STOCK AND ASSET PURCHASE AGREEMENT BY AND BETWEEN NEWELL BRANDS INC. AND STANLEY BLACK & DECKER, INC. Dated as of October 12, 2016

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BY AND BETWEEN

▇▇▇▇▇▇ BRANDS INC.

AND

▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇, INC.

Dated as of October 12, 2016

 

 

 

 

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TABLE OF CONTENTS

Page

 

ARTICLE I            PURCHASE AND SALE OF STOCK AND ASSETS	1
Section 1.1            Purchased Equity Interests	1
Section 1.2            Acquired Assets	1
Section 1.3            Excluded Assets	3
Section 1.4            Assumed Liabilities	4
Section 1.5            Excluded Liabilities	6
Section 1.6            Business Separation	6
ARTICLE II           PURCHASE PRICE	7
Section 2.1            Amount and Form of Purchase Price	7
Section 2.2            Estimated Closing Adjustment Statement; Payment of Closing Payment	7
Section 2.3            Post-Closing Purchase Price Adjustment	7
Section 2.4            Allocation of Purchase Price	10
Section 2.5            Withholding Taxes	11
ARTICLE III          CLOSING	12
Section 3.1            Closing Date	12
Section 3.2            Closing Deliveries	12
Section 3.3            Transfer of Separation Assets; Assumption of Separation Liabilities	14
ARTICLE IV          REPRESENTATIONS AND WARRANTIES OF PARENT	14
Section 4.1            Organization, Existence and Good Standing; Capitalization of Purchased Companies	14
Section 4.2            Authorization, Validity and Execution	16
Section 4.3            Consents and Approvals; No Violations	16
Section 4.4            Governmental Authorization	16
Section 4.5            Financial Statements; Absence of Undisclosed Liabilities	17
Section 4.6            Inventory	17
Section 4.7            Absence of Certain Changes or Events	17
Section 4.8            Real Property	18
Section 4.9            Intellectual Property	19
Section 4.10          Material Contracts	21
Section 4.11          Title to Assets; Sufficiency of Assets	23

Section 4.12          Litigation	24
Section 4.13          Compliance with Laws; Permits	24
Section 4.14          Taxes	25
Section 4.15          Employee Benefit Plans	26
Section 4.16          Employee and Labor Matters	28
Section 4.17          Environmental Matters	30
Section 4.18          Transactions with Affiliates	31
Section 4.19          Significant Customers and Suppliers	31
Section 4.20          FCPA; Compliance with Office of Foreign Assets Control	31
Section 4.21          Product and Service Warranties	32
Section 4.22          Brokers	32
Section 4.23          Disclaimer of Other Warranties	32
ARTICLE V           REPRESENTATIONS AND WARRANTIES OF PURCHASER	33
Section 5.1            Organization	33
Section 5.2            Authorization, Validity and Execution	33
Section 5.3            Consents and Approvals; No Violations	33
Section 5.4            Governmental Authorization	34
Section 5.5            Litigation	34
Section 5.6            Financial Capability	34
Section 5.7            Brokers	34
Section 5.8            Acknowledgements	34
ARTICLE VI          CERTAIN AGREEMENTS	35
Section 6.1            Conduct of Business	35
Section 6.2            Access	38
Section 6.3            Efforts to Close; Antitrust Clearance	39
Section 6.4            Confidentiality	41
Section 6.5            Further Assurances	42
Section 6.6            Publicity	43
Section 6.7            Business Records; Cooperation	43
Section 6.8            Bulk Transfer Laws	43

Section 6.9            Intangible Property Use Phase Out	43
Section 6.10          Intercompany Accounts	44
Section 6.11          Excluded Liabilities; Assumed Liabilities; Payments from Third Parties	45
Section 6.12          Expenses	45
Section 6.13          Third-Party Consents	45
Section 6.14          Release of Guarantees	46
Section 6.15          Purchased Company Director and Officer Indemnification	46
Section 6.16          Noncompetition	47
Section 6.17          Name Change	48
Section 6.18          Environmental Compliance	48
ARTICLE VII         EMPLOYMENT MATTERS	48
Section 7.1            Employment of Transferred Employees; Severance	48
Section 7.2            Employee Benefit Plans Generally	51
Section 7.3            401(k) Plan	52
Section 7.4            Allocation of Liabilities	52
Section 7.5            Welfare Plans	53
Section 7.6            Annual Bonuses	55
Section 7.7            Equity Awards	55
Section 7.8            Nonsolicitation	55
Section 7.9            WARN	56
Section 7.10          Release from Restrictions	56
Section 7.11          Special UK Provisions	56
Section 7.12          Other Non-US Pension Plans	56
Section 7.13          US Pension Plans	57
Section 7.14          Administration; No Third Party Beneficiaries, etc	58
ARTICLE VIII       CONDITIONS TO CLOSING	58
Section 8.1            Mutual Conditions	58
Section 8.2            Conditions to Purchaser’s Obligations	59
Section 8.3            Conditions to Parent’s Obligations	60

ARTICLE IX         INDEMNIFICATION	60
Section 9.1            Survival	60
Section 9.2            Indemnification	61
Section 9.3            Procedures	62
Section 9.4            Limitations on Liability	66
Section 9.5            Assignment of Claims	68
Section 9.6            Exclusivity	68
Section 9.7            Characterization of Indemnity Payments	68
Section 9.8            Tax Indemnification Matters	68
ARTICLE X          TAX MATTERS	68
Section 10.1          Tax Indemnification	68
Section 10.2          Preparation and Filing of Tax Returns	70
Section 10.3          Refunds, Credits and Carrybacks	72
Section 10.4          Tax Contests	73
Section 10.5          Consolidated Returns	74
Section 10.6          Cooperation	74
Section 10.7          Coordination	74
Section 10.8          Tax Treatment of Payments	74
Section 10.9          Sales and Transfer Taxes	75
Section 10.10        Other Tax Provisions	75
ARTICLE XI         TERMINATION	76
Section 11.1          Termination	76
Section 11.2          Procedure upon Termination	77
Section 11.3          Effect of Termination	77
ARTICLE XII        CERTAIN DEFINITIONS	78
Section 12.1          Certain Definitions	78
Section 12.2          Cross References	89
ARTICLE XIII       GENERAL PROVISIONS	92
Section 13.1          Disclosure Schedule	92
Section 13.2          Assignment; Purchaser Designees	92
Section 13.3          No Third-Party Beneficiaries	93

Section 13.4          Entire Agreement; Amendments	93
Section 13.5          Waiver	93
Section 13.6          Notices	93
Section 13.7          Interpretation	94
Section 13.8          Counterparts	95
Section 13.9          Severability	95
Section 13.10        Governing Law; Consent to Exclusive Jurisdiction	96
Section 13.11        WAIVER OF JURY TRIAL	96
Section 13.12        Recovery of Fees by Prevailing Party	96
Section 13.13        Specific Performance	96
Section 13.14        Conflicts; Privileges	97

 

 

 

This STOCK AND ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of October 12, 2016 (the “Effective Date”), is by and between ▇▇▇▇▇▇ Brands Inc., a Delaware corporation (“Parent”), and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇, Inc., a Connecticut corporation (“Purchaser”).  Each of Parent and Purchaser are sometimes referred to herein as a “Party” or collectively as the “Parties”.

WHEREAS, the Purchased Companies and the Asset Sellers are wholly-owned Subsidiaries of Parent engaged in the Business; and

WHEREAS, on the terms and subject to the conditions of this Agreement, (a) Purchaser desires to purchase, or cause its Purchaser Designee(s) to purchase, the Purchased Equity Interests from the Selling Shareholders, and Parent desires to sell, and cause the other Selling Shareholders to sell, the Purchased Equity Interests to Purchaser or its Purchaser Designee(s), (b) Purchaser desires to purchase, or cause its Purchaser Designee(s) to purchase, the Acquired Assets from the Asset Sellers, and Parent desires to sell, and cause the other Asset Sellers to sell, the Acquired Assets to Purchaser or its Purchaser Designee(s), and (c) Purchaser and the applicable Purchaser Designee(s) desire to assume the Assumed Liabilities.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which the Parties acknowledge, the Parties, intending to be legally bound, agree as follows:

ARTICLE I

PURCHASE AND SALE OF STOCK AND ASSETS

ARTICLE II

PURCHASE PRICE

ARTICLE III

CLOSING

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PARENT

Except as set forth in the Seller Disclosure Letter (subject to Section 13.1), Parent represents and warrants to Purchaser as follows:

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser represents and warrants to Parent as follows:

ARTICLE VI

CERTAIN AGREEMENTS

Closing Date, to all books and records to the extent relating to the Business, but not included in the Acquired Assets as described in Section 1.2(h), during normal working hours and upon reasonable advance notice, excluding Tax Returns and related notes, worksheets, files and documents related thereto (except as otherwise set forth in Section 10.6); provided, that (x) nothing herein will require any employee of a Parent or any of its Affiliates to provide any information in any other format or otherwise to manipulate or reconfigure any data; (y) nothing herein will require Parent or its Affiliates to provide Purchaser or its Representatives with access to or copies of (1) any information that must be maintained as confidential by applicable Law or in accordance with the terms of a written agreement with a third party or (2) sensitive customer or employee information, manufacturing processes, pricing lists or other information the provision of which, in Parent’s reasonable business judgment, could reasonably be expected to violate applicable Law (provided, in each case of clauses (1) and (2), that Parent and its Affiliates will use commercially reasonable efforts to provide such information in a manner that does not violate such Law or is in accordance with such agreement); and (z) nothing herein will require Parent or any of its Affiliates to provide Purchaser with access to or copies of any information that relates to any businesses or operations of Parent or its Affiliates other than the Business. All requests for access will be made to such Representatives of Parent as Parent will designate, who will be solely responsible for coordinating all such requests and access thereunder.  Notwithstanding the foregoing, prior to the Closing, Purchaser and Purchaser’s Representatives shall not contact or in any other manner communicate with the customers and suppliers of the Business in connection with the transactions contemplated hereby, except following prior consultation with and written approval from Parent or its Representatives. Notwithstanding the foregoing or any other provision in this Agreement (including Section 10.6), none of Purchaser, any Affiliate of Purchaser or any Representative of Purchaser will be entitled to review or have access to any Tax Return of a Seller or any Affiliate of a Seller (including Tax Returns of the Purchased Companies with regard to Pre-Closing Tax Periods) or any work papers related thereto, other than those portions or excerpts thereof (or a pro forma Tax Return) relating solely to the Purchased Companies.

ARTICLE VII

EMPLOYMENT MATTERS

Disability Leave, as a result of the transfer to Purchaser of the Purchased Companies or (y) as otherwise provided under Section 7.1(b) with respect to an Employee on Disability Leave (including an Employee on Disability Leave who is employed by a Purchased Company immediately prior to the Closing), not less than five Business Days prior to the Closing Date or such earlier date as may be required under applicable Law, Purchaser or one of its Affiliates shall offer employment, effective at 12:01 a.m., New York City time, on the Closing Date, to each Business Employee other than an Employee on Disability Leave (an “Offer Employee”), in accordance with this Agreement and subject to Parent and its Affiliates providing Purchaser with information necessary to make such offers of employment not less than five Business Days prior to the date that offers of employment are required to be made pursuant to this Section 7.1(a).  Each Business Employee whose employment transfers to Purchaser and Affiliates pursuant to Section 7.1(a) or Section 7.1(b), whether by operation of Law or by acceptance of an offer of employment, shall be referred to hereafter as a “Transferred Employee”.  Effective as of the applicable Transfer Time, Purchaser will or will cause the Purchased Companies to continue the employment of all Transferred Employees on substantially similar terms as those that applied to such employees immediately prior to the applicable Transfer Time and that are sufficient to avoid statutory severance obligations, but in all events such continued employment will comply with applicable Laws.  Each Transferred Employee shall cease to be employed by Parent and its Affiliates as of the applicable Transfer Time.  In any jurisdiction where the employment of a Business Employee shall transfer automatically to Purchaser and its Affiliates upon the occurrence of the Closing by operation of  Law (other than pursuant to the transfer of the Purchased Equity Interests), Purchaser and Parent agree to take, or cause their respective Affiliates to take, all actions required under applicable Laws and all other actions as are necessary or appropriate such that the employment of such Business Employee shall transfer to Purchaser or its Affiliates automatically as of the Closing Date.  Parent and its Affiliates shall reasonably cooperate with Purchaser and its Affiliates with respect to (x) their offer of employment to each Offer Employee made pursuant to this Section 7.1(a) or Section 7.1(b) and (y) continuing the employment with Purchaser and its Affiliates after the Closing Date of each Business Employee who, immediately prior to the Closing Date is employed by a Purchased Company. For six months following the Closing Date, Parent and its Affiliates shall not offer employment to any Business Employee who is not a Transferred Employee; provided, that Parent or its applicable Affiliates may continue to employ any such Business Employee that Parent or such applicable Affiliate is prohibited from terminating under applicable Law; provided, further, that nothing in this sentence will prevent Parent or an Affiliate thereof from (i) advertising employment opportunities in any national newspaper, trade journal or other publication in a major metropolitan area or any Internet website posting, or negotiating with, offering employment to or employing any Person contacted through such medium, or (ii) participating in any third-party hiring fair or similar event open to the public or negotiating with, offering employment to or employing any Person contacted through such medium.

ARTICLE VIII

CONDITIONS TO CLOSING

ARTICLE IX

INDEMNIFICATION

ARTICLE X

TAX MATTERS

provided, however, that Parent shall have no obligation under this Article X (or Article IX) for any Taxes to the extent such Taxes arise from (1) an action taken or not taken by Parent or Sellers at the request of Purchaser, or (2) an action taken or not taken by Purchaser, its Affiliates or any Purchaser Indemnitee after Closing that (A) Purchaser or such Affiliate or Purchaser Indemnitee knew or should reasonably have known would give rise to such Taxes and (B) was outside of the ordinary course of business, in each case, other than (x) any action taken that is required or expressly permitted by this Agreement, (y) any action not taken that is prohibited by this Agreement and (z) any action taken or not taken that Parent consents in writing shall be so taken or not taken (which consent shall not be unreasonably withheld, conditioned or delayed).

(ii) Any Party seeking indemnification under this Article X with respect to any indemnity claim provided for in Section 10.1 shall (A) promptly notify the other Party of such intent to claim such indemnity, and (B) within 15 days of giving such notice transmit to such other Party a written notice (a “Tax Claim Notice”) describing in reasonable detail the nature of the claim, a copy of all supporting documentation with respect to such claim (if any), the basis of such indemnity request and an estimate of any Damages suffered with respect thereto (if available).  Notwithstanding the foregoing, the delay or failure to give the notice provided in this Section 10.4(a)(ii) will not relieve any Party of its obligations under this Article X, except to the extent such Party is actually prejudiced by such delay or failure.

ARTICLE XI

TERMINATION

ARTICLE XII

CERTAIN DEFINITIONS

“Accounting Principles” means GAAP, as applied using the same accounting methods, policies, principles, practices and procedures (including classifications, judgments and estimation methodologies) as were used in the preparation of the Financial Statements, except as otherwise provided for in Exhibit 12.1(A). In the event of a conflict between GAAP and the Accounting Principles, the Accounting Principles shall control.

“Action” means any action, claim, suit, arbitration, investigation or proceeding, in each case, by or before any Governmental Authority.

“Affiliate” of any Person means another Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person.  The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlled by” and “under common control with” have meanings correlative thereto.  For purposes of the foregoing, (a) for all periods prior to the Closing, neither Purchaser, on the one hand, nor the Purchased Companies, on the other hand, will be treated as an Affiliate of the other, and (b) for all periods after the Closing, neither Parent, on the one hand, nor the Purchased Companies, on the other hand, will be treated as an Affiliate of the other.

“Affiliate Arrangements” means (a) all Contracts, arrangements, commitments or transactions between Parent or any of its Affiliates (other than a Purchased Company), on the one hand, and a Purchased Company, on the other hand and (b) all Contracts, arrangements, commitments or transactions (other than employment Contracts) between any director, officer or stockholder of Parent or any of its Affiliates (other than a Purchased Company), on the one hand, and a Purchased Company, on the other hand, in each case of clause (a) and (b) which is currently in effect.

“Ancillary Agreements” means the Transition Services Agreement, the Bailment Agreement and the Excluded Transfer Documents.

“Antitrust Laws”  means applicable supranational, national, federal, state, provincial or local Laws designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolizing or restraining trade or lessening competition of any other country or jurisdiction, to the extent applicable to the purchase and sale of the Purchased Equity Interests and the other transactions contemplated by this Agreement, including without limitation, the HSR Act and other similar competition or antitrust laws of any jurisdiction other than the United States.

“Asset Sellers” means Parent and each Subsidiary of Parent listed on Exhibit 12.1(B).

“Assumed Benefit Plan” means each Employee Benefit Plan or portion thereof (i) sponsored by one of the Purchased Companies as of the Closing, (ii) that Purchaser or any of its Affiliates has expressly agreed to assume pursuant to Article VII of this Agreement or (iii) that Purchaser or any of its Affiliates is required to assume under applicable Laws or any applicable Union Contract; provided however, that no defined UK Pension Scheme is an Assumed Benefit Plan.

“Assumed Foreign Benefit Plan” means each Assumed Benefit Plan that is not an Assumed U.S. Benefit Plan.

“Assumed U.S. Benefit Plan” means each Assumed Benefit Plan that is sponsored, maintained or contributed to by Parent or any of its Affiliates primarily for the benefit of current or former Business Employees based primarily in the United States (including Puerto Rico).

“Brazil Environmental Liabilities” means all Liabilities to the extent arising or resulting from any Release of Hazardous Substances prior to the Closing at, on, under or from the Brazil Manufacturing Facility, including any (i) post-Closing exposure to or migration of any such Release, (ii) such Release identified in whole or in part in the Brazil Phase II or subsequent investigations, (iii) such Release from the facility's wastewater discharge or treatment equipment and infrastructure (and including any discharges in violation of applicable Environmental Law resulting from the status quo operation of such equipment and infrastructure during the 180 day period following the Closing) and (iv) Actions arising or resulting from any such Release.

“Brazil Manufacturing Facility” means the real property and facility located at the commonly known street address of ▇▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇, including all underlying and associated land, buildings, fixtures, equipment and other improvements thereon and appurtenant thereto.

“Brazil Phase II” means the Confirmatory Environmental Investigation (Environmental Site Assessment - Phase II), ▇▇▇▇▇ INDUSTRIAL TOOLS ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ – RS, Brazil, prepared for ▇▇▇▇▇▇ Brands by CH2M do Brasil Engenharia Ltda., dated October 2016.

“Business” means the development, manufacture, distribution and sale of hand tools, power tool accessories, industrial bandsaw blades, and tools for HVAC/R systems, as conducted by the Purchased Companies and the Asset Sellers under the brands ▇▇▇▇▇®, Lenox® and hilmor™ and private label brands in what is referred to as the “Tools” segment.

“Business Assets” means (a) the assets, properties and rights of the Purchased Companies (in each case, except to the extent a Separation Asset) and (b) the Acquired Assets.

“Business Contract” means any Contract (a) to which a Purchased Company is party (in each case, except to the extent a Separation Asset) or (b) to which an Asset Seller is party and of the type described in Section 1.2(g).

“Business Days” means a day other than Saturday, Sunday or other day on which commercial banks in New York, New York are required to or may be closed.

“Business Employee” means each individual, other than the individuals set forth on Exhibit 12.1(E), who is employed by an Asset Seller or a Purchased Company, in each case whose employment duties are primarily connected to performance of services for the Business, including all such employees absent due to vacation, holiday, sickness, short term disability, long term disability or approved leave of absence; provided, however, that “Business Employee” will not include any individual whose employment is transitioned from a Purchased Company to an Affiliate thereof (other than another Purchased Company) pursuant to the Excluded Transfer Documents.

“Business Inventory” means (a) the Inventory and (b) inventories of raw materials, work-in-process, finished goods and packaging materials of a Purchased Company as of immediately prior to the Closing (in each case, except to the extent a Separation Asset).

“Business IP” means any Intellectual Property that is included in the Acquired Assets, any licenses to use Intellectual Property that are included in the Acquired Assets and, except to the extent a Separation Asset, any Intellectual Property owned by or licensed to a Purchased Company.

“Capital Stock” means any capital stock, partnership, membership, joint venture or other ownership or equity interest, participation or securities (whether voting or non-voting, whether preferred, common or otherwise, and including stock appreciation, contingent interest or similar rights) of a Person.

“Cash” means the consolidated cash and cash equivalents (including marketable securities and short-term investments) of the Purchased Companies as of immediately prior to the Closing.  Notwithstanding the previous sentence, cash on hand shall (A) be calculated net of uncleared checks and drafts issued by the Purchased Companies (to the extent a corresponding amount has been released from accounts payable), and (B) include uncleared checks and drafts received or deposited for the account of the Purchased Companies.

“CERCLA” has the meaning set forth in the definition of “Environmental Laws.”

“Change of Control Payment Amount” means the aggregate amount of all change of control, bonus, severance or other similar payments that are payable by Purchaser or any of its Affiliates (including, after the Closing, any Purchased Company) to any Participant solely as a result of the execution and delivery of this Agreement or the Ancillary Agreements or the consummation of the transactions contemplated hereby or thereby, or any related event that occurs on or prior to the Closing (such as a termination of a Participant’s employment or service by Parent and its Affiliates on or prior to the Closing) whether payable before, on or after the Closing Date and, in each case, any employer-paid portion of any employment or payroll taxes related thereto.

“Closing Adjustment” means an amount equal to: (A) the Working Capital Adjustment (which may be a negative number), plus (B) the Cash, minus (C) the Outstanding Indebtedness, minus (D) the Change of Control Payment Amount (to the extent unpaid as of the Closing).

“Closing Net Working Capital” means the Net Working Capital as of immediately prior to the Closing.

“Code” means the Internal Revenue Code of 1986, as amended.

“Commonly Controlled Entity” means any person that, together with Parent or any of its Affiliates is treated as a single employer under Section 414(b), (c), (m) or (o) of the Code.

“Contract” means any contract, agreement, license, lease, guaranty, indenture, sales or purchase order or other legally binding commitment or arrangement, whether written or oral.

“Controlled Group Liability” means any and all Liabilities of Parent and its Affiliates, including, for Liabilities related to periods ending on or prior to the Closing, the Purchased Companies: (i) under Title IV of ERISA, including any withdrawal liability to a Multiemployer Plan related to events on or prior to the Closing, regardless of when such withdrawal liability is assessed, (ii) under Section 302 of ERISA, (iii) under Sections 412 or 4971 of the Code, (iv) as a result of a failure to comply with the continuation coverage requirements of Section 601 et seq. of ERISA and Section 4980B of the Code and (v) any foreign Law similar to the foregoing clauses (i) through (iv).

“Controlling Party” means (a) with respect to Tax Proceedings described in Section 10.4(b), Parent, and (b) with respect to Tax Proceedings described in Section 10.4(c), whichever of Parent or Purchaser is reasonably expected to bear the greater Tax liability in connection with a Straddle Tax Period Tax Proceeding.

“Customer Programs” means any customer programs and/or related arrangements primarily related to the Business, whether written or oral, including discounts, allowances, rebates, promotions, advertising allowances, customer credits and coupons, but excluding amounts or claims regarding defective products, product warranty or product returns.

“Damages” means all damages, Liabilities, awards, losses, Taxes, fines, fees, interest, penalties, costs and expenses, including reasonable attorneys’ fees and expenses incurred in investigating or defending a claim, whether or not based on contract, tort, warranty claims or otherwise.

“Desktop Software” means non-customized, off-the-shelf third-party computer software that is licensed for use on desktop or laptop “PC-class” computers or related local area network servers with a license fee no greater than $20,000 other than by a written agreement executed by the licensee, and includes software licensed by shrink wrap or click wrap licenses, the Microsoft Windows class of operating system software, and Microsoft Office or similar office productivity software (including individual programs contained therein).

“Effect” has the meaning set forth in the definition of “Material Adverse Effect.”

“Employee Benefit Plan” means (a) an employee benefit plan (as such term is defined in Section 3(3) of ERISA or similar Laws in other countries), other than a Multiemployer Plan, (b) other plans, agreements or arrangements providing welfare (including health, dental, vision, life and disability), pension, retirement, change of control, retention, severance, deferred compensation, or vacation payments or benefits, and (c) profit-sharing, bonus, stock option or stock appreciation plans, agreements or arrangements or similar forms of incentive compensation, in each case sponsored, maintained, contributed to or entered into or required to be sponsored, maintained, contributed to or entered into by Parent or any Commonly Controlled Entity for the benefit of any Participant or under which Parent, the Purchased Companies or any Commonly Controlled Entity has any Liability with respect to any Participant, or under which any Purchased Company has any Liability. Notwithstanding the foregoing, “Employee Benefit Plan” will not include any statutory plan or arrangement or similar employee benefits required by Law.

“Employee on Disability Leave” shall mean any Business Employee who is employed primarily in the United States and who, as of the Closing Date, (x) is on long-term disability leave or (y) has incurred a disabling event that would entitle such Business Employee to benefits under the long-term disability plan of Parent and its Affiliates; provided, however, that the term “Employee on Disability Leave” shall exclude any Business Employee whose employment is required to transfer as of the Closing Date to Purchaser and its Affiliates pursuant to applicable Law or any applicable Union Contract.

“Encumbrances” means options, pledges, security interests, liens, mortgages, charges, claims or other encumbrances or restrictions.

 “Environmental Laws” means Laws or Judgments relating to (a) the protection of the environment or human health, (b) emissions, discharges, Releases or threatened Releases of pollutants, contaminants, chemicals, industrial materials, wastes or other substances into or through the environment or (c) the identification, generation, manufacture, processing, distribution, labeling, migration, use, treatment, storage, disposal, recovery, transport or other handling of pollutants, contaminants, chemicals, industrial materials, wastes or other substances, including the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”), the Toxic Substances Control Act, the Hazardous Materials Transportation Act, the Resource Conservation and Recovery Act (“RCRA”) the Federal Water Pollution Control Act, the Safe Drinking Water Act, the Clean Air Act, the Emergency Planning and Community Right-to-Know Act of 1986, the Federal Insecticide, Fungicide and Rodenticide Act, the Oil Pollution Act of 1990 and the Endangered Species Act, all as amended from time to time, together with all state, local, Foreign or other similar or analogous Laws promulgated or issued by any Governmental Authority and any implementing regulations with respect thereto, including the California Drinking Water and Toxic Enforcement Act of 1986.

“Environmental Permits” means all Permits required under Environmental Law for the conduct of the Business or the ownership or operation of the Acquired Assets.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Excluded Accounts Receivable” means (a) the Retained Accounts Receivable and (b) such accounts and notes receivable that constitute Separation Assets.

“Fraud” means (a) with respect to Parent, that (i) a representation and warranty made by Parent was false when made, (ii) to the Knowledge of Parent, such representation and warranty was false when made, (iii) Parent had an intent to induce Purchaser to act or refrain from acting in such context and (iv) Purchaser acted in justifiable reliance on such representation and warranty, and (b) with respect to Purchaser, that (i) a representation and warranty made by Purchaser was false when made, (ii) to the knowledge of Purchaser, such representation and warranty was false when made, (iii) Purchaser had an intent to induce Parent to act or refrain from acting in such context and (iv) Parent acted in justifiable reliance on such representation and warranty.

“Fundamental Representations” means the representations and warranties of Parent contained in Sections 4.1 (Organization, Existence and Good Standing; Capitalization of Purchased Companies), 4.2 (Authorization, Validity and Execution), 4.3(a) (No Violations), 4.11(b) through (e) (Sufficiency of Assets) and 4.22 (Brokers).

“GAAP” means United States generally accepted accounting principles.

“Governmental Approvals” means any notices, reports or other filings to be made, or any consents, approvals, waivers, registrations, permits, orders, clearances, terminations or expirations of waiting periods, or authorizations to be obtained from, any Governmental Authority.

“Governmental Authority” means (a) any national, federal, state, county, municipal or foreign or supranational government, or other political subdivision thereof, (b) any entity exercising executive, legislative, judicial, regulatory, tribunal, taxing or administrative functions of or pertaining to government, and (c) any arbitrator or arbitral body or panel, department, ministry, instrumentality, agency, court, commission or body of competent jurisdiction.

“Hazardous Substance” means any chemical, pollutant, contaminant, waste, substance or material, or any mixture thereof, that is regulated by, subject to, or deemed hazardous or toxic under any Environmental Law, including asbestos and asbestos-containing materials, chlorinated solvents, metals, polychlorinated biphenyls (PCBs), lead, radon and other radioactive substances, urea formaldehyde, waste oil and petroleum products and by-products.

“HSR Act” means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

“Income Taxes” means U.S. federal, state or local or foreign net income or capital gain Taxes (but not any gross income Taxes and not any withholding Taxes or payroll, employment or employee Taxes), together with any interest or penalties imposed with respect thereto.

“Intellectual Property” means any (a) utility and design patents, (b) trademarks, service marks, trade names, brand names, trade dress, slogans, logos, internet domain names, social media identifiers, together with all goodwill associated therewith, (c) inventions, discoveries, ideas, processes, formulae, designs, models, industrial designs, know-how, proprietary information, trade secrets, and confidential information, whether or not patented or patentable, (d) copyrights, writings and other copyrightable works and works in progress, databases and software, (e) all other intellectual property rights and foreign equivalent or counterpart rights and forms of protection of a similar or analogous nature or having similar effect in any jurisdiction throughout the world, (f) all registrations and applications for registration of any of the foregoing, and (g) any renewals, extensions, continuations, continuations-in-part, divisionals, reexaminations, supplemental examinations, inter partes reviews, post-grant oppositions or reissues or equivalent or counterpart of any of the foregoing in any jurisdiction throughout the world.

“Judgment” means any judgment, award, order, writ, injunction, legally binding agreement with a Governmental Authority, stipulation or decree.

“Law” means any statute, law (including common law), ordinance, rule, regulation, order or decree promulgated by any Governmental Authority, including, for the avoidance of doubt, TUPE.

“Material Adverse Effect” means any state of facts, change, effect, event or condition (each, an “Effect”) that is materially adverse to the business, assets, financial condition or results of operations of the Business, taken as a whole; provided, however, that no Effect shall be considered when determining whether a Material Adverse Effect has occurred to the extent such Effect resulted or arose from any of the following: (a) the execution, announcement or pendency of the transactions contemplated by this Agreement, including any impact thereof on relationships, contractual or otherwise, with any customers, suppliers, distributors, partners or employees (provided that this clause (a) shall not apply with respect to Section 8.2(a) insofar as it relates to Section 4.3); (b) conditions affecting the industry in which the Business participates, the U.S. economy as a whole or the markets in which the Business operates; (c) any change in applicable Laws or the interpretation thereof; (d) any change in GAAP or other accounting requirements or principles or any change in related Laws or the interpretation thereof; (e) any national or international political or social conditions, including an outbreak or escalation of hostilities, acts of terrorism, military acts, political instability or other national or international calamity, crisis or emergency, or any governmental or other response to the foregoing, in each case whether or not involving the United States; (f) any change in conditions in the United States, foreign or global financial, banking or securities markets generally (including any disruption thereof and any decline in the price of any market index or any change in interest or exchange rates); (g) any hurricane, earthquake, flood or other natural disasters; or (h) any failure by the Business to meet any internal or published projections, forecasts or revenue or earnings predictions for any period ending (or for which revenues or earnings are released) on or after the Effective Date (provided that this clause (h) shall not prevent a determination that any Effect underlying such failure has resulted in a Material Adverse Effect), but in the case of clauses (b), (c), (d), (e), (f), and (g), only to the extent any such Effects do not have a disproportionate adverse impact on the Business relative to other Persons in the industries in which the Business operates.

“Net Working Capital” means (A) the sum of the total current assets of the Purchased Companies and the total current assets included in the Acquired Assets as of the applicable date minus (B) the sum of the total current liabilities of the Purchased Companies and the total current liabilities included in the Assumed Liabilities as of the applicable date, in each case, calculated in accordance with the Accounting Principles; provided, however, that total current assets will not include (without duplication) (1) any Cash, (2) any Excluded Assets, (3) any Separation Assets, or (4) any Tax asset, and total current liabilities will not include (without duplication) (1) any item included in the Outstanding Indebtedness, (2) any Excluded Liability, (3) any Separation Liability or (4) any Tax liability, other than payroll Taxes.

“Non-Controlling Party” means whichever of Parent or Purchaser is not the Controlling Party with respect to a Tax Proceeding described in Section 10.4.

“Non-US Pension Plan” means each Employee Benefit Plan that is maintained outside of the United States and that is (i) a defined benefit pension plan or (ii) a benefit plan that is subject to minimum funding standards under applicable Laws.

“Outstanding Indebtedness” means, the following Liabilities, without duplication, of (a) the Asset Sellers, but only to the extent assumed by Purchaser pursuant to Section 1.4, and (b) the Purchased Companies: (i) all Liabilities for borrowed money, whether current or funded, secured or unsecured, all obligations evidenced by bonds, debentures, notes or similar instruments; (ii) all Liabilities for the reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction securing obligations of an unrelated third-party of a type described in clauses (i) and (ii) above only to the extent of the obligation actually drawn down or borrowed; (iii) all Liabilities in respect of cash or bank overdrafts to the extent not already netted out in the calculation of Cash; (iv) all Liabilities under conditional sale or other title retention agreements relating to property or assets purchased and any other obligations for the deferred purchase price of property or services; (v) all lease obligations that are required to be capitalized in accordance with GAAP (provided that only such capitalized amount shall be considered Outstanding Indebtedness hereunder) (for the avoidance of doubt, the issuance of FASB Accounting Standards Update No. 2016-02, Leases, ASC Topic 842, will be disregarded for the purposes of this clause (v)); (vi) interest rate or currency obligations, including swaps, ▇▇▇▇▇▇ or similar agreements (valued at the termination cost thereof); (vii) to the extent not released and canceled as of the Closing, guarantees of any such Liabilities of any other Person; and (viii) all penalty payments, premiums, charges, yield maintenance amounts and other expenses (1) payable as a result of or in connection with the prepayment of any obligations of the types referred to in clauses (i) through (vii) (assuming for purposes of calculating such amounts that such prepayment occurs immediately prior to or at the time of the Closing), or (2) in respect of obligations of the types referred to in clauses (i) through (vii) above that are triggered or accelerated solely as a result of the transactions contemplated hereby, in each case as measured as of immediately prior to the Closing and specifically excluding any Excluded Liabilities.

“Participant” means (a) any Business Employee, (b) solely for purposes of the definitions of Assumed Benefit Plan and Non-US Pension Plan, any current or former officer or employee of Parent or any of its Affiliates who provides or has provided services primarily with respect to the Business or (c) a current director of a Purchased Company who is not otherwise described in (a) or (b).

“Peg Net Working Capital” means $213,000,000.

“Permit” means any approval, permit, license, certificate, franchise, permission, clearance, registration, qualification or other authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Authority or pursuant to any Law.

“Permitted Encumbrances” means (a) (i) Encumbrances for Taxes, assessments or governmental charges or levies on property not yet delinquent or the validity of which are being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP, (ii) mechanics’, carriers’, workmen’s, repairmen’s and other like Encumbrances arising or incurred in the ordinary course of business for amounts that are not yet delinquent or are being contested in good faith by appropriate proceedings and (iii) Encumbrances arising under equipment leases with third parties entered into in the ordinary course of business; (b) restrictions contained in leases, subleases and similar Contracts listed in Section 4.8(a)(iii) of the Seller Disclosure Letter; (c) Encumbrances consisting of zoning or planning restrictions, Permits and other governmental or non-governmental restrictions or limitations on the use of real property or irregularities in title thereto, to the extent such restrictions do not and would not reasonably be expected to, individually or in the aggregate, materially impair the use of such real property in the operation of the Business as currently conducted; (d) easements, covenants, rights of way, conditions and other similar restrictions of record affecting title to any Owned Real Property or Leased Real Property to the extent such restrictions do not and would not reasonably be expected to, individually or in the aggregate, materially impair the use of the related real property in the operation of the Business as currently conducted, (e) with respect to any Leased Real Property, (i) the interests and rights of the respective lessors with respect thereto, including any statutory landlord liens and any Encumbrance thereon, and (ii) any Encumbrance permitted under the applicable lease agreement and any ancillary documents thereto, to the extent such restrictions do not and would not reasonably be expected to, individually or in the aggregate, materially impair the use of the related Leased Real Property in the operation of the Business as currently conducted; (f) Encumbrances created by Purchaser or its successors and assigns; and (g) non-exclusive licenses to Intellectual Property granted in the ordinary course of business and consistent with past practice.

“Person” means any individual, corporation (including not-for-profit), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, Governmental Authority or other entity of any kind or nature.

“Post-Closing Tax Period” means any taxable period (or portion thereof) beginning after the Closing Date.

“Pre-Closing Tax Period” means any taxable period (or portion thereof) ending on or before the Closing Date.

“Property Taxes” means real, personal, and intangible ad valorem property Taxes.

“Purchased Companies” means the Subsidiaries of Parent listed on Exhibit 12.1(C).

“Purchased Equity Interests” means the issued and outstanding Capital Stock of the Purchased Companies.

“Purchaser Designee” means any Subsidiary of Purchaser designated by Purchaser as purchaser of one or more of the Purchased Equity Interests or Acquired Assets on or prior to the Closing Date pursuant to Section 13.2.

“RCRA” has the meaning set forth in the definition of “Environmental Laws.”

“Release” means any actual or threatened spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing into the environment.

“Representatives” means a Party’s accountants, counsel, consultants, advisors and agents.

“Restricted Business” means the development, manufacture, design, sale and distribution of industrial and cutting tools, hand tools, power tool accessories, industrial bandsaw blades and tools for HVAC/R systems, as conducted by Parent and certain of its Subsidiaries in what is referred to as the “Tools” segment.

“Retained Accounts Receivable” means all accounts and notes receivable of an Asset Seller that are related to the Business to the extent such right to receive payment arose prior to the Closing Date, other than (i) receivables for royalties arising under any license agreement related to the Business, (ii) receivables in respect of any deposit made with third parties and (iii) receivables from Transferred Employees.

“Retained Business” means (i) the DYMO Business and (ii) the manufacture, design, sale and distribution of labeling products and solutions and tools of the type sold by Parent’s fishing products business or otherwise primarily intended for use in fishing activities.

“Seller Disclosure Letter” means the disclosure letter delivered by Parent to Purchaser prior to the execution of this Agreement and dated the Effective Date.

“Seller Environmental Liabilities” means all Environmental Liabilities to the extent arising out of or resulting from (a) the Excluded Assets, the Separation Assets, or any real property, entity or business that was formerly owned, leased or operated (excluding, for the avoidance of doubt, any Owned Real Property and Leased Real Property but in all cases including any real property that, as of the Closing, is currently owned or leased by any Asset Seller or Purchased Company but has been closed or at which Business operations have ceased) by (i) any Asset Seller in connection with the Business or (ii) any Purchased Company, in each case, whether arising prior to or after the Closing, including, for the avoidance of doubt, any real property or assets in ▇▇▇▇▇▇, New York; Jaguare, Brazil; or Cumberland, Wisconsin; or (b) any off-site transportation, storage, disposal, treatment or recycling of any Hazardous Substance prior to the Closing by or behalf of (A) any Asset Seller in connection with the Business or (B) any Purchased Company.

“Seller Guaranty” means any guaranty, letter of credit, indemnity or contribution agreement or other similar agreement entered into by any Seller in favor of any third party guaranteeing or assuring such third party of the payment of any actual or potential Liability or obligation of a Purchased Company or the Business to such third party.

“Sellers” means the Selling Shareholders and the Asset Sellers.

“Selling Shareholders” means Parent and each Subsidiary of Parent listed on Exhibit 12.1(D).

“Shared Contract” means any Contract relating both to (i) the Business and (ii) one or more other businesses of Parent or any of its Affiliates that is not otherwise included in the Business Contracts.

“Straddle Tax Period” means a Tax year or Tax period that begins on or before and ends after the Closing Date.

“Subsidiary” means, with respect to any Person: (a) any other Person of which such Person beneficially owns, either directly or indirectly, more than fifty percent (50%) of (i) the total combined voting power of all classes of voting securities of such other Person, (ii) the total combined equity interests of such other Person, or (iii) the capital or profit interests of such other Person; or (b) any other Person of which such Person has the power to vote, either directly or indirectly, sufficient securities to elect a majority of the board of directors or similar governing body of such other Person.

“Tax” or “Taxes” means any income, alternative or add-on minimum, gross income or receipts, sales, use, value added, consumption, transfer, gains, ad valorem, franchise, profits, license, withholding, payroll, direct placement, employment, excise, severance, stamp, procurement, occupation, premium, property, escheat, environmental or windfall profit tax, custom, duty or other tax, together with any interest, additions or penalties with respect thereto.

“Tax Benefit” means, with respect to Damages, any refund of Taxes paid or any reduction in the amount of Taxes which otherwise would have been paid, calculated on a with and without basis taking into account any Tax deduction or other Tax item attributable to such Damages or the facts giving rise to such Damages after all other Tax deductions and other Tax items have been taken into account.

“Tax Claim” means any claim with respect to Taxes made by any Taxing Authority that, if pursued successfully, would reasonably be expected to serve as the basis for a claim for indemnification under Article X.

“Tax Return” means any return, declaration, report, claim for refund, information return or similar statement filed or required to be filed with respect to any Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“Taxing Authority” means any governmental agency, board, bureau, body, department or authority of any federal, state or local jurisdiction or any foreign jurisdiction, having or purporting to exercise jurisdiction with respect to any Tax.

“Transfer Time” means (i) in the case of each Business Employee who is not an Employee on Disability Leave, 12:01 a.m., (U.S. Eastern Time), on the Closing Date and (ii) in the case of each Business Employee who is an Employee on Disability Leave and who becomes an employee of Purchaser and its Affiliates, as provided in Section 7.1(b), 12:01 a.m., (U.S. Eastern Time), on the date that such Employee on Disability Leave actually begins active employment with Purchaser and its Affiliates.

“Treasury Regulations” means final and temporary income tax regulations proposed by the U.S. Department of Treasury existing as of the Effective Date.

“TUPE” means the Transfer of Undertakings (Protection of Employment) Regulations 2006.

“UK Pension Scheme” means each Employee Benefit Plan that is a pension scheme sponsored by a UK Seller or in which a UK Seller participates or under which any UK Seller has any Liability or under which any Liabilities and obligations in respect of employees or former employees in the United Kingdom could transfer to Purchaser and its Affiliates pursuant to TUPE or any similar Law.

“UK Seller” means an Asset Seller organized under the Laws of the United Kingdom.

“Working Capital Adjustment” means the amount by which the Closing Net Working Capital is greater than or less than, as the case may be, the Peg Net Working Capital.  For the avoidance of doubt, the Working Capital Adjustment will be positive if the Closing Net Working Capital is greater than the Peg Net Working Capital and negative if the Closing Net Working Capital is less than the Peg Net Working Capital.

ARTICLE XIII

GENERAL PROVISIONS

▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇, Inc.

▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇

▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

 General Counsel and Secretary

with a copy to:

Cravath, Swaine & ▇▇▇▇▇ LLP

Worldwide Plaza

▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇

▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇

 ▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇

▇▇▇▇▇▇ Brands Inc.

▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇

▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇

 Chief Legal Officer and Corporate Secretary

with a copy to:

▇▇▇▇▇ Day

▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇

▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇

 ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇

or such other addresses or numbers and/or addressee as are furnished in writing by either Party.

and vice versa, and words denoting any gender will include all genders and words denoting natural persons will include corporations and partnerships and vice versa.  The phrase “made available” in this Agreement will mean that the information referred to has been posted in the electronic dataroom maintained on behalf of Parent by Intralinks (as evidenced by a DVD or CD-ROMs imprinted with all such documents or information and delivered by Seller to Buyer promptly following the Effective Date) prior to the Effective Date.  The descriptive headings of the several Articles and Sections of this Agreement, the Exhibits and Table of Contents to this Agreement and the Seller Disclosure Letter are inserted for convenience only, do not constitute part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement. Except as specifically stated herein, any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein (except for the Seller Disclosure Letter) means such agreement, instrument or statute as from time to time amended, modified or supplemented. The parties have participated jointly in the negotiation and drafting of this Agreement.  In the event of an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any provisions of this Agreement.  All references to “$” or “dollars” are to U.S. dollars, and all amounts to be calculated or paid under this Agreement will be in U.S. dollars.  If the last day for the giving of any notice or the performance of any act required or permitted under this Agreement is a day that is not a Business Day, then the time for the giving of such notice or the performance of such action shall be extended to the next succeeding Business Day.

[Remainder of this Page Intentionally Left Blank; Signature Page Follows]

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first written above.

 

	▇▇▇▇▇▇ BRANDS INC.
	By:	/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
		Name:  ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
		Title:    Chief Legal Officer and Corporate Secretary

 

 

	▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇, INC.
	By:	/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
		Name:  ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
		Title:    Vice President of Business Development