following is an excerpt from the SB Holdings Form 10-K (included
in Item 3 thereof). Capitalized terms used in this Exhibit 99.6 and not otherwise defined have
the respective meanings set forth in Exhibit 99.5. Unless the context indicates otherwise, the terms
the Company, Spectrum, we,
our or us refer to SB Holdings and
its subsidiaries subsequent to the SB/RH Merger and to Spectrum Brands
prior to the SB/RH Merger, as well as both before and on and after August
LEGAL PROCEEDINGS OF SPECTRUM BRANDS HOLDINGS, INC. AND SPECTRUM BRANDS, INC.
In December 2009, San Francisco Technology, Inc. filed an action in the Federal District Court
for the Northern District of California against Spectrum Brands, Inc. (Spectrum Brands), as well
as a number of unaffiliated defendants, claiming that each of the defendants had falsely marked
patents on certain of its products in violation of Article 35, Section 292 of the U.S. Code and
seeking to have civil fines imposed on each of the defendants for such claimed violations. Spectrum Brands is reviewing the claims and intends to vigorously defend this matter but, as
of the date of the SB Holdings Form 10-K cannot estimate any possible losses.
May 2010, Herengrucht Group, LLC (Herengrucht) filed an action in the U.S. District Court for the
Southern District of California against Spectrum Brands claiming that Spectrum Brands had falsely
marked patents on certain of its products in violation of Article 35, Section 292 of the U.S. Code
and seeking to have civil fines imposed on each of the defendants for such claimed violations.
Herengrucht dismissed its claims without prejudice in September 2010.
Applica Consumer Products, Inc. (Applica), a subsidiary of Spectrum Brands, is a defendant
in NACCO Industries, Inc. et al. v. Applica Incorporated et al., Case No. C.A. 2541-VCL, which was
filed in the Court of Chancery of the State of Delaware in November 2006.
The original complaint in this action alleged a claim for, among other things, breach of
contract against Applica and a number of tort claims against certain
entities affiliated the Harbinger Parties. The claims against Applica related to the alleged breach of the merger
agreement between Applica and NACCO Industries, Inc. (NACCO) and one of its affiliates, which
agreement was terminated following Applicas receipt of a superior merger offer from the Harbinger
Parties. On October 22, 2007, the plaintiffs filed an amended complaint asserting claims against
Applica for, among other things, breach of contract and breach of the implied covenant of good
faith relating to the termination of the NACCO merger agreement and asserting various tort claims
against Applica and the Harbinger Parties. The original complaint was filed in conjunction with a
motion preliminarily to enjoin the Harbinger Parties acquisition of Applica. On December 1, 2006,
plaintiffs withdrew their motion for a preliminary injunction. In light of the consummation of
Applicas merger with affiliates of the Harbinger Parties in January 2007 (Applica is currently a
subsidiary of Russell Hobbs, Inc. (Russell Hobbs)), Spectrum Brands believes that any claim for
specific performance is moot. Applica filed a motion to dismiss the amended complaint in December
2007. Rather than respond to the motion to dismiss the amended complaint, NACCO filed a motion for
leave to file a second amended complaint, which was granted in May 2008. Applica moved to dismiss
the second amended complaint, which motion was granted in part and denied in part in December 2009.
The trial is currently scheduled for February 2011. Spectrum Brands intends to vigorously
defend the action, but may be unable to resolve the disputes successfully or without incurring
significant costs and expenses. As a result, Russell Hobbs and the
Harbinger Master Fund have entered into an
indemnification agreement, dated as of February 9, 2010, by
which the Harbinger Master Fund has agreed,
effective upon the consummation of the SB/RH Merger, to indemnify Russell Hobbs, its subsidiaries
and any entity that owns all of the outstanding voting stock of Russell Hobbs against any
out-of-pocket losses, costs, expenses, judgments, penalties, fines and other damages in excess of
$3 million incurred with respect to this litigation and any future litigation or legal action
against the indemnified parties arising out of or relating to the matters which form the basis of
Applica is a defendant in three asbestos lawsuits in which the plaintiffs have alleged injury
as the result of exposure to asbestos in hair dryers distributed by that subsidiary over 20 years
ago. Although Applica never manufactured such products, asbestos was used in certain hair dryers
distributed by it prior to 1979. Spectrum Brands believes that these actions are without merit and
intends to vigorously defend the action, but may be unable to resolve the disputes successfully
without incurring significant expenses.
As of the date of the SB Holdings Form 10-K, Spectrum Brands cannot
estimate possible losses.
At this time, Spectrum Brands does not believe it has
coverage under its insurance policies for the asbestos lawsuits.
Spectrum Brands is a defendant in various matters of litigation generally arising out of the
ordinary course of business.