ASSET PURCHASE AGREEMENT
dated
as of December 7, 1994
between
WHITTAKER, CLARK & DANIELS, INC.
CLARK MINERALS, INC.,
CHEROKEE MINERALS, INC.
and
PIONEER TALC COMPANY
("Sellers")
and
SUZORITE MINERAL PRODUCTS, INC.
("Buyer")
and
ZEMEX CORPORATION
("Zemex")
TABLE OF CONTENTS
TO
ASSET PURCHASE AGREEMENT
Page
ARTICLE 1
SALE AND PURCHASE OF THE ASSETS OF THE
WCD TALC BUSINESS
1.1 Purchased Assets.. . . . . . . . . . . . . . . . . . . . .
2
(a) Real Property. . . . . . . . . . . . . . . . . . .
. 2
(b) Fixed Assets, Equipment Machinery and Other
Tangible Personal Property 2
(c) Leases.. . . . . . . . . . . . . . . . . . . . . .
. 2
(d) Inventory. . . . . . . . . . . . . . . . . . . . .
. 2
(e) Receivables. . . . . . . . . . . . . . . . . . . .
. 3
(f) Contracts and Other Agreements Relating to the
Business. 3
(g) Licenses, Permits. . . . . . . . . . . . . . . . .
. 3
(h) Brand and Trade Names; Know-How. . . . . . . . . .
. 3
(i) Prepayments. . . . . . . . . . . . . . . . . . . .
. 3
(j) Longhorn Stock.. . . . . . . . . . . . . . . . . .
. 3
(k) Other Purchased Assets.. . . . . . . . . . . . . .
. 3
1.2 Assumed Liabilities. . . . . . . . . . . . . . . . . . . .
4
1.3 Excluded Liabilities.. . . . . . . . . . . . . . . . . . .
4
(a) Intercompany Payables. . . . . . . . . . . . . . .
. 4
(b) Employee Liabilities.. . . . . . . . . . . . . . .
. 4
1.4 Title to the Purchased Assets: Documents of Conveyance.. .
4
ARTICLE 2
CLOSING
2.1 Closing. . . . . . . . . . . . . . . . . . . . . . . . . .
5
ARTICLE 3
PURCHASE PRICE
3.1 Purchase Price.. . . . . . . . . . . . . . . . . . . . . .
6
3.2 Payment to CMI, CHM and PTC and Adjustments of Cash Purchase
Price. 7
3.3 Payment to WCD of Stock Portion of Purchase Price. . . . .
7
3.4 Allocation of Purchase Price.. . . . . . . . . . . . . . .
7
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
4.1 Representations and Warranties of Sellers. . . . . . . . .
7
(a) Organization of Sellers; Authorization.. . . . . .
. 7
(b) No Conflict. . . . . . . . . . . . . . . . . . . .
. 8
(c) Balance Sheet; Inventory; Accounts Receivable. . .
. 8
(d) Absence of Undisclosed Liabilities.. . . . . . . .
. 8
(e) Consents and Approvals of Governmental Bodies. . .
. 8
(f) Title to Real Property.. . . . . . . . . . . . . .
. 8
(g) Title to Personal Property.. . . . . . . . . . . .
. 9
(h) Contracts. . . . . . . . . . . . . . . . . . . . .
. 9
(i) Litigation.. . . . . . . . . . . . . . . . . . . .
. 9
(j) Compliance with Applicable Law.. . . . . . . . . .
. 9
(k) Environmental Matters; Permits.. . . . . . . . . .
. 9
(l) No Brokers and Finders.. . . . . . . . . . . . . .
. 10
(m) Absence of Change. . . . . . . . . . . . . . . . .
. 10
(n) Labor Matters. . . . . . . . . . . . . . . . . . .
. 10
(o) Benefit Plans. . . . . . . . . . . . . . . . . . .
. 10
(p) Breaches of Contracts. . . . . . . . . . . . . . .
. 11
(q) Investment Intent. . . . . . . . . . . . . . . . .
. 12
(r) Longhorn Shares. . . . . . . . . . . . . . . . . .
. 12
(s) Reclamation and Performance Bonds. . . . . . . . .
. 12
4.2 Representations and Warranties of Buyer and Zemex. . . . .
12
(a) Organization of Buyer; Authorization.. . . . . . .
. 12
(b) No Conflict. . . . . . . . . . . . . . . . . . . .
. 13
(c) Litigation.. . . . . . . . . . . . . . . . . . . .
. 13
(d) No Brokers or Finders. . . . . . . . . . . . . . .
. 13
(e) Consents and Approvals of Governmental Bodies. . .
. 13
(f) Capitalization; Issuance of Shares; Exemption from
Registration.. . . . . . . . . . . . . . . . . . . . .
. . . 13
ARTICLE 5
COVENANTS AND OTHER AGREEMENTS OF THE PARTIES. . . . 14
5.1 Continuity of Employment.. . . . . . . . . . . . . . . . .
14
5.2 Defined Benefits Plans.. . . . . . . . . . . . . . . . . .
14
5.3 Sales and Transfer Taxes; Prorations.. . . . . . . . . . .
15
5.4 New York Real Property Transfer Gains Tax. . . . . . . . .
15
5.5 Access to Information. . . . . . . . . . . . . . . . . . .
15
5.6 Transition.. . . . . . . . . . . . . . . . . . . . . . . .
16
5.7 Environmental Audit. . . . . . . . . . . . . . . . . . .
16
5.8 Noncompetition.. . . . . . . . . . . . . . . . . . . . . .
16
5.9 Temporary Accounting Assistance. . . . . . . . . . . . . .
17
5.10 Distribution Agreement. . . . . . . . . . . . . . . . . . 17
ARTICLE 6
THE ZEMEX SHARES
6.1 Restrictions on Transferability of Shares; Compliance with
Securities Act;
Registration Rights.. . . . . . . . . . . . . . . . . . . .
. 17
(a) Restrictions on Transferability. . . . . . . . . .
. 17
(b) Restrictive Legend.. . . . . . . . . . . . . . . .
. 17
(c) Notice of Proposed Transfer. . . . . . . . . . . .
. 18
(d) Registration Rights. . . . . . . . . . . . . . . .
. 18
6.2 Redemption of Shares.. . . . . . . . . . . . . . . . . . .
19
(a) Optional Redemption by Zemex; Redemption Price.. .
. 19
(b) Notice of Redemption.. . . . . . . . . . . . . . .
. 19
(c) Surrender and Payment. . . . . . . . . . . . . . .
. 19
6.3 Payment upon Sale in a Public Market.. . . . . . . . . . .
19
6.4 Payment upon Private Resale. . . . . . . . . . . . . . . .
19
6.5 Obligation to Sell upon Demand in Certain Circumstances. .
20
6.6 Escrow of Shares.. . . . . . . . . . . . . . . . . . . . .
20
6.7 Binding Effect.. . . . . . . . . . . . . . . . . . . . . .
21
ARTICLE 7
CONDITIONS TO CLOSING
7.1 General Conditions.. . . . . . . . . . . . . . . . . . . .
21
(a) No Prohibition. . . . . . . . . . . . . . . . . .
. 21
(b) Material Titles and Permits. . . . . . . . . . . .
. 21
7.2 Conditions to Sellers' Obligations.. . . . . . . . . . . .
21
(a) Buyer's Performance. . . . . . . . . . . . . . . .
. 21
(b) Representations and Warranties True; Officer's
Certificate. 21
(c) Payments and Assumption of Liabilities.. . . . . .
. 21
(d) Approval and Consents. . . . . . . . . . . . . . .
. 22
7.3 Conditions to Buyer's Obligations. . . . . . . . . . . . .
22
(a) Sellers' Performance.. . . . . . . . . . . . . . .
. 22
(b) Representations and Warranties True; Officer's
Certificate. 22
(c) Approvals and Consents.. . . . . . . . . . . . . .
. 22
(d) Opinion of Counsel of Sellers. . . . . . . . . . .
. 22
(e) Remedial Actions.. . . . . . . . . . . . . . . . .
. 22
ARTICLE 8
INDEMNIFICATION
8.1 Indemnification by Sellers.. . . . . . . . . . . . . . . .
22
8.2 Indemnification by Buyer.. . . . . . . . . . . . . . . . .
23
8.3 Limitations on Sellers' Indemnification. . . . . . . . . .
23
8.4 Cooperation. . . . . . . . . . . . . . . . . . . . . . . .
23
(a) Notice.. . . . . . . . . . . . . . . . . . . . . .
. 23
(b) Claims for Money Damages.. . . . . . . . . . . . .
. 23
(c) Claims for Environmental Work. . . . . . . . . . .
. 24
ARTICLE 9
GENERAL PROVISIONS
9.1 Notices. . . . . . . . . . . . . . . . . . . . . . . . . .
24
9.2 Entire Agreement; Incorporation; Subsequent Modifications.
26
9.3 Assignment; Binding Effect; Third Party Beneficiaries. . .
26
9.4 Expenses of Sale.. . . . . . . . . . . . . . . . . . . . .
27
9.5 Cooperation; Execution of Additional Documents.. . . . . .
27
9.6 Bulk Sales Waiver. . . . . . . . . . . . . . . . . . . . .
27
9.7 Counterparts.. . . . . . . . . . . . . . . . . . . . . . .
27
9.8 Interpretation and Governing Law, Jurisdiction and Service
of Process. 27
9.9 Severability.. . . . . . . . . . . . . . . . . . . . . . .
27
9.10 Definition of Affiliate.. . . . . . . . . . . . . . . . . 27
9.11 Press Releases. . . . . . . . . . . . . . . . . . . . . . 27
9.12 United States Dollars.. . . . . . . . . . . . . . . . . . 28
9.13 Survival of Covenants, Representations and Warranties.. . 28
LIST OF EXHIBITS
Exhibit A 11/30/94 Balance Sheet (Section 1.1(e))
Exhibit B Form of Bill of Sale, Assignment and Assumption
Agreement (Section 1.4)
Exhibit C Forms of Deeds (Section 1.4)
Exhibit D Purchase Price Allocation Schedule (Section 3.4)
Exhibit E Certificate of Buyer (Section 7.2(b))
Exhibit E-1 Certificate of Zemex (Section 7.2(b))
Exhibit F Form of Opinion of Counsel to Buyer (Section
7.2(e))
Exhibit G Certificate of Sellers (Section 7.3(b))
Exhibit H Form of Opinion of Counsel to Sellers (Section
7.3(d))
Exhibit I Form of Registration Rights Agreement (Sections
3.3 and 6.1(d))
Exhibit J Form of Distribution Agreement (Section 5.10)
LIST OF SCHEDULES
Schedule 1.1(a) Description of Real Property
Schedule 1.1(b) Fixed Assets and Equipment
Schedule 1.1(d) Inventory
Schedule 1.1(f) Material Contracts
Schedule 4.1(b) Conflicts with Agreements, Laws, Etc.
Schedule 4.1(d) Other Liabilities
Schedule 4.1(f) Liens
Schedule 4.1(i)(i) Pending Proceedings
Schedule 4.1(i)(ii) Materially Adverse Judgments, Orders or
Decrees
Schedule 4.1(j) Legal Violations
Schedule 4.1(k) Environmental Matters and Material Permits
Schedule 4.1(m) Adverse Changes
Schedule 4.1(o)(i) Employee Welfare Benefit Plans
Schedule 4.1(o)(ii) Employee Pension Benefit Plans
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is
entered into as of this 7th day of December, 1994 by and among
Suzorite Mineral Products, Inc., a Delaware corporation
("Buyer"), Zemex Corporation, a Delaware corporation ("Zemex")
and Whittaker, Clark & Daniels, Inc., a New Jersey corporation
("WCD"), Clark Minerals, Inc., a New York corporation ("CMI"),
Cherokee Minerals, Inc., a North Carolina corporation ("CHM"),
and Pioneer Talc Company, a Texas corporation ("PTC") (WCD, CMI,
CHM and PTC will sometimes hereafter be referred to individually
as a "Seller" and collectively as "Sellers") (such persons may be
referred to individually as a "Party" and collectively the
"Parties").
RECITALS
A. WCD is the owner of all the capital stock of CMI,
CHM and Longhorn Holdings, Inc., a Delaware corporation
("Longhorn"), and WCD is the indirect owner of all of the capital
stock of PTC. CMI is in the business of buying and processing
premium talc at facilities near Diana, New York (the "CMI
Business"). CHM is in the business of processing baryte at
facilities near Murphy, North Carolina (the "CHM Business"). PTC
is in the business of mining and processing talc on properties
owned or leased by Longhorn at facilities near Van Horne, Texas
(the "PTC Business"). (Collectively, the CMI, CHM and PTC
Businesses will be referred to as the "WCD Talc Business.")
B. Sellers desire to sell, and Buyer desires to
purchase, the assets related to the operation of the WCD Talc
Business and the capital stock of Longhorn, on the terms and
conditions set forth in this Agreement.
C. Buyer is the wholly-owned subsidiary of Zemex, and
Zemex is a party hereto for purposes of the stock portion of the
purchase price.
D. Buyer desires only to assume those certain of the
liabilities and obligations of Sellers relating to the WCD Talc
Business as more specifically set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and
of the mutual representations, warranties, covenants, agreements,
terms and conditions set forth below, the receipt and adequacy of
which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1
SALE AND PURCHASE OF THE ASSETS OF THE
WCD TALC BUSINESS
1.1 Purchased Assets. On the Closing Date (as defined
below) but effective for all purposes as of December 1, 1994 (the
"Effective Date") and subject to the terms and conditions of this
Agreement, Sellers shall sell, convey, grant, assign, transfer
and deliver to Buyer, and Buyer, shall buy, accept and receive
from Seller, all of Sellers' right, title and interest in and to
the following assets:
(a) Real Property. All real property and
interests, options or rights therein owned or leased by Sellers
and used in the conduct of the WCD Talc Business, and all plant,
warehouse, office facilities, buildings, easements, rights of way
and appurtenances thereon and thereto and other improvements and
fixtures attached to such real property, and specifically
including the condominium in Murphy, North Carolina which is
considered for purposes hereof as being part of the CHM Business
but which is owned by WCD (collectively, the "Real Property").
With respect to certain mineral rights included within the Real
Property underlying the PTC Business, title to same is held by
Longhorn, and pursuant to paragraph (j) below Buyer is purchasing
all of the issued and outstanding shares of capital stock of
Longhorn from WCD. All Real Property is identified as owned or
leased and described on Schedule 1.1(a) attached hereto.
(b) Fixed Assets, Equipment Machinery and Other
Tangible Personal Property. All fixed assets, equipment,
machinery, tools, supplies, furniture, leasehold improvements,
automobiles, trucks, non-inventoried stores and supplies, and
other miscellaneous tangible personal property (other than
fixtures) exclusively related to the WCD Talc Business or located
on the Real Property at the Effective Date (collectively, the
"Fixed Assets and Equipment"), and identified in Schedule 1.1(b)
attached hereto, which schedule constitutes (i) a reprint of the
WCD Talc Business's Fixed Assets Master Report for each of CMI,
CHM and PTC, and (ii) a more detailed description (including
serial numbers, as appropriate) of the more significant
individual Fixed Assets and Equipment (defined as being those
items of material value).
(c) Leases. All leases and subleases of personal
property or Fixed Assets and Equipment used in the conduct of the
WCD Talc Business, excluding, however, all intercompany leases or
leases with Windser, Inc. ("Windser") covering any such items, it
being understood that all such intercompany or Windsor leases are
being terminated in connection with the sale of the assets of the
WCD Talc Business pursuant to this Agreement, such that items
previously covered by any such intercompany or Windser leases are
included as a Fixed Asset and Equipment on Schedule 1.1(b) and
are being conveyed by Sellers free and clear of the obligations
under any such intercompany or Windser leases.
(d) Inventory. All inventories owned by CMI, CHM
or PTC and related to the WCD Talc Business as of the Effective
Date consisting of raw materials (including any stockpiled talc
or baryte), work-in-process, finished goods and supplies and
packaging materials employed in the conduct of the WCD Talc
Business ("Inventory"). All Inventory reflected on the November
30, 1994 balance sheet of the WCD Talc Business attached hereto
as Exhibit A (the "11/30/94 Balance Sheet") was included therein
on a consistent basis with prior inventory counts and is
identified in Schedule 1.1(d) attached hereto by product,
quantity, unit cost (on a per ton basis) and total extended value
of such Inventory items.
(e) Receivables. All accounts and notes
receivable, deposits, advances, and all other receivables that
relate to the conduct of the WCD Talc Business as of the
Effective Date, exclusive of any intercompany receivables shown
on the 11/30/94 Balance Sheet (the "Accounts Receivable").
(f) Contracts and Other Agreements Relating to
the Business. All rights of Sellers as of the Effective Date
under all contracts, licenses, leases, purchase and sale orders
and other agreements exclusively relating to the operation of WCD
Talc Business as of the Effective Date. Schedule 1.1(f) to this
Agreement contains a list of such contracts and other agreements
(other than purchase orders for products of the WCD Talc Business
which are expected to be performed within 90 days) to be
transferred to Buyer hereunder that, as of the Effective Date,
are material to the operation of the WCD Talc Business or provide
for the payment to or from Sellers of amounts in excess of
$25,000 per year (collectively, the "Material Contracts").
(g) Licenses, Permits. All federal, state, local
and other governmental licenses, permits, approvals and
authorizations that relate to the operation of the WCD Talc
Business as currently being operated, including those permits
listed on Schedule 4.1(k) (the "Material Permits"), subject to
any legal restrictions on transferability pertaining to such
Schedule 4.1(k) permits.
(h) Brand and Trade Names; Know-How. All right,
title and interest of Sellers and its affiliates in and to the
brand or trade names relating to the talc and baryte products
produced by the WCD Talc Business, including without limitation
the names of Clark Minerals, Cherokee Minerals, Pioneer Talc or
Rosa Blanca Talc, together with all of Sellers' know-how and
expertise, tangible and intangible, used in the conduct of the
WCD Talc Business as of the Effective Date. Buyer intends to
register the referenced trade or brand names following the
Closing Date. It is acknowledged that following the Closing Date
the Sellers intend to liquidate and dissolve CMI, CHM and PTC as
corporations and following such dissolutions Buyer shall, to the
extent consistent with applicable law, be free to use their
corporate names.
(i) Prepayments. Any security, utility or
similar deposits or prepaid expenses.
(j) Longhorn Stock. All of the Longhorn Shares
(as defined in Section 4.1(r)).
(k) Other Purchased Assets. All other assets of
Sellers relating to the WCD Talc Business and described on or
included in the 11/30/94 Balance Sheet, or located on the Real
Property, including without limitation books, records, customer
lists, pricing information, existing sales literature, plans,
operating manuals, and all other files, and data relating to the
WCD Talc Business or any of its assets.
Collectively, the assets described in paragraphs (a)
through (k) above are referred to hereinafter as the "Purchased
Assets."
1.2 Assumed Liabilities. At Closing but effective as
of the Effective Date, Sellers shall assign and delegate to
Buyer, and Buyer shall expressly assume and undertake to pay,
defend, discharge and perform in full when due the Assumed
Liabilities (as defined below) pursuant to this Agreement and the
General Assignment, Bill of Sale and Assumption Agreement
referred to in Section 1.4. For purposes hereof, "Assumed
Liabilities" shall mean all debts (excluding any bank debt owed
by WCD, CMI, CHM or PTC), liabilities, obligations, commitments
and contracts related to the operation of the WCD Talc Business
as of the Effective Date, including, without limitation all
accounts payable and accrued liabilities identified on the
11/30/94 Balance Sheet, all purchase commitments, reclamation
bonds (if any) and other obligations pertaining to the
reclamation of the Real Property following talc mining or talc or
baryte processing operations, sales orders, the obligation to
complete all work-in process, utility contracts, sales
representative orders, licenses, leases (excluding any
intercompany and Windser leases as described in Section 1.1(c)),
consulting agreements and other contracts (including the Material
Contracts) relating to the operation of the WCD Talc Business,
and all other undertakings and obligations relating thereto, and
the obligations of the Buyer arising under other provisions of
this Agreement which survive the Closing as defined below.
1.3 Excluded Liabilities. Notwithstanding anything to
the contrary contained in this Agreement, Buyer will not assume
or be liable for any of the following liabilities or obligations
of Sellers (the "Excluded Liabilities").
(a) Intercompany Payables. All liabilities and
obligations of any kind existing as of the Effective Date of a
nature characterized as an intercompany liability (including
where such intercompany liability is used in the calculation of
net intercompany payables or receivables, as the case may be) on
the 11/30/94 Balance Sheet or otherwise owed or owing by the CMI,
CHM, PTC or Longhorn to WCD or each other or any Affiliate
thereof (the "Intercompany Payables").
(b) Employee Liabilities. All liabilities and
obligations relating to employees of WCD, CMI, CHM or PTC
currently or formerly employed in the conduct of the WCD Talc
Business ("Employees") or consultants of the WCD Talc Business
relating to the services performed prior to the Effective Date
including, without limitation, compensation, wages, bonuses,
severance, incentives, deferred compensation, life insurance,
stock options, disability laws and premiums, worker's
compensation, unemployment compensation, retiree medical or death
benefits, employee welfare or retirement benefits, and
obligations or agreements to rehire or give preferential
treatment to laid off or terminated employees, whether any of the
foregoing are written, oral, funded, unfunded, matured or
contingent.
1.4 Title to the Purchased Assets: Documents of
Conveyance. At Closing but effective as of the Effective Date,
Sellers shall convey all of its right, title and interest in and
to the Purchased Assets to Buyer. Title to the purchased Assets
other than the Real Property shall be conveyed pursuant to a Bill
of Sale, Assignment and Assumption Agreement substantially in the
form attached hereto as Exhibit B, and by such other documents as
are reasonably acceptable to counsel for Sellers and counsel for
Buyer in accordance with the terms hereof. Title to the Real
Property (other than the Real Property owned or leased by
Longhorn) shall be conveyed pursuant to Deeds substantially in
the forms attached hereto as Exhibit C, which forms it is agreed
shall be substantially the same as those deeds utilized when the
Sellers originally acquired the Real Property, and by such other
documents as are reasonably acceptable to counsel for Sellers and
counsel for Buyer. Such instruments of conveyance shall warrant
title to the same extent as Sellers received when acquiring such
Real Property (but at a minimum shall warrant against
encumbrances created by Sellers), subject only to liens permitted
by Section 4.1(f). With respect to the Real Property owned or
leased by Longhorn, Longhorn and PTC shall take whatever steps
are required as of the Effective Date to terminate that certain
Agreement dated as of March 21, 1985, as amended, pursuant to
which PTC contracted to mine talc from the mineral properties
owned by Longhorn.
ARTICLE 2
CLOSING
2.1 Closing. The sale and purchase of the Purchased
Assets shall be effective as of the Effective Date and
consummated at a closing (the "Closing") to be held at the
offices of WCD, 1000 Coolidge Street, South Plainfield, New
Jersey 07080-1000, or at such other place as the Parties may
mutually agree, on the date of execution of this Agreement, which
unless otherwise mutually agreed shall be on December 7, 1994
(the "Closing Date"); provided, however, that the Closing shall
occur no later than December 30, unless the Parties shall
otherwise mutually agree in writing. The day of the Closing is
sometimes referred to herein as the "Closing Date." At the
Closing,
(a) Sellers will execute this Agreement and
deliver to Buyer:
(i) the Deeds referred to in Section 1.4;
(ii) the Bill of Sale, Assignment and
Assumption Agreement referred to in Section 1.4;
(iii) the Certificate referred to in
Section 7.3(b);
(iv) the opinion of counsel to Sellers
referred to in Section 7.3(e);
(v) UCC termination statements and other
applicable documentation necessary to release any interest of any
third party (including without limitation First Fidelity Bank) in
the Purchased Assets;
(vi) The Registration Rights Agreement
referred to in Section 6.1(d), executed by WCD;
(vii) the Distribution Agreement referred
to in Section 5.10, executed by WCD; and
(viii) the Longhorn Shares, together with
duly executed stock power covering such securities duly executed
by WCD.
(b) Buyer will execute this Agreement, cause
Zemex to do the same and deliver to Sellers:
(i) the Cash portion of the Purchase Price
referred to in Section 3.2;
(ii) the Stock Portion of the Purchase Price
(i.e., the Shares) referred to in Section 3.3;
(iii) the Bill of Sale, Assignment and
Assumption Agreement referred to in Section 1.4;
(v) the opinion of counsel to Buyer referred
to in Section 7.2(e);
(vi) the Registration Rights Agreement
referred to in Section 6.1(d), executed by Zemex; and
(vii) the Distribution Agreement referred
to in Section 5.10, executed by Buyer.
ARTICLE 3
PURCHASE PRICE
3.1 Purchase Price. The consideration for the
Purchased Assets shall be Buyer's assumption of the Assumed
Liabilities as provided in Section 1.3, plus the payment to
Sellers of Four Million Three Hundred Eighty-Eight Thousand and
Five Hundred and Fifty-Seven Dollars ($4,388,557) payable to CMI,
CHM and PTC in consideration for the assets of the WCD Talc
Business (the "Cash Portion of the Purchase Price"), plus 136,360
shares of Zemex stock to be issued and delivered as described in
Section 3.3 (the "Stock Portion of the Purchase Price") to WCD in
exchange for the Longhorn Shares. (Collectively, the Cash
Portion of the Purchase Price and the Stock Portion of the
Purchase Price are referred to as the "Purchase Price".)
3.2 Payment to CMI, CHM and PTC and Adjustments of
Cash Purchase Price. On the Closing Date, Buyer shall pay the
Cash Portion of the Purchase Price to Sellers by same day funds,
wire transferred for receipt prior to 1:00 p.m. Eastern Time on
the Closing Date, and directed to such accounts as Sellers shall
designate.
3.3 Payment to WCD of Stock Portion of Purchase Price.
Subject to the terms and conditions hereof (and specifically of
the terms of Article 6), Buyer and Zemex shall deliver at the
Closing an aggregate 136,360 shares of Common Stock (the
"Shares") to WCD in exchange for the Longhorn Shares, all of
which Shares shall have the rights, powers, preferences and
limitations set forth herein (including without limitation in
Article 6 hereof) and in Zemex's Certificate of Incorporation.
In connection with the Shares, the Sellers shall be granted
certain registration rights pursuant to the Registration Rights
Agreement to be entered into by Zemex and Sellers in
substantially the form of Exhibit I.
3.4 Allocation of Purchase Price. Sellers and Buyer
have determined an allocation of the Cash Portion of the Purchase
Price among the purchased Assets, using the allocation method
required by Section 1060 of the Internal Revenue Code of 1986, as
amended (the "Code"), and the regulations thereunder, which
allocation schedule is attached hereto as Exhibit D. With
respect to the Shares, Sellers have advised Buyer and Zemex that
they desired the Shares be transferred and delivered to WCD.
Sellers and Buyer each agree to report the federal, state and
local income and other tax consequences of the transactions
contemplated herein, and in particular to report the information
required by Code Section 1060(b), in a manner consistent with
such allocation and will not take any position inconsistent
therewith upon examination of any tax return, in any refund
claim, in any litigation, investigation or otherwise. If Zemex
or Buyer are notified by the Internal Revenue Service of audit
and change to the valuation or allocation methodology employed
herein, Zemex and/or Buyer shall notify WCD and use its best
efforts to reasonably protect the interest of WCD in any such
audit or other investigation by such taxing authorities.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
4.1 Representations and Warranties of Sellers.
Sellers represent and warrant to Buyer and Zemex, as of the date
of this Agreement, with respect to the WCD Talc Business and
except as specifically modified and supplemented on the schedules
referred to herein and attached hereto (the "Disclosure
Schedules"), as follows:
(a) Organization of Sellers; Authorization.
WCD, CMI, CHM, PTC and Longhorn are corporations duly organized,
validly existing and in good standing under the laws of the
States of New Jersey, New York, North Carolina, Texas and
Delaware, respectively. Each Seller has full corporate power and
authority (i) to execute and deliver this Agreement, (ii) to
perform its obligations hereunder and (iii) to own, lease and
operate its properties and to carry on the WCD Talc Business as
now being conducted. The execution, delivery and performance of
this Agreement have been duly authorized by all necessary
corporate action (including, but not limited to, approval by the
Board of Directors) of each Seller and this Agreement constitutes
a valid and binding obligation of each Seller enforceable in
accordance with its terms, except insofar as such enforceability
may be limited by the application of bankruptcy, insolvency,
reorganization, moratorium and other laws affecting creditors'
rights generally and as limited by the availability of specific
performance and general principles of equity.
(b) No Conflict. Except for the matters set
forth in Schedule 4.1(b), neither the execution and delivery of
this Agreement nor the consummation of the transactions
contemplated hereby by Sellers will (i) violate any provision of
the certificate of incorporation or by-laws of any Seller, (ii)
violate, or be in conflict with, or constitute a default (or an
event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in the creation
or imposition of any encumbrance upon any of the Purchased Assets
under, any Material Contract, or (iii) violate any statute or law
or any judgment, decree, order, regulation or rule of any court
or other governmental body applicable to any Seller with respect
to any aspect of the WCD Talc Business.
(c) Balance Sheet; Inventory; Accounts
Receivable. Sellers have delivered to Buyer the 11/30/94 Balance
Sheet, which was prepared consistently with Seller's December 31,
1993 Balance Sheet for the WCD Talc Business and which presents
fairly in accordance with GAAP the assets and liabilities of the
WCD Talc Business as of such date. The values of obsolete or
substandard items of Inventory have been written down to
realizable market values or written off, or adequate reserves
therefore have been established on the 11/30/94 Balance Sheet.
The Accounts Receivable (as defined in Section 1.1(e), i.e.,
exclusive of intercompany receivables) of the Business shown on
the 11/30/94 Balance Sheet have been collected or are collectible
in the ordinary course of business net of the reserves identified
on the 11/30/94 Balance Sheet.
(d) Absence of Undisclosed Liabilities. Except
(i) as listed in Schedule 4.1(d), prior to the Closing Date the
Business has not incurred any liability or obligation (whether
accrued, absolute, contingent or otherwise) of a nature required
by GAAP to be reflected on a corporate balance sheet or disclosed
in the notes thereto which has not been discharged prior to the
date of this Agreement and which materially and adversely affects
the WCD Talc Business collectively or the CMI, CHM or PTC
Businesses individually.
(e) Consents and Approvals of Governmental
Bodies. No consent, approval or authorization of, or
declaration, filing or registration with, any governmental body
is required in connection with the execution, delivery and
performance by Sellers of this Agreement or the consummation of
the transactions contemplated hereby.
(f) Title to Real Property. At Closing Buyer
will acquire good and marketable or insurable title to the Real
Property, free and clear of all mortgages, pledges, liens,
security interests, conditional sales agreements, encumbrances,
charges, limitations, exceptions or restrictions of any kind
("Liens"), except for: (i) Liens created by or arising through
Buyer; (ii) reservations, easements, conditions and any other
restrictions of record; zoning ordinances or other limitations
imposed by any authority having jurisdiction over real property;
taxes and assessments, both general and special, which create a
lien but are not yet due and payable; rights; claims,
encroachments or discrepancies in boundaries not shown by the
public records and any other facts which a correct survey and/or
inspection of the real property would disclose; and (iii) the
Liens listed in Schedule 4.1(f).
(g) Title to Personal Property. At Closing Buyer
will obtain good and marketable title to the Fixed Assets and
Equipment and Inventory, free and clear of all Liens except for:
(i) Liens created by or arising through Buyer; and (ii) the Liens
listed in Schedule 4.1(f).
(h) Contracts. All of the Material Contracts are
in full force and effect and, except as disclosed elsewhere in
this Agreement or the Disclosure Schedules, Sellers have no
knowledge of any default or condition which, with notice or the
lapse of time or both, would constitute a default, in any
material obligation of Sellers under any Material Contract, the
effect of which would materially and adversely affect the WCD
Talc Business collectively or the CMI, CHM or PTC Businesses
individually.
(i) Litigation. Except as provided in Schedule
4.1(i), there is no action, suit or proceeding (collectively, a
"Proceeding") by or before any court or governmental body pending
or, to the knowledge of Sellers, threatened, against any of the
WCD Talc Business or which questions or challenges the validity
of this Agreement or any action taken or to be taken by Sellers
pursuant to this Agreement or in connection with the transactions
contemplated hereby. Schedule 4.1(i) lists all pending
Proceedings against the WCD Talc Business or initiated by any of
the Sellers and pertaining to the WCD Talc Business against third
parties, except for Proceedings which seek only monetary relief
in an amount not exceeding $10,000 in any one Proceeding or group
of Proceedings which arise out of the same facts. Further,
except as listed in Schedule 4.1(i), Sellers are not subject to
any judgment, order or decree that reasonably may be expected to
have a material adverse effect on the WCD Talc Business
collectively or the WCD, CMI, CHM or PTC Businesses individually.
(j) Compliance with Applicable Law. The conduct
of the WCD Talc Business and the current uses to which the
Purchased Assets have been put are not in violation of any
material statute, ordinance, regulation, license or permit
except: (i) as listed on Schedule 4.1(j); and (ii) for violations
which would not, in the aggregate, have a material adverse effect
on the WCD Talc Business collectively or the CMI, CHM or PTC
Businesses individually.
(k) Environmental Matters; Permits.
(i) Except as indicated in Schedule 4.1(k),
to the best of Sellers' knowledge, information and belief, there
are no specific facts or circumstances that would indicate that
Sellers are not, or will not be prior to Closing, in substantial
compliance with all material Environmental Laws, nor that the
present condition of the WCD Talc Business or the Real Property,
or Sellers' present or past activities or manner of owning and
operating the WCD Talc Business or the Real Property (including
on-site or off-site disposal of waste or other materials on the
Real Property), gives rise to any liability to any person,
contingent or otherwise under Environmental Law which would
materially and adversely affect the WCD Talc Business
collectively or the CMI, CHM or PTC Businesses individually. For
purposes of this Agreement, "Environmental Law" shall mean any
presently effective federal, state or local statute, ordinance or
promulgated rule or regulation, any judicial or administrative
order (whether or not on consent) or judgment, and any provision
or condition of any permit, license or other operating
authorization relating to protection of the environment
(including wildlife), persons (including employees) or the public
welfare from actual or potential exposure (or the effects of
exposure) to any actual or potential release, discharge or
emission (whether past or present) of any chemical, raw material,
pollutant, contaminant, toxic or hazardous substance or
condition.
(ii) Schedule 4.1(k) also sets forth each
environmental permit, license, consent and authorization
(collectively, the "Material Permits") issued by or required by a
governmental entity to own or operate the WCD Talc Business as
now conducted by Sellers. Sellers have no reason to believe that
such Material Permits are not, renewable upon expiration or
subject to materially different terms upon either transfer or
renewal, or that Buyer will not be able to obtain new/replacement
permits upon proper application therefor following the Closing.
(l) No Brokers and Finders. Neither Sellers nor
any affiliate of WCD has incurred any liability for any brokerage
or finders fees or commissions or similar payments in connection
with any of the transactions contemplated hereby.
(m) Absence of Change. Since December 31, 1993,
except as listed in Schedule 4.1(m) or the other Schedules hereto
or as otherwise contemplated by this Agreement, (i) the WCD Talc
Business has been operated in the ordinary course of business in
a manner consistent with past practice; (ii) there has not been
any material adverse change in the Purchased Assets or in the
operations or financial condition of the WCD Talc Business; and
(iii) the WCD Talc Business has not incurred any damage or
destruction in the nature of a casualty loss, not covered by
insurance, that materially and adversely affects the WCD Talc
Business.
(n) Labor Matters. There are no collective
bargaining agreements in place governing the employees of the WCD
Talc Business, nor is any union organizing effort underway or
threatened with respect thereto. There are no labor disputes
pending or initiated between Sellers and any of their respective
employees except for disputes which do not have a material and
adverse effect on the WCD Talc Business collectively or the CMI,
CHM or PTC Businesses individually.
(o) Benefit Plans.
(i) Employee Welfare Benefit Plans.
Schedule 4.1(o)(i) lists Sellers' employee welfare benefit plans
relating to Employees as such term is defined in Section 3(l) of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). With respect to each such plan, (i) the plan is in
material compliance with ERISA; (ii) the plan has been
administered in accordance with its governing documents; (iii)
neither the plan, nor any fiduciary with respect to the plan, has
engaged in any "prohibited transaction" as defined in Section 406
of ERISA other than any transaction subject to a statutory or
administrative exemption; (iv) except for the processing of
routine claims in the ordinary course of administration, there is
no material litigation, arbitration or disputed claim
outstanding; and (v) all premiums due on any insurance contract
through which the plan is funded have been paid or are current in
the normal course of business.
(ii) Employee Pension Benefit Plans. Other
than WCD's profit sharing plan (WCD's Profit Sharing Plan") as
listed on Schedule 4.1(o)(ii), Sellers have no "employee pension
benefit plans" relating to Employees, as such term is defined in
Section 3(2) of ERISA. With respect to each such plan listed on
Schedule 4.1(o)(ii): (A) the plan is qualified under Section
401(a) of the Code, and any trust through which the plan is
funded meets the requirements to be exempt from federal income
tax under Section 501(a) of the Code; (B) the plan is in material
compliance with ERISA; (C) the plan has been administered in
accordance with its governing documents as modified by applicable
law; (D) the plan has not suffered an "accumulated funding
deficiency" as defined in Section 412(a) of the Code; (E) the
plan has not engaged in, nor has any fiduciary with respect to
the plan engaged in, any "prohibited transaction" as defined in
Section 406 of ERISA or Section 4975 of the Code other than a
transaction subject to statutory or administrative exemption;
(F) the plan has not been subject to a "reportable event" (as
defined in Section 4043(b) of ERISA), the reporting of which has
not been waived by regulation of the Pension Benefit Guaranty
Corporation; (G) no termination or partial termination of the
plan has occurred within the meaning of Section 411(d)(3) of the
Code; (H) all contributions required to be made to the plan under
any applicable collective bargaining agreement have been made to
or on behalf of the plans (I) there is no material litigation,
arbitration or disputed claim outstanding; and (J) all applicable
premiums due to the Pension Benefit Guaranty Corporation for plan
termination insurance have been paid in full on a timely basis.
(iii) Employment and Non-Tax Qualified
Deferred Compensation Arrangements. CMI, CHM and PTC do not
maintain or contribute to any retirement or deferred compensation
arrangement entered into between any of such parties and any
current or former officer, consultant, director or employee of
the CMI, CHM, PTC or the WCD Talc Business that is not intended
to be a tax qualified arrangement under Section 401(a) of the
Code.
Contracts.
(q) Investment Intent. WCD represents and
warrants to the Buyer and Zemex that it is purchasing and will
purchase the Shares for its own account, with no present
intention of distributing or reselling the Shares or any part
thereof, and it is prepared to bear the economic risk of
retaining the Shares for an indefinite period, all without
prejudice, however, to its right at any time, in accordance with
this Agreement (and specifically subject to the provisions of
Article 6), lawfully to sell or otherwise dispose of all or any
part of the Shares held by it. WCD also represents and warrants
that it is an accredited investor, as such term is defined in
Rule 501 of Regulation D promulgated under the Securities Act.
WCD agrees that if, and to the extent, it elects to sell the
Shares, it will do so in compliance with the provisions and
requirements of the Securities Act and applicable state
securities laws.
(r) Longhorn Shares; Longhorn Tax Matters. WCD
is the owner of 2,000 shares of Common Stock, no par value, of
Longhorn (the "Longhorn Shares"), which constitute all of the
issued and outstanding capital stock of such company. All of the
Longhorn Shares are owned of record and beneficially by WCD.
None of the Longhorn Shares was issued or will be transferred
under this Agreement in violation of any preemptive or
preferential rights of any person. The authorized capital of
Longhorn consists of 3,000 shares of Common Stock, no par value,
of which only the aforementioned 2,000 shares are issued and
outstanding. WCD owns the Longhorn Shares, free and clear of any
liens, restrictions, security interests, claims, rights of
another, or encumbrances (it being acknowledged that WCD's pledge
of, and grant of a security interest in, the Longhorn Shares to
First Fidelity will be released on the Closing Date), and none of
the Longhorn Shares is subject to any outstanding option,
warrant, call or similar right of any other person to acquire the
same, and none of the Longhorn Shares is subject to any
restriction on transfer thereof except for restrictions imposed
by applicable federal and state securities laws. WCD has full
power and authority to convey good and marketable title to the
Longhorn Shares, free and clear of any mortgages, liens,
restrictions, security interests, claims, rights of another or
encumbrances. All tax returns of every kind (including income
taxes) relating to Longhorn that are due to have been filed in
accordance with any applicable law have been duly filed by
Longhorn or the Sellers; and all taxes shown to be due on such
returns have been paid in full.
(s) Reclamation and Performance Bonds. There
exist no reclamation and performance bonds in support of the
reclamation obligations of the WCD Talc Business, nor (to the
best of Seller's knowledge of the Closing Date) are any such
bonds required by law.
4.2 Representations and Warranties of Buyer and Zemex.
Buyer and Zemex represent and warrant to Sellers, as of the date
of this Agreement, as follows:
(a) Organization of Buyer; Authorization. Buyer
and Zemex are corporations duly organized, validly existing and
in good standing under the laws of Delaware, with full corporate
power and authority to execute and deliver this Agreement and to
perform their obligations hereunder. Buyer is (or, before the
Closing Date, will be) duly qualified to do business and in good
standing in the States of New York, North Carolina and Texas.
The execution, delivery and performance of this Agreement have
been duly authorized by all necessary corporate action and this
Agreement constitutes a valid and binding obligation of Buyer and
Zemex, respectively, enforceable against them in accordance with
its terms, except insofar as such enforceability may be limited
by the application of bankruptcy, insolvency, reorganization,
moratorium and other laws affecting creditors' rights generally
and as limited by the availability of specific performance and
general principles of equity.
(b) No Conflict. Neither the execution and
delivery of this Agreement nor the consummation of the
transactions contemplated hereby by Buyer or Zemex will (a)
violate any provision of the certificate of incorporation or by-
laws (or other governing instrument) of Buyer or Zemex, (b)
violate, or be in conflict with, or constitute a default (or an
event which, with notice or lapse of time or both, would
constitute a default) under any agreement or commitment to which
Buyer or Zemex is party or (c) violate any statute or law or any
judgment, decree, order, regulation or rule of any court or other
governmental body applicable to Buyer or Zemex.
(c) Litigation. There is no action, suit or
proceeding by or before any court or governmental body pending
or, to the knowledge of Buyer or Zemex, threatened against Buyer
or Zemex which challenges the validity of this Agreement or any
action taken or to be taken by Buyer or Zemex pursuant to this
Agreement or in connection with the transactions contemplated
hereby.
or finder's fees or commissions or similar
payments in connection with any of the transactions contemplated
hereby.
(e) Consents and Approvals of Governmental
Bodies. No consent, approval or authorization of, or
declaration, filing or registration with, any governmental body
is required in connection with the execution, delivery and
performance by Buyer or Zemex of this Agreement or the
consummation of the transactions contemplated hereby.
(f) Capitalization; Issuance of Shares; Exemption
from
Registration.
(i) Capitalization.
(A) Zemex's authorized capital stock
consists of 10,000,000 shares of Common Stock, par value $1.00
(the "Common Stock"), of which 6,925,982 shares were issued and
outstanding as of September 30, 1994.
(B) On the date hereof, and other than
as described in the Zemex's financial statements or issued
pursuant to this Agreement or as previously disclosed to the
Sellers, there are no (x) outstanding subscriptions, options,
warrants, rights, convertible securities or other agreements or
commitments of any character obligating Zemex to purchase,
redeem, issue, transfer or deliver any shares of its capital
stock, or other equity security, and (y) no agreements or
understandings, written or oral, with any holder of securities of
Zemex, or holder of any obligation or right to acquire such
securities.
(C) On the date hereof, Zemex's Common
Stock is listed on the New York Stock Exchange under the symbol
"ZMX" and is current on its reporting requirements under the
Securities and Exchange Act of 1934, as amended.
(ii) Issuance of Shares. The issuance, sale
and delivery of the Shares in accordance with this Agreement has
been duly authorized by all necessary corporate action on the
part of Zemex and the Shares when so issued, sold and delivered
against payment therefor in accordance with this Agreement, when
issued upon such conversion, will be duly and validly issued,
fully paid and nonassessable.
(iii) Exemption from Registration.
Subject to the accuracy of the Sellers' representations in
Section 4.1(q) hereof, the offer, sale and issuance of the Shares
as contemplated by this Agreement is exempt from the registration
requirements of the Securities Act and the securities laws of any
state having jurisdiction with respect to the transactions
contemplated by this Agreement, and neither the Buyer, Zemex nor
anyone acting on their behalf has or will take any action that
would cause the loss of such exemption.
ARTICLE 5
COVENANTS AND OTHER AGREEMENTS OF THE PARTIES
5.1 Continuity of Employment. Buyer shall offer
continuity of employment to all individuals who are employees of
the WCD Talc Business as of the Closing Date (the "Rehired
Employees"), in equivalent positions, at the same salary or wage
levels for a reasonable period of time following the Closing, but
not less than 90 days following the Closing. Buyer will
indemnify and hold Sellers harmless from any cost or expense
arising from Buyer's breach of this provision including, without
limitation, claims for vacation pay and severance pay and
liabilities arising under the Worker Adjustment and Retraining
Notification Act, with respect to any Rehired Employee who is not
offered an equivalent position and salary level by Buyer or who
has accepted such an offer and who is later dismissed, laid off
or had his or her hours reduced by more than 50% by the Buyer
during such period for any reason other than for cause. Such
continuity of employment will require, among other things, that
Buyer recognize all prior continuous service with Sellers for
purposes of determining eligibility and vesting in applying any
of Buyer s employment policies and benefit programs.
5.2 Defined Benefits Plans. Except as provided in
Section 5.1, Sellers will retain sole responsibility for all
employment, retirement, pension, profit sharing, wage, incentive,
bonus, deferred compensation, life insurance, stock option,
disability, severance payments, health and welfare benefits, and
other benefits, if any, to which the Rehired Employees are
entitled up to and effective as of the Effective Date, and for
all workers compensation, unemployment compensation or disability
claims and insurance premiums which relate to the period of
employment by Sellers ending on or before the Effective Date
(collectively, the "Employee Plans"). As of the Effective Date,
Sellers shall terminate all Rehired Employees and shall pay such
Rehired Employees all wages and salary accrued as of such date
other than accrued vacation pay. Sellers intend to cause all
benefits due to such terminated Rehired Employees under WCD's
Profit Sharing Plan to become fully vested as of the Effective
Date to the extent allowed under the terms of WCD's Profit
Sharing Plan. Sellers may, subject to the terms of WCD's Profit
Sharing Plan, pay the balance of account balances in WCD's Profit
Sharing Plan to Rehired Employees. Sellers shall be responsible
for all benefits, and claims incurred prior to the Effective Date
under Sellers' Employee Plans and any other worker's compensation
or welfare benefit plans of Sellers. Buyer shall be responsible
for all benefits, and claims incurred on or after the Effective
Date under Buyer's benefit plans.
5.3 Sales and Transfer Taxes; Prorations. The Parties
shall cooperate in obtaining any available exemptions from sales,
use and transfer taxes. Except as provided in Section 5.4, all
real estate taxes, personal property taxes and utility charges
relating exclusively to the WCD Talc Business shall be prorated
as of the Closing and amounts owing to Sellers by Buyer, or to
Buyer by Sellers, resulting from such proration shall be settled
within 30 days after the Closing Date in the case of prepaid
taxes or expenses, or within 30 days after the date on which such
taxes or expenses are paid by Buyer, in the case of taxes or
expenses which are billed after the Closing. Prior to the
Closing, Sellers shall pay all expenses ordinarily paid in the
normal course of operating the WCD Talc Business, including
payroll, and shall be responsible for all FICA and administrative
payroll matters until the Effective Date.
5.4 New York Real Property Transfer Gains Tax.
Sellers and Buyer shall cooperate in filing all real property
transfer gains tax documentation required by the New York State
Department of Taxation and Finance in connection with the
transfer of the purchased Assets pertaining to the CMI Business,
and prior to the Closing Sellers shall have received and
delivered to Buyer a copy of the tentative assessment of the real
property transfer gains tax. Sellers shall be responsible for
payment of all real property transfer gains tax (including
interest and penalties) with respect to the transactions
contemplated hereby.
5.5 Access to Information. (a) For a reasonable
period following the Closing Date consistent with Buyer's record
retention policies as in effect or subsequently modified and, in
any case, for at least one year or such longer period as may be
required by any applicable law, Buyer will retain, at its sole
expense, the books, records and other data of the WCD Talc
Business transferred pursuant to Section 1.1(j) hereof.
Similarly, for a reasonable period following the Closing Date
consistent with Sellers' record retention policies as in effect
or subsequently modified and, in any case, for at least one year
or such longer period as may be required by any applicable law,
Sellers will retain, at its sole expense, any books, records or
other data relating to the WCD Talc Business retained by Sellers
at locations other than the Real Property. During such period,
each Party will afford to the other Party, its counsel and
accountants, during normal business hours, reasonable access to
such books, records and other data, including, without
limitation, the opportunity to copy such materials at the other
Party s sole expense. Following the expiration of such period,
the Party retaining such materials (the "Retaining Party") may
dispose of any such books, records and other data; provided,
however, that before disposing of any such materials, the
Retaining Party shall give the other Party at least 30 days
notice of its intent to dispose of such materials and the other
Party may, within such 30-day period, notify the Retaining Party
of its desire to obtain such materials. Following its receipt of
such notice from the other Party, the Retaining Party shall
permit the other Party, at the other party's sole expense, to
remove such materials.
(b) For a reasonable period following the Closing
and subject to restrictions imposed by law, Buyer and Sellers
shall each consult and cooperate with the other upon request, at
the requesting Party's sole expense, in connection with any
matter, claim, investigation or proceeding, involving an
independent third party with respect to the Party's respective
ownership or operation of or other involvement with the WCD Talc
Business, directly or indirectly, and as a part of such
obligation to cooperate, shall, without limitation, and subject
to any applicable privilege of confidentiality, allow reasonable
access to and use of the assets or other facilities of the WCD
Talc Business, provided, that such access and/or use shall not
interrupt the operations of the WCD Talc Business, and Sellers
shall allow Buyer reasonable access to and the assistance of all
managers or other consultants, employees or agents of the WCD
Talc Business.
5.6 Transition. Buyer and Sellers shall use their
best efforts to identify and make appropriate arrangements for
dealing with any transition problems which may be involved, in
the transfer of the WCD Talc Business to Buyer and Buyer's
commencement of operations of such business.
5.7 Environmental Audit. Buyer's counsel engaged a
consulting firm that has conducted an environmental audit of the
Real Property and the WCD Talc Business (the "Environmental
Audit"), which audit was substantially completed and delivered in
draft form on or about November 30, 1994 with respect to
environmental matters relating to the WCD Talc Business. Buyer
and Sellers agree to split the cost of the Environmental Audit on
a 50/50 basis, subject to a cap of $25,000 as to Sellers' half,
with payment of same to be check to Buyer's counsel's Agency
Account at Closing. A copy of the findings of the Environmental
Audit has been delivered to Buyer by Buyer's counsel.
5.8 Noncompetition. For and in consideration of the
payment by Buyer of the Purchase Price hereunder, Sellers
expressly covenants and agrees that for a period of five years
from the Closing Date, Sellers will not directly or indirectly,
without the prior written consent of the Buyer, (i) own any
interest in, manage, operate or control, finance, or participate
in the ownership, management, operation or control of, any entity
which is engaged in the business of extracting, processing or
producing talc or talc products for sale to the paint, chemical,
glass, cosmetics or other industry within 100 miles of the
location of the current locations of any of the WCD, CMI, CHM or
PTC Businesses, (ii) sell "dark" baryte products or talc to the
"ceramics industry" or the "filler industry," or (iii) attempt to
recapture any paint or plastics customers supplied by the WCD
Talc Business facilities as of the Closing Date. With respect to
premium talc produced by the Diana, New York facilities purchased
by Buyer from CMI, WCD has agreed to certain non-competition
terms pursuant to the Distribution Agreement. Notwithstanding
the foregoing, however, the parties acknowledge that talc
produced from various parts of the world contains individual
performance characteristics and have individual applications, and
from time to time customers of talc will change their sources of
talc solely on the basis of physical properties and without
influence or control by Buyer or WCD.
5.9 Temporary Accounting Assistance.
(a) Accounting; December 1994 Medical Insurance
Coverage. Buyer and Sellers agree that until January 31, 1995 or
such later date as the parties may mutually agree, WCD shall
continue to manage and perform all accounting functions with
respect to the WCD Talc Business, on terms and subject to such
conditions as the parties may mutually agree in a separate
written agreement.
(b) Medical Insurance. Notwithstanding anything
to the contrary in this Agreement, during the month of December,
1994, the parties agree that the Seller will assist Buyer with
extending existing medical insurance coverage for Rehired
Employees of the WCD Talc Business, at Buyer's expense, on the
following basis: (i) with respect to Rehired Employees of the
CMI Business, coverage will continue under CMI's Guardian medical
plan during December, 1994, and Buyer will reimburse CMI for the
actual cost of the premium for such month; and (ii) with respect
to CHM and PTC Rehired Employees, coverage will continue under
WCD's CIGNA medical insurance policy during December 1994, and
Buyer will reimburse WCD for the premium for such month at the
COBRA rate of 102% of the actual premium for such Rehired
Employees.
5.10 Distribution Agreement. In connection with this
Agreement and the transactions contemplated hereby, and as a
material inducement to Buyer to purchase the WCD Talc Business
generally and the CMI Business specifically, the parties agree to
enter, effective as of the Effective Date, the Distribution
Agreement in substantially the form as attached hereto as Exhibit
J.
ARTICLE 6
THE ZEMEX SHARES
6.1 Restrictions on Transferability of Shares;
Compliance with Securities Act; Registration Rights.
(a) Restrictions on Transferability. The Shares
shall not be transferable, except upon the conditions specified
in this Section 6.1. Sellers will cause any successor or
proposed transferee of its Shares to agree to take and hold such
securities subject to the conditions specified in this Section
6.1. Sellers acknowledge the restrictions upon their right to
transfer the Shares set forth in this Section 6.1.
(b) Restrictive Legend. For purposes hereof,
each certificate representing the Shares shall constitute
"Restricted Securities" (unless otherwise permitted or unless the
securities evidenced by such certificate shall have been
registered under the Securities Act) and shall be stamped or
otherwise imprinted with a legend in the following form (in
addition to any legend required under applicable state securities
laws):
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS. THEY MAY
NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND
ANY APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL
SATISFACTORY TO ZEMEX THAT SUCH REGISTRATION IS NOT REQUIRED.
THESE SECURITIES ARE SUBJECT TO, AND ARE TRANSFERABLE
ONLY UPON COMPLIANCE WITH, THE PROVISIONS OF ARTICLE 6 OF THAT
CERTAIN ASSET PURCHASE AGREEMENT, DATED AS OF DECEMBER 7, 1994,
BETWEEN ZEMEX CORPORATION AND CERTAIN PARTIES DESCRIBED THEREIN
AS "SELLERS." A COPY OF THE ABOVE REFERENCED AGREEMENT IS ON
FILE AT THE OFFICES OF ZEMEX CORPORATION AT CANADA TRUST TOWER,
BCE PLACE, 161 BAY STREET, SUITE 3750, P.O. BOX 703, TORONTO,
ONTARIO, CANADA M5J 2S1."
Upon request of a holder of such a certificate, Zemex
shall remove the foregoing legend from the certificate or issue
to such holder a new certificate therefor free of any transfer
legend, if, with such request, Zemex shall have received the
opinion referred to in Section 6.1(c).
(c) Notice of Proposed Transfer.
(i) Notice. Prior to any proposed transfer
of any Restricted Securities, the holder thereof shall give
written notice to Zemex of such holder's intention to effect such
transfer. Each such notice shall describe the manner and
circumstances of the proposed transfer in sufficient detail, and
shall be accompanied by a written opinion of legal counsel
reasonably satisfactory to Zemex, addressed to Zemex and
reasonably satisfactory in form and substance to Zemex's counsel,
to the effect that the proposed transfer of the Restricted
Securities may be effected without registration under the
Securities Act, whereupon the holder of such Restricted
Securities shall be entitled to transfer such Restricted
Securities in accordance with the terms of the notice delivered
by the holder to Zemex.
(ii) Certificate for Transferred Securities.
Each certificate evidencing the Restricted Securities transferred
as above provided shall bear the appropriate restrictive legend
set forth in Section 6.1(b) above, except that such certificate
shall not bear such restrictive legend if the opinion of counsel
referred to above is to the further effect that such legend is
not required in order to establish compliance with any provisions
of the Securities Act. Each transferee of Restricted Securities
shall agree with respect to those securities that remain
Restricted Securities to be bound by the terms of this Section
6.1(c).
(d) Registration Rights. WCD shall have such
registration rights with respect to the Shares as are set forth
in the Registration Rights Agreement in substantially the form as
attached hereto as Exhibit I, which the parties agree to enter
into effective as of the Closing Date.
6.2 Redemption of Shares. The Shares shall be subject
to the following right of redemption by Zemex:
(a) Optional Redemption by Zemex; Redemption
Price. Subject to the terms hereof, Zemex or its assignee(s),
may at its option elect to redeem all or any portion of the
shares Stock at any time after the date of this Agreement (the
"Issue Date") for a redemption price of $11.00 per share,
adjusted proportionately to reflect any stock dividends, stock
splits, reverse stock splits or stock combinations of Zemex which
have occurred since the Issue Date (the "Redemption Price"). The
provisions of this Section 6.1 shall terminate with respect to
any Shares that are sold in a Public Market by the holder thereof
in compliance with the terms of this Article 6. For purposes
hereof, "Public Market" for the Common Stock of Zemex shall mean
either (i) the New York Stock Exchange or the Toronto Stock
Exchange or (ii) any other national exchange, the NASDAQ National
Market System or any registered interdealer quotation system.
(b) Notice of Redemption. Not more than 60 nor
less than 15 days prior to any date fixed for redemption, notice
by first class mail, postage prepaid, certified or registered,
return receipt requested, shall be given to WCD that Zemex or its
assignee(s) desire to redeem, addressed to WCD at its last
address as shown on the records of Zemex (a "Redemption Notice").
Each Redemption Notice shall state (i) the date fixed for
redemption (the "Redemption Date"); (ii) the total number of
Shares to be redeemed; (iii) the total Redemption Price for all
shares; and (iv) the place or places where the Shares to be
redeemed are to be surrendered for payment of the Redemption
Price.
(c) Surrender and Payment. If redemption occurs
pursuant to this Section 6.1, on or after the date fixed for
redemption, WCD shall surrender the certificate evidencing such
Shares to Zemex and shall thereupon be entitled to receive
payment therefor.
6.3 Payment upon Sale in a Public Market. Should WCD
desire to sell the Shares in a Public Market (a "Public Sale"),
such holder shall give Zemex at least 10 days written notice of
such Public Sale including the proposed sale price of the Shares.
In the event that the sale price for the Shares to be sold in the
Public Sale (net of any customary brokerage commissions) exceeds
the Redemption Price, the holder of such Shares shall pay to
Zemex the amount, if any, by which the sale price for the Shares
to be sold in the Public Sale exceeds the Redemption Price upon
consummation of such Public Sale. Any such Public Sale shall be
effected in an orderly manner so as to maximize value and
minimize market price disruption over a 30-day period. In no
event will the Shares be released from the Escrow (as hereinafter
defined) until arrangements have been made reasonably
satisfactory to Zemex that such amount will be paid to Zemex upon
consummation of such sale.
6.4 Payment upon Private Resale.
(a) Should WCD desire to sell its Shares in a
private resale of the Shares (a "Private Sale"), WCD shall give
Zemex at least 10 days written notice of such Private Sale
including the proposed sale price of the Shares; provided,
however, that any dividend by WCD of the Shares to WCD's
shareholders (which dividend must comply with the provisions of
Section 6.1 regarding restrictions on transfer) shall not, for
the purposes of this Section 6.4, constitute a Private Sale;
provided, however (and consistent with Section 6.1), such WCD
shareholders shall be subject to the provisions of this Article 6
to the same extent as WCD was prior to the transfer. In the
event that the sale price for the Shares to be sold in the
Private Sale exceeds the Redemption Price, Zemex shall be paid
the amount, if any, by which the sale price for the Shares to be
sold in the Private Sale exceeds the Redemption Price upon
consummation of such Private Sale. In no event will such Shares
be released from the Escrow (as hereinafter defined) until
arrangements have been made reasonably satisfactory to Zemex that
such amount is paid to Zemex upon consummation of such sale.
(b) The ability of WCD to sell its Shares in a
Private Sale is conditioned upon (i) the purchase price for the
Shares to be sold in the Private Sale being equal to or exceeding
90% of the Public Market Price (as hereinafter defined) for
shares of Zemex Common Stock and (ii) such Private Sale being
made to a non-affiliate (as defined in Section 9.10) of WCD or
its shareholders. The "Public Market Price" shall mean the
average closing price of the Company's Common Stock on the New
York Stock Exchange over the last 10 trading days prior to the
date of the Private Sale.
6.5 Obligation to Sell upon Demand in Certain
Circumstances. If at any time while WCD remains holder of the
Shares, in the event that market price for Zemex Common Stock
shall exceed the Redemption Price for a period of at least five
trading days, Zemex shall have the right to require the holder of
the Shares to sell its Shares in such Public Market (to the
extent WCD may do so under applicable securities laws) or to a
private purchaser(s) identified by Zemex within 30 days of
Zemex's written notice demanding such sale (in either event, a
"Demand Sale"). Notwithstanding the foregoing, such Demand Sale
shall be conditioned upon (i) WCD's receipt of no less than the
Redemption Price for its Shares in such Demand Sale and (ii)
evidence that such Demand Sale is permissible under applicable
securities laws. In the event that the sale price for the Shares
to be sold in the Demand Sale (net of any customary brokerage
commissions) exceeds the Redemption Price, Zemex shall be paid
the amount, if any, by which the sale price for the Shares to be
sold in the Demand Sale exceeds the Redemption Price upon
consummation of such Demand Sale. In addition, if such Demand
Sale is conducted through the Public Market, any such sale shall
be effected in an orderly manner so as to maximize value and
minimize price disruption over a 30-day period. In no event will
the Shares be released from the Escrow (as hereinafter defined)
until arrangements have been made reasonably satisfactory to
Zemex that amount will be paid to Zemex. upon the consummation of
such sale.
6.6 Escrow of Shares. In order to secure the
obligations of WCD as the holders of the Shares under this
Article 6, the parties to this Agreement hereby agree to place
the shares into escrow (the "Escrow") with Davis, Graham &
Stubbs, L.L.C. (the "Escrow Agent"). Pursuant to the terms of the
Escrow, the Escrow Agent shall hold the Shares in the Escrow
until the earlier of (i) the date the Shares are redeemed by
Zemex or its assignee(s) in accordance with the provisions of
Section 6.1 above; (ii) the Shares are sold in a Public Market
after compliance with the provisions of Section 6.2 above; (iii)
the Shares in a Private Resale in compliance with the provisions
of Section 6.3 above; (iv) the sale of such Shares in a Demand
Sale in compliance with the provisions of Section 6.4 above; or
(v) upon a sale of all or substantially all of the capital stock
or assets of Zemex.
6.7 Binding Effect. The rights and duties of Zemex
under this Article 6 are expressly assignable by Zemex to its
successors and assigns. The provisions of this Article 6 shall
survive any sale, pledge, gift hypothecation or other transfer of
Shares by WCD until such time as the Shares are released from the
Escrow.
ARTICLE 7
CONDITIONS TO CLOSING
7.1 General Conditions. The obligations of each Party
to effect the transactions contemplated by this Agreement shall
be subject to the satisfaction at or prior to the Closing of the
following conditions:
(a) No Prohibition. No order, statute, rule,
regulation, executive order, injunction, stay, decree or
restraining order shall have been enacted, entered, promulgated
or enforced by any court of competent jurisdiction or
governmental or regulatory authority or instrumentality that
prohibits the consummation of the transactions contemplated
hereby, and no litigation or governmental proceeding seeking such
an order shall be pending or threatened.
(b) Material Titles and Permits. Transfer to
Buyer of all real property titles and environmental, processing
or mining permits material to the WCD Talc Business shall have
been completed to Buyer's and its counsel's reasonable
satisfaction; provided, however, to the extent a permit is non-
transferable, Seller shall assist Buyer in its application for
new/replacement permits.
7.2 Conditions to Sellers' Obligations. Sellers'
obligations to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment of the following
conditions, any of which may be waived by Sellers in WCD's sole
discretion:
(a) Buyer's Performance. Buyer shall have
performed, in all material respects, the obligations required
under this Agreement to be performed by it at or prior to the
Closing.
(b) Representations and Warranties True;
Officer's Certificate. Certificates of senior officers of Buyer
and Zemex certifying that the representations and warranties of
Buyer and Zemex (respectively) contained herein shall be true and
correct, in all material respects, at and as of the Closing Date,
and pertaining to corporate authority, etc., in substantially the
form attached hereto as Exhibit E, shall be delivered at Closing.
(c) Payments and Assumption of Liabilities.
Sellers shall have received from Buyer the Purchase Price as
provided in Sections 3.1, 3.2 and 3.3 and received the executed
General Assignment, Bill of Sale and Assumption Agreement as
required by Section 1.4.
(d) Approval and Consents. Sellers shall have
received all necessary consents, approvals and authorizations,
and achieved satisfaction of such third party requirements, as
are necessary to consummate the transactions contemplated hereby.
(e) Opinion of Counsel of Buyer. Sellers shall
have received an opinion of Davis, Graham & Stubbs, L.L.C.,
counsel to Buyer, dated as of the Closing Date, substantially in
the form attached hereto as Exhibit F.
7.3 Conditions to Buyer's Obligations. Buyer's
obligations to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment of the following
conditions, any of which may be waived by Buyer in its sole
discretion:
(a) Sellers' Performance. Sellers shall have
performed in all material respects, the obligations required
under this Agreement to be performed by it at or prior to the
Closing.
(b) Representations and Warranties True;
Officer's Certificate. A certificate of senior officers of
Sellers certifying that the representations and warranties of
Sellers contained herein shall be true and correct, in all
material respects, at and as of the Closing Date, and pertaining
to corporate authority, etc., substantially in the form attached
hereto as Exhibit G, shall be delivered at Closing.
(c) Approvals and Consents. Buyer shall have
received approval of its Board of Directors and all other
necessary consents, approvals and authorizations, and achieved
satisfaction of such third party requirements, as are necessary
to consummate the transactions contemplated hereby.
(d) Opinion of Counsel of Sellers. Buyer shall
have received an opinion of Apruzzese, McDermott, Mastro &
Murphy, P.C., counsel to Sellers, dated as of the Closing Date,
substantially in the form attached hereto as Exhibit H.
ARTICLE 8
INDEMNIFICATION
8.1 Indemnification by Sellers. Sellers collectively,
and WCD individually, agree that they will indemnify and save and
hold Buyer harmless from and against any claim, cost, expense,
damage' liability, loss or deficiency suffered or incurred by,
Buyer (including, without limitation, reasonable attorneys fees
and other reasonable costs and expenses incident to any suit,
action or proceeding) ("Damages") arising out of or resulting
from, and will pay Buyer on written demand the full amount of,
any sum which Buyer may pay or may become obligated to pay in
respect of (i) any inaccuracy in any representation or the breach
of any warranty made by Sellers pursuant to this Agreement
(subject to the time period set forth in Section 8.3), (ii) any
failure by Sellers duly to perform or observe any covenant or
condition in this Agreement on the part of Sellers to be
performed or observed, (iii) any noncompliance with the
provisions of any applicable bulk sales law or regulation, (iv)
any claim of breach of contract or warranty under any agreement
with a customer of the WCD Talc Business which is based upon any
action or omission of Sellers prior to the Closing Date.
8.2 Indemnification by Buyer. Buyer agrees that it
will indemnify and save and hold Sellers harmless from and
against any Damages arising out of or resulting from, and will
pay Sellers on written demand the fuller amount of, any sum which
Sellers may pay or may become obligated to pay in respect of (i)
any inaccuracy in any representation or the breach of any
warranty made by Buyer pursuant to this Agreement, (ii) any
failure by Buyer duly to perform or observe any covenant or
condition in this Agreement on the part of Buyer to be performed
or observed, and (iii) any Assumed Liability asserted against
Sellers. With respect to claims for indemnification under clause
(i) or (ii) of the preceding sentence, Buyer shall be obligated
to indemnify Sellers only with respect to Damages for which
Sellers has given Buyer notice on or prior to the date which is
six months following the Closing Date.
8.3 Limitations on Sellers' Indemnification. Sellers'
indemnification obligations for Damages hereunder (a) shall be
limited in amount to $2,000,000 in the aggregate and (b) shall
not apply to any claim for Damages until either (i) an individual
claim exceeds $25,000 or (ii) the aggregate of all such claims
total $50,000, in which latter event Sellers' indemnity
obligation shall apply to all such claims regardless of size.
Sellers shall be obligated to indemnify Buyer only with respect
to Damages for which Buyer has given Sellers notice on or prior
to the date which is eighteen months following the Closing Date
(the "Indemnification Period"), except that the indemnification
obligations of the Sellers with respect to representations and
warranties relating to Longhorn's taxes in Section 4.1(r) hereof
shall continue with respect to any tax year or period prior to
the Effective Date until the expiration of all applicable
statutory periods of limitations, after giving effect to any
waiver, mitigation or extension thereof. All claims made by
Buyer during the Indemnification Period shall be counted in
determining whether the $25,000 threshold has been achieved.
Sellers shall be obligated to indemnify Buyer hereunder only with
respect to Damages for which Buyer has given Sellers notice
within the Indemnification Period. Sellers' indemnification
obligation under this Agreement shall not be subject to the
$25,000 threshold or the $2,000,000 cap to the extent Buyer
asserts a claim for Damages arising out of the assertion against
Buyer of an Excluded Liability.
8.4 Cooperation.
(a) Notice. Sellers and Buyer will give prompt
written notice to the other of any assertion, claim or demand
which Buyer or Sellers discovers or of which notice is received
after the Closing and which might give rise to a claim by Buyer
against Sellers under Section 8.1 hereof, or by Sellers against
Buyer under Section 8.2 hereof, stating in reasonable detail the
nature, basis and amount thereof.
(b) Claims for Money Damages. In case of any
claim for money damages by a third party, any suit for money
damages, any claim for money damages by any governmental body, or
any legal, administrative or arbitration proceeding with respect
to which the indemnifying party may have liability for money
damages under the indemnity agreements contained in Section 8.1
or Section 8.2 hereof, the indemnifying party shall be entitled
to participate therein, and to the extent desired, to assume the
defense thereof, and after notice from the indemnifying party of
its election so to assume the defense thereof, the indemnifying
party will not be liable to the indemnified party for any legal
or other expenses subsequently incurred by the indemnified party
in connection with the defense thereof, other than reasonable
costs of investigation, unless the indemnifying party does not
actually assume the defense thereof following notice of such
election. Buyer or Sellers shall make available to the other and
its attorneys and accountants, at all reasonable times, all books
and records relating to such suit, claim or proceeding, and Buyer
and Sellers will render to each other such assistance as may
reasonably be required of each other in order to insure proper
and adequate defense of any such suit, claim or proceeding.
Buyer and Sellers will not make any settlement of any claim which
might give rise to liability of the indemnifying party hereunder
for money damages under the indemnity agreement contained in
Section 8.1 or 8.2 hereof without the consent of the other which
consent shall not be unreasonably withheld. If the indemnifying
party shall desire and be able to effect a monetary compromise or
settlement of any such claim and the indemnified party shall
refuse to consent to such compromise or settlement (to the extent
it relates to money damages), then the liability of the
indemnifying party to the indemnified party with respect to
settlement of such claim shall be limited to the amount so
offered in compromise or settlement.
(c) Claims for Environmental Work. In the case
of any assertion, claim or demand by any governmental body
requiring the performance of investigatory, removal or remedial
work with respect to environmental conditions at the Real
Property for which Buyer may seek indemnification, Buyer shall
permit Sellers to conduct and control such work (at its sole
expense) in cooperation with Buyer (and subject to Buyer's
consent and approval, which shall not be unreasonably withheld),
and shall give Sellers access to the Real Property and to the
books and records of the WCD Talc Business as may reasonably be
required, consistent with Section 5.8 and will make available
relevant Employees as may be reasonably required.
ARTICLE 9
GENERAL PROVISIONS
9.1 Notices. Any notice, request or other
communication required or allowed under this Agreement shall be
in writing and shall be deemed given (a) upon personal delivery,
(b) when sent by telecopy, provided that receipt thereof is
confirmed verbally or by return telecopy (c) on the first
business day after receipted delivery to a courier service which
guarantees next- business-day delivery, under circumstances in
which such guaranty is applicable, or (d) on the earlier of
delivery or three business days after mailing by United States
certified mail, postage and fees prepaid, to the appropriate
Party at the address set forth below or to such other address as
the Party so notifies the other in writing. Any notice sent by
telecopy a]so shall be sent by certified mail, but shall be
deemed to have been given when the telecopy has been transmitted.
As to Buyer:
By Personal Delivery, Courier or Certified Mail:
Suzorite Mineral Products, Inc.
Canada Trust Tower
BCE Place, 161 Bay Street
Suite 3750, P.O. Box 703
Toronto, Ontario M5J 2S1
CANADA
By Telecopier Transmission: (416) 365-8094
With a Copy to:
By Personal Delivery, Courier or Certified Mail:
Zemex Corporation
Canada Trust Tower
BCE Place, 161 Bay Street
Suite 3750, P.O. Box 703
Toronto, Ontario M5J 2S1
CANADA
By Telecopier Transmission: (416) 365-8094
With a Copy to:
By Personal Delivery, Courier or Certified Mail:
Davis, Graham & Stubbs, L.L.C.
Attn: J. Hovey Kemp, Esq.
1225 New York Avenue, N.W.
Suite 1200
Washington, D.C. 20005
By Telecopier Transmission: (202) 293-4794
As to Sellers:
By Personal Delivery, Courier or Certified Mail:
Whittaker, Clark & Daniels, Inc.
1000 Coolidge Street
South Plainfield, NJ 07080-1000
By Telecopier Transmission: (800) 833-8139
With a Copy to:
By Personal Delivery, Courier or Certified Mail:
Appruzzese, McDermott, Mastro & Murphy, P.C.
Attn: Barry Marell
Somerset Hills Corporate Center
25 Independence Blvd.
P.O. Box 112
Somerset, NJ 07938
By Telecopier Transmission: (908) 647-1492
9.2 Entire Agreement; Incorporation; Subsequent
Modifications. This Agreement, together with all schedules
attached hereto, contain the entire agreement between the Parties
and supersede the July 21, 1994 letter of intent and all other
prior oral or written agreements between the Parties with respect
to the subject matter hereof, and no party shall be liable or
bound to the other in any manner by any warranties,
representations, covenants or agreements except as specifically
set forth herein or expressly required to be made pursuant
hereto. The inclusion of matters in any schedule to this
Agreement does not constitute an admission or agreement of the
Parties that the listed matter, or the dollar amount represented
by the listed matter, is material or defines materiality for
purposes of this Agreement. This disclosure of information on
any of the Schedules hereto shall constitute a disclosure of such
information on every other Schedule on which such information
might have been required in order to render such other schedule
materially true, correct or not misleading. No modification of
this Agreement shall be effective unless set forth in writing and
signed by all of the Parties hereto.
9.3 Assignment; Binding Effect; Third Party
Beneficiaries. Buyer shall not have the right to assign this
Agreement or delegate its duties hereunder without the prior
written consent of Sellers except that Buyer may assign this
Agreement and delegate its duties hereunder to any other
Affiliate of Zemex, as defined in Section 9.10. This Agreement
shall be binding upon, and inure to the benefit of, the Parties
and their respective successors and assigns. This Agreement
shall not benefit or create any right or cause of action in or on
behalf of any person other than the Parties.
9.4 Expenses of Sale. Each Party shall bear its own
direct and indirect expenses incurred in connection with the
negotiation and preparation of this Agreement and the
consummation and performance of the transactions contemplated
hereby. Without limitation, such expenses shall include the fees
and expenses of all attorneys, accountants and other
professionals incurred in connection herewith, including all fees
incurred by Buyer to investigate the WCD Talc Business (and
except as provided in Section 5.7 with respect to sharing the
costs of the Environmental Audit).
9.5 Cooperation; Execution of Additional Documents.
Each Party hereto shall cooperate fully with one another and
shall execute such other and further documents as may be
reasonably necessary or proper for the consummation of the
transactions contemplated by this Agreement.
9.6 Bulk Sales Waiver. Buyer hereby waives compliance
with the provisions of legislation which relate to the sale of
property in bulk in connection with the transfer of the Purchased
Assets to Buyer.
9.7 Counterparts. This Agreement may be executed in
one or more counterpart copies, and such fully executed copies
shall be considered an original which together shall constitute
one Agreement.
9.8 Interpretation and Governing Law, Jurisdiction and
Service of Process. This Agreement shall be construed as though
prepared by both Parties hereto. Captions at the beginning of
each section and each subsection are solely for the convenience
of the Parties and shall not modify the text of this Agreement.
This Agreement shall be construed and governed by the laws of the
State of New Jersey without giving effect to the principles of
conflicts of laws.
9.9 Severability. If any portion of this Agreement is
declared by a court of competent jurisdiction to be invalid or
unenforceable after all appeals have either been exhausted or the
time for any appeals to be taken has expired, the remainder of
the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no
way be affected, impaired or invalidated.
9.10 Definition of Affiliate. For purposes hereof, an
affiliate of a Party shall include any person or entity now or in
the future controlling, controlled by or under common control
with a Party.
9.11 Press Releases. Except as provided below, prior
to the Closing, the Parties will consult with each other before
issuing any press releases or otherwise making any public
statements with respect to this Agreement and the transactions
contemplated hereby, and neither Party shall issue any such press
release nor make any such public statement without the prior
written consent of the other Party, except as may be required by
law or by obligations pursuant to any listing agreement with any
securities exchange applicable to the Party or to any affiliate
of the Party. Sellers reserves the right to notify its
distributors and customers prior to Closing of the impending sale
hereunder.
9.12 United States Dollars. All dollar amounts
referred to in this Agreement are in lawful money of the United
States of America.
9.13 Survival of Covenants, Representations and
Warranties. The representations and warranties of the Parties
contained in Article 4 shall survive the Closing until the date
which is eighteen months following the Closing Date (other than
the representations and warranties in Section 4.1(r) which shall
survive the Closing until the expiration of Seller's indemnity
with respect thereto as set forth in Section 8.3), after which
time the Parties shall be released from any and all liability in
connection with representations and warranties. As to the
covenants of the Parties contained in Article 5 such covenants
shall continue indefinitely, except as may be expressly stated
therein. Except as provided in Section 8.4 or as otherwise
expressly stated herein, the Parties agree that their sole remedy
for breach of any representation, warranty or covenant contained
herein are the indemnification rights provided in Article 9
herein.
IN WITNESS WHEREOF, each of the Parties have caused
this Agreement to be executed in their respective names
individually and by their respective corporate officers, duly
authorized, as of the day and year first above written.
SELLERS:
WHITTAKER CLARK & DANIELS, INC.
By:
Michael C. Argyelan
President
CLARK MINERALS, INC.
By:
Edwin C. Davenport
President
CHEROKEE MINERALS, INC.
By:
Edwin C. Davenport
President
PIONEER TALC COMPANY
By:
Edwin C. Davenport
President
BUYER:
SUZORITE MINERAL PRODUCTS, INC.
By:
Name: Peter J. Goodwin
Title: President
ZEMEX:
ZEMEX CORPORATION
By:
Name: Peter J. Goodwin
Title: Vice President
THIS WORK REQUEST/COVERSHEET MUST ACCOMPANY ALL EDITS
DATE:____________________________ TIME:_________________________
DOCUMENT #: W403469.8 AUTHOR: J. Hovey Kemp
DELIVER TO: _________________ AUTHOR #: 0147 EXT: 1029
SEC: 2022
CLIENT: Zemex/WCD Talc CLIENT #: 260052.0005
TITLE OF DOC: Asset Purchase Agreement
PLEASE PROVIDE US WITH A SPECIFIC TIME.
"ASAP" AND "RUSH" PREVENT US FROM REALISTICALLY PRIORITIZING YOUR
WORK.
PREFERRED DATE/ ABSOLUTE DATE/
TIME NEEDED:_____________________ TIME
NEEDED:_______________________
( ) NEW DOCUMENT
( ) REVISIONS
( ) COPY AND SAVE ORIGINAL DOCUMENT
#:_________________________________
( ) PRINT OUT ONLY
( ) DELETE FOOTER (DOCUMENT # AND DATE)
PAPER SIZE: PAPER TYPE: SPACING:
( ) 8-1/2 x 11 ( ) White ( ) Single
( ) 8-1/2 x 14 ( ) Firm Letterhead ( ) Double
( ) _______________ ( ) Pers. Letterhead ( ) Dbl-Spaced
Draft/
( ) ________________ Single-Spaced Final
( ) As Is
( ) ___________________
SPECIAL INSTRUCTIONS: (NOTE: WILL REQUIRE MORE TURNAROUND TIME)
( ) Chart OTHER:
( ) OCR
( ) Redlining
( ) Proportional
( ) Right Margin Justify
04:53 pm
Version #: 008
03/24/95
Done By: Veronica Term #/Dir: B Total Time: \
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OPERATOR USE ONLY:
Pages Input: Pages Revised L/M/H: Pages Printed: Date Done:
___________ ___________________ _____________ _____________
NAME:_________________ NAME:_________________
NAME:__________________
START TIME:___________ START TIME:___________ START
TIME:____________
STOP TIME:____________ STOP TIME:____________ STOP
TIME:_____________
TOTAL TIME:___________ TOTAL TIME:___________ TOTAL
TIME:____________