UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 5)*
NORTEK, INC.
________________________________________________________________
(Name of Issuer)
Common Stock, par value $1.00 per share
Special Common Stock, par value $1.00 per share
________________________________________________________________
(Title of Class of Securities)
65655910
_____________________________
(CUSIP Number)
Richard L. Bready COPY TO: Douglass N Ellis, Jr., Esq.
c/o Nortek, Inc. Ropes & Gray
50 Kennedy Plaza One International Place
Providence, RI 02903 Boston, MA 02110
(401) 751-1600 (617) 951-7000
_______________________________________________________________________________
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
April 26, 1996
______________________________________________________
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box /__/
Check the following box if a fee is being paid with the statement /__/ (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
Page 1 of 35
CUSIP No. 65655910 Schedule 13D Page 2 of 35
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Richard L. Bready
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /__/
(b) /__/
3. SEC USE ONLY
4. SOURCE OF FUNDS*
PF, OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED /__/
PURSUANT TO ITEM 2(d) or 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
7. SOLE VOTING POWER
NUMBER OF 461,081 shares of Common Stock
272,031 shares of Special Common Stock
SHARES
8. SHARED VOTING POWER
BENEFICIALLY 236,800 shares of Common Stock
46,263 shares of Special Common Stock
OWNED BY
9. SOLE DISPOSITIVE POWER
EACH 461,081 shares of Common Stock
272,031 shares of Special Common Stock
REPORTING
10. SHARED DISPOSITIVE POWER
PERSON 236,800 shares of Common Stock
46,263 shares of Special Common Stock
WITH
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
461,081 shares of Common Stock
272,031 shares of Special Common Stock
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* /__/
The amount set forth in row (11) excludes 236,800 shares of
Common Stock and 46,263 shares of Special Common Stock of which
Bready disclaims beneficial ownership.
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.6 percent of Common Stock (including the Special Common Stock
in the calculations)
52.1 percent of Special Common Stock
14. TYPE OF REPORTING PERSON*
IN
Page 2 of 35
Item 1. Security Issuer.
The class of equity securities to which this Statement on Schedule 13D (the
"Statement") relates is the Common Stock, par value $1.00 per share (the
"Common Stock") and the Special Common Stock, par value $1.00 per share (the
"Special Common Stock"), each of Nortek, Inc., a Delaware corporation (the
"Issuer"). The principal executive offices of the Issuer are located at 50
Kennedy Plaza, Providence, Rhode Island 02903. This Statement amends and
supplements the Statement on Schedule 13D dated November 13, 1990, as amended
prior hereto (as so amended, the "Former Statement") relating to the Common
Stock, par value $1.00 per share of the Issuer, filed by (i) Bready Associates,
a general partnership organized under the laws of the State of Ohio ("Bready
Associates"), whose partners are Barry Silverstein ("Silverstein"), Dennis J.
McGillicuddy ("McGillicuddy"), D. Stevens McVoy ("McVoy") and Richard L. Bready
("Bready"), (ii) Phoenix Associates III, a general partnership organized under
the laws of the State of Ohio, whose partners are Silverstein, McGillicuddy and
McVoy, (iii) Silverstein, (iv) McGillicuddy, (v) McVoy and (vi) Bready. In
addition, this Statement serves as a non-group filing on behalf of Bready
(hereinafter, "Bready" or the "Reporting Person") with respect to the Common
Stock and the Special Common Stock.
Item 2. Identity and Background.
(a) The person filing this Statement is Richard L. Bready.
(b) Bready's business address is Nortek, Inc., 50 Kennedy Plaza, Providence,
Rhode Island 02903.
(c) Bready's present principal employment is as chairman and chief executive
officer of the Issuer.
(d) During the last five years, the Reporting Person has not been convicted
in any criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, the Reporting Person has not been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction resulting in his being subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
(f) Bready is a citizen of the United States.
Page 3 of 35
Item 3. Source and Amount of Funds or Other Consideration.
The shares of Common Stock and Special Common Stock acquired prior
to the transaction discussed in Item 4 hereto were acquired with personal funds
of Bready and funds borrowed by Bready, as was disclosed in the Former
Statement.
On April 26, 1996, pursuant to a Stock Purchase Agreement dated as of such
date, by and among the Issuer, Bready Associates, Phoenix Associates III and
the Partners of Bready Associates (including Bready) and of Phoenix Associates
III, Bready Associates dissolved and upon dissolution, among other things
distributed 53,182 shares of Common Stock to Bready. These shares of Common
Stock were acquired by Bready as a liquidation distribution of the Partnership
and required no additional payment by Bready.
Item 4. Purpose of Transaction.
Pursuant to a Stock Purchase Agreement dated as of April 26, 1996, by and
among the Issuer, Bready Associates, Phoenix Associates III and the Partners of
Bready Associates (including Bready) and of Phoenix Associates III, Bready
Associates dissolved and upon dissolution, among other things distributed
53,182 shares of Common Stock to Bready. The Stock Purchase Agreement provided
for the resignations of McGillicuddy, Silverstein and McVoy as directors of the
Issuer. A copy of the Stock Purchase Agreement is attached hereto as Exhibit 1
and is incorporated herein by reference.
Except as set forth in this Item 4, the Reporting Person has no present
plans or proposals which relate to or would result in any of the actions
specified in clauses (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a-b) As of the close of business on April 26, 1996, Bready directly owned
(x) 272,031 shares of Special Common Stock (including 37,500 such shares that
Bready has a right to acquire pursuant to certain employee stock options) and
(y) 461,081 shares of Common Stock (including 150,000 such shares that Bready
has a right to acquire pursuant to certain employee stock options). These
shares represent 7.6% of all outstanding shares (Common Stock and Special
Common Stock taken as a group) and 52.1% of the Special Common Stock. Bready
has both sole voting and dispositive power with respect to these shares.
Various defined benefit pension plans of the Issuer and certain of its
subsidiaries held 236,800 shares of Common Stock and 46,263 shares of Special
Common Stock as of April 11, 1996. Under the provisions of the trust agreement
governing such pension plans, the Issuer may instruct the Trustee of such plans
regarding the acquisition and disposition of plan assets and the voting of
Page 4 of 35
securities held by the trust relating to such pension plans. Bready disclaims
beneficial ownership of the shares held by such pension plans.
(c) Item 3 hereof is hereby incorporated by reference herein. Except as set
forth therein, the Reporting Person has not effected a transaction in Common
Stock or Special Common Stock during the sixty days preceding the date of this
Statement.
(d) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
The Reporting Person presently has no contracts, arrangements,
understandings or relationships with any other person with respect to any
securities of the Issuer, including but not limited to the transfer or voting
of any shares of Common Stock or Special Common Stock, finder's fees, joint
ventures, loan or option arrangements, puts or calls, guarantees of profits,
division of profits or loss, or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits.
Exhibit 1 Stock Purchase Agreement dated as of April 26, 1996 by and among the
Issuer, Bready Associates, Phoenix Associates and the Partners of
Bready Associates and Phoenix Associates.
Exhibit 2 Amendment No. 2 to the Partnership Agreement of Bready Associates
dated as of April 26, 1996 executed by Silverstein, McGillicuddy,
McVoy and Bready.
Page 5 of 35
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: April 30, 1996
Richard L. Bready
By:/s/ Richard L. Bready
Page 6 of 35
EXHIBIT INDEX
Exhibit Page
Exhibit 1 Stock Purchase Agreement dated as of April 8
26, 1996 by and among the Issuer, Bready
Associates, Phoenix Associates and the
Partners of Bready Associates and Phoenix
Associates.
Exhibit 2 Amendment No. 2 to the Partnership 33
Agreement of Bready Associates dated as of
April 26, 1996 executed by Silverstein,
McGillicuddy, McVoy and Bready.
Page 7 of 35
STOCK PURCHASE AGREEMENT
by and among
NORTEK, INC.
and
BREADY ASSOCIATES
and
PHOENIX ASSOCIATES III
and
THE PARTNERS OF BREADY ASSOCIATES
AND OF PHOENIX ASSOCIATES III
Dated as of April 26, 1996
Page 8 of 35
STOCK PURCHASE AGREEMENT
Table of Contents
SECTION 1. CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. PURCHASE AND SALE . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 3. CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 4. STANDSTILL . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 5. REPRESENTATIONS AND WARRANTIES RELATING TO THE PARTNERSHIP . . 6
5.1. Organization and Authority. . . . . . . . . . . . . . . . . . . . 6
5.2. Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.3. No Legal Obstacle . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.4. Title to Partnership Stock . . . . . . . . . . . . . . . . . . . . 7
5.5. Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 6. REPRESENTATIONS AND WARRANTIES RELATING TO PHOENIX . . . . . . 7
6.1. Organization and Authority. . . . . . . . . . . . . . . . . . . . 7
6.2. Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6.3. No Legal Obstacle . . . . . . . . . . . . . . . . . . . . . . . . . 7
6.4. Title to Phoenix Stock . . . . . . . . . . . . . . . . . . . . . . 7
6.5. Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 7. REPRESENTATIONS AND WARRANTIES RELATING TO SILVERSTEIN,
MCGILLICUDDY AND MCVOY . . . . . . . . . . . . . . . . . . . . 8
7.1. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7.2. Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7.3. Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 8. REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY . . . . 8
8.1. Organization and Authority of the Company . . . . . . . . . . . . . 8
8.2. Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 9. COVENANTS OF THE PARTNERSHIP AND PHOENIX . . . . . . . . . . . 9
9.1. Dissolution of the Partnership . . . . . . . . . . . . . . . . . . 9
9.2. Payment of Secured Obligations . . . . . . . . . . . . . . . . . . 9
9.3. Resignation of Selling Partners as Directors . . . . . . . . . . 10
i
Page 9 of 35
SECTION 10. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . 10
10.1. Indemnification of the Company . . . . . . . . . . . . . . . 10
10.2. Indemnification of the Partnership and the Sellers . . . . . 10
10.3. Claims for Indemnification . . . . . . . . . . . . . . . . . 10
10.4. Defense by Indemnifying Party . . . . . . . . . . . . . . . 11
10.5. Definition of Loss . . . . . . . . . . . . . . . . . . . . . 11
10.6. Payment . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 11. STOCK TRANSFER TAXES . . . . . . . . . . . . . . . . . . . . 12
SECTION 12. BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 13. EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 14. ADDITIONAL ASSURANCES . . . . . . . . . . . . . . . . . . . 13
SECTION 15. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 16. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 17. SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . 15
SECTION 18. SURVIVAL . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 19. AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 20. SPECIFIC PERFORMANCE . . . . . . . . . . . . . . . . . . . . 15
SECTION 21. HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 22. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 23. COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 24. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . 16
ii
Page 10 of 35
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made and entered into as
of April 26, 1996 among Bready Associates, a general partnership (the
"Partnership"), Phoenix Associates III, a general partnership ("Phoenix"),
Barry Silverstein, an individual residing in Florida ("Silverstein"), Dennis
J. McGillicuddy, an individual residing in Florida ("McGillicuddy"), D. Stevens
McVoy, an individual residing in Ohio ("McVoy," and together with Silverstein,
McGillicuddy with respect to Phoenix, the "Phoenix Partners," with respect to
the Partnership, the "Selling Partners," and such three individuals together
with Phoenix, each a "Seller" and collectively, the "Sellers"), Richard L.
Bready, an individual residing in Rhode Island ("Bready," and with respect to
the Partnership together with Silverstein, McGillicuddy and McVoy, the
"Partners") and Nortek, Inc., a Delaware corporation (the "Company").
WHEREAS, the Selling Partners and Phoenix are the beneficial owners of an
aggregate of 1,189,809 shares of common stock, par value $1.00 per share, of
the Company, together with the Preference Stock Rights associated with such
common stock (the common stock of the Company, together with the associated
Preference Stock Rights, being referred to herein as the "Common Stock").
WHEREAS, Selling Partner desires to sell to the Company, and the Company
desires to acquire from each Selling Partner, the Common Stock beneficially
owned by such Selling Partner.
WHEREAS, Phoenix desires to sell to the Company, and the Company desires to
acquire from Phoenix, the Common Stock beneficially owned by Phoenix.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto, intending
to be legally bound, hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
For purposes of this Agreement, the following terms shall have the meanings
indicated:
1.1. Partner shall be deemed the "Beneficial Owner" of any shares of Common
Stock which such Partner shall have the right to receive and become the
owner of upon dissolution of the Partnership pursuant to the Partnership
Agreement or as contemplated hereby.
1.2. The term "Board" shall mean the Board of Directors of the Company then in
office.
Page 11 of 35
1.3. The term "Directors" shall mean the members of the Board of Directors of
the Company at the time then in office.
1.4. The term "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
1.5. The term "Partnership Agreement" shall mean the Partnership Agreement of
Bready Associates dated as of October 31, 1990, as amended.
1.6. The term "Partnership Stock" shall mean the total number of shares of
Common Stock owned by the Partnership.
1.7. The term "Phoenix Stock" shall mean 183,700 shares of Common Stock owned
by Phoenix.
1.8. The term "Selling Partner Stock" shall mean with respect to the
Partnership, for each Selling Partner, the number of shares of Partnership
Stock to be distributed by the Partnership to such Selling Partner and
sold by him to the Company pursuant to this Agreement. The number of
shares of Common Stock to be distributed to the Selling Partners upon
liquidation of the Partnership as provided herein is 1,006,109 and the
number of shares to be distributed to Bready is 53,182.
1.9. The following terms defined elsewhere in this Agreement in the Sections
set forth below shall have the respective meanings therein defined:
"Agreement" Preamble
"Bready" Preamble
"Closing" Section 2.3
"Closing Date" Section 2.3
"Common Stock" Preamble
"Company" Preamble
"Company Indemnified Parties" Section 10.1
"Confidential Information" Section 4
"Indemnified Party" Section 10.3
"Indemnifying Party" Section 10.3
"Loss" Section 10.5
"McGillicuddy" Preamble
"McVoy" Preamble
"Partners" Preamble
"Partnership" Preamble
"Partnership Indemnified Parties" Section 10.2
2
Page 12 of 35
"Phoenix" Preamble
"Phoenix Partners" Preamble
"Phoenix Purchase Price" Section 2.2
"Seller" Preamble
"Selling Partner Purchase Price" Section 2.1
"Selling Partners" Preamble
"Silverstein" Preamble
"Third Party Claims" Section 10.4
SECTION 2. PURCHASE AND SALE.
2.1. Upon the terms and subject to the conditions herein set forth, (i) each
Selling Partner hereby agrees to sell, and the Company hereby agrees to
purchase, all of the Selling Partner Stock Beneficially Owned by such
Selling Partner for a price of $17 per share of Common Stock or an
aggregate purchase price for the Selling Partners of $17,103,853 (the
"Selling Partner Purchase Price").
2.2. Upon the terms and subject to the conditions herein set forth, (i) Phoenix
hereby agrees to sell, and the Company hereby agrees to purchase, all of
the Phoenix Stock for a price of $17 per share of Common Stock or an
aggregate purchase price of $3,122,900 (the "Phoenix Purchase Price").
2.3. The closing of the purchase and sale of the Common Stock hereunder (the
"Closing") shall take place at the offices of Ropes & Gray, 885 Third
Avenue, New York, New York 10022 or at such other place as to which the
Company and the Sellers shall mutually agree in writing, at 10:00 a.m.,
New York time on April 26, 1996 or at such later time as to which the
parties hereto shall mutually agree in writing (such date and time being
the "Closing Date").
2.4. At the Closing, (i) the Company shall make payment for the Selling Partner
Stock by delivering to the Selling Partners an amount equal to the Selling
Partner Purchase Price by wire transfer, and simultaneously, (ii) the
Selling Partners shall (a) deliver to the Company a certificate or
certificates representing the shares of Common Stock so purchased,
together with appropriate stock powers or other instruments of transfer in
good order; provided, however, that the Selling Partners shall not deliver
any certificate representing any of the 92,800 shares included in the
Partnership Stock and currently held for the account of the Partnership by
Lehman Bros. or its nominee; and (b) cause such 92,800 shares to be
transferred to the account of the Company.
2.5. At the Closing, (i) the Company shall make payment for the Phoenix Stock
by delivering to Phoenix an amount equal to the Phoenix Purchase Price by
3
Page 13 of 35
wire transfer, and simultaneously, (ii) Phoenix shall deliver to the
Company a certificate or certificates representing the shares of Common
Stock so purchased, together with appropriate stock powers or other
instruments of transfer in good order.
SECTION 3. CLOSING DELIVERIES.
3.1. Deliveries by the Selling Partners to the Company. At the Closing, the
Selling Partners shall cause all of the following to be delivered to the
Company.
3.1.1. One or more instruments of assignment, duly executed on behalf of the
Partnership by one of the Selling Partners, distributing to each of
the Selling Partners his Selling Partner's Stock, together with each
stock certificate evidencing the same; provided, however, that no
certificate shall be so distributed in respect of any of the 92,800
shares of Partnership Stock currently held for the account of the
Partnership by Lehman Bros. or its nominee;
3.1.2. One or more instruments of assignment, duly executed by each of the
Selling Partners, transferring, assigning and selling the Selling
Partner Stock to the Company, it being agreed that the Selling
Partner Stock so transferred, assigned and sold shall be evidenced by
the stock certificate(s) delivered to Purchaser pursuant to Section
3.1.1 and any held by Lehman Bros. or its nominee.
3.1.3. A release substantially in the form included as Exhibit 3 hereto,
which release shall be executed (i) by each of the Selling Partners
as an individual, and as a partner in the Partnership, and (ii) on
behalf of the Partnership by one of the Selling Partners.
3.2. Deliveries by the Selling Partners to Bready. At the Closing, the Selling
Partners shall cause all of the following to be delivered to Bready.
3.2.1. One or more instruments of assignment, duly executed on behalf of the
Partnership by one of the Selling Partners, distributing 53,182
shares of Common Stock to Bready, together with each stock
certificate evidencing the same; and Bready hereby authorizes and
consents to the prior delivery of all such instruments of assignment
and certificates by the Partnership to the Selling Partners.
4
Page 14 of 35
3.2.2. A release substantially in the form included as Exhibit 3 hereto,
which release shall be executed (i) by each of the Selling Partners
as an individual, and as a partner in the Partnership, and (ii) on
behalf of the Partnership by one of the Selling Partners.
3.3. Deliveries by Phoenix. At the Closing, Phoenix shall cause all of the
following to be delivered to the Company:
3.3.1. One or more instruments of assignment, duly executed on behalf of
Phoenix by one or more of the Phoenix Partners, transferring,
assigning and selling the Phoenix Stock to the Company, together with
each stock certificate evidencing the same.
3.3.2. A release substantially in the form included as Exhibit 3 hereto,
duly executed (i) by each of the Phoenix Partners as an individual,
and as one of the Phoenix Partners, and (ii) on behalf of Phoenix by
one or more of the Phoenix Partners.
3.4. Deliveries by the Company. At the Closing, the Company shall cause all of
the following to be delivered:
3.4.1. By wire transfer of federal or other immediately available funds: (i)
$7,027,048.44 to M & T Bank, New York, New York to the account of
Silverstein, McGillicuddy and McVoy and (ii) $13,199,704.56 to
Huntington National Bank, Columbus, Ohio to the account of Phoenix
Associates III.
3.4.2. A release substantially in the form included as Exhibit 3 hereto,
duly executed by the Company.
3.5. Deliveries by Bready. At the Closing, Bready shall cause the following to
be delivered to Phoenix:
3.5.1. A release substantially in the form included as Exhibit 3 hereto,
duly executed by Bready.
3.5.2. A certificate of the Chief Executive Officer of the Company
evidencing the accuracy of the representation in Section 8.4 hereto.
5
Page 15 of 35
3.6. Deliveries by McVoy and Silverstein. At the Closing, each of McVoy and
Silverstein shall cause the following documents to be delivered:
3.6.1. A waiver of notice of the meeting of the Board held on April 26,
1996.
SECTION 4. STANDSTILL.
For a period commencing on the date hereof and ending upon the fifth
anniversary of the Closing Date, no Seller will or permit any of its affiliates
to, directly or indirectly, individually or acting in concert with any other
person: (i) own, acquire or offer to acquire, directly or indirectly, in any
manner whatsoever, beneficial ownership, as defined in Section 13(d) of the
Exchange Act, of any shares of capital stock of the Company; or (ii) make, or
in any way become a "participant" (as defined in Rule 14a-11(b) promulgated
under the Exchange Act) directly or indirectly, in any manner whatsoever, in
any "solicitation of proxies" to vote any share of the capital stock of the
Company (as such terms are defined in Rule 14a-1 promulgated under the Exchange
Act); or (iii) disclose to any person who is not an officer, employee,
director, agent or other representative of the Company any confidential
information concerning the Company except to the extent (a) required to do so
pursuant to legal process and then only if and to the extent such Seller is
advised by legal counsel that such Seller is legally obligated to respond and
such Seller has afforded to the Company prompt notice of such process and the
opportunity to obtain a protective order, (b) otherwise required to do so by
law or (c) furnished confidentially to any attorney or accountant representing
any Seller. "Confidential Information" means the books and records, other
documents, material and information of or relating to the Company (whether or
not in writing) disclosed or obtained or ascertained by the Sellers in their
capacity as Directors or otherwise but does not include information which is
now in, or hereafter enters, the public domain through no violation by the
Sellers of this covenant or information disclosed by the Company to others on
an unrestricted, nonconfidential basis.
SECTION 5. REPRESENTATIONS AND WARRANTIES RELATING TO THE PARTNERSHIP.
The Partnership and the Selling Partners hereby jointly and severally
represent and warrant to the Company that:
5.1. Organization and Authority. The Partnership is a duly organized and
validly existing general partnership, in good standing under the laws of
Ohio, with all power and authority necessary to enter into and perform
this Agreement.
5.2. Authorization. This Agreement has been duly executed by the Partnership
and constitutes a valid and legally binding obligation of the Partnership,
and is enforceable against the Partnership in accordance with its terms.
6
Page 16 of 35
5.3. No Legal Obstacle. Performance by the Partnership and the Selling
Partners of their respective obligations hereunder will not cause a breach
or violation of any contract, instrument, agreement, lease, mortgage,
judgment, order, decree or other restriction or obligation to which the
Partnership is a party or by which the Partnership or its assets are
bound.
5.4. Title to Partnership Stock. Except as set forth on Schedule 5.4 hereto,
the Partnership has good and marketable title to the Partnership Stock,
consisting of 1,059,291 shares of Common Stock subject to no liens or
other adverse claims.
5.5. Approvals. Except for the filings required to be made with the SEC under
the Exchange Act, no filing with or approval or authorization of any
governmental authority or other third party is required for the
Partnership to enter into and to perform its obligations under this
Agreement.
SECTION 6. REPRESENTATIONS AND WARRANTIES RELATING TO PHOENIX.
Phoenix and the Phoenix Partners hereby jointly and severally represent and
warrant to the Company that:
6.1. Organization and Authority. Phoenix is a duly organized and validly
existing general partnership, in good standing under the laws of Ohio,
with all power and authority necessary to enter into and perform this
Agreement.
6.2. Authorization. This Agreement has been duly executed by Phoenix and
constitutes a valid and legally binding obligation of Phoenix, and is
enforceable against Phoenix in accordance with its terms.
6.3. No Legal Obstacle. Performance by Phoenix and the Phoenix Partners of
their respective obligations hereunder will not cause a breach or
violation of any contract, instrument, agreement, lease, mortgage,
judgment, order, decree or other restriction or obligation to which
Phoenix is a party or by which Phoenix or its assets are bound.
6.4. Title to Phoenix Stock. Except as set forth on Schedule 6.4 hereto,
Phoenix has good and marketable title to the Phoenix Stock, consisting of
183,700 shares of Common Stock subject to no liens or other adverse
claims.
6.5. Approvals. Except for filings required to be made with the SEC under the
Exchange Act, no filing with or approval or authorization of any
7
Page 17 of 35
governmental authority or other third party is required for Phoenix to
enter into and to perform its obligations under this Agreement.
SECTION 7. REPRESENTATIONS AND WARRANTIES RELATING TO SILVERSTEIN,
MCGILLICUDDY AND MCVOY.
Each of Silverstein, McGillicuddy and McVoy hereby represent and warrant to
the Company that:
7.1. Authority. He has full legal right and power and all authority necessary
to enter into, execute and deliver this Agreement and to perform fully his
obligations hereunder.
7.2. Authorization. This Agreement has been duly executed by and constitutes a
valid and legally binding obligation of him and is enforceable against him
in accordance with its terms.
7.3. Common Stock. Except as disclosed in filings heretofore made with the SEC
pursuant to the Exchange Act, neither he nor any of his Affiliates (other
than Phoenix and the Partnership to the extent disclosed in Sections 5.4
and 6.4 hereof) beneficially own or possess any rights to acquire Common
Stock.
SECTION 8. REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY.
The Company hereby represents and warrants to the Partnership and each
Seller that:
8.1. Organization and Authority of the Company. The execution and delivery of
this Agreement by the Company, and the performance by it of its
obligations hereunder, have been duly and validly authorized and consented
to by all necessary action by the Directors, and no other corporate act or
proceeding on the part of the Company, its stockholders or Directors is
necessary to authorize the execution and delivery of this Agreement by the
Company or the performance by it of its obligations hereunder. The
Company is a duly organized and validly existing corporation, in good
standing under the laws of Delaware, with all necessary corporate power
and authority to enter into and perform this Agreement.
8.2. Authorization. This Agreement (i) has been duly authorized by all
necessary corporate proceedings of the Company (ii) has been duly and
validly executed and delivered by Company (iii) constitutes a valid and
legally binding obligation of the Company, and (iv) is enforceable against
the Company in accordance with its terms.
8
Page 18 of 35
8.3. Consents and Approvals; No Breach. There is no unsatisfied requirement
applicable to the Company to make any filing with, or to obtain any
permit, authorization, consent or approval of, any governmental or
regulatory authority, or of any other third party, as a condition to the
consummation by the Company of the transactions contemplated by this
Agreement. Neither the execution nor delivery of this Agreement by the
Company, nor its consummation of the transactions contemplated hereby, has
or will (i) violated or violate any provision of the certificate of
incorporation or bylaws of the Company or (ii) constituted or constitutes
a breach or default under any note, bond, mortgage, indenture, lease,
contract or other agreement to which the Company is a party or by which it
may be bound.
8.4. Except as previously disclosed and simultaneously confirmed by letter to
the Selling Partners, neither the Company nor any of its subsidiaries or
affiliates (i) is engaged in any negotiations or discussions with respect
to a transaction that would result in any person or affiliated group of
persons (a) acquiring a material part of the assets of the Company or of
any of its material subsidiaries, (b) acquiring the Company or any of its
material subsidiaries in a merger, consolidation or other business
combination, or (c) holding more than twenty percent (20%) of the Common
Stock, (ii) has any agreement or understanding with respect to any
transaction described in the foregoing clause (i), or (iii) is aware that
any person or affiliated group of persons is interested in commencing a
tender offer or exchange offer for the purpose of acquiring more than
twenty percent (20%) of the Common Stock.
SECTION 9. COVENANTS OF THE PARTNERSHIP AND PHOENIX.
9.1. Dissolution of the Partnership. On the Closing Date, the Partnership will
simultaneously terminate, dissolve and liquidate, and the Partnership
shall, at the Closing, distribute, in-kind to the Partners, all of the
shares of the Partnership Stock as their respective interests appear, in
each case pursuant to Section 16 of the Partnership Agreement, and
simultaneously the Selling Partners shall tender to the Company their
respective Selling Partner Stock determined as of the date hereof together
with stock powers or other appropriate instruments of transfer in good
order and shall each receive from the Company their Selling Partner
Purchase Price.
9.2. Payment of Secured Obligations. At the Closing, the Selling Partners in
the case of the Partnership and the Phoenix Partners in the case of
Phoenix shall pay or otherwise satisfy all debts and obligations secured
by Partnership Stock or Phoenix Stock, as the case may be, such that all
9
Page 19 of 35
such shares of Common Stock to be delivered at the Closing will be free of
any liens or other adverse claims not created by Bready or the Company.
9.3. Resignation of Selling Partners as Directors. At the Closing, Silverstein,
McGillicuddy and McVoy shall resign as Directors of the Company, with such
resignations to be effective immediately.
SECTION 10. INDEMNIFICATION.
10.1. Indemnification of the Company.
Subject to the terms of this Section 10, the Partnership and the Sellers
hereby jointly and severally agree to indemnify and hold the Company, its
officers, directors, stockholders, partners, employees, agents and
representatives, and their respective affiliates (the "Company Indemnified
Parties") harmless from and against all Losses (as defined in
Section 10.5) in connection with or otherwise relating to any or all of the
following: (i) any misrepresentation or inaccuracy in, or breach of, any
representation or warranty made in Sections 5, 6 and 7 of this Agreement,
and (ii) any breach of any covenant, agreement or obligation of the
Partnership or the Sellers contained in this Agreement.
10.2. Indemnification of the Partnership and the Sellers.
Subject to the terms of this Section 10, the Company hereby agrees to
indemnify and hold harmless each of Silverstein, McGillicuddy and McVoy
(individually, in his capacity as a Director, or otherwise), together with
each other party to this Agreement, and their respective agents, successors,
assigns and representatives (the "Partnership Indemnified Parties") from and
against each and every Loss (as defined in Section 10.5) in connection with
or otherwise relating to any or all of the following: (i) any
misrepresentation or inaccuracy in, or breach of, any representation or
warranty made by, the Company in Section 8 of this Agreement, (ii) the
discussions and/or negotiations giving rise to this Agreement, the execution
of this Agreement and the consummation of the transactions contemplated
hereby, and (iii) any breach of any covenant, agreement or obligation of the
Company contained in this Agreement.
10.3. Claims for Indemnification.
Whenever any claim shall arise for indemnification hereunder, the Company
Indemnified Party or the Partnership Indemnified Party seeking
indemnification (the "Indemnified Party") shall promptly notify, in writing,
the party from whom indemnification is sought (the "Indemnifying Party") of
the claim and the facts believed to constitute the basis for such claim, all
with reasonable specificity in light of the facts then known; provided,
10
Page 20 of 35
however, that failure to so notify the Indemnifying Party shall not
discharge the Indemnifying Party from any of its liabilities and obligations
hereunder. Subject to Section 10.4, the Indemnified Party shall not settle
or compromise any claim by a third party for which it is entitled to
indemnification hereunder without the prior written consent of the
Indemnifying Party.
10.4. Defense by Indemnifying Party.
In connection with any claims giving rise to indemnification hereunder
resulting from or arising out of any claim or legal proceeding by a person
who is a third party ("Third Party Claims"), the Indemnifying Party at its
sole cost and expense may, upon written notice to the Indemnified Party that
the Indemnifying Party acknowledges that the relevant Loss is an
indemnifiable liability hereunder and that the Indemnifying Party, in its
good faith judgment, will be able to pay any award of money damages against
the Indemnified Party in connection with such claim or proceeding, assume
the defense of any such claim or legal proceeding. The Indemnified Party
shall be entitled to participate in the defense of any such action, with its
separate counsel and at its own expense. If the Indemnifying Party does not
assume the defense of any such claim or legal proceeding resulting therefrom
within 30 days after the date of receipt of the notice referred to in
Section 10.3 above, (i) the Indemnified Party may defend against such claim
or legal proceeding at the expense of the Indemnifying Party and in such
manner as it may reasonably deem appropriate, including, but not limited to,
settling such claim or legal proceeding at the expense of the Indemnifying
Party and on such terms as the Indemnified Party may deem appropriate, and
(ii) the Indemnifying Party shall be entitled to participate in (but not
control) the defense of such action, with its counsel and at its own
expense. No settlement of any claim or legal proceeding by an Indemnified
Party, unless consented to in writing (which consent shall not be
unreasonably withheld) by the Company (in the case of a Partnership
Indemnified Party) or the Partners (in the case of an Company Indemnified
Party), shall be conclusive as to the amount of the Loss incurred by such
Indemnified Party in connection with such claim or legal proceeding.
10.5. Definition of Loss.
10.5.1. For purposes of this Section 10, the term "Loss" shall mean the
amount of any actual damages, liabilities, obligations, deficiencies,
losses (including without limitation any diminution in value),
expenditures, costs or expenses (including without limitation
reasonable attorneys' fees and disbursements), but excluding any
taxes (or related interest or penalties) paid or payable. For
purposes of determining the amount of any Loss, the amount of any
Loss shall be reduced by any indemnification proceeds received in
11
page 21 of 35
respect thereof under any indemnification agreement to which either
the Partnership or any of the Partners or other Sellers was party
prior to the Closing or insurance proceeds received in respect
thereof (in each case net of costs of recovery).
10.5.2. In the event that a recovery is made by any party hereto with respect
to any Loss for which such party has received indemnification
hereunder, a refund equal to the portion of the indemnification so
recovered shall be promptly refunded to the parties that provided
such indemnification.
10.6. Payment.
On each occasion that any Indemnified Party shall be entitled to
indemnification or reimbursement under this Section 10, the Indemnifying
Party shall, at each such time, promptly pay the amount of such
indemnification or reimbursement. If any Indemnified Party shall be
entitled to indemnification under this Section 10, the Indemnifying Party
shall pay the Indemnified Party s out-of-pocket costs and expenses arising
as a result of a proceeding directly relating to an indemnifiable Loss
(including, without limitation, any reasonable fees paid to witnesses and,
unless the Indemnifying Party has assumed defense pursuant to Section 10.4,
reasonable attorney's fees), periodically, as incurred.
SECTION 11. STOCK TRANSFER TAXES.
All stock transfer taxes, if any, incurred in connection with this Agreement
in the transactions contemplated hereby shall be borne by the Sellers, and the
Sellers shall, at their own expense, prepare and file all necessary
documentation with respect to such taxes.
SECTION 12. BROKERS.
Each Seller, on the one hand, and the Company, on the other, represent, as
to himself or itself and his or its affiliates, that no agent, broker,
investment banker or other firm or person is or will be entitled to any
broker s or finder s fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement, and each agrees to
indemnify and hold the other harmless from and against any and all claims,
liabilities or obligations with respect to any such fees, commissions or
expenses asserted by any person on the basis of any act or statement alleged to
have occurred or been made by such party or its affiliates.
12
Page 22 of 35
SECTION 13. EXPENSES.
The Company shall pay for the account of, or reimburse to, all other parties
to this Agreement their legal fees incurred, and other costs charged to them by
legal counsel, in connection with negotiating this Agreement and performing
their obligations hereunder, provided that such payments to the Partnership,
Phoenix and McGillicuddy, McVoy and Silverstein shall not exceed in the
aggregate $25,000. Except as otherwise provided in this Section 13 and
elsewhere in this Agreement, the Company, on the one hand, and each of Sellers,
on the other, shall be responsible for its and his own respective costs and
expenses incurred in connection with this Agreement.
SECTION 14. ADDITIONAL ASSURANCES.
From time to time hereafter and without additional consideration, each party
hereto shall perform such further acts and execute and deliver such further
documents as the other party hereto may reasonably request for the purpose of
effectively carrying out the transactions contemplated by this Agreement,
including instruments necessary or desirable to complete the transfer, sale and
assignment of the Selling Partner Stock and the Phoenix Stock.
SECTION 15. NOTICES.
All notices and other communications to any party hereunder shall be in
writing and may be given (i) in person or by facsimile, (ii) by express mail or
delivery to an established courier service, or (iii) by registered or certified
mail, return receipt requested, postage prepaid, to such party at its address
listed below (or at such other address as such party may specify by like
notice) and shall be deemed to have been given upon such delivery or mailing:
If to any of the Sellers, the 3770 East Livingston Avenue
Partnership, the Phoenix Columbus, Ohio 43227
Partners or McVoy: Facsimile: (614) 236-1737
Attn: Thomas Wilson
With a copy to:
Vorys, Sater, Seymour and Pease
P. O. Box 1008
Columbus, Ohio 43216-1008
Attn.: James R. Beatley, Jr.
Facsimile: (614) 464-6350
13
Page 23 of 35
If to Silverstein or McGillicuddy: Mr. Barry Silverstein
or
Mr. Dennis McGillicuddy
Coaxial Communications
5111 Ocean Boulevard, Suite C
Sarasota, FL 43242
Facsimile: (941) 346-2788
With a copy to:
Vorys, Sater, Seymour and Pease
P. O. Box 1008
Columbus, Ohio 43216-1008
Attn.: James R. Beatley, Jr.
Facsimile: (614) 464-6350
If to the Company: Nortek, Inc.
50 Kennedy Plaza
Providence, Rhode Island 02903
Attn.: Kevin W. Donnelly
Facsimile: (401) 751-4610
With a copy to:
Ropes & Gray
One International Place
Boston, Massachusetts 02110
Attn.: Douglass N. Ellis, Jr.
Facsimile: (617) 951-7050
If to Bready: c/o Nortek, Inc.
50 Kennedy Plaza
Providence, Rhode Island 02903
Facsimile: (401) 521-7220
SECTION 16. TERMINATION.
This Agreement may be terminated at any time by mutual written consent of
the Sellers and the Company.
14
Page 24 of 35
SECTOPM 17. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto, and their respective heirs, representatives, successors and permitted
assigns. The rights and obligations under this Agreement may not be assigned
by any Seller under any circumstance; the rights and obligations under this
Agreement may be assigned by the Company upon written notice to the Sellers,
and the assumption by the assignee of the rights and obligations of the Company
hereunder. Any assignment by the Company permitted under this Section 17 shall
not diminish, eliminate or otherwise affect the Company's obligations under
this Agreement.
SECTION 18. SURVIVAL.
The representations and warranties contained in this Agreement shall survive
the consummation of the Closing without limitation as to time, notwithstanding
any investigation at any time made by or on behalf of either party hereto.
SECTION 19. AMENDMENT.
This Agreement (including the documents and instruments referred to herein)
sets forth the entire agreement and understanding of the parties with respect
to the subject matter hereof and supersedes all previous agreements and
understandings, written or oral, in respect thereof. This Agreement may not be
modified or amended, and no waivers of the provisions hereof may be given,
except by an instrument or instruments signed by all of the parties hereto.
SECTION 20. SPECIFIC PERFORMANCE.
In the event that the Partnership, the Partners and/or any Seller fail to
execute their obligations under this Agreement, the Company shall have the
right and remedy to have the provisions of this Agreement specifically enforced
by any court having jurisdiction. The Company's right to specific performance
does not preclude the exercise of any other rights and remedies available to
the Company.
SECTION 21. HEADINGS.
The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
SECTION 22. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of Delaware.
15
Page 25 of 35
SECTION 23. COUNTERPARTS.
This Agreement may be executed in several counterparts, and by separate
parties on separate counterparts, each of which shall be an original, but all
of which together shall constitute one and the same agreement.
SECTION 24. SEVERABILITY.
Any term or provision of this Agreement which is invalid or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms or provisions of this Agreement or affecting
the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction.
16
Page 26 of 35
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
NORTEK, INC.
By: /s/ Kevin W. Donnelly
Name: Kevin W. Donnelly
Title: Vice President
BREADY ASSOCIATES
By: /s/ Dennis J. McGillicuddy
Name: Dennis J. McGillicuddy
Title: General Partner
PHOENIX ASSOCIATES III
By:/s/ Dennis J. McGillicuddy
Name: Dennis J. McGillicuddy
Title: General Partner
BARRY SILVERSTEIN, individually and as
a partner of the Partnership and of
Phoenix
/s/ Barry Silverstein
DENNIS J. MCGILLICUDDY, individually
and as a partner of the Partnership and
of Phoenix
/s/ Dennis J. McGillicuddy
D. STEVENS MCVOY, individually and as a
partner of the Partnership and of
Phoenix
/s/ D. Stevens McVoy
RICHARD L. BREADY, individually and as
a partner of the Partnership
/s/ Richard L. Bready
17
Page 27 of 35
EXHIBIT 3
MUTUAL RELEASE OF ALL CLAIMS
In consideration of the premises and of the sum of One Dollar ($1.00) and
other good and valuable consideration received by, and to the full satisfaction
of, each of Nortek Inc., a Delaware corporation ("NORTEK"); Phoenix Associates
III, an Ohio general partnership ("PHOENIX"); Bready Associates, an Ohio
general partnership (the "PARTNERSHIP"); Barry Silverstein ("SILVERSTEIN");
Dennis J. McGillicuddy ("McGILLICUDDY"), and D. Stevens McVoy ("McVOY") (said
three individuals, singly, an "INDIVIDUAL" and, collectively, the
"INDIVIDUALS"); and Richard L. Bready ("BREADY"):
(1) Release by NORTEK. Nortek does hereby forever release, acquit and
discharge each of the INDIVIDUALS, the PARTNERSHIP, and PHOENIX, together with
their respective heirs, legatees, devisees, agents, partners, successors and
assigns, in each case from any and all claims, demands, causes of action,
judgments, damages, costs and expenses, and from any and all liability for
damages and/or other remedies of whatsoever kind, nature or description, now
existing or that may hereafter arise in connection with, under, from or out of
(i) any agreements (written or oral, express or implied), business transactions
or dealings that have occurred, transpired or been effected on or prior to the
effective date of this Release of All Claims between NORTEK and any one or more
of the parties hereby released by NORTEK, (ii) the ownership and/or voting of
stock of NORTEK by each of the parties hereby released by NORTEK, (iii) the
performance by each of the INDIVIDUALS of his duties and responsibilities as a
director of NORTEK, and (iv) any other act or omission of any one or more of
the parties hereby released by NORTEK occurring on or prior to the effective
date of this Release of All Claims.
(2) Release of NORTEK. The PARTNERSHIP, PHOENIX, and each of the
INDIVIDUALS do hereby forever release, acquit and discharge NORTEK , its
shareholders, officers, directors, employees, agents, successors and assigns,
in each case from any and all claims, demands, causes of action, judgments,
damages, costs and expenses, and from any and all liability for damages and/or
other remedies of whatsoever kind, nature or description, now existing or that
may hereafter arise in connection with, under, from or out of (i) any
agreements (written or oral, express or implied), business transactions or
dealings that have occurred, transpired or been effected on or prior to the
effective date of this Release of All Claims between NORTEK and any one or more
of the parties hereby releasing NORTEK and (ii) any other act or omission of
NORTEK occurring on or prior to the effective date of this Release of All
Claims.
(3) Release of BREADY. The PARTNERSHIP, PHOENIX and each of the
INDIVIDUALS do hereby forever release, acquit and discharge BREADY, his heirs,
legatees, devisees, agents, successors and assigns, in each case from any and
all claims, demands, causes of action, judgments, damages, costs and expenses,
and from any and all liability for damages and/or other remedies of whatsoever
kind, nature or description, now existing or that may hereafter arise in
connection with, under, from or out of (i) any agreements (written or oral,
express or implied), business transactions or dealings that have occurred,
transpired or been effected on or prior to the effective date of this Release
of All Claims between BREADY and any one or more of the parties hereby
releasing BREADY, (ii) any act or omission of BREADY in respect of (a) the
PARTNERSHIP, its business and affairs and/or (b) his duties and
18
Page 28 of 35
responsibilities as a partner in the PARTNERSHIP, and (iii) any other act or
omission of BREADY occurring on or prior to the effective date of this Release
of All Claims.
(4) Release by BREADY. BREADY does hereby forever release, acquit and
discharge each of the INDIVIDUALS, the PARTNERSHIP and PHOENIX, together with
their respective heirs, legatees, devisees, agents, partners, successors and
assigns, in each case from any and all claims, demands, causes of action,
judgments, damages, costs and expenses, and from any and all liability for
damages and/or other remedies of whatsoever kind, nature or description, now
existing or that may hereafter arise in connection with, under, from or out of
(i) any agreements (written or oral, express or implied), business transactions
or dealings that have occurred, transpired or been effected on or prior to the
effective date of this Release of All Claims between BREADY and any one or more
of the parties hereby released by BREADY, (ii) any act or omission by an
INDIVIDUAL in respect of (a) the PARTNERSHIP, its business and affairs and/or
(b) his duties and responsibilities as a partner in the PARTNERSHIP, and (iii)
any other act or omission of any one or more of the parties hereby released by
BREADY occurring on or prior to the effective date of this Release of All
Claims.
PROVIDED, HOWEVER, that the foregoing provisions of this Mutual Release of
All Claims shall not release or be construed to release any party to that
certain Agreement (the "AGREEMENT") entered into as of the effective date of
this Mutual Release of All Claims, and to which all of the undersigned are
parties, from any obligation under the AGREEMENT.
The terms and provisions of this Mutual Release of All Claims shall be
binding upon, and shall inure to the benefit of, (i) the shareholders,
officers, directors, employees, agents, successors and assigns of NORTEK, (ii)
the partners in the PARTNERSHIP and in PHOENIX, (iii) the respective agents,
successors and assigns of the PARTNERSHIP and of PHOENIX, and (iv) the
respective heirs, legatees, devisees, agents, successors and assigns of BREADY
and of each of the INDIVIDUALS. This Mutual Release of All Claims shall be
governed by and construed in accordance with the internal laws of the State of
Ohio, without giving effect to the conflict-of-law or choice-of-law principles
thereof.
19
Page 29 of 35
Executed by each of the undersigned to be effective as of April __. 1996.
Nortek, Inc.
By:__________________________
Richard L. Bready
Chief Executive Officer
Bready Associates, Phoenix Associates and Dennis
J. McGillicuddy
By:_________________________________
Dennis J. McGillicuddy, individually and as
Partner in Bready Associates and in Phoenix
Associates III
__________________________________
Barry Silverstein, individually and as
Partner in Bready Associates and in Phoenix
Associates III
__________________________________
D. Stevens McVoy, individually and as
Partner in Bready Associates and in Phoenix
Associates III
__________________________________
Richard L. Bready, individually and as
Partner in Bready Associates
20
Page 30 of 35
SCHEDULE 5.04
966,491 shares of the Partnership Stock are pledged to Manufacturers and
Trader's Trust Company, to secure the payment of certain debt.
92,800 shares of the Partnership Stock are owned beneficially, but not of
record, by the Partnership. Said 92,800 shares of the Partnership Stock are
held for the benefit of the Partnership by Lehman Brothers and are registered
in the name of Lehman Brothers or its nominee.
21
Page 31 of 35
SCHEDULE 6.04
All shares of the Phoenix Stock are pledged to a bank, as security for the
payment of certain debt.
22
Page 32 of 35
AMENDMENT NO. 2
TO
PARTNERSHIP AGREEMENT
OF
BREADY ASSOCIATES
This is an agreement (the "Agreement") made and entered into to be
effective as of April 25, 1996 by and among Barry Silverstein, Dennis J.
McGillicuddy, D. Stevens McVoy and Richard L. Bready.
Recitals:
(A) The parties to this Agreement are the only general partners of Bready
Associates.
(B) The parties to this Agreement desire to amend the partnership
agreement of Bready Associates (the "PARTNERSHIP AGREEMENT").
NOW, THEREFORE, in consideration of their mutual covenants and agreements
set forth hereinafter, and for other good and valuable consideration received
to the full satisfaction of each of them, the parties hereto make the following
agreement, intending to be bound legally thereby:
(1) Section 1.1 of the PARTNERSHIP AGREEMENT is hereby amended by adding
the following definition immediately following the definition herein of
"Proposed Purchase Notice":
"Purchase Agreement" means that certain agreement to be
hereafter effected by and among the Company, the
Partnership, the Partners, Phoenix Associates III, an Ohio
general partnership, and the partners in Phoenix Associates
III.
(2) Section 4.4 of the PARTNERSHIP AGREEMENT is hereby amended by adding
the following language immediately following the word "misconduct" at the end
of the clause (ii) of paragraph (a) therein:
. . ., or (iii) the negotiation, execution or performance
of the Purchase Agreement.
(3) Section 11.1 of the PARTNERSHIP AGREEMENT is hereby amended by adding
the following at the end thereof, immediately following the words "pursuant to
Section 11.2":
Page 33 of 35
. . . and except for sales to the Company pursuant to the
Purchase Agreement."
(4) Section 16.3 of the PARTNERSHIP AGREEMENT is hereby amended by
deleting the opening paragraph thereof, through and including the first colon
therein [preceding paragraph (a) therein], and substituting therefore the
following:
16.3 Liquidation. If the Partnership is terminated and
dissolved, the Partner selected by the Partners in
accordance with Section 4.1 or any liquidator appointed by
the Partners in accordance with Section 4.1 (in either
case, the "Liquidator") shall promptly (i) file any notice,
publish any advertisement or take any other action required
under applicable law to effect such termination and
dissolution, (ii) commence to wind up the affairs of the
Partnership, (iii) distribute (a) 679,124 shares of the
common stock of the Company owned, beneficially or of
record, by the Partnership to BS, (b) 226,374 shares of the
common stock of the Company owned, beneficially or of
record, by the Partnership to DM, (c) 100,611 shares of the
common stock of the Company owned, beneficially or of
record, by the Partnership to SM, and (d) 53,182 shares of
the common stock of the Company owned, beneficially or of
record, by the Partnership to Bready, (iv) liquidate the
other assets of the Partnership by converting the same to
cash, and (v) apply and distribute the proceeds of such
liquidation and any undistributed cash in the following
order of priority:
(5) Section 17.9 of the PARTNERSHIP AGREEMENT is hereby amended by
deleting from paragraph (a) therein the requirement to furnish copies of
certain notices or other communications to Fried, Frank, Harris, Shriver &
Jacobson and to Christ Gaetanos, Esq. and by substituting a provision requiring
the furnishing of such notices or other communications to:
Vorys, Sater, Seymour and Pease
52 East Gay Street
Columbus, Ohio 43216
Attn: James R. Beatley, Jr.
(6) The PARTNERSHIP AGREEMENT is hereby amended as necessary to suspend
the operation and effect of the provisions of Section 11.2 and 16.2 and Article
16A therein until the earlier of (i) the time when the transactions
contemplated by the Purchase Agreement shall have been consummated or (ii)
April 30, 1996.
2
Page 34 of 35
(7) The PARTNERSHIP AGREEMENT is hereby amended as necessary so that
neither the execution, the delivery nor the performance of the Purchase
Agreement by any party thereto shall violate, conflict with, or constitute a
breach or default under the PARTNERSHIP AGREEMENT.
(8) The PARTNERSHIP AGREEMENT shall be amended, automatically and without
further act of any of the PARTNERS, to be and read as the PARTNERSHIP AGREEMENT
was constituted on April 23, 1996 if, but only if, (i) the Purchase Agreement
shall not have been executed and delivered by all parties hereto on or before
April 26, 1996 or (ii) the transactions contemplated by the Purchase Agreement
shall not have been consummated in all material respects on or before April 30,
1996.
Executed by each of the parties hereto to be effective as of the date
first above written.
/s/ Barry Silverstein
Barry Silverstein
/s/ Dennis J. McGillicuddy
Dennis J. McGillicuddy
/s/ D. Stevens McVoy
D. Stevens McVoy
/s/ Richard L. Bready
Richard L. Bready
3
Page 35 of 35
