US HOME & GARDEN INC, 8-K, 1996-08-23

US HOME & GARDEN INC
8-K, 1996-08-23
TEXTILE MILL PRODUCTS

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

----------

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported): August 9, 1996

U.S. HOME & GARDEN,INC.
-----------------------
(Exact name of registrant as specified in its charter)

DELAWARE 0-19899 77-0262908
---------------------------- ----------- ------------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)

655 Montgomery Street, Suite 830, San Francisco, CA 94111
---------------------------------------------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: 415-616-8111
------------

-----------------------------------------------------------
Former name or former address, if changed since last report

<PAGE>

Item 2. Stock Acquisition.

On August 9, 1996 (the "Closing"), Easy Gardener Acquisition Corp.
("EGAC"), a Delaware corporation and Registrant's wholly-owned subsidiary
acquired all of the outstanding capital stock (the "Acquisition") of Weatherly
Consumer Products Group, Inc. pursuant to the stock purchase agreement, dated
August 9, 1996 (the "Purchase Agreement"), by and among Registrant, EGAC,
Weatherly Consumer Products Group, Inc. and all of its stockholders (the
"Weatherly Stockholders").

Weatherly Consumer Products Group, Inc., its affiliates and/or subsidiaries
(collectively, "Weatherly") are engaged in the manufacture and sale of
fertilizer, watering, insecticide and garden netting products (the "Business").

As consideration for the Acquisition, the Weatherly Stockholders received
(i) an aggregate of 1,000,000 shares of the issued and outstanding Common Stock
of Registrant (the "Registrant's Shares") and (ii) an aggregate sum of
$22,937,321, less that amount required to discharge certain outstanding
indebtedness of Weatherly, as more particularly set forth in the Purchase
Agreement, and adjusted dollar for dollar based upon the value of the Net
Current Assets (as defined in the Purchase Agreement) of Weatherly at the
Closing. The consideration paid for the Business was determined by negotiations
among the representatives of EGAC, Registrant and Weatherly.

In conjunction with the Acquisition by EGAC:

(a) Registrant agreed to file as expeditiously as possible after the
Closing a registration statement with respect to the Registrant's Shares and to
use its best efforts to cause such registration statement to be declared
effective at the earliest date reasonably practicable and to remain effective
until the second anniversary of the Closing subject to a 6-month Withdrawal
Period, as defined and more particularly described in the Purchase Agreement.

(b) Registrant agreed to issue pro ratably to the Weatherly Stockholders
who still possess Registrant's Shares at the one year anniversary of the
Closing, additional shares of its Common Stock, as more particularly set forth
in the Purchase Agreement, in the event the average of the closing bid and ask
prices of the Common Stock, on the NASDAQ Small-Cap Market, for the ten trading
days preceding such anniversary is less than $3.00.

(c) All the members of the boards of directors for Weatherly resigned,
effective as of the Closing, whereupon each of Robert L. Kassel and Richard J.
Raleigh, officers and directors of Registrant and EGAC, and Lynda G. Gustafson,
an

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employee of Registrant, were elected as directors and officers of
Weatherly.

Simultaneous with the Closing:

1. Weatherly Consumer Products, Inc. ("WCP") and each of Hills and Jackson
entered into separate Non-Competition Agreements, whereby WCP paid to each of
Hills and Jackson $250,000, and each of Hills and Jackson agreed, for a period
of twenty years, not to interfere with the operation of the Business or to
engage or become interested, directly or indirectly, in a competitive enterprise
as specified in the Non-Competition Agreements.

2. With respect to the Registrants's Shares, each Weatherly Stockholder
executed a Lock-Up Agreement, whereby each Weatherly Stockholder agreed not to
transfer or dispose of more than an aggregate of twenty-five percent of any
securities of Registrant acquired and beneficially owned by such Weatherly
Stockholder prior to the six (6) months anniversary of the Closing and
thereafter until the year anniversary of the Closing, of no more than an
aggregate of fifty percent of any such securities.

The source of the consideration paid for the Business was shares of common
stock of Registrant contributed to EGAC and cash procured by EGAC.

The descriptions of the Purchase Agreement and other agreements described
herein are qualified in their entirety by reference to the copy of the Purchase
Agreement and the other agreements which are filed exhibits to this Report and
which are incorporated herein by reference.

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.

A. Financial Statements of the Business Acquired.

It is impractical to provide the required financial information at this
time. The required financial information for the business acquired will be filed
under cover of Form 8 within 60 days of the date this Form 8-K was required to
be filed.

B. Pro Forma Financial Information and Exhibits.

It is impracticable to provide the required pro forma financial information
at this time. The required pro forma financial information will be filed under
cover of Form 8 within 60 days of the date this Form 8-K was required to be
filed.

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C. Exhibit 10.1 - Purchase Agreement, dated as of August 9, 1996, by and
among Registrant, EGAC, Weatherly and the Weatherly Stockholders.

D. Exhibit 10.2 - List of Omitted Schedules/Exhibits to Purchase
Agreement.

E. Exhibit 10.3 - Lock-up Agreement, dated August 9, 1996 between
Registrant and the Weatherly Stockholders.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

U.S. HOME AND GARDEN, INC.

By:/s/ Richard K. Raleigh
----------------------------
Richard K. Raleigh,
Chief Operating Officer

Date as of August 22, 1996

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STOCK PURCHASE AGREEMENT

AMONG

U.S. HOME & GARDEN, INC.

WEATHERLY CONSUMER PRODUCTS GROUP, INC.,

EASY GARDENER ACQUISITION CORP.

AND

each of JAMES R. HILLS, LABAN P. JACKSON, JR.,

EMMANUEL M. METZ, and E.H. ARNOLD

<PAGE>

TABLE OF CONTENTS

Page

<S> <C>
1. Purchase and Sale of Company Shares.................................................2

2. Purchase Price......................................................................3
2.1. Base Price...............................................................3
2.2. Cash Consideration Adjustments...........................................3
2.2.1. Closing Balance Sheet....................................................3
2.2.2. Trial Closing Balance Sheet..............................................4
2.2.3. Adjustment...............................................................5

3. Closing.............................................................................7
3.1. Closing Date.............................................................7
3.2. Action by Buyer..........................................................7
3.3. Action by the Company and Selling Stockholders...........................8

4. Additional Covenants....................................................................9
4.1. Further Assurances.......................................................9
4.2. Investigation............................................................9
4.3. Consummation of Transaction.............................................10
4.4. Cooperation.............................................................11
4.5. Accuracy of Representations.............................................11
4.6. Notice of Material Change...............................................11
4.7. Conduct of Business.....................................................12
4.8. Payment of Taxes Upon Transfer of Company Stock.........................18
4.9. Survival of Representations and Warranties..............................18
4.10. Discharge of Liens......................................................18
4.13. Non-Competition Agreement...............................................19
4.14. Registration Statement..................................................19
4.15. Office Facilities.......................................................20
4.16. Estoppel Letters........................................................20
4.17. Reel Easy Product Line..................................................21
4.18. Additional USH&G Stock..................................................21

5. Representations and Warranties as to the Company.......................................22
5.1. Organization, Standing and Power........................................22
5.2. Capitalization..........................................................23
5.3. Interests in Other Entities.............................................24
5.4. Authority...............................................................25
5.5. Noncontravention........................................................25
5.6. Financial Statements....................................................26
5.7. Absence of Undisclosed Liabilities......................................27
5.8. Properties..............................................................28
5.9. Accounts Receivable; Inventories........................................29
5.10. Absence of Changes......................................................30
5.11. Litigation..............................................................30
5.12. No Violation of Law.....................................................31
5.14. Intellectual Property...................................................34
5.15. Tax Matters.............................................................35
5.16. Insurance...............................................................36

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<S> <C> <C>
5.17. Banks; Powers of Attorney...............................................36
5.18. Employee Arrangements...................................................37
5.19. ERISA...................................................................37
5.19.1. Plans...................................................................37
5.19.2. Qualification...........................................................38
5.19.3. Plan Documents..........................................................38
5.19.4. No Prohibited Transactions..............................................39
5.19.5. No Accumulated Funding Deficiency.......................................39
5.19.6. Termination, etc........................................................39
5.19.7. Reportable Events.......................................................39
5.19.8. Multiemployer Plans.....................................................40
5.19.9. Contributions; Benefits.................................................40
5.19.10.Claims.....................................................................40
5.20. Certain Business Matters................................................40
5.21. Certain Contracts.......................................................41
5.22. Approvals...............................................................42
5.23. Customers and Suppliers.................................................43
5.24. Business Practices and Commitments......................................43
5.25. Information as to the Company...........................................44

6. Representations and Warranties as to the Selling
Stockholders.......................................................................44
6.1. Standing and Authority..................................................44
6.2. Ownership of the Company Stock..........................................45
6.3. Noncontravention........................................................46
6.4. Non-Registration of Securities..........................................46
6.5. Information as to the Selling Stockholders..............................47

7. Representations and Warranties as to Buyer.............................................47
7.1. Organization, Standing and Power........................................47
7.2. Authority...............................................................48
7.3. Shares..................................................................48

8. Indemnification........................................................................49
8.1. Indemnification by the Company and
Selling Stockholders....................................................49
8.2. Indemnification by Buyer................................................50
8.3. Third Party Claims......................................................51

9. Nondisclosure..........................................................................53
9.1. "Confidential Information" Defined......................................53
9.2. Nondisclosure of Confidential Information...............................54

10. Right of USH&G and Buyer to Abandon...................................................54
10.1. Accuracy of Representations and Warranties..............................54
10.2. Performance of Agreements...............................................54
10.3. Certificate.............................................................55
10.4. Opinion of Counsel for the Company......................................55
10.5. Litigation..............................................................55
10.6. Consents and Approvals..................................................56

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<PAGE>

Page

10.7. Validity of Transactions................................................56
10.8. Due Diligence...........................................................56
10.9. Minimum Net Current Assets..............................................57
10.10. No Material Adverse Change..............................................57
10.11. Financing Arrangements..................................................57
10.12. Date of Consummation....................................................57
10.13. Warrant Cancellation Agreement..........................................57
10.14. Employee Termination Agreements.........................................58
10.15. Non-Competition Agreements..............................................58
10.16. Reel Easy Product Line..................................................58
10.17. Estoppel Letters........................................................58
10.18. Indemnification Agreement. ............................................58
10.19. Lock-up Restriction.....................................................59
10.20. Investment Representation Letter. .....................................59

11. Right of the Company and Selling Stockholders
to Abandon.........................................................................59
11.1. Accuracy of Representations and Warranties..............................60
11.2. Performance of Agreements...............................................60
11.3. Certificate.............................................................60
11.4. Opinion of Counsel for Buyer............................................61
11.5. Litigation..............................................................61
11.6. Consents and Approvals..................................................61
11.7. Date of Consummation....................................................62
11.8. Validity of Transactions................................................62
11.9. Reel Easy Line..........................................................62
11.10. Non-Competition Agreements..............................................62

12. Miscellaneous Provisions..............................................................62
12.1. Effect of Abandonment...................................................62
12.2. Expenses................................................................63
12.3. Execution in Counterparts...............................................63
12.4. Notices.................................................................64
12.6. Amendment...............................................................65
12.7. Entire Agreement........................................................65
12.8. Headings................................................................66
12.9. Assignment..............................................................66
12.10. Binding Effect; Benefits................................................66
12.11. Waiver, etc.............................................................66
12.12. Severability............................................................67
12.13. Announcements...........................................................67
12.14. Schedules...............................................................67

</TABLE>

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<PAGE>

STOCK PURCHASE AGREEMENT

AGREEMENT, dated as of the 9th day of August, 1996, by and among Weatherly
Consumer Products Group, Inc., a Delaware corporation (the "Company"); Easy
Gardener Acquisition Corp., a Delaware corporation ("Buyer"); U.S. Home &
Garden, Inc., a Delaware corporation ("USH&G"), and each of James R. Hills
("Hills"), Laban P. Jackson, Jr. ("Jackson"), Emmanuel M. Metz ("Metz") and E.H.
Arnold ("Arnold") (said individuals being hereinafter collectively called the
"Selling Stockholders" and severally, the "Selling Stockolder").

W I T N E S E T H :

WHEREAS, the Selling Stockholders are the owners of all of the issued and
outstanding shares of Common Stock of the Company (the "Company Shares"); and

WHEREAS, the Company, through its wholly-owned subsidiary, Weatherly
Consumer Products, Inc. ("WCP"), is engaged in the business of marketing,
packaging and distributing consumer lawn and garden care products (the
"Business"); and

WHEREAS, unless the context indicates to the contrary, the term "Company"
shall mean Weatherly Consumer Products Group, Inc. and its subsidiaries; and

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WHEREAS, Buyer wishes to purchase all of the Company Shares from the
Selling Stockholders, upon the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of and in reliance upon the covenants,
conditions, representations and warranties herein contained, the parties hereto
hereby agree as follows:

1. Purchase and Sale of Company Shares.

Subject to the terms and conditions set forth in this Agreement and in
reliance upon the representations, warranties, covenants and conditions herein
contained, on the Closing Date (as defined in subparagraph 3.1 hereof) each of
the Selling Stockholders, shall sell, convey, assign, transfer and deliver to
Buyer the Company Shares owned by such Selling Stockholder, free and clear of
any and all Liens (as defined in subparagraph 5.5 hereof).

2. Purchase Price

2.1. Base Price. The purchase price (the "Purchase Price") for the purchase
and sale of the Company Shares by Buyer shall be (i) $22,937,321 less the amount
of the Cash Contribution (as defined in subparagraph 3.2 hereof) which
difference shall be subject to adjustment pursuant to

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subparagraph 2.2 hereof (the "Cash Consideration") and (ii) 1,000,000 shares of
Common Stock, par value of $.001 per share, of USH&G ("USH&G Stock" and
sometimes hereinafter referred to as the "Share Consideration").

2.2. Cash Consideration Adjustments.

2.2.1. Closing Balance Sheet. On the Closing Date, the Company shall
prepare and deliver to Buyer a balance sheet of the Company as of the Closing
Date (as defined in subparagraph 3.1 hereof) (the "Trial Closing Balance
Sheet"), which balance sheet shall be prepared in accordance with generally
accepted accounting principles ("GAAP") applied on a basis consistent with those
applied in the preparation of the Audited Balance Sheets (as defined in
subparagraph 5.6 hereof), except for the absence of auditor's notes, and shall
give effect to the application of the Cash Contribution (as defined in Section
3.2) and shall be presented in a form consistent with Schedule 2.2A. The Trial
Closing Balance Sheet shall be prepared at the Selling Stockholders' cost and
expense. Following the Closing, the Trial Closing Balance Sheet shall be audited
by Arthur Andersen & Co., certified public accountants, at the Selling
Stockholders' cost and expense, in accordance with the provisions of this
subparagraph 2.2.1. Representatives of Buyer shall be entitled to participate in
and observe the audit of the Trial Closing Balance Sheet, at its own expense, to
whatever extent Buyer may elect. The Company shall cause Arthur Andersen & Co.
to make available their working papers to Buyer.

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2.2.2. Trial Closing Balance Sheet. Upon the delivery thereof by the
Company (in no event later than October 7, 1996), the audited Trial Closing
Balance Sheet shall be reviewed by the Buyer; in connection with such review the
Buyer may, at its expense, employ such tests and auditing procedures as the
Buyer deems to be appropriate under the circumstances. On the basis of such
review, the Buyer may, during the 15 day period following delivery to it of the
audited Trial Closing Balance Sheet, propose such adjustments (if any), in
excess of $20,000, as shall in its judgment be required to cause the audited
Trial Closing Balance Sheet to properly reflect the financial condition of the
Company as of the Closing Date. In the event that Buyer and the Selling
Stockholders are unable to agree upon any such proposed adjustments within ten
days after they have been proposed by the Buyer as aforesaid, then, in such
event, the adjustment(s) in dispute shall be submitted to a firm of certified
public accountants of national standing which is mutually acceptable to the
Buyer and the Selling Stockholders (the "Arbitrator"), for its consideration;
the fees of said firm, the decision of which shall be final and binding upon
Buyer and the Selling Stockholders, shall be paid one-half by each of said
parties. The audited Trial Closing Balance Sheet shall become final and binding
upon the parties, (A) if the Buyer does not propose any adjustments thereto in
accordance with the terms hereof, on the earlier of the date of written
acceptance thereof by the Buyer or 15 days after the delivery thereof to the
Buyer, or (B) if the Buyer proposes adjustments thereto in accordance

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with the terms hereof, on the earlier of the date of written acceptance thereof
(as so adjusted) by Buyer and the Selling Stockholders or the date of the
receipt by Buyer and the Selling Stockholders of the decision of the Arbitrator
as to any adjustment(s) submitted to it for resolution. The audited Trial
Closing Balance Sheet, in the form in which it becomes final and binding upon
Buyer and the Selling Stockholders as aforesaid, is hereinafter referred to as
the "Closing Balance Sheet". The Closing Balance Sheet shall be delivered by the
Company to Buyer within five days after it becomes binding upon Buyer and the
Selling Stockholders as aforesaid.

2.2.3. Adjustment. (a) The Cash Consideration shall be (i) increased dollar
for dollar in the event that the aggregate amount of the current assets (cash,
accounts receivable less than 90 days old, inventory and prepaid expenses) minus
the current liabilities (accounts payable and accrued liabilities) reflected on
the Closing Balance Sheet (the "Net Current Assets") is greater than $2,000,000
(the "Base Amount"), or (ii) decreased dollar for dollar in the event that the
aggregate amount of Net Current Assets reflected on the Closing Balance Sheet is
less than the Base Amount. The foregoing adjustment shall be calculated in
accordance with Schedule 2.2B.

(b) Buyer shall pay to the Selling Stockholders (if the Net Current Assets
is greater than the Base Amount), or the Selling Stockholders shall pay to Buyer
(if the Net Current Assets is less than the Base Amount), within fifteen

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(15) business days following the acceptance of the Closing Balance Sheet, by
wire transfer or certified or official bank check payable to the order of Buyer
or the Selling Stockholders, as the case may be, an amount (without interest)
equal to the difference between the Net Current Assets and the Base Amount.

(c) The Company shall promptly complete and file its applicable federal and
state income tax returns for the period from October 1, 1995 to the date of the
Closing plus the carryback claim resulting from the net operating loss generated
for the period October 1, 1995 to the date of Closing. Such returns will be
filed at the expense of the Selling Stockholders. The Company shall cause the
respective CPA firm preparing such returns to make their supporting workpapers
available to the Buyer. Upon the receipt by the Buyer of any federal and state
income tax refunds, they shall remit to the Selling Stockholders the aggregate
refunds received minus $90,000 by wire transfer or certified check.

3. Closing.

3.1. Closing Date. The closing of the purchase and sale provided for herein
(the "Closing") shall take place on August 9, 1996, at the offices of Tenzer
Greenblatt LLP, 405 Lexington Avenue, New York, New York 10174, or at such other
place, time and date as may hereafter be mutually agreed upon by the parties
(such time and date of Closing being hereinafter called the "Closing Date").

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3.2. Action by Buyer. Subject to the terms and conditions herein contained,
on the Closing Date Buyer shall (a) contribute to the Company by wire transfer
of immediately available funds such amount (but not in excess of $22,937,321) as
shall be required in order for the Company to (i) discharge in full its
outstanding indebtedness to (A) Nations Credit Commercial Corporation under a
Credit Agreement, including a prepayment penalty, (B) Arnold and Metz under the
Company's subordinated notes and lease, (ii) cancel the Warrant described in
Schedule 5.2 and (iii) terminate the Employment Agreements of Jackson and Hills
(the "Cash Contribution") and (b) deliver to the Selling Stockholders (in
addition to the documents and instruments to be delivered by it pursuant to
paragraphs 4 and 11 hereof), on account of the Purchase Price for the Company
Shares (i) the Cash Consideration, by certified or official bank check, payable
to the order of the Selling Stockholders or wire transfer to accounts
consideration shall be paid to them in accordance with Schedule 5.2 and (ii)
stock certificates, representing in the aggregate the Share Consideration,
registered in the name of each of the Selling Stockholders, which certificates
shall be issued to each Selling Stockholders in accordance with Schedule 5.2.

3.3. Action by the Company and Selling Stockholders. Subject to the terms
and conditions herein contained, on the Closing Date the Company and/or the
Selling Stockholders, as the case may be, shall deliver to Buyer (in

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addition to the documents and instruments to be delivered by it or them pursuant
to paragraphs 2, 4 and 10 hereof): (i) stock certificates, representing all the
Company Shares issued and outstanding, which certificates shall be endorsed in
blank or accompanied by stock powers endorsed in blank and accompanied by the
requisite stock transfer stamps; (ii) all third party consents and governmental
and administrative approvals, as shall be, in the opinion of Buyer, necessary or
appropriate in order to convey, transfer and assign to and vest in Buyer good
and marketable right, title and interest in and to the Company Shares, free and
clear of all Liens (as defined in subparagraph 5.5 hereof); and (iii)
confirmation Nations Credit Commercial Corporation, Arnold, Metz, Jackson and
Hills, respectively, of their receipt of a portion of the Cash Contribution and
(iv) acknowledgment by Nations Credit Commercial Corporation of the termination
of its Liens on the Company Assets.

4. Additional Covenants.

4.1. Further Assurances. The Company, Buyer and each of the Selling
Stockholders hereby agree that it or he shall from time to time after the
Closing Date, at its or his sole cost and expense, take any and all actions, and
execute, acknowledge, deliver, file and/or record any and all documents and
instruments, as any other party may reasonably request in order to perfect more
fully the rights which are intended to be granted to such party hereunder. USH&G
shall have the right to inspect

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and approve the Federal Income Tax return of the Company for the ten (10) month
period ended as of the Closing Date prior to its being filed.

USH&G and Buyer shall, to the extent such obligations are not paid at the time
of Closing, cause the Company to pay its employees or former employees, when
due, amounts to which they are, or become entitled, under the provisions of the
Severance Plan described in Schedule 5.18 and to distribute to the Selling
Stockholders their portion of the amount budgeted therein for severance payments
to which no employee or former employee becomes entitled.

4.2. Investigation. Between the date hereof and the Closing Date, Buyer
may, directly and through its representatives, make such investigation of the
Company and the Business as Buyer deems necessary or advisable, including
without limitation the completion of a Phase I environmental assessment of the
Company (the "Phase I Study"). In furtherance of the foregoing, Buyer and
Buyer's representatives shall have, at all reasonable times after the date
hereof, full access to the premises and to the books and records of the Company,
and the officers of the Company shall cooperate fully with Buyer and its
representatives as well as furnish to Buyer and its representatives such
financial and operating data and other information with respect to the Company
and the Business as Buyer may from time to time reasonably request. Buyer shall
not disclose or use any Confidential Information (as defined in

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paragraph 9 hereof), which it obtains in connection with the foregoing, except
to the extent which it deems to be necessary in order to evaluate the Business.
In the event that the purchase and sale transaction provided for herein is not
consummated for any reason whatsoever, Buyer shall return to the Company all
documents, workpapers and other written materials which were obtained by it
during the course of such investigation which constitute Confidential
Information.

4.3. Consummation of Transaction. Each of the parties hereto hereby agrees
to use his or its best efforts to cause all conditions precedent to his or its
obligations and to the obligations of the other parties hereto to consummate the
transactions contemplated hereby to be satisfied, including, but not limited to,
using his or its best efforts to obtain all required consents, waivers,
amendments, modifications, approvals, authorizations, novations and licenses;
provided, however, that nothing herein contained shall be deemed to modify any
of the obligations imposed upon any of the parties hereto under this Agreement
or any agreement executed and delivered pursuant hereto.

4.4. Cooperation. Each of the parties hereto hereby agrees to cooperate
fully with the other parties hereto in preparing and filing any notices,
applications, reports and other instruments and documents which are required by,
or which are desirable in the opinion of any of the parties hereto in respect

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of, any statute, rule, regulation or order of any governmental or administrative
body in connection with the transactions contemplated hereby.

4.5. Accuracy of Representations. Each party hereto agrees that prior to
the Closing Date he or it will enter into no transaction and take no action, and
will use his or its best efforts to prevent the occurrence of any event, which
would result in any of his or its representations, warranties or covenants
contained in this Agreement or in any agreement, document or instrument
delivered pursuant hereto not to be true and correct, or not to be performed as
contemplated, at and as of the time immediately after the occurrence of such
transaction or event.

4.6. Notice of Material Change. The Company agrees, and each of the Selling
Stockholders agrees to cause the Company, to give USH&G and Buyer prompt notice
of (i) any material change in any of the information contained in the
representations and warranties of the Company contained in paragraph 5 or in the
schedules or exhibits thereto, which occurs prior to the Closing and (ii) any
governmental or other complaints, investigations or hearings relating to their
respective business operations or assets (or communications indicating that the
same may be contemplated), or the receipt of any notice with respect to any
requirement or obligation arising out of any applicable Laws relating to its
business operations,

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or the institution of any litigation, action, claim, proceeding or threats
relating to such business operations, as well as keep USH&G and Buyer fully
informed of material developments concerning such events.

4.7. Conduct of Business. The Company covenants and agrees, and each of the
Selling Stockholders covenants and agrees to use his best efforts to cause the
Company, to conduct its business operations during the period from the date
hereof to the Closing Date only in the ordinary course of business and in a
manner consistent with past practice and in compliance with applicable laws,
except pursuant to the terms hereof or unless USH&G and Buyer shall otherwise
agree in writing; and the Company shall use its best efforts to preserve intact
its business organizations, to keep available the services of the respective
current officers, employees and consultants of the Company and to preserve the
present goodwill of the Company and its relationships with customers, suppliers
and other persons with whom it has business relations. By way of illustration
and not limitation, neither the Company nor any Selling Stockholder shall,
between the date of this Agreement and the Closing Date, directly or indirectly
do, or propose or commit to do, any of the following without the prior written
consent of USH&G and Buyer:

4.7.1. (i) except as set forth on Schedule 4.7.1, declare, set aside or pay
any dividends on, or make any other distributions in respect of, any of the
common

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stock of the Company, (ii) split, combine or reclassify any of its common stock
or issue or authorize the issuance of any other securities in respect of, in
lieu of or in substitution for shares of its common stock or (iii) except for
the Purchase of the Warrant, purchase, redeem or otherwise acquire any shares of
common stock of the Company or any other securities thereof or any rights,
warrants or options to acquire any such shares or other securities;

4.7.2. authorize for issuance, issue, deliver, sell or agree to commit to
issue, sell or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise), pledge
or otherwise encumber any shares of common stock of the Company, any other
voting securities or any securities convertible into, or any rights, warrants or
options to acquire, any such shares, voting securities convertible securities or
any other securities or equity equivalents;

4.7.3. except to the extent required under existing written agreements as
in effect on the date of this Agreement, (i) increase the compensation or fringe
benefits of any of its directors, officers or employees, except for increases in
salary or wages of employees of the Company who are not officers of the Company
in the ordinary course of business, in accordance with past practice, (ii) enter
into employment arrangements, other than in the ordinary course of business

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consistent with past practice, with any other employee of the Company involving
compensation in excess of $25,000, (iii) establish, adopt, enter into or amend
or terminate any written agreement or other plan, agreement, trust, fund, policy
or arrangement for the benefit of any directors, officers or employees or (iv)
pay any bonus, salary or compensation to any of the stockholders of the Company.

4.7.4. amend its Certificate of Incorporation or By-Laws or alter through
merger, liquidation, reorganization, restructuring or in any other fashion the
corporate structure or ownership of the Company;

4.7.5. acquire or agree to acquire (i) by merging or consolidating with, or
by purchasing a substantial portion of the stock or assets of, or by any other
manner, any business or corporation, partnership, joint venture, association or
other business organization or division thereof, or (ii) any assets that are
material, individually or in the aggregate, to the Company except purchases
consistent with past practice;

4.7.6. sell, lease, license, mortgage or otherwise encumber or subject to
any Lien or otherwise dispose of any of the Company's properties or assets,
except sales in the ordinary course of business consistent with past practice;

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4.7.7. incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or warrants or
other rights to acquire any debt securities of the Company, guarantee any debt
securities of another person, or enter into any arrangement having the economic
effect of any of the foregoing, except for short-term borrowings incurred in the
ordinary course of business consistent with past practice;

4.7.8. enter into any agreement, contract, or commitment, not in the
ordinary course of business, involving a commitment on the part of the Company
to purchase, sell, lease or otherwise dispose of assets or require payment by
the Company in excess of $10,000;

4.7.9. adopt a plan of complete or partial liquidation or resolutions
providing for or authorizing such a liquidation or dissolution, merger,
consolidation, restructuring, recapitalization or reorganization;

4.7.10. recognize any labor union (unless legally required to do so) or
enter into or amend any collective bargaining agreement;

4.7.11. change any accounting principles used by the Company, unless
required by the SEC or the Financial Accounting Standards Board;

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4.7.12. make any tax election or settle or compromise any income tax
liability or file any federal income tax return prior to the last day (including
extensions) prescribed by law, in the case of any of the foregoing, material to
the business, financial condition or results of operations of the Company, taken
as a whole;

4.7.13. settle or compromise any litigation in which the Company is a
defendant (whether or not commenced prior to the date of this Agreement) or
settle, pay or compromise any claims not required to be paid, which payments are
individually in an amount in excess of $10,000 and in the aggregate in an amount
in excess of $50,000;

4.7.14. expend any amount with respect to development, marketing, sale or
manufacturing of the Reel Easy Product Line (as defined in subparagraph 4.15
hereof);

4.7.15. authorize or permit any of the Company's officers, directors or
employees or any investment banker, financial advisor, attorney, accountant or
other representative, to solicit, initiate or encourage (including by way of
furnishing information) or take any other action to facilitate, any inquiries or
the making of any proposal which constitutes, or may reasonably be expected to
lead to an agreement or a mutual understanding as to terms or the execution of a
letter of intent or definitive agreement or publicly

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announced agreement in principle with regard to a transaction or series of
transactions with a party other than USH&G or Buyer, which transactions relate
to the sale or other disposition of the capital stock, assets or business of the
Company or any other financing, stock repurchase, restructuring (including any
merger or consolidation involving the Company), stock issuance or similar
transaction (other than in the ordinary course of business) which causes the
Company or the Selling Stockholders not to consummate any of the transactions
contemplated by this Agreement; and

4.7.16. authorize any of, or commit or agree to take any of the foregoing
actions.

4.8. Payment of Taxes Upon Transfer of Company Stock. The Selling
Stockholders shall be responsible for, and shall pay, any and all sales, use,
purchase, transfer and similar taxes (real estate or otherwise), and any and all
filing, recording, registration and similar fees, arising out of the purchase
and sale of Company Stock (as defined in subparagraph 5.2 hereof) pursuant to
this Agreement.

4.9. Survival of Representations and Warranties. Each of the parties hereto
hereby agrees that all representations and warranties made by or on behalf of
him or it in this Agreement or in any document or instrument delivered pursuant
hereto shall, unless expressly provided otherwise herein, survive

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the Closing Date and the consummation of the transactions contemplated hereby.

4.10. Discharge of Liens. The Company shall cause all Liens upon any of the
Company Shares and Company Assets to be terminated or otherwise discharged at or
prior to the Closing.

4.11. Cancellation of Warrant Agreement. The Company shall obtain from
Nations Credit Commercial Corporation a termination agreement with respect to
any and all agreements and instruments pertaining to warrants held by Nations
Credit Commercial Corporation to purchase shares in the Company (the "Warrant
Cancellation Agreement") as successor in interest to Greyrock Capital Group,
Inc.

4.12. Termination of Employment. The Company and each of Hills and Jackson
shall execute and deliver a Termination Agreement in substantially the form of
Exhibit 4.12 attached hereto (the "Employee Termination Agreements"), whereby
they terminate their respective employment with the Company as of the Closing
Date.

4.13. Non-Competition Agreement. On or prior to the Closing Date, the
Company and each of Hills and Jackson shall execute and deliver a
Non-Competition Agreement in substantially

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the form of Exhibit 4.13 attached hereto (the "Non-Competition Agreements").

4.14. Registration Statement. As expeditiously as possible after the
Closing Date, USH&G shall file a registration statement with respect to all of
the USH&G Stock and shall use its best efforts to have any such registration
statement declared effective at the earliest date reasonably practicable, which
registration statement shall be kept effective until the second anniversary of
the Closing Date; provided, however, that, following such effectiveness, USH&G
may withdraw, for up to six (6) months (the "Withdrawal Period") such
registration statement if, in the good faith judgment of the Board of Directors
of USH&G (the "Board"), such registration statement might, if not withdrawn,
adversely affect a then proposed or pending public offering, financial project,
acquisition, merger or corporate reorganization or other event which, in the
opinion of the Board would be detrimental to USH&G to continue the effectiveness
of such registration statement; provided, however, that promptly after the
termination of the Withdrawal Period, USH&G shall file a new registration
statement which shall remain effective until the second anniversary of the
Closing Date. If any Anniversary Shares are issued, USH&G shall either file a
new registration statement with respect to all such shares or, if possible,
amend the effective registration statement to include all such shares therein.
Any such new

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registration statement shall remain effective until the second anniversary of
the Closing Date.

4.15. Office Facilities. After the Closing Date, the Company shall make
available for the use of Hills and Jackson (or an entity designated by them) an
aggregate of 1800 square feet of the Company's rental office space, located at
651 Perimeter Drive, Lexington, Kentucky (the "Premises") pursuant to a sublease
agreement in substantially the form annexed hereto as Exhibit 4.15 (the
"Sublease").

4.16. Estoppel Letters. At the Closing, the Company shall have obtained
estoppel Letters (each, an "Estoppel Letter") from its respective landlords with
respect to any and all real property leased by the Company in connection with
the Business.

4.17. Reel Easy Product Line. At the Closing, the Buyer shall cause WCP to
sell to Gulfstream House & Garden, Inc. ("Gulfstream") all of the assets
relating to the "Reel Easy" line of products, as more particularly set forth on
Schedule 4.17 (the "Reel Easy Product Line"). The purchase price to be paid by
Gulfstream at the Closing shall equal $1.00 plus other good and valuable
consideration. USH&G shall cause WCP to grant to Gulfstream a one-year license
to use the "Jobe's" trademark in connection with its operation of the Reel Easy
Product Line, substantially in the form of that License Agreement attached

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hereto as Exhibit 4.17 (the "License Agreement"), in return for a one-time
royalty payment of $10.00 due on the Closing Date.

4.18. Additional USH&G Stock. On the one (1) year anniversary of the
Closing Date (the "Anniversary Date"), each Selling Stockholder who possesses
shares of USH&G Stock received at the Closing pursuant to subparagraph 2.1
hereof (the "Retained Shares") shall be entitled to receive shares of Common
Stock of USH&G (the "Anniversary Shares") if the average of the closing bid and
ask prices of USH&G common stock on the NASDAQ Small-Cap Market, or such other
market where shares of Common Stock of USH&G are then being traded, for the ten
(10) trading days preceding the Anniversary Date (the "Calculation Price") is
less than $3.00 per share. The number of Anniversary Shares to be issued
pursuant hereto shall equal the difference of (i) the product obtained by
multiplying the number of Retained Shares by a fraction, the numerator of which
is $3.00 and the denominator of which is the Calculation Price or $2.75,
whichever is greater, minus (ii) the number of Retained Shares. Buyer shall
issue any such Anniversary Shares within ten (10) business days after the
Anniversary Date. If, prior to the Anniversary Date, USH&G shall (i) pay a
dividend in shares of its Common Stock, (ii)subdivide its outstanding shares of
Common Stock, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares or (iv) issue by reclassification of its shares of
Common Stock any shares of stock or other securities of USH&G, the

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number of Retained Shares and the foregoing dollar amounts shall be adjusted
proportionately.

5. Representations and Warranties as to the Company. The Company and the
Selling Stockholders jointly and severally represent and warrant to USH&G and
Buyer as follows:

5.1. Organization, Standing and Power. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, with full corporate power and authority to own, lease and operate its
properties and to carry on its business as presently conducted by it. Except as
set forth on Schedule 5.1, there are no states or jurisdictions in which the
character and location of any of the properties owned or leased by the Company,
or the conduct of its business, makes it necessary for it to qualify to do
business as a foreign corporation. Copies of the Certificate of Incorporation of
the Company and all amendments thereof, and of the By-laws of the Company, as
amended to date, and any and all certificates of authority or qualifications to
do business have been furnished to Buyer and are complete and correct. The
Company's minute books heretofore exhibited to Buyer contain complete and
accurate records of all meetings and other corporate actions of the Company's
stockholders and Board of Directors (including committees of its Board of
Directors). Ross Daniels, Inc., a former subsidiary of the Company was dissolved
by proclamation of the Secretary of State of Iowa in 1991.

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Nonetheless the Company, unaware of the dissolution, continued to utilize the
corporate entity for a variety of purposes including, without limitation,
inclusion of Ross Daniels, Inc. in the Company's consolidated income tax return
and in 1995, the execution and delivery of sale agreement relating to certain
real estate. The Selling Stockholders jointly and severally indemnify the Buyer
from and against any and all liability that may arise from the continued use of
the corporate entity of Ross Daniels, Inc. after its dissolution.

5.2. Capitalization. The authorized capital stock of the Company (the
"Company Stock") consists of 11,765 shares of Class A Common Stock, $.01 par
value per share, of which 10,000 shares are issued and outstanding and 1,765
shares are authorized and unissued and 1,765 shares of Class B stock, $.01 par
value per share, none of which has been issued. All issued shares of the Company
Stock have been duly and validly issued and are fully paid and nonassessable.
Except as set forth on Schedule 5.2, there are no outstanding options, warrants,
rights, puts, calls, commitments, conversion rights, plans or other agreements
of any character to which the Company is a party or otherwise bound which
provide for the acquisition, disposition or issuance of any issued but not
outstanding, outstanding, or authorized and unissued shares of Company Stock.
There is no personal liability, and, except as set forth in its Certificate of
Incorporation, there are no preemptive or similar rights, attached to the
Company Stock. Set forth on Schedule 5.2, is a

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complete and correct list of the names, addresses and record and beneficial
stock ownership of all of the stockholders of the Company. Except as set forth
on Schedule 5.2, no holders of any of the Company's securities has any rights,
"demand," "piggyback" or otherwise, to have such securities registered under the
Securities Act of 1933, as amended (the "Act").

5.3. Interests in Other Entities. Except as set forth on Schedule 5.3, the
Company does not (A) own, directly or indirectly, of record or beneficially, any
shares of voting stock or other equity securities of any other corporation, (B)
have any ownership interest, direct or indirect, of record or beneficially, in
any unincorporated entity, or (C) have any obligation, direct or indirect,
present or contingent, (1) to purchase or subscribe for any interest in, advance
or loan monies to, or in any way make investments in, any person or entity, or
(2) to share any profits or capital investments or both.

5.4. Authority. The execution and delivery by the Company of this Agreement
and of all of the agreements to be executed and delivered by it pursuant hereto,
the performance by it of its obligations hereunder and thereunder, and the
consummation of the transactions contemplated hereby and thereby, have been duly
and validly authorized by all necessary corporate action on the part of the
Company (including, but not limited to, the unanimous consent of its Board of
Directors), and the Company has all necessary power with respect thereto. This
Agreement is,

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and when executed and delivered by the Company and the Selling Stockholders (to
the extent that they are parties thereto) each of the other agreements to be
delivered by any or all of them pursuant hereto will be, the valid and binding
obligation of the Company in accordance with its terms.

5.5. Noncontravention. Except as set forth on Schedule 5.5, neither the
execution and delivery by the Company of this Agreement or of any agreement to
be executed and delivered by it pursuant hereto, nor the consummation of any of
the transactions contemplated hereby or thereby, nor the performance by the
Company of any of its obligations hereunder or thereunder, will (nor with the
giving of notice or the lapse of time or both would) (A) conflict with or result
in a breach of any provision of the Certificate of Incorporation or By-laws of
the Company, or (B) give rise to a default, or any right of termination,
cancellation or acceleration, or otherwise be in conflict with or result in a
loss of contractual benefits to the Company, under any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, license, agreement or
other instrument or obligation to which it is a party or by which the Company or
any of the assets of the Company (the "Company Assets") may be bound, or require
any consent, approval or notice under the terms of any such document or
instrument, or (C) violate any order, writ, injunction, decree, law, statute,
rule or regulation of any court or governmental or administrative authority
which is applicable to the Company or any of the

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Company Assets, or (D) result in the creation or imposition of any lien,
security interest, pledge, mortgage, easement, leasehold, assessment, covenant,
restriction, reservation, conditional sales, prior assignment, or other
encumbrance of any nature whatsoever ("Liens") upon any of the Company Assets,
or (E) interfere with or otherwise adversely affect the operation of the
Business after the Closing Date.

5.6. Financial Statements. The Company has heretofore delivered to Buyer
copies of its audited balance sheets for the years ended, September 30, 1994 and
September 30, 1995 (the "Audited Balance Sheets"), together with the related
statements of income, changes in financial position and changes in stockholders'
equity for the years ended on such dates, certified without qualification by
Arthur Andersen & Co., independent certified public accountants, and a copy of
the Company's unaudited balance sheet as of May 31, 1996 (the "Unaudited Balance
Sheet"), and the related statements of income, changes in financial position and
changes in stockholders' equity for the eight (8) month period then ended. Said
financial statements were prepared in accordance with GAAP consistently applied,
and fairly present the financial position of the Company as at the dates thereof
and its results of operations for the periods indicated, except that the
aforementioned unaudited financial statements are subject to normal recurring
adjustments which might be required as a result of year-end audit. The books and
records of the Company are in all material respects complete

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and correct, have been maintained in accordance with good business practices,
and accurately reflect the basis for the financial condition of the Company as
set forth in the aforementioned financial statements.

5.7. Absence of Undisclosed Liabilities. The Company has no liabilities or
obligations of any nature whatsoever, whether accrued, absolute, contingent or
otherwise, which have not been (i) in the case of liabilities and obligations of
a type customarily reflected on a corporate balance sheet prepared in accordance
with GAAP, set forth on the Audited Balance Sheets or (ii) in the case of other
types of liabilities and obligations, described in any of the Schedules
delivered pursuant hereto or omitted from said Schedules in accordance with the
terms of this Agreement, or (iii) incurred, consistent with past practice, in
the ordinary course of business since December 31, 1995 (in the case of
liabilities and obligations of the type referred to in clause (i) above).

5.8. Properties. The Company has good, valid and marketable title to all of
the real property and fixtures, and good and marketable title to all of the
other properties and assets, reflected on the Audited and Unaudited Balance
Sheets, or thereafter acquired, except properties or assets sold or otherwise
disposed of in the ordinary course of business or as set forth on Schedule 5.8,
free and clear of any and all Liens (including without limitation any
outstanding fee mortgages for

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which a nondisturbance agreement has not been heretofore obtained with respect
to the transactions contemplated by this Agreement), liens for current taxes not
yet due and payable or being contested in good faith by appropriate proceedings.
All plants, structures and equipment which are utilized in the Business, or are
material to operations or condition (financial or otherwise) of the Company are
owned or leased by the Company free and clear of any and all Liens (including
without limitation any outstanding fee mortgages for which a nondisturbance
agreement has not been heretofore obtained with respect to the transactions
contemplated by this Agreement), liens for current taxes not yet due and payable
or being contested in good faith by appropriate proceedings and all such plants,
structures and equipment are in good operating condition and repair (ordinary
wear and tear excepted), and are adequate and suitable for purposes for which
they are used. Schedule 5.8 sets forth all (A) real property which is owned,
leased (whether as lessor or lessee) or subject to contract or commitment of
purchase or sale or lease (whether as lessor or lessee) by the Company or which
is subject to a title retention or conditional sales agreement or other security
device, and (B) personal property which is owned, leased (whether as lessor or
lessee) or subject to contract or commitment of purchase or sale or lease
(whether as lessor or lessee) by the Company.

5.9. Accounts Receivable; Inventories. The accounts and notes receivable
which are reflected on the Audited

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and Unaudited Balance Sheets are good and collectible in the ordinary course of
business at the aggregate recorded amounts thereof, less the amount of the
allowance for doubtful accounts reflected thereon, and are not subject to
offsets. The accounts and notes receivable of the Company which were thereafter
added and which will be reflected on the Closing Date Balance Sheet are good and
collectible in the ordinary course of business at the aggregate amounts recorded
in its books of account, less the amount of the allowance for doubtful accounts
reflected thereon (which allowance was established on a basis consistent with
prior practice), and are not subject to offsets. The inventories reflected on
the Audited and Unaudited Balance Sheets, and thereafter added, as reflected on
the Closing Date Balance Sheet, consist of items of a quality and quantity
usable or saleable in the ordinary course of business, except for obsolete
materials, slow-moving items, materials of below standard quality and not
readily marketable items, all of which have been written down to net realizable
value or adequately reserved against on the books and records of the Company.
All inventories are stated at the lower of cost or market in accordance with
GAAP.

5.10. Absence of Changes. Since June 1, 1996, there has not been (i) any
material adverse change in the condition (financial or otherwise), assets,
liabilities, business, prospects, or results of operations of the Company
(including, without limitation, any such adverse change resulting from damage,
destruction or other casualty loss, whether or not

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covered by insurance), (ii) any waiver by the Company of any right, or
cancellation of any debt or claim, of substantial value, (iii) any declaration,
setting aside or payment of any dividend or other distribution or payment in
respect of the Company Stock, (iv) any change in any of the arrangements which
are referred to in subparagraph 5.17 hereof or (v) any change in the accounting
principles or methods which are utilized by the Company.

5.11. Litigation. Other than as set forth in Schedule 5.11 there are no
claims, suits, actions, arbitration, investigations, inquiry or other proceeding
before any governmental agency, court or tribunal, domestic or foreign, or
before any private arbitration tribunal, pending or, to the best of the
knowledge of the Company, threatened, against or relating to the Company, the
Business or any of the Company Assets; nor, to the best knowledge of the
Company, is there any basis for any such claim, suit, action, arbitration,
investigation, inquiry or other proceeding. There are no judgments, orders,
stipulations, injunctions, decrees or awards in effect which relate to the
Company, the Business or any of the Company Assets, the effect of which is (A)
to limit, restrict, regulate, enjoin or prohibit any business practice in any
area, or the acquisition of any properties, assets or businesses, or (B)
otherwise materially adverse to the Business or any of the Company Assets.

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5.12. No Violation of Law. The Company is not engaging in any activity or
omitting to take any action as a result of which (A) it is in violation of any
law, rule, regulation, zoning or other ordinance, statute, order, injunction or
decree, or any other requirement of any court or governmental or administrative
body or agency, applicable to the Company, the Business or any of the Company
Assets, including, but not limited to, those relating to: the use, storage,
handling, transport or disposal of pollutants, contaminants, pesticides,
petroleum or petroleum product, asbestos, hazardous or toxic materials or
wastes, or any substance, whether solid, liquid or gaseous, that is listed,
defined or regulated as a "hazardous substance", "hazardous waste" or "solid
waste" or otherwise classified as hazardous or toxic, in or pursuant to any
Environmental Law (as defined in subparagraph 5.13 hereof) causing or posing a
threat to cause contamination or adverse effect to the environment ("Hazardous
Substances"); occupational safety and health; business practices and operations;
labor practices; employee benefits; and zoning and other land use, and (B) the
Company, the Business and/or any of the Company Assets have been or may be
materially adversely affected.

5.13. Environmental Matters. Except as set forth on Schedule 5.13, (i) the
properties and facilities of the Company are not being and have never been used
to make, store, handle, treat, dispose, generate, or transport Hazardous
Substances in violation of any law; (ii) Hazardous Substances

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have never been made, stored, handled, treated, disposed of, generated, or
transported on or from the properties and facilities of the Company, except in
accordance with applicable law now in effect; (iii) the properties, facilities
and operations of the Company comply in all material respects with all
applicable Environmental Laws (as defined herein); (iv) none of the properties,
facilities or operations of the Company is subject to any judicial or
administrative proceedings alleging the violation of any Environmental Law; (v)
none of the properties, facilities or operations of the Company is the subject
of federal, state or local investigation evaluating whether any remedial action
is needed to respond to a release of any Hazardous Substance into the
environment; (vi) the Company has not filed nor is presently required to file
any notice under any federal, state, or local law indicating past or present
treatment or disposal of a Hazardous Substance or reporting a spill or release
of a Hazardous Substance into the environment; and (vii) the Company has never
received notice nor is aware of any contingent liability in connection with any
release of any Hazardous Substance into the environment.

For purposes hereof, "Environmental Laws" means all federal, state and
local laws, rules, regulations, permits, orders, judgments, injunctions and
decrees relating to Hazardous Substances applicable to the Business and the
facilities of the Company (whether or not owned by it). Such laws and
regulations include, without limitation, the Resource Conservation and Recovery
Act of 1976 ("RCRA"); the Comprehensive Environmental

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Response, Compensation and Liability Act of 1980 ("CERCLA"); the Toxic Substance
Control Act; the Clean Water Act; and the Clean Air Act, all as amended from
time to time; state and federal superlien and environmental cleanup programs;
and U.S. Department of Transportation hazardous materials transportation
regulations. The term "release" shall have the meanings specified in CERCLA and
the terms "solid waste" and "disposed," the meaning specified in RCRA, as such
definitions may be subsequently modified, supplemented or amended; provided,
however, that in the event either CERCLA or RCRA is amended so as to broaden the
meaning of any term defined thereby, such broader meaning shall apply subsequent
to the effective date of such amendment; and provided, further, however, that to
the extent a parcel of real property is situated in a state or other
jurisdiction in which the applicable laws may establish a meaning for "release,"
"solid waste," of "disposal" which is broader than that specified in either
CERCLA or RCRA, such broader meaning shall apply.

5.14. Intellectual Property. Schedule 5.14 is a complete and correct list
of all (A) United States and foreign patents, trademark and trade name
registrations, trademarks and trade names, brandmarks and brand name
registrations, servicemarks and servicemark registrations, assumed names and
copyrights and copyright registrations, owned in whole or in part or used by the
Company, and all applications therefor, (B) inventions, discoveries,
improvements, processes, formulae, proprietary rights and trade secrets used by
the Company relating

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to the Business, and (C) licenses and other agreements to which the Company is a
party or otherwise bound which relate to any of the foregoing. Except as
expressly set forth in said Schedule 5.14, (A) the Company owns or has the right
to use all of the foregoing; (B) no proceedings have been instituted, are
pending or, to the best of the knowledge of the Company are threatened, which
challenge the rights of the Company in respect thereto or the validity thereof
and, to the best knowledge of the Company, there is no valid basis for any such
proceedings; (C) to the best of the knowledge of the Company, none of the
aforesaid violates any laws, statutes, ordinances or regulations, or has at any
time infringed upon or violated any rights of others, or is being infringed by
others; and (D) none of the aforesaid is subject to any outstanding order,
decree, judgment, stipulation or charge. All of the Company's formulations,
labelling and packaging for its products comply in all material respects with
all applicable federal, state and local laws. The Company will deliver true and
correct copies of all formulations (including directions) for the Company's
products at Closing.

5.15. Tax Matters. The Company has filed with the appropriate governmental
agencies all tax returns and reports required to be filed by it, and has paid in
full or made adequate provision for the payment of, all taxes, interest,
penalties, assessments and deficiencies shown to be due or claimed to be due on
such tax returns and reports. The provision for income and other taxes which is
set forth on the Unaudited Balance Sheet is

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adequate for all accrued and unpaid taxes of the Company as of May 31, 1996,
whether (A) incurred in respect of or measured by income of the Company for any
periods prior to the close of business on that date, or (B) arising out of
transactions entered into, or any state of facts existing, on or prior to that
date. The provision for income and other taxes which is set forth on the books
of account of the Company is adequate for all income and other taxes which
accrued after October 1, 1995. The Company has not executed or filed with any
taxing authority any agreement extending the period for the assessment or
collection of any income or other taxes, and is not a party to any pending or,
to the best of the knowledge of the Company, threatened, action or proceeding by
any governmental authority for the assessment or collection of income or other
taxes. The United States federal income tax returns of the Company have not been
examined by the Internal Revenue Service ("the IRS").

5.16. Insurance. Attached hereto as Schedule 5.16 is a complete and correct
list and summary description of all policies of insurance relating to any of the
Company's assets or the Business in which the Company is an insured party,
beneficiary or loss payable payee. Such policies are in full force and effect,
all premiums due and payable with respect thereto have been paid, and no notice
of cancellation or termination has been received by the Company with respect to
any such policy. In the opinion of the Company, such policies cover risks
normally insured against, and are in amounts normally

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carried, by companies engaged in similar businesses. The Company has not
sustained any material loss or interference with its business from fire, storm,
explosion, flood or other casualty, whether or not covered by insurance, or from
any labor dispute or court of governmental action, order or decree.

5.17. Banks; Powers of Attorney. Schedule 5.17 is a complete and correct
list showing (i) the names of each bank in which the Company has an account or
safe deposit box and the names of all persons authorized to draw thereon or who
have access thereto, and (ii) the names of all persons, if any, holding powers
of attorney from the Company.

5.18. Employee Arrangements. Schedule 5.18 is a complete and correct list
and summary description of all (i) union, collective bargaining, employment,
management, termination and consulting agreements to which the Company is a
party or otherwise bound, and (ii) compensation plans and arrangements; bonus
and incentive plans and arrangements; deferred compensation plans and
arrangements; pension and retirement plans and arrangements; profit-sharing and
thrift plans and arrangements; stock purchase and stock option plans and
arrangements; hospitalization and other life, health or disability insurance or
reimbursement programs; holiday, sick leave, severance, vacation, tuition
reimbursement, personal loan and product purchase discount policies and
arrangements; and other plans or arrangements providing for benefits for
employees of the Company.

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Said Schedule also lists the names and compensation of all employees of the
Company whose earnings during the last fiscal year was $75,000 or more
(including bonuses and other incentive compensation), and all employees who are
expected to receive at least said amount in respect of the present year.

5.19. ERISA. 5.19.1. Plans. Schedule 5.18 lists each "employee pension
benefit plan" (collectively called "the Company Pension Plans" and severally
called "the Company Pension Plan"), as such term is defined in Section 3(2) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
each "employee welfare benefit plan" (collectively Company Welfare Plans" and
severally called "the Company Welfare Plan") as such term is defined in Section
3(1) of ERISA, which is maintained by the Company or to which it contributes or
is obligated or required to contribute. The Company Pension Plans and the
Company Welfare Plans are hereinafter sometimes collectively referred to as the
"Plans" and severally referred to as a "Plan".

5.19.2. Qualification. Each Company Pension Plan and the trust (if any)
forming a part thereof has been determined by the IRS to be qualified under
Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code"),
and is exempt from taxation under Section 501(a) of the Code, and

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nothing has occurred since the date of such determination which would adversely
affect such qualification.

5.19.3. Plan Documents. The Company has heretofore delivered to Buyer,
true, complete and correct copies of (i) the Plans, and all related trust
agreements, (ii) all written interpretations and summary plan descriptions
relating thereto, (iii) the two most recent annual reports (Form 5500 Series)
and accompanying schedules which were prepared in connection with each Plan,
(iii) all IRS determination letters relating to the Plans, and (iv) the two most
recent actuarial evaluation reports which were prepared in connection with any
of the Plans.

5.19.4. No Prohibited Transactions. Neither the Company, nor any of the
Plans, nor any trust created thereunder, nor any trustee or administrator
thereof, has engaged in a transaction which would subject the Company or any of
the Plans to the tax on prohibited transactions imposed by Section 4975 of the
Code or to a civil penalty assessed pursuant to Section 502(i) of ERISA.

5.19.5. No Accumulated Funding Deficiency. None of the Company Pension
Plans has incurred any "accumulated funding deficiency", as such term is defined
in Section 302 of ERISA and Section 412 of the Code, whether or not waived.

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5.19.6. Termination, etc. The Company has not incurred, and is not expected
to incur, directly or indirectly, any liability to the Pension Benefit Guaranty
Corporation (the "PBGC") with respect to any Company Pension Plan. The PBGC has
not instituted proceedings to terminate any Company Pension Plan, nor has it
notified the Company, either formally or informally, of its intention to
institute any such proceedings.

5.19.7. Reportable Events. There have not been, with respect to any of the
Plans, any "reportable events", as such term is defined in Section 4043(b) of
ERISA.

5.19.8. Multiemployer Plans. The Company has never maintained or
contributed to, or been obligated or required to contribute to, a "multiemployer
plan", as such term is defined in Section 3(37) of ERISA.

5.19.9. Contributions; Benefits. The Company has paid in full all amounts
which were required to have been paid by it on or prior to the date hereof as
contributions to any of the Company Pension Plans. The current value of all
accrued benefits under each of the Company Pension Plans did not, as of the
latest valuation date thereof, exceed the then current value of the assets of
such the Company Pension Plan allocable to such accrued benefits, based upon the
actuarial assumptions then being utilized with respect thereto.

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5.19.10. Claims. There is not pending, and to the best of the knowledge of
the Company there is not threatened, any claims against any of the Plans or any
fiduciary thereof (other than claims for benefits made in the ordinary course).

5.20. Certain Business Matters. Except as is set forth in Schedule 5.20,
(A) the Company is not a party to or bound by any distributorship, dealership,
sales agency, franchise or similar agreement which relates to the sale or
distribution of any of the products and services of the Business, (B) there are
no pending, or to the best of the knowledge of the Company threatened, labor
negotiations, work stoppages or work slowdowns involving or affecting the
Business, and, to the best of the knowledge of the Company, no union
representation questions exist, and there are no organizing activities, in
respect of any of the employees of the Company, (C) the product and service
warranties given by the Company or by which it is bound (complete and correct
copies or descriptions of which are set forth on Schedule 5.20, entail no
greater obligations than are customary in the business of the Company, (D) the
Company is not a party to or bound by any agreement which limits its freedom to
compete in any line of business or with any person, or which is otherwise
materially burdensome to it, and (E) except as set forth on Schedule 5.20, the
Company is not a party to or bound by any agreement in which any officer,
director or stockholder of the

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Company (or any affiliate of any such person) has, or had when made, a direct or
indirect material interest.

5.21. Certain Contracts. Schedule 5.21 is a complete and correct list of
all contracts, commitments, indentures, mortgages, obligations, agreements and
understandings which are not set forth in any other Schedule delivered hereunder
and to which the Company is a party or otherwise bound, except for each of those
which (A) was made in the ordinary course of business, and (B) either (1) is
terminable by the Company (and will be terminable by Buyer) without liability,
expense or other obligation on 30 days' notice or less, or (2) may be
anticipated to involve aggregate payments to or by the Company of $50,000 (or
the equivalent) or less calculated over the full term thereof, and (C) is not
otherwise material to the Business or any of the Company's Assets. Complete and
correct copies of all contracts, commitments, indentures, mortgages,
obligations, agreements and undertakings set forth on any of the Schedules
delivered pursuant to this Agreement have been furnished by the Company to
Buyer, and except as expressly stated on the Schedule on which they are set
forth, (A) each of them is in full force and effect, no person or entity which
is a party thereto or otherwise bound thereby is in default thereunder, and, to
the best of the knowledge of the Company, no event, occurrence, condition or act
exists which does (or which with the giving of notice or the lapse of time or
both would) give rise to a default or right of cancellation, acceleration or
loss of contractual benefits

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thereunder; (B) there has been no threatened cancellations thereof, and there
are no outstanding disputes thereunder; and (C) none of them is materially
burdensome to the Company. None of the material provisions of such contracts,
instruments or agreements violates any existing applicable law, rule,
regulation, judgment, order or decree of any governmental agency or court having
jurisdiction over the Company, the Business or the Company's Assets.

5.22. Approvals. Schedule 5.22 is a complete and correct list of all
governmental and administrative consents, permits, appointments, approvals,
licenses, certificates, franchises and other authorizations which are necessary
for the operation of the Business or to own or operate the Company's Assets, all
of which have been obtained by the Company and are in full force and effect and
will remain in full force and effect after the consummation of the transactions
contemplated hereby. There are no proceedings pending or threatened, or any
basis therefor, seeking to cancel, terminate or limit such consents, permits,
appointments, approvals, licenses, certificates, franchises or other
authorizations.

5.23. Customers and Suppliers. Set forth on Schedule 5.23 is a complete and
correct list setting forth, with respect to the year ended September 30, 1995,
and the eight (8) month period ended May 31, 1996: (A) the twenty (20) largest
customers of the Business and the amount for which each such

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customer was invoiced, and (B) the twenty (20) largest suppliers of the Business
and the amount of goods and services purchased from each such supplier. To the
best of the knowledge of the Company (i) there has been no material adverse
change in the business relationship between the Business and any such customer
or supplier, and (ii) said suppliers and customers will continue their
respective relationships with the Business after the Closing Date on
substantially the same basis as now exists.

5.24. Business Practices and Commitments. Schedule 5.24 is a summary
description of and a list and the amount of all of the Company's outstanding
obligations with respect to (i) all of the Company's rebate and volume discount
practices and obligations, (ii) the Company's allowance and customer return
practices and obligations, (iii) the Company's warranty practices, and (iv)
cooperative advertising. All such obligations shall be calculated in the manner
in which they are deemed earned; for example, if rebates are earned based on
sales volume, the amount of rebate owed should be based on sales to such
customer as of the date hereof.

5.25. Information as to the Company. None of the representations or
warranties made by the Company or any of the Selling Stockholders in this
Agreement or in any agreement executed and delivered by or on behalf of any of
them pursuant hereto are false or misleading with respect to any material fact,

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or omit to state any material fact necessary in order to make the statements
therein contained not misleading.

6. Representations and Warranties as to the Selling Stockholders. Each
Selling Stockholder hereby represents and warrants to USH&G and Buyer as
follows:

6.1. Standing and Authority. Such Selling Stockholder has the right, power,
legal capacity and authority to enter into this Agreement and to carry out his
respective obligations hereunder, including without limitation the execution and
delivery, as applicable, of the Lock-Up Agreement (as defined in subparagraph
10.17 hereof), the Investment Letter (as defined in subparagraph 10.18 hereof)
and the Non-Competition Agreements. This Agreement constitutes, and each
agreement to be executed and delivered by such Selling Stockholder pursuant
hereto will be the valid and binding obligation of such Selling Stockholder
enforceable against such Selling Stockholder, in accordance with their
respective terms.

6.2. Ownership of the Company Stock. Such Selling Stockholder is the record
and beneficial owner of that number of Company Stock set forth opposite such
Selling Stockholder's name in the chart annexed hereto as Schedule 5.2. Such
Selling Stockholder has good and marketable title to such Company Stock, free
and clear of any Liens. All such Company Stock has been duly authorized, validly
issued, fully paid and nonassessable and

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such Selling Stockholder has complete and unrestricted power and the unqualified
right to sell, assign, transfer and deliver his Company Stock to Buyer, and upon
delivery to Buyer of the certificates representing such Company Stock, either
endorsed in blank for transfer or together with appropriately executed stock
powers with respect thereto, Buyer shall acquire good and marketable title to
such Company Stock, free and clear of any Liens. There are no outstanding
options, warrants, rights, puts, calls, commitments, conversion rights, plans or
other agreements of any character to which such Selling Stockholder is a party
or otherwise bound which provide for the acquisition, disposition or issuance of
any issued but not outstanding, outstanding, or authorized and unissued shares
of Company Stock.

6.3. Noncontravention. Neither the execution and delivery by such Selling
Stockholder of this Agreement or of any agreement to be executed and delivered
pursuant hereto, nor the consummation of any of the transactions contemplated
hereby or thereby, nor the performance by such Selling Stockholder of any of his
respective obligations hereunder or thereunder, will (nor with the giving of
notice or the lapse of time or both would) (A) conflict with or result in a
breach of any provision of the Certificate of Incorporation or Bylaws of the
Company, or (B) give rise to a default, or any right of termination,
cancellation or acceleration, or otherwise be in conflict with or result in a
loss of contractual benefits to the Company under the terms, conditions or
provisions of any note, bond, mortgage, indenture,

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license, agreement or other instrument or obligation to which the Company is a
party or by which it may be bound, or require any consent, approval or notice
under the terms of any such document or instrument, or (C) violate any order,
writ, injunction, decree, law, statute, rule or regulation of any court or
governmental authority which is applicable to the Company or such Selling
Stockholder, or (D) result in the creation or imposition of any Liens upon any
of the Company Stock or the Company Assets.

6.4. Non-Registration of Securities. Such Selling Stockholder understands
that the Share Consideration received by him pursuant to this Agreement consists
of USH&G Stock not yet registered under the Act, or under applicable state
securities laws, in reliance upon exemption contained in the Act and such laws
and any applicable regulations promulgated thereunder or interpretations
thereof, and cannot be offered for sale, sold or otherwise transferred unless
such USH&G Stock are subsequently so registered or qualify for exemption from
registration under the Act and such applicable state securities laws; and the
certificates of such USH&G Stock shall bear an appropriate legend to that
effect.

6.5. Information as to the Selling Stockholders. None of the
representations or warranties made by such Selling Stockholder in this Agreement
or in any agreement executed and delivered by or on behalf of him pursuant
hereto are false or misleading with respect to any material fact, or omit to
state

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any material fact necessary in order to make the statements therein contained
not misleading.

7. Representations and Warranties as to Buyer. USH&G and Buyer hereby
jointly and severally represents and warrants to the Company and the Selling
Stockholders as follows:

7.1. Organization, Standing and Power. Each of USH&G and Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, with full corporate power and authority to own, lease
and operate its properties and to carry on its business as presently conducted
by it.

7.2. Authority. The execution and delivery by USH&G and Buyer of this
Agreement and of each agreement to be executed and delivered by either of them
pursuant hereto, the compliance by them with the provisions hereof and thereof,
and the consummation of the transactions contemplated hereby and thereby, have
been duly and validly authorized by all necessary corporate action on their
part, and each of USH&G and Buyer has all necessary corporate power with respect
thereto. This Agreement is, and when executed and delivered by USH&G and Buyer
each other agreement to be executed and delivered by either of them pursuant
hereto will be, the valid and binding obligation of them in accordance with the
respective terms thereof. Neither the execution and delivery by USH&G and Buyer
of this Agreement

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or of any of the aforementioned other agreements, nor the consummation of the
transactions contemplated hereby or thereby, nor the compliance by USH&G and
Buyer with the provisions hereof and thereof, will (nor with the giving of
notice or the lapse of time or both, would) conflict with or result in a
violation of any provision of the Certificate of Incorporation or By-laws of
USH&G or Buyer, or in the breach of any material agreement to which USH&G or
Buyer is a party or otherwise bound.

7.3. Shares. The USH&G Stock and the Anniversary Shares, if any, when
issued to the Selling Stockholders, will be duly authorized and validly issued,
fully paid and non-assessable, will be delivered hereunder free and clear of any
lien, claim, security interest, pledge or other encumbrance of any nature
whatsoever, except that the USH&G Stock and the Anniversary Shares, if any, will
be "restricted securities" as such term is defined in the rules and regulations
of the Securities and Exchange Commission and will be subject to restrictions on
transfers pursuant to such rules and regulations and State laws. Except as set
forth in Schedule 4.14, no person or entity has a demand or other right to
participate in the registration statement referred to in subparagraph 4.14.

8. Indemnification.

8.1. Indemnification by the Company and Selling Stockholders. The Company
and the Selling Stockholders hereby

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jointly and severally agree to indemnify and hold Buyer and USH&G harmless from
and against any and all losses, obligations, deficiencies, liabilities, claims,
damages, costs and expenses (including, without limitation, the amount of any
settlement entered into pursuant hereto, and all reasonable legal (including
attorneys' fees) and other expenses incurred in connection with the remediation,
investigation, prosecution or defense of any matter indemnified pursuant hereto)
which Buyer or USH&G may sustain, suffer or incur and which arise out of, are
caused by, relate to, or result or occur from or in connection with the breach
or alleged breach by the Company or any of the Selling Stockholders of any
representation, warranty or covenant made by him or it in this Agreement or in
any agreement or instrument executed and delivered pursuant hereto. This
indemnification obligation shall also apply to claims directly by Buyer or USH&G
against the Company or any Selling Stockholder as well as to third party claims.

Except with respect to the respective covenants of the Company and the
Selling Stockholders set forth in this Agreement and representations and
warranties set forth in Sections 5.13 and 5.15 (which shall survive for the
applicable statute of limitations), the liability of the Company and the Selling
Stockholders under this subparagraph 8.1 shall (a) terminate on January 31,
1998, except with respect to any claims for indemnification which may be pending
on such date, (b) arise only if and when the aggregate amount of any such
breaches shall have exceeded $50,000 and (c) be limited to an amount equal to

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the Cash Consideration, provided, however, that no Selling Stockholder shall
have any liability under this subparagraph 8.1 in excess of the amount of the
Cash Consideration allocated to such Selling Stockholder pursuant to the
provisions of subparagraph 3.2 hereof (including any adjustments thereto
pursuant to Section 2.2); the amount of the Share Consideration (to be valued at
$3.00 per Share) received by such Stockholder; the amount of any loans repaid to
such Stockholder at the Closing; the amount of any payments made to such
Stockholder in consideration of the termination of such Stockholder's employment
agreement.

8.2. Indemnification by Buyer. Buyer and USH&G hereby jointly and severally
agree to indemnify and hold the Company and the Selling Stockholders harmless
from and against any and all losses, obligations, deficiencies, liabilities,
claims, damages, costs and expenses (including, without limitation, the amount
of any settlement entered into pursuant hereto, and all reasonable legal and
other expenses incurred in connection with the investigation, prosecutor defense
of any matter indemnified pursuant hereto), which any of them may sustain,
suffer or incur and which arise out of, are caused by, relate to, or result or
occur from or in connection with the breach by USH&G or Buyer of any
representation, warranty or covenant made by either of them in this Agreement or
in any agreement or instrument executed and delivered pursuant hereto. This
indemnification obligation shall also apply to claims

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directly by the Company or any Selling Stockholder against USH&G or Buyer as
well as to third party claims.

8.3. Third Party Claims. If a claim by a third party is made against any
party or parties hereto and the party or parties against whom said claim is made
intends to seek indemnification with respect thereto under this paragraph 8, the
party or parties seeking such indemnification shall promptly notify the
indemnifying party or parties, in writing, of such claim; provided, however,
that the failure to give such notice shall not affect the rights of the
indemnified party or parties hereunder unless such failure materially and
adversely affects the indemnifying party or parties. The indemnifying party or
parties shall have ten (10) days after said notice is given to elect, by written
notice given to the indemnified party or parties, to undertake, conduct and
control, through counsel of their own choosing (subject to the consent of the
indemnified party or parties, such consent not to be unreasonably withheld) and
at their sole risk and expense, the good faith settlement or defense of such
claim, and the indemnified party or parties shall reasonably cooperate with the
indemnifying parties in connection therewith; provided: (i) in the case of the
Company and/or any of the Selling Stockholders as the indemnifying party or
parties, it or they shall not thereby permit to exist any Liens upon any of the
Company's Assets, Buyer or the Business, and (ii) the indemnified party or
parties shall be entitled to participate in such settlement or defense through
counsel chosen by the

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indemnified party or parties, provided that the fees and expenses of such
counsel shall be borne by the indemnified party or parties, except in the event
that such participation results from a conflict of interest or, the indemnifying
party has not diligently pursued the defense. So long as the indemnifying party
or parties are contesting any such claim in good faith, the indemnified party or
parties shall not pay or settle any such claim unless avoiding adverse
consequences to the Business entails settling any such claim sooner; provided,
however, that notwithstanding the foregoing, the indemnified party or parties
shall also have the right to pay or settle any other such claim at any time,
provided that in such event they shall waive any right of indemnification
therefor by the indemnifying party or parties. If the indemnifying parties do
not make a timely election to undertake the good faith defense or settlement of
the claim as aforesaid, or if the indemnifying parties fail to proceed with the
good faith defense or settlement of the matter after making such election, then,
in either such event, the indemnified party or parties shall have the right to
contest, settle or compromise the claim at their exclusive discretion, at the
risk and expense of the indemnifying parties to the full extent set forth in
subparagraph 8.1 or 8.2 hereof, as the case may be.

9. Nondisclosure.

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9.1. "Confidential Information" Defined. As used in this paragraph 9, the
term "Confidential Information" shall mean any and all information (oral and
written) relating to the Business or the Company Assets, other than such
information which can be shown by the Selling Stockholders (in the case of
subparagraph 9.2) and the Buyer (in the case of subparagraph 4.2 hereof) to be
in the public domain (such information not being deemed to be in the public
domain merely because it is embraced by more general information which is in the
public domain) other than as the result of a breach of the provisions of
subparagraph 9.2 below, including, but not limited to, information relating to:
identity and description of goods and services used; purchasing; costs; pricing;
machinery and equipment; manufacturing processes; technology; research; test
procedures and results; formulae, customers and prospects; marketing; and
selling and servicing.

9.2. Nondisclosure of Confidential Information. Following the Closing, each
of the Selling Stockholders jointly and severally hereby agree not to, at any
time, directly or indirectly, use, communicate, disclose or disseminate any
Confidential Information in any manner whatsoever.

10. Right of USH&G and Buyer to Abandon. USH&G and Buyer shall have the
right to terminate this Agreement and abandon the transactions contemplated
hereby

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in the event that any of the following shall not be true or shall not have
occurred, as the case may be, as of the Closing Date:

10.1. Accuracy of Representations and Warranties. The representations and
warranties of the Company and the Selling Stockholders contained in this
Agreement or in any document, agreement or instrument delivered by any or all of
them pursuant hereto shall have been true when made, and, in addition, shall be
true in all material respects on and as of the Closing Date with the same force
and effect as though made on and as of the Closing Date.

10.2. Performance of Agreements. The Company and the Selling Stockholders
shall have performed all obligations and agreements, and complied with all
covenants and conditions, contained in this Agreement or in any document,
agreement or instrument delivered by any or all of them pursuant hereto and
required to be performed or complied with by any or all of them at or prior to
the Closing Date.

10.3. Certificate. The Company and the Selling Stockholders shall have each
furnished USH&G and Buyer with a certificate or certificates (executed, on
behalf of the Company, by its President), dated the Closing Date, to the effect
that he or it has fulfilled the conditions specified in subparagraphs 10.1 and
10.2 above.

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10.4. Opinion of Counsel for the Company. USH&G and Buyer shall have
received an opinion of Winston & Strawn, counsel for the Company and the Selling
Stockholders, dated the Closing Date, in substantially the form of Exhibit 10.4
attached hereto and made a part hereof.

10.5. Litigation. No order of any court or administrative agency shall be
in effect which restrains or prohibits the transactions contemplated hereby, and
no suit, action, inquiry, investigation or proceeding in which it will be, or it
is, sought to restrain, prohibit or change the terms of or obtain damages or
other relief in connection with this Agreement or any of the transactions
contemplated hereby, and which in the judgment of USH&G and Buyer makes it
inadvisable to proceed with the consummation of such transactions, shall have
been instituted or threatened by any person or entity.

10.6. Consents and Approvals. All consents, waivers, approvals, licenses
and authorizations by third parties and governmental and administrative
authorities (and all amendments or modifications to existing agreements with
third parties) required as a precondition to the performance by the Company and
the Selling Stockholders of their respective obligations hereunder and under any
agreement delivered pursuant hereto, or which in USH&G's or Buyer's judgment are
necessary to continue unimpaired any rights in and to the Company Assets which
could be impaired by the purchase and sale hereunder, shall have been duly
obtained and shall be in full force and effect.

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10.7. Validity of Transactions. The validity of all transactions
contemplated hereby, as well as the form and substance of all agreements,
instruments, opinions, certificates and other documents delivered by the Company
and the Selling Stockholders pursuant hereto, shall be satisfactory in all
material respects to USH&G and Buyer and their counsel.

10.8. Due Diligence. Buyer being satisfied with the results of any Phase I
Study or investigation by Buyer and/or USH&G with respect to the customers,
inventory and financial statements of the Company.

10.9. Minimum Net Current Assets. The Company shall have at least
$1,000,000 of Net Current Assets on the Closing Date.

10.10. No Material Adverse Change. There shall not have occurred after the
date hereof, in the reasonable judgment of USH&G and Buyer, a material adverse
change in the financial or business condition of the Company.

10.11. Financing Arrangements. The lenders providing the financing
arrangements with respect to the acquisition of the Company Stock shall confirm
that all

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conditions precedent to such financing shall have been complied with and
satisfied in all respects and Buyer shall have received sufficient funds
thereunder to consummate the transactions contemplated by this Agreement.

10.12. Date of Consummation. The sale and purchase of Company Stock
pursuant hereto shall have been consummated on or prior to August 31, 1996.

10.13. Warrant Cancellation Agreement. Nations Credit Commercial
Corporation shall have executed and delivered to the Company the Warrant
Cancellation Agreement.

10.14. Employee Termination Agreements. The Company and each of Hills and
Jackson shall have entered into an Employee Termination Agreement.

10.15. Non-Competition Agreements. The Company and each of Hills and
Jackson shall have entered into a Non-Competition Agreement.

10.16. Reel Easy Product Line. The sale and purchase of the Reel Easy
Product Line shall have been consummated by the parties hereto, as provided in
subparagraph 4.17.

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10.17. Estoppel Letters. All Estoppel Letters by Lessors of real property
required to be obtained by the Company pursuant to this Agreement shall have
been duly obtained and shall be in full force and effect.

10.18. Indemnification Agreement. Each of the Selling Stockholders shall
have executed an Indemnification Agreement, substantially in the form of Exhibit
10.18 hereto (the "Indemnity Agreement"), to become effective upon the Closing
Date, whereby the Selling Stockholders covenant and agree, during the statutory
period of time by which the Internal Revenue Service must review and adjust the
Company's income tax return for the year ended on the Closing Date, to indemnify
and hold harmless USH&G and Buyer for any damages, losses, costs or expenses
(including attorneys' fees) incurred by USH&G as a result of any IRS action,
claim, or investigation associated with such income tax return.

10.19. Lock-up Restriction. Each of the Selling Stockholders shall have
executed a lock-up agreement, substantially in the form of Exhibit 10.19 hereto
(the "Lock-Up Agreement"), to become effective upon the Closing Date, whereby
the Selling Stockholders covenant and agree, during the initial six (6) month
period after the Closing Date and the second six (6) month period, not to sell,
assign, transfer, or otherwise dispose up to 75% and 50%, respectively, of the
shares of USH&G

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Stock held of record or beneficially by them after the Closing Date.

10.20. Investment Representation Letter. Each of the Selling Stockholders
shall have executed an investment representation letter, substantially in the
form of Exhibit 10.20 hereto (the "Investment Letter"), to become effective upon
the Closing Date.

10.21. Sublease. Each of Hills and Jackson (or an entity designated by
them) shall have executed the Sublease, as provided in subparagraph 4.15.

11. Right of the Company and Selling Stockholders to Abandon. The Company
and the Selling Stockholders shall have the right to terminate this Agreement
and abandon the transactions contemplated hereby in the event that any of the
following shall not be true or shall not have occurred, as the case may be, as
of the Closing Date:

11.1. Accuracy of Representations and Warranties. The representations and
warranties of Buyer and USH&G contained in this Agreement or in any document,
agreement or instrument delivered by it pursuant hereto shall have been true
when made, and, in addition, shall be true in all material respects on and as of
the Closing Date with the same force and effect as though made on and as of the
Closing Date.

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11.2. Performance of Agreements. Buyer and USH&G shall have performed all
obligations and agreements, and complied with all covenants and conditions,
contained in this Agreement or in any document, agreement or instrument
delivered by either of them pursuant hereto and required to be performed or
complied with by either of them at or prior to the Closing Date.

11.3. Certificate. USH&G and Buyer shall have furnished the Company and the
Selling Stockholders with a certificate, executed by the responsible executive
officers of USH&G and Buyer, dated the Closing Date, to the effect that each has
fulfilled the conditions specified in subparagraphs 11.1 and 11.2 hereof.

11.4. Opinion of Counsel for Buyer. The Company and the Selling
Stockholders shall have received an opinion of Tenzer Greenblatt LLP, counsel
for USH&G and Buyer, dated the Closing Date, in substantially the form of
Exhibit 11.4 attached hereto and made a part hereof.

11.5. Litigation. No order of any court or administrative agency shall be
in effect which restrains or prohibits the transactions contemplated hereby, and
no suit, action, inquiry, investigation or proceeding in which it will be, or it
is, sought to restrain, prohibit or change the terms of or obtain damages or
other relief in connection with this Agreement or any of the transactions
contemplated hereby, and which in

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the reasonable judgment of Company and the Selling Stockholders makes it
inadvisable to proceed with the consummation of such transactions, shall have
been instituted or threatened by any person or entity.

11.6. Consents and Approvals. All consents, waivers, approvals, licenses
and authorizations by third parties and governmental and administrative
authorities (and all amendments and modifications to existing agreements with
third parties) required as a precondition to the performance by USH&G and Buyer
of their respective obligations hereunder shall have been duly obtained and
shall be in full force and effect.

11.7. Date of Consummation. The sale and purchase of the Company Stock
pursuant hereto shall have been consummated on or prior to August 31, 1996.

11.8. Validity of Transactions. The validity of all transactions
contemplated hereby, as well as the form and substance of all agreements,
instruments, opinions, certificates and other documents delivered by USH&G and
Buyer pursuant hereto, shall be satisfactory in all material respects to the
Company, the Selling Stockholders and their counsel.

11.9. Reel Easy Line. The sale and purchase of the Reel Easy Product Line
shall have been consummated by the parties hereto, as provided in subparagraph
4.17.

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11.10. Non-Competition Agreements. The Company and each of Hills and
Jackson shall have entered into a Non-Competition Agreement.

12. Miscellaneous Provisions.

12.1. Effect of Abandonment. In the event that this Agreement is terminated
and the transactions contemplated hereby are abandoned pursuant to the terms
hereof, this Agreement shall forthwith become wholly void and of no force and
effect, except as to the last sentence of subparagraph 4.2 hereof and
subparagraph 12.2 hereof; provided, however, that nothing in this Agreement
contained shall be deemed to relieve any party hereto from liability for any
breach of this Agreement prior to termination.

12.2. Expenses/Brokers. Except as otherwise provided in this Agreement,
each of the parties hereto shall pay his or its own costs and expenses in
connection with this Agreement and the transactions contemplated hereby,
including, without limitation, any finder's fees, commissions, brokerage fees or
like payments with respect to any broker or finder engaged or dealt with by such
party. If this Agreement is terminated by the Company and the Selling
Stockholders as a result of the failure of USH&G and Buyer to satisfy the
condition set forth in subparagraph 11.7, unless such failure is due to the
failure of the Company or the Selling Stockholders to fulfill any

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of their respective obligations hereunder, USH&G shall on demand promptly pay to
the Selling Stockholders $50,000 in cash, by certified or official bank check,
to reimburse them for fees and expenses incurred in connection with the
execution and delivery of this Agreement.

12.3. Execution in Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement, and shall become effective when one
or more counterparts has been signed by each of the parties hereto and delivered
to each of the other parties hereto.

12.4. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given or
made as of the earlier of the date delivered or mailed if delivered personally
by overnight courier or mailed by express, registered or certified mail,
(postage prepaid, return receipt requested), or by facsimile transmittal,
confirmed by express, certified or registered mail, as follows:

If to Buyer, to: U.S. Home & Garden, Inc.
655 Montgomery Street
San Francisco, CA
Attn: Robert Kassel

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Copy to: Tenzer Greenblatt LLP
405 Lexington Avenue
New York, New York 10174
Attn: Barry S. Rutcofsky, Esq.

If to the Company, to: Weatherly Consumer Products
Group, Inc.
P.O. Box 1750
651 Perimeter Dr., Ste. 300
Lexington, KY 40517
Attn: James R. Hills

Copy to: Winston & Strawn
35 W. Wacker Dr.
Chicago, IL 60601
Attn: Finley Maxson, Esq.

If to any or all of the
Selling Stockholders, to: The names and addresses
set forth on Schedule 5.2
referred to in subparagraph
5.2 hereof

Copy to: Winston & Strawn
35 W. Wacker Drive
Chicago, IL 60601
Attn: Finley Maxson, Esq.

or to such other address as any party shall have designated by like notice to
the other parties hereto (except that a notice of change of address shall only
be effective upon receipt).

12.5. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York without regard to
its choice of law principles.

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12.6. Amendment. This Agreement may only be amended by a written instrument
executed by each of the parties hereto.

12.7. Entire Agreement. This Agreement (together with the other agreements
and documents being delivered pursuant to or in connection with this Agreement)
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof, and supersedes all prior agreements and understandings of
the parties, oral and written, with respect to the subject matter hereof.

12.8. Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.

12.9. Assignment. Neither this Agreement nor any rights, interests or
obligations hereunder may be assigned (by operation of law or otherwise) by any
party hereto without the prior written consent of all of the parties hereto.

12.10. Binding Effect; Benefits. This Agreement shall inure to the benefit
of, and shall be binding upon, the parties hereto and their respective heirs,
legal representatives, successors and permitted assigns. Nothing herein
contained, express or implied, is intended to confer upon any person other

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than the parties hereto and their respective heirs, legal representatives,
successors and permitted assigns, any rights or remedies under or by reason of
this Agreement.

12.11. Waiver, etc. The failure of any of the parties hereto to at any time
enforce any of the provisions of this Agreement shall not be deemed or construed
to be a waiver of any such provision, nor to in any way affect the validity of
this Agreement or any provision hereof or the right of any of the parties hereto
to thereafter enforce each and every provision of this Agreement. No waiver of
any breach of any of the provisions of this Agreement shall be effective unless
set forth in a written instrument executed by the party or parties against whom
or which enforcement of such waiver is sought; and no waiver of any such breach
shall be construed or deemed to be a waiver of any other or subsequent breach.

12.12. Severability. Any provision of this Agreement which is held by a
court of competent jurisdiction to be prohibited or unenforceable in any
jurisdiction(s) shall be, as to such jurisdiction(s), ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.

12.13. Announcements. No party hereto shall issue any press release or
otherwise divulge the existence of

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this Agreement or the transactions contemplated hereby without the prior
approval of the other parties hereto, except as may be required by applicable
law or the applicable rules or regulations of any stock exchange.

12.14. Schedules. The Schedules delivered pursuant to this Agreement are an
integral part hereof. Each such Schedule shall be in writing, shall indicate the
subpara graph pursuant to which it is being delivered, and shall be initialled
by the delivering party.

IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of the date first above written.

EASY GARDENER ACQUISITION CORP.

By: /s/ Richard Raleigh
------------------------
Its: Vice President

U.S HOME & GARDEN, INC.

By: /s/ Richard Raleigh
------------------------
Its: Chief Operating Officer00

WEATHERLY CONSUMER PRODUCTS GROUP,
INC.

By: /s/ James R. Hills
------------------------
James R. Hills, President and
CEO

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/s/ James R. Hills
--------------------------
James R. Hills

/s/ Laban P. Jackson, Jr.
--------------------------
Laban P. Jackson, Jr.

/s/ Emmanuel M. Metz
---------------------------
Emmanuel M. Metz

/s/ E.H. Arnold
--------------------------
E. H. Arnold

E.H. ARNOLD PERSONAL PROPOERTY TRUST

By:______________________________
Heath L. Allen, Co-trustee

By:______________________________
Eugene E. Pepinsky, Jr.,
Co-Trustee

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Exhibit 10.2

LIST OF OMITTED SCHEDULES/EXHIBITS
TO STOCK PURCHASE AGREEMENT

Except as otherwise indicated herein, the list identifies schedules and
exhibits annexed to the Purchase Agreement but omitted from this filing. In
accordance with Regulation S-X, Item 601, copies of any such schedule or exhibit
will be furnished to the Securities and Exchange Commission upon request.

Exhibit/Schedule Brief Description

Exhibit 4.12 Employee Termination Agreements
Exhibit 4.13 Non-Competition Agreements
Exhibit 4.15 Sublease
Exhibit 4.17 "Jobe's" License Agreement
Exhibit 10.4 Opinion of Winston & Strawn
Exhibit 10.18 Indemnity Agreement
Exhibit 10.19 Lock-Up Agreement
Exhibit 11.4 Opinion of Tenzer Greenblatt LLP

Schedule 2.2A Trial Closing Balance Sheet
Schedule 2.2B. Adjustment to Cash Consideration
Schedule 4.7.1 Dividends
Schedule 4.17 Reel Easy Product Line
Schedule 5.1 Jurisdictions
Schedule 5.2 Capitalization/Liens
Schedule 5.3 Subsidiaries
Schedule 5.5 Noncontravention
Schedule 5.8 Properties
Schedule 5.11 Litigation
Schedule 5.13 Environmental Matters
Schedule 5.14 Intellectual Property
Schedule 5.16 Insurance
Schedule 5.17 Banks; Powers of Attorney
Schedule 5.18 Employee Arrangements
Schedule 5.20 Distributorship/Franchise Agreements
Schedule 5.21 Contracts
Schedule 5.22 Approvals and Consents
Schedule 5.23 Customers and Suppliers
Schedule 5.24 Business Practices