<PAGE> 1
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 27, 1994
THE LAMSON & SESSIONS CO.
------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 1-313 34-0349210
-------------- ---------------- -------------
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) No.)
25701 Science Park Drive, Cleveland, Ohio 44122-9803
-----------------------------------------------------
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (216) 464-3400
--------------
Page 1 of 59 Pages
Exhibit Index appears on Page 6
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Item 2. Acquisition or Disposition of Assets
On May 27, 1994, the Registrant sold the assets of its Midland Steel
Products Co. division to Iochpe-Maxion Ohio, Inc. for approximately $18
million. Assets sold included its equipment and inventory located at
facilities in Cleveland, Ohio and Janesville, Wisconsin. The Registrant's
Midland Steel Products Co. division manufactured frame assembly and frame
components for the medium and heavy duty truck and school bus markets.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
FINANCIAL STATEMENTS
1. Consolidated Statement of Earnings (Unaudited) for the First
Quarters Ended 1994 and 1993 (incorporated herein by reference
to Part 1 of the Company's Quarterly Report on Form 10-Q for
the period ended April 2, 1994).
2. Consolidated Statement of Financial Position (Unaudited) for
the First Quarters Ended 1994 and 1993 and Year Ended 1993
(incorporated herein by reference to Part 1 of the Company's
Quarterly Report on Form 10-Q for the period ended April 2,
1994).
3. Notes to Consolidated Financial Statements (Unaudited)
(incorporated herein by reference to Part 1 of the Company's
Quarterly Report on Form 10-Q for the period ended April 2,
1994).
4. Pro Forma Consolidated Statement of Operations (Unaudited) for
the year ended 1993.
5. Notes to Pro Forma Consolidated Statement of Operations
(Unaudited).
EXHIBITS
10. Asset Purchase Agreement between Iochpe-Maxion Ohio, Inc. and The
Lamson & Sessions Co. dated May 4, 1994.
<PAGE> 3
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE LAMSON & SESSIONS CO.
By ________________________________
Allan J. Zambie, Vice President-
Secretary
Date: June 13, 1994
<PAGE> 4
<TABLE>
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
YEAR ENDED 1993
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<CAPTION>
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
<S> <C> <C> <C>
NET SALES $ 301,456 $ (41,884) (a) $ 259,572
(1,844) (b)
COST OF PRODUCTS SOLD 261,810 (41,261) (a) 218,705
----------- -------------- -----------
GROSS MARGIN 39,646 1,221 40,867
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 1,844 (b)
37,817 (1,461) (a) 38,200
----------- -------------- -----------
OPERATING EARNINGS (LOSS) 1,829 838 2,667
INTEREST 7,620 (1,836) (c) 5,784
----------- -------------- -----------
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS $ (5,791) $ 2,674 $ (3,117)
=========== ============== ===========
EARNINGS (LOSS) PER COMMON SHARE
CONTINUING OPERATIONS $ (0.44) $ 0.20 $ (0.24)
=========== ============== ===========
AVERAGE COMMON SHARES 13,210 13,210 13,210
=========== ============== ===========
<FN>
(a) Adjustments to reflect Midland Steel Products operations.
(b) Retiree benefits to be retained by continuing operations previously included in Cost of Products Sold.
(c) Interest Expense reduction reflects the interest costs related to Midland Steel Products.
The accompanying notes are an integral part of this pro forma consolidated financial statement.
</TABLE>
L1690 (06/09/94)
<PAGE> 5
NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
On May 27, 1994, the Company completed the sale of substantially all of the
assets and certain liabilities of its Midland Steel Products Division (MSP).
The proceeds of $18,000,000 will be used to reduce debt and eliminate the
Assets Held for Sale, as previously reported in the April 2, 1994 10-Q.
The Pro Forma Consolidated Statement of Operations (Unaudited) for Fiscal Year
1993 reflects the sale of MSP as if it had occurred at the beginning of Fiscal
Year 1993.
This pro forma financial statement includes assumptions and estimates and are
not necessarily indicative of the results that actually would have been
obtained if the sale had occurred on the date indicated. The pro forma
financial statements should be read in conjunction with the notes thereto.
L1690 (06/09/94)
<PAGE> 6
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Exhibit Index
Exhibit No. Page
10. Asset Purchase Agreement between Iochpe-Maxion 7
Ohio, Inc. and The Lamson & Sessions Co. dated
May 4, 1994.
<PAGE> 1
Exhibit 10
ASSET PURCHASE AGREEMENT
between
IOCHPE-MAXION OHIO, INC.
and
THE LAMSON & SESSIONS CO.
Dated May 4, 1994
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
<S> <C> <C>
Page
1. Sale and Purchase of Assets; Lease of Cleveland Plant; Phase II Study . . . . . . . . . . . . 1
1.1 Sale and Purchase of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.3 Lease of Cleveland Plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.4 Environmental Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.5 Destruction of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2. Assumed and Excluded Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1 Assumption of Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Excluded Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3. Purchase Price; Terms of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1 Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.2 Calculation of Post-Closing Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.3 Review of Closing Date Statement; Resolution of any Dispute . . . . . . . . . . . . . . . . . 10
3.4 Payment of Post-Closing Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4. Closing; Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.1 Date and Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.2 Deliveries by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.4 Filing of Documents for Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.5 Possession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5. Representations, Warranties, and Agreements by Seller . . . . . . . . . . . . . . . . . . . . 14
5.1 Organization; Standing; Corporate Power . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.2 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.3 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.4 Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.5 No Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.6 Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.7 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.8 Transferred Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.9 Patents, Trade Names, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.10 Contracts and Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.11 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.12 Permits and Licenses; Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.13 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.14 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.15 No Legal Violations; Governmental Consents . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.16 No Pending or Threatened Litigation and Claims . . . . . . . . . . . . . . . . . . . . . . . 24
5.17 Operation of the Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.18 Product Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.19 Product Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.20 Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
i
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<TABLE>
Page
<S> <C> <C>
5.21 Buyer's Ability to Operate the Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.22 Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6. Representations and Warranties of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.1 Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.2 Corporate Power; Due Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.3 Non-Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.4 No Governmental Consent Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.5 Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7. Covenants by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.1 Conduct the Business to the Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.2 Maintain Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.3 Advise Buyer of Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.4 Access for Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.5 Third-Party Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.6 Compliance with Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.7 Transfer of Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.8 Prohibition on Seeking Competing Offers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.9 State Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.10 Title Commitment; Title Policy; Defects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.11 Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8. Covenants of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.1 Compliance with Conditions; Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.2 Treatment of Employees after Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.3 Access for Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
8.4 Covenants and Other Provisions Regarding Group Health Plans . . . . . . . . . . . . . . . . . . . 36
9. Conditions to Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
9.1 Representations and Warranties True on Closing Date . . . . . . . . . . . . . . . . . . . . . . . 38
9.2 Compliance with Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
9.3 No Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
9.4 Third-Party Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
9.5 Opinions of Counsel for Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.6 Hart-Scott-Rodino . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.7 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.8 Title Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10. Conditions to Obligations of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.1 Representations and Warranties True on Closing Date . . . . . . . . . . . . . . . . . . . . . . . 39
10.2 Compliance with Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.3 No Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.4 Third Party Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.5 Opinion of Counsel for Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.6 Hart-Scott-Rodino . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
10.7 Guaranty of Iochpe-Maxion S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
</TABLE>
ii
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<TABLE>
Page
<S> <C> <C>
12. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
13. Bulk Sales Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
14. Covenant Not to Compete . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
15. Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
16. Public Announcements and Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
17. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
17.1 Indemnifications by Seller for General Claims . . . . . . . . . . . . . . . . . . . . . 41
17.2 Limitations on General Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 42
17.3 Indemnification by Seller for Excluded Liabilities . . . . . . . . . . . . . . . . . . 42
17.4 Indemnification by Seller for Certain Employee Claims . . . . . . . . . . . . . . . . . 42
17.5 Notice; Other Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
17.6 Limitations on Seller's Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 44
17.7 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
18. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
19. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
20. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
21. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
22. Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
23. Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
24. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
25. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
</TABLE>
iii
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ASSET PURCHASE AGREEMENT
THIS AGREEMENT, made as of the 3rd day of May, 1994, is
entered into between Iochpe-Maxion Ohio, Inc., an Ohio corporation ("Buyer"),
and The Lamson & Sessions Co., an Ohio corporation ("Seller").
Seller owns certain assets which are used in the business of
its Midland Steel Products Co. Division ("Midland Steel"), which is the
manufacture of automotive and truck frames and frame components (the
"Business"), which Midland Steel conducts at its plant located at 10615 Madison
Avenue, Cleveland, Ohio 44101 (the "Cleveland Plant") owned by Seller and at
2500 Beloit Avenue, Janesville, Wisconsin 53545 (the "Janesville Plant";
together with the Cleveland Plant, the "Plants") which is leased by Seller
pursuant to a Lease Agreement (the "Janesville Lease") dated February 22, 1989,
between Seller, as lessee, and Donald W. Helgesen Commercial and Industrial
Development Company, as lessor, to which Helgesen Properties, Inc., a Wisconsin
Corporation, (the "Janesville Lessor") is the successor by assignment. Seller
and Buyer wish to provide for the lease of the Cleveland Plant by Seller to
Buyer, and for the sale by Seller to Buyer of substantially all the assets and
rights of Seller, including the Janesville Lease and other than the Cleveland
Plant, used in the Business in accordance with the terms and conditions
hereinafter set forth.
In consideration of the payments herein provided for and the
covenants herein contained, the parties agree as follows:
1. SALE AND PURCHASE OF ASSETS; LEASE OF CLEVELAND
PLANT; PHASE II STUDY.
1.1 SALE AND PURCHASE OF ASSETS. Upon the terms and
subject to the conditions of this Agreement, Seller shall sell, assign,
transfer and convey to Buyer, and Buyer shall purchase and acquire from Seller,
at the Closing (as defined in Section 4.1 hereof), the rights, properties and
assets listed and described in this Section 1.1, except the Excluded Assets (as
defined in Section 1.2 hereof) (collectively, the "Transferred Assets"). As
used in this Agreement, assets, properties and rights "used directly in the
Business" or "relating directly to the Business" mean assets, properties and
rights of Seller as of the Closing Date exclusively pertaining to the conduct
of the Business, and exclude assets, properties and rights owned, used, held or
acquired by Seller for use in, or arising or existing in connection with, any
of its other businesses. The Transferred Assets shall be the following (except
as aforesaid):
(a) EQUIPMENT. All of the fixed assets, leasehold
improvements, machinery and equipment, trade fixtures, tools
(including tooling inventory), parts, supplies and supporting
equipment, shelving, material handling
-1-
<PAGE> 6
equipment, office furniture and equipment, and other items owned (or
leased, to the extent of such leasehold interest) by Seller and used
in the Business and located at the Plants on the Closing Date,
including without limitation, substantially all of the machinery,
equipment, and other items identified on the Equipment List attached
hereto as Schedule 1.1(a) (the "Equipment").
(b) RECEIVABLES AND ADVANCES. All notes and accounts
receivable of Seller on the Closing Date relating directly to the
Business, including, without limitation, accounts receivable and notes
receivable.
(c) CASH OF MIDLAND STEEL. Petty cash of Midland Steel
on hand at either Plant on the Closing Date.
(d) INVENTORY. All materials, parts, work in progress
and finished goods owned by Seller on the Closing Date and used
directly in the Business, including without limitation such inventory
located in, or in transit to or from, either of the Plants or any
other location identified on Schedule 5.11, or at, or in transit to or
from, any facility of Seller's customers, including, without
limitation, General Motors Corporation, or any vendor of Seller (the
"Inventory").
(e) LEASES AND CONTRACTS. All rights and interests in
and to (i) security, utility, vendor and other deposits and prepaid
items of Seller to the extent included in the Closing Date Statement
(as defined in Section 3.2), (ii) the Janesville Lease (the premises
demised by the Janesville Lease referred to herein as the "Leased Real
Property"), (iii) all the contracts, agreements and other arrangements
identified on the Transferred Contracts List attached hereto as
Schedule 1.1(e)(iii) (the "Transferred Contracts"), and (iv) all
leases of machinery, equipment, computers or other personal property
of Seller as listed on the Personal Property Lease List attached
hereto as Schedule 1.1(e)(iv) (the "Personal Property Leases").
(f) PERMITS. All licenses, permits, approvals and
qualifications, issued by any Federal, state, or local governmental
entity or other jurisdiction or instrumentality (foreign or domestic)
that are used directly in the Business in effect on the Closing Date
and as listed on the Permit List attached hereto as Schedule 1.1(f)
(the "Permits").
(g) DOCUMENTS AND RECORDS. All documents, software, and
written or computerized records of Seller, wherever located, used
directly in the Business relating directly to the ownership, use,
maintenance or repair of
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<PAGE> 7
any of the Transferred Assets such as specifications, blueprints,
drawings, design data, catalogs, maps, instruments, real estate
documents and records, all construction, repair and maintenance,
management and asset history records and files, surveys, engineering
information, manuals, written procedures, bills of material, customer
lists, delivery, billing and collection records, marketing and sales
materials, analyses, and reports, production routings, inspection
records, inventory records, payroll and personnel records, cost and
sales records, lists of suppliers, documents and records relative to
suppliers, subcontractors, and sales representatives, and related
files.
(h) INTELLECTUAL PROPERTY; OTHER INTANGIBLE PROPERTY.
All of the written or computerized materials of Seller used directly
in the Business relating to distribution, servicing, processing,
fabrication, research and development results, trade secrets and
know-how, research reports, notebooks, correspondence, trademarks and
service marks and any registrations thereof or applications for
registration therefor, trade names, including the name "Midland
Steel," inventions, patents, patent applications, copyrights,
copyright registrations and applications for copyright registration,
or any other similar type of proprietary intellectual property right,
which is owned by Seller and used directly in the Business
(collectively, the "Intellectual Property") including, without
limitation, the Intellectual Property listed on Schedule 1.1(h)
attached hereto (the "Intellectual Property List").
(i) BOOKS AND RECORDS. All written or computerized
financial, tax, and other books and records of Seller wherever located
relating exclusively to the Business; provided that Seller may retain
copies of any such books and records required or useful for purposes
of preparing or confirming information in its tax returns or financial
statements.
(j) BENEFIT PLAN ASSETS All of Seller's rights in and
with respect to the assets of the Midland Steel Products Co. Retiree
Medical Benefit Trust Agreement for former Cleveland Plant Employees
Represented by Local No. 486 and, subject to Section 8.2(f), the
"BeneMax Trust" with Blue Cross/Blue Shield of Wisconsin.
(k) CERTAIN CLAIMS. Any claims of Seller against
insurers or any other parties made by Seller to restore, repair or
correct any defect or damage to any property, or violation or default
under any contract, included in the Transferred Assets unless and to
the extent that (i) Seller shall have, prior to the Closing, incurred
expenses that are the subject of the claim to effect such
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restoration, repair or correction or (ii) any such defect, damage,
violation or default is otherwise reflected on the Closing Date
Statement.
1.2 EXCLUDED ASSETS. Notwithstanding the foregoing, the
following assets of Seller (the "Excluded Assets") will be retained by Seller
and will not be included in the Transferred Assets:
(a) CLEVELAND PLANT. The premises demised by the
Cleveland Lease, as defined in Section 1.3.
(b) BANK DEPOSITS. All cash on deposit in banks,
certificates of deposit and similar items.
(c) PREPAID EXPENSES AND DEPOSITS. All security,
utility, vendor and other deposits and prepaid items of Seller not
included in the Closing Date Statement.
(d) BENEFITS PLANS. All assets associated with Seller's
Benefit Plans (as defined in Section 5.13), to the extent such assets
are not Transferred Assets pursuant to Section 1.1(j).
(e) THIRD PARTY ASSETS. All assets located at either of
the Plants but owned by third parties and not leased to Seller or
otherwise used by Seller directly in the Business.
(f) ORDINARY COURSE OF BUSINESS DISPOSITIONS. All
rights, properties and assets which shall have been sold, transferred,
assigned, consumed or disposed of by Seller prior to the Closing in
transactions conducted in the ordinary course of business of the
Business or otherwise not in breach of this Agreement, whether or not
listed on any Schedule hereto.
(g) INSURANCE POLICIES AND CLAIMS. All insurance
policies of Seller relating to the Business and all rights of Seller
to insurance claims and proceeds arising from or related to the
operation of the Business prior to the Closing other than claims
transferred to Buyer pursuant to Section 1.1(k).
(h) CERTAIN CLAIMS. All rights to causes of action,
suits, proceedings, judgments, claims and demands of any nature,
whenever maturing or asserted, relating to or arising directly or
indirectly out of the Excluded Assets.
(i) TAX CLAIMS. All claims of Seller for refunds or
credits with respect to local real estate taxes and any other United
States Federal, state or local taxes, of whatsoever nature, with
respect to taxes paid or tax returns filed by Seller.
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(j) CERTAIN RECORDS. The corporate minute books and
records, stock books and ledgers, corporate seals, and income tax
records and returns of Seller, any accounting, financial and cost
records not relating exclusively to the Business and any worksheets,
notes, files, or documents primarily related thereto, wherever
located.
(k) NAME; CERTAIN SUPPLIES. Any right to the name
"Lamson & Sessions," any office supplies or business forms that
include that name and assets or rights relating to businesses
conducted by Seller other than the Business and not included in the
Transferred Assets.
1.3 LEASE OF CLEVELAND PLANT. Subject to the terms and
conditions of this Agreement, at the Closing, Seller, as lessor, and Buyer, as
lessee, shall enter into the Lease in the form of Exhibit A to this Agreement
(the "Cleveland Lease") providing for the lease by Seller to Buyer of the
Cleveland Plant, and the obligation and option of Buyer to purchase the
Cleveland Plant, upon the further terms and conditions specified in the
Cleveland Lease and in the exhibits and attachments thereto.
1.4 ENVIRONMENTAL AGREEMENT. The Cleveland Lease
contemplates the conduct of a "Phase II" study, a Phase II report and
development and implementation of a remedial action plan, as applicable,
relating to certain environmental matters involving the Plants and the sites of
the Plants. The Environmental Agreement, dated the date hereof, a copy of
which is attached to this Agreement as Exhibit B (the "Environmental
Agreement"), sets forth the agreement of Seller and Buyer as to the procedures,
scope of investigation, consultants' report and other matters relating to the
Phase II study, and Seller and Buyer agree to proceed cooperatively under the
terms of the Environmental Agreement from and after the date of this Agreement
with respect to the Phase II study and report.
1.5 DESTRUCTION OF ASSETS. In the event that any portion
of the Transferred Assets or of the Cleveland Plant, material to the ongoing
operations of the Business is damaged or destroyed by fire or other cause prior
to the Closing Date, but the Transferred Assets and the Cleveland Plant may be
restored so as to render them capable of reasonable and safe ongoing operation
within 60 days of such event, in Seller's best judgment, then this Agreement
shall remain in full force and effect (provided that Buyer shall have no
obligation to close the transaction contemplated herein until such restoration
is complete and reasonably satisfactory to Buyer) and Seller shall proceed to
effect such restoration. In the event that either (a) Seller determines that
such restoration cannot be completed within such 60 day period or (b) Seller
fails to complete such restoration within such 60 day period, Buyer may, at its
option and in its sole discretion, (i) terminate this Agreement or (ii)
complete the transaction contemplated by this Agreement and receive the
proceeds
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of the insurance carried by Seller (or the proceeds remaining after Seller
shall have attempted to effect such restoration) covering such damage or
destruction plus an amount equal to any applicable deductibles, provided that,
within thirty days after receipt of notice from Seller of the events specified
in either (a) or (b) above, which notice shall identify the portion of the
Transferred Assets damaged or destroyed (or remaining unrestored) and the
available insurance proceeds with respect thereto, Buyer shall have given
notice to Seller of its intention to complete the transaction.
2. ASSUMED AND EXCLUDED LIABILITIES.
2.1 ASSUMPTION OF LIABILITIES. Upon the Closing in
accordance with this Agreement, Buyer shall assume the liabilities and
obligations of Seller, whether primary or secondary, direct or indirect,
absolute or contingent, relating directly to the Business set forth below (the
"Assumed Liabilities"):
(a) LEASES AND TRANSFERRED CONTRACTS. All liabilities
and obligations existing or arising under the Janesville Lease and all
Transferred Contracts to the extent they relate to any period at or
after the Closing.
(b) CLOSING DATE STATEMENT LIABILITIES. All liabilities
and obligations reflected on the Closing Date Statement.
(c) CERTAIN BENEFIT PLANS. Certain liabilities and
obligations of Seller arising with respect to Seller's Benefit Plans,
but only (i) to the extent reflected in the Closing Date Statement
defined in Section 3.2(b) and as set forth on the Assumed Benefit
Plans List attached hereto as Schedule 2.1(c) or as supplemented on
the Closing Date, or (ii) as set forth in Sections 8.2(a)(ii),
8.2(a)(iii) and 8.2(f).
(d) PRODUCT RETURNS AND WARRANTIES. All liabilities and
obligations with respect to any product return or product warranty
relating to products of the Business which were produced or sold by
Seller prior to the date of the Closing or which were held in the
inventory of the Business at such date.
(e) EMPLOYEES. Buyer shall be responsible for payment of
any and all wages or salary, vacations, holidays, bereavement pay,
jury duty pay, disability income, sick leave pay, fringe benefits or
other perquisites of employment, payroll taxes and other
payroll-related expenses for Continuing Employees (as defined in
Section 8.2(b)) to the extent reflected on either the Closing Date
Statement or on the personnel records for Midland Steel maintained at
the Plants, provided that any such liability not reflected on the
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Closing Date Statement shall have arisen only after December 31, 1993
and shall not require any payment to any Continuing Employee of more
than his or her regular salary payments.
2.2 EXCLUDED LIABILITIES. Except for the liabilities and
obligations expressly referred to in Section 2.1, Buyer will not assume or
otherwise be responsible for any liabilities or obligations of Seller,
regardless of nature (the "Excluded Liabilities"), including, without
limitation, the following liabilities and obligations relating to or arising
out of the operation of the Business prior to the Closing:
(a) LITIGATION AND CLAIMS. Any claims, liabilities,
losses, damages or expenses relating to any litigation, proceeding or
investigation of any nature (whether presently known or hereafter
arising) arising out of or alleged to arise out of the Business or the
operations of Seller, Midland Steel, or any of its subsidiaries,
affiliates, predecessors or assignors including, without limitation,
any claims or liabilities for injury to or death of persons or damage
to or destruction of property, any workers' compensation claims, and
any product liability claims.
(b) TAX LIABILITIES. Tax liabilities on or measured by
income of any and all kinds (federal, state, local, and foreign) of
Seller, for periods ending on or prior to the Closing Date or with
respect to personal property taxes attributable to any date or period
prior to the Closing Date, including, without limitation, any
liabilities for sales or use taxes, or taxes, liabilities for withheld
Federal and state income, employee F.I.C.A. (Federal Insurance
Contribution Act) or employer F.I.C.A., except for accrued real estate
taxes reflected on the Closing Date Statement.
(c) LIABILITIES AS EMPLOYER. Any liabilities of Seller
with respect to any retirement, welfare, or other employee benefit of
employees or former employees of Seller and Midland Steel or any
affiliate of Seller relating to employment on or prior to the Closing
Date or any plan or arrangement maintained in connection therewith,
except for benefits under Benefits Plans that are Assumed Liabilities
pursuant to Section 2.1(c) or that are other employee liabilities of
Seller assumed under Section 2.1(e) and any liabilities of Seller to
any employee, former employee, beneficiary, provider, insurer,
consultant, government agency, or otherwise arising out of any injury
or other event prior to the Closing Date under applicable workers
compensation or similar laws.
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(d) TRANSACTIONAL COSTS. Any fees and expenses incurred
by Seller in connection with negotiating, preparing, closing, and
carrying out this Agreement and the transactions contemplated by this
Agreement, including, without limitation, the fees, disbursements, and
expenses of Seller's attorneys, accountants, and consultants.
(e) INDEBTEDNESS. Any indebtedness of Seller or
obligations to any persons who have lent money or provided services to
Seller including its loan for the Janesville Plant.
(f) ENVIRONMENTAL LIABILITIES. Except to the extent
otherwise agreed in the Lease or Environmental Agreement, any
liabilities or obligations, arising at any time before, at the time
of, or after the Closing under Federal, state or local environmental
laws or resulting from the generation, storage, treatment,
reclamation, recycling, transportation, handling, disposal, release or
threatened release of any "Regulated Material," as such term is
defined in the Environmental Agreement (the "Regulated Material") by
Seller or by any other person, including without limitation, any third
parties with whom Seller may have contracted to store, transport,
handle, recycle, reclaim or dispose of any of the foregoing, in
relation to the Business during the period prior to the Closing or in
respect of the operations of Seller or its subsidiaries, affiliates,
predecessors, or assignors, including without limitation, any
liability or obligation for remediating environmental conditions
wheresoever located.
(g) CHECKS. All liabilities and obligations for
outstanding Midland Steel checks issued on or prior to the Closing
Date.
3. PURCHASE PRICE; TERMS OF PAYMENT. The aggregate
purchase price (the "Purchase Price") to be paid by Buyer for the Transferred
Assets shall be (i) the assumption by Buyer, as of the Closing Date, of the
Assumed Liabilities and (ii) the payment to Seller on the Closing Date of U.S.
$18,076,633 (the "Cash Purchase Price"). The Cash Purchase Price means 110% of
the Estimated Total Net Investment minus $400,000. The "Estimated Total Net
Investment" means the difference between the net book value of the assets to be
transferred and liabilities to be assumed, as set forth on the "Pricing Balance
Sheet" of Seller as of March 26, 1994 (as defined in Section 5.3). The amount
of the Cash Purchase Price shall be paid in immediately available funds by, at
Seller's option, either wire transfer to an account designated by Seller to
Buyer in writing at least 5 days before the Closing, or by a bank check payable
to Seller.
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3.1 ALLOCATION. The Purchase Price shall be allocated
among the Transferred Assets in the manner indicated on Exhibit C attached
hereto. Seller and Buyer each agree, except as otherwise required by law, not
to take a position on any income tax return, before any governmental agency
charged with the collection of any income tax, or in any judicial proceeding
that is in any way inconsistent with the terms of this Section 3.1.
3.2 CALCULATION OF POST-CLOSING ADJUSTMENT. (a) The
Purchase Price set forth in Section 3 will be adjusted following the Closing
Date to reflect any differences between the Estimated Total Net Investment as
set forth on the Pricing Balance Sheet and the net book value of the assets
transferred and liabilities assumed as of the Closing Date (the "Closing Total
Net Investment"). The Closing Total Net Investment will be determined from the
Closing Date Statement (as defined below).
(b) Seller shall prepare a balance sheet as of the close
of business on the Closing Date (the "Closing Date Statement"). The Closing
Date Statement shall be prepared in a manner consistent with the Divisional
Balance Sheet and the adjustments made to the Divisional Balance Sheet to
create the Pricing Balance Sheet, as set forth in Section 5.3, provided that
(i) no adjustments shall be made by Seller on the Closing Date Statement from
the Divisional Balance Sheet for additional depreciation on any fixed assets of
Seller reflected on the Divisional Balance Sheet and (ii) accruals with respect
to the Seller's Benefit Plans to be assumed by Buyer shall be made on the basis
of actuarial computations as of the Closing Date to be provided by Seller's
actuaries, Coopers & Lybrand. At the option of Buyer, exercisable by written
notice given not less than ten days prior to the Closing Date, Seller shall
take a physical inventory on the weekend preceding the Closing Date, which
physical inventory shall be included in the Closing Date Statement to be
prepared by Seller. Buyer or its representatives may observe the physical
inventory. Not later than 45 days after the Closing Date, Seller shall furnish
the Closing Date Statement to Buyer's independent certified public accountants,
Price Waterhouse ("PW"), to audit the items identified in the report (in the
form of Schedule 3.2(b)) as reflected in the Closing Date Statement and to make
such adjustments (the "Proposed Adjustments") therein as shall be necessary for
PW to deliver its report in the form of Schedule 3.2(b); provided that PW shall
not be obliged to deliver such report until completion of the process
contemplated by Section 3.3, and that PW shall complete its audit within 30
days of Buyer's receipt of the Closing Date Statement.
(c) Buyer will give representatives of Seller access to
the Plants and to the books and records of the Business for purposes of
preparing the Closing Date Statement and will cause appropriate Buyer personnel
to assist Seller and its representatives in the preparation of the Closing
Balance Sheet and shall otherwise cooperate fully with Seller in the
preparation of the Closing Date Statement. Seller will give Buyer and PW
access
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to the books and records of the Seller necessary for PW to audit the items
included in the Closing Date Statement.
3.3 REVIEW OF CLOSING DATE STATEMENT; RESOLUTION OF ANY
DISPUTE. Following receipt of the Proposed Adjustments, Seller will be
afforded a period of 15 days to review the Proposed Adjustments and to complete
any review that it wishes to conduct. At or before the end of the 15 day
review period, Seller will either (a) accept the Proposed Adjustments to the
Closing Date Statement in their entirety or (b) deliver to Buyer written notice
identifying the items in the Proposed Adjustments that Seller disputes and the
basis for Seller's objection. If Seller does not deliver any such written
notice within the 15 day review period, Seller will be deemed to have accepted
the Proposed Adjustments. Within a period of 14 days from the end of the 15
day review period, the parties will attempt in good faith to resolve any
disputed items. If they are unable to do so, the remaining disputed items will
be referred to a nationally recognized firm of certified public accountants
agreed to by Buyer and Seller for resolution. The parties will share equally
the cost of the certified public accountants. The resolution of the disputed
items, as determined by such certified public accountants will be binding on
the parties.
3.4 PAYMENT OF POST-CLOSING ADJUSTMENT. If the Estimated
Total Net Investment is more than $100,000 greater than Closing Total Net
Investment (determined under Sections 3.2 and 3.3), then Seller shall pay to
Buyer an amount equal to 110% of the entire difference. If the Closing Total
Net Investment (determined under Sections 3.2 and 3.3) is more than $100,000
greater than the Estimated Total Net Investment, Buyer shall pay to Seller an
amount equal to 110% of the entire difference. If in either such case the
difference is less than $100,000, neither party will pay any additional amount
to the other. Payment of any amount due under this Section 3.4 shall be made
either by wire transfer of immediately available funds to an account designated
by the recipient or, at the option of the recipient, by certified or bank
check. The amount due shall be paid with interest from the Closing Date to the
date of payment at a per annum rate equal to the "prime rate," from time to
time, of Society National Bank, Cleveland, Ohio, plus 2.5%. Payment due under
this Section 3.4 shall be made not more than 10 business days following the
determination of the Closing Total Net Investment under Sections 3.2 and 3.3.
4. CLOSING; CLOSING DATE.
4.1 DATE AND TIME. The purchase and sale contemplated by
this Agreement (the "Closing") will take place at the offices of Thompson, Hine
and Flory, 1100 National City Bank Building, Cleveland, Ohio, at 10:00 a.m.
Eastern time, on or about May 26, 1994, or at such other place and time as the
parties may agree. Such date is herein referred to as the "Closing Date."
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4.2 DELIVERIES BY SELLER. If, on or by the Closing Date,
all of the conditions specified in Section 9 have been fulfilled or are waived
by Buyer, and all of the conditions specified in Section 10 have been fulfilled
or are waived by Seller, then, on the Closing Date, Seller will execute and
deliver to Buyer, against delivery of the Purchase Price payable at Closing and
assumption by the Buyer of the Assumed Liabilities, the following documents and
instruments of transfer:
(a) Good standing certificate for Seller, dated not more
than 30 days before the Closing Date, issued by the Secretary of State
of the State of Ohio.
(b) Good standing certificate for Seller, dated not more
than 30 days before the Closing Date, issued by the Secretary of State
of Wisconsin.
(c) Copy of Articles of Incorporation of Seller,
certified by the Secretary of State of the State of Ohio not more than
30 days before the Closing Date.
(d) Copy of Regulations of Seller.
(e) Copy of resolutions of the Board of Directors of
Seller authorizing the sale of the Transferred Assets, execution of
this Agreement, the Cleveland Lease, the Environmental Agreement and
the transactions contemplated hereby and thereby.
(f) A certificate in the name of Seller, dated the
Closing Date and executed by a duly authorized officer, certifying (i)
to the signature and office of each individual executing documents on
behalf of Seller and (ii) that the copies of the Articles of
Incorporation, Regulations and resolutions of Seller delivered
pursuant to items (c), (d) and (e) of this Section 4.2 are true and
correct and in full force and effect on the Closing Date.
(g) Certificate in the name of Seller, dated the Closing
Date, and executed by a duly authorized officer certifying the
fulfillment of the conditions stipulated in Sections 9.1, 9.2, 9.3 and
9.4.
(h) Mark-ups of the Title Commitments indicating the form
in which Title Company proposes to issue the Title Policies.
(i) General Assignment and Bill of Sale, executed by
Seller and dated the Closing Date, in the form of Exhibit G attached
hereto.
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(j) Assumption Agreement, executed by Seller and dated
the Closing Date, in the form of Exhibit H attached hereto.
(k) Assignment and Assumption of Benefit Plans.
(l) Assignments of Patents in form recordable in the
patent office of each country of issuance.
(m) Assignment of Trade Name Form.
(n) Cleveland Lease, executed by Seller and dated the
Closing Date, in the form of Exhibit A attached hereto.
(o) State of Ohio Department of Taxation Sales and Use
Tax Unit Exemption Certificate.
(p) Appropriate Receipts.
4.3 DELIVERIES BY BUYER. If, on the Closing Date, the
conditions specified by Section 9 have been fulfilled or waived by Buyer and
Seller as set forth in Section 4.2, then Buyer will execute and deliver to
Seller, against delivery of the Transferred Assets, the following documents:
(a) Good standing certificate as to the existence of
Buyer, dated not more than 30 days before the Closing Date, issued by
the Secretary of State of the State of Ohio.
(b) Good standing certificate for Buyer dated not more
than 30 days before the Closing Date, issued by the Secretary of State
of the State of Wisconsin.
(c) Copy of Articles of Incorporation of Buyer, dated not
more than 30 days before the Closing Date, certified by the Secretary
of State of the State of Ohio.
(d) Copy of Regulations of Buyer.
(e) Copy of resolutions of Board of Directors of Buyer
authorizing the purchase of the Transferred Assets, the execution of
this Agreement, the Cleveland Lease, the Environmental Agreement, and
the transactions contemplated hereby and thereby.
(f) A certificate in the name of Buyer, dated the Closing
Date and executed by a duly authorized officer, certifying (i) to the
signature and office of each individual executing documents on behalf
of Buyer and (ii) that the copies of the Articles of Incorporation,
Regulations and resolutions of Buyer delivered pursuant to items (c),
(d) and (e) of this Section 4.3 are true
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and correct and in full force and effect on the Closing Date.
(g) Certificate in the name of Buyer executed by any duly
authorized officer and dated the Closing Date certifying the
fulfillment of conditions stipulated in Sections 10.1, 10.2 and 10.3.
(h) Assumption Agreement, executed by Buyer and dated the
Closing Date, in the form of Exhibit H hereto.
(i) Assignment and Assumption of Benefit Plans.
(j) Cleveland Lease, executed by Buyer and dated the
Closing Date, in the form of Exhibit A hereto.
(k) Appropriate Receipts.
4.4 FILING OF DOCUMENTS FOR CLOSING. The following
documents shall be provided by Seller or Buyer, as indicated, to the Title
Company for filing at the appropriate location(s) in connection with the
Closing; all such documents shall be deemed delivered at the Closing and shall
be filed on the Closing Date to the extent required by law or to perfect a
security or other interest of Buyer or Seller, or otherwise as promptly
thereafter as possible:
(a) Memorandum of Lease for the Cleveland Lease, to be
signed and acknowledged by Seller and Buyer, and filed with the
Cuyahoga County Recorder, Cleveland, Ohio (the "Cuyahoga County
Recorder");
(b) In the event that the Metlife Capital Corporation
mortgage on the Janesville Plant has not been subordinated to
the Janesville Lease, an Estoppel Certificate and Consent to
Assignment to be executed by Metlife Capital Corporation and
by the Janesville Lessor, in form and substance reasonably
satisfactory to Buyer, and to be filed with the Register of
Deeds of Rock County, Wisconsin (the "Rock County Register");
(c) Estoppel, Non-Disturbance, Subordination and
Attornment Agreement (the "GECC Consent") to be signed by
General Electric Capital Corporation ("GECC"), Buyer and
Seller, in form and substance reasonably satisfactory to
Buyer, and filed with the Cuyahoga County Recorder;
(d) Termination Statements on Form UCC-7 with respect to
all security interests of record of GECC in the Transferred
Assets wherever located; and
(e) the Janesville Lease Assignment, to be filed with the
Rock County Register.
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4.5 POSSESSION. Possession of all of the Transferred
Assets will be delivered to Buyer at the time of Closing and the Cleveland
Lease and the assignment to Buyer of the Janesville Lease and the Transferred
Contracts will be effective as between Seller and Buyer at the time of Closing.
To the extent that the assignment of the Janesville Lease, or any Transferred
Contract, permit, or license to be assigned or transferred to Buyer under this
Agreement shall require the consent of any other party or shall be subject to
any option in favor of any third person by reason of any transfer to Buyer,
this Agreement shall not constitute a contract to assign if an attempted
assignment would (i) constitute a breach thereof, or (ii) create rights in
others not desired by Buyer, or (iii) create rights in third parties against
Seller. Seller shall use all reasonable efforts, and Buyer shall cooperate
where appropriate, to obtain consent to any such assignment. If any such
consent other than the Indispensable Consents is not obtained, Seller shall
cooperate with Buyer in any commercially reasonable arrangement reasonably
requested by Buyer (which shall not require the payment of any money by Seller)
designed to provide for Buyer the benefit, monetary or otherwise, of any such
contract, agreement, permit, or license, including enforcement of any and all
rights of Seller against the other party thereto arising out of breach or
cancellation thereof by such other party or otherwise. Notwithstanding the
foregoing, nothing contained in this paragraph shall limit the Buyer's right to
require the delivery at the Closing of the Indispensable Consents, as
identified in Schedule 7.5.
5. REPRESENTATIONS, WARRANTIES, AND AGREEMENTS BY
SELLER. Seller represents and warrants to Buyer as
follows:
5.1 ORGANIZATION; STANDING; CORPORATE POWER. Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of Ohio and has all requisite corporate power to carry on its business as
now conducted. Seller has no subsidiaries that are engaged, in any respect, in
the Business. Seller is duly qualified to do business as a foreign corporation
and is in good standing in Wisconsin and is not required to be so qualified in
any other jurisdiction in connection with the Business or the Transferred
Assets. No provision of the articles of incorporation or regulations (or
similar charter documents) of Seller, or of any agreement to which Seller is a
party or by which it is bound, restricts, limits, or affects the transactions
contemplated by this Agreement, the Cleveland Lease or the Environmental
Agreement, dated the date hereof, by and between Seller and Buyer (the
"Environmental Agreement"), or the consummation thereof.
5.2 AUTHORIZATION. The Board of Directors of Seller has
approved the execution, delivery and performance of this Agreement, the
Cleveland Lease, the Janesville Lease Assignment and the Environmental
Agreement. Seller has all requisite corporate power and authority to execute
and deliver this Agreement, the Cleveland Lease, the Janesville Lease
Assignment, the Environmental Agreement
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and the other instruments for which provision is made herein and to perform its
obligations under this Agreement, the Cleveland Lease, the Janesville Lease
Assignment, the Environmental Agreement and the other instruments. Upon
execution and delivery by Seller (assuming due execution and delivery by the
other parties), this Agreement, the Cleveland Lease, the Janesville Lease
Assignment, the Environmental Agreement and the other instruments will
constitute valid and binding obligations of Seller. No approval of the
shareholders of Seller is necessary for the execution, delivery or performance
of this Agreement, the Cleveland Lease, the Janesville Lease Assignment or the
Environmental Agreement.
5.3 FINANCIAL STATEMENTS. The document entitled
"MSP-Lamson `Deal Balance Sheet' Mar. 26, 1994" and dated "04/26/94 06:38 P.M."
consisting of the unaudited interim balance sheet of the Business as of March
26, 1994 under the heading "Mar. 94 Balance" (the "Divisional Balance Sheet")
and the Pricing Balance Sheet, as defined in Section 3, under the heading
"Buyer to Acquire" has heretofore been provided by Seller to Buyer and is
attached hereto as Schedule 5.3. The adjustments to the Divisional Balance
Sheet made to create the Pricing Balance Sheet are those necessary to remove
from the Divisional Balance Sheet the Excluded Assets and Excluded Liabilities.
Subject to such adjustments in the case of the Pricing Balance Sheet, the
Divisional Balance Sheet and the Pricing Balance Sheet have each been prepared
in accordance with United States generally accepted accounting principles
("GAAP") (except for the omission of any potential FAS 5 Contingency and except
for the omission of footnotes) applied on a consistent basis with prior periods
(except as otherwise disclosed to Buyer in writing) and present fairly the
financial position of Midland Steel as at such date and fairly set forth the
information purported to be shown therein, subject to normal year-end
adjustments, which in the aggregate are not material.
5.4 UNDISCLOSED LIABILITIES. To Seller's knowledge, the
Business does not have any liabilities, fixed or contingent, pending or
threatened against Seller, the Business or the Transferred Assets
(collectively, "Liabilities") other than:
(a) Liabilities fully shown or reserved against in the
Divisional Balance Sheet;
(b) Current liabilities, incurred in the ordinary course
of business consistent with prior practice by Seller since March 26,
1994;
(c) Obligations to be performed under the Leases and the
Transferred Contracts;
(d) Open purchase or sales orders or agreements for
delivery of goods and services in the ordinary course of business
consistent with prior practice which Seller is not in material default
thereunder;
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(e) Those described in other provisions of this
Agreement; and
(f) Those that are Assumed Liabilities or Excluded
Liabilities.
5.5 NO ADVERSE CHANGE. Since March 26, 1994, except as
set forth on Schedule 5.5 hereof, there has not occurred:
(a) Any material adverse change in the assets,
liabilities, or financial position and results, or operating
performance, of the Business;
(b) Any damage, destruction, or casualty, to property
owned or used by Seller, whether or not covered by insurance, having a
material adverse effect on the Business; or
(c) Any labor dispute or employee action, materially and
adversely affecting the financial position or operations of the
Business.
5.6 REAL PROPERTY.
(a) Seller has fee simple title to the Cleveland Plant.
To the best of Seller's knowledge, Seller holds such title free and
clear of all mortgages, security interests, title defects, pledges,
liens (including, without limitation, mechanics' and/or materialmen's
liens), charges, encumbrances, easements, and rights-of-way
(collectively, "Title Defects") other than (i) taxes and assessments,
both general and special, which are a lien but not yet due and
payable, (ii) zoning ordinances of the City of Cleveland, and (iii)
the specific exceptions identified in the List of Permitted Exceptions
attached hereto as Schedule 5.6A (collectively, the "Permitted
Exceptions"). The Permitted Exceptions do not, individually or in the
aggregate, materially detract from the value of the Cleveland Plant or
materially impair the use of the Cleveland Plant in the Business as
presently and ordinarily conducted. No third parties have any rights
to use or occupy any of the Cleveland Plant, whether as tenants,
subtenants, holders of easements or licenses, or otherwise other than
any such rights arising under the Permitted Exceptions. There are no
easements, conditions, reservations, covenants, restrictions or any
other matters presently of record that adversely affect the use of the
Cleveland Plant in the Business as presently conducted. To the
knowledge of Seller, there is no proposed curtailment of any utility
service to the Cleveland Plant. To the knowledge of Seller, there are
no material latent defects in any of the structures located on the
Cleveland Plant. Seller has not received any written notice, and
otherwise has no
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knowledge, that the use of the Cleveland Plant by Seller in the
Business as presently conducted does not conform with all applicable
zoning laws, regulations, and permits. Seller has not received any
written notice, and otherwise has no knowledge, of any (x) zoning
changes pending or threatened that would prohibit the use of any of
the Cleveland Plant in the Business, (y) condemnation, eminent domain,
or other legal or equitable proceedings pending or threatened with
respect to the Cleveland Plant, or (z) plans by any public authority
to install any improvements the cost of which might, in full or in
part, be assessed against Seller.
(b) LEASED REAL PROPERTY. Seller is not the tenant under
any lease of real property in connection with the Business other than
the Leased Real Property. Seller has a valid and subsisting leasehold
interest as to the Leased Real Property. Such leasehold interest is,
to Seller's knowledge, free and clear of all Title Defects created by
Seller other than (i) taxes and assessments, both general and special,
which are a lien but not yet due and payable, (ii) zoning ordinances
of the City of Janesville, and (iii) the specific exceptions
identified in the List of Leasehold Permitted Exceptions attached
hereto as Schedule 5.6B (collectively, the "Leasehold Permitted
Exceptions"). The Leasehold Permitted Exceptions do not, individually
or in the aggregate, materially detract from the value of the Leased
Real Property or materially impair the use and operation thereof in
carrying on the Business as presently and ordinarily conducted. No
third parties have any rights to use or occupy any of the Leased Real
Property, whether as tenants, subtenants, holders of easements or
licenses, or otherwise other than any such rights arising under the
Leasehold Permitted Exceptions. There are no easements, conditions,
reservations, covenants, restrictions, or any other matters presently
of record or otherwise that adversely affect the use of the Leased
Real Property in the Business as presently conducted. To the
knowledge of Seller, there are no material latent defects in any of
the structures located on the Leased Real Property. Seller has not
received any written notice, and otherwise has no knowledge, that the
use of the Leased Real Property by Seller in the Business as presently
conducted does not conform with all applicable zoning laws,
regulations, and permits. Seller has not received any written notice,
and otherwise has no knowledge, of any (x) zoning changes pending or
threatened that would prohibit the use of any of the Leased Real
Property in the Business, (y) condemnation, eminent domain, or other
legal or equitable proceedings are pending or threatened with respect
to the Leased Real Property, or (z) plans by any public authority to
install, any improvements the
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cost of which might, in full or in part, be assessed against Seller.
(c) TERMS OF JANESVILLE LEASE. The Janesville Lease is
in full force and effect. Seller has heretofore provided to Buyer a
complete, true, and correct copy of the Janesville Lease, including
any and all modifications or amendments thereof and any supplements
thereto. All material terms, conditions, and provisions of the
Janesville Lease on the part of Seller and, to Seller's knowledge, of
the Janesville Lessor, to be performed have been performed. There is,
to Seller's knowledge, no default on the part of the Janesville Lessor
and no event has occurred or failed to occur which with the giving of
notice, the passage of time, or both, would constitute a material
default by Seller or, to Seller's knowledge, by the Janesville Lessor
under the Janesville Lease. The Janesville Lessor has not waived, or
extended the time for the performance of, any obligation of Seller
under the Janesville Lease. All rent due under the Janesville Lease
has been paid in full through the date of this Agreement. There are
no security deposits or prepaid rent (including last month's rent in
advance) with respect to the Leased Real Property.
5.7 TAX MATTERS. Seller has filed all tax returns and
tax reports required to be filed by Seller prior to the date of this Agreement
with respect to the Business, including, without limitation, any returns and
reports pertaining to income taxes, excise taxes, sales and use taxes, payroll
taxes, property taxes and franchise taxes, and all taxes, interest, and
penalties shown to be due thereon have been paid or shall be paid when required
by law.
5.8 TRANSFERRED ASSETS. On the Closing Date Seller will
convey to Buyer good title to the tangible Transferred Assets free and clear of
all mortgages, security interests, title defects, pledges, liens, charges and
encumbrances of any kind or description, including any conditional sale or
other title retention agreements, and will have full power and authority to
convey, assign and transfer such title to all the Transferred Assets to Buyer,
in each case except as otherwise described on the List of Encumbrances attached
hereto as Schedule 5.8 or included within the Permitted Exceptions or the
Leasehold Permitted Exceptions. To the best of Seller's knowledge, the
tangible Transferred Assets have been properly maintained and are, and on the
Closing Date will be, in sufficiently good condition and repair to permit the
operation of the Business after the Closing Date in the same manner in all
material respects as the Business was operated prior to the Closing Date. No
affiliate of Seller or other person or entity owns, or has any other interest
in, any of the Transferred Assets.
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5.9 PATENTS, TRADE NAMES, ETC. Schedule 1.1(h) contains
a complete list or description of all registered trademarks, trade names and
patents owned, applied for or used or otherwise held by Seller for use directly
in the Business. Seller owns or possesses and, as of the Closing Date, will
transfer to Buyer, all registered trademarks, trade names, patents, patent
applications, trade secrets, formulae, production outlines, computer programs,
product development records and other proprietary information used by Seller
directly in the Business. To the best of Seller's knowledge, neither the
operation of the Business nor the products sold by Seller infringe upon the
proprietary rights of others. Seller has not received any written notice
alleging that it has infringed on any other party's intellectual property
rights in the conduct of the Business nor challenging the validity in any
respect of its ownership or use of any such item or items of intellectual
property. To the best of Seller's knowledge, none of the Intellectual Property
which, individually or in the aggregate, is material to the Business, the value
of which to Seller is contingent upon maintenance of the confidentiality
thereof, has been disclosed by Seller to any person other than employees,
representatives and agents of Seller, except pursuant to written non-disclosure
agreements.
5.10 CONTRACTS AND COMMITMENTS. The Contracts List
attached as Schedule 5.10 is a complete and accurate list of all material
contracts, agreements, and commitments directly relating to the Business to
which Seller is a party or by which it is bound, including, without limitation,
all supplier contracts, rebate arrangements, and consignment or inventory
arrangements. Except for contracts, agreements, and commitments identified on
the Transferred Contracts List, Seller is not a party to or bound by any of the
following that relate directly to the Business, whether oral or written:
(a) Contract, agreement or commitment for employment or
personal services or any severance agreement or arrangement that is
not terminable, without liability or expense, by Seller on 30 days' or
less notice;
(b) Dealer's, distributor, sales agency, or brokerage
agreement;
(c) Contract, agreement, or commitment involving a total
cost to Seller in excess of $5,000 for capital expenditures or for the
maintenance, repair, security or cleaning of either Plant or any fixed
assets, grounds, or other property used in the Business;
(d) Contract not made in the ordinary course of business;
(e) Rebate arrangement or other similar agreement given
to any customer or received from any supplier; or
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(f) Consignment, inventory, or similar contract with
either a supplier or a customer.
Except as disclosed on the Contracts List, Seller has in all material respects
performed and is performing all obligations required to be performed by it, and
neither Seller nor to the best of Seller's knowledge any other party thereto,
is in default in any material respect, under any contract, agreement, or
commitment relating to the Business to which any of them are parties. Seller
has not received any notice of default under any such contract, agreement, or
commitment, nor has any event occurred which with notice or lapse of time or
both would constitute a default by Seller thereunder. None of such contracts,
agreements, or commitments is subject to any impending cancellation or breach.
All contracts are fully assignable by Seller to Buyer without notice to or
consent of the other party except as specified in Contracts List attached
hereto as Schedule 5.10.
5.11 INVENTORY. All of the Inventory was acquired by
Seller in the ordinary course of the Business. The Inventory Location List
attached hereto as Schedule 5.11 identifies all of the locations of the
Inventory.
5.12 PERMITS AND LICENSES; COMPLIANCE WITH LAWS. Except
as identified on the Permit List attached hereto as Schedule 1.1(f), Seller
does not hold any permits, licenses, or other governmental authorizations
material to or, to Seller's knowledge, required for the operation of the
Business as presently conducted or to the ownership of the Transferred Assets.
To the best of Seller's knowledge, the ownership of the Transferred Assets by
Seller and the operation of the Business as presently conducted are in
compliance in all material respects with applicable orders, laws, ordinances,
codes, or regulations, including but not limited to those relating to
protection of the environment, civil rights, equal employment opportunity,
occupational health and safety, interstate commerce, antitrust, trading with
the enemy, and zoning, building, and use requirements, including, without
limitation, the Americans With Disabilities Act (the "ADA") and the OSHA Hazard
Communication Standard and related Material Safety Data Sheet Compliance. To
the best of Seller's knowledge, no investigation is pending concerning any such
matter, and Seller has not received any notice of any such violation.
5.13 EMPLOYEE BENEFITS.
(a) Seller has heretofore provided to Buyer an Employee
Benefits List attached hereto as Schedule 5.13, which identifies each
agreement, plan, or arrangement for employee benefits, including any
bonus, deferred compensation, severance, disability, sick pay, salary
continuation, death benefit, vacation, stock purchase or stock option,
hospitalization or other medical, life, or other insurance,
supplemental unemployment benefit, profit-sharing, pension, or
retirement plan or
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arrangement maintained or contributed to by Seller in connection with
the Business (the "Benefit Plans"). Except as identified in the
Employee Benefit List, none of the Benefit Plans is an "employee
pension benefit plan" as defined in Section 3(2) of ERISA.
(b) To the best of Seller's knowledge, all of the Benefit
Plans and related trusts are in form and have been administered in
compliance in all material respects with all applicable laws,
including ERISA and the Code; none of the Benefit Plans or related
trusts, or any administrator or trustee thereof, or party-in-interest
or disqualified person thereto has engaged in a transaction that could
subject Buyer to any liability for or with respect to a civil penalty
under Section 409 or 502(i) or other section of ERISA or a tax under
Section 4975 or 4976 or other section of Chapter 43 of Subtitle D of
the Code; all amounts required to be paid by Seller to or pursuant to
each of the Benefit Plans or related trusts on or before the date of
this Agreement have been paid; no employee pension benefit plan has
incurred any "accumulated funding deficiency," as defined in Section
412 of the Code; no "reportable event" within the meaning of Title IV
of ERISA which is required to be reported to the Pension Benefit
Guaranty Corporation ("PBGC") has occurred with respect to any Benefit
Plan subject thereto. No employees of Seller employed directly in
connection with the Business participate in any "multi-employer
pension plan" within the meaning of the Multi-employer Pension Plan
Amendments Act of 1980, as amended. Neither Seller nor an ERISA
Affiliate, nor any of their respective directors, officers, employees,
or fiduciaries, has committed any breach of fiduciary responsibility
imposed by ERISA or any other applicable law that would subject Buyer
to liability under ERISA or any other applicable law, contract,
agreement, or commitment. The PBGC has not instituted proceedings to
terminate any Benefit Plan that covers employees of the Business, and
no condition exists that presents a material risk that such
proceedings will be instituted. Except as disclosed in the Employee
Benefit List, no Benefit Plan provides benefits, including without
limitation death or medical benefits (whether or not insured), with
respect to current or former employees of the Business beyond their
retirement or other termination of service (other than (i) coverage
mandated by applicable law, (ii) death benefits or retirement benefits
under any "employee pension benefit plan," as that term is defined in
Section 3(2) of ERISA, (iii) deferred compensation accrued on the
books of Seller or (iv) benefits the full cost of which is borne by
the current or former employee (or his or her beneficiary)). If a
Benefit Plan is designed to satisfy the requirements of Section 125,
Section 401,
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Section 401(k), Section 409, Section 501(c)(9), Section 4975(e)(7),
and/or Section 4980B of the Code, the Benefit Plan satisfies such
section.
(c) Seller has heretofore made available to Buyer true
and correct copies of all of the Benefit Plans, the most recent
determination letters from the Internal Revenue Service with respect
thereto, the most recent annual reports (Form 5500 and the schedules
thereto), the most recent summary plan descriptions, and the most
recent actuarial valuations.
(d) The Employee Benefits List identifies (i) each
inactive or former employee of Midland Steel who is on layoff or
disability or any other leave, (ii) each former employee of Midland
Steel who has any right under the Local 486 Agreement (as defined in
Section 8.2) to return to work at Midland Steel, (iii) each former
employee of Midland Steel who has retired from Midland Steel since
January 1, 1993, and who was covered under the Local 486 Agreement at
the time of retirement, and (iv) each present salaried employee of
Midland Steel who is now eligible to retire.
5.14 LABOR MATTERS.
(a) The Labor Matters List attached hereto as Schedule
5.14 identifies each collective bargaining agreement to which Seller
is a party, each of which is on the date of the Agreement in full
force and effect and binding upon Seller and, to the best of Seller's
knowledge, the respective other parties thereto.
(b) Except as set forth on the Labor Matters List, in
connection with the operations of the Business, to the best of
Seller's knowledge, Seller is in full compliance with all Federal and
state laws respecting employment and employment practices (including
the ADA and the Family and Medical Leave Act), terms and conditions of
employment, wages and hours, and nondiscrimination in employment, and
is not engaged in any unfair labor practice. There are no pending
labor grievances, arbitration cases, or pending civil rights and equal
employment opportunity charges against Seller, or any settlements,
consent orders, or prior decrees of any court or governmental body
requiring any continued observance by Seller in connection with the
operations of the Business except as set forth and as described on the
Labor Matters List. There have not been any work stoppages, strikes,
or other significant labor troubles at the location or operations of
the Business other than as specified on the Labor Matters List.
Seller has no pending written labor grievances or arbitration cases
relating to the Business except as set forth and
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described on the Labor Matters List. To the best of Seller's
knowledge, and except as set forth on the Labor Matters List, no
complaint or charge has been filed with the National Labor Relations
Board with respect to Seller alleging any unfair labor practices,
there are no grievances, charges, complaints or arbitration cases
threatened against Seller or concerning the operations of the
Business, and Seller has not received any notice of any such
grievances, charges, complaints or arbitration cases.
(c) Seller is not a party to, or subject to any
obligation, liability, or commitment with respect to any written or
oral employment, compensation, bonus, consulting, severance pay, or
similar agreement relating directly to the Business other than the
agreements referred to and described on the Contracts List or the
Employee Benefits List.
5.15 NO LEGAL VIOLATIONS; GOVERNMENTAL CONSENTS.
(a) The execution and delivery by Seller of this
Agreement and the other agreements contemplated hereby to be entered
into by Seller and the consummation by Seller of the transactions
contemplated hereby and thereby (i) are not prohibited by, do not
violate any provision of, and will not result in the breach of, or
accelerate or permit the acceleration of the performance required by
the terms of, (A) any applicable law, rule, regulation, or any order,
writ, injunction, or decree of any court or governmental authority of
the United States or any State thereof, including any authority,
department, commission, board, bureau, agency, or instrumentality of
either of the foregoing, in a manner which would have a material
adverse effect on the Business, (B) the Articles of Incorporation and
Regulations of Seller or (C) any material contract, indenture,
agreement or commitment relating to the Business to which Seller is a
party or is bound in a manner which would have a material adverse
effect on the Business, and (ii) have not resulted and will not result
in the creation or imposition by, through, or under Seller of any
lien, encroachment, easement, encumbrance, mortgage, hypothecation,
equity, charge, restriction, possibility of reversion, or other
similar conflicting ownership or security interest upon any of the
Transferred Assets.
(b) Except for the filing and expiration or earlier
termination of the applicable waiting periods prescribed by the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the
regulations promulgated thereunder (the "HSR Act"), no consent,
approval, authorization, notice or order of any governmental agency or
body of the United States or any state or instrumentality thereof is
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required for the execution and delivery by Seller of this Agreement
and the agreements contemplated hereby to be signed by Seller and the
consummation by Seller of the transactions contemplated hereby and
thereby, the absence of which would have a material adverse effect on
the Business.
5.16 NO PENDING OR THREATENED LITIGATION AND CLAIMS.
Except as disclosed on the Litigation and Claims List attached hereto as
Schedule 5.16, there is no litigation, suit, proceeding, action, claim,
counterclaim, charge, grievance or investigation pending or, to the best of
Seller's knowledge, threatened, against Seller relating to or affecting the
Business or involving any Transferred Assets or the transactions contemplated
by this Agreement, before any court, governmental agency or other tribunal.
5.17 OPERATION OF THE BUSINESS. Except as set forth on
the Government Notice List attached hereto as Schedule 5.17, Seller has not
received during the immediately preceding twelve month period prior to the date
hereof a written notice or citation from a governmental agency or authority
asserting that the operation of the Business fails to comply in any material
respect with the requirements of applicable laws and regulations of Federal,
state, or local government authorities.
5.18 PRODUCT WARRANTY. The Product Warranty List attached
hereto as Schedule 5.18 contains an accurate, correct, and complete list of all
written warranties, warranty policies, service and maintenance agreements of
the Business granted or issued since January 1, 1991. The product warranty and
return experience for the 15 months ended March 26, 1994, is set forth on the
Product Warranty List. Except as set forth on the Product Warranty List, since
January 1, 1991, no product warranty or similar claims have been made in
writing or, to Seller's knowledge, threatened in connection with the Business.
5.19 PRODUCT LIABILITY. Except as set forth on the
Product Liability List attached hereto as Schedule 5.19, since January 1, 1991,
the Seller has not received written notice or information, and otherwise has no
knowledge, as to any pending or asserted claim or allegation of personal death
or material personal injury, property or economic damage, claim for punitive or
exemplary damages, claim for contribution or indemnification, or any claim for
injunctive relief in connection with any product manufactured, sold or
distributed in connection with the Business or any service provided in
connection with the Business, except for warranty claims.
5.20 FINDERS. No finder or broker has acted on behalf of
Seller in connection with the transactions contemplated by this Agreement other
than Peers & Co., all of whose fees and expenses shall be paid by Seller.
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5.21 BUYER'S ABILITY TO OPERATE THE BUSINESS. Upon the
lease to Buyer of the Cleveland Plant pursuant to the Cleveland Lease and the
sale to Buyer of the Transferred Assets and assumption by Buyer of the Assumed
Liabilities hereunder, and subject only to the effect of the Excluded Assets,
Buyer shall have received from Seller all the machinery and equipment,
inventory, contracts, permits, intellectual property, leasehold interests,
books and records, hardware and software, and other assets and rights necessary
for Buyer to conduct the Business as the Business is presently conducted by
Seller.
5.22 DISCLAIMER. EXCEPT AS OTHERWISE STATED IN SECTION 1
OR SECTION 5 OF, OR IN THE RELATED SCHEDULES TO, THIS AGREEMENT, SELLER MAKES
NO REPRESENTATION OR WARRANTY RELATING TO, THE PHYSICAL CONDITION OR UTILITY OF
THE TRANSFERRED ASSETS, ALL OF WHICH ARE TO BE SOLD "AS IS - WHERE IS," AND
SELLER DISCLAIMS ALL IMPLIED WARRANTIES INCLUDING, BUT NOT LIMITED TO, IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
6. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer
represents and warrants to Seller as follows:
6.1 CORPORATE EXISTENCE. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Ohio and has all requisite corporate power and authority to own or to hold
under lease the rights, properties and assets it will acquire pursuant to this
Agreement and the other agreements contemplated hereby to be entered into by
Buyer and to carry on the Business upon the consummation of the Closing.
6.2 CORPORATE POWER; DUE AUTHORIZATION. Buyer has all
necessary corporate power and authority under its Articles of Incorporation and
Regulations to execute, deliver and perform this Agreement and each of the
other agreements contemplated hereby to be entered into by Buyer. The
execution, delivery and performance of this Agreement, the Cleveland Lease, the
Environmental Agreement and each of the other agreements contemplated hereby to
be entered into by Buyer have been duly authorized by all necessary corporate
action on the part of Buyer. This Agreement is, and the other agreements
contemplated hereby to be entered into by Buyer are, or upon their execution
and delivery will be, the valid and binding obligations of Buyer.
6.3 NON-VIOLATION. The execution and delivery by Buyer
of this Agreement, the Cleveland Lease, the Environmental Agreement and the
other agreements contemplated hereby to be entered into by Buyer and the
consummation by Buyer of the transactions contemplated hereby and thereby are
not prohibited by, do not violate any provision of, and will not result in the
breach of, or accelerate or permit the acceleration of the performance required
by the terms of, (i) any applicable law, rule, regulation or any order, writ,
injunction or decree of any court or governmental authority of the United
States or any State thereof, including any authority, department, commission,
board, bureau, agency or
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instrumentality of either of the foregoing, in a manner which would have a
material adverse effect on the ability of Buyer to perform its obligations
hereunder or thereunder, (ii) the Articles of Incorporation or Regulations of
Buyer, or (iii) any material contract, indenture, agreement or commitment to
which Buyer is a party or bound.
6.4 NO GOVERNMENTAL CONSENT REQUIRED. Except for the
filing and expiration or earlier termination of the applicable waiting periods
prescribed by the HSR Act, no consent, approval, authorization or order of any
governmental agency or body of the United States or any state or
instrumentality thereof is required for the execution and delivery by Buyer of
this Agreement and the other agreements contemplated hereby to be entered into
by Buyer and the consummation by Buyer of the transactions contemplated hereby
and thereby, the absence of which would have a material adverse effect on the
ability of Buyer to perform its obligations under this Agreement or the other
agreements contemplated hereby.
6.5 FINDERS. Neither Buyer nor any of its directors,
executive officers or authorized representatives has taken any action that,
directly or indirectly, would obligate Seller to anyone acting as a broker,
finder, financial advisor or in any similar capacity in connection with this
Agreement or any of the transactions contemplated hereby.
7. COVENANTS BY SELLER. From the date of this Agreement
until the Closing Date, Seller will undertake to do the following:
7.1 CONDUCT THE BUSINESS TO THE CLOSING DATE.
(a) OPERATE THE BUSINESS. Seller shall carry on the
Business in the ordinary course and will use all commercially
reasonable efforts to preserve and promote the Business and the good
will of the officers, employees, customers, suppliers of the Business.
In particular, Seller shall not cause, incur or permit with respect to
the Business:
(i) Any increase in any rate of compensation of any
employees or agents, or any changes in the cost
or benefits under any bonus, insurance, pension,
welfare or other employee benefit plan except for
changes in the ordinary course of the Business,
none of which shall individually or in the
aggregate be material;
(ii) Any waiver or release of any rights relating
directly to the Business of material value;
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(iii) Any cancellation or compromise of any of
receivables or claims of the Business against
others other than in the ordinary course of
business;
(iv) Any transfer or grant of any material rights
relating to the Intellectual Property;
(v) Any purchases of inventory other than in the
ordinary course of business; or
(vi) Any default in the payment of any indebtedness
or in the performance of any contracts or
obligations or in the filing of any returns or
reports required by any governmental agency or
in the making of any disclosure to employees
required in connection with any employee benefit
plan whether by law or by the terms of the plan,
unless such default would not have a material and
adverse effect on the Business.
(b) MAINTAIN ASSETS. Seller will use all commercially
reasonable efforts to maintain the Transferred Assets in as good
repair, working order and condition substantially as exists on the
date of this Agreement, and will not purchase, sell, lease or
otherwise dispose of such assets without the prior written consent of
Buyer, other than in the ordinary course of business.
(c) CONTRACTS. Seller will not amend, supplement or
terminate the contracts, agreements and commitments, if any,
identified on the Contracts List, nor will it enter into any contract,
agreement, or commitment that would be listed on an updated Contracts
List, or incur a material liability, except in the ordinary course of
business, without receiving the prior written consent of Buyer.
(d) MAINTAIN BOOKS OF ACCOUNT. Seller will maintain the
books of account and records of the Business in the ordinary course
and will file when due all tax returns and tax reports required to be
filed by Seller, and pay when due all taxes, interest and penalties
shown to be due thereon, with respect to the Business.
(e) COMPLY WITH LAW. Seller will comply in all material
respects with all laws applicable to the Business or contest in good
faith, upon the advice of counsel, any alleged failure to comply with
any such laws.
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7.2 MAINTAIN INSURANCE. Maintain its insurance in full
force and effect, with policy limits and scope of coverage not materially less
than is now provided by its present insurance.
7.3 ADVISE BUYER OF ADVERSE CHANGE. Promptly advise
Buyer of the occurrence of any event or condition that materially and adversely
affects the Transferred Assets or the conduct of the Business or the imposition
of any lien, pledge or encumbrance on any of the Transferred Assets.
7.4 ACCESS FOR BUYER. Continue to provide Buyer's
officers, employees, agents, accountants, attorneys, engineers, and other
authorized representatives with reasonable access, during business hours and
consistent with the normal operation of Seller's business, to the locations
owned by it and to the documents, books, and records relating to the Business
to the extent necessary to enable Buyer or Buyer's representative to make a
thorough investigation of the Business, to make a physical examination of
Seller's assets, to conduct environmental and safety examinations, and to
examine its documents, books and records; provided, however, that Buyer's
employees, agents, and authorized representatives shall, until the Closing,
treat all such information as confidential and not divulge or make accessible
such information to any third party other than its lenders, counsel,
accountants, or agents in connection with the consummation of the transaction
contemplated herein, and, provided, further, if the parties hereto shall fail
to consummate the transactions contemplated hereby, Buyer shall (a) upon the
request of Seller, return all originals, copies, and summaries of such
information to Seller, and (b) continue to treat all such information as
confidential and not divulge such information to any third party. The
foregoing confidentiality and non-disclosure obligations shall not apply to
information that (i) at the time of Seller's disclosure is generally known to
the public or, after disclosure, becomes generally known to the public other
than by a breach of this Agreement; (ii) is already in Buyer's possession the
time Seller discloses the information to Buyer; (iii) is later received on a
non-confidential basis from a third party having the right to impart such
information; or (iv) is required to be disclosed by court or governmental
order.
7.5 THIRD-PARTY CONSENTS. Use its commercially
reasonable efforts to obtain all consents and approvals of third parties, if
any, required to permit the transactions contemplated by this Agreement,
including without limitation, the consents and approvals identified on the List
of Indispensable Consents attached hereto as Schedule 7.5.
7.6 COMPLIANCE WITH CONDITIONS. Use its commercially
reasonable efforts to cause the conditions set forth in Section 9 to be
satisfied on or prior to the Closing Date.
7.7 TRANSFER OF WARRANTIES. In the event that any of the
Transferred Assets is under any warranty from the manufacturer
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or the original seller thereof, Buyer will be entitled to the benefit of the
warranty to the extent that the warranty is available to a transferee, and
Seller will execute such instruments as may by required to transfer the
warranty to Buyer.
7.8 PROHIBITION ON SEEKING COMPETING OFFERS. From and
after the date hereof until the Closing Date, Seller agrees that it will
discontinue and refrain from any negotiations, discussions, or communications
with any persons or entities other than Buyer relating to the possible
acquisition of the Business by such persons or entities, whether by merger,
consolidation or the purchase of all or any substantial portion of the assets
of the Business. During such period, Seller will not solicit, directly or
indirectly, offers from any persons or entities other than Buyer relating to
the possible acquisition of the Business, and Seller will not provide to any
such persons or entities other than Buyer access to its properties, books,
records, financial statements, contracts and documents related to the Business.
7.9 STATE TAXES. Buyer shall pay any state of Ohio or
Wisconsin sales, business, franchise or other tax liabilities that may be
incurred as a result of the transaction contemplated herein. Seller hereby
agrees to fully comply with and cooperate with Buyer concerning filing any
reports, notices or other information with the states of Ohio and Wisconsin
prior to the Closing Date in accordance with applicable regulations and
statutes which may allow Buyer to insulate itself from any sales, business,
franchise, or other tax liabilities to be incurred after the Closing.
7.10 TITLE COMMITMENT; TITLE POLICY; DEFECTS.
(a) Seller, at Seller's cost and expense, shall cause
Lawyer's Title Insurance Corporation (the "Title Company") to issue
and deliver its commitments for issuance of: (i) ALTA leasehold
policies (Form B - revised 10/17/70 as to the Cleveland Lease and ALTA
Form 1992 as to the Janesville Lease) of title insurance covering the
Cleveland Lease (in the amount of $3,400,000) and the Janesville Lease
(in the amount of $1,800,000) (together, the "Leasehold Title
Commitments"). The Leasehold Title Commitments shall show the results
of a special tax search with respect to the premises demised by each
of the Cleveland Lease and the Janesville Lease. Two (2) copies of
the Leasehold Title Commitments, together with two (2) copies of each
document affecting the Cleveland Plant and the Janesville Lease, shall
be delivered to Buyer upon receipt thereof by Seller.
(b) In the event that the Survey (as hereinafter defined)
or title examination by the Title Company, at any time prior to
Closing, discloses any matter materially and adversely affecting the
Cleveland Lease or the leasehold interest created by the Janesville
Lease
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which is not included within the Permitted Exceptions or Leasehold
Permitted Exceptions or which has not theretofore been waived or
approved by Buyer in accordance with the provisions of this Section
7.10 (individually, a "Defect" and collectively, the "Defects"), Buyer
shall have the right, exercisable by written notice given to Seller
within ten (10) days after Buyer receives the applicable Leasehold
Title Commitment or Survey disclosing the existence of such Defect, to
approve or disapprove the Defect. If Buyer shall fail to disapprove
the Defect within the ten (10)-day period, Buyer shall be deemed to
have approved such Defect. In the event Buyer shall disapprove any
such Defect, as provided in this Section 7.10(b), Seller shall have
thirty (30) days from the date of Buyer's notice of disapproval in
which to seek to cause the disapproved Defect to be cured or removed
or to cause the Title Company to provide affirmative coverage with
respect thereto in form and substance acceptable to Buyer in its
reasonable discretion.
(c) If within the thirty (30)-day period (i) the
disapproved Defect is not cured or removed, (ii) the Title Company
does not agree to provide affirmative coverage with respect to the
disapproved Defect in form and substance acceptable to Buyer in its
reasonable discretion, and (iii) the disapproved Defect is not waived
in writing by Buyer, Buyer shall have the right, exercisable by notice
given to Seller within ten (10) days after the end of the thirty
(30)-day period, either: (A) to accept the Cleveland Lease or the
Janesville Lease subject to the Defect with no abatement of the rent
under the Cleveland Lease, the purchase price for the Cleveland Plant
set forth therein, or the purchase price for the Janesville Lease, and
with additional exceptions for such Defect shown in the Title Policy
referred to in Section 7.10(e) below, or (B) to terminate this
Agreement in accordance with Section 18. If Buyer shall fail to give
notice of its election to Seller within the ten (10)-day period, Buyer
shall be deemed to have elected (A) above. In the event of the
termination of this Agreement pursuant to this Section 7.10, neither
of the parties hereto shall be liable to the other hereunder and this
Agreement shall be null and void.
(d) Notwithstanding any provision of this Section 7.10 to
the contrary, Seller shall have the unconditional obligation, on or
prior to the Closing Date, to secure releases, discharges,
satisfactions or otherwise cure, at no cost to Buyer, any Defect which
is a lien for the payment of money only or any exception to title
which arose after the date of this Agreement solely as the result of
the act or volition of Seller.
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(e) It shall be a condition precedent to Buyer's
obligation to consummate the transaction contemplated hereby that the
Title Company can and will: (i) upon filing of the Cleveland Lease
and the Janesville Lease Assignment, or in either case, a memorandum
of lease or assignment of lease of record, issue its ALTA leasehold
policies (Form B - revised 10/17/70 as to the Cleveland Lease and ALTA
Form 1992 as to the Janesville Lease) of title insurance (the "Title
Policies") in the full amount set forth above, insuring Buyer as the
lessee of the Cleveland Plant and the Janesville Plant, respectively.
The Title Policies shall be subject only to the Permitted Exceptions
and Leasehold Permitted Exceptions, respectively, and any Defects
which Buyer approves or is deemed to have approved, waives, or accepts
or is deemed to have accepted pursuant to this Section 7.10, and shall
be without exception for the so-called standard printed exceptions
(rights or claims of parties in possession not shown by the public
records, encroachments, overlaps, boundary line disputes, or any other
matters which would be disclosed by an accurate survey or inspection
of the real property subject to the Cleveland Lease and the Janesville
Lease, easements or claims of easements not shown by the public
records, or any lien or right to a lien for services, labor, or
materials furnished to the Cleveland Plant or the Janesville Plant,
imposed by law, and not shown by the public records), unless and
except to the extent that any such matter included in the so-called
standard printed exceptions has been approved or waived by Buyer.
Seller agrees to execute and deliver to the Title Company such
affidavits and instruments as reasonably may be required to permit the
Title Company to issue Buyer's title evidence in the form required by
this subsection. Notwithstanding any provision of this Agreement to
the contrary, Seller's representations and warranties with respect to
its title to the Cleveland Plant and to its leasehold interest as to
the Leased Real Property set forth in Section 5.6 shall terminate and
be of no further force and Buyer can make no claim for breach thereof
after the delivery to Buyer of the Title Policies.
7.11 SURVEY. Prior to the Closing Date, Seller, at
Buyer's cost and expense, shall cause McSteen & Associates, Inc. (with respect
to the Cleveland Plant) and R. H. Batterman & Co., Inc. (with respect to the
Janesville Plant) to prepare and deliver to Buyer, Seller and the Title Company
surveys of the real property subject to the Cleveland Lease and the Janesville
Lease (the "Surveys") in form sufficient to enable the Title Company to delete
from the Title Policies the so-called standard printed exception for matters
disclosed by an accurate survey. If Buyer so requests, a perimeter legal
description prepared by McSteen & Associates, Inc. shall be used to describe
the real property subject to the Cleveland Lease. In the event either of the
Surveys discloses any
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encroachments, overlaps, boundary line disputes or any other matters materially
and adversely affecting title to the real property subject to the Cleveland
Lease or the Janesville Lease or which violates any law, rule, or regulation,
such matters(s), to the extent not included within the Permitted Exceptions or
Leasehold Permitted Exceptions, shall be considered to be a Defect(s) and the
relative rights and obligations of the parties with respect thereto shall be
governed by the provisions of Section 7.10.
8. COVENANTS OF BUYER. From the date of this Agreement
until the Closing Date, Buyer will:
8.1 COMPLIANCE WITH CONDITIONS; COOPERATION. Use its
best efforts to cause the conditions set forth in Section 9 to be satisfied on
or prior to the Closing Date, and take all commercially reasonable steps
reasonably requested by Seller to help secure the consents and approvals
referred to in Section 7.5.
8.2 TREATMENT OF EMPLOYEES AFTER CLOSING.
(a) COLLECTIVE BARGAINING AGREEMENTS. Buyer shall assume
the Agreement dated November 28, 1992 between Seller and the UAW,
Local 486 (the "Local 486 Agreement"), and the current Agreement
between Seller and the UAW, Local 95 Unit #10 (the "Janesville
Agreement") (collectively, the "Collective Bargaining Agreements") on
the Closing Date by a written assumption of such Collective Bargaining
Agreements, and shall take all action with respect thereto as may be
required thereunder or by applicable law, provided that authorized
representatives of the UAW shall have executed and delivered to Buyer
on the Closing Date the agreement of the UAW to the Local 486
Agreement with Buyer as the successor to Seller thereunder.
(i) Buyer will establish a qualified pension plan (the "Buyer
Hourly Pension Plan") that, in conjunction with the
benefits accrued under the Midland Steel Products Co.
Pension Plan for Cleveland Hourly Rated Maintenance and
Production Employees (the "Seller Hourly Pension Plan") as
of the Closing Date, will provide the pension benefits
required under the Local 486 Agreement. Seller shall amend
the Seller Hourly Pension Plan effective as of the Closing
Date to provide that (A) no participant therein who is an
active employee as of the Closing Date and who becomes an
employee of Buyer may retire and begin to receive his
pension thereunder until his employment with Buyer has
terminated and (B) except to the
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extent described in the preceding clause (A), service of
employees with Buyer following the Closing Date shall not
be counted for any purpose under the Seller Hourly Pension
Plan (including, without limitation, for purposes of
determining any employee's eligibility for early retirement
under the Seller Hourly Pension Plan).
(ii) In addition to the retiree medical and dental benefits
under The Midland Steel Products Co. Retiree Medical
Benefits Plan for Cleveland Plant Employees Represented by
Local No. 486 (the "Retiree Medical Benefits Plan"),
required by the Local 486 Agreement for employees who
retire after the Closing Date, Buyer will provide the
benefits required under the Retiree Medical Benefits Plan
for employees who shall have retired after December 31,
1992, and on or before the Closing Date ("Post-December 31,
1992 Retirees"), but only to the extent of premium
increases above the premium cost in effect on January 1,
1993, and only to the extent that funds are available from
the Midland Steel Products Co. Retiree Medical Benefit
Trust Agreement for Former Cleveland Plant Employees
Represented by Local No. 486 (the "Trust") to pay such
benefits. At the Closing, Buyer shall assume the Trust and
the obligation to make matching employer contributions to
the Trust. Buyer shall administer all benefits for the
Post-December 31, 1992 Retirees (including, without
limitation, by including the Post-December 31, 1992
Retirees in any applicable insurance coverages arranged by
the Buyer), but shall be entitled to receive the amounts
required from the Seller pursuant to Section 8.4(d) with
respect to Post-December 31, 1992 Retirees and shall have
no obligation to the Post-December 31, 1992 Retirees other
than the obligations described in this paragraph (ii) in
the event the Seller fails to perform its obligations with
respect to the Post-December 31, 1992 Retirees described in
Section 8.4(d).
(iii) Buyer shall assume as of the Closing Date Seller's
obligation to provide health care
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continuation coverage under Part 6 of Subtitle B of Title
I of ERISA ("COBRA Coverage") for former employees of the
Business who as of the Closing Date have the right under
the Local 486 Agreement to return to work.
(b) OFFERS TO SALARIED EMPLOYEES. For a period of 90
days following the Closing Date, Buyer shall use its best efforts to
make continued employment available to substantially all salaried
employees of the Seller as of the Closing Date whose services are
provided or offices are located at the Plants, including, for such
employees of Seller then on disability or any other leave, a
continuation of such leave (all such employees who are employed by
Buyer or who are on any such leave being the "Continuing Employees"),
at salaries and initially with benefits which are reasonably
comparable, within market conditions, individually and in the
aggregate to the salaries and benefits provided for and on behalf of
the Continuing Employees immediately prior to the Closing Date by
Seller in accordance with Seller's practices and programs as they then
exist, but not including any retiree medical benefits or severance
benefits, provided, however, that Buyer shall have no obligation to
provide any such comparable benefit at a cost to Buyer that is
materially different from the cost to Seller of providing its present
benefits to such employees. Notwithstanding the foregoing, Buyer
shall in all events establish a group health plan that provides
medical and dental coverage to Continuing Employees and their eligible
dependents that does not exclude or limit coverage of any pre-existing
condition of any Continuing Employee or his or her dependents.
(c) As soon as practicable after the Closing Date, Buyer
shall establish a qualified Section 401(k) savings plan (the "Buyer
Plan"), and as soon as practicable thereafter, the assets attributable
to the account of each employee of the Seller who becomes an employee
of Buyer, or the beneficiaries or alternate payees of such employees,
under The Lamson & Sessions Co. Deferred Savings Plan (the "Lamson
Plan") shall be transferred by the Trustee of the Lamson Plan to the
Buyer Plan. The value of each such account to be transferred shall be
equal to the value of such account determined by the Trustee on a
valuation date which shall be the effective date such accounts are
transferred. The Trustee shall effect such transfer as soon as
possible after such valuation date. Such transfer shall be made in
cash, unless liquidation of all or a portion of any guaranteed
investment or annuity contract or similar insurance contract would
result in a market value adjustment or other similar penalty, in which
case the portion of any
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such contract covering employees whose accounts are transferred shall
be segregated and transferred in kind. The transfer of funds shall in
no event be made on a valuation date before 30 days after the filing
with the Internal Revenue Service of Forms 5310 for the Lamson Plan
and the Buyer Plan, if necessary. Buyer and Seller agree to provide
each other with such information as is in their possession and
necessary for the other party to complete its Form 5310, if necessary.
Seller shall cause appropriate amendments to be made to the Lamson
Plan and Buyer shall cause appropriate provisions to be included in
the Buyer Plan to carry out the provisions of this Section 8.2(c).
Buyer's and Seller's obligations to effectuate the asset transfer
described in this Section 8.2(c) shall be conditioned on each
receiving evidence reasonably satisfactory to it that such transfer
will not adversely affect the qualified status of its 401(k) savings
plan under Section 401(a) or 401(k) of the Code.
(d) BENEFIT; ENFORCEABILITY. Nothing in this Agreement,
including, without limitation, this Section 8.2, shall be deemed to be
for the benefit of, or enforceable by or on behalf of, any labor union
or by any Continuing Employee or any other present or former employee
of Seller or any dependent or beneficiary of any such employee.
(e) SEVERANCE PAY. In the event Buyer (i) does not offer
employment immediately after the Closing Date to any salaried employee
of Seller (not including for this purpose any employees of Seller on
disability or any other leave on the Closing Date), or (ii) terminates
the employment of any Continuing Employee within 90 days after the
Closing Date, Seller shall pay severance benefits under Seller's
severance plan as in effect on the Closing Date for not more than a
total of four individuals including both such salaried employees not
offered employment by Buyer and Continuing Employees terminated by
Buyer during such period. In the event that more than four
individuals could be subject to the provisions of the preceding
sentence, such provisions shall apply to the four individuals to whom
the sentence applies in chronological order of the applicability of
such provision to such individuals.
(f) JANESVILLE WELFARE BENEFITS. If Blue Cross/Blue
Shield of Wisconsin consents thereto, Buyer shall assume as of the
Closing Date the contractual rights and obligations of Seller under
the "BeneMax Trust" with Blue Cross/Blue Shield of Wisconsin
(including, without limitation, the obligations of Seller thereunder
with respect to COBRA Coverage), under which the Seller provides
welfare benefits to hourly employees
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and former hourly employees of the Janesville Plant. If Blue
Cross/Blue Shield of Wisconsin does not consent to such assumption by
Buyer, Buyer shall otherwise discharge its obligations hereunder with
respect to welfare benefits for employees of the Janesville Plant.
Nothing in this provision shall override the obligation, set forth in
Section 8.4(d), of Seller to provide the retiree medical benefits
specified therein for salaried employees.
8.3 ACCESS FOR SELLER. Buyer will make available to
Seller and its representatives for inspection and copying such records
pertaining to the Business as may reasonably be requested by Seller in
connection with its rights or obligations as the former owner of the
Transferred Assets, including but not limited to cooperation: (a) in the
preparation of financial information about the Business for all periods for
which information in the possession of Buyer is relevant; (b) in the
preparation, and in the audit by taxing authorities, of Seller's tax returns
for all periods for which information in the possession of Buyer is relevant;
and (c) with respect to any pending or threatened litigation to which Seller is
party. Buyer's obligations under this Section 8.3 are subject to its right to
conduct its operations with minimal disturbance and to reimbursement by Seller
for the reasonable costs incurred in carrying out its obligations under this
Section 8.3.
8.4 COVENANTS AND OTHER PROVISIONS REGARDING GROUP HEALTH
PLANS.
(a) Subject to Sections 8.2(a)(iii) and 8.2(f), Seller
will maintain a group health plan that provides coverage or
continuation coverage rights, as applicable, to Seller's employees and
former employees, their spouses, former spouses, dependents, and
former dependents covered on the Closing Date ("Covered Persons")
under the group health plans maintained by Seller for the time period
and to the extent necessary under Part 6 of Subtitle B of Title I of
ERISA or Section 4980B of the Code, as amended (herein collectively
referred to as "COBRA") and under applicable state law to provide
after the Closing Date any continuation coverage with respect to such
Covered Persons.
(b) Subject to Sections 8.2(a)(iii) and 8.2(f), Seller
has timely provided or will timely provide all notices and any
continuation of health benefit coverage (including but not limited to
medical and dental coverage) required to be provided to any of
Seller's employees and former employees, their spouses, former
spouses, dependents, and former dependents, under COBRA and under
applicable state law to the extent such notices are required to be
provided by any party under COBRA or
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under state law by reason of the events occurring prior to, on, or
after the Closing Date or by reason of the transactions contemplated
by this Agreement. Seller also agrees to hold Buyer harmless from,
and to fully indemnify Buyer against any costs, expenses, losses,
damages, and liabilities incurred or suffered by Purchaser, directly
or indirectly, including, but not limited to, reasonable legal fees
and expenses, with respect to any failure of the Seller to comply with
the requirements of this Section or COBRA, provided that any such
costs, expenses, losses, damages or liabilities are not a result of
Buyer's breach of its obligations under Sections 8.2(a)(iii) or
8.2(f).
(c) For a period of 30 days following the Closing Date,
Seller will, on behalf of Buyer, continue to provide, on a claims
incurred basis, each employee of the Seller who becomes an employee of
the Buyer the medical and dental coverage in effect with respect to
such employee immediately prior to the Closing Date. Buyer shall
reimburse Seller for the amount of the premium, claims, payments,
administrative and other costs incurred by Seller in providing such
coverage under Seller's group health plans described in this Section
8.4(c).
(d) Seller will continue to provide retiree medical and
dental benefits as required under the Retiree Medical Benefits Plan
for covered employees who retired before January 1, 1993. Seller will
remain obligated to pay for retiree medical and dental benefits as
required under the Retiree Medical Benefits Plan for Post-December 31,
1992 Retirees to the extent of the premium cost in effect for the
Post-December 31, 1992 Retirees on January 1, 1993, it being
understood by Buyer and Seller that such premium cost for
Post-December 31, 1992 Retirees is at one level for individuals not
eligible for Medicare and at a lower level for individuals eligible
for Medicare, and that Seller's obligation described in this Section
8.4(d) at any particular time is based on each individual's respective
Medicare eligibility (or non-eligibility) at such time. As provided
in Section 8.2(a)(ii), Buyer shall administer all benefits for
Post-December 31, 1992 Retirees. Seller shall pay to Buyer (or to
such other person as Buyer may designate from time to time) the amount
of the premium cost in effect from time to time for the Post-December
31, 1992 Retirees at such time or times and in such manner as shall be
reasonably satisfactory to Buyer and Seller.
(e) Salaried employees of the Business who are eligible
to retire from Seller as of the Closing Date and to receive upon such
retirement retiree medical coverage under plans of Seller then in
effect shall, together with their eligible dependents, be entitled
after the Closing
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to such retiree medical coverage as Seller may provide from time to
time under the plans of Seller in effect from time to time, which
coverage shall be secondary to the medical coverage provided to such
salaried employees of Buyer while they are actively employed by Buyer,
and which coverage may be limited to the extent that Seller is unable
to maintain stop loss insurance coverage with respect to individuals
described in this Section 8.4(e) to protect Seller from claims in
excess of stop loss levels maintained by Seller for its other retirees
from time to time. Upon retirement of such salaried employees from
employment with Buyer, Seller's coverage (if any) shall become
primary.
9. CONDITIONS TO OBLIGATIONS OF BUYER. The obligations
of Buyer under this Agreement are subject to the satisfaction on or prior to
the Closing Date of the following conditions, unless such conditions are waived
by Buyer:
9.1 REPRESENTATIONS AND WARRANTIES TRUE ON CLOSING DATE.
Seller's representations and warranties made in this Agreement are true in all
material respects as of the Closing Date as though such representations and
warranties were made as of the Closing Date. Seller shall have provided to
Buyer, no later than two days prior to the Closing Date, supplements to each
Schedule attached hereto or other information so that each such Schedule shall
set forth, as of the Closing Date, all the information contemplated by the
representation to which it relates. Buyer shall not be obligated to close the
transactions contemplated hereby if any fact newly disclosed in such
supplements, or any other fact which becomes known to Buyer after the date of
this Agreement and is promptly disclosed by Buyer to Seller in writing,
indicates a material adverse change in the Business.
9.2 COMPLIANCE WITH AGREEMENT. Seller shall have
performed and complied in all material respects with all of its obligations
under this Agreement and the Environmental Agreement that are to be performed
or complied with by it prior to or on the Closing Date, and Seller is not
otherwise in material default in any respect under any of the provisions of
this Agreement or the Environmental Agreement.
9.3 NO LITIGATION. No litigation, proceeding,
investigation, or inquiry is pending or threatened against Buyer or Seller
which, if sustained, would enjoin or prevent the consummation of the
transactions contemplated by this Agreement or would materially and adversely
affect Buyer's right to carry on the Business as presently conducted.
9.4 THIRD-PARTY CONSENTS AND APPROVALS. Seller shall
have obtained all third-party consents and approvals, if any, identified on the
List of Indispensable Consents.
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9.5 OPINIONS OF COUNSEL FOR SELLER. Seller shall have
delivered to Buyer opinions of counsel dated as of the Closing Date,
substantially in the forms attached hereto as Exhibit E, Parts 1 and 2.
9.6 HART-SCOTT-RODINO. All applicable governmental
pre-acquisition filing and waiting period requirements or other requirements
applicable to this transaction, including, without limitation, those under the
HSR Act, as amended, shall have been satisfied.
9.7 LIENS. Seller shall obtain releases from all
financing statements covering the Transferred Assets other than those relating
to Personal Property Leases or matters permitted under Section 7.11, and shall
provide Buyer on or by the Closing Date with evidence of such releases and of
the filing of any Uniform Commercial Code termination statements with respect
thereto.
9.8 TITLE POLICIES. The Title Company shall be prepared
to issue the Title Policy as to the leaseholds under the Janesville Lease and
the Cleveland Lease as required in Section 7.10.
10. CONDITIONS TO OBLIGATIONS OF SELLER. The obligations
of Seller under this Agreement are subject to the satisfaction on or prior to
the Closing Date of the following conditions, unless such conditions are waived
by Seller:
10.1 REPRESENTATIONS AND WARRANTIES TRUE ON CLOSING DATE.
Buyer's representations and warranties made in this Agreement are true in all
material respects as of the Closing as though such representations and
warranties were made as of the Closing.
10.2 COMPLIANCE WITH AGREEMENT. Buyer shall have
performed and complied in all material respects with all of its obligations
under this Agreement and the Environmental Agreement that are to be performed
or complied with by it prior to or on the Closing Date, and Buyer is not
otherwise in default in any material respect under any of the provisions of
this Agreement or the Environmental Agreement.
10.3 NO LITIGATION. No litigation, proceeding,
investigation, or inquiry is pending or threatened which, if sustained, would
enjoin or prevent the consummation of the transactions contemplated by this
Agreement.
10.4 THIRD PARTY CONSENTS AND APPROVALS. Seller shall
have obtained all third-party consents and approvals, if any, identified on the
List of Indispensable Consents.
10.5 OPINION OF COUNSEL FOR BUYER. Buyer has delivered an
opinion of Thompson, Hine and Flory dated as of the Closing Date, substantially
in the form attached hereto as Exhibit F.
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10.6 HART-SCOTT-RODINO. All applicable governmental
pre-acquisition filing and waiting period requirements or other requirements
applicable to this transaction, including, without limitation, those under the
HSR Act, as amended, shall have been satisfied.
10.7 GUARANTY OF IOCHPE-MAXION S.A. Iochpe-Maxion, S.A.,
shall have executed and delivered to Seller its Guaranty in the form of Exhibit
I hereto.
11. FURTHER ASSURANCES. Seller will, from time to time
after the closing, upon the reasonable request of Buyer and at Buyer's cost and
expense, execute, acknowledge, and deliver all such further documents and
instruments as may be reasonably required to carry out the transactions
contemplated by this Agreement. Seller further agrees that it will cooperate
with Buyer from and after the Closing in connection with the maintenance of
favorable relations with all of its customers and suppliers, and the assertion
of warranty claims, if any, against the suppliers with respect to any items in
the Inventory.
12. EXPENSES. Whether or not the transactions
contemplated hereby shall be consummated, each of the parties hereto shall pay
its own expenses, income and similar taxes, and costs (including, without
limitation, the fees, disbursements, and expenses of its attorneys,
accountants, and consultants) incurred by it in negotiating, preparing,
closing, and carrying out this Agreement and the transactions contemplated
hereby, except as otherwise provided herein, in the Lease, or in the
Environmental Agreement.
13. BULK SALES COMPLIANCE. Seller and Buyer agree to
waive the application of all bulk sales laws.
14. COVENANT NOT TO COMPETE.
(a) During the five year period following the Closing
Date, Seller shall not, directly or indirectly, compete with Buyer in
the United States in the sale of products sold by the Business in the
three years preceding the Closing Date.
(b) During the five year period immediately following the
Closing Date, Seller shall not, directly or indirectly, compete with
respect to a product sold by the Buyer to a customer located outside
the United States if such product has been sold by the Seller to such
customer within the one year period immediately preceding the Closing
Date.
(c) Seller acknowledges that a breach of its obligations
under this Section 14 would result in irreparable injury to Buyer for
which damages would not be an adequate remedy. Therefore, Seller
consents to the
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issuance of injunctive relief in the event of a breach of its
obligations under this Section 14, in addition to any other remedies
to which Buyer may be entitled by law.
(d) Any provision of the foregoing covenant that is
prohibited or unenforceable, including without limitation, as to time,
geographic area, or scope of activity, shall be void to the extent of
that prohibition or unenforceability only and the remaining
provisions, including the remainder of any provision found only
partially invalid or unenforceable, shall continue to be in full force
and effect and shall not be affected by such invalidity or
unenforceability.
(e) Seller acknowledges that this covenant not-to-compete
is a material inducement to Buyer to enter into this Agreement and
consummate the transactions contemplated hereby. Seller further
acknowledges that it has benefited from the Agreement and will benefit
from the transactions contemplated hereby and that such benefits are
adequate consideration to support this covenant not to compete.
15. EXCLUDED ASSETS. All Excluded Assets (other than the
Cleveland Plant) located at either of the Plants shall be removed from the
Plants by Seller at its sole cost and expense within thirty (30) days following
the Closing Date.
16. PUBLIC ANNOUNCEMENTS AND RELEASES. No party to this
Agreement will, prior to the Closing, make or cause to be made any public
announcement or release concerning this Agreement or the transactions
contemplated hereby without consultation with the other party to this
Agreement, except that Seller may make such filings under the rules and
regulations of the Securities and Exchange Commission and New York Stock
Exchange and such public announcements as may, upon advice of counsel, be
necessary or appropriate in connection with the transactions contemplated
hereby.
17. INDEMNIFICATION.
17.1 INDEMNIFICATIONS BY SELLER FOR GENERAL CLAIMS. From
and after the Closing, but subject to the conditions and limitations set forth
in this Article 17, Seller shall indemnify and hold Buyer harmless for any and
all loss, cost, damage, claim, fine, penalty, expense, including, without
limitation, reasonable attorneys' fees and expenses, amounts paid in
settlement, court costs, out-of-pocket costs of investigation, fees and
expenses of accountants, investment bankers and other experts, and other
expenses of litigation (collectively, "Damages"), actually incurred or suffered
by Buyer to the extent resulting from (a) any inaccuracy in any representation
or warranty of Seller contained in Article 5 of this Agreement or in any
certificate delivered at the Closing (other than reaffirmations of such
representations and
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warranties contained in any such certificate delivered at the Closing), (b) any
breach of any covenant or agreement of Seller contained in this Agreement, or
(c) any claim made or asserted against Buyer under any bulk sales law but (z)
excluding any claim relating to Excluded Liabilities or Continuing Employees
(clauses (a) through (c), but excluding (z), collectively, the "General
Claims").
17.2 LIMITATIONS ON GENERAL INDEMNIFICATION. (a) Buyer
shall not be entitled to indemnification for Damages incurred or suffered with
respect to General Claims, until, and then only to the extent that, the
aggregate Damages with respect to General Claims to which Buyer is otherwise
entitled to indemnification exceed $100,000 (the "General Deductible").
(b) Once Damages incurred or suffered with respect to
General Claims exceed the General Deductible, Buyer shall be entitled to
indemnification for two-thirds (66 2/3%) of Damages incurred or suffered with
respect to General Claims until the aggregate payments by Seller under this
paragraph equal $700,000.
(c) Any claim for indemnification with respect to General
Claims that is not asserted in accordance with Section 17.5 prior to 5:00 p.m.
(Cleveland, Ohio Time) on the date which is one year after the Closing Date may
not be pursued and shall be irrevocably waived.
17.3 INDEMNIFICATION BY SELLER FOR EXCLUDED LIABILITIES.
From and after the Closing, without any limitation as to amount or as to time
for the assertion of any claim, but subject to the conditions set forth
elsewhere in this Article 17, Seller shall indemnify and hold Buyer harmless
for Damages actually incurred or suffered by Buyer to the extent resulting from
any Excluded Liability.
17.4 INDEMNIFICATION BY SELLER FOR CERTAIN EMPLOYEE
CLAIMS. From and after the Closing, but subject to the conditions and
limitations set forth in this Article 17, Seller shall indemnify and hold Buyer
harmless for Damages actually incurred or suffered by Buyer from:
(a) any claim made by any Continuing Employee by reason
of any provision of Section 8.2(b) or (c) of this Agreement (unless
and to the extent that any such damages arise out of violation of law
by Buyer or any covenant or representation of Buyer made to a
Continuing Employee which is different from the provisions of such
Section 8.2 ("Continuing Employee Claims").
(b) Buyer shall not be entitled to indemnification for
Damages incurred or suffered with respect to Continuing Employee
Claims to the extent that aggregate amounts paid by Seller would
exceed $750,000.
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(c) Any claim for indemnification with respect to
Continuing Employee Claims that is not asserted in accordance with
Section 17.6 prior to 5:00 p.m. (Cleveland, Ohio time) on the date
that is one year after the end of the 90 day period following the
Closing Date as provided in Section 8.2 may not be pursued and shall
be irrevocably waived.
17.5 NOTICE; OTHER PROCEDURES. (a) In the event that any
action, suit, proceeding, investigation, claim or demand is asserted against or
sought to be collected from Buyer (a "Third Party Claim") for which Buyer
intends to assert a right of indemnity under Sections 17.1, 17.3 or 17.4 and/or
a Third Party Claim is made that Buyer intends to count against the General
Deductible, Buyer shall notify Seller with reasonable promptness of such Third
Party Claim, specifying, to the extent known, the nature, circumstances and
amount of the Third Party Claim (a "Third Party Claim Notice"). The Seller
shall have 14 days from its receipt of a Third Party Claim Notice to notify
Buyer (i) whether Seller disputes Buyer's right of indemnity with respect to
such Third Party Claim and (ii) if Seller does not dispute such right, whether
or not Seller desires to defend Buyer against such Third Party Claim.
(b) If the Seller notifies Buyer within the 14-day period
that (i) except for the limitations of this Article 17, the Seller does not
dispute the Buyer's right of indemnity and (ii) the Seller desires to defend
against such Third Party Claim, then the Seller shall have the right to assume
and control, at its sole cost and expense, the defense of such Third Party
Claim by appropriate proceedings with counsel reasonably acceptable to Buyer.
Buyer may participate in, but not control, any such defense or settlement, at
its sole cost and expense.
(c) If the Seller (i) disputes the Buyer's right of
indemnity with respect to a Third Party Claim, or (ii) does not dispute such
right of indemnity but fails to promptly assume and prosecute the defense of
such Third Party Claim, then Buyer shall be entitled to assume and control the
defense of such Third Party Claim, and the Buyer shall be entitled to
indemnification for the cost of such defense, with counsel reasonably
acceptable to the Seller.
(d) The party responsible for the defense of any Third
Party Claim (the "Responsible Party") shall, to the extent reasonably requested
by the other party, keep such other party informed as to the status of any
Third Party Claim for which such party is not the Responsible Party, including,
without limitation, all settlement negotiations and offers. With respect to a
Third Party Claim for which the Seller is the Responsible Party, Buyer shall
make available to the Seller and its representatives all books and records of
Buyer relating to such Third Party Claim and shall render to the Seller such
assistance and access to records
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and the representatives of Buyers as the Seller as its representatives may
reasonably request.
(e) Neither the Seller, on the one hand, nor the Buyer,
on the other hand, shall enter into any settlement of any Third Party Claim
without the prior written consent of the other party. The Responsible Party
shall promptly notify the other party of each settlement offer (including
whether or not the Responsible Party is willing to accept the proposed
settlement with respect to a Third Party Claim). Such other party agrees to
notify the Responsible Party with reasonable promptness whether or not such
party is willing to accept the proposed settlement offer. If the Buyer fails
to consent to any settlement offer of a Third Party Claim (whether or not Buyer
is the Responsible Party with respect to such Third Party Claim), Buyer may
continue to contest or defend such Third Party Claim and, in such event, the
maximum total indemnity with respect to such Third Party Claim (including the
reasonable costs and expenses of contesting or defending such Third Party Claim
incurred after Buyer fails to consent to such settlement offer) shall not
exceed the amount of such settlement offer.
(f) In the event that the Buyer has a claim for indemnity
or against the General Deductible that does not involve a Third Party Claim (a
"Direct Claim"), Buyer shall notify the Seller of such Direct Claim with
reasonable promptness, specifying, to the extent known, the nature,
circumstances and amount of such Direct Claim (a "Direct Claim Notice"). If
the Seller notifies Buyer that it disputes Buyer's claim for indemnity or claim
against the General Deductible or the Environmental Deductible with respect to
a Direct Claim set forth in a Direct Claim Notice, Buyer and Seller shall use
reasonable efforts to resolve such dispute.
17.6 LIMITATIONS ON SELLER'S INDEMNIFICATION. For
purposes of this Agreement, the amount of Damages with respect to General
Claims, Excluded Liability Claims and Continuing Employee Claims, shall be
reduced to the extent of any applicable net tax benefit, insurance proceeds or
other third party recovery received by the Buyer. Buyer shall timely file
claims for insurance proceeds and/or defense and pursue all other third party
reimbursement rights with respect to any Damages sustained by Buyer. Buyer
shall not be entitled to indemnification for any Damages (i) incurred by Buyer
in connection with resolving any dispute arising with respect to Buyer's right
to indemnification under this Agreement or (ii) resulting from any untrue or
incorrect representation or warranty, or breach of a covenant or agreement by
Seller contained in this Agreement and disclosed to Buyer in the certificate
delivered by Seller at the Closing. Except as provided in Sections 3.2 and
3.4, the indemnification rights provided in this Article 17 shall be Buyer's
sole and exclusive remedy for Damages resulting from any breach of any
representation, warranty, covenant or agreement of the Seller contained in this
Agreement or otherwise relating to this Agreement or in respect of this
Agreement, and the Buyer shall not assert any claim relating to
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this Agreement or based hereon except by exercising its rights under this
Article 17.
17.7 INDEMNIFICATION BY BUYER. From and after the
Closing, Buyer shall indemnify and hold Seller and its officers, directors and
affiliates harmless for any Damages actually incurred or suffered by any of
them to the extent resulting from (a) any inaccuracy in any representation or
warranty of Buyer contained in Section 6 of this Agreement (or in any
certificate delivered at the Closing), (b) any breach of any covenant or
agreement of Buyer contained in this Agreement, (c) any claim against Seller
arising out of any violation of law by Buyer, or (d) the Assumed Liabilities.
18. TERMINATION. Anything herein or elsewhere to the
contrary notwithstanding, this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time on or prior to the Closing Date --
(a) By the written consent of Buyer and Seller;
(b) By Buyer if any of the conditions set forth in
Section 9 of this Agreement have become incapable of fulfillment on or
before July 31, 1994, except in the case of an event described in
Section 1.5, in which case the Closing or termination of this
Agreement shall be subject to the provisions of Section 1.5;
(c) By Seller if any of the conditions set forth in
Section 10 of this Agreement have become incapable of fulfillment on
or before July 31, 1994, except in the case of an event described in
Section 1.5, in which case the Closing or termination of this
Agreement shall be subject to the provisions of Section 1.5; or
(d) By Seller or by Buyer if any action, suit, or
proceeding before any court or other governmental body or agency has
been instituted to restrain, modify, or prohibit the transactions
contemplated hereby, and either Seller or Buyer deems it inadvisable
for that reason to proceed with such transaction.
If this Agreement is terminated in a manner permitted by subsections (a)-(d) of
this Section 18 and the transactions contemplated hereby are not consummated as
described above, this Agreement will become void and of no further force and
effect, and neither of the parties hereto will have any liability to the other
party in respect of a termination of this Agreement.
19. NOTICES. Notices hereunder will be effective when
received if they are sent by facsimile or recognized courier, with confirmation
of receipt and, in each case, addressed:
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<TABLE>
<S> <C>
(a) In the case of Buyer, prior to closing, to:
Iochpe-Maxion S.A.
Rua Guararapes, 2064-17degree mark andar
04561-004 Sao Paulo - SP
Brasil
Attention: Nildemar Secches
FAX No.: 55-11-240-3825
and from and after the closing, to:
Iochpe-Maxion Ohio, Inc.
10615 Madison Avenue
Cleveland, Ohio 44102
Attention: Salomao Ioschpe
FAX No: (216) 281-8411
With a copy in each case to:
Thompson, Hine and Flory
1100 National City Bank Building
Cleveland, Ohio 44114-7110
Attention: Raymond T. Sawyer, Esq.
FAX No.: (216) 566-5583
(b) In the case of Seller, to:
The Lamson & Sessions Co.
25701 Science Park Drive
Cleveland, Ohio 44122-9803
Attention: Allan J. Zambie, Esq.,
General Counsel
FAX No: (216) 464-1455
</TABLE>
Any party may change the address to which notices are to be addressed by giving
the other parties notice in the manner herein set forth.
20. GOVERNING LAW. The validity, interpretation, and
performance of this Agreement will be determined in accordance with the laws of
the State of Ohio in the United States of America applicable to contracts made
and to be performed wholly within the state of Ohio.
21. COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which will be deemed an original, but all of
which together shall constitute but one and the same instrument.
22. CONSTRUCTION. The headings, subheadings, and
captions in this Agreement and in any exhibit hereto are for reference purposes
only and are not intended to affect the meaning or interpretation of this
Agreement. Where any representation, warranty or other statement in this
Agreement is expressly
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qualified by reference to the knowledge, information or belief of Seller, such
knowledge, information or belief shall refer to the actual knowledge,
information or belief of John B. Schulze, Charles E. Allen, James J. Abel,
Melvin W. Johnson, and Allan J. Zambie in each case without any duty of inquiry
or investigation or (b) information contained in the files, records, books, or
documents actually maintained or required by law to be maintained by Seller,
other than any such files, records, books or documents maintained at either
Plant.
23. EXHIBITS. The exhibits and Schedules attached hereto
and the other documents delivered pursuant hereto are hereby made a part of
this Agreement as if set forth in full herein. To the extent that any one
schedule cross references to any other schedule, the information referred to
shall be deemed to be incorporated in its entirety to the schedule containing
the cross reference.
24. ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties hereto with respect to its subject matter and
supersedes all negotiations, prior discussions, agreements, arrangements, and
understandings, written or oral, relating to the subject matter of this
Agreement.
25. SUCCESSORS AND ASSIGNS. Either Buyer or Seller may
assign their respective rights and delegate their respective duties under this
Agreement to any of their respective affiliated companies. Seller may grant a
security interest in its rights under this Agreement from and after the Closing
Date to its secured lender(s) and Seller may otherwise pledge such rights under
this Agreement to such lenders and provide the benefits available to Buyer
under this Agreement to such lenders; PROVIDED, that no such assignment,
delegation or pledge shall (a) relieve the Seller of any duties or obligations
under this Agreement, nor (b) modify, amend or impair any defense the Buyer may
have against Seller under this Agreement including the right to assert such
defense against any of Seller's assignees, delegates or pledgees.
IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be duly executed and delivered as of the day and year first above
written.
THE LAMSON & SESSIONS CO.
By: ____________________________
______________, ____________
IOCHPE-MAXION OHIO, INC.
By: ____________________________
______________, ____________
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GUARANTY
The undersigned, Iochpe-Maxion S.A., a Brazilian
company and the indirect owner of the above Iochpe-Maxion Ohio, Inc. ("Buyer")
hereby guarantees to The Lamson & Sessions Co. the punctual performance by
Buyer of its obligations under the foregoing Asset Purchase Agreement.
IN WITNESS WHEREOF, the undersigned have duly
executed this Guaranty this 4th day of May, 1994.
IOCHPE-MAXION S.A.
By_______________________________
And______________________________
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INDEX OF SCHEDULES AND EXHIBITS
<TABLE>
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Schedule 1.1(a) Equipment List
Schedule 1.1(e)(iii) Transferred Contracts List
Schedule 1.1(e)(iv) Personal Property Leases List
Schedule 1.1(f) Permit List
Schedule 1.1(h) Intellectual Property List
Schedule 2.1(c) Assumed Benefit Plans List
Schedule 3.2(b) Form of Price Waterhouse Certification
on Closing Date Statement
Schedule 5.3 Divisional Balance Sheet, Adjustments
from Divisional Balance Sheet and
Pricing Balance Sheet
Schedule 5.5 Changes Since Date of Divisional
Balance Sheet
Schedule 5.6A List of Permitted Exceptions
Schedule 5.6B List of Leasehold Permitted Exceptions
Schedule 5.8 List of Encumbrances
Schedule 5.10 Contracts List
Schedule 5.11 Inventory Location List
Schedule 5.13 Employee Benefits List
Schedule 5.14 Labor Matters List
Schedule 5.16 Litigation and Claims List
Schedule 5.17 Government Notice List
Schedule 5.18 Product Warranty List
Schedule 5.19 Product Liability List
Schedule 7.5 List of Indispensable Consents
Exhibit A Cleveland Lease
Exhibit B Environmental Agreement
Exhibit C Allocation of Consideration
Exhibit D Janesville Lease Assignment
Exhibit E Opinion of Counsel for Seller
Exhibit F Opinion of Counsel for Buyer
Exhibit G General Assignment and Bill of Sale
Exhibit H Assumption Agreement
Exhibit I Guaranty of Iochpe-Maxion S.A.
</TABLE>
