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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) May 1, 2000
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Cooper Industries, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Ohio
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(State or Other Jurisdiction of Incorporation)
1-1175 31-4156620
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(Commission File Number) (IRS Employer Identification No.)
600 Travis, Suite 5800, Houston, Texas 77002
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(Address of Principal Executive Offices) (Zip Code)
713/209-8400
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
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Item 2. Acquisition or Disposition of Assets
On May 1, 2000, Cooper Industries, Inc. (the "Company" or "Cooper") consummated
its acquisition of B-Line Systems from Sigma-Aldrich Corporation and its
affiliates in accordance with the terms of the Sale and Purchase Agreement by
and among Sigma-Aldrich Corporation, Sigma-Aldrich Co., Sigma-Aldrich Canada
Ltd., Sigma-Aldrich Company Ltd., Sigma-Aldrich Chemie GmbH (Sellers) and Cooper
Industries, Inc., Cooper B-Line, Inc. (formerly known as CBL Acquisition Corp.)
and Cooper Technologies Company (Buyer), dated as of March 27, 2000 (the "Sale
and Purchase Agreement"). Pursuant to the Sale and Purchase Agreement the
Company purchased all of the stock of Sigma-Aldrich Corporation's subsidiaries
B-Line Systems, Inc. and B-Line Systems Manufacturing, Inc. and all other assets
of the Sellers used exclusively in connection with the B-Line business. As a
division of Cooper, B-Line will continue to operate as a manufacturer of metal
components for strut, cable tray, pipe support and telecommunications systems
and electrical enclosures. Pursuant to the Sale and Purchase Agreement, Cooper
paid $425,199,600 and also assumed debt in the principal amount of $350,973. The
purchase funds were raised in the US commercial paper market.
Item 7. Financial Statements and Exhibits.
Exhibits
99.1 Sale and Purchase Agreement by and Among Sigma-Aldrich
Corporation, Sigma-Aldrich Co., Sigma-Aldrich Canada Ltd.,
Sigma-Aldrich Company Ltd., Sigma-Aldrich Chemie GmbH
(Sellers) and Cooper Industries, Inc., CBL Acquisition Corp.
and Cooper Technologies Company (Buyer), dated as of March 27,
2000 relating to the B-Line Business.
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 hereunto duly authorized.
COOPER INDUSTRIES, INC.
(Registrant)
Date: May 8, 2000 /s/ Diane K. Schumacher
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Diane K. Schumacher
Senior Vice President, General
Counsel and Secretary
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EXHIBIT INDEX
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Exhibit No.
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99.1 Sale and Purchase Agreement by and Among
Sigma-Aldrich Corporation, Sigma-Aldrich Co.,
Sigma-Aldrich Canada Ltd., Sigma-Aldrich Company
Ltd., Sigma-Aldrich Chemie GmbH (Sellers) and Cooper
Industries, Inc., CBL Acquisition Corp. and Cooper
Technologies Company (Buyer), dated as of March 27,
2000 relating to the B-Line Business.
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EXHIBIT 99.1
SALE AND PURCHASE AGREEMENT
BY AND AMONG
SIGMA-ALDRICH CORPORATION
SIGMA-ALDRICH CO.
SIGMA-ALDRICH CANADA LTD.
SIGMA-ALDRICH COMPANY LTD.
SIGMA-ALDRICH CHEMIE GMBH
(SELLERS)
AND
COOPER INDUSTRIES, INC.
CBL ACQUISITION CORP
COOPER TECHNOLOGIES COMPANY
(BUYER)
RELATING TO
THE B-LINE BUSINESS
MARCH 27, 2000
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TABLE OF CONTENTS
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ARTICLE ONE: TRANSACTIONS TO TAKE PLACE AT CLOSING...............................................................2
1.1 Purchase and Sale of Stock and Assets................................................................2
1.2 Assumed Liabilities and Obligations..................................................................3
1.3 Excluded Assets......................................................................................5
ARTICLE TWO: PURCHASE PRICE AND ALLOCATION.......................................................................6
2.1 Purchase Price and Preliminary Purchase Price........................................................6
2.2 Adjusted Purchase Price..............................................................................6
2.3 Adjusted Consolidated Valuation......................................................................6
2.3.1 Sellers' Statement........................................................................6
2.3.2 Buyer's Review............................................................................7
2.3.3 Sellers' Review...........................................................................7
2.3.4 Conference................................................................................7
2.3.5 Arbitrator................................................................................8
2.3.6 Final Amount..............................................................................9
2.4 Settlement of the Adjusted Purchase Price............................................................9
2.5 Section 338(h)(10) and Allocation...................................................................10
ARTICLE THREE: CONDITIONS TO CLOSING............................................................................10
3.1 Conditions Precedent to Obligations of Sellers......................................................10
3.1.1 Representations and Warranties of Buyer..................................................11
3.1.2 Representations and Warranties of Sellers................................................11
3.1.2 Delivery of Closing Documents............................................................11
3.1.4 Performance of Agreement.................................................................11
3.1.4 Purchase Price...........................................................................11
3.1.5 No Governmental Orders, etc. ............................................................11
3.1.6 Licenses and Permits.....................................................................12
3.1.7 Hart-Scott-Rodino........................................................................12
3.2 Conditions Precedent to Obligations of Buyer........................................................12
3.2.1 Sellers' Representations and Warranties..................................................12
3.2.2 Delivery of Closing Documents............................................................13
3.2.3 Performance of Agreement.................................................................13
3.2.4 No Governmental Orders, etc. ............................................................13
3.2.5 Permits..................................................................................13
3.2.6 Hart-Scott-Rodino........................................................................14
3.2.7 Third-Party Consents.....................................................................14
3.2.8 Leased Properties........................................................................14
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ARTICLE FOUR: CLOSING...........................................................................................14
4.1 The Closing.........................................................................................14
4.2 Sellers' Obligations at Closing.....................................................................14
4.3 Buyer's Obligations at Closing......................................................................16
ARTICLE FIVE: REPRESENTATIONS AND WARRANTIES....................................................................17
5.1 Materiality and Sellers' Knowledge..................................................................17
5.2 Representations and Warranties by Sellers...........................................................17
5.2.1 Corporate Authority, Non-contravention and Ownership.....................................17
5.2.2 Capital Stock............................................................................19
5.2.3 Financial Data...........................................................................21
5.2.4 Absence of Certain Changes...............................................................21
5.2.5 Compliance with Law and Permits..........................................................25
5.2.6 Litigation, Product Claims and Related Matters...........................................26
5.2.7 Title to Personal Property - Owned.......................................................27
5.2.8 Personal Property - Leased...............................................................28
5.2.9 Real Property - Owned....................................................................28
5.2.10 Real Property - Leased..................................................................30
5.2.11 Patents, Trademarks and Other Intellectual Property.....................................31
5.2.12 Taxes...................................................................................34
5.2.13 Contracts...............................................................................35
5.2.14 Labor Relations.........................................................................37
5.2.15 Compliance with ERISA...................................................................37
5.2.16 Accounts Receivable.....................................................................38
5.2.17 Inventory...............................................................................39
5.2.18 Environmental Matters...................................................................39
5.2.19 Transactions with Affiliated Persons....................................................41
5.2.20 Stock Record and Minute Books...........................................................42
5.2.21 Sufficiency of Assets...................................................................42
5.2.22 No Undisclosed Liabilities..............................................................42
5.2.23 No Broker...............................................................................42
5.2.24 Scope of Representation.................................................................43
5.2.25 Insurance Policies......................................................................43
5.3 Representations and Warranties of Buyer.............................................................44
5.3.1 Corporate Authority and Non-Contravention................................................44
5.3.2 Litigation Concerning Agreement..........................................................45
5.3.3 No Broker................................................................................45
5.3.4 Financing................................................................................45
5.3.5 Buyer's Knowledge........................................................................45
ARTICLE SIX: PARTICULAR COVENANTS OF SELLER AND BUYER...........................................................46
6.1 Covenants of Sellers................................................................................46
6.1.1 Interim Operation of the B-Line Business.................................................46
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6.1.2 Access to Records Prior to Closing.......................................................47
6.1.3 Notices and Consents.....................................................................47
6.1.4 Exclusivity..............................................................................48
6.1.5 Covenant Not to Compete..................................................................48
6.1.6 Non-Solicitation.........................................................................49
6.1.7 Transition...............................................................................49
6.1.8 Intercompany Accounts and Agreements.....................................................49
6.1.9 Further Assurances.......................................................................50
6.2 Covenants of Buyer..................................................................................50
6.2.1 Further Assurances.......................................................................50
6.2.2 No Reliance..............................................................................50
6.3 Mutual Covenants of the Parties.....................................................................50
6.3.1 Best Efforts and Cooperation.............................................................50
6.3.2 Communications...........................................................................51
6.3.3 Access to Records and Employees Subsequent to Closing....................................51
6.3.4 Failure of Conditions; Waiver............................................................53
6.3.5 Insurance................................................................................53
6.3.6 Amounts Received for Accounts Receivable.................................................54
6.3.7 Hart-Scott-Rodino Act Approvals..........................................................54
6.3.8 Tax Matters..............................................................................54
ARTICLE SEVEN: EMPLOYEES AND EMPLOYEE MATTERS...................................................................58
7.1 Treatment of Employees-General......................................................................58
7.2 Welfare Benefits....................................................................................59
7.3 Buyer's Assumption of Liability.....................................................................60
7.4 Plant Closing Law...................................................................................61
7.5 Security Value Plan.................................................................................61
7.6 401(k) Plan.........................................................................................61
ARTICLE EIGHT: INDEMNIFICATION..................................................................................62
8.1 Indemnification by Buyer............................................................................62
8.2 Indemnification by Sellers..........................................................................62
8.3 Indemnification Procedures..........................................................................65
8.4 Computation of Claims...............................................................................66
8.5 Term of Indemnification.............................................................................66
8.6 Sole Basis For Claims...............................................................................66
ARTICLE NINE: MISCELLANEOUS.....................................................................................67
9.1 Expenses............................................................................................67
9.2 Scope of Liability and Available Remedies...........................................................67
9.2.1 Joint and Several Liability..............................................................67
9.2.2 Joint and Several Liability..............................................................67
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9.2.3 Certain Damages Waived...................................................................67
9.3 Arbitration.........................................................................................68
9.3.1 Conference...............................................................................68
9.3.2 General..................................................................................68
9.3.3 Appointment of Tribunal..................................................................69
9.3.4 Final and Binding........................................................................69
9.3.5 Award....................................................................................69
9.3.6 Cost of Proceedings......................................................................69
9.3.7 Agents...................................................................................70
9.4 Notices.............................................................................................71
9.5 Captions............................................................................................71
9.6 Successors and Assigns; Other Parties...............................................................72
9.7 Entire Agreement....................................................................................72
9.8 Construction........................................................................................73
9.9 Time of Essence.....................................................................................73
9.10 Termination........................................................................................73
9.11 Counterparts.......................................................................................74
9.12 Governing Law......................................................................................74
9.13 Modification; Waiver...............................................................................75
9.14 Severability.......................................................................................75
GLOSSARY INDEX OF DEFINED TERMS..................................................................................77
LIST OF SCHEDULES................................................................................................79
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SALE AND PURCHASE AGREEMENT
THIS SALE AND PURCHASE AGREEMENT ("Agreement") is made and
entered into this 27th day of March, 2000, by and among Sigma-Aldrich
Corporation, a Delaware corporation ("SIAL"), Sigma-Aldrich Co., an Illinois
corporation ("SAC"), Sigma-Aldrich Canada Ltd., a corporation organized under
the laws of Canada ("Sigma Canada"), Sigma-Aldrich Company Ltd., a corporation
organized under the laws of the United Kingdom ("Sigma UK"), and Sigma-Aldrich
Chemie GmbH, a corporation organized under the laws of Germany ("Sigma Germany"
and together with SIAL, SAC, Sigma Canada and Sigma UK "Sellers"), and Cooper
Industries, Inc. an Ohio corporation ("Cooper"), CBL Acquisition Corp., a
Delaware corporation ("CBL") and Cooper Technologies Company, a Delaware
Corporation ("CTC") (Cooper, CBL, CTC and any other affiliate(s) of Cooper
thereof to be designated, collectively "Buyer"). Each of Sellers and Buyer are
referred to hereinafter individually as a "Party" and collectively as the
"Parties."
WHEREAS, Sellers, among other things, are currently and have
been engaged in the business of the design, manufacture and sale of metal
components for strut, cable tray, pipe support and telecommunications systems
and electrical enclosures (which business is referred to herein as the "B-Line
Business"), directly and/or indirectly through certain subsidiaries;
WHEREAS, Buyer desires to purchase from Sellers, and Sellers
desire to sell to Buyer, all of the stock of SIAL's subsidiaries B-Line and
B-Line Manufacturing, which are engaged entirely in the B-Line Business, and the
other assets relating to the B-Line Business and to assume certain liabilities
relating to the B-Line Business on the following terms and conditions;
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NOW, THEREFORE, in consideration of the premises and the
mutual promises hereinafter expressed, it is agreed as follows:
ARTICLE ONE: TRANSACTIONS TO TAKE PLACE AT CLOSING
1.1 Purchase and Sale of Stock and Assets. Subject to the terms and
conditions hereof, at Closing (as herein defined), effective as of the Effective
Time (as herein defined), in exchange for the Adjusted Purchase Price (as herein
defined):
(a) SIAL shall sell and deliver to the Buyer and the Buyer
shall purchase and accept from SIAL all of its right, title and interest in and
to all of the issued and outstanding capital stock (the "B-Line Stock") of
B-Line Systems, Inc., an Illinois corporation ("B-Line"); and
(b) SAC shall sell to the Buyer and the Buyer shall purchase
from SAC all of SAC's right, title and interest to all of the issued and
outstanding capital stock (the "Manufacturing Stock") of B-Line Systems
Manufacturing, Inc., a Delaware corporation ("B-Line Manufacturing"); and
(c) SAC shall sell to the Buyer and the Buyer shall purchase
from SAC all of SAC's right, title and interest to all of its assets used
exclusively in connection with the B-Line Business, including without limitation
those assets described on Schedule 1.1(c) hereto (the "SAC B-Line Business
Assets"); and
(d) Sigma Canada shall sell to the Buyer and the Buyer shall
purchase from Sigma Canada all of Sigma Canada's right, title and interest to
all of its assets used exclusively in connection with the B-Line Business, which
consist of inventory, accounts receivable, cantilever racking and two Dell
computers (the "Canada B-Line Business Assets"); and
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(e) Sigma UK shall sell to the Buyer and the Buyer shall
purchase from Sigma UK all of Sigma UK's right, title and interest to all of its
assets used exclusively in connection with the B-Line Business, which consist of
inventory, accounts receivable and three motor vehicles (the "UK B-Line Business
Assets"); and
(f) Sigma Germany shall sell to the Buyer and the Buyer shall
purchase from Sigma Germany all of Sigma Germany's right, title and interest to
all of its assets used exclusively in connection with the B-Line Business, which
consist of inventory and accounts receivable (the "Germany B-Line Business
Assets").
(g) Sellers shall sell to CTC and CTC shall purchase from
Sellers all of Sellers' right, title and interest to all of their Intangibles
(as defined below) used exclusively in connection with the B-Line Business.
No later than ten days prior to Closing, Cooper on behalf of Buyer shall specify
in writing to SIAL on behalf of Sellers whether the transfers specified in
clauses (a) through (f) of this Section 1.1 shall be made to CBL or any other
designated affiliate(s) of Cooper (in which case such other affiliate(s) shall
become parties to and bound by this Agreement and shall be deemed to be included
within the definition of Buyer hereunder). Together, the B-Line Stock, the
Manufacturing Stock, the SAC B-Line Business Assets, the Canada B-Line Business
Assets, the UK B-Line Business Assets and the Germany B-Line Assets are the
"Assets." Notwithstanding the foregoing, the assets identified in Section 1.3
shall not be transferred and are hereinafter referred to as the "Excluded
Assets."
1.2 Assumed Liabilities and Obligations. On the terms and
subject to the conditions hereof, at Closing, effective as of the Effective
Time, Buyer shall assume, and thereafter shall pay and fully satisfy all
liabilities and obligations (including, without limitation, any contract,
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obligation or liability described more particularly in Sections 5.2.13, 7.2 and
7.3 and any liability with respect to products manufactured or sold by the
B-Line Business prior to the Effective Time, and any attorneys' and experts'
fees and expenses related thereto) arising out of or resulting from Sellers'
ownership (directly and/or through subsidiaries) or operation of the B-Line
Business prior to the Effective Time and Buyer's ownership or operation of the
B-Line Business after the Effective Time (the "Assumed Liabilities"), pursuant
to a general assignment and assumption of liabilities substantially in the form
of Exhibit A hereto. Notwithstanding the foregoing, Assumed Liabilities will not
include the following (collectively, the "Excluded Liabilities"):
(a) any Taxes as a result of the Section 338(h)(10) Election
which are assumed by Sellers pursuant to the last sentence of Section 6.3.8(h)
of this Agreement;
(b) any Income Taxes (as defined below) arising out of the
operation of the B-Line Business through the Effective Time;
(c) any intercompany accounts payable of the B-Line Business
existing at any time prior to Closing (all of which shall be cancelled prior to
Closing);
(d) any liability for product warranty or product liability
claims asserted, or to Sellers' knowledge threatened, prior to the Effective
Time with respect to products sold by the B-Line Business prior to the Effective
Time ("Pre-Closing Product Claims" ) in excess of the reserve or accrual
therefor reflected on the Adjusted Consolidated Valuation;
(e) any workers' compensation liability related to Occurrences
(hereinafter defined) prior to the Effective Time, except to the extent accrued
in the Adjusted Consolidated Valuation;
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(f) any indebtedness for borrowed money for which any of the
Operating Companies (as hereinafter defined) is liable, contingently or
otherwise, as obligor, guarantor, or otherwise, or in respect of which any of
the Operating Companies otherwise assures a creditor against loss, on or before
the Effective Time ("Long Term Debt" ) except as set forth on Schedule 1.2(f)
hereto; or
(g) any liabilities or obligations for which any of Sellers is
responsible under any other provision hereof (and without waiver of any
obligations of Sellers under the Transition Services Agreement), including
without limitation any obligations and liabilities retained or assumed by
Sellers pursuant to Articles Seven, Eight and Nine, subject in each case to any
conditions or limitations applicable thereto.
1.3 Excluded Assets. The Parties agree, any provision hereof
to the contrary notwithstanding, that the Assets shall not include any of the
following assets, and SIAL shall have the right, at or prior to the Closing, to
have: (a) all cash in the Business, (b) any Income Tax (hereinafter defined)
accounts, including deferred tax assets and any refunds relating to Income Tax
receivables of the B-Line Business relating to periods before the Closing, which
assets shall be distributed to SIAL or retained by any of the Sellers, (c) the
shares of Sigma-Aldrich Holding Ltd. (UK), B-Line Systems Limited (UK), James F.
Burns Co., Inc. or KL Acquisition Corp. (or any other, dormant legal entities
affiliated with any of Sellers), or (d) any intercompany accounts receivable of
the B-Line Business existing at any time prior to Closing between the B-Line
Business and any of the Sellers.
ARTICLE TWO: PURCHASE PRICE AND ALLOCATION
2.1 Purchase Price and Preliminary Purchase Price. The
purchase price for the Assets shall be the Adjusted Purchase Price. At the
Closing, Buyer shall pay to SIAL on behalf of all
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Sellers $425,000,000 (the "Preliminary Purchase Price"). Following Closing, the
Adjusted Purchase Price shall be determined and paid as provided in Sections 2.2
and 2.3.
2.2 Adjusted Purchase Price. The adjusted purchase price to be
determined and settled as provided herein (the "Adjusted Purchase Price") shall
be equal to the Preliminary Purchase Price plus or minus the amount, if any, by
which the Adjusted Consolidated Valuation is greater or less than the
Preliminary Consolidated Valuation. For purposes of this calculation,
"Preliminary Consolidated Valuation" shall be $138,640,000 (consisting of the
consolidated net book value of the Assets (other than the B-Line Stock and the
Manufacturing Stock), the Assumed Liabilities and the assets and liabilities of
B-Line and B-Line Manufacturing as derived from the Audited Financial Statements
(hereinafter defined) in accordance with Section 5.2.3 hereof, all as of
December 31, 1999 as adjusted as provided in Schedule 2.2(a), as shown on
Schedule 2.2(b) hereto. "Adjusted Consolidated Valuation" shall equal the
consolidated net book value of the Assets (other than the B-Line Stock and the
Manufacturing Stock), the Assumed Liabilities and the assets and liabilities of
B-Line and B-Line Manufacturing, all as of the Closing Date in accordance with
Section 2.3.1 hereof.
2.3 Adjusted Consolidated Valuation.
2.3.1 Sellers' Statement. Sellers shall prepare and
deliver to Buyer within 60 days after the Closing Date a statement of the
Adjusted Consolidated Valuation. Such statement shall be prepared using the same
accounting principles and practices that were used in preparing the Audited
Financial Statements and the Preliminary Consolidated Valuation and shall be
adjusted in accordance with Schedule 2.2(a).
2.3.2 Buyer's Review. In the event that Buyer, in
good faith, disagrees with any determinations made by Sellers and reflected in
the statement of Adjusted Consolidated Valuation
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delivered pursuant to Section 2.3.1, and such disagreement in Buyer's view
affects the Adjusted Purchase Price, each specific item of disagreement and
proposed adjustment shall be set forth in writing and delivered to SIAL on
behalf of all Sellers within 60 days from receipt of the statement of Adjusted
Consolidated Valuation ("Buyer's Letter" ). If Buyer does not submit Buyer's
Letter within such 60-day period, Sellers' statement of the Adjusted
Consolidated Valuation delivered pursuant to Section 2.3.1 will become final.
2.3.3 Sellers' Review. Sellers will then have 30 days
following receipt of the Buyer's Letter, if any, to review Buyer's proposed
adjustments. Within the 30-day period, Sellers shall notify Cooper on behalf of
Buyer in writing of Sellers' position with respect to each of Buyer's proposed
adjustments ("Sellers' Letter" ). If Sellers do not submit Sellers' Letter
within such 30-day period, the Sellers' statement of Adjusted Consolidated
Valuation delivered pursuant to Section 2.3.1 as adjusted by Buyer's Letter will
become final.
2.3.4 Conference. Within 30 days after the response
from Sellers pursuant to Section 2.3.3 above, the Parties shall confer and
endeavor to mutually resolve the adjustments, if any, which are in dispute. If
Sellers and Buyer do not agree upon an Adjusted Purchase Price within such
30-day period (the end of such 30 day period being hereinafter referred to as
the "Arbitration Deadline"), such dispute shall be resolved in accordance with
the procedures set out in Section 2.3.5 below.
2.3.5 Arbitrator. If the Parties cannot mutually
resolve any disputes involving Buyer's proposed adjustments by the Arbitration
Deadline, the Parties shall jointly engage the St. Louis office of the
accounting firm of PricewaterhouseCoopers (the "Accounting Arbitrator"), to act
as arbitrator. The Accounting Arbitrator shall be furnished with a copy of the
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Agreement, the Preliminary Consolidated Valuation, Sellers' statement of
Adjusted Consolidated Valuation delivered pursuant to Section 2.3.1, Buyer's
Letter, Sellers' Letter, the Buyer's proposed treatment of the items in dispute
(the "Buyer's Proposal", which may but need not be the same as set out in the
Buyer's Letter), the Seller's proposed treatment of the items in dispute (the
"Sellers' Proposal", which may but need not be the same as set out in the
Sellers' Letter), and any other relevant correspondence between the Parties. The
Accounting Arbitrator must, within 30 days from the date such documents are
furnished, complete its review and render a written report setting forth its
conclusion with respect to each of Buyer's proposed adjustments which were
unresolved between the Parties. The Accounting Arbitrator shall be granted
access to the books and records of the B-Line Business as well as the working
papers or other documents which either Party or its accountants may have which
relate to the Preliminary Consolidated Valuation and any other documents or
information which the Accounting Arbitrator may deem appropriate. The Accounting
Arbitrator's review shall be limited to the purpose of determining whether, in
respect of each disputed adjustment, the Buyer's Proposal or the Sellers'
Proposal is more nearly in accordance with the terms of this Agreement. The
Parties shall have the right to submit written materials to the Accounting
Arbitrator in accordance with procedures to be set forth in the engagement
letter between the Parties and the Accounting Arbitrator. In arriving at its
determination, the Accounting Arbitrator must select for each adjustment either
the Buyer's Proposal or the Sellers' Proposal with respect to each disputed
adjustment. The decision by the Accounting Arbitrator shall be in writing and
delivered to both Buyer and Sellers. The Parties agree that the Accounting
Arbitrator is the exclusive person to make all interpretations necessary
(including interpretations or constructions of this Agreement) to support its
determinations. The
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Accounting Arbitrator's decision shall be conclusive and binding upon the
Parties and may be entered and enforced in any court of competent jurisdiction.
The Parties agree to submit to the jurisdiction of any such court for the
enforcement of such award or decision. Buyer on one hand and Sellers on the
other hand shall each pay 50% of the fees and expenses of the Accounting
Arbitrator.
2.3.6 Final Amount. Sellers' statement of Adjusted
Consolidated Valuation delivered pursuant to Section 2.3.1 will be modified by
any adjustments proposed by Buyer to which Sellers did not object in Sellers'
Letter, any other adjustments agreed by the Parties pursuant to Section 2.3.4
and by the determination of the Accounting Arbitrator pursuant to Section 2.3.5
and will become the final determination of the Adjusted Consolidated Valuation.
2.4 Settlement of the Adjusted Purchase Price. Settlement of
the Adjusted Purchase Price ("Settlement") shall occur within five (5) business
days after the determination of the Adjusted Consolidated Valuation becomes
final, whether by expiration of the time period within which Buyer may object,
agreement of the Parties or issuance of a determination by the Accounting
Arbitrator. On Settlement, the difference between the Preliminary Purchase Price
and the Adjusted Purchase Price, plus accrued interest on such difference from
the Closing Date to (but not including) the date of payment at a rate per annum
(on the basis of a 365-day year) equal to the sum of the Federal Funds rate,
being the offered rate therefor in the "Money Rates" table of The Wall Street
Journal, published on the Closing Date plus 50 basis points, shall be paid by
the appropriate Party to the other Party. Such payment shall be by wire transfer
of immediately available funds to an account specified by the receiving Party.
2.5 Section 338(h)(10) and Allocation
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(a) Sellers and Buyer shall timely file a joint
election pursuant to Section 338(h)(10) (a "Section 338(h)(10) Election") of the
Internal Revenue Code of 1986, as amended (the "Code") (and any comparable
election under state, local, or foreign law) with respect to the sale of the
B-Line Stock and the Manufacturing Stock (together, the "Shares" ) and shall
timely file such forms and take such other actions as are necessary to
effectuate such election in accordance with said Section 338(h)(10).
(b) Prior to Closing, SIAL and Buyer shall negotiate
in good faith an allocation of the Preliminary Purchase Price among the assets
of the B-Line Business in accordance with Sections 1060 and 338 of the Code.
Within 30 days following the Settlement, SIAL and Buyer shall negotiate in good
faith an allocation of any difference resulting from the Adjusted Purchase Price
among the assets of the B-Line Business in accordance with Sections 1060 and 338
of the Code. If SIAL and Buyer are not able to agree, the allocated amounts
shall be determined in accordance with the provisions set out in Section 9.3.
The Parties will prepare and file their respective tax returns and all other
required filings based on such allocation and shall take no positions contrary
thereto.
ARTICLE THREE: CONDITIONS TO CLOSING
3.1 Conditions Precedent to Obligations of Sellers. The
obligations of Sellers to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction at or prior to Closing of each of
the following conditions (any one or more of which may be waived in whole or in
part by Sellers):
3.1.1 Representations and Warranties of Buyer. The
representations and warranties made by Buyer hereunder shall be true and correct
in all material respects at the date hereof
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and, except for changes expressly contemplated by this Agreement, at Closing as
though such representations and warranties had been made at Closing.
3.1.2 Representations and Warranties of Sellers. The
representations and warranties made by Sellers hereunder shall be true and
correct in all material respects at Closing, provided that this condition 3.1.2
shall not apply to any breach of such representations and warranties which
results from either (a) changes expressly contemplated by this Agreement or (b)
any breach by Sellers of their covenants and obligations hereunder.
3.1.3 Delivery of Closing Documents. Buyer shall have
delivered to or caused to be delivered to Sellers the documents which Buyer is
required to deliver to Sellers at Closing pursuant to this Agreement in form and
substance reasonably satisfactory to Sellers.
3.1.4 Performance of Agreement. Buyer shall have duly
performed in all material respects all agreements and covenants required to be
performed by Buyer at or prior to Closing pursuant to this Agreement.
3.1.4 Purchase Price. There shall have been delivered
to SIAL by Buyer payment of the Preliminary Purchase Price as provided in
Section 4.3(a).
3.1.5 No Governmental Orders, etc. No statute, rule,
regulation or order of any court or Authority (as hereinafter defined) shall
have been entered into after the date hereof which restrains or prohibits or
would cause the rescission after Closing of the transactions contemplated hereby
or which would limit or adversely affect the ability of Sellers to sell the
B-Line Business, and no suit, action, proceeding or investigation by any
Authority or any other party shall be pending which seeks a material amount of
damages against Sellers or an affiliate of Sellers by reason of the consummation
of the transactions contemplated by this Agreement and the Ancillary Agreements.
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3.1.6 Licenses and Permits. All governmental licenses
and permits, the granting of which is necessary for the consummation of the
transactions contemplated hereby shall have been obtained.
3.1.7 Hart-Scott-Rodino. All filing and waiting
period requirements of the HSR Act (as defined below) and any other applicable
law relating to consummation of the transactions provided for herein shall have
been duly complied with.
3.2 Conditions Precedent to Obligations of Buyer. The
obligations of Buyer to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction at or prior to Closing of each of
the following conditions (any one or more of which may be waived in whole or in
part by Buyer):
3.2.1 Sellers' Representations and Warranties. The
representations and warranties made by Sellers hereunder shall be true and
correct in all material respects at the date hereof and at Closing as though
such representations and warranties had been made at both the date hereof and
the Closing Date, except for changes (a) expressly contemplated by or permitted
under this Agreement (including without limitation as permitted by the terms of
or consented to or approved by Buyer pursuant to Section 6.1.1), or (b) as may
result from or arise out of the unreasonable failure or refusal of Buyer to
consent to or approve an action proposed by Sellers pursuant to Section 6.1.1.
3.2.2 Delivery of Closing Documents. Sellers shall
have delivered or caused to be delivered to Buyer the documents which Sellers
are required to deliver to Buyer at Closing pursuant to this Agreement in form
and substance reasonably satisfactory to Buyer.
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3.2.3 Performance of Agreement. Sellers shall have
duly performed or caused to be performed in all material respects all agreements
and covenants required to be performed by Sellers at or prior to Closing
pursuant to this Agreement.
3.2.4 No Governmental Orders, etc. No statute, rule,
regulation or order of any court or Authority shall have been entered into after
the date hereof which restrains or prohibits or would cause the rescission after
Closing of the transactions contemplated hereby or which would limit or
adversely affect the ability of Buyer to acquire the B-Line Business, and no
suit, action, proceeding or investigation by any Authority or any other party
shall be pending which seeks a material amount of damages against Buyer or an
affiliate of Buyer by reason of the consummation of the transactions
contemplated by this Agreement and the Ancillary Agreements.
3.2.5 Permits. All Permits (as defined below)
necessary for the consummation of the transactions contemplated hereby, or for
preventing the termination of any right, privilege or license relating to the
B-Line Business which is material to it, upon the consummation of the
transactions contemplated hereby, shall have been obtained prior to, and
maintained through, Closing, and are transferable to Buyer.
3.2.6 Hart-Scott-Rodino. All filing and waiting
period requirements of the HSR Act and any other applicable Law (defined below)
or Authority (defined below) relating to consummation of the transactions
provided for herein shall have been duly complied with.
3.2.7 Third-Party Consents. All notices to and
consents, authorizations and approvals by third parties specified in Section
6.1.3 shall have been procured by Sellers.
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3.2.8 Leased Properties. Assignments to Buyer in form
and substance reasonably satisfactory to Buyer shall have been procured by
Sellers, along with any required consents thereto, from the respective lessors
of the real properties identified in Schedule 3.2.8.
ARTICLE FOUR: CLOSING
4.1 The Closing. The consummation of the sale and purchase of
the Assets as contemplated by this Agreement ("Closing") shall take place at the
offices of Bryan Cave LLP, in St. Louis, Missouri, on May 1, 2000, at 9:00 A.M.
(Central time), or, if any of the conditions to Closing are not satisfied or
waived as of that date and time, on the first business day of the month
following the month in which all such conditions are satisfied or waived at 9:00
A.M., unless a different date or time for Closing is agreed upon by the Parties
(the date of Closing ultimately determined in accordance with this paragraph is
referred to herein as the "Closing Date"). The effective time of the Closing
(the "Effective Time") is midnight of the day immediately preceding the Closing
Date.
4.2 Sellers' Obligations at Closing. At Closing, Sellers shall
deliver to Buyer the following:
(a) Certificates of each of the Sellers dated the
Closing Date and signed by a duly authorized officer of such Seller which
evidence the due authorization, execution and delivery of this Agreement and the
Ancillary Agreements (as hereinafter defined) by Sellers and certifying without
qualification that the conditions set forth in Section 3.2.1 and 3.2.3 have been
fulfilled in all material respects.
(b) A general assignment and assumption of
liabilities, in substantially the form attached hereto as Exhibit A, duly
executed by SAC, Sigma Canada, Sigma UK and Sigma Germany ("General Assignment
and Assumption").
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(c) Bills of sale, in substantially the forms
attached hereto as Exhibit B, duly executed by, respectively, SAC, Sigma Canada,
Sigma UK and Sigma Germany (collectively, the "Bill of Sale"), general warranty
deeds for the Owned Properties (as defined in Section 5.2.9 ) owned by SAC
subject to the exceptions to title provided for in Section 5.2.9 and Schedule
5.2.9 and such other instruments of sale, transfer, conveyance and assignment as
Buyer may reasonably request.
(d) A receipt for the Preliminary Purchase Price.
(e) Certificates evidencing all of the issued and
outstanding Shares, accompanied by duly executed stock powers in favor of Buyer.
(f) The resignations of the directors and officers of
B-Line and B-Line Manufacturing who are employees of SIAL or SAC effective as of
Closing.
(g) A transition services agreement providing for
services, at Sellers' cost (including an overhead allocation), in substantially
the form attached hereto as Exhibit C ("Transition Services Agreement").
(h) Certificates of good standing for B-Line and
B-Line Manufacturing issued by the Secretary of State of each of their
respective states of incorporation and dated not more than ten (10) business
days before the Closing Date.
(i) The stock books, stock ledgers, minute books and
corporate seals for B-Line and B-Line Manufacturing.
4.3 Buyer's Obligations at Closing. At the Closing, Buyer
shall deliver or cause to be delivered to Sellers the following:
(a) The Preliminary Purchase Price by bank wire
transfer in federal or other immediately available U.S. dollar funds to the
account(s) specified on Schedule 4.3 hereto.
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(b) A Certificate of Buyer dated the Closing Date
signed by a duly authorized officer of Buyer which evidences due authorization,
execution and delivery of this Agreement and the Ancillary Agreements by Buyer
and certifies without qualification that the conditions set forth in Sections
3.1.1 and 3.1.3 have been fulfilled in all material respects.
(c) A General Assignment and Assumption, in
substantially the form attached hereto as Exhibit A, duly executed by Buyer.
(d) A Transition Services Agreement, in substantially
the form attached hereto as Exhibit C.
ARTICLE FIVE: REPRESENTATIONS AND WARRANTIES
5.1 Materiality and Sellers' Knowledge. References to
Sellers', Seller's, SIAL's, SAC's, Sigma Canada's, Sigma UK's or Sigma Germany's
"knowledge" in this Agreement are to the actual knowledge of persons identified
on Schedule 5.1 hereto. References to "material", "materiality" or "material
adverse effect" in this Agreement with respect to the B-Line Business are to the
B-Line Business as a whole.
5.2 Representations and Warranties by Sellers. The following
representations and warranties are made jointly and severally by the Sellers
solely with respect to the B-Line Business and are correct and complete as of
the date hereof and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date of
this Agreement throughout this Section 5.2, but except for (a) changes expressly
contemplated by or permitted under this agreement (including without limitation
as permitted by the terms of or consented to or approved by Buyer pursuant to
Section 6.1.1 and (b) as may result from or arise
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out of the unreasonable failure or refusal of Buyer to consent to or approve an
action proposed by Sellers pursuant to Section 6.6.1), except as set forth in
the attached schedules referenced in this Section 5.2 (and its subsections):
5.2.1 Corporate Authority, Non-contravention and
Ownership.
(a) SIAL is a corporation duly organized, validly
existing and in good standing under the laws of Delaware. SAC is a corporation
duly organized, validly existing and in good standing under the laws of
Illinois. B-Line is a corporation duly organized, validly existing and in good
standing under the laws of Illinois, and is duly qualified and in good standing
in each jurisdiction in which the property owned, leased or operated by it or
the nature of the business conducted by it makes such qualification necessary,
except where the failure to be so qualified would not have a material adverse
effect. B-Line Manufacturing is a corporation duly organized, validly existing
and in good standing under the laws of Delaware, and is duly qualified and in
good standing in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification necessary, except where the failure to be so qualified would not
have a material adverse effect. Sigma Canada is a corporation duly organized,
validly existing and in good standing under the laws of Canada. Sigma UK is a
corporation duly organized, validly existing and in good standing under the laws
of the United Kingdom. Sigma Germany is a corporation duly organized, validly
existing and in good standing under the laws of Germany.
(b) SAC (with respect to the portion of the B-Line
Business owned by SAC), Sigma Canada (with respect to the portion of the B-Line
Business owned by Sigma Canada), Sigma UK (with respect to the portion of the
B-Line Business owned by Sigma UK), Sigma Germany (with respect to the portion
of the B-Line Business owned by Sigma Germany), B-Line and B-Line
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Manufacturing (together with their respective subsidiaries, if any, but
excluding any such subsidiaries listed in Section 1.3, the "Operating
Companies") have full corporate power and authority to own, lease and operate
their properties and to conduct the operations of the B-Line Business as it is
currently conducted.
(c) Each of Sellers have full corporate power and
authority to execute, deliver and perform this Agreement and, as applicable, the
Bill of Sale and the General Assignment and Assumption (the latter two documents
being referred to collectively as, the "Ancillary Agreements") and to consummate
the transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement and the Ancillary Agreements have been duly
authorized by all necessary corporate action on the part of Sellers, as
applicable, and no further approval of the board of directors or stockholders of
any Seller is necessary for the execution hereof or thereof or consummation of
the transactions contemplated hereby or thereby.
(d) This Agreement and the Ancillary Agreements have
been duly executed and delivered by Sellers, as applicable, and constitute
valid, legally binding, and enforceable obligations of Sellers, as applicable,
subject, in the case of enforceability, to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and to principles of equity
regarding the availability of equitable remedies.
(e) The execution and delivery of this Agreement and,
as applicable, the Ancillary Agreements by Sellers, as applicable, and
consummation by Sellers of the transactions contemplated hereby and thereby: do
not (i) violate or conflict with any provision of the Articles or Certificate of
Incorporation or Bylaws (or their equivalents for Sellers incorporated outside
the United States) of Sellers, as applicable, (ii) result in a material breach
of, constitute a default under, give rise to
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any right of termination, modification or acceleration of, or require any
notice under, any contract, lease, license, Permits or other agreement to which
any Seller (as applicable) is a party or to which any of the Assets is subject
(or result in imposition of a Lien (as hereinafter defined) thereon), or (iii)
violate in any material respect any Law to which any of Sellers, as applicable,
is a party or by which any of the property included in the B-Line Business is
bound or subject.
5.2.2 Capital Stock.
(a) SIAL is the record and beneficial owner of the
B-Line Stock. SAC is the record and beneficial owner of the Manufacturing Stock.
Sellers will deliver or cause to be delivered to the Buyer at Closing good and
marketable title to the Shares, free and clear of all Liens.
(b) The authorized capital stock of B-Line consists
solely of 30,000 shares of common stock, $1 par value, of which the 500 shares
of B-Line Stock are the only shares issued and outstanding. The B-Line Stock is
duly authorized and validly issued and is fully paid and non-assessable. Except
for Buyer's rights hereunder, (i) there are outstanding no other securities of
B-Line and no rights or options to acquire securities of B-Line, and (ii)
neither Sellers nor B-Line is subject to any obligation to issue, deliver,
redeem, or otherwise acquire or retire or sell the B-Line Stock or any other
securities of B-Line.
(c) The authorized capital stock of B-Line
Manufacturing consists solely of 30,000 shares of common stock, $1 par value, of
which the 500 shares of Manufacturing Stock are the only shares issued and
outstanding. The Manufacturing Stock is duly authorized and validly issued and
is fully paid and non-assessable. Except for Buyer's rights hereunder, (i) there
are outstanding no other securities of B-Line Manufacturing and no rights or
options to
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acquire securities of the B-Line Manufacturing, and (ii) neither Sellers nor
B-Line Manufacturing is subject to any obligation to issue, deliver, redeem, or
otherwise acquire or retire or sell the Manufacturing Stock or any other
securities of B-Line Manufacturing.
(d) B-Line and B-Line Manufacturing have no
subsidiaries and they do not own (directly or indirectly) any capital stock or
other equity securities of any corporation or any direct or indirect equity
interest in any business, trust or joint venture, except as set forth on
Schedule 5.2.2(d).
5.2.3 Financial Data. Attached hereto as Schedule
5.2.3(a) is a Combined Balance Sheet for the B-Line Business as of February 29,
2000 and Combined Statements of Operations for the B-Line Business for the two
month period ended February 29, 2000 ("Unaudited Financial Statements"). Also
attached hereto as Schedule 5.2.3(b) are a Combined Balance Sheet of the B-Line
Business as of December 31, 1999, 1998 and 1997, Combined Statements of
Operations for the B-Line Business for the years ended December 31, 1999, 1998
and 1997, Combined Statements of Parent Company Investment for the years ended
December 31, 1999, 1998 and 1997, and Combined Statements of Cash Flows for the
years ended December 31, 1999, 1998 and 1997 (the "Audited Financial Statements"
and together with the Unaudited Financial Statements, the "Financial
Statements"). The opinion of Arthur Anderson LLP with respect to the Audited
Financial Statements is also included in Schedule 5.2.3(b). The Financial
Statements have been derived from Sellers' and the Operating Companies'
accounting records, have been prepared in accordance with United States
generally accepted accounting principles ("GAAP" ) consistently applied to the
B-Line Business, and fairly present the financial position and results of
operations of the B-Line Business as of the respective
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dates thereof or period covered thereby (subject, in the case of the Unaudited
Financial Statements, to year-end adjustments and the lack of footnotes).
5.2.4 Absence of Certain Changes. Other than as
disclosed on Schedule 5.2.4, to Sellers' knowledge, since December 31, 1999,
there has been no material adverse change in the Assets or Assumed Liabilities
or the B-Line Business, its financial condition, operations or results of
operations, except as may result from economic developments generally. Without
limiting the generality of the foregoing, Sellers further represent and warrant
that, except as specifically set forth in lettered subsections of Schedule 5.2.4
corresponding to the lettered subsections below, since December 31, 1999:
(a) none of the Operating Companies has sold, leased,
transferred or assigned any of its material assets, tangible or intangible,
other than in the ordinary course of business;
(b) none of the Operating Companies has entered into
any agreement, contract, lease or license (or series of related agreements,
contracts, leases and licenses) either (i) involving more than $50,000 or (ii)
outside the ordinary course of business and which is material;
(c) no party (including any of the Operating
Companies) has accelerated, terminated, modified or canceled any agreement,
contract, lease or license (or series of related agreements, contracts, leases
and licenses) involving more than $50,000 to which any of the Operating
Companies is a party or by which any of them is bound;
(d) none of the Operating Companies has imposed any
Lien upon any of its assets, tangible or intangible, other than in the ordinary
course of business;
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(e) none of the Operating Companies has made any
capital expenditure (or series of related capital expenditures) either involving
more than $200,000 or outside the ordinary course of business;
(f) none of the Operating Companies has made any
capital investment in, any loan to, or any acquisition of the securities or
assets (other than purchases of raw materials, components and supplies in the
ordinary course of business) of, any other person or
entity (or series of related capital investments, loans and acquisitions) either
(i) involving more than $50,000 or (ii) outside the ordinary course of business
and which is material;
(g) none of the Operating Companies has issued any
note, bond or other debt security or created, incurred, assumed or guaranteed
any indebtedness for borrowed money or capitalized lease obligation either
involving more than $25,000 singly or $50,000 in the aggregate;
(h) none of the Operating Companies has intentionally
delayed or postponed the payment of accounts payable and other liabilities or
obligations outside the ordinary course of business;
(i) none of the Operating Companies has canceled,
compromised, waived or released any right or claim (or series of related rights
and claims) either (i) involving more than $50,000 or (ii) outside the ordinary
course of business and which is material;
(j) none of the Operating Companies has granted any
license or sublicense of any rights under or with respect to any Intangibles
(hereinafter defined) other than in the ordinary course of business;
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(k) there has been no change made or authorized in
the articles of incorporation or bylaws of either B-Line or B-Line
Manufacturing;
(l) neither B-Line nor B-Line Manufacturing has
issued, sold, or otherwise disposed of, any of its capital stock, or granted any
options, warrants or other rights to purchase or obtain (including upon
conversion, exchange, or exercise) any of its capital stock;
(m) neither B-Line nor B-Line Manufacturing has
declared, set aside or paid any dividend or made any distribution with respect
to its capital stock in kind or redeemed, purchased or otherwise acquired any of
its capital stock;
(n) none of the Operating Companies has experienced
any material damage, destruction or loss (whether or not covered by insurance)
to its property;
(o) none of the Operating Companies has made any loan
to, or entered into any other transaction with, any of its directors, officers,
and employees outside the ordinary course of business;
(p) none of the Operating Companies has entered into
any employment contract or collective bargaining agreement, written or oral, or
except as allowed by any other clause of this Section 5.2.4 modified the terms
of any existing such contract or agreement;
(q) none of the Operating Companies has granted any
increase in the base or other compensation of any of its directors, officers and
employees outside the ordinary course of business;
(r) none of the Operating Companies has adopted,
amended, modified or terminated any bonus, profit-sharing, incentive, severance,
or other plan, contract or
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commitment for the benefit of any of its directors, officers and employees (or
taken any such action with respect to any other employee benefit plan);
(s) none of the Operating Companies has made any
other change in employment terms for any of its directors, officers and
employees outside the ordinary course of business;
(t) there has not been any other material occurrence,
event, incident, action, failure to act, or transaction outside the ordinary
course of business involving any of the Operating Companies except as may result
from economic developments generally; and
(u) none of Sellers has committed to any of the
foregoing.
For purposes of each of clauses (a), (b), (f) and (i) of this Section
5.2.4, the term "material" shall mean not in excess of $50,000 in the aggregate.
5.2.5 Compliance with Law and Permits. Except as set
forth on Schedule 5.2.5, to Sellers' knowledge, the B-Line Business has been
operated in compliance in all material respects with all applicable
constitutions, statutes, laws, judgments, orders, decrees, ordinances, rules,
regulations, arbitration awards, directives, and agreements (collectively,
"Laws") that are imposed or issued or enforced by, or entered into with, any
foreign, United States, supranational (including the European Union), national,
federal, state, provincial, county or local, judicial, regulatory or
governmental authority, association, corporation, agency, bureau, body,
instrumentality or commission or subdivision of any thereof exercising any
regulatory, supervisory, taxing, importing, exporting or other governmental
function (any and all an "Authority") and with all permits, licenses,
authorizations, approvals or consents that are granted or approved by any
Authority ("Permits"). The Operating Companies have all material Permits
necessary to operate the B-Line Business. No
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proceeding is pending against any Seller, or to Sellers' knowledge threatened,
to modify, suspend, revoke or otherwise limit any of such Permits and to
Sellers' knowledge no administrative or governmental actions have been taken or
threatened in connection with the expiration or renewal of such Permits or
alleging any material failure to comply with Laws in connection with the B-Line
Business or the Assets.
5.2.6 Litigation, Product Claims and Related Matters.
(a) Except as set forth on Schedule 5.2.6(a), there are no asserted claims,
actions, suits or legal proceedings pending or, to Sellers' knowledge,
threatened, and to Sellers' knowledge there are no investigations pending or
threatened, against Sellers or the Operating Companies which involves more than
$100,000 or which will adversely affect the ability of Sellers to consummate the
transactions contemplated by this Agreement, nor are Sellers or the Operating
Companies subject to any outstanding order, rule, decree or judgment of any
court or governmental agency of competent jurisdiction, which will adversely
affect the B-Line Business or the Assets.
(b) To Sellers' knowledge, each product manufactured,
sold, leased or delivered by any of the Operating Companies has been in
conformity in all material respects with all applicable contractual commitments
and all express and implied warranties, and none of the Operating Companies has
any material liability or obligation (and to Sellers' knowledge there is no
valid basis for any present or future Claim or Third Party Action (defined
below) against any of them giving rise to any such liability or obligation) for
replacement or repair thereof or other damages in connection therewith, in
excess of the reserve for product warranty or liability claims reflected in the
most recent balance sheet (rather than in any notes thereto) in the Audited
Financial Statements as adjusted through the Effective Time in accordance with
the past custom
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and practice of the Operating Companies. No product manufactured, sold, leased
or delivered by any of the Operating Companies is subject to any guaranty,
warranty or other indemnity which differs materially from the applicable
standard terms and conditions of sale or lease. Schedule 5.2.6(b) includes
copies of the standard terms and conditions of sale or lease for each of the
Operating Companies (containing applicable guaranty, warranty and indemnity
provisions).
(c) None of the Operating Companies has any material
liability or obligation, including Environmental Liabilities (defined below),
(and to Sellers' knowledge there is no valid basis for any present or future
Claim or Third Party Action against any of them giving rise to any such
liability or obligation, including Environmental Liabilities) arising out of any
injury to individuals or property as a result of the ownership, possession or
use of any product manufactured, sold, leased or delivered by any of the
Operating Companies in excess of any reserve therefor reflected in the most
recent balance sheet (rather than in the notes thereto) in the Audited Financial
Statements through the Effective Time in accordance with past custom and
practice of the Operating Companies. The term "Environmental Liabilities" means
any liability or obligation relating exclusively to the B-Line Business (a)
arising under any Environmental Law (defined below), or (b) involving any
Release of or exposure to any Hazardous Substance (defined below) including
liability for damage or harm to the Environment (defined below) or to a person
as a result of such exposure, whether such liability or obligation is to one or
more private parties or any Authority, in either case (whether under (a) or (b)
above) including any related fees and expenses of attorneys and experts, and
whether arising out of or related to on-site or off-site matters.
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5.2.7 Title to Personal Property - Owned. Except (a)
as set forth on Schedule 5.2.7, (b) for Liens (as defined below) reflected in
the Preliminary Consolidated Valuation, and (c) for Permitted Liens (as defined
below) each of the Operating Companies has good and marketable title to the
material personal property owned by each of them respectively and used solely in
relation to the B-Line Business, free and clear of all mortgages, liens, claims,
encumbrances, security interests, charges, pledges, preferential purchase
rights, options, warrants or other restrictions or adverse claims of whatever
nature (collectively, "Liens"), and, good and marketable title to such personal
property (other than that owned by B-Line and B-Line Manufacturing), free and
clear of all Liens, except as provided above, shall pass to Buyer at Closing.
5.2.8 Personal Property - Leased. All leases of any
material personal property used solely in the B-Line Business of which any of
the Operating Companies is a lessee are in full force and effect, all rental
payments due under such leases have been paid and there exist no material
defaults by any of the Operating Companies under the terms of such leases, and,
except as set forth on Schedule 5.2.8, the consummation of the transactions
contemplated by this Agreement will not create any such default with respect to
such leases or result in the lessor having the right to terminate or alter the
operative provisions of any such leases.
5.2.9 Real Property - Owned. Set forth on Schedule
5.2.9 is all the real property owned by SAC or B-Line. Other than as set forth
on Schedule 5.2.9, the Operating Companies do not own any real property or any
right or obligation to acquire any interest in any parcel of real property in
connection with the B-Line Business. Except (a) as set forth on Schedule 5.2.9,
(b) for Liens reflected in the Preliminary Consolidated Valuation, and (c) for
Permitted Liens (as defined below), SAC or B-Line has good and marketable title
to the real property set forth on
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Schedule 5.2.9 (the "Owned Properties"), free and clear of all Liens; and good
and marketable title to the scheduled real property owned by SAC, free and clear
of all Liens, except as provided above, shall pass to Buyer at Closing. The term
"Permitted Liens" shall mean (a) liens for current taxes or assessments due but
not yet payable, (b) servitudes, easements, restrictions, rights-of-way,
encroachments and other similar rights in real property or any interest therein
that have been filed as part of an official or public record, provided the same
are not of such nature as to materially interfere with the use or occupancy, or
materially impair the value, or marketability of title, of the property subject
thereto and (c) liens that constitute mechanic's, carrier's, workers' or similar
liens arising in the ordinary course of business in connection with obligations
that are not yet overdue or delinquent. Sellers further represent and warrant
concerning the Owned Properties that:
(i) there are no parties other than the
record owner or an affiliate thereof in possession of any of the Owned
Properties;
(ii) there are no pending, or to Sellers'
knowledge threatened, condemnation, eminent domain or similar proceedings
relating thereto;
(iii) Sellers have made available to Buyer a
legal description for each such parcel that describes such parcel adequately;
(iv) to Sellers' knowledge, all buildings
and improvements are located within the boundary lines of the described parcels
of land and the Owned Properties and buildings and improvements thereon are not
in violation in any material respect of any Laws, including any building code
requirements and Environmental Laws;
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(v) to the extent required for their current
use, each property abuts on and has direct vehicular access to a public road, or
has access to a public road via a permanent, irrevocable, appurtenant easement
benefiting the parcel, maintained at public expense;
(vi) to the extent required for their
current use, all the properties are served by drainage, water, electricity and
gas services, all of which are connected to public mains, and to Sellers'
knowledge there is no imminent or likely interruption of such utility service;
(vii) there are no outstanding disputes,
notices or complaints which materially adversely affect or to Sellers' knowledge
are likely to materially adversely affect the use of the Owned Properties for
the purposes for which they are now used; and
(viii) to Sellers' knowledge there are no
material structural or other defects in or affecting the buildings and
structures on the Owned Properties.
The foregoing are intended to constitute
"covenants of warranty" as such terms are used in existing title insurance
policies on the Owned Properties.
5.2.10 Real Property - Leased. Set forth on Schedule
5.2.10 is a list of each lease, identifying the property which is subject
thereto, under which each of the Operating Companies is the lessee of any real
property used exclusively in the B-Line Business. The Sellers have made
available to the Buyer a true, correct and complete copy of each lease
identified on Schedule 5.2.10. The premises or property described in said leases
are presently occupied or used by an Operating Company as lessee in conformity
in all material respects with applicable Law and the terms of such leases.
Except as set forth on Schedule 5.2.10, all rental payments due under the leases
set forth on Schedule 5.2.10 have been paid and there exists no material default
under their respective leases and, to the Sellers' knowledge, no event has
occurred which with notice or lapse of time would constitute a
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material breach or default, or permit termination, modification or acceleration,
thereunder. Except as set forth on Schedule 5.2.10 and for Permitted Liens, each
respective Operating Company has all right, title and interest of the lessee
under the terms of said leases, free of all Liens and all such leases are and
will continue to be valid and in full force and effect through the Closing Date
and in full force and effect on identical terms following the consummation of
the transactions contemplated herein. The Operating Companies have not at any
time assigned or otherwise disposed of any leasehold interest which has a
continuing liability (contingent or otherwise) for payment of rent and/or for
any other material liability. None of the Operating Companies is a guarantor of
or surety for any obligations under any lease or under any agreement relating to
the assignment of any lease. Together with the Owned Properties, the leased
properties on Schedule 5.2.10 comprise all the properties and premises owned,
leased or used in the B-Line Business.
5.2.11 Patents, Trademarks and Other Intellectual
Property. (a) Schedule 5.2.11(a) lists all patented or registered Intangibles
(defined below), all written licenses and other agreements relating thereto and
all written agreements, licensing or otherwise, authorizing others to use
material technology, know-how or processes used in or belonging to the B-Line
Business (collectively, the "Scheduled Intangibles"). The "Intangibles",
including the Scheduled Intangibles, comprise all intellectual property used or
held in the B-Line Business as presently conducted other than intellectual
property licensed in the ordinary course of business pursuant to standard form
commercial license agreements (such as non-custom software). "Intangibles" means
(i) all inventions, improvements, designs, patents, patent applications, patent
disclosures, and all extensions, reissues, continuations, revisions and
reexaminations thereof; (ii) trade dress, logos, trade names and corporate
names, (including all internet and intranet name(s),
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addresses, icon(s) and other designation(s) identifying the B-Line Business on a
computer network such as the world wide web but not including any such
designations of affiliates of the B-Line Business), together with all
translations, adaptations, derivations and combinations thereof and including
all goodwill associated therewith, and all applications, registrations and
renewals in connection therewith; (iii) all copyrightable works and all
copyright applications, registrations and renewals in connection therewith; (iv)
all trade secrets and confidential business information (including ideas,
research and development, know-how, formulas, compositions, manufacturing and
production processes and techniques, technical data, designs, drawings and
specifications); and (v) all computer software, rights in databases (including
data and related documentation) all other proprietary rights; and all copies and
tangible embodiments thereof (in whatever form or medium) but does not include
items licensed in the ordinary course of business pursuant to standard form
commercial license agreements (such as non-custom software).
(b) Except as set forth on Schedule 5.2.11(b), the
Operating Companies own or hold valid license rights to, all material
Intangibles free and clear of all Liens, licenses, injunctions or judgments.
(c) Each material item of Intangibles will be owned
or available for use by the B-Line Business on identical terms and conditions
immediately subsequent to the Closing hereunder.
(d) To Sellers' knowledge, none of the Operating
Companies has interfered with, infringed upon, misappropriated, or otherwise
come into conflict with, any rights of third parties in or to the Intangibles in
any material respect and none of the Operating Companies has any plans to do so.
None of Sellers has within three years prior to the Closing
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Date received any charge, complaint, claim, demand or notice alleging any such
interference, infringement, misappropriation or violation (including any Claim
that any of the Operating Companies must license or refrain from using any
rights of any third party in or to the Intangibles) in any material respect,
that is unresolved.
(e) To the knowledge of Sellers, no third party has
interfered with, infringed upon, misappropriated or otherwise come into conflict
with any of the Operating Company's rights in or to the Intangibles.
(f) With respect to each item of Scheduled
Intangibles that any third party owns and that any of the Operating Companies
uses pursuant to license, sublicense, agreement or permission, Sellers made
available to Buyer correct and complete copies of all such licenses,
sublicenses, agreements and permissions (as amended to date) and such agreements
(other than those held by B-Line or B-Line Manufacturing) are fully transferable
to Buyer.
(g) With respect to each material item of Intangibles
that any third party owns and that any of the Operating Companies uses pursuant
to license, sublicense, agreement or permission; (i) to Sellers' knowledge the
license, sublicense, agreement or permission covering the item is legal, valid,
binding, enforceable and in full force and effect; (ii) none of the Operating
Companies, and to Sellers' knowledge no party to the license, sublicense,
agreement or permission, is in material breach or default, and to Sellers'
knowledge no event has occurred which with notice or lapse of time would
constitute a material breach or default or permit termination, modification, or
acceleration thereunder; and (iii) none of the Operating Companies has granted
any sublicense or similar right with respect to the license, sublicense,
agreement or permission.
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5.2.12 Taxes. Except as set forth on Schedule 5.2.12:
(a) all Income Taxes and all Other Taxes (as defined
below) of the Sellers with respect to the B-Line Business not assumed by Buyer
hereunder for all periods ending on or prior to the Effective Time (whether or
not shown on a Tax return or other rendition of Taxes (defined below)) have been
or will be paid by Sellers and will not result in the imposition of any further
assessment or any Lien on any of the Assets which would affect the value thereof
or title thereto. Further, with respect to Other Taxes relating to periods
before the Effective Time for which no return or payment will be due prior to
the Effective Time, adequate provision has been made in the most recent balance
sheet of the Financial Statements (and will be made in the Adjusted Consolidated
Valuation) for all liabilities arising thereunder.
(b) B-Line and B-Line Manufacturing and the other
Operating Companies and their predecessors (i) have filed or caused to be filed
with the appropriate Authority all Income Tax and Other Tax returns which have
been required to be filed prior to the date of this Agreement (taking into
account any extensions of the time for filing such Income and other Tax returns)
and (ii) have paid in full all Taxes due and payable, except to the extent such
liabilities are reflected in the Preliminary or Adjusted Consolidated Valuation
as current liabilities, as applicable. No unresolved claim has been made in any
jurisdiction where Tax returns related to the B-Line Business are not filed that
such Tax returns must be filed. All Tax returns filed or caused to be filed by
B-Line and B-Line Manufacturing and the other Operating Companies and their
predecessors are correct and complete in all material respects.
(c) The Operating Companies have complied with all
Laws relating to the withholding of Taxes with respect to the B-Line Business
and the payment thereof and have timely and
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properly withheld from employees, independent contractors, creditors,
shareholders and third parties, and paid over to the proper Authority(ies), all
amounts required to be withheld and paid over under applicable Law.
(d) Neither B-Line nor B-Line Manufacturing nor the
Operating Companies has waived any statute of limitations in respect of Taxes or
agreed to any extension of time with respect to any Tax assessment or
deficiency.
(e) For purposes of this Agreement, "Income Taxes"
shall mean all foreign and United States national, federal, state, provincial
and local taxes upon the income of the Sellers or the Operating Companies in
relation to the B-Line Business, including any interest, penalties or additions
to tax that may become payable in respect thereof, arising before the Effective
Time. Income Taxes shall not include payroll and employee withholding taxes,
value added, unemployment insurance, social security, sales and use taxes,
excise taxes, franchise taxes, gross receipts taxes, occupation taxes, real and
personal property taxes, stamp taxes, transfer taxes, workers compensation and
all other foreign, United States federal, state, local or other taxes of any
nature whatsoever (including any interest, penalties or additions to tax that
may become payable in respect thereof, collectively "Other Taxes"). "Tax" and
"Taxes" shall mean both Income Taxes and Other Taxes.
5.2.13 Contracts. Schedules 5.2.4, 5.2.8, 5.2.10,
5.2.11, 5.2.13 and 7.3(b), set forth all contracts, agreements, indentures,
guarantees, notes, letters of credit and loan or credit agreements to which any
of the Operating Companies in connection with the B-Line Business is a party or
by which any of the Assets are bound or subject and which:
(a) involve payments still to be made by or to the
Operating Companies in connection with the B-Line Business of amounts which
exceed $50,000 in any year;
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(b) were entered into not in the ordinary course of
business and exceed $50,000 in the aggregate;
(c) concern a partnership, trust or joint venture;
(d) concern confidentiality or noncompetition;
(e) provide for the creation, assumption or guarantee
of any indebtedness for borrowed money or any capitalized lease obligation
involving more than $50,000 or imposition of a Lien other than a Permitted Lien)
on any of the Assets;
(f) are material intercompany agreements among the
Operating Companies, Sellers or their affiliates or any of them;
(g) are profit sharing, stock option, stock purchase,
stock appreciation, deferred compensation, severance or other plans or
arrangements for the benefit of its current or former directors, officers and
employees (other than as covered by Section 5.2.15).;
(h) are for the employment of any individual on a
full-time, part-time, consulting, or other basis providing annual compensation
in excess of $50,000 or providing severance benefits;
(i) are related to any credit facility, letter of
credit, payment or performance bond, or other surety relationship;
(j) are material to the B-Line Business and require
consent of the other party thereto in connection with the transactions
contemplated under this Agreement (collectively, the "Scheduled Contracts"). All
such Scheduled Contracts are in full force and effect and are binding
obligations of the Operating Companies and, to Sellers' knowledge, of the other
parties thereto, and the Operating Companies, and, to Sellers' knowledge, the
other parties, have in all material respects
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performed all obligations required to be performed by them and are not
materially in default thereunder.
5.2.14 Labor Relations. Except as set forth on
Schedule 5.2.14, (i) the Operating Companies are not a party to any collective
bargaining agreement pertaining to the B-Line Business, and no collective
bargaining agreement with respect to any employees employed solely in connection
with the B-Line Business is currently being negotiated by the Operating
Companies; and (ii) there has been no work stoppage or any other material labor
difficulty during the ten years immediately preceding the date of this Agreement
in relation to the B-Line Business.
5.2.15 Compliance with ERISA.
(a) Schedule 5.2.15(a) sets forth each "employee
benefit plan" (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) which Sellers and the Operating
Companies maintain or contribute to with respect to employees employed in
relation to the B-Line Business (the "Plans"). Each Plan, to the extent
applicable, is identified on Schedule 5.2.15(a) as one or more of the following:
an "employee pension plan" (as defined in Section 3(2) of ERISA); a plan subject
to Title IV of ERISA, Section 302 of ERISA or Section 412 of the Internal
Revenue Code of 1986, as amended, and applicable Treasury regulations
thereunder; a "multiemployer plan" (as defined in Section 4001(a)(3) of ERISA);
and an "employee welfare plan" (as defined in Section 3(2) of ERISA).
(b) Each Plan complies with the applicable
requirements of Law, and no claims or actions by the Internal Revenue Service,
the Pension Benefit Guaranty Corporation ("PBGC"), the Department of Labor, any
participant or beneficiary or any other person currently are
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pending, or to Sellers' knowledge are threatened, with respect to any Plan,
other than claims for benefits in the ordinary course.
(c) There has been delivered to Buyer with respect to
each Plan correct and complete copies of:
(i) the annual report, if required under
ERISA;
(ii) the Summary Plan Description, together
with each Summary of Material Modifications, required under ERISA, and, unless
the Plan is embodied entirely in an insurance policy, a true and complete copy
of the Plan; and
(iii) if the Plan is funded through a trust
or any third-party funding vehicle (other than an insurance policy or with
respect to any multi-employer plan), the trust or other funding agreement and
the latest financial statements thereof.
5.2.16 Accounts Receivable. The accounts receivable
of the B-Line Business reflected in the Preliminary Consolidated Valuation arose
in the ordinary course of business and are reflected therein and in the
Financial Statements in accordance with GAAP consistently applied to the B-Line
Business. To the Sellers' knowledge, such accounts receivable are valid
receivables, current and collectible, and not subject to any valid counterclaim,
set-off, defense or Lien except to the extent of any reserves in respect thereof
reflected in the Preliminary Consolidated Valuation.
5.2.17 Inventory. Except as set forth on Schedule
5.2.17 or to the extent of any reserve reflected in the Preliminary Consolidated
Valuation, all physical inventories of the B-Line Business held by the Operating
Companies at any location, consisting of raw materials, work in process,
finished goods and manufactured and purchased parts and supplies, (a) are
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valued at lower of cost or market (first-in, first-out), and (b) are
merchantable in the ordinary course of business.
5.2.18 Environmental Matters. Except as set forth on
Schedule 5.2.18:
(a) B-Line and B-Line Manufacturing, and the other
Operating Companies in their operation of the B-Line Business are and to
Sellers' knowledge their respective predecessors have been in compliance in all
material respects with all applicable Environmental Laws (as defined below), and
there have been no Releases (as defined below) of any material amount of
Hazardous Substances by the Operating Companies.
(b) The following terms shall have the following
meanings wherever used in this Agreement:
(i) "Environment" means the environment,
air, land, water (wherever located and in whatever form), fauna, flora and other
natural resources and any building or structure.
(ii) "Environmental Laws" mean all
applicable foreign and United States national, federal, state, provincial,
municipal and local Laws relating to pollution or protection of the Environment,
including all Laws relating to the manufacture, processing, distribution,
generation, use, ownership, presence, collection, treatment, storage, disposal,
transport or handling, recovery, recycling, removal, Release or threatened
Release of any Hazardous Substances (as defined below), or regarding exposure
to, monitoring or assessment of, or remediation (including operation and
maintenance) of, any Hazardous Substance, or record-keeping, notification or
reporting requirements respecting any Hazardous Substance, or the on-site or
off-site contamination or pollution of the Environment, or air, soil or water
quality, or air
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or water emissions, or public or employee health and safety or community
right-to-know, including without limitation the following U.S. federal laws: the
National Environmental Policy Act, 42 U.S.C. Section 4321 et seq.; the Solid
Waste Disposal Act, as amended by the Resource Conservation and Recovery Act and
the Hazardous and Solid Waste Amendments Act of 1984, 42 U.S.C. Section 6901 et
seq.; the Federal Water Pollution Control Act, as amended by the Clean Water Act
of 1977, 33 U.S.C. Section 1251 et seq.; the Safe Drinking Water Act, 42 U.S.C.
Section 300f et seq.; the Clean Air Act, as amended by the Clean Air Act
Amendments of 1990, 42 U.S.C. Section 7401 et seq.; the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. Section 9601
et seq.; the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; the
Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Section 136 et
seq.; the Hazard Communication Standard, 29 C.F.R. Section 1910.1200; the
Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section
11001 et seq.; the Hazardous Material Transportation Act, 49 U.S.C. Section;
1801 et seq. and any analogous foreign, state or local statutes and the
regulations promulgated pursuant thereto in each case, as such laws, statutes
and regulations are in effect on the date of this Agreement.
(iv) "Hazardous Substances" mean any
element, compound, chemical mixture, contaminant, pollutant material, waste or
other substance which is defined as hazardous or toxic under, regulated by, any
Environmental Law or the Release of which is prohibited or restricted under any
Environmental Law or which is known to pose a threat to health, safety or the
environment, or is petroleum or any fraction thereof, asbestos, asbestos-
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containing material ("ACM"), methylene chloride, trichloroethylene, or
1,2-dichloroethylene, a radioactive substance, polychlorinated biphenyl,
dibenzofuran or dioxin.
(v) "Release" and "Released" mean the
accidental or intentional, knowing or unknowing, spilling, leaking, discharging,
pumping, pouring, emitting, leaching, escaping, depositing, adding, placing,
emptying, dumping, releasing, burying, injecting, abandoning, migrating of any
Hazardous Substance into the Environment.
(c) To Sellers' knowledge, the Operating Companies
have or have applied for all Permits required under Environmental Laws for the
operation of the B-Line Business as presently conducted (the "Environmental
Permits") and there are no material violations, and no pending, or to Sellers'
knowledge threatened, material investigations or proceedings with respect to
such Environmental Permits.
5.2.19 Transactions with Affiliated Persons. Except
for employment arrangements disclosed on Schedule 5.2.13 or 5.2.15(a) and except
as set forth on Schedule 5.2.19, to Sellers' knowledge, no officer, director or
employee of the Operating Companies nor any relative of any such officer,
director or employee, is a party to or has an interest (including to Sellers'
knowledge material equity interests in third parties), directly or indirectly,
in any contract or commitment to which the Operating Companies in connection
with the B-Line Business is a party or by which any of the Assets are or may be
bound or subject, or has any interest (including to Sellers' knowledge material
equity interests in third parties), directly or indirectly, in any personal
property, tangible or intangible, owned by the Operating Companies and used in
the B-Line Business.
5.2.20 Stock Record and Minute Books. The stock
record books and minute books of B-Line and B-Line Manufacturing are true and
correct. Complete copies of the
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articles or certificate of incorporation and bylaws and all amendments thereto
currently in effect of B-Line and B-Line Manufacturing have been previously
provided to Buyer.
5.2.21 Sufficiency of Assets. Except as set forth on
Schedule 5.2.21, the Assets constitute all of the assets that are used in the
operation of the B-Line Business in the same manner as such business is
conducted as of the date hereof.
5.2.22 No Undisclosed Liabilities. None of the
Operating Companies has any material liability or obligation, and to Sellers'
knowledge there is no valid basis for any present or future Third Party Action
against any of them giving rise to any such material liability or obligation,
except for (i) liabilities or obligations reflected in the most recent balance
sheet (including in any notes thereto) in the Audited Financial Statements, (ii)
liabilities or obligations which have arisen after December 31, 1999 in the
ordinary course of business of the B-Line Business (none of which results from,
arises out of, relates to, is in the nature of, or was caused by, any material
breach of contract, breach of warranty, tort, infringement or violation of Law)
and (iii) liabilities or obligations scheduled pursuant to any of the provisions
of Section 5.2 or which are not required to be so scheduled because of any
limitation or threshold applicable thereto.
5.2.23 No Broker. Except for Goldman, Sachs & Co.
(whose fees shall be paid by Sellers), Sellers have not retained a broker or
finder in connection with the transactions contemplated herein so as to give
rise to any valid claim against Buyer for a finder's fee, brokerage commission
or similar payment.
5.2.24 Scope of Representation. (a) NOTWITHSTANDING
ANYTHING CONTAINED IN THIS AGREEMENT, IT IS THE EXPLICIT INTENT OF EACH PARTY
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HERETO THAT SELLERS ARE MAKING NO REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS
OR IMPLIED, BEYOND THOSE EXPRESSLY GIVEN IN THIS AGREEMENT, INCLUDING ANY
IMPLIED WARRANTY OR REPRESENTATION AS TO CONDITION, MERCHANTABILITY, FITNESS FOR
A SPECIFIC PURPOSE OR SUITABILITY AS TO ANY OF THE ASSETS AND IT IS UNDERSTOOD
THAT, EXCEPT AS EXPRESSLY WARRANTED IN THIS AGREEMENT (AND FOR THE AVOIDANCE OF
DOUBT WITHOUT WAIVER OR LIMITATION OF ANY REPRESENTATION OR WARRANTY EXPRESSLY
SET FORTH IN THIS AGREEMENT CONCERNING INVENTORY), BUYER TAKES THE ASSETS AS IS
AND WHERE IS.
(b) The inclusion of any item on any Schedule to this
Agreement shall not be construed as an indication that such item is material in
any respect or as establishing a standard or indication of materiality.
5.2.25 Insurance Policies.
(a) Schedule 5.2.25 ("Current B-Line Insurance")
includes all insurance policies with respect to the B-Line Business or the
Assets to which any of the Operating Companies is as of the date hereof a party,
a named insured or otherwise the beneficiary of coverage.
(b) Schedule 5.2.25 sets forth with respect to each
insurance policy (including policies providing property, casualty, liability and
workers' compensation coverage and bond and surety arrangements) (i) the name of
the insurer, the name of the policyholder, and the name of each covered insured,
and (ii) the policy number and the period of coverage.
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5.3 Representations and Warranties of Buyer. Each Buyer
jointly and severally represents and warrants to Sellers as follows, which
representations and warranties are correct and complete as of the date hereof,
and will be correct and complete as of the Closing Date (as though made then and
as though the Closing Date were substituted for the date of this Agreement
throughout this Section 5.3):
5.3.1 Corporate Authority and Non-Contravention.
(a) Each of Cooper, CBL and CTC is a corporation duly
organized, validly existing and in good standing under the laws of the States of
Ohio, Delaware and Delaware, respectively.
(b) Buyer has full corporate power and authority to
execute, deliver and perform this Agreement and the applicable Ancillary
Agreements and to consummate the transactions contemplated hereby and thereby.
The execution, delivery and performance of this Agreement and, as applicable,
the Ancillary Agreements have been duly authorized by all necessary corporate
action on the part of Buyer and no stockholder approval or further approval of
the board of directors of Buyer is necessary for the execution hereof or thereof
or the consummation of the transactions contemplated hereby and thereby.
(c) This Agreement and, as applicable, the Ancillary
Agreements, have been duly executed and delivered by Buyer and constitute valid,
legally binding and enforceable obligations of Buyer, subject, in the case of
enforceability, to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to principles of equity regarding the
availability of equitable remedies.
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(d) The execution and delivery of this Agreement and,
as applicable, the Ancillary Agreements, by Buyer and consummation by Buyer of
the transactions contemplated hereby and thereby: do not (i) violate or conflict
with any provision of the Articles or Certificate of Incorporation or Bylaws of
Buyer, (ii) result in a breach of, constitute a default under, give rise to any
right of termination, modification or acceleration of, or require any notice
under, any material contract or agreement to which Buyer is a party, or (iii)
violate any material Law, regulation, order, arbitration, award, judgment or
decree to which Buyer is a party or by which it is bound.
5.3.2 Litigation Concerning Agreement. There are no
actions, suits or proceedings pending or, to Buyer's knowledge, threatened
against Buyer which will affect Buyer's ability to consummate the transactions
contemplated by this Agreement.
5.3.3 No Broker. Buyer has not retained a broker or
finder in connection with the transactions contemplated herein or by the
Ancillary Agreements so as to give rise to any valid claim against Sellers for a
finder's fee, brokerage commission or similar payment.
5.3.4 Financing. Buyer will have on the Closing Date
and at Settlement, respectively, sufficient funds immediately available to pay
the Preliminary Purchase Price and the Adjusted Purchase Price, if any, as
provided herein.
5.3.5 Buyer's Knowledge. The persons set out on
Schedule 5.3.5 hereto do not know, after reasonable inquiry, of any breach by
Sellers of any representation or warranty in Section 5.2 of this Agreement as of
the date hereof.
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ARTICLE SIX: PARTICULAR COVENANTS OF
SELLERS AND BUYER
6.1 Covenants of Sellers. Sellers hereby covenant and agree:
6.1.1 Interim Operation of the B-Line Business. From
the date of this Agreement to the Closing, except as otherwise expressly
contemplated by this Agreement or the Ancillary Agreements, disclosed on
Schedule 6.1.1 or consented to or approved by Buyer in writing, which consent or
approval shall not be unreasonably withheld, (a) Sellers shall and shall cause
the Operating Companies to operate the B-Line Business in the ordinary and usual
course, consistent with past practice; (b) Sellers shall promptly advise Buyer
in writing of any adverse change in the Assets or Assumed Liabilities which is
material to the B-Line Business (which notice shall not amend or supplement any
Schedule or prevent or cure any misrepresentation, breach of warranty or breach
of covenant); (c) Sellers shall not grant or cause to be granted to any employee
employed solely in relation to the B-Line Business any increase in compensation
in any form, or any severance or termination pay, or make any loan to or enter
into any employment agreement with any employee, other than increases in
compensation to employees in accordance with past practices as to timing and
amount or increases as may be required by collective bargaining agreements
previously negotiated; (d) the Operating Companies shall not engage in any
practice, take any action, or enter into any transaction outside the ordinary
course of business the primary purpose or effect of which will be to generate or
preserve cash; (e) neither B-Line nor B-Line Manufacturing shall declare, set
aside or pay any dividend or make any distribution in kind with respect to its
capital stock or redeem, purchase or otherwise acquire any of its capital stock,
except as expressly permitted herein;
(f) each of the Operating Companies shall use its
reasonable best efforts to keep its business and properties substantially
intact, including its present operations,
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physical facilities, working conditions, and relationships with lessors,
licensors, suppliers, customers, and employees; and
(g) Sellers shall not agree to take any action,
engage in any practice or enter into any transaction which is of the sort
described in Section 5.2.4 (using for the purpose of determining whether this
clause (g) requires consent a threshold of $250,000 rather than any other
threshold set out therein) or which would violate the foregoing clauses (a) and
(c) through (g).
6.1.2 Access to Records Prior to Closing. From the
date of this Agreement to the Closing, Sellers shall afford or cause to be
afforded to the officers, attorneys, accountants and other authorized
representatives of Buyer displaying appropriate credentials reasonable access
during normal business hours to any and all of the premises, properties,
contracts, books, records and data of or relating to the B-Line Business,
provided that (a) such investigation shall not unreasonably interfere with the
operation of the B-Line Business or Sellers' other business, (b) such access
shall be only with reasonable prior notice to Sellers, (c) the providing of such
information will not cause any of the Sellers or any affiliate of any of the
Sellers to be in violation of Law, or bona fide preexisting (as of the date
hereof) agreement, and (d) no information subject to a requirement of bona fide
confidentiality on the part of any of the Sellers or any affiliate of Sellers
shall be provided to Buyer except in a manner which complies with such
requirement.
6.1.3 Notices and Consents. Prior to Closing, Sellers
will cause each of the Operating Companies to give any notices to third parties,
and will cause each of the Operating Companies to use its reasonable best
efforts to obtain any third-party consents, that Buyer may request in
connection with the matters referred to in Section 5.2.1 above. Each of the
Parties will (and Sellers will cause each of the Operating Companies to) give
any notices to, make any filings
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with, and use its reasonable best efforts to obtain any authorizations,
consents and approvals of, Authorities in connection with the matters referred
to in Section 5.2.1 and 5.3.1 above.
6.1.4 Exclusivity. From the date of this Agreement to
the Closing, none of Sellers will (and Sellers will not cause or permit any of
their affiliates) to solicit, initiate or encourage the submission of any
proposal or offer from any person or entity relating to the acquisition of the
B-Line Business, or participate in any discussions or negotiations relating to
the sale solely of the B-Line Business.
6.1.5 Covenant Not to Compete. For a period of five
(5) years from and after the Effective Time, none of Sellers will (and Sellers
will cause their affiliates not to) engage directly or indirectly in any
business that competes with the B-Line Business as and where conducted by any of
the Operating Companies as of the date hereof or the Effective Time; provided,
however, that ownership of less than 1% of the outstanding stock of any publicly
traded corporation shall not be deemed to engage solely by reason thereof in any
of its businesses. If the final judgment of an arbitrator or court of competent
jurisdiction declares that any term or provision of this Section 6.1.5 is
invalid or unenforceable, the Parties agree that the arbitrator or court making
the determination of invalidity or unenforceability shall have the power to
reduce the scope, duration, or area of the term or provision, to delete specific
words or phrases, or to replace any invalid or unenforceable term or provision
with a term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision,
and this Agreement shall be enforceable as so modified. The provisions of this
Section 6.1.5 shall not prevent Sellers and their affiliates from acquiring an
entity or business of
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which a business which so competes represents less than 10% of the revenue,
provided that such competing business is promptly divested.
6.1.6 Non-Solicitation. For two (2) years from and
after the Effective Time, Sellers shall not (and Sellers shall cause their
affiliates not to) directly or indirectly solicit for employment or employ the
employees of the B-Line Business without the prior written consent of Buyer. The
provisions of this Section 6.1.6 shall not apply to (a) general solicitations of
employment (such as newspaper solicitations) not directed specifically at the
employees of the B-Line Business or (b) employing personnel hired as a result of
such advertisements or unsolicited applications.
6.1.7 Transition. None of Sellers will knowingly take
any action that is designed or intended to have the effect of discouraging any
lessor, licensor, customer, supplier, or other business associate of any of the
Operating Companies from maintaining the same business relationships with the
Operating Companies after the Closing as it maintained with the Operating
Companies prior to the Closing. Each of Sellers will refer all customer
inquiries relating to the B-Line Business to Buyer from and after the Closing
(subject to the Transition Services Agreement).
6.1.8 Intercompany Accounts and Agreements. Prior to
the Closing, Sellers shall cancel all intercompany accounts and agreements,
except those agreements set forth on Schedule 6.1.8, between the B-Line Business
on one side and any of Sellers on the other side.
6.1.9 Further Assurances. After the Closing, Sellers
shall deliver or cause to be delivered to Buyer such other instruments and
information as Buyer may reasonably request in order effectively to convey to
and vest in Buyer good and marketable title to the Assets and to do all such
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further acts and things as may be reasonably required to carry out the
transactions contemplated hereunder.
6.2 Covenants of Buyer. Buyer hereby covenants and agrees:
6.2.1 Further Assurances. After the Closing, Buyer
will deliver to Sellers such other instruments and information as Sellers may
reasonably request in order to evidence and confirm Buyer's assumption of the
Assumed Liabilities and to do all such further acts and things as may be
reasonably required to carry out the transactions contemplated hereunder,
subject to applicable Law. Sellers acknowledge that Buyer will be entitled to
possession of all documents, books and records (including Other Tax records),
agreements and financial data relating exclusively to the B-Line Business,
B-Line and B-Line Manufacturing.
6.2.2 No Reliance. The purchase of the B-Line
Business and the consummation of the transactions contemplated hereunder by
Buyer are not done in reliance by Buyer or its affiliates or agents upon any
warranty or representation or covenant by, or information from or on behalf of
Sellers or any affiliate of Sellers of any sort, oral or written, except the
warranties and representations and covenants specifically set forth in this
Agreement.
6.3 Mutual Covenants of the Parties. The Parties each hereby
covenant and agree with each other:
6.3.1 Best Efforts and Cooperation. The Parties shall
each use their best efforts to take, or cause to be taken, all actions and to
do, or cause to be done, all things reasonably necessary, proper or advisable,
and to cooperate with each other as is reasonably required for such purpose, to
consummate and make effective the transactions contemplated by this Agreement,
provided that nothing in this Agreement shall obligate either Sellers or Buyer
to waive any conditions
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to its obligation to effect the Closing. In case at any time after the Closing
any further action is reasonably necessary or desirable to carry out the
purposes of this Agreement, the proper officers or directors of Sellers or
Buyer, as the case may be, shall take all such reasonably necessary or desirable
actions. Without limiting the generality of the foregoing, if a required consent
is not obtained with respect to the assignment or transfer of any material
Permit, contract or Lease, Sellers and Buyer shall cooperate in entering into
any reasonable arrangement which will provide Buyer with the rights and benefits
(subject to the obligations) thereof, including if permissible and reasonable a
Seller acting as agent on behalf of Buyer at Buyer's expense.
6.3.2 Communications. Any communications, notices to
or discussions with customers or suppliers of the B-Line Business, press
releases, public announcements or other publicity proposed to be released or
permitted by any Party hereto concerning this Agreement or the transactions
hereby or thereby contemplated shall be, insofar as practicable and lawful,
subject to prior review by and, except as required by Law or a Party's listing
or trading agreement concerning its publicly-traded securities, written approval
of Cooper and SIAL.
6.3.3 Access to Records and Employees Subsequent to
Closing.
(a) For a period of five years following the Closing,
or for such longer periods as may be required by Law, any Authority or ongoing
litigation with respect to any Third Party Action in connection with (i) any
transaction contemplated under this Agreement or (ii) any fact, event,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act or transaction
(collectively, "Occurrence" ) prior to the Effective Time involving any of the
Operating Companies, Sellers and Buyer shall retain or cause to be retained all
material business records (including without limitation all material records
used or useful in
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the preparation of Tax returns) relating solely to the operation, prior to the
Effective Time, of the B-Line Business. Sellers and Buyer shall provide or cause
to be provided duly authorized representatives of the other (the "Requesting
Party") displaying appropriate credentials and subject to appropriate assurances
of confidentiality reasonable access to all such business records for bona fide
business reasons at any time during regular business hours for a period of five
years after the Closing Date or such later time as is required for retention of
such business records, and subject to the requirements of applicable laws,
regulations or agreements, the Requesting Party may make abstracts from, or make
copies of, any such business records as it may deem desirable, at its own
expense. In connection with any review of such business records, Sellers or
Buyer shall provide to such duly authorized representatives of the Requesting
Party: (A) access to and the testimony of (to the extent of their reasonable
best efforts) employees who are familiar with such business records and who can
assist such representatives, at the Requesting Party's own expense, in locating,
explaining or otherwise reviewing such business records; and (B) permission to
use copying facilities, clerical services and telephones at the Requesting
Party's expense. Neither Sellers on the one hand, nor Buyer on the other, shall
destroy any material business records related solely to the B-Line Business
without first giving the other prior written notice thereof and 90 days
thereafter either to consent to such destruction or to take possession of such
records. Notwithstanding the foregoing, nothing in this Section 6.3.3 shall be
construed so as to waive any right to recover under Article Eight any expenses
related to the foregoing or so as to require any Party to take any action which
shall result in a breach or waiver of any applicable attorney-client or similar
privilege.
(b) If, in connection with any litigation,
arbitration, audit or settlement proceedings or negotiations with respect to the
operation of the B-Line Business the Requesting Party
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shall require the assistance of employees employed in connection with the
B-Line Business, the appropriate other Party shall make available such employees
as are reasonably required, and the Requesting Party shall pay such other
Party's out-of-pocket costs incurred in connection with such assistance by such
employees.
6.3.4 Failure of Conditions; Waiver. If Buyer
accepts a certificate under Section 4.2(a) containing one or more qualifications
to the certification that the conditions set forth in Section 3.2.1 have been
fulfilled, and in the event that Buyer nevertheless consummates the transactions
contemplated hereby, Buyer shall be deemed to have waived such condition of
Closing but shall not have waived any claims based upon matters identified in
such qualification(s). If Sellers accept a certificate under Section 4.3(b)
containing one or more qualifications to the certification that the conditions
set forth in Section 3.1.1 have been fulfilled, and in the event that Sellers
nevertheless consummate the transactions contemplated hereby, Sellers shall be
deemed to have waived such condition of Closing but shall not have waived any
claims based upon matters identified in such qualification(s).
6.3.5 Insurance. Sellers shall use their reasonable
efforts to maintain continuously from the date hereof through the Effective Time
the insurance coverage presently in force with respect to the B-Line Business
and the Assets.
6.3.6 Amounts Received for Accounts Receivable. After
the Closing any amounts received by Sellers which relate to accounts receivable
of the B-Line Business (except to the extent constituting Excluded Assets) shall
be promptly forwarded to Buyer.
6.3.7 Hart-Scott-Rodino Act Approvals. The Parties
shall make their respective filings under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended
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("HSR Act") as soon as practicable, but in no event later than five days after
the date hereof, shall request early termination of any waiting periods
thereunder, and shall promptly make any further filings pursuant thereto or
which may be necessary to consummate the transactions contemplated herein;
provided, however, that nothing in this Section 6.3.7 shall obligate either
Sellers or Buyer to waive any conditions to their respective obligations to
effect the Closing. The Parties also agree promptly to prepare and make such
other filings and provide such information to each other or to any Authority as
may be necessary, or, in the reasonable opinion of the Parties or their counsel,
advisable to permit the consummation of the transactions contemplated hereby.
6.3.8 Tax Matters.
(a) For purposes of this Section, the following terms have the
following meanings:
(i) "Seller Group" means, with respect to U.S.
federal Income Taxes, the affiliated group of corporations (as defined in
Section 1504(a) of the Code) of which SIAL is the parent and, with respect to
state or local Income Taxes, the consolidated, combined or unitary group of
which any of Sellers or any of its affiliates is a member.
(ii) "Tax Asset" means any net operating loss, net
capital loss, investment tax credit, foreign tax credit, charitable deduction,
claim for refund or any other credit or tax attribute which could reduce Income
Taxes (including, without limitation, deductions and credits related to
alternative minimum Income Taxes) or Other Taxes, provided, however, that such
term shall not include the Tax basis of the Shares.
(b) Sellers will prepare and file, or cause to be prepared and
filed, all federal, state and foreign Income Tax returns for the Operating
Companies required to be filed with the
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appropriate United States, state, and foreign governmental entities for any
taxable period that ends on or before the Effective Time (the "Pre-Closing Tax
Period"). Sellers will prepare and, if required to do so by applicable law,
deliver to Buyer for signing and filing any state Income Tax returns of each of
B-Line and B-Line Manufacturing with respect to any Pre-Closing Tax Period
(including any short period) that have not been filed prior to the Closing Date.
Buyer shall have an opportunity to review, but shall not unreasonably refuse to
sign and file such state Income Tax returns. In the event Buyer disagrees with
any such return as prepared by Sellers, Buyer shall promptly notify Sellers, and
the parties shall resolve such disagreements in the manner set forth in Section
9.3. Sellers will make all payments owing with respect to any such Tax returns
to the extent not reflected in the Adjusted Consolidated Valuation.
(c) Except as provided in Section 6.3.8(b), Buyer will prepare
and file, or cause to be prepared and filed, all Income Tax returns for B-Line
and B-Line Manufacturing that are required to be filed with the appropriate
United States, state, and foreign governmental entities for all periods as to
which such Income Tax returns are due after the Effective Time. Buyer will pay,
or caused to be paid, all Income Taxes required to be paid with respect to such
Income Tax returns.
(d) In order to assist Sellers in the preparation of all
Income Tax returns that Sellers are required to prepare pursuant to this
Agreement, Buyer will prepare, or cause B-Line and B-Line Manufacturing to
prepare, and deliver to Sellers, within 90 days following the relevant taxable
period, standard Federal and state Income Tax return data gathering packages
relating to such companies. In addition to providing such packages, Buyer will
promptly provide, or cause to be provided, to Sellers such other information as
Sellers may reasonably request (including access
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to books, records and personnel) in order for the operations of B-Line and
B-Line Manufacturing to be properly reported in such Income Tax returns, for the
preparation for any Income Tax audit or for the prosecution or defense of any
claims, suit or proceeding relating to Income Taxes.
(e) Sellers shall provide such information as reasonably
requested by Buyer to enable Buyer to fulfill its obligations for payment of
Other Taxes accrued for periods before the Effective Time. Sellers further agree
to provide any reasonable assistance requested by Buyer with respect to any
audits or examinations of returns for taxable periods prior to the Effective
Time.
(f) Buyer covenants that it will not cause or permit B-Line or
B-Line Manufacturing or any affiliate of Buyer to amend any Income Tax or Other
Tax return or take any Income Tax or Other Tax position on any Income Tax or
Other Tax return, take any action, omit to take any action or enter into any
transaction that results in any increased Income Tax or Other Tax liability or
reduction of any Tax Asset of SIAL or the Seller Group in respect of any
Pre-Closing Tax Period.
(g) If, with respect to an Income Tax or Other Tax return
required to be filed by B-Line or B-Line Manufacturing, Sellers reasonably
determine that B-Line or B-Line Manufacturing is entitled to file a claim for
refund or an amended Income Tax or Other Tax return with respect to a
Pre-Closing Tax Period, Buyer shall, upon Sellers' reasonable request, cause
B-Line or B-Line Manufacturing to file all such claims or amended Income Tax or
Other Tax returns at Sellers' expense. Buyer shall use its reasonable best
efforts to secure claims for refunds pending as of the Closing Date. Buyer shall
promptly pay or shall cause prompt payment
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to be made to Sellers of all refunds of Income Taxes or Other Taxes and interest
thereon received by, or credited against the Income Tax or Other Tax liability
or interest thereon that would otherwise have been payable but for a credit
being elected, of Buyer, any affiliate of Buyer, or B-Line or B-Line
Manufacturing attributable to Income Taxes or Other Taxes paid by Sellers,
B-Line or B-Line Manufacturing or any affiliate of Sellers with respect to any
Pre-Closing Tax Period.
(h) Buyer shall be solely liable for and shall pay all
applicable sales, transfer, use, stamp, conveyance, value added, real property
transfer, recording, stock transfer and other similar Taxes, if any, together
with all recording or filing fees, notarial fees and other similar costs of
Closing, that may be imposed upon, or payable, collectible or incurred in
connection with any deemed sale of assets pursuant to any Section 338(h)(10)
Election (including an election pursuant to Section 338(g) of the Code or a
purported Section 338(h)(10) Election that is determined to be invalid or
ineffective) or otherwise as a result of the transfer of the Assets ("Transfer
Taxes"). Notwithstanding the foregoing, Sellers shall include in its federal
consolidated Income Tax return or separate state Income Tax return the income
attributable to the deemed sale of assets pursuant to any Section 338(h)(10)
Election or equivalent election under state law and any income Tax liability
resulting therefrom.
ARTICLE SEVEN: EMPLOYEES AND EMPLOYEE MATTERS
7.1 Treatment of Employees-General. (a) At the Closing, Buyer
shall, and shall be deemed to, offer immediate or continuing employment (so that
no period of unemployment occurs) to all hourly and salaried employees of the
Operating Companies employed immediately prior to Closing in relation to the
B-Line Business who are listed on Schedule 7.1(a) as updated through Closing,
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including to account for changes between the effective date of such schedule and
the date of this Agreement and between the date of this Agreement and the
Effective Time, including without limitation disabled and laid off personnel and
personnel on leave ("Current Employees"), in each case in the same employment
status (for example, without limitation, temporary leave, part time or temporary
employment), and with the same hours, pay and other terms and conditions of
employment, as exist at Closing. Such employees who accept such offer are
referred to hereinafter collectively as "Employees" and individually as an
"Employee."
(b) Buyer agrees to provide to the Employees benefits not less
favorable in the aggregate to the benefits currently provided to other similarly
classified employees of Buyer, except as required by the terms of any written
employment contract or agreement with such Employee. Any benefit plans or
programs provided by Buyer shall give full credit for each participant's years
of service with the Operating Companies prior to the Effective Time for all
purposes (other than for the accrual of benefits) for which such service was
recognized under the Plans set forth on Schedule 5.2.15(a), including, but not
limited to, recognition of service for eligibility, vesting, eligibility to
participate and eligibility for disability and early retirement benefits.
7.2 Welfare Benefits. (a) As of and after the Effective Time,
Buyer shall be responsible for all benefits arising from claims of Employees
under employee welfare benefit plans applicable to Employees of the B-Line
Business with respect to claims incurred on or after the Closing Date. Buyer
shall provide benefits to eligible employees pursuant to this Section 7.2
notwithstanding any waiting periods or pre-existing condition restrictions which
may be contained in any of Buyer's applicable welfare benefit plans or programs
which are applicable to any of the Employees following the Effective Time.
Sellers shall use their reasonable best efforts to assist in establishing, at
Buyer's
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cost, transition arrangements which allow Buyer to continue to provide
welfare benefits which are self-insured. Upon request, Sellers will allow Buyer
to install its Cyborg payroll and human resources software at the B-Line
Business prior to the Closing Date, and such software shall remain the property
of Buyer.
(b) Sellers shall retain all liability and be
responsible for retiree welfare benefits to be provided to current retirees of
the B-Line Business and to Current Employees (as of the later of the date
benefits commence under the Sigma-Aldrich Corporation Retirement Security Value
Plan or the date the Current Employee ceases employment with Buyer or any
affiliate of Buyer or member of its controlling group) who have met the age and
service eligibility requirements as of the Effective Time. Current Employees who
have not met the age and service eligibility requirements as of the Effective
Time shall not be eligible for retiree welfare benefits from Seller, and Buyer
shall assume and be solely responsible for any retiree welfare benefits to which
such Current Employees may be entitled after the Effective Time and shall
indemnify and hold Sellers harmless with respect thereto.
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7.3 Buyer's Assumption of Liability. As of and after the
Effective Time,
(a) (i) Buyer shall recognize each collective
bargaining representative of the Current Employees, and shall assume any and all
liabilities, responsibilities and obligations of Sellers under collective
bargaining agreements set forth on Schedule 5.2.14 with respect to the B-Line
Business and (ii) Buyer shall recognize all periods of employment of each
Employee prior to the Effective Time with the Operating Companies (individually
or in sum) for all purposes including, without limitation, calculating vacation
pay, severance benefits and as relevant to the benefits described in Section 7.2
hereof, as if such Employee had been so employed by Buyer.
(b) Buyer shall assume the liabilities and
obligations of the Operating Companies with respect to the agreements listed on
Schedule 7.3(b) except (and only except) if a Current Employee receives
severance pay pursuant to such an agreement because he or she reasonably judges
that a "Permitted Executive Resignation" has occurred as provided in paragraph
b(i) or (ii) of the definition of such term contained in Section 2 of such
Agreements but that notwithstanding such reasonable judgment none of the changes
enumerated in such paragraphs b(i) or (ii) has, in fact, occurred, in which
event Sellers shall be responsible for such severance pay. Buyer shall promptly
notify SIAL in writing in the event any Current Employee claims such a Permitted
Executive Resignation has occurred and in the event Buyer claims that it would
not be responsible for such severance pay because the conditions of the
preceding sentence have been satisfied. Buyer shall not pay such severance pay
without SIAL's prior written consent (which shall not be unreasonably withheld)
or unless required to do so by court order. Sellers shall retain and be
responsible for any other liabilities and obligations of the Operating Companies
for severance pay or other separation benefits to which any Current Employee may
be or become entitled up to the Effective Time. Buyers
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shall assume and be responsible for any severance pay or other separation
benefits to which any Current Employee may be or become entitled following the
Effective Time.
7.4 Plant Closing Law. Set forth on Schedule 7.4 is the number
of employees of the Operating Companies in connection with the B-Line Business
whose employment has been terminated during the six-month period prior to the
date of this Agreement, and the location of their employment at the time of
termination. Buyer acknowledges that such actions may affect Buyer's subsequent
labor and employment decisions regarding layoffs, terminations and closings with
respect to the B-Line Business. Buyer shall bear all responsibility for any
liability or obligation under the Workers' Assistance and Retraining
Notification Act ("WARN") in connection with the B-Line Business arising from
any action by Buyer (whether or not considered in connection with the activity
specified on Schedule 7.4) after the Closing.
7.5 Security Value Plan. As of the Effective Time, Sellers
shall amend the Sigma-Aldrich Corporation Retirement Security Value Plan to
fully vest all benefits accrued by Employees. Sellers shall retain all
liabilities associated with benefits accrued under the Sigma-Aldrich Corporation
Retirement Security Value Plan.
7.6 401(k) Plan. As of the Effective Time, Sellers shall amend
the Sigma-Aldrich 401(k) Retirement Savings Plan to fully vest all account
balances of Employees in the Sigma-Aldrich 401(k) Retirement Savings Plan.
Sellers shall retain all liabilities associated with benefits accrued by and
payable to Employees under the Sigma-Aldrich 401(k) Retirement Savings Plan.
ARTICLE EIGHT: INDEMNIFICATION
8.1 Indemnification by Buyer. From and after the Closing Date,
Buyer shall defend, indemnify and hold harmless Sellers, affiliates and
shareholders of Sellers and their employees,
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officers, directors and agents from and against any and all claims, losses,
demands, causes of action, suits, orders, decrees, judgments, debts, liabilities
and expenses, including but not limited to court costs, arbitration costs and
reasonable attorneys' and experts' fees and expenses in any venue, forum or
tribunal, domestic or foreign, (collectively, a "Claim") resulting from (a) any
failure of Buyer promptly to carry out, perform, satisfy and discharge any of
its covenants, agreements, undertakings or obligations under this Agreement or
any Ancillary Agreement, including, without limitation, any liability under WARN
or any similar state statute or regulation relating to layoffs, terminations or
closings, (b) subject to Section 6.3.4, any breach of any representation or
warranty by Buyer contained herein or in any certificate delivered at the
Closing in respect thereof, (c) Buyer's ownership and operation of the Assets
and B-Line Business after the Effective Time or (d) the Assumed Liabilities. For
the avoidance of doubt, however, Buyer shall assume and be responsible for
Pre-Closing Product Claims, but only to the extent of the reserve or accrual
therefor reflected on the Adjusted Consolidated Valuation (any further or
greater liability or obligation for Pre-Closing Product Claims being retained by
Sellers).
8.2 Indemnification by Sellers. From and after the Closing
Date, Sellers shall defend, indemnify and hold harmless Buyer, affiliates and
shareholders of Buyer and their respective employees, officers, directors,
agents and permitted transferees from and against any and all Claims resulting
from or arising out of:
(a) any failure of Sellers promptly to carry out,
perform, satisfy and discharge any of their covenants, agreements, undertakings,
or obligations under this Agreement;
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(b) subject to Section 6.3.4, any breach of any
representation or warranty of Sellers contained herein, or in any certificate
delivered at the Closing in respect thereof;
(c) any liability or obligation of Sellers which is
not an Assumed Liability;
(d) any liability of B-Line or B-Line Manufacturing
or the other Operating Companies for the unpaid Taxes of any other person or
entity under Treas. Reg. Section 1.1502-6 (or any similar provision of state,
local or foreign Law), as a transferee or successor, by contract, or otherwise
for any Taxable period ending on or before the Effective Time;
(e) any of the following matters, notwithstanding any
disclosure made to Buyer, but except to the extent of a reserve or accrual
therefor reflected on the final Adjusted Consolidated Valuation:
(i) Pre-Closing Product Claims (to the
extent not assumed by Buyer pursuant to Section 1.2 above);
(ii) workers' compensation claims arising
from any Occurrences prior to the Effective Time;
(iii) the payment of any retention pay or
bonus to any Current Employee agreed to by or on behalf of Sellers
prior to the Effective Time by reason of the sale and purchase of the
B-Line Business contemplated in this Agreement (but excluding any
obligations to provide severance pay assumed by Buyer pursuant to the
terms of this Agreement including without limitation Section 7.3
hereof); or
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(iv) the assertion of any Claim relating to
any of Sellers' liability for Income Taxes owed by any of Sellers for
any taxable period ending on or before the Closing Date except for
Taxes assumed by Buyer pursuant to Section 6.3.8(g); and
(v) any Environmental Liabilities arising
out of Occurrences prior to the Effective Time, except (A) excluding
any remediation or other corrective action which is not required by
Environmental Law, and (B) to the extent that any such Environmental
Liability is increased as a result of any Occurrence following the
Effective Time.
(f) the foregoing notwithstanding, however, Sellers
shall not be required to indemnify Buyer or any other person or entity hereunder
in regard to clause (b) (and such clause only) of this Section 8.2 unless and
until the aggregate amount of all Claims pursuant to such clause (b) of this
Section 8.2 exceeds $5,000,000 (the "Basket"), and then only for the amount of
such Claims in excess of the Basket, and further provided that Sellers shall not
be required to indemnify Buyer or any other person or entity hereunder pursuant
to clause (b) of this Section 8.2 in the aggregate in an amount greater than 50%
of the Adjusted Purchase Price (the "Cap"). The ability of Buyer to seek
indemnity pursuant to clause (b) of this Section 8.2 shall not preclude Buyer
from asserting its claim (on a first dollar basis) pursuant to any other
applicable clauses of this Section 8.2. Buyer, or any other person or entity
hereunder shall not be entitled to indemnity under clause (b) of this Section
8.2 to the extent any liability or loss which is the subject of such claim is
reserved or accrued on the Adjusted Consolidated Evaluation.
8.3 Indemnification Procedures. Promptly after acquiring
knowledge of any Claim against which a party entitled to indemnification
hereunder (the "Indemnified Party") may seek
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indemnification against the other party (the "Indemnifying Party") pursuant to
this Article Eight, the Indemnified Party shall give written notice thereof to
the Indemnifying Party; provided, however, that failure to provide such notice
will not relieve the Indemnifying Party of any liability that it may have to the
Indemnified Party under this Agreement unless and to the extent the Indemnifying
Party is prejudiced as a result of such failure (and in such event, the
Indemnifying Party shall be relieved of liability only to the extent of such
prejudice). To the extent that the Claim consists of or relates to a claim, suit
or action by a third party (including an Authority)(a "Third Party Action"), so
long. as the Indemnifying Party is actively and diligently conducting itself in
accordance with these provisions the Indemnifying Party shall be entitled to
assume control of the defense of the Third Party Action with counsel and experts
reasonably satisfactory to such Indemnified Party; provided however, that (x)
the Indemnified Party shall at its own expense be entitled to participate in the
defense of such Third Party Action and to employ separate counsel and experts
and (y) without the written consent of the Indemnified Party (which shall not be
unreasonably withheld), the Indemnifying Party shall not consent to the entry of
any judgment or enter into any settlement that (a) does not include as an
unconditional term thereof the giving by the claimant or plaintiff to each
Indemnified Party of a release from all liability in respect of such Third Party
Action or (b) involves injunctive relief. After written notice by the
Indemnifying Party to the Indemnified Party of its election to assume control of
the defense of any such Third Party Action, the Indemnifying Party shall not be
liable to such Indemnified Party hereunder for any legal expenses subsequently
incurred by such Indemnified Party in connection with the defense thereof.
8.4 Computation of Claims. All computations of Claims and the
amount of indemnification to which any indemnified person is entitled under this
Article Eight shall be made
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giving effect to the tax consequences of any such Claim, and all proceeds of
insurance recoverable by the exercise of reasonable diligence for not more than
one year by the indemnified persons with respect to such Claims, provided that
in the event that such insurance recovery takes more than one year, the
Indemnified Party shall be entitled to initiate an indemnification claim and any
subsequent insurance proceeds shall be paid to the Indemnifying Party to the
extent of any payments made or expenses incurred by the Indemnifying Party.
8.5 Term of Indemnification. The respective Parties' rights to
be indemnified pursuant to Article Eight hereof shall be limited to Claims
presented in writing to the Indemnifying Party before the expiration of the
period hereinafter set forth applicable to the claim: (a) for all Claims other
than those described in the following clauses (b), (c) and (d) twenty four (24)
months after the Closing Date, (b) for any Claim for breach of representations
and warranties under Section 5.2.18 or pursuant to Section 8.2(e)(v) five years
after the Closing Date, (c) for any claim for breach of representation and
warranties under Section 5.2.9 ten years after the Closing Date and (d) for any
Claim brought pursuant to Section 8.1(a), 8.1(c), 8.1(d), 8.2(a), 8.2(c), 8.2(d)
or 8.2(e) (other than clause (v) thereof), until the expiration of the statute
of limitations applicable to such Claim.
8.6 Sole Basis For Claims. The Parties agree that the
provisions of this Article Eight set forth the exclusive remedy of the
indemnified persons after the Closing with respect to any Claims arising under
or resulting from any provision of this Agreement.
ARTICLE NINE: MISCELLANEOUS
9.1 Expenses. Each of Buyer and Sellers shall pay its own
expenses incidental to the negotiation, preparation and performance of this
Agreement and the Ancillary Agreements and the transactions contemplated hereby
and thereby, whether or not the Closing occurs, as long. as failure to
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close is not a breach of this Agreement. Buyer shall be responsible for the
payment of the filing fee under the HSR Act.
9.2 Scope of Liability and Available Remedies.
9.2.1 Joint and Several Liability. Each of Sellers
shall be deemed to have made jointly and severally each and all of Sellers'
representations, warranties, covenants, undertakings and agreements in this
Agreement or any agreement referenced herein, and Sellers shall be liable
jointly and severally for all Claims arising from any actual or asserted breach
thereof.
9.2.2 Joint and Several Liability. Each Buyer shall
be deemed to have made jointly and severally each and all of Buyer's
representations, warranties, covenants, undertakings and agreements in this
Agreement or any agreement referenced herein, and each Buyer shall be liable
jointly and severally for all Claims arising from any actual or asserted breach
thereof.
9.2.3 Certain Damages Waived. EXCEPT WITH RESPECT TO
RIGHTS OF INDEMNIFICATION IN REGARD TO AWARDS MADE PURSUANT TO THIRD PARTY
ACTIONS, NEITHER SELLERS ON ONE HAND NOR BUYER ON THE OTHER HAND SHALL BE LIABLE
TO THE OTHER FOR ANY CONSEQUENTIAL OR PUNITIVE DAMAGES IN CONNECTION WITH THIS
AGREEMENT OR ANY AGREEMENT REFERENCED IN THIS AGREEMENT, OR A PARTY'S ACTIONS OR
FAILURE TO ACT RELATED THERETO, ANY OTHER PROVISION TO THE CONTRARY
NOTWITHSTANDING.
9.3 Arbitration.
9.3.1 Conference. The Parties shall attempt in good
faith to resolve by agreement any dispute relating to this Agreement or the
agreements referenced herein or any alleged
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breach hereof or thereof (except those to which the arbitration provisions in
Section 2.3 apply and any claim or dispute regarding a covenant not to compete
including the enforceability thereof), including any issue as to whether this
Section 9.3 applies (but not the issue whether this Section 9.3 applies to a
claim or dispute regarding any covenant not to compete), which shall be
submitted for resolution to an authorized officer of Cooper and an authorized
representative of the Sellers involved in the claim or dispute (each such
officer and representative being fully empowered to settle the claim or dispute
on behalf of all of Buyer and Sellers), all of whom shall meet within 15
business days of such submission to seek in good faith an amicable settlement.
9.3.2 General. Any dispute relating to this Agreement
which is not settled by the Parties within 60 days after written notice of the
claim is first given by either Party to the other pursuant to Section 9.3.1
shall be settled by arbitration in accordance within the commercial arbitration
rules of the American Arbitration Association ("AAA") and the Guidelines for
Expediting Larger, Complex Commercial Arbitrations of the AAA, and judgment upon
the award rendered by the Arbitrator may be entered in any court having
jurisdiction over it. The arbitration proceeding, including the rendering of an
award, shall take place in Chicago, Illinois and shall be administered by the
AAA.
9.3.3 Appointment of Tribunal. Except as otherwise
provided in Sections 2.3, 2.4, and 2.5 hereof, the arbitral tribunal shall be
appointed within thirty (30) days of the notice of the dispute and shall consist
of three (3) arbitrators, one of whom shall be appointed by Sellers, one by
Buyer and the third by both Sellers and Buyer jointly; provided, however, if
Sellers and Buyer do not select the third arbitrator within such thirty-day
period, such arbitrator shall be chosen by the AAA as
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soon as practicable following notice to the AAA by the Parties of their
inability to choose such third arbitrator.
9.3.4 Final and Binding. The award of any such
arbitral tribunal shall be final and binding upon the Parties to the
arbitration. The Parties hereby waive to the extent permitted by law any rights
to appeal or to review of such award by any court or tribunal. Judgment upon
such award may be entered by the prevailing Party in any court having
jurisdiction.
9.3.5 Award. Subject to the provisions of Sections
8.6 and 9.2 hereof, the award of the arbitral tribunal may be alternatively or
cumulatively for monetary damages, an order requiring the performance of
non-mandatory obligations (including specific performance) or any other
appropriate order or remedy, including without limitation, injunction and
specific performance. The arbitral tribunal may issue interim awards and order
any provisional measures which should be taken to preserve the respective rights
of either Party which may be enforced in any court or tribunal of competent
jurisdiction.
9.3.6 Cost of Proceedings. The cost of the
arbitration proceeding, including reasonable attorney's and experts' fees and
expenses for both Parties, if there are any, shall be paid by the non-prevailing
Party, unless otherwise determined by the arbitral tribunal.
9.3.7 Agents. Each Seller appoints SIAL (including
any successor thereof upon written notice to Buyer, "Sellers' Agent") as its
agent to receive on its behalf service of copies of any notice of dispute,
complaint, summons or any other process that might be served in any action or
proceeding or entering of judgment arising out of or relating to this Agreement.
Buyer may make service on any Seller by sending or delivering a copy of the
process (i) to the Party to be served at the address and in the manner provided
for the giving of notices in Section
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9.4 or (ii) to the Party to be served in care of the Sellers' Agent at the
address and in the manner provided for the giving of notices in Section 9.4 with
a copy to the applicable Seller or Sellers. Each Buyer appoints Cooper
(including any successor thereof upon written notice to Sellers, "Buyer's
Agent") as its agent to receive on its behalf service of copies of any notice of
dispute, complaint, summons or any other process that might be served in any
action or proceeding or entering of judgment arising out of or relating to this
Agreement. Sellers may make service on any Buyer by sending or delivering a copy
of the process (i) to the Party to be served at the address and in the manner
provided for the giving of notices in Section 9.4 or (ii) to the Party to be
served in care of the Buyer's Agent at the address and in the manner provided
for the giving of notices in Section 9.4 with a copy to the applicable Buyer or
Buyers. Nothing in this Section 9.3.7, however, shall affect the right of any
Party to bring any such action or proceeding or entering of judgment in any
other court or to serve legal process in any other manner permitted by law or at
equity. Each Party agrees that a final judgment in any action or proceeding so
brought shall be conclusive and may be enforced by suit on the judgment or in
any other manner provided by law or at equity.
9.4 Notices. Any notices or other communications required or
permitted hereunder shall be given in writing and shall be sufficiently given if
delivered personally or sent by confirmed facsimile, or registered mail or
certified mail, return receipt requested, postage prepaid, addressed as follows:
To Buyer or Buyer's Agent: Cooper Industries, Inc.
600 Travis, Suite 5800
Houston, Texas 77002
Attention: General Counsel
Facsimile: (713) 209-8989
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To Sellers or Sellers' Agent: Sigma-Aldrich Corporation
3050 Spruce Street
St. Louis, Missouri 63103
Attention: Michael R. Hogan
Facsimile: (314) 286-7878
with copies to:
For Sellers: Bryan Cave LLP
One Metropolitan Square
Suite 3600
St. Louis, Missouri 63102
Attention: Don G. Lents
Facsimile: (314) 259-2020
or to such other address as shall hereafter be furnished in writing by any Party
in the aforesaid manner, and any such notice or communication shall be deemed to
have been given as of the date so delivered or 3 days after the date mailed as
provided above.
9.5 Captions. The captions set forth in this Agreement are for
convenience only and shall not be considered as part of this Agreement, nor as
in any way limiting or amplifying the terms and provisions hereof.
9.6 Successors and Assigns; Other Parties. This Agreement
shall be binding upon and inure to the benefit of the Parties and their
respective successors and assigns, provided that this Agreement may not be
assigned by either Party without the prior written consent of the other Party;
provided, however, that Buyer may (i) assign any or all of its rights and
interests hereunder to one or more of its affiliates and (ii) designate one or
more of its affiliates to perform its obligations hereunder. No assignment
(including without limitation any such assignment by Buyer) shall relieve a
Party of any of its obligations hereunder without the prior written consent of
the other Party. Nothing herein expressed or implied is intended or shall be
construed to confer upon or give to any person or
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entity, other than the Parties and their respective successors and assigns
(permitted successors and assigns in the case of Sellers), any rights or
remedies under or by reason of this Agreement. Any assignment requiring consent
that is made without such consent shall be void.
9.7 Entire Agreement. Except for the Confidentiality Agreement
dated December 6, 1999 between the Parties, as amended or supplemented, which
Confidentiality Agreement shall remain in full force and effect until Closing at
which point it shall expire, this Agreement and the Ancillary Agreements
(together with the Exhibits and Schedules hereto and thereto) supersede any
other agreement, commitment, arrangement or understanding of any sort whatever,
whether written or oral, that may have been made or entered into by any of the
Parties (or by any director, officer, employee or representative of such Parties
or their affiliates) relating to the sale and purchase of the B-Line Business.
The Confidentiality Agreement, this Agreement, the Ancillary Agreements and the
Exhibits and Schedules hereto and thereto constitute the entire agreement by and
between the Parties relating to the sale and purchase of the B-Line Business and
there are no agreements, commitments, arrangements or understandings except as
expressly set forth herein.
9.8 Construction. Both Parties have participated in the
drafting of this entire Agreement and expressly acknowledge such joint
participation to avoid application of any rule construing contractual language
against the Party which drafted the language. The word "including" shall mean
including without limitation. Any Exhibits, Certificates and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
9.9 Time of Essence. Time shall be of the essence with respect
to each Party's performance of its obligations pursuant to this Agreement.
9.10 Termination. This Agreement may be terminated as follows:
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(a) Cooper and SIAL, on behalf of all Sellers, may
terminate this Agreement by mutual written consent at any time prior to the
Closing;
(b) Cooper on behalf of Buyer may terminate this
Agreement by giving written notice to Seller's Agent on behalf of all Sellers at
any time prior to the Closing (i) in the event any of Sellers has breached any
representation, warranty, or covenant contained in this Agreement in any
material respect, Buyer has notified Sellers' Agent in writing of the breach,
and the breach has continued without cure for a period of 30 days after the
notice of breach or (ii) if the Closing shall not have occurred on or before
September 30, 2000, by reason of the failure of any condition precedent under
Section 3.2 hereof (unless the failure results primarily from Buyer itself
breaching any representation, warranty, or covenant contained in this
Agreement); and
(c) SIAL on behalf of all Sellers may terminate this
Agreement by giving written notice to Buyer's Agent at any time prior to the
Closing (i) in the event Buyer has breached any representation, warranty, or
covenant contained in this Agreement in any material respect, any of Sellers has
notified Buyer's Agent in writing of the breach, and the breach has continued
without cure for a period of 30 days after the notice of breach or (ii) if the
Closing shall not have occurred on or before September 30, 2000, by reason of
the failure of any condition precedent under Section 3.1 hereof (unless the
failure results primarily from any of Sellers themselves breaching any
representation, warranty, or covenant contained in this Agreement).
Termination by any Seller shall be exercised only by Seller's Agent acting on
behalf of all Sellers. Termination by any Buyer shall be exercised only by
Buyer's Agent acting on behalf of all Buyers. A Party's exercise of its rights
of termination hereunder shall terminate all rights and obligations of the
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Parties except the right of any party to recover damages from any other Party
for any breach by such other Party of this Agreement.
9.11 Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument. It shall not be necessary for
every Party hereto to sign each counterpart but only that each Party shall sign
at least one such counterpart.
9.12 Governing Law. This Agreement shall in all respects be
governed by and construed in accordance with the local laws of the State of
Missouri, without reference to its principles of choice or conflict of law.
9.13 Modification; Waiver. No modification of or amendment to
this Agreement shall be valid unless in a writing signed by the Parties
referring specifically to this Agreement and stating the Parties' intention to
modify or amend the same. Any waiver of any term or condition of this Agreement
must be in a writing signed by the Party sought to be charged with such waiver
referring specifically to the term or condition to be waived, and no such waiver
shall be deemed to constitute the waiver of any other breach of the same or of
any other term or condition of this Agreement.
9.14 Severability. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the validity or
enforceability of the other provisions hereof.
THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH
MAY BE ENFORCED BY THE PARTIES.
IN WITNESS WHEREOF, Sellers and Buyer, by their duly
authorized officers, have caused this Agreement to be executed as of the date
first above written.
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COOPER INDUSTRIES, INC. SIGMA-ALDRICH CORPORATION
By: /s/ DIANE K. SCHUMACHER By: /s/ MICHAEL R. HOGAN
---------------------------------- --------------------------------
Name: Diane K. Schumacher Name: Michael R. Hogan
-------------------------------- ------------------------------
Title: Senior Vice President Title: Chief Financial Officer
General Counsel & Secretary -----------------------------
-------------------------------
SIGMA-ALDRICH CANADA LTD. SIGMA-ALDRICH CO.
By: /s/ MICHAEL R. HOGAN By: /s/ MICHAEL R. HOGAN
---------------------------------- --------------------------------
Name: Michael R. Hogan Name: Michael R. Hogan
-------------------------------- ------------------------------
Title: Authorized Signatory Title: Authorized Signatory
------------------------------- -----------------------------
SIGMA-ALDRICH COMPANY LTD. SIGMA-ALDRICH CHEMIE GMBH
By: /s/ MICHAEL R. HOGAN By: /s/ MICHAEL R. HOGAN
---------------------------------- --------------------------------
Name: Michael R. Hogan Name: Michael R. Hogan
-------------------------------- ------------------------------
Title: Authorized Signatory Title: Authorized Signatory
------------------------------- -----------------------------
CBL ACQUISITION CORP. COOPER TECHNOLOGIES COMPANY
By: /s/ DIANE K. SCHUMACHER By: /s/ JAMES R. DEEN
---------------------------------- --------------------------------
Name: Diane K. Schumacher Name: James R. Deen
-------------------------------- ------------------------------
Title: President Title: General Counsel
------------------------------- -----------------------------
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GLOSSARY INDEX OF DEFINED TERMS
<TABLE>
<CAPTION>
TERM PAGE TERM PAGE
- ---- ---- ---- ----
<S> <C> <C> <C>
AAA................................................67 GAAP...............................................20
Accounting Arbitrator...............................7 General Assignment and Assumption..................14
ACM................................................40 Germany B-Line Business Assets......................3
Adjusted Consolidated Valuation.....................6 Hazardous Substances...............................39
Adjusted Purchase Price.............................6 HSR Act............................................53
Agreement...........................................1 Income Tax Asset...................................53
Ancillary Agreements...............................18 Income Taxes.......................................34
Arbitration Deadline................................7 Indemnified Party..................................63
Assets..............................................3 Indemnifying Party.................................64
Assumed Liabilities.................................4 Intangibles........................................30
Authority..........................................24 knowledge..........................................16
Basket.............................................63 Laws...............................................24
Bill of Sale.......................................15 Liens..............................................27
B-Line..............................................2 Long Term Debt......................................5
B-Line Business.....................................1 Manufacturing Stock.................................2
B-Line Manufacturing................................2 multiemployer plan.................................36
B-Line Stock........................................2 Occurrence.........................................50
Buyer...............................................1 Operating Companies................................18
Buyer's Letter......................................7 Other Taxes........................................34
Canada B-Line Business Assets.......................2 Owned Properties...................................28
Cap................................................63 Parties.............................................1
Claim..............................................61 Party...............................................1
Closing............................................14 PBGC...............................................36
Closing Date.......................................14 Permits............................................24
Code...............................................10 Permitted Liens....................................28
Current B-Line Insurance...........................42 Plans..............................................36
Current Employees..................................57 Pre-Closing Product Claims..........................4
Effective Time.....................................14 Pre-Closing Tax Period.............................54
Employee...........................................57 Preliminary Consolidated Valuation..................6
employee benefit plan..............................36 Preliminary Purchase Price..........................6
employee pension plan..............................36 Release............................................40
employee welfare plan..............................36 Released...........................................40
Employees..........................................57 Requesting Party...................................51
Environment........................................38 SAC.................................................1
Environmental Laws.................................38 SAC B-Line Business Assets..........................2
Environmental Liabilities..........................26 Scheduled Contracts................................35
Environmental Permits..............................40 Scheduled Intangibles..............................30
ERISA..............................................36 Section 338(h)(10) Election........................10
Excluded Assets.....................................3 Seller Group.......................................53
Financial Statements...............................20 Sellers.............................................1
</TABLE>
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<TABLE>
<S> <C> <C> <C>
Sellers' Agent.................................68, 69 Sigma UK............................................1
Sellers' Letter.....................................7 Tax................................................34
Settlement..........................................9 Taxes..............................................34
Shares.............................................10 Third Party Action.................................64
SIAL................................................1 Transfer Taxes.....................................56
Sigma Canada........................................1 UK B-Line Business Assets...........................3
Sigma Germany.......................................1 WARN...............................................60
</TABLE>
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LIST OF SCHEDULES
1.1(c) SAC B-Line Business Assets
1.2(f) Long Term Debt Assumed (IRB)
2.2(a) Preliminary and Adjusted Consolidated Valuation
2.2(b) Preliminary Consolidated Valuation
3.2.8 Assigned Leases
4.3 Wiring Instructions
5.1 Knowledge Persons
5.2.2(d) Certain Securities
5.2.3(a) Unaudited Financial Statements
5.2.3(b) Audited Financial Statements
5.2.4 Absence of Changes
5.2.5 Compliance with Law; Licenses and Permits
5.2.6(a) Litigation and Related Matters
5.2.6(b) Product Sale Terms
5.2.7 Title to Property - Owned
5.2.8 Personal Property - Leased
5.2.9 Owned Properties
5.2.10 Real Property - Leased
5.2.11(a) Patents, Trademarks and Other Intellectual Property (Intangibles)
5.2.11(b) Exceptions to Rights
5.2.12 Taxes
5.2.13 Contracts
5.2.14 Labor Relations
5.2.15(a) Employee Benefit Plans
5.2.17 Inventory
5.2.18 Environmental Matters
5.2.19 Transactions with Affiliated Persons
5.2.21 Shared Facilities, Etc.
5.2.25 Current B-Line Insurance
5.3.5 Buyer's Knowledge
6.1.1 Interim Operation of B-Line Business
6.1.8 Certain Intercompany Agreements
7.1(a) Employees of Operating Companies
7.3(b) Benefits Payable by Buyer
7.4 Terminated Employees of Operating Companies
77
