-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SSwcxpYg3gEqzlIw/WJZUQNvRh4BFZywNZpzWTgSrUTV7Mgi1Yu2pPGgINCnmOL4 b+C9nD61jkx/wobRkd/8CQ== 0000891554-99-002342.txt : 19991216 0000891554-99-002342.hdr.sgml : 19991216 ACCESSION NUMBER: 0000891554-99-002342 CONFORMED SUBMISSION TYPE: SC 13E4 PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 19991215 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: US HOME & GARDEN TRUST I CENTRAL INDEX KEY: 0001057699 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 943297084 FILING VALUES: FORM TYPE: SC 13E4 SEC ACT: SEC FILE NUMBER: 005-57279 FILM NUMBER: 99775185 BUSINESS ADDRESS: STREET 1: C/O US HOME & GARDEN INC STREET 2: 655 MONTGOMERY ST CITY: SAN FRANCISCO STATE: CA ZIP: 94111 BUSINESS PHONE: 4156188111 MAIL ADDRESS: STREET 1: C/O US HOME & GARDEN INC STREET 2: 655 MONTGOMERY ST CITY: SAN FRANCISCO STATE: CA ZIP: 94111 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: US HOME & GARDEN INC CENTRAL INDEX KEY: 0000879911 STANDARD INDUSTRIAL CLASSIFICATION: TEXTILE MILL PRODUCTS [2200] IRS NUMBER: 770262908 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13E4 BUSINESS ADDRESS: STREET 1: 655 MONTGOMERY ST STE 500 CITY: SAN FRANCISCO STATE: CA ZIP: 94111 BUSINESS PHONE: 4156168111 MAIL ADDRESS: STREET 1: 655 MONTGOMERY ST STREET 2: SUITE 500 CITY: SAN FRANCISCO STATE: CA ZIP: 94111 FORMER COMPANY: FORMER CONFORMED NAME: NATURAL EARTH TECHNOLOGIES INC DATE OF NAME CHANGE: 19930328 SC 13E4 1 ISSUER TENDER OFFER STATEMENT AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 15, 1999 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 SCHEDULE 13E-4 ISSUER TENDER OFFER STATEMENT (PURSUANT TO SECTION 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934) (Amendment No. ) U.S. Home & Garden Trust I - -------------------------------------------------------------------------------- (Name of Issuer) U.S. Home & Garden Inc. - -------------------------------------------------------------------------------- (Name of Person(s) Filing Statement) 9.4% Cumulative Trust Preferred Securities - -------------------------------------------------------------------------------- (Title of Class of Securities) 90331U 20 3 - -------------------------------------------------------------------------------- (CUSIP Number of Class of Securities) Robert Kassel, President, U.S. Home & Garden Inc., 655 Montgomery Street, San Francisco, CA 94111, (415) 616-8111 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications On Behalf of the Person(s) Filing Statement) COPIES TO: Robert J. Mittman, Esq. Tenzer Greenblatt LLP 405 Lexington Avenue New York, New York 10174 - -------------------------------------------------------------------------------- December 15, 1999 (Date Tender Offer First Published, Sent or Given to Security Holders) CALCULATION OF FILING FEE - -------------------------------------------------------------------------------- Transaction Valuation* Amount of Filing Fee $10,500,000 $2,100 - -------------------------------------------------------------------------------- * Calculated solely for the purpose of determining the filing fee, based upon the purchase of 700,000 trust preferred securities at $15.00 per trust preferred security in accordance with Rule 0-11 (1/50th of 1% of the Transaction Value). |_| Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. Amount previously paid: N/A Filing Party: N/A Form or registration no.: N/A Date filed: N/A ITEM 1 SECURITY AND ISSUER. (a) The issuer of the securities to which this Schedule 13E-4 relates is U.S. Home & Garden Trust I, a Delaware statutory business trust (the "Trust"), and the address of its principal executive offices is 655 Montgomery Street, San Francisco, CA 94111. (b) This Schedule 13E-4 relates to the offer by U.S. Home & Garden Inc., a Delaware corporation and the parent company of the Trust (the "Company") to purchase 700,000 Trust Securities (as hereinafter defined) (or such lesser number of Trust Securities as are properly tendered) of the 9.4% Cumulative Trust Preferred Securities of the Trust (the "Trust Securities"), 2,530,000 of which Trust Securities were outstanding as of December 14, 1999, at a price of $15.00 per Trust Security in cash upon the terms and subject to the conditions set forth in the Offer to Purchase, dated December 15, 1999 (the "Offer to Purchase"), and in the related Letter of Transmittal, which together constitute the "Offer," copies of which are attached as Exhibit (a)(1) and (a)(2), respectively, and incorporated herein by reference. Certain executive officers and directors of the Company who are also Administrative Trustees of the Trust and who own Trust Securities may participate in the Offer in the same manner as the securityholders of the Trust. The information set forth in "Introduction"; "Section 1, Number of Trust Securities; Proration" and "Section 8, Interests of Directors and Executive Officers of the Company and Trustees of the Trust; Transactions and Arrangements Concerning the Trust Securities" of the Offer to Purchase is incorporated herein by reference. (c) The information set forth in "Introduction" and "Section 7, Price Range of Trust Securities" of the Offer to Purchase is incorporated herein by reference. (d) This Schedule 13E-4 is being filed by the Company, which is the parent company of the Trust, and holds all of the issued and outstanding voting common securities of the Trust. ITEM 2 SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. (a)-(b) The information set forth in "Section 11, Source and Amount of Funds" of the Offer to Purchase is incorporated herein by reference. ITEM 3 PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE. (a)-(j) The information set forth in "Introduction" and "Section 11, Source and Amount of Funds," "Section 9, Background and Purpose of the Offer"; "Section 8, Interest of Directors and Executive Officers of the Company and Trustees of the Trust; Transactions and Arrangements Concerning the Trust Securities" and "Section 12, Effects of the Offer on the Market for Trust Securities; Registration under the Exchange Act" of the Offer to Purchase is incorporated herein by reference. -2- ITEM 4 INTEREST IN SECURITIES OF THE ISSUER. The information set forth in "Section 8, Interest of Directors and Executive Officers of the Company and Trustees of the Trust; Transactions and Arrangements Concerning Trust Securities" of the Offer to Purchase and Appendix A of the Offer to Purchase is incorporated herein by reference. ITEM 5 CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO THE ISSUER'S SECURITIES. The information set forth in "Introduction" and "Section 11, Source and Amount of Funds," "Section 9, Background and Purpose of the Offer; "Section 8, Interest of Directors and Executive Officers of the Company and Trustees of the Trust; Transactions and Arrangements Concerning Trust Securities" and "Section 10, Certain Information About the Trust and the Company" of the Offer to Purchase is incorporated herein by reference. ITEM 6 PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED. The information set forth in "Introduction" and "Section 16, Fees and Expenses" of the Offer to Purchase is incorporated herein by reference. ITEM 7 FINANCIAL INFORMATION. (a)-(b) The information set forth in "Section 10, Certain Information About the Trust and the Company" of the Offer to Purchase is incorporated herein by reference, the information in the Company's Annual Report on Form 10-K for the year ended June 30, 1999, and the information set forth in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1999, is incorporated herein by reference. ITEM 8 ADDITIONAL INFORMATION. (a) Not applicable. (b) The information set forth in "Section 13, Certain Legal Matters; Regulatory Approvals" of the Offer to Purchase is incorporated herein by reference. (c) The information set forth in "Section 12, Effects of the Offer on the Market for Trust Securities; Registration under the Exchange Act" of the Offer to Purchase is incorporated herein by reference. (d) Not applicable. (e) The information set forth in the Offer to Purchase and Letter of Transmittal is incorporated herein by reference. -3- ITEM 9 MATERIAL TO BE FILED AS EXHIBITS. (a)(1) Offer to Purchase, dated December 14, 1999 (2) Letter of Transmittal (including Certification of Taxpayer Identification Number on Form W-9 and Guidelines thereto). (3) Notice of Guaranteed Delivery. (4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (5) Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (6) Text of Press Release issued by the Company, dated December 13, 1999. (b)(1) Credit Agreement dated as of October 13, 1998 between the Company and Bank of America, N.A. (the "Credit Agreement") which is hereby incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the period ended September 30, 1998. (2) Amendment to Credit Agreement dated September 29, 1999. (3) Second Amendment to Credit Agreement dated November 22, 1999. (c)(1)Guaranty Agreement of the Company in favor of the holders of the Trust Securities which is hereby incorporated by reference to Exhibit 4.7 to the Company's and the Trust's Registration Statement on Form S-1 filed with the Securities and Exchange Commission. (File No. 333-48519). (2) Junior Subordinated Indenture between the Company and Wilmington Trust Company, as trustee, which is hereby incorporated by reference to Exhibit 4.1 to the Company's and the Trust's Registration Statement on Form S-1 filed with the Securities and Exchange Commission. (File No. 333-48519). (3) Amended and Restated Trust Agreement among the Company, Wilmington Trust Company as Property and Delaware Trustee and certain Administrative Trustees, which is hereby incorporated by reference to Exhibit 4.4 to the Company's and the Trust's Registration Statement on Form S-1 filed with the Securities and Exchange Commission. (File No. 333-48519) (d) Not applicable. (e) Not applicable. (f) Not applicable. -4- SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Schedule 13E-4 is true, complete and correct. December 15, 1999 U.S. Home & Garden Inc. By: /s/ Robert Kassel ------------------------- Robert Kassel President -5- EXHIBIT INDEX EXHIBIT NO. DESCRIPTION - -------------------------------------------------------------------------------- (a)(1) Offer to Purchase, dated December 15, 1999. (2) Letter of Transmittal (including Certification of Taxpayer Identification Form W-9 and Guidelines thereto). (3) Notice of Guaranteed Delivery. (4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees (5) Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (6) Text of Press Release issued by the Company, dated December 13, 1999. (b)(1) Credit Agreement dated October 13, 1998 between the Company and Bank of America, N.A., which is hereby incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the period ended September 30, 1998. (2) Amendment to Credit Agreement dated September 29, 1999. (3) Second Amendment to Credit Agreement dated November 22, 999. (c)(1) Guaranty Agreement of Company in favor of holders of Trust Securities which is hereby incorporated by reference to Exhibit 4.7 to the Company's and the Trust's Registration Statement on Form S-1 filed with the Securities and Exchange Commission (File No. 333-48519). (2) Junior Subordinated Indenture between the Company and Wilmington Trust Company, as trustee, which is hereby incorporated by reference to Exhibit 4.1 to the Company's and the Trust's Registration Statement on Form S-1 filed with the Securities and Exchange Commission (File No. 333-48519). (3) Amended and Restated Trust Agreement among the Company, Wilminton Trust Company as Property and Delaware Trustee and certain Administrative Trustees, which is hereby incorporated by reference to Exhibit 4.4 to the Company's and the Trust's Registration Statement on Form S-1 filed with the Securities and Exchange Commission. (File No. 333-48519). EX-99.(A)(1) 2 OFFER TO PURCHASE FOR CASH U.S. HOME & GARDEN INC. OFFER TO PURCHASE FOR CASH UP TO 700,000 9.4% CUMULATIVE TRUST PREFERRED SECURITIES OF U.S. HOME & GARDEN TRUST I AT A PURCHASE PRICE OF $15.00 PER TRUST PREFERRED SECURITY THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON JANUARY 14, 2000, UNLESS THE OFFER IS EXTENDED. U.S. Home & Garden Inc., a Delaware corporation (the "Company"), hereby invites the securityholders of U.S. Home & Garden Trust I, its subsidiary (the "Trust") to tender the 9.4% Cumulative Trust Preferred Securities (the "Trust Securities") to the Company upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which together constitute the "Offer"). The Company will pay, a price of $15.00 per Trust Security in cash (the "Purchase Price") for Trust Securities validly tendered pursuant to the Offer. The Company will buy 700,000 Trust Securities (or such lesser number of Trust Securities as are validly tendered) pursuant to the Offer. The Company reserves the right, in its sole discretion, to purchase more than 700,000 Trust Securities pursuant to the Offer. THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF TRUST SECURITIES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS NOR THE TRUST OR ITS ADMINISTRATIVE TRUSTEES MAKES ANY RECOMMENDATION TO ANY SECURITYHOLDER OF THE TRUST AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING TRUST SECURITIES. SECURITYHOLDERS OF THE TRUST MUST MAKE THEIR OWN DECISIONS AS TO WHETHER TO TENDER TRUST SECURITIES AND, IF SO, HOW MANY TRUST SECURITIES TO TENDER. CERTAIN EXECUTIVE OFFICERS AND DIRECTORS OF THE COMPANY WHO ARE ALSO ADMINISTRATIVE TRUSTEES OF THE TRUST MAY TENDER TRUST SECURITIES PURSUANT TO THE OFFER. Questions and requests for assistance or for additional copies of this Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery may be directed to the Information Agent, at the address and telephone number set forth on the back cover of this Offer to Purchase. December 15, 1999 IMPORTANT Any securityholder of the Trust desiring to tender all or any portion of such securityholder's Trust Securities should either (1) complete and sign the Letter of Transmittal or a facsimile copy thereof in accordance with the instructions in the Letter of Transmittal, mail or deliver it and any other required documents to Continental Stock Transfer & Trust Company (the "Depositary"), and either mail or deliver the Certificates for such Trust Securities to the Depositary or follow the procedure for book-entry delivery set forth in Section 3 hereof, or (2) request a broker, dealer, commercial bank, trust company or other nominee to effect the transaction on the securityholder's behalf. A securityholder of the Trust having Trust Securities registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact that broker, dealer, commercial bank, trust company or other nominee if such securityholder desires to tender such Trust Securities. Securityholders of the Trust who desire to tender Trust Securities and whose certificates for such Trust Securities are not immediately available or who cannot comply with the procedure for book-entry transfer by the expiration of the Offer must tender such Trust Securities by following the procedures for guaranteed delivery set forth in Section 3 hereof. NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE COMPANY OR THE TRUST OR ITS ADMINISTRATIVE TRUSTEES AS TO WHETHER SECURITYHOLDERS OF THE TRUST SHOULD TENDER OR REFRAIN FROM TENDERING TRUST SECURITIES PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER, OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH RECOMMENDATIONS, INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE TRUST OR ITS ADMINISTRATIVE TRUSTEES. -2- SUMMARY This general summary is provided for the convenience of the Trust's securityholders and is qualified in its entirety by reference to the full text and more specific details of this Offer to Purchase. Number of Trust Securities to be Purchased....................... 700,000 Trust Securities (or such lesser number of Trust Securities as are validly tendered). Purchase Price ....................... The Company will pay a cash price of $15.00 per Trust Security for Trust Securities validly tendered. How to Tender Trust Securities ....... See Section 3. Call the Information Agent, at the telephone number set forth on the back cover of this Offer to Purchase or consult your broker for assistance. Brokerage Commissions ................ None. Transfer Tax ......................... None, if payment is made to the registered holder. Expiration and Proration Dates ....... January 14, 2000, at 5:00 PM, New York City time, unless extended by the Company. Payment Date ......................... As soon as practicable after the Expiration Date (as defined in Section 1). Odd Lots ............................. There will be no proration of Trust Securities tendered by any securityholder of the Trust who (1) beneficially owns less than 100 Trust Securities in the aggregate (2) tenders all of such Trust Securities at the Purchase Price prior to the Expiration Date and (3) checks the "Odd Lots" box in the Letter of Transmittal. Withdrawal Rights .................... Tendered Trust Securities may be withdrawn at any time until 5:00 PM, New York City time, on Friday, January 14, 2000, unless the Offer is extended by the Company and after 5:00 PM, New York City time, on Friday, February 11, 2000 if not purchased pursuant to the Offer by such time. See Section 4. -3- Position of the Company and its Board of Directors; Tender by Certain Executive Officers and Directors of the Company ....................... Neither the Company nor its Board of Directors makes any recommendation to any securityholder of the Trust as to whether to tender or refrain from tendering Trust Securities. Certain executive officers and directors of the Company who are also Administrative trustees of the Trust may tender Trust Securities pursuant to the Offer. Background and Purpose of The Offer ............................ The Company is making the Offer because the Board of Directors of the Company believes that, given the Company's business, assets and prospects and the current market price of the Trust Securities, the purchase of the Trust Securities is in the best interests of the Company and is an attractive use of the Company's funds. -4- TABLE OF CONTENTS SUMMARY........................................................................3 INTRODUCTION...................................................................6 1. Number of Trust Securities; Proration....................................7 2. Tenders By Holders Of Fewer Than 100 Trust Securities....................9 3. Procedure for Tendering Trust Securities.................................9 4. Withdrawal Rights.......................................................13 5. Purchase of Trust Securities and Payment of Purchase Price..............13 6. Certain Conditions of the Offer.........................................14 7. Price Range of Trust Securities.........................................17 8. Interest of Directors and Executive Officers of the Company and Trustees of the Trust; Transactions and Arrangements Concerning the Trust Securities............................17 9. Background and Purpose of the Offer.....................................18 10. Certain Information About the Trust and the Company.....................19 11. Source and Amount of Funds..............................................23 12. Effects of the Offer on the Market for Trust Securities; Registration Under The Exchange Act.....................................24 13. Certain Legal Matters; Regulatory Approvals.............................24 14. Certain Federal Income Tax Consequences.................................25 15. Extension of the Offer; Termination; Amendments.........................27 16. Fees and Expenses.......................................................28 17. Additional Information..................................................28 18. Miscellaneous...........................................................29 -5- TO THE HOLDERS OF 9.4% CUMULATIVE TRUST PREFERRED SECURITIES: INTRODUCTION The Company hereby invites the securityholders of the Trust to tender Trust Securities to the Company, upon the terms and subject to the conditions of the Offer. The Company will pay $15.00 per Trust Security in cash (the "Purchase Price") for Trust Securities validly tendered pursuant to the Offer. The Company will buy 700,000 Trust Securities (or such lesser number of Trust Securities as are validly tendered) pursuant to the Offer. The Company reserves the right, in its sole discretion, to purchase more than 700,000 Trust Securities pursuant to the Offer. THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF TRUST SECURITIES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6. If more than 700,000 Trust Securities (or such greater number of Trust Securities as the Company may elect to purchase) are validly tendered before the Expiration Date (as defined in Section 1), the Company will accept Trust Securities for purchase first from all Odd Lot Owners (as defined in Section 2) who validly tender all of their Trust Securities and then on a pro rata basis, if necessary, from all other securityholders of the Trust who validly tender Trust Securities. See Sections 1 and 2. The Company will return all Trust Securities not purchased under the Offer because of proration. Tendering securityholders of the Trust will not be obligated to pay solicitation fees or, subject to Instruction 6 of the Letter of Transmittal, transfer taxes on the Company's purchase of Trust Securities pursuant to the Offer. The Company will pay certain fees and expenses of Continental Stock Transfer & Trust Company (the "Depositary") and Georgeson Shareholder Communications Inc., which is acting as the Information Agent in connection with the Offer. See Section 16. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS NOR THE TRUST OR ITS ADMINISTRATIVE TRUSTEES MAKES ANY RECOMMENDATION TO ANY SECURITYHOLDER OF THE TRUST AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING TRUST SECURITIES. SECURITYHOLDERS OF THE TRUST MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER TRUST SECURITIES AND, IF SO, HOW MANY TRUST SECURITIES TO TENDER. CERTAIN EXECUTIVE OFFICERS AND DIRECTORS OF THE COMPANY WHO ARE ALSO ADMINISTRATIVE TRUSTEES OF THE TRUST MAY TENDER TRUST SECURITIES PURSUANT TO THE OFFER. The Company is making the Offer because the Board of Directors of the Company believes that, given the Company's business, assets and prospects and the current market price of the Trust Securities, the purchase of the Trust Securities is in the best interests of Company and is an attractive use of the Company's funds. See Section 9. After this Trust Security repurchase is completed, the Company believes that it will have sufficient liquidity to operate its existing business. -6- THE OFFER PROVIDES SECURITYHOLDERS OF THE TRUST WITH THE OPPORTUNITY TO SELL ALL OR A PORTION OF THEIR TRUST SECURITIES AT THE PURCHASE PRICE OF $15.00 PER TRUST SECURITY. This Offer to Purchase contains forward-looking statements within the meaning of the federal securities laws. A number of factors could cause the Company's actual operating performance or financial results to differ materially from those anticipated. These include but are not limited to, the ability of the Company to successfully integrate any future businesses or product lines acquired into existing operations, the Company's growth strategy, customer concentration, outstanding indebtedness, dependence on weather conditions, seasonality, expansion and other activities of competitors, changes in federal or state environmental laws and the administration of such laws, protection of trademarks and other proprietary rights, the general condition of the economy and other risks detailed in the Company's Securities and Exchange Commission filings. As of the close of trading on December 14, 1999, there were 2,530,000 Trust Securities outstanding. The 700,000 Trust Securities that the Company is offering to purchase represent approximately 28% of the Trust Securities outstanding as of December 14, 1999. The Trust Securities are traded on the American Stock Exchange ("AMEX") under the symbol "UHG.Pr.A". On December 14, 1999, the last full trading day prior to the commencement of the Offer, the closing per Trust Security sales price as reported on AMEX was $14.125. THE COMPANY URGES SECURITYHOLDERS OF THE TRUST TO OBTAIN CURRENT QUOTATIONS OF THE MARKET PRICE OF THE TRUST SECURITIES. 1. Number of Trust Securities; Proration. Upon the terms and subject to the conditions of the Offer, the Company will accept for payment and purchase 700,000 Trust Securities (or such lesser number of Trust Securities as are validly tendered on or prior to the Expiration Date) at a price of $15.00 per Trust Security. THE TERM "EXPIRATION DATE" MEANS 5:00 P.M., NEW YORK CITY TIME, ON FRIDAY, JANUARY 14, 2000, UNLESS THE COMPANY, IN ITS SOLE DISCRETION, EXTENDS THE PERIOD OF TIME DURING WHICH THE OFFER IS OPEN, IN WHICH EVENT THE TERM "EXPIRATION DATE" SHALL REFER TO THE LATEST TIME AND DATE AT WHICH THE OFFER, AS SO EXTENDED BY THE COMPANY, EXPIRES. See Section 15 for a description of the Company's right to extend the time during which the Offer is open and to delay, terminate or amend the Offer. See also Section 6. Subject to Section 2, if the Offer is oversubscribed, Trust Securities tendered at the Purchase Price prior to the Expiration Date (except for tenders by Odd Lot Owners) will be subject to proration. The proration period also expires on the Expiration Date. The Company will, upon the terms and subject to the conditions of the Offer, pay $15.00 per Trust Security (the "Purchase Price") for Trust Securities validly tendered pursuant to the Offer. The Company will buy 700,000 Trust Securities (or such lesser number as are validly tendered at a price of $15.00 per Trust Security) pursuant to the Offer. As described in Section 15, the Company reserves the right, in its sole discretion, to purchase more than 700,000 Trust Securities pursuant to the Offer. -7- In accordance with Instruction 2 of the Letter of Transmittal, each securityholder of the Trust desiring to tender Trust Securities must tender Trust Securities only at the Purchase Price. All Trust Securities not purchased pursuant to the Offer, including Trust Securities not purchased because of proration, will be returned to the tendering securityholders of the Trust at the Company's expense as promptly as practicable following the Expiration Date. Upon the terms and subject to the conditions of the Offer, if the number of Trust Securities validly tendered prior to the Expiration Date is less than or equal to 700,000 Trust Securities (or such greater number of Trust Securities as the Company may elect to purchase pursuant to the Offer), the Company will purchase at the Purchase Price all Trust Securities so tendered. Upon the terms and subject to the conditions of the Offer, if prior to the Expiration Date more than 700,000 Trust Securities (or such greater number of Trust Securities as the Company elects to purchase) are validly tendered at the Purchase Price, the Company will accept Trust Securities for purchase in the following order of priority: o first, all Trust Securities validly tendered at the Purchase Price prior to the Expiration Date and not withdrawn by any Odd Lot Owner (as defined in Section 2) who: (1) tenders all Trust Securities beneficially owned by such Odd Lot Owner at the Purchase Price (partial tenders will not qualify for this preference); and (2) completes the section captioned "Odd Lots" on the Letter of Transmittal and, if applicable, on the Notice of Guaranteed Delivery; and o then, after the purchase of all foregoing Trust Securities, all other Trust Securities validly tendered at the Purchase Price before the Expiration Date and not withdrawn, on the pro rata basis, if necessary (with adjustments to avoid purchases of fractional Trust Securities). If the proration of tendered Trust Securities is required, the Company will determine the final proration factor as promptly as practicable after the Expiration Date. Proration for each securityholder of the Trust tendering Trust Securities other than Odd Lot Owners will be based on the ratio of the number of Trust Securities tendered by such securityholder to the total number of Trust Securities tendered by all securityholders other than Odd Lot Owners. Although the Company does not expect to be able to announce the final results of such proration until approximately seven AMEX trading days after the Expiration Date, the Company will announce preliminary results of proration by press release as promptly as practicable after the Expiration Date. Securityholders may obtain such preliminary information from the Information Agent, at the telephone number set forth on the back cover of this Offer to Purchase and may be able to obtain such information from their brokers or financial advisors. As described in Section 14, the number of Trust Securities that the Company purchases from a securityholder of the Trust, and the order in which they are purchased, may affect the federal income tax consequences of such purchase to the securityholder and therefore may be relevant to a Securityholder's decision whether to tender Trust Securities. The letter of -8- Transmittal affords each tendering securityholder of the Trust the opportunity to designate the order of priority in which Trust Securities tendered are to be purchased in the event of proration. 2. Tenders By Holders Of Fewer Than 100 Trust Securities. The Company, upon the terms and subject to the conditions of the Offer, will accept for purchase, without proration, all Trust Securities validly tendered on or prior to the Expiration Date at the Purchase Price by or on behalf of securityholders of the Trust who beneficially own and continue to own as of the Expiration Date, an aggregate of fewer than 100 Trust Securities ("Odd Lot Owners"). To avoid proration, however, the Odd Lot Owner must validly tender all Trust Securities that such Odd Lot Owner beneficially owns; partial tenders will not qualify for this preference. This preference is not available to holders of 100 or more Trust Securities, even if such holders have separate Certificates for fewer than 100 Trust Securities. Any Odd Lot Owner wishing to tender, free of proration, all Trust Securities beneficially owned by such Odd Lot Owner must complete the section captioned "Odd Lots" in the Letter of Transmittal and, if applicable, on the notice of Guaranteed Delivery. 3. Procedure for Tendering Trust Securities. Proper Tender of Trust Securities. For Trust Securities to be validly tendered pursuant to the Offer: o the certificates for such Trust Securities (or confirmation of receipt of such Trust Securities pursuant to the procedures for book-entry transfer set forth below), together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof) with any required signature guarantees or an Agent's Message (as defined below) in connection with a book entry transfer of Trust Securities, and any other documents required by the Letter of Transmittal, must be received on or before the Expiration Date by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase; or o the tendering securityholder of the Trust must comply with the guaranteed delivery procedure set forth below. The term "Agent's Message" means a message, transmitted by the Book-Entry Transfer Facility (as hereinafter defined) to and received by the Depositary and forming a part of a book-entry confirmation which states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Trust Securities which are the subject of such book-entry confirmation that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that securityholder may enforce such agreement against such participant. AS SPECIFIED IN INSTRUCTIONS 3 AND 4 OF THE LETTER OF TRANSMITTAL, EACH SECURITYHOLDER OF THE TRUST DESIRING TO TENDER TRUST -9- SECURITIES PURSUANT TO THE OFFER MUST PROPERLY INDICATE IN THE SECTION CAPTIONED "DESCRIPTION OF TRUST SECURITIES TENDERED" ON THE LETTER OF TRANSMITTAL THE NUMBER OF TRUST SECURITIES BEING TENDERED; PROVIDED, HOWEVER, THAT AN ODD LOT OWNER MAY CHECK THE BOX IN THE SECTION ENTITLED "ODD LOTS" INDICATING A TENDER OF ALL OF SUCH SECURITYHOLDER'S TRUST SECURITIES AT THE PURCHASE PRICE. Odd Lot Owners who tender all of their Trust Securities must complete the section entitled "Odd Lots" in the Letter of Transmittal and, if applicable, on the Notice of Guaranteed Delivery in order to qualify for the preferential treatment available to Odd Lot Owners as set forth in Section 1. Signature Guarantees And Method Of Delivery. No signature guarantee is required on the Letter of Transmittal if (i) the Letter of Transmittal is signed by the registered holder of the Trust Securities exactly as the name of the registered holder (which term, for purposes of this Section 3, includes any participant in The Depository Trust Company (the "Book-Entry Transfer Facility") whose name appears on a security position listing as the holder of the Trust Securities) appears on the certificate tendered therewith, and payment and delivery are to be made directly to such registered holder, or (ii) Trust Securities are tendered for the account of a member firm of a registered national securities exchange or the National Association of Securities Dealers, Inc. or by a commercial bank or trust company having an office, branch or agency in the United States which is a member of one of the Stock Transfer Association's approved medallion programs (such as the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program or the Stock Exchange Medallion Program) (each such entity, an "Eligible Institution"). In all other cases, all signatures on the Letter of Transmittal must be guaranteed by an Eligible Institution. See Instructions 1 and 5 of the Letter of Transmittal. If a certificate representing Trust Securities is registered in the name of a person other the signer of a Letter of Transmittal, or if payment is to be made, or Trust Securities not purchased or tendered are to be issued, to a person other than the registered holder, the certificate must be endorsed or accompanied by an appropriate stock power, in either case signed exactly as the name of the registered holder appears on the certificate, with the signature on the certificate or stock power guaranteed by an Eligible Institution. In all cases, payment for Trust Securities tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of certificates for such Trust Securities (or a timely confirmation of a book-entry transfer of such Trust Securities into the Depositary's account at the Book-Entry Transfer Facility), a properly completed and duly executed Letter of Transmittal (or facsimile thereof) with any required signature guarantees or an Agent's Message in connection with a Book-Entry Transfer and any other documents required. THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES, THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND RISK OF THE TENDERING SECURITYHOLDER OF THE TRUST. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. -10- Federal Income Tax Backup Withholding. To prevent federal income tax backup withholding equal to 31% of the gross payments made pursuant to the Offer, each securityholder of the Trust who does not otherwise establish an exemption from such withholding must notify the Depositary of such securityholder's correct taxpayer identification number (or certify that such taxpayer is awaiting a taxpayer identification number) and provide certain other information by completing a Substitute Form W-9 (included in the Letter of Transmittal). Foreign securityholders of the Trust may be required to submit Form W-8 (or a substitute form), certifying non-United States status, in order to avoid backup withholding. See Instruction 10 of the Letter of Transmittal. EACH SECURITYHOLDER OF THE TRUST SHOULD CONSULT SUCH SECURITYHOLDER'S TAX ADVISOR AS TO WHETHER SUCH SECURITYHOLDER IS SUBJECT TO OR EXEMPT FOR FEDERAL INCOME TAX WITHHOLDING. For a discussion of certain other federal income tax consequences to tendering Securityholders of the Trust, see Section 14. Book-Entry Delivery. The Depositary will establish an account with respect to the Trust Securities at the Book-Entry Transfer Facility for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in the Book-Entry Transfer Facility's system may make book-entry delivery of the Trust Securities by causing such facility to transfer such Trust Securities into the Depositary's account in accordance with such facility's procedure for such transfer. Even though delivery of Trust Securities may be effected through book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility, a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees or an Agent's Message in connection with a Book-Entry transfer and other required documents must, in any case, be transmitted to and received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Expiration Date, or the guaranteed delivery procedure set forth below must followed. DELIVERY OF THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. Guaranteed Delivery. If a securityholder of the Trust desires to tender Trust Securities pursuant to the Offer and such securityholder's certificates are not immediately available (or the procedures for book-entry transfer cannot be completed on a timely basis) or time will not permit all required documents to reach the Depositary by the Expiration Date, such Trust Securities may nevertheless be tendered, provided that all of the following conditions are satisfied: o such tender is made by or through an Eligible Institution; o the Depositary receives (by hand, mail, facsimile or telegram), on or prior to the Expiration Date, a properly completed and duly executed Notice of Guaranteed Delivery substantially in the form the Company has provided with this Offer to Purchase, which includes a guarantee by an Eligible Institution in the form set forth in such Notice of Guaranteed Delivery; and -11- o the certificates for all tendered Trust Securities in proper form for transfer (or confirmation of book-entry transfer of such Trust Securities into the Depositary's account at the Book-Entry Transfer Facility), together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof) (or, in case of a book-entry transfer, an Agent's Message) and any other documents required by the Letter of Transmittal, are received by the Depositary within three AMEX trading days after the date the Depositary receives such Notice of Guaranteed Delivery. Determination of Validity; Rejection of Trust Securities; Waiver of Defects; No Obligation to Give Notice of Defects. All questions as to the number of Trust Securities to be accepted, the price to be paid therefor, the form of documents, the terms of the Offer and the validity, form, eligibility (including the time of receipt) and acceptance for payment of any tender of Trust Securities will be determined by the Company, in its sole discretion, which determination shall be final and binding on all parties. The Company reserves the absolute right to reject any or all tenders it determines not to be in proper form or the acceptance of or payment for which may in the opinion of the Company's counsel be unlawful. The Company also reserves the absolute right to waive any of the conditions of the Offer or any defect or irregularity in the tender of any particular Trust Securities. No tender of Trust Securities will be deemed to be validly made until all defects and irregularities have been cured or waived. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as the Company determines. None of the Company, the Depositary or any other person is or will be obligated to give notice of any defects or irregularities in tenders, and none of them will incur any liability for failure to give such notice. Tender Constitutes an Agreement. The Company's acceptance for payment of Trust Securities tendered pursuant to the Offer will constitute a binding agreement between the tendering holder of the Trust Securities and the Company upon the terms and subject to the conditions of the Offer. Securityholder's Acceptance of Terms and Conditions of Offer; Representation and Warranty of Securityholder. It is a violation of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), for a person (directly or indirectly) to tender Trust Securities for his own account unless, at the time of tender and at the end of the proration period (including any extension thereof), the person so tendering (i) has a net long position equal to or greater than the amount of Trust Securities tendered in (x) Trust Securities or (y) other securities immediately convertible into, exercisable for, or exchangeable for the amount of Trust Securities tendered and will acquire such Trust Securities for tender by conversion, exercise or exchange of such other securities and (ii) will cause such Trust Securities to be delivered in accordance with the terms of the Offer. Rule 14e-4 provides a similar restriction applicable to the tender or guarantee of a tender on behalf of another person. The tender of Trust Securities pursuant to any one of the procedures described above will constitute the tendering securityholder's acceptance of the terms and conditions of the Offer as well as the tendering securityholder's representation and warranty that (i) such securityholder has a net long position in the Trust Securities being tendered within the meaning of Rule 14e-4, (ii) the tender of such Trust Securities complies with Rule 14e-4 and (iii) such securityholder has the full power and authority to tender such Trust Securities in accordance with the terms of the Offer. -12- 4. Withdrawal Rights. Except as otherwise provided in this Section 4, the tender of Trust Securities pursuant to the Offer is irrevocable. Trust Securities tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date and, unless theretofore accepted for payment by the Company, may also be withdrawn after 5:00 PM, New York City time, on Friday, February 11, 2000. For a withdrawal to be effective, the Depositary must timely receive (at one of its addresses set forth on the back cover of this Offer to Purchase) a written notice of withdrawal. Such notice of withdrawal must specify the name of the person who tendered the Trust Securities to be withdrawn, the number of Trust Securities to be withdrawn and the name of the registered holder, if different from that of the person who tendered such Trust Securities. If the certificates have been delivered or otherwise identified to the Depositary, then, prior to the release of such certificates, the tendering securityholder must also submit the serial numbers shown on the particular certificates evidencing the Trust Securities to be withdrawn and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution (except in the case of Trust Securities tendered by an Eligible Institution). In case of Trust Securities tendered by Book-Entry Transfer, the name and number of the account at the Book-Entry Facility to be credited with the withdrawn Trust Securities must be provided. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Company, in its sole discretion, which determination shall be final and binding on all parties. None of the Company, the Depositary, the Information Agent or any other person is or will be obligated to give any notice of any defects or irregularities in any notice of withdrawal, and none of them will incur any liability for failure to give such notice. Any Trust Securities properly withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. Withdrawn Trust Securities may, however, be retendered by the Expiration Date by again following any of the procedures described in Section 3. If the Company extends the Offer, is delayed in its purchase of Trust Securities or is unable to purchase Trust Securities pursuant to the Offer for any reason, then, without prejudice to the Company's rights under the Offer, the Depositary may, subject to applicable law, retain on behalf of the Company all tendered Trust Securities, and the Trust Securities may not be withdrawn except to the extent tendering Securityholders are entitled to withdrawal rights as described in this Section 4. 5. Purchase of Trust Securities and Payment of Purchase Price. Upon the terms and subject to the conditions of the Offer, the Company will pay the Purchase Price for validly tendered Trust Securities, and will accept for payment (and thereby purchase) as soon as practicable after the Expiration Date Trust Securities validly tendered. For purposes of the Offer, the Company will be deemed to have accepted for payment (and therefore purchased), subject to proration, Trust Securities which are tendered at the Purchase Price and not withdrawn when, as and if it gives oral or written notice to the Depositary of its acceptance of such Trust Securities for payment pursuant to the Offer. Upon the terms and subject to the conditions of the Offer (including proration), the Company will purchase and pay the Purchase Price for 700,000 Trust Securities (subject to increase or decrease as provided in Section 1 and Section 15) or such lesser number of Trust -13- Securities as are validly tendered as promptly as practicable after the Expiration Date. No alternative, conditional or contingent tenders will be accepted, and no fractional Trust Securities will be purchased. Payment for Trust Securities purchased pursuant to the Offer will be made by depositing the aggregate Purchase Price therefor with the Depositary, which will act as agent for tendering securityholders solely for the purpose of receiving payment from the Company and transmitting payment to the tendering securityholders. In the event of proration, the Company will determine the proration factor and pay for those tendered Trust Securities accepted for payment as soon as practicable after the Expiration Date; however, the Company does not expect to be able to announce the final results of any such proration until approximately seven AMEX trading days after the Expiration Date. Certificates for all Trust Securities not purchased, including Trust Securities not purchased due to proration, will be returned (or, in the case of Trust Securities tendered by book-entry transfer, such Trust Securities will be credited to the account maintained with the Book-Entry Transfer Facility by the participant therein who so delivered such Trust Securities) as soon as practicable after the Expiration Date or termination of the Offer without expense to the tendering Securityholder. UNDER NO CIRCUMSTANCES WILL THE COMPANY PAY INTEREST ON THE PURCHASE PRICE, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING PAYMENT. IN ADDITION, IF CERTAIN EVENTS OCCUR, THE COMPANY MAY NOT BE OBLIGATED TO PURCHASE TRUST SECURITIES PURSUANT TO THE OFFER. See Section 6. The Company will pay all transfer taxes, if any, payable on the transfer of Trust Securities purchased pursuant to the Offer; provided, however, that if payment of the Purchase Price is to be made to, or (in the circumstances permitted by the Offer) if unpurchased Trust Securities are to be registered in the name of, any person other than the registered holder, or if tendered certificates are registered in the name of any person other than the person signing the Letter of Transmittal, the amount of all stock transfer taxes, if any (whether imposed on the registered holder or such other person), payable on account of the transfer to such person will be deducted from the Purchase Price unless evidence satisfactory to the Company of the payment of such taxes or exemption therefrom is submitted. See Instruction 6 of the Letter of Transmittal. THE COMPANY MAY BE REQUIRED TO WITHHOLD AND REMIT TO THE INTERNAL REVENUE SERVICE (THE "IRS") 31% OF THE GROSS PROCEEDS PAID TO ANY TENDERING SECURITYHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY AND SIGN THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL. SEE SECTION 3. 6. Certain Conditions of the Offer. Notwithstanding any other provision of the Offer, the Company shall not be required to accept for payment, purchase or pay for any Trust Securities tendered, and may terminate or amend the Offer or may postpone the acceptance for payment of, the purchase of and the payment for any Trust Securities tendered, if at any time on or after January 14, 2000, and at or before the time of purchase of any such Trust Securities, any of the following events shall have occurred (or shall have been determined by the Company to have occurred) which, in the Company's sole judgment in any such case and regardless of the circumstances (including any -14- action or inaction by the Company), makes it inadvisable to proceed with the Offer or with such purchase or payment: o there shall have been threatened, instituted or pending any action or proceeding by any government or governmental, regulatory or administrative agency, authority or tribunal or any other person, domestic or foreign, or before any court or governmental, regulatory or administrative authority, agency or tribunal, domestic or foreign, which; (1) challenges, seeks to make illegal, delays or otherwise, directly or indirectly, restrains or prohibits the making of the Offer, the acquisition of Trust Securities pursuant to the Offer or otherwise relates in any manner to or affects the Offer or (2) in the Company's sole judgment, could materially affect the business, condition (financial or other), income, operations or prospects of the Company and its subsidiaries, taken as a whole, or otherwise materially impair in any way the contemplated future conduct of the business of the Company or any of its subsidiaries or materially impair the Offer's contemplated benefits to the Company; or o there shall have been any action threatened, instituted, pending or taken, or approval withheld, or any statute, rule, regulation, judgment, order or injunction threatened, proposed, sought, promulgated, enacted, entered, amended, enforced or deemed to be applicable to the Offer or the Company or any of its subsidiaries by any court or any government or governmental, regulatory or administrative authority, agency or tribunal, domestic or foreign, which, in the Company's sole judgment, would or might directly or indirectly: (1) challenge, seek to make illegal, delay or otherwise, directly or indirectly, restrain or prohibit the making of the Offer, the acquisition of Trust Securities pursuant to the Offer or otherwise relate in any manner to or affect the Offer or (2) materially affect the business, condition (financial or other), income, operations or prospects of the Company and its subsidiaries, taken as a whole, or otherwise materially impair in any way the contemplated future conduct of the business of the Company or any of its subsidiaries or materially impair the Offer's contemplated benefits to the Company; or o there shall have occurred: (1) the declaration of any banking moratorium or suspension of payments in respect of banks in the United States, (2) any general suspension of trading in, or limitation on prices for, securities on any United States national securities exchange or in the over-the-counter market, (3) the commencement of a war, armed hostilities or any other national or international crisis directly or indirectly involving the United States, (4) any limitation (whether or not mandatory) by any governmental, regulatory or administrative agency or authority on, or any event which, in the Company's sole judgment, might affect, the extension of credit by banks or other lending institutions in the United States, (5) any significant decrease in the market price of the Trust Securities or in the general level of market prices of equity securities in the United States or abroad, (6) any change in the general political, market, economic or financial conditions in the United States or abroad that could have a material adverse effect on the Company's business, operations or prospects or the trading in the Trust Securities or that, in the sole judgment of the Company, makes it inadvisable to proceed with the Offer or (7) in the -15- case of any of the foregoing existing at the time of the commencement of the Offer, in the Company's sole judgment, a material acceleration or worsening thereof; or o any change shall have occurred, be pending or be threatened in the business, condition (financial or other), income, operations, Trust Security ownership or prospects of the Company and its subsidiaries taken as a whole, which, in the Company's sole judgment, is or may be material to the Company, or any other event shall have occurred which, in the Company's sole judgment, may impair the Offer's contemplated benefits to the Company; or o a tender or exchange offer for any or all of the Trust Securities (other than the Offer), or any merger, business combination or other similar transaction with or involving the Company or any subsidiary, shall have been proposed, announced or made by any person; or o (1) any entity, "group" (as that term is used in Section 13(d)(3) of the Exchange Act) or person shall have acquired or proposed to acquire beneficial ownership of more than 5% of the outstanding Trust Securities (other than any such person, entity or group who has filed a Schedule 13D or Schedule 13G with the Securities and Exchange Commission (the "Commission") before December 15, 1999), (2) any such entity, group or person who has filed a Schedule 13D or Schedule 13G with the Commission before December 15, 1999 shall have acquired or proposed to acquire beneficial ownership of an additional 2% or more of the outstanding Trust Securities or (3) any person, entity or group shall have made a public announcement reflecting an intent to acquire the Company or any of its subsidiaries or any of their respective assets or securities. The foregoing conditions are for the Company's sole benefit and may be asserted by the Company regardless of the circumstances giving rise to any such condition (including any action or inaction by the Company) or may be waived by the Company in whole or in part. The Company's failure at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right, and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time. Any determination by the Company concerning the events described in this Section 6 shall be final and binding on all parties. -16- 7. Price Range of Trust Securities. The Trust Securities are traded on AMEX under the symbol "UHG.Pr.A." The following table sets forth for the periods indicated the high and low sales prices per Trust Security as reported on AMEX, during the period from April 1998 (the first month of trading for the Trust Securities) until December 14, 1999. Fiscal Year Ended June 30, 1998 High Low 4th Quarter (commencing April 1998) .............. $25.2500 $24.3750 Fiscal Year Ended June 30, 1999 1st Quarter ...................................... $24.9375 $22.0000 2nd Quarter ...................................... 23.3750 19.8750 3rd Quarter ...................................... 22.5625 22.0000 4th Quarter ...................................... 22.5000 22.6250 Fiscal Year Ended June 30, 2000 1st Quarter ...................................... $21.6250 $15.2500 2nd Quarter (through December 14, 1999 ........... 15.6875 12.0000 On December 14, 1999, the last trading day prior to the commencement of the Offer, the closing per Trust Security sales price as reported on AMEX was $14.125. THE COMPANY URGES SECURITYHOLDERS OF THE TRUST TO OBTAIN CURRENT QUOTATIONS OF THE MARKET PRICE OF THE TRUST SECURITIES. 8. Interest of Directors and Executive Officers of the Company and Trustees of the Trust; Transactions and Arrangements Concerning the Trust Securities. As of December 14, 1999, the Company had issued and outstanding 2,530,000 Trust Securities. The 700,000 Trust Securities that the Company is offering to purchase represent approximately 28% of the Trust Securities outstanding as of December 14, 1999. Certain executive officers and directors of the Company who are also Administrative trustees of the Trust may participate in the Offer on the same basis as the Trust's other securityholders. The Company has been advised that two executive officers may tender up to an aggregate of 25,800 Trust Securities pursuant to the Offer. Robert Kassel, Chief Executive Officer, President and Chairman of the Board of Directors of the Company and an Administrative Trustee of the Trust currently holds 18,800 of such Trust Securities and Richard Raleigh, Chief Operating Officer and a Director of the Company and an Administrative Trustee of the Trust currently holds 7,000 of such Trust Securities. Neither the Company nor, to the best of the Company's knowledge, any of its affiliates, directors or executive officers, or any of the executive officers or directors of its affiliates, is a party to any contract, arrangement, understanding or relationship with any other person relating, directly or indirectly, to the Offer with respect to any securities of the Trust (including, but not -17- limited to, any contract, arrangement, understanding relationship concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guaranties of loans, guaranties against loss or the giving or withholding of proxies, consents or authorizations). Except as disclosed in this Offer and the documents incorporated by reference herein, the Company has no plans or proposals which relate to or would result in (a) the acquisition by any person of additional securities of the Trust or the disposition of securities of the Trust; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Trust or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the Trust or any of its subsidiaries; (d) any change in the present management of the Trust; (e) any material change in the present dividend rate or policy, indebtedness or capitalization of the Trust ; (f) any other material change in the Trust's structure or business; (g) any actions which may impede the acquisition of control of the Trust by any person; (h) a class of equity security of the Trust being delisted from a national securities exchange or ceasing to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) a class of equity securities of the Trust becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act; or (j) the suspension of the any obligation the Trust may have to file reports pursuant to Section 15(d) of the Exchange Act. 9. Background and Purpose of the Offer. The Company is making the Offer because the Board of Directors of the Company believes that, given the Company's business, assets and prospects and the current market price of the Trust Securities the purchase of the Trust Securities is in the best interests of the Company and is an attractive use of the Company's funds. Based on the foregoing, the Board of Directors decided that it would be in the best interests of the Company to make the Offer and to consummate the repurchase of Trust Securities in accordance with the terms of the Offer. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS NOR THE TRUST OR ITS ADMINISTRATIVE TRUSTEES MAKES ANY RECOMMENDATION TO ANY SECURITYHOLDER OF THE TRUST AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ANY OR ALL OF SUCH SECURITYHOLDER'S TRUST SECURITIES AND HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY SUCH RECOMMENDATION. SECURITYHOLDERS OF THE TRUST ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION IN THE OFFER, CONSULT THEIR OWN INVESTMENT AND TAX ADVISORS AND MAKE THEIR OWN DECISIONS WHETHER TO TENDER TRUST SECURITIES AND, IF SO, HOW MANY TRUST SECURITIES TO TENDER. Any Trust Securities that the Company acquires pursuant to the Offer are expected to either become authorized but unissued Trust Securities or held in treasury by the Company and will be available for the Company to reissue without further securityholder action (except as required by applicable law or the rules of any securities exchange, including the AMEX, on which the Trust Securities are listed). -18- 10. Certain Information About the Trust and the Company. The Trust is a statutory business trust created under Delaware law pursuant to (i) the Amended and Restated Trust Agreement of the Trust among the Company, as depositor, the Wilmington Trust Company, as delaware trustee, the Wilmington Trust Company as property trustee, certain administrative trustees and the holders of the Trust Securities (the "Trust Agreement"), and (ii) the filing of a Certificate of Trust with the Delaware Secretary of State on March 16, 1998. The Trust's business and affairs are conducted by the property trustee, the Delaware trustee and three individual administrative trustees who are officers of the Company. The Trust was created and exists for the exclusive purposes of (i) issuing and selling the Trust Securities which sales were effected in April 1998, (ii) using the proceeds from the sale of the Trust Securities to acquire the 9.4% Junior Subordinated Deferrable Interest Debentures (the "Junior Subordinated Debentures") issued by the Company which mature on April 15, 2028 and (iii) engaging in only those other activities necessary, advisable or incidental thereto. The Junior Subordinated Debentures are the sole assets of the Trust and payments by the Company under the Junior Subordinated Debentures and the Expense Agreement between the Company and the Trust are the sole revenues of the Trust. The Junior Subordinated Debentures bear interest at an annual rate of 9.4% payable monthly in arrears on the 15th day of each calendar month. Distributions on the Trust Securities are paid at the annual rate of 9.4% of the stated liquidation amount of $25 per Trust Security, payable monthly in arrears on the 15th day of each calendar month. All securityholders tendering Trust Securities pursuant to this Offer shall continue to receive distributions on such Trust Securities until the Expiration Date. All of the common securities of the Trust are owned by the Company. The common securities rank pari passu, and payments will be made thereon pro rata, with the Trust Securities, except that upon the occurrence and during the continuance of an event of default under the Trust Agreement resulting from an event of default under the Indenture dated as of April 17, 1998 between the Company and the Wilmington Trust Company, as trustee, the rights of the Company as holder of the common securities to payment in respect of distributions and payments upon liquidation, redemption or otherwise are subordinated to the rights of the holders of the Trust Securities. The Trust has a term of 31 years, but may dissolve earlier as provided in the Trust Agreement. The Company has executed an irrevocable guarantee, on a subordinated basis, of the Trust's obligations under the Trust Securities, but only to the extent that the Trust has funds sufficient to make such payments, and therefore is not a guarantee of collection (the "Guarantee"). The Company has agreed to pay in full on a subordinated basis, to the extent set forth therein, the Guarantee Payments (as defined below) to the holders of the Trust Securities, as and when due, regardless of any defense, right of set-off or counterclaim that the Trust may have or assert, other than the defense of payment. The following payments with respect to the Trust Securities, to the extent not paid by or on behalf of the Trust (the "Guarantee Payment'), are subject to the Guarantee: (i) any accumulated and unpaid Distributions (as such term is defined in the Guarantee) required to be paid on the Trust Securities, to the extent that the Trust has funds on hand available therefor at such time, (ii) the redemption price with respect to any Trust Securities called for redemption, to the extent that the Trust has funds on hand available therefor at such time, and (iii) upon a voluntary or involuntary dissolution, winding up or liquidation of the Trust (unless the Junior Subordinated Debentures are distributed to holders of the Trust Securities), the lesser of (a) the Liquidation Distribution (as such term is defined in the Guarantee) and (b) the amount of assets of the Trust remaining available for distribution to holders of Trust Preferred -19- Securities, after satisfaction of liabilities to creditors of the Trust as required by law. The Company's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the Company to the holders of the Trust Securities or by causing the Trust to pay such amounts to such holders. The Company is a leading manufacturer and marketer of a broad range of consumer lawn and garden products. The Company's products include weed preventive landscape fabrics, fertilizer spikes, decorative landscape edging, weed trimmer replacement heads, shade cloth and root feeders, which are sold under recognized brand names such as WeedBlock(R) , Jobe's(R), Emerald Edge(R), Weed Wizard(TM) Shade Fabric(TM), Ross(R), and Tensar(R). The Company markets its products through most large national home improvement and mass merchant retailers, including Home Depot, Lowe's, Kmart, Wal-Mart and Home Base. The Trust and the Company each have their principal offices located at 655 Montgomery Street, San Francisco, California 94111 and their telephone number is (415) 616-8111. -20- SUMMARY HISTORICAL FINANCIAL INFORMATION The table below includes summary historical financial information of the Company. Certain information concerning the Trust, which is a subsidiary of the Company and is exempt from reporting requirements under Sections 13 or 15(d) under the Exchange Act, is included in the Company's financial statements. The summary financial information has been derived from the audited consolidated financial statements as reported in the Company's Annual Report on Form 10-K for the year ended June 30, 1999 and the unaudited consolidated financial statements as reported in the Company's quarterly report on Form 10-Q for the quarter ended September 30, 1999, and such reports are incorporated herein by reference. In the opinion of management, the unaudited financial statements for the three months ended September 30, 1999 and 1998 reflect all adjustment necessary for a fair statement of the results of operations for the interim periods. However, the results of operations for any interim period are not necessarily indicative of results for the full year. The summary historical financial information should be read in conjunction with, and is qualified in its entirety by reference to, the consolidated financial statements and related notes included in the reports referred to above. Copies of these reports may be obtained from the Commission in the manner specified in "Additional Information" below. U.S. HOME & GARDEN INC. SUMMARY HISTORICAL FINANCIAL INFORMATION (In thousands, except per Share data)
Three Months Ended Year Ended September 30, June 30, -------------------- --------------------- 1999 1998 1999 1998 ------- ------- ------- ------- (unaudited) Income Statement Data: Net sales and operating revenues and other revenues $12,985 $10,768 $89,346 $67,149 Income/(loss) before extraordinary item (1,981) (1,223) 2,049 6,976 Net income/(loss) (1,981) (1,223) 2,049 5,526 Balance Sheet Data: Working capital 29,517 42,868 32,874 46,743 Total assets 130,408 116,937 137,464 126,813 Total tangible assets 48,774 53,770 55,267 63,418 Total indebtedness 78,250 63,250 78,750 63,250 Total Stockholders' equity 43,546 47,619 46,484 51,599 Per Share Data: Income per Common Share before extraordinary item (0.10) (0.06) 0.10 0.39 Extraordinary items -- -- -- (0.08) Net income per Common Share (0.10) (0.06) 0.10 0.31 Net income per Share on a fully diluted basis (0.10) (0.06) 0.09 0.24 Ratio of earnings to fixed charges(1) N.A. N.A. 139% 383% Book value per Share as of the most recent fiscal $2.24 $2.38 $2.39 $2.59 year end and as of the date of the latest interim balance sheet
NOTES TO SUMMARY HISTORICAL FINANCIAL INFORMATION (1) Due to the seasonal nature of the Company's operations, the Company incurred pre tax losses from operations during the quarter ended September 30, on a historical and pro forma basis. -21- SUMMARY UNAUDITED PRO FORMA FINANCIAL INFORMATION The following unaudited pro forma financial information sets forth for the periods set forth below the historical financial information concerning the Company as adjusted to give effect to the purchase of 700,000 Trust Securities at a Purchase Price of $15.00 per Trust Security pursuant to the Offer to Purchase. The pro forma adjustments assume the transaction occurred, for purposes of the summary consolidated income statement, as of the first day of the period presented, and, for purposes of the consolidated balance sheet, as of the balance sheet date. The pro forma financial information does not purport to be indicative of the results that may be obtained in the future or that would have actually been obtained had the Offer occurred as of the dates indicated. The pro forma information should be read in conjunction with the Summary Historical Financial Information. U.S. HOME & GARDEN INC. SUMMARY UNAUDITED PRO FORMA FINANCIAL INFORMATION (In thousands, except per Share data)
Three Months Ended Year Ended September 30, June 30, -------------------- -------- 1999 1998 1999 ------- ------- ------- (unaudited) Income Statement Data: Net sales and operating revenues and other revenues $12,985 $10,768 $89,346 Income/(loss) before extraordinary item (1,870) (1,108) 2,534 Net income/(loss) (2) (1,870) 2,577 6,219 Balance Sheet Data: Working capital 26,602 40,457 29,833 Total assets 127,204 113,737 134,634 Total tangible assets 46,359 51,359 53,226 Total indebtedness 71,250 56,250 71,750 Total Stockholders' equity 47,342 51,419 50,654 Per Share Data: Income per Common Share before extraordinary item (0.10) (0.05) 0.13 Extraordinary items (2) -- 0.18 0.19 Net income per Common Share (0.10) 0.13 0.32 Net income per Share on a fully diluted basis (0.10) 0.13 0.26 Ratio of earnings to fixed charges: (1) N.A. N.A. 156% Book value per Share as of the most recent fiscal $2.43 $2.57 $2.61 year end and as of the date of the latest interim balance sheet
NOTES TO UNAUDITED PROFORMA FINANCIAL INFORMATION (1) Due to the seasonal natural of the Company's operations, the Company incurred pre tax losses from operations during the quarters ended September 30 on a historical and pro forma basis. (2) The extraordinary gain for retirement of debt is $3,685,000. This gain results from a $7 million pre-tax gain less an $889,000 write off of deferred debt costs and a tax provision of $2,426,000. -22- 11. Source and Amount of Funds. Assuming that the Company purchases 700,000 Trust Securities pursuant to the Offer at a Purchase Price of $15.00 per Trust Security, the Company expects the maximum aggregate cost of the Offer, including all fees and expenses applicable to the Offer, to be approximately $10,600,000. The Company anticipates that the funds necessary to purchase Trust Securities pursuant to the Offer and to pay the related fees and expenses will come from its credit facility. On October 13, 1998, the Company entered into a credit agreement (the "Credit Agreement") with the Bank of America N.A. (the "Bank"). The Credit Agreement provides for a revolving credit facility of up to $25 million to finance the cost of acquisitions by the Company (the "Acquisition Facility") and a revolving credit facility of up to $20 million to finance the Company's working capital requirements (the "Working Capital Facility"). Both of such credit facilities expire on October 14, 2001, at which time borrowings under the acquisition Facility are payable on a term loan basis in quarterly installments commencing December 31, 2001, with the final installment maturing on September 30, 2004 and, unless refinanced, borrowings under the Working Capital Facility mature on such expiration date. In addition, borrowings under the Acquisition Facility are subject to mandatory prepayment from the net proceeds of certain dispositions of assets, and certain losses or condemnation of property, from excess cash (as defined in the Credit Agreement) generated by the Company and its subsidiaries and 50% of the net proceeds of any new issuances of the Company's capital stock after such expiration date. Mandatory prepayments by the Company prior to such expiration have the effect of reducing the Acquisition Facility by the prepayment amount. In addition, during a period of 30 consecutive days during the period July 1 to December 1 in each year, no borrowings can be outstanding under the Working Capital Facility. The Company has the right under the Credit Agreement to terminate or permanently reduce the Bank's commitments under such credit facilities in the minimum amount of $1.0 million and multiples thereof subject to the payment to the Bank of "reduction fees" of 1% of the amount terminated or reduced on or prior to December 31, 1999 and 0.5% of the amounts terminated or reduced thereafter. Borrowings under such credit facilities bear interest at variable annual rates selected by the Company based on LIBOR ("London Interbank Offered Rate"), or the higher of 0.5% above the then current Federal Funds Rate or the Bank's prime rate plus, in each case, an applicable marginal rate of interest. The Company's obligations under the Credit Agreement are guaranteed by its subsidiaries and secured by a security interest in favor of the Bank in substantially all of the assets of the Company and substantially all of its subsidiaries. Upon the occurrence of an event of default specified in the Credit Agreement, the maturity of loans outstanding under the Credit Agreement may be accelerated by the Bank, which may also foreclose its security interest on the assets of the Company and its subsidiaries. Under the Credit Agreement, the Company and its subsidiaries are required, among other things to comply with (a) certain limitations on incurring additional indebtedness, liens and guaranties, on dispositions of assets, payment of cash dividends and cash redemption and repurchases of securities, and (b) certain limitations on merger, liquidations, changes in business, investments, loans and advances, affiliate transactions and certain acquisitions. In -23- addition, the Company must comply with certain financial tests and ratios. A violation of any of these covenants constitutes an event of default under the Credit Agreement. 12. Effects of the Offer on the Market for Trust Securities; Registration Under The Exchange Act. The Company's purchase of Trust Securities pursuant to the Offer will reduce the number of Trust Securities that might, otherwise trade publicly and is likely to reduce the number of securityholders of the Trust. Nonetheless, the Company anticipates that there will still be a sufficient number of Trust Securities outstanding and publicly traded following the Offer to ensure a continued trading market in the Trust Securities on AMEX. Based on the published guidelines of AMEX, the Company believes that its purchase of Trust Securities pursuant to the Offer will not cause its remaining Trust Securities to be delisted from AMEX. The Trust Securities are currently "margin securities" under the rules of the Federal Reserve Board. This has the effect, among other things, of allowing brokers to extend credit on the collateral of the Trust Securities. The Company believes that, following the purchase of Trust Securities pursuant to the Offer, the Trust Securities will continue to be "margin securities" for purposes of the Federal Reserve Board's margin regulations. The Trust Securities are registered under the Exchange Act, however, the Trust is exempt from the reporting obligations under Sections 13 and 15(d) of the Exchange Act by virtue of its status as solely a financing subsidiary of the Company that has no independent operation and whose obligations with respect to the Trust Securities are subject to the Guarantee. The Company believes that its purchase of Trust Securities pursuant to the Offer will not result in the Trust Securities becoming eligible for deregistration under the Exchange Act. 13. Certain Legal Matters; Regulatory Approvals. The Company is not aware of any license or regulatory permit that is material to its business that might be adversely affected by its acquisition of Trust Securities as contemplated in the Offer or of any approval or other action by any government or governmental, administrative or regulatory authority or agency, domestic or foreign, that would be required for the Company's acquisition or ownership of Trust Securities as contemplated by the Offer. After this Trust Security repurchase is completed, the Company believes that it will have sufficient liquidity to operate its existing business. Should any such approval or other action be required, the Company currently contemplates that it will seek such approval or other action. The Company cannot predict whether it may determine that it is required to delay the acceptance for payment of, or payment for, Trust Securities tendered pursuant to the Offer pending the outcome of any such matter. There can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that the failure to obtain any such approval or other action might not result in adverse consequences to the Company's business. The Company's obligations under the Offer to accept for payment and pay for Trust Securities are subject to certain conditions. See Section 6. -24- 14. Certain Federal Income Tax Consequences. The following discussion is a summary of the material federal income tax consequences to holders of the Trust Securities arising from the disposition thereof pursuant to the Offer. The following discussion assumes the accuracy of the facts set forth in the Offer to Purchase. The discussion set forth in this section, unless otherwise stated, deals only with Trust Securities held as capital assets by United States Persons (defined below) As used herein, a "United States Person" means a person that is (i) a citizen or resident of the United States as determined for United States federal income tax purposes, (ii) a corporation, partnership or other entity created or organized in or under the laws of the United States or any political subdivision thereof, (iii) an estate the income of which is subject to United States federal income taxation regardless of its source, or (iv) a trust if a United States court is able to exercise primary supervision over the administration of such trust and one or more United States persons have the authority to control all substantial decisions of such trust. The tax treatment of holders may vary depending on their particular situation. The following discussion does not address all the tax consequences that may be relevant to a particular holder or to holders who may be subject to special tax treatment, such as banks, real estate investment trusts, regulated investment companies, insurance companies, dealers in securities or currencies, tax-exempt investors, foreign investors, investors that hold the Trust Securities as part of a hedging, straddle, constructive sale, or conversion or other risk reduction transaction or whose functional currency is not the U.S. dollar. In addition, the following discussion does not include any description of any alternative minimum tax consequences or the tax laws of any state, local or foreign government that may be applicable to a holder of Trust Securities. The following discussion is based on the Internal Revenue Code of 1986, as amended (the "Code"), the Treasury regulations promulgated thereunder and administrative and judicial interpretations thereof, as of the date hereof, all of which are subject to change, possibly on a retroactive basis. The following discussion does not address the tax consequences that might be relevant to persons that are not United States Persons ("non-United States Persons"). Non-United States Persons should consult their own tax advisors as to the specific United States federal income and other tax consequences of the purchase, ownership and disposition of Trust Preferred Securities. The authorities on which the discussion herein are based are subject to various interpretations, and is not binding on the IRS or the courts, either of which could take a contrary position. Moreover, no rulings have been or will be sought from the IRS with respect to the transactions described herein. Accordingly, there can be no assurance that the IRS will not challenge the interpretations expressed herein or that a court would not sustain such a challenge. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF DISPOSITION OF THE TRUST SECURITIES PURSUANT TO THE OFFER INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN, AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR OTHER TAX LAWS. -25- Classification of the Trust In connection with the issuance of the Trust Securities, the Company believes that, under current law and assuming compliance with the terms of the Trust Agreement, the Trust has been and will be classified as a grantor trust and not as an association taxable as a corporation for United States federal income tax purposes. As a result, each beneficial owner of the Trust Securities has been and will be treated as owning an undivided beneficial interest in the Junior Subordinated Debentures. Accordingly, each securityholder has been and will be required to include in its gross income its pro rata share of the interest income or original issue discount ("OID") that is paid or accrued on the Junior Subordinated Debentures. Classification of the Junior Subordinated Debentures The Company intends to take the position that the Junior Subordinated Debentures will be classified for United States federal income tax purposes as indebtedness of the Company under current law, and, by acceptance of a Trust Security, each holder covenanted to treat the Junior Subordinated Debentures as indebtedness and the Trust Securities as evidence of an indirect beneficial ownership interest in the Junior Subordinated Debentures. No assurance can be given relating to the classification of the Junior Subordinated Debentures as indebtedness and no assurance can be given that such position of the Company will not be challenged by the IRS or, if challenged, that such a challenge will not be successful. The remainder of this "Certain Federal Income Tax Consequences" section assumes that the Junior Subordinated Debentures will be classified for United States federal income tax purposes as indebtedness of the Company. Sales or Redemption of Trust Preferred Securities Gain or loss will be recognized by a securityholder on the sale of Trust Securities pursuant to the Offer in an amount equal to the difference between the amount realized (which for this purpose, will exclude amounts attributable to accrued interest or OID not previously included in income) and the securityholder's adjusted tax basis in the Trust Securities sold or so redeemed. Gain or loss recognized by a securityholder on Trust Securities held for more than one year will generally be taxable as long-term capital gain or loss. Amounts attributable to accrued interest or OID with respect to a securityholder's pro rata share of the Junior Subordinated Debentures not previously included in income will be taxable as ordinary income. Backup Withholding Tax To prevent federal income tax backup withholding equal to 31% of the gross payments made pursuant to the Offer, each securityholder of the Trust who does not otherwise establish an exemption from such withholding must notify the Depositary of such securityholder's correct taxpayer identification number (or certify that such taxpayer is awaiting a taxpayer identification number) and provide certain other information by completing a Substitute Form W-9 (included in the Letter of Transmittal). Foreign securityholders of the Trust may be required to submit Form W-8 (or a substitute form), certifying non-United States status, in order to avoid backup withholding. See Instruction 10 of the Letter of Transmittal. -26- EACH SECURITYHOLDER OF THE TRUST SHOULD CONSULT SUCH SECURITYHOLDER'S TAX ADVISOR AS TO WHETHER SUCH SECURITYHOLDER IS SUBJECT TO OR EXEMPT FROM FEDERAL INCOME TAX WITHHOLDING. 15. Extension of the Offer; Termination; Amendments. The Company expressly reserves the right, at any time or from time to time, in its sole discretion, and regardless of whether any of the conditions specified in Section 6 shall have occurred, to extend the period of time during which the Offer is open by giving oral or written notice of such extension to the Depositary and making a public announcement of the extension. The Company also expressly reserves the right, in its sole discretion, to terminate the Offer and not accept for payment or pay for any Trust Securities not previously accepted for payment or paid for or, subject to applicable law, to postpone payment for Trust Securities upon the occurrence of any of the conditions specified in Section 6 by giving oral or written notice of the termination or postponement to the Depositary and making a public announcement. The Company's reservation of the right to delay payment for Trust Securities that it has accepted for payment is limited by Rules 13e-4(f)(2) and 13e-4(f)(5) promulgated under the Exchange Act. Rule 13e-4(f)(2) requires that the Company permit Trust Securities tendered pursuant to the Offer to be withdrawn: (i) at any time during the period the Offer remains open and (ii) if not yet accepted for payment, after the expiration of forty business days from the commencement of the Offer. Rule 13e-4(f)(5) requires that the Company must either pay the consideration offered or return the Trust Securities tendered promptly after the termination or withdrawal of the Offer. Subject to compliance with applicable law, the Company further reserves the right, in its sole discretion, at any time or from time to time, to amend the Offer in any respect, including increasing or decreasing the number of Trust Securities the Company may purchase or the price it may pay pursuant to the Offer. Amendments to the Offer may be made at any time or from time to time by public announcement of the amendment, and in the case of an extension, the announcement will be issued no later than 9:00 A.M., New York City time, on the next business day after the previously scheduled Expiration Date. Any public announcement made pursuant to the Offer will be disseminated promptly to Securityholders in a manner reasonably designed to inform Securityholders of such change. Without limiting the manner in which the Company may choose to make a public announcement, except as required by applicable law, the Company has no obligation to publish, advertise or otherwise communicate any such public announcement other than by making a release to the PR Newswire. If the Company materially changes the terms of the Offer or the information concerning the Offer, or if it waives a material condition of the Offer, the Company will extend the Offer to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(2) promulgated under the Exchange Act. The minimum period during which an offer must remain open following material changes in the terms of the offer or information concerning the offer (other than a change in price or a change in percentage of securities sought) will depend on the facts and circumstances, including the relative materiality of such terms or information. If (i) the Company increases or decreases the price to be paid for Trust Securities, the Company increases the number of Trust Securities being sought and any such increase in the number of Trust Securities being sought exceeds 2% of the -27- outstanding Trust Securities, or the Company decreases the number of Trust Securities being sought, and (ii) the Offer is scheduled to expire at any time earlier than the expiration of a period ending on the tenth business day from, and including, the date that notice of such increase or decrease is first published, sent or given, the Offer will be extended until the expiration of the period of ten business days. 16. Fees and Expenses. The Company has retained Continental Stock Transfer & Trust Company, as Depositary and Georgeson Shareholder Communication Inc. as Information Agent in connection with the Offer. The Depositary and Information Agent will each receive reasonable and customary compensation for their services. The Company will also reimburse the Depositary and the Information Agent for out-of-pocket expenses and indemnify them against certain liabilities and expenses in connection with the Offer, including certain liabilities and expenses under the Federal Securities laws. Neither the Depositary nor the Information Agent has not been retained to make solicitations or recommendations in connection with the Offer. The Company will not pay fees or commissions to any broker, dealer, commercial bank, trust company or other person for soliciting any Trust Securities pursuant to the Offer. The Company will, however, reimburse such persons for customary handling and mailing expenses incurred in forwarding materials in respect of the Offer to the beneficial owners for which they act as nominees. No such broker, dealer, commercial bank or trust company has been authorized to act as the Company's agent for purposes of this Offer. The Company will pay (or cause to be paid) any stock transfer taxes on its purchase of Trust Securities, except as otherwise provided in Instruction 7 of the Letter of Transmittal. 17. Additional Information. The Trust is exempt from reporting obligations under Sections 13 and 15(d) of the Exchange Act, however, the Company is subject to the informational filing requirements of the Exchange Act and, in accordance therewith, is obligated to file reports and other information with the Commission relating to its business, financial condition and other matters. Information, as of particular dates, concerning the Company's directors and officers, their remuneration, options granted to them, the principal holders of the Company's securities and any material interest of such persons in transactions with the Company is required to be disclosed in proxy statements distributed to the Company's shareholders and filed with the Commission. Such reports, proxy statements and other information can be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Room 2120, Washington, D.C. 20549; at its regional offices located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and 7 World Trade Center, New York, New York 10048. Copies of such material may also be obtained by mail, upon payment of the Commission's customary changes from the Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street N.W., Washington DC 20549. The Commission maintains an internet web site at http://www.sec.gov containing reports, proxy statements and other information regarding companies that file reports electronically with the Commission. -28- 18. Miscellaneous. The Offer is not being made to, nor will the Company accept tenders from, holders of Trust Securities in any jurisdiction in which the Offer or its acceptance would not comply with the securities or blue sky laws of such jurisdiction. The Company is not aware of any jurisdiction in which the making of the Offer or the tender of Trust Securities would not be in compliance with the laws of such jurisdiction. However, the Company reserves the right to exclude holders in any jurisdiction in which it is asserted that the Offer cannot lawfully be made. So long as the Company makes a good faith effort to comply with any state law deemed applicable to the Offer, if it cannot do so, the Company believes that the exclusion of holders residing in such jurisdiction is permitted under Rule 13e-4(f)(9) promulgated under the Exchange Act. In any jurisdiction the securities or blue sky laws of which require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on the Company's behalf by one or more registered brokers or dealers licensed under the laws of such jurisdiction. U.S. Home & Garden Inc. December 15, 1999 -29- Appendix A Certain Transactions In Trust Securities During the 40 business days prior to December 14, 1999, the following purchases were made in Trust Securities by certain executive officers and directors of the Company who are also Administrative Trustees of the Trust: PURCHASE PRICE PER TRUST DATE SHARES SECURITY Robert Kassel 10/20/99 8,900 $13.625 Richard Raleigh 10/29/99 800 15.00 11/8/99 1,000 15.125 11/8/99 200 15.00 11/9/99 1,900 14.75 11/9/99 900 15.125 11/10/99 100 14.875 11/15/99 100 14.75 11/15/99 2,000 14.875 -30- Facsimile copies of the Letter of Transmittal, properly completed and duly executed, will be accepted. The Letter of Transmittal, certificates for Trust Securities and any other required documents should be sent or delivered by each securityholder of the Trust or such securityholder's broker, dealer, commercial bank, trust company or other nominee to the Depositary at its address set forth below: The Depositary for the Offer is: CONTINENTAL STOCK TRANSFER TRUST COMPANY By Mail, Overnight Courier or Hand: 2 Broadway New York, New York 10004 Attention: Reorganization Department By Facsimile Transmission (for eligible institutions only): (212) 616-7610 Confirm facsimile by telephone only: (212) 509-4000 Ext. 535 Questions and requests for assistance or for additional copies of this Offer to Purchase, the Letter of Transmittal may be directed to the Information Agent at its address and telephone number set forth below. Securityholders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer. The Information Agent for the Offer is: GEORGESON SHAREHOLDER COMMUNICATIONS INC. 17 State Street 10th Floor New York, New York 10004 Bankers and Brokers Call Collect: (212) 440-9800 All Others Call Toll-Free: (800) 223-2064 -31- EX-99.(A)(2) 3 LETTER OF TRANSMITTAL LETTER OF TRANSMITTAL To Tender 9.4% Cumulative Trust Preferred Securities of U.S. HOME & GARDEN TRUST I Pursuant to the Offer to Purchase Dated December 15, 1999 by U.S. HOME & GARDEN INC. - -------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 PM, NEW YORK CITY TIME, ON FRIDAY, JANUARY 14, 2000, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- The Depositary for the Offer is: CONTINENTAL STOCK TRANSFER & TRUST COMPANY By Mail, Overnight Courier or Hand Delivery 2 Broadway New York, New York 10004 Attention: Reorganization Department By Facsimile Transmission (for eligible institutions only): (212) 616-7610 Confirm facsimile by telephone only: (212) 509-4000 Ext. 535 DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. PLEASE REFER TO INSTRUCTION 10 OF THIS LETTER OF TRANSMITTAL FOR IMPORTANT INFORMATION REGARDING BACKUP WITHHOLDING REQUIRED BY THE INTERNAL REVENUE SERVICE AND THE SUBMISSION OF A SUBSTITUTE FORM W-9 TO THE DEPOSITARY.
- ------------------------------------------------------------------------------------------------------------------------- DESCRIPTION OF TRUST SECURITIES TENDERED - ------------------------------------------------------------------------------------------------------------------------- Name(s) and Address(es) of Total Number of Registered Holder(s) Trust Security Trust Securities Total Number (Please fill in, if blank, exactly Certificate Represented by of Trust how name(s) appear on Trust Security Number(s) Trust Security Securities Certificate(s) (if applicable)(1) Certificate(s)(1) Tendered(2) - ------------------------------------------------------ -------------------------- ----------------------- --------------- - ------------------------------------------------------ -------------------------- ----------------------- --------------- - ------------------------------------------------------ -------------------------- ----------------------- --------------- - ------------------------------------------------------ -------------------------- ----------------------- --------------- - ------------------------------------------------------ -------------------------- ----------------------- --------------- - ------------------------------------------------------ -------------------------- ----------------------- --------------- (1) Need not be completed by Securityholders delivering by book-entry transfer. (2) Unless otherwise indicated, it will be assumed that all Trust Securities represented by certificates delivered to the Depositary are being tendered. See Instruction 4. - -------------------------------------------------------------------------------------------------------------------------
PLEASE READ THE INSTRUCTIONS SET FORTH BELOW. This Letter of Transmittal is to be completed by holders of 9.4% Cumulative Trust Preferred Securities (the "Trust Securities") of U.S. Home & Garden Trust I (the "Trust"), if certificates for Trust Securities are to be forwarded herewith or if delivery of Trust Securities is to be made by book-entry transfer into the account maintained by Continental Stock Transfer & Trust Company as Depositary (the "Depositary"), at The Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures set forth in Section 3 of the Offer to Purchase (as defined below). Securityholders of the Trust whose certificates evidencing Trust Securities (the "Certificates") are not immediately available or who cannot deliver their Certificates and all other required documents to the Depositary prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase), or who cannot complete the procedure for book-entry transfer on a timely basis, must tender their Trust Securities according to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. |_| CHECK HERE IF TENDERED TRUST SECURITIES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of Tendering Institution: _________________________________________________ Account Number: ________________________________________________________________ Transaction Code Number: _______________________________________________________ |_| CHECK HERE IF TENDERED TRUST SECURITIES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY, AND COMPLETE THE FOLLOWING: Name(s) of Registered Holder(s): _______________________________________________ Window Ticket Number (if any): _________________________________________________ Date of Execution of Notice of Guaranteed Delivery: ____________________________ Name of Institution which Guaranteed Delivery: _________________________________ If delivery is by book-entry transfer: _________________________________________ Name of Tendering Institution: ________________________________________ Account Number: _______________________________________________________ Transaction Code Number: ______________________________________________ LADIES AND GENTLEMEN: The undersigned hereby tenders to U.S. Home & Garden Inc., a Delaware corporation ("the Company") the above-described 9.4% Cumulative Trust Preferred Securities (the "Trust Securities") of U.S. Home & Garden Trust I, a Delaware statutory business trust (the "Trust"), at a purchase price of $15.00 per Trust Security, net to the seller in cash (the "Offer Price"), without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated December 15, 1999 (the "Offer to Purchase") and in this Letter of Transmittal (which together with the Offer to Purchase, constitutes the "Offer"). The undersigned understands that the Company reserves the right to transfer or assign, in whole at any time, or from time to time in part, to one or more of its affiliates, the right to purchase all or any portion of the Trust Securities tendered pursuant to the Offer. Subject to, and effective upon, acceptance for payment of the Trust Securities tendered herewith in accordance with the terms and subject to the conditions of the Offer (including, if the Offer is extended, amended or supplemented, the terms and conditions of any such extension, amendment or supplement), the undersigned hereby sells, assigns and transfers to, or upon the order of, the Company all right, title and interest of the undersigned in and to all of the Trust Securities that are being tendered hereby and any and all dividends, distributions , distributable to the undersigned on a date prior to the transfer to the name of the Company (or nominee or transferee of the Company) on the Trust's transfer records of the Trust Securities tendered herewith (collectively, a "Distribution"), and irrevocably constitutes and appoints the Depositary the true and lawful agent and attorney-in-fact of the undersigned with respect to such Trust Securities (and any Distributions) with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) to (a) deliver certificates for such Trust Securities (and any Distributions) ("Certificates") or transfer ownership of such Trust Securities (and any Distributions) on the account books maintained by the Book-Entry Transfer Facility, together in either case with appropriate evidences of transfer and authenticity, to the Depositary for the account of the Company, (b) present such Trust Securities (and any Distributions) for transfer on the books of the Trust, and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Trust Securities (and any Distributions), all in accordance with the terms and subject to the conditions of the Offer. The undersigned hereby irrevocably appoints the Company or any other designees of the Company, and each of them, as such securityholder's attorneys-in-fact and proxies, each with full power of substitution, to the full extent of such securityholder's rights with respect to the Trust Securities tendered by such securityholder and accepted for payment by the Company and with respect to any and all other Trust Securities or other securities issued or issuable in respect of such Trust Securities on or after December 15, 1999. Such appointment will be effective upon the acceptance for payment of such Trust Securities by the Company in accordance with the terms of the Offer. Upon such acceptance for payment, all prior powers of attorney and proxies given by such securityholder with respect to such Trust Securities (and such other Trust securities and securities) will be revoked without further action, and no subsequent proxies may be given nor any subsequent written consents executed (and, if given or executed, will not be deemed effective). The undersigned hereby represents and warrants that (a) the undersigned has full power and authority to tender, sell, assign and transfer the Trust Securities (and any Distributions) tendered hereby, and (b) when the Trust Securities are accepted for payment by the Company, the Company will acquire good, marketable and unencumbered title to the Trust Securities (and all Distributions), free and clear of all liens, restrictions, charges and encumbrances, and the same will not be subject to any adverse claim. The undersigned, upon request, will execute and deliver any signature guarantee or additional documents deemed by the Depositary or the Company to be necessary or desirable to complete the sale, assignment and transfer of the Trust Securities (and all Distributions) tendered hereby. In addition, the undersigned shall promptly remit and transfer to the Depositary for the account of the Company any and all Distributions in respect of the Trust Securities tendered hereby, accompanied by appropriate documentation of transfer, and pending such remittance or appropriate assurance thereof, the Company will be, subject to applicable law, entitled to all rights and privileges as owner of any such Distribution and may withhold the entire purchase price or deduct from the purchase price the amount or value thereof, as determined by the Company in its sole discretion. All authority herein conferred or agreed to be conferred shall survive the death, incapacity, liquidation or dissolution of the undersigned and any obligations of the undersigned hereunder shall be binding upon the heirs, executors, administrators, trustees in bankruptcy, personal and legal representatives, successors and assigns of the undersigned. Except as stated in the Offer to Purchase this tender of Trust Securities is irrevocable. The undersigned understands that tenders of Trust Securities pursuant to any of the procedures described in Section 2 of the Offer to Purchase and in the instructions hereto will constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions set forth in the Offer, including the undersigned's representation and warranty that the undersigned owns the Trust Securities tendered hereby. Unless otherwise indicated herein under "Special Payment Instructions," please issue the check for the Offer Price of all Trust Securities purchased, and/or return any Certificates not tendered or not accepted for payment in the name(s) of the registered holder(s) appearing under "Description of Trust Securities Tendered." Similarly, unless otherwise indicated herein under "Special Delivery Instructions," please mail the check for the Offer Price and/or return any Certificates not tendered or not accepted for payment (and accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing under "Description of Trust Securities Tendered." In the event that both the "Special Delivery Instructions" and the "Special Payment Instructions" are completed, please issue the check for the Offer Price of any Trust Securities purchased and/or return any Certificates not tendered or accepted for payment and any accompanying documents, as appropriate in the name (s) of, and deliver such check and/or return any such Certificates (and any," accompanying documents) to, the person(s) so indicated. Unless otherwise indicated herein under "Special Payment Instructions," please credit any Trust Securities tendered herewith by book-entry transfer that are not accepted for payment by crediting the account designated above. The undersigned recognizes that the Company has no obligation, pursuant to the "Special Payment Instructions," to transfer any Trust Securities from the name(s) of the registered holder(s) thereof if the Company does not accept for payment any of the Trust Securities so tendered. |_| CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING THE TRUST SECURITIES THAT YOU OWN HAVE BEEN LOST, DESTROYED OR STOLEN AND SEE INSTRUCTION 11. Number of Trust Securities represented by lost, destroyed or stolen certificates:_________________________________________________________________ - -------------------------------------------------------------------------------- SPECIAL PAYMENT INSTRUCTIONS (See Instructions 1, 5, 6 and 7) To be completed ONLY if the check for the purchase price of Trust Securities accepted for payment is to be issued in the name of a person other than the undersigned or if certificates for Trust Securities not tendered or not accepted for payment are to be issued in the name of a person other than the undersigned or if Trust Securities tendered hereby and delivered by book-entry transfer which are not accepted for payment are to be returned by credit to an account maintained at the Book-Entry Transfer Facility other than the account shown above. Issue |_| Check |_| Certificates to: Name: __________________________________________________________________________ (Please Print) Address: _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ (Include Zip Code) _____________________________________________________________________ (Taxpayer Identification or Social Security No.) (See Substitute Form W-9 on Back Cover) Credit Trust Securities tendered by book-entry transfer that are not accepted for payment to: ________________________________________________________________________________ (Account Number - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SPECIAL DELIVERY INSTRUCTIONS (See Instructions 1, 5, 6 and 7) To be completed ONLY if certificate(s) for Trust Securities not tendered or not accepted for payment and/or the check for the purchase price of Trust Securities accepted for payment is to be sent to someone other than the undersigned or to the undersigned at an address other than that shown above. Mail |_| Check |_| Certificates to: Name: __________________________________________________________________________ (Please Print) Address: _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ (Include Zip Code) _____________________________________________________________________ (Taxpayer Identification or Social Security No.) (See Substitute Form W-9 on Back Cover) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ODD LOTS To be completed ONLY if Trust Securities are being tendered by or on behalf of a person owning beneficially, as of the Expiration Date, an aggregate of less than 100 Trust Securities. The undersigned either (check one box): [__] is the beneficial owner of an aggregate of less than 100 Trust Securities all of which are being tendered; or [__] is a broker, dealer, commercial bank, trust company or other nominee which: (a) is tendering, for the beneficial owners thereof, Trust Securities with respect to which it is the record owner, and (b) believes, based upon representations made to it by such beneficial owners, that each such person was the beneficial owner of an aggregate of less than 100 Trust Securities and is tendering all of such Trust Securities. - -------------------------------------------------------------------------------- IMPORTANT. SECURITYHOLDERS SIGN HERE (Also complete Substitute Form W-9) x ______________________________________________________________________________ x ______________________________________________________________________________ (Signature(s) of Holder(s) or Authorized Signatory) Date: __________________________________________________________________________ (Must be signed by the registered holder(s) exactly as name(s) appear(s) on Trust Security Certificate(s) or on a security position listing or by person(s) authorized to become registered holders(s) by certificates and documents transmitted herewith. If signature is by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, please provide the following information and see Instruction 5.) Name (s) _______________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ (Please Print) Capacity (Full Title): _________________________________________________________ Address: _______________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ (Include Zip Code) Daytime Telephone Number. ( ) _______________________________________________ (Area Code) Tax Identification or Social Security No: ______________________________________ (See Substitute Form W-9 on Reverse Side) GUARANTEE OF SIGNATURE(s) (if Required - See Instructions I and 5) (Authorized Signature): ________________________________________________________ Name: __________________________________________________________________________ Name of Firm: __________________________________________________________________ Address: _______________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ (Include Zip Code) Daytime Telephone Number: ( ) _______________________________________________ (Area Code) Dated: _________________________________________________________________________ INSTRUCTIONS Forming Part of the, Terms and Conditions of the Offer 1. Guarantee of Signatures. No signature guarantee is required on this Letter of Transmittal (a) if this Letter of Transmittal is signed by the registered holder(s) of Trust Securities (which term, for purposes of this document, shall include any participant in the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Trust Securities) tendered herewith, unless such holder(s) has completed either the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" above, or (b) if such Trust Securities are tendered for the account of a firm which is a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of the Securities Transfer Association Medallion Program, the New York Stock Exchange, Inc., Medallion Signature Program or the Stock Exchange Medallion Program (each of the foregoing being referred to as an "Eligible Institution"). In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 5 of this Letter of Transmittal. 2. Requirements of Tender. This Letter of Transmittal is to be completed by securityholders either if certificates are to be forwarded herewith or, unless an Agent's Message is utilized, if tenders are to be made pursuant to the procedure for tender by book-entry transfer set forth in Section 3 of the Offer to Purchase. Certificates for all physically tendered Trust Securities or timely confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such Trust Securities into the Depositary's account at the Book-Entry Transfer Facility, together with a properly completed and duly executed Letter of Transmittal (or a facsimile hereof), with any required signature guarantees, or an Agent's Message in connection with a book-entry transfer, and any other documents required by this Letter of Transmittal, must be received by the Depositary at its address set forth herein on or prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase). If certificates for Trust Securities are forwarded to the Depositary in multiple deliveries, a properly completed and duly executed Letter of Transmittal must accompany each such delivery. Securityholders whose Certificates are not immediately available or who cannot deliver their Certificates and all other required documents to the Depositary prior to the Expiration Date or who cannot complete the procedure for delivery by book-entry transfer on a timely basis may tender their Trust Securities by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedure set forth in Section 2 of the Offer to Purchase. Pursuant to such procedure: (i) such tender must be made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by the Company, must be received by the Depositary on or prior to the Expiration Date; and (iii) the Certificates (or a Book-Entry Confirmation) representing all tendered Trust Securities, in proper form for transfer, in each case together with the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message) and any other documents required by this Letter of Transmittal, must be received by the Depository within three American Stock Exchange trading days after the date of such Notice of Guaranteed Delivery. An "American Stock Exchange trading day" is any day which the American Stock Exchange is open for business. If Trust Securities Certificates are delivered separately to the Depository a properly completed and executed Letter of Transmittal must accompany such delivery. Tendering securityholders should use this Letter of Transmittal (and, if necessary, the Notice of Guaranteed Delivery provided with the Offer to Purchase). Securityholders will be able to tender (or withdraw) their Trust Securities pursuant to the Offer until 5:00 PM, New York City time, Friday, January 14, 2000 (or such later date to which the Offer may be extended). Trust Securities can only be tendered at the price of $15.00 per Trust Security. THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING SECURITYHOLDER AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. No alternative, conditional or contingent tenders will be accepted and no fractional Trust Securities will be purchased. All tendering securityholders, by execution of this Letter of Transmittal (or a facsimile hereof), waive any fight to receive any notice of the acceptance of their Trust Securities for payment. 3. Inadequate Space and the Number of Trust Securities Tendered. If the space provided herein under "Description of Trust Securities Tendered" is inadequate, the certificate numbers and/or the number of Trust Securities evidenced by such Certificates and any other required information should be listed on a separate signed schedule attached hereto. 4. Partial Tender. (Not applicable to securityholders who tender by book-entry transfer). If fewer than all the Trust Securities evidenced by any Trust Security Certificate delivered to the Depositary herewith are to be tendered, fill in the number of Trust Securities which are to be tendered in the box entitled "Number of Trust Securities Tendered." In such cases, new certificates for the Trust Securities that were evidenced by your old Certificates, but which were not tendered by you, will be sent to you, unless otherwise provided in the appropriate box on this Letter of Transmittal entitled "Special Delivery Instructions", as soon as practicable after the Expiration Date. All Trust Securities represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If this Letter of Transmittal is signed by the registered holder(s) of the Trust Securities tendered hereby, the signature (s) must correspond with the name (s) as written on the face of the certificate (s) evidencing such Trust Securities without alteration, enlargement or any change whatsoever. If any Trust Securities tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any of the tendered Trust Securities are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of certificates. If this Letter of Transmittal or any certificates or stock powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and proper evidence satisfactory to the Company of their authority to so act must be submitted. When this Letter of Transmittal is signed by the registered owner(s) of the Trust Securities listed and transmitted hereby, no endorsements of certificates or separate stock powers are required unless payment is to be made to, or certificates for Trust Securities not tendered or not purchased are to be issued in the name of, a person other than the registered holder(s). Signatures on such certificates or stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered owner(s) of the Trust Security Certificate(s) listed, the Trust Security Certificate(s) must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear on the certificate(s). Signatures on such Certificates and stock powers must be guaranteed by an Eligible Institution, unless the signature is that of an Eligible Institution. 6. Transfer Taxes. Except as otherwise provided in this Instruction 6, the Company will pay any transfer taxes with respect to the purchase of Trust Securities pursuant to the Offer. If, however, payment of the Offer Price of any Trust Securities purchased is to be made to, or if certificate(s) evidencing Trust Securities not tendered or purchased are to be registered in the name of, any person other than the registered owner(s), or if tendered Certificate(s) are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any transfer taxes (whether imposed on the registered owner(s) or such person) payable on account of the transfer to such person will be deducted from the purchase price of such Trust Securities unless satisfactory evidence of the payment of such taxes, or an exemption therefrom, is submitted. 7. Odd Lots. As described in Section 1 of the Offer to Purchase, if the Company is to purchase less than all Trust Securities tendered before the Expiration Date, the Trust Securities purchased first will consist of all Trust Securities validly tendered on or prior to the Expiration Date by or on behalf of securityholders who beneficially owned and continue to beneficially own as of the Expiration Date, an aggregate of less than 100 Trust Securities, and who tenders all of such securityholder's Trust Securities. This preference will not be available unless the box captioned "Odd Lots" is completed. 8. Special Payment and Delivery Instructions. If a check for the Offer Price of any Trust Securities tendered hereby is to be issued in the name of, and/or Certificates for Trust Securities not tendered or not purchased are to be issued or returned to, a person other than the signer of this Letter of Transmittal or if a check and/or such certificates are to be returned to a person other than the person(s) signing this Letter of Transmittal or to an address other than that shown in this Letter of Transmittal in the box entitled "Description of Trust Securities Tendered", the appropriate boxes on this Letter of Transmittal must be completed. A securityholder who tenders by book-entry transfer may request that Trust Securities not accepted for payment be credited to such account maintained at the Book-Entry Transfer Facility as such securityholder may designate under "Special Payment Instructions." If no such instructions are given, such Trust Securities not accepted for payment will be returned by crediting the account designated above under "Description of Trust Securities Tendered." 9. Waiver of Conditions. The conditions of the Offer may be waived by the Company in whole or in part at any time and from time to time in its sole discretion. 10. Backup Withholding; Substitute Form W-9. Under U.S. federal income tax law, a securityholder, whose tendered Trust Securities are accepted for payment, is required to provide the Depositary with such Securityholder's correct taxpayer identification number ("TIN"), generally the Securityholder's social security or federal employer identification number, and certain other information, on Substitute Form W-9 below. If the Depositary is not provided with the correct TIN, or an adequate basis for exemption, the Internal Revenue Service may subject the Securityholder or other payee to a $50 penalty. In addition, payments that are made to such Securityholder or other payee with respect to Trust Securities purchased pursuant to the Offer may be subject to 31% backup withholding. Certain securityholders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, the securityholder must submit a Form W-8, signed under penalties of perjury, attesting to that individual's exempt status. A Form W-8 can be obtained from the Depositary. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for more instructions. If backup withholding applies, the Depositary is required to withhold 31% of any such payments made to the securityholder or other payee. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. The box in Part 3 of the Substitute Form W-9 may be checked if the tendering Securityholder has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in Part 3 is checked, the Securityholder or other payee must also complete the Certificate of Awaiting Taxpayer Identification Number below in order to avoid backup withholding. Notwithstanding that the box in Part 3 is checked and the Certificate of Awaiting Taxpayer Identification Number is completed, the Depositary will withhold 31% of all payments made prior to the time a properly certified TIN is provided to the Depositary. To prevent backup withholding on payments that are made to a securityholder with respect to Trust Securities purchased pursuant to the Offer, the securityholder is required to notify the Depositary of such securityholder's correct TIN by completing a Substitute Form W-9 certifying (a) that the TIN provided on Substitute Form W-9 is correct (or that such securityholder is awaiting a TIN), and (b) that (1) such securityholder is exempt from backup withholding or (2) such securityholder has not been notified by the Internal Revenue Service that such securityholder is subject to backup withholding as a result of a failure to report all interest or dividends or (3) the Internal Revenue Service has notified such securityholder that such securityholder is no longer subject to backup withholding. Exempt holders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. To prevent possible erroneous backup withholding, an exempt holder must enter its correct TIN in Part I of Substitute Form W-9, write "Exempt" in Part 2 of such form, and sign and date the form. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 (the "W-9 Guidelines") for additional instructions. In order for a nonresident alien or foreign entity to qualify as exempt, such person must submit a completed Form W-8, "Certificate of Foreign Status" signed under the penalties of perjury attesting to such exempt status. Such forms may be obtained from the Depositary. The securityholder is required to give the Depositary the TIN (e.g., social security number or employer identification number) of the record owner of the Trust Securities or of the last transferee appearing on the transfers attached to, or endorsed on, the Trust Securities. If the Trust Securities are in more than one name or are not in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report. 11. Requests for Assistance or Additional Copies. Questions or requests for assistance may be directed to the Information Agent at the address and telephone numbers set forth below. Additional copies of the Offer to Purchase, this Letter or Transmittal and the Notice or Guaranteed Delivery may also be obtained from the Information Agent or from brokers, dealers, commercial banks or trust companies. 12. Lost, Destroyed or Stolen Certificates. If any certificate representing Trust Securities has been lost, destroyed or stolen, the securityholder should promptly notify the Depositary by checking the box immediately preceding special payment/special delivery instructions and indicating the number of Trust Securities lost. The securityholder will then be instructed as to the steps that must be taken in order to replace the certificate. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost or destroyed certificates have been followed. 13. Order of Purchase in Event of Proration. As described in Section 1 of the Offer to Purchase, securityholders may designate the order in which their Trust Securities are to be purchased in the event of proration. The order of purchase may have an effect on the federal income tax classification of any gain or loss on the Trust Securities purchased. See Section 1 of the Offer to Purchase. IMPORTANT. THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), TOGETHER WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER OR THE NOTICE OF GUARANTEED DELIVERY, AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE).
TO BE COMPLETED BY ALL TENDERING SECURITYHOLDERS (See Instruction 10) - --------------------------------------------------------------------------------------------------------------------------- PAYER'S NAME: Continental Stock Transfer & Trust Company, as Depositary - --------------------------------------------------------------------------------------------------------------------------- SUBSTITUTE Part 1 - PLEASE PROVIDE YOUR TIN IN THE _____________________________ BOX AT RIGHT AND CERTIFY BY SIGNING AND Social Security Number DATING BELOW. Or Form W-9 _____________________________ Employee Identification Number - ---------------------------------------- ------------------------------------------- -------------------------------------- Department of the Treasury Part 2 - Certification - Under penalties Part 3 - Internal Revenue Service of perjury, I certify that: Awaiting TIN |_| (1) The number shown on this form is my correct TIN (or I am waiting for a number to be issued to me) and Depositary Request for Taxpayer (2) I am not subject to backup Identification Number ("TIN") withholding because (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service ("IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. - --------------------------------------------------------------------------------------------------------------------------- Certification Instructions - You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of under-reporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out such Item (2). SIGNATURE: ______________________________________________ DATE: __________________________________ NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9. - ---------------------------------------------------------------------------------------------------------------------- CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER - ---------------------------------------------------------------------------------------------------------------------- I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office, or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 31% of all reportable payments made to me will be withheld but that such amounts will be refunded to me if I then provide a taxpayer identification number within sixty (60) days. SIGNATURE: ______________________________________________ DATE: __________________________________ - ---------------------------------------------------------------------------------------------------------------------------
The Information Agent for the Offer is: GEORGESON SHAREHOLDER COMMUNICATIONS INC. 17 State Street 10th Floor New York, New York 10004 Bankers and Brokers Call Collect: (212) 440-9800 All Others Call Toll-Free: (800) 223-2064 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 Guidelines for Determining the Proper Identification Number to Give the Payer. - Social Security numbers have nine digits separated by two hyphens: i.e. 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e. 00-0000000. The table below will help determine the number to give the payer.
- ------------------------------- ----------------------------- ------------------------------- --------------------------- Give the Give the EMPLOYER For this type of account: SOCIAL SECURITY For this type of account: IDENTIFICATION number of number of - ------------------------------- ----------------------------- ------------------------------- --------------------------- 1. An individual's account The individual 9. A valid trust, estate or The legal entity (do not pension trust furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title(5) 2. Two or more individuals The actual owner of the 10. Corporate account The corporation (joint account) account, or, if combined funds, any one of the individuals 3. Husband and wife (joint The actual owner of the 11. Religious, charitable or The organization account) account, or, if joint educational organization funds, either person (1) account 4. Custodian account of a The minor(2) 12. Partnership account held The partnership minor (Uniform Gift to in the name of the Minors Act) business 5. Adult and minor (joint The adult or, if the minor 13. Association, club, or The organization account) is the only contributor, other tax-exempt the minor(1) organization 6. Account in the name of The ward, minor or 14. A broker or registered The broker or nominee guardian or committee incompetent person(3) nominee for a designated ward, minor or incompetent person 7 a. The usual revocable The grantor-trustee(1) 15. Account with the The public entity savings trust account Department of (grantor is also trustee) Agriculture in the name of a public entity (such as a State or local government, school district, or prison) that receives agricultural program payments b. So-called trustee The actual owner(1) account that is not a legal or valid trust under State law 8 Sole proprietorship The owner(4) account - ------------------------------- ----------------------------- ------------------------------- ---------------------------
(1) List first and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's social security number. (3) Circle the ward's, minor's or incompetent person's name and furnish such person's social security number. (4) Show the name of the owner. (5) List first and circle the name of the legal trust, estate or pension trust. Note: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 Page 2 Obtaining a Number If you don't have a taxpayer identification number or you don't know your number, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number. Payees Exempt from Backup Withholding Payees specifically exempted from backup withholding on ALL payments include the following: o A corporation. o A financial institution. o An organization exempt from tax under section 501 (a), or an individual retirement plan. o The United States or any agency or instrumentality thereof. o A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof. o A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof. o An international organization or any agency, or instrumentality thereof. o A registered dealer in securities or commodities registered in the U.S. or a possession of the U.S. o A real estate investment trust. o A common trust fund operated by a bank under section 584(a). o An exempt charitable remainder trust, or a non-exempt trust described in Section 4947(a)(1). o An entity registered at all times under the Investment Company Act of 1940. o A foreign central bank of issue. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: o Payments to nonresident aliens subject to withholding under Section 1441. o Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident partner. o Payments of patronage dividends where the amount received is not paid in money. o Payments made by certain foreign organizations. o Payments made to a nominee. Payments of interest not generally subject to backup withholding include the following: o Payments of interest on obligations issued by individuals. NOTE: You may be subject to backup withholding if this interest is $600 or more, and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. o Payments of tax-exempt interest (including exempt-interest dividends under Section 852). o Payments described in Section 6049 (b) (5) to non-resident aliens. o Payments on tax-free covenant bonds under Section 1451. Payments made by certain foreign organizations. o Payments made to a nominee. EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE FORM W-9 TO AVOID POSSIBLE ERRONEOUS BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM. Certain payments other than interest, dividends, and patronage dividends, that are not subject to information reporting are also not subject to backup withholding. For details, see the regulations under Sections 6041, 6041A(a), 6045, and 6050A. Privacy Act Notice.-- Section 6109 requires most recipients of dividends, interest, or other payments to give taxpayer identification numbers to payers who must report the payments to IRS. The IRS uses the numbers for identification purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Beginning January 1, 1993, payers must generally withhold 31% of taxable interest, dividends, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. Penalties (1) Penalty for Failure to Furnish Taxpayer Identification Number. - If you fail to furnish your correct taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) Failure to Report Certain Dividend and Interest Payments. - If you fail to include any portion of an includable payment for interest, dividends, or patronage dividends in gross income, such failure will be treated as being due to negligence and will be subject to a penalty of 5% on any portion of an underpayment attributable to that failure unless there is clear and convincing evidence to the contrary. (3) Civil Penalty for False Statements with Respect to Withholding. - If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (4) Criminal Penalty for Falsifying Information. - If you falsify certifications or affirmations, you are subject to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. EX-99.(A)(3) 4 NOTICE OF GUARANTEED DELIVERY NOTICE OF GUARANTEED DELIVERY FOR TENDER OF 9.4% CUMULATIVE TRUST PREFERRED SECURITIES U.S. HOME & GARDEN TRUST I (NOT TO BE USED FOR SIGNATURE GUARANTEES) This Notice of Guaranteed Delivery, or a form substantially equivalent hereto, must be used to accept the Offer (as defined below) (i) if certificates ("Certificates") evidencing 9.4% Cumulative Trust Preferred Securities (the "Trust Securities"), of U.S. Home & Garden Trust I are not immediately available, (ii) if Certificates and all other required documents cannot be delivered to Continental Stock Transfer & Trust Company as Depositary (the "Depositary") on or prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase (as defined below)) or (iii) if the procedure for delivery by book-entry transfer cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be delivered by hand (including delivery by courier service) or mail or transmitted by facsimile transmission, telex or telegram to the Depositary. See Section 3 of the Offer to Purchase. The Depositary for the Offer is: CONTINENTAL STOCK TRANSFER & TRUST COMPANY By Mail, Overnight Courier or Hand Delivery: 2 Broadway, 19th Floor New York, New York 10004 Attention: Reorganization Department By Facsimile Transmission (for eligible institutions only): (212) 616-7610 To Confirm facsimile by telephone only: (212) 509-4000 Ext. 535 Delivery of this Notice of Guaranteed Delivery to an address other than as set forth above, or transmission of instructions via facsimile transmission, telex or telegram other than as set forth above, will not constitute a valid delivery. This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an "Eligible Institution" under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal. The Eligible Institution that completes this Notice of Guaranteed Delivery must communicate the Guarantee to the Depositary and must deliver the Letter of Transmittal and Certificates to the Depositary within the time period shown herein. Failure to do so could result in financial loss to the Eligible Institution. Ladies and Gentlemen: The undersigned hereby tenders to U.S. Home & Garden Inc., a Delaware corporation, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated December 15, 1999 (the "Offer to Purchase"), and the related Letter of Transmittal (which, together with any amendments or supplements thereto from time to time, constitute the "Offer"), receipt of each of which is hereby acknowledged, the number of Shares specified below pursuant to the guaranteed delivery procedures described in Section 3 of the Offer to Purchase. Number of Trust Securities: ____________________________________________________ Certificate Nos. (If Available): _______________________________________________ |_| Check if Trust Securities will be delivered by book-entry transfer Name of Tendering Institution: _______________________________ Account No.: _________________________________________________ Dated: _______________, ____ Signature(s) of Holder(s): __________________________________________ __________________________________________ Name(s) of Holders: __________________________________________ __________________________________________ Please Type or Print Address: __________________________________________________ Zip Code Area Code and Telephone No.: ___________________________________________________ - -------------------------------------------------------------------------------- ODD LOTS To be completed ONLY if Trust Securities are being tendered by or on behalf of a person owning beneficially, as of the Expiration Date, an aggregate of less than 100 Trust Securities. The undersigned either (check one box): [__] is the beneficial owner of an aggregate of less than 100 Trust Securities all of which are being tendered; or [__] is a broker, dealer, commercial bank, trust company or other nominee which: - -------------------------------------------------------------------------------- 2 - -------------------------------------------------------------------------------- (a) is tendering, for the beneficial owners thereof, Trust Securities with respect to which it is the record owner, and (b) believes, based upon representations made to it by such beneficial owners, that each such person was the beneficial owner of an aggregate of less than 100 Trust Securities and is tendering all of such Trust Securities. - -------------------------------------------------------------------------------- THE GUARANTEE ON PAGE 4 MUST BE COMPLETED (NOT TO BE USED FOR SIGNATURE GUARANTEES). 3 GUARANTEE (Not To Be Used for Signature Guarantees) The undersigned, a firm which is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc. or which is a commercial bank or trust company having an office or correspondent in the United States that is a member in good standing of the Securities Transfer Association Medallion Program, the New York Stock Exchange, Inc., Medallion Signature Program or the Stock Exchange Medallion Program, guarantees to deliver to the Depositary, at its address set forth above, Certificates evidencing the Trust Securities tendered hereby, in proper form for transfer, or confirmation of book-entry transfer of such Trust Securities into the Depositary's account at The Depository Trust Company, in each case with delivery of (a) a Letter of Transmittal (or facsimile thereof) properly completed and duly executed, together with any required signature guarantees, or (b) an Agent's Message (as defined in the Offer to Purchase) in the case of a book-entry transfer, and any other required documents, all within three American Stock Exchange trading days after the date of execution of this Notice of Guaranteed Delivery. An "American Stock Exchange trading day" is any day on which the American Stock Exchange is open for business. Please Type or Print: Name of Firm: __________________________________________________________________ Address: _______________________________________________________________________ Zip Code Area Code and Telephone No.: Name: ________________________________ Title: ________________________ Authorized Signature: __________________________________________________________ Dated: _________________________________________________________________________ DO NOT SEND CERTIFICATES WITH THIS NOTICE OF GUARANTEED DELIVERY. CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. 4 EX-99.(A)(4) 5 OFFER TO PURCHASE FOR CASH OFFER TO PURCHASE FOR CASH UP TO 700,000 9.4% CUMULATIVE TRUST PREFERRED SECURITIES OF U.S. HOME & GARDEN TRUST I AT $15.00 NET PER TRUST PREFERRED SECURITY BY U.S. HOME & GARDEN INC. THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 PM, NEW YORK CITY TIME, ON FRIDAY, JANUARY 14, 2000, UNLESS THE OFFER IS EXTENDED. December 15, 1999 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: We have been appointed by U.S. Home & Garden Inc., a Delaware corporation (the "Company") to act as Information Agent in connection with the offer to purchase up to 700,000 9.4% Cumulative Trust Preferred Securities (the "Trust Securities"), of U.S. Home & Garden Trust I, a Delaware statutory business trust (the "Trust"), at a price of $15.00 per Trust Security, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Company's Offer to Purchase, dated December 15, 1999 (the "Offer to Purchase"), and in the related Letter of Transmittal (which, together with any amendments or supplements thereto from time to time, constitute the "Offer") enclosed herewith. Please furnish copies of the enclosed materials to those of your clients for whose accounts you hold Trust Securities registered in your name or in the name of your nominee. If, prior to the Expiration Date, more than 700,000 Trust Securities (or such greater number of Trust Securities as the Company may elect to purchase) are validly tendered, the Company will, upon the terms and subject to the conditions of the Offer, accept Trust Securities for purchase first from Odd Lot Owners (as defined in Section 2 of the Offer to Purchase) who validly tender all of their Trust Securities and then on a pro rata basis, if necessary, from all other securityholders whose Trust Securities are validly tendered. The Offer is not conditioned upon any minimum number of Trust Securities being tendered. The Offer is, however, subject to certain other conditions set forth in the Offer. See Section 6 of the Offer to Purchase. Enclosed for your information and use are copies of the following documents: 1. Offer to Purchase, dated December 15, 1999; 2. Letter of Transmittal to be used by holders of Trust Securities in accepting the Offer and tendering Trust Securities; 3. Notice of Guaranteed Delivery to be used to accept the Offer if the certificates evidencing Trust Securities and all other required documents are not immediately available or cannot be delivered to Continental Stock Transfer & Trust Company (the "Depositary") by the Expiration Date (as defined in the Offer to Purchase) or if the procedure for book-entry transfer cannot be completed by the Expiration Date; 4. A form of letter which may be sent to your clients for whose accounts you hold Trust Securities registered in your name or in the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Offer; and 5. Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 PM, NEW YORK CITY TIME, ON FRIDAY, JANUARY 14, 2000, UNLESS THE OFFER IS EXTENDED. In all cases, payment for Trust Securities accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) certificates evidencing such Trust Securities (the "Certificates") or, timely confirmation of a book-entry transfer of such Trust Securities into the Depositary's account at the Book-Entry Transfer Facility (as defined in the Offer to Purchase), (ii) a Letter of Transmittal (or facsimile thereof) properly completed, with the signatures guaranteed thereon, if required, and duly executed or an Agent's Message (as defined in the Offer to Purchase) in connection with a book-entry transfer, and (iii) any other required documents in accordance with the instructions contained in the Letter of Transmittal. Accordingly, payment may not be made to all tendering stockholders at the same time depending on when Certificates for, or confirmations of book-entry transfer of, such Trust Securities are actually received by the Depositary. If a holder of Trust Securities wishes to tender Trust Securities, but such holders' Certificates are not immediately available or such holder cannot deliver the Certificates and all other required documents, or cannot complete the procedure for book-entry transfer, prior to the expiration of the Offer, a tender of Trust Securities may be effected by following the guaranteed delivery procedure described in Section 3 of the Offer to Purchase. The Company will not pay any fees or commissions to any broker, dealer or other person (other than the Depositary and the Information Agent as described in the Offer) in connection with the solicitation of tenders of Trust Securities pursuant to the Offer. However, the Company will reimburse you for customary mailing and handling expenses incurred by you in forwarding any of the enclosed materials to your clients. The Company will pay or cause to be paid any transfer taxes payable with respect to the transfer of Trust Securities to it, except as otherwise provided in Instruction 6 of the Letter of Transmittal. Any inquiries you may have with respect to the Offer, or requests for additional copies of the enclosed materials, should be addressed to us at the address and telephone number set forth on the back cover page of the Offer to Purchase. Very truly yours, GEORGESON SHAREHOLDER COMMUNICATIONS INC. NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL AUTHORIZE YOU OR ANY OTHER PERSON TO ACT ON BEHALF OF OR AS THE AGENT OF THE COMPANY OR THE TRUST, THE INFORMATION AGENT OR THE DEPOSITARY, OR OF ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR TO MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN. 2 EX-99.(A)(5) 6 OFFER TO PURCHASE FOR CASH OFFER TO PURCHASE FOR CASH UP TO 700,000 9.4% CUMULATIVE TRUST PREFERRED SECURITIES OF U.S. HOME & GARDEN TRUST I AT $15.00 NET PER TRUST PREFERRED SECURITY BY U.S. HOME & GARDEN INC. THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 PM, NEW YORK CITY TIME, ON FRIDAY, JANUARY 14, 2000, UNLESS THE OFFER IS EXTENDED. To Our Clients: Enclosed for your consideration are an Offer to Purchase, dated December 15, 1999 (the "Offer to Purchase"), and a related Letter of Transmittal (which, together with any amendments or supplements thereto from time to time, constitute the "Offer") and other materials in connection with the offer to purchase by U.S. Home & Garden, Inc., a Delaware corporation (the "Company") of up to 700,000 9.4% Cumulative Trust Preferred Securities (the "Trust Securities"), of U.S. Home & Garden Trust I, a statutory business trust (the "Trust"), at the price of $15.00 per Trust Security, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer. WE ARE (OR OUR NOMINEE IS) THE HOLDER OF RECORD OF TRUST SECURITIES HELD BY US FOR YOUR ACCOUNT. A TENDER OF SUCH TRUST SECURITIES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER TRUST SECURITIES HELD BY US FOR YOUR ACCOUNT. Accordingly, we request instructions as to whether you wish to have us tender on your behalf any or all of the Trust Securities held by us for your account, upon the terms and subject to the conditions set forth in the Offer. Your attention is directed to the following: 1. The tender offer price is $15.00 per Trust Security, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer. 2. The Offer, is for up to 700,000 Trust Securities. The Offer is not conditioned upon any minimum number of Trust Securities being tendered. The Offer is, however, subject to certain conditions set forth in the Offer. 3. The Offer, proration period, and withdrawal rights will expire at 5:00 P.M. New York City time, on Friday, January 14, 2000, unless the Offer is extended. 4. Tendering securityholders will not be obligated to pay brokerage fees or commissions or, except as otherwise provided in Instruction 6 of the Letter of Transmittal, transfer taxes with respect to the purchase of Trust Securities by the Company pursuant to the Offer. However, federal income tax withholding at a rate of 31% may be required, unless an exemption is provided or unless the required taxpayer identification information is provided. See Instruction 9 of Letter of Transmittal. 5. If you own beneficially an aggregate of less than 100 Trust Securities, you instruct us to tender on your behalf all the Trust Securities of which we are the holder of record before the expiration of the Offer and you check the appropriate space in the box captioned "Odd Lots" in the attached Instruction Form, the Company will accept all such Trust Securities for purchase before proration, if any, of the purchase of other Trust Securities validly tendered. 6. Notwithstanding any other provision of the Offer, payment for Trust Securities accepted for payment pursuant to the Offer will in all cases be made only after timely receipt by the Depositary of (a) certificates for Trust Securities or a timely Book-Entry Confirmation (as defined in the Offer to Purchase) with respect to such Trust Securities pursuant to the procedures set forth in Section 3 of the Offer to Purchase, (b) the Letter of Transmittal (or a manually signed facsimile thereof), properly completed and duly executed, together with any required signature guarantees, or, in the case of book-entry transfers, an Agent's Message (as defined in the Offer to Purchase) and (c) any other documents required by the Letter of Transmittal. Accordingly, payment may not be made to all tendering securityholders at the same time depending upon when certificates for or confirmations of book-entry transfer of such Trust Securities are actually received by the Depositary. IF YOU WISH TO HAVE US TENDER ANY OR ALL OF YOUR TRUST SECURITIES, PLEASE SO INSTRUCT US BY COMPLETING, EXECUTING AND RETURNING TO US THE INSTRUCTION FORM CONTAINED IN THIS LETTER. AN ENVELOPE IN WHICH TO RETURN YOUR INSTRUCTIONS TO US IS ENCLOSED. IF YOU AUTHORIZE THE TENDER OF YOUR TRUST SECURITIES, ALL SUCH TRUST SECURITIES WILL BE TENDERED UNLESS OTHERWISE SPECIFIED IN YOUR INSTRUCTIONS. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER. As described in Section 1 of the Offer to Purchase, if before the Expiration Date more than 700,000 Trust Securities (or such greater number of Trust Securities as the Company elects to purchase) are validly tendered, the Company will accept Trust Securities for purchase at the Purchase Price in the following order of priority: (a) first, all Trust Securities validly tendered at the Purchase Price prior to the Expiration Date by any Odd Lot Owner (as defined in Section 2 of the Offer to Purchase) who: (1) tenders all Trust Securities beneficially owned by such Odd Lot Owner (partial tenders will not qualify for this preference); and (2) completes the section captioned "Odd Lots" on the Letter of Transmittal and, if applicable, on the Notice of Guaranteed Delivery; and (b) then, after purchase of all of the foregoing Trust Securities, all other Trust Securities validly tendered before the Expiration Date on a pro rata basis, if necessary (with adjustments to avoid purchases of fractional Trust Securities). The Offer is made only by the Offer to Purchase and the related Letter of Transmittal and is not being made to (nor will tenders be accepted from or on behalf of) holders of Trust Securities in any jurisdiction in which the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. However, the Company may, in its discretion, take such action as it may deem necessary to make the Offer in any jurisdiction and extend the Offer to holders of Trust Securities in such jurisdiction. In those jurisdictions where the securities laws require the Offer to be made by a licensed broker or dealer, the Offer shall 2 be deemed to be made on behalf of the Company by or one or more registered brokers or dealers licensed under the laws of such jurisdiction. 3 INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH UP TO 700,000 9.4% CUMULATIVE TRUST PREFERRED SECURITIES OF U.S. HOME & GARDEN TRUST I BY U.S. HOME & GARDEN INC. The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated December 15, 1999, and the related Letter of Transmittal (which, together with any amendments or supplements thereto from time to time, constitute the "Offer"), in connection with the offer to purchase by U.S. Home & Garden Inc. of up to 700,000 9.4% Cumulative Trust Preferred Securities (the "Trust Securities"), of U.S. Home & Garden Trust I, a Delaware statutory business trust, at the price of $15.00 per Trust Security, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer. This will instruct you to tender the number of Trust Securities indicated below (or, if no number is indicated below, all Trust Securities) that are held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer. The Company will purchase 700,000 Trust Securities. If more than 700,000 Trust Securities are tendered, the Company will prorate the number of Trust Securities offered pursuant to Section 1 of the Offer to Purchase. [___] By checking this box, all Trust Securities held by us for your account will be tendered at $15.00 per Trust Security. If less than all of the Trust Securities are to tendered, please check the box below and indicate the aggregate number of Trust Securities to be tendered by us. [___] Trust Securities(1) ODD LOTS [___] By checking this box, the undersigned represents that the undersigned owns beneficially an aggregate of less than 100 Trust Securities, and is tendering or is instructing the applicable record holder(s) to tender all such Trust Securities at $15.00 per Trust Security. Number of Trust Securities to Be Tendered*: ____________________________________ Date: __________________________________________________________________________ Signature(s): __________________________________________________________________ (Sign Here) ________________________________________________________________________________ (Print Name(s)) - ---------- (1) Unless otherwise indicated, it will be assumed that all Trust Securities held for the account of the undersigned are to be tendered. 4 ________________________________________________________________________________ (Print Address(es)) ________________________________________________________________________________ (Area Code and Telephone Number(s)) ________________________________________________________________________________ (Taxpayer Identification or Social Security Number(s)) * Unless otherwise indicated, it will be assumed that all Trust Securities held by us for your account are to be tendered. This form must be returned to the brokerage firm maintaining your account. 5 EX-99.(A)(6) 7 PRESS RELEASE FOR ADDITIONAL INFORMATION CONTACT: Robert L. Kassel, President U.S. Home & Garden Inc. (415) 616-8111 U.S. HOME & GARDEN INC. ANNNOUNCES TENDER OFFER FOR UP TO 700,000 OF THE 9.4% CUMULATIVE TRUST PREFERRED SECURITIES OF U.S. HOME & GARDEN TRUST I San Francisco, California (December 13, 1999)... U.S. Home & Garden Inc. (NASDAQ: USHG) today announced that it will launch a tender offer on or before December 15, 1999 for up to 700,000 of the outstanding 9.4% Cumulative Trust Preferred I Securities of U.S. Home & Garden Trust I (AMEX: UHG.Pr.A), a wholly owned subsidiary of the Company, at a purchase price of $15.00 per Trust Preferred Security in cash. The offer represents a 23.7% premium over the closing price of $12.125 per security for the Trust Preferred Securities on December 10, 1999. There are currently 2,530,000 Trust Preferred Securities outstanding. The terms of the tender offer will be described more fully in the offering materials to be distributed to holders of the Trust Preferred Securities. If more than 700,000 Trust Preferred Securities are tendered and the Company does not elect to acquire any additional securities, there will be a proration. The tender offer will not be contingent upon any minimum number of Trust Preferred Securities being tendered. The Company intends to finance the tender offer with available funds from its existing lines of credit. The tender offer is scheduled to expire on 5:00 p.m. New York City Time on January 14, 2000. U.S. Home & Garden Inc. is a leading manufacturer and marketer of a broad range of consumer lawn and garden products including weed preventive landscape fabrics, weed trimmer replacement heads, fertilizer spikes, decorative landscape edging, shade cloth and root feeders which are sold under various recognized brand names including Weedblock(R), Jobe's(R), Weed Wizard(TM), Emerald Edge(R), Shade Fabric(TM), Ross(R), and Tensar(R). The Company markets its products through most large national home improvement and mass merchant retailers. The Company's Internet subsidiary, E*Garden (www.egarden.com), is an electronic marketplace and portal for the lawn and garden industry. EX-99.(B)(2) 8 AMENDMENT TO CREDIT AGREEMENT AMENDMENT TO CREDIT AGREEMENT This Amendment (the "Amendment") dated as of September 29, 1999, is between Bank of America, N.A. (the "Bank"), formerly known as Bank of America National Trust and Savings Association, and U.S. Home & Garden Inc. (the "Borrower"). RECITALS A. The Bank and the Borrower entered into a certain Credit Agreement dated as of October 13, 1998 (the "Agreement"). B. The Bank and the Borrower desire to amend the Agreement. AGREEMENT 1. Definitions. Capitalized terms used but not defined in this Amendment shall have the meaning given to them in the Agreement 2. Amendments. The Agreement is hereby amended as follows: 2.1 In Section 7.4(d), clause (ii) is amended to read in its entirety as follows: (ii) the prior effective written consent or approval to such Acquisition of the board of directors or equivalent governing body of the target is obtained, and the prior written approval of the Bank to such Acquisition is obtained. 2.2 In Section 7,11(d), the clause "declare or pay cash dividends to its stockholders and" is deleted, and the amount "$8,000,000" is substituted for the amount "$5,000,000." 2.3 Section 7.18 is amended to read in its entirety as follows: 7.18 Financial Covenants. (a) Interest Coverage, Ratio. The Borrower shall not permit the Interest Coverage Ratio, for any four fiscal quarter period (on a rolling four quarter basis) to be less than (i) 1.75 to 1.00 for the four fiscal quarter periods ending on June 30, 1999, September 30, 1999, December 31, 1999, and March 31, 2000, (ii) 2.50 to 1.00 for the four fiscal quarter period ending on June 30, 2000, and (iii) 3.00 to 1.00 for any four fiscal quarter period ending after June 30, 2000. (b) Leverage Ratio. The Borrower shall not permit the Leverage Ratio for any four fiscal quarter period (on a rolling four quarter basis) to exceed (1) 6.25 to 1.00 for the four fiscal quarter periods ending on June 30, 1999, September 30, 1999, and December 31. 1999, (ii) 6.50 to 1.00 for the four fiscal quarter period ending on March 31, 2000, (iii) 4.25 to 1.00 for the four fiscal quarter period ending on June 30, 2000, and for any four fiscal quarter period ending, on March 31 of any fiscal year (except March 31, 2000), and (iv) 4.00 to 1.00 for any other four fiscal quarter period. (c) Fixed Charge Coverage Ratio. The Borrower shall not permit the Fixed Charge Coverage Ratio to be less than (i) 1.25 to 1.00 for the three fiscal quarter period ending on June 30, 1999, and for the four fiscal quarter periods (on a rolling four quarter basis) ending on September 30, 1999, December 31, 1999, and March 31, 2000, (ii) 2.00 to 1.00 for the four fiscal quarter periods (on a rolling four quarter basis) ending an or after June 30, 2000, and on or before September 30, 2001, (iii) 1.50 to 1.00 for the four fiscal quarter periods (on a rolling four quarter basis) ending on December 31, 2001, and March 31, 2002, and (iv) 1.25 to 1.00 for any four fiscal quarter period (on a rolling four quarter basis) ending after March 31, 2002. (d) Consolidated EBITDA. The Borrower shall not permit Consolidated EBITDA (Ampro Adjusted) for any four fiscal quarter period (on a rolling four quarter basis) to be less than (i) $14,500,000 for the four fiscal quarter periods ending on June 30, 1999, September 30, 1999,, and December 31, 1999, (ii) $15,500,000 for the four fiscal quarter period ending on March 31, 2000, (iii) $21,000, 000 for the four fiscal quarter period ending on June 30, 2000 and (iv) $22,000,000 for any four fiscal quarter period ending on or after September 30, 2000. 3. Representations and Warranties. When the Borrower signs this Amendment, the Borrower represents and warrants to the Bank that: 3.1 No Default or Event of Default has occurred or is continuing under the Agreement except those Defaults or Events of Default, if any, that have been disclosed in writing to the Bank or waived in writing by the Bank. 3.2 The representations and warranties in the Agreement are true as of the date of this Amendment as if made on the date of this Amendment except to the extent such representations and warranties expressly refer to an earlier date, in which case they are true and correct as of such earlier date. 3.3 The execution, delivery and performance by the Borrower of this Amendment have been duly authorized by all necessary corporate and other action and do not and will not require any registration with, consent or approval of, notice to or action by, any, Person (including any Governmental Authority) in order to be effective and enforceable. The Agreement as amended by this Amendment constitutes the legal, valid and binding obligations of the Borrower, enforceable against it in accordance with its respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability. 2 4. Effective Date. This Amendment will be effective on the date on which the Bank receives from the Borrower a duly executed original of this Amendment and a fee in the amount of Fifty-Six Thousand Two Hundred Fifty Dollars ($56,250). 5. Miscellaneous. 5.1 Except as herein expressly amended, all terms, covenants and provisions of the Agreement are and shall remain in full force and effect and all references therein and in the other Loan Documents to the Agreement shall henceforth refer to the Agreement as amended by this Amendment. This Amendment shall be deemed incorporated into, and a part of, the Agreement. This Amendment is a Loan Document. 5.2 This Amendment shall be binding upon and inure to the benefit of the parties hereto and to the Agreement and their respective successors and assigns. No third party beneficiaries are intended in connection with this Amendment. 5.3 This Amendment shall be governed by and construed in accordance with the law of the State of California. 5.4 This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. Each of the parties hereto understands and agrees that this document (and any other document required herein) may be delivered by any party thereto either in the form of an executed original or an executed original sent by, facsimile transmission to be followed promptly by mailing of a hard copy original, and that receipt by the Bank of a facsimile transmitted document purportedly bearing the signature of the Borrower shall bind the Borrower with the same force and affect as the delivery of a hard copy original. Any failure by the Bank to receive the hard copy executed original of such document shall not diminish the binding effect of receipt of the facsimile transmitted executed original of such document. 3 This Amendment is executed as of the date stated at the beginning of this Amendment. Bank of America, N.A. By: Michele Mojabi Title: Vice President U.S. Home & Garden Inc. By: Lynda Gustafson Title: V.P. Finance 4 EX-99.(B)(3) 9 SECOND AMENDMENT TO CREDIT AGREEMENT SECOND AMENDMENT TO CREDIT AGREEMENT This Amendment (the "Amendment") dated as of November 22, 1999, is between Bank of America, N.A. (the "Bank"), formerly known as Bank of America National Trust and Savings Association, and U.S. Home & Garden Inc. (the "Borrower"). RECITALS A. The Bank and the Borrower entered into a certain Credit Agreement dated as of October 13, 1998 (including previous amendments, the "Credit Agreement"). B. On or about June 11, 1999 (the "Acquisition Date"), the Borrower acquired a new subsidiary, E-Garden, Inc., a North Carolina Company, which the Borrower now wishes to reincorporate in the State of Delaware through a merger with a recently formed Delaware shell corporation (such subsidiary, either before or after such merger, is referred to herein as "E-Garden"). The Borrower desires to sell to investors in a private transaction shares of the common stock and warrants to purchase shares of the common stock of E-Garden, and otherwise issue shares of common stock or options to purchase shares of common stock of E-Garden in private transactions to officers, directors, employees and consultants to E-Garden, who may also be officers and directors of Borrower. At the conclusion of the foregoing transactions ("Transactions") the Borrower will continue to own at least 51% of the shares of E-Garden. The Transactions are prohibited by paragraph 7.2 of the Credit Agreement. C. The Bank and the Borrower desire to amend the Credit Agreement. AGREEMENT 1. Definitions. Capitalized terms used but not defined in this Amendment shall have the meaning given to them in the Agreement. 2. Waiver. The Bank hereby waives compliance by the Borrower with Section 7.2 (Deposition of Assets) of the Credit Agreement for the sole and express purpose of permitting the Borrower to enter into the Transactions. Additionally, retroactively to the Acquisition Date, the Bank waives the requirement of a guaranty from E-Garden as required under Section 6.13 of the Credit Agreement, and waives the requirement for a security interest in the assets of E-Garden as required under Sections 6.13 and 7.4(d)(vii) of the Credit Agreement. The parties acknowledge, however, that the Credit Agreement continues to require a security interest in the Borrower's remaining stock in E-Garden. The Bank waives the Borrower's earlier non-compliance with the pledge requirement. The Borrower shall deliver to the Bank the stock of E-Garden owned by the Borrower immediately following consummation of the Transactions. 3. Amendments. The Credit Agreement is hereby amended as follows: 3.1 Section 5.13 and sections 6.3 through 7.17 of the Credit Agreement are amended to provide that E-Garden shall not be considered a Subsidiary for the purposes of those sections. 3.2 Section 7.18 is amended to provide that each of the covenants therein shall be calculated using the consolidated financial information to the Borrower and all of its Wholly-Owned Subsidiaries, by excluding E-Garden. 4. Representations and Warranties. When the Borrower signs this Amendment, the Borrower represents and warrants to the Bank that: 4.1 No Default or Event of Default has occurred or is continuing under the Credit Agreement except those Defaults or Events of Default, if any, that have been disclosed in writing to the Bank or waived in writing by the Bank. 4.2 The representations and warranties in the Credit Agreement are true as of the date of this Amendment as if made on the date of this Amendment except to the extent such representations and warranties expressly refer to an earlier date, in which case they are true and correct as of such earlier date. 4.3 The execution, delivery and performance by the Borrower of this Amendment have been duly authorized by all necessary corporate and other action and do not and will not require any registration with, consent or approval of, notice to or action by, any Person (including any Governmental Authority) in order to be effective and enforceable. The Credit Agreement as amended by this Amendment constitutes the legal, valid and binding obligations of the Borrower, enforceable against it in accordance with its respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability. 5. Miscellaneous. 5.1 Except as herein expressly amended, all terms, covenants and provisions of the Agreement are and shall remain in full force and effect and all references therein and in the other Loan Documents to the Agreement shall henceforth refer to the Agreement as amended by this Amendment. This Amendment shall be deemed incorporated into, and a part of, the Agreement. This Amendment is a Loan Document. The waivers do not apply to any other breach that may now exist or may occur after the date of this Amendment with respect to the Transactions or any term, condition, or covenant of the Credit Agreement. 5.2 This Amendment shall be binding upon and inure to the benefit of the parties hereto and to the Agreement and their respective successors and assigns. No third party beneficiaries are intended in connection with this Amendment. 2 5.3 This Amendment shall be governed by and construed in accordance with the law of the State of California. 5.4 This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. Each of the parties hereto understands and agrees that this document (and any other document required herein) may be delivered by any party thereto either in the form of an executed original or an executed original sent by, facsimile transmission to be followed promptly by mailing of a hard copy original, and that receipt by the Bank of a facsimile transmitted document purportedly bearing the signature of the Borrower shall bind the Borrower with the same force and affect as the delivery of a hard copy original. Any failure by the Bank to receive the hard copy executed original of such document shall not diminish the binding effect of receipt of the facsimile transmitted executed original of such document. This Amendment is executed as of the date stated at the beginning of this Amendment. Bank of America, N.A. By: Michele Mojabi Title: Vice President U.S. Home & Garden Inc. By: Lynda Gustafson Title: V.P. Finance 3 -----END PRIVACY-ENHANCED MESSAGE-----