Exhibit 10.28
CONFIDENTIAL
 
STOCK PURCHASE AGREEMENT
 
Among
OGLEBAY NORTON COMPANY,
O-N MINERALS COMPANY,
O-N MINERALS (LIME) COMPANY
and
UNITED STATES LIME & MINERALS, INC.
Dated
December ____, 2005

 

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TABLE OF CONTENTS

         
 
    Page
ARTICLE I DEFINITIONS; CONSTRUCTION
    1  
 
       
1.1 Definitions
    1  
1.2 Construction
    7  
 
       
ARTICLE II THE SALE AND PURCHASE
    8  
 
       
2.1 Closing
    8  
2.2 Sale and Purchase of Sale Shares
    8  
2.3 Purchase Price
    8  
2.4 Closing Matters
    8  
2.5 Purchase Price Working Capital Adjustment
    9  
 
       
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLERS
    11  
 
       
3.1 Organization and Authority
    11  
3.2 Authorization; Enforceability
    11  
3.3 Shares; Capitalization
    11  
3.4 No Violation of Laws or Agreements; Consents
    12  
3.5 Financial Statements; Books and Records
    12  
3.6 No Changes
    13  
3.7 Taxes
    14  
3.8 Owned and Leased Property; Condition of Assets
    16  
3.9 Condition of Assets
    17  
3.10 No Pending or Threatened Litigation
    17  
3.11 Compliance With Law; Permits
    17  
3.12 Intellectual Property Rights
    18  
3.13 Labor Matters
    18  
3.14 Employees: Employee Related Agreements and Plans; ERISA
    19  
3.15 Environmental Matters
    21  
3.16 Bank Accounts
    22  
3.17 Material Contracts
    22  
3.18 Brokers, Finders, Etc
    23  
3.19 Insurance
    23  
3.20 Inventories
    24  
3.21 Product Liability
    24  
3.22 Significant Customers and Suppliers
    24  
3.23 Accounts Receivable
    24  
3.24 Disclosure
    24  
 
       
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER
    25  
 
       
4.1 Organization
    25  
4.2 Authorization; Enforceability
    25  

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             Page
4.3 No Violation of Laws; Consents
    25  
4.4 No Pending Litigation or Proceedings
    25  
4.5 Brokers, Finders, Etc
    25  
4.6 Investment
    25  
4.7 Financial Ability
    26  
 
       
ARTICLE V [Intentionally Left Blank]
    26  
 
       
ARTICLE VI ADDITIONAL AGREEMENTS
    26  
 
       
6.1 Use of Names
    26  
6.2 Tax Matters
    26  
6.3 Employees and Plans
    29  
6.4 Insurance
    31  
6.5 No Public Announcement
    31  
6.6 Expenses
    31  
6.7 Covenant Not to Compete
    31  
6.8 Further Assurances and Cooperation
    32  
6.9 Regarding Accounting, Financial Statements, and SEC Reporting
    32  
6.10 Indemnification
    33  
6.11 Consents
    33  
6.12 Groundwater Monitoring Program
    33  
6.13 Accounts Receivable
    33  
6.14 Infringement Liability
    33  
6.15 Trapezoid Parcel
    34  
6.16 Master Lease and License Arrangements
    34  
6.17 Defense of Certain Disclosed Litigation and Claims
    34  
 
       
ARTICLE VII CONDITIONS TO CLOSING
    35  
 
       
7.1 Conditions Precedent to Obligation of Buyer
    35  
7.2 Conditions Precedent to Obligation of Sellers
    35  
 
       
ARTICLE VIII INDEMNIFICATION
    35  
 
       
8.1 Survival of Representations, Warranties, Covenants and Agreements
    35  
8.2 General Indemnification
    36  
8.3 Procedures
    37  
8.4 Consequential Damages
    40  
8.5 Sole Remedy
    40  
8.6 Costs
    40  
 
       
ARTICLE IX MISCELLANEOUS
    40  
 
       
9.1 Books and Records
    40  
9.2 Notices
    41  
9.3 Assignment; Governing Law
    42  
9.4 Amendment and Waiver; Cumulative Effect
    43  
9.5 No Third Party Beneficiaries
    43  

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             Page
9.6 Severability
    43  
9.7 Multiple Counterparts
    44  
9.8 Joint Drafting
    44  
9.9 Entire Agreement
    44  

iii
 

 

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LIST OF SCHEDULES
Note: Schedules Omitted. Registrant agrees to furnish supplementally a copy of
any omitted Schedules to the Commission upon request.

     
Schedule 1.1A -
  Closing Net Working Capital
Schedule 1.1B -
  Permitted Encumbrances
Schedule 3.3 -
  Shares; Capitalization
Schedule 3.4(a) -
  No Violation of Laws or Agreements
Schedule 3.4(b) -
  Consents
Schedule 3.5 -
  Financial Statements; Books and Records
Schedule 3.6 -
  No Changes
Schedule 3.7 -
  Taxes
Schedule 3.8(a) -
  Owned Real Property
Schedule 3.8(b) -
  Leases of Real Property
Schedule 3.8(d) -
  Shared Facilities
Schedule 3.8(e) -
  Rights in the Assets
Schedule 3.9 -
  Condition of Assets
Schedule 3.10 -
  No Pending or Threatened Litigation
Schedule 3.11(a) -
  Compliance With Law
Schedule 3.11(b) -
  Permits
Schedule 3.12(a) -
  Intellectual Property Agreements
Schedule 3.12(b)(i) -
  Rights in Intellectual Property
Schedule 3.12(b)(ii) -
  Patents
Schedule 3.12(b)(iii) - 
  Marks
Schedule 3.13-
  Labor Matters
Schedule 3.14(a) -
  List of Plans
Schedule 3.14(b) -
  Status of Plans
Schedule 3.14(c) -
  Liabilities
Schedule 3.14(d) -
  Contributions
Schedule 3.14(f)(i) -
  Employees
Schedule 3.14(f)(ii) -
  Employees
Schedule 3.15-
  Environmental Matters
Schedule 3.15(c) -
  Permits
Schedule 3.16-
  Bank Accounts
Schedule 3.17-
  Material Contracts
Schedule 3.18-
  Brokers, Finders, Etc.
Schedule 3.19(a) -
  Insurance Policies
Schedule 3.19(b) -
  Insurance Claims
Schedule 3.20-
  Inventories
Schedule 3.21-
  Product Liability
Schedule 3.22-
  Significant Customers and Suppliers
Schedule 3.23 -
  Accounts Receivable

IV
 

 

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List of Exhibits
Note: Exhibits Omitted. Registrant agrees to furnish supplementally a copy of
any omitted Exhibits to the Commission upon request.

     
Exhibit A
  Opinion of Sellers’ Counsel
Exhibit B
  Escrow Agreement

V
 

 

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STOCK PURCHASE AGREEMENT
     This STOCK PURCHASE AGREEMENT (this “Agreement”) is made as of the 28th day
of December, 2005, by and among OGLEBAY NORTON COMPANY, an Ohio corporation
(“Parent”), O-N MINERALS COMPANY, an Ohio corporation (“O-N Minerals”), O-N
MINERALS (LIME) COMPANY, a Georgia corporation (“O-N Lime”, and together with
Parent and O-N Minerals, “Sellers”), and UNITED STATES LIME & MINERALS, INC., a
Texas corporation (“Buyer”).
INTRODUCTORY STATEMENTS

A.   Sellers directly or indirectly own all of the issued and outstanding
capital stock of O-N Minerals (St. Clair) Company, a Delaware corporation (the
“Sale Shares” and the “Company,” respectively).

B.   On the terms and subject to the conditions set forth in this Agreement, O-N
Lime desires to sell to Buyer, and Buyer desires to purchase from O-N Lime, the
Sale Shares.

     In consideration of the representations, warranties, covenants and
agreements contained herein, Sellers and Buyer, each intending to be legally
bound hereby, agree as set forth below.
ARTICLE I
DEFINITIONS; CONSTRUCTION
     1.1 Definitions. As used in this Agreement, the following terms have the
meanings specified in this Section 1.1.
     “Accounts Receivable” has the meaning given that term in Section 3.23.
     “Affected Employees” has the meaning given that term in Section 6.3(a).
     “Affiliate” means, with respect to any Person, any other Person that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with such Person.
     “Affiliated Group” has the meaning given that term in Section 3.7(a).
     “Agreement” means this Stock Purchase Agreement, as it may be amended from
time to time.
     “Applicable Contract” means any material Contract to which the Company is a
party.
     “ATF” has the meaning given that term in Section 3.15(c).
     “Balance Sheet” has the meaning given that term in Section 3.5(a).

 

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     “Balance Sheet Date” has the meaning given that term in Section 3.5(a).
     “Business” means the production and sale of limestone, quicklime, hydrated
lime, chemical limestone, blended lime, sized limestone, and related filler
products operated out of the Company’s facility located in Marble City,
Oklahoma.
     “Business Day” means a day other than a Saturday, Sunday or other day on
which commercial banks in Cleveland, Ohio are authorized or required by law to
close.
     “Buyer” has the meaning given that term in the preamble of this Agreement.
     “Buyer Benefit Programs” has the meaning given that term in Section 6.3(a).
     “Closing” has the meaning given that term in Section 2.1.
     “Closing Balance Sheet” means the Closing Balance Sheet delivered pursuant
to Section 2.5(a), as adjusted, if at all, pursuant to Section 2.5(b).
     “Closing Date” has the meaning given that term in Section 2.1.
     “Closing Net Working Capital” means the excess of the current assets of the
Company as of the close of business on the Closing Date over the current
liabilities of the Company as of the close of business on the Closing Date,
determined in accordance with GAAP and adjusted in accordance with
Schedule 1.1A.
     “COBRA” has the meaning given that term in Section 3.14(c)(ii).
     “Code” means the Internal Revenue Code of 1986, as amended from time to
time, and the applicable rulings and regulations thereunder.
     “Company” has the meaning given that term in the Introductory Statements of
this Agreement.
     “Company Share Transfer” has the meaning given that term in Section 2.2.
     “Competitive Business” has the meaning given that term in Section 6.7.
     “Contract” and “Contracts” means any agreement, written or oral, note,
letter of credit, indenture, financial instrument, lease or license to which the
Company is a party or by which it is bound.
     “DEQ” has the meaning given that term in Section 6.12.
     “Earnest Money Deposit” means the sum of $50,000, being the amount paid by
Buyer to O-N Lime prior to the date hereof as an earnest money deposit.
     “Encumbrance” means any mortgage, deed of trust, pledge, security interest,
claim, easement, lien, charge, option, restriction on transfer, conditional sale
or other title retention agreement, defect in title or other restriction of a
similar kind.

 

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     “Environmental Law” means all Laws (other than mining Laws applicable to
the reclamation of Lime Kiln Dust) in effect on the Closing Date relating to
(i) the control of any Hazardous Substance or the protection of the environment
(including air, water, land, flora, and fauna), (ii) the possession, generation,
manufacture, processing, use, handling, management, treatment, storage,
disposal, release, distribution, or transportation of any Hazardous Substance or
Lime Kiln Dust; and (iii) the acquisition or beneficial use of surface water or
groundwater.
     “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended, and the applicable rulings and regulations thereunder.
     “ERISA Affiliate” means, with respect to the Company, any other entity or
trade or business that, at the relevant time, is a member of a group described
in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA
that includes the Company or that is a member of the same “controlled group” as
the Company pursuant to Section 4001(a)(14) of ERISA.
     “Escrow Agent” has the meaning given that term in Section 2.4(h).
     “Escrow Agreement” has the meaning given that term in Section 2.4(h).
     “Escrow Amount” has the meaning given that term in Section 2.4(h).
     “Expenses” means any and all reasonable expenses incurred in connection
with any claim, action, suit or proceeding incident to any matter indemnified
against hereunder, including court filing fees, court costs, arbitration fees or
costs, costs of appeal including necessary supercedeas and other bonds, witness
fees and reasonable fees and disbursements of legal counsel, investigators,
expert witnesses, accountants and other professionals.
     “Financial Statements” has the meaning given that term in Section 3.5(a).
     “GAAP” means United States generally accepted accounting principles,
consistently applied.
     “Governing Documents” means, with respect to any Person that is not a
natural Person, the certificate or articles of incorporation, bylaws or
regulations, deed of trust, formation or governing agreement and other charter
documents or organizational or governing documents or instruments of such
Person.
     “Governmental Authority” means any court or government (federal, state,
local, foreign or provincial) or any political subdivision thereof, including
without limitation, any department, commission, board, bureau, agency or other
regulatory, administrative or Governmental Authority or instrumentality.
     “Hazardous Substance” means any solid, liquid or gaseous substance or
material that (i) is defined as a “hazardous material,” “pollutant,”
“contaminant,” “hazardous waste,” or “hazardous substance” under any
Environmental Law or (ii) is toxic, explosive, corrosive, infectious,
radioactive, carcinogenic or mutagenic or otherwise hazardous and is regulated
under Environmental Laws, including gasoline, diesel fuel or other petroleum
hydrocarbons, polychlorinated biphenyls or asbestos.

 

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     “Income Tax” means any Tax on net or gross income, profits or receipts,
together with any interest or penalties, imposed by any Governmental Authority.
     “Indebtedness” means any obligation for borrowed money of the Company, any
capitalized lease obligation of the Company, any obligation properly classified
as indebtedness or debt under GAAP, or any guarantee of the Company in respect
of any indebtedness or obligation for borrowed money of any Person (other than
the endorsement of negotiable instruments for deposit or collection in the
ordinary course of business.)
     “Indemnified Party” has the meaning given that term in Section 8.2(a).
     “Indemnifying Party” has the meaning given that term in Section 8.2(a).
     “Independent Auditors” has the meaning given that term in Section 2.5(c).
     “Intellectual Property Assets” means: (i) all trademarks and service marks
which are registered or have applications to register pending and unregistered
trademarks and service marks of the Company (collectively, “Marks”) and, subject
to the provisions of Section 6.1, the corporate name of the Company and all
fictional business names and trading names currently used by the Company,
(ii) all issued patents and patent applications of the Company (collectively,
“Patents”), (iii) all copyrights of the Company in both published works and
unpublished works including any registrations and applications appurtenant
thereto, (iv) all Internet domain names used by the Company and (v) all
know-how, trade secrets, confidential information, customer lists, software,
technical information, data, process technology, plans, drawings and blue prints
of the Company.
     “IP Liability” has the meaning given that term in Section 6.14.
     “Knowledge” of a fact or matter, when used in relation to an individual,
means: (a) such individual is actually aware of such fact or other matter; or
(b) a reasonable individual in such Person’s position would be aware of such
fact or other matter.
     “Law” means any applicable statute, law, ordinance, rule, regulation,
order, judgment or decree enacted, adopted, issued or promulgated by any
Governmental Authority.
     “Leased Real Property” means those properties identified in Section 3.8(b).
     “Lime Kiln Dust” means lime kiln dust and materials derived therefrom in
the operation of the Business by the Company, including scrubber sludge.
     “Litigation” means any action, suit, arbitration or proceeding of any
nature or kind whatsoever, whether civil, criminal or administrative, at law or
in equity, by or before any Governmental Authority or arbitrator.
     “Losses” means, without duplication, any and all losses, costs,
obligations, liabilities, settlement payments, fines, penalties, damages,
diminution in value (meaning a dollar-for-dollar loss occurring as a result of a
claim that is not a third party claim), Expenses or other charges, as such term
is further described in Section 8.2(c).

 

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     “Marks” has the meaning given that term in the definition of “Intellectual
Property Assets” above.
     “Master Leases and Licenses” means the leases and licenses with General
Electric Capital Corporation, Associates Leasing, Inc., JWS Corporation and
Datastream Systems, Inc. entered into on a group basis by Sellers, as more
particularly described in Schedule 3.4(b).
     “Material Adverse Effect” means a material adverse effect on the results of
operations, financial condition or assets of the Company other than changes
(i) relating to generally applicable economic conditions or events, (ii) the
industry in which the Company operates in general or (iii) resulting from the
announcement by O-N Lime of its intention to sell the Company.
     “Multiemployer Plan” means a multiemployer plan within the meaning of
Section 4001 of ERISA.
     “Non-Competition Party” means Parent and each Affiliate thereof.
     “Non-Competition Period” means the period commencing on the Closing Date
and continuing until the fifth anniversary of the Closing Date.
     “Non-Competition Products” means limestone, quicklime, hydrated lime,
chemical limestone, blended lime and sized limestone lime slurry, excluding lime
used in the production of autoclaved air entrained concrete.
     “Objection Notice” has the meaning given that term in Section 2.5(b).
     “O-N Minerals” has the meaning given that term in the preamble of this
Agreement.
     “Owned Real Property” has the meaning given that term in Section 3.8(a).
     “O-N Lime” has the meaning given that term in the preamble of this
Agreement
     “OPDES” has the meaning given that term in Section 6.12.
     “Parent” has the meaning given that term in the preamble of this Agreement.
     “Party” means each of Sellers and Buyer.
     “Patents” has the meaning given that term in the definition of
“Intellectual Property Assets” above.
     “Peg Amount” means Three Million Four Hundred Thousand Dollars
($3,400,000).
     “Permits” has the meaning given that term in Section 3.11(b).
     “Permitted Encumbrances” means (i) liens securing obligations of less than
$10,000 (ii) liens for Taxes and other governmental charges and assessments that
are not yet due and payable, (iii) liens of landlords and of carriers,
warehousemen, mechanics, materialmen and repairmen

 

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and other similar liens arising in the ordinary course of business for sums not
yet due and payable, (iv) liens reflected in the Financial Statements, (v) liens
for purchase money security interests, (vi) other liens on, or imperfections of
title with respect to, property that are not material in amount and do not
materially detract from the value of or materially impair the existing use of
the property affected by such lien or imperfection and (vi) Encumbrances set
forth on Schedule 1.1B.
     “Person” means and includes a natural person, a corporation, an
association, a partnership, a limited liability company, a trust, a joint
venture, an unincorporated organization or a Governmental Authority.
     “Pre-Closing Period” has the meaning given that term in Section 3.7(c).
     “Proceedings” has the meaning given that term in Section 8.2(a).
     “Purchase Price” has the meaning given that term in Section 2.3.
     “Related Party” means (i) any Affiliate of a Party or (ii) any officer or
director of a Party or of any Person identified in clause (i) preceding.
     “Remedial Action” has the meaning given that term in Section 8.3(g)(i).
     “Reserved Names” has the meaning given that term in Section 6.1.
     “Sale Shares” has the meaning given that term in the Introductory
Statements of this Agreement.
     “Schedules” means the disclosure schedules attached to this Agreement.
     “Section 338(h)(10) Election” has the meaning given that term in
Section 6.2(g).
     “Securities Act” has the meaning given that term in Section 4.6.
     “SEC” has the meaning given that term in Section 6.9(a).
     “Sellers” has the meaning given that term in the preamble of this
Agreement.
     “Sellers’ 401(k) Plan” means Oglebay Norton Company Investment Savings and
Stock Ownership Plan.
     “Sellers’ Employee Benefit Plan” means any (i) “employee benefit plan,”
within the meaning of Section 3(3) of ERISA or (ii) stock option, stock
purchase, restricted stock, profit sharing, pension, retirement, deferred
compensation, incentive, fringe benefit, severance, medical, life, disability,
accident, salary continuation, sick pay, sick leave, supplemental retirement and
unemployment benefit plans or programs (whether or not insured), that has been
established, maintained, sponsored or contributed to by Sellers or the Company
for the benefit of any active, retired or former employee or director of the
Company or for which the Company

 

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otherwise may have any liability; provided, that “Sellers’ Employee Benefit
Plan” shall not include any Multiemployer Plan.
     “Sellers’ Knowledge” means the Knowledge of Karl Everett, Joseph Ferrell,
Thomas Giordani, Kurt Klutz, James Underwood, Richard Calhoun and Wilber Ferris.
     “Settlement Date” means the date on which the Closing Balance Sheet is
finally determined pursuant to Section 2.5(b).
     “Straddle Period” has the meaning given that term in Section 3.7(c).
     “Tax” means taxes of any kind, levies or other like assessments, customs,
duties, imposts, charges or fees, including income, gross receipts, ad valorem,
value added, excise, real or personal property, asset, sales, use, license,
payroll, transaction, capital, net worth and franchise taxes, estimated taxes,
withholding, employment, social security, workers compensation, utility,
severance, production, unemployment compensation, occupation, premium, windfall
profits, transfer and gains taxes or other governmental taxes imposed by or
payable to any Governmental Authority including all applicable penalties and
interest.
     “Tax Matters” has the meaning given that term in Section 6.2(c)(i).
     “Tax Return” means any return, declaration, form, report, claim for refund,
or information return or statement relating to any Tax, including any schedule
or attachment thereto, and including any amendment thereof.
     “Territory” means the states of Arkansas, Kansas, Louisiana, Missouri,
Oklahoma and Texas.
     “Title Company” has the meaning given that term in Section 2.4(h).
     “Title Policy” has the meaning given that term in Section 2.4(h).
     “Trapezoid Parcel” means the parcel of land more particularly described in
Schedule 3.8(e) as to which the Company does not possess legal title on the date
hereof.
     “WARN Act” means the Federal Workers’ Adjustment and Retraining
Notification Act.
     “Working Capital Adjustment Amount” has the meaning given that term in
Section 2.5(d).
     1.2 Construction.
          (a) Unless the context otherwise requires, as used in this Agreement:
(i) an accounting term not otherwise defined herein has the meaning currently
ascribed to it in accordance with GAAP; (ii) “or” is not exclusive; (iii)
“including” and its variants mean “including, without limitation” and its
variants; (iv) words defined in the singular have the parallel meaning in the
plural and vice versa; (v) references to “written” or “in writing” include in
electronic form; (vi) the terms “hereof”, “herein”, “hereby”, “hereto”, and
derivative or similar

 

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words refer to this entire Agreement, including the Schedules hereto; and
(vii) all Sections, Articles and Schedules referred to herein are, respectively,
Sections and Articles of, and Schedules to, this Agreement.
          (b) Headings as to the contents of particular Articles and Sections
are for convenience only and are in no way to be construed as part of this
Agreement.
          (c) Any reference to “days” means calendar days unless Business Days
are expressly specified.
          (d) A reference to any Person includes such Person’s successors and
permitted assigns.
          (e) The Schedules to this Agreement are incorporated herein by
reference and made a part hereof for all purposes.
ARTICLE II
THE SALE AND PURCHASE
     2.1 Closing. Subject to the satisfaction or waiver of all of the conditions
set forth in Article VII, the closing of the purchase and sale of the Sale
Shares contemplated hereby (the “Closing”) shall take place at the offices of
Thompson Hine llp, One Chase Manhattan Plaza, 58th Floor, New York, New York
10005-1401, at 10:00 a.m. local time on the date of this Agreement, (the
“Closing Date”).
     2.2 Sale and Purchase of Sale Shares. Upon the terms and subject to the
conditions of this Agreement and in consideration of the Purchase Price, at the
Closing, O-N Lime hereby sells, assigns, transfers and delivers to Buyer (such
sale, assignment, transfer and delivery, the “Company Share Transfer”), and
Buyer hereby purchases and takes delivery of the Sale Shares, free and clear of
all Encumbrances. The certificate representing the Sale Shares has been duly
endorsed or accompanied by a stock power duly endorsed by O-N Lime for transfer
to Buyer.
     2.3 Purchase Price. The aggregate consideration hereunder paid by Buyer to
O-N Lime with respect to the Sale Shares (the “Purchase Price”) is (a) Fourteen
Million Dollars ($14,000,000) plus or minus (b) the Working Capital Adjustment
Amount. The Purchase Price is being paid as provided in Section 2.4(a) and (g)
and 2.5(d).
     2.4 Closing Matters. At the Closing:
          (a) Buyer shall pay the difference between (i) that part of the
Purchase Price stated in Section 2.3(a), and (ii) the sum of (A) the Earnest
Money Deposit and (B) the Escrow Amount, by wire transfer of immediately
available funds to an account designated by O-N Lime.
          (b) Sellers shall apply the Earnest Money Deposit against the Buyer’s
obligation to pay the Purchase Price.

 

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          (c) Sellers shall pay and discharge, or cause to be paid and
discharged, all outstanding Indebtedness of the Company by wire transfer of
immediately available funds.
          (d) Sellers shall deliver or cause to be delivered to Buyer pay-off
letters, releases and lien discharges (or agreements therefor) reasonably
satisfactory to Buyer from each creditor to whom any Indebtedness is owed by the
Company.
          (e) O-N Lime shall deliver and cause to be delivered the Sale Shares.
          (f) Sellers shall cause to be delivered an opinion of counsel for
Sellers in form and substance as set forth in Exhibit A, hereto.
          (g) Buyer and Sellers will enter into an escrow agreement in the form
of Exhibit B (the “Escrow Agreement”) with an escrow amount of Eight Hundred
Thousand Dollars ($800,000) (the “Escrow Amount”) and The Bank of New York (the
“Escrow Agent”) as escrow agent and Buyer shall pay the Escrow Amount to the
Escrow Agent.
          (h) Sellers shall, at their expense, deliver to Buyer:
                         (i) Endorsements to Owner’s Policy of Title Insurance
#37 0080 106 4499, dated December 22, 1995, issued by Chicago Title Insurance
Company (the “Title Company”), insuring the interest of Global Stone St. Clair
Inc., a Delaware corporation, in the described property (the “Title Policy”),
which shall (i) change the effective date of the Title Policy to Closing Date
and reflect only Permitted Exceptions, if any, and (ii) contain the agreement of
the Title Company not to assert the provisions of Exclusions from Coverage 3(a),
(b) or (e) (commonly called a Non-Imputation Endorsement); and
                         (ii) An Aerial Photographic Overlay Survey showing the
legal descriptions of the Owned Real Property and the Leased Real Property
superimposed thereon, dated no earlier than December 15, 2005, prepared by Smith
Roberts Baldischwiler, LLC, of Oklahoma City, Oklahoma.
          (i) Sellers shall deliver to Buyer executed resignations of all
officers and directors of the Company.
          (j) The Parties shall deliver to each other the documents required to
be delivered at the Closing pursuant to this Agreement.
     2.5 Purchase Price Working Capital Adjustment. Following the Closing Date,
the Purchase Price shall be adjusted, if at all, as set forth below:
     (a) Sellers shall prepare and deliver to Buyer, within forty-five (45) days
after the Closing Date, an unaudited balance sheet of the Company as of the
close of business on the Closing Date (the “Closing Balance Sheet”) which shall
set forth a calculation of the Closing Net Working Capital. The Closing Balance
Sheet and the calculation of the Closing Net Working Capital shall be prepared
in a manner consistent with the preparation of the Balance Sheet and Schedule
1.1A. During such forty-five (45) day period, Sellers shall provide Buyer with
reasonable access to their books, records and personnel. Seller shall thereafter
provide to

 

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Buyer such supporting work papers or other supporting information relating to
the Closing Balance Sheet and the calculation of the Closing Net Working Capital
as may be reasonably requested by Buyer.
          (b) On or prior to the 30th day following Sellers’ delivery of the
Closing Balance Sheet, Buyer may give Sellers a written notice stating in
reasonable detail Buyer’s objections (an “Objection Notice”) to the Closing
Balance Sheet. Any Objection Notice shall specify in reasonable detail the
dollar amount of any objection and the basis therefor. Any determination set
forth on the Closing Balance Sheet which is not specifically objected to in the
Objection Notice shall be deemed accepted and shall be final and binding upon
the parties upon delivery of the Objection Notice. If Buyer does not give
Sellers an Objection Notice within such 30-day period, then the Closing Balance
Sheet shall be final and binding upon the Parties for purposes of calculating
the Purchase Price under this Agreement.
          (c) Following Sellers’ receipt of any Objection Notice, Sellers and
Buyer shall attempt to negotiate in good faith to resolve such dispute. In the
event that Sellers and Buyer fail to agree on any of Buyer’s proposed
adjustments set forth in the Objection Notice within thirty (30) days after
Sellers receive the Objection Notice, Sellers and Buyer agree that a mutually
acceptable accounting firm of nationally recognized standing (the “Independent
Auditors”) shall, within the 30-day period immediately following referral of the
Closing Balance Sheet and/or the calculation of the Closing Net Working Capital
to the Independent Auditors, make the final determination thereon in accordance
with the terms of this Agreement. Sellers and Buyer each shall provide the
Independent Auditors with their respective determinations of the Closing Net
Working Capital. The Independent Auditors shall make an independent
determination of the Closing Net Working Capital that, assuming compliance with
the previous clause, shall be final and binding on Sellers and Buyer if such
independent determination shall be within the range proposed by Sellers and
Buyer in the Closing Net Working Capital and the Objection Notice. If the
Independent Auditors’ determination of any adjustment is outside of the range
proposed by Sellers and Buyer in the Closing Net Working Capital and the
Objection Notice, then the Closing Net Working Capital proposed by the Party
whose adjustment was closer to that of the Independent Auditors shall be final
and binding on Sellers and Buyer. The fees, costs and expenses of the
Independent Auditors shall be paid equally by the Parties.
          (d) Promptly after the Closing Balance Sheet and the calculation of
the Net Working Capital are finally determined and become final and binding on
the Parties under this Section 2.5, Sellers and Buyer or the Independent
Auditors (if applicable) shall recalculate the Purchase Price by giving effect
to such final and binding determinations. To the extent the Closing Net Working
Capital exceeds the Peg Amount, Buyer shall pay to O-N Lime an amount equal to
the excess. To the extent the Closing Net Working Capital is less than the Peg
Amount, O-N Lime shall pay to Buyer an amount equal to the shortfall. Any such
payment shall be made by wire transfer of immediately available funds to an
account designated by the Party entitled to payment within two (2) Business Days
following the Settlement Date. The foregoing payment shall be referred to herein
as the “Working Capital Adjustment Amount”.

 

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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
     Sellers, jointly and severally, represent and warrant to Buyer, the
following representations and warranties, which Buyer has relied upon.
     3.1 Organization and Authority. Sellers are corporations duly organized,
validly existing and in good standing under the Laws of their respective states
of incorporation. Each Seller has all corporate power and authority to enter
into this Agreement and to perform its obligations hereunder. The Company is
duly organized, validly existing and in good standing under the Laws of the
State of Delaware and has all corporate power and authority to own, operate or
lease its properties and carry on the Business as now conducted. The Company is
duly qualified to do business and is in good standing in the State of Oklahoma.
The Company is duly qualified to do business and is in good standing in each
other jurisdiction in which the character of the properties owned, operated or
leased by it or the nature of the activities conducted by it make such
qualification and good standing necessary, except where the failure to be so
qualified or in good standing could not reasonably be expected to have a
Material Adverse Effect.
     3.2 Authorization; Enforceability. This Agreement has been duly executed
and delivered by and constitutes the legal, valid and binding obligation of each
Seller, enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and other Laws of general
application relating to or affecting creditors’ rights and to general principles
of equity. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly authorized by
all necessary corporate proceedings on the part of each Seller.
     3.3 Shares; Capitalization.
          (a) Sale Shares. The authorized capital stock of the Company and the
number of shares of capital stock issued, outstanding and held in treasury are
listed on Schedule 3.3. All of the Sale Shares are owned of record and
beneficially by O-N Lime and are free and clear of any and all Encumbrances. All
of the Sale Shares have been duly authorized and validly issued and are fully
paid and nonassessable. The Company has no outstanding options, warrants, rights
or subscriptions, nor has it entered into or incurred any other binding
commitment or obligation which remains enforceable to issue or sell any shares
of its capital stock, or any securities or obligations convertible into or
exchangeable for any shares of its capital stock, nor has it granted to any
Person any right which is outstanding to subscribe for or acquire from it any
shares of its capital stock, and no such securities, obligations or rights are
outstanding.
          (b) Transfer of Title. Upon delivery of the Sale Shares hereunder,
Buyer shall acquire title thereto, free and clear of any and all Encumbrances.

 

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     3.4 No Violation of Laws or Agreements; Consents.
          (a) No Violation of Laws or Agreements. Except as set forth on
Schedule 3.4(a), neither the execution and delivery by Sellers of this
Agreement, the consummation of the transactions contemplated hereby, nor the
compliance with or fulfillment of the terms, conditions or provisions hereof by
Sellers:
               (i) violates any provision of the Governing Documents of a Seller
or the Company;
               (ii) conflicts with, breaches, constitutes a default or an event
of default under any of the terms of, results in the termination of, accelerates
the maturity of or creates any Encumbrance on the Sale Shares or any asset or
property of the Company or under any Applicable Contract;
               (iii) violates any Law to which the Company is subject or by
which any asset of the Company is bound or affected;
               (iv) will cause the Company to become subject to, or to become
liable for, the payment of any Tax that it is not subject to on the date hereof;
               (v) will contravene, conflict with or result in a violation or
breach of any provision of, or give any Person the right to declare a default or
exercise any remedy under, or to accelerate to maturity a performance of, or to
cancel, terminate, or modify any Applicable Contract; and
               (vi) neither Sellers nor the Company are required to give notice
to or to obtain any consent from any Person or Governmental Authority in
connection with the execution and delivery of this Agreement or the consummation
or performance of the terms hereof.
          (b) Consents. Except as set forth on Schedule 3.4(b), no material
consent, approval or authorization of, or registration or filing with, any
Person is required in connection with the execution or delivery by each Seller
of this Agreement or the consummation by each Seller of the transactions
contemplated hereby.
3.5 Financial Statements; Books and Records.
          (a) The balance sheets of the Company as of December 31, 2003 and 2004
and the income statements of the Company for the two one year periods ended on
such dates and the unaudited balance sheet and income statement for the Company
as of June 30, 2005 (collectively, the “Financial Statements”) have been
delivered to Buyer and are attached hereto as Schedule 3.5. The Financial
Statements (i) have been prepared in accordance with GAAP, except as set forth
on Schedule 3.5, and (ii) present fairly in all material respects the financial
condition and results of operations, changes in stockholders’ equity, and cash
flow of the Company at the dates and for the relevant periods indicated. The
unaudited balance sheet of the Company as of June 30, 2005 included in the
Financial Statements shall be referred to herein as the “Balance Sheet,” and
June 30, 2005 shall be referred to herein as the “Balance Sheet Date”. Except as
set forth in Schedule 3.5, the Company has no liability required to be disclosed
in the

 

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Financial Statements except for liabilities reflected or reserved against in the
Balance Sheet and current liabilities incurred in the ordinary course of
business of the Company since the Balance Sheet Date.
          (b) The books of account, minute books, stock record books, and other
records of the Company, all of which have been made available to Buyer, are
complete and correct and have been maintained in accordance with sound business
practices, including the maintenance of an adequate system of internal controls.
The minute books of the Company contain accurate and complete records of all
meetings held of, and corporate action taken by, the stockholders, the Board of
Directors, and committees of the Board of Directors of the Company. At the
Closing, all of those books and records will be placed in the possession of the
Company. Buyer agrees that Sellers shall have reasonable access thereto after
the Closing. There are no minutes for meetings of the Board of Directors or the
stockholders of the Company that are not included in the minute books of the
Company.
     3.6 No Changes. Except as set forth on Schedule 3.6, since the Balance
Sheet Date there has been no material adverse change in the business,
operations, properties, assets, contractual relationships or condition of the
Company, the Company has conducted the Business only in the ordinary course and
there has not been:
          (a) any change in the financial condition, assets or liabilities of
the Company other than in the ordinary course of business;
          (b) any material damage or destruction to or loss of any asset of the
Company, whether or not covered by insurance;
          (c) any commitment by the Company to provide benefits payable to or
for the benefit of any employee of the Company upon the occurrence of a change
in control or to pay a deal bonus to any employee of the Company;
          (d) any material increase in the salary, wage or bonus payable by the
Company to any employee of the Company;
          (e) any change in any method of accounting;
          (f) any sale or other disposition of assets or operations identifiable
with a product line of the Company, or any acquisition of another business,
whether through the purchase of assets, stock or otherwise, except in the
ordinary course of business;
          (g) any sale, lease or other disposition of any material assets of the
Company (other than inventory in the ordinary course of business), or any
condemnation or expropriation or other taking of any assets of the Company, or
known threat thereof, by any Governmental Authority;
          (h) any issuance, sale or disposition of capital stock or any other
securities or grant of any option, warrant or other right to subscribe for or
purchase any capital stock or any other securities of the Company;

 

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          (i) any declaration or payment of any dividend or distribution with
respect to the capital stock of the Company or any redemption, purchase or
acquisition of the capital stock of the Company;
          (j) any write-offs, write-downs or write-ups of the value of any of
the inventory or other assets of the Company;
          (k) any mortgage or pledge of any material assets of the Company,
except for Permitted Encumbrances or arising in the ordinary course of business;
          (l) any creation or assumption of any Indebtedness, except for
Indebtedness incurred in the ordinary course of business or pursuant to
Contracts disclosed on Schedule 3.6, entered into in the ordinary course of
business;
          (m) any guarantee of any liability (whether directly, contingently or
otherwise) for the obligations of any other Person except in the ordinary course
of business and except for the endorsement of negotiable instruments by the
Company in the ordinary course of business;
          (n) any Tax election made, any Tax liability settled or compromised,
or any waiver or extension of the statute of limitations with respect to any
Taxes; or
          (o) any agreement or commitment to do any of the foregoing.
     3.7 Taxes.
          (a) Affiliated Group. The Company is a member of an “affiliated group”
(the “Affiliated Group”) within the meaning of Section 1504(a) of the Code, and
Oglebay Norton Company is the “common parent” of the Affiliated Group.
          (b) Liabilities. Except as set forth in Schedule 3.7, each of the
Company or one or more of the Sellers, on the Company’s behalf, has:
               (i) duly and timely filed with the appropriate federal, state,
local or other taxing authorities all Tax Returns required to be filed by or on
behalf of the Company, and
               (ii) duly and timely paid all Taxes with respect to the Company
whether or not such Taxes are shown or required to be shown to be due on a Tax
Return. Any Tax Return or Taxes for which an extension to file or pay has been
obtained will be deemed to be timely if filed and paid by the date provided by
any such extension. Schedule 3.7 sets forth all Tax Returns for which an
extension to file or pay is currently outstanding.
          (c) Straddle Periods. Except as set forth on Schedule 3.7 and except
for Income Taxes, all Taxes and Tax liabilities of the Company (x) for all Tax
periods ending on or prior to the Closing Date or (y) with respect to any
taxable year or period beginning before and ending after the Closing Date (a
“Straddle Period”), the portion of such Straddle Period ending on and including
the Closing Date (each such year or period or portion thereof ending on or
before the Closing Date, a “Pre-Closing Period”) to the extent due and payable
have been paid or are being contested in good faith.

 

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          (d) Audits; Examinations. Except as set forth on Schedule 3.7:
               (i) (A) no audit or other examination of Taxes is currently
pending with respect to the Affiliated Group or the Company, or to Sellers’
Knowledge, threatened against the Company or the Affiliated Group; and (B) no
such audit or examination has been conducted with respect to which there is any
outstanding Tax liability of the Company, including the Taxes of any Person for
which the Company may be liable under Treasury Regulation §1.1502-6 (or any
similar provision of state, local or foreign law), as a transferee or successor,
by Contract or otherwise;
               (ii) the Company has not received any written notice of any
state, local or foreign income Tax deficiency outstanding, proposed or assessed
against or allocable to it; and
               (iii) as of the Closing Date, no statute of limitations will
remain open as a result of its having been waived or extended with respect to
the payment or collection of Taxes of the Affiliated Group or the Company.
          (e) Agreements. Except as disclosed in Schedule 3.7, there are no tax
sharing, allocation, indemnification or similar agreements in effect as between
the Company and any other Person (except for customary agreements to indemnify
lenders or security holders in respect of Taxes).
          (f) Consolidated Returns. Except with respect to the Affiliated Group
or as set forth on Schedule 3.7, the Company has not been included (nor has it
been required to be included) in any “consolidated”, “unitary” or “combined” Tax
Return provided for under any Law with respect to Taxes for which the Company
may be liable for any taxable period for which the statute of limitations has
not expired.
          (g) All Taxes that the Company is required by law to withhold or
collect, including without limitation, sales and use taxes, and amounts required
to be withheld for Taxes of employees, have been duly withheld or collected and,
to the extent required, have been paid over to the proper Governmental Authority
or are held in separate bank accounts for such purpose.
          (h) The Company has not received written notice of a claim made by any
taxing authority in a jurisdiction where it does not file Tax Returns that it is
or may be subject to Tax in such jurisdiction and, to the best knowledge of the
Company, it is not required to file Tax Returns in any jurisdiction other than
those set forth in Schedule 3.7.
          (i) In the twenty four (24) months preceding the Closing Date, there
have been no Tax rulings, requests for rulings or closing agreements with any
taxing authority with respect to the Company other than those set forth on
Schedule 3.7.
          (j) Neither the Company nor the Affiliated Group has deferred income
reportable for a current Tax period (or portion thereof) or a period (or portion
thereof) beginning after the Closing Date but that is attributable to a
transaction (e.g., an installment sale) occurring in a period (or portion
thereof) ending on or prior to the Closing Date.

 

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          (k) The Company has not distributed the stock of any corporation in a
transaction satisfying the requirements of Section 355 of the Code since
April 16, 1997. No stock of the Company has been distributed in a transaction
satisfying the requirements of Section 355 of the Code since April 16, 1997.
          (l) The Affiliated Group has disclosed on its federal income Tax
Returns all positions taken therein that would reasonably be expected to result
in any “substantial understatement of federal income tax” within the meaning of
Section 6662 of the Code.
          (m) No member of the Affiliated Group, including the Company, has
engaged in any “reportable transaction” within the meaning of Treasury
Regulation section 1.6011-4(b)(2).
          (n) The capital stock of the Company does not constitute a U.S. real
property interest within the meaning of Section 897 of the Code.
          (o) There are no Encumbrances for Taxes upon any of the assets of the
Company other than Permitted Encumbrances.
          (p) No power of attorney with respect to any matter relating to Taxes
of the Company will be in effect after the Closing Date other than those set
forth on Schedule 3.7.
          (q) The Company has not made any payments, is not obligated to make
any payments, or is a party to any Contract that would reasonably be expected to
obligate it to make any payments that will not be deductible by reason of
Section 162(m) or 280G of the Code.
          (r) The charges, accruals and reserves for Taxes for all Tax periods
ending on or before the date of this Agreement are adequate and are at least
equal to the Company’s liabilities for Taxes.
     3.8 Owned and Leased Property; Condition of Assets.
          (a) Owned Real Property. Schedule 3.8(a) sets forth a complete and
accurate list of all real property owned as of the date hereof by the Company
(the “Owned Real Property”). Except as set forth on Schedule 3.8(a), the Company
has good and marketable title to its Owned Real Property, free and clear of all
Encumbrances, except for Permitted Encumbrances.
          (b) Leases of Real Property. Schedule 3.8(b) sets forth a complete and
accurate list of all leases of real property to which the Company is a party on
the date hereof. Except as set forth on Schedule 3.8(b), the Company, as lessee
under each lease set forth on Schedule 3.8(b), is in possession of the real
property covered thereby, and (1) each such lease is (A) a valid and binding
obligation of the Company and (B) to Sellers’ Knowledge, a valid and binding
obligation of each other party thereto, and (2) (A) the Company is not in
material breach thereof or material default thereunder (and to Sellers’
Knowledge, no event or circumstance has occurred that with notice or lapse of
time or both, would constitute such an event of default) and (B) to Sellers’
Knowledge, no other party to any such lease is in material breach thereof or
material default thereunder.

 

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          (c) Personal Property. The Company owns or holds under valid leases
all material plant, machinery, equipment and other tangible personal property
used for the conduct of the Business, free and clear of all Encumbrances of
Sellers other than Permitted Encumbrances.
          (d) Shared Facilities. There is no office or other facility shared by
the Company with Sellers or any of Sellers’ Affiliates, except as set forth on
Schedule 3.8(d). Except for any such shared facilities, neither Sellers nor any
of Sellers’ Affiliates owns any material assets used in the Business.
          (e) Rights in the Assets. Except as set forth on Schedule 3.8(e), the
Company owns or controls or has valid contractual rights to use all of the
assets required to enable it to collectively operate the Business after the
Closing Date in substantially the same manner as the Business is presently
conducted.
     3.9 Condition of Assets. Except as set forth on Schedule 3.9, the
buildings, plant, structures, and equipment of the Company are structurally
sound, are in reasonable and customary operating condition and repair, fair wear
and tear and ordinary and routine maintenance excepted, and are adequate for the
uses to which they are being put. The nature and extent of the buildings, plant,
structures, and equipment of the Company are sufficient for the continued
conduct of the Company’s Business after closing in substantially the same manner
as immediately before.
3.10 No Pending or Threatened Litigation. Except as set forth on Schedule 3.10,
          (a) no Litigation is pending or, to Sellers’ Knowledge, threatened
against the Company;
          (b) there is no outstanding judgment, decree, or order of any
Governmental Authority against or affecting the Company; and
          (c) since the date the Company became an Affiliate of Parent and, to
Sellers’ Knowledge, prior to that date, the Company has not been given written
notice of, served in connection with or, named as a defendant in, any civil
lawsuit in which any plaintiff asserted any claim for injury or damage allegedly
caused by exposure to asbestos or silica.
     3.11 Compliance With Law; Permits.
          (a) Compliance With Law. Except (i) as set forth on Schedule 3.11(a)
and (ii) with regard to environmental matters (which the Parties agree shall be
dealt with solely pursuant to Section 3.15), the Company complies in all
material respects with all applicable Laws.
          (b) Permits. Except (i) as set forth on Schedule 3.11(b) and (ii) with
regard to environmental matters (which the Parties agree shall be dealt with
solely pursuant to Section 3.15), the Company owns, holds, possesses or has
applied for all governmental licenses, permits, and other authorizations
(collectively, “Permits”) that are required under applicable Laws to entitle it
to own or lease, operate and use its assets and to carry on and conduct the
Business as

 

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currently conducted by it, and all such Permits are valid and in effect, except
in any such case where the failure to own, hold, possess or apply for such
Permits, or maintain them as valid and in effect, would not have a Material
Adverse Effect.
     3.12 Intellectual Property Rights.
          (a) Intellectual Property Agreements. Schedule 3.12(a) sets forth a
complete and accurate list of all material agreements relating to the
Intellectual Property Assets to which the Company is a party on the date hereof
or by which the Company is bound on the date hereof, except for (i) any license
implied by the sale of a product and (ii) perpetual, paid-up licenses for
software programs with an individual value of less than $10,000 per license
under which the Company is the licensee. There are no outstanding or, to
Sellers’ Knowledge, threatened disputes with respect to any such agreement. No
such agreement permits termination by the other party in the event of a change
in the control of Seller.
          (b) Rights in Intellectual Property.
               (i) In General. Except as set forth on Schedule 3.12(b)(i),
neither Sellers nor any of their Affiliates, nor, to Sellers’ Knowledge, any
other Person owns or controls any Intellectual Property Assets that are material
to the operation of the Business as presently conducted by the Company. Except
as set forth on Schedule 3.12(b)(i), the Company is the owner of all right,
title and interest in, or the licensee of, or otherwise has the right to use,
without payment to a third party, the Intellectual Property Assets, free and
clear of all Encumbrances (other than Permitted Encumbrances), except for those
payments expressly set forth in the relevant licenses.
               (ii) Patents. Schedule 3.12(b)(ii) sets forth a complete and
accurate list of all Patents. Except as set forth on Schedule 3.12(b)(ii), no
Patent has been or is now involved in any interference, reissue or reexamination
proceeding. Except as set forth on Schedule 3.12(b)(ii), to Sellers’ Knowledge,
the Business, as conducted by Seller, does not infringe upon or misappropriate
the Intellectual Property Rights of any third party.
               (iii) Marks. Schedule 3.12(b)(iii) sets forth a complete and
accurate list of all Marks. All Marks that have been registered with the United
States Patent and Trademark Office are currently in compliance with all formal
legal requirements (including the timely post-registration filing of affidavits
of use and renewal applications). Except as set forth on Schedule 3.12(b)(iii),
no Mark has been or is now involved in any opposition or cancellation
proceeding, and, to Sellers’ Knowledge, no such action is threatened with
respect to any of the Marks. Except as set forth on Schedule 3.12(b)(iii), to
Sellers’ Knowledge, no Mark is being infringed by any third party. To Sellers’
Knowledge, none of the Marks used by the Company infringes any trade name,
trademark or service mark of any third party
     3.13 Labor Matters. To Sellers’ Knowledge, the Company is in material
compliance with all Laws applicable to it respecting employment and employment
practices, terms and conditions of employment and wages and hours. Except as set
forth on Schedule 3.13, there is no collective bargaining agreement which is
binding on the Company, and to Sellers’ Knowledge, there is no union organizing
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the Company’s employees. There are no strikes, slowdowns or work stoppages
pending between the Company and its employees. The Company has not engaged in
any unfair labor practices as defined in the National Labor Relations Act and
there is no unfair labor practice charge or complaint against the Company
pending or, to Sellers’ Knowledge, threatened before the National Relations
Board or any similar agency.
     3.14 Employees; Employee Related Agreements and Plans; ERISA.
          (a) List of Plans. Set forth on Schedule 3.14(a) is an accurate and
complete list of all Sellers’ Employee Benefit Plans.
          (b) Status of Plans. Each Sellers’ Employee Benefit Plan (including
any related trust) complies in form and is operating in accordance with the
requirements of all applicable Laws, including ERISA and the Code, and each
Sellers’ Employee Benefit Plan (in each case, including any related trust) has
been maintained and operated in substantial compliance with its terms. Except as
set forth on Schedule 3.14(b), no complete or partial termination (described in
Section 411(d)(3) of the Code) of any Sellers’ Employee Benefit Plan has
occurred or is expected to occur. No Sellers’ Employee Benefit Plan is a plan
described in Section 4063(a) of ERISA.
          (c) Liabilities.
               (i) Schedule 3.14(c) identifies each Sellers’ Employee Benefit
Plan that constitutes a “defined benefit plan” as defined in Section 3(35) of
ERISA. Neither the Company nor any ERISA Affiliate thereof has incurred any
liability under Title IV of ERISA, including, without limitation, arising in
connection with the termination of any such defined benefit plan of the Company
or any ERISA Affiliate thereof currently or previously covered by Title IV of
ERISA, and the Pension Benefit Guaranty Corporation has not instituted
proceedings to terminate any such defined benefit plan nor do any conditions
exist that present a risk of such occurrence. With respect to each Sellers’
Employee Benefit Plan subject to Title IV of ERISA, Sellers have made available
to Buyer the most recent actuarial report showing the present value of accrued
benefits under such plan, based upon the actuarial assumptions used for funding
purposes with respect to such plan. No Sellers’ Employee Benefit Plan or any
trust established thereunder has incurred any “accumulated funding deficiency”
(as defined in Section 302 of ERISA and Section 412 of the Code), whether or not
waived, as of the last day of the most recent fiscal year of each such plan
ended prior to the date hereof; and all contributions required to be made with
respect thereto (whether pursuant to the terms of any Sellers’ Employee Benefit
Plan or otherwise) on or prior to the date hereof have been timely made.
               (ii) Each Sellers’ Employee Benefit Plan which is a “group health
plan” (as such term is defined in Section 5000(b)(1) of the Code or
Section 607(1) of ERISA) has been administered and operated in substantial
compliance with the applicable requirements of Part 6 of Subtitle B of Title I
of ERISA and Section 4980B of the Code (“COBRA”), and the Company is not subject
to any liability, including additional contributions, fines, taxes, penalties or
loss of tax deduction as a result of the administration and operation of any
such Sellers’ Employee Benefit Plan. No Sellers’ Employee Benefit Plan which is
such a group health plan is a “multiple employer welfare arrangement,” within
the meaning of Section 3(40) of ERISA.

 

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Each Sellers’ Employee Benefit Plan that is intended to meet the requirements of
Section 125 of the Code meets such requirements in all material respects, and
each program of benefits for which employee contributions are provided pursuant
to elections under any Sellers’ Employee Benefit Plan meets the requirements of
the Code applicable thereto.
               (iii) Except as disclosed on Schedule 3.14(c), no Sellers’
Employee Benefit Plan (other than a plan qualified under Section 401(a) of the
Code) provides for post-employment or retiree health, life insurance and/or
other welfare benefits, and the Company has no obligation under any Sellers’
Employee Benefit Plan to provide any such benefits to any retired or former
employees or active employees following such employees’ retirement or
termination of service, except as required by COBRA or any similar state law.
The Company has no unfunded liabilities pursuant to any Sellers’ Employee
Benefit Plan that is not intended to be qualified under Section 401(a) of the
Code.
               (iv) The Company has not incurred any liability or civil penalty
under Section 409, 502(i) or 502(l) of ERISA or liability for any tax or excise
tax arising under Chapter 43 or Section 6652 of the Code with respect to any
Sellers’ Employee Benefit Plan and no event has occurred and no condition or
circumstance exists that could reasonably be expected to give rise to any such
liability with respect to any Sellers’ Employee Benefit Plan.
               (v) There are no actions, suits or claims pending or, to Sellers’
Knowledge, threatened against or with respect to any Sellers’ Employee Benefit
Plan or the assets of any such plan (other than routine claims for benefits and
appeals of denied routine claims). No civil or criminal action brought pursuant
to the provisions of Title I, Subtitle B, Part 5 of ERISA is pending or, to
Sellers’ Knowledge, threatened against the Company or, to Sellers’ Knowledge,
any fiduciary of any Sellers’ Employee Benefit Plan with respect to any Sellers’
Employee Benefit Plan. Sellers have not received any notice that any Sellers’
Employee Benefit Plan or any fiduciary thereof is presently the direct or
indirect subject of an audit, investigation or examination by any Governmental
Authority.
               (vi) Except as shown on Schedule 3.14(c), the Company has no
liabilities (actual or contingent) with respect to any Sellers’ Employee Benefit
Plan.
          (d) Contributions. Except as set forth on Schedule 3.14(d), the
Company has made full and timely payment of all amounts required to be paid by
it as contributions or premiums to any Sellers’ Employee Benefit Plan.
          (e) Tax Qualification. Each Sellers’ Employee Benefit Plan intended to
be qualified under Section 401(a) of the Code, as currently in effect, is the
subject of a favorable determination letter issued by the Internal Revenue
Service and the remedial amendment period described in Section 401(b) of the
Code applicable to any amendment of any such Sellers’ Employee Benefit Plan
adopted after the date of such letter has not expired. Each trust established in
connection with any Sellers’ Employee Benefit Plan which is intended to be
exempt from federal income taxation under Section 501(a) of the Code, as
currently in effect, is the subject of a favorable determination letter issued
by the Internal Revenue Service and the remedial amendment period described in
Section 401(b) of the Code applicable to any amendment of any such Sellers’
Employee Benefit Plan adopted after the date of such letter has

 

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not expired. Since the date of each most recent determination letter referred to
in this paragraph (e), no event has occurred and no condition or circumstance
exists that has resulted or is reasonably likely to result in the revocation of
any such determination letter or that is reasonably likely to adversely affect
the qualified status of any such Sellers’ Employee Benefit Plan or the exempt
status of any such trust.
          (f) Employees.
               (i) Schedule 3.14(f)(i) lists (A) all employees of the Company as
of the date noted on such Schedule (which includes any leased employees,
contract employees and independent contract employees), (B) each such employee’s
current rate of compensation and (C) each such employee’s job title.
Schedule 3.14(f)(i) also indicates any such person who is absent from work due
to a work-related injury, military service or is on leave under the Family and
Medical Leave Act, or is receiving workers’ compensation or disability
compensation.
               (ii) Except as listed in Schedule 3.14(f)(ii): (A) all officers
and employees of the Company are employees at-will, terminable without penalty;
(B) there are no outstanding agreements or arrangements with respect to
severance payments; and (C) there are no agreements requiring the Company to
make any payment to any officer, director or employee of the Company as a result
of the transactions contemplated by this Agreement, including any “change in
control” provisions or agreements. Schedule 3.14(f)(ii) lists (x) all employees
of the Company that provide services to any other business conducted by Sellers
or their Affiliates and (y) all employees of the Company whose primary place of
employment is not at the principal facility of the Company.
               (iii) Sellers shall make all payments required under the
retention agreements and management incentive plan listed on
Schedule 3.14(f)(ii).
          (g) No Multiemployer Plans. Neither the Company nor any ERISA
Affiliate thereof contributes to or is obligated to contribute, to any
Multiemployer Plan or has contributed, or had an obligation to contribute, to
any such plan during the six-year period ending on the Closing Date.
     3.15 Environmental Matters. Except as provided on Schedule 3.15:
          (a) Compliance. (i) The Company is in compliance in all material
respects with all applicable Environmental Laws, (ii) there are no conditions on
the Owned Real Property or the Leased Real Property that require Remedial Action
under any Environmental Law, and (iii) the Company did not cause or contribute
to any conditions on any other property that the Company previously owned,
leased, or otherwise operated (as defined by Environmental Law)or on which the
Company disposed of or arranged for the disposal of Hazardous Substances or Lime
Kiln Dust, that require Remedial Action.
          (b) Claims. There are no pending or, to Sellers’ Knowledge, threatened
actions, suits, claims or proceedings by or before any Governmental Authority or
by any Person directed against the Company that pertain to (i) any Permits,
obligations or liabilities under any Environmental Law or (ii) violations of any
Environmental Law.

 

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          (c) Permits. All Permits required under all applicable Environmental
Laws to entitle the Company to operate and use its assets and to carry on and
conduct the Business as currently conducted by it have been duly obtained or
have been applied for and are listed on Schedule 3.15(c), and the Company has
been informed by the Bureau of Alcohol, Tobacco, and Firearms (“ATF”) that it is
authorized by the ATF to continue to possess, purchase, and use explosives in
the manner previously authorized pending re-issuance of the Company’s ATF
license/permit.
          (d) Notice. In the three (3) years preceding the date hereof, or if
unresolved, any previous years, the Company (i) has not received written notice
that any existing Permit that was obtained under any Environmental Law is to be
revoked or suspended by any Governmental Authority, (ii) has not received any
written notice of violation of any Environmental Law, or (iii) is not currently
operating or required to be operating under, or subject to, any outstanding
compliance order, decree or agreement pertaining to matters regulated by any
Environmental Law.
          (e) Listed Properties. None of the Owned Real Property, Leased Real
Property, or, to Sellers’ Knowledge, other property that the Company previously
owned, leased, or otherwise operated (as defined by Environmental Law) is listed
on the National Priorities List pursuant to the Comprehensive Environmental
Response, Compensation, and Liability Act, or on an equivalent state list of
sites required to be investigated or cleaned up under an Environmental Law.
          (f) Hazardous Substances. No Person has treated, stored, disposed of,
transported to, or released (as defined by Environmental Law) any Hazardous
Substances or Lime Kiln Dust on or under any Owned Real Property or Leased Real
Property except in material compliance with applicable Environmental Laws. The
Company has not treated, stored, disposed of, arranged for disposal of,
transported to, or released any Hazardous Substance or Lime Kiln Dust on or
under any property other than Owned Real Property or Leased Real Property except
in material compliance with then applicable Environmental Laws.
          (g) Required Notice or Consent. No notice or other filing, consent or
approval is required under any Environmental Law as a prerequisite to the
transfer of the Sale Shares to Buyer.
     3.16 Bank Accounts. Schedule 3.16 lists all bank, money market, savings and
similar accounts and safe deposit boxes of the Company, specifying the account
numbers and the authorized signatories or persons having access to such accounts
or safe deposit boxes.
     3.17 Material Contracts. Schedule 3.17 sets forth a list of all currently
effective Applicable Contracts of the Company, including those in the following
categories: (a) each Contract providing for a partnership, joint venture,
teaming or similar arrangement between the Company and any other person or
entity or entities to share in the profits or losses of any parties thereto,
(b) each Contract (i) under which the Company has created, incurred, assumed or
guaranteed Indebtedness or (ii) whereby the Company has an obligation to make an
investment in or loan to any Person, (c) each Contract for the purchase by the
Company of goods and/or services involving total annual payments in excess of
$10,000, (d) each Contract for the sale by

 

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the Company of goods and/or services involving total annual revenues in excess
of $10,000, (e) each Contract, containing covenants materially restricting or
limiting the freedom of the Company to engage in any line of business, (f) each
Contract that includes “take or pay”, “meet or release”, “most favored nations”
or similar pricing or delivery arrangements involving annual payments or
receipts in excess of $10,000, (g) each Contract that was entered into outside
the ordinary course of business, (h) each Contract that extends for a term more
than twelve (12) months from the Closing Date (unless terminable without payment
or penalty upon no more than thirty (30) days notice), or (i) each Contract
between the Company and an Affiliate that cannot be terminated by the Company on
thirty (30) days or less notice without penalty. Except as set forth on
Schedule 3.17, (1) each such Contract is (A) a valid and binding obligation of
the Company and (B) to Sellers’ Knowledge, a valid and binding obligation of
each other party thereto, and (2)(A) the Company is not in material breach
thereof or material default thereunder (and to Sellers’ Knowledge, no event or
circumstance has occurred that with notice or lapse of time or both, would
constitute an event of default) and (B) to Sellers’ Knowledge, no other party to
any such Contract is in material breach thereof or material default thereunder.
The Company has not agreed to indemnify any director, officer, or employee,
whether by agreement, charter provision, bylaw provision or resolution, against
any Loss or liability whatsoever, pursuant to which the Company may be liable to
any such individual.
     3.18 Brokers, Finders, Etc. Except as set forth on Schedule 3.18, neither
Sellers nor any Affiliate of Sellers has employed, nor is any of them subject to
any valid claim of liability or obligation to, any broker, finder, consultant or
other intermediary in connection with the transactions contemplated by this
Agreement who might be entitled to a fee or commission in connection therewith.
Sellers are solely responsible for any payment, fee or commission that may be
due to the parties listed on Schedule 3.18 in connection with the transactions
contemplated hereby.
     3.19 Insurance.
          (a) Policies. Schedule 3.19(a) sets forth a list of the policies of
insurance currently maintained by or on behalf of the Company or O-N Minerals
with respect to the products, properties, assets, operations and business of the
Company (including any policies of insurance maintained for purposes of
providing benefits such as workers’ compensation and employers’ liability
coverage). Subject to Section 6.4, all such policies are in full force and
effect. All premiums due on such policies have been paid and no notice of
cancellation or termination or intent to cancel has been received by Sellers or
the Company with respect to such policies.
          (b) Claims. Schedule 3.19(b) sets forth a list of all pending claims
(including with respect to insurance obtained but not currently maintained) and
the claims history for the Company during the three (3) years preceding the date
hereof.
          (c) Post-Closing Litigation and Claims Costs. Sellers’ general
liability insurance provider has not denied coverage for the litigation listed
on Schedule 3.10 and has taken up and, to Sellers’ Knowledge, will continue, the
defense of the two cases listed on such Schedule. Sellers workers compensation
insurance provider is providing coverage for the workers compensation claims
listed on Schedule 3.19(b) and, to Sellers’ Knowledge, will

 

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continue to do so. Except to the extent covered by accruals in current
liabilities for the calculation of Closing Net Working Capital, Sellers and
Buyer agree that any moneys reasonably required to be paid by the Company or the
Buyer after the Closing Date relating to the defense and/or settlement
(including insurance deductibles) of the litigation listed on Schedule 3.10 or
the claims listed on Schedule 3.19(b), will be reimbursed by Sellers to Buyer
within ten (10) Business Days after Buyer presents proof of such payments or, in
the event Sellers fail to make any such payment, Buyer may make a claim for such
amounts pursuant to the Escrow Agreement.
     3.20 Inventories. Except as disclosed on Schedule 3.20, the inventories
reflected in the Financial Statements were classified as current assets in
accordance with GAAP. Except as disclosed on Schedule 3.20, all items of
inventory reflected on the Balance Sheet, or thereafter acquired by the Company
(and not subsequently disposed of in the ordinary course of business or
appropriately reserved for on the Balance Sheet), are of a quality and quantity
which are saleable and/or useable in the ordinary course of business within one
year of the Closing Date. Except as indicated on Schedule 3.20, no inventories
of the Company have been consigned to the Company or are otherwise owned by a
third party.
     3.21 Product Liability. Except as set forth on Schedule 3.21, there is no
currently pending, or to Sellers’ Knowledge threatened, material claim for
product liability, warranty, material backcharge, material additional work,
field repair or other claims against the Company by any third party arising
from: (a) services rendered by the Company, (b) the sale or distribution of
products by the Company or (c) the manufacture of products by the Company.
     3.22 Significant Customers and Suppliers. Except as set forth in
Schedule 3.22, none of the fifteen (15) largest customers or suppliers of the
Company (measured by value of net sales or purchases, respectively) during the
period ended on the Closing Date has terminated, canceled or limited or made any
materially adverse modification or change in, its business relationship with the
Company or, to Sellers’ Knowledge, threatened to do so.
     3.23 Accounts Receivable. All accounts receivable of the Company that are
reflected on the Balance Sheet or on the Closing Balance Sheet (collectively,
the “Accounts Receivable”) represent valid obligations arising from sales
actually made or services actually performed in the ordinary course of business.
Schedule 3.23 contains a complete and accurate list of all Accounts Receivable
as of November 30, 2005, which list sets forth the aging of such accounts
receivable.
     3.24 Disclosure. No representation or warranty of Sellers in this Agreement
and no statement in the Schedules hereto omits to state a material fact
necessary to make the statements herein or therein, in light of the
circumstances in which they were made, not misleading.

 

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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
     As an inducement to Sellers to enter into this Agreement and consummate the
transactions contemplated hereby, Buyer represents and warrants to Sellers, as
follows:
     4.1 Organization. Buyer is a corporation validly existing and in good
standing under the Laws of its state of incorporation or formation, and has the
corporate power and authority to own, operate or lease its properties, carry on
its business, enter into this Agreement and to perform its obligations
hereunder.
     4.2 Authorization; Enforceability. This Agreement has been duly and validly
authorized by all necessary corporate and other actions by Buyer and constitutes
the legal, valid and binding obligations of Buyer enforceable against it in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium and other Laws of general application relating to or affecting
creditors’ rights and to general principles of equity.
     4.3 No Violation of Laws; Consents. Neither the execution and delivery of
this Agreement, the consummation of the transactions contemplated hereby nor the
compliance with or fulfillment of the terms, conditions or provisions hereof by
Buyer will: (i) violate any provision of the Governing Documents of Buyer or
(ii) violate any Law to which Buyer is subject or by which any of its assets may
be bound or affected the result of which would have a Material Adverse Effect on
the financial condition, operation or business of Buyer. No consent, approval or
authorization of, or registration or filing with, any Person is required in
connection with the execution or delivery by Buyer of this Agreement or the
consummation by Buyer of the transactions contemplated hereby.
     4.4 No Pending Litigation or Proceedings. No Litigation is pending against
or affecting or, to the knowledge of Buyer, threatened against Buyer in
connection with any of the transactions contemplated by this Agreement. There is
presently no outstanding judgment, decree or order of any Governmental Authority
against or affecting Buyer in connection with the transactions contemplated by
this Agreement.
     4.5 Brokers, Finders, Etc. Neither Buyer nor any of its Affiliates have
employed, nor are any of them subject to any valid claim of liability or
obligation to, any broker, finder, consultant or other intermediary in
connection with the transactions contemplated by this Agreement who might be
entitled to a fee or commission in connection therewith.
     4.6 Investment. Buyer is purchasing the Sale Shares for investment for its
own account, and not with a view to, or for the offer or sale in connection
with, any distribution thereof. Buyer acknowledges that the Sale Shares have not
been registered under the Securities Act of 1933, as amended (the “Securities
Act”), or any state securities Laws, and that the Sale Shares may not be
transferred or sold except pursuant to the registration provisions of the
Securities Act and any applicable state securities Laws or pursuant to an
applicable exemption therefrom.

 

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     4.7 Financial Ability Buyer has the financial ability to consummate the
transactions contemplated by this Agreement without any delay or restriction
which would adversely impact the certainty of Buyer’s ability to so consummate.
Buyer has furnished to Seller all documentation or other evidence of such
financial ability that has been requested by Seller.
ARTICLE V
[Intentionally Left Blank]
ARTICLE VI
ADDITIONAL AGREEMENTS
     6.1 Use of Names. Notwithstanding any provision of Section 3.12 to the
contrary, except for the name “St. Clair”, which O-N Lime hereby assigns, and
delivers to Buyer, no Seller is conveying any ownership rights to Buyer or the
Company for, or licensing Buyer or the Company to use, any of the trade names,
trademarks or Internet domain names of Sellers or any of their respective
Affiliates, including the rights to the name “Oglebay Norton”, “ONCO”, “O-N”,
“Global Stone” or any derivation or variation thereof or any corporate name
which includes the foregoing names, including those names (all such names
together the “Reserved Names”) and after the Closing:
          (a) Buyer shall promptly (but in no event later than sixty (60) days
after the Closing) destroy all stocks of written, printed or other graphic
materials in its possession or control that use or embody any names or marks of
Sellers or any of its Affiliates, including the Reserved Names, or modify such
materials to remove or cover over any such names or marks;
          (b) Buyer shall promptly (but in no event later than thirty (30) days
after the Closing) remove or cause to be removed any links from the Company’s
websites on the World Wide Web to any website maintained by or on behalf of
Sellers or its Affiliates and cease the use of any metatags utilizing any
Reserved Name or any confusingly similar word or phrase to direct traffic to a
website not owned by the owner of the Reserved Names; and
          (c) Buyer shall promptly (but in no event later than seven (7) days
after the Closing) (i) file the change of corporate name of the Company (which
new name shall not include any Reserved Names) with the appropriate Governmental
Authorities and (ii) promptly thereafter file requests to have the Permits
issued or re-issued in such new corporate name of the Company.
     6.2 Tax Matters.
          (a) Liability for Taxes.
               (i) Sellers shall be liable for and, pursuant to Article VIII,
Sellers shall indemnify and hold harmless the Buyer and the Company against all
Taxes (whether assessed or unassessed) applicable to the Company
(1) attributable to a Pre-Closing Period, including the portion of any Straddle
Period ending on the Closing Date or (2) pursuant to Treas. Reg. §1.1502-6 (or
any comparable provision under state or local Law imposing several liability
upon members of a consolidated, combined, affiliated or unitary group) for any
Pre-Closing Period; provided, however, that Sellers shall not be liable for
(w) any Taxes (other than Income Taxes)

 

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to the extent accrued on the Closing Balance Sheet; (x) any Taxes imposed on the
Company as a result of transactions occurring on the Closing Date that are
properly allocable to the portion of the Closing Date after the Closing; (y) any
interest or penalties attributable to the negligence, delay or bad faith of
Buyer or its Affiliates; and (z) any interest or penalties imposed or assessed,
or losses incurred, to the extent attributable to Buyer’s or its Affiliates’
late filing of any Tax Return or late payment of any Taxes. Sellers shall be
entitled to any refund of (or credit for) Taxes allocable to any Pre-Closing
Period. Buyer or the Company shall pay over to Sellers any such refund or the
amount of any credit within fifteen (15) days after receipt.
               (ii) Buyer shall be liable for and, pursuant to Article VIII,
Buyer shall indemnify and hold harmless Sellers and its Related Parties against
all Taxes (whether assessed or unassessed) applicable to the Company
(A) attributable to (1) taxable years or periods beginning after the Closing
Date, (2) transactions occurring on the Closing Date that are properly allocable
to the portion of the Closing Date after the Closing, and (3) with respect to
any Straddle Period, the portion of such Straddle Period beginning after the
Closing Date or (B) to the extent such Taxes (other than Income Taxes) are
accrued on the Closing Balance Sheet. Except as otherwise provided herein, Buyer
shall be entitled to any refund of (or credit for) Taxes allocable to any
taxable year or period that begins after the Closing Date and, with respect to
any Straddle Period, the portion of such Straddle Period beginning after the
Closing Date.
               (iii) For purposes of Section 6.2(a)(i) and Section 6.2(a)(ii),
whenever it is necessary to determine the liability for Taxes for a Straddle
Period, the determination of the Taxes for the portion of the Straddle Period
ending on and including, and the portion of the Straddle Period beginning after,
the Closing Date shall be determined by assuming that the Straddle Period
consisted of two taxable years or periods, one which ended at the close of the
Closing Date and the other of which began at the beginning of the day following
the Closing Date, and items of income, gain, deduction, loss or credit for the
Straddle Period shall be allocated between such two (2) taxable years or periods
by assuming that the relevant books were closed at the close of the Closing
Date; provided, however, that (A) transactions occurring on the Closing Date
that are properly allocable to the portion of the Closing Date after the Closing
shall be allocated to the taxable year or period that is deemed to begin at the
beginning of the day following the Closing Date, and (B) exemptions, allowances
or deductions that are calculated on an annual basis, such as the deduction for
depreciation, shall be apportioned between such two (2) taxable years or periods
on a daily basis and Taxes that are computed on a periodic basis, such as
property Taxes, shall also be so apportioned on a daily basis. Sales and use
Taxes shall be deemed to accrue in accordance with GAAP.
               (iv) Sellers or Buyer, as the case may be, shall provide
reimbursement for any Tax paid by one Party all or a portion of which is the
responsibility of the other Party in accordance with the terms of this
Section 6.2(a). Within a reasonable time prior to the payment of any such Tax,
the Party paying such Tax shall give written notice to the other Party of the
Tax payable and the portion which is the liability of each Party, although
failure to do so will not relieve the other Party from its liability hereunder.

 

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          (b) Tax Returns.
               (i) Sellers shall prepare, execute and timely file, or cause to
be prepared, executed and timely filed in a manner consistent with past
practice, all federal and state income Tax Returns of the Company with respect
to any taxable period ending prior to or ending on and including the Closing
Date.
               (ii) Except as provided in Section 6.2(b)(i), Buyer shall have
the exclusive authority and obligation to prepare and timely file, or cause to
be prepared and timely filed, all Tax Returns for the Company that relate to
taxable periods ending after the Closing Date. With respect to any such Tax
Return which includes a Pre-Closing Period for which Sellers may be required to
indemnify Buyer under Article VIII, Buyer shall provide Sellers with draft
copies of such Tax Returns and an opportunity to review and comment on such Tax
Returns at least thirty (30) days prior to the date for filing such Tax Returns.
Buyer shall in good faith take into account such comments in its preparation of
such Tax Returns.
          (c) Tax Audits.
               (i) Buyer shall promptly notify Sellers in writing upon receipt
by Buyer or any of its Affiliates of notice of any pending or threatened
federal, state or local Tax audits, examinations, notices of deficiency or other
adjustments, assessments or redeterminations (“Tax Matters”) relating to a
Pre-Closing Period for which Sellers may be liable to indemnify Buyer under
Article VIII. In the event that Buyer fails to notify Seller with respect to a
Tax Matter in accordance with the provisions of this Section 6.2(c)(i), Seller
shall not be obligated to indemnify Buyer under Article VIII of this Agreement
with respect to such Tax Matter to the extent that such failure to notify Seller
adversely affects Seller’s ability to adequately defend against such Tax Matter.
               (ii) Sellers shall have the sole right to control, contest,
resolve and defend against any Tax Matters or initiate any claim for refund or
amend any Tax Return relating to the Income Taxes of the Company for Pre-Closing
Periods, in each case provided Sellers are obligated to indemnify Buyer for such
Income Taxes (or a portion of such Income Taxes with respect to a Straddle
Period) under Article VIII, and to employ counsel of its choice at its own
expense; provided, however, that (A) Sellers shall keep Buyer informed with
respect to the commencement, status and nature of any such Tax Matter,
(B) neither Sellers nor the ultimate parent entity filing the consolidated
return that is the subject of such Tax Matter nor any of their respective
Affiliates shall enter into any settlement of or otherwise compromise any such
Tax Matter which adversely affects the Tax liability of Buyer, the Company or
any Affiliate of either of them (to the extent Buyer, the Company or any
Affiliate of either of them may be required to make any payment for such Tax
liability that is not fully indemnified by Sellers pursuant to the terms hereof)
without the prior written consent of Buyer, which consent shall not be
unreasonably withheld or delayed, and (C) Sellers may decline to control any Tax
Matters by providing Buyer with written notice of such decision.
               (iii) Except as otherwise provided in Section 6.2(c)(ii) and
except with respect to federal or state Income Taxes, Buyer shall have the sole
right to control any Tax Matters relating to the Company, and to employ counsel
of its choice at its own expense;

 

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provided, however, that (A) Buyer shall keep Sellers informed with respect to
the commencement, status and nature of any Tax Matter for which Sellers may be
liable pursuant to Article VIII, and (B) neither Buyer nor any of its Affiliates
shall enter into any settlement of or otherwise compromise any Tax Matter for
which Sellers are required to indemnify Buyer hereunder without the prior
written consent of Sellers, which consent shall not be unreasonably withheld or
delayed.
     (d) Assistance and Cooperation. After the Closing Date, each of Seller and
Buyer shall (and shall cause their respective Affiliates, including the Company,
to):
               (i) assist the other Party in preparing any Tax Returns which
such other Party is responsible for preparing and filing in accordance with
Section 6.2(b);
               (ii) upon reasonable notice and without undue interruption to the
business of such Party or the Company, provide access during normal business
hours to the books and records of such Party relating to the Taxes of the
Company prior to the Closing Date;
               (iii) furnish the other with copies of all correspondence
received from any taxing authority in connection with any Tax Matter or
information request with respect to any taxable period for which the other may
have a liability under this Section 6.2; and
               (iv) timely provide to the other powers of attorney or similar
authorizations reasonably necessary to carry out the purposes of this
Section 6.2.
          (e) Disputes. If the Parties disagree as to the calculation of any
amount relating to Taxes governed by this Section 6.2, the Parties shall
promptly consult with each other in an effort to resolve the disagreement. If
any such disagreement is not resolved within 30 days after either Party gives
the other written notice that it cannot be resolved, the Parties shall jointly
select a firm of nationally recognized independent accountants to resolve the
disagreement. Such firm’s determination shall be final, binding and conclusive
on the Parties, and any expenses relating to the engagement of such firm shall
be shared equally by the Parties.
          (f) Purchase Price Adjustment. Any payment by Buyer or Sellers to or
on behalf of the other under this Section 6.2 will be an adjustment to the
Purchase Price.
          (g) Section 338 Election. At the option of Buyer, Sellers and the
Company shall join with Buyer in making an election under Section 338(h)(10) of
the Code with respect to the purchase and sale of the Sale Shares hereunder (a
“Section 338(h)(10) Election”). Buyer shall be responsible for, and control, the
preparation and filing of such election. The Company and Sellers shall execute
and deliver to Buyer such documents or forms as Buyer reasonably shall request
or as are required by Law for an effective Section 338(h)(10) Election. Buyer,
the Company and the Sellers shall report the purchase and sale of the Sale
Shares consistent with such election and shall take no position contrary thereto
on any Tax Return.
     6.3 Employees and Plans.
          (a) Notice to Employees. Subject to the provisions of this
Section 6.3, on or prior to the Closing Date, Buyer and Sellers shall jointly
give notice to all employees who are

 

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then employed by the Company (the “Affected Employees”) that all benefits
previously provided to the Affected Employees under the Sellers’ Employee
Benefit Plans are discontinued on the Closing Date with respect to such Affected
Employees and will be replaced by the employee benefit plans of the Buyer (the
“Buyer Benefit Programs”). Effective as of the Closing Date, Sellers shall cause
the Company to withdraw from and cease to be an employer under each Sellers’
Employee Benefit Plan.
          (b) Credit for Prior Service. Buyer agrees that the Affected Employees
shall be credited with their length of service with the Company and Sellers and
its Affiliates under the policies of the Buyer and for all purposes under the
Buyer Benefit Programs (other than for purposes of benefit accrual under a
pension plan as defined in Section 3(2) of ERISA and early retirement subsidies
under a defined benefit plan as defined in Section 3(35) of ERISA) after the
Closing.
          (c) Vacation. Buyer shall take responsibility for and cause to be paid
in the normal course of business the vacation pay of all Affected Employees for
all days of vacation to which each such employee was entitled under Sellers’ or
the Company’s vacation pay policy as of the Closing Date. For purposes of
computing eligibility for and the amount of vacation or holiday pay of Affected
Employees to be accrued after the Closing under Buyer’s vacation and holiday
policies, employment of such employees by the Company or Sellers or any of its
Affiliates prior to Closing shall be taken into account to the same extent as if
it had been employment by the Company or Buyer.
          (d) Existing Claims. Sellers shall retain the responsibility for
payment of all covered medical and dental claims or expenses actually incurred
by any employee (or covered dependent of any employee) of the Company prior to
the Closing Date and Buyer shall not assume nor shall Buyer or the Company be
responsible for any liability with respect to such claims or expenses.
          (e) COBRA. From and after the Closing, Sellers shall be responsible
for providing any employee or former employee of the Company and any “qualified
beneficiaries” of any such person with COBRA continuation coverage to the extent
required by Law for the Company employee, former employee or qualified
beneficiary, if the qualifying event of such a Person occurs before the Closing
Date.
          (f) Disability. Buyer will assume the responsibility for any
short-term or long-term disability benefits for all Affected Employees actively
at work as of the Closing Date. Sellers shall retain responsibility for any
long-term disability benefits for any employee of the Company who had qualified
for long-term disability benefits as of the Closing Date and for any long-term
disability benefits for any employee of the Company who had qualified for
short-term disability benefits as of the Closing Date and who subsequently
qualifies for long-term disability benefits as a consequence of the same injury
or disability.
          (g) WARN Act. Buyer shall be responsible for all liabilities or
obligations under the WARN Act resulting from Buyer’s or the Company’s actions
following the Closing.

 

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          (h) Sellers 401(k) Plan. Upon the withdrawal of the Company from the
Sellers 401(k) Plan, Sellers shall cause the balances of all such participants
in the Sellers 401(k) Plan who are Affected Employees to be fully vested and
distributions of the vested balances of all such participants shall be made in
accordance with ERISA and the Code and the terms of the Sellers’ 401(k) Plan.
Sellers and Buyer agree to provide each other with such records and information
as they may reasonably request relating to this Section 6.3 or the
administration of the Sellers 401(k) Plan.
     6.4 Insurance.
          (a) Termination by Sellers. Effective as of the Closing Date, Sellers
shall cause the termination of all insurance coverage relating to the Company
(other than any reclamation bonds purchased), the Business and the Company’s
current or former employees and directors under applicable policies of
insurance. Buyer shall cause any reclamation bonds in place on the Closing Date
to be replaced within forty five (45) days after the Closing Date. Sellers shall
provide reasonable assistance to enable Buyer to do so. Twenty (20) days after
the Closing Date, if such reclamation bonds have not been replaced by Buyer,
Buyer shall compensate O-N Lime for any costs and expenses, including related
interest expenses, incurred by any Seller in connection with such reclamation
bonds.
          (b) Information. To the extent that after the Closing a Party requires
any information from another Party regarding claim data, payroll or other
information in order to make filings with insurance carriers or self-insurance
regulators, such other Party shall promptly supply such information.
     6.5 No Public Announcement. Neither Buyer, Sellers nor their respective
Affiliates shall, without the written approval of the other Party, make any
press release or other public announcement concerning the transactions
contemplated by this Agreement, except as and to the extent that any such Person
shall be so obligated by Law, in which case the other Party to this Agreement
shall be advised and the Parties shall use their best efforts to cause a
mutually agreeable release or announcement to be issued; provided, however, that
the foregoing shall not preclude communications or disclosures necessary to
implement the provisions of this Agreement or to comply with applicable
accounting and disclosure obligations of any Governmental Authority or the rules
of any securities exchange.
     6.6 Expenses. Each of the Parties shall bear all of their own expenses in
connection with the negotiation and closing of this Agreement and the
transactions contemplated hereby, including the fees, expenses and disbursements
of its counsel, investment bankers and independent public accountants.
     6.7 Covenant Not to Compete; Covenant Not to Solicit.
          (a) During the Non-Competition Period, the Non-Competition Parties and
their respective Affiliates, whether currently or in the future in that
relationship, shall not (and shall cause each other Non-Competition Party not
to), directly or indirectly own, manage, operate or control any business engaged
in the sale of the Non-Competition Products in the Territory in competition with
the business activities conducted by the Company (a “Competitive

 

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Business”); provided, however, that the foregoing covenants shall not prohibit,
or be interpreted as prohibiting, any Non-Competition Party from:
               (i) entering into any relationship with a Person not owned,
managed, operated or controlled by any Non-Competition Party for purposes
unrelated to a Competitive Business; or
               (ii) making equity investments in publicly owned companies which
conduct a Competitive Business, provided such investments do not confer control
of any such Competitive Business upon any Non-Competition Party.
     If a Seller and an Affiliate thereof terminate their relationship that
causes one to cease to be an Affiliate of the other, such Seller shall obtain an
agreement in writing with the Affiliate that such Affiliate will adhere to the
terms of this Section after such termination.
          (b) Until the second anniversary of the Closing Date, neither Sellers
nor any of their respective Affiliates shall, directly or indirectly, solicit
for employment, or induce or encourage to leave employment with the Company,
whether as an employee, consultant, contractor or otherwise, any employee of
Company on the date hereof; provided, however, that the foregoing provision will
not prevent Sellers or any of their respective Affiliates from (i) with the
consent of Buyer, employing any such employee in response to a general
solicitation of employment made by Sellers or such Affiliate in a trade journal
or other publication not specifically targeted at any employee of the Company,
or (ii) hiring James Underwood upon the expiration of six (6) months from the
date hereof.
     6.8 Further Assurances and Cooperation. Sellers shall, at any time and from
time to time on and after the Closing Date, upon request by Buyer and without
further consideration, take or cause to be taken such actions and execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
such instruments, documents, transfers and conveyances as may be required for
the better conveying, transferring, assigning and delivering of the Sale Shares
to Buyer.
     6.9 Regarding Accounting, Financial Statements, and SEC Reporting. After
the Closing:
          (a) Sellers shall (and shall cause their respective Affiliates to)
provide reasonable assistance to the Buyer and the Company in preparing the 2005
audited financial statements of the Company as necessary for or required by
Securities and Exchange Commission (“SEC”) rules and regulations, which Buyer is
responsible for preparing and filing;
          (b) Sellers shall (and shall cause their respective Affiliates to)
upon reasonable notice, provide to Buyer access during normal business hours to
the books, records, and financial statements of the Sellers (and their
respective Affiliates) and the Company relating to the Company for the calendar
year period prior to and including the Closing Date; and
          (c) Buyer shall (and shall cause its Affiliates, including the
Company, to) upon reasonable notice, provide to Sellers access during normal
business hours to the books,

 

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records, and financial statements of the Company relating to the period prior to
and including the Closing Date for any legitimate business purpose.
     6.10 Indemnification. Each Seller agrees that the Company’s Governing
Documents shall be amended, to the extent necessary, so that no indemnification
or advancement or payment of expenses shall thereafter be required to be paid by
the Company to Sellers and/or their Affiliates for events or matters that
occurred before or occur after the Closing Date. Each Seller agrees to maintain
in effect insurance to the extent that it is now carried payable to such Persons
for such events or matters and to indemnify and hold harmless Buyer and the
Company and their Affiliates for any damages, costs, or expenses arising
therefrom.
     6.11 Consents. Subject to any specific limitation herein described, Sellers
and Buyer shall each use their reasonable best efforts to obtain and to
cooperate with each other in order to obtain all consents, approvals and
authorizations, and to make all registrations and filings (including, without
limitation, all filings with any Governmental Authorities) lawfully required to
be obtained from or filed with all applicable Governmental Authorities in
connection with Sellers’ and Buyer’s execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby.
     6.12 Groundwater Monitoring Program. Sellers shall be liable for and,
pursuant and subject to Article VIII, shall indemnify and hold harmless Buyer
against all Losses of the Company associated with any corrective action required
by the Oklahoma Department of Environmental Quality (“DEQ”) in response to the
groundwater monitoring program the DEQ is requiring as a condition to issuance
of the Oklahoma Pollutant Discharge Elimination System (“OPDES”) wastewater
discharge permit; provided, however, that Buyer shall assume liability (a) for
the costs of developing and installing the groundwater monitoring plan, (b) for
performing monitoring of the groundwater in compliance with the OPDES wastewater
discharge permit, and (c) arising from Buyer’s failure to comply with Law or the
terms of such permit after the Closing Date. The Company’s continued use of the
surface impoundments in substantially the same manner as currently conducted
shall not be deemed a failure to comply with Law or the terms of such permit.
     6.13 Accounts Receivable. Sellers will promptly pay over to Buyer when
received all monies received by Sellers (or any applicable Affiliate) after the
Closing with respect to any Accounts Receivable.
     6.14 Infringement Liability. Seller shall be liable for and, pursuant to
Article VIII, Seller shall indemnify and hold harmless the Buyer against all
Losses related to the Company’s liability or obligations under any intellectual
property law (“IP Liability”) (whether assessed or unassessed) arising from or
in connection with:
     (a) IP Liability arising out of or relating to the ownership or operation
of the Business by Seller at any time on or prior to the Closing Date.
     (b) Seller and Buyer agree to cooperate in connection with any
indemnification claims under this Section 6.14 and Article VIII.

 

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     6.15 Trapezoid Parcel. Sellers at their expense, shall use their commercial
best efforts to obtain good and marketable title in the Company’s name to the
Trapezoid Parcel. If such title is not obtained prior to the second anniversary
of the Closing Date, then $25,000 shall immediately be distributed under the
Escrow Agreement to Buyer without offset (whether such amount is paid to Buyer
pursuant to this provision or under Article VIII hereof), which amount shall be
in full and final settlement of all claims by Buyer against Sellers in respect
of title to the Trapezoid Parcel, other than those dealt with in the remaining
sentences of this Section. In the event that, after the payment of such amount
to Buyer, the Company obtains good and marketable title to the Trapezoid Parcel,
Buyer shall return such amount to Sellers, less Buyer’s costs of obtaining
title. Sellers shall indemnify and hold harmless Buyer (without offset or
reduction under Article VIII hereof) against all Losses incurred by the Company
in connection with any formal written request initiated by a third party seeking
the removal of Lime Kiln Dust from the Trapezoid Parcel deposited prior to the
Closing Date. Buyer shall (a) be liable for any Losses arising from such
deposits made after the Closing Date and (B) cooperate and assist Sellers in a
reasonable manner in the identification and potential use of an appropriate
disposal site for such Lime Kiln Dust, including making available, without
charge, any appropriate disused mine or other redundant property of the Company.
     6.16 Master Lease and License Arrangements. Anything in this Agreement to
the contrary notwithstanding, this Agreement and the transactions contemplated
hereby shall not constitute an agreement to convey any rights under the Master
Leases and Licenses or any claim or right or any benefit arising thereunder or
resulting therefrom, without the consent of the applicable financing party or
lessor thereto, if such agreement would constitute a breach or other
contravention of the Master Leases and Licenses or in any way adversely affect
the rights of Sellers (or the applicable Affiliate of Sellers) thereunder. Prior
to the date hereof, Buyer has sought, and expects to obtain in the near future,
satisfactory terms for the continued use by the Company of the assets subject to
the Master Leases and Licenses and pending the execution of the definitive
documents embodying such terms, Sellers and Buyer will cooperate in a mutually
agreeable arrangement under which the Company would obtain the benefits and
assume the obligations under the Master Leases and Licenses in accordance with
this Agreement, including subcontracting, sublicensing, or subleasing to the
Company, or under which Sellers (or the applicable Affiliate) would enforce for
the benefit of the Company, with Buyer assuming Sellers’ (or the applicable
Affiliate’s) obligations, and any and all rights of Sellers (or the applicable
Affiliate) against the applicable financing party or lessor. After the Closing,
Buyer shall indemnify and hold harmless Sellers from any failure of the Company
to discharge any liability or obligation to Sellers under the foregoing
arrangement. Buyer agrees to use its best efforts to promptly obtain the consent
of the applicable financing party or lessor under the Master Leases and Licenses
to the continued use by the Company of the underlying assets subject thereto.
     6.17 Defense of Certain Disclosed Litigation and Claims. Sellers will be
responsible for coordinating the defense for the two litigation cases listed on
Schedule 3.10, including consultation and coordination with the Sellers’ general
liability insurance provider, and Buyer will provide cooperation as reasonably
requested by Sellers. Sellers will provide advance notice to Buyer of any
settlement or other hearings involving such litigation cases for which it is
anticipated that settlement costs would exceed $25,000. After the Closing Date,
Buyer will be responsible for the defense of all the workers’ compensation
claims listed on Schedule 3.19(b), including consultation and coordination with
the Sellers’ workers compensation insurance

 

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provider, and Sellers will provide cooperation as reasonably requested by Buyer.
Buyer will provide full written information to Sellers relating to such matters
in advance of any settlement or other hearings of any such claims for which it
is anticipated that settlement costs would exceed $25,000. No such claim shall
be settled or compromised for an amount in excess of $25,000 without the written
consent of Sellers, which consent shall not be unreasonably withheld.
ARTICLE VII
CONDITIONS TO CLOSING
     7.1 Conditions Precedent to Obligation of Buyer. The obligation of Buyer to
proceed with the Closing under this Agreement is subject to the fulfillment
prior to or at the Closing of the following conditions, any one or more of which
may be waived in whole or in part by Buyer:
          (a) Orders; Litigation. No statute, regulation or order of any
Governmental Authority shall be in effect that restrains or prohibits the
transactions contemplated hereby, and no proceeding shall have been commenced
that restrains or prohibits the consummation of all or any portion of the
transactions contemplated hereby.
          (b) Share Certificates and Instruments of Transfer. Sellers shall have
delivered to Buyer stock certificates representing all of the Sale Shares and
shall have executed, acknowledged and delivered to Buyer such instruments of
transfer of the Sale Shares as shall be reasonably requested by Buyer to vest in
Buyer all right, title and interest in and to the Sale Shares.
          (c) Other Documents. Sellers shall have delivered to Buyer all other
documents referenced hereunder.
     7.2 Conditions Precedent to Obligation of Sellers. The obligation of
Sellers to proceed with the Closing under this Agreement is subject to the
fulfillment prior to or at Closing of the following conditions, any one or more
of which may be waived in whole or in part by Sellers:
          (a) Orders; Litigation. No statute, regulation or order of any
Governmental Authority shall be in effect that restrains or prohibits the
transactions contemplated hereby, and no proceeding shall have been commenced
that restrains or prohibits the consummation of all or any portion of the
transactions contemplated hereby.
ARTICLE VIII
INDEMNIFICATION
     8.1 Survival of Representations, Warranties, Covenants and Agreements.
Subject to the provisions of this Article VIII, the representations and
warranties of Sellers contained in Article III and those of the Buyer contained
in Article IV and the covenants and agreements of the Parties contained in this
Agreement shall survive the Closing (and any

 

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investigation by the Parties with respect to such representations and
warranties) but shall terminate and be of no further force or effect upon the
expiration of twenty-four (24) months from the Closing Date and no claims shall
be made by any Indemnified Party (as hereinafter defined) under this Section 8.1
thereafter. Notwithstanding the foregoing, (a) any such representation or
warranty as to which a claim relating thereto is asserted in writing (which
states with specificity the basis therefor) in accordance with Section 8.3
during such survival period shall, with respect to such claim, continue in force
and effect beyond such survival period pending resolution of such claim, (b) the
representations and warranties of Sellers set forth in the second sentence of
Section 3.2 (Authorization), Section 3.3(a) (Capitalization), and Section 3.3(b)
(Title), shall survive forever, (c) the representations and warranties of
Sellers set forth in Section 3.7 (Taxes), the covenants of Sellers and Buyer set
forth in Section 6.2 (Taxes) and Section 3.14 (Employees; Employee Related
Agreements and Plans; ERISA) shall survive until the expiration of the relevant
statutory period of limitations applicable to the underlying claims (provided,
however, that neither Buyer nor the Company may extend such period by giving any
waiver or agreeing to any extension thereof without the express prior written
consent of Sellers), (d) the representations and warranties of Sellers set forth
in Section 3.15 (Environmental Matters) and the covenants and agreements in
Section 6.12 shall survive until the expiration of six (6) years from the
Closing Date, (e) the covenants and agreements in this Article VIII shall
survive the Closing and shall remain in full force and effect for such period as
is necessary to resolve any claim made with respect to any representation,
warranty, covenant or agreement contained in this Agreement during the survival
period thereof, and (f) the remaining covenants and agreements of the Parties
contained in Article VI of this Agreement shall survive the Closing without any
contractual limitation on the period of survival unless a limitation on time is
contained in the relevant section, in which case such covenant shall survive for
the period of time so specified. The right to indemnification, payment of
Expenses or other remedies based on any representation, warranty, covenant or
agreement contained herein will not be affected by any investigation conducted
with respect to, or any knowledge acquired (or capable of being acquired) at any
time, whether before or after the execution and delivery of this Agreement or
the Closing Date, with respect to the accuracy or inaccuracy or compliance with
any such representation, warranty, covenant or agreement. It is hereby
stipulated that Buyer has relied on each and every representation, warranty,
covenant, and agreement contained herein, as qualified by the Schedules hereto.
     8.2 General Indemnification. Subject to the provisions of Section 8.1:
          (a) Indemnification by Sellers and Buyer. Each of Buyer and each
Seller, jointly and severally, hereby agrees (in such capacity, an “Indemnifying
Party” provided, that, the Sellers, collectively, shall be regarded as one
Indemnifying Party hereunder), from and after the Closing, to indemnify, hold
harmless and defend the other Party and its Related Parties (in such capacity,
an “Indemnified Party”) against any Losses that such Indemnified Party shall
actually incur, to the extent that such Losses (or claims, actions, suits or
proceedings in respect thereof and any appeals therefrom, “Proceedings”):
               (i) arise out of or in connection with any breach of or
inaccuracy in any representation or warranty made herein in Article III for the
benefit of the Buyer or in Article IV for the benefit of Sellers; or

 

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               (ii) arise out of or in connection with any failure to perform
any covenant made herein by the Indemnifying Party for the benefit of the
Indemnified Party.
          Notwithstanding the foregoing, the Indemnifying Party shall not have
any liability to the Indemnified Party under this Section 8.2(a) unless and
until the aggregate amount of all Losses exceed one percent (1.0%) of the
Purchase Price, in which event only the amount in excess of one-half of one
percent (0.5%) of the Purchase Price shall be recoverable; and the liability of
the Indemnifying Party under this Section 8.2(a) shall not exceed forty percent
(40%) of the Purchase Price in the aggregate; provided, however, that the
limitations set forth in this sentence shall not apply with respect to Sellers’
liability to Buyer (x) for Taxes of the Company for Pre-Closing Periods as set
forth in Section 6.2(a) (Taxes) or arising out of breaches of the
representations and warranties in the second sentence of Section 3.2
(Authorization), Section 3.3(a) (Capitalization), Section 3.3(b) (Title),
Section 3.18 (Brokers and Finders), Buyer’s failure to pay the Purchase Price,
or a willful failure to comply with a covenant made herein. All indemnity
payments made under this Article VIII shall be treated as adjustments to the
Purchase Price. For the purposes of determining the amount of Losses incurred by
an Indemnified Party in accordance with this Article VIII, such Losses shall be
offset by the proceeds of any insurance received by the Indemnified Party with
respect thereto.
          (b) Limitations. Sellers shall not be liable for any Losses resulting
from a breach of any of the representations, warranties and covenants set forth
in Article III of this Agreement or any of the covenants set forth in Article VI
of this Agreement to the extent that:
               (i) the liability for such breach occurs or is increased as a
result of the adoption or imposition of any Law not in force at the date of this
Agreement or as a result of any increase in rates of taxation after the date of
this Agreement; or
               (ii) the Losses would not have arisen but for a change in
accounting policy or practice of the Buyer or the Company after the Closing.
          (c) Losses. To the extent that any breach of or inaccuracy in any
representation or warranty made herein by Sellers results from the NEGLIGENCE of
Sellers or the Company or from the imposition of STRICT LIABILITY against one or
more of them, the term “Losses” shall not be interpreted to exclude any
liability or loss incurred by Buyer for breach of or inaccuracy in any
representation or warranty arising out of or connected therewith; provided,
however, that the foregoing provision shall not imply that the remedies of Buyer
hereunder (as limited by Section 8.5) are extended to include claims against
Sellers for negligence or strict liability.
     8.3 Procedures.
          (a) An Indemnified Party seeking indemnification under Section 8.1
shall give prompt written notice to the Indemnifying Party of the assertion of
any claim that does not involve a Proceeding brought by a third party. The
notice shall describe in reasonable detail the nature of the claim, an estimate
of the amount of Losses attributable to the claim to the extent feasible and the
basis of the request for indemnification under this Agreement.

 

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          (b) If an Indemnified Party receives notice of a Proceeding brought by
a third party for which the Indemnified Party intends to assert an
indemnification claim under Section 8.1 against the Indemnifying Party, then the
Indemnified Party shall give notice of the Proceeding to the Indemnifying Party
no later than thirty (30) Business Days before the answer or other response to
the Proceeding is required to be made. The Indemnifying Party shall assume the
defense of any Proceeding by notice to the Indemnified Party no later than
fifteen (15) Business Days prior to the date by which an answer or other
response to the Proceeding is required to be made. Any failure by either Party
to give the requisite notice within the time specified in this Section 8.3(b)
shall not relieve the Indemnifying Party of the obligation to indemnify the
Indemnified Party or the obligation to allow the Indemnifying Party to defend
pursuant to this Section 8.3(b) except to the extent that the defense of any
Proceeding is materially prejudiced by the delay. The Indemnifying Party shall
utilize counsel reasonably satisfactory to the Indemnified Party.
          (c) Notwithstanding the foregoing, if an Indemnified Party shows that
a Proceeding will materially adversely affect it or its Affiliates in the
operation of their respective businesses other than as a result of monetary
damages for which it would be entitled to indemnification under this Article or
if the Proceeding involves an assessment of Taxes solely against the Indemnified
Party, the Indemnified Party may, by notice to the Indemnifying Party, assume
the exclusive right to defend, but not compromise or settle, such Proceeding. If
a compromise or settlement will adversely affect the Indemnifying Party, and
subject to the terms hereof, any compromise or settlement of such a Proceeding
may only be made with the consent of the Indemnifying Party.
          (d) If the Indemnifying Party assumes the defense of a Proceeding
pursuant to Section 8.3(b), then the Indemnifying Party may defend and conduct
any proceedings or negotiations in connection with the Proceeding, take all
other required steps or proceedings to settle or defend any Proceeding, and to
employ counsel to contest any Proceeding in the name of the Indemnified Party or
otherwise; provided, however, (i) no compromise or settlement of any Proceeding
may be effected by the Indemnifying Party without the Indemnified Party’s
consent unless (A) there is no violation of the rights of any Person and no
effect on any other claims that may be made against the Indemnified Party, and
(B) the sole relief provided is monetary damages that are in fact paid in full
by the Indemnifying Party and (ii) the Indemnified Party will have no liability
with respect to any compromise or settlement of such Proceeding effected without
its consent.
          (e) If the Indemnifying Party does not assume the defense of (having
been given a proper opportunity to do so), or if after so assuming the
Indemnifying Party fails properly to defend, any Proceeding, then the
Indemnified Party may defend against any claim or Proceeding in a manner
reasonably appropriate and the Indemnified Party may settle any claim or
Proceeding on such terms as are reasonable in the circumstances (but subject to
the provisions of this Article VIII, including Section 8.3(f)).
          (f) The Indemnified Party shall have the right to participate in the
defense of any Proceeding related to any indemnified Losses at its sole cost and
expense and the cost and expense of that participation shall not be Losses
subject to indemnification.

 

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          (g) In connection with any and all environmental matters for which
Sellers must indemnify Buyer under this Article VIII, including, without
limitation, claims relating to the presence or removal of Lime Kiln Dust on the
Trapezoid Parcel for which Sellers must indemnify Buyer under Section 6.15
and/or Section 8.2(a):
               (i) Subject to the last two sentences of this Section 8.3(g)(i),
Buyer shall have the right to conduct and retain control over any action to
investigate, evaluate, assess, test, monitor, remove, respond to, treat, abate,
remedy, correct, clean-up or otherwise remediate the release or presence of any
Hazardous Substance or Lime Kiln Dust, correction of noncompliance or other
action (collectively, “Remedial Action”), including the right to (A) investigate
any suspected contamination or noncompliance, (B) conduct and obtain any tests,
reports, surveys and investigations, (C) contact, negotiate or otherwise deal
with Governmental Authorities, (D) prepare any plan for such Remedial Action and
(E) conduct or direct any such Remedial Action; provided that Buyer shall
consult with Sellers in good faith, including providing Sellers the opportunity
to review and comment on any plan for Remedial Action prior to submittal to any
Governmental Authority and the opportunity to participate in meetings with any
Governmental Authority regarding Remedial Actions. Prior to incurring an
obligation or material proposed expenditure for any Remedial Action under this
Article VIII, Buyer will provide Seller with notice of its intention to do so
(with adequate information relating to such proposed expenditure), and Seller
shall have the right to consent to such expenditure, which consent shall not
unreasonably be withheld. Buyer shall apprise Sellers of any information
regarding the undertaking, scheduling and execution of any Remedial Action and
shall provide Seller with copies that it receives of all written reports
associated with any Remedial Action. Neither Buyer nor any Affiliate of Buyer
(including the Company) shall initiate any Remedial Action other than (a) as
required by applicable Environmental Laws, (b) in connection with reasonable
responses to any spill or emergency situation occurring within a reasonable
period of time following such spill or emergency situation, or (c) reasonable
Remedial Actions taken in good faith following the receipt of information that
would lead a reasonable and responsible corporate citizen to believe that
Remedial Action is advisable in the circumstances; provided, however, that
following notice of the Remedial Action by Buyer to Sellers as required above,
Buyer shall follow any commercially reasonable recommendations of Sellers which
are designed to mitigate the risks of Environmental Liabilities resulting from
such Remedial Actions. Notwithstanding any other provision of this Agreement to
the contrary, neither Buyer nor any Affiliate of Buyer (including the Company)
shall initiate any Remedial Action in connection with Lime Kiln Dust unless
required to do so under any Environmental Law.
               (ii) Sellers and Buyer agree that any Remedial Action shall be
the most cost-effective, commercially reasonable method under the circumstances
and based upon the understanding that the Owned Real Property and Leased Real
Property is and will continue to be used for industrial purposes. Any Remedial
Action shall make maximum use of institutional controls, including, without
limitation, deed restrictions, signs, fencing, buffers and controls, to the
extent permitted by Governmental Authorities; provided that such institutional
controls shall not unreasonably restrict or limit the industrial activities
being performed by Buyer or the Company on the Owned Real Property or Leased
Real Property.
               (iii) Sellers and Buyer mutually agree to cooperate in connection
with any indemnification claims.

 

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               (iv) Buyer shall not contact or importune any Governmental
Authority in connection with any matter that will or could become the subject of
a claim under Section 8.2(a), unless required by Environmental Law.
The rights and remedies for claims under Section 8.1(a) as set forth in this
Agreement shall be the exclusive remedy of Buyer with respect to environmental
claims.
     8.4 Consequential Damages. In no event shall any Party be liable for
punitive, consequential, special, incidental or similar damages, including lost
profits, under or in connection with this Agreement or the transactions
contemplated hereby, regardless of whether a claim is based on contract, tort,
strict liability or any other legal or equitable principle, and each Party
releases the other from liability for any such damages. No Party shall be
entitled to rescission of this Agreement as a result of breach of any other
Party’s representations, warranties, covenants or agreements, or for any other
matter.
     8.5 Sole Remedy. From and after the Closing, the provisions of this
Article VIII shall be the sole and exclusive remedy of each Party for (a) any
breach of a Party’s representations or warranties contained in this Agreement,
(b) subject to the last sentence of this Section 8.5, any breach of a Party’s
covenants or other agreements contained in this Agreement or (c) any other
matters relating to this Agreement other than claims for fraud. Buyer and
Sellers and their respective Related Parties are the only Persons entitled to
exercise any remedy provided by this Article VIII. Nothing set forth in this
Article VIII shall be deemed to prohibit or limit the other Party’s right to
seek injunctive or other equitable relief for the failure of (i) Buyer to
perform any covenant set forth in Section 6.1 (Reserved Names) or (ii) Sellers
to perform any covenant set forth in Section 6.7 (Covenant not to Compete;
Covenant not to Solicit).
     8.6 Costs. The prevailing party shall be entitled to be paid by the
non-prevailing party all Expenses incurred in enforcing the terms of this
Agreement.
ARTICLE IX
MISCELLANEOUS
     9.1 Books and Records. From and after the Closing Date, Buyer shall cause
the Company to maintain copies of all books and records in the possession of the
Company at the time of the Closing and shall prevent the Company from destroying
any of such books and records for a period of five (5) years following the
Closing Date without first allowing Sellers, at Sellers’ expense, to make copies
of the same. During that period, Buyer shall cause the Company (a) to grant to
Sellers and their representatives reasonable cooperation, access and staff
assistance at all reasonable times and upon reasonable notice to all of such
books and records relating to the period prior to the Closing (including work
papers and correspondence with taxing authorities) that are not otherwise
protected by legal privilege, (b) to afford Sellers and their representatives
the right, at Sellers’ expense, to take extracts therefrom and to make copies
thereof and (c) to have access to the employees of the Company, all to the
extent reasonably necessary or appropriate for general business purposes,
including the preparation of Tax returns and the handling of Tax audits,
disputes and litigation; provided, however, that such requested cooperation,
access and assistance shall not unreasonably interfere with the normal
operations of Buyer or the Company.

 

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     9.2 Notices. All notices, requests, demands, claims and other
communications hereunder shall be in writing. Any notice, request, demand, claim
or other communication hereunder shall be deemed duly given: (a) if personally
delivered, when so delivered; (b) if mailed, two (2) Business Days after having
been sent by first class, registered or certified U.S. mail, return receipt
requested, postage prepaid and addressed to the intended recipient as set forth
below; (c) if given by facsimile, once such notice or other communication is
transmitted to the facsimile number specified below, provided that: (i) the
sending facsimile machine generates a transmission report showing successful
completion of such transaction and (ii) such notice or other communication is
promptly thereafter mailed in accordance with the provisions of clause
(b) above; and provided, further, that if such facsimile is sent after 5:00 p.m.
local time at the location of the receiving facsimile machine, or is sent on a
day other than a Business Day, such notice or communication shall be deemed
given as of 9:00 a.m. local time at such location on the next succeeding
Business Day, or (d) if sent through a nationally-recognized overnight delivery
service which guarantees next-day delivery, the Business Day following its
delivery to such service in time for next day-delivery:
if to Buyer, to:
United States Lime & Minerals, Inc.
13800 Montfort Drive, Suite 330
Dallas, Texas 75240
Attention: Timothy W. Byrne,
                  President & CEO
Facsimile: (972) 385-1340
with a required copy to:
Thompson & Knight
1700 Pacific Avenue, Suite 3300
Dallas, Texas 75201
Attention: Steven K. Cochran, Esq.
Facsimile: (214) 969-1751
If to any Seller, to:
Oglebay Norton Company
North Point Tower
1001 Lakeside Avenue, 15th Floor
Cleveland, OH 44114-1151
Attention: Chief Executive Officer
Facsimile: (216) 861-2313
with a required copy to:
Oglebay Norton Company
North Point Tower
1001 Lakeside Avenue, 15th Floor

 

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Cleveland, OH 44114-1151
Attention: Legal Department
Facsimile: (216) 861-2313
or such other address or facsimile number as shall be designated from time to
time by written notice in accordance with this Section 9.2 by the Person
entitled to such notice. To the extent any notice provision in any other
agreement, instrument or document required to be executed or executed by the
Parties in connection with the transactions contemplated herein contains a
notice provision which is different from the notice provision contained in this
Section 9.2, with respect to matters arising under such other agreement,
instrument or document, the notice provision in such other agreement, instrument
or document shall control.
     9.3 Assignment; Governing Law.
          (a) Assignment. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof nor any of the
documents executed in connection herewith may be assigned by any Party without
the consent of the other Party, which consent shall not be unreasonably withheld
or delayed; provided, however, that any transferee shall agree to assume all
obligations under this Agreement of the transferor. Nothing contained herein,
express or implied, is intended to confer upon any Person other than the Parties
and their successors in interest and permitted assignees any rights or remedies
under or by reason of this Agreement unless so stated herein to the contrary.
          (b) Governing Law. THE VALIDITY, INTERPRETATION AND PERFORMANCE OF
THIS AGREEMENT AND ANY DISPUTE CONNECTED HEREWITH SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (OTHER THAN THE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF).
          (c) Consent to Jurisdiction; Service of Process. EACH PARTY HERETO
HEREBY AGREES THAT ANY SUIT, ACTION OR PROCEEDING IN RESPECT THEREOF SHALL BE
BROUGHT IN ANY STATE OR FEDERAL COURT HAVING JURISDICTION SITTING IN THE STATE
OF DELAWARE; AND EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF SUCH COURTS AND ANY APPELLATE COURT THEREOF FOR THE PURPOSE OF
ANY SUIT, ACTION, PROCEEDING (AND WAIVES FOR SUCH PURPOSE ANY DEFENSE BASED ON
LACK OF PERSONAL JURISDICTION). EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT BROUGHT
IN ANY SUCH COURT, AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. Each Party irrevocably consents to the service of process in
any such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to such Party, at its address for notices set
forth in Section 9.2 of this Agreement, such service to become effective ten
(10) days after such mailing. Each Party hereby irrevocably waives any objection
to such service of process and further irrevocably waives and agrees not to

 

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plead or claim in any action or proceeding commenced hereunder or under any
other documents contemplated hereby that service of process was in any way
invalid or ineffective. Subject to Section 9.3(d) of this Agreement, the
foregoing shall not limit the rights of any Party to serve process in any other
manner permitted by law. The foregoing consents to jurisdiction shall not
constitute general consents to service of process for any purpose except as
provided above and shall not be deemed to confer rights on any Person other than
the Parties.
          (d) Waivers. Each of the Parties hereby waives any right it may have
under the laws of any jurisdiction to commence by publication any legal action
or proceeding with respect to this Agreement. To the fullest extent permitted by
applicable Law, each of the Parties hereby irrevocably waives the objection
which it may now or hereafter have to the laying of the venue of any suit,
action or proceeding arising out of or relating to this Agreement in any of the
courts referred to in Section 9.3(c) of this Agreement and hereby further
irrevocably waives and agrees not to plead or claim that any such court is not a
convenient forum for any such suit, action or proceeding.
          (e) Enforcement. The Parties agree that any judgment obtained by
either Party or its permitted successors or assigns in any action, suit or
proceeding referred to above may, in the discretion of such Party (or its
permitted successors or assigns), be enforced in any jurisdiction, to the extent
permitted by applicable Law.
          (f) Deemed Acceptance. Each Related Party of Buyer or Sellers, as the
case may be, seeking the benefit of Article VIII of this Agreement shall be
deemed to have accepted and agreed to the provisions of this Section 9.3 as a
condition to obtaining any benefits under Article VIII as if such Person was one
of the Parties.
     9.4 Amendment and Waiver; Cumulative Effect. To be effective, any amendment
or waiver under this Agreement must be in writing and be signed by the Party
against whom enforcement of the same is sought. Neither the failure of either
Party to exercise any right, power or remedy provided under this Agreement or to
insist upon compliance by the other Party with its obligations hereunder, nor
any custom or practice of the Parties at variance with the terms hereof shall
constitute a waiver by such Party of its right to exercise any such right, power
or remedy or to demand such compliance. The rights and remedies of the Parties
are cumulative and not exclusive of the rights and remedies that they otherwise
might have now or hereafter, at law, in equity, by statute or otherwise.
     9.5 No Third Party Beneficiaries. Except for Persons indemnified hereunder,
no Person not a party to this Agreement shall have rights under this Agreement
as a third party beneficiary or otherwise.
     9.6 Severability. If any term or other provision of this Agreement is held
by a court of competent jurisdiction to be invalid, illegal or incapable of
being enforced under any rule of Law in any particular respect or under any
particular circumstances, such term or provision shall nevertheless remain in
full force and effect in all other respects and under all other circumstances,
and all other terms, conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to either

 

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Party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the Parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent possible.
     9.7 Multiple Counterparts. This Agreement may be executed in a number of
identical counterparts. If so executed, each of such counterparts is to be
deemed an original for all purposes and all such counterparts shall,
collectively, constitute one agreement, but, in making proof of this Agreement,
it shall not be necessary to produce or account for more than one such
counterpart.
     9.8 Joint Drafting. The Parties have been represented by counsel in the
negotiations and preparation of this Agreement; therefore, this Agreement shall
be deemed to be drafted by each of the Parties, and no rule of construction
shall be invoked respecting the authorship of this Agreement.
     9.9 Entire Agreement. This Agreement supersedes all prior agreements,
representations, warranties, and covenants, whether written or oral, between the
parties with respect to its subject matter (including any letter of intent and
any confidentiality agreement between Buyer and Sellers) and constitutes (along
with the Schedules, Exhibits and other documents delivered pursuant to this
Agreement) a complete and exclusive statement of the terms of the agreement,
representations, warranties and covenants between the parties with respect to
its subject matter.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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     IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day
and year first above written.

     
 
  BUYER:
 
   
 
  UNITED STATES LIME & MINERALS, INC.
 
   
 
 
By:                                                                                
 
 
Name:                                                                           
 
 
Title:                                                                             
 
   
 
  SELLERS:
 
   
 
  OGLEBAY NORTON COMPANY
 
   
 
 
By:                                                                                
 
 
Name:                                                                           
 
 
Title:                                                                             
 
   
 
  O-N MINERALS COMPANY
 
   
 
  By:                                                                          
 
  Name:                                                                     
 
  Title:                                                                       
 
   
 
  O-N MINERALS (LIME) COMPANY
 
   
 
  By:                                                                         
 
  Name:                                                                    
 
  Title:                                                                      

Signature Page – Stock Purchase Agreement