademarks
shall be submitted for the approval of Scotts, and any material submitted and
not disapproved by Scotts within 30 days shall be deemed approved.
(f) Neither Andersons nor any of its affiliates will use any Scotts(R)
Trademark as all or a portion of Andersons' or any such affiliate's corporate
name, trade name or other designation. Buyers' employees will not represent
themselves as being representatives of or being from Sellers. Buyer will not
associate the Scotts(R) Trademarks with another trademark of packaging or
containers without the prior written approval of such other trademark by Scotts.
Buyers agree to use the Scotts(R) Trademarks only in the form approved by Scotts
and may not modify, change or alter the Scotts(R) Trademarks in any manner
whatsoever without the prior written approval of Scotts, which approval shall
not be unreasonably delayed, conditioned or withheld. Buyers will display the
Scotts(R) Trademarks only in such form and manner as is specifically approved by
Scotts, which approval shall not be unreasonably delayed, conditioned or
withheld.
(g) Sellers may terminate Buyers' rights to use the Scotts(R)
Trademarks pursuant to this Section 7.07 immediately: (i) if Buyers or any of
their respective affiliates breaches any of the provisions of this Section 7.07
and fails to cure such breach within 10 days of written notice thereof by Scotts
or (ii) upon the insolvency of Buyers, any assignment by Buyers for the benefit
of its creditors, the failure to obtain the dismissal of any involuntary
bankruptcy or reorganization petition filed against Buyers within 60 days from
the date of such filing, the failure of Buyers to vacate the appointment of a
receiver for all or any part of its business within 60 days from the date of
such appointment or the dissolution of Buyers. Sellers shall provide Buyers
prompt written notice of any such termination.
(h) Buyers acknowledge that Sellers would be irreparably harmed by any
breach of this Section 7.07 by Buyers and that there would be no adequate remedy
at law or in damages to compensate Sellers for any such breach. Buyers agree
that Sellers shall be entitled to injunctive relief requiring specific
performance by Buyers of this Section 7.07.
ARTICLE VIII
CONDITIONS TO CLOSING
Section 8.01. CONDITIONS TO OBLIGATIONS OF ALL PARTIES. The respective
obligations of the parties to this Agreement to consummate the transactions
contemplated hereby are subject to the satisfaction, at or prior to the Closing,
of each of the following conditions precedent:
(a) Any applicable waiting period under the HSR Act relating to the
transactions contemplated hereby shall have expired.
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(b) No judgment, injunction, order or decree of a court of competent
jurisdiction shall (i) prohibit the consummation of any of the transactions
contemplated hereby or (ii) restrain, prohibit or otherwise materially interfere
with the effect, operation or enjoyment by Buyers of all or any material portion
of the U.S. ProTurf Assets.
(c) Each of the parties hereto shall have obtained each Required
Approval to be obtained by it, without conditions or limitations that
unreasonably restrict the ability of the parties hereto to perform this
Agreement, and each of Sellers and Buyers shall have been furnished with
appropriate evidence, reasonably satisfactory to it and its counsel, that each
such Required Approval has been obtained and is in full force and effect.
Section 8.02. CONDITIONS TO OBLIGATIONS OF BUYERS. The obligations of
Buyers to consummate the transactions contemplated by this Agreement are subject
to the satisfaction, at or prior to the Closing, of each of the following
further conditions, any one or more of which may be waived by Buyers:
(a)(i) Sellers shall have performed in all material respects all of
their obligations hereunder required to be preformed by them at or prior to the
Closing Date; (ii) the representations and warranties of Sellers contained in
this Agreement and in any certificate or other writing delivered by Sellers
pursuant hereto, disregarding all qualifications and exceptions contained
therein relating to materiality or Material Adverse Effect, shall be true at and
as of the Closing Date, as if made at and as such time, with only such
exceptions as would not in the aggregate reasonably be expected to have a
Material Adverse Effect with respect to the U.S. ProTurf Assets or the U.S.
ProTurf Business; and (iii) Buyers shall have received a certificate signed by
an executive officer of each Seller to the foregoing effect.
(b) Sellers shall have delivered the documents referred to in Section
2.05(b).
(c) Buyers shall have received all documents it may reasonably request
relating to the existence of Sellers and the authority of Sellers for this
Agreement, all in form and substance reasonably satisfactory to Buyers.
Section 8.03. CONDITIONS TO OBLIGATIONS OF SELLERS. The obligations of
Sellers to consummate the transactions contemplated by this Agreement are
subject to the satisfaction, at or prior to the Closing, of each of the
following further conditions, any one or more of which may be waived by Scotts:
(a) Buyers shall have performed in all material respects all of its
obligations hereunder required to be performed by them at or prior to the
Closing Date; (ii) the representations and warranties of Buyers contained in
this Agreement and in any certificate or other writing delivered by Buyers
pursuant hereto, disregarding all qualifications and exceptions contained
therein relating to materiality or Material Adverse Effect, shall be true at and
as of the Closing Date, as if made at and as such time, with only such
exceptions as would not in the aggregate reasonably be expected to have a
Material Adverse Effect with respect to Buyers; and
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(iii) Sellers shall have received a certificate signed by an executive officer
of Buyers to the foregoing effect.
(b) Buyers shall have delivered the documents referred to in Section
2.05(c).
(c) All of the closing conditions to Sellers' obligations under the
Canadian Asset Purchase Agreement shall have been satisfied or shall have been
waived by Scotts, in its sole discretion.
(d) Sellers shall have received all documents they may reasonably
request relating to the existence of Buyers and the authority of Buyers for this
Agreement, all in form and substance reasonably satisfactory to Scotts.
ARTICLE IX
SURVIVAL; INDEMNIFICATION
Section 9.01. SURVIVAL OF WARRANTIES; TERMINATION. Except as otherwise
set forth herein, the covenants, agreements, representations and warranties of
the parties contained in this Agreement shall survive the Closing and shall
expire on, and shall be of no further force and effect after, the first
anniversary of the Closing Date; PROVIDED, that the covenants set forth in
Section 5.05 and Section 6.02 shall survive the Closing and, except as otherwise
set forth therein, shall expire on and shall be of no further force and effect
after the fifth anniversary of the Closing Date; PROVIDED, FURTHER, that the
indemnities set forth in Section 9.02(a)(ii) and Section 9.02(b)(ii) and the
covenants set forth in Section 7.07, to the extent set forth therein, shall
survive the Closing without expiration. Notwithstanding the preceding sentence,
any covenant, agreement, representation or warranty in respect of which
indemnity may be sought under Section 9.02 shall survive the time at which it
would otherwise terminate pursuant to the preceding sentence, if notice of the
inaccuracy or breach thereof giving rise to such right to indemnity shall have
been given to the party against whom indemnity may be sought prior to such time.
Section 9.02. INDEMNIFICATION. (a) After consummation of the Closing,
Sellers hereby, jointly and severally, indemnify Buyers against and agree to
hold them harmless from any and all Claims incurred or suffered by Buyers, or
any officer, director, employee, agent, representative or affiliate thereof,
arising out of:
(i) any misrepresentation or breach of warranty, covenant
or agreement made or to be performed by Sellers
pursuant to this Agreement; or
(ii) any Excluded Liability or any obligation or liability
of the U.S. ProTurf Business relating to the Excluded
Assets; or
(iii) the U.S. ProTurf Business prior to Closing;
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PROVIDED, that (x) Sellers shall not be liable under this Section 9.02(a)(i)
unless the aggregate amount of Buyers' Claims with respect to all matters
referred to in this Section 9.02(a) (determined without regard to any
materiality or Material Adverse Effect qualification contained in any
representation, warranty or covenant giving rise to the Claim) exceeds $500,000
and then only to the extent of such excess and (y) Sellers' maximum liability
under this Section 11.02(a) shall not exceed $2,000,000; PROVIDED, FURTHER, that
the immediately preceding proviso shall not apply to a breach of Sellers'
obligations pursuant to Section 5.05(a) or Section 13.07 for which Sellers shall
be liable from the first dollar and without limitation as to amount. In
addition, Sellers agree to indemnify Buyers and hold them harmless from any and
all Claims by Turf Partners, Inc. arising out of any alleged breach by Scotts of
Scotts' distribution agreement with Turf Partners, Inc. from the first dollar
and without limitation as to amount; PROVIDED that Andersons agrees to use
reasonable efforts to establish a distributor relationship with Turf Partners,
Inc. or its successor.
(b) After consummation of the Closing, and subject to the provisions of
Section 9.04, Buyers hereby indemnify Sellers against and agree to hold them
harmless from any and all Claims incurred or suffered by either Seller, or any
officer, director, employee, agent, representative or affiliate thereof, arising
out of:
(i) any misrepresentation or breach of warranty, covenant
or agreement made or to be performed by Buyers
pursuant to this Agreement;
(ii) any Assumed Liability;
(iii) any failure to pay any amounts due pursuant to
Section 7.05(e); or
(iv) the U.S. ProTurf Business after Closing;
PROVIDED, that (x) Buyers shall not be liable under this Section 9.02(b)(i)
unless the aggregate amount of Sellers' Claims with respect to all matters
referred to in this Section 9.02(b) (determined without regard to any
materiality or Material Adverse Effect qualification contained in any
representation, warranty or covenant giving rise to the Claim) exceeds $500,000
and then only to the extent of such excess and (y) Buyers' maximum liability
under this Section 11.02(b) shall not exceed $2,000,000; PROVIDED, FURTHER, that
the immediately preceding proviso shall not apply to (A) a breach of Buyers'
obligations pursuant to Section 7.05(e) for which Buyers shall be liable from
the first dollar up to the amount set forth in such Section 7.05(e) or (B) a
breach of Section 6.02 or Section 7.07 for which Buyers shall be liable from the
first dollar and without limitation as to amount.
Section 9.03. PROCEDURES. (a) The Indemnitee agrees to give prompt
notice to the Indemnitor of any Claim hereunder.
(b) In addition to, and not in limitation of, the foregoing, if any
Claim for which Indemnitee would be entitled to indemnification under this
Agreement arises out of a claim or liability asserted against or sought to be
collected from Indemnitee by a third party, Indemnitee
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<PAGE> 37
shall promptly give to Indemnitor a Claim Notice in respect of such Claim.
Indemnitor shall have thirty (30) Business Days following the giving of a Claim
Notice to it to notify Indemnitee whether or not Indemnitor elects to defend
Indemnitee in respect of such Claim; and
(i) If Indemnitor so elects to defend Indemnitee in
respect of such Claim, Indemnitor shall either settle
or, by appropriate proceedings, defend such Claim in
a manner intended to protect the interests of
Indemnitee; and Indemnitee shall cooperate as
reasonably requested by Indemnitor in connection with
such settlement or defense. Indemnitor shall (i) have
the right to control the defense or settlement of the
Claim involved, (ii) pay all costs and expenses of
such proceedings incurred by it, and (iii) pay the
amount of any resulting settlement, judgment or award
if it shall be determined that such Claim is subject
to indemnification by Indemnitor under this
Agreement; provided, however, that Indemnitor shall
effect no settlement of such Claim if such settlement
would affect the liability of Indemnitee unless
Indemnitee shall consent thereto in writing, which
consent shall not be unreasonably delayed or
withheld. If Indemnitee desires to participate in,
without controlling, any such defense or settlement
by Indemnitor, it may do so at Indemnitee's sole cost
and expense and without affecting any rights
Indemnitee may have against Indemnitor.
(ii) If Indemnitor shall not so elect to defend Indemnitee
in respect of such Claim, Indemnitee shall either
settle or, by appropriate proceedings, defend such
Claim in a manner intended to protect the interests
of Indemnitor; and Indemnitor shall cooperate as
reasonably requested by Indemnitee in connection with
such settlement or defense. Indemnitee shall (x) have
the right to control the defense or settlement of the
Claim involved and (y) be indemnified by Indemnitor
for its reasonable costs and expenses of such
defenses, and for the amount of any resulting
settlement, judgment or award, if it shall be
determined that such Claim is subject to
indemnification by Indemnitor under this Agreement;
PROVIDED, HOWEVER, that Indemnitee shall effect no
settlement of such Claim if such settlement
would affect the liability of Indemnitor unless
Indemnitor shall consent to such settlement in
writing, which consent shall not be unreasonably
delayed or withheld. If Indemnitor desires to
participate in, without controlling, any such defense
or settlement by Indemnitee, it may do so at its sole
cost and expense and without affecting any rights
Indemnitor may have against Indemnitee.
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ARTICLE X
TAX MATTERS
Section 10.01. TAX COOPERATION. Buyers and Sellers agree to furnish or
cause to be furnished to each other, upon request, as promptly as practicable,
such information and assistance relating to the U.S. ProTurf Assets and the U.S.
ProTurf Business as is reasonably necessary for the filing of all tax returns,
and making of any election related to taxes, the preparation for any audit by
any taxing authority, and the prosecution or defense of any claim, suit or
proceeding relating to any tax return. Sellers and Buyers shall cooperate with
each other in the conduct of any audit or other proceeding related to taxes
involving the U.S. ProTurf Business and each shall execute and deliver such
powers of attorney and other documents as are necessary to carry out the intent
of this Section 10.01.
Section 10.02. ALLOCATION OF TAXES. (a) All personal property taxes and
similar ad valorem obligations levied with respect to the U.S. ProTurf Assets
that accrue during the Sellers' taxable period that ends on the Closing Date
shall be paid by Sellers. All personal property taxes and similar ad valorem
obligations levied with respect to the U.S. ProTurf Assets that accrue during
Buyers' taxable period that begins after the Closing Date shall be paid by
Buyers. All personal property taxes and similar ad valorem obligations levied
with respect to the U.S. ProTurf Assets that accrue for a taxable period which
includes (but does not end on) the Closing Date shall be apportioned between
Sellers, on the one hand, and Buyers, on the other, as of the Closing Date based
on the number of days of such taxable period included in the pre-Closing tax
period and the number of days of such taxable period included in the
post-Closing tax period. Sellers shall be liable for the proportionate amount of
such taxes that is attributable to the pre-Closing tax period. Within 180 days
after the Closing Date, Sellers and Buyers shall present a statement to the
other setting forth the amount of reimbursement to which each is entitled under
this Section 10.02 together with such supporting evidence as is reasonably
necessary to calculate any allocated amount. The allocated amount shall be paid
by the party or parties owing it to the other(s) within 10 days after delivery
of such statement. Thereafter, Sellers shall notify Buyers upon receipt of any
bill for personal property taxes relating to the U.S. ProTurf Assets, part or
all of which are attributable to the post-Closing tax period, and shall promptly
deliver such bill to Buyers who shall pay the same to the appropriate taxing
authority, PROVIDED, that if such bill covers the pre-Closing tax period,
Sellers shall also remit prior to the due date of assessment to Buyers payment
for the proportionate amount of such bill that is attributable to the
pre-Closing tax period. In the event that either Sellers, on the one hand, or
Buyers, on the other, shall thereafter make a payment for which it is entitled
to reimbursement under this Section 10.02, the other party or parties shall make
such reimbursement promptly but in no event later than 30 days after the
presentation of a statement setting forth the amount of reimbursement to which
the presenting party is entitled along with such supporting evidence as is
reasonably necessary to calculate the amount of reimbursement.
(b) Any payment required under this Section 10.02 and not made within
10 days of delivery of the statement shall bear interest at the rate per annum
determined, from time to time, under the provisions of Section 6621(a)(2) of the
Internal Revenue Code of 1986, as amended, for each day until paid.
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<PAGE> 39
Section 10.03. SALES AND USE TAXES. Any transfer, documentary, sales,
use or other taxes assessed upon or with respect to the transfer of the U.S.
ProTurf Assets to Buyers and any recording of filing fees with respect thereto
shall be the responsibility of Buyers.
ARTICLE XI
LABOR AND EMPLOYMENT MATTERS
Section 11.01. EMPLOYEES AND OFFERS OF EMPLOYMENT. (a) Andersons shall
offer employment to all non-Marysville-based active employees listed on Schedule
3.11 and may offer employment to such Marysville-based active employees listed
on Schedule 3.11 as Andersons in its sole discretion may determine. For purposes
of this Article XI, the term "active employees" shall mean any Person listed on
Schedule 3.11 who, on the Closing Date, is actively employed by Sellers in the
U.S. ProTurf Business or who is on short-term disability leave, authorized leave
of absence, military service or lay-off with recall rights as of the Closing
Date (such inactive employees shall be offered employment by Andersons as of the
date they return to active employment), but shall exclude any other inactive or
former employee, including any Person who has been on long-term disability leave
or unauthorized leave of absence or who has terminated his or her employment,
retired or died on or before the Closing Date. The employees who accept and
commence employment with Andersons are hereinafter collectively referred to as
the "Transferred Employees."
(b) Offers of employment (i) shall be for equivalent total compensation
opportunity as provided by Sellers to the Transferred Employees immediately
prior to the Closing. Based on current information, it appears that, on average,
the Sellers' current compensation mix is 60% base salary and 40% incentive
opportunity. Under the Buyers' program, this mix is approximately 80% base
salary and 20% incentive opportunity, based on the achievement of established
performance goals. Offers of employment will also include employee benefits
provided by Andersons to its similarly situated employees. Andersons shall not
reduce any Transferred Employee's initial base salary as described in this
Section as an employee of Andersons during the twelve month period after the
Transferred Employee's Employment Date.
(c) Sellers will not take any action that would impede, hinder,
interfere or otherwise compete with Andersons' efforts to hire any employees
listed on Schedule 3.11. Andersons shall not assume responsibility for any
Transferred Employee until such employee commences employment with Andersons.
The date on which a Transferred Employee commences work for Andersons is the
Transferred Employee's "Employment Date."
(d) If during the twelve month period after a Transferred Employee's
Employment Date (i) Andersons terminates the employment of the Transferred
Employee without cause; or (ii) Andersons relocates the Transferred Employee
without the Transferred Employee's consent, Andersons shall pay to such
Transferred Employee the amount which the Transferred Employee would have
received under Scotts Termination Policy, minus the transition payment of
approximately $650,000 made by Scotts at the time of transfer to Andersons
employment. The
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<PAGE> 40
payments under this Section 11.01(d) shall be in lieu of and not in addition to
severance under Andersons' severance pay programs for terminations during the
twelve month period after a Transferred Employee's Employment Date.
(e) For the purposes of Sections 11.01(d), "cause" shall mean (i) the
conviction of a felony, (ii) the willful failure to perform reasonable
job-related requests, (iii) an act of intentional fraud, embezzlement or theft,
(iv) an act or omission of gross misconduct injurious to Andersons, or (v) a
material violation of Andersons' rules, policies or procedures. Andersons agrees
to indemnify and hold the Sellers harmless from and against any and all claims,
damages, liabilities or losses arising out of or related to Andersons' hiring,
promotion or termination of any Transferred Employee, including any severance
payments required under Sections 11.01(d).
Section 11.02. SELLERS' EMPLOYEE BENEFIT PLANS. (a) Sellers shall
retain all obligations and liabilities under the employee benefit plans and
benefit arrangements in respect of each employee or former employee (including
any beneficiary thereof) who is not a Transferred Employee. Scotts or one of its
affiliates shall retain all liabilities and obligations in respect of benefits
accrued as of the Closing Date by Transferred Employees under Scotts' employee
benefit plans and benefit arrangements, and neither Andersons nor any of its
affiliates shall have any liability with respect thereto. No assets of any of
Sellers' employee benefit plans or benefit arrangements shall be transferred to
either Andersons or any of its affiliates or to any plan of either Andersons or
any of its affiliates.
(b) With respect to the Transferred Employees (including any
beneficiary or dependent thereof), Sellers shall retain (i) all liabilities and
obligations arising under any group life, accident, medical, dental or
disability plan or similar arrangement (whether or not insured) to the extent
that such liability or obligation relates to contributions or premiums accrued
(whether or not payable), or to claims incurred (whether or not reported), on or
prior to the Closing Date; (ii) all liabilities and obligations arising under
any worker's compensation arrangement to the extent such liability or obligation
relates to the period prior to the Closing Date, including liability for any
retroactive worker's compensation premiums attributable to such period and (iii)
all other liabilities and obligations arising under Scotts' employee benefit
plans and benefit arrangements to the extent any such liability or obligation
relates to the period prior to the Closing Date, including, without limitation,
liabilities and obligations in respect of accruals through the Closing Date
under any bonus plan or arrangement, any vacation plans, arrangements and
policies.
(c) With respect to any Transferred Employee (including any beneficiary
or dependent thereof) who is on short-term disability under any Scotts' benefit
plan on or prior to the Closing Date and continues on short-term disability
after the Closing Date, Sellers shall be responsible for claims and expenses
incurred both before and after the Closing Date in connection with such Person,
to the extent that such claims and expenses are covered by Scotts' benefit plans
or arrangements, until such time, (if any) that, in the case of a Transferred
Employee, such Person resumes full-time employment with either Andersons or one
of its affiliates.
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Section 11.03. BUYERS BENEFIT PLANS. (a) Andersons shall treat the
Transferred Employees' service with Sellers as service with Andersons under
Andersons' defined benefit pension plan for purposes of eligibility and vesting
but not for purposes of benefit accruals.
(b) Andersons shall treat the Transferred Employees' service with
Sellers as service with Andersons under Andersons' defined contribution
retirement plan for purposes of eligibility to make Section 401(k) contributions
but not for vesting. Matching contributions will be allocated at the time of
employee deferral contributions.
(c) Andersons shall treat service with Sellers as service with
Andersons under Andersons' retiree medical plans only in the case of Transferred
Employees who have attained age 47 as of the Closing Date but are not eligible
for, and are not eligible to bridge to eligibility for, Scotts' retiree medical
plan. Andersons will not treat any other Transferred Employees' service with
Sellers as service under Andersons' retiree medical plan.
(d) Andersons will not treat the Transferred Employees' service with
Sellers as service under Andersons' severance pay programs.
(e) Andersons shall treat the Transferred Employees' service with
Sellers as service with Andersons under all of Andersons other employee benefit
plans, programs and arrangements for similarly situated employees (including
vacation pay programs, group health plans, sick pay, short-term disability
programs, long-term disability programs, nonqualified deferred compensation
plans and group term life insurance).
(f) Sellers shall cooperate with Andersons to provide applicable
service data. No provision of this Agreement shall constitute a limitation on
rights to amend, modify or terminate after the Closing Date any of Andersons'
employee benefit plans, programs or arrangements; provided that any amendment,
modification or termination of any of Andersons' employee benefit plans,
programs or arrangements shall not distinguish between Transferred Employees and
Andersons' similarly situated employees.
Section 11.04. NO THIRD PARTY BENEFICIARIES. No provision of this
Article XI shall create any third party beneficiary or other rights in any
employee or former employee (including any beneficiary or dependent thereof) of
Sellers or of any of their subsidiaries in respect of continued employment (or
resumed employment) with either Andersons or the U.S. ProTurf Business, and no
provision of this Article XI shall create any such rights in any such Persons in
respect of any benefits that may be provided, directly or indirectly, under any
pre-existing Scotts employee benefit plan or benefit arrangement or any plan or
arrangement which may be established by Andersons.
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ARTICLE XII
TERMINATION
Section 12.01. GROUNDS FOR TERMINATION. This Agreement may be
terminated at any time prior to the Closing, as follows:
(i) by the mutual, written consent of Scotts and Andersons;
(ii) by either Scotts or Andersons, if the Closing has not occurred by
May 31, 2000, except as a result of the failure of any applicable waiting period
under the HSR Act relating to the transactions contemplated hereby to have
expired, in which case such date shall be extended to December 31, 2000; or
(iii) by either Scotts or Andersons, if consummation of the
transactions contemplated hereby would violate any nonappealable final order,
decree or judgment of any court or governmental body having competent
jurisdiction.
The party desiring to terminate this Agreement pursuant to clauses (ii)
or (iii) shall give notice of such termination to the other party.
Section 12.02. EFFECT OF TERMINATION. If this Agreement is terminated
as permitted by Section 12.01, such termination shall be without liability of
any party (or any shareholder, director, officer, employee, agent, consultant or
representative of such party) to the other parties to this Agreement; PROVIDED
that if such termination shall result from the willful failure of either party
to fulfill a condition to the performance of the obligations of the other party
or to perform a covenant of this Agreement or from a willful breach by either
party to this Agreement, such party shall be fully liable for any and all Claims
incurred or suffered by the other party as a result of such failure or breach.
The provisions of Sections 6.04 and 7.02 shall survive any termination hereof
pursuant to Section 12.01.
ARTICLE XIII
MISCELLANEOUS
Section 13.01. NOTICES. Any notice or other communication required or
permitted hereunder must be in writing and shall be deemed to have been duly
given when (i) delivered to the party to whom it is given personally, (ii)
deposited in the U.S. Mail if sent by certified or registered mail (return
receipt requested, postage prepaid and addressed to the party to whom it is
given as provided immediately below), or (iii) sent by facsimile transmission if
transmitted to each telephone number specified immediately below for so giving
such notice or communication to the party to whom it is given:
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if to Sellers, to:
The Scotts Company
14111 Scottslawn Road
Marysville, OH 43041
Attention: James Hagedorn
David Aronowitz
FAX Telephone No. (937) 644-7568
and
OMS Investments, Inc.
c/o Delaware Corporate Management
1105 N. Market Street
Wilmington, DE 19899
Attention: Susan T. Dubb
FAX Telephone No. (302) 427-7664
with a copy to:
Vorys, Sater, Seymour and Pease LLP
52 East Gay Street
Columbus, OH 43215
Attention: Ronald A. Robins, Jr.
FAX Telephone No. (614) 719-4926
if to Buyers, to:
The Andersons, Inc.
P.O. Box 119
Maumee, OH 43537
Attention: Michael J. Anderson
FAX Telephone No. (419) 891-6695
and
The Andersons Agriservices, Inc.
3315 N. Staley Road
P.O. Box 6659
Champaign, IL 61822
Attention: Larry Wood
FAX Telephone No. (217) 352-0848
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with a copy to:
The Andersons, Inc.
P.O. Box 119
Maumee, OH 43537
Attention: General Counsel
FAX Telephone No. (419) 891-6695
Any party hereto may from time to time by notice given in accordance
with this Section 13.01 to each other party hereto substitute a different
address, telephone number or Person for receipt of notices and communications
hereunder by the party giving such notice.
Section 13.02. ASSIGNMENT. This Agreement shall be binding upon, and
shall inure to the benefit of and be enforceable by, the respective successors
and permitted assigns (including successive, as well as immediate, successors
and permitted assigns) of the parties hereto, but neither this Agreement nor any
right hereunder may be assigned by any party without the written consent of each
other party hereto; PROVIDED, HOWEVER, that Buyers may assign their rights
hereunder to any wholly-owned subsidiary of Andersons, or to any other
subsidiary or affiliate of Andersons of which Andersons owns more than 50% of
the total voting power and over which Andersons exercises actual control, in
each case, so long as Buyers unconditionally guarantee the assignee's
performance of its obligations hereunder; PROVIDED, FURTHER, that Scotts may
assign its rights hereunder to any subsidiary or affiliate of Scotts so long as
Scotts unconditionally guarantees the assignee's performance of its obligations
hereunder.
Section 13.03. NO THIRD PARTY BENEFICIARIES. Nothing contained in this
Agreement is intended or shall be construed to afford to any Person, other than
a party hereto, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision hereof.
Section 13.04. COUNTERPARTS; EFFECTIVENESS. This Agreement may be
executed in one or more counterparts, each of which shall be deemed to be a
duplicate original, but all of which, taken together, shall be deemed to
constitute a single instrument. This Agreement shall become effective when each
party shall have received a counterpart hereof signed by the other party hereto.
Section 13.05 ENTIRE AGREEMENT. This Agreement, the U.S. License
Agreements, the U.S. Supply Agreement and that certain Confidentiality Agreement
dated as of October 1, 1999, by and among Scotts and Andersons constitute the
entire agreement among the parties with respect to the subject matter hereof and
supersedes all prior agreements, understandings and negotiations, both written
and oral, between the parties with respect to the subject matter of this
Agreement. No representation, inducement, promise, understanding, condition or
warranty not set forth herein has been made or relied upon by any party hereto.
Neither this Agreement nor any provision hereof is intended to confer upon a
Person other than the parties hereto any rights or remedies hereunder.
Notwithstanding the foregoing, between the date hereof and the Closing Date, the
parties agree to enter into a mutual non-disclosure and confidentiality
agreement
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protecting each party's disclosure of information pursuant to this Agreement or
any of the Related Agreements.
Section 13.06. AMENDMENTS; NO WAIVERS. (a) Any provision of this
Agreement may be amended or waived prior to the Closing Date if, and only if,
such amendment or waiver is in writing and signed, in the case of an amendment,
by Scotts and Andersons or in the case of a waiver, by the party against whom
the waiver is to be effective.
(b) No failure or delay by either party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
Section 13.07. BULK SALES LAWS. Each of Buyers and Sellers hereby
waives compliance by Sellers with the provisions of the "bulk sales," "bulk
transfer" or similar laws of any state. Sellers agree to indemnify, defend and
hold Buyers harmless against any and all claims, losses, damages, liabilities,
costs and expenses incurred by Buyers or any of its affiliates (including,
without limitation, reasonable attorneys' fees and court and other costs) as a
result of any failure to comply with any such "bulk sales," "bulk transfer" or
similar laws.
Section 13.08. SEVERABILITY. If any provision of this Agreement shall
be invalid or unenforceable for any reason, such invalidity or unenforceability
shall not affect the validity or enforceability of any other provision or
portion hereof.
Section 13.09. GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Ohio, without giving effect to the choice-of-law or conflict-of-laws principles
thereof.
Section 13.10. CONSENT TO JURISDICTION. Each of the parties hereto
irrevocably submits to the jurisdiction of any Ohio state or federal court over
any suit, action or proceeding arising out of or relating to this agreement or
any related document. Each of the parties hereto irrevocably waives, to the
fullest extent permitted by law, any objection which they may have or hereafter
have to the laying of the venue of any such suit, action or proceeding brought
in such a court and any claim that any such suit, action or proceeding has been
brought in an inconvenient forum.
Section 13.11. CAPTIONS; EXHIBITS. (a) The Article and Section headings
and any other captions appearing in this Agreement are included only for ease of
reference and do not define, limit, explain or modify this Agreement or its
interpretation, construction or meaning and are not to be construed as a part
hereof.
(b) Neither the specification of any dollar amount in the
representations and warranties of the parties contained herein not the
indemnification provisions of Article IX nor the inclusion of any items in the
Schedules to this Agreement will be deemed to constitute an
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admission by any party, or otherwise imply, that any such amounts or the items
so included are material for the purpose of this Agreement.
(c) The Schedules and Exhibits referred to herein and included herewith
are part of this Agreement as if fully set forth herein. All documents or
information disclosed in any of the Schedules are intended to be disclosed for
all purposes under this Agreement and will also be deemed to be incorporated by
reference in each of the other Schedules to which, and to the extent, they may
be applicable.
(d) The parties acknowledge and agree that, between the date hereof and
the Closing Date, the Schedules and/or Exhibits to this Agreement may need to be
modified as a result of information that arises after the date hereof. The
parties agree to cooperate in good faith to make such modifications; PROVIDED,
that any such modification shall be agreed to in writing by Scotts and
Andersons.
[signature page to follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers to be effective as of the
date first above written.
SELLERS: BUYERS:
THE SCOTTS COMPANY THE ANDERSONS, INC.
By: /s/ G. Robert Lucas By: /s/ Richard M. Anderson
-------------------------------- ----------------------------
Name: Name:
Title: Executive Vice President Title: President,
and General Counsel Processing Group
OMS INVESTMENTS, INC. THE ANDERSONS AGRISERVICES, INC.
By: /s/ G. Robert Lucas By: /s/ Michael J. Anderson
-------------------------------- ----------------------------
Name: Name:
Title: President and Title: Director
Chief Executive Officer
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SCHEDULES AND EXHIBITS*
-----------------------
<TABLE>
<CAPTION>
DESCRIPTION SCHEDULE NO.
----------- ------------
<S> <C>
Registrations 2.01(b)(1)
Intellectual Property Rights........................................... 2.01(b)(2)
Customer List.......................................................... 2.01(b)(3)
Inventory.............................................................. 2.01(b)(4)
Products............................................................... 2.01(b)(5)
Contracts.............................................................. 2.01(b)(7)
Excluded Contracts..................................................... 2.02(a)
Excluded Inventory..................................................... 2.02(e)
Other Contracts........................................................ 3.07
Intellectual Property Infringement..................................... 3.08
Litigation............................................................. 3.09
Licenses............................................................... 3.10
Employees.............................................................. 3.11
Product Compliance..................................................... 3.14
Conduct of Business.................................................... 5.01
Scotts(R) Trademark.................................................... 7.07
Transferred Employees.................................................. 11.01
DESCRIPTION EXHIBIT
----------- -------
U.S. ProTurf License Agreement Exhibit A
U.S. Supply Agreement Exhibit B
U.S. Poly-S(R) License Agreement Exhibit C
U.S. Peters(R) and Starter(R) License Agreement Exhibit D
U.S. Patent License Agreement Exhibit E
Assignment and Assumption Agreement Exhibit F
</TABLE>
--------------------------------------------------------------------------------
* Not filed with this U.S. Asset Purchase Agreement
43
