1
EXHIBIT 10.1
2
BRUNSWICK CORPORATION
0 Xxxxx Xxxxx Xxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
January 19, 1996
PERSONAL AND CONFIDENTIAL
Mr. Xxxxx Xxxx
Chief Executive Officer
Roadmaster Industries, Inc.
000 Xxxxxx Xxxxxx, X.X.
Xxxxx 0 Xxxxx
Xxxxxxx, Xxxxxxx 00000
Re: Purchase of Xxxxxx/Weather-Rite Division
Dear Xx. Xxxx:
Subject to the terms and conditions set forth below, Brunswick
Corporation ("Purchaser") proposes to purchase the assets of the
Xxxxxx/Weather-Rite Division ("Xxxxxx/Weather-Rite") from Roadmaster
Industries, Inc. or its wholly-owned subsidiary, Xxxxxx/Weather-Rite, Inc.
("Seller"; any reference herein to Seller shall include both Roadmaster
Industries, Inc. and its wholly-owned subsidiary Xxxxxx/Weather-Rite, Inc.).
The terms and conditions to purchase Xxxxxx/Weather-Rite are as follows:
1. Purchase Agreement. The parties shall in good faith endeavor
to execute a definitive purchase agreement within thirty (30) days of the date
of this letter (the "Purchase Agreement") which shall reflect the terms of this
letter and shall, among other things:
a. Contain customary representations, warranties and
covenants, as well as indemnification and non-competition provisions
(with no tax allocation for said non-competes);
b. Contain certain conditions providing that the
obligations of the parties to consummate the proposed transaction
shall be subject to receipt of any required consents or authorizations
and other conditions usual and customary in transactions of this
nature;
c. Subject to obtaining third party consents and
authorizations, provide for a Closing Date of not later than March 31,
1996;
3
d. Contain a provision that Purchaser shall not be
obligated to consummate the Purchase Agreement if there is a material
adverse change in Xxxxxx/Weather-Rite from the date of the Purchase
Agreement until Closing;
e. Provide that Seller shall pay all federal, state and
local sales or transfer taxes arising from the conveyance of
Xxxxxx/Weather-Rite to Purchaser; and
f. Provide that Seller shall be responsible for the
payment of fees and expenses of SBC Capital Markets, Inc. for this
transaction or any other transaction being contemplated by Seller.
2. Purchase Price. The purchase price for Xxxxxx/Weather-Rite
shall be One Hundred Twenty Million Dollars ($120,000,000). The purchase price
shall be payable in immediately payable funds or assumption of bank debt
acceptable to Purchaser, or a combination thereof. The purchase price will be
increased to the extent net working capital of Xxxxxx/Weather-Rite as of the
Closing Date is more than $45,049,000 or decreased to the extent that such net
working capital is less than $45,049,000 (such amount being the amount of net
working capital set forth on the November 24, 1995 balance sheet of
Xxxxxx/Weather-Rite attached hereto as Exhibit "A".) The term "net working
capital" shall mean net accounts receivable, inventories and current prepaid
items less accounts payable, and current accrued expenses. Real estate and
property taxes, utilities and other similar items will be prorated as of the
Closing Date (except to the extent such items are included in the net working
capital).
3. Xxxxxx/Weather-Rite Division. The Xxxxxx/Weather-Rite Division
shall consist of all of the assets used or useful by Seller in the operation
and business of Xxxxxx/Weather-Rite, excluding Seller's cash and cash
equivalents (such exclusion to be reflected in the net working capital
adjustment) and financial and tax records consisting of Seller's general ledger
and supporting documents. Seller shall convey Xxxxxx/Weather-Rite free and
clear of all liabilities other than current liabilities included in net working
capital and any bank debt assumed as part of the payment of the purchase price.
4. Structure of Transaction. The transaction will be structured
as an asset sale, with Purchaser entitled to a stepped-up tax basis for the
Xxxxxx/Weather-Rite assets under applicable Federal income tax laws.
5. Access. Pending the Closing, Purchaser, its agents,
representatives, employees and accountants will conduct investigations of the
business and operations of Xxxxxx/Weather-Rite and, to this end, Seller will
give Purchaser, its representatives, agents, employees and accountants, as
reasonably requested, access to Xxxxxx/Weather- Rite's books, records, premises
and operations and such other documents and information, including access to
work papers of Seller's outside accountants, as relates to the business and
operations or financial condition of Xxxxxx/Weather-Rite.
6. Confidentiality. Purchaser and Seller each agrees that it will
use its best efforts to keep confidential (except for such disclosure to
attorneys, bankers, underwriters, investors, etc. as
4
may be appropriate in the furtherance of this transaction) all information of a
confidential nature obtained by it from the other (including the terms of this
letter) in connection with the transactions contemplated by this letter and, in
the event that such transactions are not consummated, will return to the other
all documents and other materials obtained from the other in connection
therewith.
7. Press Releases. Purchaser and Seller shall jointly prepare,
and determine the timing of, any press release or other announcement to the
public relating to the execution of this letter. No party hereto will issue any
press release or make any other public announcement relating to the
transactions contemplated by this letter without the prior consent of each
other party hereto, except that any party may make any disclosure required to
be made by it under applicable law (including the Federal Securities Laws) if
it determines in good faith that it is appropriate to do so and gives prior
notice to the other party hereto, which notice shall include the contents of
such press release or other public announcement.
8. Costs. Each party shall bear its own costs incurred in
connection with the transactions contemplated by this letter, including any
brokerage or financial advisory fees incurred by it with respect to the
transaction.
9. Exclusive Dealings. For the 30-day period commencing on the
date of this letter, Seller and its representatives will not, directly or
indirectly, through any officer, director, agent or otherwise, (i) solicit,
initiate, or encourage submission of inquiries, proposals, or offers from any
potential buyer (other than Purchaser) relating to the disposition of
Xxxxxx/Weather-Rite, or any part thereof, or (ii) enter into or participate in
any discussions regarding the disposition of Xxxxxx/Weather-Rite, or any part
thereof, to any potential buyer other than Purchaser.
10. Assignment. Purchaser may assign its rights and obligations
under this letter or under the Purchase Agreement to a wholly-owned subsidiary
of Purchaser. Any such assignment shall not affect Purchaser' rights and
obligations under this letter or the Purchase Agreement.
11. Term. This proposal shall expire at 11:59 p.m., Eastern Time
on January 19, 1996, unless earlier accepted by Seller.
12. Purchaser's Obligation. The obligation of Purchaser under this
letter to execute the Purchase Agreement shall be subject to Purchaser being
reasonably satisfied with its review of Xxxxxx/Weather-Rite's warehouse and
other facilities, inventories and the contracts, leases, licenses and other
items to be set forth in the schedules to the Purchase Agreement.
13. Governing Law. This letter of intent shall be governed by the
laws of the State of Delaware, without regard to conflict of law provisions.
14. Counterparts. This letter may be signed by facsimile in
counterparts, all of which taken together shall constitute one instrument, and
any of the parties hereto may execute this letter by signing any such
counterpart. This letter shall become effective upon execution by all parties
hereto.
5
Please indicate your acceptance of the terms and conditions of this
proposal by signing in the space provided below.
Very truly yours,
BRUNSWICK CORPORATION
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------
Xxxxx X. Xxxxxx, Chief Executive Officer
ACCEPTED AND AGREED TO:
ROADMASTER INDUSTRIES, INC.
By: /s/ Xxxxx Xxxx
---------------------------------
Xxxxx Xxxx, Chief Executive Officer
DATE: January 19, 1996
