EXHIBIT 10-47(a)
STOCK PURCHASE AGREEMENT
dated as of
August 23, 2002
among
USI MAYFAIR LIMITED
and
MEGAPRO TOOLS, INC.
and
S AND J ACQUISITION CORP.
TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS.............................................................. 1
Section 1.01 Definitions...................................................... 1
ARTICLE 2 Purchase and Sale........................................................ 5
Section 2.01 Purchase and Sale of Shares...................................... 5
Section 2.02 The Closing...................................................... 5
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER................................. 6
Section 3.01 Corporate Existence and Power.................................... 6
Section 3.02 Corporate Authorization.......................................... 7
Section 3.03 Governmental Authorization....................................... 7
Section 3.04 Noncontravention................................................. 7
Section 3.05 Capitalization................................................... 7
Section 3.06 Ownership of Shares.............................................. 7
Section 3.07 Company Subsidiaries............................................. 7
Section 3.08 Financial Statements............................................. 8
Section 3.09 Material Adverse Effect.......................................... 8
Section 3.10 No Undisclosed Material Liabilities.............................. 8
Section 3.11 Material Contracts............................................... 9
Section 3.12 Litigation....................................................... 9
Section 3.13 Compliance with Laws and Court Orders............................ 9
Section 3.14 Real Property.................................................... 9
Section 3.15 Intellectual Property............................................ 9
Section 3.16 Finders' Fees.................................................... 10
Section 3.17 Tax Matters...................................................... 10
Section 3.18 Environmental Matters............................................ 10
Section 3.19 Investment....................................................... 11
Section 3.20 Inspections; No Other Representations............................ 11
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER.................................. 11
Section 4.01 Corporate Existence and Power.................................... 11
Section 4.02 Corporate Authorization.......................................... 12
Section 4.03 Governmental Authorization....................................... 12
Section 4.04 Noncontravention................................................. 12
Section 4.05 Capitalization................................................... 12
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TABLE OF CONTENTS
(continued)
PAGE
Section 4.06 Buyer Subsidiaries............................................... 13
Section 4.07 SEC Reports, Financial Statements................................ 13
Section 4.08 Material Adverse Effect.......................................... 13
Section 4.09 No Undisclosed Material Liabilities.............................. 14
Section 4.10 Litigation....................................................... 14
Section 4.11 Compliance with Laws and Court Orders............................ 14
Section 4.12 Finders' Fees.................................................... 14
Section 4.13 Tax Matters...................................................... 14
Section 4.14 Inspections; No Other Representations............................ 15
ARTICLE 5 CONDUCT OF BUSINESS; ACCESS TO INFORMATION............................... 15
Section 5.01 Conduct of the Business.......................................... 15
Section 5.02 Access to Information............................................ 16
ARTICLE 6 POST-CLOSING COVENANTS................................................... 16
Section 6.01 Access........................................................... 16
Section 6.02 Trademarks; Tradenames........................................... 17
Section 6.03 Preservation of Records.......................................... 17
Section 6.04 Certain Post-Closing Assistance by Buyer......................... 17
Section 6.05 Wednesbury Transaction........................................... 17
Section 6.06 Certain Tax Matters.............................................. 17
ARTICLE 7 COVENANTS OF BUYER AND SELLER............................................ 18
Section 7.01 Best Efforts; Further Assurances................................. 18
Section 7.02 Certain Filings.................................................. 19
Section 7.03 Public Announcements............................................. 19
Section 7.04 Notices of Certain Events........................................ 19
Section 7.05 Consents......................................................... 19
Section 7.06 Insurance Policies............................................... 19
ARTICLE 8 CONDITIONS TO CLOSING.................................................... 20
Section 8.01 Conditions to Obligations of Buyer and Seller.................... 20
Section 8.02 Conditions to Obligation of Buyer................................ 20
Section 8.03 Conditions to Obligation of Seller............................... 21
ARTICLE 9 SURVIVAL; INDEMNIFICATION................................................ 22
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TABLE OF CONTENTS
(continued)
PAGE
Section 9.01 Survival......................................................... 22
Section 9.02 Indemnification.................................................. 22
Section 9.03 Procedures....................................................... 23
Section 9.04 Calculation of Damages........................................... 24
Section 9.05 Assignment of Claims............................................. 24
Section 9.06 Exclusivity...................................................... 24
ARTICLE 10 TERMINATION.............................................................. 25
Section 10.01 Grounds for Termination.......................................... 25
Section 10.02 Effect of Termination............................................ 25
ARTICLE 11 MISCELLANEOUS............................................................ 26
Section 11.01 Notices.......................................................... 26
Section 11.02 Amendments and Waivers........................................... 27
Section 11.03 Expenses......................................................... 27
Section 11.04 Successors and Assigns........................................... 27
Section 11.05 Governing Law.................................................... 27
Section 11.06 WAIVER OF JURY TRIAL............................................. 27
Section 11.07 Counterparts; Third Party Beneficiaries.......................... 27
Section 11.08 Entire Agreement................................................. 28
Section 11.09 Interpretation................................................... 28
Section 11.10 Disclosure Schedules............................................. 28
Section 11.11 English Language................................................. 28
EXHIBITS
Exhibit A-1 and A-2 Form of Promissory Notes
Exhibit B Form of Stockholders' Agreement
Exhibit C Form of Registration Rights Agreement
Exhibit D Form of Wednesbury Lease
COMPANY GROUP SCHEDULES
Schedule 3.03 Governmental Approvals
Schedule 3.04 Material Consents
Schedule 3.05 Company Capitalization and Other Particulars
Schedule 3.07 Company Subsidiaries Capitalization and Other
Particulars
Schedule 3.08(a) Preliminary Balance Sheet and US GAAP Exceptions
Schedule 3.08(b) Audited Financial Statements - US GAAP Exceptions
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TABLE OF CONTENTS
(continued)
Schedule 3.09 Material Adverse Effect
Schedule 3.10 Undisclosed Liabilities
Schedule 3.11 Material Contracts
Schedule 3.12 Litigation
Schedule 3.14 Real Property
Schedule 3.15 Intellectual Property
Schedule 3.17 Tax Matters
BUYER GROUP SCHEDULES
Schedule 4.03 Governmental Approvals
Schedule 4.05 Capitalization
Schedule 4.06 Buyer Subsidiaries
Schedule 4.08 Material Adverse Effect
Schedule 4.09 Undisclosed Liabilities
Schedule 4.10 Litigation
Schedule 4.13 Tax Matters
OTHER SCHEDULES
Schedule 2.01(c) Purchase Price Allocation
Schedule 5.01 Conduct of Business - Exceptions
Schedule 6.05 Wednesbury Transactions
Schedule 7.06 Non-transferred Insurance Policies
Schedule 8.01(b) Liens to be Discharged
Schedule 8.03(c) MTI Capitalization
Schedule 8.03(d) Wednesbury Property Transfer
Schedule 8.03(e) Credit Support Documents
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STOCK PURCHASE AGREEMENT
AGREEMENT dated as of August 23, 2002 between USI Mayfair Limited, a
company organized under the laws of England ("SELLER"), and Megapro Tools, Inc.,
a corporation organized under the laws of the State of Nevada, U.S.A. ("MTI")
and S and J Acquisition Corp., a Florida corporation ("MTI-SUB" and together
with MTI, "BUYER").
Preliminary Statement:
Seller owns all of the Shares (as defined below). On the terms and
subject to conditions set forth herein, Seller wishes to sell, and Buyer wishes
to purchase, all of the Shares.
Agreement:
ARTICLE 1
DEFINITIONS
SECTION 1.01 DEFINITIONS.
(a) The following terms, as used herein, have the following
meanings:
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person; provided that none of the Transferred Companies shall be considered
an Affiliate of Seller.
"BALANCE SHEET DATE" means June 30, 2002.
"XXXXXX SHARES" means the 50,000 fully paid ordinary shares of
(pound)1 each and the 950,000 "A" Ordinary Shares of (pound)0.01 each of Xxxxxx
Group plc together comprising the whole of the issued share capital of Xxxxxx
Group plc.
"BUYER GROUP" means Buyer and Buyer Subsidiaries.
"BUYER SUBSIDIARY" means each of the Subsidiaries of Buyer, details
of which are set out in Schedule 4.06; and collectively such entities shall be
referred to as the "BUYER SUBSIDIARIES."
"CLOSING DATE" means the date of the Closing.
"CODE" means the United States Internal Revenue Code of 1986, as
amended.
"COMPANIES ACT" means the Companies Xxx 0000, as promulgated under
the laws of England and Wales.
"COMPANY" means each of Spear & Xxxxxxx plc and Xxxxxx Group plc
details of each of which are set out in Schedule 3.05; and collectively such
entities shall be referred to as the "COMPANIES."
"COMPANY GROUP" means the Companies and each of the Company
Subsidiaries; provided, that for the purposes of Article 3 (other than the last
sentence of Section 3.07), Company Group shall exclude any Company Subsidiary
designated as dormant in Schedule 3.07.
"COMPANY SUBSIDIARY" means each of the Subsidiaries of the Company,
details of which are set out in Schedule 3.07; and collectively such entities
shall be referred to as the "COMPANY SUBSIDIARIES."
"CONSTITUENT DOCUMENTS" means, as to any Person (other than
individual), the certificate of incorporation, bylaws, certificate of formation,
partnership agreement, limited liability agreement, operating agreement, trust
instrument, memorandum of association or other similar constituent document or
documents of such Person.
"CONTRACT" means any contract, agreement or other binding
arrangement.
"GOVERNMENTAL AUTHORITY" means any national, regional, state,
municipal, other governmental or regulatory authority, administrative body or
government, department, board, body, instrumentality or commission.
"GROUP" means the Company Group or the Buyer Group, as the context
may require.
"INTELLECTUAL PROPERTY RIGHT" means any trademark, service xxxx,
trade name, mask work, invention, patent, trade secret, copyright, know-how
(including any registrations or applications for registration of any of the
foregoing) or any other similar type of proprietary intellectual property right.
"KNOWLEDGE OF BUYER" or words of similar import shall mean actual
knowledge possessed by Mr. Xxxx Xxxxxx or Mr. Xxxxxx Xxxxxxx.
"KNOWLEDGE OF SELLER" or words of similar import shall mean actual
knowledge possessed by Xx. Xxxxx Xxxxxxxxxxxx, Managing Director of Spear &
Xxxxxxx plc.
"LEASE" means any lease of real property.
"LIEN" means, with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest or encumbrance in respect of such
property or asset.
"MATERIAL ADVERSE EFFECT" means, as to any Person or group of
Persons, a material adverse effect on the business, results of operations or
financial condition of such Person or group of Persons, taken as whole, except
any such effect resulting from or arising in connection with (i) The Transaction
Documents or the transactions contemplated thereby, (ii) changes or conditions
affecting the industries in which such Person any member of such group of
2
Persons operates generally or (iii) changes in economic, regulatory, financial
or political conditions generally.
"MATERIAL CONTRACT" means, as to any Group, any Contract, the
absence of which might reasonably be expected to have a Material Adverse Effect
on such Group.
"MATERIAL LEASE" means, as to any Group, a Lease material to the
operations of such Person.
"OWNED PROPERTY" means, as to any Group, all real property owed in
fee by such Group.
"PERMITTED LIENS" means, as to any Group, (i) Liens reflected or
reserved against in the financial statements of such Group disclosed to the
other Group or one of its Affiliates (including in the notes thereto), (ii)
Liens reflected in any title abstracts or similar documents of such Group (and
disclosed to the other Group or one of its Affiliates) with respect to real
properties of such Group, (iii) Liens, imperfections of title, easements,
encroachments, rights-of-way, pledges, charges, restrictions and encumbrances,
including, without limitation, survey matters, mechanics' liens, repairmen's
liens and other similar liens, if any, that do not materially detract from the
value of the property subject thereto or materially interfere with the manner in
which it is currently being used by the applicable Group, (iv) taxes and general
and special assessments not yet due and payable without penalty or interest or
being contested in good faith, and (v) Liens otherwise disclosed in one of the
Schedules.
"PERSON" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
"S&J SHARES" means the 507,927,861 fully paid ordinary shares of 10
xxxxx each of Spear & Xxxxxxx plc and the 225,993,087 fully paid deferred shares
of 10 xxxxx each in Spear & Xxxxxxx plc comprising the whole of the issued share
capital of Spear & Xxxxxxx plc.
"SHARES" means the Xxxxxx Shares and the S&J Shares.
"SUBSIDIARIES" means, as to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by such Person.
"TAX" means any tax, duty, fee, assessment, dues or charge of any
nature whatsoever imposed by any government or taxing authority, domestic or
foreign, including, without limitation, any gross or net income, gross or net
receipts, minimum, sales, use, ad valorem, value added, stamp, transfer,
franchise, withholding, payroll, employment, employment insurance, excise,
occupation, employer health premium or property tax, duty, fee, assessment, dues
or charge together with any interest, fine, penalty, addition to tax, duty, fee,
assessment, dues or charge or additional amount imposed with respect thereto.
3
"TAX RETURNS" means any return, report, reports subsequent or form
required to be filed under applicable law.
"TRANSACTION DOCUMENTS" means this Agreement, the Notes, the
Stockholders' Agreement, the Registration Rights Agreement, the Wednesbury Lease
and any other document contemplated to be executed and/or delivered in
connection herewith.
"USI" means U.S. Industries, Inc., a Delaware corporation.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
TERM SECTION
Buyer Preamble
Buyer Intellectual Property Rights 4.13(a)
Claim 9.03(a)
Closing 2.02
Company Intellectual Property Rights 3.15
Damages 9.02
Environmental Disclosure Materials 3.18
Environmental Law 3.18
Exchange Act 4.07(a)
Indemnified Party 9.03(a)
Indemnifying Party 9.03(a)
MTI Preamble
MTI-Sub Preamble
Potential Contributor 9.05
Notes 2.01(b)
Preliminary Balance Sheet 3.08(a)
Purchase Price 2.01(b)
Registration Rights Agreement 8.02(e)
Relevant Period 3.18
Schedules 11.11
SEC 4.07(a)
SEC Reports 4.07(a)
Securities Act 4.07(a)
Seller Preamble
Stock Consideration 2.01(b)
Stockholders' Agreement 8.02(d)
Third Party Claim 9.03(b)
US GAAP 3.08(a)
Warranty Breach 9.02
Wednesbury Lease 8.02(f)
4
ARTICLE 2
PURCHASE AND SALE
SECTION 2.01 PURCHASE AND SALE OF SHARES.
(a) Upon the terms and subject to the conditions of this Agreement,
at the Closing, Seller agrees to sell, or cause to be sold, to Buyer, and Buyer
agrees to purchase from Seller, the Shares.
(b) The purchase price for the Shares (the "PURCHASE PRICE") shall
consist of (i) 3,543,281 shares of duly authorized, validly issued, fully paid
and non-assessable shares of the common stock, par value $.001 per share, of
Buyer (the "STOCK CONSIDERATION"), plus (ii) two promissory notes issued by
Buyer to Seller in the aggregate principal amount of (pound)100,000 and
(pound)50,000 in the form of Exhibits A-1 and A-2 (the "NOTES").
(c) The Purchase Price shall be allocated in accordance with
Schedule 2.01(c). Each of Seller and Buyer agree to (i) be bound, and to cause
its Affiliates to be bound, by the allocations on Schedule 2.01(c), and (ii)
act, and to cause its Affiliates to act, in accordance with the allocations set
forth in Schedule 2.01(c) in the preparation, filing and/or audit of any Tax
Return and for all other tax and accounting purposes.
SECTION 2.02 THE CLOSING. Subject to Article 10, the closing (the
"CLOSING") of the purchase and sale of the Shares hereunder shall take place at
the offices of Xxxxx Xxxxxx Xxxxx Tischman Xxxxxxx & Xxxxx P.A., Newark, New
Jersey on August 31, 2002; provided, that if the conditions set forth in Article
8 are not satisfied (or waived by the appropriate party) by such date, then the
Closing shall take place as soon as possible (but in no event later than three
business days after) after the satisfaction (or waiver) of such conditions or at
such other time or place as Buyer and Seller may otherwise agree. At the
Closing:
(a) Seller shall deliver to Buyer (or cause to be delivered to
Buyer) the following:
(i) certificates representing the Shares free and together
with any documentation required to effect the transfer of the Shares to
MTI- Sub; provided, that if any such certificate is lost, mutilated,
stolen or otherwise missing, Seller shall deliver to Buyer an express
indemnity in a form reasonably satisfactory to Buyer;
(ii) to the extent Seller is so directed by Buyer by written
notice received at least three business days prior to Closing, letters of
resignation from each director and secretary of each Company;
(iii) the statutory books of each Company, together with their
respective common seals (if any) and relevant Constituent Documents (it
being agreed that constructive delivery of the same to a Company Group
location shall satisfy the foregoing requirement);
5
(iv) a copy of resolutions of the board of directors of Seller
authorizing the execution, delivery and performance of the Transaction
Documents to which it is a party by each Seller and a certificate of an
appropriate officer of Seller, dated the Closing Date, that such
resolutions were duly adopted and are in full force and effect; and
(v) a certificate, dated the Closing Date, executed by a
senior officer of Seller certifying to the fulfillment of the conditions
specified in Section 8.02.
(b) Seller shall cause a board meeting of each Company to be held at
which the directors shall:
(i) approve the registration of the share transfers referred
to in Section 2.02(a)(i) (subject only to stamping); and
(ii) accept the resignations referred to in Section
2.02(a)(ii), if any, and appoint the persons nominated by Buyer as
directors and secretary of each member of the Company Group with effect
from the end of the meeting;
(c) Buyer shall deliver to Seller (or cause to be delivered to
Seller) the following:
(i) the Stock Consideration in form reasonably acceptable to
Seller and free and clear of all Liens;
(ii) the Notes, duly executed by Buyer;
(iii) a copy of resolutions of the board of directors of Buyer
authorizing the execution, delivery and performance of each Transaction
Document to which Buyer is a party and a certificate of the secretary or
assistant secretary, dated the Closing Date, of Buyer that such
resolutions were duly adopted and are in full force and effect; and
(iv) a certificate, dated the Closing Date, executed by a
senior officer of Buyer certifying to the fulfillment of the conditions
specified in Section 8.03.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as of the date hereof that:
SECTION 3.01 CORPORATE EXISTENCE AND POWER. Seller and each Company is an
entity validly formed and validly existing under the laws of its jurisdiction of
its formation and has all corporate powers and all governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business as now conducted, except for those licenses, authorizations, permits,
consents and approvals the absence of which would not reasonably be expected to
have a Material Adverse Effect on the Company Group, taken as a whole.
6
SECTION 3.02 CORPORATE AUTHORIZATION. The execution, delivery and
performance by Seller of the Transaction Documents to which Seller is a party
and the consummation of the transactions contemplated thereby by Seller are
within the corporate powers of Seller and have been duly authorized by all
necessary corporate action on the part of Seller. This Agreement constitutes a
valid and binding agreement of Seller.
SECTION 3.03 GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by Seller of the Transaction Documents to which Seller is a party
and the consummation of the transactions contemplated thereby require no
material action by or in respect of, or material filing with, any Governmental
Authority other than (i) those listed on Schedule 3.03; and (iii) any such
action or filing as to which the failure to make or obtain would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
on the Company Group, taken as a whole.
SECTION 3.04 NONCONTRAVENTION. The execution, delivery and performance by
Seller of the Transaction Documents to which it is a party and the consummation
of the transactions contemplated thereby by Seller do not and will not (a)
violate the Constituent Documents of Seller, (b) assuming compliance with the
matters referred to in Section 3.03, violate any applicable law, rule,
regulation, judgment, injunction, order or decree, except for any such
violations which would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company Group, taken as a whole,
(c) except as disclosed in Schedule 3.04 or as to matters which would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company Group, taken as a whole, require any consent or
other action by any Person under, constitute a default under, or give rise to
any right of termination, cancellation or acceleration of any right or
obligation of any member of the Company Group or to a loss of any benefit to
which any such member of the Company Group is entitled under any provision of
any Contract binding upon such member of the Company Group or (d) result in the
creation or imposition of any Lien on any asset of any member of the Company
Group, except for any Permitted Liens.
SECTION 3.05 CAPITALIZATION. The authorized and outstanding capital stock
of each Company on the date hereof is set forth in Schedule 3.05. All
outstanding shares of capital stock of each Company have been duly authorized
and validly issued and are fully paid and non-assessable. Except as set forth in
Schedule 3.05, there are no outstanding (a) shares of capital stock or voting
securities of the Companies, (b) securities of any Company convertible into or
exchangeable for shares of capital stock or voting securities of such Company or
(c) options or other rights to acquire from any Company, or other obligation of
such Company to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of such
Company.
SECTION 3.06 OWNERSHIP OF SHARES. Seller is the record and beneficial
owner of the Shares and will transfer and deliver to Buyer at the Closing valid
title to the Shares free and clear of any Lien other than Liens created by any
member of the Buyer Group or its Affiliates.
SECTION 3.07 COMPANY SUBSIDIARIES. Except as disclosed on Schedule 3.07,
each Company Subsidiary is duly organized and validly existing under the laws of
its jurisdiction of organization and has all corporate powers and all
governmental licenses, authorizations, permits,
7
consents and approvals required to carry on its business as now conducted,
except for those licenses, authorizations, consents and approvals the absence of
which would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company Group, taken as a whole.
Except as disclosed in Schedule 3.07, all of the outstanding capital stock or
other voting securities of each Company Subsidiary is owned by a Company,
directly or indirectly, free and clear of any Lien. Except as disclosed in
Schedule 3.07, there are no outstanding (a) securities of any Company Subsidiary
convertible into or exchangeable for shares of capital stock or voting
securities of any Company Subsidiary or (b) options or other rights to acquire
from any Company Subsidiary, or other obligation of any Company Subsidiary to
issue, any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of any Company Subsidiary.
To the Knowledge of Seller, each Company Subsidiary designated as dormant in
Schedule 3.07 is dormant.
SECTION 3.08 FINANCIAL STATEMENTS.
(a) The unaudited pro forma combined balance sheet of the Company
Group dated as of the Balance Sheet Date (the "PRELIMINARY BALANCE SHEET") and
the related unaudited combined statement of operations, and cash flow for the
nine (9) months then ended set forth in Schedule 3.08(a), present fairly, in all
material respects, the combined financial condition of the Company Group as at
such date in accordance with United States generally accepted accounting
principles ("US GAAP") with such exceptions as are described in Schedule
3.08(a).
(b) The audited combined balance sheets of the Company Group as of
September 30, 2000 and 2001, and the audited combined statement of operations,
and cash flows for the years ended September 30, 1999, 2000 and 2001 present
fairly, in all material respects, the combined financial position of the Company
Group and the combined results of their operations and their cash flows during
such periods, in conformity with US GAAP with such exceptions as are described
in Schedule 3.08(b).
SECTION 3.09 MATERIAL ADVERSE EFFECT. Except as disclosed in Schedule 3.09
or as otherwise permitted or contemplated by this Agreement, since the Balance
Sheet Date, the Company Group has conducted business in the ordinary course
consistent with past practices and there has not been any change in business or
operations of the Company Group which has had or which might reasonably be
expected to have a Material Adverse Effect on the Company Group, taken as a
whole.
SECTION 3.10 NO UNDISCLOSED MATERIAL LIABILITIES. There are no liabilities
of the Company Group of any kind, other than (a) liabilities provided for in the
Preliminary Balance Sheet (including to the extent reserved therefor therein) or
disclosed in the notes thereto; (b) liabilities not required under US GAAP to be
shown on the Preliminary Balance Sheet; (c) liabilities disclosed in, related to
or arising under any agreements, instruments or other matters disclosed in any
Transaction Document or any Schedule thereto including in Schedule 3.10; (d)
liabilities and obligations not required to be so disclosed because of their
failure to meet the materiality or minimum dollar thresholds set forth in the
relevant Section; (e) liabilities incurred in the ordinary course of business
since the Balance Sheet Date; and (f) other undisclosed liabilities which,
individually or in the aggregate do not have or would not reasonably be expected
to have a Material Adverse Effect on the Company Group, taken as a whole.
8
SECTION 3.11 MATERIAL CONTRACTS. Schedule 3.11 lists of all Material
Contracts of the Company Group. Seller has made available to Buyer complete and
correct copies of all items listed on Schedule 3.11. Except as disclosed in
Schedule 3.11, to the Knowledge of Seller, no member of the Company Group is in
default under the terms of any item listed on Schedule 3.11 which default has
had a Material Adverse Effect on the Company Group, taken as a whole. To the
Knowledge of Seller, each of the Contracts listed in Schedule 3.11 is valid and
in full force and effect, and no party has notified any member of the Company
Group in writing of its intention to cease to perform any material services
required to be performed by it or withhold any material payment required to be
made by it thereunder.
SECTION 3.12 LITIGATION. Except as disclosed on Schedule 3.12, there is no
action, suit, investigation or proceeding pending against, or to the Knowledge
of Seller, threatened in writing against or affecting, the Company Group or any
of its properties before any court or arbitrator or any Governmental Authority
(a) which might reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company Group, taken as a whole or
(b) which in any manner challenges or seeks to prevent, enjoin, alter or
materially delay the transactions contemplated by the Transaction Documents.
SECTION 3.13 COMPLIANCE WITH LAWS AND COURT ORDERS. To the Knowledge of
Seller, no member of the Company Group is in violation of any applicable law,
rule, regulation, judgment, injunction, order or decree, except for violations
that have not had and would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect on the Company Group, taken as a
whole.
SECTION 3.14 REAL PROPERTY. Schedule 3.14 (Part A) sets forth all of the
material Owned Property of the Company Group. Except as set forth on Schedule
3.14 (Part A), to the Knowledge of Seller, each member of the Company Group has
good, valid and marketable fee simple title to each such parcel of Owned
Property listed next to its name on Schedule 3.14 (Part A), except for
properties sold since the Balance Sheet Date in the ordinary course of business
consistent with past practice. None of the material Owned Properties of the
Company Group is subject to a Lien other than Permitted Liens or as otherwise
disclosed in Schedule 3.14 (Part A). Schedule 3.14 (Part B) sets forth a list of
all of the Material Leases in effect as of the date hereof under which any
member of the Company Group is a lessee. To the Knowledge of Seller, all such
Material Leases are valid, binding and enforceable in accordance with their
terms, and are in full force and effect as of the date hereof. To the Knowledge
of Seller, there are no existing defaults by any member of the Company Group
beyond any applicable grace periods under such Material Leases, except for
defaults which would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company Group, taken a whole. No
member of the Company Group has received any notice of default with respect to
any such Material Lease, except for defaults which would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company Group, taken as a whole.
SECTION 3.15 INTELLECTUAL PROPERTY. Schedule 3.15 contains a list of all
registered Intellectual Property Rights owned or licensed and used or held for
use by the Company Group the absence of which might reasonably be expected to
have a Material Adverse Effect on the Company Group, taken as a whole ("COMPANY
INTELLECTUAL PROPERTY RIGHTS"). Schedule 3.15
9
sets forth a list of all material licenses, sublicenses and other agreements as
to which a member of the Company Group is a party and pursuant to which any
Person is authorized to use any Company Intellectual Property Right.
SECTION 3.16 FINDERS' FEES. Except for Credit Suisse First Boston and
Deutche Bank Xxxx Xxxxx, whose fees will be paid by Seller, there is no
investment banker, broker, finder or other intermediary which has been retained
by or is authorized to act on behalf of Seller or the Company Group who might be
entitled to any fee or commission from the Company Group in connection with the
transactions contemplated by this Agreement.
SECTION 3.17 TAX MATTERS.
(a) To the Knowledge of Seller, and except as set forth in the
Preliminary Balance Sheet (including the notes thereto) or on Schedule 3.17, (i)
each member of the Company Group and Seller have filed (or caused to be filed)
in a timely manner, all material Tax Returns required to be filed by it under
applicable law and such Tax Returns are true, complete and correct in all
material respects; (ii) each member of the Company Group has paid all Taxes
shown due on the Tax Returns described in the preceding clause (i), except for
Taxes that are being contested in good faith by appropriate proceedings; and
(iii) no member of the Company Group is a party to or is otherwise bound by any
Contract providing for the allocation or sharing of Taxes or has any obligation
or liability under any Contract to which it was once a party or otherwise bound.
(b) Neither Seller nor USI is in control of Buyer within the meaning
of Section 304(c) of the Code.
SECTION 3.18 ENVIRONMENTAL MATTERS. Except (y) as have not had and might
reasonably be expected not to have, individually or in the aggregate, a Material
Adverse Effect on the Company Group, taken as a whole, and (z) for those facts,
circumstances and other matters disclosed in the Environmental Disclosure
Materials, to the Knowledge of Seller: (i) during the Relevant Period and as
relating to the Company Group, no notice, demand, request for information,
citation, summons or order has been received, no complaint has been filed, no
penalty has been assessed, and no investigation, action, claim, suit, proceeding
or review is pending or threatened by any Governmental Authority relating to any
Environmental Law; and (ii) the Company Group is in compliance with all
Environmental Laws. Seller delivered to Buyer all of the Environmental
Disclosure Materials (and Buyer acknowledges receipt of the same). Buyer
acknowledges and agrees that except as set forth in Section 9.02(a) hereof,
Buyer shall be apportioned all environmental liabilities associated with the
Company Group, whenever incurred, and whether pursuant to exclusion and
apportionment of liability for contaminated land (and in particular Xxxxxxxxx
X00 to D61 - "Test Three - Sold With Information" of Annex 3 of Circular 2/200)
or otherwise.
For the purposes of this Section 3.18, the following definitions shall
apply:
"ENVIRONMENTAL DISCLOSURE MATERIALS" means those material environmental
reports, surveys and other documents listed in that certain letter dated August
23, 2002 from Seller to Buyer.
10
"ENVIRONMENTAL LAW" means any law, rule, regulation, order or permit or
other requirement of any Governmental Authority relating to the environment or
to pollutants, contaminants, or other hazardous substances, wastes or materials.
"RELEVANT PERIOD" means in the case of S&J, the period commencing on
December 3, 1997 and ending on the date hereof, and, in the case of Xxxxxx,
means the period commencing on January 26, 1999 and ending on the date hereof.
SECTION 3.19 INVESTMENT. Seller is acquiring the Stock Consideration for
investment for its own account and not with a view to, or for sale in connection
with, any distribution thereof and will not sell the Stock Consideration in
violation of applicable federal, state or foreign securities laws. Seller
(either alone or together with its advisors) has sufficient knowledge and
experience in financial and business matters so as to be capable of evaluating
the merits and risks of its investment in the Stock Consideration and is capable
of bearing the economic risks of such investment.
SECTION 3.20 INSPECTIONS; NO OTHER REPRESENTATIONS. Seller is informed and
sophisticated and has engaged expert advisors, experienced in the evaluation of
companies such as the Buyer. Seller has undertaken such investigation and has
been provided with and has evaluated such documents and information as it has
deemed necessary to enable it to make an informed and intelligent decision with
respect to the execution, delivery and performance of this Agreement. Seller
acknowledges that Buyer has given Seller full access to the key employees,
documents and facilities of the Buyer Group. Seller will undertake prior to
Closing such further investigation and request such additional documents and
information as it deems necessary. Seller agrees to accept the Stock
Consideration based upon its own inspection, examination and determination with
respect thereto as to all matters, and without reliance upon any express or
implied representations or warranties of any nature made by or on behalf of or
imputed to Buyer (or any other Person), except as expressly set forth in the
Transaction Documents. Without limiting the generality of the foregoing, Seller
acknowledges that neither Buyer nor any other Person makes or has made any
representation or warranty with respect to (i) any projections, estimates or
budgets delivered to or made available to Seller of future revenues, future
results of operations (or any component thereof), future cash flows or future
financial condition (or any component thereof) of the Buyer Group or the future
business and operations of the Buyer Group or (ii) any other information or
documents made available to Seller or its counsel, accountants or advisors with
respect to the Buyer Group or their respective businesses or operations, except
as expressly set forth in the Transaction Documents.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as of the date hereof that:
SECTION 4.01 CORPORATE EXISTENCE AND POWER. Buyer is a corporation validly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate powers and all material
governmental licenses, authorizations, permits, consents and approvals required
to carry on its business as now
11
conducted, except for those licenses, authorizations, permits, consents and
approvals the absence of which would not reasonably be expected to have a
Material Adverse Effect on the Buyer Group, taken as a whole.
SECTION 4.02 CORPORATE AUTHORIZATION. The execution, delivery and
performance by Buyer of the Transaction Documents to which Buyer is a party and
the consummation of the transactions contemplated thereby are within the
corporate powers of Buyer and have been duly authorized by all necessary
corporate action on the part of Buyer. This Agreement constitutes a valid and
binding agreement of Buyer.
SECTION 4.03 GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by Buyer of the Transaction Documents to which Buyer is a party and
the consummation of the transactions contemplated thereby require no material
action by or in respect of, or material filing with, any Governmental Authority
other than (i) those listed on Schedule 4.03 and (ii) any such action or filing
as to which the failure to make or obtain would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on the Buyer
Group, taken as a whole.
SECTION 4.04 NONCONTRAVENTION. The execution, delivery and performance by
Buyer of the Transaction Documents to which it is a party and the consummation
of the transactions contemplated thereby do not and will not (i) violate the
Constituent Documents of Buyer, (ii) assuming compliance with the matters
referred to in Section 4.03, violate any applicable law, rule, regulation,
judgment, injunction, order or decree, except for any such violations which
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Buyer Group, taken as a whole, (iii) except as to
matters which would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Buyer Group, taken as a whole,
require any consent or other action by any Person under, constitute a default
under, or give rise to any right of termination, cancellation or acceleration of
any right or obligation of any member of the Buyer Group or to a loss of any
benefit to which any member of the Buyer Group is entitled under any provision
of any Contract binding upon such member of the Buyer Group; (iv) require the
consent or approval of the stockholders of Buyer; or (v) result in the creation
or imposition of any Lien on any asset of any member of the Buyer Group, except
for Permitted Liens.
SECTION 4.05 CAPITALIZATION. The authorized and outstanding capital stock
of Buyer on the date hereof is set forth in Schedule 4.05. Schedule 4.05 sets
forth a list of each stockholder of Buyer that beneficially owns ten percent
(10%) or more of the voting securities of Buyer - such disclosure to contain the
registered name, address, amount of such securities and beneficial ownership
percentage. All outstanding shares of capital stock of Buyer have been duly
authorized and validly issued and are fully paid and non-assessable. Except as
set forth in this Section 4.05 or on Schedule 4.05, there are no outstanding (i)
shares of capital stock or voting securities of Buyer, (ii) securities of Buyer
convertible into or exchangeable for shares of capital stock or voting
securities of Buyer or (iii) options or other rights to acquire from Buyer, or
other obligation of Buyer to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or voting
securities of Buyer. There are no outstanding obligations of any Company to
repurchase, redeem or otherwise acquire any securities of Buyer.
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SECTION 4.06 BUYER SUBSIDIARIES. Except as disclosed on Schedule 4.06,
each Buyer Subsidiary is duly organized and validly existing under the laws of
its jurisdiction of organization and has all corporate powers and all
governmental licenses, authorizations, permits, consents and approvals required
to carry on its business as now conducted, except for those licenses,
authorizations, consents and approvals the absence of which would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
on Buyer, taken as a whole. Except as disclosed in Schedule 4.06, all of the
outstanding capital stock or other voting securities of each Buyer Subsidiary is
owned by Buyer, directly or indirectly, free and clear of any Lien. Except as
disclosed in Schedule 4.06, there are no outstanding (i) securities of any Buyer
Subsidiary convertible into or exchangeable for shares of capital stock or
voting securities of any Buyer Subsidiary or (ii) options or other rights to
acquire from any Buyer Subsidiary, or other obligation of any Buyer Subsidiary
to issue, any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of any Buyer Subsidiary.
SECTION 4.07 SEC REPORTS, FINANCIAL STATEMENTS.
(a) Buyer has timely filed all forms, reports and documents with the
Securities and Exchange Commission ("SEC") required to be filed by it since June
20, 2000 pursuant to the Securities Act of 1933, as amended, and the rule and
regulations promulgated thereunder (the "SECURITIES ACT") and the Exchange Act
and the rules and regulations promulgated thereunder (the "EXCHANGE ACT")
(collectively, the "SEC REPORTS"), all of which have complied, at the time
filed, in all material respects with all applicable requirements of the
Securities Act and the Exchange Act, as applicable, and the rules and
regulations promulgated thereunder. None of such SEC Reports, at the time filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(b) The balance sheets and the related statements of operations,
cash flows and shareholders' equity (including the notes thereto) of Buyer and
its subsidiaries contained or incorporated by reference in the SEC Reports
comply in all material respects with applicable accounting requirements and with
the published rules and regulations of the SEC with respect thereto, and present
fairly the financial position and stockholders' equity of Buyer and its
subsidiaries as of their respective dates, and results of their operations and
their cash flows for the periods presented therein subject to the exceptions
stated therein, in conformity with US GAAP applied on a consistent basis, (i)
except as otherwise noted therein, (ii) subject in the case of unaudited
financial statements to normal year-end audit adjustments, (iii) except that the
unaudited financial statements may not contain all of the footnote disclosures
required by US GAAP, and (iv) except with respect to Form 10-QSB as may
otherwise be permitted by Form 10-QSB.
SECTION 4.08 MATERIAL ADVERSE EFFECT. Except as disclosed in Schedule
4.08, since the June 30, 2002, Buyer Group has conducted business in the
ordinary course consistent with past practices and there has not been any change
in business, operations or assets of the Buyer Group, taken as a whole, which
has had or which might reasonably be expected to have a Material Adverse Effect
on the Buyer Group, taken as a whole.
13
SECTION 4.09 NO UNDISCLOSED MATERIAL LIABILITIES. There are no liabilities
of Buyer of any kind, other than (a) liabilities provided for in the balance
sheet in Form 10-QSB filed by Buyer with the SEC for the quarterly period ended
June 30, 2002 (including to the extent reserved therefor therein) or disclosed
in the notes thereto; (b) liabilities not required under US GAAP to be shown on
such balance sheet; (c) liabilities disclosed in, related to or arising under
any agreements, instruments or other matters disclosed in this Agreement or any
Schedule hereto including in Schedule 4.09 and liabilities and obligations not
required to be so disclosed because of their failure to meet the materiality or
minimum dollar thresholds set forth in the relevant Section; (d) liabilities
incurred in the ordinary course of business since June 30, 2002; and (e) other
undisclosed liabilities which, individually or in the aggregate, do not have and
may not reasonable be expected to have a Material Adverse Effect on the Buyer
Group, taken as a whole.
SECTION 4.10 LITIGATION. Except as disclosed on Schedule 4.11, there is no
action, suit, investigation or proceeding pending against, or to the Knowledge
of Buyer, threatened in writing against, or affecting the Buyer Group before any
court or arbitrator or any Governmental Authority (a) which might reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Buyer Group, taken as a whole or (b) which in any manner challenges or seeks
to prevent, enjoin, alter or materially delay the transactions contemplated by
the Transaction Documents.
SECTION 4.11 COMPLIANCE WITH LAWS AND COURT ORDERS. To the Knowledge of
Buyer, no member of the Buyer Group is in violation of any applicable law, rule,
regulation, judgment, injunction, order or decree, except for violations that
have not had and would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Buyer Group, taken as a whole.
SECTION 4.12 FINDERS' FEES. There is no investment banker, broker, finder
or other intermediary which has been retained by or is authorized to act on
behalf of the Buyer Group who might be entitled to any fee or commission from
the Buyer Group in connection with the transactions contemplated by this
Agreement.
SECTION 4.13 TAX MATTERS.
(a) To the Knowledge of Buyer and except as set forth in the on
Schedule 4.13, (i) each member of the Buyer Group has filed (or caused to be
filed) in a timely manner, all Tax Returns required to be filed by it under
applicable law, and such Tax Returns are true, complete and correct in all
material respects; and (ii) each member of the Buyer Group has paid all Taxes
shown due on the Tax Returns described in the preceding clause (i), except for
Taxes that are being contested in good faith by appropriate proceedings.
(b) Buyer is not a person, with respect Seller and USI, specified in
any of the paragraphs of Section 267(b) of the Code.
(c) Buyer does not own at least 5% of the stock of Seller of USI for
the purposes of Section 304 including 304(c)(3)(B) of the Code. Buyer has no
plan or intention to acquire additional stock of Seller or USI as part of this
transaction.
14
(d) Taking into account, relative to the transactions contemplated
hereby, (i) any issuance of stock of Buyer to parties other than Seller, (ii)
any issuance of stock for services, (iii) the exercise of any Buyer stock
rights, warrants or subscriptions, (iv) a public offering of Buyer securities,
and (iv) the sale, exchange, transfer by gift or other disposition of any of the
securities of Buyer to be received by Seller hereunder, Buyer has not, and will
not, cause Seller together with all transferors, to be in "control" of Buyer
within the meaning of Section 368(c) of the Code.
(e) The Notes to be issued by Buyer to Seller hereunder constitutes
indebtedness for US federal income tax purposes and will be treated as such by
Buyer for all relevant tax filings.
SECTION 4.14 INSPECTIONS; NO OTHER REPRESENTATIONS. Buyer is an informed
and sophisticated purchaser, and has engaged expert advisors, experienced in the
evaluation and purchase of companies such as the Company Group, as contemplated
hereunder. Buyer has undertaken such investigation and has been provided with
and has evaluated such documents and information as it has deemed necessary to
enable it to make an informed and intelligent decision with respect to the
execution, delivery and performance of this Agreement. Buyer acknowledges that
Seller has given Buyer full access to the key employees, documents and
facilities of the Company Group. Buyer will undertake prior to Closing such
further investigation and request such additional documents and information as
it deems necessary. Buyer agrees to accept the Shares (and the related members
of the Company Group and their respective assets and liabilities) in the
condition they are in on the Closing Date based upon its own inspection,
examination and determination with respect thereto as to all matters, and
without reliance upon any express or implied representations or warranties of
any nature made by or on behalf of or imputed to Seller (or any other Person),
except as expressly set forth in the Transaction Documents. Without limiting the
generality of the foregoing, Buyer acknowledges that neither Seller nor any
other Person makes or has made any representation or warranty with respect to
(i) any projections, estimates or budgets delivered to or made available to
Buyer of future revenues, future results of operations (or any component
thereof), future cash flows or future financial condition (or any component
thereof) of the Company Group or the future business and operations of the
Company Group or (ii) any other information or documents made available to Buyer
or its counsel, accountants or advisors with respect to the Company Group or
their respective businesses or operations, except as expressly set forth in the
Transaction Documents.
ARTICLE 5
CONDUCT OF BUSINESS; ACCESS TO INFORMATION
SECTION 5.01 CONDUCT OF THE BUSINESS. From the date hereof until the
Closing Date, except as contemplated by this Agreement, Seller shall cause each
member of the Company Group, and Buyer shall and shall cause each member of the
Buyer Group, to conduct its business in the ordinary course consistent with past
practice and to use its commercially reasonable efforts to preserve intact its
business organizations and relationships with third parties and to keep
available the services of its present officers and employees; provided, however,
that any member of the Company Group shall be permitted to (a) make dividend
payments (or similar distribution) and to repay, prepay or otherwise settle
payables, receivables or other accounts due to or from
15
any Seller or its Affiliates or (b) effect any of the transactions contemplated
by this Agreement, including those described or referenced in Section 8.03.
Without limiting the generality of the foregoing, from the date hereof until the
Closing Date, except as disclosed on Schedule 5.01 or as contemplated in the
immediately preceding clauses (a) and (b), Seller will not permit any member of
the Company Group, and Buyer will not and will not permit any other member of
the Buyer Group, to:
(a) adopt or propose any change any of its Constituent Documents;
(b) merge or consolidate with any other Person or acquire a material
amount of assets from any other Person;
(c) sell, lease, license or otherwise dispose of any material assets
or property except (i) pursuant to existing Contracts or (ii) otherwise in the
ordinary course consistent with past practice; or
(d) agree or commit to do any of the foregoing.
SECTION 5.02 ACCESS TO INFORMATION. From the date hereof until the Closing
Date, Seller will cause the Company Group, and Buyer will and will cause each of
the other members of the Buyer Group, to (i) give to the other and its counsel,
financial advisors, auditors and other authorized representatives reasonable
access to its offices, properties, books and records, (ii) furnish to the other
and its counsel, financial advisors, auditors and other authorized
representatives such financial and operating data and other information relating
to it, as such Persons may reasonably request and (iii) instruct its employees,
counsel and financial advisors to cooperate with the other in the others
investigation. Any investigation pursuant to this Section shall be conducted in
such manner as not to interfere unreasonably with the conduct of the business of
the Company Group or the Buyer Group, as the case may be. Notwithstanding the
foregoing, neither party shall have access to personnel records of the other
relating to individual performance or evaluation records, medical histories or
other information which in the other's good faith opinion is sensitive or the
disclosure of which could subject it or any of its Affiliates to risk of
liability.
ARTICLE 6
POST-CLOSING COVENANTS
SECTION 6.01 ACCESS. Buyer will and will cause each member of the Company
Group, on and after the Closing Date, to afford promptly to Seller and their
agents reasonable access to their properties, books, records, employees and
auditors to the extent necessary to permit Seller to determine any matter
relating to its rights and obligations hereunder or to any period ending on or
before the Closing Date; provided that any such access by Seller shall not
unreasonably interfere with the conduct of the business of Buyer or any member
of the Company Group. Seller will hold, and will use their commercially
reasonable efforts to cause their officers, directors, employees, accountants,
counsel, consultants, advisors and agents to hold, in confidence, unless
compelled to disclose by judicial or administrative process or by other
16
requirements of law, all confidential documents and information concerning the
Company Group provided to it pursuant to this Section.
SECTION 6.02 TRADEMARKS; TRADENAMES. After the Closing, Buyer shall not,
and shall not permit its Affiliates to, use the names "USI" or "U.S. Industries,
Inc.," any trademark, tradename, logo or similar Intellectual Property Right of
Seller or its Affiliates or any derivative thereof. Buyer and the Company Group
shall promptly, but no later than one month after the Closing Date, destroy all
business cards, signs, displays and other materials that contain any such
Intellectual Property Right.
SECTION 6.03 PRESERVATION OF RECORDS. Buyer agrees, at its own expense,
that it (a) shall preserve and keep the records of the Company Group for a
period of seven years from the Closing, or for any longer periods as may be
required by any Governmental Authority or ongoing litigation and (b) shall make
such records available to Seller or its Affiliates as may be reasonably
requested. In the event Buyer wishes to destroy such records after the time
specified above, Buyer shall first give sixty (60) days' prior written notice to
Seller and Seller shall have the right at its option and expense, upon prior
written notice given to Buyer within that sixty (60) days period, to take
possession of the records within ninety (90) days after the date Seller receives
such notice.
SECTION 6.04 CERTAIN POST-CLOSING ASSISTANCE BY BUYER. After the Closing,
Buyer agrees to cause the appropriate personnel of the Company Group at no cost
or expense to Seller, to prepare all customary accounting, tax, environmental,
employment, benefits-related and similar reports for the Company Group for
periods up to the Closing Date which are reasonably requested by Seller or one
of its Affiliates. After the Closing, Seller agrees to provide Buyer, at no cost
or expense to Buyer, with information in the possession and control of Seller in
respect of accounting, tax, environmental employment, benefits-related and
similar reports for Buyer after the Closing Date to the extent reasonably
requested by Buyer.
SECTION 6.05 WEDNESBURY TRANSACTION. After the Closing, Buyer shall (and
shall cause each of its Affiliates, including each member of the Company Group)
to use its best efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary or desirable under applicable laws and
regulations to effect the transactions relative to the Wednesbury property
described in Schedule 6.05, in each case, as may be reasonably directed by
Seller or one of its Affiliates from time to time; provided, that if at anytime
prior to the time such transactions are required to be consummated a party
requests that one or more of terms set forth in Schedule 6.05 be modified on a
commercially reasonable basis because of materially changed market conditions or
other similar material events or circumstances outside the control of the
parties, then the parties shall negotiate in good faith such modifications.
SECTION 6.06 CERTAIN TAX MATTERS.
(a) Buyer shall and shall cause each member of the Company Group, on
and after the Closing, to:
(i) upon the request of Seller and to the extent permitted by
law, in respect of any accounting period commencing before the Closing,
make (A) such
17
provisional or final claims to surrender to Seller or any member of the
Seller group any group relief capable of being surrendered pursuant to
Chapter IV Part X Income and Corporation Taxes Xxx 0000, as promulgated
under the laws of England and Wales, and/or (B) such claims or disclaimers
in relation to capital allowances, in case as Seller may in its absolute
discretion direct in writing;
(ii) take all such steps as Seller may reasonably request to
permit and effect any such surrender, claim or disclaimer as is referred
to in (i) above; and
(iii) without prejudice to the generality of any of provision
of this Agreement, provide to Seller (or any of its agents or
representatives) (A) access to the books, accounts and records of each
member of the Company Group and (B) such other assistance as Seller (or
such agent or representative) may reasonably require in relation to the
Tax affairs of the Company Group in order to consider the matters referred
to in (i) above and otherwise in the context of dealing with the Tax
affairs of Seller and the Seller group. For the avoidance of doubt, in the
absence of a breach of this section 6.06(a) by Buyer, nothing in this
section 6.06(a) shall require Buyer to pay to Seller any additional
out-of-pocket cash consideration.
(b) Buyer agrees that, during the two-year period following the
Closing, Spear & Xxxxxxx plc will not carry out a distribution described in
Section 368(a)(2)(G) of the Code in any form, including, without limitation, a
liquidation, merger or check-the-box election, unless Buyer has received
Seller's prior written consent to that distribution, which consent may be
withheld or granted by Seller in Seller's sole and absolute discretion.
(c) Buyer agrees not to make an election pursuant to Section 338(g)
of the Code unless Buyer has received Seller's prior written consent to such
election, which consent may be withheld or granted by Seller in Seller's sole
and absolute discretion.
(d) Buyer agrees that it will not acquire any equity security of
Seller or U.S. Industries, Inc. during the four months after Closing unless
Buyer has received Seller's prior written consent to such acquisition, which
consent may be withheld or granted by Seller in Seller's sole and absolute
discretion.
ARTICLE 7
COVENANTS OF BUYER AND SELLER
SECTION 7.01 BEST EFFORTS; FURTHER ASSURANCES. Subject to the terms
and conditions of this Agreement, Buyer and Seller will use their best efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary or desirable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement. Seller and Buyer
agree, and Seller, prior to the Closing, and Buyer, after the Closing, agree to
cause the members of the Company Group, to execute and deliver such other
documents, certificates, agreements and other writings and to take such other
actions as may be necessary or desirable in order to consummate or implement
expeditiously the transactions contemplated by this Agreement.
18
SECTION 7.02 CERTAIN FILINGS.
(a) Seller and Buyer shall cooperate with one another in determining
whether any action by or in respect of, or filing with, any Governmental
Authority is required, or any actions, consents, approvals or waivers are
required to be obtained from parties to any material contracts, in connection
with the consummation of the transactions contemplated by this Agreement.
(b) As promptly as practicable after the execution of this
Agreement, each party shall, in cooperation with the other, but at its own
expense, file any reports or notifications or furnish information and pay any
fees that may be required to be paid by it under applicable law, and shall
furnish to the other all such information in its possession as may be necessary
for the completion of the reports or notifications to be filed by the other.
Each party will use its best efforts to obtain early termination of any
applicable waiting period, and shall as soon as practicable make any further
filings pursuant thereto that may be necessary, proper or advisable.
SECTION 7.03 PUBLIC ANNOUNCEMENTS. The parties agree to consult with each
other before issuing any press release or making any public statement with
respect to this Agreement or the transactions contemplated hereby and, except
for any press releases and public announcements the making of which may be
required by applicable law or any listing agreement with any national securities
exchange, will not issue any such press release or make any such public
statement prior to such consultation. If Buyer, Seller, or other affiliated
entity of such parties, is so required to issue a press release or otherwise
make a public statement it shall inform and provide draft copies to the other
party hereto for review and comment prior to issuing it.
SECTION 7.04 NOTICES OF CERTAIN EVENTS. From the date hereof until the
Closing Date, Seller and Buyer shall promptly notify the other of:
(a) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
(b) any notice or other communication from any Governmental
Authority in connection with the transactions contemplated by this Agreement;
and
(c) any actions, suits, claims, investigations or proceedings
commenced relating to Seller, the Buyer Group or the Company Group that, if
pending on the date of this Agreement, would have been required to have been
disclosed pursuant to Section 3.12 or Section 4.11.
SECTION 7.05 CONSENTS. Each of the parties hereto will use its
commercially reasonable efforts to obtain consents of all Persons and
Governmental Authorities necessary to the consummation of the transactions
contemplated by this Agreement.
SECTION 7.06 INSURANCE POLICIES. Buyer acknowledges that Seller or one of
its Affiliates (other than a member of the Company Group) has insurance policies
covering those risks of the Company Group described in Schedule 7.06. Buyer
acknowledges and agrees that neither Seller nor any of its Affiliates shall have
any obligation to assign or otherwise transfer to
19
Buyer (or any other Person) those insurance policies (or any portion thereof)
covering such risks described in Schedule 7.06.
ARTICLE 8
CONDITIONS TO CLOSING
SECTION 8.01 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER. The
obligations of Buyer and Seller to consummate the Closing are subject to the
satisfaction of the following conditions:
(a) No provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation of the
Closing.
(b) Each of Seller and Buyer shall have received evidence reasonably
satisfactory to it that Liens listed on Schedule 8.01(b) have been released by
the holders thereof.
SECTION 8.02 CONDITIONS TO OBLIGATION OF BUYER. The obligation of Buyer to
consummate the Closing is subject to the satisfaction of the following further
conditions:
(a) (i) Seller shall have performed in all material respects all of
their obligations hereunder required to be performed by them on or prior to the
Closing Date, and (ii) the representations and warranties of Seller, contained
in this Agreement and in any certificate or other writing delivered by Seller
pursuant hereto shall be true, disregarding all qualifications and exceptions
contained therein relating to materiality or Material Adverse Effect, at and as
of the Closing Date, as if made at and as of such date, with only such
exceptions (A) as would not in the aggregate reasonably be expected to have a
Material Adverse Effect or (B) as are results of any action permitted by Section
5.01.
(b) Execution and delivery of a stockholders' agreement in the form
of Exhibit B (the "STOCKHOLDERS' AGREEMENT") by all of the parties thereto other
than Buyer.
(c) Execution and delivery of a registration rights agreement in the
from of Exhibit C (the "REGISTRATION RIGHTS AGREEMENT") by all the parties
thereto other than Buyer.
(d) Execution and delivery of a real property lease relative to the
Wednesbury property in the form of Exhibit D (the "WEDNESBURY LEASE") by the
parties thereto (other than any party affiliated with Buyer).
(e) None of the members of the Company Group shall have any bank
debt, or other similar debt for borrowed money to Seller, any Affiliate of
Seller or any other Person (other than accounts payable in the ordinary course
of business); it being agreed that, anything in this Agreement to the contrary
notwithstanding, anytime prior to the Closing, Seller shall have the right to
(or shall have the right to cause one or more of its Affiliates, including any
members of the Company Group to) use any cash (or cash equivalent) of the
Company Group (or otherwise take, or cause to be taken, all actions and to do,
or cause to be done, all things necessary or desirable under applicable laws and
regulations) to pay off or other satisfy in full any such debt obligation.
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(f) Those actions described in Section 2.02(a) and Section 2.02(b)
shall have occurred.
(g) Seller shall have (or shall have caused) the partial repayment
of intercompany accounts of the Company Group in the amount of $2 million;
provided that to the extent Seller or any of Seller's Affiliates (other than the
Company Group) have guaranteed or otherwise extended credit support in respect
of any obligations under any letters of credit issued for the benefit of any
member of the Company Group (collectively, "LETTER OF CREDIT OBLIGATIONS"), then
out of such $2 million an amount equal to such Letter of Credit Obligations
shall be held in escrow and such escrowed amount shall be released to Buyer from
time to time after and to the extent that Seller or its Affiliates are released
from such Letter of Credit Obligations.
SECTION 8.03 CONDITIONS TO OBLIGATION OF SELLER. The obligation of Seller
to consummate the Closing is subject to the satisfaction of the following
further conditions:
(a) (i) Buyer shall have performed in all material respects all of
its obligations hereunder required to be performed by them at or prior to the
Closing Date and (ii) the representations and warranties of Buyer contained in
this Agreement and in any certificate or other writing delivered by Buyer
pursuant hereto shall be true, disregarding all qualifications and exceptions
contained therein relating to materiality or Material Adverse Effect, in all
material respects at and as of the Closing Date, as if made at and as of such
date.
(b) Execution and delivery of the Stockholders' Agreement, the
Registration Rights Agreement, the Wednesbury Lease by all the parties thereto
other than Seller (or any party affiliated with Seller).
(c) On or prior to the Closing, MTI shall have closed an equity
round of financing with net proceeds to Buyer of at least $2,000,000 on terms
and conditions reasonably satisfactory to Seller; and the other transactions
relative to the equity capitalization of MTI described in Schedule 8.03(c) shall
have been consummated on terms and conditions reasonably satisfactory to Seller;
and after giving effect to such transactions and the transactions contemplated
hereby, the capitalization of MTI shall be as disclosed in Schedule 8.03(c).
(d) On or prior to the Closing, the transactions described on
Schedule 8.03(d) relative to the Wednesbury property shall have occurred.
(e) Seller shall have received one or more deeds of release or
similar documents in form satisfactory to Seller to release Seller from any and
all liabilities or obligations under or otherwise terminate any guarantees,
letters of credit or other similar credit support documents that provide credit
support to the Company Group from Seller or any of its Affiliates (other than
any member of the Company Group), including those listed on Schedule 8.03(e).
(f) Seller shall have received consent for the transactions
contemplated hereby by those financial institutions that are party to certain
credit facilities of U.S. Industries Inc., in form and substance satisfactory to
Seller.
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(g) Those actions described in Sections 2.02(c) shall have occurred.
(h) Seller shall have received an opinion (in a form satisfactory to
Seller) which provides that the sale of the Shares as contemplated herein is a
transaction on which gain or loss is currently recognized under Section 1001 of
the Code.
ARTICLE 9
SURVIVAL; INDEMNIFICATION
SECTION 9.01 SURVIVAL. The covenants, agreements, representations and
warranties of the parties hereto contained in this Agreement or in any
certificate or other writing delivered pursuant hereto or in connection herewith
shall survive the Closing until April 30, 2003; provided that (i) the covenants,
agreements, representations and warranties contained in Sections 2.01, 3.18,
4.16 and Articles 6, 9, 10 and 11 shall survive indefinitely and (ii) the
representation and warranties contained in Section 3.17 and 4.13 shall survive
until the expiration of the applicable statute of limitations. Notwithstanding
the preceding sentence, any covenant, agreement, representation or warranty in
respect of which indemnity may be sought under this Agreement shall survive the
time at which it would otherwise terminate pursuant to the preceding sentence
with respect to the specific claim, if notice of the inaccuracy or breach
thereof giving rise to such right of indemnity shall have been given to the
party against whom such indemnity may be sought prior to such time.
SECTION 9.02 INDEMNIFICATION. (a)Subject to the other provisions of this
Article 9, Seller hereby indemnifies Buyer and its Affiliates against and agrees
to hold each of them harmless from any and all damage, loss, liability and
expense (including, without limitation, reasonable expenses of investigation or
remediation, any consulting or engineering fees in connection with any
investigation or remediation and reasonable attorneys' fees and expenses in
connection with any action, suit or proceeding) ("DAMAGES") incurred or suffered
by Buyer or any of its Affiliates arising out of (i) any misrepresentation or
breach of warranty (each such misrepresentation and breach of warranty a
"WARRANTY BREACH") or (ii) material breach of covenant or agreement made or to
be performed by Seller pursuant to this Agreement; provided that with respect to
indemnification by Seller for any Warranty Breach pursuant to this Section, (A)
Seller shall not be liable unless the aggregate amount of Damages with respect
to such Warranty Breaches exceeds $250,000 and then only to the extent of such
excess and, (B) Seller's maximum liability for all such Warranty Breaches shall
not exceed $1,250,000; provided further that Seller shall not indemnify Buyer or
its Affiliates for any deductibles under insurance policies.
(b) Subject to the other provisions of this Article 9, Buyer hereby
indemnifies Seller and its Affiliates against and agree to hold each of them
harmless from any and all Damages incurred or suffered by Seller or any of its
Affiliates arising out of (i) any Warranty Breach, (ii) material breach of
covenant or agreement made or to be performed by Buyer pursuant to this
Agreement or (iii) any liability or obligation of any kind or nature (whether,
known, unknown, fixed, contingent, liquidated, direct, indirect or otherwise)
arising out of or relating to any member of the Company Group, its assets or
business other than any liability or obligation for which Seller is required to
indemnify Buyer pursuant to Section 9.02(a); provided
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that with respect to indemnification by Buyer for any Warranty Breach pursuant
to this Section, (A) Buyer shall not be liable unless the aggregate amount of
Damages with respect to such Warranty Breaches exceeds $250,000 and then only to
the extent of such excess and (B) Buyer's aggregate maximum liability for all
such Warranty Breaches shall not exceed $1,250,000.
(c) For the avoidance of doubt, to the extent that any Transaction
Document (other than this Agreement) contains any indemnification provision,
such indemnification provision shall apply to such document.
SECTION 9.03 PROCEDURES.
(a) The party seeking indemnification under Section 9.02 (the
"INDEMNIFIED PARTY") agrees to give prompt written notice, but no later than 5
days after receipt thereof, to the party against whom indemnity is sought (the
"INDEMNIFYING PARTY") of the assertion of any claim, or the commencement of any
suit, action or proceeding ("CLAIM") in respect of which indemnity may be sought
under such Section and will provide the Indemnifying Party such information with
respect thereto that the Indemnifying Party may reasonably request.
(b) The Indemnifying Party shall be entitled to participate in the
defense of, investigation of, or corrective action required to be undertaken in
response to, any Claim asserted by a third party, including any Governmental
Authority ("THIRD PARTY CLAIM") and, subject to the limitations set forth in
this Section or Section 9.04, shall be entitled to control and appoint lead
counsel for such defense, in each case at its expense subject to the deductible
and maximum liability described in Section 9.02.
(c) If the Indemnifying Party shall assume the control of the
defense of any Third Party Claim in accordance with the provisions of this
Section or Section 9.04, (i) the Indemnifying Party shall obtain the prior
written consent of the Indemnified Party (which shall not be unreasonably
withheld) before entering into any settlement of such Third Party Claim if the
settlement does not release the Indemnified Party from all liabilities and
obligations with respect to such Third Party Claim or if the settlement imposes
injunctive or other equitable relief against the Indemnified Party and (ii) the
Indemnified Party shall be entitled to participate in the defense of such Third
Party Claim and to employ separate counsel of its choice for such purpose. The
fees and expenses of such separate counsel shall be paid by the Indemnified
Party.
(d) Each party shall cooperate, and cause their respective
Affiliates to cooperate, in the defense or prosecution of any Third Party Claim
(including any counterclaims filed by Seller) and shall provide access to
properties and individuals as reasonably requested and furnish or cause to be
furnished records, information and testimony, and attend such conferences,
discovery proceedings, hearings, trials or appeals, as may be reasonably
requested in connection therewith. This cooperation shall be provided without
cost or expense of the other party other than reimbursement of out-of-pocket
travel or similar expenses subject to the provisions of Section 9.02.
(e) Each Indemnified Party shall use reasonable efforts to collect
any amounts available under insurance coverage, or from any other Person alleged
to be responsible, for any Damages payable under Section 9.02. In addition, each
party agrees that it will not, and agrees
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to use its best efforts to ensure that its Affiliates do not, voluntarily or by
discretionary action, accelerate the timing, or increase the cost, of any
obligations of the other party under this Article 9.
SECTION 9.04 CALCULATION OF DAMAGES.
(a) The amount of any Damages payable under Section 9.02 by the
Indemnifying Party shall be net of any amounts recovered or recoverable by the
Indemnified Party under applicable insurance policies from any other third party
with indemnification obligations or from any other Person alleged to be
responsible therefor. If the Indemnified Party receives any amounts under
applicable insurance policies, from any other third party with indemnification
obligations or from any other Person alleged to be responsible for any Damages,
subsequent to an indemnification payment by the Indemnifying Party, then such
Indemnified Party shall promptly reimburse the Indemnifying Party for any
payment made or expense incurred by such Indemnifying Party in connection with
providing such indemnification payment up to the amount received by the
Indemnified Party, net of any expenses incurred by such Indemnified Party in
collecting such amount.
(b) The Indemnifying Party shall not be liable under Section 9.02
for any (i) Damages relating to any matter to the extent that there is included
in the Preliminary Balance Sheet a specific liability or reserve relating to
such matter, (ii) consequential or punitive Damages or (iii) Damages for lost
profits.
(c) Notwithstanding any other provision of this Agreement to the
contrary, if on the Closing Date the Indemnified Party has actual knowledge of
any information that would cause one or more of the representations and
warranties made by the Indemnifying Party to be inaccurate as of the date made,
the Indemnified Party shall have no right or remedy after the Closing with
respect to such inaccuracy and shall be deemed to have waived its rights to
indemnification in respect thereof.
SECTION 9.05 ASSIGNMENT OF CLAIMS. If the Indemnified Party receives any
payment from an Indemnifying Party in respect of any Damages pursuant to Section
9.02 and the Indemnified Party could have recovered all or a part of such
Damages from a third party (a "POTENTIAL CONTRIBUTOR") based on the underlying
Claim asserted against the Indemnifying Party, the Indemnified Party shall
assign such of its rights to proceed against the Potential Contributor as are
necessary to permit the Indemnifying Party to recover from the Potential
Contributor the amount of such payment.
SECTION 9.06 EXCLUSIVITY. Except as specifically and expressly set forth
in Article 9 of Agreement and claims for fraud, Buyer waives any rights and
claims it may have against Seller, whether in law or in equity (or otherwise),
arising out of or otherwise relating to the any member of the Company Group (or
any of their respective assets or liabilities) or the Shares, or the
transactions contemplated hereby. The rights and claims waived by Buyer include,
without limitation, claims for contribution or other rights of recovery arising
out of or relating to any statute, law, regulation or rule, claims for breach of
contract, breach of representation or warranty, negligent misrepresentation and
all other claims under any and all legal theories. After the Closing, Article 9
of this Agreement, will provide the sole and exclusive remedy of Buyer or
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its Affiliates for any misrepresentation, breach of warranty, covenant or other
agreement (other than those contained in Sections 2.01) or other claim (other
than a claim for fraud) arising out of or otherwise relating to the any member
of the Company Group (or any of their respective assets or liabilities), the
Shares, or the transactions contemplated hereby arising out of this Agreement.
ARTICLE 10
TERMINATION
SECTION 10.01 GROUNDS FOR TERMINATION. This Agreement may be terminated at
any time prior to the Closing:
(a) by mutual written agreement of Seller and Buyer;
(b) by either Seller or Buyer if the Closing shall not have been
consummated on or before September 15, 2002; provided, however, that the
terminating party may not exercise this right if it or any of its Affiliates is
in breach of its obligations under this Agreement; or
(c) by either Seller or Buyer if consummation of the transactions
contemplated hereby would violate any nonappealable final order, decree or
judgment of any court or Governmental Authority having competent jurisdiction.
The party desiring to terminate this Agreement pursuant to clauses
10.01(b) or 10.01(c) shall give notice of such termination to the other party.
If this Agreement is terminated as provided herein:
(i) upon written request therefor, each party will redeliver
to the other all documents, work papers and other material of the other
(or its Affiliates) relating to the transactions contemplated hereby,
whether obtained before or after the execution hereof; and
(ii) all filings, applications and other submissions made
shall, to the extent practicable, be withdrawn from the agency or other
person to which made.
SECTION 10.02 EFFECT OF TERMINATION. If this Agreement is terminated as
permitted by Section 10.01, such termination shall be without liability of
either party (or any stockholder, director, officer, employee, agent, consultant
or representative of such party) to the other party to this Agreement; provided
that if such termination shall result from the willful (i) failure of either
Buyer or Seller to fulfill a condition to the performance of the obligations of
the other party, (ii) failure to perform a covenant of this Agreement or (iii)
breach by either Buyer or Seller hereto of any representation or warranty
contained herein, such party shall be fully liable for any and all Damages
incurred or suffered by the other party as a result of such failure or breach.
The provisions of Section 10.02 and Article 11 shall survive any termination
hereof pursuant to Section 10.01.
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ARTICLE 11
MISCELLANEOUS
SECTION 11.01 NOTICES. All notices, requests and other communications to
any party hereunder shall be in writing (including facsimile transmission) and
shall be given,
if to Buyer, to:
Megapro Tools, Inc.
c/o PNC Investments Limited
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0-000
Xxxx Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
Fax: 000-000-0000
with a copy to:
Xxxxxx & Xxxx
000 Xxxx Xxx Xxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxxxx
Fax: (000) 000-0000
if to Seller, to:
c/o U.S. Industries, Inc.
Xxxxxxxx Point - West Tower
000 X. Xxxxxxx Xxxxx, Xxxxx 0000
Xxxx Xxxx Xxxxx, XX 00000-0000
Attention: General Counsel
Fax: (000) 000-0000
with a copy to:
Xxxxx Xxxxxx Xxxxx Xxxxxxxx Xxxxxxx & Xxxxx P.A.
Xxx Xxxxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Xxxxxx Xxxxx
Fax: (000) 000-0000
with a copy to (only relating to environmental matters):
Xxxxxxx & Xxxxxx, LLP
00 Xxxx X. Xxxxxxx Xxxxxxx
Xxxxx Xxxxx, XX 00000
26
Attention: Xxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
All such notices, requests and other communications shall be deemed received on
the date of receipt by the recipient thereof if received prior to 5 p.m. in the
place of receipt and such day is a business day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding business day in the place of receipt.
SECTION 11.02 AMENDMENTS AND WAIVERS.
(a) Any provision of this Agreement may be amended or waived if, but
only if, such amendment or waiver is in writing and is signed, in the case of an
amendment, by Seller and Buyer, or in the case of a waiver, by the party against
whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 11.03 EXPENSES. All costs and expenses incurred in connection with
this Agreement shall be paid by the party incurring such cost or expense.
SECTION 11.04 SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that Seller and Buyer, respectively,
may not assign, delegate or otherwise transfer any of its rights or obligations
under this Agreement without the consent of Buyer or Seller, respectively,
except that Seller may assign its right accept the Buyer Shares to its
Affiliates but no such assignment shall relieve Seller of its obligations
hereunder.
SECTION 11.05 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the law of the State of Florida.
SECTION 11.06 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 11.07 COUNTERPARTS; THIRD PARTY BENEFICIARIES. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. Facsimile execution and delivery of this Agreement shall be legal,
valid and binding execution and delivery for all purposes. This Agreement shall
become effective when each party hereto shall have received a counterpart hereof
signed by the other parties hereto. No provision of this Agreement is intended
to confer upon any Person other than the parties hereto any rights or remedies
hereunder.
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SECTION 11.08 ENTIRE AGREEMENT. This Agreement together with the other
Transaction Documents constitute the entire agreement between the parties with
respect to the subject matter of this Agreement and supersede all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter of this Agreement.
SECTION 11.09 INTERPRETATION. The following interpretative conventions
shall apply to this Agreement: (i) the singular includes the plural and the
plural includes the singular; (ii) "or" is not exclusive; (iii) a reference to
any Person includes its, his or her permitted successors and permitted assigns;
(iv) accounting terms have the meanings assigned to them by generally accepted
accounting principles, as applied by the accounting entity to which they refer;
(v) the words "include," "includes" and "including" are not limiting; (vi) the
phrases "arising out of" or "arises out of" mean arising out of, in connection
with or otherwise relating to (notwithstanding that in some cases all of such
words may be used and in most cases they are not); (vii) a reference in a
document to an Article, section, Exhibit or Schedule is to the Article, section,
Exhibit or Schedule of such document unless otherwise indicated; (viii)
references to any document (1) shall include all exhibits, schedules and other
attachments thereto, (2) shall include all documents issued or executed in
replacement thereof, and (3) shall mean such document or replacement or
predecessor thereto, as amended, modified or supplemented from time to time and
in effect at any given time; (ix) the words "hereof," "herein" and "hereunder"
and words of similar import when used in any document shall refer to such
document as a whole and not to any particular provision of such document; (x)
any reference to Buyer, shall mean MTI and MTI-Sub, jointly and severally,
unless the context expressly provides otherwise, and (xi) all pronouns shall be
deemed to include all other genders and gender neutral terms (i.e., he, she and
it). In addition, this Agreement is a result of negotiations among, and has been
reviewed by Seller Buyer, and their respective counsel. Accordingly, this
Agreement shall be deemed to be the product of all parties hereto, and no
ambiguity shall be construed in favor of or against Seller or Buyer. The
captions herein are included for convenience of reference only and shall be
ignored in the construction or interpretation hereof.
SECTION 11.10 DISCLOSURE SCHEDULES. The parties acknowledge and agree that
(i) the disclosure schedules ("SCHEDULES") attached to this Agreement may
include certain items and information solely for informational purposes for the
convenience of Buyer and (ii) the disclosure by Seller of any matter in the
Schedules shall not be deemed to constitute an acknowledgment by Seller that the
matter is required to be disclosed by the terms of this Agreement or that the
matter is material. If any Schedule discloses an item or information in such a
way as to make its relevance to the disclosure required by another Schedule
readily apparent, the matter shall be deemed to have been disclosed in such
other Schedule, notwithstanding the omission of an appropriate cross-reference
to such other Schedule.
SECTION 11.11 ENGLISH LANGUAGE. The parties confirm that it is their wish
that this Agreement as well as any other documents relating hereto including
notices, have been and shall be drawn up in English only.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
USI MAYFAIR LIMITED
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: Director
MEGAPRO TOOLS, INC.
By: /s/ Xxxx Xxxxxx
--------------------------------
Name: Xxxx Xxxxxx
Title: President
S AND J ACQUISITION CORP.
By: /s/ Xxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxx
Title: President
The undersigned hereby guaranties the obligations of Seller under this
Agreement.
U.S. INDUSTRIES, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Senior Vice President, CFO
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