Exhibit 10.3
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is entered into as of this 27th day of
October, 1997 by and between Jordan A. Kahn, a Massachusetts resident ("Kahn")
and Holmes Acquisition LLC, a Delaware limited liability company (the "Buyer").
WHEREAS, (i) Holmes Products Corp. ("Holmes") (together with its direct
and indirect majority-owned subsidiaries on a consolidated basis) and (ii)
Holmes Products (Far East) Limited (together with its direct and indirect
majority-owned subsidiaries on a consolidated basis), conduct a business of
designing, manufacturing and marketing home comfort and lighting appliances; and
WHEREAS, Holmes Products Corp., Holmes Products (Far East) Limited,
Asco Investment Ltd., Kahn and Buyer have this day entered into a Stock Purchase
and Redemption Agreement (the "Redemption Agreement"), pursuant to which Holmes
will sell stock to Buyer and redeem stock held by Asco Investments Ltd. (all
defined terms used herein and not otherwise defined have the meanings set forth
in the Redemption Agreement); and
WHEREAS, Kahn wishes to sell to Buyer and Buyer wishes to purchase from
Kahn, additional shares of Holmes Products Corp. common stock now owned by Kahn.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF STOCK
1.1 Stock Sale by Kahn. Upon the terms and subject to the conditions of
this Agreement, on the Closing Date, Kahn shall sell to the Buyer (together with
the assignees of Buyer), and the Buyer (together with the assignees of Buyer)
shall purchase from Kahn, such number of shares of Common Stock so that,
immediately following the consummation of the transactions contemplated hereby
and by the Redemption Agreement, Kahn shall retain twenty percent (20%) of the
issued and outstanding Common Stock. The purchase price per share of Common
Stock to be purchased by the Buyer hereunder shall be equal to the per share
purchase price for shares of common stock acquired by the Buyer from the Company
pursuant to, and as adjusted in accordance with, the Redemption Agreement. Of
the aggregate consideration to be paid by the Buyer to Kahn pursuant hereto, an
amount equal to $2,500,000 shall be deposited in escrow to be held and
distributed in accordance with the indemnification provisions of Article VIII of
the Redemption Agreement and the terms of the Escrow Agreement.
1.2 Post-Closing Payments. If the Final Working Capital Statement
provided for in Section 1.6 of the Redemption Agreement requires the Buyer to
pay additional amounts to Kahn, the Buyer (together with the assignees of the
Buyer) shall pay such amounts to Kahn within three (3) business days following
acceptance of the Final Working Capital Statement. If the Final Working Capital
Statement provided for in Section 1.6 of the Redemption Agreement requires Kahn
to pay any amounts to the Buyer, Kahn shall pay any such amounts to the Buyer
(and the assignees of the Buyer) within three (3) business days following
acceptance of the Final Working Capital Statement.
1.3 Closing. The closing of the transactions contemplated by Sections
1.1 hereof (the "Closing") shall take place at 9:00 a.m., local time, on
December 1, 1997, at the offices of Hutchins, Wheeler & Dittmar, 101 Federal
Street, Boston, Massachusetts, or at such other time, date on or before December
1, 1997 or place as the parties may agree. The date on which the Closing occurs
is hereinafter referred to as the "Closing Date."
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF KAHN
Kahn hereby represents and warrants to the Buyer as follows:
2.1 Authority; Binding Effect. Kahn has taken prior to the date hereof,
all necessary action, and has obtained all necessary authorization, to enter
into and perform his obligations under this Agreement and all other agreements,
documents and instruments executed by him in connection herewith. This Agreement
and all other agreements, documents and instruments executed by Kahn in
connection herewith are and will be the valid and binding obligations of Kahn,
enforceable against him in accordance with their respective terms, except as
enforceability may be subject to bankruptcy, insolvency, receivership,
moratorium, reorganization, fraudulent conveyance, equitable subordination or
similar laws of general application, and the application of equitable
principles.
2.2 Non-Contravention. Neither the execution and delivery of this
Agreement nor any agreement executed in connection herewith by Kahn, nor the
consummation by him of the transactions contemplated hereby or thereby, will
constitute a violation of, or be a default under, or conflict with the terms of
any contract, lease, indenture, mortgage, agreement or instrument to which he is
a party or by which he is bound or to which any of his assets are subject, or
will violate or constitute a default under any applicable statute, rule,
regulation, order, ordinance, judgment or decree of any governmental, judicial
or arbitral body binding upon him.
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2.3 Title to Shares. Kahn owns beneficially the number of Shares of
Holmes set forth next to his name on Schedule 2.3, free and clear of all liens
and encumbrances of any nature. The sale by Kahn of the shares of Common Stock
pursuant to Article I hereof will not be subject to any preemptive or similar
rights, voting agreements, or to any rights of first refusal or other similar
rights in favor of any person or entity, except such rights as will have been
waived or terminated at or prior to the Closing.
2.4 Brokers. Except for Goldman Sachs & Co., no broker, investment
banker, financial advisor or other person, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or an behalf of Kahn.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby represents and warrants to the Sellers as follows:
3.1 Organization, Standing and Corporate Power. The Buyer is a limited
liability company duly organized and in good standing in the State of Delaware
and has the requisite power and authority to carry on its business as now being
conducted. The Buyer is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or licensing
necessary.
3.2 Authority; Binding Effect; Noncontravention. The Buyer has all
requisite power and authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement by the Buyer and the consummation by the Buyer of the transactions
contemplated by this Agreement have been duly authorized by all necessary action
on the part of the Buyer. This Agreement has been duly executed and delivered by
and constitutes a valid and binding obligation of the Buyer, enforceable against
the Buyer in accordance with its terms except as enforceability may be subject
to bankruptcy, insolvency, receivership, moratorium, reorganization, fraudulent
conveyance, equitable subordination and similar laws of general application, and
the application of equitable principles. The execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated by this
Agreement and compliance with the provisions of this Agreement will not,
conflict with, or result in any breach or violation of, or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of or "put" right with respect to any
obligation or to loss of a material benefit under, or result in the creation of
any lien upon any of the properties or assets of the Buyer under, (i) the
organizational documents of the Buyer, (ii) any loan or credit agreement, note,
bond, mortgage, indenture, lease or other agreement, instrument, permit,
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concession, franchise or license applicable to the Buyer or its properties or
assets or (iii) subject to the governmental filings and other matters referred
to in the following sentence, any judgment, order, decree, statute, law,
ordinance, rule, regulation or arbitration award applicable to the Buyer or its
properties or assets. No consent, approval, order or authorization of, or
registration, declaration or filing with, or notice to, any Governmental Entity
is required by or with respect to the Buyer in connection with the execution and
delivery of this Agreement by the Buyer or the consummation by the Buyer of any
of the transactions contemplated by this Agreement.
3.3 Litigation. There is no suit, action or legal, administrative,
arbitration or other proceeding of any nature pending or, to the Buyer's
knowledge, threatened, against the Buyer which might reasonably be expected to
have a Material Adverse Effect on the legality or the validity of this Agreement
or the consummation transaction contemplated hereby.
3.4 Source of Funds. None of the funds used by Buyer to purchase Shares
of Holmes from Kahn pursuant hereto will come directly or indirectly from
Holmes.
ARTICLE IV
ADDITIONAL AGREEMENTS
4.1 Intra-Family Transfers of Shares. Prior to the Closing, Kahn, with
the consent of Buyer (which consent will not be unreasonably withheld), shall be
permitted to transfer Shares held by him or for his benefit to his spouse, a
child or any other relative, or to a trust of which Kahn or any relative of Kahn
is a settlor, trustee or beneficiary, or a family limited partnership, provided
that such person, trust, or family limited partnership executes and delivers to
the Buyer a copy of this Agreement and agrees to be bound hereby to the same
extent as Kahn for all purposes hereunder.
ARTICLE V
CONDITIONS PRECEDENT
5.1 Conditions to the Buyer's Obligations. The obligations of the Buyer
to consummate the Closing and the transactions contemplated by this Agreement
are subject to the satisfaction or waiver by the Buyer, on or prior to the
Closing Date, of each of the following conditions:
(a) Representations and Warranties. All representations and warranties
of Kahn set forth in this Agreement shall have been true and correct when made
and shall be true and correct on and as of the Closing Date as though made on
and as of the Closing Date. The Buyer shall have received a certificate signed
by Kahn to the effect set forth in this paragraph.
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(b) Closing of Redemption Agreement. The transactions contemplated by
the Redemption Agreement shall have been consummated.
(c) Opinion of Counsel. There shall have been delivered to Buyer an
opinion of counsel of Posternak, Blankstein & Lund, L.L.P., counsel to Kahn in
form and substance reasonably acceptable to Buyer.
5.2 Conditions to Kahn's Obligations. The obligations of Kahn to
consummate the Closing and the transactions contemplated by this Agreement are
subject to the satisfaction or waiver by Kahn, on or prior to the Closing Date,
of each of the following conditions:
(a) Representations and Warranties. All representations and warranties
of the Buyer set forth in this Agreement shall have been true and correct when
made and shall be true and correct on and as of the Closing Date as though made
on and as of the Closing Date except to the extent that such representation and
warranty relates solely to an earlier date (in which case such representation
and warranty shall be true as of such earlier date). Kahn shall have received a
certificate signed on behalf of the Buyer to the effect set forth in this
paragraph.
(b) Closing of Redemption Agreement. The transactions contemplated by
the Redemption Agreement shall have been consummated.
ARTICLE VI
GENERAL PROVISIONS
6.1 Termination. This Agreement may be terminated and abandoned at any
time prior to or on the Closing Date (i) by the mutual consent in writing of
Kahn and the Buyer at any time, (ii) by either the Buyer or Kahn if the Closing
shall not have occurred by 5:00 p.m., Eastern time, on December 1, 1997.
6.2 Amendment; Extension; Waiver. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties. At
any time prior to the Closing, the parties may (a) extend the time for the
performance of any of the obligations or other acts of the other parties, (b)
waive any inaccuracies in the representations and warranties contained in this
Agreement or in any document delivered pursuant to this Agreement or (c) waive
compliance with any of the agreements or conditions contained in this Agreement.
Any agreement on the part of a party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party. The failure of any party to this Agreement to assert any of its rights
under this Agreement or otherwise shall not constitute a waiver of such rights.
6.3 Notices. All notices, requests, claims, demands and other
communications under
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this Agreement shall be in writing and shall be deemed given if delivered
personally or sent by overnight courier providing proof of delivery) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
IF TO KAHN: Jordan A. Kahn
c/o Holmes Products Corp.
233 Fortune Blvd.
Granite Park
Milford, Massachusetts 01757
Fax: (508) 634-8374
with a copy to: Donald H. Siegel, P.C.
Posternak, Blankstein & Lund, L.L.P.
100 Charles River Plaza
Boston, Massachusetts 02114
Fax: (617) 367-2315
IF TO BUYER: Richard K. Lubin
c/o Berkshire Partners LLC
One Boston Place, Suite 3300
Boston, Massachusetts 02108
Fax: (617) 227-6105
with a copy to: James Westra, Esquire
Hutchins, Wheeler & Dittmar
101 Federal Street
Boston, MA 02110
Fax: (617) 951-1295
6.4 Interpretation. When a reference is made in this Agreement to a
Section, Exhibit or Schedule, such reference shall be to a section of, or an
Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation".
6.5 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
6.6 Entire Agreement. This Agreement, the Redemption Agreement and the
other agreements referred to herein constitute the entire agreement, and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter of this Agreement.
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6.7 Liquidation of Buyer. The parties acknowledge that the Buyer will
be liquidated immediately after the Closing.
6.8 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, REGARDLESS OF
THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF
LAWS.
6.9 JURISDICTION OF DISPUTES; WAIVER OF JURY TRIAL. IN THE EVENT ANY
PARTY TO THIS AGREEMENT COMMENCES ANY LITIGATION, PROCEEDING OR OTHER LEGAL
ACTION IN CONNECTION WITH OR RELATING TO THIS AGREEMENT, ANY RELATED AGREEMENT
OR ANY MATTERS DESCRIBED OR CONTEMPLATED HEREIN OR THEREIN, THE PARTIES TO THIS
AGREEMENT HEREBY (A) AGREE UNDER ALL CIRCUMSTANCES ABSOLUTELY AND IRREVOCABLY TO
INSTITUTE ANY LITIGATION, PROCEEDING OR OTHER LEGAL ACTION IN A COURT OF
COMPETENT JURISDICTION LOCATED WITHIN THE EASTERN DISTRICT OF MASSACHUSETTS,
WHETHER A STATE OR FEDERAL COURT; (B) AGREE THAT IN THE EVENT OF ANY SUCH
LITIGATION, PROCEEDING OR ACTION, SUCH PARTIES WILL CONSENT AND SUBMIT TO THE
PERSONAL JURISDICTION OF ANY SUCH COURT DESCRIBED IN CLAUSE (A) OF THIS SECTION
AND TO SERVICE OF PROCESS UPON THEM IN ACCORDANCE WITH THE RULES AND STATUTES
GOVERNING SERVICE OF PROCESS (IT BEING UNDERSTOOD THAT NOTHING IN THIS SECTION
SHALL BE DEEMED TO PREVENT ANY PARTY FROM SEEKING TO REMOVE ANY ACTION TO A
FEDERAL COURT IN THE EASTERN DISTRICT OF MASSACHUSETTS; (C) AGREE TO WAIVE TO
THE FULL EXTENT PERMITTED BY LAW ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER
HAVE TO THE VENUE OF ANY SUCH LITIGATION, PROCEEDING OR ACTION IN ANY SUCH COURT
OR THAT ANY SUCH LITIGATION, PROCEEDING OR ACTION WAS BROUGHT IN ANY
INCONVENIENT FORUM; (D) AGREE AS AN ALTERNATIVE METHOD OF SERVICE TO SERVICE OF
PROCESS IN ANY LEGAL PROCEEDING BY MAILING OF COPIES THEREOF TO SUCH PARTY AT
ITS ADDRESS SET FORTH HEREIN FOR COMMUNICATIONS TO SUCH PARTY; (E) AGREE THAT
ANY SERVICE MADE AS PROVIDED HEREIN SHALL BE EFFECTIVE AND BINDING SERVICE IN
EVERY RESPECT; AND (F) AGREE THAT NOTHING HEREIN SHALL AFFECT THE RIGHTS OF ANY
PARTY TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. TO THE
EXTENT PERMITTED BY LAW EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY JURY IN
ANY DISPUTE IN CONNECTION WITH OR RELATING TO THIS AGREEMENT, ANY RELATED
AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED HEREIN OR THEREIN, AND AGREE
TO TAKE ANY AND ALL ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH WAIVER.
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6.10 Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by any of the parties without the prior
written consent of the other parties; provided, however, that the Buyer shall be
permitted to assign its rights to purchase shares of Common Stock from Kahn
pursuant to Sections 1.1 and 1.2 hereof prior to the Closing, provided that any
such assignment shall not relieve the Buyer of its obligations hereunder.
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of, and be enforceable by, the parties and their respective
successors and assigns.
6.11 Enforcement. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that prior to the Closing the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Buyer and Kahn have each caused this Agreement
to be signed by their respective officers thereunto duty authorized, all as of
the date first written above.
/s/ Jordan A. Kahn
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Jordan A. Kahn
BUYER:
HOLMES ACQUISITION LLC
By: /s/ Richard K. Lubin
-----------------------
Name: Richard K. Lubin
Title: Managing Member
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