<PAGE> 1
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) February 29, 1996
Ethyl Corporation
(Exact name of registrant as specified in its charter)
Virginia 1-5112 54-0118820
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
330 South Fourth Street, Richmond, Virginia 23219
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (804) 788-5000
<PAGE> 2
Item 2. Acquisition or Disposition of Assets
On February 29, 1996, Ethyl Corporation (the "Company") completed
the acquisition of the worldwide lubricant additives business of Texaco
Inc. ("Texaco"), including manufacturing and blending facilities,
identifiable intangibles and working capital.
The products of the acquired business include viscosity index
improvers and other lubricating oil additives, which are used in
automotive and industrial applications. The acquisition, to be
accounted for under the purchase method, included a cash payment of
$135.9 million (subject to adjustment based on final working capital
determination) and a future contingent payment of up to $60 million.
The cash payment was financed primarily under the Company's revolving
credit agreement. The payment of up to $60 million will become due on
February 26, 1999, with interest payable on the contingent amount until
such date. The actual amount of the contingent payment and total
interest will be determined using an agreed upon formula based on
volumes of certain acquired product lines shipped during the calendar
years 1996 through 1998, as specified in the contingent note agreement.
Texaco retained substantially all noncurrent liabilities.
The Company intends to continue to use the assets acquired from
Texaco in the manner in which they were used by Texaco.
The principal source of funds for the cash portion of the
acquisition was the Company's $500 million revolving credit agreement
dated February 16, 1994 with Chemical Bank, as Administrative Agent and
NationsBank of North Carolina, N.A., as co-agent and a number of other
commercial banks. Nine million dollars of the purchase price was funded
with a one year variable rate loan from NationsBank, N.A.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired
As of the date of filing this Current Report on Form 8-K, it is
impracticable to provide financial statements, as of and for the two
years ending December 31, 1995, of the lubricant additives business of
Texaco acquired by the Company. Such financial statements will be filed
on or before May 14, 1996.
(b) Pro Forma Financial Information
As of the date of filing this Current Report on Form 8-K, it is
impracticable to provide pro forma financial information, as of and for
the two years ending December 31, 1995, showing the impact of the
acquisition of the lubricant additives business of Texaco on the
financial statements of the Company. Such financial statements will be
filed on or before May 14, 1996.
(c) Exhibits.
2. Purchase Agreement dated as of September 22, 1995, among
Texaco and certain of its subsidiaries and the Company,
as modified by Restatement of Amendments among the
parties to that agreement, dated as of February 29, 1996.
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
ETHYL CORPORATION
(Registrant)
Date: March 15, 1996 By: /s/ D A Fiorenza
Name: D A Fiorenza
Title: Vice President - Business
Evaluation & Support
<PAGE> 4
EXHIBIT INDEX
Exhibit Number and Description
2 Purchase Agreement dated as of September 22, 1995,
as modified by Restatement of Amendments dated as
of February 29, 1996.
<PAGE> 5 Exhibit 2
TABLE OF CONTENTS
PURCHASE AND SALE AGREEMENT
(ADDITIVE BUSINESS)
PART ONE:
SUBJECT MATTER OF THE AGREEMENT: DEFINITIONS
AND RULES OF CONSTRUCTION . . . . . . . . . . . . 1
Section 1.1 Subject Matter . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Definitions. . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.3 Rules of Construction. . . . . . . . . . . . . . . . . . 13
(a) General . . . . . . . . . . . . . . . . . . . . . . 14
(b) Parts and Sections. . . . . . . . . . . . . . . . . 14
(c) Other Agreements. . . . . . . . . . . . . . . . . . 14
PART TWO:
PURCHASE OF TEXACO ADDITIVE BUSINESS,
PURCHASE PRICE AND TRANSFER OF TEXACO ADDITIVE BUSINESS. . . . . 14
Section 2.1 Purchase and Sale of Texaco Additive Business. . . . . . 14
Section 2.2 Purchase Price . . . . . . . . . . . . . . . . . . . . . 14
Section 2.3 Transfer of the U.S. Assets, the Belgian Stock,
Brazilian Stock, Etc.. . . . . . . . . . . . . . . . . . 15
(a) Transfer of Brazilian, Belgian and Korean
Stock . . . . . . . . . . . . . . . . . . . . . . . 15
(b) Transfer of Assets, Etc.. . . . . . . . . . . . . . 15
(c) Assumed Liabilities . . . . . . . . . . . . . . . . 15
(d) Transfer of Excluded Assets . . . . . . . . . . . . 16
(e) Retained Liabilities. . . . . . . . . . . . . . . . 16
(f) Continuing Liabilities. . . . . . . . . . . . . . . 16
(g) Transfer of Excluded Contracts. . . . . . . . . . . 18
Section 2.4 Closing Working Capital. . . . . . . . . . . . . . . . . 18
(a) Estimated Working Capital.. . . . . . . . . . . . . 18
(b) Determination of Closing Working Capital. . . . . . 19
(c) Adjustment Payment. . . . . . . . . . . . . . . . . 19
Section 2.5 Payment. . . . . . . . . . . . . . . . . . . . . . . . . 19
PART THREE:
REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . 20
Section 3.1 Seller.. . . . . . . . . . . . . . . . . . . . . . . . . 20
(a) Organization and Standing of Seller . . . . . . . . 20
(b) Authority . . . . . . . . . . . . . . . . . . . . . 20
(c) Validity of Agreement . . . . . . . . . . . . . . . 20
(d) No Violation. . . . . . . . . . . . . . . . . . . . 20
(e) No Consent Required . . . . . . . . . . . . . . . . 21
(f) Disclosure. . . . . . . . . . . . . . . . . . . . . 21
(g) Financial Statements. . . . . . . . . . . . . . . . 21
(h) Changes . . . . . . . . . . . . . . . . . . . . . . 21
(i) Conduct of Business . . . . . . . . . . . . . . . . 23
(j) Litigation. . . . . . . . . . . . . . . . . . . . . 23
(k) No Undisclosed Liabilities. . . . . . . . . . . . . 23
(l) Intellectual Property Rights. . . . . . . . . . . . 23
(m) Tax Matters . . . . . . . . . . . . . . . . . . . . 25
(n) Environmental Matters . . . . . . . . . . . . . . . 25
(o) Product Tests . . . . . . . . . . . . . . . . . . . 26
Section 3.2 TOHI.. . . . . . . . . . . . . . . . . . . . . . . . . . 26
(a) Organization and Standing of TOHI . . . . . . . . . 26
(b) Authority . . . . . . . . . . . . . . . . . . . . . 26
(c) Validity of Agreement . . . . . . . . . . . . . . . 27
(d) No Violation. . . . . . . . . . . . . . . . . . . . 27
(e) No Consent Required . . . . . . . . . . . . . . . . 27
(f) Ownership of Brazilian Stock. . . . . . . . . . . . 27
(g) Ownership of TOHI . . . . . . . . . . . . . . . . . 28
Section 3.3 Company. . . . . . . . . . . . . . . . . . . . . . . . . 28
(a) Organization and Standing of Company. . . . . . . . 28
(b) Authority . . . . . . . . . . . . . . . . . . . . . 28
(c) Validity of Agreement . . . . . . . . . . . . . . . 28
(d) No Violation. . . . . . . . . . . . . . . . . . . . 28
(e) No Consent Required . . . . . . . . . . . . . . . . 29
(f) Litigation. . . . . . . . . . . . . . . . . . . . . 29
(g) Contracts . . . . . . . . . . . . . . . . . . . . . 29
(h) Title to U.S. Assets. . . . . . . . . . . . . . . . 30
(i) Condition and Repair. . . . . . . . . . . . . . . . 31
(j) Condemnation. . . . . . . . . . . . . . . . . . . . 31
(k) Compliance with Applicable Law. . . . . . . . . . . 31
(l) U.S. Employees. . . . . . . . . . . . . . . . . . . 31
(m) Inventory.. . . . . . . . . . . . . . . . . . . . . 31
(n) ERISA: Plan Administration. . . . . . . . . . . . . 32
(o) ERISA; Qualified Plans. . . . . . . . . . . . . . . 32
(p) Labor Relations . . . . . . . . . . . . . . . . . . 32
(q) Products Liability. . . . . . . . . . . . . . . . . 32
(r) Subsidiaries. . . . . . . . . . . . . . . . . . . . 33
(s) Bank Accounts . . . . . . . . . . . . . . . . . . . 33
(t) Ownership of Texaco Korea . . . . . . . . . . . . . 33
Section 3.4 Texaco Brasil. . . . . . . . . . . . . . . . . . . . . . 33
(a) Organization and Standing of Texaco Brasil. . . . . 33
(b) Authority . . . . . . . . . . . . . . . . . . . . . 33
(c) No Consent Required . . . . . . . . . . . . . . . . 33
(d) Corporate Documents . . . . . . . . . . . . . . . . 34
(e) Subsidiaries. . . . . . . . . . . . . . . . . . . . 34
(f) Capitalization. . . . . . . . . . . . . . . . . . . 34
(g) Options or Warrants . . . . . . . . . . . . . . . . 34
(h) Litigation. . . . . . . . . . . . . . . . . . . . . 34
(i) Contracts . . . . . . . . . . . . . . . . . . . . . 35
(j) Title to Brazilian Assets . . . . . . . . . . . . . 35
(k) Condition and Repair. . . . . . . . . . . . . . . . 36
(l) Condemnation. . . . . . . . . . . . . . . . . . . . 36
(m) Compliance with Applicable Law. . . . . . . . . . . 36
(n) Brazilian Employees . . . . . . . . . . . . . . . . 37
(o) Bank Accounts . . . . . . . . . . . . . . . . . . . 37
(p) Inventory . . . . . . . . . . . . . . . . . . . . . 37
(q) Brazilian Benefit Plans . . . . . . . . . . . . . . 37
(r) Recently Terminated Employees . . . . . . . . . . . 38
(s) Brazilian Collective Bargaining Convention and
Union Related Matters . . . . . . . . . . . . . . . 38
(t) Compliance with the FGTS Regulations. . . . . . . . 38
(u) Compliance with the INSS Regulations. . . . . . . . 38
Section 3.5 Selling Subsidiaries.. . . . . . . . . . . . . . . . . . 39
(a) Organization and Standing of Selling
Subsidiaries. . . . . . . . . . . . . . . . . . . . 39
(b) Authority . . . . . . . . . . . . . . . . . . . . . 39
(c) No Consent Required . . . . . . . . . . . . . . . . 39
(d) Litigation. . . . . . . . . . . . . . . . . . . . . 39
(e) Contracts . . . . . . . . . . . . . . . . . . . . . 39
(f) Title to Miscellaneous Assets . . . . . . . . . . . 40
(g) Compliance with Applicable Law. . . . . . . . . . . 40
(h) Miscellaneous Employees . . . . . . . . . . . . . . 41
(i) Inventories.. . . . . . . . . . . . . . . . . . . . 41
(j) Ownership . . . . . . . . . . . . . . . . . . . . . 41
Section 3.6 Texaco Caribbean . . . . . . . . . . . . . . . . . . . . 41
(a) Organization and Standing of Texaco
Caribbean . . . . . . . . . . . . . . . . . . . . . 41
(b) Authority . . . . . . . . . . . . . . . . . . . . . 41
(c) Validity of Agreement . . . . . . . . . . . . . . . 41
(d) No Violation. . . . . . . . . . . . . . . . . . . . 42
(e) No Consent Required . . . . . . . . . . . . . . . . 42
(f) Ownership of Brazilian Stock. . . . . . . . . . . . 42
(g) Ownership of Texaco Caribbean . . . . . . . . . . . 43
Section 3.7 Texaco Korea . . . . . . . . . . . . . . . . . . . . . . 43
(a) Organization and Standing . . . . . . . . . . . . . 43
(b) Authority . . . . . . . . . . . . . . . . . . . . . 43
(c) No Consent Required . . . . . . . . . . . . . . . . 43
(d) Corporate Documents . . . . . . . . . . . . . . . . 43
(e) Texaco Korea Capitalization . . . . . . . . . . . . 43
(f) Options or Warrants . . . . . . . . . . . . . . . . 43
(g) Subsidiaries. . . . . . . . . . . . . . . . . . . . 44
(h) Litigation. . . . . . . . . . . . . . . . . . . . . 44
(i) Contracts . . . . . . . . . . . . . . . . . . . . . 44
(j) Title to Korean Assets. . . . . . . . . . . . . . . 44
(k) Compliance with Applicable Law. . . . . . . . . . . 45
(l) Korean Employees. . . . . . . . . . . . . . . . . . 45
(m) Inventories . . . . . . . . . . . . . . . . . . . . 45
(n) Bank Accounts . . . . . . . . . . . . . . . . . . . 45
Section 3.8 Texaco Belgium . . . . . . . . . . . . . . . . . . . . . 45
(a) Organization and Standing of Texaco Belgium . . . . 45
(b) Authority . . . . . . . . . . . . . . . . . . . . . 45
(c) Validity of Agreement . . . . . . . . . . . . . . . 46
(d) No Violation. . . . . . . . . . . . . . . . . . . . 46
(e) No Consent Required . . . . . . . . . . . . . . . . 46
(f) Ownership of Belgian Stock. . . . . . . . . . . . . 47
(g) Ownership of Texaco Belgium . . . . . . . . . . . . 47
(h) Certain Real Estate Matters . . . . . . . . . . . . 47
Section 3.9 Texaco Petroleum . . . . . . . . . . . . . . . . . . . . 47
(a) Organization and Standing of Texaco
Petroleum . . . . . . . . . . . . . . . . . . . . . 47
(b) Authority . . . . . . . . . . . . . . . . . . . . . 47
(c) Validity of Agreement . . . . . . . . . . . . . . . 47
(d) No Violation. . . . . . . . . . . . . . . . . . . . 48
(e) No Consent Required . . . . . . . . . . . . . . . . 48
(f) Ownership of Belgian Stock. . . . . . . . . . . . . 48
(g) Ownership of Texaco Petroleum . . . . . . . . . . . 48
Section 3.10 TBSA.. . . . . . . . . . . . . . . . . . . . . . . . . . 49
(a) Organization and Standing of TBSA.. . . . . . . . . 49
(b) Authority.. . . . . . . . . . . . . . . . . . . . . 49
(c) No Violation. . . . . . . . . . . . . . . . . . . . 49
(d) No Consent Required.. . . . . . . . . . . . . . . . 49
(e) Ownership of TBSA . . . . . . . . . . . . . . . . . 49
Section 3.11 Buyer. . . . . . . . . . . . . . . . . . . . . . . . . . 49
(a) Organization and Standing of Buyer. . . . . . . . . 50
(b) Authority . . . . . . . . . . . . . . . . . . . . . 50
(c) Validity of Agreement . . . . . . . . . . . . . . . 50
(d) No Violation. . . . . . . . . . . . . . . . . . . . 50
(e) No Consent Required . . . . . . . . . . . . . . . . 50
(f) Disclosure. . . . . . . . . . . . . . . . . . . . . 51
(g) Employment Offers . . . . . . . . . . . . . . . . . 51
(h) ERISA; Prohibited Transaction.. . . . . . . . . . . 51
Section 3.12 No Other Warranties. . . . . . . . . . . . . . . . . . . 51
PART FOUR:
COVENANTS
REGARDING TEXACO ADDITIVE BUSINESS. . . . . . . . . . 51
Section 4.1 Covenants of Seller. . . . . . . . . . . . . . . . . . . 51
(a) Conduct of Business . . . . . . . . . . . . . . . . 51
(b) Access to Properties and Information. . . . . . . . 53
(c) Intercompany Accounts . . . . . . . . . . . . . . . 53
(d) Seller's Non-Compete. . . . . . . . . . . . . . . . 53
(e) No Solicitation . . . . . . . . . . . . . . . . . . 55
(f) Title to the U.S. Properties. . . . . . . . . . . . 56
(g) Discharge of Retained Liabilities.. . . . . . . . . 56
(h) Perimeter Surveys.. . . . . . . . . . . . . . . . . 56
(i) Ghent Real Estate Matters . . . . . . . . . . . . . 57
(j) Certain Real Estate Matters . . . . . . . . . . . . 57
(k) Belgian Company Transfer. . . . . . . . . . . . . . 57
(l) Belgian Company Representations and
Warranties. . . . . . . . . . . . . . . . . . . . . 57
(m) Brazilian Company Transfer. . . . . . . . . . . . . 62
(n) Service Supply and Technology Agreements. . . . . . 62
(o) Asset List Delivery . . . . . . . . . . . . . . . . 62
(p) Environmental . . . . . . . . . . . . . . . . . . . 62
Section 4.2 Covenants of Buyer.. . . . . . . . . . . . . . . . . . . 62
(a) Performance Bonds, Etc. . . . . . . . . . . . . . . 62
(b) Use of Texaco Mark. . . . . . . . . . . . . . . . . 63
(c) Change of Name. . . . . . . . . . . . . . . . . . . 63
(d) Accounts Receivable . . . . . . . . . . . . . . . . 63
(e) Non-Assertion of Claims . . . . . . . . . . . . . . 64
Section 4.3 Covenants of Seller and Buyer. . . . . . . . . . . . . . 64
(a) Compliance with Conditions Precedent. . . . . . . . 64
(b) Brokers . . . . . . . . . . . . . . . . . . . . . . 64
(c) Certain Filings and Consents. . . . . . . . . . . . 64
(d) Press Release . . . . . . . . . . . . . . . . . . . 65
(e) Post-Closing Access . . . . . . . . . . . . . . . . 65
(f) Exposure Litigation . . . . . . . . . . . . . . . . 65
(g) Further Assurances. . . . . . . . . . . . . . . . . 65
(h) Employment Offer to Miscellaneous Employees . . . . 66
(i) Service, Supply and Technology Request. . . . . . . 66
(j) Uncollected Accounts Receivable . . . . . . . . . . 67
(k) Transfer of Permits.. . . . . . . . . . . . . . . . 67
(l) Software Agreement. . . . . . . . . . . . . . . . . 67
(m) Insurance Policies. . . . . . . . . . . . . . . . . 67
(n) Offset Rights . . . . . . . . . . . . . . . . . . . 68
(o) Ghent Blending. . . . . . . . . . . . . . . . . . . 68
(p) Port Arthur Pilot Plant . . . . . . . . . . . . . . 69
(q) Research and Development. . . . . . . . . . . . . . 69
(r) Additional Ghent Land.. . . . . . . . . . . . . . . 69
(s) Caltex. . . . . . . . . . . . . . . . . . . . . . . 70
(t) TSCA Matters. . . . . . . . . . . . . . . . . . . . 70
(u) Rio Additive Plant. . . . . . . . . . . . . . . . . 70
(v) Sublease. . . . . . . . . . . . . . . . . . . . . . 70
(w) Purchase of Rio Additives Plant Property. . . . . . 71
(x) Brazilian Reimbursement.. . . . . . . . . . . . . . 71
(y) Additives Plant Tankage.. . . . . . . . . . . . . . 72
(z) PIBSA Plant Property. . . . . . . . . . . . . . . . 72
(aa) Post Closing Sublease . . . . . . . . . . . . . . . 73
Section 4.4 Confidentiality. . . . . . . . . . . . . . . . . . . . . 73
(a) Confidential Information. . . . . . . . . . . . . . 73
(b) Disclosure. . . . . . . . . . . . . . . . . . . . . 73
(c) Non-Disclosure. . . . . . . . . . . . . . . . . . . 74
(d) Survival. . . . . . . . . . . . . . . . . . . . . . 74
(e) Affiliates and Representatives. . . . . . . . . . . 75
(f) Confidential Nature . . . . . . . . . . . . . . . . 75
PART FIVE
COVENANTS REGARDING THE COMPANY. . . . . . . . . . . 75
Section 5.1 Covenants of Seller and Buyer. . . . . . . . . . . . . . 75
(a) Non-Represented U.S. Employees. . . . . . . . . . . 75
(b) Represented U.S. Employees. . . . . . . . . . . . . 76
(c) No Solicitation . . . . . . . . . . . . . . . . . . 76
(d) Compensation. . . . . . . . . . . . . . . . . . . . 76
(e) No Termination. . . . . . . . . . . . . . . . . . . 76
(f) Buyer Benefit Plans . . . . . . . . . . . . . . . . 76
(g) Defined Benefit Plans . . . . . . . . . . . . . . . 77
(h) Separation. . . . . . . . . . . . . . . . . . . . . 78
(i) Participant List, Etc.. . . . . . . . . . . . . . . 78
(j) Defined Contribution Plans. . . . . . . . . . . . . 79
(k) Account Balances. . . . . . . . . . . . . . . . . . 79
(l) Welfare Benefit Plans . . . . . . . . . . . . . . . 79
(m) Vacation. . . . . . . . . . . . . . . . . . . . . . 80
(n) Retirees. . . . . . . . . . . . . . . . . . . . . . 80
(o) Plan Withdrawal and Suspension of Severance . . . . 81
(p) Reimbursement, Etc. . . . . . . . . . . . . . . . . 81
(q) Employment Claims.. . . . . . . . . . . . . . . . . 81
PART SIX
COVENANTS
REGARDING TEXACO BRASIL. . . . . . . . . . . . . 82
Section 6.1 Covenants of Buyer . . . . . . . . . . . . . . . . . . . 82
(a) Brazilian Transfer Employees. . . . . . . . . . . . 82
(b) Compensation. . . . . . . . . . . . . . . . . . . . 82
Section 6.2 Covenants of Buyer and Seller. . . . . . . . . . . . . . 82
(a) Offers of Employment. . . . . . . . . . . . . . . . 83
(b) No Termination. . . . . . . . . . . . . . . . . . . 83
(c) Brazilian Savings Plan. . . . . . . . . . . . . . . 83
(d) Brazilian Environmental Permits.. . . . . . . . . . 83
PART SEVEN
COVENANTS
REGARDING BELGIAN BUSINESS. . . . . . . . . . . . 83
Section 7.1 Covenants of Seller. . . . . . . . . . . . . . . . . . . 83
(a) Withdrawal Option Under Texaco Belgian
Pension Plan. . . . . . . . . . . . . . . . . . . . 83
(b) Texaco's Belgian Pension Plan . . . . . . . . . . . 84
Section 7.2 Covenants of Buyer . . . . . . . . . . . . . . . . . . . 84
(a) Compliance with Belgian Collective
Labor Agreement No. 32. . . . . . . . . . . . . . . 84
(b) Buyer's Belgian Pension Plan. . . . . . . . . . . . 84
(c) Belgian Life Insurance. . . . . . . . . . . . . . . 85
Section 7.3 Covenants of Buyer and Seller. . . . . . . . . . . . . . 85
(a) Belgian Employees . . . . . . . . . . . . . . . . . 85
(b) Consideration for Belgian Assets. . . . . . . . . . 85
(c) Paritary Committees and Collective Labor
Agreements. . . . . . . . . . . . . . . . . . . . . 85
PART EIGHT
ENVIRONMENTAL . . . . . . . . . . . . . . . 86
Section 8.1 Survival; Applicability. . . . . . . . . . . . . . . . . 86
(a) Survival of Environmental Covenants . . . . . . . . 86
(b) Applicability to Breaches of Representations. . . . 86
Section 8.2 Definitions. . . . . . . . . . . . . . . . . . . . . . . 87
Section 8.3 Environmental Responsibilities of Seller . . . . . . . . 89
(a) Seller's Performance of Covenants . . . . . . . . . 89
(b) Seller's Environmental Events . . . . . . . . . . . 89
(c) Additional Matters in Ghent . . . . . . . . . . . . 89
(d) Shared Environmental Liabilities and Changes in
Conditions. . . . . . . . . . . . . . . . . . . . . 90
(e) Environmental Liabilities Under New . . . . . . . . 91
(f) Disposal by Buyer.. . . . . . . . . . . . . . . . . 91
(g) Additional Matters Regarding Star Enterprise. . . . 91
(h) Limitations.. . . . . . . . . . . . . . . . . . . . 91
Section 8.4 Environmental Responsibilities of Buyer. . . . . . . . . 92
(a) Post-Closing Environmental Events.. . . . . . . . . 92
(b) Shared Environmental Liabilities. . . . . . . . . . 92
(c) Changes in Conditions . . . . . . . . . . . . . . . 92
(d) Environmental Liabilities Under New . . . . . . . . 92
(e) Annual Environmental Deductible.. . . . . . . . . . 93
Section 8.5 Covenant of Cooperation. . . . . . . . . . . . . . . . . 93
Section 8.6 Performance of Work. . . . . . . . . . . . . . . . . . . 93
(a) Performance of Work by Buyer. . . . . . . . . . . . 94
(b) Remediation by Buyer. . . . . . . . . . . . . . . . 94
(c) Measures to Minimize Disruption.. . . . . . . . . . 94
Section 8.7 Remediation by Seller. . . . . . . . . . . . . . . . . . 94
(a) Seller's Election.. . . . . . . . . . . . . . . . . 94
(b) Performance of Remediation. . . . . . . . . . . . . 94
Section 8.8 Environmental Assessments. . . . . . . . . . . . . . . . 96
Section 8.9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Section 8.10 Reimbursement Procedures . . . . . . . . . . . . . . . . 97
PART NINE
INDEMNIFICATION. . . . . . . . . . . . . . . 99
Section 9.1 Seller's Indemnification.. . . . . . . . . . . . . . . . 99
Section 9.2 Buyer's Indemnification. . . . . . . . . . . . . . . . . 100
Section 9.3 Defense of Action. . . . . . . . . . . . . . . . . . . . 100
Section 9.4 Payments.. . . . . . . . . . . . . . . . . . . . . . . . 101
PART TEN
TAXES . . . . . . . . . . . . . . . . . 102
Section 10.1 General. . . . . . . . . . . . . . . . . . . . . . . . . 102
(a) Seller's Liability. . . . . . . . . . . . . . . . . 102
(b) Buyer's Liability . . . . . . . . . . . . . . . . . 102
(c) Post-Effective Date Determination . . . . . . . . . 102
(d) Refunds . . . . . . . . . . . . . . . . . . . . . . 103
(e) Tax Attributes. . . . . . . . . . . . . . . . . . . 103
Section 10.2 Tax Indemnification. . . . . . . . . . . . . . . . . . . 104
(a) Seller's Indemnification. . . . . . . . . . . . . . 104
(b) Buyer's Indemnification . . . . . . . . . . . . . . 105
(c) Payments. . . . . . . . . . . . . . . . . . . . . . 105
(d) No Liability, Etc.. . . . . . . . . . . . . . . . . 105
Section 10.3 Tax Returns. . . . . . . . . . . . . . . . . . . . . . . 106
(a) Seller. . . . . . . . . . . . . . . . . . . . . . . 106
(b) Buyer . . . . . . . . . . . . . . . . . . . . . . . 107
Section 10.4 Tax Agreements.. . . . . . . . . . . . . . . . . . . . . 107
Section 10.5 Tax Audits.. . . . . . . . . . . . . . . . . . . . . . . 107
Section 10.6 Other Assistance Regarding Taxes.. . . . . . . . . . . . 108
Section 10.7 FIRPTA Certificate.. . . . . . . . . . . . . . . . . . . 108
Section 10.8 Preservation of Records. . . . . . . . . . . . . . . . . 109
Section 10.9 Allocation of Purchase Price.. . . . . . . . . . . . . . 109
Section 10.10 Conflict.. . . . . . . . . . . . . . . . . . . . . . . . 109
PART ELEVEN
CONDITIONS PRECEDENT . . . . . . . . . . . . . 110
Section 11.1 Conditions Precedent of Buyer. . . . . . . . . . . . . . 110
(a) Representations and Warranties True
at Closing. . . . . . . . . . . . . . . . . . . . . 110
(b) Compliance with Agreement.. . . . . . . . . . . . . 110
(c) Certified Resolutions and Officers'
Certificate . . . . . . . . . . . . . . . . . . . . 110
(d) Approval of Proceedings.. . . . . . . . . . . . . . 110
(e) Opinion of Counsel. . . . . . . . . . . . . . . . . 110
(f) Injunction, Etc . . . . . . . . . . . . . . . . . . 111
(g) Consents. . . . . . . . . . . . . . . . . . . . . . 111
(h) Service, Supply and Technology Agreements.. . . . . 111
(i) Patent Assignment Agreements. . . . . . . . . . . . 111
(j) Trademark Agreements. . . . . . . . . . . . . . . . 111
(k) Resignations. . . . . . . . . . . . . . . . . . . . 111
(l) Environmental Permits.. . . . . . . . . . . . . . . 111
(m) Brazilian Fee Properties. . . . . . . . . . . . . . 111
(n) Belgium Property. . . . . . . . . . . . . . . . . . 112
(o) Additive Plants Support Services. . . . . . . . . . 112
(p) Employees . . . . . . . . . . . . . . . . . . . . . 112
(q) Assigned Contracts; Consents. . . . . . . . . . . . 112
(s) TSCA Matters. . . . . . . . . . . . . . . . . . . . 112
(t) Ghent Gas Pipeline. . . . . . . . . . . . . . . . . 112
(u) Easement and Rights of Way. . . . . . . . . . . . . 112
(v) Confidentiality Agreement . . . . . . . . . . . . . 113
(w) Release of Rights . . . . . . . . . . . . . . . . . 113
Section 11.2 Conditions Precedent of Seller . . . . . . . . . . . . . 113
(a) Representations and Warranties True at
Closing . . . . . . . . . . . . . . . . . . . . . . 113
(b) Compliance with Agreement.. . . . . . . . . . . . . 113
(c) Certified Resolutions and Officers'
Certificate . . . . . . . . . . . . . . . . . . . . 113
(d) Approval of Proceedings.. . . . . . . . . . . . . . 113
(e) Opinion of Counsel of Buyer.. . . . . . . . . . . . 114
(f) Injunction, Etc . . . . . . . . . . . . . . . . . . 114
(g) Consents. . . . . . . . . . . . . . . . . . . . . . 114
(h) Service, Supply and Technology Agreements.. . . . . 114
(i) Trademark Agreements. . . . . . . . . . . . . . . . 114
(j) TSCA Matters. . . . . . . . . . . . . . . . . . . . 114
PART TWELVE:
MISCELLANEOUS . . . . . . . . . . . . . . . 115
Section 12.1 Notices. . . . . . . . . . . . . . . . . . . . . . . . . 115
Section 12.2 Modification . . . . . . . . . . . . . . . . . . . . . . 115
Section 12.3 Governing Law. . . . . . . . . . . . . . . . . . . . . . 115
Section 12.4 Assignment . . . . . . . . . . . . . . . . . . . . . . . 116
Section 12.5 Counterparts . . . . . . . . . . . . . . . . . . . . . . 117
Section 12.6 Invalidity . . . . . . . . . . . . . . . . . . . . . . . 117
Section 12.7 Entire Agreement and Construction. . . . . . . . . . . . 117
Section 12.8 Expenses . . . . . . . . . . . . . . . . . . . . . . . . 117
Section 12.9 Waivers and Amendments . . . . . . . . . . . . . . . . . 117
Section 12.10 Survival of Representations and Covenants. . . . . . . . 118
Section 12.11 Section Headings . . . . . . . . . . . . . . . . . . . . 118
Section 12.12 Termination. . . . . . . . . . . . . . . . . . . . . . . 119
Section 12.13 Dispute Resolution . . . . . . . . . . . . . . . . . . . 119
(a) Generally.. . . . . . . . . . . . . . . . . . . . . 119
(b) Violations. . . . . . . . . . . . . . . . . . . . . 119
Section 12.14 Schedules and Exhibits . . . . . . . . . . . . . . . . . 119
<PAGE>
PURCHASE AND SALE AGREEMENT
(ADDITIVE BUSINESS)
THIS AGREEMENT, dated as of September 22, 1995, entered into
among Texaco Inc., a Delaware corporation, having an office at 2000
Westchester Avenue, White Plains, New York 10650 ("Seller") acting
on behalf of itself and the Selling Subsidiaries (as hereinafter
defined), S. A. Texaco Belgium N.V., a society anonyme organized
under the laws of the Kingdom of Belgium, having an office at
Avenue Arnaud Fraiteur 25, B-1050, Brussels, Belgium ("Texaco
Belgium"), S.A. Texaco Petroleum N.V., a society anonyme organized
under the laws of the Kingdom of Belgium, having an office at
Avenue Arnaud Fraiteur 25, B-1050, Brussels, Belgium ("Texaco
Petroleum"), Texaco Overseas Holdings Inc., a Delaware corporation,
having an office at 32 Loockerman Square, Suite L-100, Dover,
Delaware 19901 ("TOHI"), Texaco Additive Company, a Delaware
corporation, having an office at 3040 Post Oak Boulevard, Houston,
Texas 77056 ("Company"), Texaco Caribbean Inc., a Delaware
corporation, having an office at 150 Alhambra Circle, P.O. Box
343300, Coral Gables, Florida 33134-4534 ("Texaco Caribbean"), and
Ethyl Corporation, a Virginia corporation having an office at 330
South Fourth Street, Richmond, Virginia 23217 ("Buyer").
PART ONE:
SUBJECT MATTER OF THE AGREEMENT: DEFINITIONS
AND RULES OF CONSTRUCTION
Section 1.1 Subject Matter. The subject matter of the
Agreement is: (i) the sale to Buyer by Seller, the Company, TOHI,
Texaco Caribbean, Texaco Belgium, Texaco Petroleum and the Selling
Subsidiaries, as the case may be, of the U.S. Assets, as
hereinafter defined, the Brazilian Stock, as hereinafter defined,
the Belgian Stock, as hereinafter defined, the Korean Stock, as
hereinafter defined, the Miscellaneous Assets, as hereinafter
defined, and the Intellectual Property, as hereinafter defined, to
be effected by (x) the transfer by TOHI and Texaco Caribbean of the
Brazilian Stock, the transfer by the Company of the Korean Stock
and the transfer by Texaco Belgium and Texaco Petroleum of the
Belgian Stock; (y) the transfer by the Company of the U.S. Assets,
and the transfer by the Selling Subsidiaries of the Miscellaneous
Assets; and (z) the transfer by Seller and its Affiliates of the
Intellectual Property to Buyer; (ii) the purchase by Buyer or
Buyer's Subsidiary of the U.S. Assets, the Brazilian Stock, the
Korean Stock, the Belgian Stock, the Miscellaneous Assets and the
Intellectual Property, the assumption of the Assumed Liabilities,
as hereinafter defined, by Buyer or Buyer's Subsidiaries, and
retention of the Continuing Liabilities, by Texaco Brasil, the
Belgian Company, and Texaco Korea, and (iii) the terms and
conditions upon which the foregoing transactions shall take place.
Section 1.2 Definitions. For purposes of the Agreement,
except as otherwise expressly provided herein, the terms defined in
this Section 1.2 have the meanings herein assigned to them, and the
capitalized terms defined elsewhere in the Agreement by inclusion
in quotation marks and parentheses have the meanings so ascribed to
them.
"Additive Assets" means, collectively, the U.S. Assets,
the Belgian Assets, the Brazilian Assets, the Korean Assets,
the Miscellaneous Assets and the Intellectual Property,
excluding the Excluded Assets.
"Affiliate" means, with respect to any specified Person,
any other Person, directly or indirectly controlling or
controlled by or under direct or indirect common control with
such specified Person. For the purposes of this definition,
"control" (including, with correlative meanings,
"controlling", "controlled by", and "under common control
with") means the power to direct or cause the direction of the
management and policies of such Person, directly or
indirectly, whether through the ownership of voting
securities, by contract or otherwise, it being understood
that, with respect to a corporation or partnership, control
shall mean direct or indirect ownership of more than fifty
percent (50%) of the voting stock or general partnership
interest or voting interest in any such corporation or
partnership.
"Agreement" means this Purchase and Sale Agreement
(Additive Business), including the Schedules and Exhibits
hereto.
"Assets" means tangible assets and property, real,
personal and mixed, including, but not limited to: (i) fixed
assets, including land, land improvements, buildings,
fixtures, machinery and equipment, tools, furniture,
furnishings, plant and office equipment, leasehold
improvements and vehicles; (ii) inventories, including
supplies, raw materials, work-in-process, finished goods and
goods-in-transit from suppliers or manufacturers; (iii) cash
and cash equivalents; and (iv) books, records, sales and sales
promotional data, relevant information in databases,
advertising materials, customer lists, supplier lists and
business plans.
"Assumed Liabilities" means (i) current liabilities of
the Company or the Selling Subsidiaries as of the Effective
Date relating to the U.S. Business or the Miscellaneous
Business which were both incurred in the ordinary course of
business consistent with past practices and set forth in the
Closing Working Capital, it being understood that all
intercompany accounts and notes (representing amounts due from
or payable to Seller or Seller's Affiliates by the Company or
the Selling Subsidiaries) relating to the U.S. Business or the
Miscellaneous Business for activity occurring prior to and
including the Effective Date, shall cease to exist and shall
be removed from the books and records of the Company or the
Selling Subsidiaries in a manner consistent with Sections
2.4(b) and 4.1(c), and amounts due from or payable to Seller
or Seller's Affiliates by the Company or the Selling
Subsidiaries, for activity occurring after the Effective Date
through the Closing Date, shall become valid payables and
receivables as of the Closing Date under the Service, Supply
and Technology Agreements, (ii) obligations of the Company or
the Selling Subsidiaries arising and relating to periods after
the Effective Date under Contracts relating to the U.S.
Business or to the Miscellaneous Business made prior to the
Closing Date, in the ordinary course of business consistent
with past practices (other than the Contracts set forth on
Schedules 3.3(g) and 3.5(e)) and (iii) obligations of the
Company or the Selling Subsidiaries arising and relating to
periods after the Effective Date under Contracts as set forth
on Schedules 3.3(g) and 3.5(e).
"Belgian Assets" means, prior to the Belgian Transfer
Date, all of the Assets and Intangible Assets owned, leased or
otherwise controlled by Texaco Belgium which are exclusively
related to the Belgian Business, excluding the Excluded
Assets, and on or after the Belgian Transfer Date, all of the
Assets and Intangible Assets owned, leased or otherwise
controlled by the Belgian Company.
"Belgian Business" means the business and operations
conducted by Texaco Belgium to be transferred to the Belgian
Company on or prior to the Closing Date as set forth in
Section 4.1(k) at the business center and manufacturing
facility in Ghent, Belgium producing, selling and marketing
PIBSA, ZDDP's, succinimides, DI Packages, OCP and PMA VI
improvers and other miscellaneous lubricant additives,
blending and packaging lubes and antifreeze and contract
manufacturing of polyols, excluding the business and
operations related to the Excluded Assets.
"Belgian Company" means Texaco Additive N.V., a Belgian
Naamloze Venootschap having an office at 9042 Ghent 29 J. F.
Kennedylaan.
"Belgian Employees" means the individuals who were
employed by Texaco Belgium in the Belgian Business as of the
date of the Agreement as set forth on Schedule 4.1 (l) (xiv)
and excluding employees listed on Schedule 4.1(l) (xiv)(a) as
updated as of the Closing Date to eliminate individuals whose
employment terminated prior to the Closing Date and to add
individuals who were employed after the date of the Agreement
and remained employed by the Belgian Company on the Closing
Date.
"Belgian Stock" means One Thousand Two Hundred Fifty
(1,250) nominal shares of the Belgian Company which are
issued.
"Brazilian Assets" means, prior to the Brazilian
Transfer Date, all of the Assets and Intangible Assets owned,
leased or otherwise controlled by TBSA which are exclusively
related to the Brazilian Business, excluding the Excluded
Assets, and on or after the Brazilian Transfer Date, all of
the Assets and Intangible Assets owned, leased or otherwise
controlled by the Texaco Brasil.
"Brazilian Business" means the business and operations
conducted by TBSA prior to the Brazilian Transfer Date and by
Texaco Brasil on or after the Brazilian Transfer Date in the
manufacture, marketing and sale of PIBSA, succinimides and the
blending, marketing and sale of DI additive packages and OCP
VI improvers.
"Brazilian Collective Bargaining Conventions" means the
agreements, or decisions rendered in collective bargaining
proceedings by which appropriate union and the Company or the
competent companies association set the conditions of work
applicable to all employees and companies engaged in the same
activity or type of work within a specific geographical area.
"Brazilian Employees" means the individuals as set forth
on Schedule 3.4(n) who were employed by TBSA and are involved
in the Brazilian Business as of the date of the Agreement plus
individuals who were employed the date of the Agreement and
remained employed by TBSA on the Brazilian Transfer Date.
"Brazilian Stock" means the Nine Hundred Fifteen (915)
common shares of the capital stock of Texaco Brasil which are
issued and outstanding.
"Business Day" means a day on which banks are open for
business in New York City.
"Closing" means the closing of the transactions
contemplated by the Agreement at 10:00 a.m. New York time, at
2000 Westchester Avenue, White Plains, New York on the Closing
Date, or at such other time or place as the Parties may
mutually agree upon in writing.
"Closing Date" means the third Business Day after the
date on which all of the conditions to all Parties'
obligations hereunder have been satisfied unless waived by the
appropriate Party, or such later date as shall be agreed upon
in writing by the Parties, but in no event later than the
Termination Date.
"Code" means the United States Internal Revenue Code of
1986, as amended.
"Confidentiality Agreement" means the confidentiality
agreement between Seller, Buyer and Huntsman, dated August 16,
1995.
"Consolidated Return" means a return with respect to any
Taxes that are filed on a consolidated, combined or unitary
basis.
"Contracts" means contracts, commitments, understandings,
binding arrangements and other agreements of any kind or
nature, written or oral, including, without limitation, leases
of real and personal property.
"Copyright Assignment Agreements" means the agreements
conveying to Buyer copyrights substantially in the form
attached as Exhibit C.
"Corporate Documents" means with respect to a Delaware
corporation, the Certificate of Incorporation and By-Laws
thereof, and with respect to any corporation organized under
the Laws of another Governmental Body, such documents as are
equivalent to such Certificate of Incorporation and By-laws.
"DI" means dispersants and inhibitors.
"Effective Date" means the (i) Closing Date, if the
Closing occurs on the last day of any calendar month, or (ii)
if the Closing does not occur on the last day of a calendar
month, the last day of the calendar month immediately
preceding the calendar month in which the Closing occurs.
"Encumbrances" means liens, charges, mortgages, pledges,
security interests, claims, defects of title, restrictions and
any other rights of third parties, including rights of set-
off, voting trusts, transfers or receipt of income or other
exercise of any attributes of ownership.
"Excluded Assets" means the Assets and Intangible Assets
owned, leased or otherwise controlled by the Company, TBSA,
Texaco Belgium, Texaco Korea and the Selling Subsidiaries, as
set forth on Schedule 2.3(d) under the captions "U.S. Excluded
Assets", "Belgian Excluded Assets", "Brazilian Excluded
Assets", "Korean Excluded Assets" and "Miscellaneous Excluded
Assets".
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of
the accounting profession of the United States of America,
which are in effect as of the Closing Date and when used in
connection with all or part of the Texaco Additive Business
means as consistently applied by the Seller, the Company,
TBSA, Texaco Brasil, Texaco Korea, TOHI, Texaco Caribbean, the
Selling Subsidiaries, the Belgian Company or Texaco Belgium,
as the case may be.
"Governmental Body" means any domestic or foreign
national, state, provincial, municipal or other local
government or multinational body (including, but not limited
to, the European Community), any subdivision, agency,
commission or authority thereof, or any quasi-governmental or
private body exercising any regulatory or taxing authority
thereunder.
"Huntsman" means Huntsman Corporation, a Delaware
corporation having an office at 3040 Post Oak Boulevard,
Houston, Texas 77056.
"Income Tax" means any federal, alternative minimum,
state, local or foreign income, franchise or similar Tax and
in each instance any interest, penalties or additions to Tax
attributable to such Tax.
"Indefeasible" means, with respect to any real property
owned or any other real property interest owned, that such
real property owned or any other real property interest owned
cannot be revoked, defeated or voided with the exception of
minor imperfections such as shortages in areas or gaps in
parcels which, individually or in the aggregate, do not
materially impair the use of such real property or real
property interest.
"Insurance Policy" means any commercial policies of
insurance covering, prior to the Closing Date, (i) property
damage to the Additive Assets (including business
interruption) and (ii) liability of Seller, the Company,
Texaco Korea, Texaco Brasil, Texaco Belgium, Texaco Petroleum,
the Belgian Company, TOHI, Texaco Caribbean, Selling
Subsidiaries or Seller's other Affiliates including any of
their respective employees, directors, officers or agents.
"Intangible Assets" means intangible assets of every
kind, character or description, including, without limitation,
(i) rights under Contracts, (ii) accounts and notes
receivable, choses in action and (iii) prepaid rent, prepaid
Taxes, prepaid supplies, advances and other prepaid expenses
and deposits, but specifically excluding Intellectual
Property.
"Intellectual Property" means intellectual and similar
property of every kind and nature relating to or used or
necessary in the operation of the Texaco Additive Business,
including, without limitation, (i) Patents, (ii) trademarks
associated solely with the Texaco Additive Business (including
the goodwill of the Texaco Additive Business associated with
such trademarks) excluding all marks containing "Texaco" or
"Tex" as a prefix or suffix or those marks containing the Star
T design logo (but including all Governmental Body trademarks,
service marks, logos and designs, all registrations and
recordings thereof, and all applications in connection
therewith, in the United States Patent and Trademark Office,
any state of the United States or any other Governmental Body,
and all extensions or renewals thereof which are set forth on
Schedule 3.1(l)(ii)), (iii) copyrights associated solely with
the Texaco Additive Business (including without limitation all
copyrights, United States and foreign copyright registrations,
and applications to register copyrights which are set forth on
Schedule 3.1(l)(iii)), (iv) inventions, product formulae,
processes, designs, know-how, show-how or other data or
information, (v) confidential or proprietary technical and
business information, processes and trade secrets, (vi)
technical manuals and documentation made or used in connection
with any of the foregoing, (vii) engine and gear test results,
test protocols, product certifications and approvals, and
(vii) licenses and rights with respect to the foregoing or
property of like nature.
"IRS" means the Internal Revenue Service of the United
States.
"Korean Assets" means all of the Assets and the
Intangible Assets owned, leased or otherwise controlled by
Texaco Korea, which are exclusively related to the Korean
Business, excluding the Excluded Assets.
"Korean Business" means the sales and marketing
activities conducted by Texaco Korea.
"Korean Stock" means the Twelve Thousand Nine Hundred
(12,900) common shares of capital stock par value 10,000 Won
per share of Texaco Korea which are issued and outstanding.
"Laws" means all applicable statutes, laws, rules,
regulations, orders, ordinances, judgments and decrees of any
Governmental Body, including the common or civil law of any
Governmental Body.
"Lubricant Additives" means chemicals or other materials
added to lubricating oils (including without limitation
crankcase engine oils, hydraulic oils, turbine oils, power
transmission fluids, metalworking fluids, and gear oils) to
impart certain properties to said oils. Such additives may
function as: (i) inhibitors to prevent product degradation,
mechanical wear, or equipment or engine failure, (ii)
detergents and dispersants that solubilize degradation
products and reduce deposit formation, (iii) modifiers of
fluidity characteristics of the formulated lubricants,
including viscosity index improvers and cold flow improvers or
(iv) materials that provide lubricity properties, friction
reduction, or fuel economy benefits. It is expressly
understood that the term Lubricant Additives as used herein
does not include greases, fuel additives or coolant additives.
"Marketable" means, with respect to any real property
owned or other real property interest owned, that such real
property or other real property interest is free from all
Encumbrances, except Permitted Encumbrances.
"Miscellaneous Assets" means all of the Assets and the
Intangible Assets owned, leased or otherwise controlled by the
Selling Subsidiaries, primarily related to the Miscellaneous
Business, excluding the Excluded Assets.
"Miscellaneous Business" means the sales and marketing
activities related to the Texaco Additive Business conducted
by the Selling Subsidiaries at the locations set forth on
Schedule 3.5(f), excluding the business and operations related
to the Excluded Assets.
"Miscellaneous Employees" means the represented and non-
represented individuals who were employed by a Selling
Subsidiary and engaged in the Miscellaneous Business as of the
date of the Agreement as set forth on Schedule 3.5(h) and as
updated as of the Closing Date to eliminate individuals whose
employment terminated prior to the Closing Date and to add
individuals who were employed after the date of the Agreement
and remained employed on the Closing Date.
"OCP" means olefin copolymer used in the manufacture of
VI improvers.
"Party" means any of Buyer or Seller.
"Patents" means (i) all United States and foreign
patents, and all registrations and recordings thereof, (ii)
all patent applications of the United States or any other
country, including registrations and recordings thereof, and
including all reissues, divisions, continuations,
continuations-in-part, substitutions, extensions or renewals
of any of the foregoing, and (iii) invention disclosures, and
the inventions disclosed or claimed therein, including the
right to make, use or sell the inventions disclosed therein,
related to the Texaco Additive Business as set forth on
Schedule 3.1(l)(ii).
"Patent Assignment Agreements" means the agreements
conveying to Buyer the Patents, substantially in the forms
attached as Exhibit D.
"Permitted Encumbrances" means (i) Encumbrances for
Taxes, governmental charges or levies on property not yet due
and delinquent, (ii) easements, rights of way, licenses, real
property leases, encroachments and other minor imperfections
of title, which do not, individually or in the aggregate,
materially impair the use of any real property or any real
property interest or materially impair the use of any other
Additive Asset, or (iii) the Encumbrances set forth on
Schedule 2.1. Permitted Encumbrances shall not include any
mortgage, charge, lien or security interest which evidences or
secures payment for a sum of borrowed money.
"Person" means any individual, partnership, firm, trust,
association, corporation, joint venture, unincorporated
organization, other business entity or Governmental Body.
"PIBSA" means polyisobutylene succinic anhydride.
"Regulations" means the Income Tax regulations issued
with respect to the Code.
"Return" means returns, reports and information
statements with respect to Taxes required to be filed with the
IRS or any Governmental Body.
"Selling Subsidiaries" means the Subsidiaries of Seller
listed as the owners of the Miscellaneous Assets on Schedule
3.5(a).
"Service, Supply and Technology Agreements" means the
agreements as set forth on Schedule 11.1(h).
"Subsidiary" means, with respect to any Person, a
corporation incorporated under the Laws of a Governmental Body
of which at least a majority of the voting stock or voting
interest is owned, directly or indirectly, by such Person or
by one or more subsidiaries of such Person.
"Tax" means taxes of any kind, levies or other like
assessments, customs, duties, imposts, charges or fees,
including, without limitation, income, gross receipt, ad
valorem, value added, excise, real or personal property,
asset, sales, use, license, payroll, transaction, capital, net
worth and franchise taxes, withholding, employment, social
security, workers compensation, utility, severance,
production, unemployment compensation, occupation, premium,
windfall profits, transfer and gains taxes or other
governmental taxes imposed or payable to the United States, or
any state, county, local or foreign government or subdivision
or agency thereof, and in each instance such term shall
include any interest, penalties or additions to tax
attributable to any such Tax.
"Tax Sharing Arrangement" means any written agreement or
arrangement for the allocation or payment of Tax liabilities
or payment for Tax Benefits with respect to a consolidated,
combined or Consolidated Return of Seller or any of Seller's
Affiliates which Consolidated Return includes Texaco Brasil
and which is set forth in Exhibit A.
"TBSA" means Texaco Brasil S.A. Produtos de Petroleo, a
Brazilian company having an office at Avenida Republica do
Chile n. 230-25o andar (parte), Cidade do Rio Janeiro 20031,
170 Brasil.
"TDC" means Texaco Development Corporation, a Delaware
corporation, having an office at 2000 Westchester Avenue,
White Plains, NY 10650.
"TSE" means Texaco Services (Europe) Limited, a Delaware
corporation, having an office at Avenue Arnaud Fraiteur 25, B-
1050 Brussels, Belgium.
"Termination Date" means December 31, 1995.
"Texaco Additive Business" means, collectively, the U.S.
Business, the Belgian Business, the Korean Business, the
Brazilian Business and the Miscellaneous Business.
"Texaco Brasil" means Texaco Brasil Aditivos S.A., a
Brazilian company having an office at Avenida Republica do
Chile, n. 230-25o andar (parte), Cidade do Rio de Janeiro,
20031-170 Brasil.
"Texaco Korea" means Texaco Korea Ltd., a Korean company
having an office at 175-14 Nonhyun-dong, Kangnan-ku, Seoul,
Korea.
"Third Party Action" means any claim, demand, action,
suit or investigation made or instituted by a Person other
than a member of the Buyer Group or Seller Group for which an
Indemnified Party may be entitled to indemnification pursuant
to the Agreement.
"Total Fluid Management Program" means Seller's or its
Affiliates' program involving the reclamation or
refortification of used lubricants, metalworking fluids, and
antifreeze/coolants for continued use by consumers of Seller's
or its Affiliates' products and services.
"Trademark Assignment Agreements" means the Trademark
Assignment Agreement substantially in the form attached as
Exhibit B.
"Transfer Date" means (i) the Closing Date, if the
Closing occurs on the first day of any calendar month, or (ii)
if the Closing does not occur on the first day of a calendar
month, the first day of the calendar month immediately
following the calendar month in which the Closing occurs.
"U.S. Assets" means all of the Assets and Intangible
Assets owned, leased or otherwise controlled by the Company
excluding the Excluded Assets.
"U.S. Business" means the business and operations
conducted by the Company excluding the business and operations
related to the Excluded Assets.
"U.S. Employees" means the represented and non-
represented individuals who were employed by or seconded to
the Company as of the date of the Agreement as set forth on
Schedule 3.3(l) and as updated as of the Closing Date to
eliminate individuals whose employment terminated prior to the
Closing Date and to add individuals who were employed after
the date of the Agreement and remained employed to the Closing
Date.
"VI" means viscosity index.
"Working Capital" means current assets less current
liabilities determined in accordance with GAAP.
"ZDDP" means zinc dialkyl dithiophosphates.
"Other Definitions" The following terms have the
meanings ascribed to them in the Sections noted:
"Acquisition"..................... 4.1(e)
"Additional Indemnity Taxes"...... 9.4
"Additional Section 2.3(e) Taxes". 2.3(e)
"Additional Section 10.2(c) Taxes" 10.2(c)
"Annual Environmental Deductible". 8.2
"Area 1".......................... 4.3(z)
"Area 2".......................... 4.3(u)
"Asset Consideration"............. 2.2
"Assumption Agreements"........... 2.3(c)
"Auditors"........................ 2.3(f)
"Belgian Encumbrances"............ 4.1(l)(x)
"Belgian Property"................ 4.1(l)(x)
"Belgian Transfer Date"........... 4.1(l)
"Brazilian Benefit Plans.......... 3.4(q)
"Brazilian Easements"............. 3.4(j)
"Brazilian Fee Properties"........ 3.4(j)
"Brazilian Leased Properties"..... 3.4(j)
"Brazilian Savings Plan".......... 6.2(c)
"Brazilian Transfer Date"......... 4.1(m)
"Brazilian Transferred Employees.. 6.2(a)
"Buyer's Belgian Pension Plan".... 7.2(b)
"Buyer's Benefit Plan"............. 5.1(f)
"Buyer's Environmental Event"..... 8.2
"Buyer Group"..................... 9.1
"Caltex".......................... 4.3(t)
"Cash Flow Statement"............. 2.3(f)
"Claim"........................... 12.10
"Claim Termination Date".......... 12.10
"Closing Date Period"............. 10.3(a)
"Closing Payment"................. 2.4(a)
"Closing Statement"............... 2.4(b)
"Closing Working Capital"......... 2.4(b)
"Combined Financial Statements"... 3.1(g)
"Confidential Information" ....... 4.4(a)
"Continuing Liabilities".......... 2.3(f)
"Defined Benefit Plans"........... 5.1(g)
"Defined Contribution Plans"...... 5.1(j)
"Enhancements".................... 8.7(b)
"Environmental Event"............. 8.2
"Environmental Laws".............. 8.2
"Environmental Liabilities"....... 8.2
"ERISA"........................... 3.3(n)
"Estimated Working Capital"....... 2.4(a)
"Excluded Belgian Employees"...... 4.1(l)(xiv)(a)
"Excluded Contracts".............. 2.3(g)
"Excluded Marks".................. 4.2(b)
"Exposure Liability".............. 4.3(f)
"Exposure Litigation Protocol".... 4.3(f)
"FGTS"............................ 3.4(q)
"First Offer"..................... 4.1(d)
"Ghent Deed"...................... 3.8(h)
"HSR"............................. 4.3(c)
"Indemnified Member".............. 9.4
"Indemnified Party"............... 9.3
"Indemnifying Party".............. 9.3
"INSS"............................ 3.4(q)
"Intellectual Property Licenses".. 3.1(l)
"Korean Leased Properties" ....... 3.7(j)
"Legally Effective Date" ......... 8.2
"Liabilities"..................... 9.1
"Material Environmental Permits".. 3.1(n)
"Miscellaneous Leased Properties". 3.5(f)
"New Defined Benefit Plans"....... 5.1(g)
"New Defined Contribution Plans".. 5.1(j)
"New Environmental Laws".......... 8.2
"New Welfare Benefit Plans"....... 5.1(l)
"1994 Dollars".................... 8.3(d)
"Notes"........................... 2.2
"Offset".......................... 4.3(n)
"Payee"........................... 10.2(a)
"Payor"........................... 10.2(a)
"Petrobas Property"................ 4.3(u)
"Phase I Environmental Assessment" 8.2
"Protocol"........................ 8.9(b)(i)
"Purchase Price".................. 2.2
"Remediation"..................... 8.2
"Retained Liabilities"............ 2.3(e)
"Rework".......................... 3.3(q)
"Rio Lease"....................... 4.3(b)
"Seller Environmental Event"...... 8.2
"Seller Group".................... 9.2
"Seller Tax Group"................ 3.1(m)
"Seller's New Pension Plan"....... 6.2(a)
"Seller's Pension Assets"......... 6.2(b)
"Stipulated Environmental Laws" .. 8.2
"Tax Beneficiary"................. 10.2(a)
"Tax Benefit"..................... 2.3(e)
"TBSA"............................ 6.2(a)
"Texaco's Belgian Pension Plan"... 7.1(a)
"Transfer Tax".................... 10.1(a)
"Uncollected Receivables"......... 4.3(j)
"U.S. Fee Properties"............. 3.3(m)
"U.S. Leased Properties".......... 3.3(m)
"U.S. Transferred Employees"...... 5.1(a)
"Welfare Benefit Plans"........... 5.1(l)
"Withdrawal Option"............... 7.1(a)
Section 1.3 Rules of Construction. For purposes of the
Agreement:
(a) General. Unless the context otherwise requires: (i)
"or" is not exclusive; (ii) an accounting term not otherwise
defined has the meaning assigned to it in accordance with
GAAP; (iii) words in the singular include the plural and words
in the plural include the singular; (iv) words in the
masculine include the feminine and words in the feminine
include the masculine; (v) any date specified for any action
that is not a Business Day shall be deemed to mean the first
Business Day after such date; and (vi) reference to a
corporation or a partnership includes such corporation's or
partnership's successors and assigns.
(b) Parts and Sections. References to Parts and
Sections are, unless otherwise specified, to Parts and
Sections of the Agreement. Neither the captions to Parts or
Sections thereof nor the Table of Contents shall be deemed to
be a part of the Agreement.
(c) Other Agreements. References herein to any
agreement or other instrument shall, unless the context
otherwise requires (or the definition thereof otherwise
specifies), be deemed references to the same as it may from
time to time be changed, amended or extended. There is no
incorporation by reference herein unless expressly so stated.
PART TWO:
PURCHASE OF TEXACO ADDITIVE BUSINESS,
PURCHASE PRICE AND TRANSFER OF TEXACO ADDITIVE BUSINESS
Section 2.1 Purchase and Sale of Texaco Additive Business.
At the Closing, Seller shall sell, transfer, assign and deliver or
cause to be sold, transferred, assigned and delivered to Buyer or
one or more Subsidiaries of Buyer designated by Buyer, the U.S.
Assets, the Brazilian Stock, the Korean Stock, the Belgian Stock,
the Miscellaneous Assets and the Intellectual Property, free and
clear of all Encumbrances except Permitted Encumbrances, and Buyer
or one or more Subsidiaries of Buyer designated by Buyer shall
purchase, receive and accept the U.S. Assets, the Brazilian Stock,
the Korean Stock, the Belgian Stock, the Miscellaneous Assets and
the Intellectual Property.
Section 2.2 Purchase Price. The purchase price of the U.S.
Assets, the Belgian Stock, the Brazilian Stock, the Korean Stock,
the Miscellaneous Assets and the Intellectual Property shall be One
Hundred Seventy Six Million Two Hundred Thousand Dollars
($176,200,000) ("Asset Consideration") plus the Closing Working
Capital as determined in accordance with Section 2.4 (collectively,
the "Purchase Price"). At the Closing, Buyer shall deliver to
Seller an amount equal to the Asset Consideration plus the
Estimated Working Capital.
Section 2.3 Transfer of the U.S. Assets, the Belgian Stock,
Brazilian Stock, Etc. The transfer of the U.S. Assets, the Belgian
Stock, the Brazilian Stock, the Korean Stock, the Miscellaneous
Assets and the Intellectual Property shall be effected as follows:
(a) Transfer of Brazilian, Belgian and Korean Stock. At
the Closing, Seller shall assign, transfer and deliver or
cause to be assigned, transferred and delivered to Buyer or
Buyer's Subsidiaries (i) the Brazilian Stock, through the
execution of the appropriate entries in the Corporate
Registrar of Transfer of Shares and in the Corporate Registrar
of Ownership of Shares in accordance with the Brazilian
Corporation Laws, (ii) the certificates evidencing the Korean
Stock duly endorsed in blank or accompanied by appropriate
instruments of transfer in accordance with Korean corporation
Laws and (iii) the Belgian Stock, through the execution of the
appropriate entries in the Share Register in accordance with
Belgian corporation Laws. Buyer agrees that the entity buying
the Brazilian Stock shall be a U.S. corporation. Such
certificates may be legended to reflect that the securities
represented thereby have not been registered under any
Brazilian Laws, Korean Laws or Belgian Laws.
(b) Transfer of Assets, Etc. At the Closing, Seller
shall assign, transfer and deliver, or cause to be assigned,
transferred and delivered, such certificates, deeds of trust,
bills of sale or other deeds or documents as are required to
effect the transfer of the U.S. Assets, the Miscellaneous
Assets, and the Intellectual Property (including Seller's
computer software presently used in or necessary to the Texaco
Additive Business and all licenses therefor, but excluding (i)
Seller's or Huntsman's proprietary computer software presently
used both in Seller's or Huntsman's business and in the Texaco
Additive Business as set forth on Schedule 2.3(b) and (ii)
third party computer software licensed to Seller and presently
used in or necessary to Buyer in the Texaco Additive Business,
it being understood and agreed that the use of such excluded
computer software shall be provided or licensed pursuant to
one or more of the Service, Supply and Technology Agreements
to Buyer or one or more Subsidiaries of Buyer designated by
Buyer).
(c) Assumed Liabilities. At the Closing, Buyer and
Seller shall enter into or cause to be entered into assumption
agreements to assume the Assumed Liabilities substantially in
the form of Exhibit F ("Assumption Agreements"). Except as
expressly provided in the Agreement, Buyer has not agreed to
pay, shall not be required to assume, and shall not have, any
liability or obligation, direct or indirect, absolute or
contingent, of Seller, Affiliates of Seller or any other
Person, the assumption of which by Buyer is not expressly
provided for in the Agreement or Assumption Agreements.
(d) Transfer of Excluded Assets. Prior to the Closing
Date, Seller shall cause the Excluded Assets as set forth on
Schedule 2.3(d) which are held by Texaco Brasil, the Belgian
Company and Texaco Korea and all rights, obligations and
liabilities (absolute, accrued, contingent or otherwise)
related to such Excluded Assets to be sold, assigned or
otherwise conveyed by Texaco Brasil, the Belgian Company or
Texaco Korea to Seller or Seller's designees (which designees
shall in no event include Texaco Brasil, the Belgian Company
or Texaco Korea) and such sale, assignment or conveyance of
such Excluded Assets and such related obligations and
liabilities shall not create any obligations or liabilities
(including, without limitation, Tax liabilities) of Texaco
Brasil, the Belgian Company or Texaco Korea that survive the
Closing.
(e) Retained Liabilities. Prior to the Closing Date,
except for Continuing Liabilities, Seller shall remove or
extinguish or cause to be removed or extinguished all
obligations and liabilities (absolute, accrued, contingent or
otherwise) of Texaco Brasil, the Belgian Company and Texaco
Korea ("Retained Liabilities"); provided however, to the
extent Seller does not remove, extinguish or cause to be
removed or extinguished the Retained Liabilities prior to the
Closing Date, Seller shall continue to remove or extinguish or
cause to be removed or extinguished the Retained Liabilities
after the Closing Date and shall remain liable for the
Retained Liabilities. Seller's satisfaction of any Retained
Liabilities after the Closing Date shall be treated as
adjustments to the Purchase Price of the Brazilian Stock, the
Belgian Stock or the Korean Stock, as the case may be. If
Seller's satisfaction of any Retained Liabilities gives rise
to a Tax deduction, Tax credit or other Tax benefit ("Tax
Benefit") to Texaco Brasil, the Belgian Company or Texaco
Korea the amount of such Tax Benefit shall be refunded to
Seller when Texaco Brasil, the Belgian Company or Texaco Korea
realizes a cash Tax savings from such Tax Benefit. If for any
reason either of Texaco Brasil, the Belgian Company or Texaco
Korea has any Tax imposed on it on account of Seller's
satisfaction of the Retained Liabilities ("Additional Section
2.3(e) Taxes"), Seller shall also be liable for such
Additional Section 2.3(e) Taxes.
(f) Continuing Liabilities. After the Closing Date,
Buyer acknowledges that Texaco Brasil, the Belgian Company and
Texaco Korea shall be bound by the Continuing Liabilities. As
used in the Agreement, "Continuing Liabilities" means (i)
current liabilities of Texaco Brasil (excluding taxes, labor
and social security liabilities of TBSA not relating to the
Brazilian Business), the Belgian Company and Texaco Korea as
of the Effective Date which are incurred in the ordinary
course of business consistent with past practices, it being
understood that all intercompany accounts and notes
(representing amounts due from or payable to Seller or
Seller's Affiliates by Texaco Brasil, the Belgian Company and
Texaco Korea) for activity occurring prior to and including
the Effective Date, shall cease to exist and shall be removed
from the books and records of Texaco Brasil, the Belgian
Company and Texaco Korea in a manner consistent with Sections
2.4(b) and 4.1(c), and amounts due from or payable to Seller
or Seller's Affiliates by Texaco Brasil, the Belgian Company
or Texaco Korea, for activity occurring after the Effective
Date through the Closing Date, shall become valid payables and
receivables as of the Closing Date under the Service, Supply
and Technology Agreements, (ii) obligations of Texaco Brasil,
the Belgian Company and Texaco Korea arising out of and
relating to periods after the Effective Date under Contracts
made prior to the Effective Date in the ordinary course of
business consistent with past practices (other than the
Contracts as set forth on Schedule 3.4(i), 4.1(l)(ix) and
3.7(i)), and (iii) obligations of Texaco Korea, the Belgian
Company and Texaco Brasil arising out of and relating to
periods after the Effective Date under Contracts made prior to
the Effective Date as set forth on Schedules 3.4(i),
4.1(l)(ix) and 3.7(i). As of the Effective Date, and until
after the Closing Date, no payments shall be made for any
amounts due for activity occurring between the Effective Date
and the Closing Date between Seller or Seller's Affiliates and
Texaco Brasil, the Belgian Company or Texaco Korea. Any net
cash flow generated from receipt and payment activity by
Texaco Brasil, the Belgian Company or Texaco Korea in the
ordinary course of business between the Effective Date and the
Closing Date shall remain in the bank accounts of the Texaco
Brasil, the Belgian Company or Texaco Korea, as the case may
be, at Closing. With respect to the U.S. Business and the
Miscellaneous Business, Seller shall cause the Company and the
Selling Subsidiaries to keep accurate records of the net cash
flow generated by the U.S. Business and the Miscellaneous
Business from the Effective Date to the Closing Date as if the
cash flow for these operations had been held separate as set
forth in this Section 2.3(f) for the Company and the Selling
Subsidiaries. Seller shall estimate the amount of such net
cash and remit such estimated amount to Buyer at Closing.
Seller shall prepare a statement of actual net cash flow (the
"Cash Flow Statement") in accordance with GAAP as promptly as
possible after the Closing Date, but in no event later than
sixty (60) days after the Closing Date. Buyer shall have
thirty (30) days after receipt to review the Cash Flow
Statement. If Seller and Buyer agree on the resolution of all
matters relating to the Cash Flow Statement within such thirty
(30) day period, the Cash Flow Statement shall be final and
binding. If Seller and Buyer shall fail to reach an agreement
within such thirty (30) day period, then all disagreements
shall be submitted for resolution to Arthur Andersen LLP and
Coopers & Lybrand (the "Auditors"). The Auditors shall have
up to twenty (20) days after such submission to resolve the
dispute submitted to the Auditors which resolution shall be
final and binding on the Parties. In the event that the final
determination of net cash flow due Buyer is greater than the
estimated net cash flow paid on the Closing Date, Seller shall
pay such excess to Buyer within five (5) Business Days. In
the event that the final determination of net cash flow due
Buyer is less than the amount paid on the Closing Date, Buyer
shall pay such shortfall to Seller within five (5) Business
Days. From the Effective Date, accounts payable for products
and services delivered by Seller and Seller's Affiliates to
the Texaco Additive Business and receivables for products and
services delivered to Seller and Seller's Affiliates from the
Texaco Additive Business from the sales and service agreements
negotiated as a part of this transaction shall become assets
or liabilities of Buyer as applicable at the Closing Date.
The fees and expense of the Buyer's Auditor shall be paid by
Buyer.
(g) Transfer of Excluded Contracts. Prior to the
Closing Date, Seller shall or shall cause Seller's Affiliates
to transfer, assign or otherwise convey to Seller or the
appropriate Seller Affiliate the Excluded Contracts as set
forth on Schedule 2.3(g) ("Excluded Contracts") and such
contracts and related obligations and liabilities shall not
create any obligations or liabilities (including without
limitation tax liabilities) to Buyer or Buyer's Subsidiaries,
Texaco Brasil, the Belgian Company or Texaco Korea.
Section 2.4 Closing Working Capital. Buyer and Seller
agree as follows:
(a) Estimated Working Capital. The estimated amount of
the Closing Working Capital, ("Estimated Working Capital")
shall be determined jointly in the manner specified in Section
2.4(b) within five (5) days prior to the Closing Date by a
representative designated by Buyer and a representative
designated by Seller. Seller shall and shall cause Seller's
Affiliates to conduct with the right of Buyer to observe at
major facilities a physical inventory of the raw materials, in
process and finished goods and spare parts and stores in
excess of Fifty Thousand Dollars ($50,000) used to conduct the
Texaco Additives Business at the month end prior to the
Closing Date in accordance with procedures set forth in
Schedule 2.4(a).
(b) Determination of Closing Working Capital. As
promptly as practicable after the Closing Date (but in no
event later than ninety (90) days after the Closing Date),
Buyer shall prepare a statement of the Working Capital
included in the Additive Assets as of the Effective Date
("Closing Statement"). The Closing Statement shall be
prepared on the same basis as the December 31, 1994 Balance
Sheet contained in the Combined Financial Statements but
excluding amounts due from or payable to Seller or Seller's
Affiliates as well as any deferred tax assets for the benefit
of Seller or Seller's Affiliates. In addition, the Closing
Statement shall not include as an asset of the Texaco Additive
Business (i) any prepaid insurance premiums or (ii) any
Excluded Assets. The same pro rata basis of allocating the
LIFO reserve between the inventories sold and retained by
Seller used in the December 31, 1994 Balance Sheet contained
in the Combined Financial Statements shall be used in
calculating the Closing Statement. Seller shall have thirty
(30) days after receipt to review the Closing Statement. If
Seller and Buyer agree on the resolution of all matters
relating to the Closing Statement within such thirty (30) day
period, the Closing Statement shall be final and binding, and
shall set forth the Working Capital included in the Additive
Assets as of the Effective Date ("Closing Working Capital").
If Seller and Buyer shall fail to reach an agreement with
respect to all matters relating to the Closing Statement
within such thirty (30) day period, then all disagreements
shall be submitted for resolution to the Auditors. The
Auditors shall have up to twenty (20) days after such
submission to resolve the disputes submitted to the Auditors
and shall determine the Closing Working Capital which
determination shall be final and binding on the Parties. The
fees and expenses of the Auditors shall be shared equally by
Seller and Buyer.
(c) Adjustment Payment. Within ten (10) Business Days
after the final determination of the Closing Working Capital
("Adjustment Date"): (i) in the event that the Closing Working
Capital exceeds the Estimated Working Capital, the Buyer
shall pay to Seller the amount of the excess; or (ii) in the
event that the Closing Working Capital is less than the
Estimated Working Capital, Seller shall pay to Buyer the
amount of the shortfall.
Section 2.5 Payment. Unless otherwise expressly provided
herein, any amount payable under the Agreement shall be payable in
immediately available funds, by means of a wire transfer, if to
Seller, to Seller's account number 050015834 at Chemical Bank, New
York, New York (ABA#021000128) (with immediate telephone notice to
Peter Wissel at (914) 253-7705 or to such other account and
depository designated by Seller prior to the Closing by notice to
Buyer) or if to Buyer, to such account and depository designated by
Buyer prior to the Closing by notice to Seller.
PART THREE:
REPRESENTATIONS AND WARRANTIES
Section 3.1 Seller. Seller represents and warrants to
Buyer that:
(a) Organization and Standing of Seller. Seller has
been duly organized and is validly existing in good standing
under the Laws of Delaware.
(b) Authority. Seller has the corporate power and
authority to enter into and perform the Agreement and all
agreements and transactions contemplated hereby. The
execution, delivery and performance by Seller of the Agreement
and all agreements and transactions contemplated hereby,
including without limitation, the sale and delivery of the
U.S. Assets as contemplated hereby, have been duly authorized
by all requisite corporate and shareholder action, if any, on
the part of Seller and the Agreement has been duly executed
and delivered by Seller.
(c) Validity of Agreement. The Agreement is a legal,
valid and binding obligation of Seller and is enforceable
against Seller in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency or other
similar Laws affecting the enforcement of creditors' rights in
general. The enforceability of Seller's obligations under the
Agreement is subject to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at Law).
(d) No Violation. The execution and delivery of the
Agreement by Seller, and the performance by Seller of the
terms of the Agreement, do not (i) conflict with or result in
a violation of the Corporate Documents of Seller, TDC, TSE or
any Selling Subsidiary, (ii) conflict with, result in a
violation of or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default)
under, or result in the termination of, or accelerate the
performance required by, or cause the acceleration of the
maturity of any debt or obligation pursuant to the express
terms of any Contract to which Seller or any Selling
Subsidiary is a party or is subject, except for such
violations, conflicts, defaults, terminations or accelerations
which, either individually or in the aggregate, would not have
a material adverse effect on the Texaco Additive Business, or
(iii) violate any Law, except for such violations which,
either individually or in the aggregate, would not have a
material adverse effect on the Texaco Additive Business.
(e) No Consent Required. Except as otherwise provided
in Section 4.3(c) and as set forth on Schedule 3.1(e), (i) no
consent, waiver, approval, authorization or other action by,
or filing with, any Governmental Body is required in
connection with the execution, delivery and performance by
Seller of the Agreement or the agreements and transactions
contemplated hereby, and (ii) no consent, waiver, approval,
authorization or other action by any Person (other than
Governmental Bodies) is required in connection with the
execution, delivery and performance by Seller of the Agreement
or the agreements and transactions contemplated hereby, except
for consents, waivers, approvals, authorizations or actions
which, if not obtained, made or taken, would not have a
material adverse effect on the Texaco Additive Business.
(f) Disclosure. No representations or warranties by
Seller in the Agreement contain any untrue statement of a
material fact or omit to state a material fact necessary in
order to make the representations or warranties of Seller
herein, in light of the circumstances under which they were
made, not misleading.
(g) Financial Statements. The combined balance sheet of
the Texaco Additive Business as of December 31, 1994 and the
related combined statements of income and retained earnings,
and cash flows for the fiscal year 1994 audited by Arthur
Andersen LLP are as set forth on Schedule 3.1(g) ("Combined
Financial Statements"). The Combined Financial Statements are
true and complete in all material respects and have been
prepared in accordance with GAAP and fairly present, as of the
dates thereof, the combined financial position of the Texaco
Additive Business, and for the periods therein referred to,
the combined results of operations and combined cash flows of
the Texaco Additive Business.
(h) Changes. Except as set forth on Schedule 3.1(h),
since December 31, 1994 (i) there has been no material adverse
change in the financial condition of the Texaco Additive
Business; (ii) neither Seller nor any of Seller's Affiliates
has permitted or allowed any of the Additive Assets to be
subjected to any Encumbrances, except for Permitted
Encumbrances; (iii) neither Seller nor any of Seller's
Affiliates has disposed of, waived or permitted to lapse
claims and rights under Contracts relating to the Texaco
Additive Business with an aggregate value in excess of One
Hundred Twenty Five Thousand Dollars ($125,000) other than in
the ordinary course of business consistent with past
practices; (iv) neither Seller nor any of Seller's Affiliates
has transferred or otherwise disposed of any Additive Asset
except in the ordinary course of business consistent with past
practice and except for the Excluded Assets; (v) neither
Seller nor any of Seller's Affiliates has made any
announcement or proposal concerning or is under any legal
obligation to grant any general increase in the compensation
of officers of the Company, Belgian Company, Texaco Belgium,
Texaco Korea, TBSA or Texaco Brasil or U.S. Employees, Belgian
Employees, Brazilian Employees or Miscellaneous Employees
(including, without limitation, any such increase pursuant to
any bonus, pension, profit sharing or other plan or
commitment) or any contractual changes to the benefits other
than in the ordinary course of business consistent with past
practices; (vi) neither Seller nor any of Seller's Affiliates
has paid, discharged or satisfied any claims, liabilities or
obligations (absolute, accrued, contingent or otherwise)
relating to the Texaco Additive Business other than the
payment, discharge or satisfaction in the ordinary course of
business and consistent with past practice of liabilities and
obligations reflected or reserved against in the December 31,
1994 Balance Sheet contained in the Combined Financial
Statements or incurred in the ordinary course of business and
consistent with past practice since December 31, 1994; (vii)
neither Seller nor any of Seller's Affiliates has cancelled
any debts of the Texaco Additive Business in excess of Fifty
Thousand Dollars ($50,000) individually, or One Hundred
Thousand Dollars ($100,000) in the aggregate other than
intercompany accounts and notes; (viii) neither Seller nor any
of Seller's Affiliates has disposed of or permitted to lapse
any rights to the use of any material Intellectual Property,
or disposed of or disclosed to any Person other than
representatives of Buyer any trade secret, formula, process or
know-how not theretofore a matter of public knowledge other
than in the ordinary course of business including through
secrecy agreement or if not in the ordinary course of business
pursuant to those secrecy agreements as set forth on Schedule
3.1(h)(viii); (ix) neither Seller nor any of Seller's
Affiliates had any single capital expenditure or other
commitment which had been contracted to but not incurred
relating to the Texaco Additive Business in excess of Seven
Hundred and Fifty Thousand Dollars ($750,000) for additions to
property, plant, equipment or intangible capital assets or
made aggregate capital expenditures and commitments relating
to the Texaco Additive Business in excess of Seven Million
Five Hundred Thousand Dollars ($7,500,000) for additions to
property, plant, equipment or intangible capital assets; (x)
neither Seller nor Seller's Affiliates has caused a change in
inventory levels inconsistent with the normal operation of the
Texaco Additives Business; and (xi) neither Seller nor any of
Seller's Affiliates has agreed, whether in writing or
otherwise, to take any action described in clauses (i) to (x)
of this Section 3.1(h).
(i) Conduct of Business. Except as set forth on
Schedule 3.1(i), since December 31, 1994, the Texaco Additive
Business has not been conducted other than in the ordinary
course.
(j) Litigation. Except as set forth on Schedule 3.1(j),
there are no actions, suits, investigations or proceedings
pending or, to the actual knowledge of Seller, threatened
against Seller or any of Seller's Affiliates before any court
or arbitration tribunal or before or by any Governmental Body
relating to the execution, delivery or performance of the
Agreement or the agreements and transactions contemplated
hereby.
(k) No Undisclosed Liabilities. Neither Seller, the
Company, TOHI, Texaco Caribbean, Texaco Brasil, TBSA, Texaco
Korea, Belgian Company, Texaco Belgium, any Selling Subsidiary
nor any of their Affiliates have any liabilities or
obligations of any nature (absolute, accrued, contingent or
otherwise) related to the Texaco Additive Business which would
be required by GAAP to be reflected on the December 31, 1994
Balance Sheet contained in the Combined Financial Statements
of the Texaco Additive Business and which were not fully
reflected or reserved against in the December 31, 1994 Balance
Sheet contained in the Combined Financial Statements, except
for liabilities and obligations incurred in the ordinary
course of business and consistent with past practice since
December 31, 1994.
(l) Intellectual Property Rights. With respect to
Intellectual Property: (i) Seller, the Company, Texaco Brasil,
Texaco Korea, Belgian Company, Texaco Belgium, TBSA, TDC, TSE,
or a Selling Subsidiary is the owner of or has rights to use
all Intellectual Property; (ii) based on Seller's and Seller's
Affiliates actual knowledge, Schedule 3.1(l)(ii) sets forth a
complete and accurate list of all registered copyrights,
Patents and trademarks owned by or under obligation of
assignment to Seller, the Company, Texaco Brasil, TBSA, TDC,
TSE, Texaco Korea, Belgian Company, Texaco Belgium, or any of
the Selling Subsidiaries, necessary for the conduct of the
Texaco Additive Business excluding those marks containing
"Texaco", "Tex" as a prefix or suffix, or the Star T design
logo; (iii) each owner, listed on Schedule 3.1(l)(iii) is
listed in the records of the appropriate Governmental Body as
the sole owner of record (except as otherwise indicated in
such Schedule); (iv) based on Seller's and Seller's Affiliates
actual knowledge, Schedule 3.1(l)(iv) sets forth a complete
and accurate list of all agreements between Seller, the
Company, the Belgian Company, Texaco Belgium, Texaco Korea,
Texaco Brasil, TBSA, TDC, TSE, or any Selling Subsidiary or
any other Affiliate of Seller, on the one hand, and any
Person, on the other hand, granting any right to use or
practice any rights under any Intellectual Property including,
without limitation, any patent license, copyright license,
trademark license or sublicense to which Seller, the Company,
Texaco Brasil, TBSA, TDC, TSE, Texaco Korea, the Belgian
Company, Texaco Belgium or any Selling Subsidiary or any other
Affiliate of the Seller is a party, (collectively,
"Intellectual Property Licenses"); (v) except as set forth on
Schedule 3.1(l)(v), there is no Encumbrance on the right of
Seller, the Company, Texaco Belgium, Texaco Brasil, TBSA, TDC,
TSE, Texaco Korea, the Belgian Company, or any of the Selling
Subsidiaries to transfer to Buyer any of the Intellectual
Property, as herein contemplated; (vi) no trade secret,
formula, process, invention, design, know-how or any other
information considered material, proprietary and confidential
has been disclosed or authorized to be disclosed to any Person
which is not an Affiliate of Seller, except Buyer and Buyer's
Affiliates or except in the ordinary course of business or
pursuant to an obligation of confidentiality binding upon said
Person except as set forth in Schedule 3.1(l)(vi); (vii) based
on Seller's and Seller's Affiliates actual knowledge or except
as set forth on Schedule 3.1(l)(vii), there are no pending
proceedings by or before Governmental Bodies, including
opposition, interference, cancellation or other proceedings or
suits, relating to such Intellectual Property, and based on
Seller's and Seller's Affiliates actual knowledge, no such
proceedings are threatened; (viii) based on Seller's and
Seller's Affiliates actual knowledge, the conduct of the
Texaco Additive Business and the exercise of rights relating
to Patents, trademarks or copyrights contained within
Intellectual Property does not infringe upon or otherwise
violate, intellectual property rights of any Person; (ix)
based on Seller's and Seller's Affiliates actual knowledge, no
Person is infringing upon or otherwise violating any Patents,
trademarks or copyrights contained within Intellectual
Property; (x) except as set forth in Schedule 3.1(1)(x), based
on Seller's and Seller's Affiliates actual knowledge, none of
Seller, the Company, Texaco Brasil, TBSA, TDC, TSE, Texaco
Korea, the Belgian Company, Texaco Belgium, any Selling
Subsidiary or any of their Affiliates has received notice of
any claims, and there are no pending or threatened claims, of
any Persons relating to the scope, ownership or use of any of
the Intellectual Property; and (xi) except as set forth in
Schedule 3.1(1)(xi), based on Seller's and Seller's Affiliates
actual knowledge, each copyright registration, Patent and
registered trademark and application therefor listed on
Schedule 3.1(l)(ii) is in proper form, not disclaimed and has
been duly maintained, including the submission of all
necessary filings in accordance with the legal and
administrative requirements of the appropriate jurisdictions
except with respect to use requirements as to trademarks.
(m) Tax Matters. With respect to Tax matters: (i)
Texaco Korea, the Belgian Company, Texaco Belgium, TBSA and
Texaco Brasil have (x) timely filed in accordance with all
Laws, all material Returns required to be filed on or before
the Closing Date with respect to Taxes, (y) paid all Taxes
shown to have become due pursuant to such Returns, and (z)
paid all Taxes for which a notice of, or assessment or demand
for, payment has been received or which are otherwise due and
payable, except disputed amounts being contested in good faith
in accordance with applicable Laws and as to which adequate
reserves have been established; (ii) all such Returns are
true, correct and complete in all material respects; (iii)
Texaco Korea, the Belgian Company, Texaco Belgium, TBSA and
Texaco Brasil have made all payments of estimated Taxes
required to be made under foreign Law; (iv) all amounts that
are required to be collected or withheld by Texaco Korea, the
Belgian Company, Texaco Belgium, TBSA and Texaco Brasil, if
any, or with respect to Taxes imposed with respect to the
Korean Business, the Belgian Business or Brazilian Business
have been duly collected or withheld, and all such amounts
that are required to be remitted to any taxing authority have
been duly remitted; and (v) neither of Texaco Korea, Texaco
Belgium, TBSA nor Texaco Brasil has had, in the past five
taxable years, any U.S. source income or any income that is
effectively connected with a U.S. trade or business.
(n) Environmental Matters. With respect to
environmental matters: (i) except as set forth on Schedule
3.1(n)(i), the Texaco Additive Business is in substantial
compliance with all applicable Environmental Laws, the failure
to comply with which would have a material adverse effect on
the Texaco Additive Business; (ii) all permits, licenses,
registrations and other governmental authorizations under
Environmental Laws required to be held by Seller, the Company,
TBSA, Texaco Brasil, Texaco Korea, Belgian Company, Texaco
Belgium, or any of the Selling Subsidiaries in connection with
the Texaco Additive Business, other than those permits,
licenses, registrations and governmental authorizations which,
if not held, would not have a material adverse effect on the
Texaco Additive Business, are set forth on Schedule 3.1(n)(ii)
("Material Environmental Permits"); (iii) except as set forth
on Schedule 3.1(n)(iii), none of the Seller, the Company,
TBSA, Texaco Brasil, Texaco Korea, Texaco Belgium, the Belgian
Company or any of the Selling Subsidiaries has been notified
by any Governmental Body that any Material Environmental
Permit may be modified, suspended or revoked, or that any
Material Environmental Permit cannot be renewed, transferred,
provided or otherwise obtained by Buyer in the ordinary course
of business; (iv) except as set forth on Schedule 3.1(n)(iv),
there are no actions, suits, investigations or proceedings
under applicable Environmental Laws pending or, to the actual
knowledge of Seller, the Company, Texaco Brasil, TBSA, Texaco
Korea, the Belgian Company, Texaco Belgium or any of the
Selling Subsidiaries, threatened against Seller, the Company,
TBSA, Texaco Brasil, Texaco Korea, the Belgian Company, Texaco
Belgium or any of the Selling Subsidiaries relating to the
Texaco Additive Business, or against any Person whose
liability for such actions, suits, investigations or
proceedings may have been retained or assumed by Seller, the
Company, TBSA, Texaco Brasil, Texaco Korea, the Belgian
Company, Texaco Belgium or any of the Selling Subsidiaries in
connection with the Texaco Additive Business under Contract or
Law; and (v) except as set forth on Schedule 3.1(n)(iv), none
of Seller, the Company, Texaco Brasil, TBSA, Texaco Korea, the
Belgian Company, Texaco Belgium or any of the Selling
Subsidiaries is subject to any judgment, order or decree
entered in any lawsuit or other proceeding under Environmental
Laws before or by any Governmental Body which would have a
material adverse effect on the Texaco Additive Business.
(o) Product Tests. In regard to Lubricant Additive and
finished lubricant product and testing documentation submitted
by Seller or Seller's Affiliates related to the Texaco
Additive Business for approvals or certifications to customers
or approval authorities, Seller or Seller's Affiliates have
conducted the tests reflected in that documentation in
accordance with the procedures required therein and the
results are accurate and complete in all material respects.
Section 3.2 TOHI. Seller represents and warrants to Buyer
that:
(a) Organization and Standing of TOHI. TOHI has been
duly organized and is validly existing in good standing under
the Laws of Delaware.
(b) Authority. TOHI has the corporate power and
authority to enter into and perform the Agreement and all
agreements and transactions contemplated hereby and to sell
and deliver the Brazilian Stock as contemplated hereby. The
execution, delivery and performance by TOHI of the Agreement
and all agreements and transactions contemplated hereby,
including without limitation, the sale and delivery of the
Brazilian Stock as contemplated hereby have been duly
authorized by all requisite corporate and shareholder action,
if any, on the part of TOHI and the Agreement has been duly
executed and delivered by TOHI.
(c) Validity of Agreement. The Agreement is a legal,
valid and binding obligation of TOHI and is enforceable
against TOHI in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency or other
similar Laws affecting the enforcement of creditors' rights in
general. The enforceability of TOHI's obligations under the
Agreement is subject to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at Law).
(d) No Violation. The execution and delivery of the
Agreement by TOHI, and the performance by TOHI of the terms of
the Agreement, do not (i) conflict with, or result in a
violation of the Corporate Documents of TOHI or Texaco Brasil,
(ii) conflict with, result in a violation of, or constitute a
default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or
cause the acceleration of the maturity of any obligation
pursuant to the express terms of any Contract to which TOHI or
Texaco Brasil is a party or is subject, except for such
violations, conflicts, defaults, terminations, or
accelerations which, individually or in the aggregate, would
not have a material adverse effect on the Brazilian Business,
or (iii) violate any Law, except for such violations which,
individually or in the aggregate, would not have a material
adverse effect on the Brazilian Business.
(e) No Consent Required. Except as otherwise provided
in Section 4.3(c) and as set forth on Schedule 3.2(e), (i) no
consent, waiver, approval, authorization or other action by,
or filing with, any Governmental Body, is required in
connection with the execution, delivery and performance by
TOHI of the Agreement or the agreements or transactions
contemplated hereby, including, without limitation, the sale
of the Brazilian Stock as contemplated hereby and (ii) no
consent, waiver, approval, authorization or other action by
any Person (other than Governmental Bodies) is required in
connection with the execution, delivery and performance by
TOHI of the Agreement or the agreements or transactions
contemplated hereby, including, without limitation, the
transfer of the Brazilian Stock as contemplated hereby, except
for consents, waiver, approvals, authorizations or actions
which, if not obtained, made or taken would not have a
material adverse effect on the Brazilian Business.
(f) Ownership of Brazilian Stock. TOHI owns Nine
Hundred Six (906) common shares of the Brazilian Stock, free
and clear of any Encumbrance, and has the right to transfer
and deliver such common shares of the Brazilian Stock to Buyer
or its designees at the Closing.
(g) Ownership of TOHI. Seller owns, directly or
indirectly, all of the issued and outstanding capital stock of
TOHI.
Section 3.3 Company. Seller represents and warrants to
Buyer that:
(a) Organization and Standing of Company. The Company
has been duly organized and is validly existing in good
standing under the Laws of Delaware and is in good standing as
a foreign corporation in all jurisdictions where the nature of
its properties or business requires it.
(b) Authority. The Company has the corporate power and
authority to own, lease or otherwise control the U.S. Assets
and to conduct its business as presently conducted. The
Company has the corporate power and authority to enter into
and perform the Agreement and the agreements and transactions
contemplated hereby. The execution, delivery and performance
by the Company of the Agreement and the agreements and
transactions contemplated hereby have been duly authorized by
all requisite corporate and shareholder action, if any, on the
part of the Company, and the Agreement has been duly executed
and delivered by the Company.
(c) Validity of Agreement. The Agreement is a legal,
valid and binding obligation of the Company and is enforceable
against the Company in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency or other
similar Laws affecting the enforcement of creditors' rights in
general. The enforceability of the Company's obligations
under the Agreement is subject to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at Law).
(d) No Violation. The execution and delivery of the
Agreement by the Company, and the performance by the Company
of the terms of the Agreement, do not (i) conflict with or
result in a violation of the Corporate Documents of the
Company, (ii) conflict with, result in a violation of, or
constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result
in the termination of, or accelerate the performance required
by, or cause the acceleration of the maturity of any
obligation pursuant to the express terms of any Contract to
which the Company is a party or is subject, except for such
violations, conflicts, defaults, terminations, or
accelerations which, individually or in the aggregate, would
not have a material adverse effect on the U.S. Business, or
(iii) violate any Law, except for such violations which,
individually or in the aggregate, would not have a material
adverse effect on the U.S. Business.
(e) No Consent Required. Except as otherwise provided
in Section 4.3(c) and as set forth on Schedule 3.3(e), (i) no
consent, waiver, approval, authorization or other action by,
or filing with, any Governmental Body is required in
connection with the execution, delivery and performance by the
Company of the Agreement or the agreements or transactions
contemplated hereby, and (ii) no consent, waiver, approval,
authorization or other action by any Person (other than
Governmental Bodies) is required in connection with the
execution, delivery and performance by the Company of the
Agreement or the agreements or transactions contemplated
hereby, except for consents, waivers, approvals,
authorizations or actions which, if not obtained, made or
taken, would not have a material adverse effect on the U.S.
Business.
(f) Litigation. Except as set forth in Schedule 3.3(f),
there are no actions, suits, inquiries, investigations or
proceedings pending or, to the actual knowledge of Seller or
the Company, threatened against the U.S. Business before any
court or arbitration tribunal or before or by any Governmental
Body relating to the U.S. Business. The Company is not
subject to any judgment, order or decree entered in any
lawsuit or other proceeding before or by any Governmental Body
which, individually or in the aggregate, would have a material
adverse effect on the conduct of the U.S. Business.
(g) Contracts. Except as set forth on Schedule 3.3(g),
the Company is not a party to or subject to (i) any employment
or consulting Contract with any U.S. Employee, officer or
director of the Company (ii) any plan, arrangement or Contract
providing for bonuses, pensions, options, deferred
compensation, retirement payments or profit sharing for or
with any U.S. Employee, the Company's officers or directors,
(iii) any collective bargaining agreement with any labor
union, (iv) any instrument evidencing or related to
indebtedness for borrowed money, whether directly or
indirectly, which is not set forth on the December 31, 1994
Balance Sheet in the Combined Financial Statement, (v) any
Contract limiting the freedom of the Company to conduct
business in any geographic area or to compete in any line of
business or with any Person, or (vi) any other Contract which
is material to the operations of the U.S. Business. There
exists no default or event of default under any of the
Contracts set forth on Schedule 3.3(g) which, individually or
in the aggregate, would have a material adverse effect on the
U.S. Business.
(h) Title to U.S. Assets. With respect to U.S. Assets:
(i) Schedule 3.3(h) sets forth a comprehensive description of
all U.S. Assets constituting real property owned in fee,
including land, buildings, improvements and structures thereon
and appurtenances thereto ("U.S. Fee Properties"), and sets
forth the names of the record title owners of the U.S. Fee
Properties; (ii) the Company has Marketable and Indefeasible
title to the U.S. Fee Properties; (iii) Schedule 3.3(h)(iii)
sets forth a comprehensive listing of all easements and
rights-of-way where the Company, or its predecessors, is the
grantee ("U.S. Easements"); (iv) the Company has Marketable
and Indefeasible title to the U.S. Easements subject to their
terms and with respect to such U.S. Easements: (x) the
easements comprising the U.S. Easements are in full force and
effect and constitute the legal, valid and binding obligations
of each party thereto, (y) there exists no default or event of
default under any such easements which in the aggregate would
have a material adverse effect on the U.S. Business, and (z)
except as set forth on Schedule 3.3(h)(iv), no term easement
comprising a U.S. Easement which benefits any real property,
any real property interest or any U.S. Asset requires the
payment of a sum of money, excluding rentals, to prevent such
term easement from terminating or to renew such term easement,
and Schedule 3.3(h)(iv) sets forth the term and the amount
payable necessary to renew each easement or prevent the
termination of each easement; (v) Schedule 3.3(h)(v) sets
forth a comprehensive description of all U.S. Assets
constituting leasehold interests in real property where the
Company is lessee, including buildings, improvements and
structures located thereon and appurtenances thereto ("U.S.
Leased Properties") and with respect to such U.S. Leased
Properties: (x) the leases comprising the U.S. Leased
Properties are in full force and effect and constitute the
legal, valid and binding obligations of each party thereto,
and (y) there exists no default or event of default under any
of such leases which in the aggregate would have a material
adverse effect on the U.S. Business; (vi) the Company has good
title to all other U.S. Assets, subject to the Permitted
Encumbrances, and other than those that are leased which are
listed on Schedule 3.3(h)(vi), to which the Company has valid
and enforceable leases; (vii) the U.S. Assets and the
Intellectual Property constitute all of the material rights
and assets which are used in the conduct of the U.S. Business
as the U.S. Business was conducted on December 31, 1994 and is
presently being conducted; and (viii) no other material
properties or rights (with the exception of the rights arising
(x) under service or supply agreements in effect between the
Company and Seller or Huntsman or their respective Affiliates
which are superseded by Service, Supply and Technology
Agreements effective at the Effective Date, and (y) from
services or supplies offered by Seller or Huntsman to Buyer
which were declined by Buyer) as set forth on Schedule 3.3(h),
whether or not owned by the Company, are required for the
operation of the U.S. Business as the U.S. Business was
operated on December 31, 1994 or is presently being operated.
(i) Condition and Repair. Except as set forth in
Schedule 3.3(i), the plants, structures and equipment of the
U.S. Assets taken as a whole have been operated, maintained
and repaired in a reasonably prudent manner, in accordance
with industry standards and past practices, contain no known
structural defects which in the aggregate would have a
material adverse effect on the U.S. Business and are adequate
for the uses to which they are put.
(j) Condemnation. There are no condemnation proceedings
by a Governmental Body pending or to the actual knowledge of
Seller threatened with respect to any of the U.S. Fee
Properties.
(k) Compliance with Applicable Law. Except as set forth
on Schedule 3.3(k), the Company in the conduct of the U.S.
Business, has been and is in compliance with all Laws (other
than Environmental Laws), the failure to comply with which
would have a material adverse effect on the U.S. Business.
(l) U.S. Employees. Schedule 3.3(l) sets forth a
complete and accurate list of the U.S. Employees, including
and specifically identifying as such those U.S. Employees who
may go on long term disability.
(m) Inventory. The inventories of the Company (i)
consist of a quality and quantity usable in the ordinary
course of business, (ii) with respect to finished inventory,
are of a quality to be salable in the ordinary course of
business and (iii) are owned by the Company. Inventories of
feedstock, unfinished products and finished products of the
Company are valued in the December 31, 1994 Balance Sheet
contained in the Combined Financial Statements and the Closing
Statement at the lower of cost (substantially determined on a
last-in, first-out basis) or market, with adequate reserves in
the aggregate for inventories determined on a last-in, first-
out basis to cover any obsolete or below-standard quality
materials in accordance with past practices of the Company.
With respect to materials and supplies inventory, which are
carried on an average cost basis, the excess of cost over
market after any reserves for obsolete or below standard
inventory, does not exceed in the aggregate One Hundred
Thousand Dollars ($100,000).
(n) ERISA: Plan Administration. Each Defined
Contribution Plan has been operated and administered in
substantial compliance with its terms and with Law, including
but not limited to the Employee Retirement Income Security Act
of 1974, as amended, and the rules and regulations promulgated
thereunder ("ERISA") and the Code.
(o) ERISA; Qualified Plans. Each Defined Contribution
Plan that is intended to be "qualified" within the meaning of
Section 401(a) of the Code (or other Law) is so qualified.
(p) Labor Relations. With respect to labor relations:
(i) Schedule 3.3(p) sets forth a list of all collective
bargaining agreements with respect to U.S. Employees; (ii)
Seller has delivered to Buyer a complete and accurate copy of
the policy and procedures manual applicable to all U.S.
Transferred Employees; (iii) except as set forth on Schedule
3.3(p), to Seller's or the Company's actual knowledge there is
(x) no labor strike, dispute, slow down or work stoppage or
lockout actually pending or threatened against or affecting
the Company, (y) no union organizational campaign in progress
with respect to the non-represented U.S. Transferred Employees
and no question concerning representation respecting such U.S.
Transferred Employees, (z) no unfair labor practice charge or
complaint against the Company, pending or threatened against
the Company before the National Labor Relations Board, and
(aa) no charge, complaint, grievance or any arbitration
proceeding arising out of or under the collective bargaining
agreements actually pending or to the actual knowledge of
Seller or the Company threatened against the Company before
the Equal Employment Opportunity Commission or any state or
local agency responsible for the prevention of unlawful
employment practices; and (iv) the Company has not received
notice of the intent of any federal, state or local agency
responsible for the enforcement of labor or employment laws to
conduct an investigation with respect to or relating to the
Company and no such investigation is in progress.
(q) Products Liability. Except as set forth on Schedule
3.3 (q)(i), there is no claim, action, suit, proceeding or
investigation by any Person or before any Governmental Body,
or governmental inquiry pending, or to the actual knowledge of
Seller or Seller's Affiliates, threatened against or involving
Seller or any of Seller's Affiliates relating to any product
alleged to have been designed, manufactured, shipped, sold,
marketed, distributed, processed or merchandised by or on
behalf of the Texaco Additive Business and alleged to have a
defect, hazard or impurity of any kind, in manufacture,
processing, design, materials, workmanship or otherwise,
including without limitation any alleged failure to warn of
the defect, hazard or impurity or any alleged breach of
express or implied warranties or any alleged
misrepresentation, nor to the actual knowledge of Seller or
Seller's Affiliates is there any valid basis for any such
claim, action, suit, inquiry, proceeding or investigation by
any Person or before any Governmental Body that, if adversely
determined, individually or in the aggregate, would have a
material adverse effect on the Texaco Additive Business.
Except as set forth on Schedule 3.3(q)(ii), since January 1,
1989, there has not been any product recall, change in
chemical formulation resulting from government action
("Rework"), or post-sale warning made to Texaco Additive
Business customers generally (other than as set forth on
Material Safety Data Sheets or product labels) by the Texaco
Additive Business relating to any product designed,
manufactured, shipped, sold, marketed, distributed, processed
or merchandised by or on behalf of the Texaco Additive
Business, or any investigation or consideration of or decision
made by any officer, employee, agent or other representative
of the Texaco Additive Business concerning whether to
undertake any such recall, Rework or post-sale warning except
for product recalls, Reworks or post-sale warnings that would
not have a material adverse effect, individually or in the
aggregate, on the Texaco Additive Business.
(r) Subsidiaries. Except for Texaco Korea, the Company
has no Subsidiaries and holds no interest in any partnership
or other equity interest in any corporation, joint venture,
trust or other entity.
(s) Bank Accounts. Schedule 3.3 (s) sets forth a
complete and accurate list of all bank accounts of the Company
and the signatories thereunder.
(t) Ownership of Texaco Korea. The Company owns all of
the shares of Korean Stock, free and clear of any
Encumbrances, and has the right to transfer and deliver the
Korean Stock to Buyer or its designee at the Closing.
Section 3.4 Texaco Brasil. Seller represents and warrants
to Buyer that:
(a) Organization and Standing of Texaco Brasil. Texaco
Brasil has been duly organized and is validly existing in good
standing under the laws of Brazil.
(b) Authority. From and after the Brazilian Transfer
Date Texaco Brasil has the corporate power and authority to
own, lease or otherwise control the Brazilian Assets and to
conduct the Brazilian Business.
(c) No Consent Required. Except as otherwise provided
in Section 4.3(c) and as set forth on Schedule 3.4(c), (i) no
consent, waiver, approval, authorization or other action by,
or filing with, any Governmental Body, is required in
connection with the transfer of the Brazilian Stock as
contemplated hereby and (ii) no consent, waiver, approval,
authorization or other action by any Person (other than
Governmental Bodies) is required in connection with the
transfer of the Brazilian Stock as contemplated hereby except
for consents, waivers, approvals, authorizations or actions
which, if not obtained, made or taken, would not have a
material adverse effect on the Brazilian Business.
(d) Corporate Documents. The copies of Corporate
Documents of Texaco Brasil which have been delivered by Seller
to Buyer constitute true, correct and complete copies of the
Corporate Documents of Texaco Brasil and reflect all
amendments thereto through and including the date of the
Agreement.
(e) Subsidiaries. Texaco Brasil has no Subsidiaries and
holds no interest in any partnership or other equity interest
in any corporation, joint venture, trust or other entity.
(f) Capitalization. Texaco Brasil's capital stock
consists of the shares of Brazilian Stock. The Brazilian
Stock has been duly authorized and validly issued to TOHI and
Texaco Caribbean and is fully paid and nonassessable and
constitutes all of the issued and outstanding capital stock of
Texaco Brasil.
(g) Options or Warrants. There are no outstanding (i)
securities convertible into or exchangeable for capital stock
of Texaco Brasil, (ii) options, warrants or other rights to
purchase or subscribe for capital stock of Texaco Brasil or
securities convertible into or exchangeable for capital stock
of Texaco Brasil, or (iii) Contracts of any kind relating to
the issuance or disposition of any capital stock of Texaco
Brasil, or to the issuance or disposition of any securities
convertible into or exchangeable for capital stock of Texaco
Brasil, or any options, warrants or rights to purchase or
subscribe for any capital stock of Texaco Brasil.
(h) Litigation. Except as set forth on Schedule 3.4(h),
there are no actions, suits, inquiries, investigations or
proceedings pending or, to the actual knowledge of Seller, or
Texaco Brasil, threatened against TBSA or Texaco Brasil before
any court or arbitration tribunal or before or by any
Governmental Body, relating to the Brazilian Business. TBSA
or Texaco Brasil is not subject to any judgment, order or
decree entered in any lawsuit or other proceeding before or by
any Governmental Body which, individually or in the aggregate,
would have a material adverse effect on the Brazilian
Business.
(i) Contracts. Except as set forth on Schedule 3.4(i),
with respect to the Brazilian Business, Texaco Brasil or TBSA
is not a party to or subject to (i) any employment or
consulting Contract with any Brazilian Transfer Employee or
officer or director of Texaco Brasil, (ii) any plan or
Contract providing for bonuses, pensions, options, deferred
compensation, retirement payments or profit sharing for or
with any Brazilian Transfer Employee, or Texaco Brasil's
officers or directors, (iii) any collective bargaining
agreement with any labor union, (iv) any instrument evidencing
or related to indebtedness for borrowed money, whether
directly or indirectly, which is not set forth on the December
31, 1994 Balance Sheet contained in the Combined Financial
Statements, (v) any Contract limiting the freedom of Texaco
Brasil to conduct business in any geographic area or to
compete in any line of business or with any Person, or (vi)
any other Contract which is material to the Brazilian
Business. There exists no default or event of default under
any of the Contracts set forth on Schedule 3.4(i) which,
individually or in the aggregate, would have a material
adverse effect on the Brazilian Business.
(j) Title to Brazilian Assets. With respect to the
Brazilian Assets: (i) Schedule 3.4(j) sets forth a
comprehensive description of all Brazilian Assets constituting
real property owned by Texaco Brasil in fee, including land,
buildings, improvements and structures thereon and
appurtenances thereto from and after the Brazilian Transfer
Date ("Brazilian Fee Properties"); (ii) from and after the
Brazilian Transfer Date Texaco Brasil has Marketable and
Indefeasible title to the Brazilian Fee Properties subject to
the applicable Permitted Encumbrances; (iii) Schedule 3.4(j)
also sets forth a comprehensive listing of all easements and
rights-of-way where from and after the Brazilian Transfer Date
Texaco Brasil, is the grantee ("Brazilian Easements") and with
respect to the Brazilian Easements: (x) the easements
comprising the Brazilian Easements are in full force and
effect and constitute the legal, valid and binding obligations
of each party thereto, (y) there exists no default or event of
default under any such easements which in the aggregate would
materially adversely affect the Brazilian Business, (z) except
as set forth on Schedule 3.4(j), no term easement which
benefits any real property, any real property interest or any
Brazilian Asset requires the payment of a sum of money,
excluding rentals, to prevent such easement from terminating
or to renew such easement, and (aa) from and after the
Brazilian Transfer Date Texaco Brasil has Marketable and
Indefeasible title to the Brazilian Easements subject to the
specific encumbrances listed on Schedule 3.4(j); (iv) Schedule
3.4(j) also sets forth a comprehensive description of all
Brazilian Assets constituting material leasehold interests in
real property where from and after the Brazilian Transfer Date
Texaco Brasil is lessee, including buildings, improvements and
structures located thereon and appurtenances thereto
("Brazilian Leased Properties")and with respect to the
Brazilian Leased Properties: (x) the leases comprising the
Brazilian Leased Properties are in full force and effect and
constitute the legal, valid and binding obligations of each
party thereto, and (y) there exists no default or event of
default under any of such leases which in the aggregate would
have a material adverse effect on the Brazilian Business; (v)
from and after the Brazilian Transfer Date Texaco Brasil has
good title to all other Brazilian Assets, subject to the
Permitted Encumbrances, and other than those that are leased
to which it has valid and enforceable leases which are listed
on Schedule 3.4(j)(v); (vi) the Brazilian Assets and the
Intellectual Property constitute all of the material rights
and assets which are used in the conduct of the Brazilian
Business as the Brazilian Business was conducted on December
31, 1994 and is presently being conducted; and (vii) no other
material properties or rights (with the exception of the
rights arising (x) under service or supply agreements in
effect between Texaco Brasil and Seller and their respective
Affiliates, (y) under service or supply agreements in effect
between the Texaco Brasil and Seller or their respective
Affiliates which are superseded by Service, Supply and
Technology Agreements effective at Closing, and (z) from
services or supplies offered by Seller to Buyer but which were
declined by Buyer) as set forth on Schedule 3.4(j), whether or
not owned by Texaco Brasil, are required for the operation of
the Brazilian Business as the Brazilian Business was operated
on December 31, 1994 or is presently being operated.
(k) Condition and Repair. Except as set forth in
Schedule 3.4(k), the plants, structures and equipment of the
Brazilian Assets taken as a whole have been operated,
maintained and repaired in a reasonably prudent manner in
accordance with industry standards and past practices, contain
no known structural defects which in the aggregate would have
a material adverse effect on the Brazilian Business and are
adequate for the uses to which they are put.
(l) Condemnation. There are no condemnation,
expropriation or similar proceedings pending or threatened
with respect to any of the Brazilian Fee Properties.
(m) Compliance with Applicable Law. Except as set forth
on Schedule 3.4(m), TBSA and from and after the Brazilian
Transfer Date, Texaco Brasil, in the conduct of the Brazilian
Business, has been and is in compliance with all Laws (other
than Environmental Laws), but including, without limitation,
the labor laws and regulations applicable to Brazilian
Employees (including, without limitation, laws and regulations
relating to overtime work, Christmas bonuses and vacations)
the failure to comply with which would have a material adverse
effect on the Brazilian Business.
(n) Brazilian Employees. Schedule 3.4(n) sets forth a
complete and accurate list of the TBSA Employees involved in
the Brazilian Business, including and specifically identifying
as such those Brazilian Employees (i) who may go on long term
disability and (ii) who are subject to restriction from
termination, whether pursuant to a Collective Bargaining
Convention, an individual employment agreement or any Law.
With respect to each Brazilian Employee identified in Section
3.4(n)(ii), Schedule 3.4(n) sets forth the period for which
such Brazilian Employee is protected.
(o) Bank Accounts. Schedule 3.4(o) sets forth a
complete and accurate list of all bank accounts of Texaco
Brasil from and after the Brazilian Transfer Date and the
signatories thereunder.
(p) Inventory. From and after the Brazilian Transfer
Date the inventories of Texaco Brasil shall consist of those
used in the Brazilian Business (i) consist of a quality and
quantity usable in the ordinary course of business, (ii) with
respect to finished inventory, are of a quality to be salable
in the ordinary course of business, and (iii) are owned by
Texaco Brasil. Inventories of Brazilian Business are valued
in the December 31, 1994 Balance Sheet contained in the
Combined Financial Statements and the Closing Statement at the
lower of cost (substantially determined on a last-in, first-
out basis) or market, with adequate reserves in the aggregate
for inventories determined on a last-in, first-out basis to
cover any obsolete or below-standard quality materials in
accordance with past practices of TBSA. The excess of cost
over market after any reserves for obsolete or below standard
material does not exceed in the total aggregate Fifty Thousand
Dollars ($50,000).
(q) Brazilian Benefit Plans. Schedule 3.4(q) sets forth
a list of any and all benefit plans provided to the Brazilian
Employees ("Brazilian Benefit Plans"). Schedule 3.4 (q) sets
forth those benefits provided to Brazilian Employees which
have been and are considered remuneration for all legal
purposes, including, without limitation for the purpose of
calculating (x) contributions to the ("FGTS"); (y)
contributions due to the "Instituto Nacional do Seguro Social"
("INSS"); and (z) any other applicable mandatory labor rights.
(r) Recently Terminated Employees. Except as set forth
on Schedule 3.4(r), no TBSA or Texaco Brasil employee who was
involved in the Brazilian Business has been voluntarily or
involuntarily terminated in the two year period prior to the
Closing Date.
(s) Brazilian Collective Bargaining Convention and Union
Related Matters. Schedule 3.4(s) sets forth a list of all
collective bargaining conventions applicable to the Brazilian
Employees. Texaco Brasil and TBSA have been and are in
compliance with all provisions of the Brazilian Collective
Bargaining Convention concerning the Brazilian Employees and,
to Seller's, TBSA's and Texaco Brasil's actual knowledge,
except as set forth on Schedule 3.4(s), (i) there is no labor
strike, dispute, slow down, work stoppage or lockout pending
or threatened against or affecting Texaco Brasil or TBSA with
respect to the Brazilian Business; (ii) there is no union
organization charge or complaint against Texaco Brasil or TBSA
pending or threatened, with respect to any violation or
alleged violation of the provisions of any Brazilian
Collective Bargaining Convention in connection with any
Brazilian Employee; and (iii) no charge, complaint, grievance
or any arbitration proceeding arising out of or under the
Brazilian Collective Bargaining Convention is pending or, to
the actual knowledge of Seller, TBSA, and Texaco Brasil
threatened against Texaco Brasil or TBSA before any court or
commission in connection with any Brazilian Employee or the
Brazilian Business.
(t) Compliance with the FGTS Regulations. Texaco Brasil
and TBSA have been and are in compliance with the laws and
regulations concerning the FGTS with regard to Brazilian
Employees, or TBSA or Texaco Brasil directors, involved in the
Brazilian Business and, to Seller's, TBSA's and Texaco
Brasil's actual knowledge, except as set forth on Schedule
3.4(t), there is (i) no debt in connection to the FGTS before
any Brazilian Employee or before any governmental entity
responsible for surveillance or collection; and (ii) no
investigation, charge, complaint, labor claim or other suit
pending or threatened against Texaco Brasil or TBSA with
respect to any violation, or alleged violation, of the laws
and regulations concerning the "FGTS" in connection with any
Brazilian Employee, or any TBSA or Texaco Brasil director,
involved in the Brazilian Business.
(u) Compliance with the INSS Regulations. Texaco Brasil
and TBSA have been and are in compliance with the laws and
regulations concerning social security contributions with
respect to the Brazilian Business. There is (i) no debt in
connection to said contributions before the INSS or any other
Governmental Entity responsible for surveillance or
collection; and (ii) no investigation, charge, complaint,
labor claim or other suit pending or threatened against Texaco
Brasil or TBSA with respect to any violation of the laws and
regulations concerning social security contributions.
Section 3.5 Selling Subsidiaries. Seller represents and
warrants to Buyer that:
(a) Organization and Standing of Selling Subsidiaries.
Each Selling Subsidiary as set forth in Schedule 3.5(a) has
been duly organized and is validly existing in good standing
under the Laws of the jurisdiction of its organization.
(b) Authority. Each Selling Subsidiary has the
corporate power and authority to own, lease or otherwise
control the Miscellaneous Assets owned by such Selling
Subsidiary and to conduct the Miscellaneous Business conducted
by such Selling Subsidiary. The sale and delivery of the
Miscellaneous Assets as contemplated hereby have been duly
authorized by all requisite corporate and shareholder action
on the part of each Selling Subsidiary.
(c) No Consent Required. Except as otherwise provided
in Section 4.3(c) and as set forth in Schedule 3.5(c), (i) no
consent, waiver, approval, authorization or other action by,
or filing with, any Governmental Body, is required in
connection with the transfer of the Miscellaneous Assets as
contemplated hereby and (ii) no consent, waiver, approval,
authorization or other action by any Person (other than
Governmental Bodies) is required in connection with the
transfer of the Miscellaneous Assets as contemplated hereby
except for consents, waivers, approvals, authorizations or
actions which, if not obtained, made or taken, would not have
a material adverse effect on the Miscellaneous Business.
(d) Litigation. Except as set forth in Schedule 3.5(d),
there are no actions, suits, inquiries, investigations or
proceedings pending or, to the actual knowledge of Seller or
any Selling Subsidiary, threatened against the Miscellaneous
Business before any court or arbitration tribunal or before or
by any Governmental Body. The Miscellaneous Business is not
subject to any judgment, order or decree entered in any
lawsuit or other proceeding before or by any Governmental Body
which, individually or in the aggregate, would have a material
adverse effect on the Miscellaneous Business.
(e) Contracts. Except as set forth on Schedule 3.5(e),
with respect to the Miscellaneous Business, no Selling
Subsidiary is a party to or subject to: (i) any employment or
consulting Contract with any Miscellaneous Employee; (ii) any
plan or Contract providing for bonuses, pensions, options,
deferred compensation, retirement payments or profit sharing
for or with the Miscellaneous Employees; (iii) any collective
bargaining agreement with any labor union; (iv) any instrument
evidencing or related to indebtedness for borrowed money,
whether directly or indirectly, which is not set forth on the
December 31, 1994 Balance Sheet contained in the Combined
Financial Statements; (v) any Contract limiting the freedom of
the Miscellaneous Business to conduct business in any
geographic area or to compete in any line of business or with
any Person; or (vi) any other Contract which is material to
the Miscellaneous Business. There exists no default or event
of default under any of the Contracts set forth on Schedule
3.5(e) which, individually or in the aggregate, would have a
material adverse effect on the Miscellaneous Business.
(f) Title to Miscellaneous Assets. With respect to the
Miscellaneous Assets: Schedule 3.5(f)(i) sets forth a
comprehensive description of all Miscellaneous Assets
constituting leasehold interests in real property where any of
the Selling Subsidiaries is lessee, including buildings,
improvements and structures located thereon and appurtenances
thereto ("Miscellaneous Leased Properties") and with respect
to the Miscellaneous Leased Properties: (ii) the leases
comprising the Miscellaneous Leased Properties are in full
force and effect and constitute the legal, valid and binding
obligations of each party thereto, and (iii) there exists no
default or event of default under any of such leases which in
the aggregate would have a material adverse effect on the
Miscellaneous Business. The Selling Subsidiaries have good
title to all other Miscellaneous Assets, subject to the
Permitted Encumbrances, and other than those that are leased,
to which the Selling Subsidiaries have valid and enforceable
leases as listed on Schedule 3.5(f)(iv). The Miscellaneous
Assets and Intellectual Property constitute all of the
material rights and assets which are used in the conduct of
the Miscellaneous Business as the Miscellaneous Business was
conducted on December 31, 1994 and is presently being
conducted. No other material properties or rights (with the
exception of the rights arising (x) under service or supply
agreements in effect between the Selling Subsidiaries and
Seller or their respective Affiliates which are superseded by
Service, Supply and Technology Agreements effective at
Closing, and (y) from services or supplies offered by Seller
to Buyer which were declined by Buyer), whether or not owned
by the Selling Subsidiaries as set forth on Schedule
3.5(f)(y), are required for the operation of the Miscellaneous
Business as the Miscellaneous Business was operated on
December 31, 1994 or is presently being operated.
(g) Compliance with Applicable Law. Each Selling
Subsidiary, in its conduct of the Miscellaneous Business, has
been and is in compliance with all Laws (other than
Environmental Laws, the failure to comply with which would
have a material adverse effect on the Miscellaneous Business.
(h) Miscellaneous Employees. Schedule 3.5(h) contains
a complete and accurate list of the Miscellaneous Employees,
including and specifically identifying as such those
Miscellaneous Employees who may go on long term disability.
(i) Inventories. The inventories included in the
Miscellaneous Assets (i) consist of a quality and quantity
usable in the ordinary course of business, (ii) with respect
to finished inventory, are of a quality to be salable in the
ordinary course of business and (iii) are owned by the Selling
Subsidiaries. Inventories related to the Miscellaneous Assets
are valued in the December 31, 1994 Balance Sheet contained in
the Combined Financial Statements and the Closing Statement at
the lower of cost (substantially determined on an average cost
basis) or market, with adequate reserves in the aggregate to
cover any obsolete or below-standard quality materials in
accordance with past practices of the Selling Subsidiaries.
The excess of cost over market after any reserves for obsolete
or below standard quality materials, does not exceed a total
aggregate Twenty Five Thousand Dollars ($25,000).
(j) Ownership. Seller owns, directly or indirectly, all
of the outstanding capital stock of each of the Selling
Subsidiaries.
Section 3.6 Texaco Caribbean. Seller represents and
warrants to Buyer that:
(a) Organization and Standing of Texaco Caribbean.
Texaco Caribbean has been duly organized and is validly
existing in good standing under the Laws of Delaware.
(b) Authority. Texaco Caribbean has the corporate power
and authority to enter into and perform the Agreement and
agreements and transactions contemplated hereby and sell and
deliver the Brazilian Stock as contemplated hereby. The
execution, delivery and performance by Texaco Caribbean of the
Agreement and all agreements and transactions contemplated
hereby, including without limitation the sale and delivery of
the Brazilian Stock as contemplated hereby have been duly
authorized by all requisite corporate and shareholder action
on part of Texaco Caribbean and the Agreement has been duly
executed and delivered by Texaco Caribbean.
(c) Validity of Agreement. The Agreement is a legal,
valid and binding obligation of Texaco Caribbean and is
enforceable against Texaco Caribbean in accordance with its
terms, except as enforcement may be limited by bankruptcy,
insolvency or other similar Laws affecting the enforcement of
creditors' rights in general. The enforceability of Texaco
Caribbean's obligations under the Agreement is subject to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
Law).
(d) No Violation. The execution and delivery of the
Agreement by Texaco Caribbean, and the performance by Texaco
Caribbean of the terms of the Agreement, do not (i) conflict
with, or result in a violation of, the Corporate Documents of
Texaco Caribbean or Texaco Brasil, (ii) conflict with, result
in a violation of, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a
default) under, or result in the termination of, or accelerate
the performance required by, or cause the acceleration of the
maturity of any obligation pursuant to the express terms of
any Contract to which Texaco Caribbean or Texaco Brasil is a
party or is subject, except for such violations, conflicts,
defaults, terminations, or accelerations which, individually
or in the aggregate, would not have a material adverse effect
on the Brazilian Business, or (iii) violate any Law, except
for such violations which, individually or in the aggregate,
would not have a material adverse effect on the Brazilian
Business.
(e) No Consent Required. Except as otherwise provided
in Section 4.3(c) and as set forth on Schedule 3.6(e), (i) no
consent, waiver, approval, authorization or other action by,
or filing with, any Governmental Body, is required in
connection with the execution, delivery and performance by
Texaco Caribbean of the Agreement or the agreements or
transactions contemplated hereby, including the sale of the
Brazilian Stock as contemplated hereby and, without
limitation, (ii) no consent, waiver, approval, authorization
or other action by any Person (other than Governmental Bodies)
is required in connection with the execution, delivery and
performance by Texaco Caribbean of the Agreement or the
agreements or transactions contemplated hereby, including,
without limitation, the transfer of the Brazilian Stock as
contemplated hereby, except for consents, waiver, approvals,
authorizations or actions which, if not obtained, made or
taken would not have a material adverse effect on the
Brazilian Business.
(f) Ownership of Brazilian Stock. Texaco Caribbean owns
nine (9) shares of the Brazilian Stock, free and clear of any
Encumbrance, and has the right to transfer and deliver such
Brazilian Stock to Buyer or its designee at the Closing.
(g) Ownership of Texaco Caribbean. Seller owns,
directly or indirectly, all of the issued and outstanding
capital stock of Texaco Caribbean.
Section 3.7 Texaco Korea. Seller represents and warrants
to Buyer that:
(a) Organization and Standing. Texaco Korea has been
duly organized and is validly existing in good standing under
the Laws of the jurisdiction of its organization.
(b) Authority. Texaco Korea has the corporate power and
authority to own, lease or otherwise control the Korean Assets
and to conduct the Korean Business.
(c) No Consent Required. Except as otherwise provided
in Section 4.3(c) and as set forth in Schedule 3.7(c), (i) no
consent, waiver, approval, authorization or other action by,
or filing with, any Governmental Body, is required in
connection with the transfer of the Korean Stock as
contemplated hereby and (ii) no consent, waiver, approval,
authorization or other action by any Person (other than
Governmental Bodies) is required in connection with the
transfer of the Korean Stock as contemplated hereby except for
consents, waivers, approvals, authorizations or actions which,
if not obtained, made or taken, would not have a material
adverse effect on the Korean Business.
(d) Corporate Documents. Copies of the Corporate
Documents of Texaco Korea which have been delivered by Seller
to Buyer, constitute true, correct and complete copies of such
Corporate Documents of Texaco Korea and reflect all amendments
thereto through and including the date of the Agreement.
(e) Texaco Korea Capitalization. Texaco Korea's
authorized capital consists of twenty thousand (20,000) shares
of common stock with a par value of ten thousand won (10,000)
per share. The Korean Stock has been duly authorized and
validly issued to the Company and is fully paid and non-
assessable and constitutes all of the issued and outstanding
capital stock of Texaco Korea.
(f) Options or Warrants. There are no outstanding (i)
securities convertible into or exchangeable for the capital
stock of Texaco Korea, (ii) options, warrants or other rights
to purchase or subscribe for capital stock of Texaco Korea or
securities convertible into or exchangeable for capital stock
of Texaco Korea, or (iii) Contracts of any kind relating to
the issuance or disposition of any capital stock of Texaco
Korea or to the issuance or disposition of any securities
convertible into or exchangeable for capital stock of Texaco
Korea or any options, warrants or rights to purchase or
subscribe to capital stock of Texaco Korea.
(g) Subsidiaries. Texaco Korea has no Subsidiaries and
holds no interest in any partnership or other equity interest
in any corporation, joint venture, trust or other entity.
(h) Litigation. Except as set forth in Schedule 3.7(h),
there are no actions, suits, inquiries, investigations or
proceedings pending or, to the actual knowledge of Seller or
Texaco Korea, threatened against Texaco Korea before any court
or arbitration tribunal or before or by any Governmental Body
relating to the Korean Business. Texaco Korea is not subject
to any judgment, order or decree entered in any lawsuit or
other proceeding before or by any Governmental Body which,
individually or in the aggregate, would have a material
adverse effect on the Korean Business.
(i) Contracts. Except as set forth on Schedule 3.7(i),
with respect to the Korean Business, Texaco Korea is not a
party to or subject to (i) any employment or consulting
Contract with any officer or director of Texaco Korea, (ii)
any plan or Contract providing for bonuses, pensions, options,
deferred compensation, retirement payments or profit sharing
for or with any of Texaco Korea's officers or directors, (iii)
any instrument evidencing or related to indebtedness for
borrowed money, whether directly or indirectly, not set forth
on the December 31, 1994 Balance Sheet contained in the
Combined Financial Statements; (iv) any Contract limiting the
freedom of Texaco Korea to conduct business in any geographic
area or to compete in any line of business or with any Person;
or (v) any other Contract which is material to the Korean
Business. There exists no default or event of default under
any of the Contracts set forth on Schedule 3.7(i) which,
individually or in the aggregate, would have a material
adverse effect on the Korean Business.
(j) Title to Korean Assets. With respect to the Korean
Assets: (i) Texaco Korea owns no real property in fee, (ii)
there are no easements or rights-of-way where Texaco Korea, or
its predecessors, is the grantee and (iii) Schedule
3.7(j)(iii) sets forth a comprehensive description of all
Korean Assets constituting leasehold interests in real
property where Texaco Korea is lessee, including buildings,
improvements and structures located thereon and appurtenances
thereto ("Korean Leased Properties") and with respect to the
Korean Leased Properties: (x) the leases comprising the Korean
Leased Properties are in full force and effect and constitute
the legal, valid and binding obligations of each party
thereto, and (y) there exists no default or event of default
under any of such leases which in the aggregate would have a
material adverse effect on the Korean Business. (iv) Texaco
Korea has good title to all other Korean Assets, subject to
the Permitted Encumbrances, and other than those that are
leased, to which Texaco Korea has valid and enforceable
leases, which are set forth in Schedule 3.7(j)(iv). The
Korean Assets and the Intellectual Property constitute all of
the material rights and assets which are used in the conduct
of the Korean Business as the Korean Business was conducted on
December 31, 1994 and is presently being conducted. (v) No
other material properties or rights (with the exception of the
rights arising (x) under service or supply agreements in
effect between Texaco Korea and Seller or their respective
Affiliates which are superseded by Service, Supply and
Technology Agreements effective at Closing, and (y) from
services or supplies offered by Seller to Buyer which were
declined by Buyer) as set forth on Schedule 3.7(j)(v), whether
or not owned by the Selling Subsidiaries, are required for the
operation of the Korean Business as the Korean Business was
operated on December 31, 1994 or is presently being operated.
(k) Compliance with Applicable Law. Texaco Korea, in
its conduct of the Korean Business, has been and is in
compliance with all Laws (other than Environmental Laws), the
failure to comply with which would have a material adverse
effect on the Korean Business.
(l) Korean Employees. Texaco Korea has no employees.
(m) Inventories. Texaco Korea has no inventory.
(n) Bank Accounts. Schedule 3.7(n) sets forth a complete
and accurate list of all bank accounts of Texaco Korea and the
signatories thereunder.
Section 3.8 Texaco Belgium. Seller represents and
warrants to Buyer that:
(a) Organization and Standing of Texaco Belgium. Texaco
Belgium has been duly organized and is validly existing under
the Laws of Belgium.
(b) Authority. Texaco Belgium has the corporate power
and authority to enter into and perform the Agreement and all
agreements and transactions contemplated hereby and to sell
and deliver the Belgian Stock as contemplated hereby. The
execution, delivery and performance by Texaco Belgium of the
Agreement and all agreements and transactions contemplated
hereby, including without limitation, the sale and delivery of
the Belgian Stock as contemplated hereby have been duly
authorized by all requisite corporate and shareholder action,
if any, on the part of Texaco Belgium and the Agreement has
been duly executed and delivered by Texaco Belgium.
(c) Validity of Agreement. The Agreement is a legal,
valid and binding obligation of Texaco Belgium and is
enforceable against Texaco Belgium in accordance with its
terms, except as enforcement may be limited by bankruptcy,
insolvency or other similar Laws affecting the enforcement of
creditors' rights in general. The enforceability of Texaco
Belgium's obligations under the Agreement is subject to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
Law).
(d) No Violation. The execution and delivery of the
Agreement by Texaco Belgium, and the performance by Texaco
Belgium of the terms of the Agreement, do not (i) conflict
with, or result in a violation of the Corporate Documents of
Texaco Belgium or the Belgian Company, (ii) conflict with,
result in a violation of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute
a default) under, or result in the termination of, or
accelerate the performance required by, or cause the
acceleration of the maturity of any obligation pursuant to the
express terms of any Contract to which Texaco Belgium or the
Belgian Company is a party or is subject, except for such
violations, conflicts, defaults, terminations, or
accelerations which, individually or in the aggregate, would
not have a material adverse effect on the Belgian Business, or
(iii) violate any Law, except for such violations which,
individually or in the aggregate, would not have a material
adverse effect on the Belgian Business.
(e) No Consent Required. Except as otherwise provided
in Section 4.3(c) and as set forth on Schedule 3.8(e), (i) no
consent, waiver, approval, authorization or other action by,
or filing with, any Governmental Body, is required in
connection with the execution, delivery and performance by
Texaco Belgium of the Agreement or the agreements or
transactions contemplated hereby, including, without
limitation, the sale of the Belgian Stock as contemplated
hereby and (ii) no consent, waiver, approval, authorization or
other action by any Person (other than Governmental Bodies) is
required in connection with the execution, delivery and
performance by Texaco Belgium of the Agreement or the
agreements or transactions contemplated hereby, including,
without limitation, the transfer of the Belgian Stock as
contemplated hereby, except for consents, waivers, approvals,
authorizations or actions which, if not obtained, made or
taken would not have a material adverse effect on the Belgian
Business.
(f) Ownership of Belgian Stock. Texaco Belgium owns One
Thousand Two Hundred and Forty Nine (1,249) of the shares of
the Belgian Stock, free and clear of any Encumbrance, and has
the right to transfer and deliver such shares of the Belgian
Stock to Buyer or its designee at the Closing.
(g) Ownership of Texaco Belgium. Seller owns, directly
or indirectly, all of the issued and outstanding capital stock
of Texaco Belgium.
(h) Certain Real Estate Matters. With respect to
Belgian real estate matters (i) Texaco Belgium has notified
the City of Ghent, Belgium, in writing under the deed or
authentic act dated March 21, 1990 (the "Ghent Deed") of its
intention to contribute the Belgian Assets and certain
liabilities to the Belgian Company, and to subsequently sell
the Belgian Stock to Buyer's designees, a copy of which has
been delivered to Buyer and (ii) the contribution of the
Belgian Assets and certain liabilities to the Belgian Company
and the subsequent sale of the Belgian Stock to Buyer's
designees as set forth in the Agreement are not subject to any
right of first refusal or similar right to the benefit of the
City of Ghent, Belgium, or any other third party.
Section 3.9 Texaco Petroleum. Seller represents and
warrants to Buyer that:
(a) Organization and Standing of Texaco Petroleum.
Texaco Petroleum has been duly organized and is validly
existing under the Laws of Belgium.
(b) Authority. Texaco Petroleum has the corporate power
and authority to enter into and perform the Agreement and all
agreements and transactions contemplated hereby and to sell
and deliver the Belgian Stock as contemplated hereby. The
execution, delivery and performance by Texaco Petroleum of the
Agreement and all agreements and transactions contemplated
hereby, including without limitation, the sale and delivery of
the Belgian Stock as contemplated hereby have been duly
authorized by all requisite corporate and shareholder action,
if any, on the part of Texaco Petroleum and the Agreement has
been duly executed and delivered by Texaco Petroleum.
(c) Validity of Agreement. The Agreement is a legal,
valid and binding obligation of Texaco Petroleum and is
enforceable against Texaco Petroleum in accordance with its
terms, except as enforcement may be limited by bankruptcy,
insolvency or other similar Laws affecting the enforcement of
creditors' rights in general. The enforceability of Texaco
Petroleum's obligations under the Agreement is subject to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
Law).
(d) No Violation. The execution and delivery of the
Agreement by Texaco Petroleum, and the performance by Texaco
Petroleum of the terms of the Agreement, do not (i) conflict
with, or result in a violation of the Corporate Documents of
Texaco Petroleum or the Belgian Company, (ii) conflict with,
result in a violation of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute
a default) under, or result in the termination of, or
accelerate the performance required by, or cause the
acceleration of the maturity of any obligation pursuant to the
express terms of any Contract to which Texaco Petroleum or the
Belgian Company is a party or is subject, except for such
violations, conflicts, defaults, terminations, or
accelerations which, individually or in the aggregate, would
not have a material adverse effect on the Belgian Business, or
(iii) violate any Law, except for such violations which,
individually or in the aggregate, would not have a material
adverse effect on the Belgian Business.
(e) No Consent Required. Except as otherwise provided
in Section 4.3(c) and as set forth on Schedule 3.9(e), (i) no
consent, waiver, approval, authorization or other action by,
or filing with, any Governmental Body, is required in
connection with the execution, delivery and performance by
Texaco Petroleum of the Agreement or the agreements or
transactions contemplated hereby, including, without
limitation, the sale of the Belgian Stock as contemplated
hereby and (ii) no consent, waiver, approval, authorization or
other action by any Person (other than Governmental Bodies) is
required in connection with the execution, delivery and
performance by Texaco Petroleum of the Agreement or the
agreements or transactions contemplated hereby, including,
without limitation, the transfer of the Belgian Stock as
contemplated hereby, except for consents, waivers, approvals,
authorizations or actions which, if not obtained, made or
taken would not have a material adverse effect on the Belgian
Business.
(f) Ownership of Belgian Stock. Texaco Petroleum owns
One (1) share of Belgian Stock, free and clear of any
Encumbrance, and has the right to transfer and deliver such
share of Belgian Stock to Buyer or its designee at the
Closing.
(g) Ownership of Texaco Petroleum. Seller owns,
directly or indirectly, all of the issued and outstanding
capital stock of Texaco Petroleum.
Section 3.10 TBSA. Seller represents and warrants to Buyer
that:
(a) Organization and Standing of TBSA. TBSA has been
duly organized and is validly existing under the Laws of
Brasil.
(b) Authority. TBSA has the corporate power and
authority to perform the Agreement and all agreements and
transactions contemplated hereby. The performance by TBSA of
the Agreement and all agreements and transactions contemplated
hereby have been duly authorized by all requisite corporate
and shareholder action, if any, on the part of TBSA.
(c) No Violation. The execution and delivery of the
Agreement by Seller, and the performance by Seller and TBSA of
the terms of the Agreement, do not (i) conflict with, or
result in a violation of the Corporate Documents of TBSA, (ii)
conflict with, result in a violation of, or constitute a
default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or
cause the acceleration of the maturity of any obligation
pursuant to the express terms of any Contract to which TBSA or
Texaco Brasil is a party or is subject, except for such
violations, conflicts, defaults, terminations, or
accelerations which, individually or in the aggregate, would
not have a material adverse effect on the Brazilian business,
or (iii) violate any Law, except for such violations which,
individually or in the aggregate, would not have a material
adverse effect on the Brazilian Business.
(d) No Consent Required. Except as otherwise provided
in Section 4.3(c) and as set forth in Schedule 3.10(d), (i) no
consent, waiver, approval, authorization or action by, or
filing with, any Governmental Body, is required in connection
with the performance by TBSA of the Agreement or the
agreements or transactions contemplated hereby, and (ii) no
consent, waiver, approval, authorization or other action by
any Person (other than Governmental Bodies) is required in
connection with the performance by TBSA of the Agreement or
the agreements or transactions contemplated hereby, except for
consents, waivers, approvals, authorizations or actions which,
if not obtained, made or taken would not have a material
adverse effect on the Brazilian Business.
(e) Ownership of TBSA. Seller owns, directly or
indirectly, all of the issued and outstanding capital stock of
TBSA.
Section 3.11 Buyer. Buyer represents and warrants to Seller
as follows:
(a) Organization and Standing of Buyer. Buyer has been
duly organized and is validly existing and in good standing
under the Laws of Virginia.
(b) Authority. Buyer has the corporate power and
authority to enter into and perform the Agreement and to
purchase the U.S. Assets, the Brazilian Stock, the Korean
Stock, the Belgian Stock, the Miscellaneous Assets and the
Intellectual Property. The execution, delivery and
performance by Buyer of the Agreement and the agreements and
transactions contemplated hereby, including the purchase of
the U.S. Assets, the Brazilian Stock, the Korean Stock, the
Belgian Stock, the Miscellaneous Assets and the Intellectual
Property, have been duly authorized by all requisite corporate
and shareholder action, if any, on part of Buyer, and the
Agreement has been duly executed and delivered by Buyer.
(c) Validity of Agreement. The Agreement is a legal,
valid and binding obligation of Buyer enforceable against
Buyer in accordance with its terms except as enforcement may
be limited by bankruptcy, insolvency or other similar Laws
affecting the enforcement of creditors' rights in general.
The enforceability of Buyer's obligations under the Agreement
is subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in
equity or at Law).
(d) No Violation. The execution and delivery of the
Agreement by Buyer, and the performance by Buyer of the terms
of the Agreement do not (i) conflict with or result in a
violation of the Corporate Documents of Buyer, (ii) conflict
with, result in a violation of, or constitute a default (or an
event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of,
or accelerate the performance required by, or cause the
acceleration of the maturity of any obligation pursuant to the
express terms of any Contract to which Buyer is a party or is
subject, except for such violations, conflicts, defaults,
terminations or accelerations which, individually or in the
aggregate, would not have a material adverse effect on Buyer's
ability to perform the terms of the Agreement, or (iii)
violate any Law except for such violations which, individually
or in the aggregate, would not have a material adverse effect
on Buyer's ability to perform the terms of the Agreement.
(e) No Consent Required. Except as otherwise provided
in Section 4.3(c) and as set forth in Schedule 3.11 (e), (i)
no consent, waiver, approval, authorization or other action
by, or filing with, any Governmental Body, is required in
connection with the purchase by Buyer of the U.S. Assets, the
Brazilian Stock, the Korean Stock, the Belgian Stock, the
Miscellaneous Assets and the Intellectual Property and the
performance by Buyer of the transactions contemplated hereby,
and (ii) no consent, waiver, approval, authorization or other
action by any Person (other than Governmental Bodies) is
required in connection with the purchase by Buyer of U.S.
Assets, the Brazilian Stock, the Korean Stock, the Belgian
Stock, the Miscellaneous Assets and the Intellectual Property
and the performance by Buyer of the transactions contemplated
hereby except for consents, waivers, approvals, authorizations
or actions which, if not obtained, made or taken, would not
have a material adverse effect on Buyer's ability to perform
the terms of the Agreement.
(f) Disclosure. No representations or warranties by the
Buyer in the Agreement contain any untrue statement of a
material fact or omit to state a material fact necessary in
order to make the representations or warranties of Buyer
herein, in light of the circumstances under which they were
made, not misleading.
(g) Employment Offers. To Buyer's actual knowledge, the
offers of employment and failure to offer employment with
respect to employees or former employees of Seller, Seller's
Affiliates and Company made pursuant to Section 5.1 have been
made in accordance with all Laws including but not limited to
Title VII of the Civil Rights Act of 1964, as amended,
Americans with Disabilities Act, the Age Discrimination in
Employment Act and the Texas Commission of Human Rights.
(h) ERISA; Prohibited Transaction. The consummation by
Buyer of the transactions contemplated by the Agreement does
not, to Buyer's actual knowledge, result in any prohibited
transaction described in Section 406 of ERISA or Section 4975
of the Code for which an exemption is not available.
Section 3.12 No Other Warranties. Except as otherwise
provided herein, there are no express or implied warranties that
apply to the transactions contemplated herein.
PART FOUR:
COVENANTS
REGARDING TEXACO ADDITIVE BUSINESS
Section 4.1 Covenants of Seller. Seller covenants with
Buyer that:
(a) Conduct of Business. Unless otherwise expressly
provided in the Agreement, the transactions contemplated
hereby, or as set forth on Schedule 4.1(a), Seller shall not,
and shall not permit the Company, Texaco Brasil, TBSA, TOHI,
Texaco Belgium, the Belgian Company, Texaco Caribbean, Texaco
Korea, any of the Selling Subsidiaries or any of Seller's
Affiliates with respect to the Texaco Additive Business, to
(i) mortgage, pledge or subject to any Encumbrance, other than
Permitted Encumbrances, any of the Additive Assets; (ii) amend
or terminate any material Contract; (iii) increase the
salaries or other compensation or benefits of or make a loan
to, any U.S. Employees, Belgian Employees, Brazilian Employees
or Miscellaneous Employees other than in the ordinary course
of business consistent with past practices or as required by
Law or the applicable collective bargaining agreement; (iv)
make any general change in the credit or warranty terms
extended to new or existing customers; (v) sell or dispose of
any Additive Assets other than in the ordinary course of
business consistent with past practices; (vi) enter into any
lease of real or personal property (whether as lessee or
lessor) having a term in excess of one year or involving
annual rental payments of One Hundred Thousand Dollars
($100,000) or more; (vii) enter into any fixed price Contract
for the purchase or sale of inventories other than in the
ordinary course of business consistent with past practices;
(viii) enter into any Contract for the purchase or sale, or
for the exchange or storage of inventory or supplies or for
the lease (as lessor) of any storage facilities owned by or
under lease, as the case may be, other than in the ordinary
course of business consistent with past practices or having a
term in excess of one year; (ix) enter into any Contract for
capital expenditures involving future payments in excess of
One Hundred Twenty Five Thousand Dollars ($125,000); (x)
dispose of any material records related to the Texaco Additive
Business; (xi) pay, discharge or satisfy any claim, liability
or obligation (absolute, accrued, contingent or otherwise)
related to the Texaco Additive Business, other than the
payment, discharge or satisfaction of current liabilities in
the ordinary course of business and consistent with past
practices; (xii) prepay any obligation related to the Texaco
Additive Business; (xiii) cancel any debts which are related
to the Texaco Additive Business, or waive any claims or rights
which are related to the Texaco Additive Business other than
as set forth in Section 2.4; (xiv) dispose of or permit to
lapse, other than through expiration by operation of Law, any
Intellectual Property or dispose of or disclose to any Person
other than Buyer any trade secret, formula, process or know-
how owned or used by or applicable to the Texaco Additive
Business except in the ordinary course of business consistent
with past practices or pursuant to an obligation of
confidentiality binding on said Person and not theretofore a
matter of public knowledge; (xv) in connection with the Texaco
Additive Business, incur or agree to incur any long-term
indebtedness or, other than in the ordinary course of business
and consistent with past practice, incur, or assume or become
subject to, whether directly or by way of a guarantee or
otherwise, any obligation or liability (absolute or
contingent); (xvi) declare, set aside or pay any dividend or
other distribution in respect of the capital stock of Texaco
Brasil, Texaco Korea, the Belgian Company or the Company;
(xvii) redeem or otherwise acquire, sell or transfer except as
is expressly provided in the Agreement, any shares of the
capital stock of Texaco Brasil, the Belgian Company, Texaco
Korea or the Company, (xviii) allow the lapse of any material
permit required to conduct the Texaco Additive Business, or
(xix) agree, whether in writing or otherwise, to do any of the
acts prohibited by the foregoing provisions of this sentence.
From the date of the Agreement up to and including the Closing
Date, Seller shall cause the Texaco Additive Business to be
conducted consistent with the ordinary and normal course of
the Texaco Additive Business consistent with past practices
and Seller shall, and shall cause its Affiliates to, (x) use
reasonable endeavors to retain the services of the U.S.
Transferred Employees, the Brazilian Employees, the Belgian
Employees, and the Miscellaneous Employees and preserve
business relationships of the Texaco Additive Business with
labor unions, customers, suppliers and others and (y) notify
Buyer of the occurrence of any material adverse change in the
financial condition of the Texaco Additive Business.
(b) Access to Properties and Information. Except as set
forth in Section 8.8 and Part Ten, from the date hereof to the
Closing Date, Seller shall afford or shall cause to be
afforded to the officers, employees, accountants and other
representatives of Buyer full and reasonable free access to
the properties, management and records pertaining to the
Texaco Additive Business, wherever situated (including Tax
records and Tax reports and Tax litigation files as they
relate directly to the Texaco Additive Business), during
normal working hours in order that Buyer may have full
opportunity to make such investigations as it shall desire of
the affairs and financial status of the Texaco Additive
Business and all aspects thereof.
(c) Intercompany Accounts. On or prior to the Closing
Date, effective as of the Effective Date, Seller shall or
shall cause all intercompany accounts and notes existing and
due to or from Seller or Seller's Affiliates as of the
Effective Date related to the Texaco Additive Business to be
paid in full or otherwise satisfied.
(d) Seller's Non-Compete. From and after the Closing
Date and until the expiration of the fifth year following the
Closing Date, Seller shall not, and shall not permit any of
Seller's Affiliates to engage in the research, development,
manufacture or sale (including toll manufacturing for others
and exchange agreements) of Lubricant Additives; except
nothing contained herein shall preclude Seller or Seller's
Affiliates from engaging in:
(i) research and development for the sole purpose
of developing finished lubricant formulations to be
exclusively used by Seller or Seller's Affiliates;
(ii) research, development and sale (but not the
manufacture) of Lubricant Additives for exclusive use in
the Total Fluid Management Program; provided, however,
that Buyer shall have a right of First Offer with respect
to any new Lubricant Additive arising under 4.1(d)(i) and
(ii) and proposed for use by Seller or Seller's
Affiliates in its finished lubricant product formulation;
(iii) research and development of Lubricant Additives
for the sole purpose of assessing performance
characteristics of additive components in finished
lubricant products sold exclusively by Seller and
Seller's Affiliates;
(iv) packaging of Lubricant Additives as an after
market product by Seller or Seller's Affiliates under
Seller or Seller's Affiliates brand name for resale
directly or indirectly into the retail consumer market;
or
(v) researching, developing, manufacturing or
selling finished lubricant products and materials
extracted, recovered, or upgraded from refinery streams;
provided, however, that nothing contained in this Section
4.1(d) shall be deemed to limit the obligations of Seller
or any of Seller's Affiliates under the Lubricant
Additive Development and Supply Agreement to be entered
into among certain of Seller's Affiliates and Buyer.
Seller further agrees that it shall not and shall not
permit Seller's Affiliates for a period of five (5) years from
Closing Date to sell, license or otherwise transfer to third
parties other than Buyer, Lubricant Additives technology
developed as a result of research and development pursuant to
Section 4.1(d)(i), (ii), (iii), (iv) and (v) for the
manufacture, use or sale of Lubricant Additives except in the
case where Buyer declines to exercise its right of First
Offer.
During the period of Seller's non-compete as set forth in
Section 4.1(d) and in the event Seller or Seller's Affiliates
shall desire to have a Lubricant Additive manufactured which
Seller or Seller's Affiliates have developed as set forth in
Sections 4.1(d)(i) and (ii) for Seller's or Seller's
Affiliate's own use, Seller shall first offer (or shall cause
its Affiliate that has an interest in such Lubricant Additive
to first offer) to Buyer the opportunity to manufacture and
supply such Lubricant Additive for a price and upon terms
specified in writing by Seller and delivered to Buyer (a
"First Offer"). In the event that Buyer notifies Seller in
writing of its acceptance of any First Offer within thirty
(30) days of receipt by Buyer of the First Offer, Seller shall
purchase (or shall cause the Affiliate to purchase) and Buyer
or Buyer's Affiliate shall manufacture and supply such
Lubricant Additive upon the price and terms contained in such
First Offer. In the event Buyer rejects or does not accept a
First Offer within thirty (30) days of its receipt, Seller (or
Seller's Affiliate) shall be entitled to offer the right to
manufacture and supply referred to in the First Offer to third
parties for a price and upon terms and conditions no less
favorable than those set forth in the First Offer to Buyer.
If no third party accepts any such offer within thirty (30)
days of receipt of such First Offer, then Seller or Seller's
Affiliate shall not have manufactured for it such Lubricant
Additive unless such right is offered again to Buyer as set
forth above. If any third party shall accept an offer as set
forth hereunder then Buyer's right to manufacture and Seller's
obligation to purchase such Lubricant Additive subject to such
First Offer shall be terminated for the duration of the
agreement under which Seller or Seller's Affiliates are
legally bound to purchase from said third party.
Seller shall provide and shall cause Seller's Affiliates
to provide to Buyer a worldwide irrevocable royalty free
immunity from suit with respect to Seller's and Seller's
Affiliates trade secrets, patents and patent applications ((i)
existing at the Closing Date, or (ii) which are generated by
Seller or Seller's Affiliates within the five (5) year period
from the Closing Date), which cover the manufacture, use or
sale of Lubricant Additives by or for Buyer.
(e) No Solicitation. Prior to the earlier of the
Closing or termination of the Agreement in accordance with its
terms, Seller shall not, shall cause its Affiliates not to,
and shall cause Seller's and Seller's Affiliates' respective
directors, officers, employees, representatives, financial and
legal advisors and agents not to (i) solicit, initiate,
encourage the initiation of or participate in, discussions or
negotiations with, or solicit or encourage inquiries or
proposals from, any Person (other than Buyer, Buyer's
Affiliates, Huntsman, Huntsman's Affiliates and their
respective representatives) concerning any merger,
consolidation, liquidation, sale of assets (other than in the
ordinary course of business consistent with past practice),
sale of capital stock, change of control, business combination
or similar transaction principally involving the Company,
Texaco Korea, Texaco Brasil, the Belgian Company, the business
of TBSA and Texaco Belgium, related to the Texaco Additive
Business or the Texaco Additive Business (any of the
foregoing, an "Acquisition"), (ii) enter into any Contract
with respect to any Acquisition (other than with Buyer and
Buyer's Affiliates and representatives), or (iii) except as
required by Law (including the federal securities Laws),
directly or indirectly disclose to any Person (other than
Huntsman, Huntsman's Affiliates, Buyer and Buyer's Affiliates
and representatives) any information not customarily disclosed
concerning the Company, the Belgian Company, Texaco Korea,
Texaco Brasil or the Texaco Additive Business. In the event
that Seller, any of Seller's Affiliates or any of their
respective representatives receives an offer or proposal
relating to an Acquisition, Seller shall immediately provide
Huntsman and Buyer with notice thereof (such notice to include
all material terms of any such offer or proposal, including,
in the case of a written offer or proposal, a copy thereof,
and to identify the party making such offer or proposal);
provided, that this restriction shall not apply to the
Excluded Assets.
(f) Title to the U.S. Properties. Seller binds itself
and its successors and assigns to warrant and forever defend
against all and singular the U.S. Fee Properties and U.S.
Easements to Buyer and Buyer's successors and assigns against
any Person whomsoever lawfully claiming or to claim the same
or any part thereof, except as to the Permitted Encumbrances
and subject to the terms of the U.S. Easements.
(g) Discharge of Retained Liabilities. From the
Effective Date to the Closing Date, Seller shall not, and
shall cause Seller's Affiliates not to, use or apply any cash
or cash equivalents of Texaco Brasil, the Belgian Company or
Texaco Korea to pay, remove, extinguish, discharge or satisfy
any of the Retained Liabilities (it being understood and
agreed that the foregoing shall not mitigate Seller's
obligations under Section 2.3(e)).
(h) Perimeter Surveys. Seller, at Seller's sole cost
and expense, shall promptly deliver, following the date of the
Agreement but prior to the Closing Date, perimeter surveys of
the U.S. Fee Properties and the Belgian Property, and, with
respect to the Brazilian Fee Properties, shall use best
efforts to seek to obtain perimeter surveys from the Rio State
Registry within a reasonable period of time.
(i) Ghent Real Estate Matters. Buyer shall have
received a copy of the agreement of the City of Ghent Belgium,
that the operations conducted at the Belgian Company additives
plant located in the City of Ghent, Belgium, constitute a
"port-connected activity" under the terms of the Ghent Deed,
and such agreement shall remain in full force and effect and
Buyer has received confirmation by the City it does not have
the right to exercise its first refusal rights with respect to
the property as a result of the transactions contemplated by
this agreement.
(j) Certain Real Estate Matters. At the Closing, Seller
shall deliver to Buyer the following: (i) with respect to the
U.S. Fee Properties, a general warranty deed in the form
attached as Exhibit G, (ii) an Assignment of Easements for the
U.S. Easements in the form attached as Exhibit H and (iii) as
Assignment of Leases or Subleases for the U.S. Leasehold
Interests in the form attached as Exhibit I.
(k) Belgian Company Transfer. On the Closing Date,
Texaco shall cause Texaco Belgium to obtain the necessary
consents to transfer and to transfer (the "Belgian Transfer
Date") to the Belgian Company the Belgian Assets and
Intellectual Property, including without limitation, the
Contracts related to the Belgian Business, and the Belgian
Company shall assume the (i) current liabilities of Texaco
Belgium relating to the Belgian Business which were both
incurred in the ordinary course of business consistent with
past practices and set forth in the Closing Working Capital;
(ii) obligations of Texaco Belgium relating to the Belgian
Business arising out of and relating to periods after the
Effective Date under Contracts made prior to the Effective
Date in the ordinary course of business consistent with past
practices (other than the Contracts as set forth on Schedule
4.1(l)(ix); and (iii) obligations of Texaco Belgium relating
to the Belgian Business arising out of and relating to periods
after the Effective Date under Contracts made prior to the
Effective Date as set forth on Schedule 4.1(l)(ix).
(l) Belgian Company Representations and Warranties.
Seller represents and warrants to Buyer that:
(i) Organization and Standing of Belgian Company.
Belgian Company has been duly organized and is validly
existing under the Laws of Belgium.
(ii) Authority. From and after the Belgian
Transfer Date Belgian Company has the corporate power and
authority to own, lease or otherwise control the Belgian
Assets and conduct the Belgian Business.
(iii) No Consent Required. Except as otherwise
provided in Section 4.3(c) and as set forth on Schedule
4.1(l)(iii), (x) no consent, waiver, approval,
authorization or other action by, or filing with, any
Governmental Body, is required in connection with the
transfer of the Belgian Stock as contemplated hereby, and
(y) no consent, waiver, approval, authorization or other
action by any Person (other than Governmental Bodies) is
required in connection with the transfer of the Belgian
Stock as contemplated hereby except for consents,
waivers, approvals, authorizations or actions which, if
not obtained, made or taken, would not have a material
adverse effect on the Belgian Business.
(iv) Corporate Documents. The copies of Corporate
Documents of the Belgian Company which have been
delivered by Seller to Buyer constitute true, correct and
complete copies of the Corporate Documents of the Belgian
Company and reflect all amendments thereto through and
including the date of the Agreement.
(v) Subsidiaries. The Belgian Company has no
Subsidiaries and holds no interest in any partnership or
other equity interest in any corporation, joint venture,
trust or other entity.
(vi) Capitalization. The Belgian Company's capital
stock consists of the shares of Belgian Stock. The
Belgian Stock has been duly authorized and validly issued
to Texaco Belgium and Texaco Petroleum and is fully paid
and nonassessable and constitutes all the issued and
outstanding capital stock of the Belgian Company.
(vii) Options or Warrants. There are no outstanding
(x) securities convertible into or exchangeable for
capital stock of the Belgian Company, (y) options,
warrants or other rights to purchase or subscribe for
capital stock of the Belgian Company or securities
convertible into or exchangeable for capital stock of the
Belgian Company, or (z) Contracts of any kind relating to
the issuance or disposition of any capital stock of the
Belgian Company, or to the issuance or disposition of any
securities convertible into or exchangeable for capital
stock of the Belgian Company, or any options, warrants or
rights to purchase or subscribe for any capital stock of
the Belgian Company.
(viii) Litigation. Except as set forth in Schedule
4.1(l)(viii), there are no actions, suits, investigations
or proceedings pending or, to the actual knowledge of
Seller, Texaco Belgium, or the Belgian Company threatened
against the Belgian Business before any court or
arbitration tribunal or before or by any Governmental
Body, relating in any respect to the Belgian Business
including, without limitation, any claim by a Belgian
Employee, an expatriate working on the premises the
Belgian Business or a trade union or similar organization
in relation to such persons. The Belgian Business is not
subject to any judgment, order or decree entered in any
lawsuit or other proceeding before or by any Governmental
Body which individually or in the aggregate would have a
material adverse effect on the conduct of the Belgian
Business.
(ix) Contracts. Except as set forth on Schedule
4.1(l)(ix), from and after the Belgian Transfer Date the
Belgian Company is not a party to or subject to (w) any
employment or consulting Contract with any Belgian
Employee, (y) any plan, fund, program or other
arrangement or Contract providing for bonuses, pensions,
stock or other options, deferred compensation, retirement
payments, profit sharing, stock purchase rights,
incentive compensation, insurance or other similar fringe
or employee benefits for or with the Belgian Employees or
expatriates working on its premises (iii) any collective
labor agreement with any labor union or otherwise binding
upon the Belgian Company with respect to Belgian
Employees, (z) any work regulations with respect to
Belgian Employees, (aa) any indemnification Contracts or
similar agreements with respect to directors of Belgian
Company, officers of Belgian Company, expatriates or
Belgian Employees, (bb) any instrument evidencing or
related to indebtedness for borrowed money, whether
directly or indirectly, which is not set forth on the
December 31, 1994 Balance Sheet contained in the Combined
Financial Statements, (cc) any Contract limiting the
freedom of the Belgian Business to conduct business in
any geographic area or to compete in any line of business
or with any Person, or (dd) any other Contract which is
material to the Belgian Business. There exists no
default or event of default under any of the Contracts
set forth on Schedule 4.1(m)(ix) which, individually or
in the aggregate, would have a material adverse effect on
the Belgian Business.
(x) Title to Belgian Assets. With respect to
Belgian Assets: (i) Schedule 4.1(l)(x) sets forth a
comprehensive description of all Belgian Assets
constituting immovable property including land,
buildings, improvements and structures thereon and
appurtenances thereto ("Belgian Property"); (ii) the
Belgian Company has good Marketable, and Indefeasible
title to Belgian Property from and after the Belgian
Transfer Date; (iii) Schedule 4.1(l)(x) sets forth a
comprehensive listing of all easements and rights-of-way
together with any encumbrances affecting Belgian Property
("Belgian Encumbrances") and with respect to the Belgian
Encumbrances: (x) the easements comprising the Belgian
Encumbrances are in full force and effect and constitute
the legal, valid and binding obligations of each party
thereto, (y) there exists no default or event of default
under any such easements which in the aggregate would
have a material adverse effect on the Belgian Business,
(z) the Belgian Company has good Marketable and
Indefeasible title to the easements from and after the
Belgian Transfer Date, and (iv) except as set forth on
Schedule 4.1(l)(x) there is no agreement or commitment to
give or create any option, lien, mortgage charge or
encumbrance; (v) except as set forth on Schedule
4.1(l)(x) there are no leasehold interests in real
property included in the Belgian Assets; (vi) the Belgian
Company has good title to all other Belgian Assets,
subject to the Permitted Encumbrances from and after the
Belgian Transfer Date, and other than those that are
leased, to which the Belgian Company has valid and
enforceable leases from and after the Belgian Transfer
Date, which are set forth in Schedule 4.1(l)(x)(vi);
(vii) the Belgian Assets and Intellectual Property
constitute all of the material rights and assets which
are used in the conduct of the Belgian Business as the
Belgian Business was conducted on December 4, 1994 and is
presently being conducted; and (viii) no other material
properties or rights (with the exception of the rights
arising (x) under service or supply agreements in effect
between Seller or Huntsman or their respective Affiliates
which are superseded by Service, Supply and Technology
Agreements effective at Effective Date, and (y) from
services or supplies offered by Seller or Huntsman to
Buyer which were declined by Buyer) as set forth on
Schedule 4.1(l)(x), whether or not owned by the Belgian
Company are required for the operation of the Belgian
Business as the Belgian Business was operated on December
31, 1994 or is presently operated.
(xi) Condition and Repair. Except as set forth in
Schedule 4.1(l)(xi), the plants, structures and equipment
of the Belgian Assets taken as a whole have been
operated, maintained and repaired in a reasonably prudent
manner, in accordance with industry standards and past
practices, contain no known structural defects which in
the aggregate would have a material adverse effect on the
Belgian Business and are adequate for the uses to which
they are put.
(xii) Condemnation. There are no condemnation
proceedings pending or to the actual knowledge of Seller
threatened with respect to any of the Belgian Properties.
(xiii) Compliance with Applicable Law. Texaco
Belgium and the Belgian Company, in the conduct of the
Belgian Business, have been and are in compliance with
all Laws (other than Environmental Laws), the failure to
comply with which would have a material adverse effect on
the Belgian Business.
(xiv) Belgian Employees. Schedule 4.1(l)(xiv) sets
forth a complete and accurate list of the Belgian
Employees. Schedule 4.1(l)(xiv)(a) sets forth a complete
and accurate list of those Belgian Employees who are on
long term disability or on notice under a bridge pension
scheme ("Excluded Belgian Employees"). All Belgian
Employees are employed by Texaco Belgium up to the
Belgian Transfer Date and the Belgian Company with the
exception of the Excluded Belgian Employees from and
after the Belgian Transfer Date. All Belgian Employees
have employment contracts or arrangements which consist
of individual written contracts, collective bargaining
agreements or employee benefit plan arrangements.
(xv) Inventory. The inventories of Texaco Belgium
relating to the Belgian Business to the Belgian Transfer
Date and the Belgian Company from and after the Belgian
Transfer Date: (i) consist of a quality and quantity
usable in the ordinary course of business, (ii) with
respect to finished inventory, are of a quality to be
salable in the ordinary course of business, and (iii) are
owned by Texaco Belgium to the Belgian Transfer Date and
the Belgian Company from and after the Belgian Transfer
Date. Inventories of Texaco Belgium are valued in the
December 31, 1994 Balance Sheet contained in the Combined
Financial Statements and the Closing Statement at the
lower of cost (substantially determined on a last-in,
first-out basis) or market, with adequate reserves in the
aggregate for inventories determined on a last-in, first-
out basis to cover any obsolete or below-standard quality
materials in accordance with past practices of Texaco
Belgium. The excess of cost over market after any
reserves for obsolete or below standard material does not
exceed a total aggregate of Fifty Thousand Dollars
($50,000).
(xvi) Bank Accounts. Schedule 4.1(l)(xvi) sets
forth a complete and accurate list of all bank accounts
of the Belgian Company and the signatories thereunder.
(m) Brazilian Company Transfer. On or after September
30, 1995, but no later than the Closing Date, Seller shall
cause TBSA to transfer and to obtain the necessary consents to
transfer (the "Brazilian Transfer Date") to Texaco Brasil the
Brazilian Assets and Intellectual Property (including, without
limitation, Contracts related to the Brazilian Business) and
to assume the (i) current liabilities of TBSA relating to the
Brazilian Business which were both incurred in the ordinary
course of business consistent with past practices and set
forth in the Closing Statement; (ii) obligations of TBSA
arising out of and relating to periods after the Effective
Date under Contracts made prior to the Effective Date in the
ordinary course of business relating to the Brazilian Business
consistent with past practices (other than the Contracts as
set forth on Schedule 3.4(i); and (iii) obligations of TBSA
relating to the Brazilian Business arising out of and relating
to periods after the Effective Date under Contracts made prior
to the Effective Date as set forth on Schedule 3.4(i).
(n) Service Supply and Technology Agreements. Seller
shall, and shall cause each of its Affiliates to, perform
Seller's or any of its Affiliate's obligations as set forth in
the agreements to be entered into on the Closing Date among
Buyer and certain Affiliates of Seller as set forth in
Schedule 11.1(h).
(o) Asset List Delivery. Seller shall deliver the
property, plant and equipment ledger as of the close of the
month prior to the Closing Date related to the U.S. Business,
Belgian Business, Brazilian Business, Korean Business and
Miscellaneous Business.
(p) Environmental. On or prior to the Closing Date,
Seller shall: (i) obtain revision to the BOD limits of the
Integrated Permit issued to the Ghent manufacturing facility
to increase the limits from the current limits to Fifty (50)
ppm or on other terms satisfactory to Buyer; and (ii) clean
No. 65 Ditch at the Port Arthur facility in accordance with
regulatory requirements.
Section 4.2 Covenants of Buyer. Buyer covenants with
Seller that:
(a) Performance Bonds, Etc.. With respect to any surety
bonds, performance bonds, guaranties or financial assurances
set forth on Schedule 4.2(a) relating to the Texaco Additive
Business on which Seller or Seller's Affiliates, other than
Texaco Brasil, the Belgian Company or Texaco Korea, is a
principal or guarantor, Buyer shall use its reasonable
endeavors to cause such surety bonds, performance bonds,
guaranties or financial assurances to be replaced or Seller
and Seller's Affiliates (other than Texaco Brasil, the Belgian
Company or Texaco Korea) to be otherwise released within
ninety (90) days after the Closing Date. Buyer shall
reimburse Seller for any amounts paid by Seller or Seller's
Affiliates with respect to such surety bonds, performance
bonds, guaranties or financial assurances related to periods
on or after the Closing Date.
(b) Use of Texaco Mark. At the Closing, Buyer shall
cease and shall cause Buyer's Affiliates to cease using any
trademarks, symbols or trade names containing "Texaco", "Tex"
as a prefix or suffix, or similar words, as well as the Star
T Design logo associated with Seller or Seller's Affiliates
("Excluded Marks") which have not been assigned to Buyer
pursuant to the Trademark Agreements. Notwithstanding the
preceding sentence, Buyer and Buyer's Affiliates shall have
the right for a reasonable period of time based on quantity of
containers or packages existing in inventory at Closing, to
use or dispose of any inventory in containers or packages
bearing any of the Excluded Marks, and to use or dispose of
previously prepared advertising and promotional materials and
brochures, shipping, packaging and similar materials bearing
any of the Excluded Marks, and to remove or replace
identifications and signs; provided, that as soon as
practicable after the Closing Date, Buyer shall cause such
containers, packages or materials to identify Buyer or Buyer's
Affiliates as the distributor of the products bearing the
Excluded Marks. Notwithstanding any provision set forth in
Section 4.2(b), Buyer shall retain the right to use
trademarks, symbols or trade names containing "Tech" or
"Texas" (except as used in the company names "The Texas
Company" and "Texas Chemical Company") as a prefix, suffix, or
individual or base word to the extent that such use is not
confusingly similar to any Texaco trade name or any of the
Excluded Marks such as would constitute a violation of
trademark, unfair competition or false advertising Laws.
(c) Change of Name. At the Closing or as soon
thereafter as possible, Buyer shall cause the name of Texaco
Brasil, the Belgian Company and Texaco Korea to be changed to
a name which does not include the name "Texaco" or the
syllable "Tex" or any word or syllable confusingly similar to
"Texaco" and "Tex".
(d) Accounts Receivable. Buyer shall use its reasonable
endeavors to (i) collect or cause to be collected the accounts
and notes receivable included in the Closing Working Capital
and (ii) after the repurchase of the unpaid accounts and notes
receivable pursuant to Section 4.3(i) assist Seller in the
collection of the Uncollected Receivables.
(e) Non-Assertion of Claims. Buyer shall not assert,
and shall not permit Buyer's Affiliates to assert, any claims
for damages against the Company, TOHI, Texaco Caribbean,
Texaco Petroleum, Texaco Belgium or the Selling Subsidiaries
in any way arising out of or related to the sale and transfer
of the Additive Assets, the Korean Stock, the Belgian Stock or
the Brazilian Stock. Buyer shall assert any claims for
damages only against Seller.
Section 4.3 Covenants of Seller and Buyer. Seller and
Buyer covenant to each other as follows:
(a) Compliance with Conditions Precedent. Seller and
Buyer shall each use its reasonable endeavors to cause the
conditions precedent set forth in Part Eleven, which are for
the benefit of the other, to be fulfilled and satisfied as
soon as practicable.
(b) Brokers. The Parties represent to each other, that
no broker, finder, financial advisor or similar person has
been retained by a Party in connection with the transactions
contemplated by the Agreement.
(c) Certain Filings and Consents. With respect to
certain filings and consents, the Parties agree that:
(i) Buyer and Seller shall promptly make all
required submissions under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended ("HSR");
(ii) Buyer and Seller shall cooperate with one
another in (x) determining whether any filings are
required to be made or consents, approvals, permits or
authorizations are required to be obtained under any
other Laws of the United States, Brazil, Belgium, Korea,
the European Community or any other country in which an
Additive Asset is located, or where the Texaco Additive
Business has activities, and (y) making any such filings,
furnishing information required in connection therewith
and seeking timely to obtain any such consents, permits,
authorizations, approvals or waivers; and
(iii) Buyer shall promptly endeavor to obtain, and
Seller shall reasonably cooperate in connection with such
endeavors, each consent set forth on Schedules 3.11(e)
and 4.2(a), and (iv) Seller shall promptly endeavor to
obtain, and Buyer shall reasonably cooperate in
connection with such endeavors, each consent set forth on
Schedules 3.1(e), 3.2(e), 3.3(e), 3.4(c), 3.5(c), 3.6(e),
3.7(c), 3.8(e), 3.9(e), 3.10(e) and 4.1(l)(iii).
(d) Press Release. Prior to the Closing, no Party shall
make any press release or other announcement respecting the
subject matter of the Agreement without the consent of the
other Party which consent shall not be unreasonably withheld,
unless a Party refuses to consent and the Party desiring to
make the release or other announcement is advised by its
counsel that the release or other announcement is required to
comply with any Law.
(e) Post-Closing Access. Except as otherwise expressly
provided herein, from and after the Closing Date, Buyer and
Seller shall reasonably cooperate and afford each other or
cause their respective Affiliates, to afford to other party's
respective officers, employees, accountants and other
representatives access, upon reasonable notice, during
business hours with respect to the facility to which access
has been requested, to review and copy the books, documents,
databases, records or other information systems of or relating
to the Texaco Additive Business (which books, documents,
databases, records, employees files or other information
systems the Parties shall cooperate and assist one another in
identifying and locating), interview, depose or seek testimony
of employees, provide assistance in proceedings with employees
as witnesses or advisors, investigate the physical premises,
take photographs or videotapes, identify employees and
contractors with knowledge of any matter which is the subject
of a claim for which a Party has responsibility and make such
employees available to such Party and provide reasonable
office space to do any of the foregoing in connection with any
matter affecting or alleged to affect the Party requesting
such access. Access to Tax records shall be governed by Part
Ten.
(f) Exposure Litigation. Except for Exposure Liability
resulting from litigation listed on Schedules 3.3(f), 3.3(q),
3.4(h), 3.5(d), 3.7(h), 4.1(l)(viii), which shall be the
responsibility of Seller. If an Exposure Liability arises
before but continues on and after the Effective Date, the
Exposure Liability shall be allocated among Seller and Buyer
in accordance with Schedule 4.3(f). The handling of any
Exposure Liability which Seller or Buyer is obligated to
defend, shall be governed by the Exposure Litigation Protocol
set forth on Schedule 4.3(f).
(g) Further Assurances. Each Party shall, from time to
time at the request of the other, and without further
consideration, execute and deliver such other instruments of
sale, transfer, conveyance, assignment, clarification and
termination and take such other action as the Party making the
request may require to effectuate the intentions of the
Parties, including to transfer, convey and assign to and vest
in Buyer, and to place Buyer in possession of the Additive
Assets and to sell, transfer, assign or convey the Excluded
Assets to Seller. Seller intends to convey or cause to be
conveyed the Additive Assets at Closing and the Excluded
Assets on or before Closing; however, in the event it is
determined after Closing that: (i) any part of the Additive
Assets was not in fact conveyed to Buyer, and that the title
to any part of the Additive Assets is incorrectly in the name
of any of Seller or Seller's Affiliates; (ii) any asset which
is not an Asset or Excluded Asset is conveyed to Buyer and
that the title to such asset or Excluded Asset is incorrectly
in the name of Buyer; or (iii) non-exclusive, irrevocable,
royalty free licenses, under the know-how falling within
Intellectual Property to the extent necessary for Seller to
use fuel additives within the Excluded Assets were not
conveyed or entered into, then, after the Closing Date,
provided the use of such Intellectual Property shall not
violate Section 4.1(d) of this Agreement. With respect to
each of Section 4.3(g)(i) through (iii), each Party shall take
all such action necessary to correctly convey any part of the
Texaco Additive Business to Buyer, convey any Excluded Assets
to Seller or enter into additional licensing agreements. The
costs for recording the Intellectual Property Assignment
Agreements, including without limitation, the Copyright,
Patent and Trademark Assignment Agreements and also the costs
for recording any security interest involving Intellectual
Property shall be paid by the Buyer.
(h) Employment Offer to Miscellaneous Employees. As
soon as practicable, prior to the Closing Date, Buyer shall
provide at its sole discretion written offers of employment to
the Miscellaneous Employees. Any such Miscellaneous Employees
as set forth on Schedule 4.3(h) who accept employment shall
initially be paid a base salary or straight time hourly rate
no less favorable than what such Miscellaneous Employees
received from such Miscellaneous Employees' employer as of the
Closing Date and receive benefits plans provided by Buyer to
its own similarly situated employees. Such benefit plans of
the Buyer shall credit all service with the Seller, the
Company and Seller's Affiliates at the Closing Date for all
purposes under such benefit plans.
(i) Service, Supply and Technology Request. From and
after the Closing, in addition to the supply, technology and
other services provided pursuant to the Service, Supply and
Technology Agreements, Buyer, Seller and Huntsman shall
provide each other with reasonable additional service, supply,
technology and other services including research services at
Beacon, New York, Port Arthur, Texas and Ghent, Belgium on
terms mutually acceptable to the Parties at competitive fair
market prices (which shall not be less than the providing
party's full cost of providing such services) for a period not
exceeding seven (7) years following the Closing Date.
(j) Uncollected Accounts Receivable. The Seller shall
purchase all accounts receivable of the Texaco Additive
Business included in the Closing Working Capital, which have
not been collected prior to the One Hundred Twentieth (120th)
Day following the Closing Date and One Hundred Eighty (180)
days for non-U.S.accounts receivables which have payment terms
more than ninety (90) days ("Uncollected Receivables"). The
purchase price for the Uncollected Receivables shall be the
aggregate face amount thereof (net of the aggregate reserves
for bad debts relating to such receivables shown on the final
Closing Statement); provided however, that if Buyer shall have
collected accounts receivable included in the Closing Working
Capital which, when added to the amount of the Uncollected
Receivables, is greater than the amount of the accounts
receivable included in the Closing Working Capital (after
deducting therefrom the reserve for bad debts relating to such
receivables shown on the final Closing Statement), the
difference shall be credited against the amount of the
Uncollected Receivables. In the event that Buyer shall
collect any Uncollected Receivables subsequent to Seller's
purchase of such Uncollected Receivables, Buyer shall pay all
amounts so collected to Seller no later than five (5) Business
Days after collection.
(k) Transfer of Permits. Seller and Buyer agree that
the transfer of all environmental permits or the request of
transfer of all environmental permits with respect to the
Brazilian Business relating to the Texaco Additive Business,
including, but not limited to, hazardous waste permits, air
permits, wastewater permits and stormwater discharge permits,
shall take place on or prior to the Closing Date.
(l) Software Agreement. At the Closing, the Parties
shall enter into a Computer Software License and Assignment
Agreement set forth in Schedule 4.3(l).
(m) Insurance Policies. All Insurance Policies shall
remain with the Seller or Seller's Affiliates, and Buyer,
Texaco Korea, the Belgian Company and Texaco Brasil shall
deliver copies of all Insurance Policies in their possession
to Seller and may retain a copy. Seller and Seller's
Affiliates shall retain all right, title and interest under
the Insurance Policies. Buyer shall not and shall cause
Buyer's Affiliates not to assert, by way of claim, action,
litigation or otherwise, any right to any Insurance Policy or
benefit thereunder. Buyer assigns or shall cause Texaco
Korea, the Belgian Company or Texaco Brasil to assign any
rights which Buyer or Buyer's Affiliates have in such
Insurance Policies to Seller and Seller's Affiliates and
authorizes Seller and Seller's Affiliates to pursue on behalf
of Buyer and Buyer's Affiliates all claims with respect to the
Insurance Policies, including but not limited to the claims
that are the subject of litigation entitled Four Star Oil &
Gas Co. v. Allianz Ins. Co. et al., Case No. BC 036944 (Cal.
Sup.), and Texaco Refining and Marketing Inc. et al. v. 64
Fireman's Fund Ins. Co. et al., Case No. BC 084238 (Cal.
Sup.). Buyer authorizes Seller and Seller's Affiliates to
receive and retain any and all proceeds obtained as a result
of such claims and litigation, and to release any and all
rights under the Insurance Policies in order to resolve such
claims and litigation. Buyer, at Seller's cost and expense,
agrees to undertake any action requested by Seller reasonably
necessary to prosecute and conclude such claims and
litigation.
(n) Offset Rights. Each Party grants to the other and
the other's Affiliates the right of offset and equitable
recoupment ("Offset") for amounts due under the Service,
Supply and Technology Agreements. Such right shall only be
exercisable upon the material default by Buyer or Seller under
the terms of such agreements (and only for so long as such
material default is continuing) and without regard to the
mutuality of obligation between the party asserting the
Offset. Upon the exercise of the Offset the offsetting party
shall provide prompt notice thereof and reflect the Offset
taken in any revised statement of account.
(o) Ghent Blending. Prior to Closing, the Parties
shall:
(i) Commence negotiations for a long-term
coolants and lubricants blending contract at
the Ghent Manufacturing Facility: and
(ii) If negotiations are successful, the Parties
agree to enter into a contract, effective the
Closing Date, for ongoing coolant and
lubricant blending in the Benelux and the
Ghent manufacturing facility. At the Buyer's
sole option, it may elect for any reason to
terminate the said contract during the first
six (6) months following the Closing Date so
long as the Buyer agrees to continue to
provide transitional blending services to
Seller for a period of up to twelve (12)
months following the date of the notice of
termination on the same terms as contained in
said agreement.
(iii) If no agreement on a long-term agreement is
reached prior to the Closing Date, Seller and
Buyer will contract to continue to provide
transitional blending services to Seller for
a period of up to twelve (12) months
following the date of the notice of
termination of services. The price shall be
based on a reimbursement of costs plus a
profit margin equal to the actual adjusted
January through September 1995 profit margin
generated by the facility on a pro-rata
basis. Buyer will use its best efforts to
minimize costs to Seller.
(iv) In the event that Buyer shall terminate such
contract as set forth in Section 4.3(o)(ii)
or no contract is reached as set forth in
Section 4.3(o)(iii), Seller shall reimburse
Buyer and the Belgian Company for any actual
severance costs and other related costs
incurred, required by law or the employment
contract with respect to the termination of
employment by the Belgian Company of up to
sixty (60) of the Belgian Employees working
in the lubricants and coolants blending
business at the Ghent manufacturing facility;
provided however, any indemnity additional to
the special indemnity related to collective
dismissal shall not exceed the historical
practice of Texaco Belgium.
(p) Port Arthur Pilot Plant. At Buyer's option, Buyer
and Seller shall enter into a three (3) year operating/plant
services agreement at cost at the Port Arthur Pilot Plant upon
terms mutually agreed to by Buyer and Seller. This agreement
shall include an option to purchase the equipment at the pilot
plant for a price equal to Seller's Book Value.
(q) Research and Development. Buyer shall have the
right to offer employment to any and all employees of Seller
or Seller's Affiliates who are engaged in research activities
related to Seller's Texaco Additive Business.
(r) Additional Ghent Land. Seller shall use best
efforts to obtain a release from the City of Ghent of any
obligation of Seller to sell that portion of the Ghent surplus
land adjacent to the Ghent manufacturing plant, located south
of Line H-I on the surveyor draft plan, marked as Schedule
4.3(r). If the City of Ghent does not purchase the property,
Buyer shall have right of option to purchase said land at a
price of 850 BEF per sq. meter.
(s) Caltex. Seller shall use its best efforts in
accordance with the protocol as set forth in Schedule 4.3(s)
to ensure that Buyer retains Seller's and Seller's Affiliate's
historic business with Caltex Petroleum Corporation,
("Caltex") and Caltex Affiliates through direct purchase,
purchase and resale, or otherwise.
(t) TSCA Matters. Buyer shall cooperate with Seller and
Seller shall use best efforts to resolve TSCA matters as set
forth in Section 11.1(s).
(u) Rio Additive Plant. Seller shall and shall cause
TBSA to actively pursue and take all necessary actions at its
cost for the renewal of the current lease of the property that
includes the Rio Additive Plant ("Rio Lease") with the
necessary authorities, including, without limitation, to
litigate the renewal of the Rio Lease. If: (i) the Rio Lease
is not renewed for at least a five (5) year renewal term
within six (6) years of the Closing Date; or (ii) at any time
after three (3) months after the Closing Date, TBSA does not
grant to Buyer a sublease for the additive plant property on
the same terms as the Rio Lease; or (iii) due to TBSA's breach
or default of the Rio Lease, the sublease is terminated, then
Seller, at Buyer's discretion except as to the choice of
property in Section 4.3(u)(x), shall provide to Buyer: (x) a
site in the vicinity of the PIBSA Plant, at cost, for Buyer to
relocate the operations of the Rio Additives Plant, of either
Seven Thousand Four Hundred Fifty (7,450) square meters in the
area acquired for the installation of a Grease Plant as shown
on Schedule 4.3(u) ("Area 2") or Plot 54 or 58 of the property
in the north boundaries of the PIBSA plant which is currently
owned by Petroleo Brasileiro S.A. - PETROBRAS and which are
identified in Schedule 4.3(u) as Petrobras property (the
"Petrobras Property") at Seller's option; and (y) Seller or
its Affiliates shall enter into a tolling arrangement with
Buyer or its Affiliates to provide blending, PIBSA amination
and capping services on a toll basis in Brazil to the Buyer
until the earlier of the commencement of the operations of the
relocated plant or the period of five (5) years from the
Closing Date. The tolling arrangement will provide (a) an
equivalent quality of the same services currently available at
the Rio Additive Plant; (b) quantities required by Buyer up to
the Rio Additive Plant's then current capacity; and (c)
services on terms no less favorable than Texaco Brasil's then
current cost structure.
(v) Sublease. Seller shall continue to sublease the
Additive Plant property for as long as it is the lessee of
the property where the Rio Additive Plant is located provided,
however, if TBSA does not obtain such renewal of the sublease
consent or if consent is withdrawn by the Lessor, without
fault of Texaco Brasil, Seller shall cause TBSA to provide a
toll processing arrangement for Texaco Brasil set forth in
Section 4.3(u)(iii)(y) (a), (b), and (c), for the earlier of
(i) the commencement of the operations of the relocated plant
or (ii) three (3) years from failure to obtain the sublease
consent or (iii) three (3) years from the date consent was
withdrawn or terminated.
(w) Purchase of Rio Additives Plant Property. If the
owner of the property covered by the Rio Lease offers the
property for sale and if Seller or a Seller's Affiliate: (i)
buys such property, Seller shall sell or cause its Affiliate
to sell the Rio Additives plant property used by the Brazilian
Business to Texaco Brasil at cost, without markup; or (ii)
decides not to acquire such property, Seller or Seller's
Affiliate shall consult with Texaco Brasil and present, at
Texaco Brasil's request, any Texaco Brasil proposal to
purchase the property.
(x) Brazilian Reimbursement. In addition to the
obligations set forth in Sections 4.3(u) and 4.3(v), should
Seller or TBSA be unsuccessful in renewing the Rio Lease, as
set forth in Section 4.3(u) or if there is a termination of
the sublease as a result of TBSA's breach or default of the
Rio Lease, Seller agrees to reimburse Buyer or Texaco Brasil
for the following: (i) severance costs (required by Law or
contract) related to termination of any or all of the Rio
Additive Plant employees related to the Texaco Additive
Business who in Texaco Brasil's sole judgment are no longer
necessary as a result of the actions described above; and (ii)
to the extent Seller or its Affiliates cannot provide the
tolling as set forth in Section 4.3(u), liquidated damages
(not including consequential damages) up to the maximum amount
of One Hundred Seventy Thousand Dollars ($170,000) per month
for the earlier of the commencement of operations at the
relocated plant or three (3) years from the failure to renew
or termination. The payment of such maximum amount shall be
subject to the application of the following formula:
P = US$170,000 x (1 - A/B)
Where P = monthly payment to Texaco Brasil, in U.S. dollars
A = actual quantity of Product delivered to Texaco Brasil
on a toll basis in any particular month
B = the lesser of the Rio Additive Plant monthly capacity
to manufacture Product or Texaco Brasil monthly demand
for Product to meet customer requirements.
(y) Additives Plant Tankage. Subject to Sections
4.3(u), (v), and (w) as to the Rio Additive Plant in Rio de
Janeiro, TBSA, upon sixty (60) days notice, shall provide
Texaco Brasil with the use of two tanks (in addition to the
three tanks used by the Brazilian Business) of approximately
Four Hundred Seventy-Seven Thousand (477,000) or Six Hundred
Thirty-Six Thousand (636,000) liters capacity, as the case
may be, at a negotiated price to represent TBSA's actual cost
without profit, but if no agreement can be reached by TBSA
and Texaco Brasil, at book cost.
(z) PIBSA Plant Property. Seller recognizes Buyer's
possible need of additional land adjacent to the PIBSA plant
for the use of Texaco Brasil in future lube additives
operations. Seller shall cause TBSA to pursue the
acquisition of Plots 54 and 58 of the Petrobras Property. If
TBSA is successful in acquiring the Petrobras Property,
Seller shall cause TBSA to sell all or part of that property
to Texaco Brasil at TBSA's cost, with no markup and to grant
whatever easement or other rights on TBSA's adjacent property
that may be necessary in order to allow immediate road access
to the piece of the Petrobras Property acquired by Texaco
Brasil.
If TBSA is unsuccessful in acquiring the Petrobras
Property within two (2) years from the Closing Date (or any
extension of that term defined by mutual agreement between
Seller and Buyer), Seller shall cause TBSA to sell at cost up
to Seven Hundred (700) square meters in the area adjacent to
the west boundaries of the PIBSA plant and which is
identified in Schedule 4.3(u) as Area 1 (the "Area 1").
Seller shall cause TBSA to remove at TBSA's cost any
structures and equipment in such 700 square meters area.
If before the two (2) year term defined above (or
any extension thereof mutually agreed between Buyer and
Seller) but no earlier than one (1) year from Closing Date,
Buyer in its sole discretion requires additional tankage for
the PIBSA plant, Seller shall cause TBSA to sell Area 1 to
Texaco Brasil at cost with no markup. Buyer shall use
reasonable efforts to avoid the requirement for new tankage
at the PIBSA plant during the two year period.
If Texaco Brasil decides to sell, transfer or
otherwise dispose of, partially or totally, the property it
owns in Areas 1 or 2 or in Plots 54 or 58 to any third party
other than Buyer's Affiliates, Buyer shall cause Texaco
Brasil to grant TBSA the right of first refusal. If TBSA
decides to sell or otherwise dispose of, partially or
totally, the property it owns adjacent to Texaco Brasil's
facilities to any third party other than Seller's
Affiliates, Seller shall cause TBSA to grant Texaco Brasil
the right of first refusal.
(aa) Post Closing Sublease. If Seller does not deliver
the sublease for the Rio Additive Plant at Closing, then, in
addition to the obligations in Section 4.3(x), until and
unless Buyer or Texaco Brasil elects to proceed pursuant to
Section 4.3(u) but in no event earlier than three (3) months
from the Closing Date as long as Seller continues to pursue
consent, Seller or its Affiliates shall provide tolling
arrangements in Brazil pursuant to Section 4.3(u)(a), (b)
and (c) for the lesser of (i) the period until the sublease
is delivered to Buyer or (ii) five (5) years from the
Closing Date.
Section 4.4 Confidentiality. With respect to
confidentiality:
(a) Confidential Information. Buyer and Seller
acknowledge that in connection with the execution and
delivery of the Agreement and the consummation of the
transactions contemplated hereby, Buyer, the Buyer Group,
Seller, the Seller Group and their respective agents,
advisors, or representatives ("representative") have been
provided with, and may hereafter obtain, confidential
business, commercial, financial, operational and
environmental information and information relating to
intellectual property, regarding Buyer, Seller and their
respective Affiliates, whether obtained in written form,
visually (such as by inspection) or orally, or based upon,
in whole or in part, any such furnished information or
reflecting review of, or interest in contemplated hereby
collectively "Confidential Information;" provided, however,
that for purposes of the Agreement, "Confidential
Information" relating to the Texaco Additive Business shall
be deemed to be "Confidential Information" of Buyer and the
exception to nondisclosure set forth in Section
4.4(c)(iii)). For purposes of this Section 4.4, the
"Confidential Information" of a Party" shall include the
Confidential Information of such Party's Affiliates.
(b) Disclosure. Each Party agrees to exercise the
same degree of care as it uses in protecting its own
Confidential Information from disclosure (but not less than
reasonable care) to make no disclosure of any Confidential
Information received from the other Party, and further
agrees to make no use of any Confidential Information
received from the other Party except, in each case, in
connection with the execution and delivery of the Agreement
and the consummation of the transactions contemplated
hereby.
(c) Non-Disclosure. The obligations of non-disclosure
and restricted use contained in this Section 4.4 shall not
apply to any of the disclosing Party's Confidential
Information that: (i) was available to the public prior to
the date such Confidential Information was disclosed to the
receiving Party; (ii) becomes available to the public
through no fault of the receiving Party subsequent to the
date such Confidential Information was disclosed to the
receiving Party; (iii) was in the possession of the
receiving Party prior to the date such Confidential
Information was disclosed to the receiving Party, and, to
the receiving Party's best knowledge, was not obtained by
the receiving Party from a third party having an obligation
of confidentiality to the disclosing Party regarding such
Confidential Information; (iv) is hereafter rightfully
obtained by the receiving Party to the receiving Party's
best knowledge from a third party not under an obligation of
confidentiality to the disclosing Party regarding such
Confidential Information; or (v) is independently developed
by employees of the receiving Party without using the
Confidential Information of the disclosing Party; or (vi)
with respect to Buyer's Confidential Information, is
required by Seller or Seller's Affiliates (x) for the
conduct of business as specifically reserved by Seller as
set forth in Section 4.1(d) or (y) with respect to Taxes,
accounting and litigation associated with the ownership of
the Texaco Additive Business prior to the Closing Date.
Specific Confidential Information shall not be deemed to be
within the exceptions of Section 4.4(c)(i)-(vi) merely
because it is embraced by more general information within
such exceptions, nor shall a combination of features be
deemed to be within these exceptions merely because the
individual features, but not the combination itself, are
within these exceptions. It shall not be a breach of the
obligation of non-disclosure contained in this Section 4.4
if a receiving Party discloses any Confidential Information
as required by Law or judicial proceeding; provided,
however, that such disclosure shall be excused only to the
extent such disclosure is required by Law or such proceeding
or in connection with the preparation of Tax returns and
only if the receiving Party provides prior written notice to
the disclosing Party sufficient to allow the disclosing
Party an opportunity to oppose or attempt to limit the
required disclosure. In the event such limit or protective
order is not obtained, the receiving Party shall use
reasonable best efforts to ensure that the confidentiality
of the Confidential Information is protected by court or
administrative order.
(d) Survival. The obligations provided herein with
respect to non-disclosure and restricted use of Confidential
Information shall not apply to particular Confidential
Information upon the occurrence of fifteen (15) years from
the Closing Date.
(e) Affiliates and Representatives. Each Party shall
have the right to disclose to its Affiliates or its
Affiliate's respective representatives all Confidential
Information received under the Agreement; however each
receiving Party shall cause its Affiliates and
representatives to comply with all obligations set forth in
Section 4.4 and shall be responsible for any breach of this
Section 4.4 by a receiving Party's Affiliates or
representatives.
(f) Confidential Nature. Each Party agrees that it
will use reasonable efforts to inform all of its Affiliates
and their respective representatives to whom Confidential
Information of the other Party is disclosed of the existence
of the Agreement and of the confidential nature of such
Confidential Information.
PART FIVE
COVENANTS REGARDING THE COMPANY
Section 5.1 Covenants of Seller and Buyer. Seller and
Buyer covenant to each other regarding the Company as follows:
(a) Non-Represented U.S. Employees. Seller has
delivered, or caused to be delivered, relevant information
on non-represented U.S. Employees and Buyer will provide
written offers of continued employment with the Company to
those non-represented U.S. Employees that Buyer desires to
continue to employ from and after the Closing Date. Those
non-represented U.S. Employees who have accepted Buyer's
offer of employment and remain employees of the Company up
to the Closing and continue employment with Buyer on and
after the Closing shall be "U.S. Transferred Employees",
provided however that non-represented U.S. Employees shall
not be considered U.S. Transferred Employees until they
commence active employment with the Buyer. Buyer shall have
the right to offer employment to any employees of Seller or
Seller's Affiliates (other than the Company) engaged in
activity related to Texaco Additive Business, and if such
employee accepts Buyer's offer of employment such employee
shall be a "U.S. Transferred Employee". Seller shall have
the right to designate no more than five (5) U.S. Employees
to be retained by Seller.
(b) Represented U.S. Employees. Buyer acknowledges
that the Company employs represented employees and that
existing contracts covering such represented employees shall
remain in effect after the Closing Date unless modified by
collective bargaining, and nothing herein shall preclude
Buyer from engaging in appropriate collective bargaining in
accordance with applicable Laws. Such represented employees
who are U.S. Employees and remain employees of the Company
up to the Closing and continue employment with Buyer on and
after the Closing shall be included in the definition of
"U.S. Transferred Employees" for purposes of the Agreement.
(c) No Solicitation. Without the prior written
consent of Seller, which consent shall not be unreasonably
withheld, for one (1) year after the Closing Date, Buyer
agrees not to employ or otherwise secure the services of,
offer to or solicit to employ, any U.S. Employee who
received a written offer of employment from Buyer but elects
to retire or separate from the Company on or before the
Transfer Date. Seller agrees that it shall not and shall
not permit Seller's Affiliates for a period of one (1) year
after the Closing Date to hire or solicit for hire any
Seller's or Seller's Affiliates employee who becomes an
employee of Buyer or Buyer's Affiliates as a result of this
transaction.
(d) Compensation. For a period of at least twelve
(12) months from the Closing Date, all U.S. Transferred
Employees shall be paid while employed by Buyer a base
salary or straight time hourly rate no less than what such
U.S. Transferred Employees received from the Company
immediately prior to the Closing Date; provided however,
Buyer shall have the right to terminate any U.S. Transferred
Employee during the twelve (12) month period, subject to
making severance or separation payment to such U.S.
Transferred Employee equal to Seller's Separation or
Severance Plans in existence on the date of the Agreement.
Seller shall reimburse Buyer for Fifty percent (50%) of any
such severance or separation cost.
(e) No Termination. No U.S. Employee (including a
Person who becomes a U.S. Transferred Employee) shall be
treated as having terminated employment with the Company or
any other Affiliate of Seller by reason of the sale of the
Texaco Additive Business to Buyer and the transactions
contemplated hereby, for the purpose of determining
entitlement to severance or separation pay or any similar
payment.
(f) Buyer Benefit Plans. Buyer shall provide the non-
represented U.S. Transferred Employees with benefit plans
provided by Buyer to its own similarly situated employees as
of the Closing Date as set forth on Schedule 5.1(f) ("Buyer
Benefit Plans"). Except as otherwise provided in Section
5.1(g), Buyer's Benefit Plans shall credit all service of
the U.S. Transferred Employees with the Seller, the Company
and Seller's Affiliates as of the Transfer Date, for all
purposes under the Buyer's Benefit Plans to the extent that
it would be recognized under the applicable provisions of
the Buyer's Benefit Plans.
(g) Defined Benefit Plans. As of the Transfer Date,
any U.S. Transferred Employee who is a participant in the
retirement plan of Seller or the group pension plan of
Seller ("Defined Benefit Plans"), shall cease to accrue
benefits under the Defined Benefit Plans. As soon as
practicable after the Closing Date and effective as of the
Transfer Date, the Buyer shall establish new defined benefit
plans, or shall provide for participation in its existing
defined benefit plans, and, in either case, provide related
trusts ("New Defined Benefit Plans") to cover the U.S.
Transferred Employees. The New Defined Benefit Plans shall
provide each U.S. Transferred Employee, on the Transfer
Date, with service for all purposes and, but only to the
extent described below, benefit accrual equal to the service
credited to such U.S. Transferred Employee as of the
Transfer Date under the Defined Benefit Plans and any
defined benefit plan of Seller's Affiliates, Star Enterprise
and Caltex. The New Defined Benefit Plans shall provide a
pension benefit at Normal Retirement Date, as defined in the
New Defined Benefit Plan that shall equal the greater of (i)
or (ii), as follows: (i) the "Normal Retirement Benefits"
based on the formula defined in, and accrued under, the New
Defined Benefit Plans including any applicable Social
Security offset and early retirement reductions, recognizing
all benefit service recognized by the Seller, Seller's
Affiliates, Star Enterprise and Caltex as of the Transfer
Date and within two (2) years after the Transfer Date in
accordance with the terms of the Benefit Service Restoration
Program ("BSRP") under the Defined Benefit Plans and all
recognized benefit service with Buyer on or after the
Transfer Date, less the U.S. Transferred Employee's employer
provided normal retirement benefit accrued under the Defined
Benefit Plans and any defined benefit plans of, or
maintained for, Star Enterprise or Caltex as of the Transfer
Date and within two (2) years after the Transfer Date in
accordance with the terms of the BSRP, or (ii) the Normal
Retirement Benefit accrued under the New Defined Benefit
Plans including any applicable Social Security offset and
early retirement reductions, recognizing only benefit
service with Buyer on and after the Transfer Date. If a
U.S. Transferred Employee commences the payment of the U.S.
Transferred Employee's benefits before Normal Retirement
Date, as defined in the New Defined Benefits Plan, and the
amount of the U.S. Transferred Employee's retirement benefit
is determined under Section 5.1(g)(i), the early
commencement discount factors under the New Defined Benefit
Plans shall be applied to the net amount of the early
retirement benefit after the offset of the normal retirement
benefits accrued under the Defined Benefit Plans. The
benefits determined under the Defined Benefit Plans shall be
based on the base salary received while participating under
the Defined Benefit Plans prior to the Transfer Date.
Benefits accrued under the Defined Benefit Plans by U.S.
Transferred Employees with respect to (x) benefit service as
of the Transfer Date and (y) benefit service restored within
two (2) years after the Transfer Date, in accordance with
the terms of the BSRP, shall be the sole responsibility of
Seller; however, Buyer and Seller shall cooperate in
arranging for the collection of employee contributions, and
the transfer of those contributions to Seller, as required
by the BSRP for a period of two (2) years after the Transfer
Date. A U.S. Transferred Employee's service with Buyer
after the Transfer Date shall be recognized as vesting
service under the Defined Benefit Plans in accordance with
the terms of such plans.
(h) Separation. If a U.S. Transferred Employee
separates from Buyer after the Transfer Date and meets the
age and service requirements under the Defined Benefit
Plans, Seller shall thereafter pay or cause to be paid to
the U.S. Transferred Employees the benefits accrued under
the Defined Benefit Plans when the same shall be payable
pursuant to the terms of such Defined Benefit Plans. The
transfer of employment of a U.S. Transferred Employee from
Seller to Buyer shall not be considered to be a termination
of employment for the purposes of the Defined Benefit Plans.
A U.S. Transferred Employee who separates from Buyer after
the Transfer Date shall not be eligible for nonpension
retirement benefits from the Seller's benefits plans. A
U.S. Transferred Employee's benefits under the Defined
Benefit Plans shall not commence until the U.S. Transferred
Employee separates from Buyer's employment, unless otherwise
required by applicable provisions of the Code.
(i) Participant List, Etc. At the Closing, Seller
shall deliver to the Buyer a list of the U.S. Transferred
Employees who were participants in the Defined Benefit Plans
as of the Closing Date, setting forth all employee benefit
plan information necessary for Buyer to administer Buyer's
Benefit Plans in accordance with the Agreement. Buyer
agrees to provide Seller, when requested, any employee
benefit information necessary for Seller to administer
Seller's Defined Benefit Plans in accordance with the
Agreement. Seller agrees to provide Buyer with any
additional information, when requested, necessary for Buyer
to administer the New Defined Benefit Plans.
(j) Defined Contribution Plans. As of the Transfer
Date, any U.S. Transferred Employee who is a participant in
the employees thrift plan of Seller or the employees savings
plan of Seller ("Defined Contribution Plans") shall cease to
be eligible to make employee contributions or receive
employer contributions in each such plan as of the Transfer
Date and shall be entitled to participate in the defined
contribution plans of Buyer ("New Defined Contribution
Plans"). The New Defined Contribution Plans shall provide
each U.S. Transferred Employee with (i) service for all
purposes equal to the service credited to such U.S.
Transferred Employee as of the Transfer Date under the
Defined Contribution Plans to the extent that it would be
recognized under the applicable provisions of the New
Defined Contribution Plans, and (ii) a rollover account that
accepts direct rollovers of taxable distributions from the
Defined Contribution Plans.
(k) Account Balances. The account balances of the
U.S. Transferred Employees held under the Defined
Contribution Plans on the Effective Date shall remain in the
Defined Contribution Plans, except in the case of those U.S.
Transferred Employees who elect to make a complete
withdrawal (both employee stock ownership account and
employee account) and have the funds paid directly to such
U.S. Transferred Employee or elect to directly roll over the
taxable portion of their account balance into the New
Defined Contribution Plans or into an Individual Retirement
Account. Buyer shall arrange for the collection of loan
payments from the U.S. Transferred Employees to the Defined
Contribution Plans and the transfer of those payments to
Seller for a period of up to two (2) years from the Transfer
Date. The Parties agree that Buyer shall function as a
collection agent of such loan payments due to Seller or
Seller's employee benefit plan and Buyer shall have no
liability for nonpayment of such amount.
(l) Welfare Benefit Plans. As of the Transfer Date,
any U.S. Transferred Employee who is a participant in the
welfare benefit plans set forth on Schedule 5.1(l)(i)
("Welfare Benefit Plans") shall cease to be a participant in
each such plan as of the Transfer Date, and shall be
entitled to participate in the welfare benefit plans offered
by Buyer to its own similarly situated employees as set
forth on Schedule 5.1(l)(ii) ("New Welfare Benefit Plans").
The New Welfare Benefit Plans shall provide each U.S.
Transferred Employee with service for all purposes equal to
the service credited to such U.S. Transferred Employee as of
the Transfer Date under the Welfare Benefit Plans. No
waiting period or exclusion from coverage of any pre-
existing medical condition shall apply to the U.S.
Transferred Employee's participation in the New Welfare
Benefit Plans, on or after the Transfer Date, provided that
the U.S. Transferred Employees participated in comparable
Welfare Benefit Plans on the Transfer Date. The Seller
shall pay or shall cause the applicable Welfare Benefit Plan
to pay any benefits or expenses covered by the Welfare
Benefit Plans that (i) in the case of any such medical or
dental plans, are incurred with respect to services
performed for the U.S. Transferred Employees (or other
employees) or their dependents on or prior to the Transfer
Date or (ii) in the case of any life insurance plans, are
payable to the beneficiaries of any U.S. Transferred
Employee (or other employee) who dies on or prior to the
Transfer Date. If the dependent or beneficiary of a U.S.
Transferred Employee is hospitalized on the Transfer Date,
Seller's Texaco Comprehensive Medical Plan shall remain
responsible for Medical claims incurred by such covered
dependent or beneficiary after the Transfer Date and before
such beneficiary or dependent is discharged from the
hospital. The Seller shall assume and retain all
liabilities and obligations arising under the continuation
coverage requirements of Section 4980B of the Code and Part
Six of Title I of ERISA with respect to all U.S. Transferred
Employees (or any beneficiaries or dependents thereof) who
on or before the Transfer Date have exercised or are
eligible to exercise their rights to such continuation
coverage.
(m) Vacation. All vacation accrued by U.S.
Transferred Employees under the Company's vacation plan, but
not taken by the Closing Date, shall be the Buyer's
responsibility, and shall be credited to the U.S.
Transferred Employee's account under the Buyer's vacation
plan; provided, however, that the final Closing Statement
shall reflect, as a current liability determined in
accordance with GAAP, an accrual for all vacation accrued by
any U.S. Transferred Employee (or any other employee) prior
to the Closing Date.
(n) Retirees. Seller shall be responsible for all
non-pension retirement obligations related to any U.S.
Employee who retires on or before the Transfer Date. Buyer
shall have no responsibility for any non-pension retirement
obligations payable to any employees of the Seller and
Seller's Affiliates other than U.S. Transferred Employees
who retire after the Transfer Date. Buyer shall be
responsible for non-pension retirement obligations of any
U.S. Transferred Employee who retires after the Transfer
Date. In no event shall Seller be responsible for any non-
pension retirement obligations under the Buyer Benefit Plans
of any U.S. Transferred Employee who separates from Buyer's
employment after the Transfer Date.
(o) Plan Withdrawal and Suspension of Severance.
Seller shall cause the Company to withdraw as of the
Transfer Date from the plans maintained or administered by
Seller; provided however, that Seller, as of the Closing
Date, shall cease coverage of, and shall make no payments
under, the Severance Pay and Separation Plans with respect
to the U.S. Transferred Employees.
(p) Reimbursement, Etc. From the Effective Date
through the Closing Date, Seller shall pay wage expenses of
the U.S. Transferred Employees from the funds generated by
the Texaco Additive Business. After the Closing Date, U.S.
Transferred Employees shall continue to participate in the
Company's Benefit Plans up to but not including the Transfer
Date. Buyer shall arrange for the collection of required
employee contributions from the U.S. Transferred Employees
for participation in the Company Benefit Plans after the
Closing Date and up to but not including the Transfer Date,
and for the transfer of those employee contributions to
Seller within thirty (30) days after the Closing Date.
Employee contributions, collected by Seller in the month in
which the Closing occurs with respect to which benefits are
provided in the month immediately following, shall be
promptly transferred to Buyer to purchase similar benefits
for such employees in the month after Closing. Buyer shall
pay to Seller as of the Closing Date an amount representing
the Seller's expense to provide the benefits under the
Company's Benefit Plans other than the Severance Pay or
Separation Plan or any other Severance or Separation Plan,
program, policy, agreement or arrangement maintained by
Seller to the U.S. Transferred Employees from the Closing
Date to, but not including, the Transfer Date.
(q) Employment Claims. Buyer shall be responsible for
all employment-type claims of U.S. Transferred Employees and
the costs and expenses related thereto (not (i) previously
provided for in Section 5.1(p) or (ii) specifically excluded
in Section 5.1 (o)) relating to events that occur on or
after the Closing Date
PART SIX
COVENANTS
REGARDING TEXACO BRASIL
Section 6.1 Covenants of Buyer. Buyer covenants with
Seller regarding Texaco Brasil that:
(a) Brazilian Transfer Employees. Buyer acknowledges
that, in as much as Buyer is purchasing the Brazilian Stock,
Texaco Brasil shall retain responsibility for all Brazilian
Transfer Employees on and after the Closing Date. Buyer
acknowledges that Texaco Brasil shall continue to be bound
by the Brazilian Collective Bargaining Convention applicable
by Law on and after the Closing Date. On and after the
Closing Date, Texaco Brasil shall continue to pay to all
Brazilian Transfer Employees base salary or straight time
hourly rates no less than what such Brazilian Transfer
Employees received from TBSA immediately prior to the
Closing Date. Buyer shall cause Texaco Brasil to continue
on and after the Closing Date to provide the Brazilian
Transfer Employees with benefit plans which, in the
aggregate, are no less favorable than the Brazilian Benefit
Plans provided as of the Closing Date. In particular, and
without limiting the generality of the foregoing, any
replacement benefit plans shall recognize all prior service
to the extent recognized under the Brazilian Benefit Plans
for all purposes under such plans. For greater certainty,
and subject to insurer consent, no exclusion from coverage
under the replacement benefit plans by reason of a pre-
existing medical condition shall apply to the Brazilian
Transfer Employees. The Parties shall take all steps
necessary to ensure that there is no duplication of coverage
or participation between the Brazilian Benefit Plans and the
replacement benefit plans for the period from the Closing
Date to the Brazilian Transfer Date. More particularly,
where the Brazilian Transfer Employees or Texaco Brasil have
contributed to any Brazilian Benefit Plans for any period up
to the Brazilian Transfer Date, coverage or participation
therein shall continue until the last date for which such
contribution is made. Buyer shall pay to Seller as of the
Closing Date an amount representing Texaco Brasil's expense
in this regard.
(b) Compensation. All Brazilian Transfer Employees
shall continue to receive on and after the Brazilian
Transfer Date a base salary or straight time hourly rate no
less than such Brazilian Transfer Employees received from
TBSA immediately prior to the transfer of employment from
TBSA to Texaco Brasil.
Section 6.2 Covenants of Buyer and Seller. Seller and
Buyer covenant with each other regarding the Brazilian Business
as follows:
(a) Offers of Employment. As soon as practical prior
to the Brazilian Transfer Date, Buyer shall provide to
Seller a list of all those Brazilian Employees Buyer wishes
TBSA to transfer to Texaco Brazil on the Brazilian Transfer
Date ("Brazilian Transfer Employees") and TBSA shall
transfer the Brazilian Transfer Employees on the Brazilian
Transfer Date. Buyer shall provide Brazilian Transfer
Employees with the rights established under the TBSA
Collective Bargaining Convention, without prejudice to any
other rights such employee may have pursuant to Brazilian
Law, or any other applicable collective bargaining
convention.
(b) No Termination. No Brazilian Employee shall be
treated as having terminated employment with TBSA by reason
of accepting employment with Buyer, for the sole and
exclusive purpose of determining entitlement to severance or
separation pay or any similar payment.
(c) Brazilian Savings Plan. Effective as of the
Closing Date,Buyer shall cause Texaco Brasil to provide the
Brazilian Transfer Employees with a plan with benefits no
less favorable than those provided by Texaco Sociedade
Previdenciaria - Tex Prev ("Brazilian Savings Plan").
(d) Brazilian Environmental Permits. On or prior to
the Closing Date, Seller shall apply for the transfer of the
environmental permits for Texaco Brasil as set forth on
Schedule 3.1(n)(ii) Environmental Matters - Brazil and Buyer
and Seller shall cooperate to obtain such permits after the
Closing Date.
PART SEVEN
COVENANTS
REGARDING BELGIAN BUSINESS
Section 7.1 Covenants of Seller. Seller covenants with
Buyer in connection with the Belgian Business that:
(a) Withdrawal Option Under Texaco Belgian
Pension Plan. Promptly after the Closing Date,
Texaco Belgium shall afford each Belgian Employee the option
("Withdrawal Option") provided for in the Texaco Belgium's
"Texaco Pension Plan" ("Texaco's Belgian Pension Plan") for
withdrawal of such employee's contributions upon termination
of employment. Any Belgian Employee who exercises a
Withdrawal Option shall no longer be entitled to receive any
pension benefits under or by reason of the Texaco's Belgian
Pension Plan.
(b) Texaco's Belgian Pension Plan. From time to time
after the Closing Date, Texaco Belgium shall pay to the ASBL
Fonds de Pension Texaco, a Belgian non-profit association,
such amounts as may be required in order to secure the
vested rights of each Belgian Employee who has not exercised
such Belgian Employee's Withdrawal Option to receive the
pension to which such Belgian Employee is entitled under
Texaco's Belgian Pension Plan on the basis of such Belgian
Employee's pensionable salary in effect on the Closing Date
for a pensionable career ending on the Closing Date.
Section 7.2 Covenants of Buyer. Buyer covenants with the
Seller in connection with the Belgian Business that:
(a) Compliance with Belgian Collective
Labor Agreement No. 32. From and after the
Closing Date, Buyer shall in all respects comply with the
provisions of Collective Labor Agreement No. 32. et seq.
(b) Buyer's Belgian Pension Plan. From and after the
Closing Date, Buyer shall provide the Belgian Employees
pension plans (collectively, "Buyer's Belgian Pension Plan")
providing benefits no less favorable than the pension plans
provided by the Buyer to its own similarly situated
employees incorporating the following features:
(i) For purpose of eligibility, vesting, and
benefits accrual purposes, Buyer's Belgian Pension Plan
shall recognize a Belgian Employee's service that is
recognized as of the Closing Date as pensionable
service under Texaco's Belgian Pension Plan (to the
extent that it would be recognized under the applicable
provisions of Buyer's Belgian Pension Plan), except as
provided below for purposes of pension accrual, and
(ii) Buyer's Belgian Pension Plan shall provide a
pension benefit which will equal the greater of (x) the
pension benefit accrued under the Buyer's Belgian
Pension Plan formula at normal retirement date (as
defined in Buyer's Belgian Pension Plan), recognizing
all service that is recognized as of the Closing Date
as pensionable service for purposes of the Texaco
Belgian Pension Plan and all recognized service with
the Buyer on and after the Closing Date, less the
Belgian Employees vested normal retirement pension
benefit accrued under the Texaco's Belgian Pension Plan
as of the Closing Date, or (y) the pension benefit
accrued under the Buyer's Belgian Pension Plan,
including any applicable early retirement or other
similar adjustments or offsets recognizing only service
with the Buyer on and after the Closing Date. If a
Belgian Employee commences the payment of the Belgian
Employee's benefits before normal retirement date (as
defined in the Buyer's Belgian Pension Plan), and the
amount of the Belgian Employee's retirement benefit is
determined under Section 7.2(b)(ii)(x), the early
commencement discount factors and other similar
adjustments and offsets under the Buyer's Belgian
Pension Plan shall be applied to the net amount of the
early retirement benefits after the offset of the
normal retirement benefits accrued under the Texaco
Belgian Pension Plan.
(c) Belgian Life Insurance. From and after the
Closing Date the Buyer shall afford to each of the Belgian
Employees life insurance benefits comparable to the "Death &
Orphans" insurance benefits afforded prior to Closing by
Texaco Belgium.
Section 7.3 Covenants of Buyer and Seller. Seller and
Buyer covenant to each other regarding the Belgian Business as
follows:
(a) Belgian Employees. The Belgian Employees shall,
on the Belgian Transfer Date, transfer to the employment of
the Belgian Company and all rights and obligations of
Texaco Belgium or the Belgian Company arising from law, or
acts, or decree, individual labor contract or terms and
conditions of employment or otherwise, pertaining to each
Belgian Employee, shall be transferred to and taken over by
Buyer to the extent required by the provisions of the
"Convention Collective du Travail" No. 32 et seq. made by
the "Conseil National du Travail".
(b) Consideration for Belgian Assets. Seller and
Buyer agree that the Purchase Price attributed to the
Belgian Assets shall be as set forth on Schedule 7.3(b).
(c) Paritary Committees and Collective Labor
Agreements. Seller and Buyer acknowledge that, as soon as
reasonably possible after the Closing Date, Buyer intends to
reclassify the Belgian Business and the Belgian Company as a
business falling within the scope of application of the
Paritary Committee for the chemical industry, and to apply
to the Belgian Employees all terms and conditions of the
collective labor agreements promulgated by such Paritary
Committee. Seller and buyer shall cooperate to facilitate
such reclassification and redesignation of the Belgian
Employees.
PART EIGHT
ENVIRONMENTAL
Section 8.1 Survival; Applicability. Seller and Buyer
covenant to each other that:
(a) Survival of Environmental Covenants. All
covenants made by Buyer and Seller in this Part Eight: (i)
shall survive the Closing Date indefinitely with respect to
the Texaco Additive Business facilities at Port Arthur,
Texas and at Rio de Janeiro, Brasil and any property
contiguous to (including separated only by a public or
private right of way) such facilities; (ii) with respect to
the Texaco Additive Business facilities at Ghent, Belgium
shall expire twelve (12) years after the Closing Date,
except with respect to any claims by Buyer and Seller in
connection therewith before the expiration of such twelve
(12) year period; and (iii) with respect to all other
facilities and properties, shall expire thirty (30) years
after the Closing Date, except with respect to any claims
made by Buyer and Seller in connection therewith before the
expiration of such thirty (30) year period; provided,
however, that all covenants and indemnities given by Seller
in this Part Eight shall expire with respect to any portion
of the properties of the Texaco Additive Business (including
the facilities at Port Arthur) when such portion is
primarily used for any purpose other than industrial,
manufacturing, chemical, additive industries and laboratory
uses, other than a change in use at the Rio de Janeiro
facilities as a result of termination or expiration of the
lease or the Texaco Brasil sublease with respect to that
facility but provided, further, that the shutdown of use of
a facility, shall not be deemed a change of use hereunder to
the extent public access to such facility remains limited.
All claims under this Part Eight shall be in writing and
shall reasonably describe, in light of the information then
known, the basis for the Party's responsibility asserted in
the claim.
(b) Applicability to Breaches of Representations. All
covenants relating to any Remediation or other work in this
Part Eight shall also apply to any Remediation or other work
performed for which Buyer is indemnified under Section 9.1
for breach of representations and warranties in Sections
3.1(n), 3.3(j), 3.3(k) of the Agreement, provided that the
provisions of Section 12.10 relating to the survival of
representations, and not of Section 8.1(a), shall govern the
making of claims with respect to breaches of
representations, and provided further that the provisions of
Section 9.1 relating to the Two Hundred Fifty Thousand
Dollars ($250,000) deductible amount shall apply in place of
Section 8.3(h)(i) and Section 8.4(e).
Section 8.2 Definitions. For purposes of the Agreement,
the terms defined in this Section 8.2 have the meanings herein
assigned to them:
"Annual Environmental Deductible" means the first Two
Hundred Fifty Thousand Dollars ($250,000) of Environmental
Liabilities arising from Seller's Environmental Events,
excluding costs incurred pursuant to Section 8.3(c),
actually incurred by Buyer Group in each of the ten (10)
annual periods commencing on the Closing Date and ending on
each one (1) year anniversary thereof for which Seller is
solely responsible or shares responsibility with Buyer. No
credit for any annual period in which such Environmental
Liabilities are less than Two Hundred Fifty Thousand Dollars
($250,000) shall carry over to the next annual period.
"Buyer's Environmental Event" means an Environmental
Event which occurred on or after the Closing Date as a
result of Buyer's conduct of the Texaco Additive Business.
"Environmental Event" means (i) any release, disposal,
arrangement for disposal, emission, discharge or
transportation, from, on or to any property owned, operated
or leased in connection with the Texaco Additive Business on
the Closing Date or any property with respect to which the
Texaco Additive Business has Environmental Liabilities after
the Closing Date and (ii) any operations, acts or omissions
to act in connection with the Texaco Additive Business.
"Environmental Laws" means any Laws relating to pollu-
tion, the protection of the environment or the release or
disposal of materials.
"Environmental Liabilities" means all Liabilities under
Environmental Laws, Stipulated Environmental Laws, or New
Environmental Laws, but, with respect to any of Seller's
covenants under this Part Eight, Environmental Liabilities
generally shall not include any costs or expenses associated
with normal, on-going activities related to compliance with
Environmental Laws after the Closing Date.
"Legally Effective Date" means the date on which a
Stipulated Environmental Law becomes enforceable.
"New Environmental Laws" means a material change in
Environmental Laws, other than Stipulated Environmental
Laws, which becomes effective after the Closing Date and
which meets all of the following criteria: (i) it represents
a new substantive area of Environmental Laws with respect to
waste or waste-like deposits; (ii) it is not a change in
regulation or a change in interpretation of Environmental
Laws enforceable on the Closing Date; (iii) it regulates an
activity which was not regulated as of the Closing Date; and
(iv) it imposes retroactive liability which makes unlawful
conduct which was lawful or requires Remediation where
Remediation was not required as of the Closing Date.
"Phase I Environmental Assessment" means an
investigation and assessment of environmental conditions
based on currently available information and data,
including, but not limited to, interviews and review of
records, and the performance of on site or offsite
reconnaissance or inspections to determine the presence,
release or potential release of any material from, on, or to
a property, but does not include sampling of any
environmental medium.
"Remediation" means any action taken with respect to
soil, land, surface, or subsurface strata, surface water,
ground water, or sediments necessary to bring such medium
into compliance with Environmental Laws or prevent the
continuing migration of materials which threaten to result
in an imminent violation of Environmental Law. The
selection of an action shall include the consideration of
appropriate advisories, criteria or guidance when required
or provided for by Environmental Laws, for example, 40 CFR
300.400(g)(3).
"Seller's Environmental Event" means an Environmental
Event which occurred (i) prior to the Closing Date, or (ii)
after the Closing Date which was a result of operations
conducted by Seller or Seller's Affiliates on adjacent
property.
"Stipulated Environmental Laws" means the following
Laws that become enforceable after the Closing Date: (i)
With respect to the Rio de Janeiro plants, all Laws
enforceable after the Closing Date but prior to June 30,
1998 addressing the Remediation of groundwater or soil; and
(ii) with respect to the Ghent plant, the following in the
form in which they exist on the date they are initially
enforceable: (w) the Integrated Permit issued to the Ghent
Plant on March 23, 1995 (including the amendment to the
Integrated Permit issued to Texaco Belgium on August 17,
1995); and (x) the February 22, 1995 Decree "betreffende de
bodemsanering" (the "February 22, 1995 Flemish Decree")
including the implementing decrees initially promulgated
pursuant to it, but excluding subsequent modifications to
such implementing decrees. The terms "compliance" or
"comply" with on the Closing Date when used with reference
to a Stipulated Environmental Law, shall refer to the condi-
tion, state or practice of an asset or operation of the
Texaco Additives Business on the Closing Date relative to
such Stipulated Environmental Law on its Legally Effective
Date, but shall not include any changes in the condition,
state or practice of the asset or operation after the Clos-
ing Date to the extent that such changes make compliance
more expensive to achieve.
Section 8.3 Environmental Responsibilities of Seller.
Seller covenants with Buyer that:
(a) Seller's Performance of Covenants. Except as
limited in this Part Eight, Seller shall be responsible
under Environmental Laws for all Environmental Liabilities
in connection with the performance of Seller's covenants
under this Part Eight.
(b) Seller's Environmental Events. Seller shall be
responsible for all Environmental Liabilities which arise
solely from a Seller's Environmental Event (i) under
Environmental Laws enforceable on the Closing Date (ii)
under Stipulated Environmental Laws enforceable on the
Legally Effective Date, and (iii) with respect to
remediation of soil and groundwater, under modifications or
amendments to Environmental Laws, after the Closing Date, or
Stipulated Environmental Laws, after the Legally Effective
Date.
(c) Additional Matters in Ghent. Seller shall be re-
sponsible, without regard to the Annual Environmental
Deductible, except with respect to each of Sections
8.3(c)(ii),(v), and (vi) for which Buyer shall be
responsible for the first Five Thousand Dollars ($5,000) of
Environmental Liabilities incurred, for the following
matters regarding the Ghent plant:
(i) costs incurred for replacing or modifying the
H2S flare if such action is required by competent
environmental authorities pursuant to the Integrated
Permit issued to the Plant on March 23, 1995, as the
permit exists on the Closing Date and excluding any
subsequent modifications, within eight (8) years of the
Closing Date, except that Seller's responsibility shall
be limited to Fifty Percent (50%) of any such costs
incurred for such replacement or modification during
the first five (5) years after the Closing Date and
Twenty five Percent (25%) of any such costs incurred
for such replacement or modification during the sixth
through eighth years after the Closing Date. Buyer
shall be solely responsible for costs incurred for re-
placement or modification of the H2S Flare at any time
after the expiration of eight (8) years after the
Closing Date;
(ii) costs of Remediation arising from any
Seller's Environmental Event associated with the tank
farm;
(iii) Fifty Percent (50%) of any costs of diking of
or providing an impermeable base to or otherwise
modifying the bulk storage areas to minimize the poten-
tial for releases to soil or groundwater if such action
is required by competent environmental authorities
pursuant to the Integrated Permit issued to the Ghent
Plant on March 23, 1995, as the permit exists on the
Closing Date and excluding any subsequent
modifications, up to a maximum of One Million Five
Hundred Thousand Dollars ($1,500,000);
(iv) costs which the Parties reasonably agree must
be incurred for capital expenditures, which must be
initiated within two years of the Closing Date, for the
polyols plant, polyols operation, or propylene oxide
use or storage areas in order to comply with changes to
current operations required by the amendment of August
17, 1995 to the Integrated Permit issued to the Ghent
Plant on March 23, 1995, which amendment authorizes the
Ghent Plant to store propylene oxide and produce
polyols, except that Buyer shall be responsible for all
such modifications or changes in excess of One Million
Five Hundred Thousand Dollars ($1,500,000);
(v) in the event a portion of the discontinued
Texaco refinery heavy sludge pipeline is required to be
removed in connection with the installation of the
DISTRIGAZ natural gas pipeline, costs of Remediation in
connection with such removal, and
(vi) costs of any Remediation arising from a
Seller's Environmental Event in connection with
contamination in the vicinity of the control laboratory
at Ghent.
(d) Shared Environmental Liabilities and Changes in
Conditions. Seller shall be responsible for Environmental
Liabilities arising after the Closing Date from a Seller's
Environmental Event that continues as a Buyer's
Environmental Event in an amount which is proportional to
the contribution of Seller's Environmental Event to such
Environmental Liabilities, except as otherwise provided in
Section 8.3(e). In the event any change in the condition,
state or practice of an asset or operation after the Closing
Date makes compliance with Stipulated Environmental Laws or
New Environmental Laws more expensive to achieve, Seller
shall not be responsible for the share of Environmental
Liabilities to the extent attributable to such change.
(e) Environmental Liabilities Under New
Environmental Laws. Subject to Section 8.3(h),
Seller shall be responsible for: (i) all Environmental
Liabilities under New Environmental Laws arising solely from
Seller's Environmental Events and (ii) all Environmental
Liabilities under New Environmental Laws arising from
Buyer's and Seller's Environmental Events in an amount which
is proportional to the contribution of Seller's
Environmental Events, if any, to such Environmental
Liabilities.
(f) Disposal by Buyer. Notwithstanding any other
provision in this Part Eight, Seller shall be responsible
for Environmental Liabilities resulting from Buyer Group's
release, disposal, arrangement for disposal, emission,
discharge, or transportation of materials generated by a
Seller's Environmental Event in an amount which is
proportional to the contribution of Seller's Environmental
Event to such Environmental Liabilities; provided, however,
that Seller shall not be responsible for any such
Environmental Liabilities that result from Buyer's gross
negligence, willful misconduct or arrangement to dispose of
materials at a facility that is not authorized under
applicable Environmental Laws to receive such materials.
(g) Additional Matters Regarding Star Enterprise.
Seller shall be responsible for a period of seven (7) years
after the Closing Date for Environmental Liabilities arising
from Environmental Events requiring soil or groundwater
Remediation which are a result of operations conducted by
Star Enterprise on adjacent property in Port Arthur, Texas,
except that Seller shall not be responsible for such
Environmental Liabilities resulting from a Buyer's
Environmental Event.
(h) Limitations. Notwithstanding Sections 8.3(a),
(b), (d), (e), (f) and (g): (i) Seller shall not be
responsible for the Annual Environmental Deductible; (ii)
Seller shall not be responsible for the first Five Million
Dollars ($5,000,000) in Environmental Liabilities under New
Environmental Law arising from Seller's Environmental
Events; and (iii) Seller shall not be responsible for any
capital improvements and repairs or modifications to capital
improvements associated with the operation of the Texaco
Additive Business required as a consequence of any
Remediation, except to the extent provided in this Section
8.3(h)(iii). If as a consequence of a Remediation for which
Seller is responsible pursuant to Section 8.3, any
facilities of the Texaco Additive Business must be repaired,
replaced, rebuilt, or modified, Buyer and Seller shall agree
upon the value of such items in their condition prior to the
commencement of Remediation but without considering any
diminution in value relating solely to such Remediation. In
the event that Buyer and Seller cannot agree, a mutually
acceptable independent appraiser shall determine such value
and the fees and expenses of such appraiser shall be shared
equally by Buyer and Seller. In either case, Seller's
responsibility to Buyer for Environmental Liabilities
associated with such items shall be limited to the value of
any such item as so determined and the amount which is
proportional to the contribution of Seller's Environmental
Event to such Environmental Liabilities.
Section 8.4 Environmental Responsibilities of Buyer.
Buyer covenants with Seller that:
(a) Post-Closing Environmental Events. Buyer shall be
responsible for Environmental Liabilities which arise solely
from a Buyer's Environmental Event.
(b) Shared Environmental Liabilities. Buyer shall be
responsible for Environmental Liabilities arising after the
Closing Date or Legally Effective Date, as applicable, from
a Seller's Environmental Event that continues as a Buyer's
Environmental Event in an amount which is proportional to
the contribution of Buyer's Environmental Event to such
Environmental Liabilities, except as otherwise provided in
Section 8.4(d).
(c) Changes in Conditions. In the event any change in
the condition, state or practice of an asset or operation
after the Closing Date makes compliance with Stipulated
Environmental Laws or New Environmental Laws more expensive
to achieve, Buyer shall be responsible for the Environmental
Liabilities to the extent attributable to such change.
(d) Environmental Liabilities Under New
Environmental Laws. Buyer shall be responsible
for: (i) all Environmental Liabilities under New
Environmental Laws arising solely from Buyer's Environmental
Events, (ii) all Environmental Liabilities under New
Environmental Laws arising from Buyer's and Seller's
Environmental Events in an amount which is proportional to
the contribution of Buyer's Environmental Events, if any, to
such Environmental Liabilities, and (iii) the first Five
Million Dollars ($5,000,000) in Environmental Liabilities
under New Environmental Laws arising from Seller's
Environmental Events.
(e) Annual Environmental Deductible. Other than with
respect to Section 8.3(c), Buyer shall be responsible for
the Annual Environmental Deductible through the tenth (10th)
anniversary of the Closing Date.
Section 8.5 Covenant of Cooperation. Buyer and Seller
covenant with each other that they shall cooperate fully with
each other and act in good faith in implementing this Part Eight.
Buyer and Seller agree that the performance required by the
covenant set forth in the preceding sentence shall include, but
not be limited to: (a) providing to the other timely notice of
all potential Environmental Liabilities that they believe are
covered under this Part Eight about which they become aware; (b)
sharing with the other in a timely manner all material non-
privileged correspondence received from any third party that is
relevant to such potential Environmental Liabilities; (c)
affording the other timely access to and an opportunity to
comment on (both draft and final versions) any material non-
privileged correspondence to third parties, study protocols and
results, drawings, charts, Remediation work plans or reports, or
other documentation relating to such Environmental Liabilities;
(d) providing the other with timely notice of and an opportunity
to attend and participate in any meetings or hearings with
Governmental Bodies or courts relating to any Environmental
Liabilities that they believe are covered under this Part Eight,
subject to the permission or consent of such Governmental Bodies
or Courts, if required; (e) preparing all material strategies and
plans relating to any potential Environmental Liabilities in
consultation with each other using appropriate cost-effective
technology and clean-up criteria, including risk-based clean-up
standards where permitted, in accordance with applicable
Environmental Laws; (f) consulting with each other to ensure that
the most cost-effective remedy is selected and performing any
work under this Part Eight in a workmanlike and cost-effective
manner; (g) scheduling all work to be performed so as to minimize
any unreasonable costs and inconvenience to each other; (h)
permitting each other, upon reasonable advance notice (at the
expense of the inspecting party and on reasonable terms that are
mutually agreed upon by Buyer and Seller), to inspect and test
all equipment, monitoring devices, transportation vehicles and
facilities used or to be used or samples taken, and to observe
activities, related to any work under this Part Eight; and (i)
performing all work under this Part Eight in accordance with all
applicable Environmental Laws and Safety and Health Laws.
Section 8.6 Performance of Work. Buyer and Seller
covenant to each other that:
(a) Performance of Work by Buyer. Buyer shall
oversee, approve and, at Buyer's option, supervise and
perform all repairs, modifications, replacements or
rebuilding of Buyer's facilities, operations, equipment, or
fixtures related to any work other than a Remediation.
(b) Remediation by Buyer. Buyer shall supervise and
perform any Remediation on any property of Buyer or on any
property contiguous to a property of Buyer, except such
Remediation as Seller may elect to perform in accordance
with Section 8.7.
(c) Measures to Minimize Disruption. Seller shall
reimburse Buyer for increased costs of Buyer attributable to
reasonable measures taken to minimize disruption of,
interference with or other adverse effects on the operations
and property of the Texaco Additive Business relating to any
Remediation or other work performed under this Part Eight to
which Seller's covenants in Section 8.3 apply. Buyer and
Seller shall make a good faith effort to agree on such
measures in advance of such Remediation.
Section 8.7 Remediation by Seller. Seller covenants
that:
(a) Seller's Election. Seller, at Seller's sole
choice, may, by timely notice to Buyer with respect to any
Environmental Liabilities which arise solely from a Seller's
Environmental Event, or for which Seller has the greater
responsibility if such Environmental Liabilities arise from
both Buyer's and Seller's Environmental Events, supervise
and perform any Remediation on any property of Buyer or any
property contiguous to a property of Buyer. Seller shall be
relieved of obligations to Buyer under this Part Eight for
such Environmental Liabilities to the extent Seller's
supervision and performance hereunder relieve Buyer of such
Environmental Liabilities.
(b) Performance of Remediation. Seller's supervision
and performance of Remediation pursuant to Section 8.7(a)
shall be subject to the following: (i) Buyer shall oversee,
approve and, at Buyer's option, supervise and perform any
portion of a Remediation which would be impracticable to
perform separately from other work supervised and performed
by Buyer; (ii) Buyer shall oversee, approve and, at Buyer's
option, supervise and perform any repair, modification,
replacement or rebuilding of any operations, equipment,
fixtures, or facilities of Buyer; (iii) Buyer, in addition
to other rights hereunder, may request such additions,
alterations, changes or improvements to the work
("Enhancements"), and, except to the extent prohibited by a
Governmental Body, Seller shall accept and perform such
Enhancements, provided that all costs attributable to any
Enhancements shall be paid for by Buyer; (iv) Seller shall
be responsible for any Environmental Liabilities as well as
personal injury and property damage arising in connection
with Seller's supervision or performance of any Remediation,
except to the extent attributed to the negligence, willful
misconduct or failure to comply with Laws of Buyer or a
third party (other than Seller's employees, agents,
contractors, subcontractors, representatives and invitees);
(v) during any Remediation on a property of Buyer or
contiguous to a property of Buyer, Seller shall be solely
responsible for compliance by Seller's employees, agents,
contractors, subcontractors, representatives and invitees
with all Laws and professional standards applicable to its
work; (vi) Seller shall require all Seller's employees,
agents, contractors, subcontractors, representatives and
invitees entering upon any property of the Texaco Additive
Business to be bound by Buyer's reasonable terms and
conditions for such persons entering such properties, notice
of which shall be given by Buyer to Seller prior to the
commencement of the Remediation or Enhancements to be
performed by Seller; (vii) Seller shall protect Buyer Group
from any claims for labor or materials furnished to or for
any property of the Texaco Additive Business for work to be
performed by Seller under Section 8.7, which claims may be
secured by any security interest, including any worker's,
contractor's, mechanic's or materialman's lien against such
property or any interest therein; (viii) Seller shall take
reasonable measures to minimize any disruptions of,
interference with, or other adverse effects on the
operations and property of the Texaco Additive Business.
Buyer and Seller shall make a good faith effort to agree on
such measures in advance of any Remediation to be performed
by Seller; and (ix) Seller, with the approval of Buyer
(which shall not be unreasonably withheld), may have access
to and use of the storage facilities, loading facilities,
docks, rail sidings and other plant equipment or facilities,
and waste water treatment plants and similar waste treatment
and disposal systems on the properties of the Texaco
Additive Business (but only to the extent permitted by
Buyer's agreements with any co-owners or co-operators with
Buyer of such facilities and systems which agreements) in
conjunction with any work performed by Seller under Section
8.7 for purposes such as the disposal of well development
water and treated ground water, provided that (x) Seller
shall reimburse Buyer on a monthly basis for all incremental
out-of-pocket costs of Seller's use of such facilities and
systems, (y) Seller's use of such facilities and systems
shall not interfere with or disrupt Buyer's operations or
Buyer's use of such facilities and systems (including by
reducing the capacity needed for Buyer's use), (z) Seller's
use of such facilities and systems shall not violate any
Environmental Laws or contribute to a violation of
Environmental Laws by Buyer Group, (aa) Seller shall be
responsible for, and Buyer shall fully cooperate in,
obtaining all approvals required by any Governmental Bodies
for such use and (bb) Seller shall promptly perform any
Remediation or repair any damage, malfunction or impairment
of performance of such facilities and systems to the extent
resulting from Seller's use of such facilities and systems.
Section 8.8 Environmental Assessments. Seller and Buyer
covenant to each other that:
(a) Prior to the Closing Date, Buyer may conduct a
Phase I Environmental Assessment of properties owned by the
Texaco Additive Business on the Closing Date. From and
after the Closing Date: (i) Buyer may conduct additional
Phase I Environmental Assessments of such properties and any
other assessments and investigations, provided that Buyer
shall not conduct an assessment or investigation involving
sampling to determine the existence or scope of pollution,
except as required by Environmental Laws; and (ii) Buyer
shall, when Buyer reasonably believes that such assessments
and investigations to be made pursuant to Section 8.8(a)(i)
are likely to determine the existence or scope of pollution
for which Seller may be responsible under this Part Eight,
including any RCRA Facility Assessment or RCRA Facility
Investigation or similar investigation or assessment of the
Texaco Additive Business, provide Seller, to the extent
consistent with Environmental Law, a reasonable opportunity
to observe such assessments and investigations fully and to
take split samples, when applicable. Buyer shall promptly
deliver to Seller a copy of all final reports of any Phase I
assessments and any investigations and assessments performed
under Section 8.8(a)(ii).
(b) Notwithstanding any provision in Section 8.8(a),
Buyer shall have the right to (i) take such emergency
response action with respect to the properties of the Texaco
Additive Business on the Closing Date as is consistent with
prudent chemical industry practices, and in compliance with
applicable Laws; and (ii) move or disturb soil in the
ordinary course of facility operation, construction or
modification on such property provided that prior to
commencing such facility operation, construction or
modification, Buyer has given prior written notice to Seller
and has considered Seller's written comments (which Seller
shall promptly submit to Buyer) regarding the location or
placement of the construction or modification.
Section 8.9 [RESERVED]
Section 8.10 Reimbursement Procedures. Buyer and Seller
agree as follows:
(a) Seller shall reimburse Buyer Group for all costs
and expenses of Remediation and other work performed by
Buyer for which Seller is responsible under Section 8.3.
Buyer shall reimburse Seller for all costs and expenses of
Remediation and other work performed by Seller for which
Buyer Group is responsible under Section 8.4 and for all
costs and expenses of Enhancements performed by Seller for
Buyer Group under Section 8.7(b)(iii).
(b) In the event that Buyer believes that (i) Buyer
Group should receive reimbursement for a Remediation or
other work pursuant to any provision of this Part Eight,
Buyer shall promptly and, to the extent Buyer is reasonably
able to do so, prior to making any payment, submit to Seller
a notice of claim reasonably describing and documenting the
nature and basis for such claim and containing, as
applicable and available, the types of information outlined
in the Environmental Processing and Reimbursement Protocol
set forth on Schedule 8.10 ("Protocol"). If Section 9.3
also applies to a claim which is the subject of this Section
8.10, Section 8.10 and Section 9.3 shall be construed to
avoid duplication of effort; and (ii) Buyer has incurred or
shall incur Environmental Liabilities under a New
Environmental Law for which Buyer is not responsible under
Section 8.3(e), Buyer shall provide to Seller a notice of
potential claim under a New Environmental Law in the same
form as the notice of claim described in this Section
8.10(b)(i). The provisions of this Section 8.10 shall apply
to such notice of potential claim, except that: (x) Buyer
and Seller shall use the applicable procedures set forth in
the Protocol to maintain a record of costs incurred by
Buyer; (y) Seller shall not be required to respond to Buyer
pursuant to Section 8.10(c) or Section 8.10(d) prior to
receipt from Buyer of a notice that the Five Million Dollars
($5,000,000) deductible in Section 8.4(d) has been achieved;
and (z) notice that the Five Million Dollars ($5,000,000)
deductible has been achieved shall be treated as a notice of
claim under Section 8.10(c) for all amounts which are the
Seller's responsibility under Section 8.3(e).
(c) Upon receipt of a notice of claim, Seller shall
respond in writing to Buyer as promptly as reasonably
possible, but not later than thirty (30) Business Days
following receipt of such notice (except as described in
Section 8.10(d)) and shall: (i) acknowledge Seller's
responsibility with respect to the claim for reimbursement,
in which case Seller shall reimburse Buyer for Buyer's
covered expenses pursuant to the process described in the
Protocol; (ii) deny Seller's responsibility with respect to
the claim, in which case Buyer may either resubmit the claim
to Seller with additional available information or
explanation or assert a claim pursuant to Section 12.13;
(iii) acknowledge its responsibility with respect to a
portion of the claim, in which case Buyer may accept
reimbursement with respect to such portion (pursuant to the
process described in the Protocol) without prejudice to
Buyer's right to submit additional information and
explanation or assert a claim pursuant to Section 12.13;
(iv) request further information, in which case Buyer may
submit the requested information or additional explanation
or assert a claim pursuant to Section 12.13; or (v) any
combination of the above.
(d) Whenever a notice of claim is for a sum or for
work budgeted on the date of the notice of claim or
reasonably believed by Buyer to cost greater than Five
Hundred Thousand Dollars ($500,000), Seller's responses
described in Section 8.10(c) shall be made within sixty (60)
Business Days.
(e) No acknowledgement under this Section 8.10 of
whole or partial responsibility by Seller, and no acceptance
thereof by Buyer, shall prejudice the right of Buyer to
revise any claim, or of Seller to revise any acknowledgement
of responsibility with respect to a claim, based on further
discovery or evaluation of the facts or Environmental Laws,
except to the extent Seller and Buyer so agree in writing.
(f) If any allocation of responsibility under this
Section 8.10 is subsequently revised, Seller and Buyer shall
promptly pay or refund any amounts (with interest at the
prime rate plus two (2%) percent from the date of each
request for payment by Buyer or payment by Seller, as
applicable) necessary to make any reimbursement already made
consistent with the new allocation. If Seller fails to
comply with the time periods set forth in Section 8.10(c) or
Section 8.10(d) or in the Protocol, it shall pay interest to
Buyer (at the prime rate plus two (2%) percent beginning on
the date of Seller's noncompliance until the date Seller's
non-compliance is rectified), provided that no time periods
set forth in the Protocol shall be construed to require
Seller to reimburse Buyer prior to the expiration of the
periods set forth in Section 8.10(c) or Section 8.10(d).
(g) Buyer and Seller shall use the procedures set
forth in the Protocol in accordance with the terms of the
Protocol in order to ensure prompt and accurate billing,
reimbursement, auditing and record keeping of costs for
which Buyer is reimbursed under this Part Eight.
(h) The provisions of Section 8.10(a) through Section
8.10(g) (including Schedule 8.10) shall apply to any claims
for reimbursement made by Seller on Buyer, mutatis mutandis.
PART NINE
INDEMNIFICATION
Section 9.1 Seller's Indemnification. On and after the
Closing Date, Seller shall fully and promptly defend, indemnify
and hold harmless Buyer and Buyer's Affiliates, including Texaco
Brasil, the Belgian Company and Texaco Korea, and their
respective directors, officers and employees (collectively,
"Buyer Group") from all liabilities, claims, demands, actions or
suits, losses, costs or damages and expenses (including
reasonable attorney's fees) including without limitation, claims
for breach of product warranty, personal injury or death
(collectively "Liabilities") made against or incurred by any
member of the Buyer Group arising out of or with respect to (i)
the purchase of the Brazilian Stock, Belgian Stock or the Korean
Stock rather than the purchase of the Korean Assets, Belgian
Assets and the Brazilian Assets, subject to the Continuing
Liabilities; (ii) any breach of any representation or warranty
made herein by Seller; (iii) the breach or nonfulfillment of any
covenant, agreement, obligation or undertaking of Seller herein;
(iv) any alleged defect, hazard or impurity of any kind, in
manufacture, processing, design, materials, workmanship or
otherwise, including without limitation any alleged failure to
warn of the defect, hazard or impurity or any alleged breach of
express or implied warranties or any alleged misrepresentation
relating to any product alleged to have been produced or
manufactured by or on behalf of the Texaco Additive Business
prior to the Closing Date, but specifically excluding any
Exposure Liabilities other than those exposure liabilities listed
in Schedules; or, (v) severance costs and related costs, required
by law or employment contract or otherwise associated with the
termination of the Belgian Employees, which will be identified by
Buyer as Designated Employees from time to time after the Belgian
Transfer Date and prior to the day which is nine months after the
Closing Date, such Designated Employees not to exceed thirty (30)
Designated Employees, except if the termination is for cause;
provided however, any indemnity additional to the special
indemnity related to collective dismissal shall not exceed the
historical practice of Texaco Belgium, and (vi) the Belgian
Excluded Employees; provided that Seller shall not be obligated
to indemnify Buyer Group for any Liability relating to breaches
of Seller's representations and warranties (except breaches of
Seller's representations and warranties contained in Section
3.3(m)) unless the aggregate Liabilities relating to breaches of
Seller's representations and warranties exceeds Two Hundred Fifty
Thousand Dollars ($250,000), which shall be a deductible;
Section 9.2 Buyer's Indemnification. On and after the
Closing Date, Buyer shall fully and promptly defend, indemnify
and hold harmless Seller and Seller's Affiliates and their
respective directors, officers and employees (collectively,
"Seller Group") from all Liabilities made against or incurred by
any member of the Seller Group arising out of or with respect to
(i) any breach of any representation or warranty made herein by
Buyer; or (ii) the breach or non-fulfillment of any covenant,
agreement, obligation, or undertaking of Buyer herein, provided
that Buyer shall not be obligated to indemnify Seller Group for
any Liability relating to breaches of Buyer's representations and
warranties unless the aggregate Liabilities relating to breaches
of Buyer's representations and warranties exceeds Two Hundred
Fifty Thousand Dollars ($250,000), which shall be a deductible.
Section 9.3 Defense of Action. Promptly after receipt by
a party entitled to indemnification pursuant to the Agreement
("Indemnified Party") of notice of any pending or threatened
Third Party Action, such Indemnified Party shall, if a claim in
respect thereof is to be made against a Party providing
indemnification pursuant to the Agreement ("Indemnifying Party"),
give notice thereof to the Indemnifying Party. The Indemnifying
Party, at its own expense, may elect to assume the defense of any
such Third Party Action through its own counsel on behalf of the
Indemnified Party (with full right of subrogation to the
Indemnified Party's rights and defenses). The Indemnified Party
may employ separate counsel at its expense in any such Third
Party Action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the
Indemnified Party unless the Indemnified Party shall have been
advised by its counsel that there may be one or more legal
defenses available to it which are different from or additional
to those available to the Indemnifying Party (in which case the
Indemnifying Party shall not have the right to assume the defense
of such Third Party Action on behalf of the Indemnified Party),
it being understood, however, that the Indemnifying Party shall
not, in connection with any one action or separate but
substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) for
the Indemnified Party, and such firm shall be designated in
writing by the Indemnified Party. All fees and expenses shall be
paid periodically as incurred. The Indemnifying Party shall not
be liable for any settlement of any such Third Party Action
effected without its consent unless the Indemnifying Party shall
elect in writing not to assume the defense thereof or fails to
prosecute diligently such defense and fails after written notice
from the Indemnified Party to promptly remedy the same, in which
case, the Indemnified Party without waiving any rights to
indemnification hereunder may defend such Third Party Action and
enter into any good faith settlement thereof without the prior
written consent from the Indemnifying Party. The Indemnifying
Party shall not without the prior written consent of the
Indemnified Party, effect any settlement of any such Third Party
Action unless such settlement is for the payment of money damages
only and includes an unconditional release of the Indemnified
Party from all liabilities that are the subject of such Third
Party Action. The Parties agree to cooperate in any defense or
settlement of any such Third Party Action and to give each other
reasonable access to all information relevant thereto. The
Parties will similarly cooperate in the prosecution of any claim
or lawsuit against any third party. If, after the Indemnifying
Party elects to assume the defense of a Third Party Action, it is
determined by arbitration in accordance with Schedule 12.13 that
the Indemnified Party is not entitled to indemnification with
respect thereto, the Indemnifying Party shall discontinue the
defense thereof. Seller hereby elects to assume the defense of
all Third Party Actions pending as of the Closing Date, against
the Company, any of the Company's Subsidiaries, Texaco Brasil,
Texaco Korea or the Texaco Additive Business, which defense shall
be governed by the terms of this Section.
Section 9.4 Payments. All indemnity payments made by
Buyer or Seller under this Part Nine will be treated as
adjustments to the Purchase Price of the U.S. Assets, the
Brazilian Stock, the Korean Stock, the Belgian Stock or the
Miscellaneous Assets, as appropriate based on the Asset to which
the indemnity payment relates. All computations of indemnity
payments due under this Part Nine shall reflect the actual
present cash cost of the obligation with respect to which the
indemnity payment relates. If any member of the Buyer Group or
Seller Group entitled to an indemnity payment in accordance with
this Part Nine ("Indemnified Member") receives Tax Benefit by
virtue of having paid or accrued an amount for which an indemnity
payment is provided, the amount of such Tax Benefit will be
refunded to the Party making such indemnity payment when, as and
if such Indemnified Member realizes a cash Tax savings from such
Tax Benefit. If for any reason an Indemnified Member has any Tax
imposed on it on account of its receipt of an indemnity payment
including payments pursuant to this sentence ("Additional
Indemnity Taxes"), the Party liable for the indemnity payment
shall also be liable for such Additional Indemnity Taxes.
PART TEN
TAXES
Section 10.1 General. Seller and Buyer covenant with each
other regarding Taxes as follows:
(a) Seller's Liability. Except for Taxes reflected in
the computation of the Closing Working Capital, Seller shall
be liable for (i) any and all liability with respect to
Taxes which are imposed on or incurred by the Texaco
Additive Business for any taxable period ending on or before
the Effective Date for the particular Texaco Additive
Business for which the Taxes are imposed or incurred, (ii)
the portion of any Taxes which are imposed or incurred by
the Texaco Additive Business for any taxable period
beginning before and ending after the Effective Date which
are allocable as described in Section 10.1(c) to the period
ending on the Effective Date and (iii) 50% of any U.S. or
foreign real or personal property, transfer, recording,
sales, use value added or similar Taxes, but not including
any tax based on net income, ("Transfer Tax") arising from
the transfer of the ownership of the Texaco Additive
Business from Seller to Buyer and Buyer's Affiliates.
(b) Buyer's Liability. Except as provided in Section
10.1(a), Buyer and Buyer's Affiliates shall be liable for
(i) the amount of Taxes reflected in the computation of the
Closing Working Capital, (ii) any and all liability with
respect to Taxes which are imposed on or incurred by the
Texaco Additive Business for any taxable period beginning
after the Effective Date for the particular Texaco Additive
Business for which the Taxes are imposed or incurred, (iii)
the portion of any Taxes which are imposed on or incurred by
the Texaco Additive Business for any taxable period
beginning before and ending after the Effective Date which
are allocable as set forth in Section 10.1(c) to the period
after the Effective Date, and (iv) 50% of the Transfer Taxes
referred to in Section 10.1(a)(iii).
(c) Post-Effective Date Determination. When necessary
for the purposes of Section 10.1(a) or (b) to determine the
portion of any Taxes of the Texaco Additive Business for a
taxable period beginning before and ending after the
Effective Date which are allocable between the Seller and
Buyer, the determination shall be made, in the case of
property or ad valorem Taxes (other than those based upon or
measured by net income) on a per diem basis and, in the case
of other Taxes including, without limitation, franchise
taxes, but excluding Transfer Taxes as set forth in Sections
10.1(b) on the assumption that any period beginning before
and ending after the Effective Date constitutes two separate
taxable periods, the first ending on the Effective Date and
the second beginning on the day after the Effective Date,
for which the actual taxable events occurring during such
periods shall be taken into account. Notwithstanding the
foregoing in the case of Income Taxes of the Belgian
Company, Texaco Brazil and Texaco Korea, exemptions,
allowances and deductions for the taxable period beginning
before and ending after the Effective Date that are
calculated on an annual or periodic basis, such as the
deduction for depreciation, shall be apportioned between the
period ending on the Effective Date and the period beginning
after the Effective Date in a manner similar to that
described in Treasury Regulation Section 1.1502-76(b)(4),
taking into account the laws of Belgium, Brazil and Korea
respectively. In this regard, Buyer and Seller agree that
(i) the last day of the Belgian Company's, Texaco Brazil's
and Texaco Korea's taxable years shall be the Closing Date
and (ii) that all items of income, interest, loss or
deduction recognized or incurred for Income Tax purposes
through the Closing Date shall be included in the Returns
filed by Seller. Buyer and Seller covenant and agree that
each of them shall file all returns with respect to Income
Taxes, and maintain all books and records and conduct all
audits and legal and administrative proceedings on a basis
and in a manner consistent with Section 10.1(c).
(d) Refunds. Refunds plus interest received by Seller
due to the carryback of losses, credits, deductions or other
Tax Benefits incurred, created or realized by the Belgian
Company, Texaco Brasil or Texaco Korea with respect to any
period after the Effective Date, shall belong to the Belgian
Company, Texaco Brasil or Texaco Korea, as the case may be,
and if received by Seller shall be paid to Buyer or to the
relevant Affiliates of Buyer, as the case may be, within
thirty (30) days of Seller's receipt of same. Seller shall
apply for any such refund within thirty (30) days of any
appropriate written request by Buyer. Seller shall be
reimbursed by the Belgian Company, Texaco Brasil or Texaco
Korea, as appropriate, for its actual out-of-pocket costs
and expenses incurred in connection with the filing of any
such refund claim. If Buyer or any Buyer's Affiliate
receives (whether by payment, credit, offset or otherwise) a
refund, including interest, if any, in respect of any Taxes
for which Seller is liable under Section 10.1(a), Buyer or
Buyer's Affiliate receiving the refund shall, within thirty
(30) days after receipt of such refund, remit it to Seller.
Buyer and Seller shall cooperate with each other to take all
reasonable steps necessary to claim any such refunds.
(e) Tax Attributes. Seller shall provide, as soon as
practicable after Closing, to Buyer the amounts of any net
operating losses, net capital losses, earnings and profits,
previously taxed income, foreign tax credits, and any other
Income Tax attribute or other tax attributes that Texaco
Brasil, the Belgian Company and Texaco Korea possess as of
the Effective Date.
Section 10.2 Tax Indemnification. Notwithstanding the
provisions of Part Nine, Buyer and Seller covenant to each other
as follows:
(a) Seller's Indemnification. Seller shall indemnify
the Buyer against any and all liability for Taxes imposed on
the Texaco Additive Business for which Seller is liable
under Sections 10.1(a). Any indemnity payable by Seller
shall be paid within the later of ten (10) days after
Buyer's request therefore or ten (10) days prior to the date
on which the liability upon which the indemnity is based is
required to be satisfied by the Belgian Company, Texaco
Brazil, Texaco Korea or the Buyer. If the Tax liability of
the Texaco Additive Business for any taxable period ending
on or prior to the Effective Date, other than an income tax
liability of Seller and Seller's Affiliates with respect to
the transfer of ownership of the Texaco Additives Business
from Seller and Seller's Affiliates to Buyer and Buyer's
Affiliates is increased as the result of an adjustment by a
Governmental Body and the item which resulted in such
increase creates a Tax Benefit which is available to Buyer
or an Affiliate of Buyer (each such party being referred to
hereinafter as "Tax Beneficiary") for any taxable period
beginning after the Effective Date, then Buyer or its
Affiliate shall promptly pay to Seller an amount equal to
the Tax savings directly attributable to and which would not
have been realized but for such Tax Benefit. The amount
payable under the preceding sentence shall in no event
exceed the amount of Tax cost borne by Seller as a result of
the Governmental Body's adjustment. Similarly, to the
extent a Tax Beneficiary's Taxes for periods after the
Effective Date are reduced by Tax Benefits (including but
not limited to tax credits, net operating losses, capital
losses, etc.) arising from periods prior to the Effective
Date, then Buyer shall or its Affiliates shall within the
later of ten (10) days after Seller's request or the date
the Tax Beneficiary is deemed to have received the Tax
Benefit pay to Seller an amount equal to the Tax savings
directly attributable to such Tax Benefit. A Tax
Beneficiary shall be deemed to have received such Tax
benefit (i) on the date the Tax savings are received by way
of refund of previously paid Taxes or (ii) on the date of
filing of a Tax Return reflecting such savings. Any Party
("Payee") which claims the benefit of a payment from another
Party pursuant to Part Ten will make available to the Party
from which payment is sought ("Payor") a written memorandum
which will set forth the basis upon which the claim for
payment is framed. Said statement will also describe the
Returns, if any, to be filed by the Payor with respect to
the subject matter of the payment claim. When the subject
matter of the payment claim is a Tax Benefit, the Payor will
supply the Payee with a statement from a nationally
recognized certified public accounting firm detailing the
amount and time when the Tax Benefit is realized.
(b) Buyer's Indemnification. Buyer shall indemnify
the Seller against any and all liability for Taxes imposed
on the Texaco Additive Business for which Buyer is liable
under Section 10.1(b). Any indemnity payable by Buyer
pursuant to this Section 10.2(b) shall be paid within the
later of ten (10) days after Seller's request therefor or
ten (10) days prior to the date on which the liability upon
which the indemnity is based is required to be satisfied by
Seller.
(c) Payments. All payments made by Buyer or Seller
under this Part Ten shall be treated as adjustments to the
Purchase Price of the Texaco Additive Business to which the
payment most appropriately relates. All computations of
payments due under Part Ten shall reflect the actual cash
cost or benefit of the Tax with respect to which the
indemnity obligation arises (by way of example, if Texaco
Brazil or Texaco Korea receive a refund of Tax attributable
to a period prior to the Effective Date but must include the
amount thereof in its taxable income, only the net after-Tax
benefit enjoyed by such corporation is required to be paid
by Buyer to Seller. Similarly, if Texaco Brazil and Texaco
Korea are burdened by a Tax that Seller indemnifies Buyer
for and such corporation then or later realizes a Tax
savings by virtue of having paid or accrued the Tax, Buyer
will refund such amount of Tax savings to Seller). The
first sentence of this Section 10.2(c) notwithstanding, if
any party entitled to indemnification under this Part Ten
has any Tax imposed on it by reason of any payment to it
made pursuant to this Section 10.2(c) (including pursuant to
this sentence) ("Additional Section 10.2(c) Taxes"), the
party liable for such payment shall also be liable for such
Additional Section 10.2(c) Taxes.
(d) No Liability, Etc.. Notwithstanding any provision
to the contrary that may be contained in Part Nine or Part
Ten of the Agreement: (i) Buyer and its Affiliates shall
have no liability to pay Seller an amount with regard to any
Tax savings which are attributable to and which would not
have been realized by Buyer or its Affiliates but for a
change in the Income Tax liability of Seller and Seller's
Affiliates with respect to an adjustment by a Governmental
Body to the Purchase Price allocation as set forth in
Section 10.9; and (ii) with respect to the Belgian Business,
Buyer and its Affiliates shall have no liability to pay any
part of any Transfer Tax or penalty which is attributable to
a failure to declare or pay any Transfer Tax applicable to
the transfer of ownership of the Texaco Additives Business
from Seller and Seller's Affiliates to Buyer and Buyer's
Affiliates, and if such Transfer Tax or penalty is assessed
against Buyer or its Affiliates, Seller shall indemnify
Buyer and its Affiliates against such Transfer Tax or
penalty provided that in either case (a) Buyer or Buyer's
Affiliates shall remit to Seller or Seller's Affiliates the
amount of any Tax Benefit realizable by Buyer or Buyer's
Affiliates on account of payment of any such Transfer Tax or
penalty which is indemnified by or paid directly by Seller
or Seller's Affiliates under Section 10.2(d)(ii), (b) Buyer
and Seller shall cooperate as appropriate to secure proper
exemptions from Transfer Taxes, including without
limitation, making "going concern" representations for U.K.
VAT purposes, (c) no indemnification for any Belgian
Transfer Tax or penalty shall be applicable under Section
10.2(d)(ii) if Buyer or its Affiliates causes the Belgian
Company to merge with a Person within less than three (3)
years after the Closing Date, and (d) Buyer and its
Affiliates shall allow Seller and Seller's Affiliates to
conduct or participate in a contest against such Transfer
Tax Assessment before the appropriate taxing authority or
court of competent jurisdiction, at Seller and Seller's
Affiliates own expense.
Section 10.3 Tax Returns. Seller and Buyer covenant with
each other as follows:
(a) Seller. Seller shall cause to be prepared and
filed all Tax Returns to be filed in respect of all Taxes
related to the Texaco Additive Business, including
specifically Texaco Belgium, the Belgian Company, Texaco
Brazil and Texaco Korea, for periods ending on or before the
Closing Date and shall cause to be paid all Taxes which are
due for such periods. All Tax payments made hereunder by
Seller for Taxes, the liability for which is appropriately
Buyer's under this Part Ten, shall be promptly reimbursed by
Buyer to Seller as provided herein. With respect to Tax
Returns filed by Seller that include or are in respect of
the Belgian Company, Texaco Brasil or Texaco Korea for any
taxable period that includes the period from the Effective
Date through the Closing Date ("Closing Date Period"),
Seller shall pay to Buyer the amount, if any, by which the
Taxes of Seller or any Seller Affiliate or the Texaco
Additive Business are reduced for the taxable period that
includes the Closing Date or for any prior taxable period as
a result of any Tax benefits in the nature of net operating
losses, capital losses, investment tax credits or other tax
credits which are realized by the Belgian Company, Texaco
Brasil or Texaco Korea during the Closing Date Period. Such
payments shall be made no later than ten (10) days after the
date the Tax Benefit is deemed to have been received by
Seller, the Seller Affiliate, or the Texaco Additive
Business, as the case may be, in accordance with Section
10.2(a); provided, however, that Seller shall not be
required to pay to Buyer any amounts that are deemed
realized by the Texaco Additive Business after the Closing
Date. Seller shall supply Buyer with a statement from a
nationally recognized certified public accounting firm
detailing the net after-Tax amount of such Tax Benefit and
the time when it is received. Where available Seller shall
elect to cause the taxable year for Income Tax Returns of
the Belgian Company, Texaco Brazil and Texaco Korea to
terminate on the earlier of the Effective Date or the
Closing Date.
(b) Buyer. Buyer shall cause to be prepared and filed
all Tax Returns which are required by any Governmental Body
to be filed in respect of all Taxes related to the Texaco
Additive Business, including specifically the Belgian
Company, Texaco Brazil and Texaco Korea, for taxable periods
beginning on or after the Effective Date and shall cause to
be paid all Taxes which are due for such periods. In
addition, Buyer shall have the responsibility of filing Tax
Returns for periods beginning prior to the Effective Date
but ending after the Closing Date. All Tax payments made
hereunder by Buyer for Taxes, the liability for which is
appropriately the Seller's under this Part Ten, shall be
promptly reimbursed by Seller to Buyer as provided herein.
Section 10.4 Tax Agreements. All Tax Sharing Arrangements
to which the Texaco Additive Business is subject shall be
terminated as of the Effective Date canceling all rights and
obligations thereunder.
Section 10.5 Tax Audits. From and after the Closing Date
(i) Buyer shall immediately give notice to Seller of the
commencement of any Tax audit, examination or notice of a
proposed adjustment arising from or affecting the Belgian
Company, Texaco Korea or Texaco Brazil for any period beginning
prior to the Effective Date; (ii) Buyer shall immediately furnish
Seller with copies of all correspondence (including without
limitation notices, requests, explanations, determinations,
schedules, charts and lists) received; (iii) Seller shall have
the right, at Seller's cost, to approve in advance any
correspondence sent to any taxing authority by Buyer with respect
to any such Tax audit, examination or notice of proposed
adjustment (including but not limited to extending any applicable
statute of limitations), to the extent it would impact on the Tax
liability arising from such Tax audit; (iv) Seller shall have
authority, at Seller's cost, to supervise and control, in
consultation with Buyer, the conduct of, and to represent Texaco
Brazil and Texaco Korea in connection with, any Tax audit for any
taxable period ending on or prior to the Closing Date; and (v)
Seller shall be entitled, at Seller's cost, to control the
actions taken or proposed to be taken to avoid, mitigate or
otherwise defend against any change or imposition of Tax arising
from any such Tax audit; and provided, further, that Seller shall
not settle or otherwise resolve any issue which may affect the
liability for Taxes for any period with respect to which Buyer,
the Belgian Company, Texaco Brazil or Texaco Korea have any
responsibility for payments thereof, without Buyer's prior
written consent, which consent shall not be unreasonably
withheld. With respect to all such Tax audit matters all Parties
hereby agree to cooperate with each other and to take such
actions and execute such agreements, Tax forms and documents as
the Party controlling the matter may reasonably request.
Section 10.6 Other Assistance Regarding Taxes. Seller
shall provide Buyer with such relevant Tax Returns and supporting
information of Texaco Belgium, the Belgian Company, TBSA, Texaco
Brazil and Texaco Korea, including access to such employees,
books and records as may be reasonably requested, to the extent
it is reasonably necessary for Buyer, the Belgian Company, Texaco
Brasil or Texaco Korea in connection with the preparation of any
Tax Returns, any audit, or any judicial or administrative
proceeding or determination relating to liability for Taxes
covered by this Part Ten of the Belgian Company, Texaco Brasil or
Texaco Korea and shall provide Buyer, the Belgian Company, Texaco
Brasil or Texaco Korea with such assistance as Buyer may
reasonably request, at no cost to Buyer in connection with such
Tax matters. Buyer shall provide Seller with such relevant Tax
Returns and supporting information of Buyer, to the extent it is
reasonably necessary in connection with the preparation of any
Tax Returns, any audit, or any judicial or administrative
proceeding or determination relating to liability for Taxes
covered by this Part Ten of the Belgian Company, Texaco Brasil or
Texaco Korea for periods ending on or before the Closing Date,
and shall provide Seller with such assistance, including access
to employees, books and records, as Seller may reasonably
request, at no cost to Seller, in connection with such Tax
matters. All Parties agree to keep such Tax Returns and
supporting information confidential.
Section 10.7 FIRPTA Certificate. At the Closing, Seller
shall deliver to the Buyer an affidavit of Seller, signed by an
officer of Seller, in the form attached hereto as Exhibit J.
Notwithstanding anything to the contrary set forth in the
Agreement, Buyer shall be entitled to withhold the requisite
amounts from the Purchase Price if Seller fails to fulfill all of
its obligations under this Section 10.7.
Section 10.8 Preservation of Records. For a period of ten
(10) years after the Closing Date, Buyer shall (i) preserve and
retain the corporate, accounting, legal, auditing, Tax and other
books and records that relate to the conduct of the Texaco
Additive Business prior to the Effective Date and (ii) make such
books and records available at the then current administrative
headquarters of the Texaco Additive Business (or at any other
place as reasonably agreed to by Buyer and Seller) to Seller upon
reasonable notice and at reasonable times, it being understood
that Seller shall be entitled to make and retain copies of any
such books and records as it shall deem necessary at Seller's
expense. In the event Seller desires Buyer to extend the period
referred to in the first sentence of this Section 10.8 beyond ten
(10) years, it may do so if (x) the applicable statute of
limitations for the years with respect to which the books and
records relate has not expired and (y) Seller requests such
extension from Buyer in writing and informs Buyer that the
statute of limitations has not yet expired. Each such extension
shall not be for more than twelve (12) months. In the event
Buyer fails to maintain such records and as a result of such
failure the Seller's Tax liabilities as described in Part Ten are
increased, then Buyer shall indemnify and hold harmless the
Seller for any such increase in Taxes (but only to the extent
that such records were held by the Belgian Company, Texaco Korea
or Texaco Brazil at the Closing Date or transferred to Buyer or
its Affiliates).
Section 10.9 Allocation of Purchase Price. The Purchase
Price shall be allocated as set forth on Schedule 2.2. Each
Party shall notify the other in the event it believes that any
taxing authority takes a position or is proposing to take a
position inconsistent with such allocation. The Parties
recognize that certain reporting requirements as imposed by
Section 1060 of the Code apply to the transfer of the U.S. Assets
under the Agreement. Therefore Seller and Buyer shall jointly
prepare IRS Form 8594 pursuant to Temporary Treasury Regulation
Section 1.1060-IT to report the allocation of the Purchase Price
among the U.S. Assets as set forth on Schedule 2.2. Each Party
agrees not to assert, in connection with any Return, tax audit or
similar proceedings, any allocation of the Purchase Price that
differs from that set forth on Schedule 2.2.
Section 10.10 Conflict. In the event of a conflict
relating to Taxes between the provisions of Part Ten and any
other provisions of the Agreement, including without limitation
the indemnity, the provisions of Part Ten shall control.
PART ELEVEN
CONDITIONS PRECEDENT
Section 11.1 Conditions Precedent of Buyer. The
obligations of Buyer to consummate the transactions contemplated
by the Agreement are subject to the following conditions:
(a) Representations and Warranties True
at Closing. The representations and warranties of
Seller contained in the Agreement or in any certificate or
document delivered pursuant to the provisions hereof, or in
connection with the transactions contemplated hereby were
true and complete when made, and shall be true and complete
on and as of the Closing Date as though such representations
and warranties were made at and as of such date except as
otherwise expressly provided herein.
(b) Compliance with Agreement. On and as of the
Closing Date, Seller shall have performed and complied with
all, and shall have caused Seller's Affiliates to perform
and comply with all, covenants, agreements and conditions
required by the Agreement to be performed and complied with
prior to or on the Closing Date.
(c) Certified Resolutions and Officers'
Certificate. Seller shall have delivered to Buyer
(i) a certificate dated the Closing Date signed by the
Secretary or an Assistant Secretary of Seller with respect
to the action of Seller's Board of Directors authorizing the
transactions contemplated by the Agreement, and (ii) a
certificate, dated the Closing Date and signed by the
Chairman, Vice Chairman or a Vice President of Seller
certifying in such detail as Buyer may reasonably request to
the fulfillment of the conditions specified in subparagraphs
Section 11.1(a) and (b).
(d) Approval of Proceedings. All actions,
proceedings, instruments and documents required of Seller
and Seller's Affiliates to carry out the Agreement, or
incidental thereto, and all other related legal matters
shall have been approved by counsel for Buyer, which
approval shall not be unreasonably withheld.
(e) Opinion of Counsel. There shall have been
delivered to Buyer the opinion of such counsel designated by
Seller as Buyer may approve, which approval shall not be
unreasonably withheld, all dated the Closing Date as set
forth on Exhibit E.
(f) Injunction, Etc. On the Closing Date, the
statutory waiting period required under the Hart Scott
Rodino Antitrust Improvements Act of 1976, as amended and
foreign competition laws, where applicable, has expired or
terminated early and there shall be no injunction, writ, or
preliminary restraining order or any order of any nature
issued by a court or other Governmental Body of competent
jurisdiction directing that the transactions provided for
herein or any of them not be consummated as herein provided
or imposing any conditions on the consummation of the
transactions contemplated hereby and no material proceeding
or lawsuit shall have been commenced or threatened by any
Governmental Body or other Person with respect to any of the
transactions contemplated by the Agreement and the Closing
of the transaction as contemplated does not violate any
material law or regulation, foreign or domestic.
(g) Consents. All consents, approvals, clearances and
authorizations referred to in or contemplated by Section
4.3(c) (excluding any consents contemplated by Section
4.2(a) and the consent of the Brazilian Antitrust
Department) or in Schedule 3.1(e), 3.2(e), 3.3(e), 3.4(c),
3.5(c), 3.6(e), 3.7(c), 3.8(e), 3.9(e), 3.10(e) and
4.1(l)(iii) shall have been obtained.
(h) Service, Supply and Technology Agreements. Seller
or Seller's Affiliates shall have entered into the Service,
Supply and Technology Agreements as set forth in Schedule
11.1(h).
(i) Patent Assignment Agreements. Seller and its
Affiliates shall have entered into the Patent Assignment
Agreements.
(j) Trademark Agreements. Seller shall have entered
into the Trademark Agreements.
(k) Resignations. Seller shall have delivered to
Buyer the resignations of officers and directors of Texaco
Korea, the Belgian Company and Texaco Brasil.
(l) Environmental Permits. Buyer shall have obtained
all environmental permits necessary to operate the Texaco
Additive Business after the Closing except as set forth in
Section 6.2(d).
(m) Brazilian Fee Properties. Seller shall provide a
Certificate from the Registry of Real Property with respect
to the Brazilian Fee Properties providing that the Brazilian
Fee Properties' title is Marketable and Indefeasible subject
to the applicable Permitted Encumbrances.
(n) Belgium Property. Buyer shall have received from
Seller a statement dated the Closing Date issued by notary
Hans Berquin, Kloosterdreef 7, 1050 Brussels or by any other
notary mutually satisfactory to Buyer and Seller, confirming
to the full satisfaction of Buyer that the Belgian Company
owns the Belgian Property and has good Marketable and
Indefeasible title thereto.
(o) Additive Plants Support Services. Buyer and
Huntsman shall have executed and delivered the Additive
Plants Support Services Agreements as set forth on Schedule
11.1(o).
(p) Employees. Acceptance of employment with Buyer of
the research and development employees which in Buyer's
judgment are sufficient to transfer the Intellectual
Property to be purchased by Buyer.
(q) Assigned Contracts; Consents. Seller shall have
caused the contracts and agreements as set forth in Schedule
11.1(q) to be assigned to Buyer or one of Buyer's Affiliates
and written consent to the assignment of contracts and
agreements have been obtained by Seller and Buyer shall have
such consents.
(r) Copolymer Agreements. The Contracts as set forth
in Schedule 11.1(q) ("Copolymer Contracts") have been
extended through December 31, 2002 without modification or
amendment and DSM Copolymer, Inc. and its Affiliates have
agreed to the extended Copolymer Contracts to Buyer as
required under the terms of such contracts. On or prior to
the Closing Date Buyer has received a copy of the extension
of Copolymer Contracts and the consents to assignment of the
Copolymer Contracts as provided above.
(s) TSCA Matters. Resolution to Buyer's satisfaction
of the Toxic Substances Control Act ("TSCA") Inventory and
EINECS status of the sulfonate products manufactured by
Witco Corporation and purchased by Texaco Additive Company
as well as the Texaco TSCA matters as set forth in Schedule
11.1(s).
(t) Ghent Gas Pipeline. Buyer shall be satisfied with
the terms and conditions substantially as set forth in
Schedule 11.1(t) of the proposed sale or encumbrances to be
granted by Texaco Belgium or the Belgian Company to
Distrigas or an affiliated company to be constructed on the
Ghent property.
(u) Easement and Rights of Way. Buyer shall be
reasonably satisfied with proposed easements and rights of
way securing access to Buyer's property in Port Arthur,
Texas; Rio de Janeiro, Brazil; and Ghent, Belgium.
(v) Confidentiality Agreement. Execution of the
Confidentiality Agreement set forth in Schedule 11.1(v) by
Huntsman on behalf of Huntsman and its Affiliates to
maintain in confidence all information obtained by Huntsman
and its Affiliates relating to the Texaco Additives
Business.
(w) Release of Rights. Execution of the release and
covenant not to sue by Huntsman set forth in Section 11.1(w)
releasing any and all rights to purchase the Texaco
Additives Business by Huntsman from Seller and Seller's
Affiliates.
Section 11.2 Conditions Precedent of Seller. The
obligations of Seller to consummate the transactions contemplated
by the Agreement are subject to the following conditions:
(a) Representations and Warranties True at Closing.
The representations and warranties of Buyer contained in the
Agreement or in any certificate or document delivered
pursuant to the provisions hereof, or in connection with the
transactions contemplated hereby, were true and complete
when made, and shall be true and complete on and as of the
Closing Date as though such representations and warranties
were made at and as of such date except as otherwise
expressly provided herein.
(b) Compliance with Agreement. On and as of the
Closing Date, Buyer shall have performed and complied with,
and shall have caused Buyer's Affiliates to perform and
comply with, all agreements and conditions required by the
Agreement to be performed and complied with prior to or on
the Closing Date.
(c) Certified Resolutions and Officers' Certificate.
Buyer shall have delivered to Seller (i) a certificate dated
the Closing Date signed by the Secretary or an Assistant
Secretary of Buyer with respect to the action of Buyer's
Board of Directors authorizing the transactions contemplated
by the Agreement, and (ii) a certificate dated the Closing
Date and signed by the President or a Vice President of
Buyer certifying in such detail as Seller and the Company
may reasonably request to the fulfillment of the conditions
specified in Section 11.2 (a) and (b).
(d) Approval of Proceedings. All actions,
proceedings, instruments and documents required for Buyer to
carry out the Agreement, or incidental thereto, and all
other related legal matters shall have been approved by
counsel for Seller and the Company or such other counsel
designated by Seller which approval shall not be
unreasonably withheld.
(e) Opinion of Counsel of Buyer. There shall have
been delivered to Seller an opinion of counsel designated by
Buyer as Seller may approve, which approval shall not be
unreasonably withheld, dated the Closing Date, as set forth
on Exhibit K, which shall be to substantially the same
effect as the opinion of such counsel delivered to Buyer's
financing sources.
(f) Injunction, Etc. On the Closing Date, the
statutory waiting period required under the Hart Scott
Rodino Antitrust Improvements Act 1976, as amended, and
foreign competition laws, where applicable, has expired or
terminated early and there shall be no injunction, writ, or
preliminary restraining order or any order of any nature
issued by a court or other Governmental Body of competent
jurisdiction directing that the transactions provided for
herein or any of them not be consummated as herein provided,
or imposing any conditions on the consummation of the
transactions contemplated hereby and no material proceeding
or lawsuit shall have been commenced or threatened by any
Governmental Body or other Person with respect to any of the
transactions contemplated by the Agreement and the closing
of the transaction as contemplated does not violate any
material law or regulation, foreign or domestic.
(g) Consents. All consents, approvals, clearances and
authorizations referred to in or contemplated by Section
4.3(c) (excluding any consents contemplated by Section
4.2(a)and the consent of the Brazilian Antitrust Department)
or in Schedule 3.11(c) shall have been obtained.
(h) Service, Supply and Technology Agreements. Buyer
shall have entered into the Service, Supply and Technology
Agreements.
(i) Trademark Agreements. Buyer shall have entered
into the Trademark Agreements.
(j) TSCA Matters. Resolution to Seller's satisfaction
of the TSCA Inventory and EINECS status of the sulfonate
products manufactured by Witco Corporation and purchased by
Texaco Additive Company as well as the Texaco TSCA matters
as set forth on Schedule 11.1(s).
PART TWELVE:
MISCELLANEOUS
Section 12.1 Notices. All notices, consents, requests,
demands, and other communications hereunder shall be in writing
and shall be deemed to have been duly given or delivered if (i)
delivered by hand, (ii) delivered by a recognized overnight
commercial courier (receipt requested), or (iii) sent by
telecopier (with receipt confirmed), provided that a copy is
promptly thereafter mailed in the United States by first-class
postage prepaid mail, to the Party as follows (or to such other
address as any Party shall have last designated by fifteen (15)
days' notice to the other Parties).
If to Seller:
Texaco Inc.
2000 Westchester Avenue
White Plains, New York 10650
Fax: (914) 253-6342
Phone: (914) 253-6150
Attention: Corporate Secretary
If to Buyer:
Ethyl Corporation
330 South Fourth Street
Richmond, Virginia 23217
Fax:
Phone:
Attention: Vice President and General Counsel
Section 12.2 Modification. The Agreement, including this
Section 12.2 and the Schedules, shall not be modified except by
an instrument in writing signed by or on behalf of all of the
Parties.
Section 12.3 Governing Law. The Agreement shall be
governed by and construed and enforced in accordance with the
internal Laws of the State of New York without regard to the
conflict of laws principles thereof, except that for purposes of
determining whether there has been a breach of any obligation
hereunder as a result of a non-compliance with Laws involving
matters of real property or employment (including employee
benefit matters), reference shall be made to the relevant local,
state, provincial or national Law.
Section 12.4 Assignment. The Agreement shall not be
assigned by any Party directly or indirectly to any other Person
(whether by the sale of stock or other transfer of ownership
interest in a Party, or the sale or transfer by a Person that has
an indirect stock or ownership interest in a Party or otherwise);
notwithstanding anything to the contrary herein:
(i) each Party shall have the right to assign all or
any part of its rights and obligations hereunder to one
or more wholly owned Subsidiaries of such Party,
provided that such assignment shall not relieve such
Party from its obligations under the Agreement;
(ii) Buyer (and, in the case of clause (x) below, the
holder or holders, directly or indirectly, of Buyer's
capital stock) shall have the right (x) to sell the
Texaco Additive Business as a whole by means of a sale
of all or substantially all of the assets of Buyer
(including, without limitation, the capital stock of
Texaco Brasil, the Belgian Company and Texaco Korea) to
a Person, and in connection with such sale to assign to
such Person all of Buyer's rights under the Agreement
and to cause such Person to assume all of Buyer's
obligations under the Agreement, or (y) to sell all or
any of the assets of the Texaco Additive Business
constituting a facility or a parcel of land or all of
the Belgian Stock, Brazilian Stock or Korean Stock, to
one or more Persons, and in connection with such sale
to assign to such Person or Persons Buyer's rights
under the Agreement that relate to the assets so sold
and to cause such Person or Persons to assume Buyer's
obligations under the Agreement that relate to the
assets so sold; provided, however, that Buyer shall
have a one time right to assign any or all of its
rights and obligations with respect to any or all of
the Assets under the Agreement in accordance with
Section 12.4(ii)(x) or (y), and thereafter there shall
be no further right of assignment of the rights and
obligations to any such Asset under the Agreement
without the consent of Seller which shall not be
unreasonably withheld (it being understood and agreed
that if any of Buyer's rights under that Agreement are
assigned in accordance with any of Section 12.4(ii)(x)
or (y), Seller shall continue to perform Seller's
obligations under the Agreement that relate to the
rights so assigned); and
(iii) Buyer shall have the right to assign the
Agreement and the Texaco Additive Business to any
Person providing financing for the transactions
contemplated by the Agreement or to any Person
providing to Buyer financing relating to the Texaco
Additive Business, in either case, to secure such
financing, which Person, as a permitted assignee, shall
have the assignment rights as set forth in Section
12.4(i) and (ii), and any permitted assignee of such
Person shall have the assignment rights set forth in
Section 12.4(i) and (ii).
Section 12.5 Counterparts. The Agreement may be executed
in any number of counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the
same instrument.
Section 12.6 Invalidity. If any of the provisions of the
Agreement including the Schedules is held invalid or
unenforceable, such invalidity or unenforceability shall not
affect in any way the validity or enforceability of any other
provision of the Agreement. In the event any provision is held
invalid or unenforceable, the Parties shall attempt to agree on a
valid or enforceable provision which shall be a reasonable
substitute for such invalid or unenforceable provision in light
of the tenor of the Agreement and, on so agreeing, shall
incorporate such substitute provision in the Agreement.
Section 12.7 Entire Agreement and Construction. The
Agreement contains the entire agreement between the Parties
hereto with respect to the agreements and transactions
contemplated herein and all prior understandings and agreements
shall merge herein. There are no additional terms, whether
consistent or inconsistent, oral or written, which are intended
to be part of the Parties' understandings which have not been
incorporated into the Agreement and the Schedules. The Parties
agree that they have jointly participated in the drafting and
preparation of the Agreement and that the language of the
Agreement shall be construed as a whole according to its fair
meaning and not strictly for or against any of the Parties
hereto.
Section 12.8 Expenses. Except as otherwise expressly
provided herein, each Party shall bear its fees, costs and
expenses in connection with the transactions contemplated herein,
including, without limitation, all legal and accounting fees and
disbursements
and fees and expenses of other advisors retained by such Party.
Section 12.9 Waivers and Amendments. All amendments and
other modifications hereof shall be in writing and signed by each
of the Parties. Any Party may by written instrument (i) waive
any inaccuracies in any of the representations or warranties made
to it by any other Party contained in the Agreement or in any
instruments and documents delivered to it pursuant to the
Agreement, or (ii) waive compliance or performance by any other
Party with or of any of the covenants or agreements made to it by
any other Party contained in the Agreement. The delay or failure
on the part of any Party hereto to insist, in any one instance or
more, upon strict performance of any of the terms or conditions
of the Agreement, or to exercise any right or privilege herein
conferred shall not be construed as a waiver of any such terms,
conditions, rights or privileges but the same shall continue and
remain in full force and effect. All rights and remedies are
cumulative.
Section 12.10 Survival of Representations and Covenants.
All representations and warranties contained in the Agreement
shall survive the Closing and continue for a period of thirty
(30) months following the Closing Date; provided, that (i) the
representations and warranties of the Seller (x) contained in
Sections 3.1(o) and 3.3(q) shall continue for a period of four
(4) years following the Closing Date and (y) contained in Section
3.1(g) shall continue for a period of five (5) years following
the Closing Date, (ii) the representations and warranties of the
Seller contained in Section 3.1(m) shall continue until the
termination of the applicable statute of limitation, and (iii)
the representations and warranties of Seller contained in Section
3.3(h) shall continue indefinitely. The covenants and agreements
contained in the Agreement shall survive the Closing and continue
in accordance with their respective terms. In the event Buyer or
Buyer's Affiliates transfer, sell, assign or use all or any part
of the Texaco Additive Business for any purpose other than
industrial, manufacturing, chemical, additive use, or
laboratories supporting such uses, all of Seller's
representations, warranties, covenants, agreements, indemnities
and obligations under Part Eight of the Agreement shall expire
and terminate with respect to such part of the Texaco Additive
Business. Any right of indemnification pursuant to Part Nine
with respect to a claimed breach of a representation or warranty
shall expire at the date of termination of the representation or
warranty claimed to be breached ("Claim Termination Date"),
unless on or prior to the Claim Termination Date a Claim has been
made to an Indemnifying Party. If a Claim is timely made, it may
continue to be asserted beyond the Claim Termination Date of the
representation and warranty to which such Claim relates. A
"Claim" means a written notice asserting a breach of a
representation or warranty specified in the Agreement, which
shall reasonably set forth, in light of the information then
known to the Party giving such notice, a description of and
estimate (if then reasonable to make) of the amount involved in
such breach.
Section 12.11 Section Headings. The section headings in
the Agreement are for convenience of reference only and shall not
be deemed to alter or affect the interpretation of any provision
thereof.
Section 12.12 Termination. The Agreement may be terminated
(i) by mutual written consent of the Parties at any time prior to
the Closing; (ii) by Buyer by notice to Seller given on or before
the Closing Date, if Buyer shall discover any material fact or
condition existing on the date of such termination which is at
variance with any of the representations and warranties of Seller
contained in the Agreement; (iii) by and at the option of the
Seller if the Closing shall not have occurred on or before the
Termination Date; or (iv) by and at the option of the Buyer if
the Closing shall not have occurred on or before the Termination
Date. Upon any termination the Parties shall have no further
obligations under the Agreement; provided, however, Buyer shall
hold all information which it has obtained during the transaction
contemplated hereby, subject to the Confidentiality Agreement,
and the provisions of Sections 4.3(b), 12.3 and 12.8 shall remain
in full force and effect. The Parties understand and agree that,
from and after the Closing Date, the Confidentiality Agreement
shall be of no further force or effect.
Section 12.13 Dispute Resolution. Seller and Buyer
covenant with each other as follows:
(a) Generally. Any claim, controversy or dispute
arising out of, relating to, or in connection with the
Agreement or the agreements and transactions contemplated
hereby, by Buyer, Buyer's Affiliates, Seller or Seller's
Affiliates, including the interpretation, validity,
termination or breach thereof, shall be resolved solely in
accordance with the dispute resolution procedures set forth
in Schedule 12.13. The Parties covenant that they shall not
resort to court remedies except as provided for in Schedule
12.13, or for preliminary relief in aid of arbitration.
(b) Violations. A Party who violates the covenants in
Section 12.13(a) shall pay all the legal costs incurred by
the other Parties in connection with the enforcement
thereof. Suits, actions or proceedings in connection with
violations of the covenants in Section 12.13(a) and Schedule
12.13 shall be instituted in the United States District
Court for the Southern District of New York, and pursuant to
Title IX of the United States Code. Each Party waives any
option or objection which it may now or thereafter have to
the laying of the venue in any such suit, action or
proceeding and irrevocably submits to the jurisdiction of
such court in any such suit, action or proceeding.
Section 12.14 Schedules and Exhibits. The Parties
acknowledge that the Schedules and Exhibits have not been
finalized as of the time of execution and delivery of the
Agreement. The Parties agree to negotiate in good faith and use
reasonable best efforts to finalize such incomplete Schedules and
Exhibits on or prior to forty five (45) days from the date of the
Agreement. In the event that any such Schedule or Exhibit which
is required to be delivered by one Party ("Delivering Party") to
the other Party ("Receiving Party") is not finalized and
delivered by the Delivery Party to the Receiving Party, by forty
five (45) days from the date of the Agreement, or as of such date
is not satisfactory in form and substance to the Receiving Party,
in such Receiving Party's sole and absolute discretion, then the
Agreement may be terminated by the Receiving Party. In the event
that any such Schedule or Exhibit, which must be mutually
prepared by both Parties, has not been finalized by the Parties
by forty five (45) days from the date of the Agreement, or as of
such date is not satisfactory in form and substance to any Party,
in such Party's sole and absolute discretion, then the Agreement
may be terminated by any Party, in such Party's sole and absolute
discretion, then the Agreement may be terminated by any Party.
Any such termination shall be subject to the provisions of the
second sentence of Section 12.12.
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have entered into the
Agreement as of the date first herein above written.
TEXACO INC.
By:
TEXACO OVERSEAS HOLDINGS INC.
By:
S.A. TEXACO BELGIUM N.V.
By:
TEXACO ADDITIVE COMPANY
By:
TEXACO CARIBBEAN INC.
By:
S. A. TEXACO PETROLEUM N.V.
By:
ETHYL CORPORATION
By:
RESTATEMENT OF AMENDMENTS TO PURCHASE AND SALE AGREEMENT
(ADDITIVE BUSINESS)
This Restatement of Amendments to the Purchase and Sale
Agreements (Additive Business), dated as of February 29, 1996
("Restatement of Amendments"), is entered into and made by and
between Texaco Inc., a Delaware corporation, having an office at
2000 Westchester Avenue, White Plains, New York 10650 ("Seller")
acting on behalf of itself and the Selling Subsidiaries, S.A.
Texaco Belgium N.V., a society anonyme organized under the laws
of the Kingdom of Belgium, having an office at Avenue Arnaud
Fraiteur 25, B-1050, Brussels, Belgium ("Texaco Belgium"), S.A.
Texaco Petroleum N.V., a society anonyme organized under the
laws of the Kingdom of Belgium, having an office at Avenue
Arnaud Fraiteur 25, B-1050, Brussels, Belgium ("Texaco
Petroleum"), Texaco Overseas Holdings, Inc., a Delaware
corporation, having an office at 32 Loockerman Square, Suite
L-100, Dover, Delaware 19901 ("TOHI"), Texaco Additive Company,
a Delaware corporation, having an office at 3040 Post Oak
Boulevard, Houston, Texas 77056 ("Company"), Texaco Caribbean
Inc., a Delaware corporation, having an office at 150 Alhambra
Circle, P.O. Box 343300, Coral Gables, Florida 33134-4534
("Texaco Caribbean"), and Ethyl Corporation, a Virginia
corporation having an office at 330 South Fourth Street,
Richmond, Virginia 23217 ("Buyer"). Capitalized terms used but
not defined herein have the meanings assigned to such terms in
the Purchase Agreement.
WHEREAS, Seller, Texaco Belgium, Texaco Petroleum, TOHI,
Company, Texaco Caribbean and Buyer wish to (i) amend the
Purchase and Sale Agreement (Additive Business) dated as of
September 22, 1995 between Seller, Texaco Belgium, Texaco
Petroleum, TOHI, Company, Texaco Caribbean and Buyer and (ii)
restate all amendments made to the Purchase Agreement as of
December 31, 1995 and February 23, 1996 (the "Purchase
Agreement").
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements in the Purchase Agreement,
Seller, Texaco Belgium, Texaco Petroleum, TOHI, Company, Texaco
Caribbean and Buyer agree as follows:
1. Section 1.2 Definitions of the Purchase Agreement is
amended to read as follows:
"Belgian Stock" means One Million One Hundred Eighty Nine
Thousand Two Hundred Fifty (1,189,250) shares of the Belgian
Company which are issued.
"Termination Date" means February 29, 1996.
2. Section 1.2 Other Definitions. The addition of the
following defined terms:
"Excluded Products" 4.1(q)
"Promissory Note" 2.2
"Principal Reduction" 10.9
The deletion of the term:
"Assumption Agreements"... 2.3(c)
3. Section 2.2 shall be deleted and the following shall replace
it in its entirety:
Section 2.2 Purchase Price. The purchase price of the U.S.
Assets, the Belgian Stock, the Brazilian Stock, the Korean
Stock, the Miscellaneous Assets and the Intellectual Property
shall be One Hundred Fifty One Million Two Hundred Thousand
Dollars ($151,200,000) ("Asset Consideration") plus the Closing
Working Capital as determined in accordance with Section 2.4
(collectively, the "Purchase Price"). At the Closing, Buyer
shall delivery to Seller an amount equal to Ninety One Million
Two Hundred Thousand Dollars ($91,200,000) plus the Estimated
Working Capital in cash and a promissory note with the principal
amount of Sixty Million Dollars ($60,000,000) payable on
February 26, 1999 bearing interest per annum calculated by
adding fifty (50) basis points to the three (3) year U.S.
Treasury Note rate quoted by Chemical Bank, New York City, at
the close of business on the last Business Day prior to the
Closing Date payable quarterly and substantially in the form
attached as Exhibit I (the "Promissory Note").
4. Section 2.3(b)(ii) shall be amended by deleting the words
from "it being understood" to the end of the sentence and
inserting a period after "Business".
5. Section 2.3(c) shall be amended by (i) deleting the first
sentence of the section and inserting the following sentence,
"At the Closing Buyer hereby agrees to assume the Assumed
Liabilities.", (ii) deleting "or Assumption Agreements" at the
end of the second sentence and (iii) any reference to
"Assumption Agreement" shall be deleted and "Agreement" shall be
inserted.
6. Section 2.3(e) shall be amended by deleting the sentence
"Seller's satisfaction of any Retained Liabilities after the
Closing Date shall be treated as adjustments to the Purchase
Price of the Brazilian Stock, the Belgian Stock or the Korean
Stock, as the case may be."
7. Section 3.8(f) shall be amended by deleting the words "One
Thousand Two Hundred and Forty Nine (1,249)" and inserting One
Million One Hundred Eighty Nine Thousand Two Hundred Forty Nine
(1,189,249).
8. Section 3.11(a)-(d) shall be amended to insert "and the
Note" after "the Agreement".
9. The following shall be added as new Section 4.1(d):
(vi) entering into and performing the Agreement regarding
Excluded Contracts dated as of the Closing Date between Buyer
and Seller or
(vii) performing Seller's responsibilities relating to the
sale of Buyer's products pursuant to the terms of Schedule
4.3(s) Caltex Protocol and the Additive Supply Agreement as it
applies to the sale of marine sulfonate products, TLA414 and
TLA4051 to Caltex.
10. Section 4.1(l)(xiii) shall be amended by adding "Except as
set forth in Schedule 4.1(l)(xiii),".
11. Section 4.1(l)(ix) shall be amended by changing the
Schedule reference on the third to the last line from "Schedule
4.1(m)(ix) to Schedule 4.1(l)(ix)".
12. Add the following as Section 4.1(q):
Section 4.1(q) Excluded Products. Seller covenants that on
the Closing Date, Seller shall not sell, transfer or otherwise
convey to Buyer or Buyer's Affiliates any lubricating
composition, concentrate, component, or additive product which
is within the scope of one or more claims of U.S. Patent No.
4,867,890 or any foreign counterpart patents ("Excluded
Products") and such Excluded Products shall not be included in
determining Closing Working Capital pursuant to Section 2.4.
Seller further covenants that neither Seller nor any of its
Affiliates have made, used or sold such Excluded Products since
October 1, 1995.
13. Section 4.3(f). Delete the period at the end of the first
sentence; insert a comma in its place and lower case the "If".
14. Section 4.3(u) shall be amended as follows: (1) inserting
in the eleventh line after "(iii)" and before "due" the words
"during the six (6) year period after Closing Date" and (ii) by
deleting the comma in the twelfth line after the word
"terminated"; inserting a semicolon in its place and add the
following language "or (iv) during the six (6) year period after
Closing Date, TBSA terminates the Rio Lease for reasons other
than breach or default of the sublease by Buyer or its
Affiliates except for acts beyond TBSA's control.
15. Section 9.1(v) shall be amended by deleting "Thirty (30)"
and inserting "Twenty-three (23)".
16. Section 9.1 shall be amended by adding to the beginning of
Section 9.1(iv) "excluding the claims set forth in Section
9.1(x)"; by deleting the "or," before "(v)", by deleting the
"and" before "(vi)" and adding in the third line from the bottom
after "Excluded Employee" by the following:
(vii) Texaco or Texaco's Affiliates actions related to the
business relationship with NCS, including the litigation, Nippon
Chemical Sales Co., Ltd. v. Texaco Inc. and Texaco Additive
Company in Delaware and Nippon Chemical Sales Company, Ltd.'s
application for provisional injunction with respect to legal
relations against Texaco Additive Company in Tokyo, Japan.
(viii) breach or nonfulfillment of any covenant, agreement,
obligation or undertaking of Seller, Texaco Belgium and Texaco
Petroleum N.V. under the terms of the Framework Agreement dated
as of February 29, 1996 by and among Texaco Belgium, Texaco
Petroleum N.V. and Buyer and Ethyl Additives Corporation and
(ix) breach or nonfulfillment of any covenant, agreement,
obligation or undertaking of Texaco Belgium and S.A. Texaco
Petroleum N.V. under the terms of the Share Purchase Agreement
dated as of February 29, 1996 by and among Texaco Belgium and
S.A. Texaco Petroleum N.V. and Buyer and Ethyl Additives
Corporation.
(x) additive products sold to Castrol North America Automotive
Inc. by the Company with an alleged odor problem prior to the
Closing Date and any claim by Castrol North America Automotive
Inc. regarding the failure of the Company to pay for components
supplied by Castrol North America Automotive Inc. to the Company
prior to the Closing Date.
17. Section 10.9 shall be amended by inserting after the first
sentence the following: "Should the principal of the Promissory
Note referenced in Section 2.2 of the Agreement be reduced
pursuant to the Conditions contained in the Promissory Note
("Principal Reduction"), Seller and Buyer agree that Schedule
2.2 of the Purchase Agreement shall be amended to reduce the
amount of the Purchase Price allocated to Intangibles and
Technology which are U.S. Assets by the amount of the Principal
Reduction. Within this category, the reduction shall be applied
first against the Purchase price allocated to the DSM Copolymer
contract, then against the Purchase Price allocated to Patents,
and lastly against the Purchase Price allocated to other
Intellectual Property".
18. Section 11.1(r) shall be amended by changing the Schedule
reference in the second line to "Schedule 11.1(r)".
19. Section 11.1(w) shall be amended by changing Section
11.1(w) reference in the second line to "Schedule 11.1(w)".
20. Section 12.14 Schedules and Exhibits of the Purchase
Agreement shall be amended by deleting January 31, 1996 where it
appears and replacing it with February 29, 1996.
21. Exhibit F to the Purchase Agreement is deleted.
22. All other provisions in the Purchase Agreement shall remain
in full force and effect.
23. This Restatement of Amendments may be executed in multiple
counterparts, each of which shall be deemed to be an original
but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have entered into this
Restatement of Amendments to the Purchase Agreement as of the
date first herein above written.
TEXACO INC.
By:
TEXACO OVERSEAS HOLDINGS INC.
By:
S.A. TEXACO BELGIUM N.V.
By:
TEXACO ADDITIVE COMPANY
By:
TEXACO CARIBBEAN INC.
By:
S. A. TEXACO PETROLEUM N.V.
By:
ETHYL CORPORATION
By:
