SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported)
March 31, 1995
UNION CARBIDE CORPORATION
(Exact name of registrant as specified in its charter)
New York
(State or other jurisdiction of incorporation)
1-1463 13-1421730
(Commission File Number) (IRS Employer Identification No.)
39 Old Ridgebury Rd, Danbury, CT 06817-0001
(Address of principal executive offices) (Zip code)
Registrant's telephone number,
including area code 203-794-2000
Total number of sequentially numbered pages in this filing,
including exhibits thereto: 99
Item 2. ACQUISITION OF ASSETS
On March 31, 1995, Union Carbide Corporation ("UCC") acquired 50%
of the equity of Polimeri Europa S.r.l. ("PE"), a joint venture
company. EniChem S.p.A. ("EniChem") retained the other 50% of the
equity in PE. In anticipation of UCC's acquisition of its equity
interest, EniChem had transferred to PE all of its polyethylene
business, excluding its wire and cable compounds business. The
purchase price for UCC's 50% share of the joint venture's equity
was DM323,000,000, and was determined by arms-length negotiations
between UCC and EniChem.
The joint venture's business includes polyethylene production and
research and development facilities in Italy, Germany and France,
ethylene steam crackers in Italy and France, EniChem's
polyethylene resin technology, and EniChem's polyethylene sales
activities. The venture also holds a non-exclusive license of
UCC's UNIPOL technology. The shareholders intend to use the joint
venture's assets to continue to operate the polyethylene business.
The purchase price was paid in full at the closing, and was funded
through a portion of the proceeds of the January 1995
recapitalization of UCAR International Inc. and operating cash
flows.
This description of UCC's acquisition of a 50% interest in the
joint venture is qualified in its entirety by reference to the
Stock Purchase and Sale Agreement dated as of February 9, 1995, as
amended by letter agreement dated March 31, 1995, between EniChem
S.p.A. and Union Carbide Corporation, a copy of which is attached
to this report as an exhibit.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired.
(b) Pro Forma Financial Information.
UCC intends to file with the Commission, if required, within
the time period set forth in subparagraph (a)(4) of Item 7 of
Form 8-K, audited financial statements for the business
acquired and pro forma financial statements reflecting the
acquisition so that UCC will be in compliance with Rule 3-05
of Regulation S-X. It is impractical to provide the required
audited financial statements of the business acquired or the
aforesaid pro forma financial statements at this time,
therefore, said financial statements, if required, will be
filed with the Commission as soon as practicable, but no
later than June 14, 1995.
(c) Exhibits.
2. Stock Purchase and Sale Agreement dated as of
February 9, 1995, as amended by letter agreement dated
March 31, 1995, between EniChem S.p.A. and Union Carbide
Corporation.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: April 10,1995
UNION CARBIDE CORPORATION
By J. MACDONALD
J. Macdonald
Assistant Secretary
EXHIBIT INDEX
Exhibit
2. Stock Purchase and Sale Agreement dated as of
February 9, 1995, as amended by letter agreement dated
March 31, 1995, between EniChem S.p.A. and Union Carbide
Corporation.
- - 2 -
STOCK PURCHASE AND SALE AGREEMENT
dated as of February 9, 1995
between
ENICHEM S.p.A.
and
UNION CARBIDE CORPORATION
TABLE OF CONTENTS
Page
TITLE..................................................... 1
RECITALS.................................................. 1
ARTICLE 1 - PURCHASE AND SALE OF SHARES; CLOSING...... 2
1.1 Purchase and Sale of Shares; Consideration. 2
1.2 Closing.................................... 3
1.3 Payment.................................... 3
1.4 Reimbursement of Debt...................... 4
1.5 Closing Deliveries......................... 5
1.6 Effective Date Balance Sheet and Financial
adjustments................................ 6
1.7 Other Transactions......................... 9
1.8 Financial Reports.......................... 10
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES
REGARDING UNION CARBIDE................... 10
2.1 Organization............................... 10
2.2 Authorization.............................. 11
2.3 No Breach.................................. 11
2.4 Consents................................... 12
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES
REGARDING ENICHEM......................... 13
3.1 Organization............................... 13
3.2 Authorization.............................. 13
3.3 No Breach.................................. 14
TABLE OF CONTENTS
(continued)
Page
3.4 Consents................................... 15
3.5 Ownership of Stock......................... 15
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES REGARDING
THE COMPANY AND THE BUSINESS.............. 16
4.1 Organization............................... 16
4.2 No Breach.................................. 16
4.3 Consents................................... 18
4.4 Organizational Instruments................. 18
4.5 Capital Stock.............................. 19
4.6 Subsidiaries............................... 20
4.7 Financial Statements....................... 21
4.8 Tax Matters................................ 21
4.9 Real Property.............................. 23
4.10 Owned Personal Property.................... 26
4.11 Title to Owned Properties.................. 27
4.12 Contracts; Leases; Licenses................ 27
4.13 Performance of Contracts, Leases and
Licenses................................... 29
4.14 Consents Relating to Contracts............ 30
4.15 Compliance with Laws...................... 30
4.16 Permits; Licenses......................... 31
TABLE OF CONTENTS
(continued)
Page
4.17 Environmental Conditions.................. 32
4.18 Litigation; Claims; Proceedings........... 38
4.19 Patents; Technology....................... 39
4.20 Trademarks; Copyrights.................... 40
4.21 Human Resources........................... 40
4.22 Business Operations; Adverse Changes...... 43
4.23 Health and Safety Conditions.............. 45
4.24 Liabilities............................... 48
4.25 Assets.................................... 48
4.26 Customers and Suppliers................... 49
4.27 Depreciable Assets........................ 49
ARTICLE 5 - PRE-CLOSING COVENANTS..................... 49
5.1 Covenants of Union Carbide................. 49
5.2 Covenants of EniChem and the Company....... 50
5.3 Conduct of the Business.................... 51
5.4 Filings and Consents....................... 53
5.5 Insurance.................................. 55
5.6 Cooperation................................ 55
5.7 Fulfilment of Conditions................... 55
ARTICLE 6 - ENICHEM'S CONDITIONS
TO CLOSING................................ 55
TABLE OF CONTENTS
(continued)
Page
ARTICLE 7 - UNION CARBIDE'S CONDITIONS
TO CLOSING................................ 56
ARTICLE 8 - TERMINATION............................... 57
8.1 Termination................................ 57
8.2 Effects of termination..................... 58
ARTICLE 9 - LIABILITIES............................... 58
9.1 Survival of Representations, Warranties and
Covenants Regarding Union Carbide.......... 58
9.2 Survival of Representations, Warranties and
Covenants Regarding EniChem................ 59
9.3 Survival of Representations and Warranties
Regarding the Company and the Business..... 60
9.4 Assumption of Liabilities.................. 61
9.5 Transactional Taxes and Costs.............. 62
9.6 Assumption of Tax Liabilities by EniChem... 63
ARTICLE 10 - INDEMNIFICATION.......................... 66
10.1 Indemnification by Union Carbide.......... 66
10.2 Indemnification by EniChem................ 66
TABLE OF CONTENTS
(continued)
Page
10.3 Indemnification with Respect to Company
and Assumed Liabilities................... 67
10.4 Indemnification Procedure................. 69
10.5 Sole Remedy............................... 71
ARTICLE 11 - PUBLICITY; CONFIDENTILITY................ 71
11.1 Publicity................................. 71
11.2 Confidentiality........................... 72
ARTICLE 12 - NOTICES.................................. 72
ARTICLE 13 - BROKERAGE FEES; CERTAIN EXPENSES......... 74
13.1 Brokerage Fees............................ 74
13.2 Certain Expenses.......................... 74
ARTICLE 14 - APPLICABLE LAW; ARBITRATION.............. 74
14.1 Applicable Law............................ 74
14.2 Arbitration............................... 74
ARTICLE 15 - BINDING EFFECT; ASSIGNMENT; THIRD
PARTY BENEFICIARIES...................... 75
TABLE OF CONTENTS
(continued)
Page
ARTICLE 16 - FURTHER ASSURANCES...................... 76
ARTICLE 17 - AMENDMENTS.............................. 76
ARTICLE 18 - WAIVERS.................................. 77
ARTICLE 19 - HEADINGS; COUNTERPARTS................... 77
ARTICLE 20 - SEVERABILITY............................. 78
ARTICLE 21 - COMPANY COMMITMENTS...................... 79
ARTICLE 22 - ENTIRE AGREEMENT......................... 79
ARTICLE 23 - CERTAIN REFERENCES....................... 80
23.1 Affiliates................................ 80
23.2 Person.................................... 80
23.2 Subsidiaries.............................. 80
ARTICLE 24 - INDEX TO DEFINED TERMS................... 80
SIGNATURES................................................ 83
DISCLOSURE SCHEDULES
I. Financial Information
II. Assets
III. Liabilities
IV. Business Operations; Changes; and Other Matters
V. Consents
VI. Contracts
VII. Subsidiaries, Joint Ventures and Other Affiliates
VIII. Employees
IX. Benefit Plans
X. Environmental Conditions
XI. Health & Safety Conditions
XII. Insurance (deleted)
XIII. Litigation; Claims & Proceedings
XIV. Patents
XV. Permits & Licenses
XVI. Real Property
XVII. Certain Tax Matters
XVIII. Trademarks and Copyrights
EXHIBITS
A - Payment Terms on Conditional Debts
B - Modification to Accounting Principles for the Effective
Date Balance Sheet
STOCK PURCHASE AND SALE AGREEMENT dated as of
February 9, 1995 between ENICHEM SpA, a corporation validly
existing under the laws of Italy ("EniChem") and UNION CARBIDE
CORPORATION, a corporation validly existing under the laws of the
State of New York, U.S.A. ("Union Carbide"), (EniChem and Union
Carbide are hereinafter collectively referred to as the "Parties"
and sometimes individually, a "Party"),
W I T N E S S E T H:
WHEREAS, EniChem is directly and indirectly, through certain
subsidiaries, engaged in the field of development, production,
marketing and sales of polyethylene (which, excluding the wire and
cable compounding business but including certain olefins
production facilities indirectly owned and operated by EniChem,
shall hereinafter be referred to as the "Business");
WHEREAS, Union Carbide has developed UNIPOL polyethylene
technology, the leading technology for the production of
polyethylene;
WHEREAS, EniChem and Union Carbide desire to form a joint
venture by Union Carbide purchasing from EniChem a fifty percent
(50%) interest in the Business and Union Carbide licensing to the
Business UNIPOL polyethylene technology as described in the Master
Agreement between EniChem and Union Carbide dated the date hereof
(the "Master Agreement");
WHEREAS, EniChem owns the entire capital stock of Brindisi
Etilene S.r.l. (the "Company") which owns and operates certain
olefin assets, and EniChem will transfer to the Company, prior to
Closing, as set forth in the Master Agreement, that portion of the
Business it owns and operates directly together with the shares of
certain Subsidiaries (as defined in Article 4.2(a) hereof). The
Company, at Closing (as defined in Article 1.2 hereof), will be
redenominated Polimeri Europa S.r.l.; and
WHEREAS, pursuant to the terms and conditions of this
Agreement, Union Carbide will buy fifty percent (50%) of the
equity of the Company and EniChem will retain ownership of the
remaining fifty percent (50%);
NOW, THEREFORE, in consideration of the premises and
representations, warranties and covenants and agreements contained
herein, the Parties hereby agree as follows:
ARTICLE 1 - PURCHASE AND SALE OF SHARES; CLOSING
1.1 Purchase and Sale of Shares; Consideration. Subject to
the terms and conditions set forth herein and the actions to be
taken by the Parties prior to the Closing as described in the
Master Agreement being completed, including, but not limited to,
the contribution by EniChem to the Company of that portion of the
Business which it owns and operates and the transfer of the shares
of certain Subsidiaries (as defined in Article 4.2(a) hereof), at
the Closing, EniChem shall sell and deliver to Union Carbide, and
Union Carbide shall purchase and accept from EniChem, fifty
percent (50%) of the issued capital stock of the Company (the
"Shares") free and clear of all preemptive rights, liens, claims
and encumbrances except as the same may be imposed by the
Shareholders Agreement (as identified in the Master Agreement) and
the Statutes attached thereto. In consideration for the Shares,
Union Carbide will pay EniChem three hundred and twenty million
Deutschmarks (320 MDM) and shall assume the obligations and enjoy
the rights set forth in the Master Agreement and all other
agreements referred to therein.
1.2 Closing. The closing of the transactions contemplated
hereby (the "Closing") shall take place at the offices of EniChem
located at Piazza della Repubblica, 16-Milano - Italy or such
other place as EniChem and Union Carbide may mutually agree within
five business (5) days after receipt of EU (as defined in Article
5.4(a) hereof) approval of the transactions contemplated hereby
(the "Transaction") or the approval of the competent court of the
Company's capital increase referred to in Section B.1. C. of the
Master Agreement, whichever occurs later (the "Closing Date").
Notwithstanding the day upon which Closing will occur, the
benefits and burdens of ownership shall pass to Union Carbide as
if the Closing had taken place as of 11:59 PM on January 31, 1995
(the "Effective Date").
1.3 Payment. At the Closing , Union Carbide shall pay the
amount of three hundred and twenty million Deutschmarks (320MDM)
to EniChem by wire transfer of immediately available funds to the
account of EniChem maintained at Cassa di Risparmio delle
Provincie Lombarde Agenzia number 34 located in San Donato
Milanese (Mi) (account number 14500/1). Said amount shall be
increased by interest accrued at the rate of 5 . 0625 per cent per
annum from the Effective Date until the date of payment.
1.4 Reimbursement of Debt
(a) In the event the Closing occurs before the
Effective Date Balance Sheet is final and binding as provided in
Article 6.1.c), on or prior to the Closing the Company shall
reimburse EniChem's Affiliates (as defined in Article 23.1) the
financial debt incurred by the Company or the Subsidiaries towards
such EniChem's Affiliates and outstanding at October 31, 1994;
said amount is estimated to be one thousand one hundred and
seventy billion three hundred and two million Lire (Lit. 1,170.302
billion). The financial debt shall replaced for an amount equal to
six hundred eighty three billion one hundred
million Lire (Lit. 683,100,000,000.) through the Loan Agreement
referred to in the Master Agreement, for an amount equal to one
hundred fifty three billion five hundred million Lire (Lit.
153,500,000,000) by a conditional debt towards EniChem (the
"Conditional Debt") reimbursable under the terms and conditions
set forth in Exhibit A attached hereto and for the residual amount
of three hundred thirty three billion seven hundred two million
Lire (Lit. 333,702,000,000) through external credit lines.
(b) In the event the Closing occurs after the Effective
Date Balance Sheet is final and binding as provided in Article
6.1.c) on or prior to the Closing the Company shall reimburse to
EniChem's Affiliates the financial debt incurred by the Company or
the Subsidiaries towards such EniChem Affiliates and outstanding
at the Effective Date as reflected in the Effective Data Balance
Sheet. The financial debt shall be replaced for an amount equal
to six hundred eighty three billion one hundred million Lire
(Lit.683,100,000,000) through the Loan Agreement, for an amount
equal to one hundred fifty three billion five hundred million
Lire (Lit.153,500,000,000) by the Conditional Debt reimbursable
under the terms and conditions set forth in Exhibit A and for the
residual amount through external credit lines; provided that the
capital stock of the Company will not be less than six hundred
sixty two billion four hundred million Lire (Lit. 662,400,000,000)
or such other amount as shall conform to the results if the
apprasail referred to in Article B.1.a) of the Master Agreement.
1.5 Closing Deliveries.
(a) At the Closing, Union Carbide shall deliver to
EniChem one (1) copy of the resolutions adopted by the Board of
Directors of Union Carbide authorizing the transactions
contemplated hereby certified by an appropriate authorized officer
of Union Carbide.
(b) At the Closing, EniChem shall deliver or cause to
be delivered to Union Carbide one (1) copy of the resolutions (in
Italian together with an English translation thereof) adopted by
the Board of Directors of EniChem authorizing the transactions
contemplated hereby certified by the Secretary or an Assistant
Secretary of EniChem.
(c) At the Closing, EniChem and Union Carbide shall
execute and deliver to each other the deed of transfer to Union
Carbide of Shares duly certified in accordance with Italian law
number 310/93, and cause to be executed, delivered and
acknowledged, to the other of them such certificates and other
documents related to the consummation of the Transaction as may be
reasonably requested by the other of them.
The transfer of the Shares referred to in Article 1.1 hereof
will be recorded in the Shareholders Book of the Company as soon
as practicable after the Closing.
1.6 Effective Date Balance Sheet and Financial Adjustments
(a) EniChem will prepare a balance sheet of the
Business as of the close of business on January 31, 1995 in
accordance with Accounting Principles as established by the ENI
Administrative Division's manual entitled "ENI Group Norms for the
Preparation of the Financial Statements" dated "Rome, December
1993" ("AAP"), except as modified by the principles set forth on
Exhibit B, in Italian Lire. EniChem shall cause such balance sheet
to be audited by Coopers & Lybrand, independent certified public
accountants, (the "Effective Date Balance Sheet"), and shall
deliver copies thereof to Union Carbide, together with the Coopers
& Lybrand report thereon, on or before May 15, 1995. The
Effective Date Balance Sheet shall be based upon the books and
records of the Business and shall fairly present the financial
position of the Business at the close of business on January 31,
1995. Union Carbide and its certified public accountants shall
have the right to consult with the appropriate EniChem, Company
and Coopers & Lybrand personnel with respect to the preparation
and audit of the Effective Date Balance Sheet and shall have the
right to examine the work papers, schedules, and other documents
prepared in connection with the preparation of the Effective Date
Balance Sheet, as well as such relevant books and records of
EniChem, the Company, and the Subsidiaries as they deem reasonably
appropriate.
(b) Union Carbide shall have thirty (30) days from the
delivery to Union Carbide of the Effective Date Balance Sheet to
notify EniChem that Union Carbide has determined that the
Effective Date Balance Sheet has not been prepared in accordance
with AAP as modified by the principles set forth in Exhibit B or
that it does not fairly present the financial position of the
Business as of January 31, 1995 in accordance with the provisions
of paragraph (a) above. If EniChem and Union Carbide are unable
to resolve such objections between themselves within thirty (30)
days of such notification, the unresolved objections shall then be
submitted for resolution to Deloitte & Touche ("Deloitte"), or
another major accounting firm agreed to between the Parties, who
shall render a written resolution of such objections consistent
with AAP as modified by the principles set forth in Exhibit B
attached hereto within ninety (90) days thereafter, copies of
which shall be delivered to EniChem and Union Carbide. The
decision of Deloitte shall be final and binding upon both Parties.
The costs and expenses incurred in connection with the appointment
of Deloitte shall be shared equally by EniChem and Union Carbide.
(c) If Union Carbide notifies EniChem in writing that
it has determined that the Effective Date Balance Sheet is
acceptable as prepared or if Union Carbide fails to notify EniChem
that the Effective Date Balance Sheet is not acceptable as
prepared within thirty (30) days after receipt by Union Carbide of
the Effective Date Balance Sheet or if EniChem and Union Carbide
resolve all objections regarding the Effective Date Balance Sheet
and agree on the adjustments to be made thereto or any objections
which EniChem and Union Carbide are unable to resolve are resolved
by Deloitte in accordance with the procedures described in
paragraph (b) above, then the Effective Date Balance Sheet, with
the adjustments agreed upon by the Parties, or the adjustments
determined by Deloitte, if any, shall be final and binding on both
EniChem and Union Carbide.
(d) In the event the Closing occurs before the
Effective Date Balance Sheet is final and binding as provided in
Article 1.6.(c), than the following payments shall be made within
ten (10) days after the Effective Date Balance Sheet:
(i) if the Company's net worth shown on the
Effective Date Balance Sheet is higher than the amount of
Lit. 662.4 billion (or such lower amount as shall conform to
the results of the appraisal referred to the Article B.1.a)
of the Master Agreement), than the Company shall pay to
EniChem the difference;
(ii) if the Company's net worth shown on the
Effectuve Date Balance Sheet is lower than Lit. 662.4 billion
(or such lower amount as shall conform to the results of the
appraisal referred to the Article B.1.a) of the Master
Agreement), than EniChem shall pay to the Company the
difference;
(iii) if the financial liabilities to the
EniChem's Affiliates are higher than those shown on the
Balance Sheet, then the Company shall reimburse to said
Affiliates such difference;
(iv) if the financial liabilities to the
EniChem's Affiliates are lower than those shown on the
Balance Sheet, then EniChem shall reimburse to the Company
such difference.
(e) In the event the Closing occurs after the Effective
Date Balance Sheet is final and binding as provided in Article
1.6.(c), then the following payments shall be made within ten (10)
days after the Closing:
(i) if the Company's net worth shown on the
Effective Date Balance Sheet is higher than the amount of
Lit. 662.4 billion (or such lower amount as shall conform to
the results of the appraisal referred to the Article B.1.a)
of the Master Agreement), than the Company shall pay to
EniChem the difference;
(ii) if the Company's net worth shown on the
Effectuve Date Balance Sheet is lower than Lit. 662.4 billion
(or such lower amount as shall conform to the results of the
appraisal referred to the Article B.1.a) of the Master
Agreement), than Enichem shall pay to the Company the
difference;
(f) EniChem shall have the right, within one month
after the Closing Date, to purchase from the Company or its
Subsidiaries for a total amount of one thousands Lire (Lit. 1,000)
any receivable that has been valued in the Effective Date Balance
Sheet at zero value.
1.7 Other Transactions.
Concurrently with the execution and delivery of this
Agreement, EniChem and Union Carbide shall execute and deliver the
Master Agreement.
1.8 Financial Reports.
(a) Attached hereto as Schedule I(a) is a complete and
accurate copy of the unaudited proforma consolidated balance
sheet, income statement and cash flow statement, together with the
notes related thereto, of the Business of EniChem, the Company and
the Subsidiaries for the years ending December 31, 1992 and
December 31, 1993 and the related unaudited proforma consolidated
balance sheet, statements of income and cash flow for the nine (9)
months ending September 30, 1993 and September 30, 1994 together
with the notes thereto and the projected proforma balance sheet,
income statement and cash flow statement for the year ending
December 31, 1994. The financial statements referred to above are
provided for informational purposes only, are not guaranteed by
EniChem and Union Carbide shall have no claim against Enichem with
respect thereto.
(b) EniChem will prepare a balance sheet of the
Business as of the close of business on January 31,1995 in
accordance with the AAP except as modified by the principles set
forth on Exhibit B, in U.S.dollars and in accordance with United
States generally accepted accounting principles, and deliver same
by May 30, 1995.
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES REGARDING
UNION CARBIDE___________________________
Union Carbide represents and warrants as of the date hereof
as follows:
2.1 Organization. Union Carbide is a corporation duly
organized and validly existing under the laws of the State of New
York, U.S.A. Union Carbide has all corporate power and authority
necessary to (i) execute, deliver and perform its obligations
under this Agreement and (ii) consummate the Transaction and the
transactions contemplated in the Master Agreement and all the
agreements referred to therein and any other agreements with
respect thereto.
2.2 Authorization. The execution and delivery by Union
Carbide of this Agreement and the Master Agreement, all agreements
referred to therein or any other agreement with respect thereto
and the performance by Union Carbide of its obligations hereunder
and thereunder and the consummation by Union Carbide of the
Transaction and the transactions contemplated in the Master
Agreement and all agreements referred to therein and any other
agreements with respect thereto have been duly authorized by all
necessary corporate actions on the part of Union Carbide.
2.3 No Breach. The execution and delivery by Union Carbide
of this Agreement, the Master Agreement, all agreements referred
to therein or any other agreement with respect thereto, the
performance by Union Carbide of its obligations hereunder and
thereunder and the consummation by Union Carbide of the
Transaction and the transactions contemplated in the Master
Agreement and all agreements referred to therein and any other
agreements with respect thereto will not:
(a) conflict with, result in a violation of or
constitute a default under the Articles of Incorporation of Union
Carbide, as amended to date;
(b) constitute a default under, result in a violation
or breach of, result in the cancellation or termination of,
accelerate the performance required under or result in the
creation of any lien, claim or encumbrance upon any of the
material properties of Union Carbide or any of the Shares pursuant
to any material mortgage, guaranty, deed of trust, note,
indenture, bond, lease, agreement or other instrument to which
Union Carbide is a party or by which any of such properties is
bound; or
(c) result in a violation of or conflict with any law,
ordinance, rule or regulation or any order, writ, judgment, award,
edict or decree of any court of competent jurisdiction or any
governmental agency, authority or instrumentality of competent
jurisdiction applicable to Union Carbide or any of such
properties, which default, breach, cancellation, termination,
acceleration, creation, violation or conflict would have a
material adverse effect on the consummation by Union Carbide of
the Transaction and the transactions contemplated in the Master
Agreement, all agreements referred to therein or any other
agreement with respect thereto.
2.4 Consents. Except as otherwise contemplated by Article
5.4 hereof, no consent, approval, exemption or authorization is
required to be obtained from, no notice is required to be given to
and no filing is required to be made with any third party
(including, without limitation, governmental agencies, authorities
and instrumentality's of competent jurisdiction) by Union Carbide
in order (i) for this Agreement, the Master Agreement, all
agreements referred to therein and any other agreement respect
thereto to constitute a legal, valid and binding obligation of
Union Carbide and (ii) to authorize or permit the consummation by
Union Carbide of the Transaction and the transactions contemplated
in the Master Agreement, all agreements referred to therein and
any other agreement with respect thereto.
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES REGARDING
____________ENICHEM_________________________________
EniChem represents and warrants as of the date hereof as
follows:
3.1 Organization. EniChem is a Societa' per Azioni duly
organized and validly existing under the laws of Italy. EniChem
has all corporate power and authority necessary to (i) execute,
deliver and perform its obligations under this Agreement and (ii)
consummate the Transaction and the transactions contemplated in
the Master Agreement and all agreements referred to therein and
any other agreements with respect thereto.
3.2 Authorization. The execution and delivery by EniChem of
this Agreement, the Master Agreement, the agreements referred to
therein and any other agreement with respect thereto, the
performance by EniChem of its obligations hereunder and thereunder
and the consummation by EniChem of the Transaction and the
transactions contemplated in the Master Agreement and all
agreements referred to therein and any other agreements with
respect thereto have been duly authorized by all necessary
corporate actions on the part of EniChem.
3.3 No Breach. The execution and delivery by EniChem of
this Agreement, the Master Agreement, the agreements referred to
therein and any other agreement with respect thereto, the
performance by EniChem of its obligations hereunder and thereunder
and the consummation by EniChem of the Transaction and the
transactions contemplated in the Master Agreement and all
agreements referred to therein and any other agreements with
respect thereto will not:
(a) conflict with, result in a violation of or
constitute a default under the Statutes of EniChem, as amended to
date;
(b) constitute a default under, result in a violation
or breach of, result in the cancellation or termination of,
accelerate the performance required under or result in the
creation of any lien, claim or encumbrance upon any of the
material properties of EniChem pursuant to any material mortgage,
guaranty, deed of trust, note, indenture, bond, lease, agreement
or other instrument to which EniChem is a party or by which any of
such properties is bound; or
(c) result in a violation of or conflict with any law,
ordinance, rule or regulation or any order, writ, judgment, award,
edict or decree of any court of competent jurisdiction or any
governmental agency, authority or instrumentality of competent
jurisdiction applicable to EniChem or any of such properties,
which default, breach, cancellation, termination, acceleration,
creation, violation or conflict would have a material adverse
effect on (i) the conduct of the Business as presently conducted
by EniChem and its subsidiaries (including, for this purpose, the
Company and the Subsidiaries) or (ii) the consummation by EniChem
of the Transaction and the
transactions contemplated in the Master Agreement and all the
agreements referred to therein and any other agreements with
respect thereto.
3.4 Consents. Except as otherwise contemplated by Article
5.4 hereof no consent, approval, exemption or authorization is
required to be obtained from, no notice is required to be given to
and no filing is required to be made with any third party
(including, without limitation, governmental agencies, authorities
and instrumentalities of competent jurisdiction) by EniChem in
order (i) for this Agreement, the Master Agreement, all agreements
referred to therein and any other agreements with respect thereto
to constitute a legal, valid and binding obligation of EniChem and
(ii) to authorize or permit the consummation by EniChem of the
Transaction and the transactions contemplated in the Master
Agreement, the agreements referred to therein or any other
agreement with respect thereto.
3.5 Ownership of Stock. All of the issued capital stock of
the Company is owned by EniChem, free and clear of all preemptive
rights, liens, claims and encumbrances. Upon consummation of the
Closing, all of the Shares shall have been duly authorized and
validly issued, shall be outstanding, fully paid and non-
assessable and shall have been sold and delivered to Union
Carbide, free and clear of all preemptive rights, liens, claims
and encumbrances.
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES REGARDING
____________THE COMPANY AND THE BUSINESS____________
EniChem represents and warrants as of the date hereof as
follows:
4.1 Organization. The Company is a Societa a responsabilita
limitata duly organized and validly existing under the laws of
Italy. The Company has all corporate power and authority
necessary to (i) own, lease or use the properties owned, leased or
used by it and (ii) conduct the Business as presently conducted by
it. The Company is duly qualified or licensed to do business
under the laws of all of the jurisdictions where the ownership of
the properties presently owned by it or the conduct of the
Business as presently conducted by it so requires.
4.2 No Breach. The execution and delivery by EniChem of
this Agreement, the performance by EniChem of its obligations
hereunder and the consummation by EniChem of the Transaction and
the transactions contemplated in the Master Agreement and all
agreements referred to therein and any other agreements with
respect thereto and will not:
(a) constitute a default under, result in a violation
or breach of, result in the cancellation or termination of,
accelerate the performance required under or result in the
creation of any lien, claim or encumbrance upon any of the
Company and the other companies in the operation of the Business
pursuant to any material mortgage, guaranty, deed of trust, note,
indenture, bond, lease, agreement or other instrument to which the
Company or any Subsidiary is a party or by which any of such
properties is bound. Such other companies are listed on Schedule
VII attached hereto (collectively, the "Subsidiaries" and,
sometimes individually, a "Subsidiary") ;
(b) result in a violation of or conflict with any law,
ordinance, rule or regulation or any order, writ, judgment, award,
edict or decree of any court of competent jurisdiction or any
governmental agency, authority or instrumentality of competent
jurisdiction applicable to EniChem, the Company, any Subsidiary or
any of such properties in the operation of the Business; or
(c) conflict with, result in a violation of or
constitute a default under the statutes of the Company and any
Subsidiary in each case as amended to date, which default, breach,
cancellation, termination, acceleration, creation, violation or
conflict would have a material adverse effect on (i) the conduct
of the Business as presently conducted by EniChem, the Company and
its Subsidiaries, (ii) the ownership, leasing or use by Enichem,
the Company and the Subsidiaries of such properties as presently
owned, leased or used by them or (iii) the consummation by the
Company of the Transaction and the transactions contemplated in
the Master Agreement and all agreements referred to therein and
any other agreements with respect thereto.
4.3 Consents. Except as otherwise contemplated by Article
5.4 hereof or set forth in Schedule V attached hereto, no consent,
approval, exemption or authorization is required to be obtained
from, no notice is required to be given to and no filing is
required to be made with any third party by EniChem, the Company
or any Subsidiary under or pursuant to any governmental permits,
licenses, consents, authorizations or approvals held by or issued
to EniChem, the Company or any Subsidiary in the operation of the
Business (including, without limitation, environmental, health,
safety and operating permits and licenses) by reason of this
Agreement or the consummation of the Transaction and the
transactions contemplated in the Master Agreement and all
agreements referred to therein and any other agreements with
respect thereto.
4.4 Organizational Instruments. EniChem has delivered to
Union Carbide complete and accurate copies of the Statutes of the
Company as amended to date. The Company is not in violation of
any provision of its Statutes as amended to date. EniChem has
made available or caused to be made available to Union Carbide
complete and accurate copies of the Statutes of each of the
Subsidiaries, in each case as amended to date. No Subsidiary is
in violation of any provision of its Statutes, in each case as
amended to date. Except as provided in the Master Agreement, the
Shareholders Agreement or as set forth in Schedule VII attached
hereto, there are no agreements or commitments which obligate or
require EniChem, the Company or any Subsidiary to amend or
authorize an amendment of Statutes of the Company or any
Subsidiary, in each case as amended to date. EniChem has made
available or caused to be made available to Union Carbide complete
and accurate copies of the minute books and stock books of (i) the
Company and (ii) the Subsidiaries. Such minute books contain
complete and accurate copies of all records of all meetings of the
board of directors (and any committee thereof) of the Company and
each of such Subsidiaries and the shareholders of the Company and
each of such Subsidiaries.
4.5 Capital Stock. The capital stock of the Company
consists of one hundred and thirty six billion four hundred and
fifty million Lire (Lit 136.450.000.000) duly authorized and fully
paid and non-assessable. An increase of the capital stock up to
seven hundreded billion lire (700.000.000.000) was resolved by the
general meeting and is currently subject to Court approval. Upon
the consummation of the Transaction, the issued capital stock of
the Company will consist of six hundred sixty two billion four
hundred million Lire (Lit 662.400.000.000), or such other amount
as shall conform to the results of the appraisal referred to in
Article B.1.a) of the Master Agreement, fully paid and non-
assessable. There are no outstanding subscriptions, options,
warrants, rights, convertible or exchangeable securities,
agreements or commitments which obligate or require EniChem or the
Company to issue, sell or transfer any capital stock of the
Company. All of the issued capital stock of the Company is owned
by EniChem free and clear of all preemptive rights, liens, claims,
and encumbrances except as referred to in Article 1.1 hereof.
Upon consummation of the Closing and recording of the transfer of
the Shares in the Shareholders book and except as provided in the
Shareholders Agreement and the Statutes, good and marketable title
to the Shares shall pass to Union Carbide free and clear of all
preemptive rights, liens, claims and encumbrances except as
referred to in Article 1.1.
4.6 Subsidiaries. The Company has no subsidiaries. Upon
Closing the only subsidiaries of the Company shall be those listed
in Schedule VII attached hereto. Neither the Company nor any
Subsidiary is a partner of any partnership or a member of any
joint venture or other business entity other than the partnerships
and joint ventures listed on Schedule VII attached hereto. The
Company owns the percentage of shares of capital stock of each
Subsidiary indicated in Schedule VII attached hereto directly or
indirectly through another Subsidiary free and clear of all
preemptive rights, liens, claims and encumbrances and except as
set forth on Schedule VII there are no outstanding subscriptions,
options, warrants, rights, convertible or exchangeable securities,
agreements or commitments which obligate or require EniChem, the
Company or any Subsidiary to issue, sell or transfer (i) any
shares of capital stock of any Subsidiary or (ii) any securities
convertible into or exchangeable for shares of capital stock of
any Subsidiary. The number of shares of capital stock of each
Subsidiary owned by them are listed on Schedule VII attached
hereto. Each Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction
under which it has been organized. The issued and outstanding
shares of capital stock of each of the Subsidiaries owned by
EniChem have been duly authorized and validly issued and are fully
paid and non-assessable. The jurisdiction under the laws of which
each Subsidiary has been organized is listed in Schedule VII
attached hereto. Each Subsidiary has all corporate power and
authority necessary to (i) own, lease or use the properties owned,
leased or used by it and (ii) engage in the conduct of the
Business as presently conducted by it. Each Subsidiary is duly
qualified or licensed and in good standing as a foreign
corporation authorized to do business under the laws of all
jurisdictions where the ownership of the properties owned by it or
the conduct of the Business as presently conducted by it so
requires.
4.7 Financial Statements.
Schedule I(b) attached hereto sets forth a complete and
accurate copy of the unaudited proforma balance sheet as of
October 31, 1994 (the "Balance Sheet Date") of the Business of
EniChem, the Company and the Subsidiaries (the "Balance Sheet").
The Balance Sheet (i) presents fairly, in all material respects,
the consolidated financial position of the Business as of October
31, 1994, (ii) is in conformity with AAP applied on a consistent
basis and (iii) has been derived from the books and records of
EniChem, the Company and the Subsidiaries.
4.8 Tax Matters.
(a) Except as set forth on Schedule XVII attached
hereto, all Tax Returns (as defined in Article 4.8(d) hereof)
required to be filed by or on behalf of the Company or any
Subsidiary or with respect to the activity of the Business on or
prior to the Closing as operated by EniChem have been timely filed
for all years and periods for which such Tax Returns were due
(taking into account all filing date extensions) and all Taxes (as
defined in Article 4.8(c) hereof) shown thereon to be payable have
been paid. Except as set forth in Schedule XVII attached hereto,
since the Balance Sheet Date neither the Company, nor any
Subsidiary nor the Business as operated by EniChem has incurred
any material liability with respect to any Tax except in the
ordinary course of business. Except as set forth in Schedule IV
or XVII attached hereto, there are no presently pending written
claims by any Italian, non-Italian, national, state or local
taxing authority which pertain to the Company, any Subsidiary, the
Business or any of the material properties owned, used or leased
by the Company, the Subsidiaries, the Business as operated by
EniChem, which, if adversely determined, would have a material
adverse effect on the Business as presently conducted by EniChem,
the Company and the Subsidiaries.
(b) With respect to all Tax Returns, (i) the statute of
limitations for the assessment of any Tax has expired through the
taxable year set forth in Schedule XVII attached hereto with
respect to such Tax and (ii) no audit is in progress and no waiver
or agreement is in force for the extension of time for the
assessment or payment of any Tax except as set forth in Schedule
XVII.
(c) As used herein, the term "Tax" or "Taxes" shall
mean any or all Italian, national, state and local taxes levied on
the Company or its Subsidiaries in relation to the Business as
operated by EniChem and all non-Italian taxes, assessments,
imposts, duties and other similar governmental charges levied on
the Company or any of its Subsidiaries in relation to the Business
as operated by EniChem (including, without limitation, income,
profits, excise, sales, use, occupancy, value added, gross
receipts, franchise, ad valorem, capital, transfer, withholding,
employment, payroll and property taxes and import duties), any or
all interest thereon, any or all additions thereto or to any such
interest and any or all penalties with respect thereto. The
foregoing definition of the term Taxes shall be unaffected by the
accounting classification on the Company's books and records.
(d) As used herein, the term "Tax Return" shall mean
any return, report, declaration, estimate or information statement
filed or required to be filed with any taxing authority with
respect to any Tax required to be filed by or on behalf of the
Company or any Subsidiary or EniChem with respect to the operation
of the Business prior to Closing.
(e) Schedule XVII includes a list of all Tax holidays,
Tax exemptions or other similar Tax relief currently in effect for
EniChem, the Company or its Subsidiaries with respect to the
operations, activities or assets of the Business from which the
Company will benefit after the Closing and the loss of which would
materially affect the Tax liability of the Company or its
Subsidiaries after the Closing.
4.9 Real Property.
(a) Schedule XVI attached hereto consists of maps upon
which: (i) all of the real property which is owned by EniChem in
the operation of the Business, the Company, or any Subsidiary (the
"Owned Real Property") is identified and (ii) all of the real
property which is leased from a third party by EniChem in the
operation of the Business, the Company or any Subsidiary (the
"Leased Real Property") is identified (items (i) and (ii) above
are collectivelly referred to as the "Real Property").
(b) EniChem, the Company and the Subsidiaries have full
right, title and interest to the Owned Real Property and have full
right and interest to the Leased Real Property.
(c) Schedule XVI attached hereto consists of maps upon
which any Owned Real Property which is leased to a third party is
identified.
(d) Schedule XVI attached hereto consists of maps upon
which easements, rights of way, covenants and restrictions and
other rights and interests pertaining to or interfering with the
Real Property is identified. Except as set forth on Schedule XVI
attached hereto, to the best of EniChem's knowledge there are no
other easements, rights of way, covenants and restrictions and
other rights and interests pertaining to or interfering with the
Real Property. Notwithstanding the foregoing, the Company shall
grant to EniChem whatever additional easements and rights of way
which EniChem enjoyed prior to Closing.
(e) Schedule XVI attached hereto consists of maps
attached upon which easements, rights of way, covenants and
restrictions and other rights and interests of EniChem in the
operation of the Business, the Company or any Subsidiary outside
the Real Property is identified.
(f) EniChem shall grant to the Company or any
Subsidiary on the Closing Date or at anytime in the future any and
all additional easements and rights of way the Company or any
Subsidiary shall need on the property owned or controlled by
EniChem so as to allow the Company or any Subsidiary to operate
the Business in substantially the same manner and to substantially
the same extent as the Business was operated by EniChem, the
Company and the Subsidiaries prior to the Closing.
(g) Except as set forth in Schedule XVI attached
hereto, neither EniChem, Company nor any of the Subsidiaries owns,
holds, is obligated under or a party to any option, right of first
refusal or other contractual right to purchase, acquire, sell or
dispose of the Real Property or any portion thereof or interest
therein.
(h) Except as set forth in Schedule XVI attached
hereto, the material components of the buildings, structures and
other material improvements which are located on the Owned Real
Property and which are necessary and material to the operation of
the plants and other facilities of which they are a part are in
reasonable working order and repair for the conduct of the
Business as presently conducted by EniChem, the Company and the
Subsidiaries. The facilities, buildings, structures and other
material improvements which are located on the Real Property are
supplied or will be supplied by EniChem or third parties with all
utilities and services (including, gas, electricity, water,
telephone, sanitary sewer, and storm sewer all of which services
are adequate in accordance with all applicable laws, ordinances,
rules and restrictions and are provided via public records or via
permanent, irrevocable, appurtenant easements benefitting the Real
Property) necessary for the operation thereof as presently
operated by EniChem, the Company and the Subsidiaries and all
associated "hook-up" fees and other similar charges have been
fully paid.
(i) Except as set forth in Schedule XVI attached
hereto, neither EniChem, the Company nor any of the Subsidiaries
has received written notice of any threatened, and there is not,
any pending, (i) condemnation proceeding affecting the Real
Property or any part thereof or (ii) sale or other disposition of
the Real Property or any part thereof in lieu of condemnation.
(j) Except as set forth in Schedule XVI attached hereto
there are no encroachments or other facts or conditions affecting
any parcel of Owned Real Property which would be revealed by an
accurate survey or careful physical inspection thereof and which,
individually or in the aggregate, interfere in any material
respect with the use, occupancy or operation thereof as presently
used, occupied or operated by EniChem the Company and the
Subsidiaries.
4.10 Owned Personal Property. Except as set forth in
Schedule IV attached hereto and except for the properties sold,
transferred or otherwise disposed of by EniChem, the Company or
any Subsidiary in the ordinary course of business since the
Balance Sheet Date, all of the tangible personal property
(including, without limitation, furnishings, furniture, office
equipment, vehicles, inventories, tools, machinery, equipment,
structures and movable fixtures) which is reflected in the Balance
Sheet is (i) owned by EniChem, the Company or one of the
Subsidiaries and (ii) in reasonable working order and repair for
use as presently used by EniChem, the Company or the Subsidiaries.
All items of inventory are in conformance to the specifications
for such products, are of the volume and mix in conformance with
past practice and are salable or usable in conformance with past
practice except as reserved against in the Effective Date Balance
Sheet and have been carried on the books and records of EniChem,
Company or the Subsidiaries on a consistent basis.
4.11 Title to Owned Properties. Except as set forth in each
Schedule attached hereto with respect to the properties listed
therein or in Schedule IV attached hereto, EniChem, the Company
and each Subsidiary has good and marketable title to all of the
material properties owned by it, free and clear of all liens,
claims and encumbrances other than liens, claims and encumbrances
reflected in the Financial Statements.
4.12 Contracts; Leases; Licenses.
(a) Except as described in this Agreement and in the
Master Agreement, Schedule VI attached hereto sets forth all
written contracts, agreements and commitments with respect to the
Business (including, without limitation, leases, subleases,
licenses and installment sales contracts) to which EniChem, the
Company or any Subsidiary is a party and:
(i) which involve future expenditures with
respect to the purchase of raw materials, manufacturing
supplies or utilities used in the ordinary course of business
in excess of $200,000;
(ii) which involve future receipts with respect to
the sale of products in the ordinary course of business in
excess of $200,000;
(iii) which involve future expenditures or receipts
with respect to the purchase, sale or lease of real property
or personal property (other than raw materials, manufacturing
supplies and products described in clauses (i) and (ii) of
this sentence) in excess of $200,000;
(iv) which involve future expenditures or receipts
with respect to the rendition of services (other than the
purchase of utilities) in excess of $200,000;
(v) which contain commitments of suretyship,
guaranty or indemnification (other than guarantees,
warranties and indemnities provided in connection with the
purchase, sale or lease of materials, supplies, utilities,
products or other personal property or the rendition of
services in the ordinary course of business);
(vi) which are not listed above and are material
to the conduct of the Business as presently conducted by
Enichem, the Company or any Subsidiary;
(vii) to which EniChem or any of its subsidiaries
is also a party; or
(viii) pursuant to which EniChem, the Company or any
of the Subsidiaries agrees not to compete in any line of
business with any person or in any geographical area.
(b) There are no binding oral contracts, agreements or
commitments to which EniChem, the Company or any Subsidiary is a
party and which, if reduced to or set forth in writing, would be
required to be described in any Schedule attached hereto.
4.13 Performance of Contracts, Leases and Licenses. Except
as set forth in each Schedule attached hereto with respect to the
contracts, agreements and commitments listed therein, (i) to the
knowledge of EniChem all of the contracts, agreements and
commitments set forth in Schedule VI attached hereto are legal,
valid and binding and in full force and effect in all respects,
(ii) neither EniChem, the Company nor any Subsidiary is in
default, or has received notice of any default or any event which,
with the passage of time, the giving of further notice or both,
would constitute a default by EniChem, the Company or any
Subsidiary under any such contract, agreement or commitment, (iii)
to the knowledge of EniChem none of the other parties to any such
contract, agreement or commitment is in default thereunder, (iv)
to the knowledge of EniChem there does not exist any condition nor
has there occurred any event which, with the passage of time, the
giving of notice or both would constitute a breach or default
under any such contract, agreement or commitment by the other
party thereto and (v) to the knowledge of EniChem there is no
reasonable basis for any party to such contracts, agreements or
commitments to make any claim against Enichem, the Company or any
Subsidiary with respect to any such contract, agreement or
commitment which has been fully performed.
4.14 Consents relating to Contracts. Except as otherwise
contemplated in the Agreement or as set forth in Schedule VI
attached hereto, no consent, approval, exemption or authorization
is required to be obtained from, no notice is required to be given
to and no filing is required to be made with any third party
(including, without limitation, governmental agencies, authorities
and instrumentalities of competent jurisdiction) by EniChem, the
Company or any Subsidiary, in order to avoid a breach of any of
the contracts, agreements and commitments set forth in Schedule VI
attached hereto which breach would have a material adverse effect
on (i) the conduct of the Business as presently conducted by
EniChem, the Company and the Subsidiaries or (ii) the consummation
by EniChem, the Company or any Subsidiary of the Transaction.
4.15 Compliance with Laws.
Except as set forth elsewhere in this Agreement or in any
Schedule attached hereto with respect to the matters set forth
therein or in Schedule XIII attached hereto, to EniChem's
knowledge, neither EniChem, the Company nor the Subsidiaries is in
default under or in violation of any Italian, foreign, state or
local law, ordinance, regulation or rule or any judgment, writ,
order, award, edict or decree of any court of competent
jurisdiction or any governmental agency, authority or
instrumentality of competent jurisdiction (i) pertaining to the
Business as presently conducted by EniChem, the Company and the
Subsidiaries or the properties owned, leased or used by EniChem,
the Company and the Subsidiaries other than such defaults and
violations, if any, which will not have a material adverse effect
on the conduct of the Business as presently conducted by EniChem,
the Company and the Subsidiaries or the ownership, leasing or use
of such properties by EniChem, the Company and the Subsidiaries as
presently owned, leased or used by them or (ii) which would
prohibit or interfere with the consummation by EniChem , the
Company or any Subsidiary with the transactions contemplated
hereby.
4.16 Permits; Licenses. Schedule XV attached hereto sets
forth all of the governmental consents, approvals, exemptions,
permits, licenses, franchises and other authorizations which have
been issued to or are held or used by EniChem, the Company or any
Subsidiary in the operation of the Business or for which EniChem,
the Company or any Subsidiary has applied for in the operation of
the Business, the absence of which would prohibit or materially
interfere with the operation of the Business and the consummation
by EniChem, the Company or any Subsidiary of the transactions
contemplated hereby. Except as described in Schedule X, XI or XV
attached hereto, Enichem, the Company and the Subsidiaries have
obtained all of the material governmental consents, approvals,
permits, exemptions, licenses, franchises and other authorizations
which are necessary in order to (i) conduct the Business as
presently conducted by them or (ii) own, lease or use the
properties presently owned, leased or used by them in the
operation of the Business. The consummation of the transactions
contemplated hereby will not result in a violation or invalidation
of any of such consents, approvals, exemptions, permits, licenses,
franchises or other authorizations.
4.17 Environmental Conditions.
(a) Schedule X attached hereto:
(i) lists (A) all facilities and sites used for
treatment, disposal and/or recycling of waste (including but
not limited to aboveground and underground storage tanks,
landfills, surface impoundments, incinerators, underground
injection wells, lagoons, waste piles, pits and ponds) which
are located on the Real Property and (B) as to each such
facility or site the time period used and the type of
material treated, stored, disposed or recycled;
(ii) lists all waste treatment, storage, recycling
and/or disposal facilities which are not located on the Real
Property and which are or have been used by EniChem, the
Company or any Subsidiary or any of their predecessors in
interest, in connection with the conduct of the Business;
(iii) lists all written reports of internal and
governmental environmental audits or risk assessments
conducted since January 1, 1991, relating to the Business;
(iv) lists all reports of Releases of Hazardous
Materials (as hereinafter defined) submitted since January 1,
1991, to any Governmental Authority (as hereinafter defined)
relating to the Business;.
(v) lists all written notices of an Environmental
Action (as hereinafter defined) received by EniChem, the
Company or any of the Subsidiaries since January 1, 1991,
arising out of or relating to the Real Property or the
generation, use, treatment, handling, storage or disposal of
Hazardous Materials thereon, or the Release or transportation
of Hazardous Materials thereto or therefrom, or arising out
of or relating to the Business;
(vi) lists all reports of non-compliance relating
to the Business reported to or identified by any Governmental
Authority since January 1, 1991, with (A) Environmental
Consents (as hereinafter defined), or (B) the requirements of
any Environmental Law (as hereinafter defined); and
(vii) lists all reports, studies, tests or analyses
in the possession of or initiated by EniChem, the Company or
any of the Subsidiaries pertaining to the existence of
Hazardous Materials in the Environment (as hereinafter
defined) at or emanating from any part of the Real Property.
(b) Except as set forth in Schedule X or any other
Schedule attached hereto:
(i) there is no Environmental Action relating to
the Business pending or threatened and to the best of
EniChem's knowledge and belief there is no omission or
circumstance which could give rise to any such Environmental
Action;
(ii) Neither EniChem nor the Company nor any
Subsidiary has received any notice from any Governmental
Authority under any Environmental Law stating that EniChem,
the Company or any of the Subsidiaries has a present or
future obligation to undertake Remedial Action (as
hereinafter defined) with respect to the Business;
(iii) none of the buildings and improvements
included within the Business, including the Real Property,
contain asbestos;
(iv) EniChem, the Company and the Subsidiaries
have obtained and have complied with the terms and conditions
of all Environmental Consents in relation to the Business and
have also complied with all conditions, limitations,
obligations, prohibitions or requirements under any
Environmental Laws in relation to the Business;
(v) All Environmental Consents relating to the
Business are in full force and effect and no actions
(including, but not limited, to capital investments) are, to
the best of EniChem's knowledge, necessary to secure
compliance with or to maintain or obtain any Environmental
Consents relating to the Business and there are no facts or
circumstances indicating that any Environmental Consents
relating to the Business would or might be revoked,
suspended, cancelled, varied or not renewed and:
(aa) All appropriate or necessary action in
connection with the renewal or extension of any
Environmental Consents relating to the Business has been
taken;
(bb) Neither the execution nor the
performance of this Agreement will of itself cause any
Environmental Consents relating to the Business to be
withdrawn or modified; and
(cc) None of the conditions to which any
Environmental Consents relating to the Business are
subject are personal to EniChem, the Company or any of
the Subsidiaries;
(vi) No Release of any Hazardous Material relating
to the Business exceeds or has exceeded any allowable or
permissible quotas or limits prescribed or specified under
any Environmental Law or in any condition to any
Environmental Consents; and
(vii) The Real Property is not referred to or
listed as polluted or contaminated land or contaminated uses
kept pursuant to any Environmental Law nor to the best of
EniChem's knowledge are there any facts or circumstances
which would or might give rise to an entry in any such
register.
(c) As used in this Article 4.17 and elsewhere in this
Agreement:
(i) "Environmental Action" means any action,
suit, demand, demand letter, claim, notice of non-compliance
or violation, investigation, proceeding, consent order or
consent which relates to any Environmental Law, including,
without limitation
(a) any claim by any Governmental Authority
for enforcement, Remedial Action, cost recovery, damages
or injunctive relief pursuant to any Environmental Law;
and
(b) any claim by any third party seeking
damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from
Hazardous Materials or arising from alleged injury or
threat of injury to the Environment.
(ii) "Environment" means any land (including,
without limitation, surface land and subsurface strata, sea
bed or river bed); water (including, without limitation,
coastal and inland waters, surface waters and ground waters
and water in drains and sewers); and air (including, without
limitation, air within buildings and other natural or man-
made structures above or below ground);
(iii) "Environmental Law" means any and all
applicable treaties, laws, regulations, enforceable
requirements, binding determinations, orders, decrees,
judgments, injunctions, permits, approvals, authorizations,
licenses, variances, permissions, notices or binding
agreements issued, promulgated or entered into by any
Governmental Authority, relating to pollution or protection
of the Environment, protection of human health and safety,
preservation or reclamation of natural resources, or to the
management, Release or threatened Release of Hazardous
Materials.
(iv) "Environmental Consents" means all or any
permits, licenses, consents, approvals, certificates,
qualifications, specifications, registrations, and other
authorizations and the filing of all notifications, reports,
and assessments required under any Environmental Law;
(v) "Governmental Authority" means any Italian,
national, federal, state, regional, local or foreign court or
governmental agency, authority, instrumentality or regulatory
body;
(vi) "Hazardous Materials" means any material or
substance that is, as of the Effective Date, prohibited or
regulated by any Environmental Law, or that is, as of the
Effective Date, designated by any Governmental Authority to
be radioactive, toxic, hazardous, or otherwise a danger to
health, reproduction or the Environment; and any chemicals,
materials or substances which, as of the Effective Date, are
defined as or included in the definition of "hazardous
substances", "hazardous waste", "hazardous materials", "toxic
substances", "controlled waste", "special waste",
pollutants", "contaminants", or words of similar import,
under any Environmental Law;
(vii) "Release" means any spilling, emission,
leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching, emanation or migration of any Hazardous
Materials into, onto or through the Environment; and
(viii) "Remedial Action" means actions required to:
(x) clean up, remove, treat, abate or in any other way
address any Hazardous Materials in the Environment; (y)
prevent the Release or threat of Release, or minimize the
further Release of any Hazardous Materials so it does not
migrate or endanger or threaten to endanger public health or
welfare in the Environment or (z) perform studies and
investigations in connection with (x) or (y).
4.18 Litigation; Claims; Proceedings. Except for suits,
actions, proceedings, investigations, audits, examinations and
written claims described elsewhere in this Agreement or its
Schedules, Schedule XIII attached hereto sets forth all of the
civil, criminal, administrative and arbitral suits, actions,
proceedings, investigations and written claims presently pending
or, to the knowledge of EniChem, threatened and all of the final
orders, judgments, writs, decrees, awards and edicts presently
outstanding which pertain to the Business as conducted by EniChem,
the Company or any of the Subsidiaries or any of the material
properties owned, leased or used by EniChem, the Company and the
Subsidiaries in the operation of the Business other than routine
suits, actions, proceedings, investigations and written claims
(including, without limitation, product liability, product
warranty and worker's compensation suits, actions, proceedings,
investigations and written claims) where the amount involved
therein does not exceed $500,000 or where the amount involved
therein and in all suits, actions, proceedings, investigations and
written claims involving substantially similar issues outstanding
at any time after January 1, 1992 does not exceed $500,000.
Neither EniChem nor the Company nor any of the Subsidiaries has
received written notice of any statements, citations or decisions
by any governmental agency, authority or instrumentality stating
that any product made by EniChem, the Company or any of the
Subsidiaries in the operation of the Business, is defective or
unsafe or fails to meet any standards promulgated by such agency,
authority or instrumentality. There have been no recalls ordered
by any such agency, authority or instrumentality with respect to
any such product.
4.19 Patents; Technology.
The patents, patent applications, trade secrets, know-how,
inventions, processes, manufacturing information, engineering
information and technical information, which are used or held for
use in the conduct of the Business as presently conducted by
EniChem, the Company and the Subsidiaries which will be
transferred to Company and the representations and warranties
related thereto are set forth in the EniChem Technology Agreement
to be entered into between EniChem and Polimeri Europa S.r.l.
4.20 Trademarks: Copyrights.
Except as set forth in Schedule XVIII attached hereto, to the
best of EniChem's knowledge and belief, all of the trademarks and
service marks used in the conduct of the Business have been duly
registered or are the subject of pending registration applications
in the jurisdictions indicated in Schedule XVIII attached hereto
and neither EniChem , the Company nor the Subsidiaries have
infringed the trademark rights or copyrights of third parties in
connection with the conduct of the Business.
4.21 Human Resources.
(a) Schedule VIII attached hereto sets forth a complete
and accurate list of (i) all of the collective bargaining
agreements and agreements with labor unions or associations
representing employees in the operation of the Business to which
EniChem, the Company or any of the Subsidiaries is a party and
(ii) as of the dates set forth in Schedule VIII attached hereto,
the total number of employees of EniChem, the Company and the
Subsidiaries in the operation of the Business and the number of
such employees represented by each such agreement. Such numbers of
employees have not changed since such dates except in the ordinary
course of business. Except as set forth in Schedule VIII attached
hereto, there is not, or to EniChem's knowledge, there are no
threatened strikes, slowdowns, picketing, work stoppages, labor
troubles or other similar events in which employees of EniChem,
the Company or any Subsidiary in the operation of the Business are
participating and which is having a material adverse effect on the
conduct of the Business as presently conducted by EniChem, the
Company and the Subsidiaries. Except as set forth in Schedule IX
attached hereto, there is no lawsuit, arbitration or proceeding
pending, or, to the knowledge of EniChem, threatened against
EniChem, the Company or any Subsidiary in connection with any
Employees which would have a material adverse effect on the
Business, the Company or any Subsidiary.
(b) EniChem, the Company and the Subsidiaries have
properly and accurately reflected on their books and records all
of the compensation paid to, or on behalf of, their agents and
employees in the operation of the Business. Such compensation has
been or shall be, properly and accurately disclosed in the Balance
Sheet and other public or private reports, records or filings to
the extent required by law. All current and former employees of
EniChem, the Company or the Subsidiaries with respect to the
operation of the Business and have been duly recorded as such in
the records of the Company and the Subsidiaries. As far as
concerns the "clientele" indemnity payable to commercial agents ,
the appropriate provision will be duly recorded in the Effective
Date Balance Sheet.
(c) All wages and salaries (excluding bonuses and
amounts accruing under any pension and profit-sharing plans listed
in Schedule IX) payable to current or former employees for any
period other than the current payroll period, severance or
overtime pay for the current payroll period, and indemnities of
any kind, including indemnities on account of vacation, time off,
or pay in lieu thereof, have been duly recorded in the accounting
books and other relevant records and documents of the Company and
of the Subsidiaries. Neither EniChem, the Company nor the
Subsidiaries are aware of any violation of any statute, ordinance
or regulation relating to minimum wages or minimum hours of work.
(d) Schedule VII attached hereto sets forth a complete
and accurate list of the employees to be employed by the Company
and the Subsidiaries (collectively the "Employees") along with
lists identifying the Employees by age, sex, seniority,
compensation and classification. Except to the extent indicated
in Schedule IX attached hereto, neither EniChem, the Company nor
any of the Subsidiaries in the operation of the Business is a
party to, nor otherwise bound by, any (a)"Accordo Aziendale"; (b)
profit sharing, deferred compensation, bonus, retainer,
consulting, health, welfare, or incentive plan or agreement
whether legally binding or not; (c) plan or policy providing for
"fringe benefits" to the Employees, including, but not limited to,
vacation, disability, sick leave, medical, hospitalization, life
insurance and other insurance plan, and related benefits; (d)
retirement or pension plan; and (e) post-employment plan other
than retirement and pension plan. Schedule IX attached hereto
describes each of the statutory and non-statutory employee benefit
plans, funds, programs, arrangements, compensation policies and
practices (collectively the "Plans") to be provided by the Company
and the Subsidiaries to the Employees. True, correct and complete
copies of all documents creating or evidencing any such plan,
agreement or obligation indicated in Schedule VIII have been
disclosed to, or reviewed by, Union Carbide.
4.22 Business Operations: Adverse Changes.
(a) Except as set forth herein or in any Schedule
attached hereto:
(i) since the Balance Sheet Date, neither
EniChem, the Company nor the Subsidiaries have, in connection
with the conduct of the Business by them, made any material
change in practices, operations or policies with respect to
(aa) the method for selling products, (bb) the standard terms
and conditions of sale of products (including standard terms
regarding returns and discounts, but excluding price
changes), (cc) the method for accounting for sale of
products, (dd) the policy regarding maintenance of inventory
levels, or (ee) the conduct of accounts receivable collection
and accounts payable payment activities, which would have a
material adverse effect on the Business as presently
conducted by them;
(ii) since the Balance Sheet Date and except as
contemplated by the Master Agreement, neither EniChem in the
operation of the Business, the Company nor any Subsidiary
has, except in the ordinary course of business, (aa) engaged
in any material transaction, (bb) entered into any material
agreement, (cc) incurred, paid or discharged any material
obligation or liability, (dd) sold or transferred any
material property, (ee) waived or released any material right
or obligation, or (ff) incurred any indebtedness for borrowed
money;
(iii) since the Balance Sheet Date, there has been
no material adverse change in (aa) the combined financial
condition or results of operations or cash flow of the
Business of EniChem, the Company and the Subsidiaries or (bb)
the Business as presently conducted by EniChem, the Company
and the Subsidiaries and no event has occurred or condition
has arisen which affects EniChem, the Company or any of the
Subsidiaries and which to the knowledge of EniChem would
result in an adverse change in (A) the combined financial
condition or results of operations or cash flow of the
Business of EniChem, the Company or its Subsidiaries or (B)
the Business as presently conducted by EniChem, the Company
or the Subsidiaries;
(iv) since the Balance Sheet Date, there has been
no damage to or loss of properties owned, leased or used by
EniChem, the Company or the Subsidiaries in the operation of
the Business which would have a material adverse effect on
the Business of EniChem, the Company or the Subsidiaries; and
(v) To the knowledge of EniChem, there are no
laws, rules or regulations (excluding any European Commission
directives) in full force and effect as of the date hereof
affecting the Business and/or the industry in which the
Business operates which can reasonably be expected to have a
material adverse effect on the condition (financial or
otherwise), assets, properties, liabilities, operations or
prospects of the Business.
(b) Except as set forth in Schedule IV attached hereto,
no material supplier or customer of EniChem, the Company or the
Subsidiaries has indicated to EniChem in writing that it will
cease doing business with EniChem,the Company or the Subsidiaries
because of the Transaction.
4.23 Health and Safety Conditions. Schedule XI attached
hereto lists:
(i) all current material safety data sheets
relating to the products currently sold or used by EniChem,
the Company and any Subsidiary in the operation of the
Business, including:
(a) Raw materials
(b) Intermediates
(c) Finished Goods;
(ii) all product labels for the current products
of the Business including
(a) Intermediates
(b) Finished Goods;
(iii) all filings or correspondence since
January 1, 1991 with all governmental agencies, authorities
or instrumentalities in respect of Council Directive (92/32)
EEC of 30 April 1992 and previous and subsequent amendments
to Directive 67/548/EEC relating to the classification,
packaging and labeling of dangerous substances;
(iv) all applicable air, water and hazardous waste
regulations that affect the operations of the Business;
(v) monitoring reports for the Business for
permitted water discharges and air emissions since January 1,
1991 to present;
(vi) government agency, authority or
instrumentality environmental audit reports of facilities
currently owned, leased or used by the Business since
January 1, 1991;
(vii) notifications required to be submitted to any
governmental agency, authority or instrumentality since
January 1, 1991 to present which report the quantities of
hazardous, extremely hazardous or toxic substances produced,
used or stored at the facilities which are owned, leased or
used by the Business;
(viii) all PCB Transformers and Capacitors on all
facilities which are currently owned, leased or used by the
Business;
(ix) all items containing Asbestos on all
facilities which are currently owned, leased or used by the
Business;
(x) summary of any health and safety studies,
including epidemiological and toxicological studies, related
to the Business;
(xi) industrial hygiene surveys related to the
Business since January 1, 1991 to present;
(xii) summary of Personnel Safety Statistics
related to the Business since January 1, 1991 to present;
(xiii) any Health & Safety audit reports for the
manufacturing facilities;
(xiv) any French, Italian and German national or
provincial regulatory provisions concerning Health & Safety
matters since January 1, 1991 and a description of corrective
actions;
(xv) any published public reports describing
Health & Safety performance of any of the facilities of the
Business since January 1, 1991;
(xvi) All Health and Safety permits and licenses
and pending applications for facilities which are currently
owned, leased or used by the Business since January 1, 1991;
(xvii) Internal health and safety audit reports and
action plans of facilities currently owned, leased or used by
the Business since January 1, 1991;
(xviii) Government agency, authority or
instrumentality audit reports of the facilities of the
Business since January 1, 1991;
(xix) Summaries of Worker's Compensation
liabilities (or equivalent) related to the Business since
January 1, 1991; and
(xx) Litigation, Claims and Proceedings, including
Citations, notices of violations, orders, consent orders,
administrative or judicial enforcement proceedings from any
governmental agency, authority or instrumentality related to
Health & Safety matters since January 1, 1991.
4.24 Liabilities. Except as set forth herein or in any
Schedule attached hereto, since the Balance Sheet Date no material
liabilities have been incurred in the operation of the Business by
EniChem, the Company or the Subsidiaries other than liabilities
incurred in the ordinary course of business.
4.25 Assets. Except as set forth on Schedule II attached
hereto, as of the Effective Date, the Company and the Subsidiaries
will own, lease or have licenses or other contractual rights to
use all of the assets, tangible or intangible, which are currently
used or held for use in the operation of the Business except as
disposed of in the ordinary course of business or through the
relevant agreements referred to in the Article C.6 of the Master
Agreement will have the right to purchase the necessary services
and utilities, so that after the Effective Date the Company can
operate the Business in substantially the same manner and to
substantially the same extent as the Business was operated by
EniChem, the Company and the Subsidiaries prior to the Effective
Date with the exception of the facilities at Porto Torres (which
EniChem shall retain) but including the cracker at Brindisi and
the raw material storage units related thereto, all compounding
assets and the real property necessary for polyethylene plant
expansion at Brindisi and Priolo, on terms and conditions set
forth in that letter dated November 21, 1994 from Mr. Santamaria
to Mr. Yimoyines (the option to purchase property set forth
therein shall expire five years from the date hereof) all of
which are hereinafter referred to as the "Assets".
4.26 Customers and Suppliers. There has not been and
EnoiChem does not recognize a basis on which one should reasonably
anticipate, by reason of the transactions contemplated by this
Agreement or otherwise, any adverse change in relations between
the Company or any Subsidiary and any of their present customers
and suppliers.
4.27 Depreciable Assets. At the Effective Date, the
Business shall have depreciable assets for an amount of no less
than one trillion four hundred and ninty nine billion Lire
(Lit.1.499.000.000.000), or such other amount as shall conform to
the results of the appraisal referred to in Article B.1. a) of the
Master Agreement, except for such non- material fixed assets of
the Business sold in the ordinary course of business, the amount
of which shall be replaced by cash or lower financial liabilities
than those which it would have had if such asset had not been
sold.
ARTICLE 5 - PRE-CLOSING COVENANTS
5.1 Covenants of Union Carbide.
(a) From the date hereof until the Closing, Union
Carbide shall refrain from taking any action which would cause any
representation or warranty contained in Article 2 hereof to be
untrue or incorrect in any material respect as of the Closing.
(b) If, for any reason (including, without limitation,
termination of this Agreement pursuant to Article 8 hereof), the
Closing does not take place by the Termination Date (as defined in
Article 8.1(i)), Union Carbide will, and will cause its officers,
employees and other representatives to, promptly (i) return to
EniChem all documents, papers, books, records and other materials
(and all copies thereof) obtained by any of them from EniChem, the
Company, or the Subsidiaries or any of the directors, officers,
employees, agents, representatives or consultants of EniChem, the
Company or the Subsidiaries in connection with the investigation
and evaluation of the transactions contemplated by, and the
negotiation and preparation of, this Agreement, the Master
Agreement and the Shareholders Agreement or the consummation of
such transactions, (ii) destroy all copies of all analyses,
studies and other documents prepared by or for Union Carbide which
contain or reflect information contained in such documents,
papers, books, records and other materials or obtained in
connection with visits to the facilities of the Company or any of
the Subsidiaries and (iii) furnish to EniChem a certificate signed
by an appropriate authorized officer of Union Carbide to the
effect that such destruction has been completed.
(c) Prior to Closing, EniChem and Union Carbide shall
prepare and agree to a Strategic Business Plan for the Company.
5.2 Covenants of EniChem.
(a) From the date hereof until the Closing, EniChem
shall (i) refrain from taking any action which would cause any
representation or warranty contained in Article 3 or 4 hereof to
be untrue or incorrect in any material respect as of the Closing
and (ii) notify Union Carbide of any adverse change in (A) the
combined financial condition or results of operations of the
Business after the date hereof or (B) the Business after the date
hereof.
(b) If, for any reason (including, without limitation,
termination of this Agreement pursuant to Article 8 hereof), the
Closing does not take place by the Termination Date, EniChem will,
and will cause its officers, employees and other representatives
to, promptly (i) return to Union Carbide all documents, papers,
books, records and other materials (and all copies thereof)
obtained by any of them from Union Carbide, any of its
subsidiaries or any of the directors, officers employees, agents,
representatives or consultants of Union Carbide or any of its
subsidiaries in connection with the investigation and evaluation
of the Transaction, and the negotiation and preparation of, this
Agreement and the Master Agreement and the Shareholders Agreement
or the consummation of such transactions, (ii) destroy all copies
of all analyses, studies and other documents prepared by or for
EniChem which contain or reflect information contained in such
documents, papers, books, records and other materials and (iii)
furnish to Union Carbide a certificate signed by an appropriate
authorized officer of EniChem to the effect that such destruction
has been completed.
(c) Except as otherwise provided herein or in the
Master Agreement, EniChem shall not, and shall not permit the
Company to, amend or authorize any amendment of the Statutes of
the Company prior to the Closing.
(d) Prior to the Closing, EniChem and Union Carbide
shall prepare and agree to a Strategic Business Plan for the
Company.
5.3 Conduct of the Business.
(a) Subject to Articles 5.3(c), 5.5 and 5.6 hereof,
from the date hereof until the Closing, in connection with the
conduct of the Business, EniChem shall and shall cause the Company
and the Subsidiaries, at its and their cost and expense, to:
(i) employ the properties owned, leased or used by
it or them and conduct its or their business only in the
ordinary course;
(ii) use all reasonable efforts to preserve its
customers and business relationships related thereto;
(iii) refrain from entering into any contract except
in the ordinary course of business; and
(iv) refrain from taking any action which would
cause any representation or warranty contained in Article 4
hereof to be untrue or incorrect in any material respect as
of the Closing.
(b) From the date hereof until the Closing, EniChem
shall cause the Company and the Subsidiaries, at the cost and
expense of the Company and the Subsidiaries to provide reasonable
access by Union Carbide and its officers, employees and other
representatives to the books, files, papers and records of the
Company and the Subsidiaries upon reasonable request with due
regard to minimizing interference with the conduct of the Business
as presently conducted by EniChem, the Company and the
Subsidiaries; provided, however, that no such access shall be
provided to the extent that such access would (i) violate the
terms of any agreement to which EniChem, its subsidiaries, the
Company or any of the Subsidiaries is a party, any applicable law,
ordinance, rule or regulation or any order, writ, judgment, award,
edict or decree of any court of competent jurisdiction or any
governmental agency, authority or instrumentality of competent
jurisdiction or (ii) result in the loss of any attorney-client or
other privilege.
(c) From the date hereof until the Closing, the only
capital expenditures or material transactions (other than material
transactions in the ordinary course of business and/or
contemplated hereby and in the Master Agreement) which EniChem
shall permit the Company or the Subsidiaries to make or effect are
capital expenditures and transactions which (i) become necessary,
in the reasonable opinion of EniChem, in order to maintain the
Business as presently conducted by EniChem, the Company and the
Subsidiaries (including, without limitation, maintaining the
plants, structures, leasehold improvements, machinery, equipment
and other property presently owned by or leased to EniChem, the
Company or a Subsidiary), (ii) are described in Schedule IV
attached hereto or (iii) shall have been approved by Union
Carbide. Union Carbide shall not unreasonably withhold any such
approval.
5.4 Filings and Consents.
(a) Each Party shall, at its cost and expense, promptly
file and thereafter diligently pursue any filing required on its
part under the European Union regulations as amended, and all
rules and regulations adopted thereunder (collectively, the "EU")
in connection with the Transaction as a concentration contemplated
by this Agreement, the Shareholders Agreement, the Master
Agreement, the agreements referred to therein or any other
agreement with respect thereto.
(b) Each Party shall, at its cost and expense, promptly
file and thereafter diligently pursue any filing required on its
part under French, German, Italian and United States laws, if any,
in connection with the transactions contemplated by this
Agreement, the Shareholders Agreement and the Master Agreement,
the agreements referred to therein or any other agreement with
respect thereto.
(c) EniChem shall, and shall cause the Company and the
Subsidiaries to use all reasonable efforts to obtain the issuance,
transfer or reissuance of all permits, licenses, franchises,
exemptions, consents, approvals or other authorizations required
to be obtained from, make all filings required to be made with and
give all notices required to be given to any third party
(including, without limitation, governmental agencies, authorities
and instrumentalities of competent jurisdiction) that are required
on its or their part in connection with the consummation of the
transactions contemplated hereby (other than those contemplated by
Articles 5.4(a) and 5.4(b)), in each case if (but only if) the
failure to obtain, give or make which would have an adverse effect
on such consummation or the conduct of the Business as presently
conducted by the Company and the Subsidiaries.
5.5 Insurance. EniChem shall cause the Company, at the
Company's cost and expense, to use all reasonable efforts to
obtain as of the Closing insurance policies issued by reputable
and financially sound insurance companies which provide for the
coverages, deductibles, co-insurance and self-insurance described
in Schedule XII attached hereto or such other terms as EniChem and
Union Carbide may mutually agree.
5.6 Cooperation.
(a) Union Carbide shall, upon request, use all
reasonable efforts to cooperate with EniChem and the Company in
connection with the performance by EniChem and the Company of
their respective obligations under Article 5.5 hereof.
(b) Each Party shall, upon request, cooperate with the
other Party in connection with the performance of their respective
obligations under Article 5.4 hereof.
5.7 Fulfilment of Conditions. Each Party shall use all
reasonable efforts to fulfill or cause to be fulfilled as soon as
practicable the conditions set forth in Articles 6 and 7 hereof.
ARTICLE 6 - ENICHEM'S CONDITIONS TO CLOSING
The obligations of EniChem to consummate the Transaction are,
unless waived by EniChem, subject to the fulfillment, at or before
the Closing, of each of the following conditions:
(i) The applicable waiting period under the EU
Regulations, including all extensions thereof, shall have
expired or been terminated and/or all applicable consents,
exemptions, authorizations, and/or approvals have been
obtained.
(ii) The approval by the competent court of the
Company's capital increase referred to in Article B.1.c. of
the Master Agreement which EniChem agrees to diligently
pursue.
(iii) Except for such changes as may occur in the
ordinary course of business or as may be permitted or
required pursuant to the terms hereof, the representations
and warranties of Union Carbide set forth in Article 2 hereof
shall be true and correct in all material respects on and as
of the Closing with the same effect as though such
representations and warranties had been made on and as of the
Closing.
ARTICLE 7 - UNION CARBIDE'S CONDITIONS TO CLOSING
The obligations of Union Carbide to consummate the
Transaction are, unless waived by Union Carbide, subject to the
fulfillment, at or before the Closing, of each of the following
conditions:
(i) The applicable waiting period under the EU
regulations, including all extensions thereof, shall have
expired or been terminated and/or all applicable consents,
exemptions, authorizations, and/or approvals have been
obtained.
(ii) The approval by the competent court of the
Company's capital increase referred to in Article B.1.c. of
the Master Agreement.
(iii) Except for such changes as may occur in the
ordinary course of business or as may be permitted or
required pursuant to the terms hereof, the representations
and warranties of EniChem and the Company set forth in
Articles 3 and 4 hereof shall be true and correct in all
material respects on and as of the Closing with the same
effect as though such representations and warranties had been
made on and as of the Closing.
ARTICLE 8 - TERMINATION
8.1 Termination. This Agreement may be terminated by either
Party:
(i) At anytime after December 30, 1995 (the
"Termination Date") by Union Carbide, if (a) the Closing
shall not have been consummated on or before the Termination
Date and (b) the failure to consummate the Closing on or
before the Termination Date did not result from the failure
by Union Carbide to perform or comply with any covenant or
agreement contained in this Agreement required to be
performed or complied with prior to the Closing by Union
Carbide.
(ii) At anytime after December 30, 1995 (the
"Termination Date") by EniChem, if (a) the Closing shall not
have been consummated on or before the Termination Date and
(b) the failure to consummate the Closing on or before the
Termination Date did not result from the failure by EniChem
to perform or comply with any covenant or agreement contained
in this Agreement required to be performed or complied with
prior to the Closing by EniChem.
8.2 Effects of Termination. In the event the consummation of
the Transaction does not occur:
(i) due to the fault of one of the Parties hereto,
the other Party is entitled to all rights available to it
under law; and
(ii) not due to the fault of EniChem, Union Carbide
hereby agrees to pay to EniChem fifty percent (50%) of the
Transactional Taxes and Transactional Costs (as hereinafter
defined) incurred by EniChem or the Company in transferring
the assets of the Business operated by Enichem and the shares
of the Subsidiaries to the Company.
ARTICLE 9 - LIABILITIES
9.1 Survival of Representations, Warranties and Covenants
Regarding Union Carbide. The representations and warranties set
forth in Article 2 hereof and the covenants and agreements of
Union Carbide set forth in Article 5.1 hereof shall survive the
execution, delivery and performance of this Agreement and the
Transaction contemplated hereby for a period of three (3) years
following the Closing Date. No suit, action or proceeding may be
commenced by EniChem with respect to any claim arising out of or
relating to such warranties, representations, covenants or
agreements after the expiration of the period for which such
representations, warranties, covenants and agreements shall
survive pursuant to this Article 9.1 (the "Applicable UCC Survival
Period"); provided, however, that subject to this Article 9
hereof, EniChem shall have the right to commence a suit, action or
proceeding within a reasonable period of time after the expiration
of the Applicable UCC Survival Period with respect to claims
arising out of or relating to such representations, warranties,
covenants or agreements which shall have been asserted by EniChem
under Article 10.4 hereof before the expiration of the Applicable
UCC Survival Period.
9.2 Survival of Representations, Warranties and Covenants
Regarding EniChem. The representations and warranties set forth
in Article 3 hereof and the covenants and agreements of EniChem
set forth in Article 5.2 hereof shall survive the execution,
delivery and performance of this Agreement and the Transaction
contemplated hereby for a period of three (3) years following the
Closing Date. No suit, action or proceeding may be commenced by
Union Carbide with respect to any claim arising out of or relating
to such warranties, representations, covenants or agreements after
the expiration of the period for which such representations,
warranties, covenants and agreements shall survive pursuant to
this Article 9.2 (the "Applicable EniChem Survival Period");
provided, however, that, subject to this Article 9 hereof, Union
Carbide shall have the right to commence a suit, action or
proceeding within a reasonable period of time after the expiration
of the Applicable EniChem Survival Period with respect to claims
arising out of or relating to such representations, warranties,
covenants and agreements which shall have been asserted by Union
Carbide under Article 10.4 hereof before the expiration of the
Applicable EniChem Survival Period.
9.3 Survival of Representations and Warranties and Covenants
of EniChem Regarding the Company and the Business.
(a) The representations and warranties set forth in
Article 4 hereof and the covenants and agreements of EniChem set
forth in Articles 5.3 hereof shall survive the execution, delivery
and performance of this Agreement and the Transaction contemplated
hereby for a period of three (3) years following the Closing Date.
No suit, action or proceeding may be commenced by Union Carbide or
the Company, as the case may be, with respect to any claim arising
out of or relating to such representations and warranties after
the expiration of the period for which such representation and
warranties shall survive pursuant to this Article 9.3 (the
"Applicable Company Survival Period"); provided, however, that,
subject to this Article 9 hereof, Union Carbide or the Company, as
the case may be, shall have the right to commence a suit, action
or proceeding within a reasonable period of time after the
expiration of the Applicable Company Survival Period with respect
to claims arising out of or relating to such representations and
warranties, which shall have been asserted by Union Carbide under
Article 10.4 hereof before the expiration of the Applicable
Company Survival Period.
(b) Notwithstanding Article 9.3(a) hereof the
representations and warranties set forth in Article 4.8 hereof and
the covenants set forth in Article 9.6 shall survive the
execution, delivery and performance of this Agreement and the
consummation of the Transaction until the expiration of the
applicable Tax statutes of limitations.
9.4 Assumption of Liabilities.
(a) For a period of ten (10) years from the Effective
Date, EniChem shall retain and assume any and all liabilities for
all claims, demands, allegations, suits, actions, proceedings,
investigations, fines, fees, taxes, levies, imposts, charges,
assessments, deficiencies, penalties, damages, settlements and
judgments of any kind or nature whatsoever ("Liabilities")
asserted against or incurred by EniChem, the Company or any
Subsidiary by a third party arising out the conduct of the
Business, which originate from, relate to or are associated with
events occurring or circumstances existing before the Effective
Date (collectively "Pre-Effective Date Business Liabilities");
provided however, that a Liability arising after the Effective
Date due to a change in law after the Effective Date shall not be
considered a Pre-Effective Date Business Liability except for such
changes in the law with respect to ground and ground water
contamination.
(b) All liabilities relating to health, safety, and
environmental matters shall be Pre-Effective Date Business
Liabilities unless it can be demonstrated that such Liability
arose after the Closing.
(c) Notwithstanding anything contained in Article
9.4(a) hereof the Company shall assume only those liabilities
provided for in Schedule III attached hereto. The Parties also
recognize that the Company will honor all contracts, arrangements
and agreements to which it is a party as set forth in the Master
Agreement including the Loan Agreement as defined in the
Shareholders Agreement.
(d) Notwithstanding anything contained in Article
9.4(a) hereof, the Company shall not assume any Liabilities of
whatever kind not arising out of, related to or associated with
the Business such as the asphalt business at Ragusa.
(e) No suit, action or proceeding may be commenced by
Union Carbide or the Company, as the case may be, with respect to
any claim arising out of or related to Pre-Effective Date Business
Liabilities after the expiration of the period for which such Pre-
Effective Date Business Liabilities shall survive pursuant to this
Article 9.4(a) (the "Applicable Assumed Liabilities Period);
provided, however, that, subject to this Article 9 hereof, Union
Carbide or the Company, as the case may be, shall have the right
to commence a suit, action or proceeding within a reasonable
period of time after the expiration of the Applicable Assumed
Liabilities Period with respect to claims arising out of or
relating to such representations and warranties, which shall have
been asserted by Union Carbide under Article 10.4 hereof before
the expiration of the Applicable Assumed Liabilities Period.
9.5 Transactional Taxes and Costs.
(a) Notwithstanding Article 9.4 (a) and Article 9.6
hereof the Company shall be responsible for all transfer,
conveyance, excise, stamp, documentary and other governmental
taxes, duties, charges, fees, imposts and assessments (including,
without limitation, taxes, duties, charges, fees, imposts and
assessments on or measured by gross or net income), and all
interest and penalties thereon, imposed at any time by any taxing
authority with respect to this Agreement, the purchase and sale of
the Shares or the transfer of the Assets of the Business as
contemplated by this Agreement or the Master Agreement (the
"Transactional Taxes"). It is understood by the Parties that the
UNIPOL License as defined in the Shareholders Agreement shall be
governed by its own tax provisions.
(b) Notwithstanding Article 9.4 (a) hereof, the Company
shall be responsible for all filing fees, notarial fees and other
similar fees and costs incurred with respect to this Agreement,
the purchase and sale of the Shares or the transfer of the
Business as contemplated by this Agreement or the Master Agreement
(the "Transactional Costs"). It is understood by the Parties that
the UNIPOL License shall be governed by its own provisions
regarding costs.
9.6 Assumption of Tax Liabilities by EniChem.
(a) Notwithstanding Articles 9.3 and 9.4 hereof from
and after the Effective Date, EniChem shall, without any further
responsibility or liability of or recourse to the Company, the
Subsidiaries or any of their respective directors, shareholders
(other than EniChem), officers, employees, agents, consultants,
representatives, successors, transferees or assignees, absolutely
and irrevocably assume and become solely liable and responsible
for:
(i) any Taxes of any kind whatsoever imposed by
any taxing jurisdiction on EniChem, the Company, any
Subsidiary, the Business, the assets of the Business and the
operations of the Business for all periods before and
including the Effective Date; and
(ii) all interest, additions to tax and penalties
with respect to Taxes described in clause (i) of this Article
9.6(a)
to the extent that they arise out of, relate to or are associated
with events occurring or circumstances existing before the
Effective Date regardless of where or against whom they are
asserted or determined or whether they are asserted or determined
prior or subsequent to the Effective Date, and regardless of
whether they are reflected in any Schedule attached hereto, and
regardless of whether they are known or unknown, fixed or
contingent, asserted or unasserted, (the "Assumed Company Tax
Liabilities").
All property Taxes, whether or not due and payable on or
before the Effective Date, shall be for the account of EniChem
within the meaning of clause (i) above; provided that where the
property Tax period includes the Effective Date, the property
Taxes shall be allocated to EniChem's account only by the ratio of
days within the property Tax period until the Effective Date over
total days in the property Tax period.
(b) EniChem shall prepare and file, or cause to be
prepared and filed, all Tax Returns that are required to be filed
after the date hereof with respect to the Assumed Company Tax
Liabilities.
(c) All Tax Returns filed after the date hereof and on
or prior to the Closing Date shall, in each case, be prepared and
filed in a manner consistent (including elections and accounting
methods and conventions) with the Tax Return most recently filed
in the relevant jurisdiction prior to the date hereof (or, if no
such comparable return has previously been filed, in a manner
consistent with the financial statements), except as otherwise
required by law or mutually agreed by EniChem and Union Carbide.
All such Tax Returns (other than sales, payroll, property and
similar tax returns) shall be subject to the prior review of Union
Carbide and shall be submitted by EniChem to Union Carbide for
such review at least thirty (30) days prior to the filing date.
EniChem shall take into account all reasonable comments made by
Union Carbide with respect to such Tax Returns and shall not,
without the consent of Union Carbide, report any item in a manner
different from the manner in which such item is reflected in the
Tax Returns provided to Union Carbide for its review pursuant to
the preceding sentence.
(d) Nothing in this Agreement is intended to create on
the part of Union Carbide any responsibility for any liabilities,
obligations, losses, costs, expenses, fines, Taxes, levies,
imposts, duties, deficiencies, assessments or charges asserted
against or incurred or sustained by the Company or any of the
Subsidiaries.
(e) After the Closing, EniChem and Union Carbide shall
cooperate, and shall cause their respective subsidiaries to
cooperate, with each other in connection with the filing of any
Tax Return which is required to be filed by the Company and
which covers a period that ends prior to or on the Closing Date or
that includes the Closing Date; provided, however, that the
responsibility for any Taxes shall be borne as otherwise provided
in Article 9.5 hereof or this Article 9.6 and, provided further,
that information used or delivered in connection with the filing
of any such Tax Return shall be treated by the Parties as
Confidential Information (as defined in Article 11.2 hereof).
(f) Any and all Tax sharing agreements between or among
the Company or any Subsidiary and EniChem or any of its
subsidiaries shall be terminated with respect to the Company and
the Subsidiaries as of the Closing and, from and after the Closing
Date, neither the Company or any of its subsidiaries nor EniChem
or any of its subsidiaries shall have any further rights or
liabilities thereunder.
(g) The term "period" as used in Article 9 shall mean a
period of time and not a statutory tax period.
ARTICLE 10 - INDEMNIFICATION
10.1 Indemnification with respect to Union Carbide. Subject
to Articles 9.1 and 10.4 hereof, Union Carbide shall indemnify
EniChem for, and shall hold EniChem harmless from, any and all
claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable legal, accounting and other
expenses) asserted against or incurred or sustained by the Company
arising out of any breach of any of the warranties or
representations set forth in Article 2 hereof, or any breach of
any covenant or agreement contained in Article 5.1 hereof by Union
Carbide (to the extent such breach is not attributable to any
action, delay in acting or failure to act after the Closing by the
Company or any of its Subsidiaries).
10.2 Indemnification with respect to EniChem. Subject to
Articles 9.2 and 10.4 hereof, EniChem shall indemnify Union
Carbide for, and shall hold Union Carbide harmless from, any and
all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable legal, accounting and other
expenses) asserted against or incured or sustained by Union
Carbide arising out of any breach of any of the warranties or
representations set forth in Article 3 hereof; or any breach of
any covenant or agreement contained in Article 5.2 hereof by
EniChem (to the extent such breach is not attributable to any
action, delay in acting or failure to act after the Closing by the
Company or any of the Subsidiaries);
10.3 Indemnification with respect to the Company and Assumed
Liabilities
(a) Subject to Articles 9.3, 9.4, 10.3(b), 10.3(c) and
10.4 hereof, EniChem shall indemnify the Company for, and shall
hold the Company harmless from, any and all claims, damages,
losses, liabilities and expenses (including, without limitation,
reasonable legal, accounting and other expenses) asserted against
or incurred or sustained by the Company or its Subsidiaries
arising out of any breach of any of the representations or
warranties set forth in Article 4 hereof; or any covenant or
agreement contained in Article 5.3 hereof by EniChem (to the
extent such breach is not attributable to any action, delay in
acting or failure to act after the Closing by the Company or its
Subsidiaries).
(b) Subject to Articles 9.3, 10.4(c) and 10.4(d)
hereof, the Company shall only be entitled to indemnification for
any breach of the representations and warranties contained in
Article 4 hereof when the aggregate amount of all claims, damages,
losses, liabilities and expenses related to such breaches exceeds
five million dollars ($5,000,000.00), and then only to the extent
of any excess in respect of such amount, and in no event shall the
aggregate amount of indemnification to Company hereunder exceed
fifty million dollars ($50,000,000.00); provided, however, that
such limitation shall not apply to Pre-Effective Date Business
Liabilities;
(c) If any event shall occur or circumstance shall
exist which would otherwise entitle the Company to indemnification
under Articles 9.4 and 10.3(a) hereof, no loss, damage, claim,
liability or expense shall be deemed to have been asserted against
or incurred or sustained by the Company to the extent of any
proceeds (other than proceeds from self-insurance of the Company
and its Subsidiaries) recovered or recoverable by the Company or
any of its Subsidiaries from any third party (including, without
limitation, any insurance with a third party). The Company agrees
(i) in good faith, to diligently seek recovery, and to cause its
subsidiaries to diligently seek recovery, at its and their cost
and expense, from all third parties (including, without
limitation, all insurance companies) with respect to all losses,
claims, damages, liabilities and expenses with respect to which
the Company makes or may make a claim for indemnification
hereunder and (ii) to keep EniChem and Union Carbide fully and
promptly informed of all material matters related thereto. The
amount of any indemnification shall be reduced for any Tax
benefits for deductions, credits and other benefits currently
allowable to the Company with respect to any such loss, damage,
claim, liability or expense. The indemnification shall not be
reduced for a future Tax benefit beyond the current Tax year,
except in case the Company has to make an investment which is
depreciable beyond the current Tax year.
10.4 Indemnification Procedure.
(a) The obligation of a party (the "Indemnifying
Party") to indemnify the other party (the "Indemnified Party")
under Articles 9.4, 10.1, 10.2 and 10.3 hereof is conditioned upon
(a) receiving from the Indemnified Party written notice of the
assertion or institution of a claim arising from or related to any
liability set forth in Articles 9 or 10 hereof (a "Claim") or of
the occurence of an event which the Indemnified Party believes
could lead to the assertion of a Claim promptly after the
Indemnified Party becomes aware of a Claim or such event and (b)
any such Claim becoming fully assessed or otherwise due and
payable by the Indemnified Party; except the Indemnifying Party
will reimburse the Indemnified Party for all expenses as they are
incurred hereunder in defending third parties ' claims. The
Indemnified Party shall have the absolute right, in its sole
discretion and expense, to elect to defend, contest, settle or
otherwise protect against any Claim with legal counsel of its own
selection. The Indemnifying Party shall have the right, but not
the obligation, to participate, at its own expense, in the defense
thereof through counsel of its own choice and shall have the
right, but not the obligation, to assert any and all defenses,
crossclaims or counterclaims it may have. The Indemnified Party
shall, and shall cause its subsidiaries to, at all times cooperate
in all reasonable ways with, make its relevant files and records
available for inspection and copying by, and make its employees
available or otherwise render reasonable assistance to the
Indemnifying Party in its defense of any Claim subject to
indemnification hereunder. In the event the Indemnified Party,
without prior consent of the Indemifying Party, makes any
settlement with respect to any Claim, the Indemnifying Party shall
be discharged of any obligation under Article 9.4 or10.3 hereof
with respect to such Claim. In the event the Indemnified Party
fails timely to defend, contest, or otherwise protect against any
Claim, the Indemnifying Party shall have the right, but not the
obligation, to defend, contest, assert crossclaims or
counterclaims or otherwise protect against the same and may make
any compromise or settlement thereof.
(b) Except with respect to Taxes, in the event that a
Party shall be obligated to indemnify another Party hereunder, the
Indemnifying Party shall, upon payment of such indemnity, be
subrogated to all rights of the Indemnified Party, with respect to
the claims to which such indemnification relates.
(c) The Indemnifying Party shall have no liability for
any damages, losses, liabilities, costs and expenses to the extent
the Company or any Subsidiary could have mitigated such damages,
losses, liabilities, costs and expenses.
(d) Notwithstanding anything contained herein to the
contrary, each Party shall use, and shall cause its subsidiaries
to use, all reasonable efforts to mitigate any and all damages,
losses, liabilities, costs and expenses in respect of which it may
be entitled to indemnification hereunder.
(e) Notwithstanding anything contained herein to the
contrary, Union Carbide shall have the right, on behalf of the
Company, to initiate and pursue a Claim against EniChem for any
breach of any of the warranties or representations set forth in
Articles 4 hereof or any breach of any of the covenants or
agreements contained in Articles 5.3 or 9.4 hereof and whatever
action, proceeding or method Union Carbide takes in pursuing such
Claim, including but not limited to, prosecuting to the full
extent permissable or settlement thereof, shall be final and
binding upon the Company. The Company shall, and shall cause its
Subsidiaries, officers, directors and employees and the officers,
directors and employees of the Subsidiaries to, at all times,
cooperate in all reasonable ways with, make its relevant files and
records available for inspection and copying or otherwise render
assistance to Union Carbide in its handling of such Claim.
Furthermore, the Company shall have no claim, of any kind
whatsoever, against Union Carbide for pursuing the rights set
forth in this Article.
10.5 Sole Remedy. The indemnification provided in this
Article 10 constitutes the Parties and the Company's sole and
exclusive remedy for any failure by either of them to satisfy the
representations and warranties, covenants, agreements and
liabilities contained in this Agreement or assumed hereunder.
ARTICLE 11 - PUBLICITY; CONFIDENTIALITY
11.1 Publicity. No Party shall or shall permit its
subsidiaries to issue any publicity, release or announcement
concerning the execution and delivery of this Agreement, the
provisions hereof or the Transaction contemplated hereby without
the prior written approval in the form and content of such
publicity, release or announcement by EniChem and Union Carbide;
provided, however, that no such approval shall be required when
such publicity, release or announcement is required by (i) any
applicable law, ordinance, rule or regulation, (ii) any applicable
rules or regulations of a national or foreign stock exchange or
the Automated Quotation System maintained by the National
Association of Securities Dealers, Inc. or (iii) any order, writ,
judgment, award, edict or decree of any court of competent
jurisdiction or any governmental agency, authority or
instrumentality of competent jurisdiction and, provided further,
that, prior to issuing any publicity, release or announcement
without such prior written approval, the Party issuing or whose
Affiliate is issuing such publicity, release or announcement shall
have given reasonable prior notice to the other Party of such
intended issuance and, if requested by the other Party, shall have
used reasonable efforts at its own cost and expense to obtain a
protective order or similar protection for the benefit of such
other Party.
11.2 Confidentiality. The Parties hereby agree that
Confidentiality shall be governed by Article 9.2 in the
Shareholders Agreement and that such provision is incorporated
herein by reference.
ARTICLE 12 - NOTICES
All notices required or permitted to be given pursuant to
this Agreement shall be given in writing in the English language,
shall be transmitted by personal delivery, by registered or
certified mail, return receipt requested, postage prepaid, or by
telecopier or other electronic means and shall be addressed as
follows:
When EniChem is the intended recipient:
EniChem SpA
Piazza della Repubblica, 16
Milano - Italy 20124
Attention : The President
Facsimile number: 39-2-6977-2616
When Union Carbide is the intended recipient:
Union Carbide Corporation
39 Old Ridgebury Road
Danbury, Connecticut 06817
Attention: J.C. Soviero
Facsimile No: (203) 794-2519
A Party may designate a new address to which notices required or
permitted to be given pursuant to this Agreement shall thereafter
be transmitted by giving written notice to that effect to the
other Party. Each notice transmitted in the manner described in
this Article 12 shall be deemed to have been given, received and
become effective for all purposes at the time it shall have been
(i) delivered to the addressee as indicated by the return receipt
(if transmitted by mail), the affidavit of the messenger (if
transmitted by personal delivery) or the answer back or call back
(if transmitted by telecopier or other electronic means) or (ii)
presented for delivery to the addressee as so indicated during
normal business hours, if such delivery shall have been twice
refused for any reason.
ARTICLE 13 - BROKERAGE FEES; CERTAIN EXPENSES
13.1 Brokerage Fees. EniChem and Union Carbide shall
indemnify the Company and each other for, and shall hold the
Company and each other harmless from, any claim or liability for
any fee, commission, compensation or other payment by any broker,
finder or similar agent who claims to have been, or who was in
fact, engaged by or on behalf of it in connection with the
transactions contemplated by this Agreement.
13.2 Certain Expenses. Except as otherwise provided in this
Agreement and regardless of whether the transactions contemplated
by this Agreement are consummated, each Party shall pay all
expenses, fees and costs (including, without limitation, legal,
accounting and consulting expenses) incurred by it in connection
with the transactions contemplated hereby.
ARTICLE 14 - APPLICABLE LAW; ARBITRATION
14.1 Applicable Law
This Agreement shall be governed by the laws of Italy.
14.2 Arbitration
The Parties shall attempt to settle amicably any disputes
arising out of the breach, interpretation or validity of this
Agreement. Either Party may give notice to the other that such
dispute has arisen on one or more issues indicated in the notice
and propose the appropriate procedure to discuss and resolve the
matter. Failing such amicable settlement within sixty (60) days
after receipt of such notice, then either Party can only seek
final resolution of the dispute under the Rules of Arbitration of
the International Chamber of Commerce ("ICC"), and according to
the following provisions :
(i) the Arbitral Tribunal shall be composed of 3
three members fluent in English, two (2) of whom shall be
designated by the Parties in accordance with the Rules of
Arbitration of the ICC (the "Rules"), and the third (3) one,
who shall act as a chairman, by the arbitrators so
designated, within thirty (30) days from their confirmation
by the ICC Court of Arbitration (the "Court") or, in the
absence of such joint designation, by the Court in accordance
with the Rules.
(ii) Should the Parties to a dispute be more than
two (2) and except if two (2) of them agree to appoint
jointly one arbitrator, all members of the Arbitral Tribunal
shall be appointed by the Court.
(iii) The seat of arbitration shall be London,
England, and the proceedings shall be conducted in English.
(iv) The decision of the Arbitral Tribunal shall be
final and binding.
ARTICLE 15 - BINDING EFFECT; ASSIGNMENT; THIRD PARTY
BENEFICIARIES__________________________
This Agreement shall be binding upon the Parties and their
respective successors and assigns and shall inure to the benefit
of the Parties and their respective successors and permitted
assigns. Neither EniChem nor Union Carbide shall assign any of
its rights or delegate any of its duties under this Agreement (by
operation of law or otherwise) without the prior written consent
of the other Party; provided however, no written consent is
required by Union Carbide to assign its rights under Article 10
hereof, to the same third party to whom it transfers its Shares
(as defined in the Shareholders Agreement) pursuant to Article 7
of such Shareholders Agreement, if and when Union Carbide elects
to make such transfer. Any assignment of rights or delegation of
duties under this Agreement by a Party without the prior written
consent of the other Parties, if such consent is required hereby,
shall be void. No person other than the Company (including,
without limitation, any employee of the Company) shall be, or be
deemed to be, a third party beneficiary of this Agreement.
ARTICLE 16 - FURTHER ASSURANCES
At any time and from time to time after the Closing, the
Parties shall execute, deliver and acknowledge such other
documents and take such further actions as may be reasonably
required in order to consummate the transactions contemplated
hereby.
ARTICLE 17 - AMENDMENTS
No addition to, and no cancellation, renewal, extension,
modification or amendment of, this Agreement shall be binding upon
a Party unless such addition, cancellation, renewal, extension,
modification or amendment is set forth in a written instrument
which states that it adds to, amends, cancels, renews, extends or
modifies this Agreement and which is executed and delivered on
behalf of each Party by an officer of, or attorney-in-fact for,
such Party.
ARTICLE 18 - WAIVERS
No waiver of any provision of this Agreement shall be binding
upon a Party unless such waiver is expressly set forth in a
written instrument which is executed and delivered on behalf of
such Party by an officer of, or attorney-in-fact for, such Party.
Such waiver shall be effective only to the extent specifically set
forth in such written instrument. Neither the exercise (from time
to time and at any time) by a Party of, nor the delay or failure
(at any time or for any period of time) to exercise, any right,
power or remedy shall constitute a waiver of the right to
exercise, or impair, limit or restrict the exercise of, such
right, power or remedy or any other right, power or remedy at any
time and from time to time thereafter. No waiver of any right,
power or remedy of a Party shall be deemed to be a waiver of any
other right, power or remedy of such Party or shall, except to the
extent so waived, impair, limit or restrict the exercise of such
right, power or remedy. No waiver with respect to this Agreement
shall be effective unless Union Carbide and EniChem shall have
given prior written approval thereto.
ARTICLE 19 - HEADINGS; COUNTERPARTS
The headings set forth in this Agreement have been inserted
for convenience of reference only and shall not be considered a
part of this Agreement and shall not limit, modify or affect in
any way the meaning or interpretation of this Agreement. This
Agreement may be signed in any number of counterparts, each of
which (when executed and delivered) shall constitute an original
instrument, but all of which together shall constitute one and the
same instrument. This Agreement shall become effective and be
deemed to have been executed and delivered by all of the Parties
at such time as counterpart, shall have been executed and
delivered by each of the Parties, regardless of whether each of
the Parties has executed the same counterpart. It shall not be
necessary when making proof of this Agreement to account for any
counterpart other than a sufficient number of counterparts which,
when taken together, contain signatures of all of the Parties.
ARTICLE 20- SEVERABILITY
If any provision of this Agreement shall hereafter be held to
be invalid, unenforceable or illegal in whole or in part, in any
jurisdiction under any circumstances for any reason, (i) such
provision shall be reformed to the minimum extent necessary to
cause such provision to be valid, enforceable and legal while
preserving the intent of the Parties as expressed in, and the
benefits to the Parties provided by, this Agreement or (ii) if
such provision cannot be so reformed, such provision shall be
severed from this Agreement and an equitable adjustment shall be
made to this Agreement (including, without limitation, addition of
necessary further provisions to this Agreement) so as to give
effect to the intent as so expressed and the benefits so provided.
Such holding shall not affect or impair the validity,
enforceability of legality of such provision in any other
jurisdiction or under any other circumstances. Neither such
holding nor such reformation or severance shall affect or impair
the legality, validity or enforceability of any other provision of
this Agreement.
ARTICLE 21 - COMPANY COMMITMENTS
EniChem and Union Carbide shall cause the Company to enter
into an agreement at Closing whereby the Company will agree to be
bound to and perform the obligations of the Company set forth in
this Agreement.
ARTICLE 22 - ENTIRE AGREEMENT
This Agreement, together with the Exhibit attached hereto
constitutes the entire contract among the Parties with respect to
the subject matter hereof and cancels and supersedes all of the
previous contracts, representations, warranties and understandings
(whether oral or written) by, between or among the Parties with
respect to the subject matter hereof except that nothing contained
herein shall be considered to cancel or supersede the Master
Agreement, the agreements referred to therein or any other
agreement with respect thereto . Nothing contained in this
Agreement or in any Exhibit attached hereto shall constitute or be
interpreted or construed as an admission by any Party or any of
its Affiliates of liability to third parties, whether under any
foreign, federal, state or local laws, rules, regulations or
ordinances or otherwise, or as an admission that any Party of any
of its subsidiaries or Affiliates are in violation of or have ever
violated any such laws, rules, regulations or ordinances.
ARTICLE 23- CERTAIN REFERENCES.
23.1 Affiliate. As used herein, references to "Affiliate"
shall mean any corporation which, directly or indirectly,
controls, is controlled by or is under common control with such
Party, provided, however, that, except as otherwise expressly
provided herein, Company shall not be deemed as "Affiliate" of any
Party for the purpose hereof. For purposes of the preceding
sentence, "control" shall mean the power to vote or direct the
voting of more than fifty percent (50%) of the voting shares,
general partnership interest or other equity interest of a
corporation.
23.2 Person. As used herein, references to a "person" shall
mean an individual or an entity, including, without limitation, a
corporation, partnership, joint venture, trust, joint stock
company, association, unincorporated organization or group acting
in concert.
23.3 Subsidiaries. Except as otherwise expressly provided
herein, for the purposes of this Agreement, (i) neither the
Company nor any subsidiary of the Company shall be deemed to be a
subsidiary of Union Carbide.
ARTICLE 24 INDEX TO DEFINED TERMS
The capitalized terms set forth below have been defined
herein in the respective Articles or other parts hereof set forth
below:
Defined Term Article
AAP 1.6(a)
Accordo Aziendale 4.21(d)
Affiliate 23.1
Applicable Assumed Liabilities Period 9.4(e)
Applicable Company Survival Period 9.3
Applicable EniChem Survival Period 9.2
Applicable UCC Survival Period 9.1
Assets 4.25
Assumed Company Tax Liabilities 9.6(a)
Balance Sheet 4.7
Balance Sheet Date 4.7
Business 1st Recital
Claim 10.4(a)
Closing 1.2
Closing Date 1.2
Conditional Debt 1.4
Company Fourth Recital
Court 14.2(i)
Deloitte 1.6(b)
Effective Date 1.2
Effective Date Balance Sheet 1.6(a)
EniChem Title
Environment 4.17(c)(2)
Environmental Action 4.17(c)(1)
Environmental Consents 4.17(c)(4)
Environmental Law 4.17(c)(3)
EU 5.4(a)
Governmental Authority 4.17(c)(5)
Hazardous Materials 4.17(c)(6)
ICC 14.2
Indemnified Party 10.4(a)
Indemnifying Party 10.4(a)
Leased Real Property 4.9(a)
Liabilities 9.4(a)
Master Agreement Third Recital
Owned Real Property 4.9(a)
Parties Title
Party Title
Person 23.2
Plans 4.21(d)
Pre-Effective Date Business Liabilities 9.4(a)
Real Property 4.9(a)
Release 4.17(c)(7)
Remedial Action 4.17(c)(8)
Rules 14.1(i)
Shares 1.1
Subsidiaries 4.2(a)
Subsidiary 4.2(a)
Tax 4.8(c)
Taxes 4.8(c)
Tax Return 4.8(d)
Termination Date 8.1(i)
Transaction 1.2
Transactional Costs 9.6(b)
Transactional Taxes 9.6(a)
Union Carbide Title
IN WITNESS WHEREOF, the Parties have duly executed and
delivered this Agreement on February 9, 1995 effective as of the
date first above written.
ENICHEM SPA
BY: Marcello Colitti
Title: EniChem President
UNION CARBIDE CORPORATION
By: Joseph C. Soviero
Title: Corporate Vice-President
Union Carbide will furnish supplementally a copy of any
omitted schedule or exhibit to the Commission upon request,
subject to any application for confidential treatment that UCC may
file.
UNION CARBIDE CORPORATION
39 Old Ridgebury Road
Danbury, CT 06817-0001
March 31, 1995
EniChem SpA
Piazza della Repbblica
16-Milano, Italy
Attention: President
Reference is made to the Stock Purchase and Sale Agreement
between EniChem Spa and Union Carbide Corporation dated February
9, 1995 (the "Agreement") relating to a certain polyethylene joint
venture.
The Agreement is hereby amended, effective as of February 9,
1995 as follows:
1. Article 1.4 (a) and (b) shall be amended as follows:
Reference to Article 6.1.c in the third line of
Article 1.4 (a) shall be deleted and replaced with
Article 1.6.c.
Reference to Article 6.1.c in the third line of
Article 1.4(a) shall be deleted and replaced with
Article 1.6.c
2. Article 9.4(b) shall be deleted in its entirety and
replaced with the following so that as ameded Article 9.4(b) shall
read as follows:
All Liabilities relating to health, safety, and
environmental matters shall be Pre-Effective Date
Business Liabilities unless it can be demonstrated
that such Liability arose after the Effective Date.
3. Article 9.5 (a) shall be amended so that the word not
shall be added to the fourth line of Article 9.5 (a) immediately
after the first parenthesis and before the word including and the
words without limitation immediately after the word including and
before the word taxes shall be deleted. The fourth line of Article
9.5(a) as amended shall read as follows:
charges, fees, imposts and assessments ( not including
Except as set forth above, all other terms and conditions of
the Agreement shall remain unchanged and in full force and effect.
Except as otherwise defined herein all capitalized terms used
herein have the same meaning as set forth in the Agreement.
If the foregoing accurately sets forth your understanding of
the above, please execute your acceptance thereof by signing in
the space provided below.
UNION CARBIDE CORPORATION
By: Joseph C. Soviero
Title: Corporate Vice-President
Agreed to and Accepted
ENICHEM SPA
By: Vittorio Mincato
Title: Vice-President
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