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ASSET PURCHASE AGREEMENT
BY AND BETWEEN
FARBERWARE INC.,
FAR-B ACQUISITION CORP.,
SYRATECH CORPORATION,
AND
LIFETIME HOAN CORPORATION,
DATED
FEBRUARY 2, 1996
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TABLE OF CONTENTS
Page
1. Sale and Purchase of Assets................................... 1
1.1 Sale and Purchase of Assets............................. 1
1.2 Excluded Assets......................................... 3
1.3 Assignment of Contracts................................. 4
1.4 Obtaining Permits and Licenses.......................... 6
1.5 Assumed Liabilities of the Buyer, Syratech and Lifetime. 7
1.6 Excluded Liabilities.................................... 7
2. Purchase Price................................................ 8
2.1 Purchase Price.......................................... 8
2.2 Determination of Purchase Price......................... 8
2.3 Payment of Purchase Price............................... 10
3. Closing....................................................... 11
3.1 Date of Closing......................................... 11
3.2 Termination............................................. 11
4. Representations and Warranties of Seller...................... 12
4.1 Organization, Standing and Authority of Seller.......... 12
4.2 Authorization of Agreement.............................. 12
4.3 Consents of Third Parties............................... 12
4.4 Financial Statements.................................... 13
4.5 Absence of Certain Changes.............................. 13
4.6 No Material Adverse Change.............................. 14
4.7 Title to Properties; Encumbrances....................... 14
4.8 Taxes................................................... 14
4.9 Unfilled Orders......................................... 14
4.10 Products Liability...................................... 14
4.11 Contracts............................................... 14
4.12 Litigation; Compliance with Laws........................ 15
4.13 Intellectual Property................................... 15
4.14 Permits................................................. 16
4.15 Labor Relations......................................... 17
5. Representations and Warranties of Buyer, Syratech and Lifetime 17
5.1 Buyer's Organization.................................... 17
5.2 Authorization of Agreement.............................. 17
5.3 Consents of Third Parties............................... 17
5.4 Litigation.............................................. 18
5.5 Financing............................................... 18
6. Further Agreements of the Parties............................. 18
6.1 Access to Information................................... 18
6.2 Conduct of the business Pending the Closing............. 19
6.3 Employee and Employee Benefit Matters................... 20
6.4 Other Action............................................ 20
6.5 Notices................................................. 20
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Page
6.6 HSR Filings............................................. 21
6.7 Expenses................................................ 21
6.8 Publicity............................................... 21
6.9 Transfer Taxes.......................................... 21
6.10 Supplement to Disclosures............................... 21
6.11 Preservation of Records................................. 21
6.12 Certain Post-Closing Assistance by the Buyer............ 22
6.13 Use of Trade names and Trademarks....................... 23
6.14 Corporate Name.......................................... 23
6.15 Accounts Receivable..................................... 23
6.16 Manufacturing Agreement................................. 24
6.17 Confidentiality......................................... 24
6.18 [This Section Intentionally Omitted.]................... 24
6.19 Commission Obligations.................................. 24
6.20 Product Liability Insurance............................. 24
........................................................ 25
6.21 Australian Inventory.................................... 25
6.22 Buyer's Right to Purchase Certain Goods................. 25
7. Conditions of Closing......................................... 25
7.1 Conditions Precedent to Obligations of Buyer............ 25
7.2 Conditions Precedent to Obligations of Seller........... 26
8. Closing Deliveries............................................ 27
8.1 Documents to be Delivered by Seller..................... 27
8.2 Documents to be Delivered by Buyer, Syratech and Lifetime 28
8.3 Other Deliveries........................................ 28
9. Indemnification and Related Matters........................... 29
9.1 Indemnification......................................... 29
9.2 Determination of Damages and Related Matters............ 31
9.3 Time and Manner of Certain Claims....................... 32
9.4 Defense of Claims by Third Parties...................... 32
10. Miscellaneous................................................. 33
10.1 Bulk Sales Compliance................................... 33
10.2 Finders................................................. 34
10.3 Entire Agreement........................................ 34
10.4 Jurisdiction and Governing Law.......................... 34
10.5 Schedules; Tables of Contents and Headings.............. 35
10.6 Notices................................................. 35
10.7 Separability............................................ 36
10.8 Waiver.................................................. 36
10.9 Binding Effect; Assignment.............................. 37
10.10 Best Knowledge.......................................... 37
10.11 Counterparts............................................ 38
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ASSET PURCHASE AGREEMENT
The parties to this Asset Purchase Agreement, dated February 2,
1996 (this "Agreement") are FARBERWARE INC., a Delaware corporation ("Seller"),
FAR-B ACQUISITION CORP., a Delaware corporation ("Buyer"), SYRATECH CORPORATION,
a Delaware corporation and owner, through a wholly-owned subsidiary, of all of
the capital stock of Buyer ("Syratech") and LIFETIME HOAN CORPORATION, a
Delaware corporation ("Lifetime"), with Syratech and Lifetime jointly and
severally being guarantors of all of the obligations of Buyer.
Seller manufactures and distributes aluminum clad stainless steel
cookware and kitchen appliances, and owns and licenses certain intellectual
property rights and leases and operates retail outlet stores (collectively, the
"Business").
Seller wishes to sell, and Buyer and Lifetime wish to purchase, certain of the
assets and properties used in the Business. As part of such purchase and sale,
Buyer and Lifetime are willing to assume and Syratech is willing to guarantee
certain obligations and liabilities of the Business as expressly set forth
herein. It is therefore agreed as follows:
1. Sale and Purchase of Assets.
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SALE AND PURCHASE OF ASSETS. Subject to the terms and
conditions of this Agreement, at the closing referred to in Section 3 (the
"Closing"), Seller shall sell, assign, transfer, convey and deliver to Buyer and
Lifetime, and Buyer and Lifetime shall purchase, acquire and accept from Seller,
all of the Seller's right, title and interest in and to all of the assets,
properties and rights of Seller of every kind and description, real, personal
and mixed, tangible and intangible, wherever situated, other than the Excluded
Assets (defined below), with such changes, deletions or additions thereto as may
occur from the date hereof to the Closing in the ordinary course of business and
consistent with the terms and conditions of this Agreement (the "ASSETS")
including but not limited to the following:
(a) the Selected Tangible Property. As used in this Agreement,
the term "Selected Tangible Property" means (i) all building fixtures and
leasehold improvements located at the outlet stores operated
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by the Seller (the "Existing Farberware Stores"), (ii) all display racks,
furniture, and other equipment and other tangible personal property owned by the
Seller and located at the Existing Farberware Stores, (iii) all of the Seller's
tools, dies and molds, and spare parts and components thereof, and (iv) such of
the Seller's machinery, equipment (including computers and related accessories,
equipment, peripherals and software to the extent transferable without violation
of rights of third parties and at no cost to Seller) spare parts and other
supplies of all kinds, and other tangible personal property (excluding for
purposes of this definition, Inventory (as defined below) and raw materials used
in the manufacture of Inventory, it being intended that Inventory and such raw
materials shall not be deemed to be included in the term "Selected Tangible
Property") as Buyer shall select as provided in Section 8.3 for use by Buyer and
Lifetime (it being intended that they shall not acquire any machinery, equipment
or other tangible personal property for the purpose of resale), and also
excluding leasehold improvements (other than hereinabove provided);
(b) all quantities of finished goods inventory, including
wrapped goods, wherever located, including in transit, other than finished goods
inventory located in Australia (the "Inventory");
(c) those contracts, agreements, leases, sales representative
agreements, arrangements and/or commitments, which are listed on Schedule l.l(c)
and all purchase orders for the Seller's products (collectively, the
"CONTRACTS");
(d) copies or originals of all business and financial records,
files, books and documents other than those relating solely to Excluded Assets
or Excluded Liabilities;
(e) Seller's intellectual property (and all goodwill associated
therewith), i.e., all of the rights of the Seller in, and with respect to, the
trademarks, trade names, service marks, copyrights (including applications for,
rights to acquire and other rights with respect to, any of the foregoing),
licenses, technology, know-how, trade secrets, franchises, authorizations (and
all documentation relating to the foregoing) of the Seller (to the extent
transferable at no cost to Seller) used in the business of the Seller including,
without limitation, (i) the name "Farberware" (including the right, subject to
the Existing Farberware Licenses (defined below), to use and/or license the use
of such name), (ii) the U.S. patents and registered trademarks listed on the
schedule annexed hereto as Schedule 4.13, and (iii) all rights of the Seller
under Existing Farberware Licenses (collectively "Intellectual Property"). As
used herein: the term "Farberware Licenses" means licenses to manufacture
(and/or cause to be
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manufactured) and/or market products under and using the "Farberware" name and
trademark and includes, without limitation, the Existing Farberware Eicenses;
and the term "Existing Farberware Licenses" means Farberware Licenses heretofore
granted BY THE SELLER (OR ANY predecessor of the Seller) that are valid and
subsisting and includes, without limitation, the license agreements listed on
the annexed Schedule 4.13;
f) all prepaid expenses of the Seller, except deposits and
prepaid expenses relating to the Bronx Facilities (DEFINED BELOW) OR ANY other
Excluded Assets;
(g) all municipal, state and federal franchises, licenses,
authorizations, permits and licenses of the Business other than those relating
to the Excluded Assets or Excluded Liabilities (to the extent transferable at no
cost to Seller) (the "PERMITS"), which are listed on Schedule 1. I(g) to be
delivered within 5 business days after the date hereof: and
(h) all computer equipment hardware and software (to the extent
transferable without violation of rights of third parties and at no cost to
Seller).
1.2 EXCLUDED ASSETS. The parties to this Agreement expressly
understand and agree that the Seller is not selling, assigning, transferring or
conveying to the Buyer or Lifetime the following assets, rights and properties
which are specifically excluded from the transactions contemplated by this
Agreement (the "EXCLUDED Assets"):
(a) the buildings, facilities and other fixtures (which term
shall not include machinery and equipment needed or used in the manufacture of
products) and leasehold improvements located thereon, at Seller's facilities
located at 1500 Bassett Avenue, Bronx, New York and 415 Bruckner Boulevard,
Bronx, New York (the "BRONX FACILITIES");
(b) all cash and cash equivalents and all receivables of any type
that arise prior to the Closing including accounts receivable end royalty
receivables which royalty receivables are earned before 12.01 a.m. on the date
of the Closing (the "Accounts Receivable") of the Business, including all notes,
guarantees and collateral relating thereto;
(c) all furniture and furnishings (except file cabinets used in the storage of
files) located
at the Bronx Facilities;
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(d) all raw materials and work in process other than Inventory, all finished
inventory and wrapped goods sold prior to the Closing, whether or not later
returned, and all finished goods inventory located in Australia;
(e) all rights, obligations and liabilities arising out of or
resulting from any contracts, agreements, leases, arrangements and/or
commitments other than the Contracts, including as Excluded Assets all rights,
obligations and liabilities arising out of or resulting from any collective
bargaining agreement, oral or written, express or implied, between Seller and
Drug, Chemical, Cosmetics, Plastics and Affiliated Industries Warehouse
Employees, Local 815 (the "Union") and all contracts and agreements relating
exclusively to the Excluded Assets or Excluded Liabilities;
(f) amounts owed to Seller or claims by Seller against third
parties, including any right or claim to insurance proceeds, refunds of any
deposits (other than under the Store Leases (defined below) or Contracts), or
prepayments or tax abatements for which Seller may have a claim with respect to
the Assets or Business conducted prior to the Closing;
(g) the name "U.S. Industries" or derivations thereof;
(h) minute books, stock ledger records and related records of Seller;
(i) any insurance policies;
(j) all employee benefit plans and benefit arrangements of Seller and any
assets thereof;
(1) any shares of capital stock; and
(m) automobile leases not assumed by Buyer pursuant to Section 6.3(a).
1.3 Assignment of Contracts.
- ----------------------------
(a) CONTRACTS ASSIGNABLE WITHOUT CONSENT. Subject to the
provisions of this Section 1.3, Seller shall assign to Buyer (or, in the case of
leases for Existing Farberware Stores ("Store Leases") and other Contracts
relating solely to any Existing Farberware Stores, Lifetime) and Buyer and
Lifetime shall assume, as of the Closing, all of the rights and obligations of
Seller under the respective Contracts (and under any of Seller's leases of
office equipment which are assignable and which Buyer elects to assume in
writing prior to the Closing), but only
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to the extent that the obligations under such Contracts (or leases) arise out of
actions or events occurring after the Closing and provided that such assumed
obligations shall in no event include liabilities arising from a breach of the
Contracts prior to the Closing.
(b) NONASSIGNABILITV. To the extent that any Contract or any
claim, right or benefit arising thereunder or resulting therefrom is not capable
of being sold, assigned, transferred or conveyed without the approval, consent
or waiver of the other party thereto, or any third person (including a
government or governmental unit), or if such sale, assignment, transfer or
conveyance or attempted assignment, transfer or conveyance would constitute a
breach thereof or a violation of any law, decree, order, regulation or other
governmental edict (the "Interests"), this Agreement shall not constitute a
sale, assignment, transfer or conveyance thereof, or an attempted assignment,
transfer or conveyance thereof, unless, in the case of any Store Leases,
Lifetime shall so elect in writing prior to the Closing, in which case the
indemnification provisions of Section 9.1(b) shall apply. Seller shall use all
reasonable efforts, and Buyer and Lifetime shall reasonably cooperate with
Seller, to obtain all necessary approvals, consents or waivers, or to resolve
any such impediments to transfer as necessary to convey to the Buyer and
Lifetime each such Interest as soon as practicable; provided, however, that
neither Seller nor the Buyer and Lifetime shall be obligated to pay any
consideration therefore except for filing fees and other ordinary administrative
charges which shall be paid by Buyer to the third party from whom such approval,
consent or waiver is requested. If, by the Closing, Seller receives written
objection to such proposed assignment to Lifetime from the landlord under any
Store Leases, or, within 30 days after the Closing, Lifetime gets formal written
notice of eviction from the landlord under any Store Leases for an Existing
Farberware Store location as to which Seller gave Lifetime access without a
required consent of the landlord (such Existing Farberware Stores as to which
such written objection or formal written notice of eviction is so given being
herein called the "unavailable Store Leases") with the result that there are 17
or more unavailable Store Leases, THEN the following shall apply: Seller will
pay the Agreed Cost (defined below) to relocate that number of Existing
Farberware Stores as to which there is an unavailable Store Lease and as to
which Lifetime relocates such Existing Farberware Store within 30 days after the
Closing such that: the total number of (i) Store Leases assigned to Lifetime at
the Closing (which did not subsequently become unavailable Store Leases), plus
(ii) Existing Farberware Stores as to which Seller gave Lifetime access at the
Closing without such
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assignment (which did not subsequently become unavailable Store Leases), plus
(iii) the number of Existing Farberware Stores which became unavailable Store
Leases as to which Seller paid the Agreed Cost of relocation under this
provision equals at least 33 Existing Farberware Stores. "Agreed Cost" means the
actual cost to Lifetime of relocation of such Existing Farberware Store
(excluding capital expenditures) up to a maximum of $7,500 per Existing
Farberware Store relocated.
(c) IF WAIVERS OR CONSENTS CANNOT BE OBTAINED. To the extent that
any of the approvals, consents or waivers referred to in Section 1.3(b) have not
been obtained by Seller as of the Closing, or until the impediments to transfer
referred to in Section I .3(b) are resolved, except where Lifetime makes the
election provided in Section 1.3(b) with respect to Store Leases. Seller shall,
during the remaining term of such Interests, use all reasonable efforts, to (i)
obtain the consent of any such third party; (ii) at the request of the Buyer and
Lifetime, cooperate with the Buyer and Lifetime in any reasonable and lawful
arrangements designed to provide the benefits of such Interests to the Buyer and
Lifetime so long as the Buyer and Lifetime fully cooperates with Seller in such
arrangements and promptly reimburses Seller for all payments made by Seller in
connection therewith and Buyer, Syratech and Lifetime each indemnifies Seller
with respect thereto; and (iii) enforce, at the request of the Buyer and
Lifetime and at the expense and for the account of the Buyer and Lifetime, any
rights of Seller arising from such Interests against such issuer thereof or the
other party or parties thereto (including the right to elect to terminate any
such Interests in accordance with the terms thereof upon the advice of, and
indemnification from, Buyer, Syratech and Lifetime).
1.4 OBTAINING PERMITS AND LICENSES. Seller will assign, transfer or
convey to the Buyer and Lifetime at the Closing those Permits that can be
assigned without having to obtain the consent of any third party with respect
thereto; provided, however, that Seller will cooperate with the Buyer and
Lifetime in obtaining any third party consents necessary to the assignment or
transfer of any of the Permits which are so assignable or transferable or, to
the extent necessary, obtaining new permits. The failure of Seller to transfer
any Permits shall not affect the respective rights, obligations, liabilities and
indemnifications of Seller or the Buyer, Syratech or Lifetime under this
Agreement.
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1.5 ASSUMED LIABILITIES OF THE BUYER SYRATECH AND LIFETIME. The Buyer, Syratech
and Lifetime shall, without any further responsibility or liability of or
recourse to Seller or any of its affiliates or any of its or its affiliates'
directors, shareholders, officers, employees, agents, consultants,
representatives, successors, transferees or assignees, absolutely and
irrevocably assume and be solely liable and responsible for only the following
claims, liabilities and obligations arising out of the ownership of the Assets
or the operation of the Business by Seller prior to the Closing (irrespective of
when such claim is made) (the "ASSUMED LIABILITIES"):
(a) all liabilities and obligations under the Contracts, but
only to the extent that the obligations under such Contracts arise out of
actions or events occurring after the Closing and provided that such assumed
obligations shall in no event include liabilities arising from a breach of the
Contracts prior to the Closing;
(b) all obligations and liabilities with respect to warranties
for replacement or repair of products manufactured or sold by Seller in the
Business under (i) warranties that are set forth on printed warranty forms of
Seller, copies of the current versions of which have previously been furnished
to Buyer, (ii) warranties issued in the ordinary course of business pursuant to
past customary practices and described in Schedule l.5(b), and (iii) other
warranties issued pursuant to warranty policies and agreements described on
Schedule l.5(b); and
(c) the obligations and liabilities incurred by Seller in the
ordinary course of business associated with the basic on-going -business of
Seller's non-manufacturing operations relating to the designing, marketing and
selling of the Seller's products, including, but not limited to, for cooperative
advertising commitments prorated or allocated, as the case may be, on the basis
of sales by' Seller and Buyer before and after the Closing (thereby excluding
cooperative advertising expense relating to sales prior to the Closing),
fulfillment of sales orders and the like, in each case, which are listed on
Schedule l.5(c).
1.6 EXCLUDED LIABILITIES. Except to the extent specifically assumed
pursuant to Section 1.5, the parties to this Agreement expressly understand and
agree that none of Buyer, Syratech or Lifetime is assuming or shall be liable
for any of the liabilities and obligations of Seller which are expressly
excluded from the liabilities and obligations being assumed by them hereunder
(hereinafter referred to as "EXCLUDED LIABILITIES").
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2 Purchase Price.
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2.1 Purchase Price.
----------------
(a) The purchase price (the "Purchase Price") for the Assets shall be the sum of
the following:
(1) the net book value of Inventory as of the Closing. determined as Provided in
Section 2.2; and
(2) $19,000,000 for the Assets conveyed pursuant to Section 1.1 other than
Inventory.
(b) The Purchase Price shall be payable as provided in Section 2.3.
(c) Prior to the Closing Date, the Purchase Price for the
Assets in Section 2.1 (a)(2) shall be allocated for tax purposes by Buyer,
Syratech and Lifetime and the Seller among the Assets by allocating the purchase
price for the Inventory to the Inventory and the remainder of the purchase price
as provided on a Schedule 2.1 (a)(2), which shall be provided by Buyer prior to
the Closing, with the consent of Seller, not to be unreasonably withheld. Buyer,
Syratech, Lifetime and Seller agree to be bound by such allocation. Each of them
agrees to file all returns and reports including, without limitation, all
federal, state and local income and franchise tax returns, on the basis of such
allocation
2.2 Determination of Purchase Price.
--------------------------------
(a) The purchase price for the Inventory shall be determined as
of 12:01 a.m. on the day of the Closing (the "DETERMINATION TIME") based on a
physical inventory taken by Seller (and observed by Buyer and Lifetime) and
valued in accordance with generally accepted accounting principles consistently
applied in accordance with past practices. The determination of the purchase
price for the Inventory shall be audited by Price Waterhouse & Company LLP
("PW"); PROVIDED, HOWEVER, that should PW be unable or unwilling to provide the
review described above, Seller shall promptly engage another independent public
accounting firm of national reputation (the "ALTERNATE FIRM") to provide such
review, or Buyer and Seller may agree to the purchase price for the Inventory.
PW or the Alternate Firm, as the case may be, shall hereinafter be referred to
as THE "AUDITOR". Seller shall be responsible for the fees and expenses of the
Auditor.
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(b) Seller shall use its best efforts to deliver to Buyer a statement setting
forth the purchase price for the Inventory (the "Inventory Statement") within
forty-five (45) days after the Closing (or, in the event the Auditor is the
Alternate Firm, within sixty (60) days after the Alternate Firm is engaged),
together with a report of the Auditor thereon (i) setting forth the purchase
price for the Inventory, (ii) showing in reasonable detail the basis for the
determination thereof, and (iii) stating that (y) the examination has been made
in accordance with generally accepted auditing standards applying the same
methodology and all adjustments which would be applied in a normal year end
audit, and (z) the Inventory Statement has been prepared in conformity with
generally accepted accounting principles consistently applied in accordance with
past practice. Any independent accounting firm engaged by Buyer (which shall not
be the Unrelated Accounting Firm referred to below) ("Buyer's Auditor") shall
have the opportunity to observe the taking of the inventory of the Seller in
connection with the preparation of the Inventory Statement, and to examine the
records, work papers, schedules and other documents used or prepared by Seller
in connection with the preparation of the Inventory Statement. Seller shall
cause the Auditor to permit Buyer and Buyer's Auditor to examine the Auditor's
work papers used in connection with its preparation of the Inventory Statement.
(c) Within thirty (30) days following the delivery of the
Inventory Statement and the related report of the Auditor, Buyer shall deliver
to Seller a notice of objection (an "OBJECTION NOTICE") or a notice of
acceptance(an "Acceptance Notice") with respect to the Inventory Statement and
related Auditor's report. Such Inventory Statement and related Auditor's report
shall be final and binding on all of the parties hereto if an Acceptance Notice
is delivered to Seller or if no Objection Notice is delivered to Seller within
such thirty (30) day period provided that Buyer has been furnished all
information reasonably requested to verify the Inventory Statement. Any
Objection Notice shall specify in reasonable detail the items on the Inventory
Statement disputed and shall describe in reasonable detail the basis for the
objection, as well as the amount in dispute to the extent known. If an Objection
Notice is given, the parties shall consult with each other with respect to the
objection. If the parties are unable to reach agreement within fifteen (15) days
after an Objection Notice has been given, any unresolved disputed items shall be
promptly referred to a national accounting firm reasonably satisfactory to Buyer
and Seller (the "UNRELATED ACCOUNTING FIRM"). The Unrelated Accounting Firm
shall be directed to render a written report
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on the unresolved disputed issues with respect to the Inventory Statement as
promptly as practicable and to resolve only those issues of dispute set forth in
the Objection Notice. The resolution of the dispute by the Unrelated Accounting
Firm shall be final and binding on the parties. The fees and expenses of the
Unrelated Accounting Firm shall be borne equally by Seller and Buyer.
2.3 Payment of Purchase Price.
--------------------------
(a) The Purchase Price shall be paid in cash.
(b) At the Closing, Buyer shall pay, and Syratech and Lifetime
shall cause Buyer to pay, to Seller an amount equal to the Purchase Price based
on the Seller's estimate of the Purchase Price (the "Estimated Purchase Price")
by wire transfer of immediately available funds to an account designated by
Seller. Seller shall deliver to Buyer a statement of the Estimated Purchase
Price not less than five days prior to the Closing, together with a certificate
of Seller's chief financial Acceptance Notice stating that the estimate is a
good faith estimate of the Purchase Price calculated in accordance with the
terms of this Agreement.
(c) If Buyer delivers to Seller the Acceptance Notice referred
to in Section 2.2(c) or fails to deliver an Objection Notice within the thirty
(30) day period required by Section 2.2(c), then (i) in the event the actual
Purchase Price is less than the Estimated Purchase Price, Seller shall within
two (2) business days after the delivery of such Acceptance Notice or the
expiration of such thirty (30) day period, as the case may be, pay to Buyer, the
amount, if any, by which the Estimated Purchase Price exceeds the actual
Purchase Price, or (ii) in the event the actual Purchase Price exceeds the
Estimated Purchase Price, Buyer shall within two (2) business days after the
delivery of such Acceptance Notice or the expiration of such thirty (30) day
period, as the case may be, pay to Seller the amount, if any, by which the
actual Purchase Price is greater than the Estimated Purchase Price.
Alternatively, if Buyer delivers to Seller the Objection Notice referred to in
Section 2.2(c), within two (2) business days after such delivery, (y) Seller
shall pay to Buyer the amount, if any, by which the undisputed portion of the
actual Purchase Price (together with the amount in dispute) is less than the
Estimated Purchase Price, or (z) Buyer shall pay to Seller the amount, if ANY,
BY which the undisputed portion of the actual Purchase Price is greater than the
Estimated Purchase Price. Within two (2) days after the resolution of any
dispute by the parties or the Unrelated
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Accounting Firm relating to the Objection Notice, Seller shall pay to Buyer, or
Buyer shall pay to Seller, as the case may be, the amount of any further
adjustment required.
(d) Any payment pursuant to Section 2.3(b) shall be made by
certified or bank cashier's check, or, at the recipient's option, by wire
transfer of immediately available funds and shall be accompanied by payment of
an amount determined by computing simple interest on the amount of that payment
at the rate of interest announced publicly by Bank of America in San Francisco
from time to time as its "reference rate" (on the basis of a 365-day year) from
the Closing Date to the date of payment.
3. Closing.
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3.1 DATE OF CLOSING. The Closing shall take place at the offices of
Proskauer Rose Goetz & Mendelsohn LLP, located at 1585 Broadway, New York, New
York 10036 (or at such other place as the parties may agree in writing) on March
31, 1996 or such other date mutually designated by Seller and Buyer, but in no
event later than five (5) business days after the date when each of the
conditions specified in Article 7 has been fulfilled (or waived by the party
entitled to waive that condition). The date on which the Closing is held is
referred to in this Agreement as the "Closing Date". At the Closing, the parties
shall execute and deliver the documents referred to in Section 8. All
transactions to be effected at the Closing shall be deemed to have occurred as
of 12:01 a.m. on the date of the Closing.
3.2 TERMINATION. This Agreement may be terminated at any time prior to the
Closing:
(a) by mutual written agreement executed by Seller and Buyer;
(b) by Buyer, if any of the conditions specified in Section 7.1
shall not have been satisfied or waived in writing by Buyer on or before April
15, 1996; or
(c) by Seller, if any of the conditions specified in Section
7.2 shall not have been satisfied or waived in writing by Seller on or before
April 15, 1996.
This Agreement may in any event be terminated by Seller or Buyer if
the Closing shall not have occurred by May 15, 1996.
Upon such termination neither Seller nor the Buyer, Syratech or
Lifetime shall have any liability or further obligation arising out of this
Agreement except for any liability resulting from its breach of this Agreement
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prior to termination. Buyer's, Syratech's and Lifetime's obligations under
Section 6.1 shall survive the termination of this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and warrants to
Buyer that:
4.1 ORGANIZATION. STANDING AND AUTHORITY OF SELLER. Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the state of Delaware and has full corporate power and authority to carry on
its business and enter into and perform this Agreement. Seller is qualified to
do business and is in good standing in each jurisdiction in which the nature of
its business or the properties owned or leased by it requires qualification,
except where the failure to be so qualified or in good standing would not have a
material adverse effect upon the businesses, operations, assets or financial
condition of the Seller ("Material Adverse Effect"). Schedule 4.1 sets forth the
jurisdictions in which the Seller is authorized to do business. Seller does not
have any subsidiaries other than Farberware Retail Sales Corporation, a Delaware
corporation, and Direct & Television Marketing, Inc., a Washington corporation,
which on the Closing date will have no assets or liabilities.
4.2 AUTHORIZATION OF AGREEMENT. The execution, delivery and
performance of this Agreement by Seller have been duly authorized by all
necessary corporate action of Seller and this Agreement constitutes the valid
and binding obligation of Seller enforceable against it in accordance with its
terms, except to the extent enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights in general and subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).
4.3 CONSENTS OF THIRD PARTIES. Subject to receipt of the consents
and approvals referred to in Schedule 4.3, the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by Seller will not (i) violate or conflict with the
certificate of incorporation or by-laws of Seller, (ii) conflict with, or result
in the breach of, or termination of, or constitute a default under (whether with
notice or lapse of time or both), or accelerate or permit the acceleration of
the performance required by, any indenture, mortgage, lien, lease, agreement,
commitment or other instrument, or any order, judgment or decree, to which
Seller is a party or by which Seller or any of its properties is bound, (iii)
constitute a violation of any law, regulation, order, writ, judgment, injunction
or decree applicable to Seller, or (iv) result in the creation of any lien,
charge or
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encumbrance upon the capital stock, properties or assets of the Seller, other
than violations, conflicts, breaches, terminations, accelerations and defaults
specified in the foregoing clauses (ii) THROUGH (iv) which could not reasonably
be expected to have a material adverse effect on Seller or on Seller's ability
to perform its obligations under this Agreement. Other than with respect to
Permits, no consent, approval or authorization of any governmental authority is
required on the part of Seller in connection with the execution, delivery and
performance of this Agreement, except for filings with the Federal Trade
Commission and the Department of Justice, pursuant to the Hart-Scott-Rodino
Antitrust Improvement Act of 1976, as amended (the "HSR Act"), with respect to
the sale of the Assets to Buyer and Lifetime
4.4 FINANCIAL STATEMENTS. Seller has delivered to Buyer and
Lifetime an unaudited balance sheet of Seller as at September 30, 1995 (the
"RECENT BALANCE SHEET"), and the related unaudited statements of income and
retained earnings and cash flows for the fiscal year then ended. Such financial
statements fairly present the financial condition and results of operations of
the Seller as at the date thereof and for the period therein referred to, all in
accordance with GAAP consistently applied by the Seller throughout the period
involved.
4.5 ABSENCE OF CERTAIN CHANGES. Since the date of the Recent
Balance Sheet of the Seller, there has not been, occurred or arisen, with
respect to the Seller:
(a) any material damage, destruction or loss of any of the Assets (whether or
not covered by insurance);
(b) any of the Assets being subjected to any material Encumbrance (defined
below);
(c) the waiver of any material claims or rights of value of the Seller in or
relating to the Assets;
(d) transfer or other disposition of any material amount of the
Assets, except for sales of inventory in the ordinary course of business
consistent with past practice; and
(e) any agreement or commitment. whether in writing or otherwise, to do any of
the foregoing.
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4.6 NO MATERIAL ADVERSE CHANCE. Since the date of the Recent Balance Sheet,
there has not been any material adverse change in the business, operations,
assets or financial condition of Seller other than operating losses in the
ordinary course.
4.7 TITLE TO PROPERTIES; ENCUMBRANCES.(a) Schedule 4.7(a)
describes all real property owned or leased by the Seller (other than the
Excluded Assets). The Seller has good title to all of the Assets (personal and
mixed, tangible and intangible) and, on the Closing Date, will own the Assets
free and clear of all material liens, claims, encumbrances and other
restrictions ("Encumbrances").
(b) Except for the Excluded Assets, the Assets include rights,
properties and other assets sufficient to conduct the Business in all material
respects in the same manner as such Business has been conducted by Seller on the
date of this Agreement.
4.8 TAXES. All tax returns required to be filed by or with respect
to the Seller have been duly and timely filed, and all such tax returns are true
and complete in all material respects. The Seller has duly and timely paid (or
there has been paid on its behalf) all taxes that are due, with respect to it
for the periods covered by such tax returns. On the Closing date, there will be
no liens with respect to taxes upon any of the Assets.
4.9 UNFILLED ORDERS. As of the date of this Agreement, the aggregate
of all accepted and unfulfilled orders for the sale of merchandise entered into
by Seller does not exceed $3,000,000, all of which orders were made in the
ordinary course of business consistent with past practice.
4.10 PRODUCTS LIABILITY. Except as set forth in Schedule 4.12, there
is no action, suit, inquiry, proceeding or investigation by or before any court
or governmental or other regulatory or administrative agency or commission
pending with respect to which Seller has been served or, to the best knowledge
of the Seller, threatened against or involving the Seller with respect to any
product alleged to have been manufactured or sold by the Seller and alleged to
have been defective, or improperly designed or manufactured.
4.11 CONTRACTS. Seller has made available to Buyer complete and
correct copies of all Contracts listed on Schedule l.l(c) that are in writing,
and the descriptions contained in Schedule l.l(c) of all Contracts listed
therein that are not in writing are complete and correct. Except as disclosed in
Schedule l.l(c), the Seller is not in material default (including events which
with notice or the passage of time would result in a default) under the terms
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of any Contract listed on Schedule 1.1(c), nor, to the best of the knowledge of
Seller, is any other party thereto in default. Each of the Contracts listed in
Schedule 1.1(c) is valid and in full force and effect and no party has notified
Seller in writing of its intention to terminate such Contract, cease to perform
any material services required to be performed by it or withhold any material
payment required to be made by it thereunder or of any claim of any material
default thereunder.
4.12 Litigation: Compliance with Laws.
---------------------------------
(a) Except as set forth on Schedule 4.12, there are no judicial
or administrative actions, proceedings, inquiries or investigations pending as
to which Seller has received notice or, to the best of Seller's knowledge,
threatened, that question the validity of this Agreement or any action taken or
to be taken by Seller in connection with this Agreement. There is no litigation,
proceeding or governmental investigation pending or, to the best of Seller's
knowledge, threatened, or any order, injunction or decree outstanding, against
and served on the Seller that, if adversely determined, would individually or in
the aggregate, have a Material Adverse Effect.
(b) Except as set forth on Schedule 4.12, the Seller is not in
material violation of any applicable law, regulation, ordinance or any other
applicable requirement of any governmental body or court, and no written notice
has been received by Seller alleging any such violations.
(c) Except as disclosed in Schedule 4.12, there are no judicial
or administrative actions or proceeding inquiries or investigations pending
against Seller or involving the Business of which Seller has received notice or,
to the best knowledge of Seller. threatened against Seller involving the
Business.
4.13 Intellectual Property
---------------------
(a) Schedule 4.13 sets forth a list of all material inventions
which are the subject of issued letters patent or an application therefor and
all material trademarks and service marks and material copyrights whether or not
issued or registered or for which an application for issuance or registration is
pending, in each case which are owned by Seller or used in the Business under
license from others, specifying as to each, as applicable: (i) the nature of
such Intellectual Property; (ii) the owner of such Intellectual Property; (iii)
the jurisdictions by or in which such Intellectual Property has, to the best of
Seller's knowledge, been issued or registered or in which an application for
such issuance or registration has been filed, including the respective patent
registration or application numbers, if
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available; and (iv) licenses, sublicenses and other agreements to which the
Seller is a party and pursuant to which any person is authorized to use such
Intellectual Property, and (v) contracts, agreements or understandings related
to the Intellectual Property. Except as set forth in Schedule 4.13, the Seller
has the exclusive right (subject to existing license agreements listed on
schedules to this Agreement) to use the name "Farberware", and to the best of
Seller's knowledge the other names listed on Schedule 4.13, in the manner, in
the jurisdictions and for the purposes now being used by Seller and its
licensees without infringing the rights of third parties.
(b) Except as set forth on Schedule 4.13, the Seller (i) is not
a party to any claim, suit, action or proceeding which involves a claim of
infringement of any Intellectual Property, (ii) Seller does not have any
knowledge of any infringement by any other person of any Intellectual Property,
and (iii) there have been no claims made or proceedings instituted of which
Seller is aware claiming that, and Seller has not received any notice that, any
of the Intellectual Property is invalid, infringes or conflicts with the
asserted rights of others. Except as disclosed on Schedule 4.13, no Intellectual
Property is subject to any outstanding order, judgment, decree, stipulation or
agreement restricting the use thereof by the Seller or restricting the licensing
thereof by the Seller to any person. Buyer, Syratech and Lifetime acknowledge
that from time to time the products of the Seller are sold and services of the
Seller are rendered to customers whose purchase orders sometimes contain
agreements under which the Seller may be required to defend, indemnify and hold
the customer harmless against any charge of patent, trademark or copyright
infringement and that the Uniform Commercial Code imposes a similar obligation
where the products were and are made to the specifications of the customer. With
the exception of the foregoing, and except as may be provided in items disclosed
on Schedule 4.13, the Seller has not entered into any special agreement to
indemnify any other person against any charge of infringement of any patent,
trademark, service mark or copyright of the Business
4.14 PERMITS. Schedule I.I(g) is a true and complete list of each
Permit held or obtained by the Seller. All of the Permits are valid and in full
force and effect and the Business is in compliance with the terms and conditions
of such Permits, except to the extent that any such non-compliance, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect. The Seller is not in violation of any Permit. All such Permits are in
full force and effect, and no written notice of suspension or cancellation
thereof has been received by Seller.
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4.15 LABOR RELATIONS. Except as set forth in Schedule 4.15, with respect to
employees at the Existing Farberware Stores: (a) the Seller is, to the best of
its knowledge, in material compliance with all applicable laws respecting
employment and employment practices, terms and conditions of employment and
wages and hours, and the Seller is not nor has been engaged in the last 2 years
in any unfair labor practice, (b) there is no unfair labor practice complaint
against the Seller pending before the National Labor Relations Board, (c) there
is no labor strike, dispute, slowdown or stoppage actually pending or threatened
in writing against the Seller, (d) to Seller's knowledge, no union purports to
represent such employees of the Seller, (e) the Seller has not experienced any
strike, work stoppage or other labor difficulty in the last 2 years, (f) the
Seller's relations with its employees are satisfactory, and (g) the Seller is
not a party to, or subject to, a collective bargaining agreement, and no
collective bargaining agreement relating to employees of the Seller is currently
being negotiated.
5. REPRESENTATIONS AND WARRANTIES OF BUYERS, SYRATECH AND LIFETIME.
Buyer, Syratech and Lifetime each, jointly and severally, represents and
warrants to Seller as follows:
5.1 BUYER'S ORGANIZATION. Buyer, Syratech and Lifetime each is a
corporation duly organized, validly existing and in good standing under the laws
of the state of Delaware and has the full corporate power and authority to enter
into and to perform this Agreement.
5.2 AUTHORIZATION OF AGREEMENT. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by each of Buyer, Syratech and Lifetime have been duly
authorized by all necessary corporate action of Buyer, Syratech and Lifetime and
this Agreement constitutes the valid and binding obligation of Buyer, Syratech
and Lifetime enforceable against each of them in accordance with its terms,
except to the extent enforceability may be limited by bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors' rights in general and
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
5.3 CONSENTS OF THIRD PARTIES. The execution, delivery and
performance of this Agreement by each of Buyer, Syratech and Lifetime will not
(i) violate or conflict with its certificate of incorporation or by-laws; (ii)
conflict with, or result in the breach or termination of, or constitute a
default under (whether with notice or lapse of time or both), or accelerate or
permit the acceleration of the performance required by, any indenture, mortgage,
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lien, lease, agreement, commitment or other instrument or any order, judgment or
decree, to which Buyer, Syratech or Lifetime is a party or by which it or its
properties are bound; or (iii) constitute a violation of any law, regulation,
order, writ, judgment, injunction or decree applicable to Buyer, Syratech or
Lifetime, other than violations, conflicts, breaches, terminations,
accelerations and defaults specified in the foregoing clauses (ii) and (iii)
which could not reasonably be expected to have a material adverse effect on
Buyer's, Syratech's or Lifetime's ability to perform its obligations under this
Agreement. No consent, approval or authorization of any governmental authority
is required on the part of Buyer, Syratech or Lifetime in connection with the
execution, delivery and performance of this Agreement, except for filings with
the Federal Trade Commission and the Department of Justice pursuant to the HSR
Act.
5.4 LITIGATION. There are no judicial or administrative actions,
proceedings or investigations pending or, to the best of Buyer's, Syratech's or
Lifetime's knowledge, threatened, that question the validity of this Agreement
or any action taken or to be taken by Buyer, Syratech or Lifetime in connection
with this Agreement. There is no litigation, proceeding or governmental
investigation pending or, to the best of Buyer's, Syratech's or Lifetime's
knowledge, threatened, or any order, injunction or decree outstanding, against
the Buyer, Syratech or
Lifetime that, if adversely determined, would have a material adverse effect
upon Buyer's, Syratech's or Lifetime's ability to perform its obligations under
this Agreement.
5.5 FINANCING. On the Closing Date, Buyer, Syratech and Lifetime
will have all funds necessary to pay the Purchase Price and related fees and
expenses, and to have the financial capacity to perform all of its other
obligations under this Agreement and the closing documents to be executed
hereunder. Each of Buyer, Syratech and Lifetime, immediately after the Closing,
will be solvent and will be able to meet its obligations and debts as they
become due, the value of its assets at such time will exceed its liabilities,
and it will have adequate capital for the conduct of its business and the
business of the Seller.
6. Further Agreements of the Parties.
----------------------------------
6.1 ACCESS TO INFORMATION. Prior to the Closing, Buyer may make
such investigation of the business and properties of the Seller as Buyer may
desire, and upon reasonable notice, Seller shall give to Buyer and its counsel,
accountants and other representatives reasonable access, during normal business
hours throughout the
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period prior to the Closing, to the books, commitments, agreements, records,
files and personnel of the Seller, and Seller shall furnish to Buyer during that
period all copies of documents and information concerning the Business as Buyer
may reasonably request subject to applicable law. Buyer, Syratech and Lifetime
shall hold, and shall cause its counsel, accountants and other agents and
representatives to hold, all such information and documents in accordance with,
and subject to the terms of, the confidentiality agreement previously executed
by Lifetime with respect to this transaction as if each of them was a party
thereto.
6.2 CONDUCT OF THE BUSINESS PENDING: THE CLOSING. Until the
Closing, except as otherwise set forth in Schedule 6.2 or contemplated by this
Agreement, Seller shall comply with the provisions set forth below:
(a) Seller shall operate the Business in the ordinary course consistent with
past practices;
(b) Seller shall promptly notify Buyer of, and furnish to
Buyer, any information that Buyer may reasonably request with respect to the
occurrence of any event or the existence of any state of facts that would result
in any of Seller's representations and warranties not being true if they were
made at any time prior to or as of the date of the Closing;
(c) Seller shall use reasonable efforts to maintain and
preserve the Business intact, and to maintain its relationships with customers
so that those relationships will be preserved after the Closing;
(d) Seller shall not sell, assign, encumber, grant a security
interest in or license with respect to, or dispose of, any of the Assets, except
for sales and dispositions made in the ordinary course of business;
(e) Seller shall maintain in full force and effect all
insurance currently maintained by the Seller with respect to the Business;
(f) Seller shall keep Buyer advised of Seller's production of Farberware
products;
(g) Seller shall not enter into any licenses or other material agreements
affecting the Assets;
(h) Seller shall not amend or terminate any of the Contracts; and
(i) Seller will perform in all material respects its
obligations under the Contracts to be performed on or before the Closing.
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6.3 Employee and Employee Benefit Matters.
--------------------------------------
(a) EMPLOYMENT OF EMPLOYEES AT CLOSING. Buyer may, as of the
Closing, offer employment to the employees of Seller that Buyer has elected to
employ, and shall provide Seller a list of such employees to whom an offer is
made 10 days prior to the Closing marked as Schedule 6.3(a). In the event the
Buyer hires any of Seller's employees identified on Schedule 6.3(b), Buyer shall
have the right, but not the obligation, by notice to Seller 10 days prior to
Closing, to assume the automobile lease with respect to the vehicle identified
opposite each such individual's name on Schedule 6.3(b).
(b) CLAIMS UNDER EMPLOYEE BENEFIT PLANS AND ARRANGEMENTS.
Seller shall retain liability for all claims incurred under Seller's employee
benefit plans and benefit arrangements.
(c) SEVERANCE. If Buyer terminates the employment of any
employee employed by Buyer on the Closing Date and listed on Buyer's Schedule
6.3(a) within 6 months after the Closing Date, Seller shall be responsible for
payment of severance to that employee in accordance with Seller's policy or as
Seller and such employee shall otherwise agree.
(d) BENEFITS. If Buyer so requests and if Seller is permitted
to do so by the terms of its plans and insurance, Seller shall continue to
provide medical and insurance benefits coverage to employees of Seller employed
by Buyer for a period requested by Buyer but not longer than the term of the
Manufacturing Agreement referred to in Section 6.16, provided that Buyer
reimburses Seller for all costs of such medical and insurance benefits.
6.4 OTHER ACTION. Each of the parties shall use its best efforts to
cause the fulfillment at the earliest practicable date but, in any event, prior
to the Closing Date, of all of the conditions to their respective obligations to
consummate the transactions under this Agreement.
6.5 NOTICES. Each party shall promptly notify the other parties in
writing of, and furnish to such party any information that such party may
reasonably request with respect to the occurrence of any event or the existence
of any state of facts that would (a) result in the party's representations and
warranties not being true if they were made at any time prior to or as of the
Closing Date, or (b) impair the party's ability to perform its obligations under
this Agreement.
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6.6 HSR FILINGS. As promptly as practicable after the execution of this
Agreement, each party shall, in cooperation with the others, but at its own
expense, file any reports or notifications and pay any fees that may be required
to be paid by it under applicable law including filings under the HSR Act with
the Federal Trade Commission and the Antitrust Division of the Department of
Justice, 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 others. Each party will use its good-faith best efforts to obtain
any early termination of the applicable waiting period, and shall promptly make
any further filings pursuant thereto that may be necessary, proper or advisable.
6.7 EXPENSES. Except as otherwise specifically provided in this
Agreement, Buyer, Syratech, Lifetime and Seller shall bear their own respective
expenses incurred in connection with this Agreement and in connection with all
obligations required to be performed by each of them under this Agreement.
6.8 PUBLICITY. Buyer, Syratech, Lifetime and Seller shall consult
with each other before issuing any press release concerning the transactions
contemplated by this Agreement and, except as may be required by applicable law
or any listing agreement with or regulation or rule of any stock exchange on
which the securities of Seller's parent or Syratech or Lifetime are listed or
traded, will not issue a press release prior to such consultation. If Buyer or
Seller, Syratech OR LIFETIME IS SO REQUIRED TO issue a press release it SHALL
USE ITS best efforts to inform the other parties hereto prior to issuing it.
6.9 TRANSFER TAXES. Any sales or transfer taxes, recording fees or
any other taxes payable as a result of the sale of the Assets and the recording
of trademarks shall be paid one-half by Seller and one-half by the Buyer.
6.10 SUPPLEMENT TO DISCLOSURES. For purposes of determining the
accuracy of the representations and warranties of Seller contained in Article 4
and the fulfillment of the conditions precedent set forth in Section 7.1, the
Schedules delivered by Seller shall be deemed to include only that information
contained therein on the date of THIS AGREEMENT AND AS THE same may be amended
or supplemented by Seller with Buyer's consent prior to the Closing Date.
6.11 PRESERVATION OF RECORDS. Buyer agrees, at its own expense
that it (a) shall preserve and keep the records of the Seller for a period of
seven years from the Closing, or for any longer periods as may be required
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by any government agency or ongoing litigation, and (b) shall make such records
available to Seller as may be reasonably required by Seller. In the event Buyer
wishes to destroy such records after the time specified above, it 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) day period, to take possession of the records within ninety (90)
days after the date of Seller's notice to Buyer.
6.12 Certain Post-Closing Assistance by the Buyer.
---------------------------------------------
(a) Buyer agrees to cause the appropriate personnel (to the
extent such personnel are under the control of Buyer, Syratech or Lifetime), at
no cost or expense to Seller, to provide reasonable assistance to Seller in the
preparation of all customary accounting, tax, employment, benefits-related and
similar reports of the Seller for periods up to the Closing Date which are
reasonably requested by Seller but Buyer shall have no responsibility for the
substance, accuracy or completeness of such reports. Buyer shall provide Seller
with reasonable access to all books and records necessary for the preparation of
such reports.
(b) Buyer, Syratech and Lifetime each agrees to cause the
appropriate personnel under its control to provide reasonable assistance to
Seller in the prosecution or defense of any claims and litigation (including
counterclaims and tax refund claims filed by the Seller) for which Seller is
entitled to be indemnified by Buyer, Syratech or Lifetime hereunder or which
Buyer, Syratech or Lifetime has not assumed, provided that such assistance does
not unreasonably disrupt the ordinary business operations of the Business. Such
services shall be rendered by Buyer, Syratech or Lifetime to the Seller at no
cost and expense to Seller except that (i) Seller shall reimburse Buyer,
Syratech or Lifetime for any reasonable out-of-pocket travel and similar
expenses incurred by its personnel in performing these functions, and (ii)
Seller shall pay all reasonable outside counsel fees, disbursements and other
charges and other reasonable fees and expenses for services performed by third
parties in defending the interests of Seller or the interests of the Business
for which Seller has indemnified Buyer, Syratech or Lifetime hereunder. Each of
Buyer, Syratech or Lifetime agrees promptly to pay to Seller, upon receipt, any
amount collected by it other than from Seller in connection with any action,
suit or proceeding for which Seller has agreed to indemnify Buyer, Syratech or
Lifetime under Section 9.1(a) to the extent such amount, when added to any
amount received from Seller, exceeds the loss or other liability indemnified.
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6.13 USE OF TRADE NAMES AND TRADEMARKS. On and after the Closing, none of Buyer,
Syratech or Lifetime shall have any right, title or interest in and to, and none
of Buyer, Syratech or Lifetime shall use, the name "U.S. Industries", or any
combination or derivation of such name, or any trade name, logo or trademark
containing or using any such name.
6.14 CORPORATE NAME. From and after the Closing, except as
expressly reflected hereunder or in connection with disposing of returned
products or collecting accounts receivable, Seller will discontinue using in the
conduct of its business or in any other business, the words constituting the
present name of Seller or any words or expression bearing any resemblance to or
likely to be confused with its present name or names and will promptly change
the corporate name of Seller. Seller will execute or obtain such consents and
documents as Buyer shall request in order to enable Buyer to use as it may
desire the aforesaid name as its corporate name and for all other purposes to
the extent it shall deem desirable.
6.15 Accounts Receivable.
--------------------
(a) Seller shall provide its own administrative personnel to
supervise collection of the Accounts Receivable. Promptly after the Closing,
Seller shall furnish to Buyer a list of the accounts receivable that arose out
of the operations of the Business through the Determination Time. For a period
of six months after the Closing, Buyer shall receive and monitor the collection
of Accounts Receivable for Seller, and Seller shall reimburse Buyer for its
reasonable costs of recordation and bookkeeping with respect thereto. Within two
(2) business days after the last day of each week during the six-month period,
Buyer shall remit to Seller the amount received by Buyer, Syratech and Lifetime
during that week, together with a report, with respect to the Accounts
Receivable. Buyer, Syratech and Lifetime shall furnish Seller with such records
and other information as Seller may reasonably require to verify the amounts
received by Buyer, Syratech and Lifetime with respect to the Accounts
Receivable. Seller shall be afforded reasonable access and accommodations at
Buyer's offices in connection with the collection of the Accounts Receivable.
Upon five days prior written notice from Seller, Buyer shall terminate all
collection efforts on behalf of Seller, and shall have no further responsibility
for collection, with respect to the Accounts Receivable specified in the notice.
Buyer hereby grants to Seller a license to use the name "Farberware" only in
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connection with its efforts to collect any Accounts Receivable. Buyer shall
cooperate with Seller in Seller's effort to collect the Accounts Receivable.
(b) For the purpose of determining amounts received by Buyer,
Syratech or Lifetime with respect to the Accounts Receivable, (i) in the absence
of a bona fide dispute between an account debtor and Seller, all payments by an
account debtor relating to Farberware products shall first be applied to
Accounts Receivable due from the account debtor, and (ii) any amount received by
Buyer which is from an account debtor relating to Farberware products who claims
in writing to have a bona fide dispute with Seller shall be deemed to have been
received with respect to the accounts receivable due Buyer to the extent of such
dispute.
(c) Buyer shall not be required to retain a collection agency,
bring any suit, or take any other action to collect any of the Accounts
Receivable. Buyer shall not compromise, settle or adjust the amount of any of
the Accounts Receivable.
6.16 MANUFACTURING AGREEMENT. Buyer and Seller shall use reasonable
best efforts promptly to negotiate in good faith and enter into a Manufacturing
and Services Agreement (the "Manufacturing Agreement"). the principal terms of
which are set forth on Exhibit 6.16. During the term of the Manufacturing
Agreement, any managerial employees of Buyer may use office space in Seller's
Bronx, New York facility without payment of any rent or other facilities related
costs other than out-of-pocket expenses directly attributable to those
employees.
6.17 CONFIDENTIALITY. Seller agrees after the Closing to maintain in
confidence all confidential proprietary information relating to the Business.
6.18 [THIS SECTION INTENTIONALLY OMITTED.]
6.19 COMMISSION OBLIGATIONS. Buyer agrees to reimburse Seller,
promptly upon demand by Seller, for all commission obligations arising under the
sales representative agreements not assumed by Buyer and identified on Schedule
6.19 with respect to purchase orders assumed by Buyer pursuant to Section
l.l(c).
6.20 PRODUCT LIABILITY INSURANCE. Seller shall maintain for not less
than three years after the Closing Date product liability insurance with respect
to products sold by Seller prior to the Closing in an amount not less than
currently maintained.
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6.21 AUSTRALIAN INVENTORY. Buyer hereby grants to Seller a royalty-free license
to use the name "Farberware" only in connection with the sale in Australia of
finished goods inventory located in Australia on the Closing Date.
6.22 BUYER'S RIGHT TO PURCHASE CERTAIN GOODS. The Buyer shall have
a right, exercisable within five business days of its receipt of a written offer
from Seller, to purchase from Seller all finished goods returned to Seller
included in the Excluded Assets and any second quality, or "z", goods produced
by Seller at the transfer prices historically used with respect to such sales to
the Existing Farberware Stores.
6.23 CERTAIN ROYALTIES. Buyer agrees to reimburse Seller, promptly
upon demand by Seller, for all commission obligations to Ananta Group Ltd.
("Ananta") arising under the Agreement between Farberware Inc. and Ananta, dated
September 14, 1988 (the "Ananta Agreement"), solely with respect to royalties
payable by Excel Cutlery, Inc. Nothing herein shall be deemed to be an
assumption by Buyer of the Ananta Agreement or to create a direct obligation
from Buyer to Ananta.
6.24 ADVERTISING COMMITMENTS. Seller agrees to use its reasonable
best efforts between the date hereof and the Closing Date to cancel the
advertising commitments identified on Schedule 6.24. Seller and Buyer agree to
pay in equal amounts (i) any cancellation payment, fee or penalty payable in
connection with cancellation of any such commitments and (ii) the full amount of
each such commitment which is not canceled. The Buyer shall have the benefit of
the advertising pursuant to each commitment which is not cancelled.
7. Conditions of Closing.
----------------------
7.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER. The obligation of
Buyer, Syratech or Lifetime to consummate the purchase under this Agreement is
subject to the fulfillment, prior to or at the Closing, of each of the following
conditions (any or all of which may be waived by Buyer):
(a) all representations and warranties of Seller contained in
this Agreement shall be true and correct in all material respects, at and as of
the time of the Closing with the same effect as though made again at, and as of,
that time;
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(b) Seller shall have performed and complied in all material respects with all
obligations and covenants required by this Agreement to be performed or complied
with by Seller prior to OR AT THE CLOSING;
(c) Buyer shall have been furnished with a certificate, dated
the Closing Date, executed by an officer of Seller certifying to the fulfillment
of the conditions specified in Sections 7.1(a) and 7.1(b);
(d) Buyer shall have been furnished with a favorable opinion of
the General Counsel to Seller, subject to customary qualifications and
limitations, as to the due execution and delivery of this Agreement and the
documents delivered by Seller at the Closing and as to the matters set forth in
Sections 4.1 and 4.2, and, to the best of such counsel's knowledge, Sections
4.3;
(e) the waiting period under the HSR Act shall have expired or been terminated;
(f) no provision of any applicable law or regulation shall
prohibit, and there shall not be in effect any injunction or restraining order
issued by a court of competent jurisdiction in any action or proceeding against
the consummation of the sale and purchase of the Assets pursuant to this
Agreement;
(g) Seller shall have delivered to Buyer a balance sheet of
Seller as at September 30, 1995 and the related statement of income and retained
earning and cash flow for the fiscal year then ended, together with the report
thereon of independent certified public accountants.
7.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER. The obligation
of Seller to consummate the sale under this Agreement is subject to the
fulfillment, prior to or at the Closing, of each of the following conditions
(any or all of which may be waived by Seller):
(a) all representations and warranties of Buyer, Syratech and
Lifetime contained in this Agreement shall be true and correct in all material
respects at and as of the time of the Closing with the same effect as though
made again at, and as of, that time;
(b) Buyer, Syratech and Lifetime shall have performed and
complied in all material respects with all obligations and covenants required by
this Agreement to be performed or complied with by Buyer, Syratech or Lifetime
prior to or at the Closing;
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(c) Seller shall have been furnished with a certificate, dated the Closing Date,
executed by an officer of Buyer, Syratech and Lifetime, respectively,
certifying to the fulfillment of the conditions specified in Sections 7.2(a) and
7.2(b);
(d) Seller shall have been furnished with a favorable opinion
of counsel to Buyer, Syratech and Lifetime, subject to customary qualifications
and limitations, as to the due execution and delivery of this Agreement and the
documents delivered by Buyer, Syratech and Lifetime, at the Closing and as to
the matters set forth in Sections 5.1, 5.2 and, to the best of such counsel's
knowledge, Sections 5.3 and 5.4;
(e) the waiting period under the HSR Act shall have expired or been terminated;
and
(f) no provision of any applicable law or regulation shall
prohibit, and there shall not be in effect any injunction or restraining order
issued by a court of competent jurisdiction in any action or proceeding against
the consummation of the sale and purchase of the Assets pursuant to this
Agreement.
8. Closing Deliveries.
-------------------
8.1 DOCUMENTS TO BE DELIVERED BY SELLER. At the Closing, Seller
shall deliver, or cause to be delivered, to Buyer and Lifetime the following:
(a) one or more executed bills of sale, instruments of
assignment or certificates of title, dated the Closing Date, transferring to
Buyer (or Syratech or Lifetime) all of the Seller's right, title and interest in
and to the Assets (other than those to be delivered after the Closing) together
with possession of the Assets in form reasonably satisfactory to Buyer;
(b) documents evidencing the assignment and assumption of the
assignable Contracts referred to in Section 1.3 and the assignment of any
assignable Permits referred to in Section 1.4 in form reasonably satisfactory to
Seller;
(c) a copy of resolutions of the board of directors and
stockholders of Seller authorizing the execution, delivery and performance of
this Agreement by Seller and a certificate of the secretary or assistant
secretary of Seller, dated the Closing date, that such resolutions were duly
adopted and are in full force and effect;
(d) the officer's certificate referred to in Section 7.1(c); and
(e) the opinion of counsel referred to in Section 7.1(d).
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8.2 DOCUMENTS TO BE DELIVERED BY BUYER, SYRATECH AND LIFETIME. At the Closing,
Buyer, Syratech and Lifetime shall deliver to Seller the following:
(a) payment and evidence of the wire transfer referred to in Section 2.3(b);
(b) documents evidencing the assignment and assumption of the
assignable Contracts referred to in Section 1.3, the acceptance of assignable
Permits in accordance with Section 1.4, and the assumption of the Assumed
Liabilities in accordance with Section 1.5, as required;
(c) a copy of the resolutions of the board of directors of
Buyer, Syratech and Lifetime, respectively, authorizing the execution, delivery
and performance of this Agreement by Buyer, Syratech and Lifetime, and a
certificate of the secretary or assistant secretary of each of them, dated the
Closing Date, that such resolutions were duly adopted and are in full force and
effect;
(d) the officer's certificate referred to in Section 7.2(c); and
(e) the opinions of counsel referred to in Section 7.2(d).
8.3 OTHER DELIVERIES. Promptly following Closing, Seller shall
deliver the Inventory located at the Bronx Facilities to Buyer f.o.b. the Bronx
Facilities loaded onto Buyer's trucks. Seller will promptly provide access to
Inventory at other locations. Buyer shall dismantle, remove and load all other
Assets located at the Bronx Facilities on Buyer's trucks with Union labor, and
Seller shall make appropriate arrangements and Seller shall provide Buyer with
reasonable access to the Bronx Facilities for such purpose. Buyer shall remove
all such other Assets from the Bronx Facilities during the period from 30 to 135
days after the termination of the Manufacturing Agreement (which period shall be
extended to the extent delayed by any work actions of Seller's employees) (the
"Removal Period"). Any Assets remaining at the Bronx Facilities after the
Removal Period shall become the property of Seller. Buyer agrees to promptly
repair any structural damage or alteration to the Bronx Facilities caused by
Buyer in connection with the removal of the machinery and equipment; provided,
however, Buyer shall HAVE NO obligation to refill the pits under the transfer
presses.
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9. Indemnification and Related Matters.
------------------------------------
9.1 Indemnification.
----------------
(a) Subject to the provisions of this Article 9, Seller agrees
to indemnify and hold Buyer, Syratech or Lifetime and their affiliates,
predecessors, successors and assigns (and their respective of officers,
directors, employees and agents) harmless from and against all actions, suits,
proceedings, claims, demands, assessments, judgments, losses, damages, costs and
expenses, including reasonable attorneys' fees, arising or resulting from the
following:
(i) a breach of any representation or warranty on the
part of Seller under the terms of this Agreement or any other document executed
by Seller pursuant hereto;
(ii) non-fulfillment of any agreement on the part of
Seller under the terms of this Agreement or any other document executed by
Seller pursuant hereto;
(iii) any liabilities resulting from product warranty
claims, returns or allowances relating to products sold by Seller prior to the
Closing Date, provided such claims, returns or allowances are paid or allowed in
a manner consistent with Seller's prior practices or as Seller may otherwise
approve, such approval not to be unreasonably withheld;
(iv) any and all other liabilities resulting from claims
arising out of or resulting from Seller's ownership of the Assets or Seller's
operation of the Business on or before the Closing other than in respect of the
Assumed Liabilities;
(v) any and all Liabilities arising out of the failure to comply with the
provisions of applicable bulk sales laws;
(vi) product liability claims relating to products sold by Seller prior to the
Closing or other Excluded Liabilities;
(vii) any liability of Seller or imposed on the property
of Seller for federal, state, local or foreign taxes, levies, imposts, duties,
licenses, registration fees and charges of any nature whatsoever, unemployment
taxes, withholding taxes, custom duties and social security taxes, including
interest and penalties thereon (collectively, "Taxes"), including any liability
for deferred Taxes;
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(viii) any liabilities or obligations of Seller arising out of or resulting
from any collective bargaining obligations, relationship or agreement, oral or
written express or implied, between Seller and the Union;
(ix) any liabilities or obligations of Seller with
respect to Seller's employees in connection with their employment by Seller,
including, without limitation, worker's compensation claims and claims arising
under any law, rule or regulation relating to employment, and all liabilities
and obligations toe employees of the Business arising out of or resulting from
the closing of Seller's facilities, including those arising under the Workers
Adjustment and Retraining Notification Act ("WARN");
(x) any multiemployer pension plan withdrawal obligations;
(xi) any environmental liabilities or obligations of
Seller or any predecessor resulting from, among other things, any claim or
requirement to take response, remedial, removal or corrective action arising
from or incurred in connection with any real property, regardless of whether
such real property is or has been owned, leased or occupied by Seller or any
predecessor in connection with the Business or Assets provided, in the case of
the Existing Farberware Stores, such liability or obligation arises from an act
or event prior to the Closing;
(xii) any environmental liabilities or obligations of
Seller or any predecessor arising out of or resulting from any business,
activity, course of conduct, action or omission before the Closing Date,
including, without limitation, the arranging for any transportation, treatment,
storage or disposal of any hazardous substance, contaminant or pollutant,
including petroleum or any fraction thereof; and
(xiii) any claims made against the Seller alleging
violation of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") or otherwise premised on an ERISA claim.
(b) Subject to the provisions of this Article 9, Buyer,
Syratech and Lifetime, each jointly and severally, agrees to indemnify and hold
Seller and its affliates, predecessors, successors and assigns (and their
respective of officers, directors, employees and agents) harmless from and
against all actions, suits, proceedings, losses, claims, demands, assessments,
judgments, damages, costs and expenses, including reasonable attorneys' fees,
arising or resulting from the following:
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(i) a breach of any representation or warranty on the part of Buyer, Syratech or
Lifetime under the terms of this Agreement or any other document executed by any
of them pursuant hereto;
(ii) non-fulfillment of any agreement on the part of
Buyer, Syratech or Lifetime under the terms of this Agreement or any other
document executed by any of them pursuant hereto;
(iii) any and all liabilities resulting from claims
first asserted in writing after the Closing arising out of or resulting from the
ownership by any of Buyer, Syratech or Lifetime of the Assets or its conduct
with respect to the Assets after the Closing (including, without limitation,
products liability claims, worker's compensation claims, and claims arising
under any law, rule or regulation relating to employment) other than in respect
of the Excluded Liabilities and other than liabilities resulting from any action
or inaction of Seller prior to the Closing or any breach by Seller of any
representation, warranty or covenant contained in this Agreement;
(iv) the Assumed Liabilities;
(v) any and all Taxes arising out of or resulting from the ownership of the
Assets
subsequent to the Closing; and
(vi) any liability arising out of or relating to
Seller's assignment of any Store Leases to Lifetime, at Lifetime's request,
without a required consent of any third party.
9.2 Determination of Damages and Related Matters.
---------------------------------------------
(a) In calculating any amounts payable to any of Buyer,
Syratech and/or Lifetime pursuant to Section 9.1(a) or payable to Seller
pursuant to Section 9.1(b), (i) Seller or Buyer, Syratech and/or Lifetime, as
the case may be, shall receive credit for (y) any reduction in actual tax
liability as a result of the facts giving rise to the claim for indemnification.
and (z) any insurance recoveries, and (ii) no amount shall be included for
Buyer's, Syratech's and/or Lifetime's or Seller's, as the case may be,
consequential damages.
(b) Seller, Buyer, Syratech and Lifetime agree that, except as
specifically set forth in this Agreement (including the Schedules and Exhibits
and any other document executed pursuant hereto), no party (including its
representatives) has made or shall have liability for any representation or
warranty, express or implied, in connection with the transactions contemplated
by this Agreement, including in the case of Seller and its representatives any
representation or warranty, express or implied, as to the accuracy or
completeness of any
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information regarding the Business. It is expressly understood and agreed that,
except as specifically set forth in this Agreement, Buyer, Syratech and Lifetime
accepts the condition of the Assets "AS IS, WHERE IS" without any
representation, warranty or guarantee, express or implied, as to
merchantability, fitness for a particular purpose or otherwise as to the
condition, size, extent, quantity, type or value of such property.
(c) Seller shall have no liability under this Article 9 for
breaches of representations and warranties under Article 4 of this Agreement
unless the aggregate amount of the damages and losses to Buyer, Syratech and
Lifetime from all claims finally determined to arise under Article 4 exceed an
amount equal to $400,000 and, in such event, Seller shall be required to pay
only the amount by which such aggregate amount of claims for breaches of
representations and warranties under Article 4 exceeds said amount in the
aggregate; provided, further, that in no event shall the amount of Seller's
aggregate liability under this Section 9 (other than pursuant to clauses
9.1(a)(vi) through (xiii)) exceed the Purchase Price.
(d) The indemnification provided for in this Article 9 shall,
from and after the Closing, be the sole remedy for any of the makers referred to
herein.
9.3 TIME AND MANNER OF CERTAIN CLAIMS. Except as otherwise
expressly provided herein, Seller on the one hand, and Buyer, Syratech and
Lifetime, on the other hand, shall be liable for damages for breaches of
representations and warranties set forth in Articles 4 or 5 of this Agreement
respectively and asserted under Section 9.1(a)(i) (other than those set forth in
Sections 4.7(a) and 4.13) or Section 9.1(b)(i) respectively only to the extent
that notice of a claim therefor complying with the requirements of this Section
is asserted by the other in writing and delivered prior to the expiration of a
period ending twelve (12) months from the Closing Date. Seller shall be liable
for damages for breaches of representations and warranties set forth in Sections
4.7(a) and 4.13 only to the extent that notice of a claim therefor complying
with the requirements of this Section is asserted by the other in writing and
delivered prior to the expiration of a period ending thirty-six (36) months from
the Closing Date. Any notice of a claim shall state specifically the facts
giving rise to the alleged basis for the claim and the amount of liability
asserted against the other party by reason of the claim.
9.4 DEFENSE OF CLAIMS BY THIRD PARTIES. If any claim is made
against Buyer, Syratech or Lifetime or Seller that, if sustained, would give
rise to a lability of the other under this Agreement. Buyer. Syratech
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and Lifetime or Seller, as the case may be, shall promptly cause notice of the
claim to be delivered to the others, provided that failure to give notice does
not relieve the indemnifying party of liability in the absence of actual
prejudice, and shall afford the other and its counsel, at the other's sole
expense, the opportunity to defend or settle the claim, provided that failure to
afford such opportunity does not relieve the indemnifying party of liability in
the absence of actual prejudice. If an indemnifying party assumes the defense of
such an action, (a) no compromise or settlement thereof may be effected by the
indemnifying party without the indemnified party's consent (which shall not be
unreasonably withheld or delayed) unless (i) there is no finding or admission of
any violation of law or any violation of the rights of any Person and no effect
on any other claims that may be made against the indemnified party and (ii) the
sole relief provided is monetary damages that are paid in full by the
indemnifying party and (b) the indemnifying party shall have no liability with
respect to any compromise or settlement thereof effected without its consent
(which shall not be unreasonably withheld or delayed). If notice is given to an
indemnifying party of the commencement of any action and it does not, within 20
days after the indemnified party's notice is given, give notice to the
indemnified party of its election to assume the defense thereof, the
indemnifying party shall be bound by any determination made in such action or
any compromise or settlement thereof effected by the indemnified party. In the
event that the indemnified party or parties shall have reasonably concluded that
an actual or potential conflict exists between the indemnifying party and the
indemnified party or parties in connection with the defense of such action, the
indemnified party or parties shall be entitled to employ their own counsel and
assume their own defense and the reasonable fees and expenses of such counsel
shall be paid by the indemnifying party; provided, however, that in no event
shall the indemnifying party be required to pay the fees and expenses of more
than one firm of attorneys for all of the indemnified parties.
10. Miscellaneous.
--------------
10.1 BULK SALES COMPLIANCE. Buyer, Syratech and Lifetime each hereby
waives compliance by Seller with the provisions of the Bulk Sales Law of any
state which may be applicable to this transaction. In consideration of such
waiver, Seller agrees to defend and indemnify Buyer, Syratech and Lifetime
against and hold it harmless from any and all loss, liability, claim, damage or
expense (including reasonable attorneys' fees) arising
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out of or resulting from such noncompliance, provided that such loss, liability,
claim, damage or expense was not caused by conduct of the Business by any member
of Buyer, Syratech and Lifetime.
10.2 FINDERS. Buyer, Syratech, Lifetime and Seller respectively
represent and warrant that they have not employed or utilized the services of
any broker or finder in connection with this Agreement or the transactions
contemplated by it except Seller has employed Paine Webber Incorporated. Seller
shall indemnify and hold Buyer, Syratech and Lifetime harmless from and against
any and all claims for brokers' commissions made by any party (including Paine
Webber Incorporated) as a result of this Agreement and the transaction
contemplated hereunder to the extent that any such commission was incurred, or
alleged to have been incurred, by, through or under Seller. Buyer, Syratech and
Lifetime shall indemnify and hold Seller harmless from and against any and all
claims for brokers' commissions made by any party as a result of this Agreement
and transactions contemplated hereunder to the extent that any such commission
was incurred, or alleged to have been incurred, by, through or under Buyer,
Syratech and Lifetime. Seller hereby covenants and agrees that it will, at any
time and from time to time after the Closing at Buyer's sole expense (except as
otherwise provided herein), do all such further acts and things as may be
reasonably requested by Buyer for the effective transferring and delivering to
Buyer, or for aiding and assisting Buyer in collecting and reducing to
possession, any and all of the Assets.
10.3 ENTIRE AGREEMENT. This Agreement (with its Schedules and
Exhibits) together with the existing confidentiality agreement between the
parties contains, and is intended as, a complete statement of all of the terms
of the arrangements between the parties with respect to the matters provided
for, supersedes any previous agreements and understandings between the parties
with respect to those matters (except as otherwise provided in Section 6.1), and
cannot be changed or terminated orally.
10.4 JURISDICTION AND GOVERNING LAW. Seller, Buyer, Syratech and
Lifetime each hereby consents to personal jurisdiction in any action brought
with respect to this Agreement and the transactions contemplated hereunder in
any federal or state court within the City and State of New York and agrees that
service of process may
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be accomplished pursuant to the provisions of Section 10.6 below. This Agreement
shall be governed by and construed in accordance with the law of the State of
New York without giving effect to conflicts of law principles thereof.
10.5 SCHEDULES: TABLES OF CONTENTS AND HEADINGS. Any matter
disclosed on any Schedule to this Agreement shall be deemed to have been
disclosed on all other Schedules to this Agreement to the extent that it should
have been disclosed on such other Schedule. The table of contents and section
headings of this Agreement and titles given to Schedules and Exhibits to this
Agreement are for reference purposes only and are to be given no effect in the
construction or interpretation of this Agreement.
10.6 NOTICES. All notices and other communications under this
Agreement shall be in writing and shall be deemed given when delivered
personally (including by confirmed legible telecopier transmission) or mailed by
certified mail, return receipt requested, to the parties at the following
addresses (or to such address as a party may have specified by notice given to
the other party pursuant to this provision):
(a) If to Seller c/o:
U.S. Industries, Inc.
101 Wood Avenue South
Iselin, New Jersey 08830
Attention: General Counsel
Telecopy No.: (908)767-2208
(b) If to Buyer or Syratech to:
Syratech Corporation
175 McClellan Highway
East Boston, MA 02128-9114
Attn: Mr. Leonard Florence,
Chairman of the Board,
President and Chief
Executive Officer
Facsimile: 617-561-()77S
With copies to:
Faye A. Florence, Esq.
Vice President and General Counsel
Syratech Corporation
175 McClellan Highway
East Boston, MA 02128-9114
Facsimile: 617-561-0275
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and
Bachner Tally Polevoy & Misher LLP
380 Madison Avenue
New York, NY 10017
Attn: Steven A. Fishman, Esq.
Facsimile: 212-682-5729
and
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019-6064
Attn: James L. Purcell, Esq.
Facsimile: 212-373-2145
and
(c) If to Lifetime, to:
Lifetime Hoan Corporation
One Merrick Avenue
Westbury, NY 11590
Attn: Mr. Milton L. Cohen
Chairman of the Board
President and Chief
Executive Officer
Facsimile: 516-683-6116
with a copy to:.
Bachner Tally Polevoy & Misher LLP
380 Madison Avenue
New York, NY 10017
Attn: Steven A. Fishman, Esq.
Facsimile: 212-682-5729
10.7 SEPARABILITY. In the event that any provision hereof would,
under applicable law, be invalid or enforceable in any respect, such provision
shall be construed by modifying or limiting it so as to be valid and enforceable
to the maximum extent compatible with, and permissible under, applicable law.
The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement
which shall remain in full force and effect.
10.8 WAIVER. Any party may waive compliance by another with any of
the provisions of this Agreement. No waiver of any provision shall be construed
as a waiver of any other provision. Any waiver must be in writing.
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10.9 BINDING EFFECT: ASSIGNMENT. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and permitted
assigns. All obligations of any of Buyer, Syratech and Lifetime hereunder, or
under any instruments, agreements or other documents delivered at the Closing,
are the joint and several obligations of each of Buyer, Syratech and Lifetime.
Nothing in this Agreement shall create or be deemed to create any third party
beneficiary rights in any person or entity not a party to this Agreement. No
assignment of this Agreement or of any rights or obligation hereunder may be
made by any party (by operation of law or otherwise) without the prior written
consent of the others and any attempted assignment without the required consent
shall be void; provided, however, that no such consent shall be required of any
party for another party to assign part or all of its rights under this Agreement
to one or more of its subsidiaries or affiliates, but no such assignment by a
party of its rights or obligations hereunder shall relieve such party of any of
its obligations under any of such agreements to the other parties hereto.
10.10 BEST KNOWLEDGE. As used in this Agreement "to the best of
Seller's knowledge" or words of similar import shall mean actual knowledge
possessed by an executive of officer of Seller and "to the best of Buyer's
knowledge" or words of similar import shall mean actual knowledge possessed by
an executive officer of Buyer, Syratech or Lifetime.
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10.11 COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be an original, but which together shall constitute one and
the same Agreement.
FARBERWARE INC
By /s/ George H. MacLean
--------------------------------
FAR-B ACQUISITION CORP.
By /s/ E. Merle Randolph
--------------------------------
SYRATECH CORPORATION
By /s/ E. Merle Randolph
--------------------------------
LIFETIME HOAN CORPORATION
By /s/ Fred Spivak
--------------------------------
Guarantee
- ---------
In order to induce Buyer, Syratech and Lifetime to enter into this Agreement and
consummate the transactions contemplated hereby, U.S. Industries, Inc. ("USI")
hereby guarantees the performance of all obligations and undertakings of, and
the payment when due of all amounts payable by, Seller under this Agreement
(collectively, the "Obligations"). USI waives notice of acceptance of the
guarantee set forth herein and also presentment, demand, protest, notice of
protest and notice of dishonor of any of the Obligations guaranteed hereunder.
No extension of time or other indulgence granted by any of Buyer, Syratech and
Lifetime to Seller or USI, or either of them, and no default, failure, or delay,
willful or otherwise, in the performance or payment by Seller of any Obligation
hereunder, will release, impair or affect the obligations of USI and no omission
or delay on the part of any member of Buyer, Syratech and Lifetime in exercising
any right under this Guarantee or taking any action to collect or
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enforce performance or payment of any of the Obligations shall be deemed a
waiver of such right or release or affect
the obligations of USI hereunder.
U.S. INDUSTRIES, INC.
By /s/ Chris Gunther
--------------------------------
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