Item 1.01 Entry into a Material Definitive Agreement.
Acquisition
On
The Purchase Price for the Transaction is approximately
The Closing of the Transaction is subject to customary closing conditions, including the expiration of any applicable waiting period under the Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended, the absence of any law or order preventing the consummation of the Transaction, the accuracy of the representations and warranties contained in the Purchase Agreement (subject to various exceptions and qualifications, including the absence of a material adverse effect with respect to the Acquired Companies), and compliance with covenants set forth in the Purchase Agreement in all material respects.
The Purchase Agreement contains representations, warranties and covenants of the Company and the Sellers that are customary for a transaction of this nature. The Company will obtain a representation and warranty insurance policy to obtain coverage for losses that may result from a breach of certain representations and warranties made by the Sellers in the Purchase Agreement, subject to exclusions, policy limits and certain other terms and conditions. From signing to Closing, the Acquired Companies must operate in the ordinary course of business, subject to certain exceptions set forth in the Purchase Agreement.
Under the terms of the Purchase Agreement, the Sellers and Acquired Companies
will be subject to customary "no-shop" restrictions on their ability to
encourage, initiate or engage in discussions or negotiations with any third
parties concerning the sale of all or substantially all of the equity interests
of the Acquired Companies or all or substantially all of the assets related to
the purchased business (other than assets sold in the ordinary course of
business). Additionally, the Purchase Agreement contains certain termination
rights, including that either the Company or the Sellers may terminate the
Purchase Agreement if the transaction is not completed by
As an inducement to enter into the Purchase Agreement, the Company has entered into employment agreements with seven key employees of Sellers, pursuant to which, among other things, the Company has agreed to grant 25,000 non-qualified stock options in the aggregate to the seven employees as an inducement for continuing their employment with the Company after the Closing. The employment agreements will become effective at the Closing.
The foregoing description of the Purchase Agreement and the transactions contemplated thereby is only a summary, does not purport to be complete, and is subject to and qualified in its entirety be reference to the full text of the Purchase Agreement, a copy of which is incorporated herein by reference.
Financing
In connection with the execution of the Purchase Agreement, the Company executed
two debt commitment letters with, and secured financing commitments from
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The Credit Facilities will be sufficient for the Company to pay the Purchase Price and other amounts required to be paid in connection with the Purchase Agreement.
The foregoing descriptions of the Commitment Letters are only a summary, do not purport to be complete and are qualified in their entirety by reference to the full text of the Commitment Letters, copies of which are attached hereto as Exhibit 10.1 and Exhibit 10.2.
The representations, warranties and covenants contained in the Purchase
Agreement and Commitment Letters were made only for purposes of the Purchase
Agreement and the Commitment Letters, respectively, and as of specified dates,
were solely for the benefit of the parties to the Purchase Agreement and the
Commitment Letters, and may be subject to limitations agreed upon by the
contracting parties, including being qualified by confidential disclosures
exchanged between the parties in connection with the execution of the Purchase
Agreement and the Commitment Letters. The representations and warranties have
been made for the purpose of allocating contractual risk between the parties to
the Purchase Agreement and the Commitment Letters instead of establishing these
matters as facts, and may be subject to standards of materiality applicable to
the contracting parties that differ from those applicable to investors.
Investors should not rely on the representations, warranties and covenants or
any description thereof as characterizations of the actual state of facts or
condition of the Company, the Sellers,
Item 7.01 Regulation FD Disclosure.
On
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description Exhibit 2.1 Purchase Agreement, datedJanuary 24, 2021 , by and among HoneywellSafety Products USA, Inc. ,North Safety Products Limited ,Honeywell Safety Products (UK) Limited ,North Safety de Mexicali S de R.L. de C.V. ,Honeywell (China) Co. Ltd. andRocky Brands, Inc. *
Exhibit 99 Press Release, dated
Acquire Leading Brand Portfolio IncludingThe Original Muck Boot Company and XTRATUF."
Exhibit 10.1 Commitment Letter, dated
Bank of America, N.A .
Exhibit 10.2 Commitment Letter, dated
Direct Lending Group of TCW Asset Management Company LLC .
Exhibit 104 Cover Page Interactive Data File (imbedded within the Inline XBRL
document)
*Exhibits and schedules have been omitted pursuant to Item 601(b)(2) of
Regulation S-K. The registrant hereby undertakes to furnish copies of any of the
omitted schedules or exhibits upon request of the
Cautionary Statement Regarding Forward Looking Statements
This Current Report on Form 8-K and the exhibits included contain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Investors are cautioned that forward-looking
statements are inherently uncertain and involve potential risks and
uncertainties. A number of factors could cause actual results to differ
materially from these statements, including, but not limited to risks relating
to the Company's proposed acquisition of the Acquired Companies and the
Additional Acquired Assets, including the possibility that the closing
conditions to the contemplated transaction may not be satisfied or waived,
including that a governmental entity may prohibit, delay or refuse to grant
antitrust approval; delay in closing the transaction or the possibility of
non-consummation of the transaction; the occurrence of any event that could give
rise to termination of the Purchase Agreement; risks inherent in the achievement
of expected financial results and cost synergies for the acquisition and the
timing thereof; risks that the pendency, financing and efforts to consummate the
transaction may be disruptive to the Company or the Acquired Companies or their
respective management teams; the effect of announcing the transaction on the
Acquired Companies' ability to retain and hire key personnel and maintain
relationships with customers, suppliers and other third parties; risks related
to integration of the businesses and other factors. Additional information
concerning other risks and uncertainties that could cause actual results to
differ materially from that projected or suggested is contained in the Company's
filings with the
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