ASSET SALE AGREEMENT
dated as of April 27, 1998
by and between
SPECIALTY MINERALS (MICHIGAN) INC.
as Seller
and
OGLEBAY NORTON LIMESTONE COMPANY
as Buyer
ASSET SALE AGREEMENT
-------------------------
AGREEMENT made as of April 27, 1998, by and between
SPECIALTY MINERALS (MICHIGAN) INC., a Michigan corporation
with its principal place of business at P.O. Box 1047, Iron
Mountain, Michigan 49801 (hereinafter, "Seller"), and OGLEBAY
NORTON LIMESTONE COMPANY, a Michigan corporation with its
principal place of business at 1100 Superior Avenue,
Cleveland, Ohio 44114-2598 (hereinafter, "Buyer").
RECITALS
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Seller is the owner of certain assets consisting of three
quarries and a processing facility and related real and
personal property located in Mackinac and Schoolcraft
counties in the State of Michigan, and a separate port
facility and related real property located at River Rouge
Dock, Wayne County, Michigan (hereinafter, the "Facilities").
Seller is engaged in the quarrying, processing and sale of
limestone, dolomite and related products at the Facilities
(hereinafter, "Seller's Business").
Buyer desires to buy, and Seller is willing to sell, the
Facilities and the other Included Assets, as defined herein,
all on the terms and subject to the conditions contained in
this Agreement.
Seller desires certain lime suppliers to purchase limestone
products from Buyer following Buyer's acquisition of the
Included Assets, and Buyer desires to sell such products to
such lime suppliers.
I. ACQUISITION OF ASSETS
A. ASSETS TO BE SOLD.
On the Closing Date (as hereinafter defined), and
otherwise on the terms and subject to the conditions
contained in this Agreement, Seller will sell, transfer,
assign and convey to Buyer, and Buyer will purchase and
accept from Seller, the assets, properties and rights
described in this Section I(A), but not including those
assets described in Section I(B). All of said assets,
properties and rights described in this Section I(A) are
collectively referred to in this Agreement as the "Included
Assets".
1. EQUIPMENT.
All equipment, machinery, fixtures, patterns,
apparatus, tools, dies, parts (including office equipment),
jigs for parts, molds, vehicles, desks, chairs, tables, room
dividers, typewriters, computers, computer programs
(including program and source codes to the extent legally
transferrable), automobiles, trucks, communication equipment,
and other similar equipment located at the Facilities and
owned by Seller (hereinafter, "Equipment") including without
limitation the items set forth on Schedule I(A)(1).
2. PRODUCT INVENTORIES.
All inventories of finished products, primary surge stone,
and other work in process located at the Facilities
(hereinafter, "Product Inventories") as set forth in Schedule
I(A)(2).
3. GENERAL INVENTORIES.
All inventories of spare parts, replacement and component
parts, office and other supplies, goods, raw materials, and
other materials, located at the Facilities, excluding
Product Inventories (hereinafter, "General Inventories") as
set forth in Schedule I(A)(3).
4. OFFICE FILES.
All files, records, books, memoranda, mining plans, computer
printouts, databases and related items located at the
Facilities, which are related to Seller's Business or the
Included Assets, provided that if any such item shall be an
integral part of any system, report, file or record of Seller
which does not relate primarily to Seller's Business or the
Included Assets, Seller shall have the option of delivering
to Buyer at Closing (as hereinafter defined) copies of any
portion of such items which are related to Seller's Business
or the Included Assets. Specifically included hereunder,
without limitation however, are blue prints, drawings and
other technical papers, and inventory, maintenance, and asset
history records and ledgers.
5. PREPAID ITEMS.
Any prepaid items, deposits, bonds and escrowed amounts with
respect to the Included Assets or Seller's Business and all
rights in connection with such items.
6. REAL PROPERTY.
All of Seller's interests in real estate, mineral leases,
land, easements, benefits, structures and improvements
(including docks) at the Facilities, whether owned or leased,
as described on Schedule I(A)(6) and subject to the permitted
exceptions described in Section II (hereinafter the "Real
Property"). Buyer shall assume and agree to perform and
discharge when due Seller's obligations under the executory
portion of any matter listed on Schedule I(A)(6). Except as
otherwise specifically provided in this Agreement, Buyer
shall also assume and agree to perform and discharge when due
Seller's obligations for reclamation or restoration of the
Real Property, whether required by federal, state or local
law.
7. PERSONAL PROPERTY LEASES.
All leasehold interests and leasehold improvements created by
all leases of personal property used primarily in connection
with Seller's Business or the Included Assets under which
Seller is a lessee or lessor, as are listed on Schedule
I(A)(7). Except as specifically otherwise provided in this
Agreement, Buyer shall assume and agree to perform and
discharge when due Seller's obligations under the executory
portion of any matter listed on Schedule I(A)(7).
8. CONTRACTS.
All claims and rights of every kind and nature whatsoever
(and benefits arising therefrom) related to or arising
primarily out of the Seller's Business or the Included
Assets, including, but not limited to, customer purchase and
sale orders, customer sales contracts, backlogs, contractual
claims, rights and benefits, rights against suppliers (other
than Seller and Seller's parent, subsidiary and affiliated
companies) under warranties covering Product Inventories and
General Inventories or Equipment, and all licenses, permits
and operating rights related to Seller's Business, but not
including Purchase Commitments, License and Similar
Agreements, and Governmental Permits, to the extent they are
legally transferable by Seller (hereinafter "Contracts"). The
Contracts are listed on Schedule I(A)(8), and copies of all
of the Contracts have been provided to Buyer. Buyer shall
assume and agree to perform and discharge when due Seller's
obligations under the executory portion of the Contracts from
and after the Closing Date.
9. PURCHASE COMMITMENTS.
All purchase orders, contracts, quotations and bids for the
purchase of raw materials, component parts, goods, supplies
and other material relating to Seller's Business or the
Included Assets (hereinafter "Purchase Commitments"). The
Purchase Commitments are listed on Schedule I(A)(9), and
copies of the Purchase Commitments have been provided to
Buyer. Buyer shall assume and agree to perform and discharge
when due Seller's obligations under the executory portion of
such Purchase Commitments from and after the Closing Date.
10. LICENSE AND SIMILAR AGREEMENTS.
All license agreements, distribution agreements, sales
representative agreements, service agreements supply
agreements, franchise agreements and technical service
agreements relating to Seller's Business or the Included
Assets (hereinafter "License Agreements") are listed on
Schedule I(A)(10) and copies of the License Agreements have
been provided to Buyer. Buyer shall assume and agree to
perform and discharge when due Seller's obligations under the
executory portion of such License Agreements from and after
the Closing Date.
11. CUSTOMER LISTS.
All customer lists and customer records and information
relating to Seller's Business.
12. GOVERNMENTAL PERMITS.
All governmental licenses, permits, approvals,
authorizations, license applications, license amendment
applications, product registrations, and the like, of every
kind and nature, relating to Seller's Business or the
Included Assets, used in the conduct of Seller's Business, to
the extent their transfer is permitted by law, (hereinafter,
"Permits"). The Permits are listed on Schedule I(A)(12),
and copies of all Permits have been provided to Buyer. Buyer
shall assume and agree to perform and discharge Seller's
obligations under the executory portion of such Permits from
and after the Closing Date.
13. INTANGIBLE ASSETS.
All of Seller's interests in and to all registered and
unregistered trade names, registered and unregistered
trademarks, service marks, d/b/a names, applications and
notices of allowances, and specifically including the names
"Inland Lime and Stone Company" and "Port Inland"; all
patents and patent applications; and all copyrights and
copyright applications, in each case used by Seller primarily
in Seller's Business, (hereinafter, "Intangible Assets").
Schedule I(A)(13) sets forth all of the Intangible Assets.
14. OTHER PROPERTY.
All proprietary know-how, trade secrets, confidential
information, process technology, inventions, processes,
formulae, plans, drawings and blueprints used in Seller's
Business; and all good will and Deferred Charges (as
hereinafter defined) associated with Seller's Business.
B. EXCLUSIONS.
Notwithstanding anything to the contrary herein contained,
the Included Assets shall not include any of the items listed
in the following portions of this Section I:
1. CASH.
All cash on hand and in banks, cash equivalents and
investments.
2. CHECKBOOKS.
Seller's checkbooks and canceled checks.
3. ACCOUNTS RECEIVABLE.
The accounts receivable generated in the conduct of Seller's
Business and rights in connection therewith.
4. INSURANCE POLICIES.
Insurance policies of Seller and rights in connection
therewith.
5. INTELLECTUAL PROPERTY.
Except as is provided in Sections I(A)(13) and I(C), Seller's
name and that of its parent, subsidiaries, and affiliated
companies, registered and unregistered trade names,
registered and unregistered trademarks, service marks, d/b/a
names, applications, and notices of allowances; all patents
and patent applications; all copyrights and copyright
applications; and all know-how, trade secrets, confidential
information, process technology, inventions, processes,
formulae, plans, drawings, and blue prints not used primarily
in Seller's Business.
6. MISCELLANEOUS.
Except for the properties, assets, and items listed on any
schedule under Section I(A), any other property or asset
which is not and has not been used primarily in the conduct
of Seller's Business.
C. USE OF SELLER'S NAME.
Buyer acknowledges and agrees that it does not have and is
not purchasing any rights in or to Seller's corporate name,
"Speciality Minerals (Michigan) Inc.", or the name of any
Affiliate (as defined in Section V(R)(1) of this Agreement)
of Seller other than the names "Inland Lime and Stone
Company" and "Port Inland"; and Buyer further agrees to
obliterate any reference to Seller or Seller's name from any
material transferred herein that will or may be viewed by
customers, vendors or any member of the general public. It
is the intention of this provision that Buyer take, and Buyer
agrees to take, all reasonable actions necessary to prevent
customers, vendors and any member of the general public from
associating Buyer's use of the Included Assets with Seller
from and after the Closing Date, provided that nothing herein
shall prevent the use of the names "Inland Lime and Stone
Company" or "Port Inland" by Buyer.
D. METHOD OF TRANSFER.
The sale of the Included Assets shall be effected by a Bill
of Sale in substantially the form provided in Exhibit I(D)a,
the delivery of Warranty Deeds to, and Assignments of the
Real Property listed on Schedule I(A)(6) in substantially the
forms provided in Exhibits I(D)b and I(D)c, respectively, and
the execution, delivery, and recording of such documents as
may be reasonably deemed necessary by Buyer's counsel. All
consents and other approvals necessary to transfer the
Included Assets to Buyer and to permit Buyer to operate
Seller's Business in a similar manner to that done by Seller
prior to this Agreement shall be evidenced by such documents
as are reasonably deemed necessary by Buyer's counsel. Title
to Real Property shall be determined in accordance with
Section II.
E. ASSUMPTION OF LIABILITIES.
Buyer assumes and agrees to perform and discharge when due
Seller's obligations described in subsections 6, 7, 8, 9, 10,
and 12 of Section I.A. Seller shall retain responsibility
for the payment of accounts payable relating to transactions
occurring prior to the Closing Date.
II. TITLE AND RISK OF LOSS
A. RISK OF LOSS.
Title to the assets being sold, assigned, transferred and
conveyed hereunder shall pass to Buyer upon delivery of the
portion of the Purchase Price (as hereinafter defined), that
is due at Closing, on the Closing Date (as hereinafter
defined) with the risk of loss being borne by Seller until
such date and time, from and after which time risk of loss
shall be borne by Buyer.
B. TITLE INSURANCE COMMITMENT.
Seller has ordered a commitment for an owner's policy of
title insurance, American Land Title Insurance ("ALTA")
Owner's Policy Form 1992B (the "Title Commitment") from
Chicago Title Insurance Company (the "Title Company") for
each asset comprising a fee interest in real estate. Copies
of Title Commitments with respect to the Real Property
located in Mackinac and Schoolcraft counties and with respect
to the Real Property associated with the River Rouge Dock in
Wayne county have been delivered to Buyer, Buyer acknowledges
the receipt of the same, and Buyer accepts the state of title
to the Real Property as set forth in said Title Commitments,
subject to the title exceptions listed thereon as set forth
on attached Schedule I(A)(6) and identified herein in Section
V(C) as the "Permitted Encumbrances."
III. CLOSING
A. PLACE AND TIME.
The closing of this transaction (hereinafter "Closing") shall
take place at 10:00 a.m. on April 28, 1998, or on such other
date as shall be mutually agreed between the parties in
writing, effective as of 6:01 a.m. on April 27, 1998
(hereinafter "Closing Date"), at the offices of Ulmer & Berne
LLP, Buyer's counsel, at 1300 East Ninth Street, Suite 900,
Cleveland, Ohio or at such other place as the parties hereto
shall agree upon in writing. If for any reason the Closing
has not occurred by April 30, 1998, then this Agreement may
be terminated by either party upon notice to the other party,
and each party shall be relieved of all liability hereunder.
B. DELIVERIES AT THE CLOSING.
1. DELIVERIES BY BUYER.
At the Closing, Buyer shall deliver to Seller:
a. The portion of the Purchase Price
deliverable at Closing.
The payment of the Purchase Price as
required pursuant to Article IV below.
b. Certificate of Incorporation; Bylaws.
Copies of the certificate of
incorporation and bylaws of Buyer, certified by its Secretary
or Assistant Secretary.
c. Certificates of Good Standing.
A certificate of good standing from the
State of Michigan with respect to Buyer, dated not earlier
than 10 days prior to the Closing Date.
d. Board of Directors Resolutions.
A copy of the resolutions of Buyer's
board of directors, approving the transactions contemplated
herein and the execution, delivery and performance of this
Agreement, certified by the Secretary or an Assistant
Secretary of Buyer.
e. Incumbency Certificate.
A certificate of the Secretary or an
Assistant Secretary of Buyer certifying the names and
signatures of the officer or officers of Buyer who are
authorized by Buyers board of directors to sign this
Agreement and related documents.
f. Opinion of Counsel.
An opinion of Ulmer & Berne LLP, counsel
for Buyer, dated the Closing Date, in substantially the form
attached hereto as Exhibit III (B)(1)(f).
g. Closing Certificate.
A closing certificate duly executed by
any officer of Buyer authorized to do so, on behalf of Buyer,
pursuant to which Buyer represents and warrants to Seller
that Buyer's representations and warranties to Seller are
true and correct as of the Closing Date as if then originally
made, that all covenants required by the terms hereof to be
performed by Buyer on or before the Closing Date have been so
performed, and that all documents to be executed and
delivered by Buyer at the Closing have been executed by duly
authorized officers of Buyer.
h. Limestone Availability Agreement.
The Limestone Availability Agreement
referred to in Section VII(O) of this Agreement or a
counterpart thereto fully executed by any officer of Buyer
authorized to do so, on behalf of Buyer.
i. Other Documents.
Such other documents as Seller shall
reasonably request.
2. DELIVERIES BY SELLER.
At the Closing, Seller shall deliver to Buyer:
a. Transfer Documents.
The Bill of Sale, Assignments, Deeds and
other documents required pursuant to Section I.
b. Certificate of Incorporation; Bylaws.
Copies of the certificate of
incorporation and bylaws of Seller, certified by its
Secretary or Assistant Secretary.
c. Certificate of Good Standing.
A certificate of good standing from the
State of Michigan with respect to Seller, dated not earlier
than 10 days prior to the Closing Date.
d. Board of Directors Resolutions.
A copy of the resolutions of Seller's
board of directors, approving the transactions contemplated
herein and the execution, delivery and performance of this
Agreement, certified by its Secretary or an Assistant
Secretary.
e. Incumbency Certificate.
A certificate of the Secretary or an
Assistant Secretary of Seller certifying the names and
signatures of the officer or officers of Seller who are
authorized by Seller's board of directors to sign this
Agreement and related documents.
f. Assignments and Consents.
Such assignments and consents of third
parties or governmental entities as may reasonably be
determined necessary or required by Buyer to transfer the
contracts, leases, permits and licenses and other Included
Assets.
g. Opinion of Counsel.
An opinion of S. Garrett Gray, counsel
for Seller, dated the Closing Date, in substantially the form
attached hereto as Exhibit III (B)(2)(g).
h. Physical Possession.
Physical possession of all real estate
and all tangible personal property included in the Included
Assets.
i. Closing Certificate.
A closing certificate duly executed by
any officer of Seller authorized to do so, on behalf of
Seller, pursuant to which Seller represents and warrants to
Buyer that Seller's representations and warranties to Buyer
are true and correct as of the Closing Date as if then
originally made, that all covenants required by the terms
hereof to be performed by Seller on or before the Closing
Date have been so performed, and that all documents to be
executed and delivered by Seller at the Closing have been
executed by duly authorized officers of Seller.
j. Limestone Availability Agreement.
The Limestone Availability Agreement
referred to in Section VII(O) of this Agreement or a
counterpart thereof fully executed by any officer of Seller
authorized to do so, on behalf of Seller.
k. Title Insurance.
An owner's policy of title insurance as
described in Section II(B) of this Agreement covering the
interests of Buyer or its nominee in the Real Property in the
total amount of the Purchase Price (as hereinafter defined),
allocated to the Real Property, subject only to the Permitted
Encumbrances.
l. Noncompetition Agreement.
A fully executed Noncompetition
Agreement, as defined in Section VII(Q) of this Agreement.
m. Other Documents.
Such other documents as Buyer shall
reasonably request.
IV. PURCHASE PRICE: PAYMENT
A. PURCHASE PRICE.
The purchase price for the Included Assets (hereinafter,
"Purchase Price") shall be an amount equal to the net book
value of the Included Assets as of April 27, 1998, determined
in accordance with accepted accounting principles as
determined by Seller and applied on a consistent basis, which
amount shall include the aggregate amount of all unamortized
Deferred Charges (as defined below).
As used herein, "Deferred Charges" means all costs and
expenses incurred, including compensation and related costs,
repairs and maintenance, and any other costs and expenses
associated with Seller's Business during the non-operating
period between approximately November 15, 1997 and April 6,
1998. For purposes of this Section, recognition of income
and expenses shall be determined in accordance with accepted
accounting principles as determined by Seller and applied on
a consistent basis.
B. ADJUSTMENTS AND REIMBURSEMENTS.
1. REAL AND PERSONAL PROPERTY TAXES.
Real and personal property taxes with respect to the Included
Assets shall be prorated between Buyer and Seller as of the
Closing Date based upon the most recent available tax
duplicate, using the due date method of proration in which
tax bills for the current year shall be deemed payable in
advance.
2. DOCUMENTARY TRANSFER TAXES.
Buyer and Seller shall share equally in the cost of all
Documentary Transfer taxes, real estate transfer taxes and
conveyance fees, if any, with respect to the sale of the
Included Assets.
3. TITLE INSURANCE.
Seller shall be responsible for the cost of the title
examination and the Title Commitment covering Buyer's
interest in the Real Property to be furnished as provided in
this Agreement, and Buyer shall be responsible for the cost
of the title insurance premiums.
4. HART-SCOTT-RODINO FILING.
Buyer and Seller shall share equally in the cost of all
filing or other fees required to satisfy the requirements of
the Hart-Scott-Rodino Anti-Trust Improvements Act.
C. PAYMENTS AT CLOSING.
1. ESTIMATED PURCHASE PRICE.
At the Closing, Buyer shall pay to Seller an amount equal to
the net book value of the Included Assets as of March 29,
1998, determined in accordance with accepted accounting
principles as determined by Seller and applied on a
consistent basis, which amount shall include all Deferred
Charges (hereinafter Estimated Purchase Price"), less the
Deferred Charges incurred by Seller between December 29, 1997
and April 6, 1998 (the Deferred Purchase Price"), by wire
transfer to an account designated by Seller.
2. DEFERRED PURCHASE PRICE.
At the Closing, Buyer shall pay an amount equal to the
Deferred Purchase Price into an escrow account with Key Bank
N.A. (the Escrow Agent) by wire transfer pursuant to an
escrow agreement in the form attached hereto as Exhibit
IV(C)(2) (the Escrow Agreement").
3. OTHER COSTS AND EXPENSES.
At the Closing, Seller and Buyer shall pay and/or reimburse
each other or the Title Company for the amounts required to
be paid or reimbursed pursuant to Section IV(B) of this
Agreement.
D. POST-CLOSING PAYMENTS.
1. DETERMINATION OF AMOUNT.
Within seven (7) days after the Closing Seller shall deliver
to Buyer a written notice (Seller's Notice") which sets forth
the aggregate amount of the Purchase Price, as determined by
Seller in accordance with Section IV(A) of this Agreement,
together with the workpapers and other documentation used or
relied upon by Seller in calculating the Purchase Price.
Within seven (7) days after the receipt of Seller's Notice,
Buyer shall deliver to Seller a written notice (Buyer's
Notice") which sets forth Buyer's objections, if any, to
Seller's determination of the Purchase Price. If Buyer does
not object to the Purchase Price so determined by Seller, or
if Buyer fails to deliver a Buyer's Notice to Seller within
such seven (7) day period, then the Purchase Price, as
determined by Seller, shall be final and binding upon the
parties. If Buyer delivers a Buyer's Notice to Seller within
such seven (7) day period objecting to the Purchase Price
determined by Seller, the parties shall use their best
efforts to resolve any disputes with respect to the
determination of the Purchase Price through good faith
negotiations. If such negotiations have not resulted in an
agreement between the parties with respect to the aggregate
amount of the Purchase Price within thirty (30) days after
the Closing Date, an independent certified public accounting
firm designated by Buyer and reasonably acceptable to Seller
(the "Independent Accountants") shall determine the Purchase
Price based upon the provisions of this Agreement. Buyer and
Seller shall cooperate fully with the Independent Accountants
and shall share equally in all costs and expenses of the
Independent Accountants. The Purchase Price so determined by
the Independent Accountants shall be final and binding upon
the parties.
2. PAYMENT OF BALANCE DUE.
If the Purchase Price, as finally determined in accordance
with Section IV(D)(1) of this Agreement, is greater than the
Estimated Purchase Price, Buyer shall pay Seller an amount
equal to the difference between the Estimated Purchase Price
and the Purchase Price as finally determined, which amount
shall be paid by wire transfer to an account designated by
Seller within three (3) business days after the final
determination of the Purchase Price pursuant to Section
IV(D)(1) of this Agreement. If the Purchase Price, as
finally determined in accordance with Section IV(D)(1) of
this Agreement, is less than the Estimated Purchase Price,
Seller shall pay Buyer an amount equal to the difference
between the Estimated Purchase Price and the Purchase Price
as finally determined, which amount shall be paid by wire
transfer to an account designated by Buyer within three (3)
business days after the final determination of the Purchase
Price pursuant to Section IV(D)(1) of this Agreement.
3. THIRD-PARTY PAYMENTS AFTER CLOSING.
Seller shall remain entitled to the benefit of any assets
described in Section I(B), and to the extent that Buyer
receives on or after the Closing Date payment on account of
any such assets, Buyer shall hold the same in trust for
Seller and shall pay over such payment and account therefor
to Seller within five business days of receipt thereof. To
the extent that Seller received on or after the Closing Date
payment on account of the business or assets sold hereunder
in relation to the period after the Closing Date, Seller
shall hold the same in trust for Buyer and shall pay over
such payment and account therefor to Buyer within five (5)
business days of receipt thereof.
V. REPRESENTATIONS AND WARRANTIES OF SELLER
The term "Disclosure Schedule" as used in his Agreement means
the Disclosure Schedule delivered by Seller to Buyer
concurrently with the execution and delivery of this
Agreement. Except as set forth in the Disclosure Schedule,
Seller represents and warrants to Buyer that, as of the date
of this Agreement and on the Closing Date:
A. DUE INCORPORATION.
Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Michigan and
has all requisite corporate power and authority to own or
lease the Included Assets in the places where such assets are
now owned or leased. Seller has all necessary corporate power
sufficient to enable it to enter into, perform, and carry out
the transactions contemplated by this Agreement.
B. AUTHORIZATION.
No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery
and performance of this Agreement, other than the
Hart-Scott-Rodino filing referred to in Section VII(M) of this
Agreement.
C. TITLE.
Seller has, and will convey to Buyer or its nominee, good and
marketable title in fee simple to the Real Property (other
than leased Real Property), free and clear of all interests,
claims, liens and encumbrances, with no title defects
whatsoever other than Permitted Encumbrances. Seller has the
corporate power and authority to sell, transfer, assign or
convey, as the case may be, such Real Property. As used in
this Agreement, "Permitted Encumbrances" means: those
matters listed on Schedule I(A)(6); zoning, building or other
restrictions, variances, easements and rights-of-way, none of
which, individually or in the aggregate: (A) interfere with
or impair in any material respect the present use of the Real
Property, (B) have more than an insignificant effect on the
value thereof or its present use, or (C) would impair the
ability of Buyer to sell the Real Property for its present
use; and taxes on Real Property not yet due and payable.
Seller has, and will convey to Buyer or its nominee, good and
marketable title to, and has the corporate power and
authority to sell, transfer, assign or convey, as the case
may be, the Included Assets (other than owned Real Property),
free and clear of all liens, leases, pledges, charges,
claims, encumbrances, security interests and equities. As of
the Closing Date, there will be no mortgage, trust deed,
chattel mortgage, conditional sale agreement, security
agreement, financing statement or other instrument
encumbering any of the Included Assets except for Permitted
Encumbrances. There are no contracts, restrictions, liens,
claims or encumbrances which will prevent Seller from giving
to Buyer possession of the Included Assets or which will
limit in any way Buyer's ability, in accordance with its
ownership interest, to use, sell, or in any way handle, use
or dispose of said assets.
D. LIMESTONE AND DOLOMITE RESERVES.
To the best of Seller's knowledge, the written information
with respect to Limestone and Dolomite reserves attached
hereto as Exhibit V(D) is a reasonable estimate of such
reserves located on or under the Real Property and to which a
fee interest, leasehold interest, mineral right, or other
right of exploitation in good standing will be transferred to
Buyer as provided in this Agreement.
E. ALL MATERIAL ASSETS INCLUDED.
There are no material assets or properties that were used in
Seller's Business other than those described in the schedules
to this Agreement or conveyed to Buyer under this Agreement.
Seller has set forth in the Disclosure Schedule a list of all
software program and source codes, all claims and rights
arising out of or related to customer purchase and sales
orders, customer sales contracts, backlogs, contractual
claims, rights and benefits, rights against suppliers under
warranties covering Product Inventories and General
Inventories or equipment, and has set forth in Schedule
I(A)(12) all governmental licenses, permits, approvals,
authorizations, license applications, license amendment
applications, operating rights and product registration,
which in each case relate to Seller's Business or the
Included Assets but which are not legally transferable by
Seller or any Affiliate (as hereinafter defined) of Seller
(collectively the "Nontransferable Assets"). Seller shall
use reasonable efforts to make the Nontransferable Assets
available for use by Buyer in connection with the operation
of Seller's Business by Buyer from and after the Closing Date
for no additional consideration if so requested by Buyer.
F. CONDITION OF ASSETS.
To the best of Seller's knowledge, the plants, structures,
equipment and other items of personal property owned by
Seller which are part of the Included Assets are structurally
sound with no material defects, are in good and safe
operating condition and repair, and are adequate in all
material respects for the uses to which they are being put,
normal wear and tear excepted.
G. CERTAIN CLAIMS.
To the best of Seller's knowledge, there are no facts which,
if known by a potential claimant or governmental authority,
would give rise to a claim or proceeding of any kind or
nature whatsoever which, if asserted or conducted with
results unfavorable to Seller, would have a material adverse
effect on the Included Assets or Buyer's ability to operate
Seller's Business in a similar manner as that conducted by
Seller immediately prior to this Agreement.
H. CERTAIN VIOLATIONS OR PROCEEDINGS.
There is no litigation or proceeding, in law or in equity,
and there are no proceedings or governmental investigations
before any commission or other administrative authority,
pending or to the best of Seller's knowledge threatened
against Seller with respect to or affecting Seller's Business
or the Included Assets, or the consummation of the
transactions herein contemplated, or the use of the Included
Assets (whether by Buyer after the Closing or by Seller prior
thereto) in a manner similar to that conducted by Seller
immediately prior to this Agreement. Seller's operation and
management of Seller's Business, and the Included Assets, are
in compliance in all material respects with all applicable
orders, laws, ordinances, codes, regulations or other
requirements of any governmental authority, including,
without limitation, those relating to environmental
protection, civil rights, occupational safety and health,
mining and zoning, building and use requirements.
I. CERTAIN CONTRACTS, PERMITS AND LICENSES.
All contracts, agreements, leases, warranty agreements,
mineral leases and all licenses, Permits and governmental
approvals and intangible assets listed on Schedule I(A)(6),
Schedule I(A)(7), Schedule I(A)(8), Schedule I(A)(9),
Schedule I(A)(10), Schedule I(A) (12), and Schedule I(A)(13)
are in full force and effect and are, except as otherwise
indicated on those Schedules, freely transferrable to Buyer
or its nominee without the consent or approval of any third
party. There are no defaults, breaches or violations of or
with respect to any such documents, and, to the best of
Seller's knowledge, no event, occurrence or condition has
occurred (or is threatened to occur) which, with the lapse of
time, the giving of notice, or the happening of any further
event or condition, or both would become a default or
violation of any such document. Seller is not bound by, and
Buyer is not assuming, any commitment for the delivery of any
of its products, including the Limestone Availability
Agreement identified in Section VII(O), aggregating in excess
of what can be delivered out of present inventories plus
future production at current practicable capacity during the
time available to satisfy such commitments. There are no
occupancy, sanitary district, water, sewage, air,
environmental protection agency, natural resource department
or other licenses or permits required by any federal, state,
regional or local governmental authority for the ownership,
use or operation of the Included Assets by Buyer in the
conduct of Seller's Business. To the best of Seller's
knowledge, all Permits are in full force and effect, validly
issued, and without violations on the part of Seller or its
affiliates.
J. NO MATERIAL LOSS.
Since January 1, 1997, Seller has not suffered or been
threatened with any material loss of any Included Assets and
has not entered into any material transaction related to the
Included Assets.
K. BROKERS.
Other than as set forth in the Disclosure Schedule, Seller
has not engaged any broker or finder in connection with the
transaction contemplated herein, and Seller hereby agrees to
indemnify and hold harmless Buyer against the claims of any
broker or finder engaged by Seller.
L. INSURANCE.
Seller will maintain in full force and effect through the
Closing Date all insurance coverage which it presently
carries on Seller's Business and the Included Assets.
M. ENVIRONMENTAL AND RECLAMATION LAWS.
1. DEFINITIONS. As used in this Agreement, the
following terms shall have the meanings indicated below:
a. Applicable Permit. Any permit, license
or document issued at or prior to the Closing Date that is
necessary for Seller to do business in connection with
Seller's Business in each of the jurisdictions in which it is
qualified or authorized to do business.
b. CERCLA. The Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42
U.S.C.Section 9601 et seq., as amended.
c. Claims. All liens, encumbrances,
security interests, mortgages, equities, options or pledges
of every kind, nature and description.
d. Governmental Authority. Any national,
state or local government (whether domestic or foreign) and
any political subdivision thereof or any other governmental,
quasi-governmental, judicial, public or statutory
instrumentality, authority, body, agency, bureau or entity,
including, without limitation, any court, zoning authority,
building inspector, or any arbitrator with authority to bind
a party at law.
e. Hazardous Substances. Any "hazardous
substance," as defined in Section 101(14) of CERCLA; any
"hazardous waste" as defined by Section 1004(5) of the
Resource Conservation and Recovery Act, 42 U.S.C.Section 6901
et seq. RCRA; any radioactive material (including "byproduct
material," "depleted uranium," "source material," or "special
nuclear material") as defined by The Atomic Energy Act, 42
U.S.C. Section 2011 and 10 C.F.R. Section 40.4; any
"hazardous chemicals" as defined by 29 C.F.R. Section
190.1200 et seq. any "toxic pollutant," as listed pursuant to
Section 307 of the Federal Water Pollution Control Act, 33
U.S.C. Section 1251 et seq. any "hazardous air pollutant" as
listed under Section 112 of the Clean Air Act, 42 Section
7401 et seq., any oil as defined in The Oil Pollution Act of
1990, 33 Section 2701 et seq. and any other material
regulated by any state statute which is equivalent or
comparable to the foregoing.
2. OPERATIONS IN COMPLIANCE. The operations
of the Seller's Business are in compliance, in all material
respects, with all statutes, laws, ordinances, rules,
regulations, judgments, orders and decrees, which are
presently in effect and which are applicable to the Seller's
Business. These include, without limitation, laws relating
to the protection of the environment, including laws relating
to emissions, discharges, releases or threatened releases of
pollutants, contaminants or hazardous or toxic materials or
wastes, contaminated air, surface water, ground water, or
land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants or Hazardous Substances.
3. NO VIOLATIONS. There are no outstanding
notices of violation, Claims, citations, complaints, penalty
assessments, suits or other proceedings, administrative,
civil or criminal, at law or in equity, pending or, to
Seller's knowledge, threatened against the Seller by or
before any governmental authority with respect to Seller's
Business. No investigation or review is pending or, to
Seller's knowledge, threatened against Seller by or before
any governmental authority with respect to any alleged
violation of any Applicable Permit, law, regulation,
ordinance, standard or order relating to Seller's Business.
Seller has received no notices stating that any third party
intends to file suit under any environmental statute with
respect to Seller's Business. All Hazardous Substances and
Solid Wastes (as defined in RCRA, 42 U.S.C. Section 6903(27))
of Seller's Business have been transported and disposed of in
compliance with all applicable laws and Applicable Permits.
Seller has no knowledge that any Hazardous Substances have
ever been released, discharged or disposed of on or about the
Facilities, other than incidents or matters which have been
fully resolved under all applicable laws and regulations.
4. WASTE DISPOSAL. Seller has not received from
any Governmental Authority or third party any request for
information, notice of Claim, demand letter, citizen suit
notice or other notification to the effect that Seller may be
potentially responsible with respect to any investigation or
clean-up of Hazardous Substances released or Solid Wastes
disposed of at any site pertaining to Seller's Business. To
Seller's knowledge, no Hazardous Substances or Solid Wastes
generated by Seller from the Facilities have been sent,
directly or indirectly, to any site listed or formally
proposed for listing on the National Priority List
promulgated pursuant to CERCLA, or to any site listed on any
state list of hazardous substance sites requiring
investigation or cleanup.
5. UNDERGROUND STORAGE TANKS. All underground
storage tanks previously located on Facilities currently
occupied by Seller have been closed in place or removed in
compliance with all applicable laws and regulations.
6. NO PCB'S. No electrical, heat transfer or
hydraulic equipment or other equipment containing
polychlorinated biphenyl at levels of regulatory concern is
located on any real property currently leased or occupied by
Seller.
7. HAZARDOUS SUBSTANCES. None of the Facilities
and, to Seller's knowledge, none of the properties leased
and/or operated by Seller in connection with Seller's
Business, is contaminated by or contains any Hazardous
Substance. Neither Seller nor any Affiliate of Seller has
ever applied for "Interim Status" for the Facilities under 42
U.S.C.Section 6925(e), and regulations enacted thereunder,
nor are the Facilities subject to the treatment, storage and
disposal regulations promulgated by any Governmental
Authority under RCRA.
8. ASBESTOS. Seller has not been notified that
any claim has been made against Seller with respect to any of
the Facilities currently occupied by Seller resulting from
any asbestos or similar materials used in the construction
thereof.
N. EXECUTION, DELIVERY, AND PERFORMANCE OF AGREEMENT.
Neither the execution, delivery nor performance of this
Agreement by Seller will, with or without the giving of
notice or the passage of time, or both, conflict with, result
in a default, right to accelerate or loss of rights under, or
result in the creation of any lien, charge or encumbrance
pursuant to, any provision of Seller's certificate of
incorporation or by-laws or any franchise, mortgage, deed of
trust, lease, license, agreement, understanding, law, rule,
or regulation or any order, judgment or decree to which
Seller is a party or by which Seller or the Included Assets
may be bound or affected. This Agreement has been duly
executed and delivered by Seller and constitutes the legal,
valid and binding obligation of Seller, enforceable against
Seller in accordance with its terms, except as enforcement
may be affected by bankruptcy, moratorium or similar laws for
the benefit of creditors generally, and subject to the
availability of equitable relief.
O. PRODUCT INVENTORIES
Except as specifically set forth in the Disclosure Schedule,
no material portion of the Product Inventories consists of
items which are not merchantable or which are not suitable
and usable for the production or completion of merchantable
products for sale within a reasonable period of time in the
ordinary course of Seller's Business as first quality goods
at normal mark-ups, or if required to be fit for any
particular purpose of customers of Seller's Business, are so
fit, and no material portion of the Product Inventories
consists of any items which are slow-moving, obsolete, or of
below-standard quality. The quantities of all lines of
Product Inventories are reasonable and appropriate in the
present circumstances of Seller's Business. The inventories
of primary surge stone and other work in process which
constitute part of the Product Inventories on hand on the
date of this Agreement and on the Closing Date are and will
be sufficient to satisfy the normal business needs therefor
of Seller's Business as of the date of this Agreement and of
the Closing Date, respectively, in a manner consistent with
the historical practices of Seller's Business.
P. DOCKS
The docks and dock faces which constitute part of the
Facilities are in a safe and operable condition which will
permit self-unloading bulk vessels of the type which
customarily use the dock to safely reach the dock and remain
afloat. As of the Closing Date, the underwater areas
adjacent to and leading to the docks which constitute part of
the Facilities are adequately dredged by Seller at Port
Inland and by the Corps of Engineers at Rouge dock to permit
such self-unloading bulk vessels to safely reach, tie up next
to, load to midsummer draft, and depart the Port Inland dock,
and to safely reach, tie up next to, discharge cargo, and
depart the Rouge dock in Detroit.
Q. INCLUDED ASSETS SUFFICIENT TO OPERATE SELLER'S
BUSINESS
All Included Assets, including mobile mine equipment and
processing plant facilities, are in a condition which will
permit Buyer to operate Seller's Business in a manner similar
to that as operated by Seller prior to the date of this
Agreement, reasonable wear and tear excepted. The Included
Assets, when taken as a whole, are suitable and sufficient to
operate Seller's Business in a manner similar to that
conducted by Seller immediately prior to the date of this
Agreement.
R. ERISA AND LABOR LAW COMPLIANCE
1. DEFINITIONS. As used in this Agreement, the
following terms shall have the meanings indicated below:
a. Affiliate. The term "Affiliate" shall
include a corporation, which is a member of a controlled
group of corporations with Seller within the meaning of
Section 414(b) of the Code, or a trade or business (including
a sole proprietorship, partnership, trust, estate or
corporation) which is under Common Control with Seller within
the meaning of Section 414(c) of the Code, or any entity
which is a member of an affiliated service group within the
meaning of Section 414(m) or (o) of the Code with Seller.
b. Code. The Internal Revenue Code of 1986,
as amended. Reference to a specific Section of the Code
shall include any regulation promulgated thereunder.
c. ERISA. The Employee Retirement Income
Security Act of 1974, as amended.
d. ERISA Plan. Any ERISA Pension Plan and
any ERISA Welfare Plan, regardless of whether such plan is
tax qualified pursuant to Section 401 of the Code, including
all employee benefit plans as defined in Section 3(3) of
ERISA, and all bonus, stock option, stock purchase,
incentive, deferred compensation, supplemental retirement,
severance and other similar fringe or employee benefit plans,
programs or arrangements, including all obligations,
arrangements or customary practices, whether or not legally
enforceable, to provide benefits other than salary or
compensation for services rendered, to present or former
directors, employees or agents of Seller or any Affiliate of
Seller.
e. ERISA Pension Plan. Any employee pension
benefit plan as defined in Section 3(2) of ERISA which has
been or is established or maintained by Seller or an
Affiliate of Seller.
f. ERISA Welfare Plan. Any employee welfare
benefit plan as defined in Section 3(1) of ERISA which has
been or is established or maintained by Seller or an
Affiliate.
g. Governmental Authority. Any national,
state or local government (whether domestic or foreign) and
any political subdivision thereof or any other governmental,
quasi-governmental, judicial, public or statutory
instrumentality, authority, body, agency, bureau or entity,
including, without limitation, any court, zoning authority,
building inspector, or any arbitrator with authority to bind
a party at law.
h. Multi-Employer Plan. Any plan as defined
in Section 3(37) of ERISA to which Seller or any Affiliate
has or has had an obligation to contribute, and for purposes
hereof, shall include (i) a plan to which the provisions of
Section 413(c) of the Code or Sections 4063 or 4064 of ERISA
apply, and (ii) any union's sponsored welfare plan to which
Seller or any Affiliate contributes.
i. Person. Any natural person, corporation,
partnership, firm, association, Governmental Authority or any
other entity, whether acting in an individual, fiduciary or
other capacity.
2. ERISA MULTIEMPLOYER PLANS. Neither Seller nor
any Affiliate is now or has ever been, a contributing
employer to a Multiemployer Plan.
3. PROVISIONS APPLICABLE TO ERISA PLANS OTHER
THAN MULTIEMPLOYER PLANS.
a. Except as otherwise agreed to in writing
by the Seller and Buyer, Seller shall retain all of the
liabilities and obligations arising under any ERISA Plans
including, without limitation, any obligation with respect to
any Employees or former Employees of Seller or an affiliate,
or any of such person's spouses, children, other dependants
or beneficiaries. Buyer shall not assume or have any
responsibility relating to any ERISA Plan maintained by
Seller.
b. Seller shall pay any claims with respect
to occurrences arising prior to the Closing Date relating to
(i) medical and dental benefits to the extent covered by the
ERISA Plans and (ii) workers' compensation benefits when the
same become due and payable, whether prior to or after the
Closing Date. Seller shall be solely responsible for any
retiree medical liabilities and related costs of medical and
life insurance for persons who shall have retired from Seller
or an Affiliate on or prior to the Closing Date. Seller
shall be responsible for employee benefit claims of Employees
(or their eligible dependents) with respect to Claim Events
occurring prior to the Closing Date, and to the extent that
Buyer implements benefit plans for Employees, Buyer shall be
responsible for such claims with respect to Claim Events
occurring on and after the Closing Date. A Claim Event shall
be defined as the illness or injury giving rise to a claim of
the nature referred to in this Section V(R)(3)(b).
4. COBRA. Seller shall offer to all of its
employees at the time of Closing the right to continue their
coverage under Seller's or an Affiliate's group health
plan(s), such offer to be made in accordance with the
continuation coverage requirement of part b of Subtitle B of
Title I of ERISA and Section 4980B of the Code.
S. INTANGIBLE ASSETS.
Schedule I(A)(13) sets forth a complete and accurate list and
description of all of Seller's Intangible Assets. The
Intangible Assets are free of any liens, claims or
encumbrances and consist of all such rights used by Seller to
conduct Seller's Business as currently being conducted. To
the best of Seller's knowledge, none of the Intangible Assets
conflict with or have been alleged to conflict with or
infringe the patents, trademarks, trade names, service marks,
copyrights or other rights of any third party. Seller has no
knowledge of any use of any of the Intangible Assets by any
third party. All trademarks, trade names, service marks,
d/b/a names, patents and patent applications, and copyrights
and copyright applications which have been used by Seller in
connection with Seller's Business but which are not included
in the Intangible Assets are described in the Disclosure
Schedule.
T. BOUNDARY LINES.
There is no pending litigation or dispute concerning the
location of the lines and corners of the Real Property, and
the improvements constructed on the Real Property are
entirely within the boundary lines of the Real Property.
U. NOTICE OF CONDEMNATION.
Seller has not received notice of, nor is Seller aware of,
any pending, threatened or contemplated action by any
governmental authority having the power of eminent domain,
which might result in any part of the Real Property being
taken by condemnation or conveyed in lieu thereof. Seller
shall, promptly upon receiving any such notice or learning of
any such contemplated or threatened action, give Buyer
written notice thereof.
V. ASSESSMENTS.
No assessments have been made against any portion of the Real
Property which are unpaid (except ad valorem taxes for the
current year which are not yet due and payable), whether or
not they have become liens; Seller has received no notice of,
and Seller is not aware of, any reassessment of the Real
Property or any portion thereof; and Seller shall notify
Buyer upon learning of any such assessments or reassessments.
W. UTILITIES.
Those public utilities (including water, electricity, gas,
sanitary sewage, storm water drainage facilities, and
telephone utilities) sufficient to operate the Real Property
for its current uses are available to the Real Property and
are completed on the Real Property and, as may be
appropriate, are connected to the improvements. Seller has
not received any notice of, nor is Seller aware of, any
pending, threatened or contemplated action by any
governmental authority having jurisdiction or by any other
person or entity seeking to restrict access of such public
utilities to the Real Property or the Facilities or to
increase the cost of such access.
X. GOOD MINING PRACTICES
Seller conducts its operation of Seller's Business
substantially in accordance with good mining practices and
all applicable local state and federal laws and regulations
governing its operation, including, but not limited to:
1. Maintaining all existing means of ingress,
egress and dock facilities and such other roads, bridges,
fire overlooks, water and communication systems, as an
orderly mining development may require.
2. Taking all necessary precautions against
property loss and danger to lives from floods and water
runoffs, installing and maintaining reasonable drainage
courses, culverts and storage dams as may be warranted or
otherwise required by all appropriate governmental
requirements.
3. Maintaining on the real property all safety
systems and facilities (and which are included as a part of
the Included Assets) necessary for the operation of Seller's
Business.
4. Developing and maintaining such natural on-site
water resources and water rights of the Real Property as
are reasonable and sufficient to operate Seller's Business in
a manner substantially equivalent to that conducted by Seller
prior to Closing.
5. Carrying on a reasonable drilling, exploration
and sampling program designed to not detract from the
economic useful life of the mining operation and its mine.
6. Filing with all appropriate governmental
agencies all required permit applications, notices of intent
to mine, mining plans, and all reports of Seller's activities
during its conduct of Seller's Business.
7. Consistently maintaining an ongoing program to
mine, process and ship the known reserve deposits of minerals
on the Real Property with the personnel and appropriate
equipment needed on the Real Property for the efficient
conduct of such activities.
8. Substantially complying with all health,
safety and antipollution regulations of all federal, state,
regional and local agencies and carrying adequate worker's
compensation for its operation.
9. Maintaining proper records of all mineral
production and sales of minerals and other products from
Seller's operation of Seller's Business, logs of drilling,
sampling, maps of proven and indicated reserves, mine
workings, rods and watercourses, and maps of lands to be
reclaimed and restored as required by good mining practices
and mining or environmental permits governing Seller's
Business.
Y. FINANCIAL STATEMENTS.
Seller has delivered to Buyer copies of financial
information, including income statements and statements of
assets, with respect to Seller's Business for the fiscal
years ended December 31, 1995, 1996 and 1997 and for the
three months ended March 29, 1998, together with the
certificate of Seller's Treasurer with respect thereto (the
"Financial Statements"). The Financial Statements have been
prepared internally by Seller or by an Affiliate of Seller in
accordance with accepted accounting principles as determined
by Seller or an Affiliate of Seller and applied on a
consistent basis and present fairly the financial position
and results of operations of Seller's Business at each such
date. There has been no change in accounting procedures or
methods, or in the method of valuing inventories respecting
Seller's Business, during the period covered by the Financial
Statements.
Z. WETLANDS.
Seller has filed an application with the State of Michigan,
Department of Environmental Quality, for a permit pursuant to
Part 303 of Michigan's Natural Resources and Environmental
Protection Act in connection with Seller's proposed five-year
mining plan, and such application is currently pending before
the State.
AA. DISCLOSURE.
No representation, warranty or other statement made by Seller
in this Agreement and no statement in the Disclosure Schedule
contains an untrue statement of material fact or omits to
state a material fact necessary to make the statements in
this Agreement and in the Disclosure Schedule, in the light
of the circumstances in which they were made, not misleading.
Seller does not have knowledge of any fact that has specific
application to Seller's Business (other than general economic
or industry conditions) and that, as far as any officer or
director of Seller or any Affiliate of Seller can reasonably
foresee, materially threatens the Included Assets or the
prospects of Seller's Business that has not been set forth in
this Agreement or the Disclosure Schedule.
VI. REPRESENTATIONS AND WARRANTIES OF BUYER
Except as set forth in the Disclosure Schedule, Buyer
represents and warrants to Seller that, as of the date of
this Agreement and on the Closing Date:
A. CORPORATE ORGANIZATION.
Buyer is a corporation duly organized, validly existing and
in good standing under the laws of the state of its
incorporation with corporate power and authority sufficient
to enable it to carry out this Agreement. Buyer has the power
and authority to own properties and carry on business. As of
the Closing Date Buyer will be duly qualified to do business
in the State of Michigan. The execution, delivery and
performance of this Agreement have been duly authorized by
all necessary corporate action of Buyer.
B. AUTHORIZATION.
No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery
and performance of this Agreement other than the
Hart-Scott-Rodino filing referred to in Section VII(M) of this
Agreement.
C. BROKERS
Buyer has not engaged any broker or finder in connection with
the transactions contemplated herein.
D. CERTAIN PROCEEDINGS.
There is no litigation or proceeding, in law or in equity,
and there are no proceedings or governmental investigations
before any commission or other administrative authority,
pending or to Buyer's knowledge threatened against Buyer with
respect to or affecting the consummation of the transactions
herein contemplated, or the use of the Included Assets by
Buyer after the Closing.
E. EXECUTION, DELIVERY AND PERFORMANCE OF AGREEMENT.
Neither the execution, delivery nor performance of this
Agreement by Buyer will, with or without the giving of notice
or the passage of time, or both, conflict with, result in a
default, right to accelerate or loss of rights under, or
result in the creation of any lien, charge or encumbrance
pursuant to, any provision of Buyer's certificate of
incorporation or bylaws or any franchise, mortgage, deed or
trust, lease, license, agreement, understanding, law, rule
or regulation or any order, judgment or decree to which Buyer
is a party or by which Buyer may be bound or affected. This
Agreement has been duly executed and delivered by Buyer and
constitutes the legal, valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms,
except as enforcement may be affected by bankruptcy,
moratorium or similar laws for the benefit of creditors
generally, and subject to the availability of equitable
relief.
VII. COVENANTS
A. CONSENTS.
Seller and Buyer shall cooperate to obtain any consent or
governmental approval with respect to the assignment of, or
shall make alternate arrangements reasonably satisfactory to
Buyer with respect to, any contract, lease, license or Permit
which is to be assigned to Buyer hereunder and which may be
required for such assignment to be effective.
B. PERIOD FROM EXECUTION TO CLOSING.
From the date of this Agreement until the Closing, Seller
will not, with respect to the Included Assets, engage in any
material transaction including any material disposition of
any of the Equipment, Inventories or Real Estate, without the
prior written consent of Buyer.
C. PAYMENT OF TAXES.
Seller shall pay when due any consolidated federal income tax
liability, state or local corporate income or franchise tax
liability (applied to each state or locality separately),
payroll or other tax liability for the portion of any taxable
period during which the income from Seller's Business is
included in a consolidated return of the "affiliated group",
within the meaning of Section 1504 of the Internal Revenue
Code of 1986, as amended, of which Seller is a member.
Seller shall also pay when due all sales and use taxes and
all other taxes and assessments of every kind and nature
arising out of the operation of the Seller's Business or the
ownership of the Included Assets prior to the Closing.
D. PURCHASE PRICE ALLOCATION.
Seller and Buyer shall allocate the Purchase Price for the
Included Assets based upon an independent appraisal of the
Included Assets to be completed by Buyer and concurred in by
Seller after the Closing Date. Buyer shall provide notice to
Seller of such proposed allocation within a reasonable time
after Buyer has completed the same, and Seller shall provide
notice to Buyer whether Seller concurs in such allocation
within a reasonable time after Seller's receipt of such
proposed allocation. The allocation shall be in accordance
with federal and state laws and regulations, including but
not limited to Section 1060 of the Internal Revenue Code of
1986, as amended. Buyer and Seller each agree to file
identical (except for taxpayer identification information)
asset acquisition statements (IRS form 8594), in accordance
with the agreed allocations for their respective taxable
years which include the Closing Date. Buyer and Seller shall
each indemnify, defend, save and keep the other party
harmless against and from all liability, demands, claims,
actions or causes of action, assessments, penalties, costs or
expenses, including reasonable attorneys' fees, sustained or
incurred by such other party as a result of the failure of
Buyer or Seller to properly file an asset acquisition
statement in accordance with such agreed allocations.
E. INSPECTION BEFORE CLOSING.
Pending the Closing, Seller shall furnish to Buyer all
documents, reports and other information and data covering
the Included Assets, and shall otherwise cooperate with Buyer
in such manner as, Buyer may reasonably request. Seller
shall provide Buyer and its representatives with reasonable
access to all financial records of Seller and its affiliates
relating to Seller's Business and shall provide Buyer with
copies of any such records requested by Buyer or its
representatives. Seller shall provide Buyer with copies of
Seller's accounts payable records with respect to Seller's
Business for the years ending December 31, 1995, 1996 and
1997 and for the first two months of 1998. At all reasonable
times, Seller shall make the Facilities and the Included
Assets available for examination and inspection by Buyer and
its agents and representatives.
F. INSPECTION OF RECORDS AFTER CLOSING.
From and after the Closing, Seller and Buyer shall each make
their respective books and records, including tax and
financial records, available to the other party with respect
to all transactions of Seller's Business occurring prior to
the Closing or relating to Seller's obligations which are
assumed by Buyer (in the case of records owned by Seller, at
its offices in Bethlehem, Pennsylvania, or such other place
as shall be reasonable under the circumstances and, in case
of records owned by Buyer, at its offices in Gulliver,
Michigan, or its offices in Cleveland, Ohio or such other
place as shall be reasonable under the circumstances), for
inspection by the other party, or by its duly authorized
representatives, for reasonable and necessary business
purposes at all reasonable times during normal business
hours, for a seven-year period after the Closing Date. As
used in this paragraph, the right of inspection includes the
right to make extracts or copies at the expense of the party
requesting such copies. Buyer and Seller shall be permitted
to destroy any of the books and records described in this
Section VII(F) after three years following the Closing Date;
provided, however, that for a period of seven years after the
Closing Date, Buyer and Seller each shall give the other
prior written notice of its intent to destroy any of the
books and records described in this Section VII(F) and the
party desiring to destroy records shall permit the other
party to make reasonable arrangements to preserve or
duplicate such records.
G. EMPLOYEES OF SELLER'S BUSINESS.
Buyer shall offer employment as of the Closing Date to all
employees of Seller's Business on the date immediately prior
to the Closing Date, including any employees on vacation, but
not any employees on short-term disability, worker's
compensation, long-term disability or leave of absence
(hereinafter, "Employees" or, individually, "Employee").
Such offer of employment to each Employee shall be at a rate
of pay at least equal to such Employee's base rate of pay in
effect on the day immediately prior to the Closing Date.
Buyer shall review the benefits provided by Seller to such
Employees prior to the Closing Date and shall provide such
Employees with benefits from and after the Closing Date of
the types and in the amounts which Buyer provides to other
similarly situated employees of Buyer. Prior to the
execution of this Agreement, Seller delivered to Buyer a
listing of the current rates of pay, positions and dates of
hire of the Employees. Buyer shall have no obligation
whatsoever with regard to any persons who are not Employees
or to Employees who do not accept Buyer's offer of
employment. Buyer shall be solely responsible for all
salaries or wages and benefits accruing on or after the
Closing Date. In the event Buyer terminates any Employee's
employment with Buyer other than for cause within six (6)
months after the Closing Date, Seller shall provide
termination payments to such Employee in an amount equal to
such Employee's then-current weekly rate of pay multiplied by
such Employee's combined years of service with Seller and
Buyer. Seller shall retain the responsibility for, and
indemnify, defend and hold Buyer harmless, against, all
liabilities, claims and obligations of and to Employees,
reported or unreported, which arise or accrue prior to the
Closing Date including, but not limited to, their employment
and the conditions thereof, employee welfare benefit plans of
any type (including workers' compensation claims, medical and
dental insurance coverage and long-term disability benefits)
and salary, wages, bonus, deferred compensation, stock
option, retirement, pension, or other benefit arrangement.
H. PRODUCT WARRANTIES.
Buyer will cooperate with Seller concerning product
warranties extended by Seller prior to Closing and shall
promptly inform Seller of any complaints or claims made with
respect to such warranties. All such warranties shall remain
the obligation of Seller, and Seller shall defend, indemnify
and hold harmless Buyer against any loss, damage or expense
relating to the same, provided that Buyer shall have complied
with the requirement of notice and cooperation set forth in
Section VII(I). Buyer shall have the benefit of any express
or implied warranties from the manufacturer or original
seller of the Included Assets if the same is available to a
transferee pursuant to the terms of the warranty, and Seller
shall take all actions necessary and execute such instruments
as are necessary to effect the transfer of the warranty.
I. THIRD PARTY CLAIMS.
From and after the Closing, the parties shall provide prompt
notice to one another and shall cooperate with each other
with respect to any third party investigations and the
defense of any claims or litigation made or commenced by
third parties relating to the Included Assets or Seller's
Business, provided that the party requesting cooperation
shall reimburse the other party for the other party's
reasonable out-of-pocket costs and expenses of furnishing
such cooperation. In the event Seller is required by law to
mitigate impacts at the Facilities relating to Seller's
operations, Buyer shall allow Seller to conduct such
mitigation at the Facilities provided that Seller shall not
unreasonably interfere with Buyer's ongoing or reasonably
anticipated future mining operations.
J. BULK SALES LAWS.
Seller and Buyer shall not give notice under the provisions
of the Uniform Commercial Code of any states relating to bulk
sales. Except as is otherwise specifically provided under
this Agreement, Seller shall remain solely responsible to all
of its creditors with respect to liabilities incurred
relative to the conduct of Seller's Business prior to the
Closing Date. Notwithstanding anything to the contrary in
this Agreement, Seller agrees to indemnify, defend and hold
harmless Buyer for any loss or liability incurred by Buyer
because of the failure to comply with the bulk sales laws of
any state.
K. NOTICE; BEST EFFORTS TO CONSUMMATE TRANSACTION.
Each party shall promptly give the other party written notice
upon its discovery of the existence or occurrence of any
condition which would make any representation or warranty
herein contained of either party untrue or which might
reasonably be expected to prevent the consummation of the
transactions herein contemplated. Neither Buyer nor Seller
shall intentionally perform any act which, if performed, or
omit to perform any act which, if omitted to be performed,
would prevent or excuse the performance of this Agreement by
Buyer or Seller or which would result in any representation
or warranty herein contained being untrue in any material
respect.
L. SCHEDULES.
Buyer and Seller acknowledge that all Schedules and Exhibits
referred to herein and not attached hereto at the time of
execution shall be delivered after the date hereof, in
accordance with this Section VII(L). Each party shall use its
best efforts to deliver to the other each of the Schedules
and Exhibits required to be delivered by such party as soon
as possible and shall update all such Schedules and Exhibits
as reasonably necessary prior to Closing and at Closing.
M. CASUALTY PRIOR TO CLOSING.
1. Effect on Purchase Price.
If, prior to the Closing, any damage to or loss of any of the
Included Assets occurs due to fire, flood, riot, act of God
or other casualty (hereinafter "Casualty"), and if Buyer, in
accordance with the provisions of this Agreement, does not
elect, or is not permitted to elect, to terminate this
Agreement, the Purchase Price (had there been no Casualty)
shall be reduced by an amount equal to the value of such
Casualty determined by the allocation provided under Section
VII(D).
2. Termination Option.
If, between the date hereof and the Closing, Casualty occurs
to the Included Assets having a replacement cost of five
million dollars ($5,000,000.00) or more, Buyer, at its
option, may elect to terminate this Agreement or proceed to
Closing.
N. HART-SCOTT-RODINO FILING.
Seller and Buyer shall each use all reasonable efforts to
expeditiously file completed notification reports under the
Hart-Scott-Rodino Anti-Trust Improvements Act in connection
with the transactions contemplated by this Agreement and will
cooperate with each other in attempting to secure a waiver of
the applicable waiting periods under the Act, and, upon the
request of either the Federal Trade Commission or the United
States Department of Justice, will use all reasonable efforts
to supply such agency with any additional requested
information as expeditiously as possible.
O. LIMESTONE AVAILABILITY AGREEMENT.
As of the Closing Date, Buyer and Seller shall enter into a
Limestone Availability Agreement in the form attached hereto
as Exhibit VII(O).
P. CONFIDENTIALITY.
In the event that the transactions contemplated by this
Agreement are not consummated, Buyer will not use or
disclose, nor will it permit any of its investors, employees,
agents, or representatives to use or disclose, to any third
parties, any written or oral information obtained from Seller
or obtained through investigation of Seller's Business or the
Included Assets, except to the extent that such information
is publicly available or obtainable from independent sources
or is required to be disclosed by law. In the event that the
transactions contemplated by this Agreement are not
consummated, any and all documents and other materials
furnished by Seller to Buyer or its representatives, with
respect to the transactions contemplated hereby, and all
copies thereof, shall be returned to Seller forthwith. This
Section VII(P) shall survive any termination of this
Agreement. In no event shall Buyer disclose to any third
party information relating to any items set forth in the
Disclosure Schedule, unless such disclosure is required by
law, in which case Buyer shall provide advance notice of any
proposed disclosure to Seller and shall afford Seller the
opportunity to participate in such disclosure.
Q. NONCOMPETITION
At Closing, Seller shall deliver a noncompetition agreement
in the form attached hereto as Exhibit VII(Q), which prevents
Seller, Specialty Minerals Inc., a Delaware corporation
("SMI"), Mineral Technologies Inc., a Delaware corporation
("MTI"), and any Affiliate of Seller, SMI or MTI from
competing, directly or indirectly, against Buyer in the sale
of any products currently sold from the Facilities as part of
Seller's Business, in any geographic area serviced by Great
Lakes shipping vessels, for a period of five (5) years after
the Closing Date (the "Noncompetition Agreement").
R. OPERATION OF BUSINESS
Seller shall operate, maintain and protect Seller's Business
from the date of this Agreement until Closing in accordance
with good operating and mining practices. Except for the
Deferred Charges, Seller shall not make, or incur liability
for, any capital expenditures for additions or improvements
to its plant or other business operations without Buyer's
prior written consent. Seller shall not pre-sell any product
beyond that which can be produced through the normal
operating rate of Seller's Business through the date prior to
the Closing Date. Seller shall not transfer or otherwise
dispose of any Included Assets except for sales of Product
Inventories to its customers in accordance with the terms of
applicable customer orders and other transfers of Product
Inventories in the ordinary course of business. Seller shall
not incur any obligation or liability, absolute, accrued,
contingent, or otherwise, whether due or to become due,
except for liabilities and obligations incurred in the
ordinary course of Seller's Business. Seller shall not make,
permit or suffer any adverse change in the financial
condition of Seller's Business, the Included Assets, or its
or Buyer's prospects for any aspect of Seller's Business
prior to or after Closing, or waive any right or cancel or
comprise any debt or claim included as part of the Included
Assets, other than in the ordinary course of business.
Seller shall not make any material change in the rate of
compensation, commission, bonus, perquisites, benefits or
other remuneration payable, or paid or agreed to be paid to
officers, directors, employees, salesmen or agents other than
regularly scheduled increases about which Buyer has received
prior notice and given its written consent.
S. DEFERRED CHARGES.
From November 15, 1997 through the Closing Date, Seller has
not incurred and will not incur any Deferred Charges or
capital additions with respect to Seller's Business except
for Deferred Charges and capital additions of the types and
not in excess of the amounts set forth in Schedule VII(S)
attached hereto.
VIII. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
Each and every obligation of Buyer to be performed on the
Closing Date shall be subject to the satisfaction prior
thereto of the following conditions, upon the nonfulfillment
of which this Agreement may be terminated in accordance with
Section XIII;
A. REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING.
All representations and warranties made by Seller in this
Agreement are true and correct in all material respects when
given and on the Closing Date.
B. PERFORMANCE OF COVENANTS.
Seller shall have performed and complied in all material
respects with each and every covenant, agreement and
condition required by this Agreement to be performed or
complied with by it prior to or on the Closing Date.
C. NO MATERIAL ADVERSE CHANGE.
There shall have been no material adverse change in the
condition of the Included Assets or in the prospects for
Seller's Business since the date hereof other than Casualty
which has not resulted in termination of this Agreement.
D. NO LITIGATION.
No suit or proceeding shall be pending before any court,
administrative agency, governmental body or arbitration
tribunal seeking to restrain, prohibit or restrict in any way
the consummation of the transactions contemplated hereby, or
to obtain damages or other relief in connection with this
Agreement.
E. CORPORATE AUTHORITY.
The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby
shall have been approved by the Board of Directors of Buyer
and by the Board of Directors of Seller.
F. SCHEDULES.
The Schedules and Exhibits which are required by this
Agreement to be delivered to Buyer prior to Closing shall
have been delivered to Buyer in accordance with the terms and
provisions hereof and shall be in form and substance
satisfactory to Buyer.
G. CONSENTS/GOVERNMENT APPROVALS.
All consents to assignment, and all governmental approvals
and consents, including the expiration or early termination
of the Hart-Scott-Rodino waiting period, shall have been
obtained or alternate arrangements reasonably satisfactory to
Buyer shall have been made with respect to those contracts,
leases, licenses or permits for which in Buyer's reasonable
judgment the inability to secure the benefits thereof would
materially and adversely affect Buyer's ability to conduct
business using the Facilities in a manner substantially
equivalent to that conducted by Seller prior to Closing.
H. DELIVERIES.
Buyer shall have received the items to be delivered pursuant
to Section III(B)(2).
I. ENVIRONMENTAL ASSESSMENT.
Buyer shall have received an environmental assessment of the
Facilities reasonably satisfactory to Buyer and performed for
Buyer's account by a consulting engineer chosen by Buyer
("Environmental Assessment"). Buyer shall inform Seller as to
whether the Environmental Assessment is satisfactory to Buyer
no later than the Closing Date. If Buyer does not give
notice to Seller that the Environmental Assessment is not
satisfactory to Buyer on or before the Closing Date, this
Section VIII(I) shall be waived by Buyer and shall be of no
further force or effect.
J. TRANSFER OF ASSETS BY SMI.
SMI shall have transferred to Buyer, for no additional
consideration, all contract rights, permits and other assets
relating primarily to Seller's Business which were titled in
SMI's name prior to the incorporation of Seller and which
remain titled in SMI's name as of the Closing Date, pursuant
to instruments of transfer, assignment and conveyance which
are acceptable to Buyer in form and substance, in each case
to the extent legally transferable.
K. GUARANTY BY SMI AND MTI.
SMI and MTI shall have entered into a Guaranty in the form
attached hereto as Exhibit VIII(K), pursuant to which SMI and
MTI shall, jointly and severally, absolutely and
unconditionally guarantee the obligations of Seller under
this Agreement and each of the other instruments and
documents executed by Seller in connection with the
transactions contemplated by this Agreement.
L. TRANSITION SERVICES AGREEMENT.
Buyer, Seller and SMI shall have entered into a Transition
Services Agreement (the "Transition Services Agreement") in
the form attached hereto as Exhibit VIII(L) pursuant to
which Seller and SMI will provide certain services to Buyer
after the Closing relating to the operation of Seller's
Business.
IX. CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
Each and every obligation of Seller to be performed on the
Closing Date shall be subject to the satisfaction prior
thereto of the following conditions, upon the nonfulfillment
of which this Agreement may be terminated in accordance with
Section XIII:
A. REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING.
All representations and warranties made by Buyer in this
Agreement are true and correct in all material respects when
given and on the Closing Date.
B. PERFORMANCE OF COVENANTS.
Buyer shall have performed and complied in all material
respects with each and every covenant, agreement and
condition required by this Agreement to be performed or
complied with by it prior to or on the Closing Date.
C. CORPORATE AUTHORITY.
The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby
shall have been approved by the Board of Directors of Buyer
and the Board of Directors of Seller.
D. NO LITIGATION.
No suit or proceeding is pending before any court,
administrative agency, governmental body, or arbitration
tribunal seeking to restrain, prohibit or restrict in any way
the consummation of the transaction contemplated hereby or to
obtain damages or other relief in connection with this
Agreement.
E. DELIVERIES.
Seller shall have received the items to be delivered pursuant
to Section III(B)(1).
F. APPROVALS AND CONSENTS.
All governmental approvals and consents, including the
expiration or early termination of the Hart-Scott-Rodino
waiting period, shall have been obtained.
G. GUARANTY BY ONC.
Oglebay Norton Company, a Delaware corporation which is an
Affiliate of Buyer ("ONC"), shall have entered into a
Guaranty in the form attached hereto as Exhibit IX(G),
pursuant to which ONC shall absolutely and unconditionally
guarantee the obligations of Buyer under this Agreement and
each of the other instruments and documents executed by Buyer
in connection with the transactions contemplated by this
Agreement.
X. SURVIVAL OF WARRANTIES AND REPRESENTATIONS
The representations and warranties of Seller and Buyer
contained in this Agreement or referred to in any closing
document shall survive the Closing Date as hereinafter
provided. No claim shall be made for breach of any
representation or warranty or indemnification with respect
thereto, unless such claim is asserted in writing within (but
not later than) three (3) years after the Closing Date.
XI. TAX RETURNS
Each of Buyer and Seller shall honor all reasonable requests
of the other for access to information relating to Seller's
Business in the possession of the other that will assist the
requesting party in preparation of a tax return relating to
Seller's Business or the Included Assets for which the
requesting party is responsible, or in the defense of such a
return in the event of a subsequent audit.
XII. INDEMNIFICATION
A. SELLER'S INDEMNIFICATION COVENANTS.
Seller shall indemnify, defend, save and keep Buyer, its
Affiliates, their officers, directors, employees and agents,
and their successors and assigns, harmless against and from
all liability, demands, claims, actions or causes of action,
assessments, penalties, costs, or expenses, including
reasonable attorneys' fees, sustained or incurred by Buyer,
its Affiliates, their officers, directors, employees or
agents, or their successors or assigns:
1. as a result of or arising out of or by virtue
of any incorrect representation or breach of warranty made by
Seller to Buyer herein or in any closing document delivered
to Buyer in connection herewith, provided, however, that
Seller, in the absence of fraud or intentional
misrepresentation by or on behalf of Seller, shall have no
obligation to indemnify Buyer under this Section XII(A)(1)
for any claim asserted by Buyer which arises after twenty-four
(24) months after the Closing Date;
2. as a result of or arising out of or by virtue
of the failure of Seller to comply with, or the breach by
Seller of any of the covenants of this Agreement to be
performed by Seller, provided, however, that Seller, in the
absence of fraud or intentional misrepresentation by or on
behalf of Seller, shall have no obligation to indemnify Buyer
under this Section XII(A)(2) for any claim asserted by Buyer
which arises after twenty-four (24) months after the Closing
Date except for a breach of the covenant given in Section
VII(Q), for which the indemnification period shall be five
(5) years from the Closing Date;
3. notwithstanding any other provision of this
Agreement to the contrary, as a result of or arising out of
or by virtue of any incorrect representation or breach of
warranty made by Seller to Buyer in Section V(B), Section
V(C)(relating to the Included Assets other than Real
Property), Section V(M) or Section V(R), in any closing
document delivered to Buyer in connection with such Sections,
or Seller's failure to honor, discharge, pay or fulfill any
responsibility, liability or obligation not assumed by Buyer
pursuant to this Agreement, regardless of when such claim is
asserted by Buyer; provided, however, that a claim shall not
be asserted by Buyer with respect to any incorrect
representation or breach of warranty made by Seller to Buyer
in Section V(M)(2) unless and until the aggregate amount of
all liabilities, demands, claims, actions or causes of
action, assessments, penalties, costs or expenses, including
reasonable attorneys' fees, sustained or incurred by Buyer,
its Affiliates, their officers, directors, employees or
agents, or their successors and assigns, exceeds the sum of
One Hundred Thousand Dollars ($100,000), and then only to the
extent of such excess;
4. any increase in the cost of operation of
Seller's Business during the 1998 and 1999 shipping seasons
as a result of or arising out of or by virtue of any delay in
the issuance of, or any failure or refusal to issue, the
permit described in Section V(Z). For purposes of
determining the increase in the cost of operation of Seller's
Business pursuant to this Section XII(A)(4), the parties
hereby agree that the amount of such increase shall be deemed
to be five cents ($.05) per ton of Limestone or Dolomite
mined by Buyer until such permit is issued; and
5. as a result of, in consequence of or arising
out of, under or by reason of any ERISA Plan maintained by or
contributed to by the Seller or its Affiliates (including,
but not limited to, any liability pertaining to any of
Seller's obligations under the minimum funding standards of
ERISA and of the Code).
B. BUYER'S INDEMNIFICATION COVENANTS.
Buyer shall indemnify, defend, save and keep Seller, its
Affiliates, their officers, directors, employees and agents,
and their successors and assigns, harmless against and from
all liability, demands, claims, actions or causes of action,
assessments, penalties, costs, expenses, including reasonable
attorneys' fees, sustained or incurred by Seller, its
Affiliates, their officers, directors, employees or agents,
or their successors and assigns:
1. as a result of or arising out of or by virtue
of any incorrect representation or breach of warranty made by
Buyer to Seller herein or in any closing document delivered
to Seller in connection herewith, provided, however, that
Buyer, in the absence of fraud or misrepresentation by or on
behalf of Buyer, shall have no obligation to indemnify Seller
under this Section XII(B)(1) for any claim asserted by Seller
which arises after twenty-four (24) months after the Closing
Date;
2. as a result of or arising out of or by virtue
of the failure of Buyer to comply with, or the breach by
Buyer of, any of the covenants of this Agreement to be
performed by Buyer, provided, however that Buyer, in the
absence of fraud or misrepresentation by or on behalf of
Buyer, shall have no obligation to indemnify Seller under
this Section XII(B)(2) for any claim asserted by Seller which
arises after twenty-four (24) months after the Closing Date;
and
3. as a result of or arising out of or by virtue
of (i) any product liability claims made against Seller or
Seller's Business resulting solely from any Products that are
shipped from the Facilities at any time after the Closing or
(ii) Buyer's failure to honor, discharge, pay or fulfill any
liabilities or obligations assumed by Buyer in this
Agreement.
C. NOTICE OF INDEMNIFICATION.
In the event any legal proceeding or investigation shall be
threatened or instituted or any claim or demand shall be
asserted by any person in respect of which payment may be
sought by one party hereto from the other party under the
provisions of this Section XII (hereinafter, "Claim"), the
party seeking indemnification (the "Indemnitee") shall
promptly cause written notice of the assertion of any such
Claim of which it has knowledge and which is covered by this
indemnity to be forwarded to the other party (the
"Indemnitor"), which notice must be received by the
Indemnitor prior to the expiration of twenty-seven (27)
months after the Closing Date (except for indemnification
sought pursuant to Section XII(A)(3), Section XII(A)(4),
Section XII(A)(5) or Section XII(B)3). Any such notice shall
state specifically the provision of this Agreement with
respect to which the Claim is made, the facts giving rise to
such Claim, and the amount of the liability asserted against
the Indemnitor by reason of the Claim.
D. INDEMNIFICATION PROCEDURE FOR THIRD-PARTY CLAIMS.
In the event of the initiation of any legal proceeding
against an Indemnitee by a third party, the Indemnitor shall
have the absolute right after the receipt of notice, at its
option and at its own expense, to engage counsel of its
choice and to defend against, negotiate, settle, (but not
without the prior consent of Indemnitee which consent shall
not be unreasonably withheld) or otherwise deal with any
proceeding, claim, or demand which relates to any loss,
liability, or damage indemnified against hereunder, and the
Indemnitee shall cooperate fully with the Indemnitor.
E. EXCLUSIVE REMEDY.
Except as is otherwise specifically set forth in this
Agreement, the exclusive remedy available to a party hereto
in respect of a breach by the other party of its obligations
under this Agreement shall be to proceed in the manner set
forth in this Section XII and subject to the limitations set
forth herein. Notwithstanding anything else in this
Agreement to the contrary, the limitations of Section
XII(A)(1) and the provisions of this Section XII(E) shall not
apply to any breach of Seller's warranties set forth in the
Warranty Deeds referred to in Section I(D)b.
F. RESPONSIBILITY UNDER CERTAIN ENVIRONMENTAL LAWS.
No provision of this Agreement shall limit or otherwise
restrict any liability or responsibility of either party to
the other or in any manner under or in connection with the
Comprehensive Environmental Response, Compensation and
Liability Act, as amended, 42 USC 9601, et seq., the Resource
Conservation and Recovery Act of 1976, as amended, 42 USC
6901, et seq., and Parts 111 and 303 of the Michigan Natural
Resources and Environmental Protection Act.
G. ARBITRATION.
Each party agrees that to the extent any dispute arising in
connection with this Agreement is not resolved by voluntary
agreement of the parties, such dispute shall be finally and
exclusively settled by arbitration in accordance with the
provisions of this Section XII(G). If any such dispute
arises, either party may at any time deliver written notice
that it intends to submit such dispute to arbitration. If
such a notice is delivered to the other party, then the party
that delivered such notice shall be entitled to direct
submission of the dispute to arbitration. The party
directing a submission to arbitration shall promptly deliver
written notice to the other party. Notwithstanding this
Section XII(G), each party shall have the right to seek from
any court of competent jurisdiction pending the establishment
of the arbitral tribunal interim relief in aid of arbitration
or to protect the rights of such party in respect of this
Agreement. Any request for such interim relief by a party
shall not be deemed incompatible with, or a waiver of, this
agreement to arbitrate. Such arbitration shall be held in
Detroit, Michigan (which shall be the exclusive location of
such arbitration unless otherwise agreed by the parties) in
accordance with the commercial arbitration rules and
regulations of the American Arbitration Association, with
pre-hearing discovery rights in accordance with the Federal
Rules of Civil Procedure. The determination of the
arbitrators shall be conclusive and binding upon the parties,
and any determination by the arbitrators of an award may be
filed with the clerk of a court of competent jurisdiction as
a final adjudication of the claim involved, where application
may be made to such court for a judicial acceptance of the
award and an order of enforcement, as the case may be. The
expenses of each party, including legal and accounting fees,
if any, with respect to the arbitration, shall be borne by
such party, except to the extent otherwise directed by the
arbitrators. The arbitrators shall designate the parties to
bear the expenses of the arbitrators of the respective
amounts of such expense to be borne by each party.
XIII. TERMINATION: RIGHT TO DAMAGES
If this Agreement is terminated pursuant to its terms,
neither party hereto shall have any claim against the other
except if the circumstances giving rise to such termination
were caused by the other party's willful breach of any
covenant or agreement in this Agreement, by a representation
known by such other party to be false when made, or by a
closing document delivered by such other party being
knowingly incorrect when delivered; in which events such
termination shall be in violation of this Agreement and shall
not be deemed or construed as limiting or denying any legal
or equitable right or remedy of said party.
XIV. MISCELLANEOUS
A. LAW GOVERNING AGREEMENT.
This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan.
B. NOTICES.
All notices, requests, demands and other communications
hereunder shalt be deemed to have been duly given, if
delivered by hand or mailed, by registered mail with postage
prepaid:
1. To Seller.
If to Seller, to:
Mr. Paul R. Saueracker
President
Speciality Minerals Inc.
405 Lexington Avenue
New York, New York 10174-1901
with a copy to:
S. Garrett Gray
General Counsel
Minerals Technologies Inc.
405 Lexington Avenue
New York, New York 10174-1901
or to such other person or address as Seller shall furnish to
Buyer in writing.
2. To Buyer.
If to Buyer, to:
Oglebay Norton Company
1100 Superior Avenue
Cleveland, Ohio 44114
Attention: Jeffrey S. Gray
Vice President-Corporate Development and Legal Affairs
with a copy to:
Christopher C. McCracken, Esq.
Ulmer & Berne LLP
Bond Court Building
1300 East Ninth Street, Suite 900
Cleveland, Ohio 44114
or to such other person or address as Buyer shall furnish to
Seller in writing.
C. EXPENSES.
Except as otherwise provided herein, each of the parties
shall be responsible for the fees and expenses of its
counsel, brokers, and other agents and any other costs
incurred by it in connection with the transaction
contemplated hereby.
D. HEADINGS.
The headings in the paragraphs of this Agreement are inserted
for convenience only and shall not constitute a part hereof.
E. FURTHER COOPERATION
From and after the Closing Date, Buyer and Seller agree to
execute and deliver all other documents and to take such
other action or corporate proceedings as may be reasonably
necessary or desirable to confirm and vest title to the
Included Assets in Buyer and to carry out and give effect to
all of the terms and conditions of this Agreement. Without
limiting the generality of the foregoing, Seller, SMI and
Buyer shall cooperate with each other with respect to the
services to be provided to Buyer pursuant to the terms of the
Transition Services Agreement.
F. NO THIRD PARTY BENEFICIARIES.
Rights and duties hereunder shall inure to the benefit of the
parties hereto only and not to the benefit of any third
parties, including but not limited to, employees of Buyer or
Seller.
G. SEVERABILITY.
If any provision of this Agreement shall be deemed or
adjudged invalid or unenforceable to any extent, the
remainder of this Agreement shall not be affected thereby and
shall be enforced to the full extent permitted by law.
H. BINDING AGREEMENT AND ASSIGNABILITY.
Each term and provision of this Agreement shall be binding
upon and enforceable against any successors or assigns of
Seller or Buyer. This Agreement shall not be assignable by
either party without the consent of the other party except
that Buyer may assign this Agreement to any entity which is
controlled by Buyer without the consent of Seller.
I. COMPLETE AGREEMENT.
This document and the documents (including exhibits and
schedules) referred to herein contain the complete agreement
between the parties and supersede any and all prior
understandings, agreements or representations by or between
the parties, written or oral, which may have related to the
subject matter hereof in any way.
J. COUNTERPARTS.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
K. NON-WAIVER AND OTHER MISCELLANEOUS MATTERS.
No delay on the part of Seller or Buyer in the exercise of
any right, power or remedy shall operate as a waiver thereof,
nor shall any single or partial exercise by Seller or Buyer
of any right, power or remedy preclude other or further
exercise thereof, or the exercise of any other right, power
or remedy. No amendment, modification, termination or waiver
at or consent with respect to, any provision of this
Agreement shall in any event be effective unless the same
shall be in writing and signed and delivered by Seller and
Buyer, and then any such amendment, modification,
termination, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which
given. Consummation of the transaction contemplated herein
shall not be deemed a waiver or a breach of any
representation, warranty or covenant or of any party's rights
and remedies with regard thereto. No specific
representation, warranty or covenant shall limit the
generality or applicability of a more general representation,
warranty or covenant. A breach of any representation,
warranty or covenant shall not be affected by the fact that a
more general representation, warranty or covenant was not
also breached.
L. PUBLICITY AND NEWS RELEASES.
Except as required by law, no publicity, release or
announcement concerning the transactions contemplated by this
Agreement shall be issued without the advance approval in
writing of the substance thereof by each of the parties
hereto and their respective legal counsel. Each party will
consult with the other as to any release or announcement
required by law prior to the making of the same.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.
SELLER
SPECIALTY MINERALS (MICHIGAN) INC.
By____/s/ William A. Kromberg__________
Title__Vice President _________________
BUYER
OGLEBAY NORTON LIMESTONE COMPANY
By______/s/ Jeffrey Gray ______________
Title___Vice President_________________