<PAGE> 1
Conformed
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: June 21, 1997
(Date of earliest event reported)
UNITED STATES LIME & MINERALS, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Texas 0-4197 75-0789226
----- ------ ----------
(State of Incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
12221 Merit Drive, Suite 500
----------------------------
Dallas, Texas 75251
------------- -----
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (972) 991-8400
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Effective June 21, 1997, Corson Lime Company ("Corson"), a
Pennsylvania corporation and wholly-owned subsidiary of United States
Lime & Minerals, Inc., a Texas corporation (the "Registrant"), sold
substantially all of its aggregate and lime assets to Highway
Materials, Inc. ("Highway Materials"), a Pennsylvania corporation, in
a transaction for $7,855,000 in cash paid at closing, and an
additional $376,000 for the final aggregate inventory, secured by a
letter of credit, to be paid within one-hundred and twenty days.
Corson retained its accounts receivable, certain lime inventories and
accounts payable. The terms of the sale are more fully described in
the Asset Purchase Agreement by and among Corson Lime Company, United
States Lime & Minerals, Inc. and Highway Materials, Inc., dated as of
April 22, 1997, a copy of which is included as Exhibit 2 to this
Report.
Proceeds, net of expenses and tax benefit, generated from the
sale of Corson's primary assets to Highway Materials and realization
of Corson's other assets that were not sold to Highway Materials,
will be available for the Registrant's ongoing plans to modernize and
expand its Texas and Arkansas plants and the funding of other growth
opportunities.
-2-
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Not applicable.
(b) Pro forma financial information.
1. Pro Forma Condensed Consolidated Balance Sheet as of March 31,
1997.
2. Pro Forma Condensed Consolidated Statement of Income for the year
ended December 31, 1996.
3. Pro Forma Condensed Consolidated Statement of Income for the
quarter ended March 31, 1997.
4. Pro Forma Condensed Consolidated Statement of Income for the
quarter ended March 31, 1996.
(c) Exhibits.
2 Asset Purchase Agreement by and among Corson Lime Company, United
States Lime & Minerals, Inc., and Highway Materials, Inc., dated
as of April 22, 1997. Schedules and similar attachments to the
Agreement have not been filed.
-3-
<PAGE> 4
UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)
The following Pro Forma Condensed Consolidated Balance Sheet as of March 31,
1997 and the Pro Forma Condensed Consolidated Statements of Income for the year
ended December 31, 1996 and the three months ended March 31, 1997 and 1996 give
effect to the sale of substantially all of the assets of Corson Lime Company, a
wholly-owned subsidiary of the Registrant, giving effect to the transaction as
if it had occurred on the dates indicated and by applying the assumptions and
adjustments described in the accompanying notes to Pro Forma Condensed
Consolidated Financial Statements. The accompanying Pro Forma Condensed
Consolidated Balance Sheet assumes that the transaction described above
occurred on March 31, 1997. The accompanying Pro Forma Condensed Consolidated
Statements of Income for the fiscal year ended December 31, 1996 and the three
months ended March 31, 1997 and 1996 assume that the transaction described
above occurred on January 1, 1996.
The Pro Forma Condensed Consolidated Financial Statements have been prepared by
the Registrant's management based upon the Registrant's historical financial
statements. These Pro Forma Statements may not be indicative of the results
that actually would have occurred if the sale had been in effect on the dates
indicated or which may be obtained in the future. The Pro Forma Financial
Statements should be read in conjunction with the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1996 and Quarterly Report on Form
10-Q for the three months ended March 31, 1997 filed with the Securities and
Exchange Commission.
F-1
<PAGE> 5
UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1997
(In thousands of dollars)
(Unaudited)
<TABLE>
<CAPTION>
PRO FORMA
ASSETS AS REPORTED ADJUSTMENTS PRO FORMA
- ------ ----------- ----------- ---------
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents $ 43 6,155 (A),(D) 6,198
Trade receivables 4,749 4,749
Inventories 5,284 (1,619)(A) 3,665
Prepaid expenses and other assets 770 (375)(A) 395
-------- -------- --------
Total current assets 10,846 4,161 15,007
-------- -------- --------
Net property, plant and equipment 19,398 (5,623)(A) 13,775
Other assets, net 961 (827)(A),(B) 134
-------- -------- --------
Total assets $ 31,205 (2,289) 28,916
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current installments of long-term debt $ 1,143 1,143
Accounts payable-trade 2,438 2,438
Accrued expenses 1,980 (177)(C) 1,803
-------- -------- --------
Total current liabilities 5,561 (177) 5,384
Long-term debt, excluding current installments 4,352 (1,400)(D) 2,952
Other liabilities 713 713
-------- -------- --------
Total liabilities 10,626 (1,577) 9,049
-------- -------- --------
Stockholders' equity:
Common stock 529 529
Additional paid-in capital 15,311 15,311
Retained earnings 19,301 (712)(A),(B),(C) 18,589
-------- -------- --------
35,141 (712) 34,429
Less treasury stock at cost (14,562) (14,562)
-------- -------- --------
Total stockholders' equity 20,579 (712) 19,867
-------- -------- --------
Total liabilities and stockholders' equity $ 31,205 (2,289) 28,916
======== ======== ========
</TABLE>
F-2
<PAGE> 6
UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES
Notes to Pro Forma Condensed Consolidated Balance Sheet
(In thousands of dollars)
(Unaudited)
The accompanying Pro Forma Condensed Consolidated Balance Sheet assumes that
the sale of substantially all of the assets of Corson Lime Company occurred on
March 31, 1997 and include the following Pro Forma adjustments.
(A) Reflects the sale of property, plant and equipment ($5,623),
sale of certain inventories ($1,619), write-off of deferred
stripping costs ($689 in other assets), write-off of deferred
maintenance costs ($375 in prepaid expenses and other assets),
and receipt of $7,855, less transaction costs of approximately
$300, for a computed loss of $712 (net of tax benefit). The
actual loss will be based on the book values of the assets of
Corson Lime Company at the date of the sale. The actual loss is
expected to be less than the pro forma loss computed with these
adjustments.
(B) Write off of the intangible pension asset ($138) due to the
curtailment of the pension plan covering the union employees of
Corson Lime Company.
(C) Tax effect of adjustments (A) and (B) above.
(D) Application of $1,400 of the net proceeds used to eliminate the
borrowings under the Registrant's revolving credit facility.
F-3
<PAGE> 7
UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1996
(In thousands of dollars, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
(A)
LESS ADJUST-
AS REPORTED CLC MENTS PRO FORMA
----------- --- ----- ----------
<S> <C> <C> <C> <C> <C> <C>
Revenues $ 40,159 100.00% 11,769 28,390 100.00%
Cost of revenues:
Labor and other operating expenses 28,684 71.43% 11,736 16,948 59.70%
Depreciation, depletion and amortization 3,592 8.94% 1,321 2,271 8.00%
-------------------- -------- ----------------------
32,276 80.37% 13,057 19,219 67.70%
-------------------- -------- ----------------------
Gross profit (loss) 7,883 19.63% (1,288) 9,171 32.30%
Selling, general and administrative expenses 4,359 10.85% 1,027 3,332 11.74%
-------------------- -------- ----------------------
Operating profit (loss) 3,524 8.78% (2,315) 5,839 20.57%
-------------------- -------- ----------------------
Other deductions (income):
Interest expense 563 1.40% (34)(B) 529 1.86%
Gains on sales of assets, net (21) -0.05% (21) -0.07%
Other, net (234) -0.58% (115) (119) -0.42%
-------------------- -------- ------- ----------------------
308 0.77% (115) (34) 389 1.37%
-------------------- -------- ------- ----------------------
Income (loss) before taxes 3,216 8.01% (2,200) 34 5,450 19.20%
Income taxes 614 1.53% (420) 7(C) 1,041 3.67%
-------------------- -------- ------- ----------------------
Net income (loss) $ 2,602 6.48% (1,780) 27 4,409 15.53%
==================== ======== ======= ======================
Net income (loss) per share of
common stock: $ 0.67 1.12
========= ========
</TABLE>
Notes to Pro Forma Condensed Consolidated Statement of Income:
(A) Represents Corson Lime Company (CLC) results of operations, excluding
allocated corporate overhead, for the year ended December 31, 1996.
(B) Interest expense reduced to reflect no borrowing under the revolving
loan during the period. See Note (D) to Pro Forma Condensed
Consolidated Balance Sheet.
(C) Tax effect of entry (B).
F-4
<PAGE> 8
UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
THREE MONTHS ENDED MARCH 31, 1997
(In thousands of dollars, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
(A)
LESS ADJUST-
AS REPORTED CLC MENTS PRO FORMA
----------- --- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenues $ 7,808 100.00% 1,898 5,910 100.00%
Cost of revenues:
Labor and other operating expenses 6,233 79.83% 2,142 4,091 69.22%
Depreciation, depletion and amortization 980 12.55% 391 589 9.97%
------------------ ------- ---------------------
7,213 92.38% 2,533 4,680 79.19%
------------------ ------- ---------------------
Gross profit (loss) 595 7.62% (635) 1,230 20.81%
Selling, general and administrative expenses 1,116 14.29% 205 911 15.41%
------------------ ------- ---------------------
Operating profit (loss) (521) -6.67% (840) 319 5.40%
------------------ ------- ---------------------
Other deductions (income):
Interest expense 133 1.70% (12)(B) 121 2.05%
Other, net (44) -0.56% (8) (36) -0.61%
------------------ ------- ----------- ---------------------
89 1.14% (8) (12) 85 1.44%
------------------ ------- ----------- ---------------------
Income (loss) before taxes (610) -7.81% (832) 12 234 3.96%
Income taxes (122) (166) 2 (C) 46 0.78%
------------------ ------- --------- ---------------------
Net income (loss) $ (488) -6.25% (666) 10 188 3.18%
================== ======= ========= =====================
Net income (loss) per share of
common stock: $ (0.12) 0.05
======== =======
</TABLE>
Notes to Pro Forma Condensed Consolidated Statement of Income:
(A) Represents Corson Lime Company (CLC) results of operations, excluding
allocated corporate overhead, for the quarter ended March 31, 1997.
(B) Interest expense reduced to reflect no borrowing under the revolving
loan during the period. See Note (D) to Pro Forma Condensed
Consolidated Balance Sheet.
(C) Tax effect of entry (B).
F-5
<PAGE> 9
UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
THREE MONTHS ENDED MARCH 31, 1996
(In thousands of dollars, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
(A)
LESS ADJUST-
AS REPORTED CLC MENTS PRO FORMA
----------- --- ----- ---------
<S> <C> <C> <C> <C> <C>
Revenues $ 8,523 100.00% 1,720 6,803 100.00%
Cost of revenues:
Labor and other operating expenses 5,872 68.90% 1,893 3,979 58.49%
Depreciation, depletion and amortization 841 9.87% 287 554 8.14%
------------------------ ------ -----------------------
6,713 78.77% 2,180 4,533 66.63%
------------------------ ------ -----------------------
Gross profit (loss) 1,810 21.23% (460) 2,270 33.37%
Selling, general and administrative expenses 1,105 12.96% 270 835 12.28%
------------------------ ------ -----------------------
Operating profit (loss) 705 8.27% (730) 1,435 21.09%
------------------------ ------ -----------------------
Other deductions (income):
Interest expense 134 1.57% 134 1.97%
Other, net (58) -0.68% (12) (46) -0.68%
------------------------ ------ -----------------------
76 0.89% (12) 88 1.29%
------------------------ ------ -----------------------
Income (loss) before taxes 629 7.38% (718) 1,347 19.80%
Income taxes 126 (143) 269 3.95%
------------------------ ------ -----------------------
Net income (loss) $ 503 5.90% (575) 1,078 15.85%
------------------------ ------ -----------------------
Net income (loss) per share of
common stock: $ 0.13 0.28
======= -------
</TABLE>
Notes to Pro Forma Condensed Consolidated Statement of Income:
(A) Represents Corson Lime Company (CLC) results of operations, excluding
allocated corporate overhead, for the quarter ended March 31, 1996.
F-6
<PAGE> 10
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
UNITED LIME & MINERALS, INC.
(Registrant)
Date: July 3, 1997 By: /s/ Robert F. Kizer
----------------------------------
Robert F. Kizer,
President and Chief
Executive Officer
-4-
<PAGE> 11
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No Description
- ---------- -----------
<S> <C>
2 Asset Purchase Agreement among
Corson Lime Company,
United States Lime & Minerals Inc.,
and Highway Materials, Inc.,
dated as of April 22, 1997.
</TABLE>
<PAGE> 1
EXHIBIT 2
ASSET PURCHASE AGREEMENT
BY AND AMONG
CORSON LIME COMPANY,
UNITED STATES LIME & MINERALS, INC.
AND
HIGHWAY MATERIALS, INC.
--------------------
APRIL 22, 1997
--------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1-
1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . -1-
(a) "AGGREGATE" . . . . . . . . . . . . . . . . . . . . . -1-
(b) "AGGREGATE INVENTORY" . . . . . . . . . . . . . . . . -1-
(c) "AGGREGATE INVENTORY PRICE" . . . . . . . . . . . . . -1-
(d) "AGREEMENT" . . . . . . . . . . . . . . . . . . . . . -1-
(e) "ASPHALT PLANT" . . . . . . . . . . . . . . . . . . . -1-
(f) "AUTHORITY" . . . . . . . . . . . . . . . . . . . . . -1-
(g) "BASELINE INVENTORY REPORT" . . . . . . . . . . . . . -1-
(h) "BONDED CONTRACT" . . . . . . . . . . . . . . . . . . -1-
(i) "BOOKS AND RECORDS" . . . . . . . . . . . . . . . . . -2-
(j) "BUYER" . . . . . . . . . . . . . . . . . . . . . . . -2-
(k) "BUYER'S CERTIFICATE" . . . . . . . . . . . . . . . . -2-
(l) "CAPITAL PROJECTS" . . . . . . . . . . . . . . . . . -2-
(m) "CLOSING" and "CLOSING DATE" . . . . . . . . . . . . -2-
(n) "CONTROL ENTITY" . . . . . . . . . . . . . . . . . . -2-
(o) "CORESTATES OBLIGATIONS" . . . . . . . . . . . . . . -2-
(p) "DECLARATION" . . . . . . . . . . . . . . . . . . . . -2-
(q) "EMPLOYEES" . . . . . . . . . . . . . . . . . . . . . -2-
(r) "ENVIRONMENTAL DEFICIENCY" . . . . . . . . . . . . . -2-
(s) "ENVIRONMENTAL EVENT" . . . . . . . . . . . . . . . . -2-
(t) "ENVIRONMENTAL REPRESENTATIONS" . . . . . . . . . . . -2-
(u) "ENGINEER" . . . . . . . . . . . . . . . . . . . . . -2-
(v) "EQUIPMENT" . . . . . . . . . . . . . . . . . . . . . -2-
(w) "EQUIPMENT LIST" . . . . . . . . . . . . . . . . . . -2-
(x) "EXCLUDED ASSETS" . . . . . . . . . . . . . . . . . . -2-
(y) "INDEMNIFYING PARTY" . . . . . . . . . . . . . . . . -2-
(z) "INVENTORY" . . . . . . . . . . . . . . . . . . . . . -2-
(aa) "KNOWLEDGE" . . . . . . . . . . . . . . . . . . . . . -3-
(ab) "LETTER OF CREDIT" . . . . . . . . . . . . . . . . . -3-
(ac) "LIEN" . . . . . . . . . . . . . . . . . . . . . . . -3-
(ad) "LIME INVENTORY" . . . . . . . . . . . . . . . . . . -3-
(ae) "LIME PROCESSING PLANT" . . . . . . . . . . . . . . . -3-
(af) "NPDES" . . . . . . . . . . . . . . . . . . . . . . . -3-
(ag) "PARENT" . . . . . . . . . . . . . . . . . . . . . . -3-
(ah) "PERMITS" . . . . . . . . . . . . . . . . . . . . . . -3-
(ai) "PERMITTED LIENS" . . . . . . . . . . . . . . . . . . -3-
(aj) "PERSON" . . . . . . . . . . . . . . . . . . . . . . -3-
(ak) "PROTECTED PARTY" . . . . . . . . . . . . . . . . . . -3-
(al) "PURCHASED ASSETS" . . . . . . . . . . . . . . . . . -3-
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
(am) "PURCHASE PRICE" . . . . . . . . . . . . . . . . . . . -3-
(an) "REAL ESTATE" . . . . . . . . . . . . . . . . . . . . . -3-
(ao) "REAL ESTATE LEASES" . . . . . . . . . . . . . . . . . -3-
(ap) "RETAINED LIABILITIES" . . . . . . . . . . . . . . . . -3-
(ar) "SELLER'S AND PARENT'S CERTIFICATE" . . . . . . . . . . -4-
(as) "SELLER'S RECEIVABLES" . . . . . . . . . . . . . . . . -4-
(at) "SETTLING POND RIGHTS" . . . . . . . . . . . . . . . . -4-
(au) "STORAGE PERIOD" . . . . . . . . . . . . . . . . . . . -4-
(av) "TAXES" . . . . . . . . . . . . . . . . . . . . . . . . -4-
(aw) "THIRD-PARTY CLAIM" . . . . . . . . . . . . . . . . . . -4-
2. THE TRANSACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
2.1. Sale and Purchase of Assets . . . . . . . . . . . . . . . . . . -4-
2.2. Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . -5-
2.3. Assignment of Real Estate Leases, Bonded Contract, Permits
and Settling Pond Rights . . . . . . . . . . . . . . . . . . . . -5-
2.4. As Is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -6-
2.5. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . -6-
2.6. Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . -6-
(a) Deliveries by Seller and Parent to Buyer . . . . . . . -6-
(b) Deliveries by Buyer to Seller and Parent . . . . . . . -7-
2.7. Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . -7-
2.8. Aggregate Inventory Price . . . . . . . . . . . . . . . . . . . -8-
(a) Calculation of Aggregate Inventory Price . . . . . . . -8-
(b) Payment of Aggregate Inventory Price . . . . . . . . . -8-
(c) Letter of Credit . . . . . . . . . . . . . . . . . . . -8-
2.9. Lime Inventory . . . . . . . . . . . . . . . . . . . . . . . . . -8-
2.10. Restrictive Covenant . . . . . . . . . . . . . . . . . . . . . . -9-
(a) Term of Restrictive Covenant . . . . . . . . . . . . . -9-
(b) Specific Performance . . . . . . . . . . . . . . . . . -9-
2.11. Apportionment . . . . . . . . . . . . . . . . . . . . . . . . . -9-
(a) Expenses . . . . . . . . . . . . . . . . . . . . . . . -9-
(b) Transfer Taxes . . . . . . . . . . . . . . . . . . . . -9-
(c) Other Closing Costs . . . . . . . . . . . . . . . . . . -9-
2.12. Commercial Disputes . . . . . . . . . . . . . . . . . . . . . . -9-
3. REPRESENTATIONS AND WARRANTIES OF SELLER AND PARENT . . . . . . . . . -10-
3.1. Organization of Seller . . . . . . . . . . . . . . . . . . . . -10-
3.2. Organization of Parent . . . . . . . . . . . . . . . . . . . . -10-
3.3. Authorization and Enforceability . . . . . . . . . . . . . . . -10-
3.4. No Violation of Laws or Agreements . . . . . . . . . . . . . . -10-
3.5. No Pending Litigation or Proceedings . . . . . . . . . . . . . -10-
3.6. Environmental Matters . . . . . . . . . . . . . . . . . . . . -11-
3.7. Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . -11-
3.8. Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . -11-
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
3.9. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . -11-
3.10. Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . -11-
3.11. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . -11-
3.12. Completeness . . . . . . . . . . . . . . . . . . . . . . . . -11-
4. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . -12-
4.1. Organization . . . . . . . . . . . . . . . . . . . . . . . . -12-
4.2. Authorization and Enforceability . . . . . . . . . . . . . . -12-
4.3. No Violation of Laws or Agreements . . . . . . . . . . . . . -12-
4.4. Consents . . . . . . . . . . . . . . . . . . . . . . . . . . -12-
4.5. Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . -12-
4.6. Completeness . . . . . . . . . . . . . . . . . . . . . . . . -12-
5. COVENANTS PENDING CLOSING . . . . . . . . . . . . . . . . . . . . . -13-
5.1. Pre-Closing Conduct of Seller and Parent . . . . . . . . . . -13-
5.2. Pre-Closing Conduct of Buyer . . . . . . . . . . . . . . . . -14-
6. CONDITIONS PRECEDENT; TERMINATION . . . . . . . . . . . . . . . . . -14-
6.1. Conditions Precedent to Obligations of Buyer . . . . . . . . -14-
(a) Performance of Agreements; Representations
and Warranties. . . . . . . . . . . . . . . . . . . -14-
(b) Injunction; Litigation . . . . . . . . . . . . . . -14-
(c) State Tax Certificates . . . . . . . . . . . . . . -14-
(d) Documents . . . . . . . . . . . . . . . . . . . . . -15-
6.2. Conditions Precedent to Obligations of Seller . . . . . . . -15-
(a) Performance of Agreements; Representations
and Warranties . . . . . . . . . . . . . . . . . . -15-
(b) Injunction; Litigation . . . . . . . . . . . . . . -15-
(c) Documents . . . . . . . . . . . . . . . . . . . . . -15-
6.3. Termination . . . . . . . . . . . . . . . . . . . . . . . . -15-
(a) When Agreement May Be Terminated . . . . . . . . . -15-
(b) Effect of Termination . . . . . . . . . . . . . . . -15-
6.4. Specific Performance . . . . . . . . . . . . . . . . . . . . -16-
6.5. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . -16-
6.6. Environmental Matters . . . . . . . . . . . . . . . . . . . -16-
(a) Update . . . . . . . . . . . . . . . . . . . . . . -16-
(b) Closing Obligations . . . . . . . . . . . . . . . . -16-
(c) Calculation of Remediation Cost . . . . . . . . . . -17-
7. CERTAIN ADDITIONAL COVENANTS . . . . . . . . . . . . . . . . . . . . -17-
7.1. Expenses of Transaction . . . . . . . . . . . . . . . . . . -17-
7.2. Access to Information . . . . . . . . . . . . . . . . . . . -17-
7.3. Indemnification . . . . . . . . . . . . . . . . . . . . . . -17-
(a) Indemnification Obligations of Seller and Parent . -17-
(b) Indemnification Obligations of Buyer . . . . . . . -18-
(c) Indemnification Procedures . . . . . . . . . . . . -18-
</TABLE>
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<TABLE>
<S> <C> <C>
8. ACCOUNTS RECEIVABLE . . . . . . . . . . . . . . . . . -19-
8.1. Receivables . . . . . . . . . . . . . . . . . -19-
8.2. Collection Assistance . . . . . . . . . . . . -19-
9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . -19-
9.1. Representations and Warranties . . . . . . . . -19-
9.2. No Offset . . . . . . . . . . . . . . . . . . -20-
9.3. Notices . . . . . . . . . . . . . . . . . . . -20-
9.4. Successors and Assigns . . . . . . . . . . . . -20-
9.5. Risk of Loss . . . . . . . . . . . . . . . . . -21-
9.6. Governing Law . . . . . . . . . . . . . . . . -21-
9.7. Entire Agreement . . . . . . . . . . . . . . . -21-
9.8. Further Assurances . . . . . . . . . . . . . . -21-
9.9. Amendment and Waiver . . . . . . . . . . . . . -21-
9.10. Non-Waiver of Rights . . . . . . . . . . . . . -22-
9.11. Counterparts . . . . . . . . . . . . . . . . . -22-
9.12. Headings . . . . . . . . . . . . . . . . . . . -22-
9.13. Publicity . . . . . . . . . . . . . . . . . . -22-
</TABLE>
EXHIBITS
A Form of Special Warranty Deed
B Form of Bill of Sale and Assignment
C Form of Assignment of Lease
D Form of Opinion of Counsel for Seller and Parent
E Form of Seller's and Parent's Certificate
F Form of Opinion of Counsel for Buyer
G Form of Buyer's Certificate
H Form of Declaration of Restrictive Covenant
SCHEDULES
1.1(l) Capital Projects
1.1(o) CoreStates Obligations
1.1(ah) Permits
1.1(ai) Permitted Liens
1.1(an) Legal Description of Real Estate
1.1(ao) Real Estate Leases
2.7 Allocation of Purchase Price
2.8 Unit Pricing for Inventory
3.5 Pending Litigation or Proceedings
3.9 List of Policies of Property and Casualty Insurance
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<PAGE> 6
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "AGREEMENT") is made effective as
of the 22nd day of April, 1997 by and among CORSON LIME COMPANY, a wholly owned
subsidiary of UNITED STATES LIME & MINERALS, INC. ("SELLER"), UNITED STATES
LIME & MINERALS, INC. ("PARENT") and HIGHWAY MATERIALS, INC. ("BUYER").
BACKGROUND
a. Seller owns and operates a quarry (the "QUARRY") and
lime processing plant located in Montgomery County,
Pennsylvania.
b. Seller desires to sell, and Buyer desires to buy,
all real and personal property of Seller related
to or used in the operation of the Quarry, except for the
Excluded Assets (as defined below), subject to the terms
and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement, intending to be legally bound hereby, the parties agree as
follows:
1. DEFINITIONS.
1.1. DEFINITIONS. As used in this Agreement, the following terms
shall have the following meanings:
(a) "AGGREGATE" means crushed and sized limestone.
(b) "AGGREGATE INVENTORY" means that portion of the
Inventory consisting solely of Aggregate.
(c) "AGGREGATE INVENTORY PRICE" has the meaning set forth
in SECTION 2.8(A).
(d) "AGREEMENT" has the meaning set forth in the Recital.
(e) "ASPHALT PLANT" means the asphalt plant operated by
Buyer or a Control Entity of Buyer on the Real Estate.
(f) "AUTHORITY" means any federal, state or local
governmental or regulatory agency or authority.
(g) "BASELINE INVENTORY REPORT" means that certain
Stockpile Survey Report prepared by the Engineer dated April 4, 1997 and April
7, 1997.
(h) "BONDED CONTRACT" means that certain agreement dated
February 18, 1997
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between the County of Montgomery and Seller.
(i) "BOOKS AND RECORDS" means all books, records and
files pertaining to the Purchased Assets or the operation of the Quarry in the
possession of Seller or Parent, including without limitation all customer
lists, fixed asset records, price lists, sales and advertising materials, sales
and purchase correspondence, warranties and guarantees.
(j) "BUYER" has the meaning set forth in the Recital.
(k) "BUYER'S CERTIFICATE" has the meaning set forth in
SECTION 2.6(B)(III).
(l) "CAPITAL PROJECTS" means the equipment recently
purchased, refurbished or otherwise improved by Seller, as more specifically
described on SCHEDULE 1.1(L).
(m) "CLOSING" and "CLOSING DATE" have the meanings set
forth in SECTION 2.5.
(n) "CONTROL ENTITY" means any Person directly or
indirectly controlling, controlled by or under common control with Buyer or
Seller and Parent, as the case may be.
(o) "CORESTATES OBLIGATIONS" means all obligations of
Seller to CoreStates Bank, N.A. as more specifically described on SCHEDULE
1.1(O) hereto.
(p) "DECLARATION" has the meaning set forth in SECTION
2.6(B)(VI).
(q) "EMPLOYEES" means the individuals employed by Seller.
(r) "ENVIRONMENTAL DEFICIENCY" has the meaning set forth
in SECTION 6.6(A).
(s) "ENVIRONMENTAL EVENT" means the occurrence of any
event which gives rise to an obligation of Seller and/or Parent to notify an
Authority of such occurrence pursuant to any environmental law, rule or
ordinance enacted by the Commonwealth of Pennsylvania or any of its agencies or
departments.
(t) "ENVIRONMENTAL REPRESENTATIONS" has the meaning set
forth in SECTION 6.6.
(u) "ENGINEER" means Maurer & Scott Sales, Inc.
(v) "EQUIPMENT" has the meaning set forth in SECTION
2.1(B).
(w) "EQUIPMENT LIST" means the list of certain equipment
and machinery of Seller prepared for Buyer by Nevins Brothers.
(x) "EXCLUDED ASSETS" has the meaning set forth in
SECTION 2.2.
(y) "INDEMNIFYING PARTY" has the meaning set forth in
SECTION 7.3(C).
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<PAGE> 8
(z) "INVENTORY" has the meaning set forth in SECTION
2.1(C).
(aa) "KNOWLEDGE" means, as to Seller and Parent, the
actual present knowledge of the current President and Senior Vice
President/Chief Financial Officer of Parent, without inquiry or investigation,
and, as to Buyer, the actual present knowledge of Peter DePaul, as President of
Buyer, without inquiry or investigation.
(bb) "LETTER OF CREDIT" has the meaning set forth in
SECTION 2.8(C).
(cc) "LIEN" means any lien, charge, claim, security
interest, conditional sale agreement, mortgage, security agreement, option or
other encumbrance, restriction or adverse interest of any kind.
(dd) "LIME INVENTORY" means all bags, pallets, quick
lime, hydrated lime and brick located on the Real Estate on the Closing Date.
(ee) "LIME PROCESSING PLANT" means a manufacturing plant
or process which creates quick lime and/or hydrated lime from limestone.
(ff) "NPDES" means National Pollutant Discharge
Elimination System.
(gg) "PARENT" has the meaning set forth in the Recital.
(hh) "PERMITS" means those permits and licenses, including
without limitation all mining, NPDES air, petroleum bulk storage and
underground storage tank permits, issued to and maintained by Seller in
connection with the Purchased Assets or the operation of the Quarry, including
without limitation those specifically described on SCHEDULE 1.1(AH) hereto.
(ii) "PERMITTED LIENS" means those Liens described on
SCHEDULE 1.1(AI) hereto.
(jj) "PERSON" means an individual, a corporation, a
partnership, an association, a trust, a limited liability company or any other
entity or organization, including an Authority.
(kk) "PROTECTED PARTY" has the meaning set forth in
SECTION 7.3(C).
(ll) "PURCHASED ASSETS" has the meaning set forth in
SECTION 2.1.
(mm) "PURCHASE PRICE" has the meaning set forth in SECTION
2.7.
(nn) "REAL ESTATE" means that certain real property
located at 500 Stenton Avenue, Whitemarsh Township, Montgomery County,
Pennsylvania, and all improvements located thereon, as more specifically
described on SCHEDULE 1.1(AN) hereto.
(oo) "REAL ESTATE LEASES" means those oral or written
leases for all or any part of the Real Estate as more particularly described on
SCHEDULE 1.1(AO).
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<PAGE> 9
(pp) "RETAINED LIABILITIES" has the meaning set forth in
SECTION 2.3(B).
(qq) "SELLER" has the meaning set forth in the Recital.
(rr) "SELLER'S AND PARENT'S CERTIFICATE" has the meaning
set forth in SECTION 2.6(A)(X).
(ss) "SELLER'S RECEIVABLES" has the meaning set forth in
SECTION 8.1.
(tt) "SETTLING POND RIGHTS" has the meaning set forth in
SECTION 2.1(H).
(uu) "STORAGE PERIOD" has the meaning set forth in SECTION
2.9.
(vv) "TAXES" means all federal, state and local income,
payroll, withholding, excise, sales, use, personal property, use and occupancy,
business and occupation, mercantile, real estate, capital stock and franchise
and other taxes, including without limitation interest and penalties thereon
and estimated taxes.
(ww) "THIRD-PARTY CLAIM" has the meaning set forth in
SECTION 7.3(A).
2. THE TRANSACTION.
2.1. SALE AND PURCHASE OF ASSETS. Subject to the terms and
conditions of this Agreement, at the Closing provided for in SECTION 2.5,
Seller agrees to sell, assign, transfer and convey to Buyer on the Closing
Date, free and clear of all Liens of every kind, nature and description, except
the Permitted Liens, and Buyer hereby agrees to purchase from Seller on the
Closing Date, the assets, properties and rights of Seller enumerated below (the
"PURCHASED ASSETS"), but not including the Excluded Assets:
(a) The Real Estate;
(b) All machinery, equipment, tools, furniture, fixtures,
office equipment and other tangible personal property located on the Real
Estate, including without limitation the Capital Projects and the equipment,
machinery and motor vehicles listed on the Equipment List (the "EQUIPMENT");
(c) All inventory, other than the Lime Inventory, located
on the Real Estate, including all raw materials, finished goods and spare parts
(the "INVENTORY");
(d) All Permits, to the extent assignable and subject to
the obtaining of any required consents (other than the consent of Seller or
Parent);
(e) All Books and Records;
(f) Seller's rights as lessor under the Real Estate
Leases, including without limitation all rights to security deposits, if any,
to the extent assignable and subject to the obtaining
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<PAGE> 10
of any required consents (other than the consent of Seller or Parent);
(g) Seller's rights under the Bonded Contract, to the
extent assignable and subject to the obtaining of any required consents (other
than the consent of Seller or Parent); and
(h) Seller's rights, if any, to use and enjoy the
settling pond located on real property adjacent to the Real Estate pursuant to
an agreement with the Philadelphia Cricket Club (the "SETTLING POND RIGHTS"),
to the extent assignable and subject to the obtaining of any required consents
(other than the consent of Seller or Parent).
2.2 EXCLUDED ASSETS. The following assets of Seller shall not
constitute Purchased Assets (the "EXCLUDED ASSETS"):
(a) All cash and bank accounts of Seller;
(b) All accounts receivable of Seller created or arising
prior to or on the Closing Date;
(c) All tax refunds (including all property tax refunds
arising as a result of any successful tax appeal for the Real Estate) for
periods through the Closing Date;
(d) All intellectual property;
(e) The Lime Inventory; and
(f) To the extent not otherwise specifically included or
excluded by SECTION 2.1 or this SECTION 2.2, all assets, rights, claims,
contracts, causes of action and properties of Seller, as of the Closing Date,
of every kind, character and description, whether tangible or intangible,
matured or unmatured, real, personal or mixed, known or unknown, contingent or
fixed, whether or not having any value for accounting purposes, and wherever
located.
2.3 ASSIGNMENT OF REAL ESTATE LEASES, BONDED CONTRACT, PERMITS AND
SETTLING POND RIGHTS.
(a) Seller shall assign to Buyer, to the extent
assignable and subject to the obtaining of any required consents (other than
the consent of Seller or Parent), (i) the Real Estate Leases, (ii) the Bonded
Contract, (iii) the Permits and (iv) the Settling Pond Rights, and Buyer shall
assume all the obligations and liabilities of Seller with respect thereto
solely to the extent such obligations and liabilities (A) relate to required
performance under the Real Estate Leases, the Bonded Contract and the Permits
after the Closing Date, including without limitation the obligation to maintain
any performance or reclamation bond in connection with the Bonded Contract or
any Permit, (B) relate to any obligation of Buyer arising after the Closing
Date to permit the Philadelphia Cricket Club to use without charge the water
stored in the settling pond for its irrigation purposes and (C) arise out of or
result from any act or omission of Buyer with respect to the Real Estate
Leases, the Bonded Contract, the Permits or the Settling Pond Rights occurring
or arising after the Closing Date.
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<PAGE> 11
(b) Except as specifically provided in SECTION 2.3(A),
Buyer shall not assume any liabilities or obligations of Seller, whether such
liabilities or obligations relate to payment, performance or otherwise, all of
the foregoing being retained by Seller (the "RETAINED LIABILITIES").
2.4 AS IS. Except as specifically provided herein, the Purchased
Assets are being sold by Seller to Buyer "As Is" and Seller makes no
representations or warranty regarding the condition or value of any of the
Purchased Assets.
2.5 CLOSING. The closing of the sale and purchase of the
Purchased Assets (the "CLOSING") shall take place on Saturday, June 21, 1997
(such date being hereinafter referred to as the "CLOSING DATE"), at the offices
of Buyer's counsel, or on such other date and at such other time, place or
means (including by mail) as may be mutually agreed to by the parties.
2.6 DELIVERIES. At or before the Closing (unless otherwise
designated herein), the parties shall deliver the following:
(a) DELIVERIES BY SELLER AND PARENT TO BUYER. Seller and
Parent shall deliver to Buyer all of the following duly executed by Seller or
Parent, to the extent such execution is applicable:
(i) a Special Warranty Deed for the Real Estate,
in recordable form attached hereto as EXHIBIT "A";
(ii) a Bill of Sale and Assignment covering the
Purchased Assets, in the form attached hereto as EXHIBIT "B";
(iii) an Assignment of Lease with respect to the
Real Estate Leases, in the form attached hereto as EXHIBIT "C";
(iv) all requisite state and federal applications
and/or forms timely prepared and submitted by Buyer to Seller for the transfer
of the assignable Permits from Seller to Buyer;
(v) all titles, registrations and other evidence
of ownership for any motor vehicles, trailers and titled equipment included in
the Purchased Assets, in the possession of Seller or Parent;
(vi) an opinion of counsel for Seller and Parent,
addressed to Buyer dated as of the Closing Date, in the form attached hereto as
EXHIBIT "D";
(vii) all Books and Records, together with a sales
list by product for the Quarry operation for the period from January 1, 1996
through June 15, 1997;
(viii) all written Real Estate Leases and all Books
and Records relating thereto, in the possession of Seller or Parent;
(ix) if the reports of any lien or judgment
searches conducted by Buyer or
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<PAGE> 12
its designee evidence that financing statements, tax liens or mechanics,
materialmen or other statutory liens are on file with respect to any of the
Purchased Assets (other than the Permitted Liens), and Buyer timely notifies
Seller and Parent of the Lien, a termination statement or other document signed
by the secured party or lienholder evidencing the release or termination of
such financing statement or such lien;
(x) a certificate of Seller and Parent in the
form attached hereto as EXHIBIT "E" (the "SELLER'S AND PARENT'S CERTIFICATE");
and
(xi) such other certificates, instruments and
documents as Buyer may reasonably require.
(b) DELIVERIES BY BUYER TO SELLER AND PARENT. Buyer
shall deliver to Seller and Parent all of the following duly executed by Buyer
to the extent such execution is applicable:
(i) The Purchase Price;
(ii) an opinion of counsel for Buyer, addressed to
Seller and Parent, dated as of the Closing Date, in the form attached hereto as
EXHIBIT "F";
(iii) a certificate of Buyer in the form attached
hereto as EXHIBIT "G" (the "BUYER'S CERTIFICATE");
(iv) the Letter of Credit, to be delivered within
three (3) business days following the Closing;
(v) the report calculating the Aggregate
Inventory Price, to be delivered within three (3) business days following the
Closing;
(vi) a declaration of restrictive covenant, in
recordable form attached hereto as EXHIBIT "H" (the "DECLARATION"); and
(vii) such other certificates, instruments and
documents as Seller or Parent may reasonably require.
2.7 PURCHASE PRICE. The purchase price for the Purchased Assets
(other than the Aggregate Inventory) shall be Seven Million Eight Hundred
Seventy-Five Thousand Dollars ($7,875,000.00) (the "PURCHASE PRICE") payable in
cash, by wire transfer in immediately available US Dollars, on the Closing
Date. The Purchase Price shall be allocated as set forth in SCHEDULE 2.7
hereto. Seller and Buyer shall file their respective tax returns, including
IRS Form 8594, in a manner consistent with such allocation.
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<PAGE> 13
2.8. AGGREGATE INVENTORY PRICE.
(a) CALCULATION OF AGGREGATE INVENTORY PRICE. On June
21, 1997, Seller and Buyer shall cause the Engineer to calculate the amount of
the Aggregate Inventory. Such calculation shall be conducted in accordance
with the same methodology and assumptions used in the calculation previously
conducted by the Engineer for Buyer as described in the Baseline Inventory
Report. Upon completion of the calculation, the Aggregate Inventory shall be
valued in accordance with the unit pricing described on SCHEDULE 2.8 attached
hereto (the "AGGREGATE INVENTORY PRICE").
(b) PAYMENT OF AGGREGATE INVENTORY PRICE. The Aggregate
Inventory Price shall be paid by Buyer to Seller as follows:
(i) One Hundred Seventy-Five Thousand Dollars
($175,000.00), by wire transfer in immediately available US Dollars, on or
before the sixtieth (60th) day following the Closing Date;
(ii) One Hundred Seventy-Five Thousand Dollars
($175,000.00), by wire transfer in immediately available US Dollars, on or
before the ninetieth (90th) day following the Closing Date;
(iii) The lesser of One Hundred Seventy-Five
Thousand Dollars ($175,000.00) or the balance of the Aggregate Inventory Price,
by wire transfer in immediately available US Dollars, on or before the one
hundred twentieth (120th) day following the Closing Date; and
(iv) The balance of the Aggregate Inventory Price,
if any, by wire transfer in immediately available US Dollars, on or before the
one hundred fiftieth (150th) day following the Closing Date.
(c) LETTER OF CREDIT. Within three (3) business days
following the Closing, Buyer shall deliver to Seller an irrevocable letter of
credit with a face amount equal to the Aggregate Inventory Price, which face
amount shall reduce, on a dollar for dollar basis, upon the payment by Buyer to
Seller of any installment of the Aggregate Inventory Price (the "LETTER OF
CREDIT"). The Letter of Credit shall be issued by a financial institution
reasonably acceptable to Seller and shall only collateralize Buyer's
obligations to Seller under SECTION 2.8(B). Seller shall have the right to
demand payment under the Letter of Credit of any installment of the Aggregate
Inventory Price not paid within one (1) business day after the due date of such
installment. All costs and expenses of the Letter of Credit shall be borne by
Buyer.
2.9. LIME INVENTORY. Buyer agrees that Seller may store all or any
part of the Lime Inventory on the Real Estate for a period not to exceed six
(6) months following the Closing Date (the "STORAGE PERIOD"). At any time
during the Storage Period and upon reasonable notice, Seller may enter the Real
Estate for purposes of removing all or any part of the stored Lime Inventory.
Buyer shall cooperate with Seller's removal of the Lime Inventory and shall
provide, at no cost to Seller, such personnel and use of scales and other
existing equipment as are reasonably necessary to assist
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<PAGE> 14
with Seller's removal of the Lime Inventory from the Real Estate. Any Lime
Inventory not removed from the Real Estate within the Storage Period shall
become the property of Buyer, and Seller shall have no further rights thereto.
Notwithstanding the foregoing, Seller shall use its best efforts to remove all
bulk lime located on the Real Estate within the Storage Period.
2.10. RESTRICTIVE COVENANT.
(a) TERM OF RESTRICTIVE COVENANT. During the period from
the date of Closing and for five (5) years thereafter, Buyer agrees that
neither it nor any Control Entity of Buyer shall operate, or permit any other
Person to operate, a Lime Processing Plant on the Real Estate. The terms of
this SECTION 2.10 constitute a covenant running with the land as evidenced by
the Declaration.
(b) SPECIFIC PERFORMANCE. Buyer agrees that any breach
of this SECTION 2.10(A) may result in irreparable harm to Seller and Parent.
Buyer further agrees that Seller and Parent have no adequate remedy at law if
Buyer shall fail to perform its obligations under this SECTION 2.10(A). Buyer
therefore confirms and agrees that Seller's and Parent's right to injunction,
specific performance and other equitable relief is essential to protect the
rights and interests of Seller and Parent thereunder. Accordingly, in addition
to any other remedies which Seller and Parent may have hereunder or at law or
in equity or otherwise in connection with Buyer's breach of its obligations
under this SECTION 2.10(A), Buyer agrees that Seller and Parent shall be
entitled to an injunction, specific performance or other equitable relief to
prevent or remedy such breach, and that Seller and Parent shall have the right
to obtain such relief in any of the courts of the United States or of any state
or other political subdivision.
2.11. APPORTIONMENT.
(a) EXPENSES. All expenses and prepaid items relating to
the Real Estate, including without limitation real estate taxes and water and
sewer charges, shall be apportioned as of the Closing Date, with all tax
adjustments calculated based on the fiscal year used by the Taxing Authority.
(b) TRANSFER TAXES. At the Closing, Buyer and Seller
shall each pay one-half (1/2) of the applicable transfer taxes for the Real
Estate.
(c) OTHER CLOSING COSTS. At the Closing, Buyer shall pay
all recording charges, title insurance premiums and other closing costs
customarily assumed by a buyer of real estate in the Commonwealth of
Pennsylvania.
2.12. COMMERCIAL DISPUTES. Each party hereto represents and
warrants to each other party hereto that neither it nor any of its respective
Control Entities has any disputes with or claims against any other party hereto
or its respective Control Entities, however arising.
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3. REPRESENTATIONS AND WARRANTIES OF SELLER AND PARENT.
Seller and Parent, jointly and severally, represent and warrant as
follows:
3.1. ORGANIZATION OF SELLER. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania and has all requisite power and authority to own,
lease and operate its properties and assets as now owned, leased and operated
and to carry on its business as now being conducted.
3.2. ORGANIZATION OF PARENT. Parent is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas and has all requisite power and authority to own, lease and operate its
properties and assets as now owned, leased and operated and to carry on its
business as now being conducted.
3.3. AUTHORIZATION AND ENFORCEABILITY. Each of Seller and Parent
has full power and authority to make, execute, deliver and perform this
Agreement, and the execution, delivery and performance of this Agreement by
Seller and by Parent have been duly authorized by all necessary action on the
part of Seller or Parent, as applicable. This Agreement has been duly executed
and delivered by Seller and Parent and constitutes the legal, valid and binding
obligation of Seller and Parent enforceable in accordance with its terms.
3.4. NO VIOLATION OF LAWS OR AGREEMENTS. The execution and
delivery of this Agreement do not, and the consummation of the transactions
contemplated by this Agreement and the compliance with the terms, conditions
and provisions of this Agreement by Seller and Parent, shall not (a) contravene
any provision of the certificate or articles of incorporation or by-laws of
Seller or Parent; (b) to Seller's and Parent's Knowledge, and except for the
CoreStates Obligations, conflict with or result in a breach of or constitute a
default (or an event which might, with the passage of time or the giving of
notice, or both, constitute a default) under, or result in or permit the
termination or amendment of any provision of, or result in or permit the
acceleration of the maturity or cancellation or performance of any obligation
under, any indenture, mortgage, loan or credit agreement, license, contract,
lease or other agreement or commitment to which Seller is a party or by which
any of the Purchased Assets may be bound or affected; (c) to Seller's and
Parent's Knowledge, conflict with or result in a breach of any judgment or
order of any court or Authority to which Seller or Parent is subject or any
applicable law, rule or regulation; or (d) to Seller's and Parent's Knowledge,
result in the creation or imposition of any Lien of any nature whatsoever upon
any of the Purchased Assets or give to any other Person any interests or rights
therein.
3.5. NO PENDING LITIGATION OR PROCEEDINGS. Except as set forth in
SCHEDULE 3.5 hereto, to Seller's and Parent's Knowledge, there are no actions,
suits, investigations or proceedings pending or threatened against or affecting
the Purchased Assets or the operation of the Quarry before any court,
arbitrator or Authority, which have or may have a materially adverse effect on
the Purchased Assets, the operation of the Quarry or Seller's or Parent's
ability to close the transactions contemplated hereunder.
3.6. ENVIRONMENTAL MATTERS. To Seller's and Parent's Knowledge,
the Quarry is not
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<PAGE> 16
currently in violation of any applicable federal, state or local environmental
laws, statutes, rules or regulations, or applicable land use ordinances, laws,
rules or other requirements relating to the operation of the Quarry on the Real
Estate, which has or may have a materially adverse effect on the Purchased
Assets, the operation of the Quarry or Seller's or Parent's ability to close
the transactions contemplated hereunder. Nothing contained herein shall be
deemed to constitute a representation or warranty of Seller or Parent with
respect to the operation of the Asphalt Plant.
3.7. CONSENTS. To Seller's and Parent's Knowledge, except for the
consent of CoreStates Bank, N.A., no consent, approval or authorization of, or
registration or filing with, any Person is required in connection with the
execution and delivery of this Agreement by Seller or Parent or the
consummation by Seller or Parent of the transactions contemplated hereby.
3.8. TITLE. Seller has good and marketable title to all of the
Purchased Assets, free and clear of any Lien, claims related to services
rendered or offsets, except the Permitted Liens. Seller represents that the
Capital Projects were acquired, refurbished or otherwise improved by Seller at
the costs set forth on SCHEDULE 1.1(L) hereto. To Seller's and Parent's
Knowledge, no Person has an option to purchase or lease, or right of first
refusal or other similar right with respect to all or any part of the Purchased
Assets.
3.9. INSURANCE. Attached hereto as SCHEDULE 3.9 is a list of
policies of property and casualty insurance maintained by Seller and Parent
covering the Purchased Assets, indicating for each policy the carrier, risks
insured, the amounts of coverage and expiration date. All such policies are
outstanding and in full force and effect and will remain so until the Closing.
3.10. BROKERAGE. Neither Seller nor Parent has made any agreement
or taken any other action which might cause anyone to become entitled to a
broker's fee or commission as a result of the transactions contemplated
hereunder.
3.11. TAXES. To Seller's and Parent's Knowledge, Seller has filed
all federal, state, municipal and other returns and reports related to any and
all Taxes required to be filed by Seller, and has fully paid all such Taxes
which have become due pursuant to such returns or pursuant to any impositions
or assessment; all of such returns and reports have been prepared in accordance
with the Books and Records and are true and complete; there are no proposed
assessments of additional taxes or potential deficiencies of Seller or any tax
audits, investigations or claims pending or threatened against Seller with
respect to any Taxes; and no waiver of any statute of limitations has been
given or requested by Seller.
3.12. COMPLETENESS. To Seller's and Parent's Knowledge, this
Agreement, the Exhibits and the Schedules do not contain any untrue statements
of material fact or omit to state a material fact necessary to make the
statements herein or therein contained not misleading. All statements in any
Exhibit or Schedule shall constitute representations and warranties by Seller
and Parent, to the extent applicable. Except to the extent expressly set forth
herein, neither Seller nor Parent makes any other representations or warranties
with respect to the Purchased Assets, the operation of the Quarry, Seller,
Parent or any other matter related thereto.
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4. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents and warrants as follows:
4.1. ORGANIZATION. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Pennsylvania and has all requisite power and authority to own, lease and
operate its properties and assets as now owned, leased and operated and to
carry on its business as now being conducted.
4.2. AUTHORIZATION AND ENFORCEABILITY. Buyer has full power and
authority to make, execute, deliver and perform this Agreement, and the
execution, delivery and performance of this Agreement by Buyer have been duly
authorized by all necessary action on the part of Buyer. This Agreement has
been duly executed and delivered by Buyer and constitutes the legal, valid and
binding obligation of Buyer enforceable in accordance with its terms.
4.3. NO VIOLATION OF LAWS OR AGREEMENTS. The execution and
delivery of this Agreement do not, and the consummation of the transactions
contemplated by this Agreement and the compliance with the terms, conditions
and provisions of this Agreement by Buyer, shall not (a) contravene any
provision of the certificate or articles of incorporation or by-laws of Buyer;
(b) to Buyer's Knowledge, conflict with or result in a breach of or constitute
a default (or an event which might, with the passage of time or the giving of
notice, or both, constitute a default) under, or result in or permit the
termination or amendment of any provision of, or result in or permit the
acceleration of the maturity or cancellation or performance of any obligation
under, any indenture, mortgage, loan or credit agreement, license, contract,
lease or other agreement or commitment to which Buyer is a party; or (c) to
Buyer's Knowledge, conflict with or result in a breach of any judgment or order
of any court or Authority to which Buyer is subject or any applicable law, rule
or regulation.
4.4. CONSENTS. To Buyer's Knowledge, no consent, approval or
authorization of, or registration or filing with, any Person is required in
connection with the execution and delivery of this Agreement by Buyer or the
consummation by Buyer of the transactions contemplated hereby.
4.5. BROKERAGE. Buyer has not made any agreement or taken any
other action which might cause anyone to become entitled to a broker's fee or
commission as a result of the transactions contemplated hereunder.
4.6. COMPLETENESS. To Buyer's Knowledge, this Agreement, the
Exhibits and the Schedules do not contain any untrue statements of material
fact or omit to state a material fact necessary to make the statements herein
or therein contained not misleading. All statements in any Exhibit or Schedule
shall constitute representations and warranties by Buyer, to the extent
applicable. Except to the extent expressly set forth herein, Buyer makes no
other representations or warranties with respect to Buyer or any other matter
related thereto.
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5. COVENANTS PENDING CLOSING.
5.1. PRE-CLOSING CONDUCT OF SELLER AND PARENT. From the date of
this Agreement to the Closing Date, Seller and Parent agree that:
(a) They shall not intentionally engage, or omit to
engage, in any conduct which would have a materially adverse effect on the
Purchased Assets or the operation of the Quarry. Notwithstanding the
foregoing, Buyer acknowledges and agrees that, from the date hereof through the
Date of Closing, Seller and Parent intend to wind-down the business operations
of Seller on the Real Estate. Buyer agrees that any action taken by Seller or
Parent, in good faith and consistent with their intention to wind-down Seller's
business operations, shall not be deemed an intentional act or omission
violative of this SECTION 5.1(A).
(b) They shall maintain in full force and effect all
Permits and the current insurance coverage for the Purchased Assets, as well as
the Books and Records, all in the ordinary course of business and consistent
with prior practice.
(c) Neither Seller nor Parent shall, without the prior
written consent of Buyer:
(i) enter into any contract or commitment, incur
any liability, absolute or contingent, waive any right or enter into any other
transaction which would have a materially adverse effect on the Purchased
Assets or the operation of the Quarry;
(ii) agree to sell or lease or otherwise dispose
of any of the property included in the Purchased Assets, except for sales of
Inventory in the ordinary course of Seller's business; or
(iii) mortgage, pledge or subject to any Lien any
of the Purchased Assets.
(d) Seller shall give Buyer and its representatives
(including its accountants, counsel and employees) reasonable access, upon
reasonable notice to Parent, to the Purchased Assets.
(e) Neither Seller, Parent nor any of their respective
officers, employees or agents shall solicit, initiate, furnish information
relating to or participate in negotiations with respect to any offer for any
purchase or sale of any capital stock of Seller or any of the Purchased Assets,
except for sales of Inventory in the ordinary course of Seller's business.
(f) Seller and Parent shall cooperate with Buyer in
Buyer's determination as to which filings are required to be made or consents
required to be obtained in any jurisdiction or from any Person in connection
with the consummation of the transactions contemplated by this Agreement
(including without limitation the transfer or assignment of the Permits) and in
making or causing to be made any such filings promptly and in seeking to obtain
in a timely fashion any such consents.
(g) Seller and Parent shall obtain the satisfaction of
the conditions to the Closing of the transactions and furnish to Buyer all
information as may be reasonably required in order to complete the Closing.
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5.2. PRE-CLOSING CONDUCT OF BUYER. From the date of this Agreement
to the Closing Date, Buyer agrees that:
(a) Buyer shall cooperate with Seller and Parent in
Buyer's determination as to which filings are required to be made or consents
required to be obtained in any jurisdiction or from any Person in connection
with the consummation of the transactions contemplated by this Agreement
(including without limitation the transfer or assignment of the Permits) and in
making or causing to be made any such filings promptly and in seeking to obtain
in a timely fashion any such consents.
(b) Buyer shall obtain the satisfaction of the conditions
to the Closing of the transactions and furnish to Seller and Parent all
information as may be reasonably required in order to complete the Closing.
6. CONDITIONS PRECEDENT; TERMINATION.
6.1. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER. The obligations
of Buyer to purchase the Purchased Assets are subject to the satisfaction, on
or prior to the Closing Date, of each of the following conditions (any one or
more of which may be waived in whole or in part by Buyer at Buyer's option):
(a) PERFORMANCE OF AGREEMENTS; REPRESENTATIONS AND
WARRANTIES. Seller and Parent shall have performed or complied with all
agreements, covenants and conditions required by this Agreement to be performed
or complied with by them at or prior to the Closing. The representations and
warranties set forth in this Agreement made by Seller and Parent shall be true
and correct on and as of the Closing Date, with the same force and effect as
though such representations and warranties had been made on, as of and with
reference to the Closing Date.
(b) INJUNCTION; LITIGATION. No statute, rule or
regulation or order of any Authority shall be in effect which restrains or
prohibits the transactions contemplated by this Agreement or which would
materially limit or materially adversely affect Buyer's ownership of the
Purchased Assets or operation of the Quarry; nor shall there be pending or
threatened any litigation, suit, action or proceeding by any Person which (i)
could be reasonably expected to materially limit or materially adversely affect
Buyer's ownership of the Purchased Assets or operation of the Quarry; (ii)
seeks to restrain or prohibit the transactions contemplated by this Agreement;
(iii) challenges the legality or validity of the transactions contemplated by
this Agreement; or (iv) seeks damages from Seller, Parent or Buyer as a result
of the transactions contemplated by this Agreement.
(c) STATE TAX CERTIFICATES. Seller shall have received
and shall have delivered at Closing a clearance or lien certificate, or such
other documentation of the status of all of its state tax accounts as is
obtainable without the filing of tentative returns or reports for tax periods
not yet concluded, from the Pennsylvania Department of Revenue.
(d) DOCUMENTS. Buyer shall have received all of the
items required to be delivered to Buyer under SECTION 2.6(A).
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6.2. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER. The
obligations of Seller to sell the Purchased Assets are subject to the
satisfaction, on or prior to the Closing Date, of each of the following
conditions (any one or more of which may be waived in whole or in part by
Seller at Seller's option):
(a) PERFORMANCE OF AGREEMENTS; REPRESENTATIONS AND
WARRANTIES. Buyer shall have performed or complied with all agreements,
covenants and conditions required by this Agreement to be performed or complied
with by it at or prior to the Closing. The representations and warranties set
forth in this Agreement made by Buyer shall be true and correct on and as of
the Closing Date, with the same force and effect as though such representations
and warranties had been made on, as of and with reference to the Closing Date.
(b) INJUNCTION; LITIGATION. No statute, rule or
regulation or order of any Authority shall be in effect which restrains or
prohibits the transactions contemplated by this Agreement or which would
materially limit or materially adversely affect Seller's or Parent's ability to
complete their respective obligations hereunder; nor shall there be pending or
threatened any litigation, suit, action or proceeding by any Person which (i)
seeks to restrain or prohibit the transactions contemplated by this Agreement;
(ii) challenges the legality or validity of the transactions contemplated by
this Agreement; or (iii) seeks damages from Seller, Parent or Buyer as a result
of the transactions contemplated by this Agreement.
(c) DOCUMENTS. Seller and Parent shall have received all
of the items required to be delivered to Seller and Parent at or prior to the
Closing under SECTION 2.6(B).
6.3. TERMINATION.
(a) WHEN AGREEMENT MAY BE TERMINATED. This Agreement may
be terminated at any time prior to the Closing:
(i) by mutual written consent of Buyer and
Seller;
(ii) by Buyer pursuant to SECTION 6.6(B)(III) or
SECTION 9.5.
(iii) by Buyer or Seller if the Closing shall not
have occurred by June 21, 1997; or
(iv) by Buyer or Seller pursuant to SECTION 6.5.
(b) EFFECT OF TERMINATION. In the event of termination
of this Agreement by either Buyer or Seller as provided above, this Agreement
shall terminate, and there shall be no liability on the part of either Buyer or
Seller, except for liabilities arising from a breach of this Agreement prior to
such termination.
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6.4. SPECIFIC PERFORMANCE. Seller and Parent acknowledge that the
Purchased Assets are unique and that Buyer has no adequate remedy at law if
Seller and Parent shall fail to perform any of their respective obligations
hereunder. Seller and Parent therefore confirm and agree that Buyer's right to
specific performance is essential to protect the rights and interests of Buyer.
Accordingly, in addition to any other remedies which Buyer may have hereunder
or at law or in equity or otherwise, Seller and Parent hereby agree that Buyer
shall have the right to have all obligations, undertakings, agreements and
other provisions of this Agreement specifically performed by Seller and Parent,
and that Buyer shall have the right to obtain an order or decree of such
specific performance in any of the courts of the United States or of any state
or other political subdivision thereof.
6.5. REMEDIES. If any party hereto fails to close the transactions
contemplated herein and each other party hereto has fulfilled all their
respective obligations hereunder, the non-defaulting party may, upon notice to
the defaulting party, terminate this Agreement and pursue any rights and
remedies available to the non-defaulting party hereunder, at law, in equity or
otherwise. Buyer acknowledges that, if it fails to close hereunder and Seller
and Parent have complied with all their obligations hereunder, Seller's and
Parent's claim for damages against Buyer for breach of contract shall include a
claim for lost revenues of Seller occurring as a result of Seller's
winding-down its business operations on the Real Estate in contemplation of
completing the transactions contemplated hereunder.
6.6. ENVIRONMENTAL MATTERS. With respect to the effect of
representations and warranties of Seller and Parent set forth in SECTION 3.6
(the "ENVIRONMENTAL REPRESENTATIONS"), the parties hereto agree as follows:
(a) UPDATE. Seller and Parent shall promptly notify
Buyer of the occurrence of any Environmental Event of which the Seller or
Parent obtains Knowledge during the period from the date of this Agreement
through the Date of Closing, which Environmental Event causes the Environmental
Representations to be untrue (an "ENVIRONMENTAL DEFICIENCY").
(b) CLOSING OBLIGATIONS. In addition to Seller's and
Parent's obligations pursuant to SECTION 6.1(A), the parties hereto agree that,
to the extent any Environmental Deficiency exists as of the Closing Date, the
following shall occur:
(i) If the cost to remedy the Environmental
Deficiency is less than or equal to Seventy- Five Thousand Dollars
($75,000.00), the transactions contemplated hereunder shall close, and Buyer
shall bear the full cost of remedying the Environmental Deficiency.
(ii) If the cost to remedy the Environmental
Deficiency is greater than Seventy-Five Thousand Dollars ($75,000.00) and less
than or equal to Four Hundred Seventy-Five Thousand Dollars ($475,000.00), the
transactions contemplated hereunder shall close, and (A) Buyer shall bear the
full cost of the first Seventy-Five Thousand Dollars ($75,000.00) of expenses
incurred in connection with remedying the Environmental Deficiency, and (B) all
expenses incurred in connection with remedying the Environmental Deficiency in
excess of Seventy-Five Thousand Dollars ($75,000.00) shall be shared equally by
(x) Buyer and (y) Seller and Parent.
(iii) If the cost to remedy the Environmental
Deficiency exceeds Four
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Hundred Seventy-Five Thousand Dollars ($475,000.00), Buyer may, at its option
and upon notice given not later than five (5) business days following Buyer's
receipt of notice of the Environmental Deficiency, (A) elect to close the
transactions contemplated hereunder, or (B) terminate this Agreement, subject
to the Seller's and Parent's right to compel Buyer to close hereunder. If
Buyer elects to close the transactions contemplated hereunder, (x) Buyer shall
bear the full cost of the first Seventy-Five Thousand Dollars ($75,000.00) of
expenses incurred in connection with remedying the Environmental Deficiency,
(y) all expenses incurred in connection with remedying the Environmental
Deficiency in excess of Seventy-Five Thousand Dollars ($75,000.00) and less
than or equal to Four Hundred Seventy-Five Thousand Dollars ($475,000.00) shall
be shared equally by (1) Buyer and (2) Seller and Parent, and (z) Buyer shall
bear the full cost of all expenses incurred in connection with remedying the
Environmental Deficiency in excess of Four Hundred Seventy-Five Thousand
Dollars ($475,000.00). Notwithstanding the foregoing, if Buyer elects to
terminate the Agreement pursuant to this SECTION 6.6(B)(III), Seller and Parent
may compel Buyer to close hereunder by agreeing in writing to bear all expenses
incurred in connection with the remedying of the Environmental Deficiency in
excess of Four Hundred Seventy-Five Thousand Dollars ($475,000.00).
(c) CALCULATION OF REMEDIATION COST. The estimated cost
of remedying an Environmental Deficiency shall be calculated by an independent
environmental engineer reasonably acceptable to all parties.
7. CERTAIN ADDITIONAL COVENANTS.
7.1. EXPENSES OF TRANSACTION. Seller, Parent and Buyer shall each
bear its respective accounting, legal and other expenses incurred in connection
with the transactions contemplated by this Agreement.
7.2. ACCESS TO INFORMATION. Seller and Buyer shall cooperate fully
with each other after the Closing so that both Seller and Buyer have access to
the Books and Records existing at the Closing Date and relating in any manner
to any of the Purchased Assets or the operation of the Quarry. No Books or
Records existing at the Closing Date and relating in any manner to the
Purchased Assets or the operation of the Quarry shall be destroyed by Seller or
Buyer for a period of six (6) years after the Closing Date without Seller or
Buyer, as the case may be, giving at least thirty (30) days prior written
notice, during which time Buyer or Seller, as the case may be, shall have the
right to examine and to remove any such Books and Records prior to their
destruction.
7.3. INDEMNIFICATION. Except to the extent that, elsewhere in this
Agreement, liabilities or obligations are otherwise allocated, assumed or
provided for, the indemnification obligations of the parties hereto shall be as
follows:
(a) INDEMNIFICATION OBLIGATIONS OF SELLER AND PARENT.
Seller and Parent shall jointly and severally indemnify Buyer and hold Buyer
harmless from and against any and all damages, claims, losses, expenses,
obligations and liabilities (including attorney's fees and legal costs) arising
out of any third-party claim, action, suit or proceeding (a "THIRD-PARTY
CLAIM") resulting from (i) any act or omission of Seller, Parent or their
respective officers, directors, employees or agents occurring or arising prior
to or on the Closing Date, relating to the Purchased Assets, the operation of
the Quarry
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or any other business operated by Seller on the Real Estate, other than a
claim, action, suit or proceeding alleging an act or omission by Seller, Parent
or their respective officers, directors, employees or agents under any
environmental or land use law, rule or ordinance; (ii) the Retained
Liabilities, other than a claim, action, suit or proceeding alleging an act or
omission by Seller, Parent or their respective officers, directors, employees
or agents under any environmental or land use law, rule or ordinance; (iii) any
failure of Seller to comply with applicable law and/or any applicable contract
in connection with the termination or relocation of the Employees; and (iv) any
obligation of Seller to the Employees.
(b) INDEMNIFICATION OBLIGATIONS OF BUYER. Buyer shall
indemnify Seller and Parent and hold Seller and Parent harmless from and
against any and all damages, claims, losses, expenses, obligations and
liabilities (including attorney's fees and legal costs) arising out of any
third-party claim, action, suit or proceeding resulting from any act or
omission of Buyer or its officers, directors, employees or agents occurring or
arising after the Closing Date, relating to the Purchased Assets, the operation
of the Quarry or any other business operated by Buyer on the Real Estate, other
than a claim, action, suit or proceeding alleging an act or omission by Buyer
or its officers, directors, employees or agents under any environmental or land
use law, rule or ordinance.
(c) INDEMNIFICATION PROCEDURES.
(i) Any party seeking indemnification hereunder
(the "PROTECTED PARTY") shall give notice to the party who is obligated to
indemnify it (the "INDEMNIFYING PARTY") of the assertion of any Third-party
Claim, or the commencement of any action, suit or proceeding, in respect of
which indemnity may be sought hereunder and shall give the Indemnifying Party
such information with respect thereto as the Indemnifying Party may reasonably
request, but failure to give such notice shall not relieve the Indemnifying
Party of any liability hereunder (except to the extent that the Indemnifying
Party has suffered actual prejudice thereby). The Indemnifying Party shall
have the right, exercisable by notice to the Protected Party within fifteen
(15) days after receipt of notice from the Protected Party of the commencement
of or assertion of any Third-party Claim, to assume the defense of such
Third-party Claim which involves (and continues to involve) solely monetary
damages; provided that (A) the Indemnifying Party expressly agrees in such
notice that the Indemnifying Party shall be solely obligated to satisfy and
discharge the Third-party Claim; (B) the defense of such Third-party Claim by
the Indemnifying Party would not, in the reasonable judgment of the Protected
Party, have any continuing material adverse effect on the Protected Party's
business; and (C) the Indemnifying Party makes reasonably adequate provision to
ensure the Protected Party of the ability of the Indemnifying Party to satisfy
the full amount of any adverse monetary judgment that may result.
(ii) Within fifteen (15) days after the
Indemnifying Party has given notice to the Protected Party of its intended
exercise of its right to defend a Third-party Claim, the Protected Party shall
give notice to the Indemnifying Party of any objection thereto based upon the
condition set forth in SECTION 7.3(C)(I)(B) above. If the Protected Party so
objects, the Protected Party shall continue to defend the Third-party Claim
until such time as such objection is withdrawn. If no such notice is given, or
if any such objection is withdrawn, the Indemnifying Party shall be entitled to
assume and conduct such defense, with counsel selected by the Indemnifying
Party and acceptable to the Protected Party, until such time as the Protected
Party shall give notice that the condition set forth
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<PAGE> 24
in SECTION 7.3(C)(I)(B) above is, in its judgment, no longer satisfied. If the
Protected Party gives notice at any time of its objection based upon SECTION
7.3(C)(I)(B) above, the Indemnifying Party shall thereafter remain obligated to
pay the amount found to be owing to the third-party with respect to such
Third-party Claim, but shall not be obligated to pay the costs (including
attorney's fees and legal costs) incurred by the Protected Party in defending
such Third-party Claim. The Protected Party may defend any Third-party Claim
with counsel selected by it.
(iii) Any party shall have the right to
participate, at its own expense, in the defense of any Third-party Claim which
any other party is defending.
(iv) The Indemnifying Party, if it shall have
assumed the defense of any Third-party Claim, shall have the right to consent
to the entry of judgment with respect to, or otherwise settle, such Third-party
Claim only with the prior written consent of the Protected Party. The
Protected Party shall have the sole and exclusive right to settle any
Third-party Claim on such terms and conditions as it deems reasonably
appropriate.
(v) Whether or not the Protected Party chooses to
defend any Third-party Claim, the Indemnifying Party shall cooperate in the
defense thereof and shall furnish such records, information and testimony, and
attend such conferences, discovery proceedings, hearings, trials and appeals,
as may be reasonably requested in connection therewith.
8. ACCOUNTS RECEIVABLE.
8.1. RECEIVABLES. All accounts receivable of Seller created or
arising prior to or on the Closing Date shall continue to be the property and
assets of Seller (the "SELLER'S RECEIVABLES"). All accounts receivable of
Buyer created or arising after the Closing Date shall be the property and
assets of Buyer. If Seller receives any payments on any accounts receivable to
which Buyer is entitled, Seller shall forward such sums directly to Buyer
within three (3) days after Seller's receipt. If Buyer receives any payments
on any accounts receivable to which Seller is entitled, Buyer shall forward
such sums directly to Seller within three (3) days after Buyer's receipt.
8.2. COLLECTION ASSISTANCE. Buyer shall cooperate with Seller in
its efforts to collect the Seller's Receivables. Upon reasonable request,
Buyer shall for a period of one hundred twenty (120) days following the Closing
provide, at no cost to Seller, Seller with space and access to a telephone for
use in connection with Seller's collection efforts.
9. MISCELLANEOUS.
9.1. REPRESENTATIONS AND WARRANTIES. All representations and
warranties of Seller, Parent or Buyer contained in this Agreement or any
Exhibit or Schedule shall continue to be true and complete as to all items as
of the Closing Date. The representations and warranties of Seller and Parent
(other than the Environmental Representations which shall not survive the
Closing) and of Buyer shall survive the Closing for a period of six (6) months.
9.2. NO OFFSET. Buyer shall not have the right to offset any
amounts due or alleged to be
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due to Buyer from Seller or Parent against the Purchase Price, the Aggregate
Inventory Price or any amounts due to Seller from Buyer under any purchase
orders or open invoices of Buyer or any Control Entities of Buyer that have not
been paid in full as of the Closing.
9.3. NOTICES. Any notice, request, demand, waiver, consent,
approval or other communication which is required or permitted to be given to
any party hereunder shall be in writing and shall be deemed given only if
delivered to the party personally or sent to the party by telecopy or by
overnight delivery service or registered or certified mail (return receipt
requested) with postage and registration fees thereon prepaid, addressed to the
party at its address set forth below:
If to Buyer, to:
Highway Materials, Inc.
1750 Sentry Parkway
Blue Bell, PA 19422
Attention: Peter DePaul
Telecopy No.: (610) 397-0700
With a copy to:
Wolf, Block, Schorr and Solis-Cohen
350 Sentry Parkway, Bldg 640
P.O. Box 3038
Blue Bell, PA 19422-0757
Attention: Lawrence R. Lesser, Esquire
Telecopy No.: (610) 238-0305/0374
If to Seller or Parent to:
Corson Lime Company
c/o United States Lime & Minerals, Inc.
12221 Merit Drive, Ste. 500
Dallas, TX 75251-2223
Attention: Timothy W. Byrne, Senior
Vice President
Telecopy No.: (214) 385-1340
With a copy to:
Morgan, Lewis & Bockius, LLP
1800 M. Street, N.W.
Washington, DC 20036-5869
Attention: George G. Yearsich, Esquire
Telecopy No.: (202) 467-7176
9.4. SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
9.5. RISK OF LOSS. The risk of loss, damage, taking or destruction
to the Purchased Assets
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from fire, condemnation proceeding or other casualty or cause shall be borne by
Seller at all times up to the Closing. Seller shall cause Buyer to be added as
a loss payee and additional insured on all of its insurance policies covering
the Purchased Assets. Seller shall notify Buyer immediately upon any such
loss, damage, taking or destruction occurring prior to the Closing. Such
notice shall specify with particularity the loss, damage, taking or destruction
incurred, the cause thereof, if known, or reasonably ascertainable, and the
insurance coverage, if any. In the event of such loss, damage, taking or
destruction, the proceeds of any claim for any such loss, damage or destruction
payable under any insurance policy with respect thereto or in connection with
any taking shall be used to repair, replace or restore any such property to its
former condition subject to the conditions stated below. In the event that
property reasonably required for the operation of the Quarry is not, or cannot
be, repaired, replaced or restored prior to the Closing, and the loss, damage,
taking or destruction resulted in a materially adverse change in the value or
condition of the Purchased Assets or the operation of the Quarry, the Buyer, at
its sole option upon prior written notice to Seller, (a) may elect to postpone
the Closing until such time as the property has been repaired, replaced or
restored; (b) may elect to consummate the Closing and accept the property in
its then condition, in which event Buyer shall have the right to all proceeds
of insurance or of the taking received, whether before or after the Closing,
covering the property involved and/or appropriate deductions from the Purchase
Price shall be made; or (c) may terminate this Agreement and declare it of no
further force and effect, in which event this Agreement and all the terms and
provisions hereof shall thereupon be deemed null and void without liability of
any party hereto.
9.6. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Pennsylvania
(without regard to its rules and principles relating to conflicts of laws) and
without regard to any rule or canon of construction which interprets agreements
against the draftsman.
9.7. ENTIRE AGREEMENT. This Agreement, together with the Exhibits
and the Schedules, constitutes the entire understanding of the parties,
supersedes any prior agreements or understandings, written or oral, between the
parties with respect to the subject matter hereof and is not intended to confer
upon any Person other than the parties hereto any benefit, right or remedy.
9.8. FURTHER ASSURANCES. Each party shall cooperate and take such
action as may be reasonably requested by any other party in order to carry out
the provisions and purposes of this Agreement and the transactions contemplated
hereby.
9.9. AMENDMENT AND WAIVER. The parties may, by mutual agreement,
amend this Agreement in any respect, and any party, as to such party, may (a)
extend the time for the performance of any of the obligations of the other
party; (b) waive any inaccuracies in representations and warranties by the
other party; (c) waive compliance by the other party with any of the agreements
contained herein and performance of any obligations by the other party; and (d)
waive the fulfillment of any condition that is precedent to the performance by
such party of any of its obligations under this Agreement. To be effective,
any such amendment or waiver must be in writing and be signed by the party
against whom enforcement of the same is sought.
9.10. NON-WAIVER OF RIGHTS. By completing the Closing and except as
specifically set forth
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<PAGE> 27
in this Agreement, no party hereto waives any breach of any warranty or
representation (other than the Environmental Representations) made by any other
party under this Agreement, the Exhibits and the Schedules, and any claims and
rights of Seller and Parent or of Buyer resulting from any breach by Buyer or
by Seller and/or Parent, as the case may be, are specifically reserved.
Notwithstanding the foregoing, by completing the Closing, Buyer does not waive
any claims arising out of fraud or intentional misrepresentation.
9.11. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument.
9.12. HEADINGS. The headings preceding the text of the sections and
subsections hereof are inserted solely for convenience of reference, and shall
not constitute a part of this Agreement nor shall they affect its meaning,
construction or effect.
9.13. PUBLICITY. Except for disclosures required by law, no party
hereto shall issue, prior to the Closing, any press release or make any other
public announcement about this Agreement or the transactions contemplated
hereunder without first submitting a draft of the press release or public
statement to the non-disclosing party for its review and consent, which consent
shall not be unreasonably withheld or delayed.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, effective
as of the date first written above.
CORSON LIME COMPANY
By:
--------------------------------------
Robert F. Kizer, President
UNITED STATES LIME & MINERALS, INC.
By:
--------------------------------------
Robert F. Kizer, President and
Chief Executive Officer
HIGHWAY MATERIALS, INC.
By:
--------------------------------------
Peter DePaul, President
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