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EXHIBIT 10.05
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ASSET PURCHASE AGREEMENT
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BY AND BETWEEN
ARISTECH CHEMICAL CORPORATION
as Seller
AND
ASHLAND INC.
as Buyer
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April 28, 1995
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TABLE OF CONTENTS
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ARTICLE I. THE TRANSACTION
1.1 Sale and Purchase of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Enumeration of Purchased Assets . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Retained Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.4 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.5 Physical Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.6 Purchase Price Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.7 Determination of Working Capital . . . . . . . . . . . . . . . . . . . . . . . . 11
1.8 Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.9 Allocation of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.10 Assumption of Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.11 Certain Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1.12 Continuing Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
1.13 Certain Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF SELLER
2.1 Organization; Corporate Power and Authority . . . . . . . . . . . . . . . . . . 29
2.2 Authorization and Enforceability . . . . . . . . . . . . . . . . . . . . . . . . 29
2.3 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.4 Certain Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.5 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.6 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.7 Certain Contracts and Commitments . . . . . . . . . . . . . . . . . . . . . . . 33
2.8 Permits; Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.9 Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.10 Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.11 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.12 Intellectual Property Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.13 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.14 Sufficiency of the Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.15 Maintenance of Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.16 Customers and Suppliers Relations . . . . . . . . . . . . . . . . . . . . . . . 39
2.17 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.18 Violation of Certain Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.19 Finders' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.20 Accuracy of Representations and Warranties . . . . . . . . . . . . . . . . . . 41
2.21 Limitation on Seller's Warranties . . . . . . . . . . . . . . . . . . . . . . . 41
2.22 Knowledge Concerning Buyer's Representations . . . . . . . . . . . . . . . . . . 42
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF BUYER
3.1 Organization; Corporate Power and
Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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3.2 Authorization and Enforceability . . . . . . . . . . . . . . . . . . . . . . . . 42
3.3 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
3.4 Absence of Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
3.5 Finders' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
3.6 Knowledge Concerning Seller's
Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE IV. COVENANTS OF THE PARTIES
4.1 Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
4.2 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.3 Access to and Preservation of Information
and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.4 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.5 Transition Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.6 Non-competition and Non-interference
by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.7 Non-Interference by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.8 Identification of Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.9 Return of Polyester Resins . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.10 Colton Resins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
4.11 Cleaning of Colton Tanks . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE V. CLOSING
5.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.2 Deliveries by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
5.4 Deliveries by Both Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE VI. CERTAIN ADDITIONAL COVENANTS
6.1 Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
6.2 Fulfillment of Assumed Liabilities . . . . . . . . . . . . . . . . . . . . . . . 64
6.3 Collection of Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . 64
6.4 Use of Name "Aristech Chemical Corporation" . . . . . . . . . . . . . . . . . . 65
6.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE VII. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
7.1 Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
7.2 Survival of Representations . . . . . . . . . . . . . . . . . . . . . . . . . . 66
7.3 Indemnification by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
7.4 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
7.5 Limitations on Indemnification Obligations . . . . . . . . . . . . . . . . . . . 69
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ARTICLE VIII. ENVIRONMENTAL INDEMNIFICATION AND OTHER ENVIRONMENTAL MATTERS
8.1 Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
8.2 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
8.3 Provisions Relating to All Properties . . . . . . . . . . . . . . . . . . . . . 85
8.4 Provisions Relating to Neville Island
Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
8.5 Provisions Relating to Other Production
Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
8.6 Provisions Relating to Distribution
Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
8.7 Environmental Indemnification Cap . . . . . . . . . . . . . . . . . . . . . . . 169
8.8 Transfer of Buyer's Environmental
Indemnification Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
ARTICLE IX. MISCELLANEOUS
9.1 Alternative Dispute Resolution Process . . . . . . . . . . . . . . . . . . . . . 181
9.2 Exclusive Remedy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
9.3 Exclusion of Certain Damages . . . . . . . . . . . . . . . . . . . . . . . . . . 186
9.4 Survival of Indemnification Provisions . . . . . . . . . . . . . . . . . . . . . 187
9.5 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
9.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188
9.7 Certain Understandings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190
9.8 Sales and Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190
9.9 Amendments, Waivers and Consents . . . . . . . . . . . . . . . . . . . . . . . . 190
9.10 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
9.11 No Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192
9.12 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192
9.13 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192
9.14 No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 192
9.15 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193
9.16 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193
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SCHEDULES
Schedule 1.2(a) - Certain Real Estate
Schedule 1.2(b) - Buyer's Neville Island Plant
Schedule 1.2(c) - Excluded Equipment at Business Sites
Schedule 1.2(e) - Certain Equipment
Schedule 1.2(g) - Vehicles
Schedule 1.2(h) - Real Property Leases
Schedule 1.2(i) - Personal Property Leases
Schedule 1.2(j) - Permits
Schedule 1.2(k) - Certain Orders and Agreements
Schedule 1.2(l) - Purchased Intellectual Property
Schedule 1.3(d) - Retained Accounts Receivable
Schedule 1.3(k) - Retained Intellectual Property
Schedule 1.9 - Purchase Price Allocation
Schedule 1.10(a) - Assumed Collective Bargaining
(iii) Agreements
Schedule 1.11(a) - Business Employees
Schedule 1.11(b) - Employee Benefits
Schedule 2.3 - Consents and Approvals
Schedule 2.4 - Certain Financial Statements
Schedule 2.5 - Conduct of Business
Schedule 2.6 - Litigation
Schedule 2.7 - Certain Contracts and Commitments
Schedule 2.9 - Leased Real Estate
Schedule 2.10(a) - Encumbrances on Personal Property
Schedule 2.11 - Labor Relations
Schedule 2.13 - Environmental Matters
Schedule 4.5(a) - Transitional Employees
Schedule 8.7(e) - Escalation Methodology for
Environmental Cap, Retained Premises
Cap and UPR Cap
EXHIBITS
Exhibit "A" - Seller's Accounting Policies
Exhibit "B" - Form of Assumption and
Assignment Agreement
Exhibit "C" - Form of Seller's Supply Contract
Exhibit "D" - Form of Buyer's PA Supply Contract
Exhibit "E" - Form of Buyer's 2-EH Supply Contract
Exhibit "F" - Form of Opinion of Seller's
Counsel
Exhibit "G" - Form of Mitsubishi Corporation Letter
Agreement
Exhibit "H" - Form of Opinion of Buyer's Counsel
Exhibit "I" - Form of Services Agreement
Exhibit "J" - Form of Easement Agreement
Exhibit "K" - Form of Lease Agreement
Exhibit "L" - Form of Confidentiality Agreement
[The above Schedules and Exhibits to this Agreement are not being filed
herewith. The Registrant agrees to furnish supplementally a copy of any such
omitted Schedule or Exhibit to the Commission upon request.]
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INDEX OF DEFINED TERMS
Defined Term Section In Which Defined
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1994 Daily Throughput Rates . . . . . . . . . . . . . . . . . . . Section 8.3(f)(i)(D)
Access Easement Areas . . . . . . . . . . . . . . . . . . . . . . Section 8.4(a)
Additional Operating Space . . . . . . . . . . . . . . . . . . . Section 8.2(a)
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Annual Deductible Amount . . . . . . . . . . . . . . . . . . . . Section 8.5(e)(i)
Appropriate and Reasonable Criteria . . . . . . . . . . . . . . . Section 8.2(b)
Arbitration Notice . . . . . . . . . . . . . . . . . . . . . . . Section 8.3(v)(C)(1)
Aristech Environmental Condition . . . . . . . . . . . . . . . . Section 8.4(g)
Arrangement for treatment or disposal . . . . . . . . . . . . . . Section 8.2(c)
Assessed Environmental Conditions . . . . . . . . . . . . . . . . Section 8.4(p)(v)
Assumed Liabilities. . . . . . . . . . . . . . . . . . . . . . . Section 1.10(a)
Assumption and Assignment Agreement . . . . . . . . . . . . . . . Section 5.2(d)
Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Business Employees. . . . . . . . . . . . . . . . . . . . . . . . Section 1.2(o)
Business Interruption Costs . . . . . . . . . . . . . . . . . . . Section 8.2(d)
Business Sites . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.8
Buyer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Buyer Damages . . . . . . . . . . . . . . . . . . . . . . . . . . Section 7.3
Buyer Environmental Conditions . . . . . . . . . . . . . . . . . Section 8.2(e)
Buyer Environmental Report . . . . . . . . . . . . . . . . . . . Section 2.13
Buyer Exacerbated Conditions . . . . . . . . . . . . . . . . . . Section 8.7(a)(iii)
Buyer Indemnitees . . . . . . . . . . . . . . . . . . . . . . . . Section 7.3
Buyer Regulated Substance . . . . . . . . . . . . . . . . . . . . Section 8.2(f)
Buyer's 2-EH Supply Contract . . . . . . . . . . . . . . . . . . Section 5.2(h)
Buyer's Ancillary Documents . . . . . . . . . . . . . . . . . . . Section 3.1
Buyer's Environmental Indemnification Rights . . . . . . . . . . Section 8.8
Buyer's Neville Island Plant. . . . . . . . . . . . . . . . . . . Section 1.2(b)
Buyer's Operating Space . . . . . . . . . . . . . . . . . . . . . Section 8.2(g)
Buyer's PA Supply Contract . . . . . . . . . . . . . . . . . . . Section 5.2(g)
Buyer's Percentage . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(h)
CERCLA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(i)
Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(j)
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.1
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.1
Closing Inventory. . . . . . . . . . . . . . . . . . . . . . . . Section 1.5
COBRA Provisions. . . . . . . . . . . . . . . . . . . . . . . . . Section 1.11(c)
Colton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.8(b)
Colton Cap . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.8(b)(ii)(B)(1)
Colton Resins. . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.2(f)
Confidential Business Information . . . . . . . . . . . . . . . . Section 4.1(d)
Construction or Expansion Project . . . . . . . . . . . . . . . . Section 8.2(k)
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Defined Term Section In Which Defined
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Continuing Liability . . . . . . . . . . . . . . . . . . . . . . Section 1.12(a)
Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.7
Court . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.3(v)(A)
Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 7.5(b)(iii)
Deeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.2(a)
DER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.4(p)(iv)
Determination. . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.12(e)
Direct Reports . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.11(d)(i)
Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Distribution Facilities . . . . . . . . . . . . . . . . . . . . . Section 8.6
Easement Agreement . . . . . . . . . . . . . . . . . . . . . . . Section 5.4(b)
Environmental Assessment . . . . . . . . . . . . . . . . . . . . Section 8.2(k)
Environmental Cap . . . . . . . . . . . . . . . . . . . . . . . . Section 8.7(a)
Environmental Condition . . . . . . . . . . . . . . . . . . . . . Section 8.2(m)
Environmental Law . . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(n)
Environmental Professional . . . . . . . . . . . . . . . . . . . Section 8.2(o)
Environmental Study . . . . . . . . . . . . . . . . . . . . . . . Section 8.4(o)(ii)
EPCRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(ac)(ii)
ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.11(c)
Financial Statements . . . . . . . . . . . . . . . . . . . . . . Section 2.4
Governmental Approval . . . . . . . . . . . . . . . . . . . . . . Section 8.2(p)
HMOs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.11(b)(iii)
Identified Environmental Conditions . . . . . . . . . . . . . . . Section 8.5(d)
Indemnification Payments . . . . . . . . . . . . . . . . . . . . Section 8.7(a)(i)
Indemnification Obligations . . . . . . . . . . . . . . . . . . . Section 8.7(b)
Indemnified Party . . . . . . . . . . . . . . . . . . . . . . . . Section 7.5(b)(i)
Indemnified Person . . . . . . . . . . . . . . . . . . . . . . . Section 4.5(f)
Indemnifying Party . . . . . . . . . . . . . . . . . . . . . . . Section 7.5(b)(i)
Jacksonville Incinerator . . . . . . . . . . . . . . . . . . . . Section 8.3(f)(i)
Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 7.5(a)(iii)
Lead Party . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.3(j)(i)
Leased Premises . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.2(h)
MA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Modifications . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.3(f)(i)(A)
MSDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(ac)(i)
Neville Island Facility. . . . . . . . . . . . . . . . . . . . . Section 1.2(b)
Non-Competition Claims. . . . . . . . . . . . . . . . . . . . . . Section 1.2(o)
Non-Conforming Goods. . . . . . . . . . . . . . . . . . . . . . . Section 1.5
Non-Lead Party . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.3(j)(ii)
Off-Site Locations . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(q)
Operating Easement Areas . . . . . . . . . . . . . . . . . . . . Section 8.4(a)
Other Confidential Information . . . . . . . . . . . . . . . . . Section 4.1(d)
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Defined Term Section In Which Defined
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Other Environmental Conditions . . . . . . . . . . . . . . . . . Section 8.5(e)
Other Production Facilities . . . . . . . . . . . . . . . . . . . Section 8.5
Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.5(d)
Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.8
Permitted Encumbrances . . . . . . . . . . . . . . . . . . . . . Section 2.10(a)
Pre-Closing Environmental Condition . . . . . . . . . . . . . . . Section 8.2(s)
Pre-Closing Waste . . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(t)
Project Affected Soils . . . . . . . . . . . . . . . . . . . . . Section 8.2(u)
Project Area . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(v)
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(w)
Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.4
Purchase Price Adjustment. . . . . . . . . . . . . . . . . . . . Section 1.6
Purchased Accounts Receivable. . . . . . . . . . . . . . . . . . Section 1.2(l)
Purchased Assets. . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Purchased Intellectual Property. . . . . . . . . . . . . . . . . Section 1.2(n)
Purchased Inventory. . . . . . . . . . . . . . . . . . . . . . . Section 1.2(f)
Raw Materials. . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.2(f)
RCRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(x)
Real Estate. . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.2(b)
Regulated Substance . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(y)
Regulatory Remediation Standard . . . . . . . . . . . . . . . . . Section 8.2(z)
Regulatory Remediation Standards . . . . . . . . . . . . . . . . Section 8.4(p)(iii)
Release to the Environment . . . . . . . . . . . . . . . . . . . Section 8.2(aa)
Remaining UPR Cap . . . . . . . . . . . . . . . . . . . . . . . . Section 8.8(b)(ii)(B)(1)
Required by Law . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(ab)
Required Regulated Substance Records . . . . . . . . . . . . . . Section 8.2(ac)
Retained Assets. . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Retained Intellectual Property. . . . . . . . . . . . . . . . . . Section 1.3(k)
Retained Liabilities. . . . . . . . . . . . . . . . . . . . . . . Section 1.10(b)
Retained Premises . . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(ad)
Retained Premises Cap . . . . . . . . . . . . . . . . . . . . . . Section 8.7(e)
Seller. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Seller Damages . . . . . . . . . . . . . . . . . . . . . . . . . Section 7.4
Seller Indemnitees . . . . . . . . . . . . . . . . . . . . . . . Section 7.4
Seller's Ancillary Documents . . . . . . . . . . . . . . . . . . Section 2.1
Seller's Neville Island Plant. . . . . . . . . . . . . . . . . . Section 1.3(m)
Seller's Percentage . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(ae)
Seller's Supply Contract . . . . . . . . . . . . . . . . . . . . Section 5.2(f)
Severance Payments. . . . . . . . . . . . . . . . . . . . . . . . Section 1.11(d)(i)
Surveys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.10(b)
Terminated Direct Report . . . . . . . . . . . . . . . . . . . . Section 1.11(d)(i)
Title Commitment Reports . . . . . . . . . . . . . . . . . . . . Section 2.10(b)
Transferred Employees. . . . . . . . . . . . . . . . . . . . . . Section 1.11(a)
- iii -
9
Defined Term Section In Which Defined
------------ ------------------------
Transition Period . . . . . . . . . . . . . . . . . . . . . . . . Section 4.5(e)
Transitional Employee Payments . . . . . . . . . . . . . . . . . Section 4.5(d)
Transitional Employees . . . . . . . . . . . . . . . . . . . . . Section 4.5(a)
TSCA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.2(n)
UPR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
USW Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.10(a)(iii)
Vehicles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.2(g)
Working Capital. . . . . . . . . . . . . . . . . . . . . . . . . Section 1.6
- iv -
10
ASSET PURCHASE AGREEMENT
------------------------
This Asset Purchase Agreement ("AGREEMENT") is made as of
April 28, 1995, by and between Aristech Chemical Corporation, a Delaware
corporation ("SELLER"), and Ashland Inc., a Kentucky corporation ("BUYER"),
through its Ashland Chemical Company Division.
Seller is engaged in, among other things, the production and
sale of unsaturated polyester resins ("UPR") and maleic anhydride ("MA") and
the distribution of UPR and other polyester products ("DISTRIBUTION"). Seller
desires to sell and transfer to Buyer and Buyer desires to purchase from
Seller, certain assets relating to Seller's UPR, MA and Distribution businesses
(collectively, the "BUSINESS") on the terms and subject to the conditions
contained in this Agreement. In consideration of the mutual agreements
contained herein, Seller and Buyer, intending to be legally bound, agree as
follows:
ARTICLE I
THE TRANSACTION
---------------
1.1. SALE AND PURCHASE OF ASSETS. At the Closing referred to in
Section 5.1 below, Seller shall sell and transfer to Buyer, and Buyer shall
purchase from Seller, all of Seller's right,
11
title and interest in and to the assets, properties and rights of Seller as of
the date of the Closing that are used in or directly relate to the conduct of
the Business, wherever such assets are located and whether real, personal or
mixed, tangible or intangible, and whether or not any of such assets have any
value for accounting purposes or are carried or reflected on or specifically
referred to in Seller's books or financial statements (the "PURCHASED ASSETS"),
except that the Purchased Assets shall not include any of the assets,
properties and rights described in Section 1.3 below (the "RETAINED ASSETS").
1.2. ENUMERATION OF PURCHASED ASSETS. Without limiting the
generality of the foregoing, the Purchased Assets shall include the following
assets owned by Seller and used in the Business (except to the extent that any
of the following assets are also enumerated in Section 1.3 below as being
Retained Assets):
(a) all those certain lots and pieces of ground, together with
the buildings, structures and other improvements erected thereon, and all
easements, rights and privileges appurtenant to any of the foregoing, owned by
Seller and located at Bartow, Florida, Jacksonville, Arkansas, and Colton,
California, each as more particularly described in Schedule 1.2(a);
(b) each of such buildings, structures and other improvements,
together with all easements, rights and privileges appurtenant thereto, owned
by Seller and located at Seller's
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12
facility at Neville Island, Pennsylvania (the "NEVILLE ISLAND FACILITY"), as
are described in Schedule 1.2(b) ("BUYER'S NEVILLE ISLAND PLANT"), (Buyer's
Neville Island Plant, together with the real property described in Section
1.2(a), are collectively referred to herein as the "REAL ESTATE");
(c) all of Seller's furniture, fixtures, equipment, machinery,
spare parts, tools, dies, supplies and all other tangible personal property
(other than inventory) located upon or affixed to Buyer's Neville Island Plant,
as are described in Schedule 1.2(b) or that are located upon or affixed to the
other Real Estate or the Leased Premises, except for those items set forth in
Schedule 1.2(c);
(d) those items of Seller's equipment, machinery, spare parts,
tools, dies, supplies and other tangible personal property (other than
inventory) described in Schedule 1.2(b) as are located at the Seller's Neville
Island Plant (as defined in Section 1.3(m));
(e) the equipment located at Seller's corporate research center
in Monroeville, Pennsylvania, used in connection with the molding group and
pilot plant operations of the polyester technical group of Seller, all as more
particularly described in Schedule 1.2(e);
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13
(f) Seller's inventory of resins being cured at the Colton,
California Business Site (as defined in Section 2.8) (the "COLTON RESINS"),
together with all those other items of Seller's inventory of raw materials
("RAW MATERIALS"), work-in-process, finished goods, packaging and supplies held
for use in the conduct of the Business, wherever located and whether or not
carried on Seller's books of account (collectively with the Colton Resins, the
"PURCHASED INVENTORY");
(g) each of such trucks, tractors, trailers and other vehicles
owned by Seller and used in the Business as is more particularly described in
Schedule 1.2(g) (the "VEHICLES");
(h) Seller's leasehold interest as lessee of the real property
(such real property, together with that described in Schedule 2.9, being
collectively referred to herein as the "LEASED PREMISES") subject to the leases
listed in Schedule 1.2(h);
(i) all of Seller's leasehold interest as lessee of the personal
property subject to the leases listed in Schedule 1.2(i);
(j) each of Seller's Permits (as hereinafter defined) listed in
Schedule 1.2(j);
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14
(k) all of Seller's sales orders and sales contracts, purchase
orders and purchase contracts, quotations and bids, license agreements, supply
agreements and other contracts and agreements to which Seller is a party and
that relate exclusively to the Business, including without limitation those
listed in Schedule 1.2(k);
(l) all of Seller's trade and other notes and accounts
receivable (collectively, the "PURCHASED ACCOUNTS RECEIVABLE"), advance
payments and prepaid items and expenses arising from the Business and existing
on the Closing Date, except for those listed in Schedule 1.3(d);
(m) all of Seller's books, records, manuals, documents, books of
account, correspondence, sales and credit reports, customer lists, literature,
brochures, advertising material and the like that relate exclusively to the
Business;
(n) those of Seller's intellectual property licenses, patents
and applications therefor, trade secrets, copyrights and applications therefor,
proprietary manufacturing processes and other intellectual property or
industrial property rights that are used in the Business and that are described
on Schedule 1.2(n), including the right to use the name "Aristech Chemical
Corporation" and derivatives thereof pursuant to Section 6.4 (collectively, the
"PURCHASED INTELLECTUAL PROPERTY"); and
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15
(o) Seller's causes of action, if any and to the extent
assignable, for enforcement of any agreement between Seller and any person
employed by Seller in the Business prior to the Closing ("BUSINESS EMPLOYEES")
restricting such person's right to engage in any activity competing with the
Business ("NON-COMPETITION CLAIMS"); provided, however, that if Buyer receives
any payment as a result of the enforcement of a Non-Competition Claim, whether
in settlement of or as damages for such claim, Buyer shall, upon receipt of
such payment, pay to Seller that part of such payment allocable to such
Business Employee's conduct prior to the Closing.
1.3. RETAINED ASSETS. Notwithstanding the provisions of Sections
1.1 and 1.2, all of the following assets, properties and rights of Seller shall
be excluded from the Purchased Assets and shall constitute the Retained Assets:
(a) all of Seller's assets, properties and rights related to
businesses of Seller other than the Business, including any assets located or
generally maintained at Seller's corporate headquarters in Pittsburgh,
Pennsylvania;
(b) all of Seller's cash on hand and in banks, cash equivalents,
deposits and investments;
(c) all of Seller's negotiable instruments and chattel paper;
- 6 -
16
(d) those of Seller's accounts receivable relating to the
Business as are listed on Schedule 1.3(d);
(e) all of Seller's bank accounts, checkbooks and canceled
checks;
(f) Seller's minute book, corporate seal and federal, state and
local tax returns and accounting ledgers;
(g) all insurance policies of Seller and Seller's rights in
connection therewith;
(h) all of Seller's federal, state or local income tax benefits,
claims or receivables;
(i) all of Seller's rights of indemnification, claims and causes
of action of any nature whatsoever that relate to the conduct of the Business
prior to the Closing (other than the Non-Competition Claims);
(j) all of Seller's rights under this Agreement and under all
purchase orders, purchase contracts or other agreements, instruments or
contracts related to Seller's trade payables;
(k) such of Seller's intellectual property licenses, patents and
applications therefor, trade secrets, copyrights and applications therefor,
trade names and applications therefor,
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17
trade dress, and names and slogans, including without limitation, any rights to
use the name "Aristech Chemical Corporation" or any derivative thereof (except
as provided in Section 6.4), proprietary manufacturing processes and other
intellectual property rights used in the Business as are described in Schedule
1.3(k) (collectively, the "RETAINED INTELLECTUAL PROPERTY");
(l) all those certain lots and pieces of ground underlying
Buyer's Neville Island Plant, and all easements, rights and privileges
appurtenant thereto;
(m) all lots and pieces of ground owned by Seller, together with
the buildings, structures and other improvements erected thereon, that comprise
the Neville Island Facility (other than Buyer's Neville Island Plant), and all
easements, rights and privileges appurtenant thereto ("SELLER'S NEVILLE ISLAND
PLANT");
(n) all of Seller's furniture, fixtures, equipment, machinery,
spare parts, tools, dies, supplies and all other tangible personal property
located upon or affixed to Seller's Neville Island Plant other than that set
forth in Schedule 1.2(b); and
(o) those items of Seller's equipment, machinery, spare parts,
tools, dies, supplies, and other tangible personal property (other than
inventory) located upon or affixed to the
- 8 -
18
Real Estate or the Leased Premises as are set forth in Schedule 1.2(c).
1.4. PURCHASE PRICE. The aggregate purchase price for the
Purchased Assets shall be $81,350,000 (the "PURCHASE PRICE"), subject to
adjustment as provided in Section 1.6, plus the assumption of certain
liabilities of Seller, as provided in Section 1.10.
1.5. PHYSICAL INVENTORY. The parties shall conduct a physical
count and inspection of the inventory of Seller held for use exclusively in the
Business as of the close of business on the Closing Date (the "CLOSING
INVENTORY"). During such process, Seller and Buyer shall identify the
following items of inventory, Seller's standard product cost of which, per
item, exceeds $25,000: (a) polyester resins and other polyester based products
that are more than seven (7) months old based on the batch record date of
production thereof, and (b) waxes, catalysts and mold care products that are
more than twelve (12) months old based on the date of shipment thereof to
Seller (collectively, the "NON-CONFORMING GOODS"). Buyer shall purchase all of
the Closing Inventory (including items described in clauses (a) and (b),
Seller's standard product cost of which is $25,000 or less). The parties shall
negotiate in good faith to determine within three (3) business days after the
Closing Date a mutually agreeable purchase price for all Non-Conforming Goods,
and Buyer shall purchase all of the Non-Conforming Goods at the agreed upon
- 9 -
19
price. The purchase price for Non-Conforming Goods sold pursuant to this
Section 1.5 shall be paid by virtue of the Purchase Price Adjustment (as
defined below).
1.6. PURCHASE PRICE ADJUSTMENT. If the Working Capital (as
defined below) at the Closing Date, as determined in accordance with Section
1.7, is less than $26,400,000, then the Purchase Price shall be reduced
dollar-for-dollar by the amount of such deficiency. If the Working Capital at
the Closing Date, as so determined, is greater than $26,400,000, then the
Purchase Price shall be increased dollar-for-dollar by the amount of such
excess. For purposes hereof, "WORKING CAPITAL" means (i) the sum of (a) the
market value, as of the Closing Date, of the Raw Materials, (b) Seller's
standard product cost, as of August 1, 1994, of work-in-process and finished
goods being purchased by Buyer hereunder (other than Non-Conforming Goods),
adjusted dollar-for-dollar to reflect the increase or decrease in the market
value of the raw material component of such standard product cost from August
1, 1994 to the Closing Date, (c) the agreed upon purchase price for any Non-
Conforming Goods purchased by Buyer pursuant to Section 1.5, and (d) the face
amount, as of the Closing Date, of the Purchased Accounts Receivable less 3% of
such face amount, less (ii) 0.5% of the sum of (i)(a) and (b). "PURCHASE PRICE
ADJUSTMENT" means the post-closing adjustment to the Purchase Price pursuant to
this Section 1.6.
- 10 -
20
1.7. DETERMINATION OF WORKING CAPITAL. (a) Promptly after the
Closing, Seller (with such assistance as Seller shall reasonably request of
Buyer and its representatives) shall calculate the amount of the Purchase Price
Adjustment based on its books and records of account maintained in accordance
with Seller's standard practices with respect to the Business. For purposes of
making such calculation, (i) the inventory to be taken into account in such
calculation shall not include any items that are not purchased by Buyer
pursuant to Section 1.5, (ii) the market value of raw materials shall be equal
to the price applicable to such raw materials, delivered to the appropriate
Business Site, as of the Closing Date, and (iii) the face amount of the
Purchased Accounts Receivable shall be computed without taking into account any
allowances against such accounts, including allowances for uncollectible
accounts, warranties and returns.
(b) As soon as reasonably practicable following the Closing
Date, but in no event later than twenty (20) days thereafter, Seller shall
deliver to Buyer notice of the amount of the Purchase Price Adjustment
calculated in accordance with Section 1.7(a), showing Seller's calculation in
reasonable detail. Buyer and its representatives shall be provided complete
access to Seller's books and records and all workpapers and other information
used by Seller to make such calculation. Such notice, when delivered by Seller
to Buyer, shall be conclusive and binding on the parties for purposes of
determining the
- 11 -
21
Purchase Price Adjustment, unless Buyer notifies Seller within fifteen (15)
days after receipt of the notice of its disagreement therewith (stating with
reasonable specificity the reasons for any disagreement). If the disagreement
can not be resolved by the parties within thirty (30) days after Seller
receives notice thereof, payment of the undisputed amount shall be made in
accordance with Section 1.8 and the items in dispute shall be submitted to
arbitration conducted as provided in Section 9.1.
1.8. PAYMENT OF PURCHASE PRICE. The Purchase Price shall be paid
by Buyer to Seller at the Closing as follows:
(a) $81,350,000 by wire transfer of federal funds to PNC Bank,
N.A., Pittsburgh, PA, ABA No. ▇▇▇▇▇▇▇▇▇, Credit: Aristech Chemical Corporation
Concentration Account No. 2-948495; and
(b) by Buyer's assumption of Seller's liabilities as provided in
Section 1.10. Any amounts owing Buyer or Seller as a result of a Purchase
Price Adjustment shall be paid by Seller or Buyer to the other, as the case may
be, within ten (10) days after the amount is finally determined pursuant to
Section 1.7, by wire transfer of federal funds.
1.9. ALLOCATION OF PURCHASE PRICE. Buyer and Seller agree that
the Purchase Price shall be allocated among the Purchased Assets in accordance
with the allocation set forth in Schedule 1.9. Buyer and Seller agree that
each will report the federal,
- 12 -
22
state and local income and other tax consequences of the purchase and sale
contemplated hereby in a manner consistent with such allocation and that
neither will take any position inconsistent therewith upon examination of any
tax return, in any refund claim, in any litigation, or otherwise.
1.10. ASSUMPTION OF LIABILITIES.
(a) At the Closing, Buyer shall assume and agree to discharge
and perform promptly when due the following liabilities and obligations of
Seller, whether direct or indirect, material or immaterial, known or unknown,
absolute, contingent or otherwise, to the extent such liabilities and
obligations accrue after the Closing (except as provided in Section
1.10(a)(vi)) (collectively, the "ASSUMED LIABILITIES"):
(i) all liabilities and obligations of Seller under the
contracts, leases and other agreements associated
with the Business Assets (but not including any
accounts payable or agreements relating to
employment, deferred compensation, welfare benefits,
independent contractors, consultants or any aspects
of the employment relationship, except to the extent
provided in Sections 1.10(a)(iii) and (vi) and in
Section 8.3(g) and except for the Distributorship/
Independent Contractor Agreements referred to on
- 13 -
23
Schedule 2.7) or otherwise comprising part of the
Purchased Assets;
(ii) all liabilities and obligations of Seller under the
Permits listed in Schedule 1.2(j);
(iii) all of Seller's liabilities and obligations under the
collective bargaining agreements listed in Schedule
1.10(a)(iii) and any agreements related thereto, but
not that certain Agreement between Seller and the
United Steelworkers of America dated November 30,
1994, covering Business Employees at the Neville
Island Facility, and any related agreements
(collectively, the "USW AGREEMENT");
(iv) subject to Section 1.12, all claims, liabilities,
obligations, litigation, arbitration proceedings or
other actions in any way relating to the Business or
the Purchased Assets, arising out of occurrences,
transactions, events or incidents occurring after the
Closing Date (as hereinafter defined), including all
liabilities and obligations incurred after the Closing
Date as a result of Buyer's continuation of any
pattern or practice established or engaged in by
Seller prior to the Closing Date;
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24
(v) subject to Section 1.12, all occupational disease and
other workers' compensation claims (whether insured or
otherwise), and claims for employee pay (including
vacation pay and sick pay) and any other employee
benefits (except to the extent Seller remains liable
therefor pursuant to Section 1.11) by persons who at
or prior to the Closing Date are or were Business
Employees, arising while such persons are employed by
Buyer or otherwise arising out of events occurring on
or after the Closing Date; and
(vi) Seller's obligation to make severance payments to the
Terminated Direct Reports, to the extent provided in
Section 1.11(d), and Seller's obligations to make
severance payments to those Business Employees
employed as drivers in the Distribution component of
the Business as provided in Section 1.11(e). These
obligations shall constitute Assumed Liabilities,
notwithstanding the extent to which they may have
accrued prior to the Closing.
(b) All liabilities and obligations of Seller (whether direct or
indirect, material or immaterial, known or unknown, absolute, accrued,
contingent or otherwise) that do not
- 15 -
25
constitute Assumed Liabilities shall be retained by Seller (collectively, the
"RETAINED LIABILITIES").
1.11. CERTAIN EMPLOYEE MATTERS.
(a) On or prior to the Closing Date, Buyer shall make offers of
employment, effective as of the Closing Date, to such salaried and hourly
Business Employees as are identified on Schedule 1.11(a) and who are actively
at work with Seller as of the Closing Date. Buyer shall prescribe the manner
by which such offers may be accepted. Seller has provided Buyer a written list
of all the Business Employees, which includes the employee's name, social
security number, hourly rate or bi-weekly salary, job title, annual earnings,
date of hire, years and types of service recognized by Seller as of November 9,
1994, as supplemented by the updates of such list as of January 31, 1995 and
March 20, 1995. Seller represents and warrants that the information on such
list was accurate as of the time specified in such list and, notwithstanding
anything to the contrary in Section 7.1, such representation and warranty shall
survive indefinitely beyond the Closing Date. Buyer has notified Seller of the
names of all the Business Employees, who have accepted offers of employment
(the "TRANSFERRED EMPLOYEES").
(b) Except as may otherwise be expressly provided in this
Section 1.11(b), the Transferred Employees shall be treated as newly hired
employees of Buyer.
- 16 -
26
(i) The offer of employment, if accepted, will not
provide for any certain term of employment, and all
who accept such offer shall be employees-at-will of
Buyer. Buyer shall pay the Transferred Employees
wages that are substantially equivalent to those paid
the Transferred Employees by Seller immediately prior
to Closing, and shall assign each of the Transferred
Employees duties and responsibilities that are
substantially equivalent to those assigned such
Transferred Employee by Seller immediately prior to
Closing. Buyer shall also provide the Transferred
Employees a package of benefits that is suitable in
light of the Transferred Employees' particular
circumstances.
(ii) The Transferred Employees shall be eligible to
participate in the qualified and non-qualified
pension, stock bonus, profit sharing and retirement
plans (except for the Ashland Oil, Inc. Leveraged
Employee Stock Ownership Plan, unless and until some
or all of the Transferred Employees become members of
a designated eligible group for participation
thereunder under the procedures generally applicable
for acquired employees) in which similarly situated
employees of Buyer participate, and Buyer and such
plans shall recognize, solely for purposes of
eligibility and
- 17 -
27
vesting (and not for benefit accrual) under Buyer's
said plans, the Transferred Employees' years of
credited service with Seller prior to the Closing
Date. Buyer shall amend said plans as of the Closing
Date to recognize such service with Seller; provided,
however, that nothing herein shall be construed as
conferring on any Transferred Employee any right to,
in or under any such plan of Buyer other than pursuant
to the terms of such plans, as so amended, and as from
time to time in effect.
(iii) The Transferred Employees shall be eligible to
participate in health and life plans (including
accidental death and dismemberment plans) in which
similarly situated employees of Buyer are eligible to
participate, and Buyer and such plans shall recognize,
solely for the purposes of eligibility under Buyer's
said health and life (and accidental death and
dismemberment) plans, the Transferred Employees'
employment with Seller prior to the Closing Date. Such
recognition of prior service shall also count for
purposes of determining whether any Transferred
Employee becomes eligible for any retiree health,
retiree life or retiree accidental death and
dismemberment plan benefits. Buyer shall amend said
plans as of the Closing
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28
Date to recognize such service with Seller; provided,
however, that nothing herein shall be construed as
conferring on any Transferred Employee any right to,
in or under any such plan of Buyer other than pursuant
to the terms of such plans, as so amended, and as from
time to time in effect. The eligibility of
Transferred Employees to participate in Buyer's health
and life plans shall not be delayed or limited in any
way by pre-existing conditions; provided, however,
that the applicable proof of health conditions in such
plans shall be applied pursuant to their terms if any
Transferred Employee fails to timely enroll himself or
herself or his or her dependents (when dependent
coverage is applicable and available) within thirty
(30) days of first becoming eligible. All claims
incurred with regard to any Transferred Employee
before the Closing Date and which are covered under
the applicable health, life or accidental death and
dismemberment plans of Seller shall be payable under
the terms of the applicable plan of Seller. All other
claims incurred with regard to any Transferred
Employee and which are covered under the applicable
health, life or accidental death or dismemberment
plans of Buyer shall be payable under the terms of the
applicable plan of Buyer. The Transferred
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29
Employees who participated in health maintenance
organizations ("HMOs") immediately prior to the
Closing shall be provided the opportunity to enroll in
the Buyer's indemnity plan on the same terms and
subject to the same conditions as the Transferred
Employees who did not so participate in HMOs. All the
Transferred Employees shall be offered participation
in the HMOs available to other similarly situated
employees of the Buyer at the time and in the same
manner as such participation is ordinarily offered.
(iv) The Transferred Employees shall be eligible to
participate in sick pay and short term and long term
disability plans in which similarly situated employees
of Buyer are eligible to participate. Buyer shall
recognize for purposes of such plans the Transferred
Employees' employment with Seller prior to the Closing
Date. Buyer shall amend said plans as of the Closing
Date to recognize such service with Seller; provided,
however, that nothing herein shall be construed as
conferring on any Transferred Employee any right to,
in or under any such plan of Buyer other than pursuant
to the terms of such plans, as so amended, and as from
time to time in effect.
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30
(v) The Transferred Employees shall be eligible for other
benefits in which or policies under which similarly
situated employees of Buyer are eligible. Buyer
shall recognize for purposes of such plans the
Transferred Employees' employment with Seller prior
to the Closing Date. Buyer shall amend said benefits
and policies as of the Closing Date to recognize such
service with Seller; provided, however, that nothing
herein shall be construed as conferring on any
Transferred Employee any right to, in or under any
such benefits and policies of Buyer other than
pursuant to the terms of such benefits and policies,
as so amended, and as from time to time in effect.
The Transferred Employees shall be eligible for paid
vacation benefits under the policies of the Buyer
that apply to similarly situated employees of the
Buyer and, for this purpose, the Transferred
Employees' service with the Seller prior to the
Closing Date shall be counted.
(vi) Buyer shall use its best efforts to notify Seller of
the termination of employment or reemployment of any
Transferring Employee. Such notification shall be
made within thirty (30) days of the date of
termination of employment or reemployment.
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(c) For purposes of the COBRA health continuation of coverage
provisions (hereafter referred to as the "COBRA PROVISIONS") contained in
Section 4980B(f) of the Internal Revenue Code of 1986 and in Sections 601
through 608 of the Employee Retirement Income Security Act of 1974 ("ERISA"),
the Transferred Employees shall be considered to have undergone a termination
of employment with Seller. It is the understanding and intention of the Seller
and Buyer that no group health plan maintained by Buyer shall constitute a
successor plan to any of the Seller's group health plans and the Buyer is not a
successor employer with respect to any of the Seller's group health plans and
the Seller is not a predecessor employer with respect to the Buyer's group
health plans, within the meaning of the COBRA Provisions. It is the further
understanding and intention of Seller and Buyer, however, that the health plan
coverage to be afforded to the Transferred Employees pursuant to Section
1.11(b)(iii) shall be coverage that, pursuant to Section 602(2)(D)(i) of ERISA,
terminates any continuation coverage rights the Transferred Employees might
otherwise have under the COBRA Provisions as a result of termination of
employment with Seller.
(d) (i) Subject to clause (ii) of this Section 1.11(d), the
parties agree that responsibility for all amounts paid ("SEVERANCE PAYMENTS")
to any Business Employee (including any Transitional Employee, as defined in
Section 4.5(a)) who is a Direct Report (as defined below) and who is ultimately
successful
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in collecting any benefits under Seller's severance plan or policies based on
such Business Employee's termination prior to January 1, 1997 in connection
with the transactions contemplated hereby ("TERMINATED DIRECT REPORT") shall be
allocated as follows: All Severance Payments made to the first fifty-five (55)
Terminated Direct Reports shall be for Seller's account, and all Severance
Payments made to all other Terminated Direct Reports shall be for Buyer's
account. Any Business Employees employed by Seller at the Neville Island
Facility who are terminated at any time before January 1, 1997 shall constitute
Terminated Direct Reports to the extent they are successful in collecting
Severance Payments as hereinabove provided. The drivers referred to in Section
1.11(e) shall not be deemed Terminated Direct Reports for purposes of this
paragraph (d). For purposes of this Section 1.11(d), the term "DIRECT REPORTS"
shall mean those employees of Seller 100% of whose time is charged to the
Business based on Seller's policies in effect immediately prior to Closing and
shall not include such employees as corporate attorneys, accounting staff and
information services personnel whose time is not charged 100% to the Business
on such basis.
(ii) (A) In the event that more than fifty-five (55)
Direct Reports who are entitled to Severance Payments are terminated within
thirty (30) days of Closing, the average Severance Payment payable to all such
Direct Reports terminated within thirty (30) days of Closing shall be
calculated, and Seller shall be deemed to have satisfied all of its obligations
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under Section 1.11(d) upon making Severance Payments to Terminated Direct
Reports (regardless of the number of such Terminated Direct Reports) in an
aggregate amount equal to fifty-five (55) times such average Severance Payment.
All Severance Payments in excess of the amount specified in the foregoing
sentence shall be paid by Buyer.
(B) In the event that less than fifty-five (55) Direct
Reports who are entitled to Severance Payments are terminated within thirty
(30) days of Closing, Seller shall pay the actual Severance Payments for the
first fifty-five (55) Terminated Direct Reports who shall be determined in
accordance with the order in which Seller makes Severance Payments to
Terminated Direct Reports, and Buyer shall pay the actual Severance Payments
for all other Terminated Direct Reports.
(iii) Seller shall notify Buyer of any Severance Payments
made to Terminated Direct Reports for Buyer's account pursuant to Section
1.11(d). Buyer shall reimburse Seller in full therefor within five (5) working
days after Buyer's receipt of such notice. Any amount not reimbursed within
such five-day period shall bear interest, from the date the corresponding
Severance Payment was made by Seller until the date such amount is reimbursed
to Seller, at the prime lending rate charged by Mellon Bank, N.A. during such
period.
(e) Buyer shall pay all amounts payable to any Business Employee
employed by Seller as a driver in connection with the
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Distribution component of the Business who is ultimately successful in
collecting any benefits under Seller's severance plan or policies based on such
Business Employee's termination in connection with the transactions
contemplated hereby. Seller shall notify Buyer of any such payments made to
such Business Employees, and Buyer shall reimburse Seller in full therefor
within five (5) working days after Buyer's receipt of such notice. Any amount
not reimbursed within such five-day period shall bear interest, from the date
the corresponding severance payment was made by Seller until the date such
amount is reimbursed to Seller, at the prime lending rate charged by Mellon
Bank, N.A. during such period.
(f) Except as provided in Section 1.10(a)(vi), it is expressly
agreed and acknowledged by the parties hereto that Buyer has assumed no
liability for any wages or benefits that Seller or any of its affiliates
provided to Seller's employees including, but not limited to, retiree medical
benefits, retiree life insurance benefits, benefits under the COBRA Provisions,
employment contracts, qualified or non-qualified retirement benefits, and
benefits which could be payable with respect to services, expenses or other
events that occurred prior to the Closing Date under any plan, policy or
program of the Seller.
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1.12. CONTINUING LIABILITIES.
(a) The term "CONTINUING LIABILITY" shall mean any liability
that commences, or that arises from facts in existence, prior to the Closing
and that continues, or the facts giving rise to which continue, to exist after
the Closing. Subject to clause (b), Seller is indemnifying Buyer against
Continuing Liabilities to the extent arising from Seller's operation of the
Business prior to Closing pursuant to Section 7.3(e), and Buyer is indemnifying
Seller against Continuing Liabilities to the extent arising from Buyer's
operation of the Business after Closing pursuant to Section 7.4(d).
(b) Within ten (10) days after either party receives notice or
otherwise becomes aware of the existence of a Continuing Liability as to which
such party intends to seek indemnification from the other party, such party
shall notify the other party. Either party's failure to so notify the other
of a Continuing Liability, shall constitute a waiver by the failing party of
all rights to indemnification by the other arising from such Continuing
Liability. Promptly after the delivery of such notice, Seller and Buyer shall
consult with each other in good faith to develop a joint strategy for defending
against the Continuing Liability, including allocation of the costs of such
defense.
(c) In the event that a claim is made against only one of the
parties as a result of a Continuing Liability, such party
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shall not be entitled to any indemnification by the other party with respect to
such claim unless such party permits the other party to participate in and
control the defense of such claim jointly and equally with it. Notwithstanding
the foregoing, the party against which the claim is made may, after consulting
the other party, settle such claim in its sole discretion; provided that such
party obtains as a condition to such settlement a full and complete release of
the other party from all claims arising from such Continuing Liability.
(d) If a third party makes a claim against both Seller and
Buyer, or if both Seller and Buyer are otherwise called upon to defend a claim
arising from a Continuing Liability, each of Seller and Buyer shall separately
defend itself against such claim with representatives of its choosing, unless
the parties otherwise agree.
(e) Any determination of the extent to which a Continuing
Liability arises from Seller's operation of the Business prior to Closing or
Buyer's operation of the Business after Closing (a "DETERMINATION"), shall be
subject to the following:
(i) To the extent that a court hearing a claim arising from
a Continuing Liability makes a final, non-appealable
Determination, the parties shall be bound thereby.
(ii) In all other cases, the parties shall attempt in good
faith to agree upon a Determination. If the parties are
unable jointly to make a Determination, the matter
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shall be submitted to the alternative dispute resolution
procedure described in Section 9.1.
(iii) Any Determination shall be made by consideration of
all the factors relevant to the causation of such Continuing
Liability. For purposes of illustration and not in
limitation of the foregoing, in the case of a Continuing
Liability arising from occupational injury or disease to
persons employed by both Seller and Buyer the relevant
factors shall include without limitation the duration and
extent of exposure to operative conditions while an employee
of each party. The date of manifestation of injury or
disease shall not be solely determinative of the date on
which the exposure commenced, but shall be a relevant factor
for consideration.
1.13. CERTAIN CONSENTS. Nothing in this Agreement shall be
construed as an attempt to assign any contract, agreement, permit, franchise,
or claim included in the Purchased Assets which is by its terms or in law
nonassignable without the consent of the other party or parties thereto, unless
such consent shall have been given, or as to which all the remedies for the
enforcement thereof enjoyed by Seller would not, as a matter of law, pass to
Buyer as an incident of the assignments provided for by this Agreement. In
order, however, to provide Buyer the full benefits of every contract,
agreement, permit, franchise and claim of the character described in the
immediately preceding sentence, Seller shall, to the extent reasonably
necessary and at Buyer's cost, cooperate with Buyer in any reasonable
arrangement designed to provide the benefits thereof to Buyer. Without
limiting the generality of any provision contained elsewhere herein, the
non-assignment of the foregoing shall not, to the
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extent the liabilities hereunder would have been Assumed Liabilities but for
this Section 1.13, affect the status of such liabilities as Assumed
Liabilities. Nothing in this Section shall in any way diminish Seller's
obligations hereunder to obtain all consents and approvals prior to or at
Closing as are necessary to enable Seller to convey or assign good and valid
title to all the Purchased Assets to Buyer.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF SELLER
Seller represents and warrants to Buyer as follows:
2.1. ORGANIZATION; CORPORATE POWER AND AUTHORITY. Seller is a
corporation duly organized, existing and in good standing under the laws of the
State of Delaware. Seller has all requisite corporate power and authority to
conduct the Business as it is now being conducted and to make, execute, deliver
and perform this Agreement and each agreement, document or instrument to be
delivered by Seller pursuant to this Agreement (collectively, the "SELLER'S
ANCILLARY DOCUMENTS").
2.2. AUTHORIZATION AND ENFORCEABILITY. Seller has full corporate
power and authority to enter into and perform this Agreement and Seller's
Ancillary Documents. This Agreement has been duly executed and delivered by
Seller and constitutes, and
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each of Seller's Ancillary Documents, when executed and delivered by Seller
shall constitute, the legal, valid and binding obligation of Seller,
enforceable against it in accordance with its terms.
2.3. CONSENTS AND APPROVALS. (a) Except for (i) applicable
requirements of the HSR Act (as hereinafter defined) and (ii) governmental
permits, authorizations, consents and approvals that have been obtained or will
be obtained on or prior to the Closing Date, there is no requirement applicable
to Seller to make any material filing with, or to obtain any material permit,
authorization, consent or approval of, any governmental or regulatory authority
as a condition to the lawful consummation by Seller of the sale of the
Purchased Assets pursuant to this Agreement. Except as set forth in Schedule
2.3, no consent, approval or authorization of, or registration or filing with,
any other person or entity is required in connection with the execution and
delivery by Seller of this Agreement and Seller's Ancillary Documents and the
consummation by Seller of the transactions contemplated hereby and thereby.
(b) Except as provided in Schedule 2.3 (and assuming compliance
with the HSR Act), neither the execution and delivery of this Agreement and
Seller's Ancillary Documents, nor the consummation by Seller of the
transactions contemplated hereby or thereby, will, at the date hereof (i)
contravene any provision of Seller's Certificate of Incorporation or Bylaws,
(ii) result in a
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breach of or constitute a default under any material license, franchise, note,
bond, mortgage, indenture, loan or credit agreement or other material agreement
or instrument related to the Business to which Seller is a party or by which
Seller or any of the Purchased Assets may be bound, or (iii) violate any
statute or administrative regulation, or any order, writ, injunction, judgment
or decree of any court or of any governmental authority applicable to the
Business or by which any of the Purchased Assets may be bound, which in either
of the foregoing cases (ii) or (iii) would have a material adverse effect on
the business, operations or financial condition of the Business, taken as a
whole, or of any element of the Business, i.e., UPR, MA or Distribution.
2.4. CERTAIN FINANCIAL STATEMENTS. Seller has previously
delivered to Buyer certain financial statements reflecting the historical
financial results of the Business for each of the calendar years from 1989
through 1994, inclusive, and for each of the months and for the year to date
from January 1 through March 31, 1995 (collectively, the "FINANCIAL
STATEMENTS"). Except as provided in Schedule 2.4, the Financial Statements
have been prepared in accordance with Seller's internal accounting policies and
procedures, a summary of which is attached hereto as Exhibit A, which Exhibit A
includes a description of the respects in which such policies and procedures
deviate from generally accepted accounting policies as in effect on the date
hereof.
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2.5. CONDUCT OF BUSINESS. Except as contemplated by this
Agreement or as set forth in Schedule 2.5, since March 31, 1995, Seller has
not, with respect to the Business:
(a) Sold or transferred any material portion of its assets or
property, except for (i) sales of inventory in the usual and ordinary course of
business and (ii) cash applied in payment of Seller's liabilities in the usual
and ordinary course of business;
(b) Suffered any material loss, or any material interruption in
use, of any material assets or property (whether or not covered by insurance),
on account of fire, flood, riot, strike or other hazard or act of God;
(c) Suffered any material adverse change to the operations,
properties, assets, liabilities or financial condition of the Business, taken
as a whole, or of any element thereof; i.e., UPR, MA or Distribution (other
than changes affecting the Business' industry, or any such element's industry,
generally);
(d) Waived any material right other than in the ordinary course
of business;
(e) Without limitation by the enumeration of any of the
foregoing, entered into any transaction other than in the usual
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42
and ordinary course of business without Buyer's consent, which consent shall be
deemed to have been granted if Buyer has failed to object to such transaction
in writing within five (5) days after receipt of written notice thereof from
Seller; or
(f) Suffered any disposition or lapse of any of the Purchased
Intellectual Property.
2.6. LITIGATION. Except as set forth in Schedule 2.6, (a) no
notice or service of process has been received by Seller with respect to any
material claim, action, suit, proceeding or investigation pending against
Seller with respect to the Business, or the use of the Purchased Assets, or the
transaction contemplated hereby, and (b) to the best of Seller's knowledge, no
such claim, action, suit, proceeding or investigation is threatened, in either
case at law or in equity or before or by any federal, state or other
governmental authority that (i) relates directly to the Business, or (ii) would
prevent consummation of the transaction contemplated hereby. Except as set
forth in Schedule 2.6, Seller is not subject to any outstanding order, writ,
injunction or decree that (i) relates directly to the Business, or (ii) would
prevent consummation of the transaction contemplated hereby.
2.7. CERTAIN CONTRACTS AND COMMITMENTS. Except as set forth in
Schedules 1.2(h), 1.2(i), 1.2(k), 1.10(a)(iii), 2.7 and 2.9, Seller is not a
party to or bound by any lease, contract or
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commitment, oral or written, formal or informal, of the following types
relating to the Business:
(a) Union or other collective bargaining agreements;
(b) Licenses or other agreements relating to patent, trademark
and other intellectual property rights;
(c) Lease or sublease agreements under which it is either lessor
or sublessor or lessee or sublessee;
(d) Sales agency and distributorship agreements or agreements
providing for the services of an independent contractor; or
(e) Agreements under which any products of the Business are
manufactured by others for sale by Seller.
Each agreement, contract, lease, license, commitment or instrument of
Seller being assumed by Buyer hereunder (collectively, the "CONTRACTS") is in
full force and effect. Seller is not and, to the knowledge of Seller without
investigation, no other party is, in material default or breach under any of
the Contracts.
2.8. PERMITS; COMPLIANCE WITH LAW. Seller possesses all licenses,
permits, registrations and governmental approvals (the
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44
"PERMITS") that are required in order for Seller to conduct the Business as
presently conducted, except for those the failure to possess which would not
materially impair Seller's ability to conduct the Business at any of its plants
in Bartow, Florida, Jacksonville, Arkansas, Colton, California or Neville
Island, Pennsylvania, or at any of its Distribution facilities (collectively,
the "BUSINESS SITES"). Seller is not aware that it has failed to comply with
any laws and regulations applicable to the Business or the Purchased Assets,
except for failures to comply that do not presently materially impair Seller's
ability to conduct the Business at any of the Business Sites. The
representation and warranty provided in this Section 2.8 do not apply to
Permits required under applicable Environmental Law, which are exclusively
provided for under Section 8.3(d). The representation and warranty provided
under this Section 2.8 do not apply to compliance with laws and regulations
relating to the environment; matters relating to compliance with Environmental
Law are exclusively provided for under Sections 2.13, 8.3(e) and 8.3(f). For
purposes of this Agreement, "ENVIRONMENTAL LAW" shall have the meaning given in
Section 8.2(n).
2.9. REAL ESTATE. Except as set forth on Schedule 2.9, the
Leased Premises are leased to Seller pursuant to written leases, true and
correct copies of which have been delivered to Buyer. There are no
condemnation proceedings pending, or to Seller's knowledge threatened, with
respect to any portion of the Real Estate.
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2.10. TITLE. (a) Seller has good title to all of the Purchased
Assets (other than real property and interests therein and the Purchased
Intellectual Property), and none of such property is subject to any mortgage,
pledge, lien, restriction, encumbrance, license, covenant, claim, security
interest, charge or any other matter affecting title, except (i) minor items,
none of which materially detracts from the value of or impairs the use of the
affected property, (ii) mechanics', carriers', workmen's, repairmen's or other
like liens arising in the ordinary course of business, (iii) liens for current
taxes, assessments and other governmental charges not yet due and payable, and
(iv) as disclosed on Schedule 2.10(a) (all of the foregoing referred to
collectively as the "PERMITTED ENCUMBRANCES"). This paragraph (a) does not
apply to real property or interests in real property, such items being the
subject of Section 2.10(b), or to the Purchased Intellectual Property, which is
the subject of Section 2.12 below. Seller acknowledges that it shall remain
responsible for satisfying the obligations secured by the liens referred to in
clauses (ii), (iii) and (to the extent not assumed by Buyer hereunder) (iv),
when and as such obligations become due and payable.
(b) Schedules 1.2(a), 1.2(b), 1.2(h) and 2.9 set forth a correct
description of all real property and interests in real property included in the
Purchased Assets. Buyer has received a title commitment report for and survey
of each parcel of land included in the Real Estate (collectively, the "TITLE
COMMITMENT
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46
REPORTS" and the "SURVEYS," respectively). Seller has (a) good fee title to
all real property and interests in real property shown on Schedules 1.2(a) and
1.2(b) owned by it and (b) to Seller's knowledge, good leasehold interests in
all real property subject to the leases described in Schedules 1.2(h) and 2.9
and leased by it, in each case free and clear of all mortgages, liens, security
interests, easements, covenants, rights-of-way and other encumbrances or
restrictions of any nature whatsoever, except (i) Permitted Encumbrances, (ii)
easements, covenants, rights-of-way and other encumbrances or restrictions of
record, (iii) zoning and other similar restrictions, (iv) unrecorded easements,
covenants, rights-of-way or other restrictions that do not materially impair
the use of the property to which they relate in the Business as presently
conducted and (v) as otherwise shown on the Title Commitment Reports and the
Surveys. Seller acknowledges that it shall remain responsible for satisfying
the obligations secured by the liens referred to in clauses (ii), (iii) and (to
the extent not assumed by Buyer hereunder) (iv), of Section 2.10(a), when and
as such obligations become due and payable.
2.11. LABOR RELATIONS. Except as disclosed in Schedule 2.11, (a)
no Business Employee is represented by a union or other labor organization; (b)
there is no unfair labor practice complaint pending before the National Labor
Relations Board, or to Seller's knowledge threatened, against Seller with
respect to the Business; (c) there is no labor strike or stoppage
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by Business Employees pending, or to the knowledge of Seller, threatened; and
(d) there is no pending labor grievance by any Business Employee.
2.12. INTELLECTUAL PROPERTY RIGHTS. The Purchased Intellectual
Property, together with the Retained Intellectual Property, constitutes all
intellectual property rights that are owned, licensed or used by Seller and
that are material to the Business. Seller's retention of the Retained
Intellectual Property will not materially impair Buyer's ability to conduct the
Business. Seller owns, or has the right to use without interference from any
other party, all of the Purchased Intellectual Property. No claim, suit or
action is pending, or, to the knowledge of Seller, threatened, against Seller,
alleging that Seller is infringing upon the intellectual property rights of
others in the conduct of the Business or challenging the validity of the
Purchased Intellectual Property, or alleging that Seller's use of the Purchased
Intellectual Property infringes or conflicts with the rights of others. Seller
is not aware that it is infringing upon the intellectual property rights of
others in the conduct of the Business.
2.13. ENVIRONMENTAL MATTERS. Except as set forth in Schedule 2.13
and except for those matters referred to in Buyer's document entitled "Project
A Site Issues" dated December 16, 1994 with respect to the Business Sites (the
"BUYER ENVIRONMENTAL REPORT"), Seller has not, with respect to the Real Estate,
the
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48
Leased Premises or the conduct of the Business, received within the last two
(2) years any written notice of violation of any Environmental Laws (as defined
in Section 8.2) from any federal, state or other governmental authority, which
violation is currently existing and has caused, or if not corrected, will
cause, a material adverse change to the operations, properties, assets,
liabilities or financial condition of the Business or of any element thereof,
i.e., UPR, MA or Distribution.
2.14. SUFFICIENCY OF THE ASSETS. The Purchased Assets, together
with the Retained Assets, constitute sufficient assets for Seller's operation
of the Business as presently conducted.
2.15. MAINTENANCE OF EQUIPMENT. The equipment being purchased by
Buyer hereunder has been maintained by Seller in all material respects in
accordance with the standard maintenance policies of Seller in effect during
Seller's ownership thereof.
2.16. CUSTOMERS AND SUPPLIERS RELATIONS. Seller has not received
any notice that (a) any single customer of the Business that accounted for more
than 5% of the total net sales of the Business for the twelve-month period
ended on December 31, 1994, or (b) any current supplier that is material to the
Business and could not be replaced by Seller at substantially comparable cost,
will terminate its business relations with Seller.
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49
2.17. Tax Matters. Seller has timely paid all federal, state and
local income, profit, franchise, sales, use, employment and similar taxes, and
all interest and penalties thereon due and payable by it as of the Closing
Date, and has filed all federal, state and local tax returns which have been
required to be filed on or prior to the Closing Date, the non-payment of or
failure to file which would result in a lien or encumbrance on any Purchased
Asset, or would result in Buyer becoming liable or responsible therefor.
Seller will timely pay all tax liabilities, assessments, and interest and
penalties thereon that have accrued but that are not yet due and payable, the
non-payment of which would result in a lien or encumbrance on any Purchased
Asset or would result in Buyer becoming liable therefor. All ad valorem and
other taxes (excluding income taxes) assessed against the Purchased Assets and
payable as of the Closing Date have been paid. Seller shall file all ad
valorem tax returns for the Purchased Assets held by Seller on assessment date
January 1, 1995, or on any other assessment date occurring prior to the
Closing.
2.18. VIOLATION OF CERTAIN LAWS. To its knowledge, Seller has
not, with respect to the Business, taken or agreed to take any action in
violation of the Foreign Corrupt Practices Act or the Export Administration
Act.
2.19. FINDERS' FEES. Neither Seller nor any of its officers,
directors or employees has made any agreement or taken
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any other action that might cause Buyer to become liable for any brokerage
fees, commissions or finders' fees in connection with the transaction
contemplated hereby and by Seller's Ancillary Documents.
2.20. ACCURACY OF REPRESENTATIONS AND WARRANTIES. No
representation or warranty by Seller in this Agreement or in any of Seller's
Ancillary Documents, or in any Exhibit, certificate or other instrument
furnished to Buyer by Seller pursuant hereto or thereto, contains or will
contain, as of the time made, any untrue statement of a material fact;
provided, however, that Seller shall not be deemed to have breached this
representation as a result of any inaccuracy arising from (a) facts that
generally apply to or affect businesses in the industries in which the Business
is operated, or (b) facts or matters that are the subject of, or that are
purported to be excluded from, any other representation or warranty made by
Seller in any such agreement or instrument.
2.21. LIMITATION ON SELLER'S WARRANTIES. BUYER AGREES THAT IT IS
PURCHASING THE PURCHASED ASSETS "AS IS", "WHERE IS" WITHOUT ANY REPRESENTATION
OR WARRANTY AS TO CONDITION, VALUE, MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OF THE PURCHASED ASSETS OR THE FUTURE PROFITABILITY OR
FUTURE EARNINGS PERFORMANCE OF THE BUSINESS OR THE PURCHASED ASSETS.
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2.22. KNOWLEDGE CONCERNING BUYER'S REPRESENTATIONS. Neither
Seller nor any of its representatives has knowledge of any breach by Buyer or
the failure to be true and correct of any of Buyer's representations or
warranties set forth in this Agreement or in Buyer's Ancillary Documents (as
defined below) or in any Exhibit, Schedule, certificate or other instrument
furnished pursuant hereto or thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
3.1. ORGANIZATION; CORPORATE POWER AND AUTHORITY. Buyer is a
corporation duly organized, existing and in good standing under the laws of the
Commonwealth of Kentucky. Buyer has full corporate power and authority to
make, execute, deliver and perform this Agreement and each agreement, document
or instrument to be delivered by Buyer pursuant to this Agreement
(collectively, the "BUYER'S ANCILLARY DOCUMENTS").
3.2. AUTHORIZATION AND ENFORCEABILITY. The execution, delivery
and performance by Buyer of this Agreement and Buyer's Ancillary Documents have
been duly authorized by all necessary action on the part of Buyer. This
Agreement has been duly executed and delivered by Buyer and constitutes, and
each of Buyer's Ancillary Documents, when executed and delivered by Buyer
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52
shall constitute, the legal, valid and binding obligations of Buyer,
enforceable against it in accordance with their respective terms.
3.3. CONSENTS AND APPROVALS. (a) Except for (i) applicable
requirements of the HSR Act and (ii) governmental permits, authorizations,
consents and approvals that have been obtained or will be obtained on or prior
to the Closing Date, there is no requirement applicable to Buyer to make any
material filing with, or to obtain any material permit, authorization, consent
or approval of, any governmental or regulatory authority as a condition to the
lawful consummation by Buyer of the purchase of the Purchased Assets pursuant
to this Agreement. No consent, approval or authorization of, or registration
or filing with, any other person or entity is required in connection with the
execution and delivery by Buyer of this Agreement and Buyer's Ancillary
Documents and the consummation by Buyer of the transactions contemplated hereby
and thereby.
(b) Assuming compliance with the HSR Act, neither the execution
and delivery of this Agreement and Buyer's Ancillary Documents, nor the
consummation by Buyer of the transaction contemplated hereby, will to the
knowledge of Buyer, at the date hereof (i) contravene any provision of Buyer's
Articles of Incorporation or Bylaws, (ii) result in a breach of or constitute a
default under any material note, bond, mortgage indenture, loan or credit
agreement or other material agreement or instrument to
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which Buyer is a party or by which Buyer's assets may be bound, or (iii)
violate any statute or administrative regulation, or of any order, writ,
injunction, judgment or decree of any court or of any governmental authority
applicable to Buyer or by which any of Buyer's assets may be bound.
3.4. ABSENCE OF PROCEEDINGS. No action or proceeding has been
instituted against Buyer before any court or other governmental body (a)
seeking to restrain or prohibit the execution and delivery of this Agreement or
any of Buyer's Ancillary Documents or the consummation of the transactions
contemplated hereby or thereby, or (b) that could if decided adversely to
Buyer, have a material adverse effect on Buyer's ability to perform its
obligations under this Agreement or any of Buyer's Ancillary Documents.
3.5. FINDERS' FEES. Neither Buyer nor any of its officers,
directors or employees has made any agreement or taken any other action that
might cause Seller to become liable for any brokerage fees, commissions or
finders' fees in connection with the transaction contemplated hereby and by
Buyer's Ancillary Documents.
3.6. KNOWLEDGE CONCERNING SELLER'S REPRESENTATIONS. Neither
Buyer nor any of its representatives has knowledge of any breach by Seller or
the failure to be true and correct of any of Seller's representations or
warranties set forth in this
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Agreement or in Seller's Ancillary Documents or in any Exhibit, Schedule,
certificate or other instrument furnished pursuant hereto or thereto.
ARTICLE IV
COVENANTS OF THE PARTIES
4.1. CONFIDENTIAL INFORMATION. (a) Seller agrees that it shall
not use the Confidential Business Information for any purpose hereafter and
that it shall use its best efforts to maintain the confidentiality of the
Confidential Business Information.
(b) Buyer agrees that it shall not use the Other Confidential
Information for any purpose hereafter and that it shall use its best efforts to
maintain the confidentiality of the Other Business Information.
(c) In the event that Seller or Buyer is requested or required
(by oral question or request for information or documents in legal proceedings,
interrogatories, subpoena, civil investigative demand or similar process) to
disclose any Confidential Business Information or Other Confidential
Information, respectively, Seller or Buyer, as the case may be, shall provide
the other party with prompt notice of any such request or requirement so that
the other party may seek an appropriate protective order. If the other party
fails to seek
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or obtain such order prior to the time disclosure is required, Seller or Buyer,
as the case may be, shall be free to comply with any such request or
requirement at that time without limitation under the provisions of this
Section 4.1.
(d) For purposes of this Section 4.1, the term "CONFIDENTIAL
BUSINESS INFORMATION" means all information of any kind relating directly to
the Business, including the Purchased Intellectual Property, financial data,
projections, marketing information, reports, process designs, economics, and
any and all drawings, engineering, data specifications and other information
regarding the Business. The term "OTHER CONFIDENTIAL INFORMATION" means the
Retained Intellectual Property and all information of any kind relating to
Seller's businesses other than the Business, wherever obtained and regardless
of the manner in which it is obtained. Neither the term "Confidential Business
Information" nor the term "Other Confidential Information" includes information
which (i) becomes generally available to the public other than as a result of a
disclosure by Seller or Buyer, respectively, or their respective
representatives, or (ii) becomes available to Seller or Buyer, respectively, on
a non-confidential basis from a source other than Buyer or Seller,
respectively, or their respective representatives, provided that such source is
not bound by a confidentiality agreement with Buyer or Seller, respectively.
The term "Other Confidential Information" also excludes information which was
available to
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Buyer on a non-confidential basis prior to its disclosure to Buyer by Seller or
its representatives.
(e) Without limiting any other rights or remedies available to
the parties, each of Seller and Buyer will be entitled to equitable relief
(including without limitation injunctive relief) for any breach or failure to
abide by the provisions of this Section 4.1.
4.2. PUBLICITY. Except as may be required by applicable law or
by applicable stock exchange rules, press releases and other publicity
concerning this transaction (including without limitation statements to
customers) shall be made only with the prior agreement of Seller and Buyer as
to the form, content and timing thereof (and, in any event, Seller and Buyer
shall use all best efforts to consult and agree with each other with respect to
the form, content and timing of any such required press release or other
publicity). The foregoing shall not apply to Buyer's communications with
investment bankers and other professionals in the investment community.
4.3. ACCESS TO AND PRESERVATION OF INFORMATION AND RECORDS. For
a period of ten (10) years following the Closing Date or for the period
indicated by the respective party's record retention policy, whichever is
shorter, each of Buyer and Seller shall preserve the books and records of the
Business and shall provide such access to such books and records as the other
party shall
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reasonably request for purposes of preparing tax reports or returns required to
be filed by each other party, and responding to audits thereof. Buyer and
Seller shall also provide written notice to the other party not less than
thirty (30) days prior to destroying any such books or records, and shall
permit such other party to take possession thereof. Buyer and Seller shall
also provide the other party such information as such other party shall
reasonably request for such purposes.
4.4. COOPERATION. From and after the Closing Date, each of Buyer
and Seller shall provide to the other such assistance and such access to its
employees and to the records referred to in Section 4.3, and shall otherwise
cooperate fully with the other, as shall be reasonably necessary in connection
with any threatened, pending or future demand, claim, action, cause of action,
suit or proceeding related to the Business, whether or not arising out of
events occurring prior to, on or after the Closing Date.
4.5. TRANSITION PERIOD.
(a) During the Transition Period (as hereinafter defined),
Seller shall provide to Buyer the services on a full-time basis of the
employees of Seller identified in Schedule 4.5(a) (the "TRANSITIONAL
EMPLOYEES"); provided, that such persons do not elect, of their own initiative,
to terminate their employment with Seller during such period. During the
Transition Period, the Transitional Employees shall perform such services
related to
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the conduct of the Business as Buyer shall determine from time to time. Seller
shall be responsible for all personnel matters regarding the Transitional
Employees. Such matters shall include, but not be limited to, promotions,
transfers, compensation, employee benefits, performance evaluations, all
disciplinary actions up to and including termination of employment and
compliance with all applicable employment and tax laws and related regulations
at the federal, state and local level, including income tax withholding and
payment of the employer and employee share of employment and unemployment tax.
Seller shall have the final decision to terminate employment of any
Transitional Employees. Notwithstanding the foregoing sentence, Buyer retains
the right to cease using the services of any particular Transitional Employee
at any time as Buyer deems appropriate. Seller agrees that the Transitional
Employees shall observe those work hours at work locations of the Business as
determined by Buyer's on-site supervisory officials. Seller shall consult with
Buyer in order to attempt to resolve all questions and needs of Buyer regarding
the work hours of the Transitional Employees. During the Transition Period,
Seller may redeploy any Transitional Employee within Seller's own organization;
provided that Seller places another of Seller's employees in the position from
which the Transitional Employee is so redeployed.
(b) It is expressly acknowledged by the parties hereto that
nothing in this Agreement is intended or shall be construed
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to create an employer/employee relationship between Buyer and the Transitional
Employees and it is expressly agreed and acknowledged by the parties that
Seller is the common law employer of the Transitional Employees. In the event
the Internal Revenue Service or any other governmental agency should question
or challenge the employment status of the Transitional Employees, the parties
hereto agree that both Seller and Buyer shall have the right to participate in
any discussion or negotiation occurring with such agency or agencies,
irrespective of with whom or by whom such discussion or negotiation is
initiated.
(c) During the Transition Period, Seller shall use commercially
reasonable efforts to provide such additional assistance to Buyer as Buyer
shall request in order to effect the orderly transition from Seller's to
Buyer's operation of the Business. Such assistance may include receiving
orders and inquiries from customers of the Business and directing such orders
and inquiries to Buyer, assisting Buyer in developing computer services to
support the Business and providing such interim computer services to Buyer.
(d) Seller shall not charge Buyer any fee for the services of
the Transitional Employees provided pursuant to Section 4.5(a) or for any
transitional assistance provided by Seller pursuant to Section 4.5(c), except
that within thirty (30) days after demand therefor, Seller shall reimburse
Buyer for all reasonable travel expenses incurred by Transitional Employees or
any other employee
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in providing services to or for the benefit of Seller pursuant to Section
4.5(a) or 4.5(c).
(e) The "TRANSITION PERIOD" shall be the ninety (90) day period
immediately following the Closing Date; provided, however, that Buyer may
extend the Transition Period for additional thirty (30) day periods by giving
written notice to Seller at least ten (10) days prior to the date that the
Transition Period would otherwise expire; provided further, however, that in no
event shall the Transition Period extend beyond one hundred and eighty (180)
days following the Closing Date.
(f) Buyer agrees to release, indemnify, defend, save and hold
Seller and its officers, directors, employees, agents, successors and permitted
assigns (any or all of the foregoing hereinafter referred to as an "INDEMNIFIED
PERSON"), harmless from and against any and all demands, claims, actions or
causes of action, assessments, losses, damages, deficiencies, liabilities,
costs and expenses (including but not limited to reasonable attorneys' fees and
expenses, and the aggregate amount paid in reasonable settlement of any
actions, suits, proceedings, or claims, or threats thereof, to which any
Indemnified Person may become subject under any statute or common law or
otherwise), asserted against, imposed upon, resulting to or incurred by any
Indemnified Person, directly or indirectly, as a result of or in connection
with any claim directly or indirectly based on or arising from the performance
of services for Buyer by Seller or
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the Transitional Employees pursuant to this Section 4.5. The parties
acknowledge that it is the intent of this Section 4.5(f) that Seller bear no
cost or liability of any nature whatsoever (whether arising from claims made by
the Transitional Employees or by others as a result of the acts of Transitional
Employees or otherwise) as a consequence of Seller's provision of transitional
services to Buyer pursuant to this Section 4.5. The foregoing indemnification
provisions shall survive the Closing and completion of the services rendered to
Buyer by Seller and the Transitional Employees hereunder, shall be in addition
to any other liability which Buyer may otherwise have to Seller, and shall
inure to the benefit of the heirs, personal representatives, successors and
assigns of each Indemnified Person.
4.6. NON-COMPETITION AND NON-INTERFERENCE BY SELLER.
(a) Except as otherwise required by law, regulation or a court
of competent jurisdiction, Seller shall not, for a period of two (2) years
after the Closing Date, without the prior written consent of Buyer, either (i)
directly or indirectly provide any advisory or consulting services for, invest
in (other than stock in a publicly held corporation which is traded on a
recognized securities exchange) or otherwise operate any corporation,
partnership, organization, proprietorship, or other entity which develops,
manufactures, sells or distributes unsaturated polyester resins or maleic
anhydride in competition with the Business in each of the states in the United
States in
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which Seller conducted the Business and each element thereof, i.e., UPR, MA and
Distribution, or (ii) intentionally and knowingly induce or attempt to induce
any supplier, employee, agent or other representative or associate of Buyer
involved in the Business as conducted by Buyer to terminate its relationship
with Buyer.
(b) Notwithstanding the foregoing, the following shall not
constitute a breach by Seller of Section 4.6(a): (i) Seller's production,
whether through its ownership of Avonite, Inc. or otherwise, of solid surfacing
materials using polyester resins as feedstock; or (ii) Seller's hiring of any
person who voluntarily, and without inducement by Seller, seeks employment by
Seller.
(c) Notwithstanding Section 4.6(a), Seller shall have complete
freedom to develop, patent, test market, produce, have toll produced, market,
license others, sell and conduct all other business related to all Retained
Intellectual property as contained in Schedule 1.3(k) as well as any
continuations, divisions, reissues, continuations-in-part, foreign counterpart
applications thereof, and improvements thereon, and any patents issuing
therefrom including, but not limited to (i) compositions containing maleimides,
such as in U.S. Patent 5,983,669, (ii) methods of inhibiting the growth of
zebra mussels, such as in U.S. Patent 5,288,409, (iii) water blown,
thermosetting, unsaturated polyester-polyurethane hybrid foam formulations and
components as described in U.S. Patent 5,344,852 hereinafter
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referred to as "Hyrizon" and (iv) unsaturated laminating resins having low
organic emissions and their constituent monomers comprising epoxylated and/or
alkoxylated bisphenol-A acrylates, methacrylates, diacrylates and
dimethacrylates, hereinafter referred to as "▇▇▇▇" such as described in U.S.
Patent 5,292,841 and patent applications listed on Schedule 1.3(k) having the
title "Laminating Resins Having Low Organic Emissions." Seller shall provide
Buyer the opportunity to produce ▇▇▇▇ under non-exclusive license and shall
give Buyer an opportunity to toll produce Hyrizon and ▇▇▇▇ for market
development if Seller desires such production or toll production and the
parties agree to the terms thereof. Buyer shall be considered to have received
confidential information associated with products included in Schedule 1.3(k)
by nature of this transaction and shall keep confidential all related
information and shall not produce, sell, or otherwise practice business related
to products described in Schedule 1.3(k) without written consent from Seller.
(d) Seller acknowledges that in the event of any breach of the
covenants set forth in clause (a) of this Section 4.6, Buyer and its successors
and permitted assigns shall be entitled to injunctive relief and to such other
and further relief as is proper in the circumstances.
4.7. NON-INTERFERENCE BY BUYER. Buyer shall not, for a period of
two (2) years after the Closing Date, without the prior written consent of
Seller, intentionally and knowingly induce or
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attempt to induce any supplier, employee, agent or other representative or
associate of Seller to terminate its relationship with Seller. Notwithstanding
the foregoing, Buyer's hiring of any person who voluntarily and without
inducement by Buyer, seeks employment with Buyer shall not constitute a breach
by Buyer of this Section 4.7. Buyer acknowledges that in the event of any
breach of this Section 4.7, Seller and its successors and permitted assigns
shall be entitled to injunctive relief and to such other and further relief as
is proper in the circumstances.
4.8. IDENTIFICATION OF GOODS. Buyer shall assure that any goods
and all packaging materials related to the Business shipped after the Closing
Date shall clearly identify Buyer as the producer or distributor thereof and
shall bear no marks or other features identifying Seller as the producer or
distributor thereof or otherwise referring to Seller in any way.
4.9. RETURN OF POLYESTER RESINS.
(a) Buyer shall notify Seller if any customer of the Business,
claiming that polyester resins shipped by Seller prior to
the Closing Date do not conform to the specifications
applicable thereto, returns such resins to Buyer within
ninety (90) days after Seller's shipment thereof. Upon
receipt of such notification, Seller may request such
verification and documentation
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of the alleged non-conformity and the return date as Seller
shall reasonably request.
(b) Seller shall have no liability for any polyester resins so
returned that are returned more than ninety (90) days after
Seller's shipment thereof or that conform to applicable
specifications. Any credit offered the customer, other
concession made or any cost incurred by Buyer in connection
with such resins shall be solely for the account of Buyer.
(c) Subject to the following sentence, if the returned polyester
resins do not conform to applicable specifications, Buyer
shall re-work the returned resin, and Seller shall pay Buyer
$.30 per pound of resin so re-worked, plus reasonable
freight charges for the original shipment of the resins to
the customer and for the customer's return, plus an amount
equal to Seller's standard product cost of the resin as of
the date of Closing based on Seller's accounting records.
With respect to resins shipped in tank wagons that are not
accepted by customers due to deviations from applicable
specifications, but which resins can be adjusted and
reshipped, Seller shall pay Buyer $.15 per pound of affected
resins, plus reasonable freight charges for the customer's
return and for reshipping the adjusted resin to the
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customers. The final disposition of all material that does
not conform with applicable specifications shall be the sole
responsibility of Buyer and any credits or other concessions
granted to the customer by Buyer in respect of the returned
resins shall be solely for the account of Buyer.
4.10. COLTON RESINS. The Colton Resins are Purchased Inventory
being transferred to Buyer at Closing. Buyer shall be solely responsible for
completing the curing of the Colton Resins and for disposing of them after
Closing.
4.11. CLEANING OF COLTON TANKS. Seller shall be responsible for
cleaning the five (5) tanks located at the Colton, California Business Site
that contain gelled heels. To the extent that such cleaning has not been
completed as of the Closing, Buyer shall permit Seller, at Seller's option, to
supervise and direct such cleaning after Closing. In consideration of such
cleaning, Buyer shall pay Seller at Closing $50,000 in addition to the Purchase
Price. Any costs incurred for such cleaning in excess of such amount shall be
solely for Seller's account. Any waste generated as a result of such cleaning
shall be considered Pre-Closing Waste (as defined in Section 8.2(t)) and shall
be subject to the provisions of Sections 8.3(a) and (b).
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ARTICLE V
CLOSING
-------
5.1. CLOSING. The closing of the purchase and sale of the
Purchased Assets and the other transactions contemplated hereby (the "CLOSING")
is taking place at 10:00 a.m., local time, on April 28, 1995 at the offices of
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, 1500 ▇▇▇▇▇▇ Building, Pittsburgh, Pennsylvania, or at
such other time, date or place as the parties mutually agree (the "CLOSING
DATE").
5.2. DELIVERIES BY SELLER. At the Closing, Seller is also
delivering to Buyer each of the following:
(a) a special warranty deed or deeds to the Real Estate, duly
executed and acknowledged by Seller and in recordable form (collectively, the
"DEEDS");
(b) a special warranty ▇▇▇▇ of sale and instrument of assignment
with respect to the other Purchased Assets, duly executed by Seller;
(c) an assignment or assignments of the Purchased Intellectual
Property, duly executed by Seller;
(d) an Assignment and Assumption Agreement in substantially the
form attached hereto as Exhibit B (the "ASSUMPTION AND ASSIGNMENT AGREEMENT"),
duly executed by Seller;
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(e) an assignment of all transferable or assignable licenses,
permits and warranties relating to the Purchased Assets, duly executed by
Seller;
(f) a long-term supply agreement, whereby Seller shall purchase
MA from Buyer, in substantially the form attached hereto as Exhibit C
("SELLER'S SUPPLY CONTRACT"), duly executed by Seller;
(g) a long-term supply agreement, whereby Buyer shall purchase
phthalic anhydride from Seller, in substantially the form attached hereto as
Exhibit D ("BUYER'S PA SUPPLY CONTRACT"), duly executed by Seller;
(h) A long-term supply agreement, whereby Buyer shall purchase 2
ethyl-hexanol from Seller, in substantially the form attached hereto as Exhibit
E ("BUYER'S 2-EH SUPPLY CONTRACT"), duly executed by Seller;
(i) title certificates to each of the Vehicles (together with
any other transfer forms necessary to transfer title to the Vehicles), duly
executed by Seller;
(j) a Good Standing Certificate of Seller in the State of
Delaware as of a date within ten (10) days prior to the Closing Date;
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(k) an incumbency and specimen signature certificate signed by
the officers of Seller who execute this Agreement or any of Seller's Ancillary
Documents and certified by the Secretary of Seller;
(l) true and correct copies of Seller's Certificate of
Incorporation since the date of its incorporation certified by the Secretary of
State of Delaware and Seller's bylaws certified by the Secretary of Seller;
(m) resolutions of the Board of Directors of Seller authorizing
the execution and delivery of this Agreement and Seller's Ancillary Documents
and the performance by Seller of the transactions contemplated hereby and
thereby, certified by the Secretary of Seller;
(n) the opinion of ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, legal counsel to
Seller, in substantially the form attached hereto as Exhibit F; and
(o) a letter agreement of Mitsubishi Corporation in
substantially the form attached hereto as Exhibit G.
5.3. DELIVERIES BY BUYER. At the Closing, Buyer is also
delivering to Seller each of the following:
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(a) a wire transfer of federal funds in accordance with Section
1.8(a);
(b) the Assumption and Assignment Agreement, duly executed by
Buyer;
(c) Buyer's PA Supply Contract, duly executed by Buyer;
(d) Buyer's 2-EH Supply Contract, duly executed by Buyer;
(e) Seller's Supply Contract, duly executed by Buyer;
(f) a good standing certificate of Buyer in its state of
incorporation as of a date within ten (10) days prior to the Closing Date;
(g) an incumbency and specimen signature certificate signed by
the officers of Buyer who execute this Agreement or any of Buyer's Ancillary
Documents and certified by the Secretary of Buyer;
(h) resolutions of the Board of Directors of Buyer authorizing
the execution and delivery of this Agreement and Buyer's Ancillary Documents,
and the performance of the transactions contemplated hereby and thereby,
certified by the Secretary of Buyer;
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(i) the opinion of ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, legal counsel to Buyer, in
substantially the form attached hereto as Exhibit H;
(j) a check in the amount of $50,000 pursuant to Section 4.11;
and
(k) appropriate sales and use tax exemption certificates for
inventory, machinery and equipment being purchased hereunder.
5.4. DELIVERIES BY BOTH PARTIES. At the Closing, each party is
also delivering to the other each of the following agreements related to the
Neville Island Facility:
(a) a Services Agreement substantially in the form attached
hereto as Exhibit I;
(b) an Irrevocable Easement Agreement (the "EASEMENT AGREEMENT")
covering the parcels of land underlying Buyer's Neville Island Plant and
certain other matters substantially in the form attached hereto as Exhibit J;
(c) a Lease Agreement covering certain space at Buyer's Neville
Island Plant and Seller's Neville Island Plant substantially in the form
attached hereto as Exhibit K; and
(d) a Confidentiality Agreement substantially in the form
attached hereto as Exhibit L.
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ARTICLE VI
CERTAIN ADDITIONAL COVENANTS
----------------------------
6.1. COSTS AND EXPENSES. (a) Except as set forth in Section 9.8,
each party hereto shall bear all fees and expenses incurred by such party in
connection with, relating to or arising out of the execution, delivery and
performance of this Agreement, the Ancillary Documents and the transactions
contemplated hereby and thereby, including without limitation, financial
advisors', attorneys', accountants' and other professional fees and expenses.
(b) Notwithstanding Section 6.1(a), the cost of
obtaining the Title Commitment Reports and the Surveys shall be borne by the
parties as follows: (i) such costs relating to the Jacksonville, Arkansas
Business Site shall be borne by Seller, (ii) such costs relating to the Neville
Island, Pennsylvania Business Site shall be borne by Buyer and (iii) such costs
relating to the Bartow, Florida and Colton, California Business Sites shall be
borne equally by Seller and Buyer.
(c) Notwithstanding Section 6.1(a), all accrued expenses
associated with Real Estate, such as electricity, gas, water, sewer, telephone,
property taxes, security services and similar items, shall be pro-rated between
Buyer and Seller as of the Closing. All such expenses attributable to the
period on or prior to the Closing Date shall be for the account of Seller, and
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all such expenses attributable to the period after the date hereof shall be for
the account of Buyer. Buyer and Seller shall settle such amounts on or before
July 31, 1995, except that settlement of such amounts arising from property
taxes shall occur within sixty (60) days after receipt of the applicable
property tax ▇▇▇▇.
6.2. FULFILLMENT OF ASSUMED LIABILITIES. From and after Closing,
Buyer shall pay, discharge and perform each of the Assumed Liabilities when and
as due and shall observe all of the covenants, terms and conditions of each and
every agreement related to the Assumed Liabilities.
6.3. COLLECTION OF ACCOUNTS RECEIVABLE. (a) After the Closing,
Buyer shall have the right and authority to collect for Buyer's own account all
the Purchased Accounts Receivable and Buyer shall use commercially reasonable
efforts to collect all the Purchased Accounts Receivable. Seller shall
promptly (i) endorse and deliver to Buyer any checks or other payment
instruments payable to Seller that are received by Seller, whether directly or
through a lockbox, on account of the Purchased Accounts Receivable and (ii)
deliver to Buyer any checks or other payment instruments received by Seller,
whether directly or through a lockbox, and payable to or otherwise intended for
Buyer on account of the Purchased Accounts Receivable.
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(b) In the event that during the two-year period following the
Closing, Buyer collects any amount in respect of the Purchased Accounts
Receivable in excess of 97% of the aggregate face value of the Purchased
Accounts Receivable, Buyer shall remit 50% of the amount of such excess to
Seller within thirty (30) days after Buyer's receipt thereof. Within fifteen
(15) days after the end of each calendar month following the Closing, Buyer
shall provide Seller an accounts aging statement with respect to all Purchased
Accounts Receivable that remain uncollected as of the last day of such month.
Such statement shall also reflect all amounts collected during such month in
respect of the Purchased Accounts Receivable.
(c) For a period of two (2) years following the Closing Date,
Buyer shall preserve all of Buyer's correspondence, books, records and all
other information related to the Purchased Accounts Receivable. Seller shall
be permitted reasonable access to such information for purposes of verifying
Buyer's collections and reviewing Buyer's collection efforts in respect of the
Purchased Accounts Receivable.
6.4. USE OF NAME "ARISTECH CHEMICAL CORPORATION". Buyer
acknowledges that except for the Purchased Intellectual Property, it is not
acquiring any right to use patents, trademarks, service marks, trade names,
logos or other intellectual property used by Seller in connection with the
Business, including without limitation, the name "Aristech Chemical
Corporation" or any
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derivative thereof; provided, however, that Buyer shall be permitted for a
period of one (1) year after the Closing, to identify Seller as the preceding
owner of the Purchased Assets in communications with customers and potential
customers of the Business.
6.5. FURTHER ASSURANCES. The parties shall execute such further
documents and perform such further acts as may be necessary to transfer and
convey the Purchased Assets to Buyer upon the terms contained in this Agreement
and the Ancillary Documents and to otherwise comply with the terms of and
consummate the transactions contemplated hereby and thereby.
ARTICLE VII
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
--------------------------------------------
7.1. SCOPE. This Article VII shall govern the parties'
indemnification rights and obligations with respect to all matters other than
environmental matters, which are governed exclusively by Article VIII except to
the extent expressly provided in Section 8.1.
7.2. SURVIVAL OF REPRESENTATIONS. Except as set forth in the
following sentence, all representations and warranties made by any party in
this Agreement shall survive the Closing for a period of one (1) year from the
Closing Date. Notwithstanding
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the foregoing, the representations and warranties contained in Sections 2.2,
2.10, 2.22, 3.2 and 3.6 shall never terminate or expire. All claims for
damages made by virtue of any representation or warranty shall be made under,
and subject to the limitations set forth in, this Article VII.
7.3. INDEMNIFICATION BY SELLER. Subject to the terms and
conditions of this Article VII, Seller shall indemnify, defend, save and hold
Buyer and its officers, directors, employees, agents, successors and permitted
assigns (collectively, "BUYER INDEMNITEES") harmless from and against all
demands, claims, actions or causes of action, assessments, losses, damages,
deficiencies, liabilities, costs and expenses (including reasonable attorneys'
fees and expenses, interest, penalties, and all judgments and reasonable
amounts paid in investigation, defense or settlement of or in connection with
any threatened, pending or future claim, action, suit or proceeding, whether
criminal, civil, administrative or investigative) (collectively, "BUYER
DAMAGES") asserted against, imposed upon, resulting to or incurred by any of
Buyer Indemnitees, directly or indirectly, in connection with, or arising out
of, or resulting from (a) a breach of any of Seller's representations and
warranties, (b) a breach or nonfulfillment of any of the covenants or
agreements made by Seller in or pursuant to this Agreement or any of Seller's
Ancillary Documents, (c) all Retained Liabilities, (d) any failure to comply
with any "bulk sales" laws applicable to the sale of the Purchased Assets
hereunder, and (e) Seller's
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operation of the Business prior to the Closing Date (including Continuing
Liabilities to the extent arising therefrom), except as set forth in Section
7.5(b).
7.4. INDEMNIFICATION BY BUYER. Subject to the terms and
conditions of this Article VII, Buyer shall indemnify, defend, save and hold
Seller and its officers, directors, employees, agents, successors and permitted
assigns (collectively, "SELLER INDEMNITEES") harmless from and against all
demands, claims, actions or causes of action, assessments, losses, damages,
deficiencies, liabilities, costs and expenses (including reasonable attorneys'
fees and expenses, interest, penalties, and all judgments and reasonable
amounts paid in investigation, defense or settlement of or in connection with
any threatened, pending or future claim, action, suit or proceeding, whether
criminal, civil, administrative or investigative) (collectively, "SELLER
DAMAGES") asserted against, imposed upon, resulting to or incurred by any of
Seller Indemnitees, directly or indirectly, in connection with, or arising out
of, or resulting from, (a) a breach of any of Buyer's representations and
warranties, (b) a breach or nonfulfillment of any of the covenants or
agreements made by Buyer in or pursuant to this Agreement or any of Buyer's
Ancillary Documents, (c) all Assumed Liabilities, (d) Buyer's operation of the
Business after the Closing Date, including Continuing Liabilities to the extent
arising therefrom, and (e) Seller's provision of transitional assistance in
accordance with Section 4.5.
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7.5. LIMITATIONS ON INDEMNIFICATION OBLIGATIONS.
(a) Seller's obligations to indemnify Buyer Indemnitees against
any Buyer Damages pursuant to Section 7.3 shall be subject to all of the
following limitations:
(i) No indemnification shall be required to be made by Seller
pursuant to section 7.3(a) until the aggregate amount of
Buyer Damages thereunder exceeds $50,000, and then only to
the extent of the excess of such Buyer Damages over $50,000.
(ii) Seller's aggregate obligations to indemnify Buyer
Indemnitees pursuant to Section 7.3(a) shall not exceed
$30,000,000. Except as set forth in Section
7.5(a)(iii)(A)(2), no such monetary limit shall apply to
Seller's obligations to indemnify Buyer Indemnitees pursuant
to Sections 7.3(b), (c), (d) or (e).
(iii) Except for a breach of the representation set forth in
Section 2.8 or as expressly provided in (A) below or in
Sections 8.3(e) and 8.3(f), Seller shall not be obligated to
indemnify Buyer Indemnitees under Section 7.3(e) or
otherwise by reason of any alleged failure of the Purchased
Assets or the Business to comply with any applicable laws,
statutes, regulations, codes,
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ordinances, binding policies and case law or other legal
requirements (collectively, "LAWS").
(A) With regard to any condition of non-compliance (other
than non-compliance with applicable Environmental
Laws, which is exclusively governed by Article VIII)
that was not known by Buyer prior to Closing, and
that could not have been discovered by the exercise
of due diligence by Buyer prior to Closing, Seller
shall indemnify Buyer for the reasonable cost of
correcting any such condition, subject to the
following qualifications:
(1) Buyer shall notify Seller of such condition
of non-compliance prior to the expiration of
the applicable notice period, as follows:
(a) For non-compliance with applicable
federal requirements, four (4) months
after the Closing Date;
(b) For non-compliance with
Pennsylvania, California or Florida
state requirements, arising from the
Purchased Assets or the Business
conducted at Neville Island, Colton,
California or
- ▇▇ -
▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, respectively, eight
(8) months after the Closing Date;
and
(c) For all other non-compliance, twelve
(12) months after the Closing Date.
(2) Seller's aggregate obligations to indemnify
Buyer Indemnitees for any condition of
non-compliance referred to in this clause
(iii) shall not exceed $500,000.
(3) No indemnification shall be required to be
made by Seller for any condition of
non-compliance referred to in this clause
(iii) until the aggregate amount of Buyer
Damages thereunder exceeds $20,000, and then
only to the extent of the excess of such
Buyer Damages over such amount.
(4) Under no circumstance shall Seller be
obligated to indemnify Buyer Indemnitees with
respect to any conditions of non-compliance
with the following Laws:
(a) The process safety management
standard regulations under the
Occupational Safety and Health Act;
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(b) The Americans with Disabilities Act;
or
(c) The Toxic Substances Control Act, to
the extent not covered by Sections
8.3(e) or 8.3(f).
(5) No indemnification shall be required to be
made by Seller with respect to any condition
of non-compliance that did not exist as of
the Closing Date.
(iv) To the extent the subject matter of the claim is covered by
insurance held by Buyer, or the Buyer Indemnitee is
otherwise entitled to recovery from a third party with
respect to such claim, Seller shall be subrogated to Buyer's
or the Buyer Indemnitee's rights against such insurer or
other third party.
(v) No indemnification shall be required to be made with respect
to any action or inaction by Buyer or a Buyer Indemnitee
subsequent to the Closing Date causing, or causing an
increase in, Buyer Damages.
(b) The indemnification obligations of both Seller (pursuant to
Section 7.3) and Buyer (pursuant to Section 7.4) are subject to the following
limitations:
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(i) the amount of any recovery by a Buyer Indemnitee or a Seller
Indemnitee, as the case may be, shall be net of any foreign,
federal, state and/or local income tax benefits inuring to
the indemnified party (the "INDEMNIFIED PARTY") as a result
of the state of facts that entitled the Indemnified Party to
recover from Seller or Buyer, as the case may be (the
"INDEMNIFYING PARTY");
(ii) neither the Buyer Indemnitees nor the Seller Indemnitees may
recover with respect to a misrepresentation or breach of
warranty or covenant by Seller or Buyer, respectively, if at
or before the Closing Buyer or Seller, respectively, had
actual knowledge of the misrepresentation or breach of
warranty or covenant; and
(iii) the Indemnifying Party shall be obligated to indemnify the
Indemnified Party only for those Buyer Damages or Seller
Damages, as the case may be (collectively the "DAMAGES"), as
to which the Indemnified Party has given the Indemnifying
Party written notice (A) in the case of indemnification
pursuant to Section 7.3(a) or Section 7.4(a), within six (6)
months after the expiration of the representations and
warranties; and (B) in all
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other cases, as promptly as practicable (but in any event
described in clause (A) or (B), no later than six (6) months
after the Indemnified Party's discovery of the facts giving
rise to such claim). Any written notice delivered pursuant
to this clause (iii) shall set forth with specificity the
basis of the claim for Damages and an estimate of the amount
thereof.
ARTICLE VIII
ENVIRONMENTAL INDEMNIFICATION AND
OTHER ENVIRONMENTAL MATTERS
---------------------------
8.1. SCOPE. Except for Seller's representation set forth in
Section 2.13, this Article VIII shall exclusively govern the rights of the
parties with respect to environmental matters related to the Business Sites.
8.2. DEFINITIONS. For purposes of this Article VIII, the
following terms shall have the meanings set forth in this Section 8.2:
(a) "ADDITIONAL OPERATING SPACE" means the structures, space or
parcels of land at the Neville Island Facility (other than Buyer's Neville
Island Plant or the Operating Easement Areas) as to which Buyer obtains, after
the date hereof, an
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ownership or possessory interest for the purposes of conducting operations.
(b) "APPROPRIATE AND REASONABLE CRITERIA" means environmental
cleanup criteria based on a site-specific assessment of risks, considering the
environmental media affected by the contaminants or conditions, the reasonably
foreseeable uses of the Premises and any other natural resources affected or
potentially affected by the contaminants or conditions, the physical setting of
the affected area, potential pathways of contaminant migration, the
characteristics of the contaminants involved, the technical feasibility and
cost-effectiveness of cleanup, removal, or remediation alternatives that might
be pursued, and human health and environmental protection levels indicated in
guidance documents issued by federal or state environmental agencies, and other
relevant factors.
(c) "ARRANGEMENT FOR TREATMENT OR DISPOSAL" for purposes of
Sections 8.3(a) and 8.3(c) shall mean any arrangement for treatment or disposal
of waste that, under the particular facts of the situation, results in the
imposition of liability upon the entity or person who "arranged for disposal or
treatment" pursuant to Section 107(a)(3) of the CERCLA, 42 U.S.C. Section
9707(a)(3) or counterpart state Environmental Laws.
(d) "BUSINESS INTERRUPTION COSTS" means where there is a loss of
access to or use of an affected production unit or facility for a period in
excess of five (5) days, the costs
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85
actually incurred to provide a replacement of production, products or services
that would have otherwise been provided by the affected unit or facility, and
the expenses incurred in ordinary maintenance of the affected unit or facility.
(e) "BUYER ENVIRONMENTAL CONDITIONS" means (i) with respect to
Buyer's Operating Space or the Access Easement Areas, all Environmental
Conditions resulting from (A) the release of any Regulated Substances arising
from Buyer's operation of the Polyester or MA businesses upon Buyer's Operating
Space, or arising from any other use or activities conducted by Buyer on
Buyer's Operating Space or the Access Easement Areas; or (B) the migration of
Regulated Substances at Buyer's Operating Space or the Access Easement Areas as
of the Closing Date to the extent that such migration, or the costs associated
therewith, are caused or increased by Buyer's actions or by Buyer's failure to
act where Buyer has an obligation to act arising under law, this Agreement, or
any Ancillary Document; and (ii) with respect to the other Production
Facilities or the Distribution Facilities, all Environmental Conditions
resulting from (A) the release of any Regulated Substances arising from Buyer's
operation of any of the Other Production Facilities or the Distribution
Facilities, or arising from any other use or activities conducted by Buyer at
any of such Properties, or (B) the migration of Regulated Substances at any of
the Other Production Facilities or the Distribution Facilities as of the
Closing Date to the extent such migration or the costs associated therewith are
caused or
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86
increased by Buyer's actions or by Buyer's failure to act where Buyer has an
obligation to act arising under law, this Agreement, or any Ancillary Document.
(f) "BUYER REGULATED SUBSTANCE" means any Regulated Substance
released as a result of Buyer's operations, use or activities.
(g) "BUYER'S OPERATING SPACE" means (i) Buyer's Neville Island
Plant, (ii) the Operating Easement Areas and (iii) the Additional Operating
Space, if any.
(h) "BUYER'S PERCENTAGE" means a fraction, the numerator of
which is equal to the land component of Buyer's Operating Space, plus one-half
of the roadways included in the Access Easement Areas, and the denominator of
which is equal to the total area of land comprising the Neville Island
Facility. Buyer's Percentage as of the Closing Date is 34.85%.
(i) "CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., and
regulations promulgated thereunder.
(j) "CLAIMS" means any suits, claims, actions, damages, losses,
costs (including costs of defense, settlement and reasonable attorney's fees),
liabilities, obligations, expenses, damages, fines, or penalties. Unless
specifically stated in an indemnification provision in this Article VIII,
"Claims" does not include Business Interruption Costs. Except for Business
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Interruption Costs where specifically provided, Claims does not include any
consequential, indirect, incidental, or other similar damages (including
without limitation lost profits) incurred by any indemnified party, under any
form or theory of action whatsoever, whether in contract or otherwise.
(k) "CONSTRUCTION OR EXPANSION PROJECT" means any project at
Buyer's Neville Island Plant involving the construction of new or expanded
structures, the installation of new equipment, or any modification to
structures or equipment that increases the capacity of such facilities; but
does not include any project that solely involves the in-kind replacement
(including in-kind replacement with new equipment) or repair of previously
existing equipment or structures.
(l) "ENVIRONMENTAL ASSESSMENT" means a systematic evaluation of
potential environmental contamination at a site, or portion of a site, that
includes both soil and groundwater sampling and analysis. Such an assessment
may involve sampling focused on those areas where, based on reviews of site
history and current or past operations, it is believed that contamination is
more probable to occur.
(m) "ENVIRONMENTAL CONDITION" means the presence of a Regulated
Substance (other than a naturally-occurring substance) on or at a property
(including, but not limited to, the presence in surface water, groundwater,
soils or subsurface strata).
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88
(n) "ENVIRONMENTAL LAW" shall mean any federal, state or local
statute, law, rule, regulation, ordinance, code, or policy having the force of
law relating to the environment or Regulated Substances, including, without
limitation: CERCLA, 42 U.S.C. Section 9601 et seq.; the Superfund Amendments
and Reauthorization Act, Public Law 99-499, 100 Stat. 1613; RCRA, 42 U.S.C.
Section 6901, et seq.; the National Environmental Policy Act, 42 U.S.C. Section
4321; the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq.; Section 6 of
the Toxic Substances Control Act (including regulations promulgated thereunder,
"TSCA"), 15 U.S.C. Section 2605 (but not including Sections 4 and 5 of TSCA, 15
U.S.C. Section 2603-2604); the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801; the Federal Water Pollution Control Act, 33 U.S.C. Section
1251 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. Section 2701, et seq.;
the Clean Air Act, 42 U.S.C. Section 7401 et seq., and counterpart state
statutes, and regulations adopted thereunder.
(o) "ENVIRONMENTAL PROFESSIONAL" means a registered professional
engineer, registered professional geologist, environmental scientist or
attorney, each of whom has a minimum of 10 years of experience with respect to
environmental regulatory issues and remediation of environmental contamination.
(p) "GOVERNMENTAL APPROVAL" means any permit, license,
authorization, consent, approval, waiver, exception, variance, order, or
exemption issued by any federal, state or local governmental authority.
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(q) "OFF-SITE LOCATIONS" means locations other than the Business
Sites.
(r) "OPERATING EASEMENT AREAS" shall have the meaning ascribed
in Section 8.4(a).
(s) "PRE-CLOSING ENVIRONMENTAL CONDITION" means an Environmental
Condition on or at a Business Site that existed as of the Closing Date.
(t) "PRE-CLOSING WASTE" means hazardous or non-hazardous
industrial waste in containers generated by Seller as a result of industrial
operations at the Business Sites prior to the Closing Date. Except to the
extent provided in Section 4.11 with respect to the waste generated as a result
of the cleaning referred to therein, Pre-Closing Waste does not include
contaminated media (such as soil or groundwater), tank bottoms or other
material currently stored or contained in raw material, product or process
tanks.
(u) "PROJECT AFFECTED SOILS" means soils underlying, or directly
affected by activities undertaken in connection with, any project involving the
construction, installation, expansion, repair, or replacement of any equipment
or structures. Project Affected Soils includes, but is not limited to, soils
excavated or disturbed in order to provide for footings, foundations, or access
to underground facilities associated with such a project.
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(v) "PROJECT AREA" means the area underlying, or directly
affected by activities undertaken in connection with, any project involving the
construction, installation, expansion, repair, or replacement of any equipment
or structures. The Project Area includes, but is not limited to, any area
excavated in order to provide for footings, foundations, or access to
underground facilities associated with such a project.
(w) "PROPERTIES" means the real properties and leased
facilities, together with Buyer's Operating Space, being acquired by Buyer as
part of the Purchased Assets.
(x) "RCRA" means the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901 et seq., and regulations promulgated thereunder.
(y) "REGULATED SUBSTANCE" means any pollutant, contaminant,
hazardous substance, hazardous material, toxic substance, toxic pollutant,
solid waste, municipal waste, industrial waste, or hazardous waste, that is
defined as such and is subject to regulation under any applicable Environmental
Law.
(z) "REGULATORY REMEDIATION STANDARD" means any environmental
cleanup standards established by statute, duly-adopted regulations, or policies
that have the force of law.
(aa) "RELEASE TO THE ENVIRONMENT" means the spilling, leaking,
pumping, pouring, emitting, discharging, injecting, escaping, leaching, dumping
or disposal of any Regulated
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Substance into surface water, groundwater, soil, the land surface or
subsurface, or ambient air. Release to the Environment does not include:
(i) A release of solids or liquids onto an impervious
surface that is promptly contained and cleaned up,
and that does not come into contact with soil,
stormwater, surface water or groundwater.
(ii) A release of a Regulated Substance that is approved
by, and conducted in full compliance with, a
Governmental Approval issued under an applicable
Environmental Law.
(iii) Fugitive air emissions allowable under applicable
Environmental Law.
Where the term "Release to the Environment" is not capitalized, the word
"release" when used in relation to a substance or material has the same meaning
as defined in Section 101(22) of CERCLA, 42 U.S.C. Section 9601(22).
(ab) "REQUIRED BY LAW" means an action that is specifically
mandated by an injunction, order, consent order, permit or license condition,
or other legally-binding document issued by a government agency, or that is
specifically mandated by a statute
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or by an applicable regulation or standard issued by a government agency.
(ac) "REQUIRED REGULATED SUBSTANCE RECORDS" means the following
records for Regulated Substances used, stored, produced, released, or present
at the Properties:
(i) Material Safety Data Sheets ("MSDS") for all
materials where the employer is required to obtain
and maintain such MSDS information under the
Occupational Safety and Health Act, 29 U.S.C. Section
651-678;
(ii) Emergency and Hazardous Chemical Inventory data to the
extent required under the Emergency Planning and
Community Right to Know Act (including regulations
promulgated thereunder, "EPCRA") ▇▇▇▇▇▇▇ ▇▇▇, ▇▇
▇.▇.▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇;
(iii) Toxic Chemical Release Inventory data to the extent
required under EPCRA ▇▇▇▇▇▇▇ ▇▇▇, ▇▇ ▇.▇.▇. ▇▇▇▇▇▇▇
▇▇▇▇▇;
(iv) Air emission inventory data as required under the
federal Clean Air Act or equivalent state laws, and
applicable regulations and permit conditions;
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(v) Discharge monitoring reports and wastewater
monitoring data, as required pursuant to the federal
Clean Water Act, state water quality and water
pollution control laws, and applicable regulations
and permit conditions;
(vi) Manifests for all hazardous or other special wastes
requiring such manifests under applicable laws and
regulations, shipped from or received at Buyer's
Operating Space;
(vii) Hazardous waste biennial reports as required under 40
C.F.R. Section 262.41, and any more frequent similar
reports required under state regulations (e.g., 25 Pa.
Code Section 262.41); and
(viii) Waste Determinations rendered pursuant to 40 C.F.R.
Section 262.11 and similar state regulations (e.g., 25
Pa. Code Section 262.11);
(ix) Chemical analyses of wastes as required under federal
or state waste management rules (e.g., 25 Pa. Code
Section 287.54);
(x) Residual waste reports and records as required under
25 Pa. Code Section Section 287.52 and 287.55 or
similar state regulations in other jurisdictions;
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(xi) Chemical Manufacturers Association waste survey forms;
and
(xii) Any other record concerning Regulated Substances that
must be maintained by the site owner or operator as
Required by Law.
(ad) "RETAINED PREMISES" means the Neville Island Facility other
than Buyer's Operating Space.
(ae) "SELLER'S PERCENTAGE" means a fraction, the numerator of
which is equal to the land component of the Retained Premises, plus one-half of
the roadways included in the Access Easement Areas, and the denominator of
which is equal to the total area of land comprising the Neville Island
Facility. Seller's Percentage as of the Closing Date is 65.15%.
8.3. PROVISIONS RELATING TO ALL PROPERTIES. The provisions set
forth in this Section 8.3 shall apply to all the Properties.
(a) PRE-CLOSING SHIPMENTS/TREATMENT/DISPOSAL. Seller agrees to
retain liability for, and to indemnify, defend, save and hold harmless Buyer
Indemnitees from and against Claims arising from (i) the shipment by Seller
prior to the Closing Date of any Regulated Substances from the Properties, or
(ii) the arrangement by Seller prior to the Closing Date for the treatment or
disposal at Off-Site Locations of Regulated Substances
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generated at the Properties, or (iii) the shipment or arrangement for treatment
or disposal by Seller of Pre-Closing Waste.
(b) INVENTORY AND DISPOSITION OF PRE-CLOSING WASTE MATERIALS.
Prior to Closing, Seller and Buyer have jointly inventoried and listed the
hazardous and non-hazardous wastes present at the Properties. Seller has used
all reasonable efforts to remove such Pre-Closing Waste from the Properties
prior to Closing. To the extent that such Pre-Closing Waste has not been
removed from the Properties prior to Closing, Seller agrees to arrange for
proper shipment, treatment and disposal of such wastes within sixty (60) days
of Closing (unless Seller is precluded from such action by applicable law, in
which case Seller shall arrange for proper shipment, treatment and disposal of
such waste as soon as practicable. If Seller fails or is unable to take such
action, Seller shall reimburse Buyer for any expenses incurred by Buyer in
arranging for the shipment, treatment and disposal of such wastes at a facility
acceptable to Seller and Seller shall indemnify Buyer Indemnitees pursuant to
clause (a) above with respect to such wastes).
(c) POST-CLOSING SHIPMENTS/TREATMENT/DISPOSAL. Buyer shall be
responsible for, and agrees to indemnify, defend, save and hold harmless Seller
Indemnitees from and against any Claims arising from the shipment after the
Closing Date of any Regulated Substances, or for the arrangement by Buyer for
the treatment or disposal at Off-Site Locations of any Regulated Substances
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96
generated at the Properties. In no event shall Buyer be required to indemnify,
hold harmless or defend Seller Indemnitees against any Claims arising from the
shipment or arrangement for treatment, storage or disposal of Pre-Closing Waste
at Off-Site Locations, regardless of when such Pre-Closing Waste is shipped.
(d) INDEMNIFICATION FOR FAILURE TO HOLD REQUIRED GOVERNMENTAL
APPROVALS. Seller agrees, for a period of one (1) year after Closing, to
indemnify, defend, save and hold harmless Buyer Indemnitees from and against
Claims arising from failure of Seller to have obtained and hold any
Governmental Approval required under applicable Environmental Law as of the
Closing Date in order to conduct the Business at the Business Sites in the
manner in which it was conducted as of the Closing Date.
(e) INDEMNIFICATION FOR PRE-CLOSING VIOLATIONS. Seller agrees
to indemnify, defend, save and hold harmless Buyer Indemnitees from and against
any enforcement proceedings or penalties relating to alleged violations of
Environmental Laws that occurred prior to the Closing Date resulting from
operation of the Business. This clause (e) does not cover:
(i) Any Claims relating to violations occurring after the
Closing Date (including any allegations of violations
by Buyer resulting from Buyer's continuation of any
pattern or practice
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97
established or engaged in by Seller prior to the
Closing Date).
(ii) Any Claims relating to investigation or remediation of
any Environmental Condition on or at the Properties,
Environmental Conditions being addressed in Sections
8.4, 8.5 and 8.6.
Where an enforcement proceeding or penalty relates to violations of
Environmental Laws committed by both Seller before the Closing Date and Buyer
after the Closing Date, the costs of defense of any such proceeding and any
penalty shall be apportioned between the parties according to the number,
magnitude and seriousness of the violations committed by each (considering,
among other factors, the manner in which the regulatory agency or adjudicating
forum calculated the penalty imposed). (For example, if in a proceeding
involving exceedances of air emission limits, a daily penalty of $1000 per day
was assessed for a violation that occurred on each of the 6 days prior to
Closing, and the 4 days after Closing, Seller would be responsible for $6000 of
the penalty, and Buyer would be responsible for $4000 of the penalty. If,
however, the agency calculated the seriousness of the penalty as being $100 per
day for the 6 days of violations that occurred before Closing, and $1000 a day
for the 4 days of violations that occurred after Closing, Seller would be
responsible for $600, and Buyer would be responsible for $4000.)
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(f) PRE-CLOSING COMPLIANCE ITEMS.
(i) Seller shall be responsible for making modifications
to the incinerator located at the Jacksonville,
Arkansas Business Site (the "JACKSONVILLE
INCINERATOR") in accordance with the following
provisions:
(A) Seller shall make or cause to be made
modifications to the Jacksonville Incinerator
(the "MODIFICATIONS") required to cause the
incinerator to perform in accordance with the
warranty set forth in clause (D) below.
(B) To the extent that the Modifications are not
completed as of the Closing, Buyer shall
permit Seller, at Seller's option, to
supervise and direct the implementation of
the remaining Modifications. Buyer shall, at
no cost to Seller, provide Seller's
employees, agents and contractors access to,
and reasonable accommodation at, the
Jacksonville, Arkansas Business Site for such
purpose. The parties shall consult with each
other to determine a mutually convenient time
or times during which such access and
accommodation will be provided so as to
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assure that the Modifications are implemented
in a manner that is as cost efficient for
Seller as possible.
(C) Buyer shall indemnify, defend, save and hold
harmless Seller Indemnitees from and against
all Claims based on injury, loss or damage to
property or persons (including without
limitation, Buyer's and Seller's personnel,
business invitees, and consultants or
contractors engaged by either party in
connection with the Modifications) directly
or indirectly arising in connection with or
related to the installation of the
Modifications, except to the extent any such
Claims arise from the negligence or willful
misconduct of Seller's personnel, business
invitees, and consultants or contractors, in
which case, Seller shall indemnify Buyer
Indemnitees from and against any such Claims.
Buyer shall provide a safe work environment
for Seller's personnel and any contractors,
consultants or other persons involved in the
Modifications and will provide any necessary
and relevant health and safety information to
such persons. However, Seller shall be
responsible for ensuring that its personnel,
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contractors, and consultants are trained in
relevant safety procedures and follow Buyer's
safety rules and regulations.
(D) Seller warrants to Buyer that upon completion
of the planned Modifications, the
Jacksonville Incinerator will be capable of
performing reliably when handling daily
volumes of liquid phase and vapor phase
throughput equal to the daily throughput rate
experienced by the Seller in 1994 (the "1994
DAILY THROUGHPUT RATES"). For purposes of
this warranty, the Jacksonville Incinerator
shall be deemed to perform reliably if, when
operated in compliance with the incinerator's
operating instructions and good engineering
practice, it is capable of incinerating
liquid phase and vapor phase wastes from the
polyester resin manufacturing process in
volumes not exceeding the respective 1994
Daily Throughput Rates, and of producing air
emissions in compliance with Air Operating
Permit No. 821-AR-1 in effect as of the
Closing Date, with no more incinerator bypass
operating time than allowed in Air Operating
Permit No. 821-AR-1 (including the
cross-referenced portions of the application
for
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such Air Operating Permit relating to bypass
operating times). Upon completion of the
Modifications, Seller shall have the right to
conduct a test of the Jacksonville Incinerator
to measure its capability of complying with
these criteria. Such test shall be performed
by an independent consultant, and Buyer shall
have the right to observe the test. In the
event that such test (or any subsequent test)
performed by the independent consultant, in
which the incinerator is operated over a
period of three (3) consecutive days in
compliance with the incinerator's operating
instructions and good engineering practice,
indicates compliance with these criteria,
Seller shall be deemed to have satisfied all
of its obligations under the warranty set
forth in this clause (D) and shall have no
further liability to Buyer under Section
8.3(f)(i). In the event such test indicates
non-compliance with these criteria, Seller
shall have the right to make such further
adjustments and modifications and to conduct
such further tests as Seller shall deem
necessary and appropriate.
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(E) Seller makes no warranty in Section
8.3(f)(i)(D) with respect to the performance
of the Jacksonville Incinerator at daily
throughput rates of either liquid phase or
vapor phase liquids that exceed the 1994
Daily Throughput Rates. The warranty set
forth in Section 8.3(f)(i)(D) shall be void
and of no further effect if (i) Buyer
operates the Jacksonville Incinerator with
inputs of liquid phase or vapor phase wastes
in volumes greater than the respective 1994
Daily Throughput Rates; or (ii) Buyer
operates the Jacksonville Incinerator in a
manner that does not comply with the
incinerator's operating instructions and good
engineering practice.
(ii) All those pre-Closing environmental compliance issues
identified by Buyer in its due diligence investigation
are set forth in the Buyer Environmental Report (as
defined in Section 2.13). Except as set forth in
Sections 8.3(d) and (e), under no circumstance shall
Seller be liable to Buyer in any respect whatsoever,
directly or indirectly, in connection with any of the
matters referred to in the Buyer Environmental Report
or any other pre-Closing instance of non-compliance
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with applicable environmental laws, whether known or
unknown, and Buyer hereby releases Seller from any and
all liability in connection with all such matters.
Buyer acknowledges that it has negotiated a reduction
in the Purchase Price as full and sufficient
consideration for the foregoing release.
(g) TITLE V PERMIT. Prior to Closing, Seller had commenced
preparation of the Title V air permit application for Bartow, Florida which is
due November 15, 1995. As of the Closing, Buyer shall take over and complete
the preparation of the application and Buyer shall assume Seller's unaccrued
obligations under its contract with the consultant engaged to prepare the
application.
(h) DISCLAIMER OF LIABILITY. No provision of this Agreement or
any of the Ancillary Documents (including any indemnification or cost-sharing
arrangement between Seller and Buyer) shall constitute an admission of
liability by either Buyer or Seller as to Claims made by third parties with
respect to Environmental Conditions or compliance with Environmental Laws.
(i) COOPERATION REGARDING CLAIMS AGAINST OTHER RESPONSIBLE
PARTIES. Notwithstanding any indemnification or cost-sharing arrangement
between Buyer and Seller, both parties agree to cooperate with each other in
pursuing any claims that may be made
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against other parties (including predecessor owners or operators of the
Properties) who may be responsible for Environmental Conditions or other
liabilities, and in pursuing any claims that may be pursued against insurers
who may have provided insurance coverage against such claims, liabilities,
losses, occurrences, incidents, or events, in accordance with the following
arrangements:
(i) For matters on which Seller has an obligation to
defend:
(A) Buyer shall, without charge to Seller, provide
access to Buyer's employees and records.
(B) Buyer agrees that, to the extent necessary or
appropriate, Seller may include Buyer's name
on any complaint or other pleading asserting
claims against other responsible parties, and
on any complaint or other pleading asserting
a claim against an insurer (other than a
claim arising under an insurance policy
issued to Buyer).
(C) Seller and Buyer agree to consult with each
other regarding the pursuit of any defenses
or claims (under the terms of a joint defense
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agreement that assures the confidentiality and
privileges of such communications), and Seller
will consider Buyer's comments regarding such
proceedings, but Seller shall have the
ultimate right, in its discretion, to render
all decisions regarding the pursuit of such
claims and defenses.
(D) The legal fees and other costs incurred to
assert such defenses or claims shall be borne
by Seller.
(ii) For matters on which Buyer has an obligation to
defend:
(A) Seller shall, without charge to Buyer, provide
access to Seller's employees and records.
(B) Seller agrees that, to the extent necessary
or appropriate, Buyer may include Seller's
name on any complaint or other pleading
asserting claims against other responsible
parties, and on any complaint or other
pleading asserting a claim against an insurer
(other than a claim arising under an
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insurance policy issued to Seller or its
parent).
(C) Seller and Buyer agree to consult with each
other regarding the pursuit of any defenses
or claims (under the terms of a joint defense
agreement that assures the confidentiality
and privileges of such communications), and
Buyer will consider Seller's comments
regarding such proceedings, but Buyer shall
have the ultimate right, in its discretion,
to render all decisions regarding the pursuit
of such claims and defenses.
(D) The legal fees and other costs incurred to
assert such defenses or claims shall be borne
by Buyer.
(iii) For matters on which both parties have
cross-obligations to indemnify or defend, or for
matters that are subject to cost-sharing arrangements
(such as claims related to Other Environmental
Conditions under Section 8.5(e)):
(A) Buyer and Seller shall make available to each
other, without charge, their respective
employees and records.
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107
(B) Seller and Buyer agree to consult with each
other regarding the pursuit of any defenses
or claims (under the terms of a joint defense
agreement that assures the confidentiality
and privileges of such communications).
(C) Any legal fees or other costs incurred in
asserting such defenses and claims shall be
allocated between the parties in accordance
with their respective shares of
responsibility for the Environmental
Condition or violations as ultimately
adjudicated.
(j) RELATIONSHIP BETWEEN PARTIES.
(i) Where a party is designated the "LEAD PARTY" with
respect to an Environmental Condition, unless the
parties otherwise agree, the Lead Party shall be
responsible for:
(A) the provision of all notices to governmental
authorities Required by Law;
(B) engagement of such consultants or other
professionals to prepare any required studies,
assessments, or plans;
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(C) consulting with, and obtaining the comments
of the other party, with respect to any draft
studies, assessments, or plans;
(D) submission of any correspondence to, and
coordination of communications with, any
involved governmental agencies; and
(E) any negotiations with involved governmental
agencies.
(ii) The Lead Party shall promptly give the other party
(the "NON-LEAD PARTY") notice and copies of any
correspondence to or from any governmental agency
concerning the Environmental Condition. The other
party shall be advised of, and have the opportunity to
attend any meetings with any involved governmental
agency.
(iii) Except as provided in Section 8.3(j)(iv), the Non-Lead
Party shall not engage in any ex parte communications
with any involved governmental agency or other entity
or person regarding the Environmental Condition,
without notice to and the approval of the Lead Party.
The Non-Lead Party shall engage in no communication
and shall take no action that would hinder, render
more difficult or
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render more expensive the remediation of the
Environmental Condition in accordance with the terms
of the Agreement. If the Non-Lead Party breaches
either of these covenants, the Non-Lead Party shall
release, indemnify, save and hold harmless the Lead
Party and its officers, directors, employees, agents,
successors and permitted assigns for any additional
costs incurred as a result of such communication or
action.
(iv) The Non-Lead Party may engage in a communication with
an involved governmental agency, without notice to and
the approval of the Lead Party, if:
(A) the Non-Lead Party is Required by Law to make
a notification to the governmental agency
within a time period that does not
practicably allow an opportunity to first
notify and receive the approval of the Lead
Party, provided that the Non-Lead Party shall
notify the Lead Party of any such
notification as soon as practicable following
the provision of such a notice; or
(B) a governmental agency conducts an unannounced
inspection or otherwise initiates a
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communication with the Non-Lead Party of which
the Non-Lead Party did not have prior notice,
provided that the Non-Lead Party shall notify
the Lead Party as soon as practicable
following such communication.
In making any such required notification or any
communication, the Non-Lead Party shall in no event
advocate or take any action that would hinder, render
more difficult or render more expensive the
remediation of the Environmental Condition in
accordance with the terms of this Agreement.
(k) ALTERNATIVE DISPUTE RESOLUTION PROCESS. Disputes regarding
the application of these environmental provisions in Article VIII (including
the determination of responsibility for Environmental Conditions) shall be
subject to the following alternative dispute resolution process:
(i) INVOCATION. The resolution procedures shall be
invoked when either party sends a written notice to
the other. The notice shall describe the nature of
the dispute or conflict and the party's position with
respect to such dispute or conflict. The parties
shall expeditiously schedule consultations or a
meeting to discuss the dispute
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or conflict informally in accordance with Section
8.3(k)(iii).
(ii) DESIGNATION OF TECHNICAL AND MANAGEMENT
REPRESENTATIVES.
(A) The following Technical Representatives have
been designated for the purposes of this
provision:
For Buyer: Vice President,
Environmental, Health and
Safety of Ashland Chemical
Company, or his or her
designees.
For Seller: Vice President,
Environmental Affairs, Health
and Safety of Aristech
Chemical Corporation, or his
or her designees.
(B) The following Management Representatives have
been designated for purposes of this
provision:
For Buyer: President, Ashland Chemical
Company, or his or her
designees.
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For Seller: President, Aristech Chemical
Corporation, or his or her
designees.
(C) Any Technical Representative or Management
Representative designation may be changed by
the appointing organization, by written
notice to the other party.
(iii) TECHNICAL CONSULTATION. Any conflicts or disputes
shall, in the first instance, be the subject of
informal consultation and discussion between the
Technical Representatives. The period of informal
technical consultations and discussions shall not
extend beyond thirty (30) days from the date of the
first consultations or meetings between the Technical
Representatives, unless the parties agree to extend
this period.
(iv) REFERENCE TO MANAGEMENT REPRESENTATIVES. In the event
that the Technical Representatives are unable to reach
agreement during the technical consultation and
discussion period under Section 8.3(k)(iii), the issue
shall be referred to the Management Representatives
for informal negotiation. The period of informal
negotiations shall not extend beyond sixty (60) days
from the
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date of the first meeting between the Management
Representatives, unless the parties agree to extend
this period. The Management Representatives may
request the assistance of an independent mediator if
they believe that such a mediator would be of
assistance to the efficient resolution of the dispute.
(v) FORMAL RESOLUTION PROCEDURES. In the event that the
Management Representatives are unable to resolve the
matter within the period provided in Section
8.3(k)(iv), the matter shall be resolved in
accordance with the formal resolution procedures set
forth in this clause (v).
(A) Where (prior to the initiation of arbitration
under Section 8.3(k)(v)(C)) an action has
been initiated in a court or similar
adjudicating forum ("COURT") by a third party
asserting Claims against both Buyer and
Seller, and such Court has jurisdiction to
adjudicate the relative contribution
liability of the respective parties, Buyer
and Seller shall (unless they mutually agree
otherwise) utilize the Court to adjudicate
any dispute between themselves regarding
liabilities for such Claims, and the final
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decision of such Court (after the exhaustion
of any available appeals) shall be binding on
the parties.
(B) Where (prior to the initiation of arbitration
under Section 8.3(k)(v)(C)) an action has
been initiated in a Court by a third party
asserting Claims against only one of the
parties (but for which the named party
believes the other party has an obligation of
indemnification or defense), the parties
agree to submit any dispute between
themselves to arbitration under Section
8.3(k)(v)(C) unless they mutually agree to
submit such matter to the Court; provided,
however, if in such a Court proceeding the
initially unnamed party is, as a result of
subsequent pleadings by a third party, added
as a named party, and the Court undertakes
the adjudication of relative contribution
liability of the respective parties prior to
the conclusion of arbitration, Buyer and
Seller shall (unless they otherwise agree)
terminate any pending arbitration and submit
their respective claims to the Court, and the
final decision of such Court (after the
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exhaustion of any available appeals) shall be
binding on the parties.
(C) Except as provided in Sections 8.3(k)(v)(A)
and 8.3(k)(v)(B), the parties shall submit
any claim to binding arbitration and any
controversy or claim arising out of or
relating to the provisions set forth in this
Article VIII or the breach thereof shall be
settled and finally determined by arbitration
in Pittsburgh, Pennsylvania, or at such other
location as the parties may agree, in
accordance with the terms of this Section
8.3(k)(v)(C).
(1) INITIATION OF ARBITRATION PROCESS.
Upon the occurrence of a dispute,
and failure of the parties to
resolve such dispute through the
informal processes described in
Sections 8.3(k)(iii) and 8.3(k)(iv),
either party may initiate the
arbitration process set forth in
this Section 8.3(k)(v)(C) by giving
written notice to the other party
(the "ARBITRATION NOTICE").
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(2) SELECTION OF ARBITRATOR(S). Within
thirty (30) days of the Arbitration
Notice, the parties shall either
agree upon the appointment of a
single mutually-approved independent
Environmental Professional to serve
as arbitrator; or, if the parties
are unable to agree upon a single
arbitrator, each of the parties
shall appoint an Environmental
Professional to serve as arbitrator,
and the two individuals so named
shall, within thirty (30) additional
days, agree upon a third independent
Environmental Professional (who
shall be an environmental lawyer) to
serve as the third arbitrator. The
parties shall mutually cooperate to
retain the arbitrator(s) upon terms
and conditions mutually satisfactory
to the parties as soon as
practicable after selection of the
arbitrator(s).
(3) FEES. The fees of the arbitrator(s)
shall be paid one-half by Seller and
one-half by Buyer.
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(4) DISCOVERY. For a period of sixty
(60) days following the appointment
of the arbitrator(s) (or such longer
period as the parties may mutually
agree or the arbitrator(s) may
direct), the parties shall have the
right to engage in such discovery
relevant to the matters in dispute
as is allowed pursuant to the
discovery rules of the Pennsylvania
Rules of Civil Procedure.
(5) RESOLUTION. The arbitrator(s) shall
decide such disputes pursuant to the
Commercial Arbitration Rules of the
American Arbitration Association in
force at the time of the
arbitration. The arbitrator(s)
shall be required to make a final
determination, not subject to
appeal, within thirty (30) days from
the receipt of such dispute by the
arbitrator(s), and the parties shall
be bound by the terms of such final
determination. Where three
arbitrators are appointed, the
decision may be rendered by a
majority of the arbitrators. The
determination by the arbitrator(s)
shall be made in writing
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and shall contain written findings of
fact, and may be specifically
enforced by a court of competent
jurisdiction. The arbitrator(s)
shall determine a fair and equitable
allocation of the reasonable expenses
of the parties incurred in connection
with the resolution of any dispute
hereunder. Each party shall bear its
own attorney's fees, unless the
arbitrator(s) shall determine that
the nature of the action or defense
of the losing party was frivolous, in
which event the arbitrator shall
determine a fair and equitable
attorney's fee to be paid by the
losing party to the prevailing party.
(6) INDEPENDENCE OF ARBITRATOR. The
arbitrator(s) shall retain
independence of all parties to this
Agreement, and neither party shall
engage or attempt to engage the
services of the arbitrator(s) for
any other purposes without prior
written notice to the other party.
(l) NATURE OF PRESUMPTIONS. Where any provision provides for a
presumption to be used in determining responsibility for an
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Environmental Condition, such presumption shall be a rebuttable presumption.
Such presumption shall place the burden of going forward and the burden of
persuasion upon the party against whom the presumption applies. The
presumption may be overcome by a preponderance of the evidence to the contrary.
(m) INDEMNIFICATION/DEFENSE ARRANGEMENTS. Where either party
agrees to indemnify and defend the other, the following shall apply:
(i) the amount of any recovery by a Buyer Indemnitee or a
Seller Indemnitee, as the case may be, shall be net
of any foreign, federal, state and/or local income
tax benefits inuring to the Indemnified Party as a
result of the state of facts that entitled the
Indemnified Party to recover from the Indemnifying
Party.
(ii) the Indemnifying Party shall be obligated to indemnify
the Indemnified Party only for those claims as to
which the Indemnified Party has given the Indemnifying
Party written notice as promptly as practicable, but
in any event no later than forty-five (45) days after
the Indemnified Party's discovery of the facts giving
rise to any such claim. Any written notice delivered
pursuant to this clause (ii) shall set forth with
specificity
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the basis of the claim and an estimate of the amount
thereof.
(iii) the Indemnifying Party shall have the right to conduct
and control, through counsel of its choosing, any
third party claim, action or suit, and the
Indemnifying Party may compromise or settle the same.
The Indemnified Party shall be permitted to
participate in the defense of any such action or suit
through counsel chosen by it; provided that the fees
and expenses of such counsel shall be borne
exclusively by the Indemnified Party.
(iv) With respect to any obligation of the Indemnifying
Party arising out of an order, directive, or mandate
of an environmental agency or other governmental body,
the parties agree that the Indemnifying Party shall
have the right to appeal the terms and conditions of
such order, directive or mandate, and may postpone
compliance with its terms pending final disposition of
the appeal (provided that the terms and conditions are
stayed by operation of law or action of the relevant
authority). The Indemnified Party agrees to cooperate
with the Indemnifying Party to the extent necessary to
effectuate the right of appeal. The Indemnifying
Party who exercises the
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option to appeal agrees to indemnify, defend, save and
hold harmless the Indemnified Party and its officers,
directors, employees, agents, successors and permitted
assigns from and against any liabilities or damages
(including penalties) arising as a consequence.
8.4. PROVISIONS RELATING TO NEVILLE ISLAND FACILITY. The
provisions set forth in this Section 8.4 shall apply exclusively to the Neville
Island Facility.
(a) STRUCTURE. Seller is selling to Buyer the Polyester and MA
production equipment and structures, the Technical Center, and certain other
structures at the Neville Island Facility that constitute Buyer's Neville
Island Plant. Seller is also granting Buyer an easement in certain designated
parcels of land under and around Buyer's Neville Island Plant (the "OPERATING
EASEMENT AREAS") as depicted on Exhibit C to the Easement Agreement. Also
pursuant to the Easement Agreement, Seller is granting Buyer easements in
respect of other portions of the Neville Island Facility as depicted on Exhibit
B to the Easement Agreement, to permit Buyer, its employees and business
invitees access to, parking at and egress from Buyer's Neville Island Plant and
the Operating Easement Areas and, as depicted on Exhibit D to the Easement
Agreement, to permit Buyer access to certain utility assets at Seller's Neville
Island Plant (collectively, the "ACCESS EASEMENT AREAS").
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122
(b) APPROVAL OF ACTIVITIES.
(i) Buyer will not undertake any modification of the
facilities on or included in Buyer's Operating Space
involving (i) a Construction or Expansion Project, or
(ii) the installation of new equipment for material
or waste handling, processing, storage, treatment or
disposal, without the express prior approval of
Seller, which approval will not be unreasonably
withheld (considering among other factors the need
for such modifications to maintain the efficient
operation of Buyer's business at Neville Island, the
need for such modifications to comply with applicable
regulatory or other requirements, and the impact of
the proposed modifications on the Retained Premises).
If such a project involves excavation of land
underlying Buyer's Operating Space, Section
8.4(b)(iv) shall apply.
(ii) Buyer shall not make any change to the processes or
methods of Polyester or MA production involving the
introduction, use, or production of any chemical not
in use as of the Closing Date without written
notification to Seller identifying such new chemical.
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123
(iii) Buyer shall only conduct on Buyer's Operating Space
Polyester and MA production, related distribution of
Polyester and MA chemicals, and related research and
quality control laboratory operations, and shall not
undertake the production or distribution of any other
chemical products or other businesses or activities on
Buyer's Operating Space without the express prior
approval of Seller, which approval shall not be
unreasonably withheld.
(iv) Buyer will not undertake any activity involving
excavation of the land under Buyer's Operating Space
without notice to Seller; and Buyer shall not
undertake any activity involving excavation of the
land under Buyer's Operating Space (other than
excavation Required by Law, or excavation required to
undertake in-kind replacement, maintenance or repair
of equipment or structures on or included in Buyer's
Operating Space) without the express prior approval of
Seller, which approval shall be in Seller's sole
discretion.
(c) MINIMIZATION OF EXCAVATION. If Buyer undertakes any New
Construction or Expansion Project, any project involving the maintenance,
repair or in-kind replacement of any then existing equipment or structures on
or included in Buyer's Operating
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124
Space, or any project that is Required by Law, Buyer shall take all reasonable
steps in the design and implementation of such project to minimize the area of
soils to be excavated or disturbed.
(d) INDEMNIFICATION FOR BUYER VIOLATIONS. Buyer agrees to
indemnify, defend, save and hold harmless Seller Indemnitees from and against
any Claims (including Business Interruption Costs) arising out of the alleged
violation of any applicable Environmental Law associated with the operation by
Buyer of the Polyester or MA businesses on Buyer's Operating Space or
associated with any other use or activities conducted by Buyer on Buyer's
Operating Space or the Access Easement Areas. For purposes of this provision,
Claims includes Business Interruption Costs incurred by Seller as a result of
the revocation or suspension of any permit held by Seller, or the denial of any
permit or permit renewal to Seller, where Buyer's violation is the substantial
and proximate cause of such permit revocation, suspension or denial.
(e) INDEMNIFICATION FOR SELLER VIOLATIONS. Seller agrees to
indemnify, defend, save and hold harmless Buyer Indemnitees from and against
any Claims (including Business Interruption Costs) arising out of the alleged
violation of any applicable Environmental Law associated with the operation by
Seller of its businesses on the Retained Premises or associated with any other
use or activities conducted by Seller on the Retained Premises,
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125
including the Access Easement Areas. For purposes of this provision, Claims
includes Business Interruption Costs incurred by Buyer as a result of the
revocation or suspension of any permit held by Buyer, or the denial of any
permit or permit renewal to Buyer, where Seller's violation is the substantial
and proximate cause of such permit revocation, suspension or denial.
(f) ENVIRONMENTAL CONDITIONS CAUSED BY BUYER RELEASES AND
ACTIVITIES. Buyer shall be responsible for and agrees to indemnify, defend,
save and hold harmless Seller Indemnitees from and against any Claims relating
to Buyer Environmental Conditions. Where a release of a Buyer Regulated
Substance affects soils such as to require remediation, Buyer shall be solely
responsible for the remediation of any such affected soils, irrespective of
whether such soils also contain other Regulated Substances not related to the
Buyer Regulated Substance; provided that Buyer shall not be responsible under
this Section 8.3(f) for the remediation of soils containing a Buyer Regulated
Substance in combination with an other Regulated Substance if the nature and
concentration of the Buyer Regulated Substance does not require remediation.
(g) ENVIRONMENTAL CONDITIONS CAUSED BY SELLER RELEASES AND
ACTIVITIES. Seller shall be responsible for and agrees to indemnify, defend,
save and hold harmless Buyer Indemnitees from and against any Claims relating
to Environmental Conditions resulting from the release of any Regulated
Substances arising
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126
from Seller's operation after Closing of its business upon the Retained
Premises, or arising from any other use or activities conducted after Closing
by Seller on the Retained Premises, including the Access Easement Areas
(collectively, an "ARISTECH ENVIRONMENTAL CONDITION").
(h) PROVISIONS RELATING TO CONDITION OF EQUIPMENT, RECORDKEEPING
AND INSPECTIONS.
(i) Buyer acknowledges that, prior to the Closing Date,
it has had the right to inspect the exterior of all
equipment and to review past testing and maintenance
records relating to all equipment (including tanks
and pipelines) being acquired on the Operating
Easement Areas.
(ii) Buyer shall maintain all material and waste handling,
storage, processing, treatment and control equipment
on Buyer's Operating Space in good condition, and
shall conduct periodic inspections and tests of such
equipment to the extent (i) Required by Law or (ii)
consistent with Seller's inspection and testing
practices for such equipment prior to the Closing
Date, whichever is more stringent. Buyer shall keep
records of all such required inspections and tests.
Seller may at any time advise Buyer in writing if
Seller
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127
believes that a modification of inspection or testing
practices is indicated by then prevailing good
engineering and operating practices; however, Seller
shall be under no obligation to advise Buyer regarding
such practices, and Buyer shall be solely responsible
for the maintenance, inspection and testing of its
equipment on Buyer's Operating Space.
(iii) Buyer will keep accurate records of Regulated
Substances used, stored, treated, disposed, discharged
or generated on Buyer's Operating Space. Such records
shall include all Required Regulated Substance Records
and inventory records, production records, purchase
orders, change orders related to purchase orders, and
requisitions concerning Regulated Substances.
(iv) Buyer will keep accurate records of, and promptly
notify Seller of, the Release to the Environment of
any Regulated Substance, whether or not such release
is reportable to governmental authorities.
(v) Seller shall have the right at any time upon
reasonable notice to inspect any portion of Buyer's
Operating Space and any of the records referred to in
Sections 8.4(b)(ii) through (iv),
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128
and to investigate any actual or suspected Release to
the Environment of a Regulated Substance. In the
event of an exigent condition, involving an actual or
threatened Release to the Environment that poses, or
is reasonably anticipated to pose, a significant
threat of pollution to surface water, groundwater or
other environmental media, Seller shall have the right
of immediate access to Buyer's Operating Space. In
conducting any such inspection or investigation,
Seller shall take all reasonable steps to avoid
interference with Buyer's operations on Buyer's
Operating Space.
(vi) Seller and Buyer agree to coordinate any investigation
of an actual or suspected Release to the Environment.
If Buyer undertakes adequate sampling or testing in
response to an actual or suspected Release to the
Environment, Seller shall refrain from conducting
duplicative tests or sampling; provided that Seller
shall have a right (at its expense) to observe such
investigations and to obtain and analyze split
samples.
(i) PROVISION OF SELLER RECORDS. Seller agrees to provide Buyer
with all Required Regulated Substance Records regarding Regulated Substances
used, stored, treated, disposed, discharged or generated on the Operating
Easement Areas by Seller prior to
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129
the Closing Date, to the extent that such information is in Seller's
possession.
(j) PRE-CLOSING ENVIRONMENTAL CONDITIONS. Seller agrees to
indemnify, defend, save and hold harmless Buyer Indemnitees from and against
any Claims relating to any Pre-Closing Environmental Conditions, subject to the
limitations and conditions in Sections 8.4(k) through 8.4(n) and Section
8.4(p)(v).
(k) RESPONSIBILITY FOR REMEDIATION TRIGGERED BY NEW CONSTRUCTION
AND EXPANSION. If Buyer undertakes any Construction or Expansion Project on
Buyer's Operating Space (other than a project Required by Law), and such
Construction or Expansion Project results in disclosure of an Environmental
Condition on Buyer's Operating Space that requires remediation under applicable
Environmental Law:
(i) Buyer shall be solely responsible for all costs of
remediating Project Affected Soils and all costs of
remediating any Buyer Environmental Condition;
(ii) Buyer shall be responsible for Buyer's Percentage of
the costs of required remediation of any disclosed
Environmental Condition (other than a Buyer
Environmental Condition) within Buyer's
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Operating Space that affects media other than Project
Affected Soils; and
(iii) Seller shall be responsible for Seller's Percentage of
the costs of required remediation of any Environmental
Condition (other than Buyer Environmental Condition)
within Buyer's Operating Space that affects media
other than Project Affected Soils.
(l) RESPONSIBILITY FOR REMEDIATION TRIGGERED BY REPAIR,
REPLACEMENT OR PROJECTS REQUIRED BY LAW. If Buyer undertakes any project
involving the repair, maintenance or in-kind replacement of any then existing
equipment or structures on or included in Buyer's Operating Space, or any
project that is Required by Law, and such project results in the disclosure of
an Environmental Condition that requires remediation under applicable
Environmental Law:
(i) Buyer shall be responsible for the costs of required
remediation of Project Affected Soils and the costs
of required remediation of any Buyer Environmental
Condition; and
(ii) Seller shall be responsible for the costs of required
remediation of any Environmental
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131
Condition, other than a Buyer Environmental Condition
and other than Project Affected Soils.
(m) ALLOCATION WHERE LIABILITY FOR ENVIRONMENTAL CONDITIONS IS
SHARED. Except as otherwise provided in Sections 8.4(f), 8.4(k) or 8.4(l) or
otherwise specifically provided in this Agreement, where (after the application
of the presumptions contained in Section 8.4(n)) it is determined that an
Environmental Condition that requires remediation is the result of a Buyer
Environmental Condition in combination with either a Pre-Closing Environmental
Condition or an Aristech Environmental Condition, liability for any Claims
associated with or arising from such Environmental Condition shall be allocated
equitably between Seller and Buyer, based on a consideration of (among others)
the following factors:
(i) Whether, but for the Environmental Condition for
which one of the parties is solely responsible, an
obligation to investigate or remediate would have
arisen for the other party;
(ii) The relative quantity, toxicity and area affected by
the Regulated Substances for which the respective
parties are responsible;
(iii) The degree to which the Regulated Substance for which
a party is responsible affects the selection
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132
of the remedy, the cost of the remedy, and the period
of time over which the remedy must be implemented; and
(iv) Other relevant considerations.
(n) DETERMINATION OF PRE-CLOSING ENVIRONMENTAL CONDITIONS/BUYER
ENVIRONMENTAL CONDITIONS.
(i) The parties agree that, prior to the conduct of an
Environmental Assessment (such as provided under
Section 8.4(p)), the following presumptions will be
used in the determination of whether an Environmental
Condition discovered at Buyer's Operating Space or
the Access Easement Areas is a Pre-Closing
Environmental Condition or a Buyer Environmental
Condition:
(A) If the Environmental Condition involves a
Regulated Substance that was not used,
generated, or stored by Buyer, and is not a
decomposition product of a substance used,
generated, or stored by Buyer, it shall be
presumed that the Environmental Condition is
a Pre-Closing Environmental Condition.
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(B) If the Environmental Condition involves a
Regulated Substance that was used, generated,
or stored by Buyer, or is a decomposition
product of a substance used, generated, or
stored by Buyer, and such Regulated Substance
was not used, generated or stored by Seller,
it shall be presumed that the Environmental
Condition is a Buyer Environmental Condition.
(C) If the Environmental Condition involves a
Regulated Substance that was used, generated,
or stored by both Seller and Buyer, or is a
decomposition product of such a substance,
then:
(1) in the absence of evidence that such
Environmental Condition resulted
from a release of the Regulated
Substance by Buyer, the
Environmental Condition shall be
presumed to be a Pre-Closing
Environmental Condition.
(2) if there is evidence that the
Environmental Condition resulted
from a release of a Regulated
Substance by Buyer, the
Environmental Condition shall
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134
be presumed to be a Buyer
Environmental Condition.
(ii) If an Environmental Assessment is conducted of Buyer's
Operating Space, the parties agree that the following
presumptions will be used in the determination of
whether an Environmental Condition discovered at
Buyer's Operating Space or the Access Easement Areas,
either in or after the Environmental Assessment, is a
Pre-Closing Environmental Condition or a Buyer
Environmental Condition:
(A) If the Environmental Condition involves a
Regulated Substance that was not used,
generated, or stored by Buyer, and is not a
decomposition product of a substance used,
generated or stored by Buyer, it shall be
presumed that the Environmental Condition is
a Pre-Closing Environmental Condition.
(B) If the Environmental Condition involves a
Regulated Substance that was used, generated,
or stored by Buyer, or is a decomposition
product of a substance used, generated or
stored by Buyer, and such Regulated Substance
was not used, generated or stored by Seller,
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135
it shall be presumed that the Environmental
Condition is a Buyer Environmental Condition.
(C) If the Environmental Condition involves a
Regulated Substance that was used, generated,
or stored by both Seller and Buyer, or is a
decomposition product of such a substance, it
shall be presumed that:
(1) the concentrations and areas
affected by the Regulated Substance
as identified in the Environmental
Assessment are a Pre-Closing
Environmental Condition in the
absence of evidence that such
Environmental Condition resulted
from a release of the Regulated
Substance by Buyer;
(2) an Environmental Condition found
after the completion of the
Environmental Assessment involving
the presence of any Regulated
Substance that was not identified in
the Environmental Assessment, and is
not the decomposition product of a
substance identified in the
Environmental Assessment, is a Buyer
Environmental Condition;
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136
(3) an Environmental Condition found
after the completion of the
Environmental Assessment involving
the presence in soils of a Regulated
Substance, or breakdown product
thereof, at a higher concentration
or in a different area than
identified in the Environmental
Assessment, is a Buyer Environmental
Condition.
Where an Environmental Condition found after
the completion of the Environmental
Assessment involves the presence in
groundwater of a Regulated Substance, or
decomposition product thereof, in higher
concentrations or in different areas than
identified in the Environmental Assessment,
no presumptions shall be made.
(iii) The parties agree that, at all times, the following
presumptions will be used in the determination of
whether an Environmental Condition discovered at
Buyer's Operating Space or Easement Areas is a
Pre-Closing Environmental Condition or a Buyer
Environmental Condition:
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137
(A) If an Environmental Condition relates to a
Regulated Substance that Buyer has used,
generated or stored, but where Buyer has
failed to maintain accurate records with
respect to the use and management of such
substance as required under Section 8.4(h),
it shall be presumed that the Environmental
Condition is a Buyer Environmental Condition.
(B) If an Environmental Condition is located in
the vicinity of equipment that Buyer
operated, and relates to a Regulated
Substance used in relation to such equipment,
and Buyer has failed to inspect and test such
equipment as required under Section 8.4(h),
it shall be presumed that the Environmental
Condition is a Buyer Environmental Condition.
(o) CONTACTS WITH AGENCIES/ENVIRONMENTAL STUDIES AND
ASSESSMENTS.
(i) DESIGNATION OF LEAD PARTIES.
(A) Buyer shall be the Lead Party with respect to
any Buyer Environmental Condition and an
Environmental Study (as defined in Section
8.4(o)(ii)) undertaken with respect to
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138
maintenance, monitoring, repair or replacement
of equipment or structures on or included in
Buyer's Operating Space.
(B) Seller shall be the Lead Party with respect
to any Environmental Condition on Buyer's
Operating Space other than a Buyer
Environmental Condition or an Environmental
Study undertaken with respect to maintenance,
monitoring, repair or replacement of
equipment or structures on or included in
Buyer's Operating Space.
(ii) ENVIRONMENTAL STUDIES. Buyer shall not undertake any
environmental study, testing or sampling of soils or
groundwater under Buyer's Operating Space
("ENVIRONMENTAL STUDY") without notice to Seller.
(A) No such Environmental Study shall be
undertaken by Buyer (unless such study is
Required by Law) without the approval of
Seller.
(B) Where such an Environmental Study is ordered
or otherwise directed by a governmental
agency, Buyer shall provide Seller with
prompt notice of such a requirement, and
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139
Seller shall have the right to appeal such
action.
(C) If Buyer believes an Environmental Study is
otherwise Required by Law, Buyer shall
provide Seller with written notice, stating
the reasons why Buyer believes the study is
Required by Law. If Seller believes to the
contrary, Seller shall so notify Buyer within
fourteen (14) days of receiving the notice
from Buyer, stating the reasons Seller
believes that the Environmental Study is not
Required by Law.
(D) Where such an Environmental Study is
requested by a governmental agency, but not
Required by Law, Buyer shall provide prompt
notice of such request, and the parties shall
consult regarding the appropriate response to
such request; provided that no such
Environmental Study shall be undertaken
without the approval of Seller.
(E) If Buyer undertakes an Environmental Study
that is not Required by Law without Seller's
approval, Buyer shall be solely responsible
for any Environmental Conditions disclosed by
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140
such study, and all indemnifications by Seller
with respect to such Environmental Conditions
shall be void.
(F) Whether or not a study is Required by Law,
except for a Buyer Environmental Condition or
the Environmental Studies related to the
maintenance, monitoring, repair or
replacement of a structure on Buyer's
Operating Space, Seller shall have the option
(exercisable in Seller's sole discretion) to
be Lead Party in any such Environmental
Study.
(p) OPTION TO CONDUCT ASSESSMENT/REMEDIATION PLAN.
(i) Seller has the option, at any time (whether or not
Required by Law) to conduct an Environmental
Assessment of Buyer's Operating Space.
(ii) On the basis of such Environmental Assessment, Seller
may (whether or not Required by Law) prepare a
remediation plan to address any Environmental
Condition that requires remediation under applicable
Environmental Law.
- ▇▇▇ -
▇▇▇
(▇▇▇) The parties agree that any remediation plan shall be
designed to meet any environmental cleanup standards
established by statute, duly-adopted regulations, or
policies that have the force of law ("REGULATORY
REMEDIATION STANDARDS"). Where remediation is
required under then current Environmental Laws, but
definitive Regulatory Remediation Standards have not
been adopted, the remediation plan shall be based on
an Appropriate and Reasonable Criteria. The parties
agree that, unless otherwise mandated by applicable
governmental agencies having jurisdiction over the
Environmental Condition, the remediation plan to be
proposed and implemented shall be that alternative for
meeting such Regulatory Remediation Standards or
Appropriate and Reasonable Criteria that: (i) has the
least cost (considering the present discounted value
of both capital cost and operating and maintenance
costs), and (ii) does not unreasonably interfere with
the operations on Buyer's Operating Space.
(iv) Seller shall submit any proposed remediation plan to
the Pennsylvania Department of Environmental Resources
("DER") or any other appropriate regulatory authority.
Upon approval of the remediation plan, Seller shall
implement the plan
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142
(subject to reimbursement by Buyer for any costs
associated with remediation of Buyer Environmental
Conditions).
(v) Upon completion of the work prescribed under the
approved remediation plan, Seller shall be relieved
of any further liability for Pre-Closing
Environmental Conditions at Buyer's Operating Space
to the extent that such Pre-Closing Environmental
Conditions were located in areas evaluated as part of
the Environmental Assessment submitted to the DER or
other appropriate regulatory authority and the
Pre-Closing Environmental Conditions involve
substances that were analyzed for (either directly or
through surrogate parameters) as part of the
Environmental Assessment ("ASSESSED ENVIRONMENTAL
CONDITIONS"). (As an example, if the Environmental
Assessment evaluated samples for total petroleum
hydrocarbons, it would be deemed to have evaluated
constituent petroleum hydrocarbons.) Buyer shall
release any further claims against Seller relating to
such Assessed Environmental Conditions at Buyer's
Operating Space (including Pre-Closing Environmental
Conditions, whether known or unknown), and Buyer
shall indemnify, defend, save and hold harmless
Seller Indemnitees against any
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143
Claims related to Assessed Environmental Conditions
discovered at Buyer's Operating Space after the
completion of the approved remediation plan.
(q) ACCESS FOR REMEDIATION. Buyer acknowledges that
investigation and remediation of Environmental Conditions may include testing,
monitoring and other activities on Buyer's Operating Space related to the
Environmental Conditions. Access for such activities shall be provided under
the following arrangements:
(i) Seller and Buyer shall consult in efforts to
coordinate any such activities with operations on
Buyer's Operating Space, and Seller shall take all
reasonable steps to minimize interference with
Buyer's operations.
(ii) Seller shall have the right to enter Buyer's Operating
Space at any time and from time to time for the
purpose of conducting any activity in connection with
investigation, remediation and monitoring of
Environmental Conditions, whether pursuant to a
remediation plan or otherwise. (This provision shall
supersede any contrary or inconsistent provision in
any agreement or other
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144
instrument granting Buyer rights in or otherwise
relating to Buyer's Operating Space.)
(iii) Seller agrees that it will not make any change in
Buyer's Operating Space or use Buyer's Operating Space
for any purpose not necessary and appropriate to the
performance of the investigation, remediation and
monitoring of Environmental Conditions.
(iv) During any investigation, remediation, or monitoring
work, Seller agrees to comply with all applicable
laws, regulations, rules or permits pertaining to
Buyer's Operating Space, including environmental,
occupational health and safety, and other health and
safety laws. Seller agrees to indemnify, defend, save
and hold harmless Buyer Indemnitees from and against
any Claims arising from failure to comply with such
laws.
(v) Upon completion of any work required for
investigation, remediation, or monitoring of
Environmental Conditions, Seller shall promptly
restore any structures, pavement, or other parts of
Buyer's Operating Space to substantially the
condition they were in prior to engaging in such
work.
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145
(vi) Where Seller voluntarily undertakes an Environmental
Assessment or remediation plan, other than an
Environmental Assessment or remediation plan that is
Required by Law or that is undertaken in connection
with a project Required by Law, Seller shall be
responsible for, and agrees to indemnify Buyer from
and against, any Business Interruption Costs incurred
by Buyer as a proximate cause of such work. Where an
Environmental Assessment or remediation plan is
Required by Law, Seller shall not be liable for any
Business Interruption Costs.
(vii) Except as provided in Sections 8.4(q)(iv) through
8.4(q)(vi), and except for the willful or negligent
acts or omissions of Seller, Seller shall not be
liable for any loss or damage of any kind caused by
Seller's activities on Buyer's Operating Space in
connection with such investigation, remediation and
monitoring activities.
(r) STORMWATER SYSTEM LIABILITIES.
(i) The parties understand that they will be sharing a
common stormwater sewer system and outfall, that will
receive and discharge stormwater associated
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146
with industrial activities generated at both Buyer's
facilities on Buyer's Operating Space, and Seller's
facilities on the Retained Premises.
(ii) In the event of a discharge of stormwater that
contains pollutants in excess of applicable effluent
limitations, or that otherwise violates any applicable
regulation, permit term or condition, the parties
agree to cooperate in the investigation of the source
of such pollutants or the cause of such
non-compliance.
(A) If the pollutant is a chemical that is used,
generated, or stored by Buyer in connection
with the Polyester or MA operations or other
Buyer operations at Buyer's Operating Space,
but is not used, generated, or stored by
Seller in connection with the operations on
the Retained Premises, it will be presumed
that Buyer is responsible.
(B) If the pollutant is a chemical that is used,
generated or stored by Seller in connection
with the operations on the Retained Premises,
but is not used, generated or stored by Buyer
in connection with the Polyester, MA or other
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147
Buyer operations, it will be presumed that
Seller is responsible.
(C) If the pollutant is a chemical that is used,
generated, or stored by both Seller and
Buyer, no presumptions shall be made
regarding responsibility.
(D) Either party shall have the opportunity to
demonstrate that an effluent limit exceedance
or other violation is a result of
infiltration from contaminated groundwater,
in which event responsibility for the
violation shall be apportioned in accordance
with the allocation of liability for the
Environmental Conditions giving rise to such
contamination.
(iii) Each of Buyer and Seller, to the extent it is
responsible for the discharge of the pollutant or the
area that was the source of the pollutant causing the
non-compliance shall indemnify, defend and hold
harmless Seller Indemnitees or Buyer Indemnitees,
respectively, for all costs, damages, claims,
liabilities and penalties arising or resulting from
such non-compliance.
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148
(iv) If a determination cannot be made regarding the source
of the pollutant causing the non-compliance, the
parties shall proportionately share any costs relating
to the non-compliance event based on Buyer's
Percentage and Seller's Percentage.
(s) Effect of Services Agreement. The provisions of the
Services Agreement, including without limitation the requirement that Seller's
employees provide certain maintenance and other services for Buyer, shall have
no effect on the obligations and rights of the parties as set forth in this
Section 8.4. To the extent that the provisions of this Section 8.4 are
inconsistent with the provisions of the Services Agreement, the provisions of
this Section 8.4 shall control.
8.5. PROVISIONS RELATING TO OTHER PRODUCTION FACILITIES. The
provisions set forth in this Section 8.5 shall apply exclusively to the Bartow,
Florida, Jacksonville, Arkansas and Colton, California Business Sites (the
"OTHER PRODUCTION FACILITIES").
(a) POST-CLOSING VIOLATIONS. Buyer agrees to indemnify, defend,
save and hold harmless Seller Indemnitees from and against any Claims arising
out of the alleged violation of any applicable Environmental Law associated
with the operation by Buyer of the Other Production Facilities or arising from
any
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149
other use or activities conducted by Buyer on the Other Production Facilities.
(b) ENVIRONMENTAL CONDITIONS CAUSED BY BUYER RELEASES AND
ACTIVITIES. Buyer shall be responsible for and agrees to indemnify, defend,
save and hold harmless Seller Indemnitees from and against any Claims relating
to Buyer Environmental Conditions at the Other Production Facilities. Where a
release of a Buyer Regulated Substance affects soils such as to require
remediation, Buyer shall be solely responsible for the remediation of any such
affected soils, irrespective of whether such soils also contain other Regulated
Substances not related to the Buyer Regulated Substance; provided that Buyer
shall not be responsible under this Section 8.5(b) for the remediation of soils
containing a Buyer Regulated Substance in combination with an other Regulated
Substance if the nature and concentration of the Buyer Regulated Substance does
not require remediation.
(c) PROVISIONS RELATING TO CONDITION OF EQUIPMENT AND
RECORDKEEPING.
(i) Buyer acknowledges that, prior to Closing it has had
the right to inspect the exterior of and to review
past testing and maintenance records relating to all
equipment (including tanks and pipelines) being
acquired at the Other Production Facilities.
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150
(ii) Buyer shall maintain all material and waste handling,
storage, processing, treatment and control equipment
at the Other Production Facilities in good condition,
and shall conduct periodic inspections and tests of
such equipment to the extent (i) Required by Law or
(ii) consistent with Seller's inspection and testing
practices for such equipment prior to the Closing
Date, whichever is more stringent. Buyer shall keep
records of all such required inspections and tests.
Seller may at any time advise Buyer in writing if
Seller believes that a modification of inspection or
testing practices is indicated by then prevailing good
engineering and operating practices; however, Seller
shall be under no obligation to advise Buyer regarding
such practices, and Buyer shall be solely responsible
for the maintenance, inspection and testing of its
equipment at the Other Production Facilities.
(iii) Buyer will keep accurate records of all Regulated
Substances used, stored, treated, disposed, discharged
or generated at the Other Production Facilities for a
period of at least twenty-four (24) years from
Closing. Such records shall include all Required
Regulated Substance Records and inventory records,
production records,
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151
purchase orders, change orders related to purchase
orders, and requisitions concerning Regulated
Substances.
(iv) For a period of twenty-four (24) years from Closing,
Buyer will keep accurate records of, and promptly
notify Seller of, any Release to the Environment of
any Regulated Substance at the Other Production
Facilities whether or not such release is reportable
to governmental authorities.
(v) Seller shall have the right at any time upon
reasonable notice to inspect any of the records
required to be maintained by Buyer under this
provision.
(d) INDEMNIFICATION FOR IDENTIFIED ENVIRONMENTAL CONDITIONS.
Seller agrees to indemnify, defend, save and hold harmless Buyer Indemnitees
from and against any Claims relating to those Pre-Closing Environmental
Conditions at the Other Production Facilities that are specifically identified
in this paragraph (d) (the "IDENTIFIED ENVIRONMENTAL CONDITIONS"), to the
extent and in the manner described for each such Identified Environmental
Condition.
(i) With respect to the following Environmental
Conditions, Seller shall be liable for all Claims,
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152
including all costs of investigation and remediation:
(A) At Colton: Contamination in and resulting
from the former waste pit area, identified as
Solid Waste Management Unit #7 in the RCRA
Facility Assessment issued by U.S. EPA,
Region IX (November, 1988).
(B) At Bartow: Phosphate contamination in
groundwater caused by mining and processing
operations on lands contiguous to the Bartow
Property.
Contamination in and resulting from the
former waste pond identified as a Solid Waste
Management Unit in a document entitled
"Information Regarding Potential Releases
from Solid Waste Management Units" for
Aristech Chemical Corp., Bartow, Polyester
Unit initially submitted by Seller to U.S.
EPA on an unknown date, and portions amended
July 14, 1988; provided that such
contamination does not involve any Regulated
Substances of a type stored or used by Buyer
in or near the maintenance shed located above
and overlying such waste pit area.
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153
(ii) With respect to the following Environmental
Conditions, Seller shall be liable for all costs
relating to closure of the listed units until such
closure is approved by the environmental agency having
jurisdiction under RCRA. After such closure has been
approved, Seller shall be responsible for any
additional assessments or investigations of the
affected units and areas (including RCRA facility
investigations) required as a result of such unit
having previously been a solid waste management unit
subject to RCRA corrective action. Any Environmental
Condition found as a result of such post-closure
investigation shall be treated as an Other
Environmental Condition, and any liability associated
with required remediation of, or Claims relating to,
such other Environmental Condition shall be allocated
between Seller and Buyer in accordance with Section
8.5(e), based on the year in which the contamination
is identified and confirmed.
(A) At Colton: The former hazardous waste
incinerator.
(B) At Bartow: The former sprayfield.
- ▇▇▇ -
▇▇▇
(▇▇▇) With respect to the following Environmental
Conditions, that relate to solid waste management
units and areas of concern, Seller shall be
responsible for any additional assessments or
investigations of the affected area (including RCRA
facility investigations) required as a result of such
unit having previously been a solid waste management
unit subject to RCRA corrective action. Any
Environmental Condition found as a result of such
investigation shall be treated as an Other
Environmental Condition, and any liability associated
with required remediation of, or Claims relating to,
such Other Environmental Condition shall be allocated
between Seller and Buyer in accordance with Section
8.5(e), based on the year in which the contamination
is identified and confirmed.
(A) At Colton: The 17 Solid Waste Management
Units and 3 Areas of Concern identified in
the RCRA Facility Assessment issued by the
U.S. EPA, Region IX (November, 1988).
(B) At Jacksonville: The 16 Solid Waste
Management Units and 18 Areas of Concern
identified in the RCRA Facility Assessment
issued by U.S. EPA, Region VI (June, 1988).
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155
(C) At Bartow: The 8 Solid Waste Management
Units identified in a document entitled
"Information Regarding Potential Releases
from Solid Waste Management Units" for
Aristech Chemical Corp., Bartow, Polyester
Unit initially submitted by Seller to U.S.
EPA on an unknown date, and portions amended
July 14, 1988.
(iv) With respect to the following Environmental
Conditions, that relate to former (previously removed)
underground storage tanks, if the areas of such former
tanks are listed in a RCRA Facility Assessment as a
solid waste management unit or as an area of concern,
Seller shall be responsible for any additional
assessments or investigations of the affected area
(including RCRA facility investigations) required as a
result of such unit having been listed as a solid
waste management unit subject to RCRA corrective
action. Any Environmental Condition found as a result
of such investigation shall be treated as an Other
Environmental Condition, and any liability associated
with required remediation of, or Claims relating to,
such other Environmental Condition shall be allocated
between Seller and Buyer in accordance with Section
8.5(e), based on the year
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156
in which the contamination is identified and
confirmed.
(A) At Bartow: The area of the former, previously
removed, 500 gallon diesel fuel underground
storage tank.
(B) The area of the former, previously removed,
1,000 gallon 2-ethylhexanol underground
storage tank.
(v) Buyer shall exercise due care with respect to the
areas of the Identified Environmental Conditions so
as to avoid any actions that exacerbate the
conditions (including but not limited to actions that
increase the concentration or cause the migration of
contamination) or that render more difficult or
expensive the investigation or remediation of such
conditions. If Buyer fails to exercise such due care
and takes any such action that exacerbates an
Identified Environmental Condition, or that renders
more difficult or expensive the investigation or
remediation of such conditions, Buyer shall be liable
for the additional costs incurred as a result of such
action, and any associated increase or migration of
contamination resulting from such action.
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157
(e) ALLOCATION OF RESPONSIBILITY FOR OTHER ENVIRONMENTAL
CONDITIONS. Liabilities associated with required remediation of, or Claims
relating to (i) Environmental Conditions discovered at the Other Production
Facilities, other than Buyer Environmental Conditions and Identified
Environmental Conditions, and (ii) any Environmental Conditions that are
discovered following any post-closure investigation as described in Sections
8.5(d)(ii) through 8.5(d)(iv) (collectively referred to as "OTHER ENVIRONMENTAL
CONDITIONS") shall be allocated as follows:
(i) DEDUCTIBLE. The first $20,000 per Other Production
Facility and $40,000 in the aggregate of all Other
Production Facilities (the "ANNUAL DEDUCTIBLE
AMOUNT"), of costs incurred in each year shall be
borne by Buyer. If the costs incurred in any year
exceed the Annual Deductible Amount, all such costs
that exceed the Annual Deductible Amount, shall be
shared in accordance with Sections 8.5(e)(ii) through
8.5(e)(vi).
(ii) SHARES RELATED TO SOLID WASTE MANAGEMENT UNITS. For
those Environmental Conditions arising from previous
Solid Waste Management Units subject to RCRA
corrective action as specifically identified in
Sections 8.5(d)(ii) and 8.5(d)(iii) the disclosure of
which is not triggered by Buyer's actions (as
specified in Section 8.5(e)(v)),
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158
Seller and Buyer shall share those costs in excess of the Annual Deductible
Amount in the following ratios:
===============================================================================
Time Period Seller Share Buyer Share
-------------------------------------------------------------------------------
Year 1 (Closing Date to 100% 0%
First Anniversary)
-------------------------------------------------------------------------------
Year 2 100% 0%
-------------------------------------------------------------------------------
Year 3 100% 0%
-------------------------------------------------------------------------------
Year 4 100% 0%
-------------------------------------------------------------------------------
Year 5 100% 0%
-------------------------------------------------------------------------------
Year 6 95% 5%
-------------------------------------------------------------------------------
Year 7 90% 10%
-------------------------------------------------------------------------------
Year 8 85% 15%
-------------------------------------------------------------------------------
Year 9 80% 20%
-------------------------------------------------------------------------------
Year 10 75% 25%
-------------------------------------------------------------------------------
Year 11 70% 30%
-------------------------------------------------------------------------------
Year 12 65% 35%
-------------------------------------------------------------------------------
Year 13 60% 40%
-------------------------------------------------------------------------------
Year 14 55% 45%
-------------------------------------------------------------------------------
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159
-------------------------------------------------------------------------------
Year 15 50% 50%
-------------------------------------------------------------------------------
Year 16 45% 55%
-------------------------------------------------------------------------------
Year 17 40% 60%
-------------------------------------------------------------------------------
Year 18 35% 65%
-------------------------------------------------------------------------------
Year 19 30% 70%
-------------------------------------------------------------------------------
Year 20 25% 75%
-------------------------------------------------------------------------------
Year 21 20% 80%
-------------------------------------------------------------------------------
Year 22 15% 85%
-------------------------------------------------------------------------------
Year 23 10% 90%
-------------------------------------------------------------------------------
Year 24 5% 95%
-------------------------------------------------------------------------------
Year 25 and thereafter 0% 100%
===============================================================================
This Section 8.5(e)(ii) only applies to the
previously identified solid waste management units,
and does not apply to "areas of concern" identified
in Sections 8.5(d)(ii) or 8.5(d)(iii); such areas of
concern are subject to the provisions of Section
8.5(e)(iii).
(iii) SHARES RELATED TO ALL OTHER ENVIRONMENTAL CONDITIONS.
For all those other Environmental Conditions not
arising from solid waste management
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units, the disclosure or remediation of which is not triggered by Buyer's
actions (as specified in Section 8.5(e)(v)), Seller and Buyer shall share those
costs in excess of the Annual Deductible Amount in the following ratios:
===============================================================================
Time Period Seller Share Buyer Share
-------------------------------------------------------------------------------
Year 1 (Closing Date to 100% 0%
First Anniversary)
-------------------------------------------------------------------------------
Year 2 95% 5%
-------------------------------------------------------------------------------
Year 3 90% 10%
-------------------------------------------------------------------------------
Year 4 85% 15%
-------------------------------------------------------------------------------
Year 5 80% 20%
-------------------------------------------------------------------------------
Year 6 75% 25%
-------------------------------------------------------------------------------
Year 7 70% 30%
-------------------------------------------------------------------------------
Year 8 65% 35%
-------------------------------------------------------------------------------
Year 9 60% 40%
-------------------------------------------------------------------------------
Year 10 55% 45%
-------------------------------------------------------------------------------
Year 11 50% 50%
-------------------------------------------------------------------------------
Year 12 45% 55%
-------------------------------------------------------------------------------
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Year 13 40% 60%
-------------------------------------------------------------------------------
Year 14 35% 65%
-------------------------------------------------------------------------------
Year 15 30% 70%
-------------------------------------------------------------------------------
Year 16 25% 75%
-------------------------------------------------------------------------------
Year 17 20% 80%
-------------------------------------------------------------------------------
Year 18 15% 85%
-------------------------------------------------------------------------------
Year 19 10% 90%
-------------------------------------------------------------------------------
Year 20 5% 95%
-------------------------------------------------------------------------------
Year 21 and thereafter 0% 100%
===============================================================================
(iv) The parties' respective shares of the costs of any study or investigation
of an Other Environmental Condition (whether determined by reference to
Section 8.5(e)(ii) or 8.5(e)(iii)) shall be determined based upon the
year in which the study or investigation is ordered or required by a
governmental agency to be undertaken, or otherwise shall be based upon
the year in which the study or investigation is commenced. The parties'
respective shares of the costs of any required remediation of an Other
Environmental Condition
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162
(whether determined by reference to Section 8.5(e)(ii)
or 8.5(e)(iii)) shall be determined based upon the
year in which the contamination is identified and
confirmed as a result of sampling, testing or other
scientific quantitative evidence.
(v) SURCHARGE.
(A) If an Environmental Condition is disclosed,
or requires remediation, as a result of any
project undertaken by Buyer at the Other
Production Facilities (other than a project
involving the maintenance, repair or in-kind
replacement of then existing equipment or a
project Required by Law), or as a result of
an environmental test, study, investigation
or assessment conducted by Buyer (other than
a test, study, investigation or assessment
that is Required by Law or that is
necessitated by a project involving the
maintenance, repair or in-kind replacement of
then existing equipment), Buyer's share as
specified in Section 8.5(e)(ii) or
8.5(e)(iii) shall be increased by twenty-five
(25) percentage points.
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163
(B) If through the course and as a result of any
communication with any governmental agency by
Buyer, or any officer, director, manager,
employee or agent of Buyer (other than a
notification or communication Required by
Law), Buyer advocates, suggests, or otherwise
invites action by a governmental agency to
undertake or require an environmental study
or remediation of an Environmental Condition
at the Other Production Facilities, Buyer's
share as specified in Section 8.5(e)(ii) or
8.5(e)(iii) shall be increased by twenty-five
(25) percentage points.
(C) Except for notifications that are Required by
Law to be immediately provided (such as
notifications of spills or releases of
Regulated Substances above reportable
quantities), if Buyer believes a study,
notification or communication is Required by
Law, Buyer shall provide Seller with written
notice, stating the reasons why Buyer
believes the study, notification or
communication is Required by Law. If Seller
believes to the contrary, Seller shall so
notify Buyer within fourteen (14) days of
receiving the notice from Buyer, stating the
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164
reasons Seller believes that the study,
notification or communication is not Required
by Law.
(vi) RELEASE AND INDEMNIFICATION. After (A) the 20th
anniversary following the Closing Date (that is, in
year 21 and thereafter) with respect to Environmental
Conditions referred to in Section 8.2(e)(iii), and
(B) the 24th anniversary following the Closing Date
(that is, in year 25 and thereafter with respect to
Environmental Conditions referred to in Section
8.2(e)(ii), Buyer shall indemnify, defend, save and
hold harmless Seller Indemnitees from and against any
Claims relating to Environmental Conditions at the
Other Production Facilities (other than for those
Identified Environmental Conditions for which Seller
retains continuing liability under Section 8.5(d)).
(f) SPECIAL PRESUMPTIONS. The parties agree that, at all times,
the following presumptions shall be used in the determination of whether an
Environmental Condition discovered at an Other Production Facility Property is
a Buyer Environmental Condition:
(i) If an Environmental Condition relates to a
Regulated Substance that Buyer has used, generated
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165
or stored, but where Buyer has failed to maintain
accurate records with respect to the use and
management of such substance as required under Section
8.5(c), it shall be presumed that the Environmental
Condition is a Buyer Environmental Condition.
(ii) If an Environmental Condition is located in the
vicinity of equipment that Buyer operated, and
relates to a Regulated Substance used in relation to
such equipment, and Buyer has failed to inspect and
test such equipment as required under Section 8.5(c),
it shall be presumed that the Environmental Condition
is a Buyer Environmental Condition.
(g) ALLOCATION WHERE LIABILITY FOR ENVIRONMENTAL CONDITIONS IS
SHARED. Except as otherwise provided in Section 8.5(b) or otherwise
specifically provided in this Agreement, where (after the application of the
presumptions contained in Section 8.5(f)) it is determined that an
Environmental Condition that requires remediation is the result of a Buyer
Environmental Condition in combination with either an Identified Environmental
Condition or an Other Environmental Condition, liability for any Claims
associated with or arising from such Environmental Condition shall be allocated
equitably between Seller and Buyer, based on a consideration of (among others)
the following factors:
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166
(i) Whether, but for the Environmental Condition for
which one of the Parties is solely responsible, an
obligation to investigate or remediate would have
arisen for the other party;
(ii) The relative quantity, toxicity and area affected by
the Regulated Substances for which the respective
parties are responsible;
(iii) The degree to which the Regulated Substance for which
a party is responsible affects the selection of the
remedy, the cost of the remedy, and the period of
time over which the remedy must be implemented; and
(iv) Other relevant considerations.
(h) CONTACTS WITH AGENCIES/DESIGNATION OF LEAD PARTIES.
(i) Buyer shall be the Lead Party with respect to any
Buyer Environmental Condition, and with respect to
any Other Environmental Condition that is discovered
and confirmed in and after (A) Year 11 with respect
to those Environmental Conditions referred to in
Section 8.5(e)(iii), and (B) Year 15 with respect to
those Environmental Conditions referred to in Section
8.5(e)(ii).
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167
(ii) Seller shall be the Lead Party with respect to any
Identified Environmental Condition.
(iii) At its option and upon written notification to Buyer,
Seller shall be the Lead Party with respect to any
Other Environmental Condition that is discovered and
confirmed prior to Year 11 or Year 15, as applicable.
(i) OPTION TO CONDUCT ASSESSMENT/REMEDIATION PLAN.
(i) For the first ten (10) years after Closing, Seller
has the option, at any time (whether or not Required
by Law) to conduct an Environmental Assessment of any
Other Production Facility.
(ii) If an Environmental Assessment is conducted at an
Other Production Facility, the parties agree that the
following presumptions will be used in the
determination of whether an Environmental Condition
discovered at the Other Production Facility, either
in or after the Environmental Assessment, is an Other
Environmental Condition or a Buyer Environmental
Condition:
(A) If the Environmental Condition involves a
Regulated Substance that was not used,
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168
generated, or stored by Buyer, and is not a
decomposition product of a substance used,
generated or stored by Buyer, it shall be
presumed that the Environmental Condition is
an Other Environmental Condition.
(B) If the Environmental Condition involves a
Regulated Substance that was used, generated,
or stored by Buyer, or is a decomposition
product of a substance used, generated or
stored by Buyer, and such Regulated Substance
was not used, generated or stored by Seller,
it shall be presumed that the Environmental
Condition is a Buyer Environmental Condition.
(C) If the Environmental Condition involves a
Regulated Substance that was used, generated,
or stored by both Seller and Buyer, or is a
decomposition product of such a substance, it
shall be presumed that:
(1) the concentrations and areas
affected by the Regulated Substance
as identified in the Environmental
Assessment are Other Environmental
Conditions in the absence of
evidence that such Environmental
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169
Condition resulted from a release of
the Regulated Substance by Buyer;
(2) an Environmental Condition found
after the completion of the
Environmental Assessment involving
the presence of any Regulated
Substance that was not identified in
the Environmental Assessment, and is
not the decomposition product of a
substance identified in the
Environmental Assessment, is a Buyer
Environmental Condition;
(3) an Environmental Condition found
after the completion of the
Environmental Assessment involving
the presence in soils of a Regulated
Substance, or decomposition product
thereof, at a higher concentration
or in a different area than
identified in the Environmental
Assessment, is a Buyer Environmental
Condition.
Where an Environmental Condition found after
the completion of the Environmental
Assessment involves the presence in
groundwater of a Regulated Substance, or
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170
decomposition product thereof, in higher
concentrations or in different areas than
identified in the Environmental Assessment, no
presumptions shall be made.
(iii) On the basis of such Environmental Assessment, Seller
may (whether or not Required by Law) prepare a
remediation plan to address any Environmental
Condition that requires remediation under applicable
Environmental Law.
(iv) The parties agree that any remediation plan
(including any remediation plan to address an
Identified Environmental Condition) shall be designed
to meet Regulatory Remediation Standards. Where
remediation is required under then current
Environmental Laws, but definitive Regulatory
Remediation Standards have not been adopted, the
remediation plan shall be based on Appropriate and
Reasonable Criteria. The parties agree that, unless
otherwise mandated by applicable governmental
agencies having jurisdiction over the Environmental
Condition, the remediation plan to be proposed and
implemented shall be that alternative for meeting
such Regulatory Remediation Standards or Appropriate
and Reasonable Criteria that: (i) has the least cost
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171
(considering the present discounted value of both
capital cost and operating and maintenance costs), and
(ii) does not unreasonably interfere with the
operations on the Other Production Facility.
(v) Seller shall submit any proposed remediation plan to
the applicable state environmental agency. Upon
approval of the remediation plan, Seller shall
implement the plan (subject to reimbursement by Buyer
for any costs associated with remediation of Buyer
Environmental Conditions and Buyer's share of costs
for Other Environmental Conditions).
(vi) Upon completion of the work at an Other Production
Facility prescribed under the approved remediation
plan, Seller shall be relieved of any further
liability for Environmental Conditions at the Other
Production Facility to the extent that such
Environmental Conditions are Assessed Environmental
Conditions. (As an example, if the Environmental
Assessment evaluated samples for total petroleum
hydrocarbons, it would be deemed to have evaluated
constituent petroleum hydrocarbons.) Buyer shall
release any further claims against Seller relating to
such Assessed Environmental Conditions at the
applicable Other
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172
Production Facility (whether known or unknown), and
Buyer shall indemnify, defend, save and hold harmless
Seller Indemnitees against any Claims related to
Assessed Environmental Conditions discovered at such
Other Production Facility after the completion of the
approved remediation plan.
(j) ACCESS FOR INVESTIGATION AND REMEDIATION. Buyer acknowledges
that investigation and remediation of Environmental Conditions at the Other
Production Facilities may include testing, monitoring and other activities at
the Other Production Facilities related to the Environmental Conditions. Buyer
shall provide Seller and Seller's consultants, contractors and agents with
access to, and reasonable accommodation at, the Other Production Facilities for
such purposes under the following arrangements:
(i) Seller and Buyer will agree to consult in efforts to
coordinate any such activities with operations at the
Other Production Facilities, in order to take all
reasonable steps to minimize interference with
Buyer's operations.
(ii) Anything in this Agreement to the contrary
notwithstanding, Seller shall have the right to enter
the Other Production Facilities at any time and from
time to time for the purpose of
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173
conducting any activity in connection with
investigation, remediation and monitoring of
Environmental Conditions, whether pursuant to a
remediation plan or otherwise.
(iii) Seller agrees that it will not make any change in the
Other Production Facilities or use the Other
Production Facilities for any purpose not necessary
and appropriate to the performance of the
investigation, remediation and monitoring of
Environmental Conditions.
(iv) During any investigation, remediation, or monitoring
work, Seller agrees to comply with all applicable
laws, regulations, rules or permits pertaining to the
applicable Other Production Facility, including
environmental, occupational health and safety, and
other health and safety laws. Seller agrees to
indemnify, defend, save and hold harmless Buyer
Indemnitees from and against any Claims arising from
failure to comply with such laws.
(v) Upon completion of any work required for
investigation, remediation, or monitoring of
Environmental Conditions, Seller shall promptly
restore any structures, pavement, or other parts
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174
of the Other Production Facilities to substantially
the condition they were in prior to engaging in such
work.
(vi) Where Seller voluntarily undertakes an Environmental
Assessment or remediation plan, other than an
Environmental Assessment or remediation plan that is
Required by Law, Seller shall be responsible for, and
agrees to indemnify Buyer from and against, any
Business Interruption Costs incurred by Buyer as a
proximate cause of such work. Where an Environmental
Assessment or Remediation Plan is Required by Law,
Seller shall not be liable for any Business
Interruption Costs.
(vii) Except as provided in Sections 8.5(j)(iv) through
8.5(j)(vi), and except for the willful or negligent
acts or omissions of Seller, Seller shall not be
liable for any loss or damage of any kind caused by
Seller's activities at the Other Production
Facilities in connection with such investigation,
remediation and monitoring activities.
8.6. PROVISIONS RELATING TO DISTRIBUTION FACILITIES. The
provisions set forth in this Section 8.6 shall apply exclusively to the
Business Sites other than the Neville Island Facility and
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175
the Other Production Facilities (the "DISTRIBUTION FACILITIES").
(a) POST-CLOSING VIOLATIONS. Buyer agrees to indemnify, defend,
save and hold harmless Seller Indemnitees from and against any Claims arising
out of the alleged violation of any applicable Environmental Law associated
with the operation by Buyer of the Distribution Facilities or arising from any
other use or activities conducted by Buyer at the Distribution Facilities.
(b) ENVIRONMENTAL CONDITIONS CAUSED BY BUYER RELEASES AND
ACTIVITIES. Buyer shall be responsible for and agrees to indemnify, defend,
save and hold harmless Seller Indemnitees from and against any Claims relating
to Buyer Environmental Conditions at the Distribution Facilities. Where a
release of any Buyer Regulated Substance affects soils such as to require
remediation, Buyer shall be solely responsible for the remediation of any such
affected soils, irrespective of whether such soils also contain other Regulated
Substances not related to the Buyer Environmental Condition.
(c) ANKENY DISTRIBUTION FACILITY. With respect to Pre-Closing
Environmental Conditions at the Ankeny, Iowa Distribution Facility arising from
the former operations of the ▇▇▇▇▇▇▇ Chemical Company at the Property, to the
extent that Buyer is not indemnified by virtue of the indemnification to the
lessee of such Distribution Facility from the lessor thereof, Seller shall
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176
be responsible for (and indemnify, defend, save and hold harmless Buyer
Indemnitees from and against) a proportionate share of the non-indemnified
costs incurred by Buyer. The proportionate share shall be determined based on
the period of ▇▇▇▇ ▇▇▇▇▇▇ and Buyer respectively have been in possession under
the current lease. This indemnity is subject to the following terms and
conditions:
(i) If Buyer renews or renegotiates the current lease,
Seller's obligation under this Section 8.6(c) shall
terminate upon the expiration date of the current
term of the lease.
(ii) If Buyer does not renew or renegotiate the current
lease, Seller's obligation under this Section 8.6(c)
shall not expire.
(d) OTHER DISTRIBUTION FACILITIES. Seller agrees to indemnify,
defend, save and hold harmless Buyer Indemnitees from and against any Claims
relating to any Pre-Closing Environmental Conditions at the Distribution
Facilities (except for the Ankeny, Iowa Distribution Facility, which is
provided for in Section 8.6(c)). Seller's obligation under this Section 8.6(d)
shall terminate upon (i) the date on which Buyer vacates the premises of such
Distribution Facility, or (ii) the expiration date of the current term of the
lease for any such Distribution Facility, whichever is earlier.
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177
(e) ALLOCATION WHERE LIABILITY FOR ENVIRONMENTAL CONDITIONS IS
SHARED. Except as provided in Section 8.6(b), where an Environmental Condition
that requires remediation is the result of a Buyer Environmental Condition in
combination with a Pre-Closing Environmental Condition, liability for any
Claims associated with or arising from such Environmental Condition shall be
allocated equitably between Seller and Buyer, based on a consideration of
(among others) the following factors:
(i) Whether, but for the Environmental Condition for
which one of the parties is solely responsible, an
obligation to investigate or remediate would have
arisen for the other party;
(ii) The relative quantity, toxicity and area affected by
the Regulated Substances for which the respective
parties are responsible;
(iii) The degree to which the Regulated Substance for which
a party is responsible affects the selection of the
remedy, the cost of the remedy, and the period of
time over which the remedy must be implemented;
(iv) Other relevant considerations.
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178
(f) ACCESS. Buyer acknowledges that investigation and remediation
of Environmental Conditions at the Distribution Facilities may include testing,
monitoring and other activities at the Distribution Facilities related to the
Environmental Conditions. Buyer shall provide Seller and Seller's consultants,
contractors and agents with access to, and reasonable accommodation at, the
Distribution Facilities for such purposes under the same arrangements as
provided under Sections 8.5(j)(i) through 8.5(j)(vii).
8.7. ENVIRONMENTAL INDEMNIFICATION CAP.
(a) Seller's Indemnification Obligations (as defined in Section
8.7(b)) shall terminate, and Seller shall have no further obligations
thereunder, when the aggregate of the following payments and expenditures by
Seller exceeds $34 million, subject to adjustment as provided in Section 8.7(e)
(the "ENVIRONMENTAL CAP"):
(i) Payments made to Buyer and its successors or
permitted assigns (each of which shall be deemed to
be included in the term "Buyer" as used in this
Section 8.7) or any other entity or person for
indemnification or defense of Claims arising from
Pre-Closing Environmental Conditions, Identified
Environmental Conditions, or Other Environmental
Conditions at the Properties ("INDEMNIFICATION
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179
PAYMENTS"). Payments made in respect of post-Closing
Aristech Environmental Conditions (such as cleanup of
post-Closing spills caused by Seller on the Retained
Premises) shall not be applied against the
Environmental Cap.
(ii) Expenditures incurred by Seller in response to any
Environmental Condition at the Properties (including
Pre-Closing Environmental Conditions, Identified
Environmental Conditions, Other Environmental
Conditions and, to the extent, if any, Seller does
not receive indemnification therefor, those matters,
such as Buyer Environmental Conditions, as to which
Buyer has an indemnification obligation under this
Article VIII).
(iii) Expenditures incurred by Seller in response to any
Pre-Closing Environmental Condition at the Retained
Premises to the extent that such Environmental
Condition is caused or exacerbated as a result of any
action by Buyer or any failure by Buyer to act where
Buyer has an obligation to act arising under law,
this Agreement, or any Ancillary Document ("BUYER
EXACERBATED CONDITIONS"). The aggregate amount of
expenditures under this clause (iii) that may be
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180
applied against the Environmental Cap is $4 million
(subject to escalation as provided in Section 8.7(e)).
(b) "INDEMNIFICATION OBLIGATIONS" means all obligations of Seller
under this Article VIII to indemnify, defend, save and hold harmless Buyer
Indemnitees in respect of any of the matters described in Sections 8.7(a)(i)
and 8.7(a)(ii). The term shall include any payments made directly by Seller to
third parties in respect of such indemnification obligations.
(c) Anything to the contrary herein notwithstanding, payments made
and expenditures incurred with respect to Sections 8.3(a) and 8.3(b) shall not
be applied against the Environmental Cap.
(d) Buyer (on behalf of itself and its successors and assigns)
hereby releases and forever discharges Seller, its successors and assigns, from
Seller's Indemnification Obligations and from any and all Claims of every kind,
name and nature, which Buyer had, has, or may in the future have against
Seller, with respect to (i) Environmental Conditions at the Properties and (ii)
Pre-Closing Environmental Conditions at the Retained Premises that are Buyer
Exacerbated Conditions, to the extent that such Indemnification Obligations and
Claims exceed the Environmental Cap.
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181
(e) The Environmental Cap and the $4 million figure referred to in
Section 8.7(a)(iii) (the "RETAINED PREMISES CAP") shall be escalated on a
quarterly basis in accordance with the methodology described in Schedule
8.7(e).
8.8. TRANSFER OF BUYER'S ENVIRONMENTAL INDEMNIFICATION RIGHTS.
Buyer's rights under this Article VIII ("BUYER'S ENVIRONMENTAL INDEMNIFICATION
RIGHTS") shall not be transferable except as follows:
(a) Buyer may transfer Buyer's Environmental Indemnification
Rights to any of the following transferees:
(i) the successor or surviving corporation in a corporate
merger or reorganization to which Buyer is a party;
(ii) the company resulting from the incorporation by Buyer
of a wholly-owned subsidiary to which substantially
all the assets (including the UPR business) of the
Ashland Chemical Company division of Buyer are
transferred; and
(iii) the purchaser of substantially all the assets
(including the UPR business) of the Ashland Chemical
Company division of Buyer.
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182
(b) Buyer may not assign Buyer's Environmental Indemnification
Rights in connection with either (X) a sale of all the assets of
Buyer's UPR business (separately from a sale of all the assets of the
Ashland Chemical Company division of Buyer), or (Y) the sale of the
Colton, California Business Site ("COLTON") without Seller's prior
written consent, which consent shall not be unreasonably withheld.
(i) (A) Seller's failure to consent to any transfer
referred to in clause (X) or (Y) of this
Section 8.8(b) shall be deemed reasonable if
the prospective transferee (1) is (or
controls, is under common control with or is
controlled by) a person or an entity that has
historically had an adversarial relationship
with Seller; (2) intends to use any of the
facilities for any purpose other than the
production and/or sale of unsaturated
polyester resins and, in the case of Buyer's
Operating Space, maleic anhydride; or (3) has
a tangible net worth of less than $100
million in the case of a transaction referred
to in clause (X) of this Section 8.8(b), or
$25 million in the case of a transaction
referred to in clause (Y) of this Section
8.8(b).
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183
(B) In all other cases, Seller's failure to
consent shall be presumed to be reasonable if
any of the following criteria applies to the
prospective transferee: (1) it has
demonstrated (a) a lack of ability or
intention to comply with Environmental Law,
or (b) a recurring pattern or practice of
violating Environmental Law; (2) it has
engaged in unlawful activity under
Environmental Law that is not being corrected
to the satisfaction of the governmental
agency or agencies with jurisdiction over the
violation; or (3) it does not possess
substantial experience in the production of
chemical products.
(ii) Any assignment as to which Seller grants its consent
under this subparagraph (b) shall automatically, and
without any action on the part of Seller, Buyer or
Buyer's transferee, give rise to the caps described
in clauses (A) through (D) of this Section 8.8(b)(ii)
and the releases set forth in Section 8.8(b)(iii).
(A) If Buyer sells all of the assets of Buyer's
UPR business (including Colton), all of
Buyer's Environmental Indemnification Rights
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184
shall be subject to a cap equal to $15
million, adjusted as set forth in Clauses (C)
and (D) (the "UPR Cap").
(B) (1) If Buyer sells Colton prior to selling
the remainder of the assets of Buyer's UPR
business, Buyer shall have the option, upon
prior written notice to Seller, of allocating
up to $3 million out of the UPR Cap to
Colton. The amount so allocated to Colton
shall become the "COLTON CAP", and the amount
of the UPR Cap less the Colton Cap shall be
the "REMAINING UPR CAP." (For example, if
Buyer allocates $2 million of the UPR Cap to
the Colton Cap, the Remaining UPR Cap shall
be $13 million.)
(2) Upon the sale of Colton, all of Buyer's
Environmental Indemnification Rights relating
to Colton shall be subject to the Colton Cap;
and the Environmental Cap provided in Section
8.7 shall be reduced by the amount of the
Colton Cap. If no amount is allocated by
Buyer to Colton, all of Buyer's Environmental
Indemnification Rights with respect to Colton
shall terminate upon the sale of Colton (that
is, neither Buyer nor the purchaser of Colton
from Buyer shall have any further rights
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185
under the Buyer's Environmental
Indemnification Rights with respect to matters
relating to Colton).
(3) Upon the subsequent sale of the remainder
of the assets of Buyer's UPR business, all of
Buyer's Environmental Indemnification Rights
with respect to such assets shall be subject
to the Remaining UPR Cap, adjusted as set
forth in Clauses (C) and (D).
(C) The amount of the UPR Cap in effect
immediately following a sale of Buyer's UPR
business (including Colton) shall be $15
million, less the aggregate Indemnification
Payments and expenditures made by Seller in
response to Environmental Conditions at the
Properties during the period from Closing
until the date of the sale. If Colton is
sold prior to a sale of the remainder of
Buyer's UPR business: (1) the amount of the
Colton Cap in effect immediately after the
sale of Colton shall be an amount up to $3
million (determined as per clause (B) above),
less all the Indemnification Payments and
expenditures made by Seller in response to
Environmental Conditions at or related to
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186
Colton during the period from Closing until
the date of the sale; and (2) the amount of
the Remaining UPR Cap that shall be in effect
immediately after the subsequent sale of the
UPR business shall be the UPR Cap minus the
Colton Cap (determined as per clause (B)
above), less (x) all Indemnification Payments
and all expenditures made by Seller in
response to Environmental Conditions at other
Properties from the Closing until the date of
sale of the UPR business, and (y) all
expenditures made by Seller in response to
Environmental Conditions at Colton from the
Closing until the sale of Colton, to the
extent not deducted under clause (1) of this
Section 8.8(b)(ii)(C).
(D) The amount of the UPR Cap and the Remaining
UPR Cap shall be escalated on a quarterly
basis in accordance with the methodology set
forth in Schedule 8.7(e). The Colton Cap
shall not be increased under any
circumstances.
(iii) Releases effective on certain sales:
(A) Effective upon the sale of Buyer's UPR
business (including Colton), Buyer (on behalf
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187
of itself and its successors and assigns)
hereby releases and forever discharges Seller,
its successors and assigns, from Seller's
Indemnification Obligations and from any and
all Claims of every kind, name and nature,
which Buyer had, has, or may in the future
have against Seller, with respect to (i)
Environmental Conditions at the Properties and
(ii) Pre-Closing Environmental Conditions at
the Retained Premises that are Buyer
Exacerbated Conditions, to the extent that
such Indemnification Obligations and Claims
exceed the UPR Cap.
(B) Effective upon the sale of Colton (if
sold prior to the remainder of Buyer's UPR
business, Buyer (on behalf of itself and its
successors and assigns) hereby releases and
forever discharges Seller, its successors and
assigns, from Seller's Indemnification
Obligations and from any and all Claims of
every kind, name and nature, which Buyer had,
has, or may in the future have against Seller,
with respect to Environmental Conditions at
Colton, to the extent that such
Indemnification Obligations and Claims exceed
the Colton Cap.
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(C) If Colton is sold prior to the sale of the
remainder of Buyer's UPR business, then
effective upon the subsequent sale of the
remainder of Buyer's UPR business, Buyer (on
behalf of itself and its successors and
assigns) hereby releases and forever
discharges Seller, its successors and
assigns, from Seller's Indemnification
Obligations and from any and all Claims of
every kind, name and nature, which Buyer had,
has, or may in the future have against
Seller, with respect to (i) Environmental
Conditions at the Properties and (ii)
Pre-Closing Environmental Conditions at the
Retained Premises that are Buyer Exacerbated
Conditions, to the extent that such
Indemnification Obligations and Claims exceed
the Remaining UPR Cap.
(c) Except as provided in Section 8.8(a) or 8.8(b), Buyer may not
transfer any of Buyer's Environmental Indemnification Rights with respect to
any of the Properties, in part or as a whole, unless Seller, in its sole and
absolute discretion, approves the transfer in advance. Seller may impose any
condition whatsoever on the grant of such approval, including the termination
of its environmental indemnification obligations under this Article VIII at any
of the Properties.
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(d) The assignee of, or successor to, Buyer's Environmental
Indemnification Rights in any transfer permitted under Sections 8.8(a) through
8.8(c) must assume or succeed to all of Buyer's obligations under this Article
VIII effective simultaneously with such transfer; provided, however, that no
such assumption shall relieve Buyer of its obligations under this Article VIII.
(e) In the event that the assignee of or successor to Buyer's
Environmental Indemnification Rights in any transfer permitted under Section
8.8(a) through 8.8(c) is not an entity that controls, is under common control
with or is controlled by Buyer, Buyer's Environmental Indemnification Rights
shall not be further assignable to any other person or entity by such assignee
or successor. Buyer shall require as a condition precedent to any such
transfer that the transferee acknowledge to Seller in writing that it may not
assign Buyer's Environmental Indemnification Rights and that it is bound by the
release contained in Section 8.8(b)(iii).
(f) For purposes of this Section 8.8 the term "control" means
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of an entity, whether through the
ownership of voting securities, by contract or otherwise.
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(g) Any attempt to transfer Buyer's Environmental Indemnification
Rights in violation of this Section 8.8 shall be void and of no effect.
ARTICLE IX
MISCELLANEOUS
-------------
9.1. ALTERNATIVE DISPUTE RESOLUTION PROCESS. Except as provided in
Section 1.12, disputes regarding the application of any of the provisions of
this Agreement other than those contained Article VIII (which disputes are
governed exclusively by Section 8.3(k)) shall be subject to the following
alternative dispute resolution process:
(a) INVOCATION. The resolution procedures shall be invoked when
either party sends a written notice to the other. The notice shall describe
the nature of the dispute or conflict and the party's position with respect to
such dispute or conflict. The parties shall expeditiously schedule
consultations or a meeting to discuss the dispute or conflict informally in
accordance with subparagraph (b) of this Section 9.1.
(b) DESIGNATION OF MANAGEMENT REPRESENTATIVES. The following
Management Representatives have been designated for purposes of this Section
9.1:
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For Buyer: President, Ashland Chemical
Company, or his or her designees.
For Seller: President, Aristech Chemical
Corporation, or his or her designees.
Any Management Representative designation may be changed by the appointing
organization, by written notice to the other party.
(c) INITIAL CONSULTATION. Any conflicts or disputes shall, in the
first instance, be the subject of informal consultation and discussion between
an executive officer or management-level employee designated by Buyer's
Management Representative and an executive officer or management-level employee
designated by Seller's Management Representative. The period of informal
consultations and discussions shall not extend beyond thirty (30) days from the
date of the first consultations or meetings between such designees, unless the
parties agree to extend this period.
(d) REFERENCE TO MANAGEMENT REPRESENTATIVES. In the event that
the Management Representatives' designees are unable to reach agreement during
the informal consultation and discussion period under Section 9.1(c), the issue
shall be referred to the Management Representatives for informal negotiation.
The period of informal negotiations shall not extend beyond sixty (60) days
from the date of the first meeting between the Management
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Representatives, unless the parties agree to extend this period. The
Management Representatives may request the assistance of an independent
mediator if it is believed that the assistance of such a mediator would be of
assistance to the efficient resolution of the dispute.
(e) FORMAL RESOLUTION PROCEDURES. In the event that the
Management Representatives are unable to resolve the matter within the period
provided in Section 9.1(d), the parties shall submit the dispute to binding
arbitration in Pittsburgh, Pennsylvania, or at such other location as the
parties may agree, in accordance with the terms of this subparagraph (e).
(i) INITIATION OF ARBITRATION PROCESS. Upon the
occurrence of a dispute, and failure of the parties
to resolve such dispute through the informal
processes described in Sections 9.1(c) and 9.1(d),
either party may initiate the arbitration process set
forth in this clause (i) by giving written notice to
the other party.
(ii) SELECTION OF ARBITRATOR(S). Within thirty (30) days
after the notice referred to in clause (i), the
parties shall either agree upon the appointment of a
single mutually-approved independent Commercial
Attorney to serve as arbitrator; or, if the parties
are unable to agree
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upon a single arbitrator, each of the parties shall
appoint a Commercial Attorney to serve as arbitrator,
and the two individuals so named shall, within thirty
(30) additional days, agree upon a third independent
Commercial Attorney to serve as the third arbitrator.
The parties shall mutually cooperate to retain the
arbitrator(s) upon terms and conditions mutually
satisfactory to the parties as soon as practicable
after selection of the arbitrator(s). For purposes of
this clause (ii) the term "Commercial Attorney" shall
mean an attorney having at least ten (10) years
experience in commercial transactions of the type
contemplated by this Agreement and in the preparation,
negotiation and interpretation of the documentation of
such transactions.
(iii) FEES. The fees of the arbitrator(s) shall be paid
one-half by Seller and one-half by Buyer.
(iv) DISCOVERY. For a period of sixty (60) days following
the appointment of the arbitrator(s) (or such longer
period as the parties may mutually agree or the
arbitrator(s) may direct), the parties shall have the
right to engage in such discovery relevant to the
matters in dispute as is
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allowed pursuant to the discovery rules of the
Pennsylvania Rules of Civil Procedure.
(v) RESOLUTION. The arbitrator(s) shall decide such
disputes pursuant to the Commercial Arbitration Rules
of the American Arbitration Association in force at
the time of the arbitration. The arbitrator(s) shall
be required to make a final determination, not
subject to appeal, within thirty (30) days from the
receipt of such dispute by the arbitrator(s), and the
parties shall be bound by the terms of such final
determination. Where three arbitrators are
appointed, the decision may be rendered by a majority
of the arbitrators. The determination by the
arbitrator(s) shall be made in writing and shall
contain written findings of fact, and may be
specifically enforced by a court of competent
jurisdiction. The arbitrator(s) shall determine a
fair and equitable allocation of the reasonable
expenses of the parties incurred in connection with
the resolution of any dispute hereunder. Each party
shall bear its own attorney's fees, unless the
arbitrator(s) shall determine that the nature of the
action or defense of the losing party was frivolous,
in which event the arbitrator shall determine a fair
and equitable attorney's
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fee to be paid by the losing party to the prevailing
party.
(vi) INDEPENDENCE OF ARBITRATOR. The arbitrator(s) shall
retain independence of all parties to this Agreement,
and neither party shall engage or attempt to engage
the services of the arbitrator(s) for any other
purposes without prior written notice to the other
party.
9.2. EXCLUSIVE REMEDY. Except as provided in Sections 4.1, 4.6 and
4.7, the remedies provided in Article VII and Article VIII shall be the sole
and exclusive remedy of Buyer and Seller (and of any other of Buyer's
Indemnitees or Seller's Indemnitees), under or in connection with this
Agreement, the Ancillary Documents, any certificate or agreement delivered in
connection herewith or therewith or the transactions contemplated hereby and
thereby. Subject to Sections 4.1, 4.6 and 4.7, the only legal action that may
be asserted by any party or with respect to any matter under this Agreement or
the Ancillary Documents shall be a contract action to enforce, or to recover
damages for the breach of, this Article VII or Article VIII. Without limiting
the generality of the preceding sentence, no legal action sounding in tort or
strict liability may be maintained by any party. Notwithstanding the
foregoing, Buyer shall be entitled to exercise all of the remedies to which it
is otherwise entitled under the Deeds.
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9.3. EXCLUSION OF CERTAIN DAMAGES. EXCEPT AS EXPRESSLY SET FORTH
WITH RESPECT TO BUSINESS INTERRUPTION COSTS IN ARTICLE VIII, IN NO EVENT SHALL
SELLER BE LIABLE TO BUYER (OR ANY OTHER BUYER INDEMNITEE) FOR ANY
CONSEQUENTIAL, INDIRECT, INCIDENTAL OR OTHER SIMILAR DAMAGES, INCLUDING WITHOUT
LIMITATION LOST PROFITS FOR ANY BREACH OR DEFAULT UNDER, OR ANY ACT OR OMISSION
ARISING OUT OF OR IN ANY WAY RELATING TO, THIS AGREEMENT, THE ANCILLARY
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY CONCERNING OR
RELATING TO ANY OF THE FOREGOING, UNDER ANY FORM OR THEORY OF ACTION
WHATSOEVER, WHETHER IN CONTRACT OR OTHERWISE.
9.4. SURVIVAL OF INDEMNIFICATION PROVISIONS. The provisions of
Section 1.12, Article VII and Article VIII shall survive the Closing.
9.5. CONSTRUCTION. As used herein, unless the context otherwise
requires: (a) the terms defined herein shall have the meaning set forth herein
for all purposes; (b) references to "Article" or "Section" are to an article or
section hereof; (c) all "Exhibits" and "Schedules" referred to herein are
incorporated herein by reference and made a part hereof; (d) "include",
"includes" and "including" are deemed to be followed by "without limitation"
whether or not they are in fact followed by such word or words of like import;
(e) "writing," "written" and comparable terms refer to printing, typing,
lithography and other means of reproducing words in a visible form; (f)
"hereof," "herein," "hereunder" and comparable terms refer to the entirety
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of this Agreement and not to any particular article, section or other
subdivision hereof or attachment hereto; (g) (i) "knowledge" of Seller means
the actual knowledge of the President, any Vice President, Secretary/General
Counsel, Group Vice President, Seller's Plant Managers at each of the Neville
Island Facility and the Other Production Facilities, and those persons
reporting directly to any of the foregoing, and (ii) "knowledge" of Buyer means
the actual knowledge of the President, Group Vice Presidents, Vice Presidents
of Composite Polymers, Fiberglass Reinforced Plastics and the Petrochemical
Divisions of Ashland Chemical Company Division of Buyer and ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇,
Esq. in his capacity as Deputy General Counsel of Ashland Chemical Company, and
those persons reporting directly to any of the foregoing; (h) references to any
gender include references to all genders, and references to the singular
include references to the plural and vice versa; (i) references to an agreement
or other instrument or statute or regulation are referred to as amended and
supplemented from time to time (and, in the case of a statute or regulation, to
any successor provision); and (j) the table of contents and headings of the
various articles, sections and other subdivisions hereof are for convenience of
reference only and shall not modify, define or limit any of the terms or
provisions thereof.
9.6. NOTICES. All notices, and other communications given or made
pursuant to this Agreement shall be in writing and shall be deemed to have been
duly given or made (a) the second day
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after mailing, if sent by registered or certified mail, return receipt
requested, (b) upon delivery, if sent by hand delivery, (c) when received, if
sent by prepaid overnight carrier, with a record of receipt, or (d) the first
day after dispatch, if sent by cable, telegram, facsimile or telecopy (with a
copy simultaneously sent by registered or certified mail, return receipt
requested), to the parties at the following addresses (or at such other
addresses as shall be specified by the parties by like notice):
(i) if to Buyer, to:
Ashland Chemical Company
▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a required copy to:
Ashland Chemical Company
▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to Seller, to:
Aristech Chemical Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: President
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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with a required copy to:
Aristech Chemical Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and to:
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Any party hereto may change the address to which notice to it, or copies
thereof, shall be addressed, by giving notice thereof to the other parties
hereto in conformity with the foregoing.
9.7. CERTAIN UNDERSTANDINGS. Neither party makes any
representation or warranty, express or implied, with respect to the Business,
the Purchased Assets or otherwise regarding the subject matter of this
Agreement except as set forth herein. Neither party nor any other person will
have or be subject to any liability to the other party or any other person
resulting from the distribution to or by either party, or either party's use
of, any information regarding the Business or the Purchased Assets not included
in this Agreement.
9.8. SALES AND TRANSFER TAXES. Buyer shall pay all recording fees
and all sales and use taxes, and real estate transfer and any other conveyance
taxes arising in connection with the sale and transfer of the Purchased Assets
to Buyer
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pursuant to this Agreement; provided, however, that real property transfer
taxes shall be paid 50% by Buyer and 50% by Seller.
9.9. AMENDMENTS, WAIVERS AND CONSENTS. The parties may, by mutual
agreement, amend this Agreement in any respect by written instrument signed by
the parties. Any failure of any of the parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the party entitled to
the benefit thereof only by a written instrument signed by the party granting
such waiver, but such waiver or failure to insist upon strict compliance with
such obligation, representation, warranty, covenant, agreement or condition
shall not operate as a waiver of or estoppel with respect to, any subsequent or
other failure. Whenever this Agreement requires or permits consent by or on
behalf of any party hereto, such consent shall be given in writing in a manner
consistent with the requirements for a waiver of compliance as set forth in
this Section 9.9.
9.10. ENTIRE AGREEMENT. This Agreement and the Ancillary Documents
constitute the entire agreement between the parties with respect to the subject
matter hereof and thereof and supersede all prior and contemporaneous
agreements and understandings, inducements or conditions, express or implied,
oral or written. Any matter that is disclosed in any Schedule is deemed to
have been disclosed for the purposes of all relevant provisions of this
Agreement and the Ancillary Documents. The inclusion of any item in the
Schedules is not evidence of the
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materiality of such item for the purpose of this Agreement and the Ancillary
Documents. The parties make no representations or warranties to each other,
except as contained in this Agreement and the Ancillary Documents, and any and
all prior representations and warranties made by any party or its
representatives, whether verbally or in writing, are deemed to have been merged
into this Agreement and the Ancillary Documents, it being intended that no such
prior representations or warranties shall survive the execution and delivery of
this Agreement and the Ancillary Documents.
9.11. NO ASSIGNMENT. Except to the extent expressly provided in
Section 8.8, neither party may assign this Agreement or the rights, interests
and obligations hereunder, by operation of law or otherwise without the prior
written consent of the other party.
9.12. SUCCESSORS AND ASSIGNS. This Agreement and all the rights and
powers granted hereby will bind and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
9.13. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania
without regard to its conflict of laws provisions, unless and to the extent
that the laws of another jurisdiction mandatorily apply.
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9.14. NO THIRD PARTY BENEFICIARIES. This Agreement is not intended
to confer any rights or remedies hereunder upon any person other than the
parties hereto (and, solely with respect to Article VII and Article VIII, the
Buyer Indemnitees and Seller Indemnitees) and their respective successors and
permitted assigns.
9.15. SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transaction contemplated hereby is not affected in any
manner adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that the transaction contemplated hereby is fulfilled to the
extent possible.
9.16. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall be deemed to be one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
ARISTECH CHEMICAL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------
Title: President
-------------------
ASHLAND INC.
By: /s/ ▇. ▇. ▇'▇▇▇▇▇▇
--------------------------
Title: Sr. Vice President
-------------------
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