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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 22, 1994
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PATTEN CORPORATION
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(Exact name of registrant as specified in its charter)
5295 Town Center Road, Boca Raton, Florida 33486
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(Address of principal executive office) (Zip Code)
Massachusetts 0-19292 03-0300793
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Registrant's telephone number, including area code: (407) 361 - 2700
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Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On November 22, 1994, Patten Corporation (the "Company") and Mr. Harry
S. Patten, a Director and Chairman of the Board of the Company, entered into a
Separation Agreement (the "Separation Agreement") providing for, among other
things, Mr. Patten's resignation in all capacities from the Company and the
termination of his employment agreement dated December 20, 1993. Simultaneous
with the execution of the Separation Agreement, Mr. Patten entered into a Stock
Purchase Agreement (the "Stock Purchase Agreement") with a limited number of
purchasers (the "Purchasers") pursuant to which Mr. Patten agreed to sell, and
the Purchasers severally agreed to purchase, an aggregate of 1,481,366 shares
of the Company's Common Stock owned by Mr. Patten at a price per share of
$2.875. The Purchasers consist of members of the Company's management or Board
of Directors or their affiliates and three private investors. Grace Brothers,
Ltd., which currently owns approximately 7% of the Company's Common Stock, is
one of the Purchasers and will acquire approximately 640,000 shares from Mr.
Patten. Bradford T. Whitmore, a Director of the Company, is a general partner
of Grace Brothers, Ltd. The purchase of Mr. Patten's shares, which represent
approximately 8% of the Company's outstanding shares of Common Stock, is
scheduled to close in January, 1995. The closing of the purchase is subject to
the satisfaction of certain conditions.
A copy of the Stock Purchase Agreement is attached as Exhibit A hereto
and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit Description of Exhibit
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A Stock Purchase Agreement by and among Harry S. Patten
and the Purchasers named therein.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PATTEN CORPORATION
By:
12-9-94 /s/ Alan L. Murray
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Date Alan L. Murray
Treasurer and Chief Financial Officer
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STOCK PURCHASE AGREEMENT
This Agreement is dated as of November 22, 1994 by and among Harry S.
Patten (the "Seller") and the Persons and Entities listed on the Schedule of
Purchasers attached hereto as Exhibit A (each individually a "Purchaser" and
collectively the "Purchasers").
Introduction
The Seller is the Chairman of the Board and a Director of Patten
Corporation, a Massachusetts corporation (the "Company"), and the owner of
certain shares of the Common Stock, $.01 par value, of the Company (the "Common
Stock"). The Purchasers are directors and/or officers of the Company or are
otherwise sophisticated investors familiar with the Company and its affairs.
The Seller wishes to sell to the Purchasers, and the Purchasers, severally and
not jointly, wish to purchase from the Seller, as aggregate of 1,481,366 shares
of the Common Stock on the terms and conditions set forth herein.
1. Purchase and Sale of the Shares. Based on the representations
contained in this Agreement, and subject to the terms and conditions set forth
herein, the Seller agrees to sell to the Purchasers and each Purchaser,
severally and not jointly, agrees to purchase from the Seller the number of
shares of the Common Stock specified opposite such Purchaser's name on Exhibit
A. The Purchasers shall purchase an aggregate of 1,481,366 shares of the
Common Stock owned by the Seller (the "Shares", which term shall include any
stock dividends issued in respect of such shares after the date hereof).
2. Purchase Price: Closing. In payment for the Shares, each
Purchaser will pay to the Seller, by wire transfer, a purchase price of $2.875
per share, appropriately adjusted for any stock dividends issued after the date
of this Agreement (the "Purchase Price"). The closing (the "Closing") of the
purchase and sale of the Shares shall take place at the offices of Patten
Corporation, 5295 Town Center Road, Boca Raton, Florida 33486 at 10:00 a.m.
(local time) on January 3, 1995, or at such other time, place or business day
on or after January 3, 1995, as shall be agreed to by the parties.
3. Deliveries at Closing. At the Closing, the Seller shall deliver
or cause to be delivered to Patrick E. Rondeau on behalf of each Purchaser
certificates representing the Shares to be purchased by such Purchaser duly
endorsed for transfer or accompanied by duly executed stock powers, and each
Purchaser shall deliver to the Seller by wire transfer to such account as the
Seller shall designate in writing prior to the Closing an amount equal to
$2.975 times the number of Shares to be acquired by such Purchaser as specified
in section 2.
4. Representations and Warranties by the Seller. The Seller hereby
represents and warrants to each Purchaser that each of the statements contained
in this section 4 is true and correct as of the date hereof, and will be true
and correct at an as of the date of Closing:
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(a) The Seller is the lawful, record and beneficial owner of
the Shares, free and clear of all liens, encumbrances, charges, claims, or
restrictions on transfer, other than restrictions on transfer under applicable
federal and state securities laws. Seller has, and at the Closing will have,
good and marketable and unencumbered title to the Shares and full right, power
and authority to enter into this Agreement and to sell, transfer, assign and
deliver such Shares to the Purchaser as herein agreed. Each Purchaser will, on
transfer of the Shares to be acquired by such Purchaser at the Closing, acquire
good and marketable title to such Shares, free and clear of all liens,
encumbrances, charges, claims, or restrictions on transfer, other than
restrictions on transfer under applicable federal and state securities laws.
(b) The Shares constitute all of the shares of Common Stock
owned beneficially or of record by the Seller, except for shares which are held
in the Seller's 401k account and for shares issuable upon conversion of the
Company's 8 1/4% convertible subordinated debentures due 2012 held by the
Seller.
(c) This Agreement has been duly executed and delivered by the
Seller and is the valid and binding obligation of the Seller, enforceable
against the Seller in accordance with its terms.
(d) The Seller, as Chairman of the Board and a Director of the
Company and a member of its investment committee, has full knowledge of all
material facts concerning the Company and its business, operations, conditions
and prospects.
5. Representations and Warranties by Each Purchaser. Each Purchaser
(on behalf of itself and not on behalf of any other Purchaser) hereby
represents and warrants to the Seller that each of the statements contained in
this section 5 is true and correct as of the date hereof, and will be true and
correct at and as of the date of Closing:
(a) Such Purchaser is acquiring the Shares to be acquired by
him for his own account for investment only and not with a view to, or for sale
in connection with, any distribution of such Shares within the meaning of or in
violation of the Securities Act of 1933, as amended (the "Act"), any rule or
regulation under the Act, or any state securities laws.
(b) Such Purchaser is an "accredited investor" as defined in
Regulation D promulgated under the Act and has sufficient familiarity with the
business and affairs of the Company to be able to evaluate the merits and risks
of his investment in the Company through the purchase of the Shares to be
acquired by him. Such Purchaser has had the opportunity to ask questions of
and receive answers from management of the Company concerning his acquisition
of such Shares, and to obtain any additional information, documents, contracts,
records and books relative to the Company, its business, assets, financial
condition, results of operation, liabilities (contingent or otherwise), and his
investment in the Company through the purchase of such Shares. Such Purchaser
has sufficient experience in business, financial and investment matters to be
able to evaluate the merits and risks involved in the acquisition of the Shares
to be acquired by him and to make an informed investment decision with respect
to such acquisition.
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Such Purchaser can afford a complete loss of the value of such Shares and is
able to bear the economic risk of holding such Shares for an indefinite period.
(c) Such Purchaser understands that (i) the Shares to be
acquired by him have not been registered under the Act, the Seller is an
"affiliate" of the Company and the Share are therefore "restricted securities"
within the meaning of Rule 144 under the Act; (ii) such Shares cannot be sold,
transferred or otherwise disposed of unless they are subsequently registered
under the Securities Act and applicable state securities laws or an exemption
from registration is then available; (iii) in any event, the exemption from
registration under Rule 144 will not be available for at least two years and
even then will not be available unless the terms and conditions of Rule 144 are
complied with; and (iv) there is now no registration statement on file with the
Securities and Exchange Commission or any state securities commission with
respect to the Shares and the Company has no obligation to register the Shares
under the Act or any state securities laws. The Purchaser agrees, for the
benefit of the Seller and the Company, not to sell, transfer or otherwise
dispose of the Shares except in compliance with the Act and all applicable
securities laws. The Purchaser understands that the Shares have not been, and
will not be, registered under the Act by reason of a specific exemption from
the registration provisions of the Act, the availability of which depends upon,
among other things, the bona fide nature of the investment intent of the
Purchaser and the accuracy of the Purchaser's representations contained herein.
(d) This Agreement has been duly executed and delivered by
such Purchaser and is the valid and binding obligation of such Purchaser,
enforceable against such Purchaser in accordance with its terms.
(e) Each Purchaser hereby represents and warrants that (i) he
has made an independent decision to purchase the Shares and such investment
decision is not a product of or contingent on the investment decision of any
other Purchaser, (ii) he will hold the Shares for his sole benefit and at his
sole risk; (iii) he has not sought or accepted and has no intention of seeking
or accepting investment advice or direction from any other Purchaser on the
decision to buy, hold or sell the Shares; and (iv) he has no intention of
seeking or accepting advice or direction from any other Purchaser as to any
matters submitted to a vote of the shareholders of the Company. No Purchaser
shall have any fiduciary or similar obligation to any other Purchaser solely by
reason of being a party to this Agreement.
6. Contemporaneous Transactions. Contemporaneous with the execution
and delivery of this Agreement, the Company and the Seller are effecting the
following transactions:
(a) The Seller is resigning from all of the offices he holds
with the Company and its subsidiaries, including, without limitation, as
Chairman of the Board and a Director of the Company and as a member of its
investment committee, and is delivering to the Company written resignations to
that effect.
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(b) The Company and the Seller are terminating the written
employment contract and all other employment arrangements between the Company
and the Seller, and neither the Company nor the Seller shall have any further
obligations thereunder.
(c) The Company and the Seller are cancelling all outstanding
options (whether or not vested) with respect to the Company's capital stock
issued to the Seller by the Company.
(d) The Company and the Seller are entering into an agreement
in the form of Exhibit B hereto (the "Separation Agreement") providing for,
among other things, the Seller's entering into a non-competition covenant for
the benefit of the Company, and the cooperation by the Seller with the Company
and its attorneys in connection with certain ongoing litigation against the
Company.
(e) The Company, the Purchasers, the Seller and the escrow
agent named therein are entering into an escrow agreement in the form of
Exhibit C hereto pursuant to which the Shares will be held in escrow by the
agent named therein pending the Closing.
7. Conditions Precedent to the Purchasers' Obligations. The
obligation of each Purchaser to purchase the Shares at the Closing is subject
to the fulfillment of the following conditions on or prior to the date of
Closing:
(a) The Seller shall have delivered the certificates
representing the Shares, duly endorsed for transfer or accompanied by duly
executed stock powers, as specified in section 3.
(b) The transactions described in section 6 shall have been
consummated as described therein, and the Seller shall be in compliance with
the terms of the Separation Agreement.
(c) Each of the representations and warranties contained in
section 4 shall be true and correct at and as of the Closing.
(d) All consents, approvals or filings required by the New
York Stock Exchange to be obtained or made in connection with the transactions
contemplated hereby shall have been obtained or made by the Company at its sole
cost and expense, as the case may be, and shall be in full force and effect.
8. Conditions Precedent to the Seller's Obligations. The obligation
of the Seller to sell the Shares at the Closing is subject to the fulfillment
of the following conditions on or prior to the date of Closing:
(a) The Purchasers, in the aggregate, shall have purchased not
less than 75% of the Shares and shall have delivered to the Seller an amount
equal to the Purchase Price times the number of Shares acquired (or an
aggregate of $4,258,927.25 if all Shares are acquired) as
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specified in section 3. Nothing contained herein shall relieve any Purchaser
from liability for breach of such Purchaser's obligations to acquire the Shares
to be acquired by him/it hereunder.
(b) Each of the representations and warranties contained in
section 5 shall be true and correct at and as of the Closing.
(c) All consents, approvals or filings required by the New
York Stock Exchange to be obtained or made in connection with the transactions
contemplated hereby shall have been obtained or made, as the case may be, and
shall be in full force and effect.
9. Survival of Representations. The representations and warranties
contained in sections 4 and 5 hereof shall survive the Closing and any
investigation made by either party hereto.
10. Termination. Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated:
(a) by mutual consent of the Purchasers and Seller;
(b) by the Purchasers if the Seller shall have failed to
perform any condition to Closing required of him herein by the date of
Closing Date (including any extensions thereof) and the Purchasers shall
have performed all of the conditions to Closing to be performed by them
by such date;
(c) by the Seller if the Purchasers shall have failed to
perform any condition to Closing required of them herein by the Closing
Date (including any extensions thereof) and the Seller shall have
performed all of the conditions to Closing to be performed by him by such
date, provided that except as provided in clause (d) of this Section 10
the Seller may not terminate this Agreement because of a failure of the
Purchasers to acquire all of the Shares so long as the condition
precedent set forth in clause (a) of Section 8 has been satisfied; or
(d) by the Seller as to any Shares not purchased on or before
January 13, 1995 if the Purchasers satisfy the condition precedent set
forth in clause (a) of Section 8 but fail to purchase all of the Shares
on or before January 13, 1995.
Upon any termination of this Agreement pursuant to clause (a) of this section
10, all obligations of the Seller to the Purchasers, and of the several
Purchasers to the Seller, shall terminate without further liability of any
party to any other party. Upon any termination of this Agreement by the
Purchasers pursuant to clause (b) of this section 10, each Purchaser shall be
entitled to recover from the Seller all out-of-pocket costs incurred by such
Purchaser in connection with this Agreement and the transactions contemplated
hereby and no other damages, unless the last sentence of this section applies.
Upon any termination of this Agreement by the Seller pursuant to clause (c) or
(d) of this section 10, the Seller shall be entitled to recover from the
Purchasers all out-of-pocket costs incurred by the Seller in connection with
this Agreement and the transactions contemplated hereby and no other damages,
unless the last sentence of this section
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applies; provided that the Seller shall not be entitled to recover any such
costs from any Purchaser which was ready, willing and able to acquire the
Shares to be acquired by it/him under this Agreement. The Purchasers agree
among themselves that any amount owed to the Seller under the preceding
sentence shall be paid by the defaulting Purchasers on a pro rate basis based
on the number of Shares to be acquired by them. Nothing contained herein shall
be deemed to restrict the remedies available to any party in the case of a
willful breach by the other party or parties.
11. Miscellaneous.
(a) All notices to a party hereunder shall be deemed to have
been adequately given if delivered in person or mailed, certified mail, return
receipt requested, or sent by overnight courier to such party at its address
specified on the signature pages to this Agreement (or such other address as it
may from time to time designate in writing to the other parties hereto).
(b) No failure to exercise and no delay in exercising, on the
part of any Purchaser or the Seller, any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or remedy hereunder preclude any other or further exercise thereof
or the exercise of any other right, power or remedy. The rights provided are
cumulative and not exclusive of any rights provided by law.
(c) This Agreement may be modified or amended only by a
writing signed by each party hereto. No waiver of any term or provision hereof
shall be effective unless in writing signed by the party waiving such term or
provision.
(d) This Agreement shall be governed by and construed in
accordance with the internal laws of The Commonwealth of Massachusetts. The
descriptive headings of the several sections hereof are for convenience only
and shall not control or affect the meaning or construction of any of the
provisions hereof.
(e) This Agreement shall be binding upon and shall inure to
the benefit of the parties and their respective heirs, successors and assigns,
provided that, except as set forth in the next sentence, no party may assign
their rights hereunder without the prior written consent of the other parties
hereto. Any Purchaser may assign such Purchaser's rights hereunder to acquire
Shares to (i) any other Purchaser(s) or (ii) to any third party provided that
such third party executes a counterpart signature page to this Agreement and
makes the representations and warranties contained in section 5 hereof and
provided further that no assignment shall relieve the assigning Purchaser of
any obligation under this Agreement.
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(f) This writing, together with the Exhibits hereto, embodies
the entire agreement and understanding between the parties with respect to this
transaction and supersedes all prior discussions, understandings and agreements
concerning the matters covered hereby.
(g) This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
(h) If any provision of this Agreement is unenforceable or
illegal, the remainder of the Agreement shall remain in full force and effect.
(i) The parties agree that irreparable damage would occur if
any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to specifically enforce the terms and provisions
of this Agreement.
(j) Except as otherwise expressly provided herein, each party
shall bear its own costs and expenses with respect to this Agreement and the
transactions contemplated hereby.
(k) The Seller acknowledges that the Purchasers are third
party beneficiaries of the Separation Agreement.
(l) From and after the Closing, the Seller shall take such
actions as the Purchaser (or any one of them) shall reasonably request in order
to effectively transfer and convey the shares to the Purchasers.
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EXECUTED as a sealed instrument as of the date first above written.
SELLER
/s/ Harry S. Patten
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Harry S. Patten
Address for Notices:
Sloan Road
Williamstown, MA 01267
PURCHASERS
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[Name of Purchaser]
Address for Notices:
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Patrick E. Rondeau and Patten Corporation hereby agree to become
parties to this Agreement only to the extent of their obligations hereunder.
/s/ Patrick E. Rondeau
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Patrick E. Rondeau
Patten Corporation
by Vice President
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(Title)
[COUNTERPART SIGNATURE PAGES FOR THE PURCHASERS ARE ATTACHED.]
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SIGNATURE PAGE OF STOCK PURCHASE AGREEMENT
<TABLE>
<S> <C>
/S/ GEORGE DONOVAN GRACE BROTHERS LTD.
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GEORGE F. DONOVAN
/S/ CHARLES D. PATTERSON By: /S/ BRADFORD T. WHITMORE
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CHARLES D. PATTERSON
/S/ THOMAS E. LIPAR /S/ JOSEPH C. ABELES
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THOMAS E. LIPAR JOSEPH C. ABELES
/S/ PATRICK E. RONDEAU /S/ STUART A. SHIKIAR
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PATRICK E. RONDEAU STUART A. SHIKIAR
/S/ ALAN L. MURRAY /S/ FREDERICK M. MYERS
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ALAN L. MURRAY FREDERICK M. MYERS
/S/ JOAN A. MCCORMICK /S/ RICHARD S. FRARY
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JOAN A. MCCORMICK RICHARD S. FRARY
/S/ DANIEL C. KOSCHER /S/ MILTON S. STEARNS, JR.
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DANIEL C. KOSCHER MILTON S. STEARNS, JR.
/S/ MARY JO WIEGAND /S/ LEWIS B. HARDER
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MARY JO WIEGAND LEWIS B. HARDER
/S/ ALLAN J. HERZ
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ALLAN J. HERZ
</TABLE>
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Exhibit A
Schedule of Purchasers
<TABLE>
<CAPTION>
Number of Shares
Name to be Acquired
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<S> <C>
Management
George F. Donovan 50,000
Charles D. Patterson 20,000
Thomas E. Lipar 5,000
Patrick E. Rondeau 10,000
Alan L. Murray 35,000
Joan A. McCormick 10,000
Daniel C. Koscher 1,000
Mary Jo Wiegand 1,000
Allan J. Herz 8,000
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Total Management 140,000
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Board of Directors
Grace Brothers, Ltd. 641,366
Joseph C. Abeles 125,000
Stuart A. Shikiar 75,000
Frederick M. Myers 100,000
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Total Board of Directors 941,366
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Others
Richard S. Frary 100,000
Milton S. Stearns, Jr. 100,000
Lewis B. Harder 200,000
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Total Others 400,000
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Grand Total 1,481,366
============
</TABLE>
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