SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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) AUGUST 15, 1997
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THE B.F.GOODRICH COMPANY
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(Exact name of registrant as specified in charter)
New York 1-892 34-0252680
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
4020 Kinross Lakes Parkway, Richfield, Ohio 44286-9368
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 330-659-7600
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Not Applicable
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(Former name or former address, if changed since last report.)
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Item 2. Acquisition or Disposition of Assets
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On August 15, 1997, the Company completed the disposition of its chlor-
alkali and olefins (CAO) business. This transaction was reported in the
Company's Form 10-Q for the Quarter Ended June 30, 1997 and in Form 8-K dated
October 16, 1997.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits
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Exhibit 2 Plan of Disposition: Purchase and Sale Agreement between
The B.F.Goodrich Company and Westlake Monomers Corporation
dated July 16, 1997.
Exhibit 99 Unaudited Pro Forma Consolidated Balance Sheet as of June
30, 1997
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE B.F.GOODRICH COMPANY
By /s/Nicholas J. Calise
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Nicholas J. Calise, Secretary
Dated: October 27, 1997
EXHIBIT 2
PURCHASE AND SALE AGREEMENT
between
THE B.F.GOODRICH COMPANY
and
WESTLAKE MONOMERS CORPORATION
July 16, 1997
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Table of Contents
Page
1. Purchase and Sale of Assets..........................................1
1.1. Purchase and Sale.........................................1
1.2. Assets to be Conveyed.....................................2
1.3. Assets Not to be Conveyed.................................5
1.4. Conveyance Instruments and Related Matters................7
2. Purchase Price - Funds...............................................9
2.1. Purchase Price............................................9
3. The Closing..........................................................9
3.1. Closing and Closing Date..................................9
3.2. Title, Possession, Risk of Loss..........................10
3.3. Mechanics of Closing.....................................10
4. Conduct Prior to the Closing and Certain Covenants
and Other Matters...................................................10
4.1. Conduct of Business......................................10
4.2. FTC Proceedings..........................................13
4.3. Environmental Permits....................................14
4.4. Access to Properties and Records.........................14
4.5. .........................................................15
5. Personnel Employment Arrangements and Employee Benefits.............15
5.1. Personnel................................................15
5.2. Covenant re Personnel....................................17
5.3. Benefits.................................................17
5.4. Cooperation of the Parties...............................25
5.5. Employee Rights..........................................25
5.6. Wage Reporting...........................................26
5.7. Collective Bargaining Agreement..........................26
6. Certain Contracts...................................................26
6.1. Termination of Agreements................................26
6.2. Services Agreement.......................................27
6.3. Technology License Agreement.............................27
6.4. Propane Dock Usage Agreement.............................27
6.5. Access and Easement Agreements...........................27
6.6. Environmental Services Agreement.........................28
7. Representations and Warranties......................................28
7.1. Representations and Warranties of BFG....................28
(a) Corporate Existence and Authority.................28
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(b) Execution and Delivery............................29
(c) Consents and Approvals............................29
(d) Title.............................................29
(e) No Violations.....................................30
(f) Kentucky Location.................................30
(g) Technology........................................30
(h) Employee Matters..................................31
(i) Complete Assets; No Misrepresentation.............32
(j) Business Arrangements.............................33
(k) Taxes.............................................33
(l) Compliance with Laws..............................33
(m) Prepaid Expenses..................................35
(n) No Default........................................35
(o) Absence of Certain Changes........................35
(p) Litigation........................................36
(q) Anti-Sandbagging..................................36
(r) Ethylene Supply...................................36
7.2. Representations and Warranties of Westlake...............37
(a) Corporate Existence and Authority.................37
(b) Execution and Delivery............................37
(c) No Default........................................37
(d) Claims............................................38
(e) Consents and Approvals............................38
(f) Anti-Sandbagging..................................38
7.3. Updated Exhibits.........................................38
8. Survival; Indemnifications..........................................39
8.1. Survival.................................................39
8.2. Indemnification by BFG...................................39
8.3. Indemnification by Westlake..............................40
8.4. Limitation of Liability..................................41
8.5. Notice of Claim..........................................43
8.6. Amicable Resolution......................................44
9. Conditions to Closing...............................................44
9.1. Conditions Precedent to Obligations of Westlake..........44
9.1.1. Representations, Warranties
and Covenants of BFG..........................44
9.1.2. No Casualty, Loss or Damage...................45
9.1.3. Title Insurance...............................45
9.1.4. Documents.....................................45
9.1.5. Ad Valorem and Other Taxes....................45
9.1.6. Governmental Approvals........................45
9.1.7. Opinions; Corporate Authority.................45
9.1.8. Ethylene Supply...............................46
9.1.9. Westlake's Board Approval.....................46
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9.2. Conditions Precedent to Obligations of BFG...............46
9.2.1. Representations, Warranties and
Covenants of Westlake.........................46
9.2.2. Payment.......................................46
9.2.3. Corporate Authority...........................47
9.2.4. Documents.....................................47
9.2.5. Governmental Approvals........................47
9.2.6. BFG's Board Approval..........................47
9.2.7. Ethylene Supply...............................47
9.3. No Waiver................................................47
10. Termination.........................................................48
10.1. Grounds for Termination..................................48
10.2. Effect of Termination....................................48
11. Receivables, Payables, Apportionment................................48
11.1. Apportionment; Payment Terms.............................49
11.2. Other Taxes..............................................49
12. Additional Covenants................................................49
12.1. Consents to Assignments..................................49
12.2. Books and Records........................................50
12.3. Financial Information and Other Assistance...............51
12.4. Remedial Investigations and Measures ....................53
12.5. Efforts to Comply With Preconditions.....................54
12.6. Efforts of Closing.......................................54
12.7. Services for Geon........................................55
12.8. Option on Weld Shop......................................55
13. Miscellaneous.......................................................55
13.1. Notice...................................................55
13.2. Bulk Sales Laws..........................................56
13.3. Further Documents........................................56
13.4. Assignability............................................56
13.5. Exhibits.................................................57
13.6. Sections and Articles....................................57
13.7. Entire Agreement.........................................57
13.8. Headings.................................................58
13.9. Controlling Law and Jurisdiction.........................58
13.10. Public Announcement......................................58
13.11. Finder's Fees and Commissions; Sellers'
Closing Expenses.........................................58
13.12. Responsible Care.........................................59
13.13. Confidentiality..........................................59
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EXHIBITS
Exhibit 1.2(a) Real Property
Exhibit 1.2(b) Equipment
Exhibit 1.2(c) Rolling Stock
Exhibit 1.2(f) Permits
Exhibit 1.2(i) Business Arrangements
Exhibit 1.2(k) Critical Spares and Miscellaneous Raw Materials
Exhibit 1.2(l) Stores
Exhibit 1.2(n) Inventory
Exhibit 1.3(d) Certain Non-Disclosure Agreements
Exhibit 1.3(e) Certain Permits
Exhibit 1.3(f) Excluded Equipment
Exhibit 1.3(i) Office Equipment
Exhibit 1.3(k) Certain Retained Assets
Exhibit 1.4(a) Form of Warranty Deed
Exhibit 1.4(b)(i) Surveys
Exhibit 1.4(b)(ii) Permitted Exceptions
Exhibit 1.4(b)(iii) Retained Rights
Exhibit 1.4(c) Form of Bill of Sale
Exhibit 1.4(d) Assignment and Assumption Agreement
Exhibit 4.3 Environmental Permits
Exhibit 5.1 Business Employees and Severance Amounts
Exhibit 5.3(b)(i) Pension Plans
Exhibit 5.3(b)(ii) Plan Amendments
Exhibit 5.3(d)(iii)(a) Westlake's Opinion of Counsel
Exhibit 5.3(d)(iii)(b) BFG's Opinion of Counsel
Exhibit 6.2 Services Agreement
Exhibit 6.3 Technology License Agreement
Exhibit 6.4 Propane Dock Usage Agreement
Exhibit 6.5 Form of Access and Easement Agreement
Exhibit 6.6 Environmental Services Agreement
Exhibit 7.1(g) License
Exhibit 7.1(h) Employee Benefit Plans
Exhibit 7.1(j) Defaults
Exhibit 7.1(k) Taxes
Exhibit 7.1(l) Compliance with Laws
Exhibit 8.2 Litigation
Exhibit 9.1.2 Casualty Loss or Damage
Exhibit 10.2 Global Release - Termination of Agreement
Exhibit 12.6 Global Release - Closing
Exhibit 13.12 CMA Principles of Responsible Care
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DEFINITIONS
Accounting Records: Section 1.3(n)
Assets: Section 1.1
Assignment and Assumption Agreement: Section 1.4(d)
BFG: Intro
BFG Pension Plans: Section 5.3(b)(i)
BFG Plant: Section 1.3(o)
BFG RPSP: Section 5.3(c)(i)
Books and Records: Section 1.2(j)
Business Arrangements: Section 1.2(i)
Business Employees: Section 5.1
CA&O Plant: Section 1.1
Capital Project Plans: Section 1.2(f)
Closing: Section 3.1
Closing Date: Section 3.1
Code: Section 5.3(c)(i)
Company Plans: Section 7.1(h)
Controlled Group: Section 7.1(h)
Critical Spares: Section 1.2(j)
Customer Data: Section 1.2(c)
Entity: Section 4.1.2
Environmental and Safety Records: Section 1.2(g)
Equipment: Section 1.2(b)
ERISA: Section 5.3(c)(iii)(D)
Excluded Assets: Section 1.3
Final Order: Section 4.3
Frozen Benefit Obligation: Section 5.3(b)(ii)
FTC: Section 4.3
Geon: Section 12.7
Governmental Authority: Section 1.2(e)
HSR Act: Section 4.5
Information: Section 12.2(c)
Inventory: Section 1.2(n)
KDEP: Section 4.4
Legal Requirements: Section 4.1.10
Liability or Liabilities: Section 8.2
Miscellaneous Raw Materials: Section 1.2(j)
Net Proceeds: Section 3.2(iv)
Permits: Section 1.2(e)
Permitted Exceptions: Section 1.4(b)
Person: Section 4.1.2
Plant Employees: Section 5.1
Proprietary Rights: Section 1.2(h)
Purchase Price: Section 2.1
Real Property: Section 1.2(a)
Retained Liabilities: Section 1.4(d)
Retained Rights: Section 1.4(b)
Stores: Section 1.2(b)
Supplier Data: Section 1.2(d)
Survival Period: Section 8.1
Title Insurance Property: Section 1.4(b)
Transaction Documents: Section 1.4(d)
VCM Plant 8.2(c)
Westlake: Intro
Westlake's Pension Plans: Section 5.3(b)(ii)
Westlake's Savings Plan: Section 5.3(c)(i)
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT is made and entered into this 16th day
of July, 1997, between Westlake Monomers Corporation, a Delaware corporation
("Westlake") and The B.F.Goodrich Company, a New York corporation ("BFG").
W I T N E S S E T H:
WHEREAS, BFG owns and operates an ethylene plant, a chlor-alkali plant,
and related plant utilities located at Calvert City, Kentucky and the on-going
business activities associated therewith including, but not limited to, caustic
resales and external propane transactions (hereafter referred to as the "CA&O
Plant"); and
WHEREAS, BFG desires to sell and Westlake desires to purchase, either
directly or through an affiliated entity, the CA&O Plant on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, BFG and Westlake do hereby covenant and agree, as follows:
1. Purchase and Sale of Assets.
1.1. Purchase and Sale. BFG hereby agrees to sell, convey, transfer,
assign and deliver to Westlake, or an affiliated entity, and Westlake hereby
agrees to purchase from BFG, either directly or through an affiliated entity,
the assets and properties described in Section 1.2 hereof (all such assets and
properties being herein collectively referred to as the "Assets" and
individually referred to as an "Asset"), such purchase and sale to be effective
on the Closing Date, as defined below. The Assets shall not include the assets
described in Section 1.3 hereof (such excluded assets being herein collectively
referred to as the "Excluded Assets").
1.2. Assets to be Conveyed. The Assets to be sold, conveyed,
transferred, assigned and delivered to Westlake by BFG on the Closing Date shall
consist of the following:
(a) All real property, including all riparian rights attendant
thereto, identified in the metes and bounds legal description and survey
attached hereto as Exhibit 1.2(a); all buildings, structures, fixtures (other
than the fixtures and other items which are subject to personal property leases
otherwise scheduled under this Agreement) and improvements located thereon; and,
all easements, hereditaments, rights and appurtenances thereto (collectively,
the "Real Property");
(b) all machinery, equipment, tools, accessories, reactors,
material handling equipment, all the river docking and wharf facilities, testing
equipment, non-certificated vehicles and other transportation equipment,
including barges and railcars, maintenance and janitorial equipment; computer
and data processing equipment and software, office machines, furniture and
fixtures and all other tangible personal property of every kind and character
which is either (i) located on the Real Property, or (ii) listed in Exhibit
1.2(b) hereto and associated with the operation of the CA&O Plant (collectively
referred to as the "Equipment") but excluding (x) all engineering stores
(hereinafter referred to as "Stores"), (y) Critical Spares and Miscellaneous Raw
Materials (as hereinafter defined) and (z) the fixtures and other items which
are subject to personal property leases otherwise scheduled under this
Agreement;
(c) (i) all certificated vehicles listed in Exhibit 1.2(c)
(the "Rolling Stock"); and (ii) all catalyst installed in the operating units
("Installed Catalyst");
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(d) all customer records and files in BFG's possession
relating to merchant sales since January 1, 1994 of products manufactured at the
CA&O Plant, caustic resales and external propane transactions ("Customer Data");
(e) current supplier lists and supplier data related to the
purchase of raw materials, utilities and supplies used at the CA&O Plant or in
connection with caustic resales (the "Supplier Data");
(f) the licenses, permits and approvals related to the CA&O
Plant or Assets issued by any Governmental Authority listed in Exhibit 1.2(f)
(collectively, the "Permits") (as used in this Agreement, the term "Governmental
Authority" means the United States of America, any state, commonwealth,
territory or possession thereof and any political or judicial subdivision or
instrumentality of any of the foregoing, including but not limited to courts,
departments, commissions, boards, bureaus or agencies);
(g) all existing plans or designs for capital and cost
reduction projects in process or planned for at the CA&O Plant (the "Capital
Project Plans");
(h) a paid up license, as more specifically described in
Section 6.3 herein, to practice the technology being used by BFG at the CA&O
Plant on the Closing Date, technology formerly used at the CA&O Plant by BFG,
and technology developed for use at the CA&O Plant by BFG, to the extent it
relates to operations at the CA&O Plant (the "Proprietary Rights");
(i) all of BFG's rights under the equipment leases, waste
disposal agreements, servicing contracts, maintenance agreements, docking,
loading and tariff agreements and all other agreements of whatever kind or
character relating solely to the use, ownership or operation of the CA&O Plant,
the Assets or caustic resale and external propane transactions, and listed in
Exhibit 1.2(i) hereto (the "Business Arrangements");
(j) all other books, records and documents relating
exclusively to the Assets or CA&O Plant ("Books and Records") not otherwise
covered by the defined terms Customer Data, Accounting Records and Environmental
and Safety Records;
(k) certain critical spares as well as miscellaneous raw
materials located at, used in or necessary for use in the operations of the CA&O
Plant or Assets ("Critical Spares" and "Miscellaneous Raw Materials") identified
generically in Exhibit 1.2(k) hereto, but for the purposes of this Agreement the
terms "Critical Spares" and "Miscellaneous Raw Materials" shall exclude the
items described in Exhibit 1.3(k) or otherwise retained pursuant to Section 1.3
hereof;
(l) the Stores described in Exhibit 1.2(l) or otherwise
exclusively associated with the CA&O Plant, but for the purposes of this
Agreement the term "Stores" shall exclude the engineering stores items described
in Exhibit 1.3(k) or otherwise retained pursuant to Section 1.3 hereof;
(m) all machinery, equipment, tools, accessories,
transportation equipment, leases, contracts, business arrangements, and all
other property, agreements and other assets related to the purchase and
reselling of diaphragm grade caustic soda ("Caustic Resale") and the propane
trade arrangements with Warren Petroleum ("Propane Resale") as currently
practiced by BFG; and
(n) all feedstock and product inventories ("Inventory")
described in Exhibit 1.2(n).
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1.3. Assets Not to be Conveyed. The provisions of Section 1.2
notwithstanding, the Assets to be conveyed hereunder shall not include the
following (hereinafter collectively referred to as the "Excluded Assets"):
(a) accounts and notes receivable;
(b) prepayments and deposits of any kind including but not
limited to those for utility services applicable to periods prior to the
Closing Date;
(c) any claims or suits arising prior to the Closing Date
which BFG may have against third parties for refunds or credits or offsets from
third parties arising out of any matters occurring prior to the Closing Date,
except to the extent such claims are attributable to expenses borne by Westlake
in accordance with this Agreement;
(d) customer and supplier information which can not be
disclosed under confidentiality agreements, as listed in Exhibit 1.3(d);
(e) Permits to the extent not transferable by law, as listed
in Exhibit 1.3(e);
(f) all equipment listed in Exhibit 1.3(f);
(g) all cash, securities and bank deposits, of whatever
description;
(h) [intentionally omitted];
(i) BFG's portion of all safety equipment located in the
EDC vinyl technical building at the Westlake VCM Plant and computers and office
equipment/supplies located in the administration building and listed in Exhibit
1.3(i);
(j) title to BFG's chlor-alkali and ethylene technology,
including patents and know-how;
(k) any equipment, Stores, critical spares, miscellaneous raw
materials or inventory used in connection with the operation of the BFG Plant as
of the Closing Date, which are retained by BFG and not transferred to Westlake
in connection with the transactions contemplated herein including without
limitation the property identified in Exhibit 1.3(k);
(l) any equipment, machinery and tools used for environmental
remedial investigations and measures conducted by BFG pursuant to this
Agreement, including without limitation the groundwater remediation system;
(m) all environmental, health, safety and hygiene records
relating to the CA&O Plant or the Assets or the employees engaged in work
primarily in connection with the CA&O Plant (the "Environmental and Safety
Records"); and,
(n) all books, ledgers, records, and information used or
maintained by BFG in connection with its preparation and maintenance of
accounting and financial systems and records (the "Accounting Records").
(o) those portions of the Calvert City, Kentucky plant owned
and/or operated by BFG as of the Closing Date, generally contained within the
area indicated as such on the plot plan attached hereto as Exhibit 1.2,
including all real and personal property, whether tangible or intangible, and
all of the business activities associated therewith (hereafter referred to as
the "BFG Plant")
It is the intention of the parties that by virtue of the purchase and sale of
the Assets herein, Westlake shall have acquired from BFG all of the assets and
business associated with the CA&O Plant other than those specifically excepted
herein, but not the assets of BFG which are solely involved in or utilized in
connection with the BFG Plant and the businesses associated therewith. Anything
contained in this Agreement to the contrary notwithstanding, the Excluded
Assets, including any assets of BFG which are solely of or associated solely
with
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any business other than the Assets or CA&O Plant, shall not be sold, assigned,
transferred or delivered to Westlake under this Agreement.
1.4. Conveyance Instruments and Related Matters. At the Closing,
the Assets shall be conveyed by BFG to Westlake as follows:
(a) BFG shall convey to Westlake the Real Property and
Business Arrangements (to the extent any of the same constitute interests in
real property) by special warranty deed in the form set forth in Exhibit 1.4(a)
hereto, subject to the "Permitted Exceptions", as defined below.
(b) BFG shall arrange to provide to Westlake, at Westlake's
expense, commitments for title insurance issued by Commonwealth Land Title
Insurance Company of Philadelphia, Pennsylvania, or other reasonably acceptable
title insurance company, with respect to the Real Property ("Title Insurance
Property"), surveys prepared by Florence and Hutcheson, Inc. of Paducah,
Kentucky dated May 24, 1994 and January 4, 1996 (reduction copies of which are
attached hereto as Exhibit 1.4(b)(i)), a new survey to be prepared by a
qualified surveyor to reflect the metes and bounds description in Exhibit
1.2(a), and duplicate sets of legible copies of title exception documents with
respect thereto. At Closing, BFG shall provide to Westlake, at Westlake's
expense, title insurance policies with respect to the Title Insurance Property,
in an amount designated by Westlake within seven days from the date of execution
hereof, issued by Commonwealth Land Title Insurance Company, or other reasonably
acceptable title insurance company, subject only to those easements,
reservations, restrictions, covenants, conditions, safe harbor leases, and other
matters therein specified in Exhibit 1.4(b)(ii) ("Permitted Exceptions") and
containing all reasonable and usual endorsements as requested by Westlake,
including comprehensive, zoning and land use, contiguity, public access and
affirmative insurance of easements, options and rights that run with the land.
Reinsurance shall be provided in amounts requested by Westlake upon reinsurance
agreements providing for direct access. At its expense, BFG shall obtain
surveys of the Title Insurance Property and as are necessary to enable the title
insurance company to delete the survey exception from such title policies.
Title to be granted by BFG shall be good and marketable subject to exceptions
hereinabove provided and such retained rights ("Retained Rights") as may be
provided pursuant to the general principles set forth in Exhibit 1.4(b)(iii).
(c) BFG shall convey to Westlake the Equipment, Rolling Stock,
Installed Catalyst, Inventory, Stores, caustic and propane resale assets,
Critical Spares and Miscellaneous Raw Materials (to the extent the items
constitute tangible personal property) and all other tangible personal property
included in the Assets by a bill of sale in the form set forth in Exhibit 1.4(c)
hereto; provided, however, that with respect to any Rolling Stock or property as
to which ownership is evidenced by a certificate of title or similar instrument
required to be filed to evidence a transfer of title, such transfer shall be
effected by the execution by BFG and delivery to Westlake of appropriate
endorsements, certificates, affidavits and other instruments required to effect
transfer of ownership to Westlake.
(d) BFG shall convey to Westlake the Business Arrangements,
Capital Project Plans, Environmental and Safety Records, Permits, Customer Data,
Supplier Data, Books and Records which constitute contractual rights or
intangibles by an assignment and assumption agreement ("Assignment and
Assumption Agreement") in the form set forth in Exhibit 1.4(d) hereto. This
Agreement, the Assignment and Assumption Agreement, the other agreements
referenced in the preceding subsections of this Section 1.4, and all other
agreements,
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documents, certificates or instruments to be delivered in connection with the
transactions referenced herein are hereinafter collectively referred to as the
"Transaction Documents". Westlake, however, shall not assume any liability or
obligation, known or unknown, fixed, contingent or otherwise of BFG, and BFG and
its affiliates shall retain all liabilities and obligations, whether primary or
secondary, direct or indirect, or fixed, absolute or contingent, with respect to
or arising out of the use, operation or ownership of the CA&O Plant, or the
ownership, possession or use of the Assets, or the employment or compensation of
any of the employees, prior to the Closing, unless expressly provided otherwise
herein, all of such liabilities or obligations being herein referred to as the
"Retained Liabilities".
(e) BFG shall deliver to Westlake a FIRPTA Affidavit, duly
executed by BFG, stating that BFG is not a "foreign person" as defined in the
Foreign Investment in Real Property Tax Act of 1980 and the 1984 Tax Reform Act.
2. Purchase Price - Funds.
2.1. Purchase Price. The purchase price (the "Purchase Price") for
the Assets shall be Ninety-Two Million, Seven Hundred Fifty Thousand United
States Dollars ($92,750,000). The parties agree to endeavor in good faith to
agree upon the allocation of the Purchase Price among the Assets.
3. The Closing.
3.1. Closing and Closing Date. The closing of the transactions
contemplated hereby (the "Closing") shall be held on September 1, 1997 at the
offices of BFGoodrich in Brecksville, Ohio, or such other place as the parties
mutually agree. Provided however, that in the event the conditions to Closing
as set forth in Article 9 hereof have been satisfied or waived on or before such
date, then the Closing shall be rescheduled for August 15, 1997. The Closing
shall be effective as of 12:01 a.m., Calvert City, Kentucky time on the date of
the Closing (the "Closing Date").
3.2. Title, Possession, Risk of Loss. Title, possession and risk of loss
or destruction or damage to the Assets shall pass to Westlake as of the Closing
Date; provided, however, that this Section 3.2 shall not diminish, limit or
otherwise impair in any manner Westlake's rights under the other provisions of
this Agreement or the other Transaction Documents which apportion liability
among the parties with respect to events, occurrences, omissions or other
matters arising or occurring during specified periods.
3.3 Mechanics of Closing. The Closing shall occur in the following
sequence of steps, all of which shall be deemed to have occurred simultaneously:
(i) All conditions precedent shall be satisfied;
(ii) All documents relating to the Closing as provided for
herein shall be executed and delivered; and
(iii) Westlake shall cause the Purchase Price to be delivered
on the Closing Date by wire transfer of immediately available funds to a bank
account which will be identified by BFG in writing not less than one (1) week
prior to the Closing. 4. Conduct Prior to the Closing and Certain Covenants and
Other Matters.
4.1. Conduct of Business. BFG covenants and agrees, from the date
hereof and through the Closing Date, that:
4.1.1. The Assets will be maintained and repaired in the
usual and ordinary course and operated in a good, workmanlike and prudent manner
until the Closing Date;
4.1.2. BFG will use its best efforts to preserve for
Westlake the goodwill of all Persons dealing with the Assets and the CA&O Plant
until the Closing Date (as used in this
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Agreement, the term "Person" shall mean an individual or Entity, and the term
"Entity" shall mean a corporation, partnership, joint venture, trust,
unincorporated organization or association, Governmental Authority or other
entity);
4.1.3. The business and operations of the CA&O Plant
will be conducted in a prudent, businesslike manner until the Closing Date,
consistent with past practice;
4.1.4. From the date hereof to the Closing Date, BFG
will cooperate fully with Westlake as to arrangements for the transfer of
the Assets to Westlake in an orderly fashion to be made on or after the Closing
Date;
4.1.5. From the date hereof to the Closing Date, BFG will
maintain in full force and effect all insurance now in effect or renewals
thereof covering all of the Assets and the CA&O Plant and their respective
operations and employees, and not default with respect to any provision of, and
give all notices and present all claims under, all insurance policies in a due
and timely fashion;
4.1.6. From the date hereof to the Closing Date, BFG will
promptly notify Westlake of its receipt of any significant notice or claim,
written or oral, of default or breach by BFG under, or of any termination or
cancellation, or threat of termination or cancellation, of any material contract
or other material instrument relating to the Assets or the CA&O Plant or their
operations;
4.1.7. From the date hereof to the Closing Date, BFG will
promptly notify Westlake of any material loss of or damage to any of the Assets
(other than the sale or use of inventory and raw materials in the ordinary
course of business) and BFG will not transfer any Asset other than the sale or
use of inventory and raw materials in the ordinary course of business,
consistent with past practice;
4.1.8. From the date hereof to the Closing Date, promptly
after receipt of notice thereof by BFG, BFG will give notice to Westlake of any
material claim or litigation, threatened or instituted, or any other material
adverse event or occurrence known to BFG involving or affecting the CA&O Plant
or the Assets;
4.1.9. From the date hereof to the Closing Date, BFG will take
all actions which are reasonably necessary to lawfully transfer the Assets to
Westlake on the Closing Date including taking such actions as are appropriate to
work with Westlake in obtaining the Permits listed in Exhibit 1.2(f) at no
additional cost to Westlake, except for filings in connection with approvals or
consents of Persons customarily made or obtained subsequent to transfer of
title;
4.1.10. From the date hereof to the Closing Date, BFG will
comply with or cause to be complied with in all material respects all Legal
Requirements affecting or relating to the Assets or the CA&O Plant (as used in
this Agreement, the term "Legal Requirement" shall mean any law, statute,
ordinance, decree, requirement, order, judgment, rule or regulation of,
including the terms of any license or permit issued by, any Governmental
Authority);
4.1.11. From the date hereof to the Closing Date, BFG will not
increase the compensation of its Business Employees, including benefits, except
in the reasonable and ordinary course of business consistent with past practice.
4.1.12. No Shopping. From the date of this Agreement to
the earlier of (i) the Closing Date or (ii) termination of this Agreement, BFG
shall not itself, and shall cause its affiliates and all of its and its
affiliates' respective officers, directors, employees, partners, agents and
advisors not to, directly or indirectly, encourage, solicit or engage in
discussions
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or negotiations with, or provide any information to, or consider any proposal or
offer presented by, any party concerning any sale or any other disposition of
the Assets or the CA&O Plant. From the date of this Agreement to the earlier of
(i) the Closing Date or (ii) termination of this Agreement, Westlake shall not
itself, and shall cause its affiliates and all of its and its affiliates'
respective officers, directors, employees, partners, agents and advisors not to,
directly or indirectly, encourage, solicit or engage in discussions or
negotiations with, or provide any information to, or consider any proposal or
offer presented by, any party concerning any sale or any other disposition of
the Assets, the CA&O Plant or its VCM Plant at Calvert City, Kentucky.
4.1.13 Inventories. On the Closing Date, the value of
Engineering Stores (excluding Carbopol items), finished goods inventories, raw
materials inventories and in-process material, to the extent included in the
Assets, shall be determined by physical inventory, and BFG shall report the
value thereof to Westlake within five (5) business days after the Closing Date.
Such value shall be determined in accordance with the books and records
maintained by BFG for the CA&O Plant in the ordinary course of business, in
accordance with past practice consistently applied. In the event such value
shall exceed U.S. $15,517,436 (the "Target Level") then Westlake shall pay BFG
an amount equal to the excess thereof. In the event such value is less than
Target Level then BFG shall pay Westlake an amount equal to the shortfall. No
action or decision of BFG undertaken solely in order to maintain such
inventories at the Target Level shall form the basis for any claim of breach of
any applicable representation, warranty, covenant or agreement contained in this
agreement.
4.2. FTC Proceedings. BFG will make such filings or notifications
with the Federal Trade Commission ("FTC") as may be appropriate in respect of
the transactions contemplated by this Agreement relative to the Stipulation and
Final Order entered July 25, 1989 issued by the United States Court of Appeals
for the Second Circuit in Docket No. 88-4065 styled The B.F.Goodrich Company
v. The Federal Trade Commission (the "Final Order"). BFG agrees promptly to
notify Westlake of any communications it submits to or receives from the FTC
with respect to such transactions and to furnish copies thereof to Westlake
contemporaneously with their submission or receipt. BFG and Westlake shall
promptly file any required notifications under the Hart-Scott-Rodino Antitrust
Improvement Act of 1976, as amended (the "HSR Act") with respect to the
transactions contemplated by this Agreement.
4.3. Environmental Permits. Prior to Closing, BFG shall notify the
Kentucky Department of Environmental Protection ("KDEP") of the transactions
contemplated herein. BFG and Westlake shall cooperate in effecting the transfer
of the environmental permits listed in Exhibit 4.3 to Westlake in accordance
with the applicable laws and regulations. From and after Closing, Westlake shall
continue to treat wastewater from the BFG Plant in the wastewater treatment
system included in CA&O Plant, in accordance with the Services Agreement which
is attached hereto and made part hereof as Exhibit 6.2.
4.4 Access to Properties and Records. From the date of this Agreement and
through the Closing Date, BFG will (i) keep Westlake advised of all material
developments relevant to the consummation of this Agreement and CA&O Plant
operations; (ii) cooperate, both in permitting Westlake and its representatives,
advisers, consultants, appraisers, engineers and other experts to make a full
investigation of the business, properties, operations and financial condition of
the Assets; and (iii) afford Westlake and its representatives, advisers,
consultants, appraisers, engineers and other experts reasonable access to the
offices, buildings, real properties, machinery and equipment, inventory and
supplies, records, files, books of account,
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agreements and commitments and personnel of BFG related to the Assets and the
CA&O Plant.
4.5 Westlake agrees to promptly undertake negotiations in good faith with
Geon (and with BFG's involvement and cooperation at BFG's request) to consummate
the execution of the ethylene supply agreement contemplated in Section 7.1(r)
hereof. It is Westlake's intention to give priority to consummating an ethylene
supply agreement with Geon on the terms contemplated in Section 7.1(r). The
parties intend that the average acquisition price referred to in Section 7.1(r)
shall be equal to the Ethylene Price as defined in Article 7 of the current
ethylene sale agreement between BFG and Geon (excluding the price floor and the
banked ethylene credit). Westlake, to the extent within its control, will not
allow discussions regarding an ethylene supply agreement involving a longer term
or greater quantities to operate to the detriment of or to otherwise prevent the
execution of the ethylene supply agreement contemplated in Section 7.1(r)
hereof. 5. Personnel Employment Arrangements and Employee Benefits.
5.1. Personnel. Exhibit 5.1 is a list of hourly and salaried employees of
BFG who are employed on a full-time basis (or on long term disability) in the
operation of the CA&O Plant as of the date of this Agreement. (All of the
employees listed on Exhibit 5.1, shall hereinafter be referred to as the
"Business Employees.") Westlake shall identify the number of wage and salary
employees to whom it wishes to offer employment and make offers of employment to
selected Business Employees on the Closing Date. Westlake will offer employment
to not less than 165 of the Business Employees. A Business Employee who is
"actively" employed immediately prior to the Closing Date who accepts an offer
of employment by Westlake shall become an employee of Westlake at the opening of
business on the Closing Date. A Business Employee shall be considered to be
"actively" employed if such employee was either at work (whether on or off the
CA&O Plant premises) as of the day prior to or on the Closing Date, or was
temporarily absent at such time because of illness, disability (other than
disabilities which are reasonably anticipated to be long term or of indefinite
duration), vacation, or other excused absence. The employment by Westlake of
any Business Employee who is not actively employed immediately prior to the
Closing Date shall commence at such time as such Business Employee actually
returns to work. Until that time, any such Business Employee shall remain an
employee of BFG, and BFG shall retain responsibility for all benefits to which
such Business Employee is entitled. Westlake agrees to notify BFG when any such
Business Employee returns to work.
Each salaried Business Employee offered employment by Westlake shall be
offered compensation which may include base and incentive pay provisions
generally equivalent to such Business Employee's compensation level immediately
prior to the Closing Date, and benefits consistent with those provided to
similarly situated Westlake employees. Each offer of employment made by Westlake
shall be for either the same position as such Business Employee held with BFG,
or for a position which would clearly be reasonable for a person of that
Business Employee's qualifications and skills to accept under the circumstances
existing at the time of the offer.
The Business Employees who accept offers of employment from Westlake
shall be referred to hereinafter as "Plant Employees." BFG shall provide
Westlake with information as to the title, employment history and current
compensation level of all Business Employees and shall assist Westlake in
effecting an orderly change of employment for Plant Employees. Business
Employees who decline offers of employment will, unless they are provided with
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other employment by BFG, be treated as having voluntarily terminated their
employment with BFG. BFG shall request Business Employees to accept offers of
employment from Westlake.
5.2. Covenant re Personnel. For a period of two (2) years after the
Closing Date, BFG and Westlake agree that they will not, without first obtaining
the written consent of the other, which consent may be withheld for any reason,
offer employment to any employee of the other party who is employed by or who
has voluntarily terminated employment from such other party after the Closing
Date except that Westlake may offer employment to the Business Employees.
5.3. Benefits.
(a) Recognition of Prior Service. With respect to Plant
Employees, Westlake shall recognize all credited service and the entire period
of plan participation recognized under the BFG Pension Plans (as defined below)
in which the Plant Employees were participating as employees of BFG, for
purposes of determining benefit eligibility and vesting, and calculating the
benefits of Plant Employees, under the Pension Plans of Westlake described in
Article 5.3(b) herein.
(b) Pension Plans.
(i) Except as otherwise set forth in this Section 5,
BFG shall retain responsibility and complete liability for all benefits accrued
up to the Closing Date by the Plant Employees under the pension plans in which
such Business Employees were participating as employees of BFG (the "BFG Pension
Plans"). The BFG Pension Plans and the categories of employees covered by
each plan are listed on Exhibit 5.3(b)(i).
(ii) Westlake shall maintain tax-qualified defined
benefit pension plans ("Westlake's Pension Plans") for all salaried Plant
Employees, which plans shall be consistent with plans provided to Westlake
Monomers Employees, and which plans shall provide for the accrued benefit
payable monthly thereunder to a Plant Employee to be reduced by the amount
of such Plant Employee's "Frozen Benefit Obligation", as defined below, under
the BFG Pension Plans; provided, however, that Westlake's obligation with
respect to employees presently subject to collective bargaining agreements shall
be limited to obligations Westlake agrees to with the appropriate collective
bargaining agents. The Frozen Benefit Obligation of each Plant Employee shall
be calculated by BFG as soon as practicable after the Closing Date, and shall
be promptly delivered to Westlake. The Frozen Benefit Obligation of a Plant
Employee shall be the monthly pension payment which such Plant Employee
would be entitled to receive from the applicable BFG Pension Plan if such Plant
Employee commenced receipt of pension payments at age 65. If a Plant Employee
retires from Westlake prior to reaching age 65, the Frozen Benefit Obligation
of such Plant Employee shall be actuarially adjusted from the amount payable
commencing at age 65 to equal the monthly pension amount that such Plant
Employee would have received from the applicable BFG Pension Plan had
pension payments commenced on the date on which such Plant Employee retires from
Westlake. In actuarially adjusting the amount of the Frozen Benefit
Obligation for Plant Employees, BFG shall use the actuarial assumptions which
are consistent with current plan provisions and applicable ERISA requirements
with respect to the applicable BFG Pension Plan, which assumptions have
previously been furnished in writing to Westlake.
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(iii) All Plant Employees will be fully vested in their
accrued benefits under the BFG Pension Plans as of the Closing Date, regardless
of their length of service at that time.
(c) Savings and Investment Plan.
(i) Within 180 days after the Closing Date, Westlake,
if it does not already maintain such a plan, shall establish and shall
thereafter maintain a tax-qualified defined contribution plan (the "Westlake's
Savings Plan") under Section 401(k) of the Internal Revenue Code of 1986, as
amended ("the Code") for all of those Plant Employees who were eligible to
participate in The B.F.Goodrich Company Retirement Plus Savings Plan or The
B.F.Goodrich Company Retirement Plus Savings Plan for Wage Employees
collectively the "BFG RPSP") immediately prior to the Closing Date. The
parties agree to work together to facilitate a trust-to-trust transfer under
the requirements of the Code for those Plant Employees who elect to do so as of
a given date, whereby all assets in the trust established under the BFG RPSP
attributable to all Plant Employees electing to do so will be transferred to
the trust established under the Westlake's Savings Plan. Westlake shall grant
past service credit for service recognized by BFG for purposes of determining
eligibility to participate and vesting in Westlake's Savings Plan.
(ii) All Plant Employees shall be fully vested in
their account balances in the BFG RPSP as of the Closing Date, regardless of
their length of service at that time.
(iii) Transfer of Plan Assets. In connection with the
trust-to-trust transfer of assets from the trust established under the BFG RPSP
to the trust established under Westlake's Savings Plan:
(A) BFG and Westlake each warrant to the other
that all applicable provisions of the Code and regulations promulgated
thereunder will be complied with in effecting such asset transfer, and Westlake
does further warrant, conditioned on BFG's warranty that it is transferring
to Westlake's Savings Plan the entire accrued benefit of each Plant Employee
electing to do so, that the Plant Employees' accrued benefits under Westlake's
Savings Plan immediately after such transfer of assets shall not be less than
such Plant Employees' accrued benefits transferred from the BFG RPSP to the
trust under Westlake's Savings Plan immediately prior to such transfer or
funding. This warranty is limited to the accrued benefits transferred;
(B) At least thirty (30) days prior to any
scheduled transfer of trust assets, BFG and Westlake agree to provide each other
copies of their respective savings plans;
(C) At least seven (7) days prior to any
transfer of trust assets, Westlake shall provide BFG with an opinion of
Westlake's counsel, substantially in the form attached as Exhibit 5.3(d)(iii)(a)
hereto, and BFG shall provide Westlake with an opinion of its counsel,
who may be an employee of The B.F.Goodrich Company, in substantially the form
attached hereto as Exhibit 5.3(d)(iii)(b);
(D) Westlake and BFG shall, in connection with
such transfer, cooperate in making all appropriate filings required under
the Code or the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and the regulations thereunder;
(E) Any qualified domestic relations orders
(as defined in Code Section 414(p)) received by BFG with respect to any assets
transferred to Westlake's Savings
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Plan shall be transferred to Westlake at the time such assets are transferred or
at the time such order is received by BFG if later, to the extent allowed by and
in compliance with applicable law; and
(F) It is contemplated by the parties that the
trust-to-trust transfer will occur within 180 days from the Closing.
(iv) After the trust-to-trust transfer referred to
above is complete Westlake shall permit Plant Employees to voluntarily roll-over
their balances in the BFG RPSP into Westlake's Savings Plan from time to time.
(d) Welfare and Other Non-Pension Benefits. As soon as
practicable after the date hereof, Westlake shall maintain group health, life,
disability and other welfare and fringe benefit programs for salaried Plant
Employees, with coverage commencing as of the Closing Date. BFG agrees to pay
for all charges reimbursable under its group health plans applicable to Plant
Employees, which are attributable to medical services which were rendered prior
to the Closing Date, and BFG agrees to cover, to the extent set forth in its
applicable group health plans, the costs incurred after the Closing Date for
services rendered due to any hospital confinement which commenced prior to the
Closing Date, until the covered Plant Employee or covered dependent is
discharged. Except for the specific circumstance set forth in the previous
sentence or elsewhere in this Agreement, BFG shall not be liable for any costs
relating to medical conditions which existed prior to, but for which medical
services were rendered on or after the Closing Date, regardless of whether BFG
had knowledge of such conditions as of the Closing Date. Plant Employees and
their dependents who are covered under or eligible to participate immediately in
a BFG basic medical and hospitalization plan as of the Closing Date shall be
offered participation in a basic medical and hospitalization plan of Westlake as
of the Closing Date, with exclusions for preexisting conditions only to the
extent so excluded under BFG's plan.
(e) Retiree Life and Medical. BFG shall provide retiree
medical and life insurance coverage for Plant Employees who are eligible to
retire on the Closing Date. Westlake shall provide retiree medical and life
insurance coverage to other Plant Employees, which coverage for salaried Plant
Employees shall be generally comparable to that provided by Westlake to its
similarly-situated employees. In the event a Plant Employee receives retiree
medical and/or life insurance coverage from BFG and active employee medical or
life insurance coverage, as the case may be, from Westlake, Westlake agrees that
its coverage shall be primary, and any coverage provided by BFG shall be
secondary. If a Plant Employee who is eligible to retire on the Closing Date is
eligible for retiree medical and/or life insurance coverage from BFG and
Westlake, BFG agrees that BFG's coverage shall be primary, and any such primary
coverage provided by Westlake shall be secondary.
(f) Vacation. Westlake shall adopt vacation entitlement
policies for the salaried Plant Employees which are generally consistent with
the policies of similarly situated Westlake employees. Westlake will permit such
salaried Plant Employees an opportunity to schedule, in the same manner
previously available to such Plant Employees under the BFG vacation policy,
vacation time off with pay for the unused vacation to which such Plant Employees
were entitled under the BFG vacation policy applicable to them as of the Closing
Date, provided such request for vacation time off do not materially adversely
affect the Westlake's operation of the CA&O Plant. An employee shall not lose
vacation accrued as of the Closing Date if he has timely requested vacation and
time off has been denied by Westlake. BFG shall
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reimburse Westlake for the value of (1) unused, earned vacation and (2) accrued
vacation for Plant Employees as of the Closing Date.
(g) Severance and Other Items. Westlake agrees to pay any
salaried Plant Employee the severance amount opposite such Business Employee's
name as listed on Exhibit 5.1 if such salaried Plant Employee's employment is
terminated by Westlake, other than for "cause", during the period which
commences on the Closing Date and ends one (1) year thereafter. For purposes of
this section, "cause" shall mean failure of an employee to perform those duties
in the scope of his employment as a person of ordinary prudence would have done
under the same or similar circumstances, or the commission of acts by the
employee in the scope of his employment which a person of ordinary prudence
would not have done under the same or similar circumstances, including but not
limited to (i) the misappropriation of funds or property of Westlake or a
subsidiary of the Westlake by a Plant Employee, (ii) commission by a Plant
Employee of an act of fraud upon, or a material evidence of bad faith,
dishonesty or disloyalty towards Westlake or its subsidiary, or (iii) any
conduct on the part of the Plant Employee which would, in Westlake's sole good
faith judgment, result in prejudice to the best interest of Westlake or its
subsidiary if he were retained as an employee.
After receipt of the employee information furnished by Westlake pursuant
to Section 5.1 hereof, BFG will work with Westlake to formulate a voluntary
separation program with features and employee eligibility mutually determined by
BFG and Westlake. In formulating such a program, BFG will consider reasonable
and flexible approaches which do not increase or decrease the amount of risk and
financial exposure agreed to by BFG herein, regardless of the timing and nature
of the program. This program would be offered to the eligible employees in
connection with the closing of the transactions contemplated herein. After
determination of the number of eligible employees who will accept the voluntary
separation program, the balance of the number of the wage and salary employees
will either be offered employment by Westlake or severed at the time of closing.
Westlake shall reimburse BFG for voluntary separation and severance costs
paid by BFG in respect of all Business Employees who accept the early retirement
program or are otherwise severed, in excess of an amount calculated as follows:
fifty-percent times Average Cost (as hereinafter defined) multiplied by
twenty-three (23). For the purposes of the foregoing sentence, the term "Average
Cost" means the total amount of severance payments identified in Schedule 5.1
for all of the Business Employees who accept the voluntary separation program or
are otherwise severed, times one hundred ten (110%) percent, divided by the
total number of such Business Employees.
(h) Scope and Term of Certain Obligations. Westlake agrees
that its obligations (i) to maintain Westlake's Pension Plans described in
Section 5.3(b)(ii), (ii) to maintain Westlake's Plan described in Section
5.3(c)(i), (iii) to provide certain welfare and other non-pension benefits as
described in Section 5.3(d), (iv) to provide certain retiree life and medical
coverage as described in Section 5.3(e) and (v) to adopt vacation entitlement
policies as described in Section 5.3(f) shall include the obligation to not
reduce benefits under such arrangements which obligation shall continue for a
period ending on the first to occur of (A) the expiration of twelve (12) months
from the Closing Date or (B) any of the following: (i) the effective date of a
requirement that Westlake incur increased costs with respect to the pension and
benefit plans provided to those of its employees in the United States other than
Plant Employees (Other Plans), in order to satisfy the so called
Anti-discrimination rules under the applicable provisions of the Code and ERISA
(in which case Westlake may reduce benefits
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after twelve (12) months, or such shorter period as is required to comply with
applicable law or regulations, have elapsed from the Closing Date, to the extent
necessary to comply with such provisions without incurring increased costs with
respect to such Other Plans), (ii) with respect to Plant Employees as a result
of a collective bargaining process, different benefit programs, plans, practices
or arrangements are required to be established with respect to such group of
employees, (iii) mutual agreement of Westlake and BFG or (iv) termination,
modification or reduction by BFG of its benefits available under its similar
plans, programs or arrangements, in which case Westlake may only make reductions
comparable to those made by BFG. Westlake's obligation hereunder shall extend
only with respect to Business Employees who become actively employed by Westlake
as of a time immediately after the Closing Date.
(i) The parties hereto agree that it is not intended that any
Plant Employees will, by reason of their employment by Westlake, be entitled to
duplicative benefits from BFG and Westlake, and do agree that the provisions of
this Agreement shall not be construed by either party so as to entitle the Plant
Employees to duplicative benefits. This provision shall not, however, be read to
limit in any way the provisions of Section 5.3(a).
5.4. Cooperation of the Parties. BFG and Westlake agree to fully
cooperate with respect to each of the filings and calculations necessary to
effect the transactions contemplated by this Article 5 and in obtaining any
governmental approvals required hereunder.
5.5. Employee Rights. Nothing herein expressed or implied shall
confer upon any employee of BFG, any Plant Employee or any other employee or
legal representatives thereof any rights or remedies, including any right to
employment, or continued employment for any specified period, of any nature or
kind whatsoever under or by any reason of this Agreement.
5.6. Wage Reporting. Wages paid by BFG to Plant Employees during
the year in which the Closing Date occurs shall be considered attributable to
Westlake for purposes of Code Section 3121(a)(1) and Income Tax Regulations
promulgated thereunder. BFG shall furnish each Plant Employee one Wage and Tax
Statement (IRS Form W-2) for wages paid by BFG from January 1 of the year in
which the Closing Date occurs to the Closing Date. Westlake shall furnish each
Plant Employee one Form W-2 covering the period from the Closing Date through
the end of the year in which the Closing Date occurs. Both parties shall comply
with the provisions of Section 4 of Rev. Proc. 84-77.
5.7. Collective Bargaining Agreement. Westlake agrees to offer to
recognize the IAM as the present collective bargaining agents of Plant Employees
and to assume the present collective bargaining agreement. Westlake may
negotiate with the IAM to modify the current collective bargaining agreement as
related to all provisions of the agreement; however, failing to reach an
agreement prior to the Closing Date, Westlake will accept the existing
collective bargaining agreement provisions; provided, however, that if, prior to
the Closing, the Union seeks to enjoin the Closing in aid of arbitration or BFG
experiences any strike, slowdown, or any other form of interference with normal
operations as a direct and proximate result of such negotiations by Westlake,
Westlake shall cooperate with BFG in order to promptly and effectively resolve
such matters.
6. Certain Contracts. At the Closing, BFG and Westlake shall enter into the
agreements referred to in Sections 6.2 through 6.6.
6.1. Termination of Agreements. All ancillary agreements entered
into between the parties in connection with the Amended and Restated Master
Conveyance Agreement dated
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March 1, 1990, other than the Agreement on Licensing of EDC and VCM Technology,
the Access and Easement Agreement and the Catalyst Supply Agreement shall
terminate upon completion of the Closing.
6.2 Services Agreement. A Services Agreement, substantially in the form
attached hereto as Exhibit 6.2, covering such items as (i) deliveries of raw
materials, air, water, steam, nitrogen and natural gas, (ii) treatment and
discharge of certain substances, (iii) the provision of electricity, (iv) the
installation of meters, (v) general site administrative, accounting, laboratory
and construction support, (vi) dispensary, fire and emergency services, (vii)
docking and railcar services, (viii) transitional and occasional services to be
provided by the parties to each other, and (ix) maintenance of the facilities
required to provide the services and utilities contemplated by such agreement
(the "Services Agreement"). It is understood and agreed that the Services
Agreement may be entered into by either Westlake or by an affiliated entity
formed for the purpose of acquiring the Assets and CA&O Plant.
6.3. Technology License Agreement. A Technology License Agreement,
substantially in the form attached hereto as Exhibit 6.3, granting Westlake a
license to practice the technology described therein.
6.4. Propane Dock Usage Agreement. A Propane Dock Usage Agreement
containing terms set forth on Exhibit 6.4 hereto (the "Propane Dock Usage
Agreement").
6.5. Access and Easement Agreements. A joint easement and access
agreement pursuant to which Westlake and BFG are granted access to and easements
on the other's property in connection with the operation of the CA&O Plant by
Westlake and the BFG Plant by BFG, substantially in the form attached hereto as
Exhibit 6.5.
6.6. Environmental Services Agreement. An Environmental Services
Agreement substantially in the form attached hereto as Exhibit 6.6 hereto (the
"Environmental Services Agreement").
7. Representations and Warranties.
7.1. Representations and Warranties of BFG. BFG MAKES NO WARRANTY THAT
ANY OF THE ASSETS, PROPERTIES OR PRODUCTS OF THE CA&O PLANT OR BUSINESS ARE
MERCHANTABLE OR FIT FOR ANY PARTICULAR PURPOSE NOR IS THERE ANY OTHER WARRANTY
OR CONDITION WITH RESPECT THERETO, EXPRESS OR IMPLIED, EXCEPT AS EXPRESSLY
STATED IN THIS AGREEMENT WITH RESPECT TO SUCH ASSETS, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTIES OR CONDITIONS WITH RESPECT TO THE MERCHANTABLE
QUALITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH ASSETS, PROPERTIES AND
PRODUCTS WHICH MIGHT OTHERWISE BE IMPLIED BY THE UNIFORM COMMERCIAL CODE OR ANY
OTHER LAW. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, WESTLAKE SPECIFICALLY
ACKNOWLEDGES THAT THE ASSETS BEING TRANSFERRED AND CONVEYED PURSUANT TO THIS
AGREEMENT ARE BEING SOLD AND PURCHASED ON AN "AS IS" AND "WHERE IS" BASIS.
BFG hereby expressly represents and warrants to Westlake that, as of the
date hereof and the Closing Date, and except as set forth in any Exhibit hereto:
(a) Corporate Existence and Authority. BFG is a corporation
duly organized, validly existing and in good standing under the laws of the
State of New York and is duly qualified or licensed and authorized to do
business in the Commonwealth of Kentucky.
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(b) Execution and Delivery. BFG has full right, power, legal
capacity and authority to execute, deliver and perform this Agreement and the
other Transaction Documents and to consummate the transactions contemplated
therein and thereby, subject only to receipt of the approval referred to in
Section 9.2.6 hereof. This Agreement, and each other Transaction Document
required to be executed and delivered by BFG pursuant to this Agreement, has
been duly executed and delivered by BFG and, when duly executed and delivered by
BFG, will constitute legal, valid and binding obligations of BFG enforceable in
accordance with their respective terms and conditions, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors' rights generally
and by general principles of equity (whether applied in a proceeding at law or
in equity).
(c) Consents and Approvals. Except for the consents and
approvals for the transfer of the Permits, any approvals related to the RCRA or
HSWA permits, the approval referred to in Section 9.2.6 hereof and compliance
with the HSR Act with respect to the transactions contemplated by this
Agreement, no approval, consent or other order or action of or filing with any
Person is required for the execution, delivery or performance by BFG of this
Agreement or the other Transaction Documents. There are no preferential rights
of purchase or rights of first refusal held or claimed by third parties with
respect to the Assets.
(d) Title. Except for the Permitted Exceptions, BFG owns
outright, or has a valid license or lease for, and has, and shall at the Closing
have, and upon Closing Westlake shall receive, full legal and beneficial title
to all of the Assets (other than the Real Property interests, as to which BFG is
giving a special warranty of title as herein provided) free and clear of all
liens, pledges, mortgages, security interests, conditional sales contracts and
encumbrances. The Permitted Exceptions do not materially adversely affect the
ownership and operation of the CA&O Plant as currently operated by BFG.
(e) No Violations. The execution and delivery by BFG of this
Agreement and the other Transaction Documents, and the consummation of the
transactions contemplated thereby and the performance by BFG of its obligations
thereunder, will not (i) constitute a violation of, conflict with, or result in
a breach or constitute a default under any mortgage, indenture, charter or bylaw
provision, contract, agreement, commitment or other instrument of any kind to
which BFG is a party or by which BFG or any of its respective properties or
assets may be bound or affected or (ii) violate any Legal Requirement or (iii)
result in the creation or imposition of any lien, charge or other encumbrance
upon the Assets.
(f) Kentucky Location. The Assets are primarily located in the
Commonwealth of Kentucky, Marshall County, Calvert City, and will be so located
when conveyed to Westlake at the Closing. The transaction contemplated by this
Agreement constitutes an occasional sale and is not a transaction sufficient in
number, scope and character to constitute an activity requiring the holding of a
Kentucky Sales Tax Seller's Permit. All tangible personal property transferred
to Westlake hereunder consists solely of inventories held for resale in the
normal course of business and manufacturing assets held or used in the course of
an activity for which BFG is not required to hold a Kentucky Sales Tax Seller's
Permit.
(g) Technology. The Proprietary Rights will afford Westlake
the rights to use all technology, proprietary information, know-how or patented
ideas, designs or inventions owned by BFG or others, if and to the extent BFG
has the right to grant such rights owned by Persons other than BFG, necessary
for the present operation of the CA&O Plant or Assets and the marketing,
distribution, and sale (whether by Westlake or Westlake's direct or indirect
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customers) of the products produced at the CA&O Plant. Neither the use nor
practice of the Proprietary Rights by BFG infringes on the rights of any third
party. No license fees and royalties are payable in connection with the use and
practice of the Proprietary Rights, except as set forth in Exhibit 7.1(g).
(h) Employee Matters. Except as identified in Exhibit 7.1(h),
the Plant Employees are not subject to any collective bargaining agreements or
other contracts with a labor union, contingent or otherwise, nor are any Plant
Employees represented by any labor union.
Except as disclosed in Exhibit 7.1(h) hereto, neither BFG nor
any other organization which is a member of a controlled group of organizations
(within the meaning of Code Sections 414(b), (c), (m) or (o)) of which BFG is a
member (the "Controlled Group"), has any obligation, contingent or otherwise, to
any Plant Employees under any employment or consulting agreement or under any
executive or employee compensation or benefit plan, agreement or arrangement,
sponsored by BFG or such other organization, including, without limitation, any
pension, retirement, profit sharing, stock option, stock purchase, bonus,
savings, medical, life insurance, and other welfare benefit plans (collectively
referred to herein as "Company Plans"). With respect to Plant Employees, except
as disclosed in Exhibit 7.1(h) hereto, BFG has not breached or otherwise failed
to comply in any material way with any provision of any Company Plan.
With respect to each Company Plan: (i) each Company Plan which
is an "employee pension benefit plan" (as such term is defined in ERISA Section
3(2)) is "qualified" within the meaning of Section 401(a) of the Code and has
received a favorable determination letter as to its qualification under the
Code; (ii) to the best of BFG's knowledge, no member of the Controlled Group nor
any other party has, with respect to any Company Plan, engaged in a prohibited
transaction, as such term is defined in Code Section 4975 or any applicable
sections of ERISA, which would subject BFG or Westlake to any taxes, penalties
or other liabilities resulting from prohibited transactions under Code Section
4975 or under any applicable sections of ERISA; (iii) to the best of BFG's
knowledge, no event has occurred and no condition exists that would subject
BFG or Westlake to any taxes under any applicable sections of the Code or to
a fine under ERISA Section 502(c); and (iv) each member of the Controlled Group
has substantially complied with the reporting and disclosure requirements of
ERISA. Except as disclosed in Exhibit 7.1(h), BFG does not presently maintain
any "multi-employer plan" (within the meaning of Section 3(37) of ERISA)
applicable to Plant Employees. With respect to any Company Plan which is an
employee welfare benefit plan (within the meaning of ERISA Section 3(1)),
such plan complies in all material respects with all applicable federal laws.
Except as disclosed in Exhibit 7.1(h), neither BFG nor the Controlled Group
maintains any post-retirement health and life insurance plans for employees
and retirees of BFG. Except as listed in Exhibit 7.1(h) hereto, BFG has no
commitment, whether formal or informal and whether legally binding or not, to
create any additional Company Plan or to amend or modify any Company Plans and
no benefits will become payable under any Company Plan as a result of the
consummation of the transactions contemplated hereby.
(i) Complete Assets; No Misrepresentation. Other than any
Permits or governmental approvals, the Assets are all of the material assets and
properties, real, personal, tangible and intangible, which are owned by BFG and
which are necessary for the operation of the CA&O Plant as currently operated by
BFG.
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(j) Business Arrangements. Exhibit 1.2(l) sets forth all
Business Arrangements, each of which is in full force and effect. Except as
disclosed in Exhibit 7.1(j) hereto, BFG is not in material default under, nor
does any event, circumstance or situation exist which, with the passage of time
will cause a material default under any Business Arrangement or Legal
Requirement relating to any of the Assets or the businesses or operations of the
CA&O Plant under which any Person is or may be entitled to assert any rights
against any of the Assets or the business, operations, or products produced or
used at the CA&O Plant.
(k) Taxes. Except for the Permitted Exceptions or as disclosed
in Exhibit 7.1(k), BFG has either discharged or caused to be discharged, as the
same have become due, all taxes, costs, expenses, charges and debts of every
kind and character, attributable or relating to the Assets, the business and
operations of the CA&O Plant, or revenues or income derived therefrom for all
periods through the Closing Date, the nonpayment of which would result in a lien
or encumbrance on any Asset; and the assessment of any additional taxes, that by
law should have been reported or paid or in accordance with generally accepted
accounting principles should have been accrued, is not expected.
(l) Compliance with Laws. Except as set forth in Exhibit 7.
1(l):
(i) BFG is in compliance in all material respects with
all Legal Requirements applicable to the Assets and/or the ownership, operation
and use thereof (except with respect to any non-compliance caused by or
resulting from Westlake's operations), and BFG has not received notice of any
noncompliance or alleged noncompliance with any Legal Requirement relating or
applicable to any of the Assets or to the operation of the CA&O Plant,
the existence or enforcement of which would have a material adverse effect upon
Westlake's ability to operate the CA&O Plant subsequent to the Closing Date on
substantially the same basis as currently conducted and operated or which
would require the payment of fines or penalties in respect of matters occurring
prior to the Closing Date including, without limitation, any Legal Requirement
relating to (A) wages, hours, hiring, non-discrimination, promotion, retirement,
benefits, pensions or working conditions, (B) air, water, noise, odor or solid
or liquid waste (including the generation, treatment, storage, disposal or
transportation thereof), (C) health and safety, (D) zoning, (E) the production,
processing, advertising, sales or warranty of products or services of the CA&O
Plant or (F) trade or antitrust regulations.
(ii) Without limiting the generality of the foregoing,
to the best of the knowledge of BFG, there exists no noncompliance or alleged
noncompliance with, or any condition caused by BFG which would result in
liability under, any applicable Legal Requirement relating to air, water,
noise, odor, solid or liquid waste (including the generation, treatment,
storage, disposal or transportation thereof) or health and safety, which
would have a material adverse effect on Westlake's ability to operate the
CA&O Plant and/or Assets subsequent to the Closing Date on substantially the
same basis as currently conducted and operated or would require the payment
of fines, penalties or remedial expenditures in respect of facts, conditions
or matters occurring or existing prior to the Closing Date.
(iii) BFG has not handled, treated, stored or disposed
of, or arranged for the handling, treatment, storage or disposal of any wastes
or toxic or hazardous substances on the Real Property or, as to wastes and
substances generated at the CA&O Plant or in connection with Caustic Resale, of
the Real Property except in compliance with all Legal Requirements in effect
at the time such activity was undertaken.
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(iv) The Permits are in full force and effect and
constitute all permits or approvals from any Governmental Authority necessary to
permit the lawful use and operation of the CA&O Plant and Assets by Westlake on
substantially the same basis as currently conducted and operated by BFG;
provided, however, BFG makes no representation with respect to any permit or
approval that may be required due to Westlake's ownership or operation of both
the VCM Plant and the CA&O Plant.
(m) Prepaid Expenses. The prepaid expenses related to the
operations and businesses of the CA&O Plant have been and will be incurred
solely for the benefit of the CA&O Plant.
(n) No Default. BFG is not in default under, and no condition
exists that with notice or lapse of time or both would constitute a default
under, (i) any mortgage, indenture, loan, credit agreement or other agreement or
instrument evidencing indebtedness for borrowed money to which BFG is a party or
by which it is bound or to which any of the Assets are subject or (ii) any other
agreement, contract, lease, license or other instrument, which default or
potential default might reasonably be expected to have a material adverse effect
on the Assets or the ownership, use or operation thereof.
(o) Absence of Certain Changes. Since January 1, 1996, BFG has
operated the Assets in the ordinary course of business and in accordance with
BFG's past management, operating and accounting practices and there has not
been:
(a) any material adverse change affecting the Assets,
which change was not the result of an industry-wide development affecting other
companies in the ethylene and chlor-alkali businesses;
(b) any damage, destruction or loss to or of the
Assets, whether or not covered by insurance, that has had, or might reasonably
be expected to have, a material adverse effect;
(c) any sale, lease or other disposition of the
Assets other than the sale of products in the ordinary course of business,
consistent with past practice; or (d) any contract or commitment to do any of
the foregoing.
(p) Litigation. Except for matters shown on Exhibit 8.2(p),
there is no action, investigation, suit or proceeding pending or, to the
knowledge of BFG, threatened against or affecting the Assets claiming any relief
which, if granted, would have a material adverse effect or that would prevent
the consummation of the transactions contemplated by this Agreement.
(q) Anti-Sandbagging. Except for facts and circumstances that
BFG has brought to the attention of Westlake, there is no fact or circumstance
known to BFG that gives it reason to believe that any representation or warranty
of Westlake contained in this Agreement (including any Exhibits hereto) or the
other Transaction Documents is not true and correct in any material respect.
(r) Ethylene Supply. BFG hereby represents and warrants to
Westlake that BFG has obtained a proposal from Geon that Geon is willing to
execute an ethylene supply agreement with Westlake for a term beginning on the
Closing Date and expiring on December 31, 1998, with an obligation to purchase
350 million pounds + 10% of ethylene per year for a purchase price (Geon's
average acquisition price) for ethylene each month which for all purposes of
this Agreement must be consistent with pricing in the current sales agreement
between BFG and Geon other than the price floor and bank mechanism)
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7.2. Representations and Warranties of Westlake. Westlake represents
and warrants to BFG that, as of the date hereof and the Closing Date:
(a) Corporate Existence and Authority. Westlake is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and is, or on the Closing Date will be, duly qualified
or licensed and authorized to do business in Kentucky and all other states in
which any of the Assets may be situated and where such qualification or license
is required. Westlake CA&O Corporation is, or upon its incorporation will be, a
corporation duly organized validly existing and in good standing under the laws
of the State of Delaware and is, or on the Closing Date will be, duly qualified
or licensed and authorized to do business in Kentucky and all other states in
which any of the Assets may be situated and where such qualification or license
is required.
(b) Execution and Delivery. Westlake has full power and
authority to execute and deliver this Agreement and the other Transaction
Documents and to carry out the terms and obligations thereof. This Agreement and
each of the other Transaction Documents has been duly executed and delivered by
Westlake and, when executed and delivered by Westlake will constitute legal,
valid and binding obligations of Westlake, enforceable in accordance with their
respective terms and conditions except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity (whether applied in a proceeding at law or in equity).
(c) No Default. The execution, delivery and performance by
Westlake of this Agreement and the other Transaction Documents, and the
consummation of the transaction contemplated thereby and the performance by
Westlake of its obligations thereunder will not constitute a violation of,
conflict with, or result in a default under, any mortgage, indenture, charter
or bylaw provision, contract, agreement, commitment or other instrument of any
kind to which Westlake is a party or by which Westlake is bound, or any Legal
Requirement or any valid and enforceable order of a Governmental Authority
having jurisdiction over Westlake.
(d) Claims. There are no claims, actions or suits by or
against Westlake which may affect the transactions contemplated hereby at law or
in equity or before or by any Governmental Authority.
(e) Consents and Approvals. Except as otherwise contemplated
by this Agreement and except for compliance with the HSR Act with respect to the
transactions contemplated by this Agreement, no further consent, approval,
license, permit or authorization of, or declaration, filing or registration
with, any third party or any public body or authority is required in connection
with (i) the execution and delivery by Westlake of this Agreement, and (ii) the
consummation by Westlake of the transactions contemplated hereby.
(f) Anti-Sandbagging. Except for facts and circumstances that
Westlake has brought to the attention of BFG, there is no fact or circumstance
known to Westlake that gives it reason to believe that any representation or
warranty of BFG contained in this Agreement (including any Exhibits hereto) or
the other Transaction Documents is not true and correct in any material respect.
7.3 Updated Exhibits. All of the Exhibits set forth in this Agreement
shall be updated to reflect any changes from the Exhibits delivered as of the
date of execution hereof and the Closing Date by the delivery of updated
Exhibits at the Closing, with updated Exhibits subject to reasonable approval of
the parties. Any liability, default, violation of law, damage or destruction
identified in the updated Exhibits which has a material adverse effect upon the
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Assets or CA&O Plant shall be cured or otherwise retained by BFG unless
otherwise agreed in an amendment to this Agreement.
8. Survival; Indemnifications.
8.1. Survival. The representations and warranties set forth in this
Agreement shall survive the Closing for the maximum period provided by law
except as hereinafter provided. The representations and warranties of BFG herein
other than those relating to title to the Assets or environmental matters, shall
survive until December 31, 1998. Westlake's representations and warranties
herein shall survive until December 31, 1998. The liabilities of the parties
under their respective representations and warranties shall expire as of the
expiration of the applicable Survival Period; provided, however, that such
expiration shall not include or extend or apply to any representation or
warranty, the breach of which shall give rise to a claim by either party against
any other as to which written notice shall have been given to the party against
which the claim is asserted, on or before such expiration. The covenants and
agreements of the parties herein shall survive for the maximum period permitted
by law. The periods of survival of the representations and warranties and
covenants and agreements as contemplated by this Section 8.1 are referred to
herein as the "Survival Period".
8.2. Indemnification by BFG. From and after the Closing, BFG shall
indemnify and save Westlake harmless from and against any and all loss, cost,
damage, claim, judgment, fine, penalty, debt, liability or expense, including,
without limitation, reasonable fees and disbursements of counsel incurred by
Westlake in investigating and defending any such claim with reimbursement on a
current basis (herein collectively referred to as "Liability" or "Liabilities")
which results from or arises out of or occurs in connection with:
(a) the Retained Liabilities;
(b) subject to the Survival Periods established in Section
8.1, any breach of any covenant, representation, warranty, agreement or
obligation of BFG contained herein (other than any inaccuracies which are known
to Westlake prior to the Closing Date and not brought to the attention of BFG in
writing prior to the Closing Date);
(c) any injury, sickness, disease or death of any person,
damage to any property or the investigation or remediation of any soil, surface
water and/or groundwater resulting from or attributable to events occurring or
any condition existing prior to the Closing Date and arising from or in any way
incident to the ownership, use and/or operation of the CA&O Plant by BFG prior
to the Closing Date, but excluding any condition or event existing, arising or
occurring at, on, over or under the CA&O Plant for which Westlake indemnified
BFG pursuant to Section 8.3(c) of the Amended and Restated Master Conveyance
Agreement dated March 1, 1990 among BFG, BFG Intermediates Company, Inc. and
Westlake whereby Westlake acquired the ethylene dichloride and vinyl chloride
monomer plant at Calvert City, Kentucky (the "VCM Plant");
(d) the matters referenced on Exhibit 8.2 hereto; or,
(e) any breach of any covenant, representation, warranty,
agreement, or obligation of BFG contained in the Services Agreement or in the
Environmental Services Agreement, respectively, in the form of such documents
as are executed and delivered by the parties hereto at the Closing.
8.3. Indemnification by Westlake. From and after the Closing Date,
Westlake shall indemnify and save BFG harmless from and against any Liability
which results from, arises out of or occurs in connection with:
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(a) any assigned or assumed liability or obligation of
Westlake contained herein;
(b) subject to the Survival Periods established in Section 8.
1, any breach of any covenant, representation, warranty, agreement, or
obligation of Westlake contained herein (other than any inaccuracies which are
known to BFG prior to the Closing Date and not brought to the attention of
Westlake in writing prior to the Closing Date); or
(c) any injury, sickness, disease or death of any person,
damage to any property or the investigation or remediation of any soil, surface
water and/or groundwater resulting from or attributable to events occurring from
and after the Closing Date and arising from or in any way incident to the
ownership, use and/or operation of the CA&O Plant by Westlake after the Closing
Date, or
(d) any breach of any covenant, representation, warranty,
agreement, or obligation of Westlake contained in the Services Agreement or in
the Environmental Services Agreement, respectively, in the form of such
documents as are executed and delivered by the parties hereto at the Closing.
8.4. Limitation of Liability.
(a) The liability of the parties under this Section 8 shall be
limited to actual damages and shall not include incidental, consequential,
indirect loss of profits, or punitive or exemplary damages. Notwithstanding the
foregoing, however, any incidental, consequential, indirect loss of profits, or
punitive or exemplary damages alleged or recovered by a third party (including
Governmental Authorities and employees) against a party entitled to indemnity
hereunder shall be included in the damages recoverable under such indemnity.
(b) Notwithstanding anything herein to the contrary,
(i) except as provided in Section 8.4(b)(iii), neither
party shall be entitled to indemnification pursuant hereto unless the damages
and costs which have been incurred by such party by reason of those matters
specified herein equal or exceed in the aggregate during any 24-month period
One Hundred Thousand Dollars ($100,000), except as provided in Section
8.4(b)(iii) hereof, and for all purposes of this Agreement the foregoing
amounts shall be considered to be material;
(ii) the sum of either party's obligations arising
under and relating to Sections 8.2(b) and 8.3(b) (breach of representations
or warranties) herein shall not exceed the amount of the Purchase Price. The
limitation set forth in this Section 8.4(b)(ii) shall in no event limit the
obligations of either party under Sections 8.2(a), (c) or (d) and 8.3(a) or (c);
(iii) Westlake shall not be entitled to indemnification
pursuant to Section 8.2(c) hereof unless the damages and costs which have been
incurred by Westlake by reason of the matters specified therein during any
24-month period equal or exceed Ten Thousand Dollars ($10,000) individually
or Twenty Five Thousand Dollars ($25,000) in the aggregate.
(c) The right of indemnification herein provided for shall be
the sole remedy of each of the parties hereto with respect to any action
relating to or arising out of this Agreement, except in the event of fraud or
willful misrepresentation by the other party hereto.
(d) Notwithstanding any provision to the contrary included in
this Article 8, Westlake and BFG each hereby waive the right, for either itself
or its subsidiaries, to be indemnified by the other party hereunder to the
extent of any insurance proceeds or other recovery received by it or its
subsidiaries with respect to the Liabilities for which indemnification would
otherwise be required hereunder, but such party reserves the right to
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be indemnified for amount of the deductibles under such applicable insurance
policies of each party and its subsidiaries.
(e) Notwithstanding any provision to the contrary in this
Agreement, should Westlake desire to undertake to perform any environmental
remedial investigations or measures, which Westlake reasonably believes are
covered by Section 8.2 of this Agreement and necessitated by any Legal
Requirement, Westlake shall consult in good faith with BFG in advance of
performing such remedial investigations or measures. Such consultation shall
include, but not be limited to, providing BFG with work plans for the proposed
remedial investigations or measures.
8.5 Notice of Claim. If either party hereto (the "Indemnitee") desires to
assert an indemnity claim ("Claim") against the other ("Indemnitor") under this
Article 8, respectively, the Indemnitee shall give notice in writing to the
Indemnitor setting forth the amount, nature and circumstances of the Claim. No
communication between the parties shall be deemed to constitute valid notice
under this Section 8.5 unless: (i) the notice is provided in writing in
accordance with Section 13.1, and (ii) a specific Claim for indemnification is
asserted with reference to particular facts and circumstances described therein.
In the event of the assertion by any third party of circumstances giving rise to
a Claim with respect to which Westlake or BFG is entitled to indemnification
hereunder, the Indemnitor and its legal representatives shall have the right to
compromise or defend any such Claim (and the Indemnitee shall cooperate with
respect to any such compromise or defense); provided that, the Indemnitor shall
indemnify Indemnitee against any loss resulting from the Indemnitor's failure to
pay any such liability as may finally be determined. Upon payment of
indemnification by the Indemnitor, the Indemnitee will assign to Indemnitor its
right against any applicable account debtor or other responsible party to the
extent of the indemnification payment. The parties hereto mutually agree that
the remedies provided by this Article 8 shall be exclusive with respect to
the matters described herein and the transactions contemplated by this
Agreement, and that such remedies may be protected and enforced to the fullest
extent permitted at law and equity, including the right to seek specific
performance of affirmative obligations contained herein.
8.6 Amicable Resolution. In the event any dispute or controversy arising
under this Agreement cannot be resolved through reasonable discourse between the
managements of the parties hereto, then such dispute or controversy will be
submitted to the senior executive management of the respective parties for
amicable resolution. It is understood and agreed that such process is intended
to facilitate the prompt and efficient resolution of disputes and controversies
between the parties, but is not intended to serve as exclusive or binding or to
otherwise restrain the parties from taking such measures or actions as they
consider appropriate to enforce the rights, duties and obligations of the
parties as set forth herein.
9. Conditions to Closing.
9.1. Conditions Precedent to Obligations of Westlake. The obligation
of Westlake to consummate the transactions contemplated by this Agreement shall
be subject to satisfaction prior to the Closing Date or at the Closing of all of
the following conditions:
9.1.1. Representations, Warranties and Covenants of BFG. BFG
shall have complied in all material respects with all of its agreements and
covenants contained herein to be performed at or prior to the Closing, and all
the representations and warranties of BFG contained herein shall be accurate in
all material respects at and as of the Closing Date and through the Closing with
the same effect as though such representations and warranties had been made at
and as of the Closing Date.
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9.1.2. No Casualty, Loss or Damage. Except as disclosed in
Exhibit 9.1.2, no material casualty, loss or damage shall have occurred prior to
the Closing Date to any Assets unless BFG shall have either repaired or replaced
such lost or damaged property.
9.1.3. Title Insurance. Westlake shall have received the
commitment for title insurance and the Owner's Policies of Title Insurance
required under Section 1.4(b).
9.1.4. Documents. All Transaction Documents required to
be executed and delivered by BFG or third parties at the Closing as contemplated
hereby shall have been duly executed and delivered by BFG and any other parties
required and shall have been received.
9.1.5. Ad Valorem and Other Taxes. All ad valorem and
other taxes (excluding income) assessed and due against the Assets for the year
1996 and all prior years shall have been paid.
9.1.6. Governmental Approvals. All filings required to be made
under the HSR Act and any approvals related to the RCRA and HSWA permits in
respect of the transactions contemplated herein shall have been made and all
waiting periods thereunder shall either have expired or have been terminated.
9.1.7. Opinions; Corporate Authority. On the Closing Date, (i)
BFG shall have delivered to Westlake and such other parties as Westlake may
direct in connection with financing its purchase, in such form as Westlake's
legal counsel may reasonably request, opinions of BFG's counsel as to BFG's
corporate authority for the execution, delivery and performance of this
Agreement and the other Transaction Documents to be executed and delivered by
BFG pursuant hereto and the transactions contemplated thereby, and (ii) Westlake
shall have received from its local counsel, in such form as Westlake's legal
counsel may reasonably request, opinions regarding the enforceability of this
Agreement and the other Transaction Documents.
9.1.8. Ethylene Supply. In the event Westlake has been unable
prior to the Closing Date to secure the execution of the agreement contemplated
under Section 4.5 hereof, Westlake shall have no obligation to close hereunder,
so long as Westlake has fully complied with the covenants contained in Section
4.5 hereof. However, if Westlake and Geon execute any ethylene supply agreement
prior to Closing, this condition of Westlake's obligation to close shall be
deemed satisfied.
9.1.9 Westlake's Board Approval. The Board of Directors of
Westlake shall have approved the execution and delivery of this Agreement on or
before July 18, 1997, and any agreement required by or under it and the
performance by Westlake of its obligations under this Agreement and any
agreements required by or under it.
9.2. Conditions Precedent to Obligations of BFG. The obligation of BFG to
consummate the transactions contemplated by this Agreement shall be subject to
satisfaction prior to the Closing Date or at the Closing of all of the following
conditions:
9.2.1. Representations, Warranties and Covenants of Westlake.
Westlake shall have complied in all material respects with all of its agreements
and covenants contained herein to be performed at or prior to the Closing, and
all of the representations and warranties of Westlake contained herein shall be
accurate in all material respects at and as of the Closing Date and through the
Closing with the same effect as though such representations and warranties had
been made at and as of the Closing Date.
9.2.2. Payment. Westlake shall have delivered to BFG the
payments required to be made at the Closing pursuant to Section 2 hereof.
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9.2.3. Corporate Authority. On the Closing Date, Westlake
shall have delivered to BFG in such form as legal counsel for BFG may reasonably
request, opinions of Westlake's counsel as to Westlake's corporate authority for
the execution, delivery and performance of this Agreement and the Transaction
Documents to be delivered pursuant thereto by Westlake and the transactions
contemplated thereby.
9.2.4. Documents. All Transaction Documents required to
be executed and delivered by Westlake or third parties at Closing as
contemplated hereby shall have been duly executed and delivered by Westlake and
any other parties required and shall have been received.
9.2.5. Governmental Approvals. All filings required to be made
under the HSR Act and any approvals related to the RCRA and HSWA permits in
respect of the transactions contemplated herein shall have been made and all
waiting periods thereunder shall either have expired or have been terminated.
9.2.6 BFG's Board Approval. The Board of Directors of BFG
shall have approved the execution and delivery of this Agreement on or before
July 21, 1997, and any agreement required by or under it and the performance by
BFG of its obligations under this Agreement and any agreements required by or
under it.
9.2.7 Ethylene Supply. In the event Westlake has been
unable prior to the Closing Date to secure the execution of the agreement
contemplated under Section 4.5 hereof, BFG shall have no obligation to close
hereunder.
9.3. No Waiver. The consummation of the Closing shall not be deemed
to be a waiver by a party hereto of any of its rights or remedies hereunder for
breach of warranty, covenant or agreement herein by another party hereto or by
Westlake for any defects in title to any of the Assets.
10. Termination.
10.1. Grounds for Termination. This Agreement may be terminated by
Westlake and BFG as follows:
(a) by BFG if the Closing has not occurred by September 30,
1997;
(b) by Westlake if the Closing has not occurred by December
31, 1997;
(c) by Westlake or BFG in the event Westlake has been unable
prior to September 1, 1997 to secure the execution of the agreement contemplated
under Section 7.1(r) hereof, and in the case of Westlake, so long as Westlake
has fully complied with the covenants contained in Section 4.5 hereof; or,
(d) by mutual written agreement.
Any right of termination existing hereunder may be exercised by the giving of
written notice to the other party. In the event the Closing has not occurred by
March 1, 1998 and neither party has terminated this Agreement on or before that
date pursuant to the foregoing provisions, then this Agreement shall
automatically terminate on that date.
10.2. Effect of Termination. If this Agreement is terminated as
permitted:
(a) Such termination shall be without liability of either
party;
(b) This Agreement shall be terminated; and
(c) The release contained in Exhibit 10.2 shall
automatically become effective as of the date of the termination.
11. Receivables, Payables, Apportionment.
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<PAGE>
11.1. Apportionment; Payment Terms. Ad valorem and similar taxes and paid
utility charges applicable to periods both prior to and after the Closing Date
with respect to the Assets shall be prorated as of the Closing Date. At or about
the Closing Date, Westlake and BFG shall take readings or other measurements of
gas, water, electricity and other utilities; such readings and measurements
shall be binding, conclusive and used for purposes of the apportionment provided
in this Section. All amounts owing to BFG by Westlake or to Westlake by BFG,
resulting from such prorations or otherwise due and payable under the terms and
conditions of this Agreement, shall be settled and paid within thirty (30) days
unless otherwise expressly provided herein.
11.2. Other Taxes.
(a) Transfer or documentary taxes assessed upon or with
respect to the documents required to transfer the Real Property to be
transferred hereunder to Westlake and recording and filing fees with respect
thereto shall be the responsibility of BFG.
(b) To the extent there are any sales, use, or similar taxes
payable to any taxing authority in any state arising from this transaction they
shall be borne by Westlake and Westlake agrees to indemnify BFG therefor,
including any interest and penalties assessed in connection therewith. In the
event any taxing authority in any state assesses any such taxes against BFG, the
provisions of Section 8.3 shall apply with respect thereto.
12. Additional Covenants.
12.1. Consents to Assignments. With respect to those Business
Arrangements requiring the consent to assignment by third parties, BFG shall
take such actions as are appropriate to work with Westlake to effect assignment
of such contracts to Westlake at Closing at no additional cost to Westlake, but
BFG shall not be required to pay any consideration or expense, or assume any
obligation with respect thereto. Each party shall assist the other in attempting
to obtain any consents required for the assignment of any Permits requested by
Westlake prior to the Closing Date to be included in the Assets; provided, that
all expenses incurred in connection with the obtaining of such consents shall
be borne by BFG. If such consents or permits cannot be obtained prior to the
Closing Date, BFG and Westlake shall cooperate in any arrangement reasonably
satisfactory to the parties, including BFG retaining any such contract or
entering into an agreement to supply material to be supplied under such contract
to Westlake at no greater cost to Westlake, designed to fulfill BFG's
obligations thereunder and to afford Westlake the benefits thereof.
12.2. Books and Records.
(a) BFG Copies. Prior to the Closing, BFG may make and retain
copies of any of the Books and Records or Customer Data. Following the Closing,
Westlake shall give BFG access to the Books and Records or Customer Data for
reasonable and lawful business purposes related to events or occurrences
affecting BFG pursuant to this Agreement and pertaining to the Assets, including
the right to make copies thereof, during normal business hours. Westlake shall
keep such Books and Records and Customer Data safely and in good order for a
reasonable period of time and in accordance with all legal requirements
following the Closing Date. Prior to any destruction or other permanent
retirement of any such materials, Westlake will notify BFG and provide BFG the
option, at its expense, to take possession and control thereof. Should BFG so
elect, then Westlake will deliver any such Books and Records or Customer Data to
BFG, and Westlake shall thereafter have access thereto in the same manner as set
forth below.
-25-
<PAGE>
(b) Westlake Copies. BFG will retain the original
Environmental and Safety Records and Accounting Records. Following the Closing,
BFG shall give Westlake access thereto for reasonable and lawful business
purposes related to events or occurrences affecting Westlake pursuant to this
Agreement and pertaining to the Assets, including the right to make copies
thereof, during normal business hours. BFG shall keep such books, records and
documents safely and in good order for a reasonable period of time and in
accordance with all legal requirements following the Closing Date. Prior to any
destruction or other permanent retirement of any such materials, BFG will notify
Westlake and provide Westlake the option, at Westlake's expense, to take
possession and control thereof. Should Westlake so elect, then BFG will deliver
any such materials to Westlake, and BFG shall thereafter have access thereto in
the same manner as set forth above.
12.3. Financial Information and Other Assistance.
(a) Financial Services. It is recognized that either party may
need financial or other data or information after the Closing Date with respect
to the operation of the CA&O Plant and production of the products covering
fiscal periods prior to the Closing Date in order to comply with the rules and
regulations of the Securities and Exchange Commission, the courts or other
governmental organizations and agencies. Each party shall render reasonable
cooperation to the other and such party's auditors for such purposes, it being
understood and agreed that BFG is responsible for all periods prior to and
ending on the Closing Date and Westlake is responsible for all periods
commencing on or after the Closing Date. In particular, it is understood and
agreed that BFG will require support and effort by Westlake employees in order
to accomplish normal period-end financial closing for periods ending prior to,
on or after the Closing Date, and Westlake specifically agrees to make available
appropriate Business Employees who have become Westlake employees to
support such requirements of BFG on a priority basis. In addition, the party
requesting assistance from the other party shall bear all reasonable direct
and indirect costs and expenses incurred by such assisting party (excluding
salaries or wages of its employees) and such assistance shall be subject to
compliance by the requesting party with the assisting party's regulations
regarding security and confidential information.
(b) Other Assistance. Westlake shall also make available to
BFG and its representatives from time to time as may be reasonably required,
access to the CA&O Plant, in connection with claims or actions brought by or
against third parties based upon events or circumstances occurring prior to the
Closing Date. In addition to the rights of access provided hereinabove, Westlake
shall, at the request of BFG, provide reasonable assistance in the collection of
information or documents and make Westlake's employees available as witnesses
when reasonably requested by BFG. BFG shall reimburse Westlake for all
reasonable out-of-pocket costs and expenses incurred by Westlake (excluding
salaries or wages of Westlake's employees) in providing said assistance.
(c) Transition Services. As soon as practicable from the date
of this Agreement, and in order for Westlake to establish prior to the Closing
Date, any necessary accounting, payroll, environmental, human resources
(including safety and health), and management systems, Westlake shall designate
the name(s) of the employees or representatives with whom it wishes to have BFG
consult. BFG shall designate one or more of its employees in each of the
specified areas who will advise and consult with Westlake's designees. Each
party from time to time may by written notice to the other party designate
replacement employees or representatives.
-26-
<PAGE>
12.4. Remedial Investigations and Measures.
(a) BFG covenants to perform or cause to be performed, prior
to and after the Closing Date, all remedial investigations and measures designed
to address soil and groundwater conditions existing on the Closing Date that are
required by any Legal Requirement and that BFG is responsible for pursuant to
Section 8.2. BFG may also voluntarily conduct additional remedial investigations
and measures. For remedial measures performed after the Closing Date, BFG shall
consult with Westlake for planning purposes prior to performing such remedial
measures. Such consultation shall include providing Westlake with a work plan
for the planned remedial measures. BFG shall use all reasonable efforts to
design and conduct the remedial investigations and measures in a manner that
will avoid or minimize interference with Westlake's operation of the Assets.
Westlake shall provide reasonable access to BFG and its contractors for the
conduct of the remedial investigations and measures, including the installation
and operation of groundwater monitoring or recovery wells and collecting lines.
Any such remedial investigations and measures performed by Westlake pursuant to
a BFG work plan shall be subject to indemnification by BFG pursuant to this
Agreement. Both BFG and Westlake acknowledge that some or all of the remedial
investigations and measures will be performed by third parties on behalf of BFG,
and that no such arrangements shall operate to amend or relieve the obligations
of BFG under this Agreement. BFG will notify Westlake as to the operations or
activities to be undertaken by such third parties, and Westlake shall be
entitled to rely upon the communications, instructions or notifications
furnished to it by such third parties in relation to such operations or
activities.
(b) BFG and Westlake shall each notify the other of any
meetings with any applicable Governmental Agency in which it will participate
(together with copies of correspondence) in relation to any environmental
investigations or remedial measures to be conducted by or for such party.
Representatives of the other party shall have the opportunity to be present at
and to participate in any such meetings, at its own expense. With respect
to meetings with the State of Kentucky regarding this transaction, the
parties agree to cooperate in formulating a common strategy and presenting
their positions in a mutually agreed format.
(c) It is understood and agreed that BFG has retained, and has
not transferred to Westlake, responsibility for ongoing compliance with the RCRA
and HSWA permits applicable to the CA&O Plant, in accordance with their terms
and applicable laws and regulations, regarding investigation and remediation of
conditions at, on or in the CA&O Plant which were caused by or resulted from
BFG's ownership or operation thereof prior to the Closing Date. On the Closing
Date the parties shall enter into the Environmental Services Agreement referred
to in Section 6.6, and each party shall be responsible for performing the
obligations set forth therein in accordance with their terms. The parties
further agree that, notwithstanding any action or determination by an
Governmental Agency, the obligations and liabilities of the parties with respect
to environmental conditions existing at, on or in the CA&O Plant site shall be
determined exclusively by the terms of this Agreement and the Environmental
Services Agreement.
12.5. Efforts to Comply With Preconditions. BFG and Westlake covenant
that they will each use their best efforts to comply in good faith with all
preconditions to Closing set forth in Section 9 hereof in a timely manner, in
order to close the transactions contemplated by this Agreement by August 15,
1997 if practicable.
12.6. Effect of Closing. Upon Closing the release contained in
Exhibit 12.6 shall automatically become effective. Upon the request of either
party, both parties covenant and
-27-
<PAGE>
agree to execute and deliver a document in executed form containing the release
set forth in Exhibit 12.6. The failure of such execution and delivery shall not
affect the effectiveness of the release.
12.7. Services for Geon. Effective upon completion of the Closing, BFG
shall assign to Westlake and Westlake shall assume BFG's obligations under
Amended and Restated Plant Services Agreement relating to the manufacturing
facilities located in Calvert City, Kentucky dated April 28, 1993 between BFG
and The Geon Company ("Geon") relating to provision of services by BFG to Geon
at the CA&O Plant. Westlake and Geon may enter into a separate agreement
relating to these services. In addition, the parties shall allow Geon to be
added as a party to the Environmental Services Agreement.
12.8. Option on Weld Shop. Part of the Assets being acquired by
Westlake is the weld shop, laborer building and land thereunder, as reflected on
Exhibit 1.2 (the "Weld Shop"). Westlake hereby grants BFG an option to acquire
the Weld Shop, by making an election to do so and by having a new weld shop
comparable to the existing weld shop facility (but not the laborer building)
constructed at BFG's expense on a site to be designated by Westlake on
Westlake's property in Calvert City, Kentucky.
13. Miscellaneous.
13.1. Notice. Any notice required or permitted to be given under this
Agreement shall be in writing, and shall be deemed sufficiently given when
delivered in person or transmitted by telegram, or when deposited in the United
States mail (registered or certified) postage prepaid, to the addresses given
below or sent by fax to the fax numbers set forth below:
BFG: The B.F.Goodrich Company
9911 Brecksville Road
Cleveland, Ohio 44141-3247
Attention: Vice President, Legal
Fax No.: (216) 447-5730
Westlake: Westlake Monomers Corporation
Westlake Center
2801 Post Oak Blvd.
Houston, Texas 77056
Attention: President
Fax No: (713) 960-8738
13.2. Bulk Sales Laws. The parties hereby waive compliance, to the
extent possible, with the Bulk Sales Laws of any state in which the Assets are
located or in which operations relating to the CA&O Plant are conducted.
13.3. Further Documents. BFG shall, at any time and from time to time
after the Closing, upon request by Westlake and without further consideration,
execute and deliver such instruments of transfer or other documents and take
such further action as may be reasonably required in order to convey, transfer,
assign and deliver to Westlake the Assets in accordance with this Agreement or
to perfect any other undertaking made by BFG hereunder.
13.4. Assignability. Neither party shall assign this Agreement or any
Transaction Document (as ultimately executed and delivered on the Closing Date)
in whole or in part without the prior written consent of the other party except
for collateral assignments to lenders; provided, however, that either party
shall be entitled to assign this Agreement or any Transaction Document to a
parent, sister corporation, or subsidiary, if the relationship between the
assignee and assignor exists by virtue of 85 % ownership interest, whether
through the ownership of voting securities or otherwise. Any assignment made or
attempted in violation of this Section 13.4 shall be void and of no effect. No
assignment of rights or duties under this Agreement or any Transaction Documents
shall relieve such party of liability hereunder or thereunder unless and until
such party is released in writing by the other party. The terms
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<PAGE>
of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their successors and permitted assigns.
13.5. Exhibits. The Exhibits and Schedules (and any appendices
thereto) inclusive, referred to in this Agreement and all amendments thereto
from the time of agreement thereto, are and shall be incorporated herein and
made a part hereof.
13.6. Sections and Articles. All Sections and Articles referred to
herein are sections and articles of this Agreement and all Exhibits and
Schedules referred to herein are exhibits and schedules attached to this
Agreement.
13.7 Entire Agreement. This Agreement and the other Transaction Documents
constitute the full understanding of the parties, a complete allocation of risks
between them and complete and exclusive statement of the terms and conditions of
their agreement relating to the subject matter thereof and supersede any and all
prior agreements, whether written or oral, that may exist between the parties
with respect thereto. Except as otherwise specifically provided herein and in
the Transaction Documents, no conditions, usage of trade, course of dealing or
performance, understanding or agreement purporting to modify, vary, explain or
supplement the terms or conditions of this Agreement and the Transaction
Documents shall be binding unless hereafter made in writing and signed by the
party to be bound, and no modification shall be effected by the acknowledgment
or acceptance of documents containing terms or conditions at variance with or in
addition to those set forth herein and in the Transaction Documents. No waiver
by either party with respect to any breach or default or of any right or remedy
and no course of dealing, shall be deemed to constitute a continuing waiver of
any other breach of default or of any other right or remedy, unless such waiver
be expressed in writing signed by the party to be bound. Failure of a party
to exercise any right shall not be deemed a waiver of such right or rights in
the future.
13.8. Headings. Headings as to the contents of particular articles
and sections are for convenience only and are in no way to be construed as part
of this Agreement or as a limitation of the scope of the particular articles or
sections to which they refer.
13.9. Controlling Law and Jurisdiction. The validity, interpretation
and performance of this Agreement and any dispute connected herewith shall be
governed and construed in accordance with the laws of the Commonwealth of
Kentucky without regard to choice-of-law principles.
13.10. Public Announcement. No press release, public announcement,
confirmation or other information regarding this Agreement or the contents
hereof shall be made by either party without the prior consultation of the other
party, except as may be necessary in the opinion of counsel of either party to
meet the requirements or regulations of any applicable law, governmental unit or
agency or stock exchange on which the securities of such party may be listed.
Notwithstanding the foregoing, the parties will provide prior notice of all such
public announcements.
13.11. Finder's Fees and Commissions; Sellers' Closing Expenses. BFG and
Westlake agree to indemnify each other and hold each other harmless from any
liability, cost or expense (including but not limited to, fees and disbursements
of legal counsel) resulting from any agreement, arrangement or understanding
made or alleged to be made by the indemnifying party with any third party for
brokerage or finder's fees or other commissions in connection with this
agreement, the documents and instruments referred to herein, or the transactions
contemplated hereby or thereby.
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<PAGE>
13.12. Responsible Care. Each party covenants and agrees that in all
of its operations hereunder after the Closing Date it will operate in accordance
with the principles of Responsible Care from time to time adopted by the
Chemical Manufacturers Association. A copy of the current principles is attached
hereto as Exhibit 13.12.
13.13 Confidentiality.
(a) In connection with the activities contemplated herein, BFG
and Westlake will disclose or make available to the receiving party certain
confidential or proprietary information and data ("Proprietary Information").
This Agreement and its contents, as well as all information relating to the
status and contents of discussions and actions hereunder, are Proprietary
Information.
(b) Proprietary Information communicated by the disclosing
party to the receiving party shall not be disclosed by the receiving party to
any other person or entity (i) unless authorized in writing by the disclosing
party, except to employees or agents of the receiving party having a
need-to-know, provided that such employees are bound to maintain the
confidentiality thereof, or (ii) except as may be required by law or order of
any governmental body or tribunal.
(c) The receiving party shall, for a period of five (5) years
from the date of this Agreement, protect and maintain in confidence Proprietary
Information received by it and use the same effort to avoid disclosure thereof
to others as it employs with respect to information of its own which it does not
desire to be disclosed to others.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
the duly authorized officers of the parties hereto on the date first hereinabove
written.
THE B.F.GOODRICH COMPANY
By: /s/ David L. Burner
-------------------------------
Name: David L. Burner
Title: C.E.O.
WESTLAKE MONOMERS CORPORATION
By: /s/ Albert Chao
-------------------------------
Name: Albert Chao
Title: President
-30-
INTRODUCTION TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
On August 15, 1997, The BFGoodrich Company (the "Company") completed the
disposition of its chlor-alkali and olefins business to The Westlake Group for
$92.75 million. The accompanying unaudited pro forma condensed consolidated
balance sheet presents the financial position of the Company as if the
divestiture occurred at June 30, 1997.
<PAGE>
EXHIBIT 99
THE B.F.GOODRICH COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1997
(Dollars in millions)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
ASSETS
- ------
Current Assets
Cash and cash equivalents $ 174.9 $ 105.0 $ 279.9
Accounts and notes receivable, net of allowance 367.5 (26.7) 340.8
Inventories 350.0 (13.5) 336.5
Other current assets 94.5 (0.8) 93.7
--------------- --------------- --------------
Total Current Assets 986.9 64.0 1,050.9
--------------- --------------- --------------
Property
Land, buildings and machinery and equipment 1,551.0 (142.4) 1,408.6
Allowance for depreciation and amortization (676.4) 99.0 (577.4)
--------------- --------------- --------------
Total Property 874.6 (43.4) 831.2
--------------- --------------- --------------
Goodwill 504.3 - 504.3
Other Non-current Assets 251.6 (2.1) 249.5
--------------- --------------- --------------
$ 2,617.4 $ 18.5 $ 2,635.9
=============== =============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current Liabilities
Accounts payable $ 227.2 $ (7.5) $ 219.7
Accrued expenses 233.2 - 233.2
Other current liabilities 53.7 11.5 65.2
--------------- --------------- --------------
Total Current Liabilities 514.1 4.0 518.1
--------------- --------------- --------------
Long-term Debt and Capital Lease Obligations 391.8 - 391.8
Postretirement Benefits Other Than Pensions 341.4 - 341.4
Other Non-current Liabilities 81.5 - 81.5
Mandatorily Redeemable Preferred Securities of Trust 122.9 - 122.9
Shareholders' Equity
Common stock 276.2 - 276.2
Additional capital 367.3 - 367.3
Income retained in the business 564.8 14.5 579.3
Other shareholders' equity (42.6) - (42.6)
--------------- --------------- --------------
Total Shareholders' Equity 1,165.7 14.5 1,180.2
--------------- --------------- --------------
$ 2,617.4 $ 18.5 $ 2,635.9
=============== =============== ==============
</TABLE>
See accompanying note to Unaudited Pro Forma Condensed Consolidated Balance
Sheet.
<PAGE>
NOTE TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
On August 15, 1997, The BFGoodrich Company (the "Company") completed the
disposition of its chlor-alkali and olefins business to The Westlake Group for
$92.75 million. The accompanying unaudited pro forma condensed consolidated
balance sheet presents the financial position of the Company as if the
divestiture occurred at June 30, 1997. In addition to the cash proceeds from the
sale, the settlement of accounts receivable and accounts payable have been
presented as a pro forma adjustment to cash.
