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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) March 25, 1998
--------------------------
BMC INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
MINNESOTA 1-8467 41-0169210
- -------------------------------------------------------------------------------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
ONE MERIDIAN CROSSINGS
SUITE 850
MINNEAPOLIS, MINNESOTA 55423
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (612) 851-6000
--------------------------
TWO APPLETREE SQUARE, MINNEAPOLIS, MINNESOTA 55425
- --------------------------------------------------------------------------------
(Former Address)
<PAGE>
Item 5. OTHER EVENTS.
VIS-ORC, Inc. (the "Company")(a wholly-owned subsidiary of Vision-Ease
Lens, Inc., in turn a wholly-owned subsidiary of BMC Industries, Inc.) entered
into an Asset Purchase Agreement, dated as of March 25, 1998 (the "Asset
Purchase Agreement"), with Monsanto Company, a Delaware corporation
("Monsanto"). The Asset Purchase Agreement provides for the purchase by the
Company of substantially all of the assets, properties and rights (the "Assets")
of Monsanto used in the Orcolite business unit (the "Business"), an operating
division of Monsanto.
Under the terms of the Asset Purchase Agreement, the Company will pay to
Monsanto $100,000,000 and up to an additional $800,000 (representing the amount
of additional capital expenditures made by Monsanto between March 25, 1998 and
the closing of this transaction) as consideration for the Assets. The foregoing
purchase price is subject to adjustment at closing for certain working capital
items, as set forth in the Asset Purchase Agreement. Subject to certain
indemnification rights against Monsanto, the Company will also assume the
obligations and liabilities of Monsanto primarily relating to the Assets and the
Business. The acquisition is expected to close in the second quarter of 1998.
The foregoing description of the Asset Purchase Agreement does not purport
to be complete and is qualified in its entirety by reference to the Asset
Purchase Agreement, which is attached hereto as an exhibit and incorporated
herein by reference.
Item 7. EXHIBITS.
2.1 Asset Purchase Agreement, dated as of March 25, 1998, between Monsanto
Company and VIS-ORC, Inc.
The Registrant hereby agrees to furnish supplementally a copy of any
omitted schedule or exhibit to the Commission upon request.
99.1 Press Release of BMC Industries, Inc. dated March 25, 1998.
-2-
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SIGNATURES
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.
BMC INDUSTRIES, INC.
Date: April 3 , 1998 By /s/ Jeffrey J. Hattara
--------------- --------------------------------
Jeffrey J. Hattara
Vice President of Finance and
Administration, and Chief
Financial Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
No. Exhibit No. Page
- -- ----------- -----
<S> <C> <C>
2.1 Asset Purchase Agreement, dated as of March 25, Filed
1998, between Monsanto Company Electronically
and VIS-ORC, Inc.
99.1 Press Release of BMC Industries, Inc. Filed
dated March 25, 1998. Electronically
</TABLE>
<PAGE>
ASSET PURCHASE AGREEMENT
DATED AS OF
MARCH 25, 1998
BETWEEN
MONSANTO COMPANY
AND
VIS-ORC, INC.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
ARTICLE 1 - PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.1. PURCHASE AND SALE. . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.2. EXCLUDED ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . .3
SECTION 1.3. TRANSFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
ARTICLE 2 - PURCHASE PRICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
SECTION 2.1. PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . . .3
SECTION 2.2. WORKING CAPITAL ADJUSTMENT . . . . . . . . . . . . . . . . . . . .3
SECTION 2.3. ASSUMPTION OF LIABILITIES. . . . . . . . . . . . . . . . . . . . .4
SECTION 2.4. PURCHASE PRICE ALLOCATION. . . . . . . . . . . . . . . . . . . . .5
SECTION 2.5. LIKE-KIND EXCHANGE.. . . . . . . . . . . . . . . . . . . . . . . .5
ARTICLE 3 - SELLER'S REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . .6
SECTION 3.1. ORGANIZATION AND CORPORATE STANDING. . . . . . . . . . . . . . . .6
SECTION 3.2. CORPORATE POWER AND AUTHORITY. . . . . . . . . . . . . . . . . . .6
SECTION 3.3. FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . .6
SECTION 3.4. ABSENCE OF CERTAIN CHANGES AND EVENTS. . . . . . . . . . . . . . .7
SECTION 3.5. NO VIOLATION OF LAW. . . . . . . . . . . . . . . . . . . . . . . .8
SECTION 3.6. REAL PROPERTY. . . . . . . . . . . . . . . . . . . . . . . . . . .8
SECTION 3.7. TITLE TO ASSETS/SUFFICIENCY. . . . . . . . . . . . . . . . . . . .9
SECTION 3.8. LEASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
SECTION 3.9. LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
SECTION 3.10. EMPLOYEES OF THE BUSINESS. . . . . . . . . . . . . . . . . . . . .9
SECTION 3.11. OMITTED INTENTIONALLY. . . . . . . . . . . . . . . . . . . . . . .9
SECTION 3.12. COLLECTIVE BARGAINING; EMPLOYMENT CONTRACTS. . . . . . . . . . . 10
SECTION 3.13. LABOR MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.14. ENVIRONMENTAL MATTERS. . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.15. PERMITS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.16. CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.17. REQUIRED CONSENTS, APPROVALS AND FILINGS . . . . . . . . . . . . 12
SECTION 3.18. NO CONFLICT. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.19. INTELLECTUAL PROPERTY. . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.20. DISCLAIMER . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 4 - BUYER'S REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . 14
SECTION 4.1. ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4.2. CORPORATE POWER AND AUTHORITY. . . . . . . . . . . . . . . . . . 14
SECTION 4.3. REQUIRED CONSENTS, APPROVALS AND FILINGS . . . . . . . . . . . . 14
SECTION 4.4. NO CONFLICT. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4.5. LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.6. FINANCING. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 5 - COVENANTS OF THE PARTIES. . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.1. OPERATIONS PENDING CLOSING . . . . . . . . . . . . . . . . . . . 15
SECTION 5.2. ACCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 5.3. PREPARATION OF SUPPORTING DOCUMENTS. . . . . . . . . . . . . . . 17
SECTION 5.4. APPROVALS OF THIRD PARTIES; SATISFACTION OF CONDITIONS TO
CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 5.5. HART-SCOTT-RODINO NOTIFICATION . . . . . . . . . . . . . . . . . 18
SECTION 5.6. FINANCIAL AND TAX SERVICES . . . . . . . . . . . . . . . . . . . 18
SECTION 5.7. TRANSFER TAXES . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 5.8. NOTICE AND OPPORTUNITY TO CURE . . . . . . . . . . . . . . . . . 19
ARTICLE 6 - CASUALTY AND CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 6.1. CASUALTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 6.2. CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 7 - COVENANTS AS TO EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 7.1. OFFERS OF EMPLOYMENT . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 7.2. BENEFITS AND EMPLOYMENT CONDITIONS OF
TRANSFERRED EMPLOYEES . . . . . . . . . . . . . . . . . . . . . 23
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SECTION 7.3. ACCESS TO EMPLOYEE INFORMATION . . . . . . . . . . . . . . . . . 25
SECTION 7.4. WORKERS' COMPENSATION CLAIMS . . . . . . . . . . . . . . . . . . 25
SECTION 7.5. GENERAL EMPLOYEE PROVISIONS. . . . . . . . . . . . . . . . . . . 25
SECTION 7.6. EMPLOYEE BENEFIT PLANS . . . . . . . . . . . . . . . . . . . . . 26
SECTION 7.7. EMPLOYEE COMMUNICATION . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 8 - CONDITIONS TO SELLER'S OBLIGATIONS. . . . . . . . . . . . . . . . . . . 27
SECTION 8.1. REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING DATE. . . . . . . 27
SECTION 8.2. LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 8.3. OPINION OF COUNSEL TO BUYER. . . . . . . . . . . . . . . . . . . 27
SECTION 8.4. REQUIRED GOVERNMENTAL APPROVALS. . . . . . . . . . . . . . . . . 27
SECTION 8.5. OTHER NECESSARY CONSENTS . . . . . . . . . . . . . . . . . . . . 28
SECTION 8.6. SELLER EPA AGREEMENT . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 9 - CONDITIONS TO BUYER'S OBLIGATIONS . . . . . . . . . . . . . . . . . . . 28
SECTION 9.1. REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING DATE. . . . . . . 28
SECTION 9.2. LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 9.3. OPINION OF COUNSEL TO SELLER . . . . . . . . . . . . . . . . . . 29
SECTION 9.4. REQUIRED GOVERNMENTAL APPROVALS. . . . . . . . . . . . . . . . . 29
SECTION 9.5. OTHER NECESSARY CONSENTS . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 10 - CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 10.1. CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 10.2. TERMINATION PRIOR TO CLOSING . . . . . . . . . . . . . . . . . . 30
SECTION 10.3. TERMINATION OF OBLIGATIONS . . . . . . . . . . . . . . . . . . . 31
SECTION 10.4. ASSIGNMENT OF ORC AGREEMENT. . . . . . . . . . . . . . . . . . . 31
SECTION 10.5. BUYER'S OPTION TO DEFER CLOSING. . . . . . . . . . . . . . . . . 31
ARTICLE 11 - INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 11.1. SELLER INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . 32
SECTION 11.2. BUYER INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . 33
SECTION 11.3. INDEMNITY CLAIMS . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 11.4. DEDUCTIBLE . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 11.5. NOTICE OF CLAIM. . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 11.6. DEFENSE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 11.7. LIMITATION OF LIABILITY. . . . . . . . . . . . . . . . . . . . . 35
SECTION 11.8. TAX INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 11.9. PROPERTY TAX ALLOCATION. . . . . . . . . . . . . . . . . . . . . 36
SECTION 11.10. EXCLUSIVE REMEDY; RELEASE. . . . . . . . . . . . . . . . . . . . 36
ARTICLE 12 - MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 12.1. EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 12.2. NON-COMPETITION. . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 12.3. ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 12.4. WAIVERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 12.5. PARTIES BOUND BY AGREEMENT; SUCCESSORS AND ASSIGNS . . . . . . . 38
SECTION 12.6. COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 12.7. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 12.8. BROKERAGE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 12.9. GOVERNING LAW; JURISDICTION. . . . . . . . . . . . . . . . . . . 40
SECTION 12.10. PUBLIC ANNOUNCEMENTS. . . . . . . . . . . . . . . . . . . . . . 41
SECTION 12.11. NO THIRD-PARTY BENEFICIARIES. . . . . . . . . . . . . . . . . . 41
SECTION 12.12. DEFINITION OF AFFILIATE . . . . . . . . . . . . . . . . . . . . 41
SECTION 12.13. INTERPRETATION. . . . . . . . . . . . . . . . . . . . . . . . . 41
</TABLE>
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SCHEDULES
- ---------
1.1(g) Computer software, equipment and databases
1.2 Excluded Assets
2.2 Working Capital
2.3(a) Other Assumed Liabilities
2.3(b) Excluded Liabilities
3.3 Financial Statements and Exceptions to Financial Statements
3.4 Absence of Certain Changes and Events
3.6(a) Real Property
3.6(b) Permitted Liens
3.7 Exceptions to Title
3.8 Equipment and Automobile Leases
3.9 Litigation
3.10 Employees
3.11 Omitted Intentionally
3.12 Agreements with Employees
3.13 Labor Matters
3.14 Release of Hazardous Materials
3.15 Permits and Registrations
3.16 Contracts
3.17 Seller Required Consents, Approvals and Filings
3.19 Intellectual Property
4.3 Buyer Required Consents, Approvals and Filings
5.1 Operation Pending Closing
5.1(b) Actions Prior to Closing
7.1(c) List of Employee Receiving Short-Term Disability Benefits
9.5 Other Necessary Consents
EXHIBITS
- --------
I Opinion of Counsel to Buyer
II Opinion of Counsel to Seller
DEFINITIONS
TERM: FIRST DEFINED IN SECTION:
"Affiliate" Section 12.12
"Agreement" First paragraph of Agreement
"Assets" Section 1.1
"Assumed Liabilities" Section 2.3(a)
"Base Working Capital" Section 2.2(a)
"Business" Section 1.1
"Buyer" First paragraph of Agreement
"Buyer Defined Contribution Plan" Section 7.2(a)(2)
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"Buyer Protected Parties" Section 11.1
"Claims" Section 3.14(a)(1)
"Closing" Section 10.1
"Closing Date" Section 10.1
"Closing Working Capital" Section 2.2(a)
"Code" Section 2.4
"Contracts" Section 1.1(d)
"Current Assets" Section 2.2(c)
"Deductible" Section 11.4
"Effective Date" First paragraph of Agreement
"Employee Benefit Plans" Schedule 2.3(b)
"Employees" Section 3.10
"Employment Date" Section 7.1(b)
"Environmental Claims" Section 3.14(a)(1)
"Environmental Laws" Section 3.14(a)(2)
"Equipment" Section 1.1(f)
"Excluded Assets" Section 1.2
"Excluded Liabilities" Section 2.3(b)
"ERISA" Schedule 2.3(b)
"FTC" Section 5.5
"Financial Statements" Section 3.3
"GAAP" Section 3.3
"Hazardous Materials" Section 3.14(a)(3)
"HSR" Section 3.17
"Inaccuracy" Section 5.8(a)
"Indemnifying Party" Section 11.5
"Intellectual Property" Section 3.19
"Inventory Value" Section 2.2(b)
"Justice Department" Section 5.5
"Leases" Section 1.1(f)
"Losses" Section 11.1
"Material Adverse Effect" Section 3.1
"ORC Agreement" Section 2.3(a)
"Permits" Section 1.1(c)
"Permitted Liens" Section 3.6
"Purchase Price" Section 2.1
"Real Property" Section 3.6
"Registrations" Section 1.1(b)
"Release" Section 3.14(a)(4)
"Seller" First paragraph of Agreement
"Seller's Accrued Vacation" Section 7.2(b)
"Seller's Defined Contribution Plans" Section 7.2(a)(1)
"Seller EPA Agreement" Section 9.4(b)(i)
"Seller Protected Parties" Section 11.2
"Taxes" Section 11.8
iv
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"Transaction Agreements" Section 3.2
"Transferred Employees" Section 7.1(a)
"Working Capital" Section 2.2(c)
v
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, made and entered into as of this 25th day of
March 1998 (the "Effective Date"), between Monsanto Company, a Delaware
corporation, having its principal place of business at 800 North Lindbergh
Blvd., St. Louis, Missouri 63167 (the "Seller"), and VIS-ORC, Inc., a Minnesota
corporation, having its principal place of business at Suite 312, 7100 Northland
Circle, Brooklyn Park, Minnesota 55428 (the "Buyer").
WITNESSETH:
WHEREAS, upon and subject to the terms and conditions of this Agreement,
the Seller desires to sell to the Buyer, and the Buyer desires to purchase from
the Seller, the assets of the Orcolite business unit, an operating division of
the Seller.
NOW, THEREFORE, in consideration of the mutual promises and covenants and
the terms and conditions set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE 1 - PURCHASE AND SALE OF ASSETS
SECTION 1.1. PURCHASE AND SALE. Subject to the terms of this Agreement,
at the Closing (as defined in Section 10.1), the Seller will sell, convey,
transfer, assign and deliver to the Buyer, and the Buyer will purchase and
accept from the Seller, all of the assets, properties and rights of every kind,
nature, character or description, currently used primarily by the Seller in the
Orcolite business to develop, manufacture and market ophthalmic lenses (the
"Business"), including any additions to such assets and properties in the
ordinary course of business between the date hereof and the Closing (the
"Assets"), but specifically excluding the (X) Excluded Assets (as defined in
Section 1.2) and any (Y) deletions to such assets and properties in the ordinary
course of business between the date hereof and the Closing in accordance with
this Agreement. The Assets include:
(a) All originals (where originals exist), and/or copies of records,
operating data and business files, including customer lists and files,
customer credit files, advertising materials and sales literature,
information relating to purchasing histories and
<PAGE>
procedures, vendor files and financial records (including all sales
invoices and purchase order records and supporting documents with respect
to accounts receivable and accounts payable ) and other marketing
information and records, which are in the Seller's possession on the
Closing Date (as defined in Section 10.1);
(b) All governmental registrations, registration applications,
temporary registrations, experimental use permits, applications and
emergency use exemptions used in the Business, including those listed on
Schedule 3.15 hereto (the "Registrations");
(c) All governmental authorizations, licenses and permits used in the
Business, including those listed on Schedule 3.15 (collectively, the
"Permits");
(d) All Contracts, agreements, arrangements, instruments,
undertakings, commitments, purchase orders or understandings (other than
the Leases as defined in 1.1(f)), including any renewals and amendments
thereto and any new contracts entered into prior to the Closing in
accordance with the terms of this Agreement and in the ordinary course of
business, and including those listed on Schedule 3.16, but excluding any
such contracts that expire or are terminated prior to Closing in accordance
with this Agreement (the "Contracts");
(e) All machinery, motor vehicles, tools, furniture, instruments,
laboratory equipment, research equipment, fixtures and personal property
used in the Business (the "Equipment");
(f) All leases of Real Property set forth on Schedule 3.6 and leases
of Equipment used in the Business, including those listed on Schedule 3.8
(the "Leases");
(g) Computer, data processing and telecommunications systems
software, equipment and databases used in the Business and located at the
Business, as set forth on Schedule 1.1(g);
(h) All accounts receivable of the Business, excluding intercompany
receivables, as of the Closing;
(i) All inventories of the Business, including finished goods and
products, goods and products in process, and materials and supplies on hand
and in transit, as of the Closing; and
2
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(j) All intellectual property (including patents and trademarks)
used in the Business, including that set forth on Schedule 3.19.
SECTION 1.2. EXCLUDED ASSETS. The Assets shall not include the following
(the "Excluded Assets"):
(a) Cash;
(b) Securities;
(c) Bank deposits;
(d) Assets, properties and rights of Seller not currently used
primarily in the Business;
(e) Intercompany receivables; and
(f) All other assets, properties and rights identified on Schedule
1.2.
SECTION 1.3. TRANSFER. The sale, conveyance, transfer, assignment and
delivery of the Assets by the Seller to the Buyer will be effected by Seller's
delivery to Buyer at Closing all bills of sale, endorsements, assignments and
transfers as required by the Agreement plus such other instruments of transfer
and conveyance in forms reasonably satisfactory to the parties.
ARTICLE 2 - PURCHASE PRICE
SECTION 2.1. PURCHASE PRICE. Subject to the purchase price adjustments
pursuant to Section 2.2, the purchase price for the Assets shall be One Hundred
Million Dollars ($100,000,000) (the "Purchase Price") plus the amount of capital
expenditures set forth in the financial records of the Business made by Seller
for the benefit of the Business between the Effective Date and the Closing not
to exceed $800,000. The Purchase Price is payable by Buyer to Seller at Closing
in immediately available funds by wire transfer.
SECTION 2.2. WORKING CAPITAL ADJUSTMENT.
(a) CLOSING ADJUSTMENT. Attached hereto as Schedule 2.2 is a
calculation of Working Capital (as defined in Section 2.2(c) below) as of
December 31, 1997 ("Base Working Capital"). Not later than two (2)
business days prior to Closing, Seller and Buyer shall jointly prepare,
and shall use reasonable best efforts to agree on, a calculation of Working
Capital as of the Closing Date (the "Closing Working Capital"). At the
3
<PAGE>
Closing, the Purchase Price shall be increased to the extent that Closing
Working Capital exceeds Base Working Capital, or shall be decreased to the
extent that Closing Working Capital is less than Base Working Capital.
(b) INVENTORY PHYSICAL COUNT AND VALUATION. On a weekend commencing
no less than 3 business days prior to the Closing Date, Seller shall
perform a physical inventory count at the Business location. Subsequent to
such physical inventory count, Seller shall provide to Buyer an analysis
which values the inventory utilizing the accounting practices and policies
consistent with those utilized by the Business management as of December
31, 1997 ("Inventory Value"). The Seller's independent auditors and the
Buyer's independent auditors shall have the right to observe such physical
inventory count on behalf of their respective clients. The Inventory Value
shall be a component of Current Assets (as defined in Section 2.2(c))
included in Closing Working Capital (as defined in Section 2.2(a)).
(c) DEFINITION OF WORKING CAPITAL. The term "Working Capital" shall
be calculated in accordance with accounting policies and procedures as
currently practiced by Seller in managing the Business and consistent with
those in use by Seller in managing the Business as of December 31, 1997.
In general, "Working Capital" shall mean an amount equal to current assets
(excluding (i) deferred income taxes, (ii) intercompany receivables between
the Business and Seller, (iii) intangibles, (iv) prepaid expenses and (v)
cash and cash equivalents) ("Current Assets") minus current liabilities
(excluding (i) the current portion of indebtedness for borrowed money, (ii)
deferred income tax liabilities, (iii) intercompany payables between the
Business and Seller and (iv) accrued income tax liabilities).
SECTION 2.3. ASSUMPTION OF LIABILITIES.
(a) At the Closing, pursuant to one or more written agreements in a
form reasonably satisfactory to the parties, the Buyer will assume and
agree to pay, perform and discharge, and to indemnify Seller against and
hold it harmless from, all obligations and liabilities of Seller (whether
imposed by contract, by operation of law, or otherwise) primarily relating
to the Assets or the Business of any nature or kind, known or unknown,
fixed, accrued, absolute or contingent, which arise, accrue or are incurred
on and after the
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Closing Date related primarily to or based upon the past, present or future
Business or operation of the Assets or the Business as heretofore,
currently or hereafter conducted ("Assumed Liabilities"), including without
limitation: (i) all liabilities and obligations of Seller under the
Contracts, Permits or Leases included in the Assets; (ii) all accounts
payable and accrued liabilities; (iii) all liabilities shown on the books
and records of the Business as of the Closing Date; (iv) obligations
associated with open purchase orders on and as of the Closing Date, (v) the
obligations with respect to the Transferred Employees in accordance with
Article 7 of this Agreement; (vi) the obligations of Seller pursuant to
that certain Asset Purchase Agreement dated as of February 11, 1996 by and
among Benson Eyecare Corporation, BEC Group, Inc. and Optical Radiation
Corporation (as Sellers) and Monsanto Company (as Buyer) (the "ORC
Agreement"); (vii) all obligations and liabilities of Seller with respect
to Environmental Claims (as defined below); and (viii) the obligations or
liabilities set forth on Schedule 2.3(a).
(b) Notwithstanding the foregoing, the Assumed Liabilities shall not
include, and Buyer shall not assume or become liable for, the obligations and
liabilities of Seller set forth on Schedule 2.3(b) (the "Excluded Liabilities").
SECTION 2.4. PURCHASE PRICE ALLOCATION. Seller and Buyer agree that they
will report (and will cause their respective affiliates to report, as
appropriate), to the extent required under Section 1060 of the Internal Revenue
Code of 1986, as amended (the "Code") and the temporary regulations thereunder
and any other applicable laws and regulations, the allocation of the Purchase
Price to the Assets in a manner consistent with an appraisal. The firm
conducting the appraisal shall be selected by agreement between Seller and
Buyer. The cost of the appraisal shall be borne by the Buyer.
SECTION 2.5. LIKE-KIND EXCHANGE. Notwithstanding any other provision
hereof, in the event that Seller desires to transfer any of the Assets located
in the United States as part of a like-kind exchange pursuant to Section 1031 of
the Code, Buyer agrees that Seller may, upon prior written notice to Buyer,
assign its rights under this Agreement (but not its obligations under the
Agreement) insofar as may be required in order to effect such exchange, and
thereafter such assignee shall have such rights as assigned; provided, however,
Seller agrees to indemnify the Buyer for, and to hold the Buyer harmless from
and against, any and all damages arising or
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resulting from, such like-kind exchange; and provided further, that the Buyer
shall incur no additional costs, expenses, fees, delays or liabilities as a
result of or connected with such like-kind exchange.
ARTICLE 3 - SELLER'S REPRESENTATIONS AND WARRANTIES
The Seller makes the representations and warranties set forth in this
Article.
SECTION 3.1. ORGANIZATION AND CORPORATE STANDING. The Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on and conduct the Business as it is now being conducted and to own or
lease the Assets. The Seller is duly qualified and in good standing in the
State of California and in every jurisdiction in which the conduct of the
Business or the ownership of the Assets requires it to be so qualified, and the
absence of such qualification would have a material adverse effect on the
Business taken as a whole (a "Material Adverse Effect").
SECTION 3.2. CORPORATE POWER AND AUTHORITY. The Seller has the right,
power and capacity to execute, deliver and perform this Agreement and all the
documents and instruments referred to herein and contemplated hereby together
with all other agreements to be signed or delivered at Closing (the "Transaction
Agreements") and to consummate the transactions contemplated by this Agreement.
The execution, delivery and performance of this Agreement and the Transaction
Agreements, and the consummation of the transactions contemplated hereby and
thereby, have been duly and validly authorized by all necessary corporate action
on the part of the Seller. This Agreement has been, and each of the Transaction
Agreements after execution and delivery thereof at the Closing will have been,
duly and validly executed and delivered by the Seller and constitute the
Seller's legal, valid and binding obligation, enforceable in accordance with its
terms.
SECTION 3.3. FINANCIAL STATEMENTS. Schedule 3.3 includes the following:
(i) the unaudited balance sheet of the Business as of December 31, 1997, and
December 31, 1996 (for purposes of this Section 3.3 only, for the period between
May 3, 1996 and December 31, 1996), and (ii) the related unaudited profit and
loss statements for the period between May 3, 1996 and
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December 31, 1996, and for the year ending December 31, 1997, and the Seller has
delivered to Buyer the unaudited profit and loss statements for the months of
January and February, 1998 (collectively the "Financial Statements"). Except as
set forth on Schedule 3.3, the Financial Statements and each of them have been
prepared from the books and records of the Business in accordance with generally
accepted accounting principles ("GAAP") specifically relating to unaudited and
interim financial statements for a non-material division of a large corporation.
The Financial Statements fairly present, in all material respects, the financial
position of the Business as of the dates thereof, and results of operations from
the Business for the periods described therein. In 1997, the internal transfer
price of acrylic coated polycarbonate lenses sold to Diamonex was calculated
utilizing a market-based pricing mechanism, resulting in a modest gross profit
for the Business. In 1997, the internal transfer price of "Mon-3" coated
polycarbonate lenses sold to Diamonex was calculated at the standard cost of
production for molded lenses plus the actual cost incurred to dip-coat and
package the product.
SECTION 3.4. ABSENCE OF CERTAIN CHANGES AND EVENTS. Except as set forth
on Schedule 3.4, since December 31, 1997, the Seller has conducted the Business
in the ordinary course in all material respects, and:
(a) the Business has not suffered any material damage or destruction
to the Assets (either individually or in the aggregate);
(b) Seller has not caused the Business to incur or discharge any
material obligation or liability, except in the ordinary course of
business;
(c) Seller has not increased the rate or terms of the compensation
payable to the Transferred Employees, or increased or amended any employee
benefit plan in which the Transferred Employees participate, except
increases or amendments occurring in the ordinary course of business,
including normal periodic performance reviews and related compensation and
benefit increases, or as required by any Contract;
(d) Seller has not created or assumed any mortgage, lien, security
interest, or other encumbrance on the Assets, except for Permitted Liens
(as defined in Section 3.6);
(e) Seller has not sold, transferred or otherwise disposed of any of
the Assets, except inventory in the ordinary course of business and other
tangible personal property that has been retired or replaced in the
ordinary course of business;
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(f) Seller has not waived any material claims or rights;
(g) Seller has not changed in any material respect the accounting,
payment or collection practices used in the Business, except such changes
required by changes in GAAP;
(h) Seller has not agreed to take any action described in this
Section 3.4; and
(i) No event has occurred with respect to the Assets or the Business
that would be likely to have a Material Adverse Effect. Notwithstanding the
foregoing, the voluntary resignation or termination for cause of any
Employee(s) (including but not limited to the senior managers of the
Business) or the election by a customer or supplier to curtail or cease
business relations with the Business, shall not be deemed to have a
Material Adverse Effect, to the extent that any such event directly or
indirectly results from the announcement and/or consummation of the
transaction contemplated by this Agreement.
SECTION 3.5. NO VIOLATION OF LAW. Seller has not received any notice or
other communication alleging Seller is in violation of any applicable local,
state or federal law, ordinance, regulation, order, injunction or decree, or any
other requirement of any governmental body, agency or authority or court binding
on it, relating to the Assets or the Business, and Seller has no knowledge of
any such violation. The Seller has received no written notice of an enforcement
action relating to the Business in connection with any violation or alleged
violation of applicable law.
SECTION 3.6. REAL PROPERTY. Schedule 3.6(a) includes a list of all real
property used or held for use in the Business that the Seller leases, has agreed
(or has an option) to purchase, sell or lease, or may be obligated to purchase,
sell or lease, which is included in the Assets (the "Real Property"). Seller
does not own any Real Property in fee simple for use in the Business. Seller's
interest in the Real Property is subject to the Permitted Liens. "Permitted
Liens" are: (A) the liens, mortgages or other encumbrances set forth on
Schedule 3.6(b); (B) liens for taxes not yet due and payable; (C) carriers',
warehousemen's, mechanics', materialmen's, repairmen's or other like liens
arising in the ordinary course of business, payment for which is not yet due or
which is being contested in good faith; and (D) deposits to secure the
performance of utilities, leases, statutory obligations and surety and appeal
bonds and other obligations of a like nature incurred in the ordinary course of
business.
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SECTION 3.7. TITLE TO ASSETS/SUFFICIENCY. The Seller has good title to
the Assets, free and clear of all liens or other encumbrances, except (i) as set
forth on Schedule 3.7 and (ii) Permitted Liens. The Assets include all assets
and rights necessary for the conduct of the Business as now conducted (except
for assets not held at the Business location or not used by Seller primarily for
the benefit of the Business, in each case to the extent used by Seller in
providing administrative services to the Business, such as payroll, electronic
mail and certain other information services).
SECTION 3.8. LEASES. Except for the leases set forth on Schedule 3.6(a),
Schedule 3.8 lists all material Leases (including any capital leases) and
lease-purchases and other arrangements pursuant to which the Seller leases any
Assets from others. Except as set forth on Schedule 3.8, (i) each Lease is in
full force and effect and has not been modified or amended, and (ii) there are
no disputes, oral agreements or forbearance programs in effect as to any Lease.
There has not occurred any material default by the Seller under any Lease, and
to the Seller's knowledge, there has not occurred any material default
thereunder by any other party thereto.
SECTION 3.9. LITIGATION. Schedule 3.9 sets forth all litigation, suits,
actions, investigations, indictments or informations, or proceedings or
arbitrations pending, or to the knowledge of the Seller, threatened, before any
court, arbitration tribunal, or judicial, governmental or administrative agency,
relating to the Business or the Assets. Further, except as set forth in
Schedule 3.9, there are no judgments, orders, writs, injunctions, decrees,
indictments or informations, grand jury subpoenas or civil investigative
demands, or awards against the Seller relating to the Business or the Assets.
There is no suit, investigation, action or other proceeding pending, or to the
Seller's knowledge, threatened before any court, arbitration, tribunal, or
judicial, governmental or administrative agency, against the Seller which would
have a material adverse effect on the ability of the Seller to perform its
obligations hereunder or which seeks to prevent the consummation of the
transactions contemplated herein.
SECTION 3.10. EMPLOYEES OF THE BUSINESS. Schedule 3.10 sets forth the
names, positions, and current compensation of all employees of the Seller who
are now working exclusively in the Business and who will be subject to the
provisions of Article 7 (the "Employees"). Schedule 3.10 shall be updated as of
one week prior to the date of Closing.
SECTION 3.11. [OMITTED INTENTIONALLY]
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SECTION 3.12. COLLECTIVE BARGAINING; EMPLOYMENT CONTRACTS. There are no
labor contracts or collective bargaining agreements covering any of the
Employees and no collective bargaining agreement or union contract is currently
being negotiated by the Seller. None of the Employees are represented by any
union or labor organization. Except as set forth in Schedule 3.12, the Seller,
in connection with the operation of the Business, is not bound by or subject to
any written employment agreements.
SECTION 3.13. LABOR MATTERS. Seller has not received any notice or other
communication alleging any violation of any applicable local, state or federal
law, ordinance, regulation, order, injunction, or decree, or any other
requirement of any governmental body, agency or authority or court respecting
employment and employment practices, and Seller has no knowledge of any such
violation. Except as set forth in Schedule 3.13, (i) the Seller has not received
any written notification that any of the Employees have any claim against the
Seller, (ii) the Seller has received no written notice of any charge of, or
action or proceedings relating to unfair labor practices by the Seller pending
or threatened before the National Labor Relations Board, the Equal Employment
Opportunity Commission, or the United States Department of Labor, and (iii) the
Seller does not know of any labor organizing effort related to the Business, or
any strike or other labor trouble actually pending, or to the knowledge of
Seller, threatened against the Business.
SECTION 3.14. ENVIRONMENTAL MATTERS.
(a) DEFINITIONS. For purposes of this Section 3.14, the following
definitions apply:
1) The term "Environmental Claims" means any and all
administrative, regulatory or judicial actions or
proceedings relating to the Release (as defined in (4)
below) or alleged Release into the environment of any
Hazardous Material (as defined in (3) below) on or at the
Real Property or arising from the operation of the Business
("Claims"), including, without limitation, Claims by any
governmental or regulatory authority or by any third party
or other person for enforcement, mitigation, cleanup,
removal, response, remediation or other actions for damages,
fines, penalties, contribution, indemnification, cost
recovery, compensation or injunctive
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or declaratory relief pursuant to any Environmental Law (as
defined in (2) below).
2) The term "Environmental Laws" means all federal and state
laws, rules and regulations relating to the regulation or
protection of human health, safety, natural resources or the
environment and applicable to the Business, including but
not limited to the Resource Conservation and Recovery Act,
42 U.S.C. Section 6901, ET SEQ., as amended; the
Comprehensive Environmental Response, Compensation &
Liability Act of 1980, 42 U.S.C. Section 9601, ET SEQ., as
amended; the Clean Water Act, 33 U.S.C. Section 1251, ET
SEQ., as amended; the Clean Air Act, 42 U.S.C. Section 7401,
ET SEQ., as amended; the Toxic Substances Control Act, 15
U.S.C. Section 2601, ET SEQ., as amended; and the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Section
136, ET SEQ., as amended.
3) The term "Hazardous Materials" means any substance or
material that is included within the definition of a
"hazardous substance," "hazardous waste," "hazardous
constituent," "hazardous material," "hazardous chemical"
or "extremely hazardous substance" contained in the
Environmental Laws.
4) The term "Release" means spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping or disposing into the
environment (including the abandonment or discarding of
barrels, containers, and other closed receptacles
containing any Hazardous Materials).
b) SELLER'S PREMISES. Except as disclosed in Schedule 3.14, during
the Seller's ownership and operation of the Business, (i) there have been
no Releases of Hazardous Materials to the Real Property or arising from
operation of the Business, (ii) there are no Environmental Claims pending
or threatened against or relating to the Business, (iii) the Business has
been conducted in accordance with the Environmental Laws, and (iv) Seller
has not received any notice or other communication (and has no other
information) to the
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effect that there has been any violation of the Environmental Laws in
connection with the Business.
SECTION 3.15. PERMITS. Schedule 3.15 contains a list of all material
Permits used in or relating to the Business. The Permits disclosed on Schedule
3.15 are all material Permits or other authorizations of governmental
authorities necessary or required for the production of products of the Business
or for the conduct of the Business as currently conducted. There is no action
pending, or to the Seller's knowledge, threatened, seeking the revocation,
cancellation, suspension or adverse modification of any Permit.
SECTION 3.16. CONTRACTS. Schedule 3.16 sets forth a list of all material
Contracts. Except as set forth on Schedule 3.16, such Contracts are in full
force and effect and have not been modified or amended. There are no disputes,
oral agreements or forbearance programs in effect as to the Contracts and there
has not occurred any default by Seller of any such Contracts. To the Seller's
knowledge, there has not occurred any default under any such Contract by any
other party thereto.
SECTION 3.17. REQUIRED CONSENTS, APPROVALS AND FILINGS. Except as set
forth in Schedule 3.17, no consent or approval is required by virtue of the
execution hereof by the Seller or the consummation of any of the transactions
contemplated herein by the Seller to avoid the violation or breach of, or the
default under, or the creation of a lien or other encumbrance on the Assets
pursuant to the terms of any regulation, order, decree or award of any court or
governmental agency or any Lease, agreement, Contract, mortgage, note or license
to which the Seller is a party or to which the Business or the Assets is
subject. Except for filings under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended ("HSR"), and as set forth on Schedule 3.17, there are
no filings or similar procedures required with respect to any governmental body
in connection with the consummation of the transactions contemplated hereby.
SECTION 3.18. NO CONFLICT. Subject to obtaining the consents and
approvals and making the filings described in Section 3.17, the execution and
delivery of this Agreement by the Seller, and the consummation of the
transactions contemplated herein by the Seller will not (with or without the
giving of notice or the lapse of time or both): (i) violate or conflict with any
of the provisions of any charter document or bylaw of the Seller; or (ii)
violate, conflict with or result in a breach or default under or cause
termination of any term or condition of any mortgage,
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indenture, contract, license, permit, instrument, or other agreement, document
or instrument to which the Seller is a party or by which the Seller or the
Assets may be bound, or (iii) violate any provision of law or any valid and
enforceable court order, judgment, decree or ruling of any governmental
authority, to which the Seller is a party or by which it or its properties may
be bound, or (iv) result in the creation or imposition of any lien or other
encumbrance upon any Asset, except as to clauses (i) through (iv) above, any
such matters that would not (X) involve or affect the Business or the Assets, or
(Y) prevent or delay the consummation of the transactions contemplated herein.
SECTION 3.19. INTELLECTUAL PROPERTY. Schedule 3.19 sets forth a list of
all material trademarks and patents and describes the Copyrights and other
intellectual property used in the Business (the "Intellectual Property").
Except as set forth on Schedule 3.19, the Seller owns or is licensed under a
Contract to use all the Intellectual Property, free and clear of any liens or
other encumbrances. Unless otherwise noted on Schedule 3.19, none of the
Intellectual Property is subject to any pending or, to the knowledge of the
Seller, threatened challenge or reversion, and to the knowledge of the Seller,
use of the Intellectual Property in the conduct of the Business as now being
conducted does not infringe or otherwise conflict with any trademarks, patents
or other intellectual property or proprietary rights of others. Seller is not
aware of any circumstances which might lead to the invalidity or
unenforceability of any portion of the Intellectual Property or restrict the
scope of any protection or prospective protection thereof, and Seller is not
aware of any circumstances indicating that any person is or has been infringing
on any rights or prospective rights to the Intellectual Property.
SECTION 3.20. DISCLAIMER. EXCEPT AS SET FORTH IN THIS ARTICLE 3, (A)
SELLER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, RELATING TO THE
ASSETS OR THE BUSINESS, INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATION OR
WARRANTY AS TO VALUE, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR FOR
ORDINARY PURPOSES, OR ANY OTHER MATTER, AND (B) THE ASSETS AND BUSINESS OF THE
SELLER BEING TRANSFERRED TO THE BUYER ARE CONVEYED ON AN "AS IS, WHERE IS" BASIS
AS OF THE CLOSING, AND BUYER SHALL RELY UPON ITS OWN EXAMINATION THEREOF.
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ARTICLE 4 - BUYER'S REPRESENTATIONS AND WARRANTIES
The Buyer makes the representations and warranties set forth in this
Article.
SECTION 4.1. ORGANIZATION. The Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Minnesota
and has all requisite corporate power and authority to carry on and conduct its
business as it is now being conducted, to own or lease its assets and properties
and is duly qualified and in good standing in every jurisdiction in which the
conduct of its business or ownership of its assets requires it to be so
qualified.
SECTION 4.2. CORPORATE POWER AND AUTHORITY. The Buyer has the right,
power and capacity to execute, deliver and perform this Agreement and the
Transaction Agreements and to consummate the transactions contemplated by this
Agreement. The execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, have been duly and validly
authorized by all necessary corporate action on the part of the Buyer. This
Agreement has been, and each of the Transaction Agreements after execution and
delivery thereof at the Closing will have been, duly and validly executed and
delivered by the Buyer and constitute the Buyer's legal, valid and binding
obligation, enforceable in accordance with its terms.
SECTION 4.3. REQUIRED CONSENTS, APPROVALS AND FILINGS. Except as set
forth in Schedule 4.3, no consent or approval is required by virtue of the
execution hereof by the Buyer or the consummation of any of the transactions
contemplated herein by the Buyer to avoid the violation or breach of, or the
default under, or the creation of a lien or other encumbrance on assets of the
Buyer pursuant to the terms of any regulation, order, decree or award of any
court or governmental agency or any lease, agreement, contract, mortgage, note,
license, or any other instrument to which the Buyer is a party or to which it or
any of its property is subject. Except for filings under HSR and applicable
securities laws, and as set forth on Schedule 4.3, there are no filings or
similar procedures required with respect to any governmental body in connection
with the consummation of the transactions contemplated hereby.
SECTION 4.4. NO CONFLICT. Subject to obtaining the consent and approvals
and making the filings described in Section 4.3, the execution and delivery of
this Agreement by the Buyer, and
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the consummation of the transactions contemplated herein by the Buyer will not,
with or without the giving of notice or the lapse of time, or both, (i) violate
or conflict with any of the provisions of any charter document or bylaw of the
Buyer, (ii) violate, conflict with or result in breach or default under or
cause termination of any term or condition of any mortgage, indenture, contract,
license, permit, instrument, or other agreement, document or instrument to which
the Buyer is a party or by which the Buyer or any of its properties may be
bound, or (iii) violate any provision of law or any valid and enforceable court
order, judgment, decree, or ruling of any governmental authority, to which Buyer
is a party or by which Buyer or its properties may be bound, and except as to
clause (i) through (iii) above, any such matters that would not prevent or delay
the consummation of the transaction contemplated herein.
SECTION 4.5. LITIGATION. There is no suit, investigation, action or other
proceeding pending, or to the Buyer's knowledge, threatened before any court,
arbitration tribunal, or judicial, governmental or administrative agency,
against the Buyer which would have a material adverse effect on the ability of
the Buyer to perform its obligations hereunder or which seeks to prevent the
consummation of the transactions contemplated herein.
SECTION 4.6. FINANCING. The Buyer will have available at Closing
sufficient immediately available funds to enable the Buyer to pay the Purchase
Price to the Seller and to effect the consummation of the transactions described
herein.
ARTICLE 5 - COVENANTS OF THE PARTIES
SECTION 5.1. OPERATIONS PENDING CLOSING. The Seller hereby agrees that,
except as set forth on Schedule 5.1 or as consented to in writing by the Buyer,
pending the Closing, the Seller will operate and conduct the Business in the
ordinary course. Pursuant thereto and not in limitation of the foregoing:
(a) The Seller will maintain, in all material respects, the Assets in
their present state of repair (ordinary wear and tear excepted), and will
use its commercially reasonable best efforts to preserve the good will of
its business and relationships with the Employees, and customers and
suppliers with whom it has business relations. Notwithstanding the
foregoing, the voluntary resignation or termination for cause of any
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Employee(s) (including but not limited to the senior managers of the
Business) or the election by a customer or supplier to curtail or cease
business relations with the Business, shall not be deemed a breach of, or
failure to comply with, this Section 5.1(a), to the extent that any such
event directly or indirectly results from the announcement and/or
consummation of the transaction contemplated by this Agreement.
(b) Except as set forth on Schedule 5.1(b), or without the written
consent of the Buyer (such consent not to be unreasonably withheld), the
Seller will not take any of the following actions after the date of this
Agreement:
(1) Sell, transfer or otherwise dispose of any Assets, except
for inventory in the ordinary course of business and other tangible
personal property retired or replaced in the ordinary course of
business;
(2) Enter into any material contract or commitment relating to
the Business or the Assets, except purchase orders in the ordinary
course of business;
(3) Mortgage, pledge or subject to any liens or other
encumbrances, any Assets, except by incurring Permitted Liens;
(4) Amend in any material respect or terminate any Employee
Benefit Plan (except as otherwise contemplated by this Agreement) or
any insurance policy, in force on the date hereof relating to the
Business or the Assets;
(5) Cause the Business to incur or discharge any material
obligation or liability, except in the ordinary course of business;
(6) Increase the rate or terms of the compensation payable to
the Transferred Employees, or increase or amend any employee benefit
plan in which the Transferred Employees participate, except increases
or amendments occurring in the ordinary course of business, including
normal periodic performance reviews and related compensation and
benefit increases, or as required by any Contract;
(7) Waive any material claims or rights; or
(8) Change in any material respect the accounting, payment or
collection practices used in the Business, except such changes
required by changes in GAAP.
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SECTION 5.2. ACCESS. From the date of this Agreement through the Closing
Date, the Seller will (i) provide the Buyer and its designees (officers,
counsel, accountants, actuaries, lenders and other authorized representatives)
with such information as the Buyer may from time to time reasonably request with
respect to the Assets and the Business and the transactions contemplated by this
Agreement, (ii) provide the Buyer and its designees, upon reasonable notice and
during regular business hours, access to the Real Property, books, records,
offices, counsel, accountants and actuaries of the Business and those of the
Seller as such relate to the Business, as the Buyer or its designees may from
time to time reasonably request, and (iii) permit the Buyer and its designees
to make such inspections thereof, including Phase I Environmental Site
Assessments, as the Buyer may reasonably request. Any investigation will be
conducted in such a manner so as not to interfere unreasonably with the
operation of the business of the Seller, and any representative of Buyer shall,
at all times while in Seller's facilities, be accompanied by an employee(s) or
representative(s) of Seller. Seller shall also have the right to require, prior
to entry onto any of the Real Property or Seller's facilities by contractors
acting on behalf of Buyer, that Buyer provide Seller with evidence of the
contractor's insurance in form and amount reasonably satisfactory to Seller,
including contractor's insurance that names Seller as an insured. At Seller's
request, Buyer shall furnish to Seller at Buyer's expense a copy of all
information obtained by Buyer as a result of any such investigation. Buyer
shall inform its representatives and agents of the Confidentiality Agreement,
dated November 11, 1997, by and between Seller and Buyer, and shall cause said
representatives to abide by such Confidentiality Agreement and Seller's rules
and regulations regarding safety, security and operations. Buyer shall and
hereby does indemnify, defend and hold harmless Seller Protected Parties (as
defined in Section 11.2) from and against any and all Losses (as defined in
Section 11.1) that may arise in connection with or as a result of Buyer's
investigations of the Real Property or the Business, and Buyer further agrees to
be responsible for and bear all costs and expenses related to any of Buyer's
investigations and/or for restoring the Real Property to its condition prior to
Buyer's investigations.
SECTION 5.3. PREPARATION OF SUPPORTING DOCUMENTS. In addition to such
actions as the Parties may otherwise be required to take under this Agreement or
applicable law in order to consummate this Agreement and the transactions
contemplated hereby and by the Transaction
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Agreements, the parties will take such action, furnish such information, and
prepare, or cooperate in preparing, and execute and deliver such certificates,
agreements and other instruments as the other party may reasonably request from
time to time, before, at or after the Closing, with respect to compliance with
obligations of the Buyer or the Seller in connection with the transactions
contemplated hereby or by the Transaction Agreements.
SECTION 5.4. APPROVALS OF THIRD PARTIES; SATISFACTION OF CONDITIONS TO
CLOSING. The Seller and the Buyer will use their reasonable, good faith
efforts, and will cooperate with one another, to secure all necessary consents,
approvals, authorizations and exemptions from governmental agencies and other
third parties, including, without limitation, all consents required by Sections
8.4, 8.5, 9.4 and 9.5. The Seller will use its reasonable, good faith efforts
to obtain the satisfaction of the conditions specified in Article 9. The Buyer
will use its reasonable, good faith efforts to obtain the satisfaction of the
conditions specified in Article 8.
SECTION 5.5. HART-SCOTT-RODINO NOTIFICATION. The Seller and the Buyer
will each promptly prepare and file a notification with the United States
Justice Department (the "Justice Department") and the Federal Trade Commission
(the "FTC") as required by HSR. The Seller and the Buyer will cooperate with
each other in connection with the preparation of such notification, including
sharing information concerning sales and ownership and such other information as
may be needed to complete such notification, and providing a copy of such
notification to the other prior to filing. Each of the Seller and the Buyer
will keep confidential all information about the other obtained in connection
with the preparation of such notification. The Buyer and Seller will share
equally the filing fee required under by the regulations promulgated pursuant
to HSR. Buyer and Seller will cooperate to respond to all inquiries and requests
for further information associated with the HSR filing.
SECTION 5.6. FINANCIAL AND TAX SERVICES. It is recognized that one or
more party may need tax, financial or other data after the Closing Date with
respect to the Business covering fiscal periods prior to the Closing Date in
order to facilitate the preparation of tax returns or in connection with any
audit, investigation, litigation, amended return, claim for refund or any
proceeding in connection therewith or to comply with the rules and regulations
of the Internal Revenue Service, the Securities and Exchange Commission or any
other governmental organization or agency. The parties will render reasonable
cooperation and will afford access during
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normal business hours to all books, records, data and personnel concerning use
and ownership of the Assets and the operation and conduct of the Business with
respect to periods prior to and including the Closing Date to each other and
their auditors, accountants, counsel or other authorized representatives for
such purpose. The parties will also each execute such documents as the other
may reasonably request in order to file any required reports or tax returns and
provide the other with prompt written notice upon receipt of any written claim,
notice of deficiency or proposed or actual assessment pertaining to the Business
which could affect the tax liability of the other. The party requesting
assistance from the other party will bear all reasonable out-of-pocket costs and
expenses incurred by such assisting party (excluding salaries or wages of its
employees).
SECTION 5.7. TRANSFER TAXES. All sales or transfer taxes, including but
not limited to, document recording fees, real property transfer taxes, sales and
excise taxes, arising out of or in connection with the consummation of the
transactions contemplated herein shall be paid by Buyer.
SECTION 5.8. NOTICE AND OPPORTUNITY TO CURE.
(a) If between the Effective Date and the Closing Date either party
becomes aware that any of Seller's representation(s) or warranty(ies) are
or will be untrue or inaccurate ("Inaccuracy"), such party will promptly
notify the other. In any such case, even if such Inaccuracy would be
likely to have a Material Adverse Effect, the Seller can elect to take any
of the following actions, in which case Buyer shall be obligated to close
the transaction contemplated hereby if all other conditions to Closing in
Article 9 have been satisfied:
(i) prior to Closing, Seller can cure such Inaccuracy by
completely correcting such Inaccuracy without any potential Loss, risk
or adverse effect to Buyer;
(ii) if the Inaccuracy can be cured (without any remaining
potential risk or adverse effect to Buyer) by Seller's assumption of,
and indemnification for, any Losses resulting from any such
Inaccuracy, Seller can agree to the unconditional and unlimited
assumption of liability for, and indemnification of Buyer for, any
such Loss; or
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(iii) if the Inaccuracy cannot be completely cured by Seller
prior to Closing with commercially reasonable best efforts, then
Seller can present to Buyer a reasonable plan to cure such Inaccuracy
after the Closing (without any remaining potential risk or adverse
effect to Buyer) including Seller's unconditional and unlimited
indemnification of Buyer for any potential Losses resulting from any
such Inaccuracy.
If Seller satisfies all conditions in any of clauses (i), (ii) or
(iii) above, then the appropriate Schedule(s) will be updated and the
Inaccuracy shall be deemed corrected for all purposes of this Agreement
(including without limitation Section 11.1 hereof); provided, however, that
except as contemplated hereby and by Section 3.10 hereof, Seller shall not
otherwise have any right to update such Schedules. The parties acknowledge
and agree that Seller's indemnity provided in this Section 5.8 is without
regard to the provisions of Article 11 hereof.
(b) If the parties discover an Inaccuracy between the Effective Date
and the Closing Date, but such Inaccuracy would not be likely to have a
Material Adverse Effect, then the parties acknowledge and agree that the
condition in Section 9.1 of this Agreement will nevertheless be satisfied
insofar as Section 9.1 relates to the required degree of accuracy of the
representations and warranties as of the Closing Date. However, the
parties further acknowledge and agree that after the Closing Buyer shall be
entitled to assert an indemnification claim against Seller under Article 11
hereof in respect of such Inaccuracy, subject to all applicable limitations
of Article 11.
ARTICLE 6 - CASUALTY AND CONDEMNATION
SECTION 6.1. CASUALTY. The Seller will bear the risk of any loss or
damage or destruction to any of the Assets from fire or other casualty or cause
at all times prior to the Closing. Upon the occurrence of any loss or damage to
any of the Assets as a result of fire, casualty, or other causes prior to the
Closing, the Seller will notify the Buyer of the same in writing as soon as
practicable thereafter. The Buyer will have the option, but not the obligation,
exercisable within ten days after receipt of such notice from the Seller to:
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(1) Postpone the Closing until such time as such Assets have been
repaired, replaced, or restored in all material respects, provided that the
Closing shall not be postponed later than June 30, 1998;
(2) Elect to consummate the Closing and accept the Assets in their
"then" condition, in which event Seller will assign to the Buyer all rights
under any insurance claim covering the loss and pay over to the Buyer any
proceeds under any such insurance policy theretofore received by the Seller
with respect thereto; or
(3) Only if such loss or damage would have a Material Adverse Effect,
terminate this Agreement, whereupon this Agreement will be of no further
force or effect and neither the Seller nor the Buyer will have any further
rights, duties, or obligations hereunder.
SECTION 6.2. CONDEMNATION. If, prior to the Closing, any of the Real
Property has been taken by condemnation in any proceeding by a public authority
or other body vested with the power of eminent domain or has been acquired by a
public or quasi-public body for public purposes, or if condemnation proceedings
therefor have been instituted, the Seller will give the Buyer prompt notice of
such occurrence. If such condemnation takes, or proposes to take, all or any
portion of the Real Property which would have a Material Adverse Effect, the
Buyer may cancel this Agreement by giving the Seller notice to such effect
within ten days after the Seller's notice to the Buyer of such occurrence, with
the date of the Closing to be extended, if necessary, to provide such a ten day
period. If the Buyer so elects, this Agreement will be terminated and the
parties hereto will have no further rights, duties, or obligations hereunder.
If this Agreement is not terminated as provided above, this Agreement will
remain in full force and effect and the purchase contemplated herein, less any
portion of the Real Property taken by eminent domain or condemnation, or sold in
lieu thereof, will be consummated without reduction of the Purchase Price. In
such event, the Seller will, at the Closing, assign, transfer, and set over to
the Buyer all of the Seller's right, title and interest in and to any awards or
proceeds paid or payable for such taking or sale in lieu thereof.
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ARTICLE 7 - COVENANTS AS TO EMPLOYEES
SECTION 7.1. OFFERS OF EMPLOYMENT.
(a) TRANSFERRED EMPLOYEES. At least one week prior to Closing, the
Buyer shall offer employment with the Buyer to 100% of the Employees. The
Seller and its Affiliates agree to release from their employment those
Employees who are offered and accept employment with the Buyer
("Transferred Employees") to enable them to commence their employment with
the Buyer. All of the original personnel records maintained by Seller
shall remain with the Seller after Closing. Each offer of employment made
by the Buyer will at least equal the salary or wages (including, as
applicable, shift differentials, incentives, premiums and variable pay
potential) provided by the Seller to the Transferred Employee immediately
prior to Closing. The Buyer shall not reduce any Transferred Employee's
base salary or wages (including as applicable, shift differentials,
incentives, premiums and variable pay potential) as an employee of Buyer
during the 90 day period after Closing.
(b) TERMINATION OF EMPLOYEES. The Buyer shall not terminate the
employment of any Transferred Employee for a period of at least 90 days
after the date on which such Transferred Employee commences work for the
Buyer (the "Employment Date") without cause. If the Buyer does terminate
the employment of any Transferred Employee without cause during the 90 day
period after the Transferred Employee's Employment Date, the Buyer shall
pay to such Transferred Employee an amount at least equal to the remaining
portion of such 90 day period plus the severance pay calculated in
accordance with Buyer's standard severance practice giving any such
Transferred Employee credit for all of such Transferred Employee's service
with the Business, including any periods prior to Seller's acquisition of
the Business.
(c) EMPLOYEES NOT ACTIVELY AT WORK. Schedule 7.1 (c) is a list of
all Employees on short-term disability leave. Any Employee who is on
short-term disability leave on the Closing Date shall be offered employment
by the Buyer as provided in Section 7.1(a) above on the date such Employee
is certified by a health care provider fit to return to work, but will
continue to be the responsibility of Seller unless and until employed by
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Buyer. Any Employee who was not actively at work on the Closing Date
because of long-term disability leave will continue to be the
responsibility of the Seller after such date.
SECTION 7.2. BENEFITS AND EMPLOYMENT CONDITIONS OF TRANSFERRED EMPLOYEES.
(a) QUALIFIED DEFINED CONTRIBUTION PLANS.
(1) Any defined contribution plans of the Seller (the "Seller's
Defined Contribution Plans") will provide for the distribution to
or on behalf of the Transferred Employees of their vested account
balances in accordance with such Plans' regular distribution
rules for employees whose employment with the Seller and its
Affiliates has terminated in accordance with applicable law.
(2) So long as the Buyer maintains one or more defined
contribution pension plans for its other similarly situated
employees, the Buyer shall maintain a defined contribution
pension plan for the Transferred Employees (the "Buyer Defined
Contribution Plan"). The Buyer Defined Contribution Plan shall
recognize the Transferred Employees' service recognized by the
Seller as of their Employment Dates for purposes of eligibility
to participate and vesting.
(b) VACATION PAY. The Buyer will recognize a Transferred
Employee's service with the Business (including any periods of employment
with the Business prior to Seller's acquisition of the Business) for
purposes of determining the Transferred Employee's eligibility for and
amount of vacation benefits. The Buyer will assume the Seller's aggregate
liability as of the applicable Employment Date for Transferred Employees'
vacation pay for vacation accrued but not taken or paid for by the Seller
(reduced by any vacation taken but not accrued) (the "Seller's Accrued
Vacation"). The Seller's Accrued Vacation will be paid to the Transferred
Employees by the Buyer either through vacation actually taken by a
particular Transferred Employee or upon termination of employment in a cash
payment in lieu of vacation not taken by the particular Transferred
Employee. If Seller is required to pay the Seller's Accrued Vacation
pursuant to applicable law or statute, Buyer shall indemnify Seller for
such amounts. As soon as reasonably practicable after the Closing Date, the
Seller will notify the Buyer of
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the liability assumed for each Transferred Employee. If Seller has been
required to pay any such Accrued Vacation to the Transferred Employees in
connection with the Closing, then within five (5) business days of Buyer's
receipt of such notice, Buyer will reimburse such amount to Seller by wire
transfer.
(c) MEDICAL AND DENTAL PLANS. As of his or her Employment Date, each
Transferred Employee will be eligible to enroll in a medical and dental
plan established by the Buyer which shall provide coverage under Buyer's
medical and dental plans for similarly situated employees. The Buyer will
cause the Buyer's medical and dental plans to waive any pre-existing
condition limitations and to recognize each such Transferred Employee's
(and his or her covered dependents') expenditures under the corresponding
Seller medical and dental plans for the calendar year in which the
Employment Date occurs toward any applicable deductible and annual out-of-
pocket limit for such calendar year. The Seller will cause the Seller's
medical and dental plans to be liable for covered expenses of the
Transferred Employees and their dependents that were incurred before the
applicable Employment Date or during hospital stays that began before such
Employment Date, and the Buyer's medical and dental plans may exclude
liability for such expenses. Any benefits provided by the Buyer pursuant
to this paragraph are subject to the Buyer's right to amend or terminate at
any time.
(d) LIFE INSURANCE COVERAGE. The Buyer agrees that as of a
Transferred Employee's Employment Date, the Transferred Employee may elect
the Buyer's group term and supplemental life insurance coverage on his or
her life without evidence of insurability. The Buyer agrees that the plan
will recognize the Transferred Employee's service with the Business for
purposes of determining the Transferred Employee's eligibility for and
amount of coverage. Any benefits provided under this paragraph are subject
to the Buyer's right to amend or terminate at any time.
(e) DISABILITY COVERAGE. The Buyer agrees that as of a Transferred
Employee's Employment Date, the Transferred Employee shall be eligible to
enroll in a short-term and long-term disability plan established by the
Buyer. The plan will recognize the Transferred Employee's service with the
Business for purposes of determining the Transferred Employee's eligibility
for and amount of benefits and shall treat the date the Transferred
Employee was employed by the Seller as the date the
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Transferred Employee was employed by the Buyer for purposes of defining a
preexisting condition.
SECTION 7.3. ACCESS TO EMPLOYEE INFORMATION. After the Closing Date, the
parties hereto will cooperate with each other in the administration of any
applicable Employee Benefit Plans and programs. To the extent permitted by law,
at the Closing or within a reasonable time after the Closing, the Seller will
provide to the Buyer the necessary employee data, including personnel and
benefit information, maintained with respect to the Transferred Employees by the
Seller or by its independent contractors, such as insurance companies and
actuaries.
SECTION 7.4. WORKERS' COMPENSATION CLAIMS. The Seller will be responsible
for any workers' compensation claims by any Transferred Employee for injuries
prior to such Transferred Employee's Employment Date. The Buyer will be
responsible for any workers' compensation claims for injuries incurred by any
Transferred Employee on or after such Transferred Employee's Employment Date.
SECTION 7.5. GENERAL EMPLOYEE PROVISIONS.
(a) The Seller and the Buyer will give notices required by law and
take whatever other actions with respect to the plans, programs and
policies described in this Article 7 as may be necessary to carry out the
arrangements described in this Article 7.
(b) The Seller and the Buyer will provide each other with such plan
documents and descriptions, employee data or other information as may be
reasonably required to carry out the arrangements described in this Article
7.
(c) From the Effective Date through the Closing Date, the Seller will
provide Buyer and its designees (as described in Section 5.2) with access
to the Employees at the location of the Business for interviews,
discussions, meetings and the like so that Buyer can become familiar with
the Employees and to assist in the transition of the Employees to Buyer and
for such other reasonable purposes as Buyer may determine necessary. Buyer
shall indemnify, defend and hold harmless Seller Protected Parties (as
defined in Section 11.2) from and against any and all Losses (as defined in
Section 11.1) that may arise in connection with or as a result of Buyer's
activities with respect to the Employees as provided in this Section
7.5(c).
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(d) If any of the arrangements described in this Article 7 are
determined by the Internal Revenue Service or other applicable governmental
authority, or by a court of competent jurisdiction, to be prohibited by
law, the Seller and the Buyer will modify such arrangements to as closely
as possible retain the intent and economic benefits and burdens of the
parties as reflected herein in a manner which is not prohibited by law.
(e) No provision of this Agreement will create any third party
beneficiary rights to any person, including without limitation any
Transferred Employee or any dependent of a Transferred Employee, in respect
of continued employment or resumed employment and no provision of this
Agreement will create any third party beneficiary rights in any person,
including without limitation any Transferred Employee or any dependent of a
Transferred Employee, in respect of any employee benefit plan or
arrangement or any other arrangement which may be maintained from time to
time by the Buyer.
(f) The Seller and the Buyer agree to utilize the "Alternative
Procedure" provided in Section 5 of the Revenue Procedure 84-77, 1984-2
Cumulative Bulletin 753, with respect to filing and furnishing Internal
Revenue Service Forms W-2, W-3, and 941.
SECTION 7.6. EMPLOYEE BENEFIT PLANS. Except as expressly provided in this
Article 7, the Buyer will not adopt, assume or otherwise become responsible for,
either primarily or as a successor employer, any assets or liabilities of any
employee benefit plans, arrangements, commitments or policies currently provided
by the Seller or by any member of its controlled group of corporations. In
particular, the Buyer will not assume liability for any group health
continuation coverage or coverage rights under Internal Revenue Code Section
4980B and ERISA Section 606 which exist as of the Closing Date or which arise as
a result of the Seller's dissolution and/or termination of its group health plan
or plans.
SECTION 7.7. EMPLOYEE COMMUNICATION. The parties will cooperate to
coordinate any of Buyer's communications to the Employees between the date of
this Agreement and the Closing. All such communications, whether in writing or
oral, shall be reviewed and approved by Seller's designated Human Resource
representative, such approval not to be unreasonably withheld.
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ARTICLE 8 - CONDITIONS TO SELLER'S OBLIGATIONS
Each of the obligations of the Seller to consummate the transactions
contemplated hereby will be subject to the satisfaction (or written waiver by
the Seller) at or prior to the Closing Date of each of the following conditions.
SECTION 8.1. REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING DATE. Except
for changes as may be contemplated by this Agreement, each of the
representations and warranties of the Buyer contained in this Agreement must be
true in all material respects on and as of the Closing Date with the same force
and effect as though made on and as of such date unless the representation and
warranty is made as of a specified date and except to the extent that the
failure of such representations and warranties to be true as of the Closing Date
would not, in the aggregate, have a material adverse effect on the Seller; the
Buyer must have performed and complied in all material respects with the
covenants and agreements set forth herein to be performed or complied with by it
on or before the Closing Date; and the Buyer must have delivered to the Seller a
certificate dated the Closing Date and signed by its duly authorized officer to
all such effects.
SECTION 8.2. LITIGATION. No suit, investigation, action or other
proceeding may be pending against the Seller or its Affiliates or the Buyer
before any court or governmental agency which has resulted in the restraint or
prohibition of the Seller, or, could in the reasonable opinion of counsel for
the Seller, result in the assessment of material damages or other relief against
the Seller, in connection with this Agreement or the consummation of the
transactions contemplated hereby.
SECTION 8.3. OPINION OF COUNSEL TO BUYER. The Seller shall have received
from counsel to the Buyer an opinion, dated the Closing Date, in the form of
Exhibit I.
SECTION 8.4. REQUIRED GOVERNMENTAL APPROVALS. All governmental
authorizations, consents and approvals necessary for the valid consummation
of the transactions contemplated hereby, the absence of which would have a
Material Adverse Effect, must have been obtained and must be in full force
and effect. All applicable governmental pre-acquisition filing, information
furnishing and waiting period requirements, including expiration of all
applicable waiting periods pursuant to HSR, the absence of which would have a
Material Adverse Effect,
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must have been met or such compliance must have been waived by the
governmental authority having authority to grant such waivers.
SECTION 8.5. OTHER NECESSARY CONSENTS. The parties must have obtained
all consents and approvals listed on Schedule 3.18 and 4.3, the absence of which
would have a Material Adverse Effect.
SECTION 8.6 SELLER EPA AGREEMENT. Seller shall have received the
written confirmation, at Seller's cost and expense, that in the event of an
assignment of the Seller EPA Agreement (as defined in Section 9.4(b)) to Buyer
that Seller shall continue to have the protection currently afforded to Seller
under the Seller EPA Agreement.
ARTICLE 9 - CONDITIONS TO BUYER'S OBLIGATIONS
Each of the obligations of the Buyer to consummate the transactions
contemplated hereby is subject to the satisfaction (or written waiver by the
Buyer) at or prior to the Closing Date of each of the following conditions.
SECTION 9.1. REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING DATE. Except
for changes as may be contemplated by this Agreement, each of the
representations and warranties of the Seller contained in this Agreement must be
true in all material respects on and as of the Closing Date with the same force
and effect as though made on and as of such date, unless the representation or
warranty is made as of a specified date and except to the extent that the
failure of such representations and warranties to be true as of the Closing Date
would not in the aggregate have a Material Adverse Effect; the Seller must have
performed and complied in all material respects with the respective covenants
and agreements set forth herein to be performed or complied with by it on or
before the Closing Date; and the Seller must have delivered to the Buyer a
certificate dated the Closing Date and signed by its duly authorized officer to
all such effects.
SECTION 9.2. LITIGATION. No suit, investigation, action or other
proceeding may be pending, or overtly threatened, against the Buyer or the
Seller or its Affiliates before any court or governmental agency which has
resulted in the restraint or prohibition of the Buyer, or, in the reasonable
written opinion of counsel for the Buyer, could result in the assessment of
material
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damages or other relief against the Buyer in connection with this Agreement or
the consummation of the transactions contemplated hereby.
SECTION 9.3. OPINION OF COUNSEL TO SELLER. The Buyer shall have received
from counsel to the Seller an opinion, dated the Closing Date, in the form of
Exhibit II.
SECTION 9.4. REQUIRED GOVERNMENTAL APPROVALS.
(a) All governmental authorizations, consents and approvals necessary
for the valid consummation of the transactions contemplated hereby must
have been obtained and must be in full force and effect. All applicable
governmental pre-acquisition filing, information furnishing and waiting
period requirements, including expiration of all applicable waiting periods
pursuant to HSR, must have been met or such compliance must have been
waived by the governmental authority having authority to grant such
waivers.
(b) Buyer shall have received from the Environmental Protection
Agency either (i) documentation that the EPA has consented to and will
recognize Buyer as the Assignee of the rights and obligations of that
certain EPA Prospective Purchaser Agreement to Seller dated as of May 3,
1996 (the "Seller EPA Agreement") or (ii) Buyer shall have entered into, at
its cost and expense, an EPA Prospective Purchaser Agreement with
substantially similar terms to the Seller EPA Agreement. If either (i) or
(ii) above is available to Buyer, it shall be Buyer's option as to which to
elect to accept. Seller agrees to reasonably cooperate with and provide
such reasonable documentation (e.g. an assignment of the Seller EPA
Agreement) as is required to assist Buyer in obtaining the protections
contemplated in this Section 9.4(b).
SECTION 9.5. OTHER NECESSARY CONSENTS. The parties must have obtained all
consents and approvals listed on Schedule 9.5, the absence of which would have a
Material Adverse Effect.
ARTICLE 10 - CLOSING
SECTION 10.1. CLOSING. The closing of the transactions contemplated
hereby (the "Closing") will take place at 10:00 a.m. Central Time on the
"Closing Date," at the Seller's
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offices located at 800 North Lindbergh Blvd., St. Louis County, Missouri, or at
such other place as may be mutually agreeable. Subject to Section 10.5, and
subject to satisfaction or waiver of the conditions to the Seller's and the
Buyer's obligations set forth in Articles 8 and 9, respectively, the Closing
Date will be May 15, 1998, or such other date as the parties may mutually agree.
At the Closing, the parties hereto will duly execute and deliver all documents
and instruments required to be delivered, and the Buyer will make all payments
to the Seller required to be paid at the Closing as provided in this Agreement.
SECTION 10.2. TERMINATION PRIOR TO CLOSING. Notwithstanding the
foregoing, the parties will be relieved of the obligation to consummate the
Closing and purchase or sell the Assets:
(a) By the mutual written consent of the Buyer and the Seller;
(b) By the Seller in writing, without liability, if the Buyer (i)
fails to perform in any material respect its agreements contained herein
required to be performed by it on or prior to the Closing Date, (ii)
materially breaches any of its representations, warranties or covenants
contained herein, which failure or breach is not cured within ten (10) days
after the Seller has notified the Buyer of such failure or breach and of
its intent to terminate this Agreement pursuant to this subparagraph, or
(iii) has not received one of the documents described in Section 9.4(b) (i)
or (ii), or an irrevocable commitment from the EPA that Buyer will receive
one of the two documents referenced herein on or before the date forty-five
(45) days after the Effective Date (unless Buyer has waived such
condition);
(c) By the Buyer in writing, without liability, if the Seller (i)
fails to perform in any material respect its agreements contained herein
required to be performed on or prior to the Closing Date, or (ii)
materially breaches any of its representations, warranties or covenants
contained herein, which failure or breach is not cured within thirty (30)
days
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after the Buyer has notified the Seller of such failure or breach and of
its intent to terminate this Agreement pursuant to this subparagraph;
(d) By either the Seller or the Buyer in writing, without liability,
if there is issued any order, writ, injunction or decree of any court or
governmental or regulatory agency binding on the Buyer or the Seller which
prohibits or restrains the Buyer or the Seller from consummating the
transactions contemplated hereby; provided that the Buyer and the Seller
have used their reasonable, good faith efforts to have any such order,
writ, injunction or decree lifted and the same has not been lifted within
sixty (60) days after entry, by any such court or governmental or
regulatory agency;
(e) By the Buyer in writing, without liability, if Buyer elects to
terminate pursuant to 6.1 or 6.2 hereof; or
(f) By either the Seller or the Buyer in writing, without liability,
if for any reason the Closing has not occurred by June 26, 1998 other than
as a result of the breach of this Agreement by the party attempting to
terminate this Agreement.
SECTION 10.3. TERMINATION OF OBLIGATIONS. Termination of this Agreement
pursuant to Section 10.2 will terminate all obligations of the parties
hereunder, except for the obligations under Article 11 (Indemnity Claims), and
Sections 5.2 (Indemnification Regarding Investigation), 12.1 (Expenses), 12.8
(Brokerage) and 12.9 (Public Announcements); provided that termination pursuant
to subparagraphs (b), (c), or (f) of Section 10.2 will not relieve a defaulting
or breaching party from any liability to the other party hereto.
SECTION 10.4. ASSIGNMENT OF ORC AGREEMENT. To the extent permitted under
such agreement, at Closing, Seller will assign and Buyer will assume all rights
and obligations of Seller under the ORC Agreement and upon Buyer's request will
provide to ORC any notice required under the ORC Agreement. Seller makes no
representation or warranty to Buyer and shall have no liability with respect to
any limitation of any rights acquired as a result of such assignment or whether
any certain rights or obligations are capable of assignment and assumption
hereunder.
SECTION 10.5. BUYER'S OPTION TO DEFER CLOSING. If the conditions to
Buyer's obligation under Article 8 and Seller's obligations under Article 9
hereof have been satisfied on May 15, 1998, and therefore the Closing
contemplated hereby could occur, then Buyer may elect to defer
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the Closing until any date on or before June 1, 1998; provided, however, that in
the event the Closing is so deferred, the closing condition in Section 9.1
hereof will be deemed satisfied to the extent Seller's representations and
warranties would have satisfied the requirements of Section 9.1 as of May 15,
1998.
ARTICLE 11 - INDEMNIFICATION
SECTION 11.1. SELLER INDEMNIFICATION.
(a) Except as otherwise provided in this Article 11, and in Article 7
and Sections 5.2 and 12.8, the Seller will indemnify and reimburse the
Buyer for any and all claims, losses, liabilities, damages, penalties,
fines, costs and expenses (including reasonable attorneys' fees and court
costs) (collectively, "Losses") incurred by the Buyer and its Affiliates
and their successors or assigns, and their respective directors, officers,
employees, consultants and agents (the "Buyer Protected Parties"), as a
result of, with respect to, or arising out of:
(i) except as to Sections 3.1, 3.2 and 3.7, any breach or
inaccuracy of any representation or warranty of the Seller set forth in
this Agreement;
(ii) any breach of, or noncompliance by the Seller with, any
covenant or agreement of the Seller contained in this Agreement to be
performed after the Closing;
(iii) the Excluded Assets;
(iv) any liabilities or obligations for which Seller has assumed
responsibility under Article 7 hereof;
(v) those matters set forth in Section 11.8(i);
(vi) any of the Excluded Liabilities;
(vii) ownership of the Assets or operation of the Business prior
to the Closing Date (except with respect to any Environmental liability for
which Seller's indemnifiable shall be limited to the period of Seller's
ownership of the Assets or operation of the Business prior to the Closing
Date); provided, however, that Seller has no obligation to indemnify Buyer
for any Loss arising from, with
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respect to, or resulting from any matters or information disclosed to Buyer
in this Agreement or the Schedules to this Agreement; and
(viii) any breach or inaccuracy of any representation or warranty
of Seller set forth on Sections 3.1, 3.2 and 3.7.
(b) Notwithstanding anything in the foregoing to the contrary, subject
to Section 11.3(b) (Time to Assert Claims) and Section 11.4 (Deductible),
Seller's obligation for indemnity under Section 11.1(i) and Section
11.1(vii) shall be only for one-half of any Losses up to a maximum
liability for Seller of $5,000,000 (which is Seller's maximum obligation
pursuant to such Sections in respect of Buyer's Losses in an aggregate
amount of $10,000,000); provided however that such limitation shall not
apply to Seller's obligation to indemnify Buyer under Sections 5.8,
11.1(iii), 11.1(iv), 11.1(v), 11.1(vi), 11.1(viii), 11.8, 12.8 and Article
7 or in respect of Seller's fraud or willful breaches or misconduct.
SECTION 11.2. BUYER INDEMNIFICATION. Except as otherwise provided in this
Article 11 and in Article 7 and Sections 5.2 and 12.8, the Buyer will indemnify
and reimburse the Seller for any and all Losses incurred by the Seller and its
Affiliates and their successors or assigns, and their respective directors,
officers, employees, consultants and agents (the "Seller Protected Parties") as
a result of, or with respect to, or arising out of:
(i) any breach or inaccuracy of any representation or warranty of
the Buyer set forth in this Agreement;
(ii) any breach of or noncompliance by the Buyer with respect to any
covenant or agreement of the Buyer contained in this Agreement to be
performed after the Closing;
(iii) the Assumed Liabilities, except to the extent Buyer is entitled
to indemnification from Seller pursuant to Section 11.1 above;
(iv) those matters set forth in Section 11.8 (ii); and
(v) the ownership or operation of the Assets or the Business after
the Closing.
SECTION 11.3. INDEMNITY CLAIMS.
(a) SURVIVAL. The representations, warranties, covenants and
agreements contained herein, except for covenants and agreements to be
performed by the parties prior to the Closing, will not be extinguished by
the Closing but will survive the Closing,
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subject to the limitations set forth in subsection (b) below with respect
to the time periods within which claims for indemnity must be asserted.
The covenants and agreements to be performed by the parties prior to the
Closing shall expire at the Closing.
(b) TIME TO ASSERT CLAIMS. All claims for indemnification under this
Article 11 which are not extinguished by or at the Closing in accordance
with Section 11.3(a) must be asserted no later than twenty-four (24) months
after the Closing Date, except claims with respect to Losses arising out of
or related in any way to the matters described in Article 7, Sections 5.8,
11.1(iii), 11.1(iv), 11.1(v), 11.1 (vi), 11.1(viii), 11.2(iii), 11.2(iv),
11.8(i), 11.8(ii) or 11.9 or for fraud or willful breaches or misconduct,
which may be made without limitation, except as limited by law.
SECTION 11.4. DEDUCTIBLE. Except claims pursuant to Sections 5.8 and
11.1(viii), the Buyer Protected Parties may make no claim against the Seller for
indemnification pursuant to Section 11.1 unless and until the aggregate amount
of such claims exceeds $250,000 (the "Deductible"), in which event the Buyer
Protected Parties may claim indemnification for the amount of such claims in
excess of the Deductible.
SECTION 11.5. NOTICE OF CLAIM. The Buyer Protected Party or the Seller
Protected Party, as the case may be, will notify the party against whom
indemnification under this Agreement is sought (the "Indemnifying Party"), in
writing, of any claim for indemnification, specifying in reasonable detail the
nature of the Loss, and, if known, the amount, or an estimate of the amount, of
the liability arising therefrom. The Buyer Protected Party or the Seller
Protected Party, as the case may be, will provide to the Indemnifying Party, as
promptly as practicable thereafter, such information and documentation as may be
reasonably requested by the Indemnifying Party to support and verify the claim
asserted, so long as such disclosure would not violate the attorney-client
privilege of the Buyer Protected Party or the Seller Protected Party, as the
case may be.
SECTION 11.6. DEFENSE. If the facts pertaining to a Loss arise out of the
claim of any third party, or if there is any claim against a third party (other
than a Buyer Protected Party or a Seller Protected Party) available by virtue of
the circumstances of the Loss, the Indemnifying Party may assume the defense or
the prosecution thereof by prompt written notice to the Buyer Protected Party or
the Seller Protected Party, as the case may be, including the employment of
counsel or accountants, at the Indemnifying Party's cost and expense. The
affected Protected
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Party will have the right to employ counsel separate from counsel employed by
the Indemnifying Party in any such action and to participate therein, but the
fees and expenses of such counsel employed by the affected Protected Party will
be at its expense. The Indemnifying Party will not be liable for any settlement
of any such claim effected without its prior written consent, which will not be
unreasonably withheld; provided that if the Indemnifying Party does not assume
the defense or prosecution of a claim as provided above within thirty days after
notice thereof from any Protected Party (or within such shorter period, if any,
as may be necessary to avoid default judgment or other prejudice to the
Protected Party), the affected Protected Party may settle such claim without the
Indemnifying Party's consent. The Indemnifying Party will not agree to a
settlement of any claim which provides for any relief other than the payment of
monetary damages or which could have a material precedential impact or effect on
the business or financial condition of any Protected Party without the affected
Protected Party's prior written consent. Whether or not the Indemnifying Party
chooses to so defend or prosecute such claim, the Indemnifying Party and the
affected Protected Party will cooperate in the defense or prosecution thereof
and will furnish such records, information and testimony, and attend such
conferences, discovery proceedings, hearings, trials and appeals, as may be
reasonably requested in connection therewith. The Indemnifying Party will be
subrogated to all rights and remedies of any Protected Party, except to the
extent they apply against another Protected Party.
SECTION 11.7. LIMITATION OF LIABILITY. In calculating any amount of
damages to be paid by the Indemnifying Party pursuant to this Agreement, the
amount of such damages will be reduced by all reimbursements credited to or
received by the other party, relating to such damages, and will be net of any
tax benefits and insurance proceeds received by the other party with respect to
the matter for which indemnification is claimed.
SECTION 11.8. TAX INDEMNIFICATION. Notwithstanding anything to the
contrary contained herein, (i) Seller will pay, indemnify and hold harmless
Buyer from and against any liability for federal, state, local or foreign taxes
or similar governmental charges, of any nature whatsoever, and any interest,
penalties or additions to tax payable with respect thereto ("Taxes") that result
from Seller's ownership, possession, use or operation of the Assets or the
Business on or prior to the Closing Date, and (iii) Buyer will pay, indemnify
and hold harmless Seller from and against
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any liability for Taxes resulting from Buyer's acquisition of the Business and
the ownership, possession, use or operation of the Assets or the Business after
the Closing Date.
SECTION 11.9. PROPERTY TAX ALLOCATION. Real property, personal property
and ad valorem taxes or other similar taxes levied upon the Assets and Real
Property (whether leased or owned) located in the State of California, assessed
January 1, 1997 for the taxable period July 1, 1997 through June 30, 1998 shall
be prorated as of the Closing Date between the parties based upon their
respective periods of ownership during the taxable year 1997/1998. Said taxes
assessed upon the Assets and Real Property (whether leased or owned) located in
the State of California and assessed on January 1, 1998, together with any
supplemental assessments resulting from the sale of the Assets, shall be the
sole responsibility of the Buyer.
SECTION 11.10. EXCLUSIVE REMEDY; RELEASE.
(a) The indemnification provided pursuant to this Agreement shall be
the sole and exclusive remedy hereto for any Losses as a result of, with
respect to or arising out of the breach of this Agreement, or any of the
transactions or other agreements or instruments contemplated or entered
into in connection herewith (including, but not limited to, all Exhibits
attached or referenced herein); provided, however, that such
indemnification shall not be the sole and exclusive remedy, and shall in no
way limit the rights of the parties for fraud or willful breach or
misconduct.
(b) Except as specifically provided in this Article 11 and Section
12.8, neither party nor its Affiliates or representatives shall be liable
to the other party for, and (except as so provided each party) hereby
releases and discharges the other party and , its Affiliates and
representatives from, any and all Losses incurred as a result of, with
respect to or arising out of the ownership or operation of the Assets or
the Business.
(c) Without limiting the generality of this Section 11.9, Buyer
understands and agrees that the rights accorded under this Article 11 are
the sole and exclusive remedy of Buyer against Seller or its Affiliates
with respect to any matters relating to Environmental Laws. Buyer hereby
waives any right to seek contribution or other recovery from Seller or its
Affiliates under such Environmental Laws, and Buyer hereby releases the
Seller and its Affiliates from any claims, demands or causes of actions
that Buyer has or may have in the future against Seller or its Affiliates
under the Environmental Laws.
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ARTICLE 12 - MISCELLANEOUS
SECTION 12.1. EXPENSES. The Seller and the Buyer will each pay all costs
and expenses incurred by each of them, or on their behalf respectively, in
connection with this Agreement and the transactions contemplated hereby,
including fees and expenses of their own financial consultants, accountants and
counsel.
SECTION 12.2. NON-COMPETITION.
(a) In consideration of the transaction contemplated hereby,
commencing on the Closing Date and continuing for two years thereafter,
Seller agrees that, except for its current ownership of Diamonex Ophthalmic
Products (a wholly owned operating division of Seller) it will not
directly, or indirectly, anywhere in the world own, manage, operate or
control, or participate in management, operation or control of any business
that manufactures, develops or sells ophthalmic lenses in competition with
the Business; provided, however nothing herein shall prohibit Seller from
acquiring, merging with, or being merged into another entity which has as
one or more of its businesses an opthalmic lens business if such lens
business does not constitute more than 50% of the revenue of such acquired
or merged entity, or (ii) acquiring, owning or controlling less than 5% of
the voting stock of a publicly held entity.
(b) If any of the provisions of this Section 12.2(a) are held to be
unenforceable because of the scope, duration or area of its applicability,
a court of competent jurisdiction that makes such decision shall have the
power to modify such scope, duration or area, or all of them, and such
provision shall then be applicable in such modified form.
(c) Because Buyer would be irreparably damaged if the provisions of
Section 12.2(a) were violated by Seller, Buyer shall be entitled to
injunctive relief or such other remedies as may be available to it at law
or in equity; provided, however, nothing herein shall prohibit Seller from
challenging any action by Buyer asserting a violation of this Section
12.2(a) on the basis that an activity by Seller is not in competition with
that of the Business.
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SECTION 12.3. ENTIRE AGREEMENT. This Agreement (including the Schedules
and Exhibits) and all other agreements to be signed or delivered at Closing
constitute the full understanding of the parties, a complete allocation of risks
between them and a complete and exclusive statement of the terms and conditions
of their agreement relating to the subject matter hereof and supersede any and
all prior agreements, whether written or oral, that may exist between the
parties with respect thereto; provided that this provision is not intended to
abrogate any Transaction Agreements executed with or after this Agreement.
Except as otherwise specifically provided in this Agreement, no conditions,
usage of trade, course of dealing or performance, understanding or agreement
purporting to modify, vary, explain or supplement the terms or conditions of
this Agreement will be binding unless hereafter made in writing and signed by
the party to be bound, and no modification will be effected by the
acknowledgment or acceptance of documents containing terms or conditions at
variance with or in addition to those set forth in this Agreement. The Exhibits
and Schedules identified in this Agreement are incorporated herein by reference
and a made a part hereof.
SECTION 12.4. WAIVERS. No waiver by a party with respect to any breach or
default or of any right or remedy and no course of dealing or performance, will
be deemed to constitute a continuing waiver of any other breach or default or of
any other right or remedy, unless such waiver is expressed in writing signed by
the party to be bound. Failure of a party to exercise any right will not be
deemed a waiver of such right or rights in the future.
SECTION 12.5. PARTIES BOUND BY AGREEMENT; SUCCESSORS AND ASSIGNS. The
terms, conditions and obligations of this Agreement will inure to the benefit of
and be binding upon the parties hereto and the respective successors and assigns
thereof. No Party shall transfer or assign its rights, duties or obligations
hereunder or any part thereof to any other person or entity without the prior
written consent of the other Party.
SECTION 12.6. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will for all purposes be deemed to be an original
and all of which will constitute the same instrument.
SECTION 12.7. NOTICES. Any notice, request, instruction or other document
to be given hereunder by any party hereto to any other party hereto must be in
writing and delivered
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personally (including by overnight courier or express mail service) or sent by
registered or certified mail, postage or fees prepaid,
If to the Buyer: VIS-ORC, Inc.
Suite 312, 7100 Northland Circle
Brooklyn Park, Minnesota 55428
Attention: President
Telephone: (612) 851-6000
Telecopier: (612) 851-6050
With a copy to: Faegre & Benson, LLP
2200 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402-3901
Attention: William R. Busch
If to the Seller: Monsanto Company
800 North Lindbergh Boulevard
St. Louis, Missouri 63167
Attention: Vice President, Secretary and
General Counsel
Telephone: (314) 694-9322
Telecopier: (314) 694-6395
or to such other address as may be specified from time to time in a notice given
by such party. Any notice which is delivered personally in the manner provided
herein will be deemed to have been duly given to the party to whom it is
directed upon actual receipt by such party or the office of such party. Any
notice which is addressed and mailed in the manner herein provided will be
conclusively presumed to have been duly given to the party to which it is
addressed at the close of business, local time of the recipient, on the fourth
business day after the day it is so placed in the mail or, if earlier, the time
of actual receipt.
SECTION 12.8. BROKERAGE. The Seller and the Buyer do hereby expressly
warrant and represent, each to the other, that except Donaldson, Lufkin and
Jenrette, in the case of Seller, no broker, agent, or finder has rendered
services to such party in connection with the transaction contemplated under
this Agreement. The Seller hereby indemnifies and agrees to hold harmless the
Buyer from and against any and all Losses arising or resulting, or sustained or
incurred by the Buyer, by reason of any claim by any broker, agent, finder, or
other person or entity based upon any arrangement or agreement made or alleged
to have been made by the Seller in connection with the transaction contemplated
by this Agreement. The Buyer does hereby indemnify and
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agree to hold harmless the Seller from and against any and all Losses arising or
resulting, or sustained or incurred by the Seller, by reason of any claim by any
broker, agent, finder, or other person or entity based upon any arrangement or
agreement made or alleged to have been made by the Buyer in connection with the
transaction contemplated by this Agreement.
SECTION 12.9. GOVERNING LAW; JURISDICTION.
(a) The validity, interpretation and performance of this agreement
and any dispute connected with this agreement will be governed by and
determined in accordance with the statutory, regulatory and decisional law
of the State of Delaware (exclusive of such state's choice or conflicts of
laws rules) and, to the extent applicable, the federal statutory,
regulatory and decisional law of the United States (except for the U.N.
Convention on Contracts for the International Sale of Goods, April 10,
1980, U.N. Doc. A/Conf. 97/18, 19 I.L.M. 668, 671 (1980) reprinted in
Public Notice, 52 Fed. Reg. 662-80 (1987), which is hereby specifically
disclaimed and excluded).
(b) Any suit, action or proceeding against any party hereto with
respect to the subject matter of this Agreement, or any judgment entered by
any court in respect thereof, may be brought or entered in the United
States District Court for the Eastern District of Missouri, and each such
party hereby irrevocably submits to the non-exclusive jurisdiction of such
court for the purpose of any such suit, action, proceeding or judgment.
Each party hereto hereby irrevocably waives any objection which either of
them may now or hereafter have to the laying of venue of any suit, action
or proceeding arising out of or relating to this Agreement brought as
provided in this subsection, and hereby further irrevocably waives any
claim that any such suit, action or proceeding brought in any such court
has been brought in an inconvenient forum. To the extent each party hereto
has or hereafter may acquire any immunity from jurisdiction of any court or
from legal process with respect to itself or its property, each party
hereto hereby irrevocably waives such immunity with respect to its
obligations under this subsection. The parties hereto agree that exclusive
jurisdiction of all disputes, suits, actions or proceedings between the
parties hereto with respect to the subject matter of this Agreement lies in
the courts as hereinabove provided. Service of process by mailing (by
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certified mail, return receipt requested) or delivering a copy of such
process to a party in accordance with Section 12.6 hereof will be deemed
good and sufficient service thereof.
SECTION 12.10. PUBLIC ANNOUNCEMENTS. No public announcement may be made
by any person with regard to the transactions contemplated by this Agreement
without the prior consent of the Seller and the Buyer; provided that either
party may make such disclosure to the extent required if advised by written
opinion of counsel that it is required to do so by applicable law or regulation
of any governmental agency or stock exchange upon which securities of such party
are registered. The Seller and the Buyer will discuss any public announcements
or disclosures concerning the transactions contemplated by this Agreement with
the other parties prior to making such announcements or disclosures.
SECTION 12.11. NO THIRD-PARTY BENEFICIARIES. With the exception of the
parties to this Agreement and the Seller Protected Parties or Buyer Protected
Parties, there exists no right of any person to claim a beneficial interest in
this Agreement or any rights occurring by virtue of this Agreement.
SECTION 12.12. DEFINITION OF AFFILIATE. As used in this Agreement,
"Affiliate" of a person or entity shall mean: (i) any other person or entity
directly, or indirectly through one or more intermediaries, controlling,
controlled by, or under common control with such person or entity, (ii) any
officer, director, partner, employee, or direct or indirect beneficial owner of
any [10%] or greater of the equity or voting interests of such person or entity,
or (iii) any other person or entity for which a person or entity described in
clause (ii) acts in such capacity.
12. 13. INTERPRETATION. Words of the masculine gender will be deemed and
construed to include correlative words of the feminine and neuter genders.
Words importing the singular number will include the plural number and vice
versa unless the context will otherwise indicate. References to Articles,
Sections and other subdivisions of this Agreement are to the Articles, Sections
and other subdivisions of this Agreement as originally executed. The headings
of this Agreement are for convenience and do not define or limit the provisions
hereof. Words importing persons include firms, associations and corporations.
The terms "herein," "hereunder," "hereby," "hereto," "hereof" and any similar
terms refer to this Agreement; the term "heretofore" means before the date of
execution of this Agreement; and the term "hereafter" means after the date of
execution of this Agreement and the word "including" shall be deemed to
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be followed by the words "without limitation". The terms "ordinary course of
business" or "ordinary course" means the ordinary course of business consistent
with past custom and practice (including with respect to quantity and
frequency).
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives in the United States of America as of
the date first above written.
MONSANTO COMPANY, SELLER
By: /s/ Jan S. Wolpert
----------------------------
Name: Jan S. Wolpert
Title: V.P. Venture Capital
VIS-ORC, INC., BUYER
By: /s/Jeffrey J. Hattara
----------------------------
Name: Jeffrey J. Hattara
Title: Treasurer
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Contact: Jeffrey J. Hattara (NYSE-BMC)
(612)851-6030 FOR IMMEDIATE RELEASE
BMC INDUSTRIES TO ACQUIRE MONSANTO'S ORCOLITE UNIT
FOR $100 MILLION
March 25, 1998 --Minneapolis, Minnesota - BMC Industries, Inc. ("BMC") and
Monsanto Company ("Monsanto") announced today that they have entered into a
definitive agreement under which BMC will acquire Monsanto's Orcolite business
for $100 million in cash. The transaction has been approved by the boards of
directors of both companies and is subject to customary conditions and normal
regulatory approval. The transaction is expected to close in the second
quarter.
Orcolite, headquartered in Azusa, California, is a producer of ophthalmic lenses
with estimated 1997 sales of $34 million. Orcolite produces both hard resin
plastic and polycarbonate lenses and is well regarded in the ophthalmic lens
industry for its manufacturing capabilities, product innovation and customer
service. Orcolite employs approximately 285 people at the California facility.
When the transaction closes, Orcolite will be operated with BMC's existing
ophthalmic lens subsidiary, Vision-Ease Lens, Inc. ("Vision-Ease"), to form a
single ophthalmic lens business. Vision-Ease plans to operate Orcolite's
manufacturing facility to accommodate increasing product demand and facilitate
the launch of a continued stream of new, innovative products.
"This is an outstanding opportunity for Vision-Ease and the customers we serve,"
stated Paul B. Burke, Chairman and CEO of BMC. "The relative strengths of
Vision-Ease and Orcolite complement each other well. With this combination,
Vision-Ease and Orcolite customers will enjoy the benefits of broader product
lines, significantly increased sales and marketing efforts, more resources
devoted to research and development and better service levels."
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The acquisition will be funded through borrowings under a $275 million
syndicated bank credit facility provided for BMC by BT Alex. Brown and NBD Bank.
This facility is committed, subject to customary terms and conditions, and will
provide sufficient funds to satisfy working capital requirements and general
corporate purposes.
BMC Industries, Inc. is one of the world's largest manufacturers of aperture
masks for color picture tubes used in televisions and computer monitors. The
Company is also a leading producer of glass, plastic and polycarbonate eyewear
lenses. BMC's common stock is traded on the New York Stock Exchange under the
symbol BMC.
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