Exhibit 2
CHURCH & XXXXXX CO., INC.
PUT & CALL AGREEMENT
THIS PUT & CALL AGREEMENT (this "AGREEMENT") is made as of the 14th day
of June 2000, by and between Xxxxxxxxx X. Xxxxx ("XXXXX") and Church & Xxxxxx
Co., Inc., a Delaware corporation ("CHD").
WHEREAS, USA Detergents, Inc., a Delaware corporation ("USAD"), and CHD
are concurrently entering into a Limited Liability Company Operating Agreement
(the "JOINT VENTURE AGREEMENT");
WHEREAS, the Board of Directors of each of USAD and CHD has determined
that the Joint Venture Agreement and the transactions contemplated thereby are
in the best interests of their respective stockholders; and
WHEREAS, this Agreement is one of the conditions to USAD being willing
to enter into the Joint Venture Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the parties, the parties hereby
agree as follows:
1. DEFINITIONS.
(a) "XXXXX SHARES" means all shares of Common Stock owned
beneficially or of record by Xxxxx other than the 1,071,428 shares of Common
Stock to be sold by Xxxxx to CHD under that certain Stock Purchase Agreement,
dated as of the date hereof, by and among Xxxxx, USAD and CHD, comprised of
704,255 shares. Xxxxx Shares shall not include the aggregate of 353,500 shares
of Common Stock that may be acquired by Xxxxx or persons related to Xxxxx upon
the exercise of outstanding stock options and warrants.
(b) "CALL DATE" means the Effective Date of the Joint Venture
Agreement; provided that the Effective Date occurs on or before January 1, 2001.
(c) "COMMON STOCK" means the common stock of USAD.
(d) "PUT DATE" means the date that the Call Right (as defined in
Section 2(a)) terminates without being exercised in full.
(e) "PUT/CALL PRICE" means $7.00 per share of Common Stock.
2. GRANT OF PUT AND CALL RIGHTS.
(a) Grant of Call Right. Xxxxx hereby irrevocably grants to CHD the
right and option (the "CALL RIGHT"), exercisable by CHD in its sole and absolute
discretion, to cause and irrevocably require Xxxxx to sell all or any portion of
the Xxxxx Shares (including any accrued but unpaid dividends and all other
rights and privileges pertaining or attached thereto) at the Put/Call
Price. The Call Right may be assigned by CHD to any affiliate of CHD. The Call
Right will automatically terminate 30 days after the Call Date.
(b) Grant of Put Right. CHD hereby irrevocably grants to Xxxxx the
right and option (the "PUT RIGHT"), exercisable by Xxxxx in his sole and
absolute discretion, to cause and irrevocably require CHD to purchase all (but
not less than all) of the Xxxxx Shares owned beneficially and of record by Xxxxx
and not purchased by CHD pursuant to the Call Right (including any accrued but
unpaid dividends and all other rights and privileges pertaining or attached
thereto) (the "PUT SHARES") for a purchase price equal to the Put/Call Price.
The Put Right will automatically terminate 30 days after the Put Date.
3. EXERCISE OF CALL AND PUT RIGHTS.
(a) Exercise of Call Right. At any time within thirty (30) days
after the Call Date, CHD may exercise the Call Right and purchase from Xxxxx,
and Xxxxx shall sell to CHD, the Xxxxx Shares (or any portion thereof) by
providing Xxxxx with an irrevocable written notice (the "CALL NOTICE") of its
intention to exercise the Call Right. The Call Notice must state the exact
number of Xxxxx Shares to be purchased by CHD (the "CALL SHARES") and the date
on which the purchase will occur, which date shall not be less than five (5) nor
more than ten (10) business days after the date of the Call Notice (the "CALL
CLOSING DATE"). Thereafter, Xxxxx shall sell the Call Shares to CHD, and CHD
shall purchase from Xxxxx the Call Shares for an aggregate purchase price equal
to (i) the Put/Call Price multiplied by (ii) the exact number of Call Shares
being purchased by CHD. The aggregate purchase price will be payable by CHD in
full at the Call Closing Date in immediately available funds by wire transfer to
such account or accounts of Xxxxx as he may designate at least three (3)
business days prior to the Call Closing Date.
(b) Exercise of Xxxxx Put Right. At any time within thirty (30) days
after the Put Date, Xxxxx may exercise the Put Right and sell to CHD, and CHD
shall purchase from Xxxxx, the Put Shares by providing CHD with an irrevocable
written notice (the "PUT NOTICE") of his intention to exercise the Put Right.
The Put Notice must state the date on which the sale will occur, which date
shall not be less than five (5) nor more than ten (10) business days after the
date of the Put Notice (the "PUT CLOSING DATE"). Thereafter, CHD shall purchase
from Xxxxx, and Xxxxx shall sell to CHD, the Put Shares for an aggregate
purchase price equal to (i) the Put/Call Price multiplied by (ii) the number of
Put Shares being sold by Xxxxx. The aggregate purchase price will be payable by
CHD in full at the Put Closing Date in immediately available funds by wire
transfer to the account or accounts of Xxxxx as Xxxxx may designate at least
three (3) business days prior to the Put Closing Date.
4. DELIVERY OF XXXXX SHARES. At any closing of either a Put Right or a
Call Right, and in exchange for payment of the appropriate aggregate purchase
price therefor, Xxxxx shall deliver to CHD endorsed share certificates or
executed stock powers and other good and sufficient instruments of transfer as
CHD may reasonably require to vest effectively in CHD good and valid title to
the Put Shares or Call Shares, as applicable, free and clear of any claims,
liens, pledges, options, security interests, trusts, encumbrances or other
rights or interests of any person.
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5. REPRESENTATIONS AND WARRANTIES OF XXXXX. Xxxxx hereby represents and
warrants to CHD as follows:
(a) Ownership of Xxxxx Shares. He is the beneficial and record owned
of the Xxxxx Shares. All of the Xxxxx Shares are free and clear of any lien,
encumbrance, charge or claim whatsoever. When any of the Xxxxx Shares are sold
and delivered to CHD in compliance with the provisions of this Agreement, CHD
will be vested with good and valid title to such Xxxxx Shares, free and clear of
any claims, liens, pledges, options, security interests, trusts, encumbrances or
other rights or interests of any person (except such as exists as a result of
actions taken by CHD).
(b) Authority. He has full power and authority to execute and
deliver this Agreement and to perform of all of his obligations hereunder. This
Agreement constitutes his valid and legally binding obligation enforceable in
accordance with its terms, subject to laws of general application relating to
bankruptcy, insolvency and the relief of debtors (the "Bankruptcy Exception").
(c) Compliance with Other Instruments. The execution, delivery and
performance of this Agreement and the completion of the transactions
contemplated hereby will not result, to his knowledge, in any violation or be in
conflict with or constitute, with or without the passage of time and giving of
notice, a default under any instrument, judgment, order, writ, decree or
contract to which he is a party or by which he is bound or of any provision of
any federal or state statute, rule or regulation applicable to him.
6. REPRESENTATIONS AND WARRANTIES OF CHD. CHD hereby represents and
warrants to Xxxxx that:
(a) Authorization. All corporate action on the part of CHD and its
officers, directors and stockholders necessary for the authorization, execution
and delivery of this Agreement and the performance of all of CHD's obligations
hereunder have been taken. This Agreement constitutes CHD's valid and legally
binding obligation enforceable in accordance with its terms, subject to the
Bankruptcy Exception.
(b) Compliance with Other Instruments. The execution, delivery and
performance of this Agreement and the completion of the transactions
contemplated hereby will not result, to CHD's knowledge, in any violation or be
in conflict with or constitute, with or without the passage of time and giving
of notice, a default under any instrument, judgment, order, writ, decree or
contract to which it is a party or by which it is bound or of any provision of
any federal or state statute, rule or regulation applicable to it.
(c) Purchase Entirely for Own Account. The Xxxxx Shares to be
received by CHD upon exercise of either the Put Right or the Call Right will be
acquired for investment for CHD's own account, not with a view to the
distribution of any part thereof, and CHD has no present intention of selling,
granting any participation in, or otherwise distributing the same. CHD does not
have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participations to such person or to any third person,
with respect to any of the Xxxxx Shares.
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(d) Restricted Securities. CHD understands that the Xxxxx Shares to
be received by it upon exercise of either the Put Right or the Call Right are
characterized as "restricted securities" under the federal securities laws
inasmuch as such securities are being acquired in a transaction not involving a
public offering and that under such laws and applicable regulations such
securities may not be resold in the absence of an effective registration
statement covering the Xxxxx Shares or an exemption from registration. CHD is
familiar with SEC Rule 144 under the Securities Act, as presently in effect, and
understands the resale limitations imposed thereby and by the federal securities
laws.
(e) Legend. CHD understands that the certificates evidencing the
Xxxxx Shares may bear a legend in substantially the form as follows:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THEY MAY NOT BE RESOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL SATISFACTORY TO USA
DETERGENTS, INC. THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT
TO RULE 144 OF THE SECURITIES ACT OF 1933.
7. EFFECT OF TRANSFERS.
(a) Survival of Put Right and Call Right. The Put Right and the Call
Right set forth in this Agreement are effectively attached to the Xxxxx Shares
and may not be terminated with respect to the Xxxxx Shares or as a result of any
transfer or assignment of any of the Xxxxx Shares. As a result thereof, any
subsequent holder or holders of any Xxxxx Shares shall enjoy the benefits of and
bear the burdens of the Put Right and Call Right set forth herein.
(b) Rights Legend. The certificates evidencing the Xxxxx Shares will
bear a legend referencing this Agreement and the applicability of the Put Right
and the Call Right contained herein. Any transferee of the Xxxxx Shares shall,
as a condition to such transfer, execute and deliver an agreement in form
reasonably satisfactory to all parties to this Agreement providing that such
transferee agrees to be bound by the provisions set forth herein.
8. SPECIFIC PERFORMANCE. Each party hereby acknowledges that
irreparable harm and significant injury would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached and that such harm and injury would be
difficult to ascertain and would not be adequately compensable by damages alone.
Accordingly, each of the parties hereto will have the right to enforce such
provisions by injunction, specific performance or other equitable relief without
prejudice to any other rights and remedies the enforcing party may have.
9. XXXXX MARKET STAND-OFF. From the date of this Agreement until five
years from the latest of (a) the date of this Agreement, (b) the Put Closing
Date or (c) the Call Closing Date, Xxxxx (which for the purposes of this Section
9 shall include investment funds and other investment vehicles over which Xxxxx
has sole investment control) will not, either directly or by affirmatively
causing another to act on his behalf, purchase, offer to purchase, contract to
purchase, obtain any option to purchase or otherwise acquire any shares of
Common Stock or any securities exercisable or convertible into or exchangeable
for Common Stock; provided,
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however, that Xxxxx shall be permitted to exercise warrants or options for the
purchase of Common Stock which exist on the date of this Agreement.
10. MISCELLANEOUS.
(a) Survival of Warranties. The warranties, representations and
covenants of Xxxxx and CHD contained in or made pursuant to this Agreement will
survive the execution and delivery of this Agreement and the Put Closing Date or
Call Closing Date.
(b) Successors and Assigns. This Agreement will inure to the benefit
of and be binding upon the respective successors and assigns of the parties
(including transferees of any Xxxxx Shares). Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the parties hereto
or their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
herein.
(c) Governing Law. This Agreement will be governed by and construed
in accordance with the internal laws of the State of New York, without reference
to any choice of law principles.
(d) Headings and Captions. The headings and captions used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(e) Notices. All notices and other communications required or
permitted hereunder will be in writing and will be delivered by facsimile,
courier or nationally recognized overnight delivery service addressed as
follows:
If to Xxxxx:
Venad Administration Services, Inc.
000 Xxxxxxx Xxx., Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxxx, Chief Financial Officer
Telecopy No.: 000-000-0000
with a copy to:
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: 000-000-0000
If to CHD:
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
0 Xxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
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(f) Attorneys' Fees. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement, the prevailing party will
be entitled to actual attorney's fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
(g) Amendments and Waivers. Any term of this Agreement may be
amended, and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of each affected party.
(h) Severability. If any provision of this Agreement, or the
application of such provision to any person or circumstance, is judicially
declared to be invalid, unenforceable or void, such decision will not have the
effect of invalidating or voiding the remainder of this Agreement or affect the
application of such provision to other persons or circumstances, and the part or
parts of this Agreement so held to be invalid, unenforceable or void will be
deemed to have been stricken herefrom and the remainder of this Agreement will
have the same force and effect as if such part or parts had never been included
herein. Any such finding of invalidity or unenforceability will not prevent the
enforcement of such provision in any other jurisdiction to the maximum extent
permitted by applicable law.
(i) Counterparts. This Agreement may be executed in counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
XXXXX:
/s/ Xxxxxxxxx X. Xxxxx
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Xxxxxxxxx X. Xxxxx
CHD:
CHURCH & XXXXXX CO., INC.,
A DELAWARE CORPORATION
By: /s/ X.X. Xxxxxx III
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Name: Xxxxxx X. Xxxxxx III
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Title: President and Chief Executive Officer
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