EXHIBIT 10.17
PURCHASE AND SALE AGREEMENT
Remington Arms Company, Inc.
to
Desa Industries, Inc.
Subject: Remington's Power Tool Business
INDEX*
ARTICLE I - SALE AND PURCHASE
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF REMINGTON
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF DESA
ARTICLE IV - COVENANT NOT TO MAKE OR SELL
ARTICLE V - PRODUCT SUPPLY AND EXPORT SALES AGREEMENTS
ARTICLE VI - HARD COATED SAW CHAIN DEVELOPMENT
ARTICLE VII - USE OF EXISTING SUPPLIES
ARTICLE VIII - PERSONNEL
ARTICLE IX - USE OF TRADEMARKS AND TRADENAMES
ARTICLE X - RECORDS AND WITNESSES
ARTICLE XI - CONDITIONS PRECEDENT TO CLOSING
ARTICLE XII - PAYMENT OF COSTS
ARTICLE XIII - WAIVER OF CONDITIONS
ARTICLE XIV - CONFIRMING DOCUMENTS
ARTICLE XV - DAMAGE, DELAY OR DESTRUCTION BEFORE CLOSING
ARTICLE XVI - ASSIGNMENT BY DESA
ARTICLE XVII - SURVIVAL, MODIFICATION AND ENTIRETY
ARTICLE XVIII - NOTICE
ARTICLE XIX - MULTIPLE ORIGINALS
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* The captions set forth below are for convenience only and are not to be
considered in the construction of any provisions of this Agreement.
SCHEDULE A-1 THRU A-2 - REAL PROPERTIES AND BUILDINGS
SCHEDULE B-1 THRU B-4 - PERSONAL PROPERTIES
SCHEDULE C-1 THRU C-11 - PROPRIETARY RIGHTS
SCHEDULE D - PROPERTIES AND ASSETS NOT A PART OF
SUBJECT ASSETS
SCHEDULE E - PRODUCTS SUBJECT TO REMINGTON'S
COVENANT NOT TO MAKE OR SELL
EXHIBIT A - NOTE
EXHIBIT B - PRODUCT SUPPLY AGREEMENT
EXHIBIT C - PERSONNEL PROCEDURES
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United States
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT, made and entered into as of this 18th day of July,
1969, by and between REMINGTON ARMS COMPANY, INC., a Delaware corporation
("Remington"), and DESA INDUSTRIES, INC., a Delaware corporation ("Desa"),
W I T N E S S E T H:
WHEREAS, Remington, through its Power Tool Department, has been and is
engaged in the business of manufacturing certain products at a plant located at
Park Forest, Illinois; and
WHEREAS, Remington desires to sell and Desa is willing to purchase the
business and certain properties and assets of Remington's Power Tool Department
(the "Department") located in or relating to the business of the Department in
the United States, in consideration of the payment of the purchase price
hereinafter referred to, all upon the terms and conditions set forth in this
Agreement; and
WHEREAS, simultaneously with the execution and delivery of this
Agreement, Remington Arms of Canada, Limited, a Canadian corporation, and Desa
are entering into an agreement for the sale by Remington Arms of Canada, Limited
and the purchase by Desa of the business and certain properties and assets of
Remington Arms of Canada, Limited's Power Tool Department located in or relating
to the business of such Department in Canada;
NOW, THEREFORE, Remington and Desa agree as follows:
ARTICLE I - SALE AND PURCHASE
1. Subject to the terms, provisions and conditions contained in this
Agreement, and on the basis of the representations, warranties, covenants and
agreements hereinafter set
forth, Remington agrees to sell, assign, transfer and deliver to Desa on the
Closing Date (as hereinafter defined), and Desa agrees to purchase and accept
the assignment, transfer and delivery from Remington on the Closing Date, by
appropriate instruments and documents of transfer, all of the following defined
properties and assets relating to or used in the business of the Department in
the United States as of May 31, 1969, which properties and assets, together with
additions thereto and deletions therefrom from and after May 31, 1969 to and
including the Closing Date not inconsistent with this Agreement, are hereinafter
called the "Subject Assets";
(A) All right, title and interest in and to the "Real
Properties and Buildings" (as hereinafter defined);
(B) All right, title and interest in and to the "Personal
Properties" (as hereinafter defined); and
(C) All right, title and interest in and to the "Proprietary
Rights" (as hereinafter defined).
The term "Real Properties and Buildings" as used in this Agreement
shall mean all land, buildings and improvements located at the Park Forest plant
site of Remington, as described or listed in the following schedules attached to
this Agreement;
Schedule A-1 - Description of Land to be conveyed by Remington
to Desa, and
Schedule A-2 - Description of Buildings and Improvements to be
Conveyed by Remington to Desa.
The term "Personal Properties" as used in this Agreement shall mean all
of the
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following assets:
(1) equipment and machinery, inventories (raw material,
work-in-process and finished goods), supplies, accounts and
notes receivable, prepaid items, deposits, books and records,
customer lists, tools, jigs, patterns, fixtures, dies,
vehicles, furniture, and all contracts and contractual rights
of any kind or description relating to, or used in the
business of, the Department, regardless of whether reflected
in the financial statements or shown on the books of
Remington, as described or listed in the following schedules.
Schedules ▇-▇, ▇-▇, ▇-▇ and B-4 have been furnished to Desa.
Schedule B-1 - List of Equipment, including
manufacturing equipment, technical equipment, furniture and
fixtures, and transportation equipment, as shown on IBM
printouts for period ending May 31, 1969,
Schedule B-1 - List of inventories, including raw
materials, work-in-process and finished goods, as shown on IBM
printouts dated May 31, 1969,
Schedule B-3 - List of Other Assets, including
accounts and notes receivable, prepaid expenses, and cashier's
fund, and
Schedule B-4 - List of Contracts, customers and
suppliers.
(2) all other properties and assets (including, but without
limitation, cash generated and not expended from and after May
31, 1969 to and including the Closing Date, and customers
lists), which are not Proprietary Rights, primarily relating
to, or used in the business of, the Department at the Park
Forest, Illinois plant site, regardless of whether reflected
in the financial statements or shown on the books of
Remington, and which are not listed on Schedules A-1 and A-2
or B-1 through B-4 to this Agreement.
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The term "Proprietary Rights" as used in this Agreement shall mean all
designs, drawings, patents, trademarks, trade names, trade secrets, copyrights,
and applications, registrations and licenses with respect thereto, relating
primarily to, or used in the business of, the Department, regardless of whether
reflected in the financial statements or shown on the books of Remington. All
such patents, trademarks, applications, registrations and licenses are listed in
the following schedules, which schedules have been furnished to Desa:
C-1 Patents to be Assigned to Desa by Remington,
C-2 Patents to be Assigned to Desa, with Remington Reserving
Non-exclusive License,
C-3 Patents to be Retained by Remington, Subject to Non-exclusive
License to Desa,
C-4 Patent Agreements Under Which Royalties Are due Remington to
be Assigned to Desa,
C-5 Patent Agreements Under Which Remington Is Obligated to Pay
Royalties to be Assigned to Desa,
C-6 Miscellaneous Patent and Trademark Agreements to be Assigned
to Desa,
C-7 Trademark Applications for "REMINGTON" to be Assigned to Desa,
C-8 Trademark Registrations for "REMINGTON" to be Assigned to
Desa,
C-9 Miscellaneous Trademark Registrations to be Assigned to Desa,
C-10 Foreign Trademark Registrations to be Licensed to Desa, and
C-11 Foreign Trademark Registrations to be Assigned to Desa.
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There have been delivered to Desa copies of the patent and trademark
agreements identified in Schedules C-4, C-5 and C-6 and of the trademark
application identified in Schedule C-7, and Desa acknowledges receipt thereof.
Notwithstanding any provision of this Agreement, the Subject Assets
shall not include (i) any properties and assets relating to, or used in the
business of, the Power Tool Department of Remington Arms of Canada, Limited,
(ii) any right or claim of Remington to any refund of taxes or insurance paid in
respect of any period ending on or prior to May 31, 1969, and (iii) any
properties and assets relating to abrasive products, power loads, industrial
shells, or other products as described or listed in Schedule D attached to this
Agreement, other than inventory of the Department of power loads and industrial
shells.
2. For the purpose of determining the purchase price to be paid by or
on behalf of Desa for the Subject Assets to be sold, assigned, transferred and
delivered by Remington hereunder,
(A) A physical inventory of the inventory classifications
listed on Schedule B-2 was conducted as of the close of business on May
31, 1969 by Remington (and observed by Price Waterhouse & Co.,
independent accounts for Remington), and Remington has prepared and
delivered to Desa a report (the "Department's Report") which states
separately by class or category of assets the gross book value of the
Subject Assets on the Department's books as of the close of business on
May 31, 1969, less, by each such class or category, any and all
allowances for doubtful accounts, inventory reserves, writeoffs and
writedowns (if any), reserves for depreciation and amortization, and
the amount of any liens, mortgages or other
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encumbrances (the "Department's Agreed Book Value"). The Department's
Report has been prepared, and all figures therein determined, in
accordance with those accounting principles customarily employed by
Remington in the keeping and maintenance of the books and records of
the Department and on a consistent basis with those applied in the
preparation of the unaudited financial statements referred to in
Article II, Section 6 and related data delivered to or to be delivered
by Remington to Desa under this Agreement; all determinations of
inventories have been based upon the physical inventory taken as of May
31, 1969; and depreciation and amortization have been computed on the
same basis and at the same rates as those employed in the preparation
of the unaudited financial statements and related data delivered to or
to be delivered by Remington to Desa pursuant to this Agreement; and
(B) Price Waterhouse & Co., independent accountants for
Remington, will prepare and deliver to Remington and Desa on or before
August 15, 1969, a report (the "Accountants' Report") which states
separately by class or category of assets the gross book value of the
Subject Assets as of the close of business on May 31, 1969, less, by
each such class or category, any and all allowances for doubtful
accounts, inventory reserves, writeoffs and writedowns (if any),
reserves for depreciation and amortization, and the amount of any
liens, mortgages or other encumbrances (the "Accountants' Agreed Book
Value"). The Accountants' Report will be prepared, and all figures
therein determined, in accordance with generally accepted accounting
principles applied on a consistent basis with those applied and to be
applied in the preparation of the audited financial statements and
related data to be delivered to Desa
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pursuant to this Agreement, accompanied by an opinion of Price
Waterhouse & Co. to the foregoing effect and additionally to the effect
that the Accountants' Report fairly represents the information
purported to be shown thereby as of the close of business on May 31,
1969; all determinations of inventories have been based upon the
physical inventory taken as of May 31, 1969; and depreciation and
amortization have been computed on the same basis and at the same rates
as those employed and to be employed in the preparation of the
foregoing audited financial statements and related data to be delivered
to Desa.
(C) It is agreed that the foregoing valuations of the Subject
Assets are for the purpose of determining the overall purchase price to
be paid for all of the Subject Assets; and such valuations do not
necessarily reflect or indicate the price to be paid for each
individual Subject Asset. 3. The purchase price to be paid by or on
behalf of Desa to Remington for the
Subject Assets shall be $7,144,166.44 unless such amount is more than the
Accountants' Agreed Book Value, in which case such purchase price shall be the
Accountants' Agreed Book Value. Of such purchase price, $2,150,000 shall be paid
on the Closing Date by means of Desa's Subordinated Note due August 31, 1975 in
such amount (the "Note"), in the form and with the terms substantially as set
forth as Exhibit A to this Agreement, and the balance of the purchase price
shall be paid on the Closing Date by certified or official bank check or checks
payable to the order of Remington.
4. The sale, assignment, transfer and delivery and the purchase and
acceptance of the Subject Assets (such sale and purchase being herein called the
"Closing") shall take place
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as of the close of business on August 29, 1969, or such other time and date
thereafter as shall be mutually agreed upon by the parties hereto (such date and
time shall herein be called the "Closing Date"), at the offices of ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, N.Y., or such other place as may be mutually
agreed on by the parties hereto. At the Closing Desa will deliver or cause to be
delivered to Remington a Note and a check or checks in the respective amounts
provided in Section 3 of this Article I, against delivery by Remington to Desa
of such deeds, assignments, bills of sale and other instruments and documents of
transfer as are required by this Agreement or as may reasonably be requested by
Desa in order to deliver or cause to be delivered to Desa on the Closing Date
all of the Subject Assets to be sold, transferred and delivered hereunder.
5. On the Closing Date Desa shall, except to the extent otherwise
provided in this Agreement, and except to the extent satisfied between May 31,
1969 and the Closing Date by disbursement of the Department's funds, assume and
agree to pay, perform and discharge the following obligations, liabilities and
commitments and no others: (A) any and all obligations, liabilities and
commitments incurred by or on behalf of Desa or for the account of Desa after
May 31, 1969 to and including the Closing Date in connection with the conduct of
the business of the Department with respect to the Subject Assets subsequent to
May 31, 1969 in the ordinary course of business as heretofore conducted and
consistent with prior practice and not inconsistent with this Agreement, (B) all
obligations of Remington under the contracts, licenses and agreements described
or listed in Schedules ▇-▇, ▇-▇, ▇-▇ ▇▇▇ ▇-▇, hereto and assigned by Remington
to Desa on the Closing Date, but only to the extent that such contracts,
licenses and agreements are assignable to Desa, are valid, subsisting and
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enforceable in accordance with their terms on the Closing Date, and only insofar
as any such obligations arise after May 31, 1969 and are not based on or do not
result from or relate to any default under such contracts, licenses and
agreements by Remington, (C) all obligations of Remington for merchandise and
supplies ordered prior to, but delivered after, May 31, 1969 to the extent
ordered in the ordinary course of the Department's business with respect to the
Subject Assets as heretofore conducted and consistent with prior practice and
permitted and not inconsistent with this Agreement, and (D) any other
obligations, liabilities or commitments of any kind, character or description
whatsoever, including, without limitation, personal injury or death, or property
damage claims of third parties, including employees, which obligations,
liabilities or commitments arise out of or result from an incident or occurrence
on or after the Closing Date in respect of the business acquired by Desa on the
Closing Date pursuant to this Agreement. Desa shall indemnify and hold harmless
Remington from any and all damages, claims, losses, liabilities and expenses
(including, but without limitation, legal and other expenses) which result from
or relate to any act, omission, default or arrearage by Desa with respect to
such obligations, liabilities and commitments so assumed by Desa under this
Agreement.
6. Remington hereby agrees to retain any and all obligations,
liabilities and commitments, whether known, unknown, contingent or otherwise,
not assumed by Desa under this Agreement and Remington hereby further agrees to
indemnify and hold harmless Desa against and in respect of all damages, claims,
losses, liabilities and expenses (including, but without limitation, legal fees
and expenses) which may result from or relate to any act, omission, default or
arrearage by Remington with respect to any and all such obligations, liabilities
and commitments not assumed by Desa under this Agreement.
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7. On October 31, 1969 (the "Settlement Date") the following expenses
and obligations, to the extent not otherwise given effect to in determining the
Department's Agreed Book Value or to the extent appropriate in light of the
provisions of Sections 5, 8 and 9 of Article I, Section 2 of Article VIII,
Article XII, Section 2 of Article XIV and Exhibit C, shall be adjusted, prorated
and assumed as of May 31, 1969, and the net amount thereof (without duplication)
paid by or to Desa or Remington, as the case may be, including but not limited
to: (A) all charges for rent, utilities and other charges under leases,
subleases and licenses assumed by Desa, (B) all real estate and personal
property taxes, on the basis of prior years' real estate and personal property
taxes, taking into consideration discounts, if any, and (C) all payments under
contracts described or listed in Schedules B-4, C-4 and C-5 to this Agreement.
8. In the event that the Closing shall take place as hereinabove
provided, the transactions contemplated by this Agreement, being the sale by
Remington and the purchase by Desa of the Subject Assets, shall, to the extent
permitted by law, be deemed to have taken place as of the close of business on
May 31, 1969; and, to the extent permitted by law, since May 31, 1969 to the
date hereof and from and after the date hereof to the Closing Date Remington has
conducted and shall conduct the business of the Department, and the operations
thereof shall be, for the account of Desa as if Desa were the legal owner
thereof.
9. Any state income taxes, state franchise taxes or Federal income
taxes arising out of or in connection with the operation of the Department's
business as contemplated by and consistent with this Agreement during the period
from and after May 31, 1969 to and
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including the Closing Date, shall be deducted by Remington from the operative
earnings (profits before such taxes) of the business during such period, state
income taxes being deducted at an effective rate of 4%, state franchise taxes at
their respective effective rates, Federal income taxes at the statutory rate of
52.8% of the earnings after such state taxes. If the operation of the
Department's business during such period should be unprofitable, then the amount
of the tax benefit to Remington from such unprofitable operations shall be paid
by or on behalf of Remington to Desa. In order to determine the payments, if
any, due under this Section 9, Remington shall prepare a statement of operations
of the Department for the period in question, which statement shall be submitted
to Desa for its review not later than 15 days prior to the Settlement Date,
together with a statement of the amount payable, if any, under this Section and
the party to which any such payment is to be made. Desa shall have the right to
review such statement of operations and all data, books and records used by
Remington in connection with the preparation thereof, and upon agreement among
the parties with respect to the subject matter thereof, the payments, if any, to
be made pursuant to such statement (or otherwise as may be determined in a
manner binding the parties) shall be made on the Settlement Date.
10. Since May 31, 1969 to the date hereof and from and after the date
hereof to and including the Closing Date Remington has maintained and shall
maintain separate books, records and data with respect to the Department, its
operations, and the Subject Assets, and Remington personnel (who may be assisted
and observed by representatives of Desa) shall record therein any and all
transactions in the normal course of business, or otherwise, relating to the
operations of the Department after May 31, 1969 to the Closing Date. As
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provided in Section 15 of Article II of this Agreement, such books, records and
data, and all facilities of the Department and the Subject Assets, shall be
available for inspection at all times during normal business hours by
representatives of Desa.
ARTICLE II - REPRESENTATION AND
WARRANTIES OF REMINGTON
Remington represents and warrants to and agrees with Desa as follows:
1. Remington is now and on the Closing Date will be a corporation duly
organized and validly existing under the laws of the State of Delaware, with
full power and authority (corporate and other) to own and hold its properties
and to carry on its business in the manner in which now conducted, and to enter
into, and carry out the transactions contemplated by, this Agreement.
2. The execution and delivery of this Agreement and the performance of
and compliance with the terms and conditions hereof have been duly authorized by
the Remington Board of Directors (stockholder approval not being required) and
do not and will not violate any provisions of applicable law or the articles of
incorporation or the by-laws of Remington, and do not and will not conflict with
or result in any breach of any of the terms or conditions of, or constitute a
default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any of the Subject Assets pursuant to any agreement,
instrument, order or decree to which Remington is a party, by which it is bound,
or of which it or any of the Subject Assets are the subject; and, except as may
be set forth in this Agreement or any of the Exhibits or Schedules attached or
delivered to Desa pursuant hereto, to the knowledge of Remington, the
Department, through Remington, is not now and on the Closing Date will not be a
party to, or bound by any agreement, instrument, decree, order or undertaking
which
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materially and adversely affects its business, properties, assets, operations or
condition, financial or otherwise.
3. No subsidiary of Remington owns or is the lessee of any of the
Subject Assets which are to be sold and transferred pursuant to the terms of
this Agreement.
4. Remington will cooperate with Desa and exercise Remington's best
efforts to obtain the transfer to Desa of licenses, permits, authorizations and
approvals from federal, state and local governmental regulatory bodies, as are
necessary to carry on the Department's business as now conducted.
5. There has been delivered to Desa the Department's Report which
fairly presents the information contained therein as at May 31, 1969, and has
been prepared in accordance with the accounting principles customarily employed
by the Department in keeping its books and records and applied on a consistent
basis with those principles employed in preparing the unaudited statement of
assets as at December 31, 1968, which has been furnished to Desa by Remington.
6. There have been delivered to Desa copies of the Department's
consolidated and unconsolidated unaudited statement of assets as at December 31,
1968, and the related consolidated and unconsolidated statements of operations
for the five years ended December 31, 1968, and for the five-month period ended
May 31, 1969, including the related notes and schedules thereto. Such financial
statements and related notes and schedules have been prepared in accordance with
the accounting principles customarily employed by the Department in keeping its
books and records and applied on a consistent basis throughout the periods
involved. For the purposes of this Section 6 and Section 8 below, unconsolidated
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financial statements are statements of the Department only; and consolidated
statements are the combined statements of the Department and of Remington Arms
of Canada, Limited relating to the businesses, Subject Assets and properties and
assets to be acquired by Desa and its subsidiaries from the Department and
Remington Arms of Canada, Limited (after elimination of inter-company accounts
and transactions).
7. There will be delivered to Desa and Remington the Accountants'
Report which will fairly present the information contained therein as at May 31,
1969, and will be prepared in accordance with generally accepted accounting
principles applied on a consistent basis with those applied in the preparation
of the consolidated balance sheet at December 31, 1968 to be delivered to Desa
pursuant to Section 8 below.
8. (a) There will be delivered to Desa not less than 15 days prior to
the Closing Date a consolidated balance sheet of the Department as at December
31, 1968, and related consolidated statements of operations for the five years
then ended, including the related notes and schedules thereto, together with the
opinions thereon of Price Waterhouse & Co., independent accountants for
Remington, as to such balance sheet and as to such statements of operations for
at least the three years ended December 31, 1968. Such financial statements and
the related notes and schedules, when prepared and delivered, will fairly
present the consolidated financial position of the Department as at December 31,
1968, and the consolidated results of its operations for the five years then
ended, will have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods involved and on
a consistent basis with the Accountants' Report, and will comply as to form in
all material respects with the requirements of the Securities Act of
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1933 and the rules and regulations of the Securities and Exchange Commission
with respect to the preparation and certification of financial statements; and
the opinions of Price Waterhouse & Co. with respect to such financial statements
examined by them shall be to such effect.
(b) There will be delivered to Desa prior to the Settlement Date an
unaudited consolidated statement of operations for the eight months ended August
31, 1969 and the eight months ended August 31, 1968, including the related notes
and schedules thereto. Such financial statements and the related notes and
schedules, when prepared and delivered, will fairly present the financial
position of the Department as at August 31, 1969 and the results of its
operations for the eight months then ended and ended August 31, 1968, and will
have been prepared in accordance with the accounting principles customarily
employed by the Department in keeping its books and records applied on a
consistent basis throughout the periods involved. such financial statements and
the related notes and schedules, when prepared and delivered, will comply as to
form in all material respects with the requirements of the Securities Act of
1933 and the rules and regulations of the Securities and Exchange Commission
with respect to the preparation of financial statements.
9. Remington has not acquired or disposed of any Real Properties or
Buildings relating to the Department since May 31, 1969, nor has it contracted
to do so. The Real Properties and Buildings of Remington relating to the
Department are insurable as to title by a reputable title insurer at premiums
which are reasonable in relation to premiums charged for property of a similar
character, size and location.
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10. The Real Properties and Buildings of Remington reflected on
Schedules A-1 and A-2 will be duly conveyed, by special warranty deed in the
form set forth in Schedule A-1, to Desa on the Closing Date. Remington
represents that it has not done or suffered to be done anything whereby the
title to the same Real Properties and Buildings has become impaired or
encumbered, except as described in Schedules A-1 and A-2 hereto. Each lease of
Remington referred to in Schedule B-4 hereto will be duly assigned to Desa on
the Closing Date by an assignment, satisfactory in form and substance to Desa
and its counsel, and upon such assignment, Desa will acquire all of Remington's
right, title and interest in and to each such lease. Each such lease is
assignable by Remington to Desa without the consent of any person or, with
respect to any such lease which may not be so assigned without any such consent,
Remington has duly obtained, or will duly obtain prior to the Closing Date, all
such consents to such assignments. Except as set forth on a Schedule to this
Agreement, Remington is not in default or in arrears in the performance of any
term or condition on its part to be performed under any such lease, and except
as may have been disclosed in writing to Desa, Remington has not received notice
that the buildings, plants and improvements owned by, or leased to, Remington
relating to the Department and the use thereof fail to comply with all zoning
laws, ordinances and regulations of governmental authorities having jurisdiction
thereof.
11. Remington has and on the Closing Date will have good and marketable
title, free and clear of all mortgages, liens, encumbrances, to all Subject
Assets (other than the Real Properties and Buildings referred to above)
reflected on the Department's Report and to all such assets acquired after May
31, 1969 to and including the date hereof, except for assets disposed of after
May 31, 1969 in the ordinary course of business and as not
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inconsistent with the terms of this Agreement, or except as otherwise disclosed
in Schedules B-1 and B-2; and the properties and assets listed on Schedules B-1
and B-2 are not subject to any conditional sales or title retention agreements.
12. All furniture, fixtures, vehicles, equipment and other assets
reflected on the Department's Report or acquired since the respective dates
thereof (to the extent not disposed of as aforesaid), including leasehold
improvements, are now and on the Closing Date will be well maintained and in
good repair and operating conditions; all items of inventory so reflected or so
to be reflected are now and on the Closing Date will be, in the case of raw
materials, of a quality conforming to the Department's usual standards and in
the case of work-in-process and finished goods, of merchantable quality,
workmanship and material. Products considered obsolete and quantities considered
excess have been and will be written off and the value thereof has not and will
not be reflected in the inventory. The values at which inventories are reflected
on the Department's Report are in accordance with Remington's normal inventory
valuation method with respect to the Department.
13. The sale, assignment, transfer and delivery of the personal
Properties and the Proprietary Rights (other than leaseholds referred to in
Schedule B-4 of this Agreement) owned or held by Remington relating to the
Department to Desa shall be by appropriate general warranty bulk bills of sale
and assignments, in form and substance satisfactory to Desa and its counsel,
together with such other appropriate instruments of transfer of title as may be
required by law for the full legal protection of the right, title and interest
of Desa or as may be reasonably requested by or on behalf of Desa. Upon the
sale, assignment, transfer and delivery of the Personal Properties and the
Proprietary Rights owned or held by
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Remington relating to the Department to Desa, there will be vested in Desa good
and marketable title thereto, free and clear of all mortgages, liens and
encumbrances, except as disclosed in Schedules B-1 through B-4 and C-1 through
C-11.
14. Since May 31, 1969 to and including the date hereof and from and
after the date of this Agreement to and including the Closing Date, Remington
has and will (A) not merge or consolidate with or into any corporation, or sell
or otherwise dispose of, or purchase or acquire, any assets inconsistent with
the provisions of this Agreement, (B) not make, accrue, or become labile in any
way for any bonus, profit-sharing, pension or incentive compensation payments to
any employee in the Department other than under presently existing arrangements
and in conformity therewith, (C) not make any changes in rates of wages or
salaries or in any employment benefits of any of its employees in the Department
except under existing and normally scheduled wage and salary progressions, (D)
carry on the business of the Department in the same manner as heretofore
conducted and will not take any other action other than in conformity with prior
practice in the ordinary and regular course of business as heretofore conducted,
(E) not create, assume or guarantee any indebtedness for money borrowed on
behalf of the Department, (F) use its best efforts to maintain and preserve the
Department's business intact and to maintain its relationships with suppliers
and customers and others having business relationships with the Department, and
(G) use its best efforts to persuade the employees of the Department to become
employees of Desa to the extent and as provided in Article VIII.
15. Remington will give to ▇▇▇▇▇ Incorporated, Desa, and their
representatives, and their banks and lending institutions, full access to the
Subject Assets, books, contracts
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agreements, purchase and sale orders, invoices, records and all other data
(financial or otherwise) relating to the Department and the Subject Assets at
all reasonable times. Remington will furnish to such persons copies of all such
documents and all such financial and operating data and information with respect
to the Department's business, affairs and Subject Assets as any such person all
reasonably request from time to time or at any time. Remington acknowledges and
agrees that the information referred to in this Section 15 may be disclosed
privately or publicly, orally or in writing, by ▇▇▇▇▇ Incorporated, Desa and
their representatives to others in connection with the transactions contemplated
by this Agreement, including, but without limitation, the financing thereof. To
the extent that any such information and access has been granted or permitted
prior to the date hereof, the same is hereby ratified and approved.
16. All negotiations relating to this Agreement and transactions set
forth herein or contemplated hereby have been and will be carried on by
Remington and the duly authorized representatives of Remington directly with
▇▇▇▇▇ Incorporated, Desa, and their representatives without the intervention of
any person as a result of any act or omission of Remington, or any of their
representatives, in such a manner as to give rise to any claim against ▇▇▇▇▇
Incorporated or Desa for any brokerage commissions, finders' fees or other like
payments, and Remington hereby agrees that it will indemnify and hold harmless
▇▇▇▇▇ Incorporated and Desa against any and all such claims resulting from any
acts or omissions of Remington, including but without limitation, legal and
other expenses.
17. Remington agrees to furnish Desa on or before August 1, 1969 a list
of the insurance policies concerning the Subject Assets, indicating extent and
type of coverage and carrier.
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18. There are no collective bargaining agreements in effect between
Remington and the employees at the Department.
19. Except as otherwise stated in this Agreement, each of the
Representations and warranties of Remington contained in this Agreement shall be
true, correct and complete on and as of the Closing Date with the same effect as
if made on and as of such date.
20. It is agreed that Remington makes no representations or warranties
concerning the willingness of any person or organization with which Remington
stands in contractual relationship to honor the transfer hereunder of any
contract, orders, licenses, patents, trademarks or other commitments; provided,
however, that Remington will cooperate with Desa and exercise Remington's best
efforts to obtain all necessary consents from such persons and/or organizations.
21. Remington makes no representations or warranties and assumes no
liability to Desa, in connection with the making, using or selling of the
Department's products, as to freedom from infringement of the patents,
trademarks, trade names or copyrights of third parties, except that, other than
as disclosed in writing to Desa, it has not been notified that it is so
infringing.
22. Remington makes no representations or warranties as to the future
relations of Desa with third parties or as to the success or profitability of
future use or operation of the Subject Assets.
23. Remington will acquire the Note for its own account for investment
without any intent to sell, transfer, or otherwise distribute or dispose of the
same and that, upon
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receipt of the Note, such representation shall be deemed to be reaffirmed as of
such date. Remington acknowledges that the Note (including any Notes issued in
substitution or exchange therefor) may bear the following legend:
"This Note is subject to certain restrictions and limitations on the
sale, transfer and disposition as contained in a Purchase and Sale
Agreement dated as of July 18, 1969 between the Remington Arms Company,
Inc., and Desa Industries, Inc., a copy of which Agreement is on file
at the principal offices of Desa Industries, Inc., and Remington Arms
Company, Inc."
ARTICLE III - REPRESENTATIONS AND
WARRANTIES OF DESA
Desa represents and warrants to, and agrees with, Remington as follows:
1. Desa is now and on the Closing Date will be a corporation duly
organized and validly existing in good standing under the laws of the State of
Delaware. No provision of the Certificate of Incorporation or By-Laws of Desa
has been or will be violated by the execution and delivery of this Agreement, or
by the performance or satisfaction of any agreement, covenant or condition
herein contained upon Desa's part to be performed or satisfied, and all
requisite corporate action and other authorizations, including but without
limitation, consents and waivers under any agreement or instrument to which Desa
is a party or by which it is or may be bound, have been or will have been duly
obtained prior to the Closing.
2. The Board of Directors of Desa has duly authorized and approved the
execution and delivery of this Agreement and the Note and approved the
transactions contemplated hereby; this Agreement has been duly authorized,
executed and delivered and
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constitutes a legal, valid and binding obligation of Desa in accordance with its
terms; and upon the execution and delivery of the Note, such Note will be a
legal, valid and binding obligation of Desa in accordance with its terms. No
authorization or approval of this Agreement, the Note or the transactions
contemplated hereby by the stockholders of Desa is required.
3. All negotiations relating to this Agreement and the transactions set
forth herein or contemplated hereby have been and will be carried on by ▇▇▇▇▇
Incorporated and Desa and their duly authorized representatives with Remington
and their representatives without the introduction or intervention of any person
not a party to this Agreement as a result of any act or omission of ▇▇▇▇▇
Incorporated or Desa, or any of their representatives, in such a manner as to
give rise to any claim by any such person against Remington for any brokerage
commissions, finders' fees or other like payments, and Desa hereby agrees that
it shall indemnify and hold harmless Remington against any and all such claims
by any such person including, but without limitation, legal and other expenses.
4. Except as otherwise stated in this Agreement, each of the
representations, warranties, covenants and agreements of Desa contained in this
Agreement shall be true, correct and complete on and as of the Closing Date with
the same effect as if made on such date.
ARTICLE IV - COVENANT NOT TO
MAKE OR SELL
For a period of at least five years from and after the Closing Date
neither Remington nor any of its subsidiaries will manufacture, market or
distribute any oft he products shown on Schedule E attached to this Agreement.
Other than as ste forth on such Schedule E, there
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are now, and on the Closing Date there will be, no other products manufactured,
marketed or distributed by the Department which are a part of the business and
the Subject Assets being purchased and intended to be purchased by Desa
hereunder.
ARTICLE V - PRODUCT SUPPLY AND
EXPORT SALES AGREEMENTS
1. On or prior to the Closing Date, the parties will execute and
deliver the Product Supply Agreement in the form attached hereto as Exhibit B.
2. On or prior to the Closing Date, Remington and Desa will negotiate,
execute and deliver an agreement satisfactory in form and substance to both
parties relating to the export sale of 8 gauge industrial kiln guns and shells
therefor.
ARTICLE VI - HARD COATED SAW
CHAIN DEVELOPMENT
Remington has undertaken limited development effort regarding the
application of hard, wear resistant and/or abrasive coatings to saw chain teeth
for chain saws. If Remington, either with or without the participation of Desa
in a development program, should develop a commercially feasible process for
applying the above coatings, Remington agrees not to perform such coating work
for third parties or to license third parties to perform such coating work for a
period of three years from the date of this Agreement, without the prior written
consent of Desa. If Remington should perform such coating work for third parties
or should license third parties to perform such coating work at any time,
whether with or without the prior consent of Desa, Remington will offer to
perform such coating work for Desa, and will offer a license to Desa, on most
favored terms as the same shall exist from time to time.
-23-
ARTICLE VII- USE OF EXISTING SUPPLIES
Desa, its subsidiaries and affiliates shall have the right from and
after the Closing Date to use all existing inventory and all equipment,
materials or manufacturing supplies marked with Remington's name and/or
trademarks, trade names or otherwise (except that such markings on trucks and
other public vehicles shall be changed by Desa as soon as practicable after the
Closing Date); and for a period of six months from and after the Closing Date to
use all existing advertising, packaging or assets not heretofore covered in this
Article marked with Remington's name and/or trademarks, trade names or otherwise
(and after such six months period if such items are identified as being
associated with Desa), except letterheads, purchase order forms, invoices and
other such printed paper supplies which shall not be used by Desa after the
Closing Date.
ARTICLE VIII - PERSONNEL
1. Prior to but as of August 31, 1969, the employment of substantially
all employees in the Department will be terminated by Remington. Remington
agrees to encourage all terminated personnel to accept employment by Desa. Desa
agrees to offer employment to all such personnel acceptable to it.
2. Remington will pay vacation pay of employees in+ the Department in
respect to 1969 vacations and carryover from prior years, as follows: (A) To
wage roll employees for all vacation taken prior to the Closing Date, and pay in
lieu of vacation for all unused vacation to which they were eligible as of the
Closing Date and (B) to salary roll employees for all vacation taken prior to
June 1, 1969, and pay in lieu of vacation for all unused vacation to which they
were eligible as of August 31, 1969.
-24-
3. Prior to the Closing Date, Remington will offer to all employees of
the Department to be terminated the options set forth in paragraph 2 of
"Personnel Procedures" attached hereto as Exhibit C with respect to termination
of their employment with Remington, and any costs and expenses in respect of
such employees incurred in connection therewith shall be for the account of and
shall be paid by Remington except to the extent expressly assumed by Desa.
4. Promptly after the Closing Date, Desa will adopt, subject to any
required approvals, a pension plan and other employee benefits (with retroactive
effect to August 31, 1969 in the case of all employees of the Department
becoming employees of Desa) substantially the same as the pension plans and
employee benefit plans of Remington as set forth in paragraph 1 of Exhibit C
hereto. Copies of the plans listed in paragraph 1 of Exhibit C have been
furnished Desa, and Desa acknowledges receipt thereof. As for Remington's other
employee benefits existing on the date of this Agreement, Desa will continue
such other benefits on and after the closing date with a view to reviewing them
and, where deemed appropriate or practicable by Desa, continuing them or
establishing comparable or substitute benefits.
5. Desa agrees to accept responsibility for employing all employees of
the Department who are on military leave as of August 31, 1969, to the extent
that such employees elect employment with Desa.
ARTICLE IX - USE OF TRADEMARKS
AND TRADE NAMES
1. Without the prior consent of Remington, Desa will not (A) change its
corporate name to include the word "Remington"; (B) incorporate a subsidiary
under such
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name; (C) permit any subsidiary to change its name to include the word
"Remington"; and (D) will not permit any department, division or other
organizational structure to include in its name the word "Remington".
2. Desa agrees that, except as contemplated by Article IX, it will use
the trademark "Remington" only in simple block letter form on the products
presently produced by Remington at the Park Forest Plant, certain of said
products being set forth in Schedule E. The trademark "Remington" in simple
block letter form may, with the consent of Remington, be used by Desa on
products previously produced at the Park Forest Plant.
3. Desa will indemnify and hold harmless Remington against and in
respect of any and all damages, claims, losses, liabilities and expenses
(including legal and other expenses) which may arise out of or be in respect of
the use by Desa, its subsidiaries and affiliates of the trademarks assigned or
licensed on Schedules C-6 through C-11.
ARTICLE X - RECORDS AND WITNESSES
For a period of ten years after the Closing Date:
1. Desa will give to Remington and its duly authorized representatives
at all reasonable times during normal business hours to the extent not
disruptive of the conduct of Desa's business, access to the Subject Assets,
including but not limited to books, contracts, agreements, purchase and sales
orders, invoices and financial records for use by Remington in connection with
its commitments, obligations and responsibilities under this Agreement or for
use by Remington for any lawful and reasonable purposes.
2. Desa agrees to make available at reasonable times and places
personnel which Remington might need as expert witnesses in connection with
product liability litigation
-26-
involving products marketed by the Department. Remington agrees to pay Desa
reasonable compensation for the services of such expert witnesses.
ARTICLE XI - CONDITIONS
PRECEDENT TO CLOSING
1. The obligation of Desa to purchase and accept delivery of the
Subject Assets to be sold, assigned, transferred and delivered at the Closing
shall be subject to the satisfaction on or prior to the Closing Date of the
following conditions, the compliance with or occurrence of which may be waived
in writing by Desa:
A. The representations and warranties of Remington
contained in this Agreement shall be true and correct on and
as of the Closing Date, with the same effect as though such
representations and warranties had been made on and as of the
Closing Date; Remington shall have performed, complied with or
satisfied all agreements, covenants and conditions required by
this Agreement to be performed, complied with or satisfied by
it at or prior to the Closing Date; and there shall have been
delivered to Desa on the Closing Date such certificates and
other documents with respect to the foregoing and in
compliance with this Agreement as Desa may reasonably request.
B. No action or proceeding shall be pending or
threatened at any time prior to or at the Closing Date before
any court or governmental body by any person not a party to
this Agreement or any public agency or authority seeking to
restrain, enjoin or prohibit, or damages or other relief in
connection with the execution and delivery of this Agreement
or the sale, assignment, transfer or delivery or the purchase
hereunder.
-27-
▇. ▇▇▇▇▇▇▇▇▇ shall have delivered or caused to be
delivered to Desa such deeds, bills of sale, assignments and
other documents of transfer as required to transfer all its
right, title and interest to all the Subject Assets and the
business of the Department to be sold to Desa pursuant to this
Agreement, such deeds, bills of sale, assignments and other
documents of transfer to be satisfactory in form and substance
to Desa and its counsel and to be in compliance with this
Agreement.
D. There shall have been no material adverse change
in the Subject Assets taken as a whole, or in the business,
general affairs, condition (financial or otherwise),
management, financial position or results of operations of the
Department from that set forth on the financial statements as
at December 31, 1968 and May 31, 1969.
▇. ▇▇▇▇▇▇▇▇▇ shall have furnished to Desa an opinion,
dated the Closing Date, of ▇▇▇▇▇▇▇ ▇. ▇▇▇, General Counsel for
Remington, in form and substance satisfactory to Desa and its
counsel, to the effect that:
(1) Remington is a corporation duly organized and
validly existing in good standing under the laws of the State
of Delaware, with full corporate power and authority to own
and hold its properties and conduct its business as presently
operated, and to enter into, and carry out the transactions
contemplated by, this Agreement, the Product Supply Agreement
and the Export Sales Agreement;
-28-
(2) Remington has taken all action (corporate and
other) necessary for the due authorization, execution,
delivery and performance of this Agreement, the Product Supply
Agreement and the Export Sales Agreement in accordance with
their terms, and this Agreement, the Product Supply Agreement,
and the Export Sales Agreement have each been duly authorized,
executed and delivered by Remington and each constitutes a
legal, valid and binding obligation of Remington in accordance
with its terms;
(3) Each deed and document of sale, assignment,
transfer or delivery delivered to Desa pursuant to the
Agreement has been duly authorized, executed and delivered by
Remington;
(4) The execution and delivery of this Agreement, the
Product Supply Agreement and the Export Sales Agreement, and
the performance of, and compliance with, the terms and
conditions thereof, have not and will not violate any
provision of applicable law or the Articles of Incorporation
or ByLaws of Remington and have not and will not conflict with
or result in any breach of any of the terms or conditions of,
or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon, any of the
Subject Assets pursuant to any agreement, instrument, decision
or order known to such counsel to which Remington is a party,
by which it is bound, or to which any of the Subject Assets
are subject;
(5) To the best of counsel's knowledge, there do not
exist any violations of, or defaults under, any agreement,
instrument, decision or order to which Remington is a party,
by which it is bound, or of which any of the Subject Assets
are subject; and
-29-
(6) Remington has duly and validly sold, assigned,
transferred and delivered to Desa (by special warranty deeds
in the case of real property and appropriate instruments and
documents of transfer in the case of all other Subject Assets,
in proper form and duly executed and acknowledged) all its
right, title and interest in and to the Subject Assets.
F. All required authorizations, consents, and
approvals of any authority or person in respect of this
Agreement, the Product Supply Agreement and the Export Sales
Agreement and of the consummation of the transactions set
forth herein and therein and contemplated hereby and thereby
shall have been duly obtained.
G. The purchase and sale contemplated by the Canada
Purchase and Sale Agreement, dated as of July 18, 1969,
between Desa and Remington Arms of Canada, Limited shall have
been consummated.
▇. ▇▇▇▇▇▇▇▇▇ shall have delivered to Desa such
additional certificates, instruments and documents as Desa or
its counsel may reasonably request.
I. The validity of all transactions herein mentioned
as well as the form and substance of all opinions, deeds,
certificates, instruments and other documents to be delivered
by Remington hereunder, shall be satisfactory to Desa's
counsel, Messrs. ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇.
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J. A sufficient number of employees in the Department
at the Park Forest Plant shall have accepted employment by
Desa so that Desa may conduct the business of the Department
in substantially the manner and at substantially the levels
existing prior to the Closing Date.
K. The contract dated May 2, 1969, between Remington
and ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and Company shall have been assigned to
Desa and ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ shall have consented to the
assignment.
L. There shall have been delivered to Desa
certificates for all of the outstanding capital stock of Mall
Tool Company, a Delaware corporation incorporated on November
24, 1958, duly endorsed in blank or with stock powers attached
and in negotiable form for transfer and with all transfer tax
stamps, if any, July affixed, together with all of the books
and records of such corporation; and Desa shall have received
a certificate of a Vice President and the Treasurer of
Remington to the effect that to the best of their knowledge,
as of the Closing Date, Mall Tool Company has no liabilities,
obligations or commitments of any kind and only such assets in
such amounts as may be set forth in such certificate.
M. The Accountant's Agreed Book Value shall not be
less than the Department's Agreed Book Value.
2. The obligations of Remington to sell, assign, transfer and deliver
the Subject Assets and the business of the Department at the Closing shall be
subject to the satisfaction at or prior to the Closing Date of the following
conditions, the compliance with or occurrence of which may be waived in writing
by Remington:
-31-
A. The representations and warranties of Desa
contained in this Agreement shall be true and correct on and
as of the Closing Date, with the same effect as though such
representations and warranties had been made on and as of the
Closing Date; Desa shall have complied with or satisfied all
agreements, covenants and conditions required by this
Agreement to be performed, complied with or satisfied by them
at or prior to the Closing Date; and there shall have been
delivered to Remington on the Closing Date such certificates
and other documents with respect to the foregoing and in
compliance with this Agreement as Remington may reasonably
request.
▇. ▇▇▇▇▇▇▇▇▇ shall have received the Note and a check
or checks payable to its order pursuant to Section 3 of
Article I of this Agreement.
▇. ▇▇▇▇ shall have assumed by appropriate instruments
all obligations and liabilities to be assumed by it under this
Agreement (other than as provided in Section 2 of Article
XIV), which instruments shall provide that Desa will indemnify
and hold harmless Remington from any and all damages, claims,
losses, liabilities and expenses (including but without
limitation, legal and other expenses) which result from or
relate to any act, omission, default or arrearage by Desa from
and after May 31, 1969 with respect to such obligations and
liabilities so assumed as of such date, except that Desa shall
not assume any obligations or liabilities with respect to
product liability claims or litigation involving personal
injury or death arising prior to the Closing Date.
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▇. ▇▇▇▇ shall have furnished to Remington an opinion,
dated the Closing Date, of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, New York, New
York, in form and substance satisfactory to Remington and its
counsel to the effect that:
(1) Desa is a corporation duly organized and validly
existing and in good standing under the laws of the State of
Delaware with full corporate power and authority to enter
into, and carry out the transactions contemplated by, this
Agreement, the Product Supply Agreement and the Export Sales
Agreement;
(2) This Agreement, the Product Supply Agreement and
the Export Sales Agreement have each been duly authorized,
executed and delivered by Desa and each constitutes a legal,
valid and binding obligation of Desa in accordance with its
terms;
(3) The Note has been duly and validly authorized and
issued and is a legal, valid and binding obligation of Desa in
accordance with its terms; and
(4) The instruments of assumption whereby Desa has
assumed certain obligations and liabilities of Remington to be
assumed by it under this Agreement have been duly authorized,
executed and delivered.
▇. ▇▇▇▇ shall have delivered to Remington such
additional certificates, instruments and documents as
Remington or its counsel may reasonably request.
F. The conditions set forth in Sections 1(B) and 1(G)
of this Article XI shall have been satisfied.
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ARTICLE XII - PAYMENT OF COSTS
Regardless of whether the transactions provided for herein are
consummated, Remington shall pay all costs and expenses (including, without
limitation, the payment of all fees and expenses of counsel and of Price
Waterhouse & Co. (except the Price Waterhouse & Co. fees and expenses referred
to below), and all obligations, liabilities and commitments not assumed by Desa
under this Agreement) incurred by it in carrying out this Agreement and the
transactions set forth herein and contemplated hereby, and any sales and other
transfer taxes (other than recording fees) and expenses with respect thereto.
Regardless of whether the transactions provided for herein are consummated, Desa
shall pay all costs and expenses (including, without limitation, all fees and
expenses of counsel and ▇▇▇▇▇▇ ▇▇▇▇▇ & Company, the fees and expenses of Price
Waterhouse & Co. incurred in the preparation of the audited financial statements
and data referred to in Article II of this Agreement (other than the
Accountants' Report), title insurance premiums, if any, and all obligations,
liabilities and commitments expressly assumed by it under this Agreement)
incurred by it in carrying out this Agreement and the transactions set forth
herein and contemplated hereby, including recording fees and expenses.
ARTICLE XIII - WAIVER OF CONDITIONS
In the event that either Desa or Remington expressly waives
any unsatisfied condition, representation, warranty, covenant or agreement (or
portion thereof) to its respective obligations to consummate the Closing on the
Closing Date, the waiving party shall thereafter be barred from recovering, and
thereafter shall not seek to recover, any damages, claims, losses, liabilities
or expenses (including, but without limitation, legal and
-34-
other expenses) from the other party to this Agreement in respect of the matter
or matters so waived.
ARTICLE XIV - CONFIRMING DOCUMENTS
1. At any time and from time to time after the Closing Date
Remington will execute and deliver or cause to be executed and delivered to Desa
such further instruments of title and other written assurances as Desa shall
reasonably request in order to vest, confirm and perfect in Desa title to the
Subject Assets and business of the Department to be and intended to be acquired
by Desa under this Agreement. The execution and delivery of this Agreement shall
not constitute an assignment of any claim, contract, interest, license, lease,
sublease, commitment or other document if an attempted assignment of any such
item without the consent of the other party thereto, or otherwise, would
constitute a breach thereof.
2. At any time and from time to time after the Closing Date Remington
and Desa will cooperate and use their best efforts to cause the transfer and the
assignment to Desa of all Remington's right, title and interest in and to
Government contracts involving products of the Department in the manner and as
provided by law, including, but without imitation, ASPR Part 16 (Novation
Agreements and Change of Name Agreements). A list of outstanding Government
contracts involving products of the Department has been furnished Desa. Subject
to and in connection with the foregoing, Remington agrees to execute and deliver
any and all instruments, documents, assignments, novations, agreements and other
instruments as may be required in order to vest, confirm and perfect in Desa all
Remington's right, title and interest in and to the foregoing Government
contracts to be and intended to be
-35-
transferred or assigned, subject to the requirements of applicable law, to Desa
under this Agreement. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby shall not constitute an
assignment or transfer by Remington of any claim, contract, interest, or other
right with respect to any such Government contracts if any such attempted
assignment or transfer, or the consummation of the transactions contemplated
hereby, without the consent or the approval of the appropriate Government office
or body, would constitute a breach thereof or be otherwise prohibited by law.
Prior to the Closing Date Remington shall continue to perform
its obligations under such contracts in accordance with their terms, and, if the
Closing under this Agreement shall take place, for the account and at the risk
of Desa (as if it were an original contracting party) from and after May 31,
1969 to and including the Closing Date. From and after the Closing Date, Desa
agrees to perform all obligations of Remington under such contracts in
accordance with their terms. Payments made to Remington on account of such
Government contracts on or after the Closing Date shall be paid over to Desa by
Remington. In the event any such Government contracts are transferred and
assigned, Desa will pay for any performance bonds required.
ARTICLE XV - DAMAGE, DELAY OR
DESTRUCTION BEFORE CLOSING
1. If prior to the Closing Date, any material part of the Subject
Assets is destroyed or damaged by fire or other casualty (whether or not such
destruction or damage is covered by insurance), then either party may terminate
this Agreement and all the obligations of the parties hereunder upon written
notice of such termination to the other, without any liability of either party
to the other.
-36-
2. Except as otherwise provided in this Article, any delays or failures
by either party hereto in performance hereunder shall be excused if and to the
extent that such delays or failure are caused by occurrences beyond such party's
control, including but not limited to, acts of God, decrees or restraints of
Government, strikes or other labor disturbance, war, sabotage and any other
cause or causes, whether similar or dissimilar to those already specified, which
cannot be controlled by such party. Such performance shall be so excused during
the continuance of the inability of the party affected to perform but for no
longer period, and the cause thereof shall be remedied as far as possible with
all reasonable dispatch. In the event of any delay or failure excused under this
Section 2 which continues beyond October 31, 1969, then either party may
terminate this Agreement.
ARTICLE XVI - ASSIGNMENT BY DESA
Desa may assign its rights under this Agreement to a
subsidiary (whether now or hereafter existing), without the prior written
consent of Remington. Any other assignment by Desa prior to Closing requires the
prior written consent of Remington. Any such assignment to a subsidiary shall
not relieve Desa of its obligations under this Agreement and Desa shall retain a
primary obligation to Remington under this Agreement; in addition, any assignee
of Desa shall execute and deliver to Remington at the Closing an appropriate
document of assumption of all obligations, liabilities and indemnification
agreements assumed by Desa under this Agreement. Upon any such assignment by
Desa, there shall inure automatically to the benefit of Desa and its assignee
all representations, warranties, covenants and agreements of Remington made
herein, and all instruments and documents of transfer
-37-
and all certificates, opinions and other instruments provided for in this
Agreement shall be in the name of Desa or assignee, or both, as Desa shall
designate to Remington on not less than five days' notice prior to the Closing
Date.
ARTICLE XVII - SURVIVAL,
MODIFICATION AND ENTIRETY
All representations, warranties, covenants and agreements contained of
all parties shall survive the Closing Date and delivery against payment
hereunder regardless of any investigation made by or on behalf of any such
party. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns. This Agreement
represents the entire understanding and agreement between the parties hereto
with respect to the subject matter hereof, supersedes all prior negotiations and
writing between the parties; cannot be amended, supplemented or modified orally,
but only by an agreement in writing signed by the party against whom enforcement
of any such amendment, supplement or modification is sought; can be assigned by
Desa prior to Closing only in accordance with Article XVI; and can be assigned
by Remington only with the prior consent of Desa.
ARTICLE XVIII - NOTICE
Any notices or other communications permitted or required hereunder
shall be sufficiently given if sent by registered or certified mail, postage
prepaid, or by telegram, addressed as follows:
To Remington: Remington Arms Company, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇. ▇. ▇▇▇▇▇▇▇
President and General Manager
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To Desa: c/o The President
Desa Industries, Inc.
c/▇ ▇▇▇▇▇ Incorporated
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(with a copy in each case to ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇ Incorporated, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇).
or to such other person or persons and/or at such other address or addresses as
shall be furnished in writing by any party hereto to the other parties. Any such
notice or communication required or permitted herein shall be deemed to have
been given as of the date so mailed or telegraphed, as evidenced by the postmark
on the envelope or the official notation of time and date on a telegram.
ARTICLE XIX - MULTIPLE ORIGINALS
This Agreement may be executed in any number of multiple originals,
each of which shall have the same form and effect as an original instrument, and
all of which taken together shall constitute one instrument.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
REMINGTON ARMS COMPANY, INC.
Attest: By:______________________________
-----------------------------
DESA INDUSTRIES, INC.
Attest: By:_____________________________
-----------------------------
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