UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13
or 15(d) of The Securities Exchange Act of 1934
Date of report (Date of earliest event reported): April 27, 2006
Lifetime Brands, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
0-19254
(Commission File Number) |
11-2682486
(IRS Employer Identification No.) |
One Merrick Avenue, Westbury, New York, 11590
(Address of Principal Executive Offices)(Zip Code)
(Registrant’s Telephone Number, Including Area Code) 516-683-6000
(Former Name or Former
Address, if Changed Since Last Report) N/A
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see
General Instruction A.2. below):
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.01. Acquisition
or Disposition of Assets
On April 27, 2006,
Syratech Acquisition Corporation, a Delaware corporation (the “Purchaser”),
purchased from Syratech Corporation, a Delaware corporation (“Syratech”),
Wallace International de P.R., Inc., a Delaware corporation (“Wallace”),
Syratech (H.K.) Limited, a Hong Kong corporation (“Limited”), and CHI
International, Inc., a Maryland corporation (“CHI International” and, together
with Syratech, Wallace and Limited, the “Sellers”) substantially all of the
assets used or held for use by Sellers in the conduct of the Business (as defined below)
and Purchaser assumed certain of the liabilities and obligations of Sellers with respect
to the business, all upon the terms and conditions of an Asset Purchase Agreement dated as
of March 8, 2006 by and among Sellers, Purchaser and Lifetime Brands Inc.
(“Lifetime” or the “Company”), a Delaware corporation and the owner of
all of the outstanding shares of capital stock of the Purchaser.
Capitalized terms
used herein which are not defined have the meanings ascribed thereto in the Asset Purchase
Agreement, a copy of which was filed by the Company as an exhibit to the Company’s
Form 8-K dated March 8, 2006.
Prior to the closing
of the purchase, the Sellers designed, licensed, manufactured, imported, marketed and
sold, at wholesale (for ultimate sale to consumers through various channels including
department stores, high end specialty stores, jewelers, mass merchants and discounters)
and by direct marketing and internet marketing, a variety of high quality branded products
for the home, including: (i) tabletop products: including sterling silver flatware,
stainless steel flatware, silver plated hollowware, dinnerware, glassware, crystal,
giftware and alternative metal products; (ii) frames: including photo albums, picture
frames and photo storage products; and (iii) home décor products: including
lighting, giftware, ceramics, holiday items, decorative glassware, wall and garden
products (the “Business”). Following the closing, the Purchaser will be carrying
on the business previously conducted by Sellers.
Upon the terms and
subject to the conditions contained in the Asset Purchase Agreement the Purchaser
purchased all right, title and interest in and to the following properties of the Sellers
(collectively, the “Acquired Assets”):
| (a) |
all
right to conduct the Business (including the exclusive right to sell any and
all of the Products and the exclusive right to sell and manage all of the
product lines and brand names); |
| (b) |
all
receivables including accounts receivable; |
| (c) |
all
right, title and interest in and to the real property in Crisfield, Maryland
known as “Carvel Hall”, the lease with respect thereto and the
buildings, improvements and furniture and fixtures thereat; |
| (d) |
all
of the Sellers’ worldwide right, title, and interest in, to and under
the Sellers Intellectual Property and all Intellectual Property Licenses
as defined in the Asset Purchase Agreement; |
| (f) |
all
furniture and equipment; |
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| (g) |
the
Leases and the Leased Real Property as defined in the asset purchase
agreement, including any leasehold interest or other use and occupancy
rights and interests, rights of way, and easements with or in favor or for
the benefit of one or more of the Sellers therein, and any furniture and
fixtures related thereto (but not the leasehold interest in the Owned Real
Property as defined in the Asset Purchase Agreement); |
| (h) |
the
Tangible Personal Property and any leases of any Tangible Personal Property
set forth on Schedule 2.1(viii) of the Asset Purchase Agreement; |
| (i) |
the
Contracts (as defined by the Asset Purchase Agreement) listed on Schedule
2.1(ix) of the Asset Purchase Agreement; |
| (j) |
all
prepaid expenses, advances (including prepaid royalties) , credits and
deposits (other than the items listed on Schedule 2.2(viii) of the Asset
Purchase Agreement); |
| (k) |
copies
of any and all records; |
| (l) |
the
names of each of the Sellers, including but not limited to “Syratech,” and
any and all derivatives and similar names; |
| (m) |
all
rights related to any portion of the Acquired Assets, including any express
or implied third party warranties, guarantees, representations, covenants,
indemnities, and other similar contractual rights or claims as to third
parties held by or in favor of any Seller and arising out of, resulting
from or relating to the Acquired Assets, including, but not limited to,
any warranties or claims with respect to damaged or defective goods; |
| (n) |
all
rights to insurance and condemnation proceeds relating to any damage,
destruction, taking or other similar impairment of any of the Business or
any of the Acquired Assets; |
| (o) |
all
rights to obtain any permits with respect to the Business (and to the extent
assignable in connection with the Acquisition Transactions, as defined in
the Asset Purchase Agreement, all such assignable Permits); and |
| (p) |
all
goodwill related to the foregoing. |
The Acquired Assets
did not include the following properties (collectively, the “Excluded Assets”):
| (a) |
the
purchase price hereunder; |
| (b) |
all
cash and cash equivalents and marketable securities on hand or on deposit; |
| (c) |
the
Vera Wang Assets; |
| (d) |
the
Vera Wang License; |
| (e) |
all
minute books, stock records and corporate seals of any of the Sellers; |
| (f) |
the
shares of capital stock of any of the Sellers held in treasury; |
| (g) |
the
shares of capital stock of any subsidiary of any of the Sellers, except as
may be provided in Section 7.17 of the Asset Purchase Agreement. |
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| (h) |
without
duplication of any matters set forth in Section 7.14 of the Asset Purchase
Agreement, those rights relating to deposits listed on Schedule 2.2(viii)
of the Asset Purchase Agreement; |
| (i) |
all
insurance policies of the Sellers and all rights thereunder (except to the
extent specified in item (xv) of Section 2.1 of the Asset Purchase
Agreement); |
| (j) |
all
of the Sellers’ contracts listed on Schedule 2.2(x) of the Asset
Purchase Agreement; |
| (k) |
any
tax asset, such as tax refunds receivable; and |
| (l) |
items
listed on Schedule 2.2(xii) of the Asset Purchase Agreement. |
The Purchaser assumed
only the following liabilities of the Sellers incurred in connection with Acquired Assets
and the operation of the Business in the ordinary course of business, and no others
(collectively, the “Assumed Liabilities”).
| (a) |
the
liabilities of the Sellers with respect to periods after the closing under
and in connection with (A) the leases with respect to the Leased Real
Property and (B) the Owned IP Rights and the Licensed IP Rights as defined
in the Asset Purchase Agreement; |
| (b) |
the
liabilities of the Sellers arising under the Purchased Contracts (as defined
in the Asset Purchase Agreement), with respect to periods after the
closing (other than any liability set forth on Schedule 2.4(ii) of the
Asset Purchase Agreement) or arising out of or relating to a breach by the
Sellers of such Purchased Contract that occurred prior to the closing); |
| (c) |
the
liabilities that are attributable to or arising out of the ownership or
operation of any Acquired Assets or the Business with respect to periods
after the closing; |
| (d) |
the
liabilities set forth on Schedule 2.4(iv) of the Asset Purchase Agreement; |
| (e) |
the
liabilities arising in connection with the Legal Proceedings listed on
Schedule 5.19 of the Asset Purchase Agreement (but not any of the items
listed on the continuation portion of Schedule 5.19 of the Asset Purchase
Agreement titled “Proof of Claim Status – Unresolved Claims,” not
any of the items listed in the “Second Omnibus Objection to Allowance
of Claims attached to Schedule 5.19 of the Asset Purchase Agreement, or
titled “Proof of Claim Status – Unresolved Claims,” or any
of the items referred to on the “Order Granting the Reorganized
Debtors’ First Omnibus Objection to Allowance of Claims attached to
Schedule 5.19 of the Asset Purchase Agreement) and liabilities arising in
connection with any legal proceeding arising after the closing with
respect to an event, fact or circumstance that occurred or existed prior
to the closing, provided that if the Purchaser is required to pay any
amount in respect of any such legal proceeding in excess of the amount, if
any, accrued therefor on the closing date working capital calculation, the
Purchaser shall be entitled to reimbursement from the indemnity escrow for
such excess amount as a loss indemnifiable pursuant to Article XII of the
Asset Purchase Agreement; provided, further, that nothing in this clause (v)
shall preclude the Purchaser from seeking indemnification for any matter
that may constitute a breach of any of the Sellers’ representations
and warranties hereunder; and provided further, that nothing herein
(including without limitation Section 2.4(v) of the Asset Purchase
Agreement) shall result in the Purchaser from assuming any Excluded
Liability; |
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| (f) |
any
liabilities related to the retirement benefits payable to each of Alan
Kanter, Faye Florence and Mel Levine, pursuant to the employment
agreements between each of those persons and Syratech, as reflected in the
unaudited year-end financial Statements; |
| (g) |
any
accrued employment-related liabilities with respect to vacation, severance
and other benefits owing as of 12:00:01a.m. on the closing date, all of
which obligations and liabilities shall be reflected in the closing date
working capital calculation prepared pursuant to Section 3.5(a) of the
Asset Purchase Agreement; |
| (h) |
the
liabilities arising from or relating to the employment or services of any
employee (i.e., accrued salaries, wages and associated items) with respect
to incomplete pay periods as of the 12:00:01a.m. on the closing date, all
of which obligations and liabilities shall be reflected in the closing
date working capital calculation prepared pursuant to Section 3.5(a) of
the Asset Purchase Agreement; |
| (i) |
any
accrued obligations for matching contributions or other related payable with
respect to any Employee Benefit Plans to the extent reflected as a payable
in the closing date working capital calculation prepared pursuant to
Section 3.5(a) of the Asset Purchase Agreement. |
| (j) |
any
accounts payable (including, for the avoidance of doubt, (i) invoiced
accounts payable and (ii) accrued but uninvoiced accounts payable), and
other accrued expenses owing as of 12:00:01a.m. on the closing date and
incurred in the ordinary course of business; |
| (k) |
the
portion of the Transfer Taxes payable by the Purchaser under Section 10.3 of
the Asset Purchase Agreement; and |
| (l) |
any
tax reflected as a liability on the final closing date balance sheet (but
not any tax referred to in item (vi) of Section 2.5 of the Asset Purchase
Agreement ). |
The Purchaser only
assumed the liabilities of the Sellers expressly set forth in Section 2.4 of the Asset
Purchase Agreement. Without limiting the generality of the foregoing, the Purchaser did
not assume and the Sellers remain responsible for and shall promptly pay, perform and
discharge, any and all of the other Liabilities of the Sellers (the “Excluded
Liabilities”), such that the Purchaser will incur no liability in connection
therewith, and the Sellers shall forever indemnify the Purchaser and Purchaser Indemnitees
with respect to and shall forever hold the Purchaser and Purchaser Indemnitees harmless
from and against all such Excluded Liabilities, including but not limited to the
following:
| (a) |
any
liability of any of the Sellers arising from a breach of a representation or
warranty in the Asset Purchase Agreement on its part or its failure to
fully, faithfully and promptly perform any agreement or covenant on its
part contained in the Asset Purchase Agreement; |
| (b) |
any
liability of any of the Sellers to the extent that such Seller shall be
indemnified by an insurer; |
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| (c) |
any
expenses of the Sellers incurred in connection with the transactions
contemplated under the Asset Purchase Agreement; |
| (d) |
any
liabilities relating to an Excluded Asset, including without limitation any
liability relating to a contract of the Sellers that is not included as a
Purchased Contract on Schedule 2.1(ix) of the Asset Purchase Agreement; |
| (e) |
any
liabilities related to the Rauch discontinued operations liabilities; |
| (f) |
any
liability for taxes attributable to any Seller or imposed on any Seller and
(1) attributable to the operation of the Business prior to the closing
date, (2) attributable to the ownership of the Acquired Assets prior to
the closing date, or (3) incurred by a Seller as a result of the
transactions contemplated by the Asset Purchase Agreement, none of which
Taxes described in subclauses (1) through (3) of the Asset Purchase
Agreement shall be included in the closing date working capital
calculation; provided, however, that (A) Purchaser’s portion of the
transfer taxes under Section 10.3 of the Asset Purchase Agreement, and (B)
Seller’s taxes arising from compensation paid or payable by the
Sellers to their respective employees on or before the closing date,
including but not limited to taxes of Seller arising by reason of Sections
280G or Section 409A of the Internal Revenue Service Code shall be deemed
Assumed Liabilities and shall be included in the closing date working
capital calculation; |
| (g) |
any
liability to any holder of any shares of the capital stock or other
securities of any Seller, or any option to purchase any of the foregoing
(including, but not limited to, the Convertible Senior Notes); |
| (h) |
any
liability for indebtedness; |
| (i) |
any
liability arising out of or with respect to the First Amended Joint Plan of
Reorganization of Syratech Corporation, effective June 3, 2005, as filed
with the United States Bankruptcy Court for the District of Massachusetts
(Eastern Division) (the “Plan”), including any liability related
to the settlement of any claims under and pursuant to the Plan),
regardless of when occurring; |
| (j) |
any
liability relating to, resulting from, or arising out of, any operation of
the Sellers other than the Business or any former operation of the
Business that has been discontinued or disposed of prior to the closing; |
| (k) |
any
liability related to any intercompany arrangements; and |
| (l) |
except
as expressly provided in Section 2.4 of the Asset Purchase Agreement,
attributable to or arising out of the ownership or operations of the
Sellers, any Acquired Assets or the Business prior to the closing. |
In addition, pursuant
to Asset Purchase Agreement, the Sellers, and not the Purchaser, shall be responsible for
any change in control obligations provided for in any current employment agreements.
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As consideration for
the assets the Purchaser paid at closing $37,000,000, plus an additional net working
capital payment of $5,140,500, for a total cash payment of $42,140,500.
In addition to the
cash paid at closing, Lifetime issued 439,676 shares of the Company’s Common Stock
the equivalent of Twelve Million Five Hundred Thousand Dollars $12,500,000 to the Sellers.
The cash paid at the
closing was funded through the Company’s credit facility.
The information
provided in this Item 2.01 is qualified in its entirety by reference to the terms and
conditions of the Asset Purchase Agreement, a copy of which was filed by the Company as an
exhibit to the Company’s Form 8-K dated March 8, 2006.
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Item 9.01. Financial
Statements and Exhibits
The financial
statements required by this item will be filed by amendment not later than 71 calendar
days after the date that this initial report on Form 8-K must be filed.
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Signature
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned thereunto duly authorized.
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Lifetime Brands, Inc. |
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By: /s/ Robert McNally |
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Robert McNally
Vice President of Finance and
Chief Financial Officer
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Date: May 3 , 2006
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