<PAGE>
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): January 2, 1996.
THE RIVAL COMPANY
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(Exact name of registrant as specified in its charter)
Delaware 43-0794462
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(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
Commission file number 0-20274
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800 E. 101st Terrace, Kansas City, MO 64131
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(Address of principal executive offices) (Zip Code)
(816) 943-4100
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(Registrant's telephone number, including area code)
Not applicable
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(Former name, former address and former fiscal year,
if changed from last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On January 2, 1996, the Company acquired 100% of the common stock of Fasco
Consumer Products, Inc. ("Fasco"), from H.S. Investments Inc., a subsidiary of
BTR Dunlop, Inc. Fasco is a manufacturer of heating, ventilating and other
convenience products that are distributed through wholesale and retail markets
with annual sales of approximately $40 million.
The Company paid $23,532,000 in cash as consideration for the common stock of
Fasco and a non-compete agreement from H.S. Investments Inc. and its affiliates.
The amount of the consideration was determined by negotiation between the
parties. The source of the funds used by the Company to effect the acquisition
was borrowings under its revolving credit agreement which was amended to
increase the facility from $50 million to $75 million to accommodate the
transaction. The acquisition will be accounted for as a purchase and,
accordingly, the purchase price will be allocated to Fasco's assets and
liabilities based upon their respective fair values.
The financial statements of Fasco and pro forma financial information relating
to the business acquired which are required by Item 7 of Form 8-K are not
presently available. The required financial statements and pro forma financial
information will be filed as an amendment to this Form 8-K as soon as
practicable, and in no event later than March 18, 1996.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit 2 Stock Purchase Agreement between H.S. Investments Inc. as
seller, and The Rival Company, as buyer, dated as of
December 29, 1995.
2
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SIGNATURE
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 thereunto duly authorized.
THE RIVAL COMPANY
Date: January 16, 1996
/s/ William L. Yager
By: __________________________________________________
William L. Yager
Senior Vice President - Finance and Administration
Duly Authorized Officer
3
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EXHIBIT (2)
[Execution Copy]
STOCK PURCHASE AGREEMENT
between
H.S. INVESTMENTS INC.
as Seller,
and
THE RIVAL COMPANY
as Buyer
Dated as of December 29, 1995
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STOCK PURCHASE AGREEMENT
------------------------
Table of Contents
-----------------
<TABLE>
<CAPTION>
ARTICLE I
<C> <S> <C>
PURCHASE AND SALE OF THE SHARES............... -1-
1.1 Purchase Price for Shares; Noncompetition Covenant......... -1-
1.2 Closing Date............................................... -1-
1.3 Closing Deliveries......................................... -1-
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER........... -2-
2.1 Organization............................................... -2-
2.2 Authority; Validity of Agreement........................... -2-
2.3 No Conflict................................................ -2-
2.4 Title to the Shares........................................ -3-
2.5 Financial Statements....................................... -3-
2.6 Absence of Certain Changes or Events....................... -3-
2.7 Title to Properties........................................ -4-
2.8 Insurance.................................................. -4-
2.9 Contracts.................................................. -4-
2.10 Litigation................................................. -4-
2.11 Compliance with Law........................................ -5-
2.12 Labor Relations............................................ -5-
2.13 Severance Benefits......................................... -5-
2.14 Employee Benefit Plans..................................... -5-
2.15 Absence of Undisclosed Liabilities......................... -5-
2.16 Intellectual Property Rights............................... -6-
2.17 Taxes...................................................... -6-
2.18 Products and Warranties; Return Privileges................. -7-
2.19 Environmental Compliance................................... -7-
2.20 Customer and Vendor Relations.............................. -8-
2.21 Misstatement or Omission................................... -9-
2.22 DISCLAIMERS................................................ -9-
2.23 Qualification of Representations and Warranties............ -9-
2.24 Material Transactions...................................... -9-
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER............ -9-
3.1 Organization............................................... -9-
3.2 Authority; Validity of Agreement........................... -10-
3.3 No Conflict................................................ -10-
</TABLE>
<PAGE>
<TABLE>
<C> <S> <C>
3.4 Litigation................................................. -10-
3.5 Securities Law Compliance.................................. -10-
ARTICLE IV
ACTIONS BEFORE THE CLOSING.................. -11-
4.1 Conduct of Business........................................ -11-
4.2 Access and Information..................................... -13-
4.3 Covenant to Satisfy........................................ -13-
ARTICLE V
ACTIONS AFTER THE CLOSING.................. -13-
5.1 Cooperation................................................ -13-
5.2 Record Retention........................................... -14-
5.3 Further Assurances......................................... -14-
ARTICLE VI
CONDITIONS TO CLOSING................... -14-
6.1 Obligations of Buyer....................................... -14-
6.2 Obligations of Seller...................................... -16-
ARTICLE VII
TERMINATION AND REMEDIES................... -17-
7.1 Termination................................................ -17-
7.2 Effect of Termination...................................... -17-
ARTICLE VIII
TAXES AND EMPLOYEE BENEFIT PLANS............... -18-
8.1 Liability for Taxes........................................ -18-
8.2 Refunds or Credits......................................... -18-
8.3 Contests................................................... -19-
8.4 Mutual Cooperation......................................... -20-
8.5 Covenants and Agreements................................... -20-
8.6 Transfer Taxes............................................. -21-
8.7 Tax Sharing Agreement...................................... -21-
8.8 Certain Employee Matters and Benefit Plans................. -21-
</TABLE>
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ARTICLE IX
INDEMNIFICATION....................... -22-
9.1 Survival of Representations, Warranties and Covenants......... -22-
9.2 Indemnification by Seller..................................... -23-
9.3 Indemnification by Buyer...................................... -23-
9.4 Claims........................................................ -23-
9.5 Limitations on Indemnification................................ -24-
9.6 Indemnification as Exclusive Remedy........................... -25-
ARTICLE X
DEFINITIONS......................... -25-
10.1 Definitions................................................... -25-
10.2 Other Definitions............................................. -25-
10.3 References.................................................... -26-
ARTICLE XI
MISCELLANEOUS........................ -26-
11.1 Expenses...................................................... -26-
11.2 Execution in Counterparts..................................... -26-
11.3 Confidentiality............................................... -26-
11.4 Notices....................................................... -27-
11.5 Severability.................................................. -28-
11.6 Titles and Headings........................................... -28-
11.7 Successors and Assigns; No Third Party Beneficiaries.......... -28-
11.8 Incorporation of Schedules.................................... -28-
11.9 Brokers and Finders........................................... -28-
11.10 Entire Agreement; Waivers and Amendments...................... -28-
11.11 Public Announcements.......................................... -29-
11.12 Construction.................................................. -29-
11.13 Hart-Scott-Rodino Filing...................................... -29-
11.14 Interim Use of Fasco Name..................................... -29-
11.15 Governing Law................................................. -29-
11.16 Leased Vehicles............................................... -30-
ARTICLE XII
12.1 Non-Competition................................................ -30-
12.2 Exception...................................................... -30-
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LIST OF SCHEDULES
-----------------
Schedule 2.2 Authority; Validity of Agreement - Seller
Schedule 2.4 Shares
Schedule 2.5 Financial Statements
Schedule 2.8 Insurance
Schedule 2.9 Contracts
Schedule 2.10 Litigation of the Company
Schedule 2.13 Severance Benefits
Schedule 2.14 Employee Benefit Plans
Schedule 2.16 Intellectual Property
Schedule 2.18 Warranties; Recalls
Schedule 2.23 Due Diligence Material
Schedule 3.2 Authority; Validity of Agreement - Buyer
Schedule 3.3 No Conflict
Schedule 3.4 Litigation of Buyer
Schedule 4.1 Conduct of Business
Schedule 11.16 Leased Vehicles
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STOCK PURCHASE AGREEMENT
------------------------
THIS STOCK PURCHASE AGREEMENT ("Agreement") is dated as of December 29,
1995, between H.S. Investments Inc., a Delaware corporation ("Seller"), and The
Rival Company, a Delaware corporation ("Buyer").
WITNESSETH:
----------
WHEREAS, Fasco Consumer Products, Inc., a Delaware corporation ("FCP" or
the "Company") is engaged in the business of manufacturing and marketing fans,
vents, electric heaters and other utility products for consumer and industrial
markets (the "Business"); and
WHEREAS, Seller is the owner of all the outstanding stock of FCP (the
"Shares"); and,
WHEREAS, Seller desires to sell the Shares to Buyer, and Buyer desires to
purchase the Shares from Seller.
NOW, THEREFORE, in consideration of the premises and mutual terms,
conditions and covenants set forth herein and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, Seller
and Buyer hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF THE SHARES
1.1 Purchase Price for Shares; Noncompetition Covenant. On the terms and
subject to the conditions set forth in this Agreement, on the Closing Date,
Seller agrees to sell, and Buyer agrees to buy, all of the Shares for a total
cash purchase price in the amount of U.S. $19,532,000. In addition, Buyer shall
pay Seller $4,000,000 in consideration for the non-competition covenant set
forth in Article XII.
1.2 Closing Date. The Closing of the purchase and sale of the Shares
shall be held at 10:00 a.m. Kansas City time on January 2, 1996, or such other
date or time as is mutually agreed by the parties hereto (such date and time
being referred to herein as the "Closing Date"), at the offices of Hillix,
Brewer, Hoffhaus, Whittaker & Wright, L.L.C., Two Crown Center, 2429 Pershing
Road, Kansas City, Missouri 64108. Subject to the terms and conditions hereof,
Buyer and Seller agree to use all reasonable efforts to satisfy the conditions
to the obligations of the parties hereto in order to expedite the Closing.
1.3 Closing Deliveries. Subject to satisfaction or waiver of the
conditions to the respective obligations of the parties hereto, on the Closing
Date: (a) Seller shall deliver to Buyer share certificates evidencing all of the
Shares, duly endorsed or accompanied by duly executed stock powers in favor of
Buyer; and (b) Buyer shall pay the amounts set forth in Section 1.1 to Seller in
immediately available United States funds by bank wire transfer to the account
<PAGE>
designated in writing by Seller. At the Closing, Seller shall deliver the
documents required to be delivered pursuant to Section 6.1 and Buyer shall
deliver the documents required to be delivered pursuant to Section 6.2.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
2.1 Organization. Each of Seller and the Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. Each of Seller and the Company has the
corporate power to own its properties and carry on its business as the same is
now being conducted and is, or on the Closing Date will be, duly qualified to do
business and in good standing in each jurisdiction in which the failure to be so
qualified and in good standing would have a material adverse effect on such
corporation. The Company has no subsidiaries or any other equity interest in
any corporation, partnership, joint venture or other entity. The minute books
of the Company provided to Buyer contain a true and complete record of the
corporate proceedings of the Company.
2.2 Authority; Validity of Agreement. Seller has all requisite corporate
power and authority to enter into this Agreement and to perform its obligations
hereunder. The execution and delivery of this Agreement by Seller and
performance of the transactions herein contemplated have been duly authorized by
all necessary corporate action of Seller. Except as set forth in Schedule 2.2,
no consent, approval or authorization of, or registration, declaration or filing
with, or notice to, any court, administrative agency or other governmental
authority, domestic or foreign, is required to be obtained or made by or with
respect to Seller in connection with the execution and delivery of this
Agreement or the consummation by Seller of the transactions contemplated hereby.
This Agreement has been duly executed and delivered by Seller and, subject to
and upon its due authorization, execution and delivery by Buyer, shall
constitute the valid and binding agreement of Seller, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally, to general principles of equity and, in the case of Article XII, the
limits on the enforceability of non-competition covenants imposed by applicable
law.
2.3 No Conflict. Neither the execution and delivery of this Agreement nor
the performance of the transactions contemplated herein by Seller will: (a)
violate or conflict with any of the provisions of the respective organizational
documents of Seller or the Company; (b) violate, conflict with or constitute a
default under, or result in the termination or acceleration or a right of
termination or acceleration of, or the loss of a right under, any material note,
bond, mortgage, indenture, deed of trust, lease, contract or any other
agreement, license, franchise or permit or other instrument or any law, statute,
regulation, order, judgment or ruling of any
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governmental authority, to which Seller or the Company is a party or by which
any of their respective properties is bound; or (c) result in the creation of
any Lien on the assets of the Company.
2.4 Title to the Shares. The equity capitalization of the Company is set
forth on Schedule 2.4. The Shares have been duly authorized, validly issued and
are fully paid and nonassessable. The Shares have not been issued in violation
of any preemptive or other similar rights of stockholders and are owned
beneficially and of record as set forth above, free and clear of any Liens. No
other equity securities of the Company are issued or outstanding, and there are
no outstanding options, warrants, scrip or other rights, whether contingent or
otherwise, to acquire, sell or issue shares of capital stock of the Company,
whether upon conversion or exchange of other securities or otherwise, other than
this Agreement. Neither Seller nor the Company is a party to any voting trust,
proxy or other agreement or understanding with respect to the voting of any of
the Shares.
2.5 Financial Statements. Included in Schedule 2.5 are: (a) the unaudited
financial statements of the Company for each of the three fiscal years ended
December 31, 1992, December 31, 1993, and December 31, 1994, respectively, in
accordance with GAAP consistently applied; and (b) the unaudited monthly reports
of the Company for each month of 1995 (collectively, the "Financial
Statements"). Except as may be set forth on Schedule 2.5, the Financial
Statements have been prepared in accordance with GAAP consistently applied.
Except as may be set forth on Schedule 2.5, the Financial Statements and notes
are in accordance with the books and records of the Company and present fairly
in all material respects the financial condition of the Company as of the
respective dates thereof, subject, in the case of the monthly statements, to
year-end adjustments.
2.6 Absence of Certain Changes or Events. Since December 31, 1994, the
Company has operated its business in the ordinary course, and there has not
been:
(a) any change in the business or financial condition of the Company
which would have a material adverse effect on the Company, with the
exception of general business and economic conditions and currency
fluctuations that are also applicable to other companies in similar
businesses;
(b) any damage to or destruction of any physical property of the
Company, which damage or destruction is not covered by insurance and would
have a material adverse effect on the Company.
(c) except in the ordinary course of business, any transfer, sale,
lease, imposition of any Lien or other disposition of any assets material
to the Company; and
(d) any increase in the wages, salaries, compensation, pension or
other benefits payable to any executive officer or employee of the Company,
except as consistent with past practice.
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2.7 Title to Properties. The Company has good and marketable title to or
a valid leasehold interest in its material assets including, without limitation,
those assets listed on the most recent balance sheet of the Company included in
Schedule 2.5 other than those disposed of in the ordinary course since the date
of such balance sheet, free and clear of all Liens.
2.8 Insurance. Schedule 2.8 sets forth information concerning all
policies of insurance (including carriers, effective dates, coverage types and
self-insured retention amounts) relating to the business, assets and employees
of the Company. Such policies have been maintained in full force and effect,
and all premiums therefor have been paid. Such policies will provide coverage
for product liability claims arising before, but reported after Closing Date.
Schedule 2.8 also sets forth a true and complete description of loss experience
history by line of coverage for the past three years, and a description of all
claims for the past three years. Except as otherwise disclosed in such Schedule
2.8, all such claims have been settled by payment thereof and the receipt by the
Company of releases with respect thereto or have been reported to the errors and
omissions carrier of the Company, and the Company has not been notified, nor
does the Company have reason to believe, that any such carrier will deny
coverage. There is no default under any such coverage nor has there been any
failure to give notice or present any claim under any such coverage in a due and
timely fashion. There are no provisions in such insurance policies for
retroactive or retrospective premium adjustments. All products liability and
general liability insurance policies maintained by the Company prior to the date
of this Agreement have been occurrence policies and not claims made policies.
There are no outstanding performance bonds covering or issued for the benefit of
the Company.
2.9 Contracts. Schedule 2.9 contains a true and complete list of all
material contracts, agreements or commitments to which the Company is a party or
otherwise bound, excluding purchase and sales contracts or commitments entered
into in the ordinary course of business, but including without limitation
distributorship or similar agreements, lease or sublease agreements (either as
lessor or lessee), equipment leases, employment agreements and consulting
agreements. Complete and correct copies of all of the contracts set forth in
Schedule 2.9 have been made available for review by Buyer or its counsel.
Except as set forth in Schedule 2.9, the Company is not, and, to the Knowledge
of Seller, no third party is, in default under any such contract, agreement or
understanding listed on Schedule 2.9, and no event has occurred which, with the
passage of time or giving of notice or both, would constitute such a default.
Schedule 2.9 sets forth a list of all agreements to which the Company is a party
which require the consent of any party (other than the Company or Seller) in
order to consummate the transactions contemplated by this Agreement. As used in
this Section 2.9 "material" includes, without limitation, a contract, agreement
or commitment that involves (i) commitment of $25,000 or more, (ii) is not
terminable upon sixty days' notice or less without penalty or (iii) is with an
affiliate of the Company. Subject to bankruptcy, moratorium, fraudulent
conveyance and similar laws; and general principles of equity, the contract and
agreements are enforceable in accordance with their terms.
2.10 Litigation. Except as disclosed in Schedule 2.10, there is no
lawsuit or legal, administrative or regulatory proceeding or investigation or
arbitration pending or, to the
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Knowledge of Seller, threatened against the Company. Except as disclosed in
Schedule 2.10, neither the Company nor its assets is subject to any order,
judgment, injunction, notice of potential responsibility, ruling or decree.
2.11 Compliance with Law. The Company has not received any notification
of any asserted failure by the Company to comply, or investigation relating to
compliance, with any laws, rules or regulations of any federal, state, local or
other governmental authority having jurisdiction over the Company which would
have a material adverse effect on the Company. The Company is in material
compliance with all applicable laws.
2.12 Labor Relations. The Company is not a party to any collective
bargaining agreement. There is no charge, claim or other complaint against the
Company pending before the National Labor Relations Board or any comparable
government agency; and (b) there is no labor strike, dispute, grievance,
slowdown, lockout or stoppage pending or, to the Knowledge of Seller, threatened
against or affecting the Company.
2.13 Severance Benefits. Except as set forth in Schedule 2.13, no
employee or director of the Company will become eligible for any severance or
additional compensation or benefits by reason of the transactions contemplated
by this Agreement.
2.14 Employee Benefit Plans. Schedule 2.14 contains a complete list
of "employee welfare benefit plans" (as that term is defined in Section 3(1) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), in
which employees of the Company participate (which plans, as applied to active
and former employees of the Company, are hereinafter referred to as "Company
Welfare Plans"). Schedule 2.14 contains a complete list of "employee pension
benefit plans" (as that term is defined in Section 3(2) of ERISA) in which
employees of the Company participate (which plans are hereinafter referred to as
"Company Pension Plans"). Company Welfare Plans and Company Pension Plans are
hereinafter collectively referred to as "Company Plans". In addition, Schedule
2.14 contains a complete list of employee benefit plans in which employees of
the Company participate which are not Company Welfare Plans or Company Pension
Plans. Except as disclosed on Schedule 2.14, each Company Plan is in material
compliance with the provisions of ERISA and the applicable provisions of the
Internal Revenue Code of 1986, as amended (the "Code"). Except as disclosed on
Schedule 2.14, to the Knowledge of Seller, no Company Plan has incurred any
"accumulated funding deficiency" (as defined in Section 412(a) of the Code).
Except as disclosed on Schedule 2.14, the Company has not incurred any liability
to the Pension Benefit Guaranty Corporation under Sections 4062, 4063 or 4064 of
ERISA with respect to any Company Plans or any withdrawal liability under Title
IV of ERISA with respect to any Company Plans that are multiemployer plans. The
Company does not maintain and has not contributed to a "Multiemployer Plan" (as
defined in Section 3(37)) of ERISA.
2.15 Absence of Undisclosed Liabilities. The Company does not have any
material liability or material obligation, including any guaranty with respect
to any obligation, except (a) such liabilities or obligations as are fully
reflected or reserved against in the Financial Statements,
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(b) such liabilities or obligations as have been incurred in the ordinary course
of business, consistent with past practice, since the date of the last Financial
Statements, and (c) (without limiting the representations in Section 2.9)
liabilities and obligations under executory contracts.
2.16 Intellectual Property Rights. Schedule 2.16 contains a correct and
complete list of the following assets and related matters: (a) all trademarks,
service marks, trade names, patents, copyrights, royalty rights, logos,
applications therefor and registrations thereof used by the Company all of
which, except as expressly noted, are owned by the Company, except for the
trademarks or trade names BTR and Fasco and variants thereof, none of which are
conveyed in connection with this transaction other than as provided in Section
11.14 (collectively, the "Proprietary Rights"), and, the jurisdictions in or by
which such assets or any of them have been registered, filed or issued and (b)
all contracts, agreements or understandings pursuant to which the Company has
authorized any person to use any of the Proprietary Rights as so owned. To the
knowledge of Seller, the Company owns or possesses all Proprietary Rights that
are required to conduct its business as now conducted without conflict with the
rights of others. Except as set forth on Schedule 2.16, the Company has the
exclusive right to use the Proprietary Rights (including applications for any of
the foregoing) used in connection with its business, and has had through Closing
the non-exclusive right to use the tradename and trademark "Fasco," and, subject
to the qualification in Section 11.14, the consummation of the transactions
contemplated hereby will not alter or impair any such rights; and no claims have
been asserted by any Person to the use of any of the foregoing, or challenging
or questioning the validity or effectiveness of any such license or agreement,
and to the knowledge of Seller, there is no basis for any such claim. To the
knowledge of Seller after due investigation, neither the Company nor any of its
representatives or agents have committed any inequitable conduct or fraud that
may affect the validity or enforceability of the Proprietary Rights.
2.17 Taxes.
(a) The Company has timely filed with each appropriate federal,
state, local and foreign governmental entity or other authority
(individually or collectively, "Taxing Authority") all Tax Returns, as
defined in Section 2.17(c), required to be filed and has timely paid in
full all Taxes, as defined in Section 8.1(c), if any, shown to be due on
such Tax Returns and at the Closing Date shall have paid all U.S., federal,
state and local income taxes and shall have paid or accrued for all other
Taxes due and payable through and including the close of business on the
Closing Date (whether or not shown on any Tax Return). All Tax Returns
filed by the Company are true, correct and complete in all material
respects and no other Taxes for the periods covered by such Tax Returns are
required to be paid except, with respect to Taxes other than U.S., federal,
state and local income taxes, Taxes which have been reserved on the books
of the Company. There are no liens for Taxes upon the Company or their
assets except liens for current Taxes not yet due.
(b) All taxes with respect to the Company that are required to be
withheld or collected have been duly withheld or collected and, to the
extent required, have been paid
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to the proper governmental authorities or properly deposited as required by
applicable laws.
(c) As used in the Agreement, "Tax Return" is defined as any return,
report, information return or other document (including any related or
supporting information) filed or required to be filed with any Taxing
Authority or other authority in connection with the determination,
assessment or collection of any Tax paid or payable by the Company or the
administration of any laws, regulations or administrative requirements
relating to any such Tax.
(d) The Company has not received notice of assessment or deficiency
or proposed assessment in connection with any Tax Returns and there are not
pending any tax examinations of or tax claims asserted against the Company
or any of its assets or properties. There are no unexpired waivers or any
extensions by the Company of any statute of limitations with respect to the
assessment or collection of any Taxes.
2.18 Products and Warranties; Return Privileges. To the Knowledge of the
Seller, there are no statements, citations or decisions by any governmental or
regulatory body that any product which has been manufactured, marketed or
distributed by the Company is defective or fails to meet any standards
promulgated by any such governmental or regulatory body. Except as set forth
in Schedule 2.18, no product produced by the Company has been recalled
voluntarily or involuntarily in the last five years, no such recall is being
considered by the Company, and, to the Knowledge of the Seller, no such recall
is being considered by or has been requested or ordered by any governmental
authority or consumer group. To the Knowledge of the Seller, there is no (a)
fact relating to any product which has been manufactured, marketed or
distributed by the Company that may impose upon the Company a duty to recall any
such product or a duty to warn customers of a defect in any such product, or (b)
latent or overt design, manufacturing or other material defect in any such
product. Schedule 2.18 sets forth a description of all warranties and return
privileges (written or otherwise) which the Company gives in connection with the
manufacture and/or distribution of its products. The Company has not extended
any service obligations or return privileges to customers other than in the
ordinary course of business.
2.19 Environmental Compliance. Except as may be provided in Schedule
2.19, the Company is in material compliance with all applicable federal, state
and local laws and regulations relating to pollution control and environmental
contamination including, without limitation, all laws and regulations governing
the handling, generation, use, collection, treatment, storage, transportation,
recovery, removal, discharge or disposal of Hazardous Materials (as defined
below) and all laws and regulations with regard to record keeping, notification
and reporting requirements respecting Hazardous Materials. Except as may be
provided in Schedule 2.19, Seller has received no notice of any administrative
or judicial proceeding pursuant to any applicable federal, state and local laws
or regulations relating to pollution control and environmental contamination at
any time during the past four years, it has no knowledge of any material
violations of the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA"), the Resource Conservation and Recovery Act
("RCRA") or any other
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federal, state or local environmental statute and it has not received any notice
of any environmental liens. To the best of Seller's knowledge, there are
currently no underground storage tanks on the real property owned by the Company
and no underground storage tanks have been removed except in compliance with
applicable law. For purposes of this Section 2.19, "Hazardous Materials" means
without limitation any substance: (i) which is regulated as hazardous, extremely
or imminently hazardous, dangerous or toxic, under any local, state or federal
governmental authority or any regulations promulgated pursuant thereto as well
as judicial or administrative interpretation thereof; (ii) which is toxic,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic, or otherwise hazardous which is regulated by any governmental
authority; (iii) the presence of which requires investigation or remediation
under any federal, state or local statute, regulation, order, ordinance, action,
guideline, requirement, permit, notice, or policy; or (iv) that contains
gasoline, diesel fuel or other petroleum hydrocarbons or fraction thereof. Such
terms also include without limitation: (i) asbestos and PCB-containing and
polychlorinated biphenyl-containing equipment including transformers; (ii) any
material, substance or waste defined as "hazardous waste" pursuant to Section
1004 of the Resource Conservation and Recovery Act (42 U.S.C. (S)6901 et seq.);
(iii) any material, substance or waste defined as "hazardous substance" pursuant
to Section 101 of the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. (S)9601, et seq.) or (iv) any material, substance or
waste defined as "regulated substance" pursuant to Subchapter 9 of the Solid
waste Disposal Act (42 U.S.C. (S)6991, et seq.) or (v) any material, substance
or waste regulated by the Hazardous Materials Transportation Act (49 U.S.C.
Appendix (S)1801, et seq.), the Federal Insecticide, Fungicide and Rodenticide
Act, Federal Pesticide Act (7 U.S.C. (S)136, et seq.) the Federal Safe Drinking
Water Act (42 U.S.C. (S)300 (f), et seq.), the Toxic Substances Control Act (15
U.S.C. (S)2061, et seq.), the Clean Air Act (42 U.S.C. (S)7401, et seq.) or the
Clean Water Act (33 U.S.C. (S)1251, et seq.) and all other federal, state and
local laws, statutes, regulations and ordinances applicable to Hazardous
Materials as well as any judicial or administrative interpretation thereof.
2.20 Customer and Vendor Relations. The Company is the sole and exclusive
owner of, and has the unrestricted right to use, its customer list, it being
understood that the information on such customer list may or may not be
proprietary to the Company and the customers themselves are not exclusive to the
Company. The Company has not since December 31, 1994 paid or promised to pay or
refund to any client, customer or account of the Company, any money or other
valuable consideration as an inducement for placing orders with the Company
other than credits for returns, replacements or warranty work in the normal
course of business and gifts of nominal value typical in the industry. To the
Knowledge of Seller, no customer of the Company, including without limitation
any distributor or dealer, has since December 31, 1994 given written or oral
notice to the Company of its intent to terminate or significantly reduce the
amount of its business with the Company, or has in fact terminated or
significantly reduced the amount of, its business with the Company, other than
W.W. Grainger, which has indicated an intent to eliminate the Company's
ventilation products from its catalog in 1997. To the Knowledge of Seller, no
vendor to the Company has since December 31, 1994 given oral or written notice
to the Company that it intends to cease doing business with the Company or
increase the prices of the materials or services provided by such vendor to the
Company, other than changes imposed
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by the vendor from time to time in the ordinary course of business.
2.21 Misstatement or Omission. There are no material facts relating
to the assets, liabilities, earnings, properties or operations of the Company
which have not been disclosed to Buyer in writing. No representation or
warranty by Seller in this Agreement, and no Exhibit or Schedule attached hereto
contains or will contain any untrue statement of a material fact, or omits or
will omit to state a material fact required to be stated herein or therein or
necessary to make the statements contained herein or therein not misleading.
2.22 DISCLAIMERS. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
SELLER MAKES NO REPRESENTATIONS OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, AS TO
THE PHYSICAL CONDITION, VALUE OR QUALITY OF THE COMPANY'S ASSETS OR THE
COLLECTIBILITY OF THE COMPANY'S RECEIVABLES, AND SELLER SPECIFICALLY DISCLAIMS
ANY WARRANTY OF MERCHANTABILITY, USAGE OR FITNESS FOR ANY PARTICULAR PURPOSE OF
ANY OF THE COMPANY'S ASSETS.
2.23 Qualification of Representations and Warranties. Notwithstanding
anything to the contrary, express or implied, contained in this Agreement, each
of the representations and warranties of Seller in this Agreement is modified by
reference to the disclosures and information contained in this Agreement, in the
agreements and documents referred to herein, in the Schedules hereto, and in the
documents and information delivered or made available to Buyer or its
representatives in connection with its due diligence investigation of the
Company, a list of which is included as Schedule 2.23.
2.24 Material Transactions. Since November 30, 1995, the Company has
operated and carried on its business in the manner described in Section 4.1 and
the Company has not taken any action that would have been prohibited by Section
4.1 had that Section been effective since November 30, 1995.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
3.1 Organization. Buyer is a corporation duly incorporated, validly
existing, and in good standing under the laws of the state of its incorporation.
Buyer has the corporate power to own its properties and carry on its business as
the same is now being conducted insofar as such powers are relevant to the
transactions contemplated herein and is, or on the Closing Date will be, duly
qualified to do business and in good standing in each jurisdiction in which the
failure to be so qualified and in good standing would have a material adverse
effect on its ability to consummate the transactions contemplated herein.
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3.2 Authority; Validity of Agreement. Buyer has all requisite corporate
power and authority to enter into this Agreement and to perform its obligations
hereunder. The execution and delivery of this Agreement by Buyer and
performance of the transactions herein contemplated have been duly authorized by
all necessary corporate action of Buyer. Except as set forth in Schedule 3.2,
no consent, approval or authorization of, or registration, declaration or filing
with, or notice to, any court, administrative agency or other governmental
authority is required to be obtained or made by or with respect to Buyer in
connection with the execution and delivery of this Agreement or the consummation
by Buyer of the transactions contemplated hereby, except where failure to obtain
such consent, approval or authorization, or failure to make such registration,
declaration, filing or notice would not prevent Buyer from performing any
material obligations under this Agreement and would not have a material adverse
effect on the transactions contemplated hereby. This Agreement has been duly
executed and delivered by Buyer and, subject to and upon the due authorization,
execution and delivery by Seller, shall constitute the valid and binding
agreement of Buyer, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors rights generally and to general
principles of equity.
3.3 No Conflict. Except as set forth in Schedule 3.3, neither the
execution and delivery of this Agreement nor the performance of the transactions
contemplated herein by Buyer, will: (a) violate or conflict with any of the
provisions of the Certificate of Incorporation or By-laws of Buyer; (b) violate,
conflict with or constitute a default under or result in the termination or
acceleration or a right of termination or acceleration of, or the loss of a
right under, or require or depend upon consent or approval under, any material
note, bond, mortgage, indenture, deed of trust, lease, contract or any other
agreement, license, franchise or permit or other instrument or any law, statute,
regulation, order, judgment or ruling of any governmental authority to which
Buyer is a party or by which any of its property is bound.
3.4 Litigation. Except as disclosed in Schedule 3.4, there is no lawsuit
or legal, administrative or regulatory proceeding or investigation or
arbitration pending or, to the Knowledge of Buyer, threatened against Buyer
which would, if adversely determined, have a material adverse effect on Buyer's
ability to perform its obligations hereunder or consummate the transactions
contemplated herein. Except as disclosed in Schedule 3.4, neither Buyer nor its
assets are subject to any order, judgment, injunction, notice of potential
responsibility, ruling or decree which could have a material adverse effect on
Buyer's ability to perform its obligations hereunder or consummate the
transactions contemplated herein.
3.5 Securities Law Compliance. Buyer acknowledges that none of the Shares
has been registered under the Securities Act of 1933, as amended (the
"Securities Act"), or under any state or foreign securities laws. Buyer is not
an underwriter, as such term is defined under the Securities Act, and is
purchasing the Shares solely for investment, with no present intention to
distribute any of such Shares to any person. Buyer will not sell or otherwise
dispose of any of such Shares, except in compliance with the registration
requirements or exemption provisions under the Securities Act and the rules and
regulations promulgated thereunder, and any other applicable securities laws.
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ARTICLE IV
ACTIONS BEFORE THE CLOSING
The parties covenant to take the following actions between the date hereof
and the Closing Date:
4.1 Conduct of Business. Except as otherwise contemplated by the terms of
this Agreement, the transactions provided for herein, or by Schedule 4.1,
pending the Closing Seller shall cause the Company to operate and carry on its
business in all material respects only in the ordinary course consistent with
past practices. Notwithstanding anything contained in the immediately preceding
sentence, between the date hereof and the Closing:
(a) Preservation of Business. Seller shall, and shall cause the
Company to, use commercially reasonable efforts to preserve the corporate
existence, business organization and goodwill of the Company's business, to
preserve the Company's relationships with its customers, suppliers and
employees and to keep available to Buyer the officers and key employees of
the Company.
(b) Prohibited Changes. Except as otherwise contemplated by this
Agreement or Schedule 4.1 hereto, Seller shall use commercially reasonable
efforts to prevent the Company from taking any of the following actions
without the prior written approval of Buyer, which approval shall not be
unreasonably withheld or delayed:
(i) Sell, consume or otherwise dispose of any assets material
to the Company other than in the ordinary course of business or
consistent with past practice;
(ii) Other than purchase and sales contracts entered into in the
ordinary course of business, enter into or amend in any material
adverse respect any contracts or commitments of any kind requiring the
aggregate expenditure by the Company of an amount in excess of $50,000
or which irrespective of amount, could have a material adverse effect
on the Company;
(iii) Pledge or subject to any Lien any assets material to the
Company;
(iv) Amend the organizational documents of the Company;
(v) Issue any shares of capital stock or other interests or
evidences or types of ownership or make any change in the issued and
outstanding capital stock of the Company, issue any warrant, option or
other right to purchase shares of capital stock, or redeem, purchase
or otherwise acquire any shares of capital stock, of the Company;
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(vi) Other than intercompany loans made in a manner consistent with
past practice, assume, incur or guarantee any obligation or liability for
borrowed money;
(vii) Cancel any debts owed to it or waive any material claim or
right of substantial value, except for compromises of trade debt in the
ordinary course of business;
(viii) Make any changes in its accounting methods, principles or
practices except as required by changes in generally accepted accounting
principles;
(ix) Other than intercompany loans made in a manner consistent with
past practice, pay, discharge or satisfy any claim, liability or
obligation, other than liabilities or obligations reflected or reserved
against in the Company's accounts or incurred in the ordinary course of
business or consistent with past practice;
(x) Prepay any obligation having a fixed maturity of more than 90
days from the date such obligation was issued or incurred;
(xi) Write down the value of any inventory or write off as
uncollectible any notes or accounts receivable, except for non-material
write-downs and non-material write-offs required in accordance with
generally accepted accounting principles or in the ordinary course of
business or consistent with past practice;
(xii) Grant any general increase in the compensation of officers or
employees or any increase in the compensation payable or to become payable
to any officer or employee, except in the ordinary course of business or
pursuant to existing contracts or agreements (including, without
limitation, any such increase pursuant to any Company Plan or other
commitment) or consistent with past practice; or
(xiii) Accelerate the collection of receivables, delay payment of
payables or alter any inventory management practice so as to have a
material affect on the Company's working capital at Closing.
(d) Distributions. Immediately prior to the Closing, Seller shall cause
the Company to (i) pay in full in cash any non-trade amounts owed to Seller or
any affiliates of Seller, (ii) declare and pay a dividend or make such other
distribution of any remaining cash of the Company to its shareholders, and (iii)
eliminate by means of a cash distribution to Seller the intercompany funding
loan, which at November 30, 1995 was in the approximate amount of
$11,800,000.00. As of the Closing Date the Company will not have a negative
cash balance in any of its bank accounts assuming all outstanding checks and
other drafts as of such date were cleared against such accounts and all deposits
in transit as of such date were credited to such accounts; and as of such date
there will
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be no checks written, recorded and not issued.
4.2 Access and Information.
(a) Access by Buyer. Between the date of this Agreement and the
Closing Date, representatives and counsel of Seller will, at the request of
Buyer, meet from time to time at a mutually agreeable time and place with
executive officers and counsel of Buyer to discuss such matters relating to
the business, operations and financial condition of the Company as Buyer
may reasonably request. Seller will from time to time prior to the Closing
make available to Buyer for inspection such documents as Buyer shall
reasonably request and permit during normal business hours and in a manner
that will not interfere with normal business operations, such inspections
of the physical condition and operations of the Company, by personnel and
representatives of Buyer (such personnel to be at all times escorted by
personnel or representatives of Seller) as Buyer shall reasonably request.
Subject to any statutory or regulatory requirements to which Seller may be
subject and to legitimate needs to preserve an attorney-client privilege,
Seller shall furnish to Buyer copies of such documents concerning the
operations or business of the Company and such additional information with
respect to the Company as Buyer may reasonably request.
(b) Cooperation. If either Buyer or Seller desires access or
requests any delivery of information which the other believes is reasonably
likely to create a substantial risk of violation of any antitrust or
national security or other laws or a breach of a contractual obligation of
such party or which may, if delivered, conflict with the preservation of an
attorney-client privilege, Buyer and Seller, to the extent practicable,
will cooperate and use reasonable efforts to develop appropriate procedures
to provide access to such information in a manner which does not create a
substantial risk of violation of any such laws, contractual obligations or
waiver of attorney-client privilege.
4.3 Covenant to Satisfy Conditions. Each party hereto agrees to use all
reasonable efforts to obtain the permits, approvals and authorizations and
satisfy all of the other conditions set forth in Article VI.
ARTICLE V
ACTIONS AFTER THE CLOSING
The parties covenant to take the following actions after the Closing Date:
5.1 Cooperation. Subject to any limitations that are required to preserve
any applicable attorney-client privilege, for a period of five (5) years from
and after the Closing Date, each party agrees to furnish or cause to be
furnished to the other party, its counsel and accountants, upon reasonable
request during normal business hours, after not less than three (3)
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business days prior written notice, such information and assistance relating to
the Company or its business (including, without limitation, the cooperation of
officers and employees and reasonable access to books, records and other data
and the right to make copies and extracts therefrom) as is reasonably necessary
to: (a) facilitate the preparation for or the prosecution, defense or
disposition of any suit, action, litigation or administrative, arbitration or
other proceeding or investigation (other than one by or on behalf of one party
to this Agreement against the other party hereto); (b) prepare and file any tax
return or election relating to the Company and any audit by any taxing authority
of any returns relating to the Company; and (c) prepare and file any other
documents required by governmental or regulatory bodies. The party requesting
such information and assistance shall reimburse the other party for all
reasonable out-of-pocket costs and expenses incurred by such party in providing
such information and assistance.
5.2 Record Retention. Buyer shall, or cause the Company to, use
commercially reasonable efforts to preserve and keep the books and records of
the Company that Buyer obtains pursuant to the transactions contemplated hereby,
and Seller shall use commercially reasonable efforts to preserve and keep any
such book and records it may retain with respect to the business of the Company,
in each case in accordance with Seller's Record Retention Policy, as such policy
has been provided to Buyer at or prior to Closing, except that no books and
records must be retained by either party for more than seven (7) years after the
Closing Date unless otherwise required by law.
5.3 Further Assurances. Each party shall cooperate with the other, and
execute and deliver, or cause to be executed and delivered, all such other
instruments, including, without limitation, instruments of conveyance,
assignment and transfer, and take all such other actions as may reasonably be
requested by the other party hereto from time to time, consistent with the terms
of this Agreement, in order to effectuate the provisions and purposes of this
Agreement.
ARTICLE VI
CONDITIONS TO CLOSING
6.1 Obligations of Buyer. At the option of Buyer, the obligation of Buyer
to consummate the transactions contemplated by this Agreement shall be subject
to the following conditions:
(a) Seller's Representations and Warranties and Performance. The
representations and warranties of Seller herein contained shall be true in
all material respects as and at the Closing Date with the same effect as
though made at the Closing Date, except for changes permitted or
contemplated by this Agreement and except to the extent that any
representation or warranty is made herein as of a specified date, in which
case such representation or warranty shall be true as of such date. Seller
shall have performed in all material respects all obligations and complied
in all material respects
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with all covenants and other agreements and satisfied all conditions
required by this Agreement prior to or on the Closing Date. Seller shall
have delivered to Buyer a certificate affirming the satisfaction of the
conditions set forth above executed on behalf of Seller by its President or
a Vice President.
(b) Permits, Approvals and Authorizations. Any and all material
consents, waivers, permits and approvals from any governmental or
regulatory body, and of any corporation or other person or entity required
in connection with the execution, delivery and performance of this
Agreement shall have been duly obtained and shall be in full force and
effect on the Closing Date.
(c) Share Certificates. Seller shall have tendered to Buyer one or
more certificates evidencing all of the issued and outstanding Shares and
duly executed instruments of transfer necessary to transfer such Shares.
(d) Opinion of Seller's Counsel. Buyer shall have received the
opinion of Peter M. Kent, counsel to Seller, dated the Closing Date,
substantially in the form attached hereto as Exhibit A.
(e) Minute Books, Resignations. Buyer shall have received the minute
books and stock record books of the Company and the written resignations,
effective as of the Closing Date, of such members of the boards of
directors and officers of the Company as, after consultation with Seller,
Buyer shall timely request.
(f) No Challenge or Violation of Orders. No investigation, action,
suit or proceeding by any governmental or regulatory commission, agency or
authority, and no action, suit or proceeding by any other person, firm,
corporation or entity, shall be pending or threatened on the Closing Date
which challenges this Agreement or the Closing of the transactions
contemplated hereby, or which claims damages in a material amount as a
result of the transactions contemplated hereby. No preliminary or permanent
injunction or other order by any court or governmental or regulatory
authority, and no statute, rule, regulation, decree or executive order
promulgated or enacted by any government or governmental or regulatory
authority, that declares this Agreement invalid in any respect or prevents
the consummation of the transactions contemplated hereby, shall be in
effect.
(g) No Material Adverse Changes. From the date hereof to the Closing
Date, neither the Company nor its business or assets shall have been
materially adversely affected in any way, including, without limitation, by
fire, casualty, act of God or otherwise, whether insured or uninsured.
(h) Transfer of Intellectual Property. The Company shall own all of
the patents and trademarks listed in Schedule 2.16 free and clear of all
Liens.
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(i) Termination of BTR Agreement. The Agreement dated November, 1993
between the Company and BTR Dunlop, Inc., a Delaware corporation, shall
have been terminated pursuant to the Termination Agreement attached as
Schedule 6.1(i).
(j) Auditors' Letter. Buyer shall have received a copy of a letter
from Ernst & Young LLP in the form attached as Schedule 6.1(j) confirming
that the consolidated stockholder's equity of BTR Dunlop, Inc. as of
December 31, 1994 exceeded $500 million.
6.2 Obligations of Seller. At the option of Seller, the obligation of
Seller to consummate the transactions contemplated by this Agreement shall be
subject to the following conditions:
(a) Buyer's Representations and Warranties and Performance. The
representations and warranties of Buyer herein contained shall be true in
all material respects as of and at the Closing Date with the same effect as
though made at the Closing Date, except for changes permitted or
contemplated by this Agreement and except to the extent that any
representation or warranty is made herein as of a specified date, in which
case such representation or warranty shall be true as of such date. Buyer
shall have performed in all material respects all obligations and complied
in all material respects with all covenants and other agreements and
satisfied all conditions required by this Agreement on or prior to the
Closing Date. Buyer shall have delivered to Seller a certificate affirming
the satisfaction of the conditions set forth above executed on behalf of
Buyer by its President or a Vice President.
(b) Permits, Approvals and Authorizations. Any and all material
consents, waivers, permits and approvals from any governmental or
regulatory body and of any corporation or other person required in
connection with the execution, delivery and performance of this Agreement
shall have been duly obtained and shall be in full force and effect on the
Closing Date.
(c) Purchase Price. Buyer shall have tendered to Seller the sum of
$23,532,000 in accordance with Section 1.1 hereof.
(d) Opinion of Buyer's Counsel. Seller shall have received the
opinion of Hillix, Brewer, Hoffhaus, Whittaker & Wright, L.L.C., counsel to
Buyer, dated the Closing Date, substantially in the form attached hereto as
Exhibit B.
(e) No Challenge or Violation of Orders. No investigation, action,
suit or proceeding by any governmental or regulatory commission, agency or
authority, and no action, suit or proceeding by any other person, firm,
corporation or entity, shall be pending or threatened on the Closing Date
which challenges this Agreement or the Closing of the transactions
contemplated hereby, or which claims damages in a material amount as a
result of the transactions contemplated hereby. No preliminary or permanent
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injunction or other order by any court or governmental or regulatory
authority and no statute, rule, regulation, decree or executive order
promulgated or enacted by any government or governmental or regulatory
authority, that declares this Agreement invalid in any respect or prevents
the consummation of the transactions contemplated hereby, shall be in
effect.
(f) Buyer shall furnish Seller's counsel with a replacement lid for
his ten-year old Crock Pot/TM/.
ARTICLE VII
TERMINATION AND REMEDIES
7.1 Termination. Anything in this Agreement to the contrary
notwithstanding, this Agreement may be terminated at any time prior to the
Closing as follows:
(a) By the mutual written agreement of Buyer and Seller; or
(b) By written notice of Buyer to Seller in the event any condition
to the obligations of Buyer set forth in Section 6.1 is not satisfied or
waived as of or on the Closing Date or in the event that the Closing has
not occurred on or before January 31, 1996; or
(c) By written notice of Seller to Buyer in the event any condition
to the obligations of Seller set forth in Section 6.2 is not satisfied or
waived as of or on the Closing Date or in the event that the Closing has
not occurred on or before January 31, 1996.
7.2 Effect of Termination. Any such termination of this Agreement shall
not affect the rights and remedies of the parties accruing or arising prior to
such termination.
ARTICLE VIII
TAXES AND EMPLOYEE BENEFIT PLANS
8.1 Liability for Taxes.
(a) Taxable Periods Ending On or Before the Closing Date. Seller
shall be liable for, and shall indemnify and hold Buyer harmless against,
all Taxes (as defined in Section 8.1(c)) due or payable by the Company for
any taxable year or taxable period ending on or before the Closing Date,
but in the case of Taxes other than U.S. federal, state and local income
taxes only to the extent that the amount of such Taxes exceeds the
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amount reserved therefor on the applicable Financial Statements.
(b) Taxable Periods Commencing On or After the Closing Date. Buyer
shall be liable for, and shall indemnify and hold Seller and any affiliate
of Seller harmless against any and all Taxes due or payable by the Company
or by Buyer with respect to the Company for any taxable year or taxable
period commencing after the Closing Date.
(c) Definition of "Taxes". "Taxes" shall mean all taxes, levies,
assessments, charges or fees of any kind or character, including without
limitation, U.S. federal, state, local and foreign income, profits, capital
gains, franchise, sales, use, service, gross receipts, occupation,
property, property transfer, lease, capital stock, premium, excise,
payroll, withholding, estimated taxes and other governmental charges
imposed by the United States or any state, county, local or foreign
government or subdivision or agency thereof, including any interest,
additions to tax and penalties thereon.
8.2 Refunds or Credits.
(a) Except as otherwise set forth in this Agreement, any refunds or
credits of Taxes, to the extent that such refunds or credits are
attributable to taxable periods ending on or before the Closing Date, shall
be for the account of Seller, and, to the extent that such refunds or
credits are attributable to taxable periods beginning after the Closing
Date, such refunds or credits shall be for the account of Buyer. There will
be no such refund or credit on the most recent Financial Statements of the
Company as an asset of the Company on the Closing Date. Buyer shall cause
the Company promptly to forward to Seller or to reimburse Seller for any
such refunds or credits due Seller after receipt thereof by Buyer or the
Company.
(b) If the examination of any federal, state, local or other tax
return of Seller or the Company shall result (by settlement or otherwise)
in any adjustment that decreases deductions, losses or tax credits or
increases income, gains or recapture of tax credits for any period ending
on or before or including the Closing Date, and that will permit Buyer to
increase recapture of tax credits that would otherwise (but for such
adjustments) have been taken or reported with respect to Buyer or the
Company for one or more periods ending after the Closing Date, Seller will
notify Buyer and provide it with adequate information so that it can
reflect on tax returns of Buyer or the Company such increases in
deductions, losses or tax credits or decreases in income, gains or
recapture of tax credits. With respect to such increases or decreases on
tax returns of Buyer or the Company, Buyer shall pay to Seller the amounts
by which the aggregate of all Tax Benefits which result therefrom exceeds
Ten Thousand Dollars ($10,000), such amounts to be paid when and as such
Tax Benefits in excess of $10,000 are realized.
(c) If the examination of any Tax return of Buyer or the Company
shall result (by settlement or otherwise) in any adjustment that decreases
deductions, losses or other tax credits for any period beginning after the
Closing Date, and that will permit Seller or
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the Company to increase deductions, losses or tax credits or decrease the
income, gains or recapture of tax credits that would otherwise (but for
such adjustment) have been taken or reported with respect to Seller or the
Company for one or more periods before the Closing Date, Buyer will notify
Seller and provide it with adequate information so that it can reflect on
its return such increases in deductions, losses or tax credits or decreases
in income, gains or recapture of tax credits. Seller shall pay to Buyer the
amounts by which the aggregate of all Tax Benefits which result therefrom
exceeds $10,000, such amounts to be paid when and as such Tax Benefits in
excess of $10,000 are realized.
(d) The term "Tax Benefits" shall mean in the case of a separate
state, local or other tax return, the sum of the amount by which the tax
liability of such corporation to the appropriate government or jurisdiction
is reduced (including by refund) and any interest from such government or
jurisdiction relating to such tax liability, and in the case of a
consolidated federal income tax return or similar state, local or other tax
return, the sum of the amount by which the tax liability of the affiliated
group of corporations to the appropriate government or jurisdiction is
reduced (including tax refund) and any interest from such government or
jurisdiction relating to such tax liability.
8.3 Contests. Whenever any taxing authority sends a notice of an audit,
initiates an examination of the Company, or otherwise asserts a claim, makes an
assessment, or disputes the amount of Taxes (i) for any taxable period for which
Seller is or may be liable under this Agreement, or (ii) for any taxable period
that involves an issue that could potentially affect a taxable period for which
Seller is or may be liable under this Agreement, Buyer shall promptly inform
Seller, and Seller shall have the right to control any resulting proceedings and
to determine whether and when to settle any such claim, assessment or dispute to
the extent such proceedings or determinations are more likely to affect a
greater amount of Taxes for which Seller is liable under this Agreement than
Buyer. Whenever any taxing authority sends a notice of an audit, initiates an
examination of the Company, or otherwise asserts a claim, makes an assessment or
disputes the amount of Taxes (i) for any taxable period for which Buyer is
liable under this Agreement, or (ii) for any taxable period that involves an
issue that could potentially affect a taxable period for which Buyer is or may
be liable under this Agreement, Seller shall promptly inform Buyer, and Buyer
shall have the right to control any resulting proceedings and to determine
whether and when to settle any such claim, assessment or dispute, to the extent
such proceedings or determinations are more likely to affect a greater amount of
Taxes for which Buyer is liable under this Agreement than Seller.
8.4 Mutual Cooperation. Each of Buyer and Seller will provide the other
with such assistance as may reasonably be requested by either of them in
connection with the preparation of any tax return, any audit or other
examination by any taxing authority, or any judicial or administrative
proceedings relating to liability for Taxes, and each will retain and provide
the other with any records or information which may be relevant to such return,
audit or examination, proceedings or determination. Such assistance shall
include making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder and
shall include providing copies of any relevant tax return and
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supporting work schedules. The party requesting assistance hereunder shall
reimburse the other for reasonable expenses incurred in providing such
assistance. Without limiting in any way the foregoing provisions of this Section
8.4, Buyer hereby agrees that it will retain, until the appropriate statutes of
limitation (including any extensions) expire, copies of all tax returns,
supporting work schedules and other records or information which may be relevant
to such returns of the Company for all taxable periods which include the dates
from January 1, 1992, to and including the Closing Date, and that such records
shall be maintained in accordance with the Seller's Record Retention Policy, as
such policy has been provided to Buyer at or prior to Closing. Notwithstanding
the foregoing, Buyer may destroy or otherwise dispose of such records at any
time after the fifth anniversary of the Closing Date.
8.5 Covenants and Agreements.
(a) Seller's Obligation to File Returns. Seller shall timely file, or
cause to be timely filed, with the appropriate taxing authorities all
returns and reports with respect to Taxes that are required to be filed on
or prior to the Closing Date by or with respect to the Company, and Seller
shall pay or cause to be paid all Taxes shown as due thereon. Seller shall
also file all U.S. federal, state and local income tax returns for the
Company for the taxable period of the Company that ends on the Closing Date
and shall pay or cause to be paid all income taxes shown as due thereon.
Such Tax Returns shall be consistent with Tax Returns filed by or on behalf
of the Company for prior periods with respect to the recognition of net
income, net losses, deductions, credits and depreciation.
(b) Buyer's Obligation to File Returns. Except as provided in Section
8.5(a), Buyer shall timely file or cause to be timely filed all other
returns and reports with respect to Taxes that are required to be filed
with respect to the Company, or any successor(s) to its business, after the
Closing Date, and Buyer shall pay or cause to be paid all Taxes shown as
due thereon. To the extent requested by Seller, Buyer shall participate in
the filing of any required returns, reports, statements or forms with
respect to any period that ends on or before Closing. Buyer shall prepare
or cause to be prepared and shall file or cause to be filed all other tax
returns, reports, statements and forms required of the Company, or in
respect of its activities, for any period ending after Closing that
includes the operations of the Company prior to Closing. Buyer shall also
prepare or cause to be prepared the schedules (known as the BTR Group
T-Schedules) as provided to Buyer prior to Closing, containing the tax
accrual information necessary to prepare the consolidated U.S. income tax
return. Any such tax returns, reports, statements, forms or schedules that
include or relate to tax periods ending on or before Closing or that
include the operations of the Company prior to Closing shall be on a basis
consistent with the last previous such returns, reports, statements, forms
or schedules filed or prepared in respect of the Company, unless Seller or
Buyer, as the case may be, concludes that there is no reasonable basis for
such position. Seller shall compensate Buyer for any reasonable and
documented expenses incurred by Buyer in performing the obligations of this
Section 8.5(b) to the extent that such expenses relate to periods prior to
the Closing Date.
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8.6 Transfer Taxes. Notwithstanding anything herein to the contrary,
Buyer shall bear all liabilities for any sales, use, transfer stamp, conveyance
or similar Taxes and fees assessed or payable in connection with the transfers
of the Shares to Buyer.
8.7 Tax Sharing Agreement. All Tax sharing agreements or practices among
or between the Company and Seller or any affiliates thereof shall be terminated
as of Closing. No payment shall be due to the Company from the Seller or any
affiliates thereof in respect of losses of the Company included in any return
made on a consolidated basis for the purposes of federal income taxes for any
tax period ending on or before Closing.
8.8 Certain Employee Matters and Benefit Plans.
(a) Seller shall be responsible and liable for any claim in respect
of the Company's employees arising under any State Worker's Compensation or
similar law which is based on or any occurrence prior to the Closing. Buyer
shall cause the Company to be responsible and liable for any claim in
respect of the Company's employees arising under any state worker's
compensation or similar law which is based on any occurrence after the
Closing. Claims based on injuries occurring over a period of time both
before and after Closing shall be apportioned between Seller and Buyer in
accordance with applicable law or, in the absence of such law, pro-rata
based on the relevant period of time before and after Closing. Buyer shall
make reasonable commercial efforts to minimize worker's compensation claims
for which Seller is responsible.
(b) Within a reasonable period following Closing, Seller will,
without expense to the Company, provide to all Company employees and former
employees all distributions, benefits or assurances to which they are then
entitled or to which they will thereafter become entitled by reason of all
Company Plans described in Section 2.14. Seller shall have sole
responsibility for administration of the Company Plans described in Section
2.14, including, without limitation, providing the Company employees with
all notifications or other forms which are due them and duly filing all
related Tax Returns and all necessary notifications to the Department of
Labor and other governmental agencies. Upon and after the Closing Date, no
further benefits or entitlement shall accrue under the Company Plans.
(c) Notwithstanding anything to the contrary in this Section 8.8,
Seller shall, at or before the Closing Date, terminate or cause the Company
to terminate, any and all obligations and liabilities of the Company to
continue the Company Plans, or the benefits provided thereby, as of and
after the Closing Date. Seller agrees that neither the Buyer nor the
Company shall be responsible for, and that Seller shall be responsible for,
any and all obligations, liabilities and expenses resulting from the
adoption of, participation in, administration of, termination of, and
distributions from all Company Plans, including, without limitation, the
Company's post retirement health care plan. Buyer and Seller agree that
Seller has retained all obligations, liabilities and expenses relating to
the
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Company Plans, that no deductible, threshold or limitation as to time shall
be applicable to any indemnification claim by Buyer relating thereto. Buyer
and Seller agree that Seller shall not be responsible for any employee
benefit plans which Buyer may cause the Company to adopt for benefits to be
provided after closing.
(d) Effective 12:01 a.m. on January 1, 1996, Buyer shall provide or
cause the Company to provide healthcare benefits to all employees with the
Company receiving healthcare benefits as of December 31, 1995
notwithstanding the fact that the Closing will not occur until January 2,
1996, it being expressly understood that such obligation shall not extend
to post-retirement healthcare benefits.
ARTICLE IX
INDEMNIFICATION
9.1 Survival of Representations, Warranties and Covenants. Each of the
representations, warranties and covenants made by Seller and Buyer in this
Agreement shall survive the Closing until August 1, 1997 (unless the Indemnified
Party knew of any such misrepresentation or breach of warranty at the time of
Closing), on which date they shall terminate, excepting only those
representations, warranties and covenants contained in Sections 2.24 and 4.1
which shall survive for a period of 30 days from the Closing Date, Section 2.19
and Articles V and XI, which shall survive for a period of five (5) years from
the Closing Date and the representations, warranties and covenants contained in
Sections 2.2, 2.3, 2.4, 2.14, 2.17, Article VIII and Article IX which shall
survive until the expiration of the applicable statute of limitations.
Notwithstanding anything in this Agreement to the contrary, no action for
indemnification or otherwise with respect to breach of any representation,
warranty or covenant under this Agreement may be brought, and no litigation or
arbitration with respect thereto commenced, and the party making such
representation, warranty or covenant shall have no obligation with respect
thereto, unless written notice thereof specifying with reasonable particularity
the incorrect representation or breach of warranty or covenant claimed shall
have been delivered to the party against whom a claim is sought to be made on or
before the expiration of the above-specified survival periods.
9.2 Indemnification by Seller. Subject to Section 9.1, Seller hereby
indemnifies and agrees to hold harmless Buyer from any and all losses, damages,
costs, fines, penalties, deficiencies, liabilities and expenses (including
without limitation court costs and reasonable attorneys', consultants' and
accountants' fees and other expenses and costs of litigation) actually suffered
or incurred, but excluding consequential, indirect or other similar types of
damage that are not the direct result of the harm suffered or incurred
(collectively, "Losses") arising out of or resulting from: (a) any breach or
inaccuracy of any representation or warranty by Seller to Buyer contained in
this Agreement, (b) any breach or violation of any covenant or agreement by
Seller contained in this Agreement; and (c) product liability claims arising out
of occurrences prior to the Closing Date, including, without limitation claims
reported after the Closing Date.
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9.3 Indemnification by Buyer. Subject to Section 9.1, Buyer hereby
indemnifies and agrees to hold harmless Seller from any and all Losses arising
out of or resulting from: (a) any breach or inaccuracy of any representation or
warranty by Buyer to Seller contained in this Agreement; and (b) any breach or
violation of any covenant or agreement by Buyer contained in this Agreement.
9.4 Claims.
(a) Either party hereto shall request indemnification for any
particular claim (with respect to such claim, the "Indemnified Party") by
giving the party from whom indemnification is requested (with respect to
such claim, the "Indemnifying Party") written notice within thirty (30)
days after the Indemnified Party has received notice or knowledge of the
matter that has given or could give rise to a right of indemnification
under this Agreement. Such notice shall state the amount of Losses, if
known, and the method of computation thereof, all with reasonable
particularity and shall contain a reference to the provisions of this
Agreement in respect of which such right of indemnification is claimed.
Failure of the Indemnified Party to give notice within said thirty (30) day
period shall not be deemed a waiver of its rights under this Article IX
except to the extent such failure shall have actually prejudiced the
Indemnifying Party or caused it to incur additional costs, expenses or
liabilities; provided, however, that nothing herein shall extend the
limitations period set forth in Section 9.1 above.
(b) With respect to any Losses arising from any third party claim (a
"Third Party Claim"), the Indemnified Party shall give the Indemnifying
Party written notice within thirty (30) days after receiving notice of any
Third Party Claim. Failure of the Indemnified Party to give notice within
said thirty (30) day period shall not be deemed a waiver of its rights
under this Article IX except to the extent such failure shall have actually
prejudiced the Indemnifying Party or caused it to incur additional costs,
expenses or liabilities; provided, however, that nothing herein shall
extend the limitations period set forth in Section 9.1 above. The
Indemnifying Party shall be permitted, at its option, to participate in the
defense of any such Third Party Claim with counsel of its own choosing and
at its expense. If, however, the Indemnifying Party acknowledges in writing
its obligation to indemnify the Indemnified Party hereunder against any
Losses that may result from any Third Party Claim (subject to the
limitations set forth in this Article IX) within sixty (60) days of
receiving the Indemnified Party's notice, then the Indemnifying Party shall
be entitled, at its option, to assume and control the defense of such Third
Party Claim at its expense and through counsel of its choice upon giving
written notice of its intention to do so to the Indemnified Party. If the
Indemnifying Party exercises its right to undertake the defense of any such
Third Party Claim as provided above, the Indemnified Party shall cooperate
with the Indemnifying Party and make available to the Indemnifying Party
all pertinent records, materials and information in its possession or under
its control as is reasonably requested by the Indemnifying Party.
Similarly, if the Indemnified Party is, directly or indirectly, conducting
the defense of any Third Party Claim, the Indemnifying Party shall
cooperate with the Indemnified Party and
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make available to it all such records, materials and information in the
Indemnifying Party's possession or under its control relating thereto as is
reasonably requested by the Indemnified Party. No Third Party Claim may be
settled by the Indemnifying Party without the written consent, not to be
unreasonably withheld, of the Indemnified Party; provided, however, that if
such settlement involves the payment of money only and the Indemnified
Party is totally indemnified for such payment and the Indemnified Party
refuses to consent thereto, the Indemnifying Party shall cease to be
obligated with respect to such Third Party Claim. The Indemnified Party
shall not settle any Third Party Claim which is being defended in good
faith by the Indemnifying Party.
9.5 Limitations on Indemnification.
(a) Dollar Limitations. Notwithstanding anything contained in
Sections 9.2 and 9.3 to the contrary, the Indemnifying Party shall be
required to indemnify and hold harmless the Indemnified Party under this
Article IX only to the extent the aggregate amount of any Losses shall
exceed a deductible of $2,000,000 (it being understood that, if the amount
of such Losses shall exceed $2,000,000, the indemnity shall be only for
that portion of the Losses in excess of $2,000,000). In no event shall the
Indemnifying Party have any obligation to indemnify the Indemnified Party
for any Losses in excess of an aggregate ceiling of 100% of the Purchase
Price. Notwithstanding the foregoing, there shall be no deductible and no
ceiling on losses by the Company or Buyer in connection with (i) Worker's
Compensation claims retained by Seller pursuant to Section 8.8, (ii) any
and all claims relating to or arising out of or otherwise connected to the
Company's Plans, (iii) any and all other claims arising under Article VIII
except as specifically provided otherwise therein, (iv) any liability
relating to the Carolawn Superfund site at Ft. Lawn, South Carolina, and
(v) breach of Seller's representations, warranties in Sections 2.2, 2.3 and
2.4. In addition there shall be only a $10,000 deductible and no ceiling
with respect to breaches of Seller's representation and warranty in Section
2.17, a $100,000 deductible with respect to breaches of Seller's
representations, warranties and covenants in Section 2.24 and Section 4.1
and a $500,000 deductible for Losses indemnified by Seller hereunder
pursuant to Section 9.2(c).
(b) Calculation of Losses. The parties shall make appropriate
adjustments for tax benefits in determining the amount of Losses for
purposes of this Article IX.
(c) Other Limitations. The Indemnifying Party shall have no liability
under any provision of this Agreement for Losses to the extent that such
Losses relate to actions taken by the Indemnified Party after the Closing
Date other than such Losses relating to (i) actions taken by the
Indemnified Party to mitigate Losses or (ii) actions taken after the
Closing in accordance with the provisions of this Article IX in connection
with Losses for which indemnification is specifically provided in this
Agreement. The Indemnified Party shall take all reasonable steps to
mitigate Losses upon becoming aware of any event which could reasonably be
expected to give rise thereto.
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9.6 Indemnification as Exclusive Remedy. The indemnification
provided in this Article IX shall be the exclusive post-closing remedy available
to the parties for any breach of any representation, warranty, covenant or
agreement contained in this Agreement or any other documents, instruments or
agreements executed and delivered in connection with the transactions
contemplated hereby; provided, however, that either party shall be entitled to
enforce the provisions of Section 11.3 by any remedy available to such party,
including, without limitation, injunction or specific performance.
ARTICLE X
DEFINITIONS
10.1 Definitions.
"Agreement" shall mean this Agreement and all Schedules hereto.
"Closing" shall mean the actual conveyance, transfer and delivery of
the Shares to Buyer pursuant to Section 1.3 hereof.
"Knowledge of Buyer" shall mean the actual knowledge without
independent investigation of any of Thomas K. Manning and William L. Agar.
"Knowledge of Seller" shall mean the actual knowledge without
independent investigation of any of Aubrey W. Vaughan, James J. Hilly, or
Jeffrey Meighen.
"Lien" shall mean any lien (statutory or other), security interest,
mortgage, pledge, hypothecation, assignment, encumbrance, chattel mortgage or
conditional sale or other title retention agreement, restriction or
transferability, or defect of title, charge or claim of any nature whatsoever on
any property or property interest.
"Material" and "Materially" when used (whether or not capitalized)
with respect to any entity, shall be measured relative to the entire business
operations, properties, liabilities, assets or condition (financial or
otherwise), as existing on the date referred to, of such entity taken as a
whole.
10.2 Other Definitions. The following terms shall have the meaning
ascribed to such terms in the Section set forth opposite such term:
Business Recitals
Closing Date Section 1.2
Company Pension Plans Section 2.14
Company Plans Section 2.14
Company Welfare Plans Section 2.14
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ERISA Section 2.14
Financial Statements Section 2.5
Indemnified Party Section 9.4(a)
Indemnifying Party Section 9.4(a)
Losses Section 9.2
Securities Act Section 3.5
Shares Recitals
Taxes Section 8.1(c)
Tax Benefits Section 8.2(d)
Third Party Claim Section 9.4(b)
10.3 References. All references to Section or Article numbers refer
to Section or Article numbers in this Agreement unless otherwise specifically
indicated. The words "hereby," "hereof," "hereunder" and words of similar
import, refer to this Agreement as a whole and not to any particular Sections or
subdivisions thereof.
ARTICLE XI
MISCELLANEOUS
11.1 Expenses. Except as otherwise provided herein, Buyer and Seller
shall each bear their respective fees, commissions and other expenses incurred
by each of them in connection with the negotiation and preparation of this
Agreement and in preparing to consummate the transactions contemplated hereby,
including, without limitation, the fees and expenses of their respective
counsel.
11.2 Execution in Counterparts. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
instrument, and shall become a binding agreement when one or more counterparts
have been signed by and delivered to each party.
11.3 Confidentiality. All information given by any party hereto to
any other party shall be considered confidential and shall be used only for the
purposes intended. Buyer has previously delivered to Seller a confidentiality
agreement, dated July 17, 1995, the provisions of which are incorporated herein
by reference and shall continue to apply for the benefit of Seller as if
entirely set forth herein.
11.4 Notices. All notices, consents, demands, requests, waivers,
appeals and other communications required or permitted under this Agreement
shall be in writing and shall be deemed to have been duly given: (a) when
received by facsimile or similar device, if subsequently confirmed by a writing
sent within twenty-four (24) hours after the giving of such notice; (b) upon
receipt if delivered personally; or (c) on the date of receipt, if sent by
Federal Express or other reputable national overnight delivery service; and in
any case, addressed as
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follows:
if to Seller: Measurement & Flow Control
1380 Old Freeport Road
Pittsburgh, PA 15238
Attention: Aubrey W. Vaughan
Telephone No: 412-963-2310
Facsimile No: 412-963-2321
with a copy via same
means to: BTR, Inc
333 Ludlow Street
Stamford, CT 06902
Attention: Peter M. Kent, Esq.
Telephone No.: 203-352-0006
Facsimile No.: 203-324-0503
if to Buyer: The Rival Company
800 East Terrace
Kansas City, MO 64131
Attention: Thomas K. Manning
Telephone No.: 816-943-4100
Facsimile No.: 816-943-4123
with a copy via same
means to: Hillix, Brewer, Hoffhaus, Whittaker & Wright
L.L.C.
4th Floor, Two Crown Center
2420 Pershing Road
Kansas City, MO 64108
Telephone No.: 816-221-0355
Facsimile No.: 816-421-2896
No change in any of such addresses shall be effective insofar as such notices,
consents, demands, requests, waivers, appeals and other communications are
concerned, unless such changed address is located in the United States and
notice of such change shall have been given to the other party hereto as
provided in this Section 11.4.
11.5 Severability. The terms and provisions of this Agreement shall be
deemed to be severable, and if any provision hereof shall be held invalid or
unenforceable by a court of competent jurisdiction or as a result of future
legislative action, such holding or action shall be strictly construed and shall
not affect the validity or effect of any other provision hereof, and the parties
shall use all reasonable efforts to amend this Agreement in order to effect the
parties original intent with respect to such provision, to the extent
practicable.
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11.6 Titles and Headings. The titles and headings to the Articles,
Sections and Table of Contents contained in this Agreement are inserted for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.
11.7 Successors and Assigns; No Third Party Beneficiaries. This
Agreement shall be binding upon and shall inure to the benefit of the successors
and assigns of the parties hereto; provided, however, that no party hereto shall
assign or delegate any of the obligations created under this Agreement without
the prior written consent of the other party hereto. No person not a party
hereto shall derive any rights hereunder or be construed to be a third party
beneficiary hereof.
11.8 Incorporation of Schedules. The Schedules attached hereto are
incorporated into this Agreement and shall be deemed a part hereof as if set
forth herein in full.
11.9 Brokers and Finders.
(a) Buyer represents and warrants to Seller that Buyer has not
employed the services of a broker or finder in connection with this
Agreement or any of the transactions contemplated hereby.
(b) Seller represents and warrants to Buyer that Seller has not
employed the services of a broker or finder in connection with this
Agreement or any of the transactions contemplated hereby, except for the
H. Russell Lemcke Group, Inc. Seller shall be solely responsible for any
payments required to be made to Lemcke in connection with the transition
contemplated herein.
11.10 Entire Agreement; Waivers and Amendments. This Agreement, the
Schedules attached hereto, and the confidentiality agreement referred to in
Section 11.3, set forth the entire agreement among the parties hereto with
respect to the purchase and sale of the Shares and any related transactions, and
no representations or warranties have been made in connection with this
Agreement or the subject matter hereof other than those expressly set forth
herein or in the Schedules, certificates and other documents delivered in
accordance herewith. This Agreement supersedes all prior negotiations,
discussions, communications, representations, agreements and understandings
(other than the confidentiality agreement referred to in Section 11.3), whether
oral or written, relating to the subject matter of this Agreement. Seller, on
the one hand, and Buyer, on the other hand, may by written notice to the other:
(a) extend the time for the performance of any of the obligations or other
actions of the other; (b) waive any inaccuracies in the representations or
warranties of the other contained in this Agreement; (c) waive compliance with
any of the covenants of the other contained in this Agreement; (d) waive
performance of any other obligations of the other created under this Agreement;
or (e) waive fulfillment of any of the conditions to its own obligations under
this Agreement. The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach, whether or not similar. This Agreement may be amended, modified or
supplemented only by a written instrument executed by the parties hereto.
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11.11 Public Announcements. Neither Buyer nor Seller shall make any public
announcement not required by law or stock exchange rule or regulation concerning
the transactions contemplated by this Agreement without the prior approval of
the other party, which approval shall not be unreasonably withheld or delayed.
If any such public announcement is required by law, the party hereto proposing
to make such announcement shall use all reasonable efforts to consult with the
other party hereto before making any such public announcement.
11.12 Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any
provision of this Agreement.
11.13 Hart-Scott-Rodino Filing. The obligations of Seller and Buyer to
consummate the transactions contemplated by this Agreement shall each be subject
to the condition that, on or prior to the Closing Date, Seller and Buyer shall
have made a complete filing of pertinent information required pursuant to the
Hart-Scott-Rodino Antitrust Improvements Act and approval of the appropriate
agency shall have been obtained or the applicable waiting period (as may have
been extended)shall have expired.
11.14 Interim Use of Fasco Name. For a period of two years after the
Closing Date, Buyer may utilize without further obligation to compensate Seller
the trademark or trade name "Fasco" or the Company's corporate name or both or
any variance thereof currently used by the Company in connection with supplies,
labels, stationery, catalogs, molds, dies and inventory owned by the Company on
the Closing Date, or produced thereafter, subject to the following terms and
conditions:
(a) Buyer agrees that such use is for transitional purposes only and
Buyer shall have no rights to use the Fasco name for any other product or
purpose during such two year period and for any purpose whatsoever after
such two year period.
(b) No later than two years after the Closing Date, Buyer shall cause
the Company to change its corporate name to remove any and all references
to the name "Fasco" and shall cease using such name for trading purposes.
11.15 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of Delaware.
11.16 Leased Vehicles. The Company presently uses the vehicles listed on
Schedule 11.16 pursuant to one or more master leases with affiliates of Seller
and one or more automobile leasing companies. Buyer may continue to use such
leased vehicles for a period of 60 days after the Closing Date provided (i)
Buyer or the Company pays all applicable lease payments and other charges
attributable to such period, (ii) Buyer indemnifies Seller and its Affiliates,
with no deductible, for all losses that may arise out of the use of such
vehicles, and (iii) Buyer or the Company procures liability insurance coverage
for such vehicles naming Seller as an additional
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insured thereon. Seller agrees on its own behalf and on behalf of its
Affiliates that the Company shall have no further obligation under this Section
11.16 or any such lease with respect to any vehicle after such vehicle is
delivered to Seller, except for liabilities that have accrued during the
aforementioned 60 day period.
ARTICLE XII
COVENANT NOT TO COMPETE
12.1 Non-Competition. In consideration of the payment to it by Buyer of
Four Million Dollars ($4,000,000) at the Closing Date, in immediately available
United States funds, Seller, individually and on behalf of its Affiliates,
covenants and agrees that it shall not, directly or indirectly:
(a) Divert or attempt to divert business from the Company; or
(b) Individually or through any corporation, partnership, joint
venture, trust, limited liability company or person, for a period of eight
years from and after the Closing Date manufacture, distribute or market
products manufactured, distributed or marketed by the Company that are
competitive with the business being conducted by the Company as of the date
hereof, at any place and in any state in which the Company is then
conducting its business.
(c) An Affiliate, for the purposes hereof, is defined as one who
controls, is controlled by or is under common control with Seller.
Seller acknowledges and agrees that a breach of the provisions of this
Section 12.1 will cause irreparable injury and damage, and therefore,
expressly agrees that Buyer and the Company shall be entitled to injunctive
and other equitable relief to prevent such breach, in addition to any other
remedy to which they may be entitled. If any court shall determine any
provision of this Section to be unreasonably broad, the parties agree that
such provision shall be deemed amended to the greatest breadth which such
court shall find to be reasonable and enforceable.
12.2 Exception. Notwithstanding the foregoing, the Seller and its
Affiliates shall not be prohibited from owning, as an investment, up to 5% of a
class of equity securities issued by any person that is publicly traded on a
national securities exchange. Further, nothing in this Agreement shall prohibit
the acquisition by Seller or any of its Affiliates of an equity interest or
similar financial interest in, or control of, a diversified company having not
more than 10% of its total assets (based on its most recently prepared annual
financial statements prior to the acquisition) attributable to a Person who
competes with the Business, as long as Seller or the Affiliate divests the
competitor from the diversified company within two years after the acquisition.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first written above.
THE RIVAL COMPANY
By: /s/ Stanley D. Biggs
--------------------------------
Name: Stanley D. Biggs
Title: Vice President, Treasurer
H.S. INVESTMENTS INC.
By: /s/ William C. Denninger
--------------------------------
Name: William C. Denninger
Title: Vice President
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The obligations of H.S. Investments Inc. under the foregoing Agreement
are hereby unconditionally and irrevocably guaranteed by BTR Dunlop Inc.
BTR DUNLOP INC.
By: /s/ Edgar P. DeVylder
------------------------------------
Name: Edgar P. DeVylder
Title: Vice President and Secretary
and
By: /s/ William C. Denninger
-----------------------------------
Name: William C. Denninger
Title: Vice President and Treasurer
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