EXHIBIT 10(i).2***
===========================================================================
PURCHASE AGREEMENT
between
WITCO CORPORATION
and
▇▇▇▇▇▇▇▇▇▇▇ SKW SURFACTANTS GMBH
Dated as of June 22, 1999
===========================================================================
*** Material has been omitted pursuant to a request for confidential treatment.
Such omitted material has been filed with the Securities and Exchange
Commission separaterly.
TABLE OF CONTENTS
Page
ARTICLE I
Definitions, Interpretations
SECTION 1.1 Definitions ............................................. 1
SECTION 1.2 Interpretation .......................................... 7
ARTICLE II
Purchase and Sale
SECTION 2.1 General ................................................. 8
SECTION 2.2 Assets and Liabilities .................................. 8
SECTION 2.3 Sale of Witco Surfactants ............................... 13
SECTION 2.4 Procedures for Purchased Assets not Transferable ........ 14
SECTION 2.5 Title Issues ............................................ 14
SECTION 2.6 Customer Remittances .................................... 15
SECTION 2.7 Environmental Matters ................................... 15
SECTION 2.8 Construction, Safety and Health Projects ................ 15
SECTION 2.9 Malaysia Project ........................................ 15
ARTICLE III
Purchase Price, Closing Statement, Adjustments: Consistent Treatment
SECTION 3.1 Purchase Price .......................................... 15
SECTION 3.2 Closing Statement ....................................... 15
SECTION 3.3 Post-Closing Purchase Price Adjustment .................. 17
SECTION 3.4 Post-Closing Accrual Statement .......................... 17
SECTION 3.5 Accrual Purchase Price Adjustments ...................... 18
SECTION 3.6 Consistent Treatment .................................... 18
SECTION 3.7 U.K. Value Added Tax .................................... 18
SECTION 3.8 Spanish Value Added Tax ................................. 20
SECTION 3.9 Exchange Rate Fluctuations Disregarded .................. 20
ARTICLE IV
Closing
SECTION 4.1 Closing Date ............................................ 21
SECTION 4.2 Foreign Closings ........................................ 21
SECTION 4.3 Transactions at Closing ................................. 21
Page
ARTICLE V
Representations, Warranties, Agreements and Covenants of Sellers
SECTION 5.1 Organization ............................................ 22
SECTION 5.2 Due Authorization ....................................... 22
SECTION 5.3 Sufficiency of and Title to the Assets .................. 22
SECTION 5.4 Business Statements ..................................... 23
SECTION 5.5 Certain Contracts ....................................... 23
SECTION 5.6 Intangible Rights ....................................... 24
SECTION 5.7 Litigation .............................................. 25
SECTION 5.8 Employee Benefit Plans .................................. 25
SECTION 5.9 Labor Matters ........................................... 26
SECTION 5.10 Default ................................................. 26
SECTION 5.11 Consents ................................................ 27
SECTION 5.12 Receivables ............................................. 27
SECTION 5.13 Equity Interests ........................................ 27
SECTION 5.14 Compliance with Applicable Laws ......................... 27
SECTION 5.15 ***...................................................... 27
SECTION 5.16 Management Compensation ................................. 27
SECTION 5.17 No Changes .............................................. 27
SECTION 5.18 Personal Property ....................................... 28
SECTION 5.19 Real Property ........................................... 29
SECTION 5.20 Taxes ................................................... 29
SECTION 5.21 Value Added Tax ......................................... 29
SECTION 5.22 Environmental, Occupational, Health and Safety Matters .. 29
SECTION 5.23 Permits ................................................. 29
SECTION 5.24 No Broker-Sellers ....................................... 30
SECTION 5.25 Year 2000 Readiness Disclosure .......................... 30
SECTION 5.26 Mapleton Sewer Line ..................................... 30
SECTION 5.27. Employees ............................................... 30
ARTICLE VI
Representations, Warranties, Agreements and Covenants of Buyer
SECTION 6.1 Organization ............................................ 30
SECTION 6.2 Due Authorization ....................................... 30
SECTION 6.3 Consents ................................................ 31
SECTION 6.4 Litigation .............................................. 31
SECTION 6.5 No Contemplated Sales ................................... 31
SECTION 6.6 No Broker-Buyer ......................................... 31
SECTION 6.7 Availability of Funds ................................... 31
ARTICLE VII
Employees, Pension and Other Benefit Plans
SECTION 7.1 Employment of Employees of the Business ................. 31
SECTION 7.2 Maintenance of Benefits; Service Credit ................. 32
*** Material has been omitted pursuant to a request for confidential treatment.
Such omitted material has been filed with the Securities and Exchange
Commission separaterly.
Page
SECTION 7.3 Severance Benefits ...................................... 32
SECTION 7.4 Retirement Plans ........................................ 32
SECTION 7.5 Witco Corporation Employee Retirement Savings Plan ...... 33
SECTION 7.6 Welfare Benefits ........................................ 33
SECTION 7.7 Vacation and Sick Pay ................................... 33
SECTION 7.8 Union and Works Council Representation .................. 34
SECTION 7.9 Worker Adjustment and Retraining Notification Act ....... 34
SECTION 7.10 Witco Surfactants ....................................... 34
SECTION 7.11 Transfer of Employees of Spain Business ................. 34
SECTION 7.12 Pension Plans ........................................... 35
SECTION 7.13 Retained Benefit Plans .................................. 35
SECTION 7.14 No Third Party Beneficiaries ............................ 35
ARTICLE VIII
Pre-Closing Covenants of Sellers, Witco Surfactants and Buyer
SECTION 8.1 Corporate and Other Actions ............................. 35
SECTION 8.2 Local Transfer Agreements ............................... 35
SECTION 8.3 Consents and Approvals .................................. 35
SECTION 8.4 Antitrust ............................................... 35
SECTION 8.5 Access to Information ................................... 35
SECTION 8.6 Employment Assistance ................................... 36
SECTION 8.7 Ordinary Course of Business ............................. 36
SECTION 8.8 Other Actions ........................................... 36
SECTION 8.9 Bulk Transfer Laws ...................................... 36
SECTION 8.10 Leased Vehicles ......................................... 36
SECTION 8.11 Unions; Work Councils ................................... 36
SECTION 8.12 Witco Surfactants ....................................... 36
SECTION 8.13 Exclusivity ............................................. 37
SECTION 8.14 Other Agreements ........................................ 37
ARTICLE IX
Conditions
SECTION 9.1 Conditions to Obligations of Sellers .................... 37
SECTION 9.2 Conditions to Obligations of Buyer ...................... 38
ARTICLE X
Non-Competition
SECTION 10.1 Noncompetition--Sellers ................................. 40
SECTION 10.2 Noncompetition--Buyer ................................... 40
SECTION 10.3 Non-Solicitation ........................................ 41
SECTION 10.4 Additional Agreements ................................... 41
Page
ARTICLE XI
Post-Closing Covenants
SECTION 11.1 Availability of Records ................................. 42
SECTION 11.2 Use of Trade or Service Marks ........................... 42
SECTION 11.3 Tax Matters ............................................. 43
SECTION 11.4 Confidentiality ......................................... 43
SECTION 11.5 Continuing Obligations .................................. 45
SECTION 11.6 Inventory Removal ....................................... 45
ARTICLE XII
Indemnification and Survival
SECTION 12.1 Indemnification by Sellers .............................. 45
SECTION 12.2 Indemnification by Buyer ................................ 46
SECTION 12.3 Survival ................................................ 47
SECTION 12.4 Limitation on Liability ................................. 48
ARTICLE XIII
Termination
SECTION 13.1 Termination of Agreement ................................ 48
SECTION 13.2 Mutual Consent .......................................... 48
SECTION 13.3 By Witco ................................................ 48
SECTION 13.4 By Buyer ................................................ 48
SECTION 13.5 Closing Has Not Occurred ................................ 48
SECTION 13.6 Written Notice .......................................... 49
SECTION 13.7 Continuing Confidentiality .............................. 49
ARTICLE XIV
Miscellaneous
SECTION 14.1 Assignment .............................................. 49
SECTION 14.2 No Press Release Without Consent ........................ 49
SECTION 14.3 Confidentiality ......................................... 49
SECTION 14.4 Expenses ................................................ 49
SECTION 14.5 Severability ............................................ 50
SECTION 14.6 Entire Agreement ........................................ 50
SECTION 14.7 No Third Party Beneficiaries ............................ 50
SECTION 14.8 Waiver .................................................. 50
SECTION 14.9 Governing Law ........................................... 50
SECTION 14.10 Counterparts ............................................ 50
SECTION 14.11 Choice of Forum ......................................... 50
SECTION 14.12 Further Documents ....................................... 51
SECTION 14.13 Notices ................................................. 51
Page
SECTION 14.14 Schedules ............................................... 52
SECTION 14.15 Construction ............................................ 52
List of Schedules
Schedule 1(a) Affiliates and Subsidiaries of Witco Corporation
Schedule 2.2(a)(i)(A)(II)(1) Facilities
Schedule 2.2(a)(i)(A)(II)(2) Machinery, Plant, Equipment, Computer Hardware,
Vehicles and Other Personal Property
Schedule 2.2(a)(i)(F) Computer Programs and Software
Schedule 2.2(a)(i)(G) Restrictive/Limiting Agreements
Schedule 2.2(a)(i)(H)(1) Patents and Patent Applications
Schedule 2.2(a)(i)(H)(2) Patents and Patent Applications Subject to Grant
Back
Schedule 2.2(a)(i)(I) Registered and Common Law Trademarks and Pending
Trademark Applications
Schedule 2.2(b)(viii) MOP Facility Map
Schedule 2.2(b)(xiv) Trademarks Used in the Business But Not to be
Sold
Schedule 2.5(c) Terms of Sale of Flimby Facility
Schedule 2.5(d) Terms of Sale of Granollers Facility
Schedule 2.8 Construction Projects
Schedule 3.6 Purchase Price Allocation
Schedule 4.3(b) Bank Accounts
Schedule 5.1 Organization of Sellers and Witco Surfactants
Schedule 5.3 Liens
Schedule 5.4(a) Exceptions to Business Statements
Schedule 5.4(b) Inventory Reserves
Schedule 5.5 Contracts
Schedule 5.6(a) Germany Business Patents and Patent Applications
Schedule 5.6(b) Germany Business Trademark Registrations
Schedule 5.6(c) Intellectual Property Infringements
Schedule 5.7 Seller Litigation
Schedule 5.8(a) Employee Benefit Plans
Schedule 5.8(c) Employee Benefit Plan Liabilities
Schedule 5.8(h) Retiree Life and Health Plans
Schedule 5.9 Labor Matters
Schedule 5.10 Defaults
Schedule 5.11 Seller Consents
Schedule 5.14 Compliance with Applicable Laws
Schedule 5.16 Transaction Bonuses
Schedule 5.17 Proposed Capital Expenditure Projects
Schedule 5.18 Condition of Purchased Assets
Schedule 5.20 Taxes
Schedule 5.22 Environmental, Occupational, Health & Safety
Matters
Schedule 5.23 Permits
Schedule 5.25 Year 2000
Schedule 6.3 Buyer Consents
Schedule 7.1 Continuity of Employment
Schedule 7.4(b) Stand Alone Plans
Schedule 7.8 Collective Bargaining Agreements
Schedule 8.14(a) Term Sheets
Schedule 8.14(b) Transition Services
Schedule 10.2 Non-Competition--Buyer
Schedule 11.2(b) Certain Trademarks
List of Exhibits
EXHIBIT ▇-▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇-▇ ▇▇▇▇▇▇▇ Statement
EXHIBIT A-3 Proposed Germany Statement
EXHIBIT B Environmental Agreement
EXHIBIT C Arbitration Procedures
EXHIBIT D Profit and Loss Statement of Witco Surfactants
EXHIBIT E UK Certificate of Title
PURCHASE AGREEMENT dated as of June
22, 1999 ("Agreement"), between WITCO
CORPORATION, a corporation organized under the
laws of Delaware ("Witco"), on behalf of itself
and its indirect wholly owned Subsidiaries set
forth on Schedule 1(a) hereto (Witco and such
Subsidiaries, other than Witco Surfactants GmbH
("Witco Surfactants"), are collectively referred
to herein as the "Sellers"), and ▇▇▇▇▇▇▇▇▇▇▇ SKW
SURFACTANTS GMBH, a company organized under the
laws of the Federal Republic of Germany
("Buyer").
WITNESSETH:
WHEREAS Sellers are engaged in the business of manufacturing and
selling natural resource-based oleochemicals, derivatives and surfactants
to the home/fabric care and personal care markets, the industrial and
institutional hard surface cleaner market and the paper, textile, mining,
and asphalt segments of the industrial specialties markets; and
WHEREAS Witco Deutschland wishes to sell the shares of Witco
Surfactants to Buyer, and the other Sellers wish to sell substantially all
of the assets and liabilities of the business described in the previous
paragraph and conducted through the facilities and operations described in
Section 2.1 other than the Germany Business and the Memphis Business (such
business, giving effect to such exclusions, being called the "Business") to
the Buyer, and Buyer wishes to purchase the same from Sellers, on the
terms, and subject to the conditions, set forth herein. "Germany Business"
means the assets used by Sellers to manufacture products in Germany and the
business related to such assets and products, and "Memphis Business" means
the assets used by Sellers to manufacture products in Memphis, Tennessee
and the business related to such assets and products (the "Memphis
Business").
NOW, THEREFORE, in consideration of the foregoing, the covenants
and agreements set forth herein, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
ARTICLE I
Definitions, Interpretations
SECTION 1.1 Definitions. The following terms have the following
meanings when used herein:
"ABO" has the meaning set forth in Section 7.4(b).
"Accrual Purchase Price Adjustments" has the meaning set forth in
Section 3.5.
"Adjusted Purchase Price" has the meaning set forth in Section
3.1.
"Affiliate" means (i) with respect to any Seller or Witco
Surfactants or any other Person directly or indirectly controlling or
controlled by, or under direct or indirect common control with such Seller
or Witco Surfactants and (ii) with respect to Buyer, any other Person
directly or indirectly controlling or controlled by, or under direct or
indirect common control with, Buyer.
"Agreement" has the meaning set forth in the recitals hereof.
"Ancillary Documents" means the Environmental Agreement dated as
of the date hereof, between Witco and Buyer, and the License Agreement
dated as of the date hereof, between Witco and Buyer.
"Applicable Law" means, with respect to any Person, any domestic
or foreign, federal, state or local statute, law, ordinance, rule,
administrative interpretation, regulation, order, writ, injunction,
directive, judgment, decree or other requirement of any Governmental Entity
in effect on or prior to the Closing Date (excluding any Environmental,
Occupational, Health and Safety Laws) applicable to such Person or any of
its Affiliates or any of their respective properties, assets, or business
operations.
"Assignment and Assumption Agreements" means the Assignment and
Assumption Agreements and Bills of Sale between Buyer and Sellers to be
executed and delivered on the Closing Date.
"Assumed Liabilities" has the meaning set forth in Section
2.2(c).
"Assumed Plans" has the meaning set forth in Section 5.8(a).
"Benefit Plans" has the meaning set forth in Section 5.8(a).
"Business" has the meaning set forth in the recitals hereof, and
for the avoidance of doubt includes the NA Business, the UK Business, the
Spain Business and the Malaysia Assets but excludes the Memphis Business,
the Germany Business and the MOP Facility.
"Business Contracts" has the meaning set forth in Section
2.2(a)(i)(D).
"Business Statement" means the statement of assets, consisting of
Inventory and property, plant and equipment of the Business as of December
31, 1998, attached as Exhibit A-1 hereto.
"Buyer" has the meaning set forth in the recitals hereof.
"Buyer's Confidential Information" has the meaning set forth in
Section 11.4(a).
"Buyer's Prorations" has the meaning set forth in Section 3.4.
"Buyer's Auditors" has the meaning set forth in Section 3.2(b).
"Buyer's 401(k) Plan" has the meaning set forth in Section
7.5(b).
"Closing" has the meaning set forth in Section 4.1.
"Closing Business Statement" has the meaning set forth in Section
3.2(c).
"Closing Date" has the meaning set forth in Section 4.1.
"Closing Germany Statement" has the meaning set forth in Section
3.2(c).
"Closing Statements" has the meaning set forth in Section 3.2(c).
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" has the meaning set forth in Section
11.4(a).
"Continuing Employees" has the meaning set forth in Section 7.1.
"Continuing Spain Employees" has the meaning set forth in Section
7.11(a).
"Contracts" has the meaning set forth in Section 5.5(a).
"Co-Owned Confidential Information" has the meaning set forth in
Section 11.4(e).
"Derivative Patent" means any continuation, continuation-in-part,
continuing, divisional, or reissue patents and applications or
reexamination certificates or any foreign equivalent of the foregoing
existing as of the Closing Date.
"District" has the meaning set forth in Section 9.2(m).
"Employees" has the meaning set forth in Section 7.1.
"Encumbrance" means all Liens other than Permitted Liens.
"Environmental Agreement" means the Environmental Agreement dated
as of the date hereof among the parties hereto, in substantially the form
attached hereto as Exhibit B.
"Environmental, Occupational, Health and Safety Laws" shall mean
all federal, state, local and foreign laws, statutes, codes, ordinances,
rules, regulations, permits, or orders in effect on or prior to the Closing
Date and relating to or addressing the environment, health or safety, which
shall include, but not be limited to, the manufacture, distribution, use,
handling or disposal of any Hazardous Substances, or occupational,
workplace, or worker safety and health.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Excluded Assets" has the meaning set forth in Section
2.2(b) .
"Excluded Liabilities" has the meaning set forth in Section
2.2(d) .
"Existing Products" has the meaning set forth in Section
10.2.
"Facilities" has the meaning set forth in Section
2.2(a)(i)(A)(II).
"Fair Market Value" has the meaning set forth in Section
7.4(b).
"FIFO" has the meaning set forth in Section 3.2(a).
"Flimby Facility" has the meaning set forth in Section 2.1.
"Foreign Agreements" has the meaning set forth in Section 4.2.
"Foreign Closing" has the meaning set forth in Section 4.2.
"GAAP" means United States generally accepted accounting
principles consistently applied.
"Germany Business" has the meaning set forth in the recitals
hereof.
"Germany Pension Plan" has the meaning set forth in Section
2.3.
"Germany Statement" means the December 31, ▇▇▇▇ ▇▇▇▇▇▇▇ Statement
in the form attached as Exhibit A-2 hereto, containing (i) the Witco
Surfactants audited statutory balance sheet and the Witco Surfactants GAAP
balance sheet and a reconciliation between such balance sheets, (ii)
certain Witco Surfactants special adjustments and (iii) the Witco
Surfactants Adjusted Statement.
"Governmental Entity" means any federal, state or local court,
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign.
"Granollers Facility" has the meaning set forth in Section 2.1.
"Hazardous Substance(s)" means and includes flammable substances,
explosives, radioactive materials, hazardous wastes or substances, toxic
wastes or substances, crude oil or any fraction thereof, refined or
partially refined petroleum products, or any other wastes, materials or
pollutants included in the definition of "hazardous substance," "toxic
substance," "hazardous material," "hazardous waste," "extremely hazardous
waste," "restricted hazardous waste," "petroleum substance" or words of
similar import under any Environmental, Occupational, Health and Safety
Law.
"Intangible Rights" means patents, patent applications,
trademarks, trademark applications, tradenames, service marks and
copyrights.
"Inventory" has the meaning set forth in Section
2.2(a)(i)(A)(I).
"Janesville Facility" has the meaning set forth in Section 2.1.
"Knowledge" means knowledge after due inquiry of employees of
Sellers or Witco Surfactants actually responsible for performing the
function to which the applicable statement relates.
"Liens" has the meaning set forth in Section 5.3.
"Losses" has the meaning set forth in Section 12.1(a).
"Malaysia Assets" has the meaning set forth in Section 2.1.
"Malaysia Project" has the meaning set forth in Section 2.9.
"Management Group" means Georg Urban, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇.
"Mapleton Facility" has the meaning set forth in Section 2.1.
"Mapleton Sewer Line" has the meaning set forth in Section
2.2(a)(i)(K).
"Marks" has the meaning set forth in Section 11.2(b).
"Memphis Assets" has the meaning set forth in Section 2.1.
"Memphis Business" has the meaning set forth in the recitals
hereof.
"MOP Facility" has the meaning set forth in Section
2.2(b)(viii).
"NA Business" has the meaning set forth in Section 2.1.
"Obsolete Inventory" means Inventory described in paragraphs A.1.
and A.74. and B.1. and B.2.iv. of Schedule 5.4(b).
"Other Employees" has the meaning set forth in Section 10.3.
"Overlapping Technologies/Products" has the meaning set forth in
Section 2.2(a)(ii)(A).
"Permitted Liens" means (i) Liens set forth in Section A of
Schedule 5.3, (ii) mechanics', carriers', workmen's, repairmen's or other
like Liens arising or incurred in the ordinary course of business, Liens
arising under original purchase price conditional sales contracts and
equipment leases with third parties entered into in the ordinary course of
business and liens for Taxes that are not due and payable, (iii) leases,
subleases and similar agreements set forth in Schedule 5.5, and (iv) to the
extent they, individually or in the aggregate, do not materially impair,
and could not reasonably be expected to materially impair, the continued
use and operation of the assets to which they relate in the conduct of the
Business as presently conducted (A) easements, covenants, rights-of-way and
other similar restrictions of record, (B) any conditions that may be shown
by a current, accurate survey or physical inspection of any Facilities made
prior to Closing and (C) (1) zoning, building and other similar
restrictions, (2) Liens that have been placed by any developer, landlord or
other third party on property over which a Seller has easement rights or on
any property leased to a Seller and subordination or similar agreements
relating thereto and (3) unrecorded easements, covenants, rights-of-way and
other similar restrictions.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, trust or unincorporated organization or
Governmental Entity.
"Post-Closing Accrual Statement" has the meaning set forth in
Section 3.4.
"Product Stewardship Materials" has the meaning set forth in
Section 8.5(b).
*** has the meaning set forth in Section 5.15.
"Proposed Business Statement" has the meaning set forth in
Section 3.2(a).
"Proposed Germany Statement" means the Germany Closing Statement
dated as of the Closing Date containing the Witco Surfactants Closing Date
Germany Balance Sheet and the Witco Surfactants Closing Date GAAP Balance
Sheet and a reconciliation between such balance sheets, and, to the extent
necessary, the Witco Surfactants special adjustments referred to in clause
(ii) of the definition "Germany Statement" and an adjusted statement, all
in the form of Exhibit A-3 hereto.
"Proposed Statements" has the meaning set forth in Section
3.2(a).
"Prorated Items" has the meaning set forth in Section 3.4.
"Purchase Price" has the meaning set forth in Section 3.1.
"Purchased Assets" has the meaning set forth in Section
2.2(a)(i).
"Purchased Co-Assets" has the meaning set forth in Section
2.2(a)(ii).
"Real Property" means the real property included in the Purchased
Assets or used or held for use by Witco Surfactants.
*** Material has been omitted pursuant to a request for confidential treatment.
Such omitted material has been filed with the Securities and Exchange
Commission separaterly.
"Receivables" has the meaning set forth in Section 2.2(b)(v).
"Referee" has the meaning set forth in Section 3.2(c)(iii).
"Seller" or "Sellers" has the meaning set forth in the recitals
hereof.
"Seller Prorations" has the meaning set forth in Section 3.4.
"Sellers' Auditors" has the meaning set forth in Section 3.2(b).
"Sellers' Confidential Information" has the meaning set forth in
Section 11.4(a).
"Spain Business" has the meaning set forth in Section 2.1.
"Spanish Employment Regulations" means the Royal Decree
Legislative 1/1995, of March 24, which approves the revised text of the
Workers Statute ("Estatuto de los Trabajadores").
"Stand Alone Plan" has the meaning set forth in Section 7.4(b).
"Subsidiary" means, with respect to any Person, any other Person,
an amount of the voting securities, other voting ownership or voting
partnership interests of which is sufficient to elect at least a majority
of its board of directors or other governing body (or, if there are no such
voting interests, 50% or more of the equity interests of which) is owned
directly or indirectly by such first Person.
"Subsidiary Assets" has the meaning set forth in Section
3.4(a).
"Subsidiary Shares" means all of the issued and outstanding
shares of capital stock of Witco Surfactants owned by Sellers.
"Tangible Net Worth" means the total aggregate value of the
assets of the Germany Business less the total aggregate value of the
liabilities of the Germany Business, excluding goodwill and other
intangible assets and excluding the Germany Pension Plan and deferred
taxes.
"Taxes" means with respect to any Person (i) any net income,
gross income, gross receipts, sales, use, ad valorem, franchise, profits,
license, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property, value-added or windfall profit tax, custom
duty or other tax, governmental fee or other like assessment or charge of
any kind whatsoever (including, in the UK, rates - and national insurance),
together with any interest and any penalty, addition to tax or additional
amount imposed by any taxing authority (domestic or foreign) on such Person
and (ii) any liability of such Person or any of its Subsidiaries for the
payment of any amount of the type described in clause (i) as a result of
being a member of any affiliated, consolidated or combined group or as a
transferee or successor, pursuant to a tax sharing or indemnification
agreement, by contract or otherwise.
"Technology Rights" has the meaning set forth in Section
2.2(a)(i)(G).
"Title Commitments" has the meaning set forth in Section 2.5(a).
"Title Company" has the meaning set forth in Section 2.5(a).
"Total Business" has the meaning set forth in Section 2.1.
"UK Benefit Plan" has the meaning set forth in Section 5.8(j).
"UK Business" has the meaning set forth in Section 2.1.
"UK Employment Regulations" means the Transfer of Undertakings
(Protection of Employment) Regulations 1981.
"VAT" has the meaning set forth in Section 3.7(b).
"WARN" has the meaning set forth in Section 7.9(a).
"Witco 401(k) Plan" has the meaning set forth in Section 7.5(a).
"Witco" has the meaning set forth in the recitals hereof.
"Witco Deutschland" means Witco Deutschland GmbH.
"Witco Espana" means Witco Espana, S.L.
"Witco International" means Witco International Corporation, a
corporation organized under the laws of New Jersey.
"Witco Surfactants" has the meaning set forth in the recitals
hereof.
"Witco Surfactants Adjusted Statement" means the portion of the
Germany Statement under the heading "Witco Surfactants GmbH Adjusted
Statement."
"Witco Surfactants Closing Date GAAP Balance Sheet" means the
portion of the Proposed Germany Statement or Closing Germany Statement, as
applicable, under the heading "Witco Surfactants GmbH Audited GAAP Balance
Sheet."
"Witco Surfactants Closing Date Germany Balance Sheet" means the
portion of the Proposed Germany Statement or Closing Germany Statement, as
applicable, under the heading "Witco Surfactants GmbH Audited Statutory
Balance Sheet."
"Witco UK" means Witco Corporation (UK) Limited.
"Year 2000 Problem" means a date handling problem relating to the
Year 2000 date change that would cause a computer system, software, or
equipment to fail to correctly perform, process and handle data for the
dates within and between the twentieth and twenty-first centuries and all
other centuries.
SECTION 1.2 Interpretation. The headings contained in this
Agreement, in any exhibit or schedule annexed hereto and in the table of
contents to this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement. When a
reference is made in this Agreement to an Article, Section, Schedule or
Exhibit, such reference shall be to an Article, Section, Schedule or
Exhibit of this Agreement unless otherwise indicated. Whenever the words
"included", "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation". All
accounting terms not defined in this Agreement shall have the meanings
determined in accordance with GAAP. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of
this Agreement. The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms and to the
masculine as well as to the feminine and neuter genders of such terms, and
references to a person are also to its
permitted successors and assigns. References to classes of chemicals in
this Agreement are mutually exclusive such that no one defined class of
chemicals is or is to be deemed within another defined class of chemicals.
ARTICLE II
Purchase and Sale
SECTION 2.1 General. Seller Witco Corporation conducts the
Business in North America through manufacturing facilities located in
Mapleton, Illinois (the "Mapleton Facility") and Janesville, Wisconsin (the
"Janesville Facility"), research and development personnel located in
Dublin, Ohio, Business management personnel located in Greenwich,
Connecticut and direct sales personnel located in various locations
(collectively, the "NA Business"). Seller Witco UK conducts the Business in
the United Kingdom through a manufacturing facility located in Flimby,
United Kingdom (the "Flimby Facility"), and direct sales personnel located
in various locations (the "UK Business"). Witco Surfactants conducts the
Germany Business through a manufacturing facility located in Steinau,
Germany and sales personnel located in various locations. Seller Witco
Espana conducts the Business in Spain through a manufacturing facility
located in Granollers, Spain (the "Granollers Facility") and direct sales
personnel located in various locations (the "Spain Business"). Seller Witco
International holds engineering data in respect of a proposed grassroots
oleochemicals and derivatives manufacturing facility in Malaysia (the
"Malaysia Assets"). The remaining Sellers set forth on Schedule 1(a) own
limited inventory, Intangible Rights, contract and other assets of the
Business outside of the previously mentioned jurisdictions, and employ
certain Employees of the Business. All of the Sellers other than Witco
Deutschland will sell the assets of the Business to the Buyer in the manner
contemplated by Section 2.2 hereof, and Witco Deutschland will sell the
Germany Business to Buyer in the manner contemplated by Section 2.3 hereof,
and all such sales shall be on the remaining terms and conditions set forth
herein. Notwithstanding any provision herein to the contrary, Sellers shall
not sell any property, asset or right of the Memphis Business, whether
tangible or intangible, real or personal (collectively, the "Memphis
Assets") other than Purchased Co-Assets. For the avoidance of doubt, Buyer
acknowledges and agrees that this Agreement does not purport to sell,
transfer, convey, assign or deliver any of the Memphis Assets other than
Purchased Co-Assets and that the term "Business" is defined to exclude the
Memphis Business and the MOP Facility. The Germany Business and the
Business are sometimes referred to herein collectively as the "Total
Business."
SECTION 2.2 Assets and Liabilities. (a) Sale of Assets. Upon the
terms and subject to the conditions of this Agreement, at the Closing each
Seller (other than Witco Deutschland), shall sell, transfer, convey, assign
and deliver to the Buyer and the Buyer shall purchase and accept from such
Seller in respect of the portion of the Business owned by such Seller:
(i) all right, title, and interest of such Sellers in and to all
the properties, assets and rights of any kind, whether tangible or
intangible, real or personal, used or held for use in the Business,
free and clear of all Encumbrances and except for the Purchased
Co-Assets and the Excluded Assets and except as limited in the
following paragraphs of this Section 2.2(a)(i) (collectively, the
"Purchased Assets"), including:
(A) all of the assets reflected on the Business Statement,
(excluding assets disposed of or used in the ordinary course of
business since the date of the Business Statement, but including
assets acquired since that date), including:
(I) all raw materials, intermediate and finished
goods inventories (including related packaging
inventories) whether in transit,
located at the Facilities or at warehouses or toll
manufacturers maintained by the Sellers ("Inventory");
and
(II) all property, plant and equipment, including
(1) the facilities set forth on Schedule
2.2(a)(i)(A)(II)(1), including all real property,
buildings, structures and improvements thereon and all
fixtures and fittings attached thereto and contained
therein (the "Facilities"), and (2) all machinery,
plant, equipment, computer hardware, vehicles and other
personal property of Sellers set forth on Schedule
2.2(a)(i)(A)(II)(2), other than vehicles returned
pursuant to Section 8.10.
(B) all sales order files, engineering order files, purchase
order files, manufacturing records, advertising and promotional
materials and business files and other data, provided that any
information not pertaining to the Business will be redacted and
further provided that Sellers shall be permitted to retain copies
of such files and records to the extent permitted by Buyer;
(C) all books of account, general, financial and accounting
records, provided that any information not pertaining to the
Business will be redacted and further provided that Sellers shall
be permitted to retain originals of such files and records to the
extent they provide Buyer with copies of same;
(D) except in respect of contracts identified on Schedule
5.5 as not being exclusive to the Business, all rights and
interest of Sellers to or in all agreements, options, contracts,
distributor agreements, sales representative agreements, leases,
instruments, purchase orders, sales orders and commitments in
respect of the Business (including outstanding bids)
(collectively, the "Business Contracts");
(E) all licenses, approvals, certificates, permits,
franchises or other evidence of authority issued by a
Governmental Entity in respect of the Business;
(F) all computer programs and software (including
documentation and related object and source codes), and all
records thereof, that are set forth on Schedule 2.2(a)(i)(F);
(G) except as set forth in Section 2.2(a)(i)(H) below, and
as restricted or limited by the Agreements set forth in Schedule
2.2(a)(i)(G), all rights, title and interest in and to all trade
secrets, unpatented inventions, protocols, know-how, product
formulae, product formulations, manufacturing processes and
procedures, products, records of inventions, test information,
drawings, diagrams, designs, research and development files and
operating manuals used exclusively in or related exclusively to
the Business (collectively, the "Technology Rights");
(H) (1) all patents and patent applications set forth on
Schedule 2.2(a)(i)(H)(1) hereto as well as any Derivative Patent
thereof and (2) subject to the rights therein in Sellers' favor
pursuant to the License Agreement between Witco and Buyer dated
as of the date hereof, all patents and patent applications set
forth on Schedule 2.2(a)(i)(H)(2) as well as any Derivative
Patent thereof;
(I) all trademarks, trademark registrations, tradenames and
servicemarks, whether registered or unregistered, set forth on
Schedule 2.2(a)(i)(I) hereof;
(J) the copyrights used exclusively in the Business;
(K) the eight mile sewer line connecting the Mapleton
Facility and the Greater Peoria Sanitary District (the "Mapleton
Sewer Line");
(L) all claims, known or unknown as of the Closing Date, (1)
for past infringement of any patents or patent applications
purchased hereunder, or other claims or choses in action relating
to the misuse or misappropriation of Technology Rights or (2)
relating to other Purchased Assets or Assumed Liabilities;
(M) all records of whatever nature relating to employment of
Continuing Employees, to the extent in Sellers' possession and to
the extent such files pertain to (1) skill and development
training and resumes, (2) seniority histories, (3) salary and
benefit information, (4) Occupational Safety and Health Act
medical reports, (5) active medical restriction forms and (6) any
other matters, disclosure of which by Sellers to Buyer is
permitted under Applicable Law without the consent of the
Continuing Employee, but not including any performance
evaluations or disciplinary records; and
(N) the Malaysia Assets.
(ii) an undivided ownership right, title and interest in and
to the following properties or rights owned by Sellers, free and
clear of all Encumbrances (collectively, the "Purchased
Co-Assets"):
(A) all trade secrets, unpatented inventions, protocols,
know-how, product formulae, product formulations, manufacturing
processes and procedures, products, records of inventions, test
information, drawings, diagrams, designs, research and
development files and operating manuals relating to technologies
used by or held for use by both (1) the Business and (2) any
other business of Sellers or any of their Affiliates (including
the Memphis Business) as of the Closing Date (the "Overlapping
Technologies/Products");
(B) except as set forth in Section 2.2(b)(xvi), the customer
lists of the Business; and
(C) any copyrights in any literature, brochures, articles,
labels, etc., that relate, but not exclusively, to the Business,
to the extent such rights exist in Sellers, but only to those
portions thereof that relate to the Business;
(b) Excluded Assets. Sellers shall not sell, transfer or assign,
and Buyer shall not purchase, the following assets of the Sellers (such
assets being collectively referred to as the "Excluded Assets"):
(i) all rights of Sellers arising under this Agreement and
the consummation of the transactions contemplated hereby;
(ii) all cash, commercial paper, certificates of deposit and
other bank deposits, treasury bills, investments, security
deposits and other cash equivalents and marketable securities of
Sellers;
(iii) all corporate minute books, stock records and tax
returns of Sellers and such other similar corporate books and
records of Sellers as may exist on the Closing Date; provided,
however, that Buyer shall be entitled to obtain copies of
such other records of Sellers relating to the Purchased Assets
and Purchased Co-Assets as Buyer may reasonably require in
connection with the operation of the Business or use of the
Purchased Assets subsequent to the Closing;
(iv) all interests in and to the corporate names of Sellers
or any Affiliates of Sellers, including "Witco" and all variants
thereof and all rights to the use of such names as trademarks;
(v) all receivables owing to Sellers in respect of the
Business, including third party receivables and intercompany and
intracompany receivables owed by Sellers and their Affiliates to
the Business (collectively, the "Receivables");
(vi) all rights to refunds in respect of Taxes that accrued
prior to the Closing;
(vii) all transfer pricing, distribution and other
agreements among Sellers and their Affiliates designed to
facilitate transfers of products and funds related to the
Business among Witco entities;
(viii) the land, building and related manufacturing assets
in respect of the metal alkyls manufacturing operations at the
Mapleton Facility, as indicated on the map set forth on Schedule
2.2(b)(viii) hereto (the "MOP Facility");
(ix) the building and facility for the conduct of research
and development located in Dublin, Ohio, and the machinery,
computer hardware and other personal property of Witco contained
therein other than those set forth on Schedules
2.2(a)(i)(A)(II)(2), 2.2(a)(i)(F), 2.2(a)(i)(H)(1) and
2.2(a)(i)(H)(2);
(x) the building and facility located in Singapore that is
used in part in the conduct of the Business, and the machinery,
computer hardware and other personal property contained therein
other than as set forth on Schedules 2.2(a)(i)(A)(II)(2),
2.2(a)(i)(F) and 2.2(a)(i)(H)(1) and 2.2(a)(i)(H)(2);
(xi) the shares of Enenco Incorporated owned by Witco;
(xii) all trade secrets, unpatented inventions, protocols,
know-how, product formulae, product formulations, manufacturing
processes and procedures, products, records of inventions, test
information, drawings, diagrams, designs, research and
development files and operating manuals in respect of those
products manufactured by Witco or its Affiliates, other than the
Business, and sold by the Business;
(xiii) all trade secrets, unpatented inventions, protocols,
know-how, product formulae, product formulations, manufacturing
processes and procedures, products, records of inventions, test
information, drawings, diagrams, designs, research and
development files and operating manuals relating to or held for
use by Sellers other than in the Business;
(xiv) all trademarks, trademark registrations, tradenames
and servicemarks used in the Business and other than those set
forth on Schedule 2.2(a)(i)(I) hereof, including those set forth
on Schedule 2.2(b)(xiv);
(xv) copyrights except as set forth in Sections 2.2(a)(i)(J)
and 2.2(a)(ii)(C).
(xvi) lists of customers of fatty acids;
(xvii) all records of any nature whatsoever related to
employment of the Employees prior to the Closing Date; provided
that Buyer shall receive copies of such records contemplated by
Section 2.2(a)(i)(M);
(xviii) all property and assets of Sellers used or held for
use in the Memphis Business other than Purchased Co-Assets; and
(xix) except as otherwise expressly set forth herein, all
property, wherever situated, of Sellers not used or held for use
in the Business.
(c) Assumed Liabilities. On the Closing Date, upon the terms and
subject to the conditions of this Agreement, Buyer shall assume the
following, and only the following liabilities of Sellers in respect of the
Business (collectively, the "Assumed Liabilities"), including:
(i) all the obligations of Sellers under the Business
Contracts, licenses, approvals, certificates, permits, franchises
or other evidences of authority issued in respect of the Business
by a Governmental Entity, in each case, included as part of the
Purchased Assets excluding obligations or liabilities resulting
from a breach or violation by any Seller;
(ii) all claims for damages, direct or consequential,
related to warranty or product liability claims in respect of
products of the Business that are a work in process or unpackaged
finished goods as of the Closing Date, other than in respect of
products that constitute finished goods stored in bulk prior to
the Closing Date and ultimately shipped in bulk;
(iii) all obligations related to the construction, safety
and health projects set forth on Schedule 2.8, excluding any
fines or penalties imposed by any Governmental Entity for any
instances of non-compliance with Applicable Laws occurring prior
to the Closing Date irrespective of whether or not such instance
of non-compliance is intended to be corrected pursuant to any of
the projects set forth on Schedule 2.8;
(iv) all Taxes relating to the Purchased Assets which accrue
after the effective time of the Closing; and
(v) all obligations and liabilities assumed by Buyer
pursuant to Article VII.
(d) Excluded Liabilities. Buyer does not assume and shall have no
responsibility for any liability in respect of the Business other than the
Assumed Liabilities (the "Excluded Liabilities"), including:
(i) all obligations and liabilities relating to or arising
out of any claims made by Employees or former employees (or their
dependents or beneficiaries) of the Business or labor
organizations, unions or associations representing Employees or
former employees of the Business for severance or other
separation benefits or for compensation or damages with respect
to the employment or the failure to offer employment to, the
failure to promote or the termination of employment of any such
Employee or former employee or which are based on, arise out of,
or result from, acts, facts, circumstances, events or conditions
occurring or existing prior to the Closing Date;
(ii) any third party and intracompany and intercompany
accounts payable of the Business and current liabilities of the
Business for withholding taxes, self-insurance and accrued
advertising and similar expenses that are accrued prior to the
Closing Date;
(iii) any liability, obligation or claim based on
circumstances existing before the Closing or the conduct of the
Business on or before the Closing, including the matters set
forth on Schedule 5.7;
(iv) all claims for damages, direct or consequential,
related to warranty or product liability claims in respect of
products of the Business that are finished goods and are packaged
or shipped prior to the Closing Date and finished goods stored in
bulk and ultimately shipped in bulk;
(v) any liabilities or obligations for employee benefit
plans or other arrangements (including the Benefit Plans) unless
such liability or obligation is expressly assumed by Buyer
pursuant to Article VII;
(vi) any and all liabilities and obligations relating to or
arising from any breach or violation by Sellers of any Business
Contract, licenses, approvals, certificates, permits, franchises
or other evidences of authority issued by a Governmental Entity;
(vii) any obligations of Sellers or their Affiliates under
any agreement purporting to limit such entity's ability to
compete in the Business;
(viii) any claim for vacation pay and sick pay, if any, to
the extent required to be paid by Witco pursuant to Section 7.7;
(ix) any and all obligations relating to Taxes related to
the Purchased Assets or the Purchased Co-Assets which accrue or
have accrued at or prior to the effective time of Closing;
(x) any and all liabilities and obligations with respect to
the Malaysia Project or the Malaysia Assets;
(xi) any and all liabilities, costs and obligations related
to noncompliance with Applicable Law related to Product
Stewardship Materials;
(xii) any and all liabilities, costs and expenses incurred
in connection with the Sellers' obligation to remove Obsolete
Inventory pursuant to Section 11.6; and
(xiii) any and all liabilities, costs and obligations
incurred by Buyer as a result of matters set forth on Schedule
5.8(c).
SECTION 2.3 Sale of Witco Surfactants. Upon the terms, and
subject to the conditions, of this Agreement, at the Closing Witco
Deutschland shall sell and transfer to Buyer, and Buyer shall purchase and
accept from Witco Deutschland, all of the issued and outstanding shares of
Witco Surfactants which are owned of record and beneficially by Witco
Deutschland, and Buyer shall cause Witco Surfactants, from and after the
Closing Date, to discharge, pay and perform any and all obligations and
liabilities of Witco Surfactants existing as of and after the Closing Date,
including obligations and liabilities under the Betriebsvereinbarung Nr.
13, 13a, 13b and 21 (the "Germany Pension Plan"). Buyer generally
acknowledges and agrees that, prior to the Closing Date, Witco Deutschland
will cause Witco Surfactants to (a) dispose of its
preferred stock interest in Witco Specialties Italia S.P.A., (b) transfer
its assets and employees not related to the Germany Business to an
Affiliate of Witco, (c) make cash distributions out of capital reserves and
1998 and 1999 (through the date prior to the Closing Date) earnings as
permitted by Applicable Law and (d) settle any payables or receivables
owing to or from Affiliates for periods prior to the Closing Date. Buyer
agrees that the Control and Profit and Loss Pooling Agreement
(Beherrschungs-und Gewinnabfuhrungsvertrag) between Witco Surfactants and
Witco Deutschland will be terminated prior to Closing.
SECTION 2.4 Procedures for Purchased Assets not Transferable. If
any property or rights included in the Purchased Assets (other than
permits) or owned by Witco Surfactants (other than permits) are not
assignable or transferable either by virtue of the provisions thereof or
under Applicable Law without the consent of one or more third Persons,
Sellers shall use their reasonable best efforts to obtain such consents
after the execution of this Agreement, but prior to the Closing Date, and
Buyer shall use its reasonable best efforts to assist in that endeavor. If
any of the permits included in the Purchased Assets or in the name of Witco
Surfactants are not assignable or transferable under Applicable Law without
the consent of one or more third Persons, it shall be Buyer's obligation to
obtain such consents or to obtain replacement permits issued in its name,
and Sellers shall use their best efforts to assist in that endeavor. If any
such consent cannot be obtained prior to the Closing Date and, the Closing
occurs, this Agreement and the related instruments of transfer shall not
constitute an assignment or transfer thereof and Buyer shall not assume
Sellers' obligations with respect thereto, but Sellers (or Buyer, as
applicable in the case of permits) shall use their reasonable best efforts
to obtain such consent as soon as possible after the Closing Date or
otherwise obtain for Buyer the practical benefit and burden of such
property or rights and Buyer (or Sellers, as applicable in the case of
permits) shall use their best efforts to assist in that endeavor.
SECTION 2.5 Title Issues. (a) Witco has provided true copies of
the unsigned title commitments set forth on Schedule 5.3 (collectively, the
"Title Commitments") issued by First American Title Insurance Company (the
"Title Company"), and related recent surveys, with respect to the owned
Facilities used in the operation of the NA Business. Such Title
Commitments, until signed, effectively constitute title reports with
respect to such Facilities. Buyer shall cause the Title Commitments and
surveys to be updated to the Closing, and shall cause to be delivered at
the Closing, an owner's policy of title insurance covering the fee title
with respect to each owned Facility used in the operation of the NA
Business, in an amount equal to at least the portion of the Purchase Price
for each such owned Facility and issued by First American Title Insurance
Company or such other company as Buyer shall approve in writing at standard
rate containing such endorsements as required by Buyer, subject only to the
exceptions set forth on Section A of Schedule 5.3; provided, however, that
such owners policy of title insurance shall not contain the exceptions set
forth on Section B of Schedule 5.3. Buyer shall pay all premiums in
connection with such title insurance. At the Closing, Witco shall convey
title to each owned Facility used in the operation of the NA Business and
the Mapleton Sewer Line pursuant to a limited warranty deed with covenants
against grantor's acts or equivalent document.
(b) At the Closing, Seller Witco Deutschland shall cause to be
delivered to Buyer the landbook register excerpts for the real estate owned
by Witco Surfactants.
(c) At the Closing, Seller Witco UK will sell, and Buyer will
purchase, the Flimby Facility in accordance with the terms contained in
this Agreement and such additional terms as set forth on Schedule 2.5(c).
(d) At the Closing, Witco Espana shall sell, transfer, convey,
assign and deliver to Buyer and Buyer shall purchase and accept from Witco
Espana, all right, title and interest of Witco Espana in and to the
Granollers Facility through the appearance of duly authorized
representatives of Witco Espana and Buyer in front of a notary in Spain
executing a
sale and purchase public deed on the terms contained in this Agreement and
in accordance with such additional terms as set forth on Schedule 2.5(d).
SECTION 2.6 Customer Remittances. Buyer agrees that, following
the Closing Date, it will forward promptly to Sellers any moneys, checks or
other instruments received by it in respect of receivables of the Business
for periods prior to the Closing Date. Sellers agree that, from and after
the Closing Date, they will forward promptly to Buyer any moneys, checks or
other instruments received by them in respect of receivables of the
Business for periods from and after the Closing Date.
SECTION 2.7 Environmental Matters. Notwithstanding anything to
the contrary contained herein, nothing in this Agreement, except Section
2.2(d)(iii) (solely to the extent it relates to matters not covered by the
Environmental Agreement), Section 2.2(d)(xi), Section 2.2(d)(xii), Section
2.4, Section 5.22, Section 5.23, Section 8.5 and, to the extent of breaches
of such Sections, Article XII, shall be deemed to address or relate to any
environmental or permitting matters, obligations, liabilities or laws
related either to the Business or the Germany Business, all of which are
addressed exclusively in the Environmental Agreement; provided that to the
extent any of the Purchased Assets would be deemed to include books,
records, forms and permits which relate to environmental matters affecting
the Facilities, the foregoing shall not be deemed to limit the definition
of Purchased Assets, such that all such books, records, forms and permits
shall, to the extent assignable, be conveyed to the Buyer pursuant to the
Assignment and Assumption Agreement.
SECTION 2.8 Construction, Safety and Health Projects. Schedule
2.8 sets forth a true and correct list of all the material construction,
safety and health projects (other than outstanding projects for routine and
other maintenance reflected in purchase orders constituting Contracts
hereunder) currently ongoing, or provided for in the projections of the
Business and the Germany Business in the Offering Memorandum and data room
established for this transaction, at any of the Facilities and the facility
owned by the Germany Business.
SECTION 2.9 Malaysia Project. Included among the Purchased Assets
are the Malaysia Assets owned by Witco International. Buyer acknowledges
that the Malaysia Assets and certain other assets not being sold hereby
were procured for the sole purpose of constructing and operating a
grassroots oleochemicals and derivatives manufacturing facility and
business in Malaysia, but that no construction has been undertaken in
connection therewith (the "Malaysia Project"). The Malaysia Project may be
terminated or abandoned without any liability to the Buyer other than the
write-off of the assets reflected on the Business Statement in respect of
such project.
ARTICLE III
Purchase Price, Closing Statement, Adjustments: Consistent Treatment
SECTION 3.1 Purchase Price. The total purchase price for the
Business and the shares of Witco Surfactants shall be $248,900,000 (the
"Purchase Price"), subject to adjustment after Closing as provided in
Sections 3.3, 3.4 and 3.5 (as so adjusted, the "Adjusted Purchase Price").
The Purchase Price and the Adjusted Purchase Price shall each be exclusive
of amounts in respect of value added tax or other similar Taxes.
SECTION 3.2 Closing Statement. (a) On the day immediately
preceding the Closing Date, Sellers shall conduct a physical count of the
Inventory located at the Facilities, and shall either conduct a physical
count or obtain confirmations of all Inventory that is located at
warehouses or toll manufacturers and shall support ownership (through bills
of lading or otherwise) of all Inventory that is then currently in-transit.
Buyer and its representatives will be
given the opportunity to observe all activities in respect of such physical
inventories. Not later than 90 days after the Closing Date, Sellers shall
deliver to Buyer (i) a statement of assets, consisting of Inventory and
property, plant and equipment of the Business (the "Proposed Business
Statement") as at the Closing Date, which shall be prepared in accordance
with methods used to prepare the Business Statement as set forth in Section
5.4, including reduction for Inventory reserves in accordance with Schedule
5.4(b), except that the first-in/first-out ("FIFO") value, prior to
reduction for reserves, of the Inventory previously valued using a moving
average cost or current cost methodologies will be computed, due to the
implementation of the SAP R3 accounting system, using standard costs with
variances capitalized based on Inventory turnover and (ii) a Proposed
Germany Statement. The Witco Surfactants Closing Date Germany Balance Sheet
included on the Proposed Germany Statement shall be audited by Sellers'
independent accountants and shall be prepared in accordance with Germany
statutory requirements and the Witco Surfactants Closing Date GAAP Balance
Sheet included on the Proposed Germany Statement shall be audited by
Sellers' independent accountants and shall be prepared in accordance with
GAAP. The Proposed Business Statement and the Proposed Germany Statement
are referred to herein collectively as the "Proposed Statements".
(b) The Proposed Statements shall be accompanied by a report of
Ernst & Young LLP, Sellers' independent accountants ("Sellers' Auditors"),
to the effect that such Proposed Statements and any related notes thereto
were prepared in accordance with this Agreement. In rendering the foregoing
report, Sellers' Auditors shall permit KPMG LLP, Buyer's independent
accountants ("Buyer's Auditors"), to review, at their request, the report
of Sellers' Auditors, including all work papers, schedules and calculations
related thereto prior to the issuance and delivery thereof and shall
continue to provide such access until the Proposed Statements have become
final in accordance with the provisions hereof.
(c) If Buyer does not notify Sellers in accordance with
subsection (i) below of any dispute of such Proposed Statements, the
Proposed Business Statement shall become the "Closing Business Statement"
for all purposes hereof, and the Proposed Germany Statement shall become
the "Closing Germany Statement" for all purposes hereof. (The Closing
Business Statement and the Closing Germany Statement are referred to herein
individually as a "Closing Statement" and collectively as the "Closing
Statements".) In the event Buyer has any dispute with regard to the
Proposed Statements or any item included therein, such dispute shall be
resolved in the following manner:
(i) Buyer shall notify Sellers in writing within 45 days
after Buyer's receipt of the Proposed Statements, which notice
shall specify in reasonable detail the nature of the dispute;
(ii) during the 15-day period following Sellers' receipt of
such notice, Sellers and Buyer shall attempt to resolve such
dispute; and
(iii) if, at the end of the 15-day period specified in
subsection (ii) above, Sellers and Buyer shall have failed to
reach a written accord with respect to such dispute, the
undisputed portion shall be paid immediately as provided in
Section 3.3(b) and the disputed portion shall be arbitrated by
the New York, New York office of PricewaterhouseCoopers, LLP, or
such other mutually agreed upon nationally recognized accounting
firm located in New York, New York (the "Referee"), in accordance
with the arbitration procedures set forth on Exhibit C hereof.
The Proposed Statements, as modified by any adjustments
determined to be appropriate by the Referee, shall then be the
"Closing Statements". The decision of the Referee in accordance
with the provisions hereof shall be final and binding (absent
manifest error or correction by the Referee); and there shall be
no right of appeal therefrom. Each party shall bear its own fees
and expenses (including attorneys' fees and expenses) incurred in
connection with the
arbitration, and each party shall pay one-half the fees
and expenses of the Referee.
(d) From the Closing Date until the final determination of the
Closing Statements, each party will grant to the other and its respective
representatives reasonable access during usual business hours to agents and
employees of such party and to the books, records and files of the Total
Business in its possession to enable such party to review and otherwise
satisfy itself as to the accuracy of the Closing Statements and the
preparation thereof.
SECTION 3.3 Post-Closing Purchase Price Adjustment. (a) The
amount of the Purchase Price shall be adjusted following the Closing Date
as follows: (i) the Purchase Price shall be increased by the amount if any,
by which (X) the net book value of the Inventory and property, plant and
equipment reflected on the Closing Business Statement is greater than the
net book value of the Inventory and property, plant and equipment as
reflected on the Business Statement, and (Y) the Tangible Net Worth
reflected on the Witco Surfactants Closing Date GAAP Balance Sheet is
greater than the Tangible Net Worth reflected on the Witco Surfactants
Adjusted Statement; and (ii) the Purchase Price shall be decreased by (A)
an amount, if any, by which (X) the net book value of the Inventory and
property, plant and equipment as reflected on the Closing Business
Statement is less than the net book value of the Inventory and property,
plant and equipment as reflected on the Business Statement, and (Y) the
Tangible Net Worth reflected on the Witco Surfactants Closing Date GAAP
Balance Sheet is less than the Tangible Net Worth reflected on the Witco
Surfactants Adjusted Statement, (B) an amount equal to the present value as
of the Closing Date of the liabilities of the Germany Pension Plan
calculated in accordance with ss.6a of the German tax code and using, in
accordance therewith, a valuation method based upon "Teilwert" entry age
funding with individual level premiums and a discount rate of 6% per annum,
and (C) an amount equal to the net present value (using a discount rate of
10% per annum) as of the Closing Date of the balance of deferred taxes
(excluding the balance of the Schering acquisition step-up, net) for the
Germany Business set forth on the Witco Surfactants Closing Date GAAP
Balance Sheet using a 35% German tax rate.
(b) If the sum of the adjustment required by this Section 3.3
results in a net increase in the Purchase Price, Buyer shall pay to
Sellers, by electronic bank transfer of immediately available funds, an
amount equal to such net increase within 10 days after such final
determination and delivery of the Closing Statements (or agreement as to
any undisputed portion of such adjustment). If the sum of the adjustments
required by this Section 3.3 results in a net decrease in the Purchase
Price, Sellers shall pay to Buyer, by electronic bank transfer of
immediately available funds, an amount equal to such net decrease within 10
days after such final determination and delivery of the Closing Statements
(or agreement as to any undisputed portion of such adjustment).
SECTION 3.4 Post-Closing Accrual Statement. No later than 90 days
after the Closing Date, Sellers shall prepare and deliver to Buyer a
statement (a "Post-Closing Accrual Statement") prorating all the items
listed in this Section 3.4 ("Prorated Items") through the day immediately
prior to the Closing Date. Sellers shall be liable to the extent the
Prorated Items relate to any time period prior to the Closing Date ("Seller
Prorations") and Buyer shall be liable to the extent Prorated Items relate
to periods from and subsequent to the Closing Date ("Buyer's Prorations").
The Prorated Items are as follows:
(a) all real estate, personal property and ad valorem Taxes
relating to the Purchased Assets or any of the assets owned by Witco
Surfactants (the "Subsidiary Assets") which relate to a period that begins
before and ends on or after the Closing Date (but, for the avoidance of
doubt, excluding transfer and other Taxes, duties and costs referred to in
Section 14.4). In connection with such proration of such Taxes, in the
event that actual Tax figures are not available at the time of delivery of
the Post-Closing Accrual Statement, such Taxes to be prorated shall be
based upon the actual Taxes for the preceding year for which actual
Tax amounts are available and such Taxes shall be reprorated upon request
of either party made within 60 days of the date that the actual amounts
become available; provided that the actual amount is at least 5% more or 5%
less than the amount on which the original proration was based, and
appropriate payment shall be made within 30 days after such reproration;
amounts calculated pursuant to this clause (a) that are Buyer's Prorations
shall be treated as Taxes accrued on or after the Closing Date, and amounts
that are Seller Prorations shall be treated as Taxes accrued before the
Closing Date;
(b) rents, Taxes and other items payable or paid by Sellers under
any Contract to be assumed by Buyer hereunder or included among the
Subsidiary Assets;
(c) the amount of sewer rents and charges for water, telephone,
electricity and other utilities and fuel;
(d) rebates and other discounts payable, or to be credited, to
customers under any Contracts to be assumed by Buyer hereunder, or included
among the Subsidiary Assets;
(e) the amount of any annuities, registration fees, issuance fees
and selected costs for the preparation, filing, prosecution, issuance and
maintenance or renewal of or with respect to any patents, licenses or
trademark registrations which are being assigned or transferred to Buyer
hereunder, in each case, in respect of the year or applicable portion
thereof during which Closing occurs; and
(f) the amount of any vacation and sick pay liability
assumed by Buyer.
In addition to the Prorated Items, the Post-Closing Accrual Statement shall
also reflect any payments made by Sellers prior to the Closing with respect
to any Prorated Items. Sellers agree to furnish Buyer with such documents
and other records as Buyer reasonably requests in order to confirm all
adjustment and proration calculations reflected on the Post-Closing Accrual
Statement.
SECTION 3.5 Accrual Purchase Price Adjustments. After the Closing
Date and in addition to any adjustments required pursuant to Section 3.3,
the Purchase Price shall be increased by the amount, if any, by which
Buyer's Prorations had been paid by Sellers prior to Closing and decreased
by the amount, if any, by which Seller Prorations had been paid by Buyer
after the Closing (collectively, "Accrual Purchase Price Adjustments"). All
Accrual Purchase Price Adjustments shall be reflected on the Post-Closing
Accrual Statement. If the Accrual Purchase Price Adjustment results in a
net increase in the Purchase Price, Buyer shall pay to Sellers, by
electronic bank transfer in immediately available funds, an amount equal to
such net increase within 10 days after the delivery of the Post-Closing
Accrual Statement. If the Accrual Purchase Price Adjustment results in a
net decrease in the Purchase Price, Sellers shall pay to Buyer, by
electronic bank transfer in immediately available funds, an amount equal to
such net decrease within 10 days after delivery of the Post-Closing Accrual
Statement. Final payments with respect to prorations contemplated by this
Section 3.5 which are not able to be calculated on or before the 90th day
after the Closing Date shall be paid by Buyer or Sellers, as the case may
be, within 10 business days after confirmation thereof.
SECTION 3.6 Consistent Treatment. The parties hereto agree to (a)
allocate the Adjusted Purchase Price in accordance with the allocation
schedule attached as Schedule 3.6 hereto, (b) treat and report the
transactions contemplated by this Agreement in all respects consistently
for purposes of any Taxes, and (c) not take any action inconsistent with
such obligation.
SECTION 3.7 U.K. Value Added Tax. (a) Sellers and Buyer shall use
all reasonable endeavors to procure that the sale of the UK Business under
this Agreement is treated
by H.M. Customs & Excise as a transfer of the UK Business as a going
concern for the purposes of section 49(1) of the Value Added Tax ▇▇▇ ▇▇▇▇
and Article 5 of the Value Added Tax (Special Provisions) Order 1995 (SI
1995/1268) except that Sellers shall not be required by virtue of this
Section 3.7(a) to make any appeal to any court against any determination of
H.M. Customs & Excise that the sale does not fail to be so treated.
(b) If notwithstanding Section 3.7(a) value added tax ("VAT") is
chargeable in respect of the supply of all or any part of the UK Business
under this Agreement, Buyer shall pay to Sellers, in addition to the
Purchase Price, a sum equal to the amount of VAT chargeable, within 10 days
of Sellers notifying Buyer of the same (which payment shall be treated as
an increase in the portion of the Purchase Price payable for the UK
Business) (against delivery by Sellers of an appropriate VAT invoice which
shall be delivered within 30 days of Closing).
(c) Buyer undertakes to Sellers that:
(i) Upon and immediately after Closing it shall use the Purchased
Assets in relation to the UK Business to carry on the same kind of
business (whether or not as part of any existing business of the
Buyer) as that carried on by the Sellers in relation to those
Purchased Assets before Closing; and
(ii) the Buyer is already or will as a result of such transfer of
the UK Business immediately upon Closing become a taxable person (as
defined in Section 3 of the Value Added Tax Act of 1994).
(d) If the Purchase Price as it relates to the UK Business is
increased by virtue of an adjustment pursuant to any provision of this
Agreement, Buyer shall pay to Sellers, in addition to the net increase
payable by Buyer, a sum equal to the amount of VAT chargeable by reference
to such net increase, within 10 days of Sellers notifying Buyer of the same
(which payment shall be treated as an increase in the portion of the
Purchase Price payable for the UK Business) (against delivery by Sellers of
an appropriate VAT invoice).
(e) If the Purchase Price as it relates to the UK Business is
decreased by virtue of an adjustment pursuant to any provision of this
Agreement, and Buyer has already accounted to Sellers for amounts in
respect of VAT in connection with the supply of all or any part of the UK
Business under this Agreement and such amount exceeds the VAT properly
chargeable in respect of that supply, Sellers shall pay to Buyer an amount
equal to such excess (which payment shall be treated as a reduction in the
Purchase Price payable for the UK Business) and deliver to Buyer an
appropriate credit note for VAT purposes.
(f) Sellers undertake that they will as soon as practicable after
the date hereof and in any event no later than two weeks prior to the
Closing Date either:
(i) provide to Buyer a copy of any notice delivered to H.M.
Customs and Excise making an election to waive exemption under
paragraph 2 of Schedule 10 to the Value Added Tax ▇▇▇ ▇▇▇▇ together
with a copy of the confirmation from H.M. Customs and Excise of
acceptance of such an election; or
(ii) confirm to Buyer that no election referred to in sub-clause
(g)(i) has been made.
(g) Sellers and Buyer intend that Section 49 of the Value Added
Tax Act 1994 shall apply to the transfer of the Business under this
Agreement and accordingly:
(i) at Closing Sellers shall deliver to Buyer all records
referred to in such Section 49;
(ii) Sellers shall not make any request to H.M. Customs and
Excise for the records referred to in Section 3.7(g)(i) to be
preserved by Sellers rather than Buyer; and
(iii) Buyer shall preserve the records referred to in Section
3.7(h)(i) for such period as may be required by law and during that
period permit Seller reasonable access to such records for the purpose
of inspection or copying (at Sellers' expense).
SECTION 3.8 Spanish Value Added Tax. (a) In connection with the
sale of the Spain Business, Seller Witco Espana shall deliver to Buyer an
invoice prepared in accordance with Royal Decree 2402/1985, as amended by
Royal Decree 267/1995 and Royal Decree 80/1996, and Buyer, concurrently
with the payment of the Purchase Price, shall pay the amount set forth on
such invoice to Seller Witco Espana.
(b) In connection with the transfer of Granollers Facility, Buyer
represents and agrees that:
(i) Buyer meets the conditions provided for in article 20.Two of
Law 37/1992 of 28th December and article 8 of Value Added Tax
Regulation (Royal Decree 1624/1992 of 29th December); and
(ii) In the notarial deed to be executed for the sale and
purchase of the Granollers Facility Buyer shall make the statement
required by article 8 of Value Added Tax Regulation providing that
Buyer (x) is a VAT tax payer and (y) is entitled to the full recovery
of the VAT paid in respect of the Spain Business.
(c) To the extent Buyer's representations in Section 3.8(b) are
true and correct, on or before the date of sale and purchase of the
Granollers Facility, Seller Witco Espana shall waive the VAT exemption
provided in article 20.One.22 of Law 37/1992 of 28th December and Seller
Witco Espana shall charge Buyer, and Buyer shall pay to Seller Witco
Espana, VAT as provided in clause (a) above.
(d) If the Purchase Price as it relates to Spain Business is
increased by virtue of an adjustment pursuant to any provision of this
Agreement, Buyer shall pay to Sellers, in addition to the net increase
payable by Buyer, a sum equal to the amount of VAT chargeable by reference
to such net increase, within 10 days of Sellers notifying Buyer of the same
(which payment shall be treated as an increase in the portion of the
Purchase Price payable for the Spain Business) (against delivery by Sellers
of an appropriate VAT invoice).
(e) If the Purchase Price as it relates to the Spain Business is
decreased by virtue of an adjustment pursuant to any provision of this
Agreement, and Buyer has already accounted to Sellers for amounts in
respect of VAT in connection with the supply of all or any part of the
Spain Business under this Agreement and such amount exceeds the VAT
properly chargeable in respect of that supply, Sellers shall pay to Buyer
an amount equal to such excess (which payment shall be treated as a
reduction in the Purchase Price payable for the Spain Business) and deliver
to Buyer an appropriate credit note for VAT purposes.
SECTION 3.9 Exchange Rate Fluctuations Disregarded. For purposes
of Sections 3.2 and 3.3, calculations shall be made on the basis of
exchange rates used in the Business Statement and the Germany Statement.
ARTICLE IV
Closing
SECTION 4.1 Closing Date. A preclosing of the transactions
contemplated hereby shall, subject to Article IX, take place at 10:00 a.m.
at the offices of Cravath, Swaine & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ August 30, 1999, and the closing (the "Closing") shall be
effective at 12:01 a.m. on September 1, 1999, or at such other places,
times or dates as Sellers and Buyer may agree (such date of the Closing
being referred to as the "Closing Date").
SECTION 4.2 Foreign Closings. Except as otherwise mutually agreed
by the parties, to the extent that any closing of the sale and purchase of
the Business is required to occur at a place within the jurisdiction of
formation of a foreign Seller or Witco Surfactants (whether by reason of
notarial deed or otherwise), such closing (a "Foreign Closing") shall take
place, and the executed closing documents shall be held in escrow by the
agent mutually appointed by the Buyer and Sellers, on or prior to the
Closing (but not prior to the satisfaction of all of the conditions set
forth in Article 9 relating to such Foreign Closing and the conditions
contained in the Foreign Agreements (as defined below)) at such times and
places as may be agreed to by Buyer and Sellers. The agent shall hold all
such executed documents until such time as it is advised in a writing
signed by Buyer and Sellers that the transactions contemplated hereby have
been consummated or terminated. Upon consummation of the transactions
contemplated hereby, the agent shall deliver to each party one fully
executed set of the documents which were being held in escrow by the agent.
If the transactions contemplated hereby are terminated, the agent shall
deliver to each party the documents executed by such party which were held
in escrow by the agent.
It is understood and agreed that the foreign Sellers, or some of
them, will execute with Buyer a separate acquisition agreement as may be
required with respect to the Purchased Assets held in countries outside the
United States and the Subsidiary Shares (the "Foreign Agreements"). It is
further understood and agreed that the Foreign Agreements are intended to
act only as the operative documents of transfer, and that such Foreign
Agreements do not alter, modify or amend in any way any of the terms or
provisions of this Agreement, including without limitation, terms and
provisions relating to Assumed Liabilities, representations and warranties
and indemnification. To the extent any conflict exists between any of the
terms of the Foreign Agreements and this Agreement, the terms of this
Agreement shall control.
SECTION 4.3 Transactions at Closing. At the Closing, and on the
basis of the representations, warranties, covenants and agreements made
herein and in the exhibits hereto and in the certificates and other
instruments delivered pursuant hereto, and subject to the terms and
conditions hereof:
(a) Transfer of Purchased Assets and Shares. Sellers shall
transfer and convey or cause to be transferred and conveyed to Buyer all
the Purchased Assets, Subsidiary Shares and Purchased Co-Assets, and shall
deliver or cause to be delivered to Buyer the Assignment and Assumption
Agreements, stock powers, the conveyance documents relating to Intangible
Rights, deeds, and such other good and sufficient instruments of transfer
and conveyance as shall be necessary to vest in Buyer title to all the
Purchased Assets, the Subsidiary Shares and Purchased Co-Assets. In
addition, Sellers shall deliver the certificates, opinions and other
documents required by Section 9.2.
(b) Payment of Purchase Price and Assumption of Assumed
Liabilities. In consideration for the transfer of the Purchased Assets,
Subsidiary Shares and Purchased Co-Assets, Buyer shall pay to the
corresponding Seller from which it is purchasing Purchased Assets,
Subsidiary Shares or Purchased Co-Assets the Purchase Price allocated
thereto by
electronic bank transfer in immediately available funds directly to the
accounts set forth on Schedule 4.3(b) hereof. For purposes hereof, the
Purchase Price allocated to the Germany Business and the Spain Business
will be converted to and paid in Euros, at the exchange rate for converting
US Dollars to Euros, and the Purchase Price for the UK Business shall be
converted to the British Pound at the exchange rate for converting U.S.
Dollars to the British Pound, in each case as set forth in The Wall Street
Journal on the business day immediately preceding the Closing Date. The
balance of the Purchase Price shall be paid in U.S. Dollars. In addition,
Buyer shall deliver to Sellers the Assignment and Assumption Agreements and
the certificates, opinions and other documents required by Section 9.1.
ARTICLE V
Representations, Warranties, Agreements and Covenants of Sellers
Witco, on behalf of itself and the other Sellers, and Witco
Surfactants, solely on behalf of itself and in respect of the German
Business and not jointly and severally with Witco, represent and warrant to
Buyer as follows:
SECTION 5.1 Organization. Each Seller and Witco Surfactants is
duly organized and validly existing in good standing under the laws of the
jurisdiction of its organization set forth on Schedule 5.1 hereof, and is
duly qualified to transact business as a foreign corporation in all
jurisdictions necessary to enable such Seller and Witco Surfactants to
conduct the Total Business. Each Seller and Witco Surfactants has all
requisite corporate power to own, lease and operate its properties and to
carry on its business as now being conducted.
SECTION 5.2 Due Authorization. Each Seller and Witco Surfactants
has full corporate power and authority to execute, deliver and perform this
Agreement and such Ancillary Documents to which it is a party, and the
execution and delivery of this Agreement and the Ancillary Documents and
the performance of all applicable obligations hereunder and thereunder have
been duly authorized by such Seller or Witco Surfactants. The execution,
delivery and performance of this Agreement and the Ancillary Documents is
not prohibited or limited by, and will not result in the breach of or a
default under: (a) any provision of the governing documents or By-Laws of
Sellers or Witco Surfactants, (b) any Contract set forth on Schedule 5.5
binding on any Seller or Witco Surfactants, or (c) any applicable order,
writ, injunction or decree of any Governmental Entity. This Agreement and
the Ancillary Documents have been duly executed and delivered by each
Seller and Witco Surfactants, to the extent party thereto; and, assuming
execution and delivery by the other parties thereto, constitute, or, in the
case of any ancillary documents to be executed and delivered on the Closing
Date, will constitute, the legal, valid and binding obligation of each
Seller and Witco Surfactants, to the extent party thereto, enforceable
against such party in accordance with their respective terms, except as
enforcement may be limited or affected by applicable bankruptcy,
insolvency, moratorium, reorganization or other laws of general application
relating to or affecting creditors' rights generally.
SECTION 5.3 Sufficiency of and Title to the Assets. (a) All
Sellers and Witco Surfactants have the right to sell, assign, transfer and
convey, and upon consummation of the transactions contemplated by this
Agreement will have transferred to Buyer, good and valid title to all the
Purchased Assets and Subsidiary Shares and an undivided title interest,
with Sellers, in the Purchased Co-Assets, in each case free and clear of
all liens, encumbrances, charges, equities and claims of every kind
("Liens"), except (x) Permitted Liens, (y) as set forth on Schedules
5.6(a), (b) and (c) and subject to obtaining any authorizations, exemptions
and consents listed on Schedule 5.11 and (z) in the case of Purchased
Co-Assets, Sellers' undivided interest therein.
(b) The Purchased Assets, Subsidiary Shares and Purchased
Co-Assets constitute and will constitute all the assets (other than the
Excluded Assets) used or held for use in the Total Business.
(c) All assets constituting machinery and equipment set forth on
the Business Statement or Germany Statement are located at a facility,
warehouse or other premises owned or leased by Sellers and included in the
Purchased Assets or owned or leased by Witco Surfactants, as applicable.
SECTION 5.4 Business Statements. (a) Except as set forth on
Schedule 5.4(a), the Business Statement fairly presents in all material
respects the account balances of the categories of assets stated in such
statement at the date thereof with respect to the NA Business, the Spain
Business and the UK Business. The property, plant and equipment account
balance, other than in respect of the Malaysia Project, is prepared in
accordance with GAAP. Inventory has been (i) valued using (A) moving
average cost methodology for all Inventory of the NA Business and for
Inventory of the Spain Business and (B) current cost methodology for
Inventory of the UK Business, which, in each case, approximates FIFO prior
to reduction for reserves, and (ii) subsequently reduced for reserves (in
the case of the Mapleton Facility, Janesville Facility and Lake River
warehouse in accordance with Schedule 5.4(b)).
(b) Except as set forth on Schedule 5.4(a), the portion of the
Germany Statement set forth under the heading "Witco Surfactants GmbH GAAP
Balance Sheet" was prepared in accordance with GAAP and fairly presents in
all material respects the financial condition of Witco Surfactants as of
the date thereof.
(c) The profit and loss statement of Witco Surfactants attached
as Exhibit D hereto for the year ended December 31, 1998, was prepared in
accordance with GAAP and fairly presents in all material respects the
results of its operations for the period covered thereby. This statement
does not contain any items of special or non-recurring income or other
income not earned in the ordinary course of business except as set forth on
the "Analysis of Other Expense (Income) - Net" on the profit and loss
statement of Witco Surfactants.
SECTION 5.5 Certain Contracts. (a) Set forth on Schedule 5.5 are
all written contracts of the following types in respect of the Business and
the Germany Business and to which any of the Sellers or Witco Surfactants
is a party or by which any one or more of them are bound (collectively, the
"Contracts"):
(i) All contracts with any customer, toll manufacturer,
consignee, consignor, distributor, manufacturer, broker,
franchisor, franchisee, dealer, sales representative, consultant,
agent or management entity, including distribution contracts,
manufacturer representative contracts, management contracts,
agency contracts and bonus contracts;
(ii) All contracts relating to any joint venture, licensing
arrangement, partnership or sharing of profits or losses with any
person or entity or permitting any person or entity to utilize
any technology, know-how or proprietary information of the
Business or the Germany Business;
(iii) All contracts that contain an obligation of
confidentiality with respect to any information furnished to a
third party or received from a third party and relating to the
Business or the Germany Business;
(iv) All personal property leases which involve or are
reasonably expected to involve expenditures in excess of $25,000
during any fiscal year of the Business or the Germany Business,
and all real property leases related thereto;
(v) All contracts relating to any Intangible Rights included
in the Business or the Germany Business;
(vi) All purchase orders and contracts for the purchase of
materials, products or supplies that relate to the Business or
the Germany Business and that are for a term of more than 12
months or that involve or are reasonably expected to involve
aggregate payments of more than $500,000 during any fiscal year
or that were entered into other than in the ordinary course of
the Business or the Germany Business;
(vii) All contracts for construction for the purchase of
real estate, improvements, equipment, machinery and other items
which constitute capital expenditures or which involve or are
reasonably expected to involve expenditures in excess of $50,000
during any fiscal year of the Business or the Germany Business;
(viii) All contracts with any other division of Witco or any
Affiliate thereof (other than those contracts described in
Section 2.2(b)(vii) hereof);
(ix) All contracts with any third parties, or pursuant to
any consortiums, for the testing of products manufactured by the
Business or the Germany Business; and
(x) All contracts that involve or may involve the payment or
receipt by a Seller or Witco Surfactants (whether in payment of
debt, as a result of a guarantee or indemnification, for goods or
services or otherwise) in excess of $50,000 over the term thereof
or which are cancelable by a Seller or Witco Surfactants only
after giving at least 30 days' notice without any penalty or
other financial obligation.
(b) Except as otherwise set forth on Schedule 5.5, true and
correct copies of all Contracts listed on Schedule 5.5, together with all
amendments, waivers or changes in respect thereof have been made available
to Buyer. To the extent that Schedule 5.5 lists any oral Contracts in
respect to the Business or the Germany Business, Buyer acknowledges and
agrees that such disclosure has been provided as an accommodation to Buyer,
and that none of the Sellers or Witco Surfactants makes any representation
or warranty of any nature whatsoever regarding the accuracy or completeness
of any such disclosure. Buyer further acknowledges and agrees that Schedule
5.5 has been annotated to reflect that certain of the Contracts disclosed
thereon are not exclusively related to the Business or the Germany
Business, and that such Contracts will either be assigned to Buyer in part,
or appropriate introductions shall be made to the contracting parties
thereunder, to enable Buyer, at Buyer's option, to enter into appropriate
commercial relationships with respect thereto.
SECTION 5.6 Intangible Rights. All patents, patent applications,
trademarks, trademark registrations, trade names, servicemarks, copyright
registrations and licenses and other rights related thereto which are owned
or used in the Business are set forth on Schedules 2.2(a)(i)(G), (H)(1),
(H)(2) and (I) or owned or used by the Germany Business are set forth on
Schedules 5.6(a) and (b), except for those excluded as Excluded Assets.
Except as set forth on Schedule 5.6(c) to Sellers' knowledge, (i) there are
no outstanding claims or threatened claims of patent infringement, (ii)
none of the patents, trademarks, service marks, tradenames or copyrights
included in the Purchased Assets or Purchased Co-Assets are being infringed
upon by any other party, (iii) none of such rights is subject to any
outstanding order, decree, ruling, charge, injunction, judgment or
stipulation and (iv) none of the trademarks, service marks, tradenames or
copyrights included in the Purchased Assets or the Purchased Co-Assets
infringes upon any valid trademarks, service marks, tradenames or
copyrights of others.
SECTION 5.7 Litigation. Schedule 5.7 is a list and brief
description, as of the date of this Agreement, of all litigation,
proceedings and claims by or against any Seller or Witco Surfactants
pending or, to Sellers' Knowledge, threatened against any Seller or Witco
Surfactants, in each case relating to the Business or the Germany Business.
SECTION 5.8 Employee Benefit Plans.
(a) Listing. Schedule 5.8(a) is a list of all employment
contracts, employee benefit plans and other employee arrangements
(including "plans" within the meaning of Section 3(3) of ERISA and
collective bargaining, works council, stock purchase, stock option,
employment, compensation, deferred compensation, pension, retirement,
severance, termination, separation, vacation, sickness, insurance, welfare
and bonus plans and agreements) under which Sellers or Witco Surfactants,
with respect to any employee of any of them who works or is employed in
connection with the Business or with respect to any former employee of the
Business who is or was subject to a collective bargaining agreement has any
obligation (the "Benefit Plans"). Benefit Plans which are (i) a Stand Alone
Plan or (ii) assumed by Buyer by operation of law shall be collectively
referred to herein as "Assumed Plans".
(b) Documents. With respect to each Benefit Plan, a complete and
correct copy of each of the following documents (if applicable) has been
provided or made available to Buyer: (i) the most recent plan and related
trust documents, and all amendments thereto, and all agreements; (ii) with
respect to Assumed Plans, (A) the most recent summary plan description, and
all related summaries of material modifications thereto; (B) the most
recent Form 5500 (including schedules and attachments); (C) the most recent
Internal Revenue Service determination letter; and (D) the most recent
actuarial reports (including for purposes of Financial Accounting Standards
Board report no. 87, 106 and 112).
(c) Multiemployer Plans. Except as disclosed in Schedule 5.8(c),
Witco and its Affiliates have not during the preceding six years had any
obligation or liability (contingent or otherwise) with respect to a Benefit
Plan which is described in Section 4063, 4064, 4203 or 4205 of ERISA for
which Buyer will be liable.
(d) Tax Qualification. The Assumed Plans and their related trusts
intended to qualify under Sections 401 and 501(a) of the Code,
respectively, have received a favorable determination letter from the
Internal Revenue Service with respect to such qualification and to the
Knowledge of Sellers no event has occurred which is reasonably likely to
adversely affect such qualification.
(e) Contributions. All contributions or other payments required
to have been made under any Assumed Plan pursuant to Applicable Law or the
terms of such Assumed Plan (or any agreement relating thereto) have been
timely and properly made.
(f) Compliance with Laws. The Assumed Plans have been maintained
and administered in accordance with their terms and Applicable Law.
(g) Claims. There are no pending or, to the Knowledge of Sellers,
threatened actions, claims or proceedings against or relating to any
Assumed Plan other than routine benefit claims by persons entitled to
benefits thereunder.
(h) Retiree Medical. Except as disclosed in Schedule 5.8(h), the
Sellers and Witco Surfactants do not maintain or have an obligation to
contribute to retiree life or retiree health plans which provide for
continuing benefits or coverage for current or former officers, directors
or employees of the Business except (i) as may be required under Part 6 of
Title I of ERISA) and at the sole expense of the participant or the
participant's beneficiary or (ii) a medical expense reimbursement account
plan pursuant to Section 125 of the Code.
(i) Change in Control. Except as disclosed in Schedule 5.16 or in
connection with equity compensation, neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby
will (i) result in any payment becoming due to any employee (current,
former or retired) of the Business, (ii) increase any benefits under any
Benefit Plan or (iii) result in the acceleration of the time of payment of,
vesting of or other rights with respect to any such benefits.
(j) UK Benefit Plans. Sellers' Benefit Plans, which are subject
to the laws of the United Kingdom (each, a "UK Benefit Plan") (A) are
exempt approved schemes within the meaning of Section 592 of the Income and
Corporation Taxes Act 1988 and there is no reason why approval may be
withdrawn, and (B) are contracted out schemes within the meaning of the
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and there is in force contracting out certificates
covering the Sellers and Witco Surfactants, as applicable, and there is no
reason why any such certificate should be canceled. Every person who has at
any time had the right to join, or apply to join, a U.K. Benefit Plan has
been properly advised of that right. No person is excluded from membership
of any U.K. Benefit Plan or from any of the benefits thereunder in
contravention of Article 141 of the Treaty of Rome, the Pensions ▇▇▇ ▇▇▇▇
or other Applicable Laws or requirements or the provisions of the U.K.
Benefit Plan.
SECTION 5.9 Labor Matters. (a) Except as set forth on Schedule
5.9, the Sellers and Witco Surfactants are not parties to any labor or
collective bargaining agreement with respect to the Business, and no
employees of the Business are represented by any labor organization. With
respect to the NA Business, within the preceding three years there have
been no representation or certification proceedings, or petitions seeking a
representation proceeding, pending or, to the Knowledge of Sellers,
threatened in writing to be brought or filed with the National Labor
Relations Board or any other labor relations tribunal or authority. With
respect to the NA Business, within the preceding two years, to the
Knowledge of Sellers, there have been no organizing activities involving
the Business with respect to any group of employees of the Business.
(b) Except as set forth on Schedules 5.7 and 5.9, there are no
strikes, work stoppages, slowdowns, lockouts, arbitrations or grievances or
other labor disputes pending or, to the Knowledge of Sellers and Witco
Surfactants, threatened in writing against or involving the Business. There
are no unfair labor practice charges, grievances or complaints pending or,
to the Knowledge of Sellers and Witco Surfactants, threatened in writing by
or on behalf of any employee or group of employees of the Business against
any Seller or Witco Surfactants.
(c) Except as set forth on Schedules 5.7 and 5.9, there are no
complaints, charges or claims against Sellers and Witco Surfactants pending
or, to the Knowledge of Sellers and Witco Surfactants, threatened to be
brought or filed with any governmental authority, arbitrator or court
against any Seller or Witco Surfactants based on, arising out of, in
connection with, or otherwise relating to the employment or termination of
employment of any individual who is or was employed in the Business.
(d) Sellers and Witco Surfactants are in compliance with
Applicable Law relating to the employment of labor, including Applicable
Law relating to wages, hours, WARN, collective bargaining, discrimination,
civil rights, safety and health, workers compensation and the collection
and payment of withholding and/or social security taxes and any similar
tax.
(e) With respect to the NA Business, there has been no "mass
layoff" or "plant closing" as defined by WARN with respect to the Business
within the six (6) months prior to Closing.
SECTION 5.10 Default. Except as set forth on Schedule 5.10, none
of Sellers or Witco Surfactants, and to Sellers' Knowledge, no other party
to any written Contract disclosed
on Schedule 5.5, is in default under any provisions thereof, and no
condition or set of facts exists which, with notice, lapse of time or both
would constitute a default thereunder on the part of Sellers or Witco
Surfactants, to the extent party thereto, or, to Sellers' Knowledge, on the
part of any other party thereto.
SECTION 5.11 Consents. Except as set forth on Schedule 5.11 and
subject to the terms of Section 2.4, no notice to, filing with,
authorization of, exemption by, or consent of, any Person or Governmental
Entity is required for Sellers or Witco Surfactants to consummate the
transactions contemplated hereby.
SECTION 5.12 Receivables. All receivables to be shown on the
Closing Germany Statement as at the Closing Date will have arisen in the
ordinary course of business.
SECTION 5.13 Equity Interests. (a) The authorized capital stock
of Witco Surfactants consists of 6,000,000 Deutsche Marks, of which three
shares totaling 5,910,000 Deutsche Marks, are issued and outstanding, all
of which outstanding shares are validly issued, and are fully paid and
non-assessable. A share in the nominal amount of 90,000 Deutsche Marks was
redeemed in 1982. Witco Deutschland now owns, and at all times after the
date hereof and on and through the Closing Date will own, beneficially and
of record all of the issued and outstanding shares of Witco Surfactants,
free and clear of all Liens, options, calls or commitments (other than to
Buyer pursuant to this Agreement) of any character whatsoever, other than
Permitted Liens.
(b) Witco Surfactants does not have outstanding, or is not bound
by or subject to, any subscription, option, warrant, call, right, contract,
commitment, agreement, understanding or arrangement to issue any additional
shares of capital stock, including any right of conversion or exchange
under any outstanding security or other instrument, other than Permitted
Liens.
SECTION 5.14 Compliance with Applicable Laws. Except as set forth
in Schedule 5.14, the Business and the Germany Business are operated in
compliance with Applicable Law. Except as set forth in Schedule 5.14, none
of the Sellers or Witco Surfactants has received during the past two fiscal
years any written communication from a Governmental Entity that alleges
that the Business or the Germany Business is not in compliance with any
Applicable Law. The representations and warranties made pursuant to this
Section 5.14 shall not be deemed to apply to any instances of
non-compliance intended to be corrected pursuant to any of the projects set
forth on Schedule 2.8.
SECTION 5.15 ***
SECTION 5.16 Management Compensation. No member of the management
of the Total Business has received or been offered a bonus, or any similar
type of compensation, that is in any manner contingent upon the
consummation or performance of the transactions contemplated in this
Agreement, except as set forth on Schedule 5.16. Sellers and Witco
Surfactants have provided Buyer with a true and correct copy of each
written agreement set forth on Schedule 5.16 and, if any agreement set
forth on Schedule 5.16 is an oral agreement, a true and correct summary
thereof.
SECTION 5.17 No Changes. (a) Except for (i) termination of all
miscellaneous spending and spending for growth projects (***), including
projects set forth on Schedule 5.17, and reductions for maintenance
spending, in each case, consistent with Witco capital expenditures for its
business other than the Total Business, not replacing certain employees
whose employment terminated as
*** Material has been omitted pursuant to a request for confidential treatment.
Such omitted material has been filed with the Securities and Exchange
Commission separaterly.
a result of attrition, since December 31, 1998, the Sellers and Witco
Surfactants have conducted the Business only in the ordinary course of
business and in accordance with their budgets, for fiscal year 1999,
including the capital expenditures as budgeted.
(b) Without limiting the generality of the foregoing sentence,
except as disclosed in Section 5.17(a) or on Schedule 5.17, since December
31, 1998, there has not been;
(i) any change in the Business or assets of the Business or
the financial condition, assets, liabilities or results of
operations of Witco Surfactants, except for changes in the
ordinary course of business consistent with past practice;
(ii) except for changes required due to the implementation
of SAP on May 1, 1999, or changes to accounting methods required
to account for Inventory and Inventory reserves in accordance
with the terms of this Agreement, any change in accounting
methods with respect to the Purchased Assets and Witco
Surfactants;
(iii) any casualty, damage, destruction, or loss, whether or
not covered by insurance, adversely affecting the Purchased
Assets or the Total Business, or any accidents in which any
employees or other persons have been killed or seriously injured;
(iv) any failure to maintain the Purchased Assets in the
ordinary course or to make budgeted capital expenditures with
respect to the Total Business, including, without limitation, in
respect of the construction, safety and health projects set forth
on Schedule 2.8 in a timely and workmanship like manner;
(v) any direct or indirect redemption, purchase or other
acquisition of any Witco Surfactants stock;
(vi) except as set forth in Section 5.16 and except for a
one-time special award proposed to be paid to a research
scientist at the Dublin Facility any increase or decrease in the
compensation, including salary, bonuses, special compensation,
severance or termination pay payable to any employee or increase
in any benefit plan obligations, other than normal merit
increases in the ordinary course of business consistent with past
practice;
(vii) any cancelation or waiver of any right relating to the
operation of the Total Business other than in the ordinary course
of business;
(viii) any sale, transfer, lease or other disposition of any
Purchased Asset or Purchased Co-Asset, except in the ordinary
course of business consistent with past practice;
(ix) except as set forth on Schedule 7.1, any transfer of
any employees from Witco or any of its Affiliates to the Germany
Business;
(x) any agreement or commitment to take or do any of the
actions described in subsections (i) through (ix) above.
SECTION 5.18 Personal Property. Except as set forth on Schedules
5.17 and 5.18 and except as a result of terminated or reduced spending
referred to in Section 5.17, the plants, buildings, structures and
equipment included in the Purchased Assets and currently used in the
Business are in satisfactory operating condition and repair, ordinary wear
and tear excepted.
SECTION 5.19 Real Property. None of Sellers or Witco Surfactants
have received notice of any pending zoning or other land-use regulation
proceedings or any proposed change in any Applicable Laws that could
reasonably be expected to detrimentally affect the use or operation of the
Real Property, nor have any of the Sellers or Witco Surfactants received
notice of any special assessment proceedings affecting the Real Property,
or applied for any change to the zoning or land use status of the Real
Property. There is not pending any eminent domain proceeding in respect of
the Real Property, and none of any Seller or Witco Surfactants has received
notice of such a proceeding.
SECTION 5.20 Taxes. Except as set forth on Schedule 5.20, Witco
Surfactants has (a) timely filed all Tax returns required to be filed by it
with respect to all Taxes, (b) paid all Taxes required to be paid by it, or
such Taxes have been paid on its behalf, and (c) all Taxes that are
required to be collected or withheld have been duly collected or withheld
and any such amounts that are required to be remitted to any taxing
authority have been duly remitted. All such returns have been prepared in
accordance with all Applicable Laws and requirements and are correct and
complete. The accruals for Taxes contained in the Germany Statement are not
less than all unpaid liabilities for Taxes for all periods ended on or
before the respective dates of such Germany Statement and include adequate
provisions for all deferred Taxes, and nothing has occurred subsequent to
such dates to make any of such accruals inadequate. All Taxes for periods
beginning after the dates of the Germany Statement have been paid or are
adequately reserved against. Sellers have timely filed all information
returns or reports which are required to be filed and have accurately
reported all information required to be included on such returns or
reports. No representative of any government taxing authority has made a
pending proposal (whether in writing or verbal, formal or informal) to
assert any deficiency in Taxes, adjust any return, or revise the manner in
which any Tax liability is determined with respect to Witco Surfactants. No
return of Witco Surfactants has been audited by the relevant authorities
where any deficiencies or proposed deficiencies resulting from such audit
have not been paid or adequately reserved in the Germany Statement.
SECTION 5.21 Value Added Tax. Seller Witco U.K. is a registered
taxable person for the purpose of the Valued Added Tax ▇▇▇ ▇▇▇▇.
SECTION 5.22 Environmental, Occupational, Health and Safety
Matters. (a) Except as set forth on Schedule 5.22, all operations and
facilities of each Seller and Witco Surfactants related to or used in the
conduct of the Business and the Germany Business are in compliance with all
applicable Environmental, Occupational, Health and Safety Laws.
(b) Except as set forth on Schedule 5.22 hereto, none of Sellers
or Witco Surfactants is aware of or has received notice of any past,
present or future events, conditions, circumstances, activities,
arrangements, practices, incidents, actions or plans which may interfere
with or prevent compliance or continued compliance with the Environmental,
Occupational, Health and Safety Laws or which may give rise to any
occupational safety or health related statutory, common law or other legal
liability, or otherwise form the basis of any claim, action, demand, suit,
proceeding, hearing, study, inquiry, investigation, notice or demand or
notice of violation based on or related to the conduct of the Business.
(c) Except as set forth on Schedule 5.22 hereto, there is no
civil, criminal or administrative claim, action, proceeding, hearing,
study, inquiry, investigation, or notice of violation pending or, to the
Knowledge of Sellers, threatened against or relating to any Sellers' or
Witco Surfactants' conduct of the Business or the Germany Business with
respect to Environmental, Occupational, Health and Safety Laws.
SECTION 5.23 Permits. Except as set forth on Schedule 5.23, the
Sellers and Witco Surfactants possess all permits, including permits
pursuant to Environmental, Occupational, Health and Safety Laws, which are
required in order to operate the Total Business
as currently operated, all such permits are in full force and effect and
the Sellers and Witco Surfactants are not in violation of any such permit
and no proceedings for the suspension or cancelation of any permits are
pending or threatened in writing.
SECTION 5.24 No Broker-Sellers. Except for Deutsche Bank
Securities, Inc., none of Sellers nor Witco Surfactants have engaged any
broker or any other person who would be entitled to any brokerage fee or
commission in respect of the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby.
SECTION 5.25 Year 2000 Readiness Disclosure. Sellers and Witco
Surfactants have exercised and will exercise reasonable commercial efforts
to ensure that their operation of the Total Business will not be adversely
impacted in any way by a Year 2000 Problem to computer systems, software or
equipment owned, leased or licensed by them or their Affiliates. These
efforts have included or will include: implementation of SAP R3 software,
which has been represented by its manufacturer to be Year 2000 compliant,
as Seller's primary business software system; inventory, remediation and
testing of potentially affected systems at each location; replacement,
upgrade or other remediation of all items identified as non-compliant on
Schedule 5.25 hereto; and systematic contact and communications with
critical third-party suppliers of materials, services and equipment to
ensure appropriate Year 2000 readiness on the part of such third parties.
SECTION 5.26 Mapleton Sewer Line. The Mapleton Sewer Line is in
good working repair and has adequate capacity to service the facilities
currently serviced by it as they are currently operated.
SECTION 5.27. Employees. Schedule 7.1 is a list of all employees
of the Business and the Germany Business as of June 1, 1999, indicating (a)
the date of hire and place of employment of each employee listed therein
and (b) the position held by each employee and the base salary, if
available, payable to each employee, including base salary. On or prior to
the Closing Date, Sellers and Witco Surfactants shall make such revisions
to Schedule 7.1 in order that it be accurate as of the Closing Date and
shall add base salary information for all employees listed thereon.
ARTICLE VI
Representations, Warranties, Agreements and Covenants of Buyer
Buyer represent and warrants to, and agrees with, Sellers as
follows:
SECTION 6.1 Organization. Buyer is duly organized and validly
existing under the laws of the Federal Republic of Germany, and is duly
qualified to transact business as a foreign corporation in all
jurisdictions necessary to enable Buyer to consummate the transactions
contemplated by this Agreement. Buyer has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
business as now being conducted.
SECTION 6.2 Due Authorization. Buyer has full corporate power and
authority to execute, deliver and perform this Agreement and the Ancillary
Documents and the execution and delivery of this Agreement and the
Ancillary Documents and the performance of all obligations hereunder and
thereunder has been duly authorized by Buyer. The execution, delivery and
performance of this Agreement and the Ancillary Documents by Buyer is not
prohibited or limited by, and will not result in the breach of or a default
under, (a) any provision of the Certificate of Incorporation or By-Laws (or
equivalent constitutive documents) of Buyer, (b) any agreement or
instrument binding on Buyer or (c) any applicable order, writ, injunction
or decree of any Governmental Entity. This Agreement and the Ancillary
Documents have been
duly executed and delivered by Buyer and constitute, or, in the case of the
ancillary documents to be executed and delivered on the Closing Date will
constitute, the legal, valid and binding obligation of Buyer, enforceable
against Buyer in accordance with their respective terms, except as
enforcement may be limited or affected by applicable bankruptcy,
insolvency, moratorium, reorganization or other laws of general application
relating to or affecting creditors' rights generally.
SECTION 6.3 Consents. Except as shown on Schedule 6.3, no notice
to, filing with, authorization of, exemption by, or consent of, any Person
or Governmental Entity is required for Buyer to consummate the transactions
contemplated hereby.
SECTION 6.4 Litigation. There is no litigation, proceeding or
claim pending or, to Buyer's knowledge, threatened relating to or affecting
Buyer's ability to purchase or operate the Business or purchase the
Subsidiary Shares and operate the Germany Business, or assume the Assumed
Liabilities.
SECTION 6.5 No Contemplated Sales. Neither the Buyer nor any of
its Affiliates or representatives thereof have any agreements as of the
date hereof relating to the sale or other disposition of all or
substantially all of the Purchased Assets or Subsidiary Shares following
the Closing.
SECTION 6.6 No Broker-Buyer. Except for ▇▇ ▇▇▇▇▇▇▇▇▇▇, Buyer has
not engaged any broker or any other person who would be entitled to any
brokerage fee or commission in respect of the execution and delivery of
this Agreement or the consummation of the transactions contemplated hereby.
SECTION 6.7 Availability of Funds. Buyer has cash available or
existing borrowing facilities or commitments which, together with their
available cash, are sufficient to enable them to consummate the
transactions contemplated by this Agreement.
ARTICLE VII
Employees, Pension and Other Benefit Plans
SECTION 7.1 Employment of Employees of the Business. The parties
hereto intend that there shall be continuity of employment with respect to
the employees of the Business or the Germany Business listed on Schedule
7.1 hereto at the Closing Date (the "Employees"), and Buyer shall offer
employment, commencing on the Closing Date, to all Employees, including
those on vacation, leave of absence, or disability, who were employed by
the Business immediately prior to the Closing Date, on the same salary
terms and with substantially comparable benefits as those provided to such
Employees by Sellers immediately prior to the Closing (it being understood
that Buyer will not provide a defined benefit pension plan for employees of
the NA Business but will provide a savings plan which currently offers a 4%
profit sharing contribution by Buyer) and with such other terms and
conditions as may be required under Applicable Law or under the terms of
any applicable collective bargaining agreement; provided, however, that all
Continuing Employees of the NA Business shall be offered "at-will"
employment unless otherwise required pursuant to an obligation assumed by
Buyer under this Article VII and, except as provided in Sections 7.2 and
7.3, nothing herein shall be construed as preventing Buyer from changing
the salary terms or benefits provided to Employees. Employees who are to be
offered employment by Buyer pursuant to this Section 7.1 and who accept
such employment and Employees who transfer automatically by virtue of the
UK Employment Regulations, Spanish Employment Regulations or because they
are employees of Witco Surfactants shall hereafter be referred to as
"Continuing Employees."
SECTION 7.2 Maintenance of Benefits; Service Credit. (a)
Maintenance of Benefits Generally. Buyer shall maintain (or cause its
subsidiaries to maintain) for a period of one year after the Closing Date,
without interruption, employee compensation, benefit plans, programs and
arrangements (excluding equity-based compensation) that are, in the
aggregate, substantially comparable to, excluding equity-based
compensation, those provided pursuant to the Benefit Plans in effect on the
date of this Agreement.
(b) Service Credit. Continuing Employees shall be given credit
for service with the Sellers and Witco Surfactants for purposes of
eligibility and vesting under any employee benefit plan maintained by Buyer
and for benefit accrual purposes under any Assumed Plan.
SECTION 7.3 Severance Benefits. (a) Continuation of Severance
Program. Without limiting the generality of Section 7.2(a), for a period of
one year after the Closing Date, Buyer shall provide (or cause its
subsidiaries to provide) to each Continuing Employee severance pay and
benefits that are no less favorable than the greater of the severance pay
and benefits (i) provided to similarly situated employees of Buyer under
their severance benefit plans and practices then in effect and (ii)
provided by Sellers to (A) their employees in the United States under the
Witco Corporation Enhanced Severance Program under the Witco Corporation
Severance Plan and (B) their employees in accordance with applicable
collective bargaining agreements, applicable laws and applicable works
council rules. Witco shall not, in its capacity as plan administrator, (i)
make any determination that failure by Buyer to offer a defined benefit
pension plan is a triggering event for termination under the Witco
Corporation Severance Plan, the Witco Corporation Enhanced Severance
Program under the Witco Corporation Severance Plan or the Witco Corporation
Change in Control Severance Program under the Witco Corporation Severance
Plan or (ii) take any other action to cause severance benefits to be paid
under such severance plan or program (to the extent not otherwise required
to be paid under the respective terms of such plan or program if such
action by Witco were not taken) if, as a result of such action by Witco,
Buyer would be liable for such severance benefits under Section 7.3(b)
hereof.
(b) Severance Liability. Buyer shall be responsible for and shall
provide all severance benefits due to Continuing Employees as a result of
the termination of their employment with Buyer on and after the Closing
(including as a result of the transactions contemplated by this Agreement).
SECTION 7.4 Retirement Plans. (a) Witco Corporation Retirement
Plan. Prior to the Closing Date or as soon as reasonably practicable
thereafter, Witco shall use its best efforts to cause the Witco Corporation
Retirement Plan to be amended to provide that each Continuing Employee who
participates in such plan on the Closing Date shall be fully vested in his
or her entire accrued benefit as of the Closing Date. Such benefits shall
be payable to each such Continuing Employee, or in the case of a Continuing
Employee's death to the Continuing Employee's beneficiaries, in accordance
with the terms of the Witco Corporation Retirement Plan and the
requirements of applicable law.
(b) Stand Alone Plan. As of the Closing Date, Buyer shall assume
all liabilities and obligations (including for any former employees of the
Business) for the stand-alone plan listed on Schedule 7.4(b) (the "Stand
Alone Plan") maintained by the NA Business. To the extent that, as of the
Closing Date, the fair market value of the assets of the Stand Alone Plan
(the "Fair Market Value") is less than the present value of the benefits
accrued under such plan (the "ABO") as of the Closing Date, determined
using the plan's respective ongoing actuarial assumptions then in effect
for funding purposes (i.e., 8.5% interest rate, 1988 GAM mortality), Witco
shall, in its discretion, either (i) make a contribution to the Stand Alone
Plan before the date of transfer of assets and liabilities thereunder out
of Witco's Master Trust or (ii) pay to Buyer an amount equal to the
difference between the ABO and the Fair
Market Value, plus interest thereon from the Closing Date to the date of
transfer of assets and liabilities at the 90-day Treasury ▇▇▇▇ rate in
effect on the Closing Date, which payment shall be specifically designated
for deposit by Buyer for the benefit of the Stand Alone Plan. Disputes in
respect of the amounts contributed or paid pursuant to the foregoing
sentence shall be resolved in accordance with the procedures set forth in
Section 3.2(c).
SECTION 7.5 Witco Corporation Employee Retirement Savings Plan.
(a) Contributions. Prior to the Closing Date or as soon as reasonably
practicable thereafter, Witco shall contribute to the Witco Corporation
Employee Retirement Savings Plan (the "Witco 401(k) Plan") an amount equal
to the salary deferral and other contributions (if any) of each Continuing
Employee who participates in the Witco 401(k) Plan plus related matching
contributions through the Closing Date, and Witco shall cause the Witco
401(k) Plan to be amended to provide that such Employees shall be fully
vested in their account balances determined after taking into account the
contributions described in the preceding clause.
(b) Buyer's 401(k) Plan. Effective as of the Closing Date, Buyer
shall have in effect a defined contribution plan that includes a qualified
cash or deferred arrangement within the meaning of Section 401(k) of the
Code ("Buyer's 401(k) Plan") providing benefits as of the Closing Date to
Continuing Employees of the NA Business participating in the Witco 401(k)
Plan as of the Closing Date. Each Continuing Employee who is participating
in the Witco 40l(k) Plan immediately prior to the Closing Date shall have
the option to become a participant in Buyer's 401(k) Plan on the Closing
Date.
(c) Plan Distributions. Effective as of the Closing Date,
Continuing Employees shall be deemed terminated from employment for
purposes of the Witco 401(k) Plan in accordance with Code Section 401(k)
and the regulations thereunder, and to the extent permitted, shall be
entitled to a distribution of their respective account balance or an
eligible rollover distribution to Buyer's 40l(k) Plan in accordance with
Code Section 40l(a)(31). Buyer's 40l(k) Plan shall provide for the receipt
of such rollover.
SECTION 7.6 Welfare Benefits. (a) Allocation of Liability. Witco
shall retain responsibility for claims incurred by Continuing Employees or
their covered dependents under Witco's medical, dental, life insurance, and
disability benefit programs expenses for each Continuing Employee with
respect to claims incurred by such Employees or their covered dependents
prior to the Closing Date. Claims incurred by Continuing Employees or their
covered dependents on or after the Closing Date shall be the responsibility
of Buyer. For purposes of this paragraph, a claim is deemed incurred when
the services that are the subject of the claim are performed; provided,
however, in the case of life insurance, when the death occurs, in the case
of disability benefits, when the injury first occurs and, in the case of a
hospital stay, when the employee first enters the hospital. Witco shall
retain responsibility for post-retirement and post-employment life and
medical benefit coverage of all former and retired employees of the
Business and Buyer shall assume responsibility for post-retirement and
post-employment life and medical benefit coverage of all Continuing
Employees covered by the Stand Alone Plan.
(b) Preexisting Condition Limitations. With respect to any
welfare benefit plan (as defined in Section 3(l) of ERISA) maintained by
Buyer for the benefit of Continuing Employees on and after the Closing
Date, Buyer shall cause to be waived any preexisting condition limitations
that may apply and shall give effect, in determining any deductibles and
out of pocket maximums, amounts paid by or under similar plans maintained
by Witco in the calendar year during which the Closing occurs.
SECTION 7.7 Vacation and Sick Pay. Except as otherwise required
by Applicable Law, as soon as practicable following the Closing Date,
Sellers shall pay Continuing Employees for all vacation and sick pay, if
any, which such employees accrued but did not use prior to the Closing
Date.
SECTION 7.8 Union and Works Council Representation. Buyer agrees
to (i) recognize each union or works council that at the Closing Date
represents any of the Continuing Employees, as the representatives of such
employees as of the Closing Date, and (ii) assume the agreements listed on
Schedule 7.8.
SECTION 7.9 Worker Adjustment and Retraining Notification Act.
(a) Witco's Obligations. Witco shall not, at any time between the
date hereof and the Closing Date, effectuate a "plant closing" or "mass
layoff", as those terms are defined in the Worker Adjustment and Retraining
Notification Act of 1988 ("WARN"), affecting in whole or in part any site
of employment, facility, operating unit or employee of the NA Business,
without complying with the notice requirements and other provisions of
WARN.
(b) Buyer's Obligations. Buyer shall not, at any time prior to 60
days after the Closing Date, effectuate a "plant closing" or "mass layoff",
as those terms are defined in WARN, affecting in whole or in part any site
of employment, facility, operating unit or employee of the NA Business,
without complying with the notice requirements and other provisions of
WARN.
SECTION 7.10 Witco Surfactants. Buyer is aware of (a) the
Agreement on Future Personnel Policy at Rewo, ▇▇▇▇▇▇▇ ("Vereinbarung uber
die kunftige Personalpolitik bei Rewo, ▇▇▇▇▇▇▇"), which was entered into
between Witco GmbH and Schering AG when Witco Surfactants was acquired from
Schering AG, and (b) the Germany Pension Plan, and agrees, in each case, to
assume and be bound by all of the terms and conditions thereof.
Notwithstanding anything to the contrary contained in this Article VII,
Buyer acknowledges and agrees that the continuity of the employment of the
Employees of the Germany Business is governed by statute and, accordingly,
the provisions set forth herein with respect to such Employees are for
declaratory purposes only. Disputes in respect of the adjustment in respect
of the Germany Pension Plan shall be resolved in accordance with the
procedures set forth in Section 3.2(c).
SECTION 7.11 Transfer of Employees of Spain Business. (a) At the
Closing, Continuing Employees of the Spain Business as of the Closing Date
(the "Continuing Spain Employees"), will be automatically transferred to
the payroll of Buyer. According to the provisions of Article 44 of the
Spanish Workers' Act, Buyer shall subrogate in all labor rights and
obligations of Witco Espana, with respect, without limitation, to the
seniority, annual salary and professional status as well as to all
individual and collective acquired rights of the Continuing Spain
Employees. Buyer acknowledges that pursuant to said Article 44, the current
labor conditions of the Continuing Spain Employees remain applicable upon
completion. Therefore, as from Closing, Buyer shall assume and pay, perform
and discharge any and all obligations arising from the employment contracts
with the Continuing Spain Employees, as well as the Social Security
obligations deriving from such contracts. In any case, the cost of
severance payments derived from the termination of any employment contract
after the Closing shall be for the account of Buyer, and Buyer shall hold
harmless Sellers in that respect.
(b) Witco Espana undertakes to notify, with the cooperation of
Buyer, prior to or on the Closing, the Continuing Spain Employees, or, if
applicable, their legal representatives, of the execution of this
Agreement, in accordance with Article 44 of the Spanish Workers Act.
(c) On or after the Closing, Buyer, with the cooperation of Witco
Espana, shall take all the necessary steps in relation to the Continuing
Spain Employees, their representatives, the Labor Authorities and the
Spanish Social Security Administration, in order to formalize the transfer
and the registration of all the Continuing Spain Employees.
SECTION 7.12 Pension Plans. At the Closing, Buyer will assume all
pension plans affecting the Continuing Spain Employees and which are listed
in Schedule 5.8(a) in accordance to the provisions of Article 44 of the
Spanish Workers Act.
SECTION 7.13 Retained Benefit Plans. Except as expressly provided
under this Article VII, the Sellers and Witco Surfactants shall retain all
liabilities and obligations with respect to the Benefit Plans.
SECTION 7.14 No Third Party Beneficiaries. Nothing in this
Agreement is intended to create, nor shall anything in this Agreement be
deemed to create or have created, any third party beneficiary rights
related to the rights granted and benefits conferred by this Article VII.
ARTICLE VIII
Pre-Closing Covenants of Sellers, Witco Surfactants and Buyer
SECTION 8.1 Corporate and Other Actions. Each of the Sellers,
Witco Surfactants and Buyer shall take all necessary corporate action
required to fulfill their respective obligations under this Agreement and
the Ancillary Documents and the transactions contemplated hereby and
thereby.
SECTION 8.2 Local Transfer Agreements. The Sellers and the Buyer
shall cooperate to identify, and enter into, such ancillary agreements as
may be necessary under the laws of the jurisdictions where each Business is
conducted to cause the transfer of the Business, or the Subsidiary Shares,
as the case may be, from the appropriate Seller to the appropriate Buyer,
in accordance with local laws and regulations.
SECTION 8.3 Consents and Approvals. Each of the Sellers, Witco
Surfactants and Buyer shall use their commercially reasonable efforts to
obtain all necessary consents and approvals to the performance of their
respective obligations under this Agreement and the Ancillary Documents and
the transactions contemplated hereby and thereby. Each of the Sellers,
Witco Surfactants and Buyer shall promptly make all filings, applications,
statements and reports to all Governmental Entities which are required to
be made prior to the Closing Date pursuant to any Applicable Law in
connection with this Agreement and the Ancillary Documents and the
transactions contemplated hereby and thereby.
SECTION 8.4 Antitrust. The parties shall promptly prepare and
file with the appropriate Governmental Entity, the notifications and report
forms required under any antitrust laws and regulations in any jurisdiction
where such filings may be necessary for consummation of the transactions
contemplated hereby, and any further filings pursuant thereto as may be
required.
SECTION 8.5 Access to Information. (a) Sellers and Witco
Surfactants will permit representatives of Buyer from and after the date
hereof up to the Closing Date, to have access at all reasonable times to
any and all information, books, accounts, records, properties, operations
and facilities of every kind pertaining to the Business or the Germany
Business, and will furnish Buyer with such financial, operating or other
data concerning the Business or the Germany Business, including monthly
reports to management, as Buyer shall from time to time reasonably request,
subject to any confidentiality agreements to which Sellers may be a party.
No investigation made by Buyer pursuant to this Section shall affect any
representation or warranty of Sellers or Witco Surfactants or the
obligations of Sellers or Witco Surfactants hereunder.
(b) Without limiting the generality of the foregoing, Sellers and
Witco Surfactants will permit representatives of Buyer from and after the
date hereof until the Closing Date to have reasonable access to any and all
records and documents, including records and documents that contain
confidential business information, maintained by any Seller or Witco
Surfactants in connection with (i) compliance by the Business and the
Germany Business with all legal requirements for chemical registration to
permit the entry of products into markets for their intended uses and
applications, or other public circulation of information concerning hazards
associated with chemical product exposure or use pursuant to the Toxic
Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide
Act, the Occupational Safety & Health Act, the Food and Drug Act, and all
state and foreign counterparts of such laws, and (ii) the participation of
the Business or the Germany Business in voluntary activities evidencing
good product stewardship, including without limitation participation in the
Federal High Production Volume Program (collectively, the "Product
Stewardship Materials").
SECTION 8.6 Employment Assistance. Sellers and Witco Surfactants
will provide reasonable assistance (without incurring any expense or
liability) to Buyer in its efforts to employ all Employees.
SECTION 8.7 Ordinary Course of Business. Subsequent to the date
hereof and prior to the Closing Date, except as contemplated in this
Agreement, the Environmental Agreement or the Ancillary Documents, Sellers
and Witco Surfactants will continue to conduct the Business and the Germany
Business in substantially the same manner as heretofore conducted and in
the usual and ordinary course consistent with past practice and
substantially in accordance with the Total Business's 1999 profit objective
plan. Subsequent to the date hereof and prior to the Closing Date, except
as contemplated by this Agreement, the Environmental Agreement or any
Ancillary Documents, none of Sellers or Witco Surfactants shall sell, lease
or otherwise dispose of, or agree to sell, lease or otherwise dispose of,
any of the Purchased Assets, the Subsidiary Shares or the Purchased
Co-Assets, except in the ordinary course of business consistent with prior
practice.
SECTION 8.8 Other Actions. None of Sellers or Witco Surfactants
shall take any action that would be reasonably likely to result in any of
the representations and warranties of Sellers or Witco Surfactants set
forth in this Agreement becoming untrue in any material respect or in any
of the conditions set forth in Article IX not being satisfied.
SECTION 8.9 Bulk Transfer Laws. Buyer hereby waives compliance by
Sellers with the provisions of any so-called "bulk transfer law" or similar
laws of any jurisdiction in connection with the sale of the Purchased
Assets, Purchased Co-Assets and Subsidiary Shares to Buyer. Sellers shall
indemnify and hold harmless Buyer against any and all liabilities that may
be asserted by third Persons against Buyer as a result of noncompliance
with any such bulk transfer law.
SECTION 8.10 Leased Vehicles. Buyer acknowledges and agrees that
Sellers and Witco Surfactants will cancel all leases for any leased vehicle
used either by the Business or the Germany Business, or by Continuing
Employees, effective as of the Closing Date, and request the return of such
vehicles to Sellers as of the effective date of cancelation.
SECTION 8.11 Unions; Work Councils. Sellers, Witco Surfactants
and Buyer shall use all reasonable efforts to negotiate and cooperate with,
and take all actions as may be required by, the unions and works councils
representing any of the Employees of the Business and the Germany Business,
to effect the transactions contemplated hereby.
SECTION 8.12 Witco Surfactants. Prior to the Closing Date, Witco
Deutschland shall take such actions as may be reasonably necessary to
change the name of Witco Surfactants
to a name that does not include the word "Witco" or any word or prefix
similar thereto, or reasonably capable of being confused therewith.
SECTION 8.13 Exclusivity. From and following execution of this
Agreement until the Termination Date, the Sellers and Witco Surfactants
shall refrain, and shall cause their Affiliates to refrain, from any
activities directly or indirectly involving the further solicitation of
acquisition offers with respect to the Business, including participation in
any negotiations or formal or informal communications of any kind or nature
with any party concerning a potential disposition of all or substantially
all of the stock or assets of the Business (whether conducted by them or on
their behalf), in all such cases with anyone other than Buyer. In
connection therewith, and without limiting the generality of the foregoing,
(a) the Sellers and Witco Surfactants shall indicate to any Person
expressing any interest in such a disposition of the restrictions imposed
by this Section and shall ensure that no further discussions or
communications take place with such Person with respect thereto; (b) the
Sellers and Witco Surfactants shall ensure that all current discussions
with any other Persons respecting such a disposition are terminated; (c)
the Sellers and Witco Surfactants shall notify Buyer of any direct or
indirect approaches made to the Sellers or Witco Surfactants or any of
their Affiliates or representatives relating to any such possible or
proposed disposition; (d) the Sellers and Witco Surfactants shall ensure
that no information concerning the Business or any of their Affiliates is
provided by any of their Affiliates or representatives to another Person
regarding or in furtherance of such a disposition.
SECTION 8.14 Other Agreements. Sellers and Buyer shall negotiate
in good faith definitive agreements incorporating the terms set forth on
the term sheets attached as Schedule 8.14(a) hereto and the transition
services agreement described on Schedule 8.14(b), which agreements shall be
executed and delivered on the Closing Date.
ARTICLE IX
Conditions
SECTION 9.1 Conditions to Obligations of Sellers. The obligations
of Sellers to consummate the transactions contemplated by this Agreement
shall be subject to fulfillment at or prior to Closing of the following
conditions (any one or more of which may be waived in whole or in part by
Sellers):
(a) Performance of Agreements and Satisfaction of Conditions. All
agreements and conditions to be performed and satisfied by Buyer hereunder
on or prior to the Closing Date shall have been duly performed and
satisfied in all material respects.
(b) Representations and Warranties True. The representations and
warranties of Buyer contained in this Agreement shall be true and correct
in all material respects on and as of the Closing Date, with the same
effect as though made on and as of the Closing Date, and there shall be
delivered to Witco on the Closing Date a certificate, in form and substance
reasonably satisfactory to Witco and its counsel duly signed by the
President or Vice President (or an officer of equivalent status) of Buyer,
to that effect.
(c) Opinion of Counsel. Witco shall have received from counsel to
Buyer, including local counsel, opinions dated the Closing Date and in form
and substance reasonably satisfactory to Witco and its counsel.
(d) Payment of Purchase Price. Buyer shall have paid the Purchase
Price and assumed the Assumed Liabilities as provided in Sections 3.1 and
2.2(c), respectively.
(e) Waiting Periods. Any applicable mandatory waiting period
under any applicable antitrust, competition or other similar laws or
regulations pursuant to which notification or report forms have been filed
pursuant to Section 8.4 shall have expired without action by the applicable
Governmental Entity to prevent consummation of this Agreement or shall have
been terminated earlier and all required approvals, if any, under such laws
shall have been obtained.
(f) No Court Order. No court order shall have been entered in any
action or proceeding instituted by any Person which enjoins, restrains or
prohibits this Agreement or the consummation of the transactions as
contemplated by this Agreement.
(g) Other Agreements. Sellers, Witco Surfactants and Buyer shall
have executed and delivered the agreements contemplated by the term sheets
set forth on Schedules 8.14(a) and (b) hereof.
(h) Negotiations with Unions and Work Councils. The parties shall
have engaged in all consultations necessary with unions and works councils
representing the Employees of the Business and the Germany Business, and no
further actions or consultations shall be required with respect thereto.
(i) Foreign Closings. To the extent contemplated by Section 4.2,
the Foreign Closings shall have occurred in escrow.
(j) Supervisory Board Approvals. The supervisory board of each of
VIAG AG, SKW Trostberg AG and Th. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ shall have irrevocably
approved this Agreement and the transactions contemplated hereby.
(k) Witco Board Approval. The board of directors of Witco shall
have irrevocably approved this Agreement and the transactions contemplated
hereby.
SECTION 9.2 Conditions to Obligations of Buyer. The obligations
of Buyer to consummate the transactions contemplated by this Agreement
shall be subject to fulfillment at or prior to the Closing of the following
conditions (any one or more of which may be waived in whole or in part by
Buyer):
(a) Performance of Agreements and Satisfaction of Conditions. All
agreements and conditions to be performed and satisfied by Sellers and
Witco Surfactants hereunder on or prior to the Closing Date shall have been
duly performed and satisfied in all material respects.
(b) Representations and Warranties True. The representations and
warranties of Witco contained in this Agreement, shall be true and correct
in all material respects on and as of the Closing Date with the same effect
as though made on and as of the Closing Date, and there shall be delivered
by Witco on the Closing Date certificates, in form and substance reasonably
satisfactory to Buyer and its counsel, duly signed by an officer of each
Seller and Witco Surfactants, to that effect.
(c) Material Adverse Effect. Between the date hereof and the
Closing Date, no event or condition shall have occurred or arisen which has
resulted in, or would reasonably be expected to result in, a material
adverse effect on the assets, business, financial condition or results of
operations of the Total Business, taken as a whole, other than any change
or effect resulting from (i) developments in United States or international
economic conditions or financial markets in general or (ii) conditions
generally affecting the chemicals industry.
(d) Opinion of Counsel. Buyer shall have received the following
opinions of counsel, dated the Closing Date, in form and substance
reasonably satisfactory to Buyer: Cravath, Swaine & ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇,
Esq., General Counsel of Witco, with respect to Witco, ▇▇▇▇▇▇▇▇▇ & May,
with respect to Witco UK, Cuatrecasas, with respect to Witco Espana, and
Hengeler ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, with respect to Witco Deutschland and Witco
Surfactants.
(e) Waiting Periods. Any applicable mandatory waiting period
under any applicable antitrust, competition or other similar laws or
regulations pursuant to which notification or report forms have been filed
pursuant to Section 8.4 shall have expired without action by the applicable
Governmental Entity to prevent consummation of this Agreement or shall have
been terminated earlier and all required approvals, if any, under such laws
shall have been obtained.
(f) No Court Order. No court order shall have been entered in any
action or proceeding instituted by any Person which enjoins, restrains or
prohibits this Agreement or the consummation of the transactions as
contemplated by this Agreement.
(g) Deeds, etc. Sellers shall have delivered to Buyer limited
warranty deeds with covenants against grantor's acts conveying Sellers'
interests in the Facilities, and the Assignment and Assumption Agreements,
stock powers and such other documents as may be reasonably necessary to
convey and transfer the other Purchased Assets and the Subsidiary Shares to
Buyer.
(h) Other Agreements. Sellers, Witco Surfactants and Buyer shall
have executed and delivered the agreements contemplated by the term sheets
set forth on Schedules 8.14(a) and (b) hereof.
(i) Negotiations with Unions and Work Councils. The parties shall
have engaged in all consultations necessary with unions and works councils
representing the Employees of the Business and the Germany Business, and no
further actions or consultations shall be required with respect thereto.
(j) UK Real Estate. Seller Witco UK shall have delivered to Buyer
a certificate of title prepared by ▇▇▇▇▇▇▇▇▇ and May in respect of the
Flimby Facility substantially in the form attached as Exhibit E.
(k) Witco Specialties Italia S.P.A. Witco Deutschland shall have
spun off its preferred stock interest in Witco Specialties Italia, S.P.A.
as contemplated in Section 2.3.
(l) Beherrschungs-und Gewinnabfurungsvertrag. The
Beherrschungs-und Gewinnabfuhrungsvertrag by and between Witco Surfactants
and Witco Deutschland shall have been terminated.
(m) Mapleton Sewer Line. Sellers shall have delivered to Buyer
the consents of (i) the Greater Peoria Sanitary and Sewage Disposal
District (the "District") to the transfer of the agreement between the
District and Witco to Buyer and (ii) Lonza Chemical, Inc. to the transfer
of the Mapleton Sewer Line by Witco to Buyer and waiver of its right of
first refusal thereof.
(n) Supervisory Board Approvals. The supervisory board of each of
VIAG AG, SKW Trostberg AG and Th. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ shall have irrevocably
approved this Agreement and the transactions contemplated hereby.
(o) Witco Board Approval. The board of directors of Witco shall
have irrevocably approved this Agreement and the transactions contemplated
hereby.
ARTICLE X
Non-Competition
SECTION 10.1. Noncompetition--Sellers. Except as may otherwise be
agreed in writing by Witco on behalf of Sellers and Buyer, Sellers, in
order to induce Buyer to enter into this Agreement, expressly covenant and
agree, on behalf of themselves and their Affiliates, that for a period of
three (3) years from and after the Closing Date, none of Sellers or any of
their Affiliates shall (a) engage in or own, manage, operate, join,
control, or participate in or be connected with any business, individual,
partnership, firm or corporation, which is, at the time, engaged in (i) the
production or manufacture of betaines, sulfobetaines, amphoglycinates,
amidoamines or quat esters, or (ii) the development, marketing,
distribution or sale of (A) betaines, sulfobetaines, quat esters, or
amidoamines for use in the personal care, home care, fabric care,
institutional and industrial hard surface cleaner, asphalt, paper, textile
and mining market channels or (B) alkylamine quats, sorbitan esters,
glycerine esters or glycol esters for use in the home care, fabric care and
institutional and industrial hard surface cleaner market channels, provided
that:
(1) Sellers and Sellers' Affiliates may continue those operations
and activities conducted by Sellers and Sellers' Affiliates that would
otherwise violate this Section 10.1, other than the Total Business, prior
to the Closing Date; and
(2) Sellers or any of their Affiliates may acquire a business or
Person that otherwise would violate the foregoing restrictions as long as
no more than 25% of the annual sales of the acquired business or Person is
in businesses which violate the foregoing restrictions. If more than 25% of
the annual sales of a business or Person is in businesses which violate the
foregoing restrictions, Sellers or any of their Affiliates may acquire such
business or Person as long as it divests itself of the competing operations
within 18 months after such acquisition.
Notwithstanding the foregoing, Sellers may own an aggregate of not more
than five percent of the outstanding stock of any class of any corporation
that otherwise would violate the foregoing restrictions, if such stock is
listed on any securities exchange or dealing facility (whether in the
United States or elsewhere) without violating the provisions of this
Section 10.2, provided that Sellers do not have the power to control or
direct the management or affairs of such corporation and is not otherwise
associated with it; or (b) sell any portion of their business engaged in an
activity subject to a restriction set forth in Sections 10.1(a)(i) and
10.1(a)(ii) above without imposing the applicable restrictions on such
sale.
SECTION 10.2. Noncompetition--Buyer. Except as may otherwise be
agreed in writing by Witco on behalf of Sellers, Buyer in partial
consideration for the transaction contemplated by this Agreement, expressly
covenants and agrees, on behalf of itself and its Affiliates, that for a
period of three (3) years from and after the Closing Date, none of Buyer or
any of its Affiliates shall (a)(i) develop, manufacture, produce, market or
sell any phosphochemicals, primary or secondary fatty amides listed on
Schedule 10.2 based on long-chain fatty acids, bisamides or organometallo
salts of fatty acids; (ii) develop, manufacture, produce, market or sell
any tallow amine, ethoxylated tallow amine, ether amine or ethoxylated
ether amine for use in agriculture (including any commercial, industrial
and consumer agricultural, pesticidal or other Federal Insecticide,
Fungicide, Rodenticide Act associated application) market channel or (iii)
develop, manufacture, produce, market or sell any products based on
Purchased Assets or Purchased Co-Assets, including Overlapping
Technology/Products, for use in the Oilfield market channel or (b) sell any
portion of the Total Business without imposing restrictions on such sale
consistent with the foregoing, provided that Buyer or any of its Affiliates
may acquire a business or Person that otherwise would violate the foregoing
restrictions as long as no more than 25% of the annual sales of the
acquired business or Person is in businesses which violate the foregoing
restrictions. If more than 25% of the
annual sales of a business or Person is in businesses which violate the
foregoing restrictions, Buyer or any of its Affiliates may acquire such
business or Person as long as it divests itself of the competing operations
within 18 months after such acquisition.
Notwithstanding the foregoing, Buyer may own an aggregate of not more than
five percent of the outstanding stock of any class of any corporation that
otherwise would violate the foregoing restrictions, if such stock is listed
on any securities exchange or dealing facility (whether in the United
States or elsewhere) without violating the provisions of this Section 10.2,
provided that Buyer does not have the power to control or direct the
management or affairs of such corporation and is not otherwise associated
with it. However, nothing in this Section 10.2 shall preclude Buyer or its
Affiliates from the development, manufacture, production, marketing or
sales of any products the same as or similar to those products manufactured
and sold on the open market by Buyer or its Affiliates prior to the Closing
Date ("Existing Products"), except that Buyer or its Affiliates may not
develop, manufacture or produce an Existing Product using any Purchased
Asset or Purchased Co-Asset in contravention to the restrictions set forth
above.
Notwithstanding any provision herein to the contrary, the
covenants and agreements in this Section 10.2 shall not apply to any
Affiliate of Buyer not directly or indirectly controlled by Buyer, unless
any portion of the Purchased Assets or Purchased Co-Assets or any assets of
Witco Surfactants used or held for use in the Total Business as of the
Closing Date or any Continuing Employee is transferred to such Affiliate
and such Affiliate uses such assets or employee to engage in the activities
in which Buyer may not engage pursuant to Section 10.2.
The management of Buyer is, and for the three-year period from
and after the Closing Date shall be, independent from the management of
Buyer's Affiliates engaged in a similar business unless such Affiliate
agrees to be bound by the provisions of this Section 10.2.
SECTION 10.3 Non-Solicitation. Sellers and each of its Affiliates
agree, for the three (3) year period commencing on the date hereof, in
respect of the members of the Management Group and the research and
development staff of the Business in Dublin, Ohio, not to solicit or hire
such employees, and for the one (1) year period commencing on the date
hereof, in respect of any other employee of the Sellers or Witco
Surfactants (other than any hourly worker or employee who serves in a
clerical function) employed in the Total Business on the date hereof
(collectively, the "Other Employees"), not to make, offer, solicit or
induce to enter into, any written or oral arrangement, agreement or
understanding regarding employment or retention as a consultant in respect
of any such employee, with any person who was, on the date hereof, such
Other Employee (other than any hourly worker or employee who serves in a
clerical function), without the prior written consent of the Buyer (which
consent will not be unreasonably withheld); provided, however, that the
foregoing shall not prohibit Sellers or their Affiliates, from (i)
employing any Other Employee who contacts such party on his or her own
initiative and without any direct or indirect solicitation by such party or
who is no longer employed by Buyer, (ii) conducting generalized
solicitations for Other Employees (which solicitations are not specifically
targeted at the employees of the other party) through the use of media
advertisements, professional search firms or otherwise and (iii) employing
any Other Employee of the Total Business who declines an offer of
employment by Buyer, including as a result of a proposed relocation to more
than 25 miles from such employee's current site of employment.
SECTION 10.4 Additional Agreements. Buyer and Sellers acknowledge
and agree that the foregoing and such related terms set forth in any
Ancillary Documents are intended to be the only restrictions binding
against Buyer and Sellers and their respective Affiliates following the
Closing. For the avoidance of doubt, Buyer acknowledges and agrees that
Sellers and Sellers' Affiliates have, prior to the Closing, utilized
process technology similar or, in some cases, identical to process
technology used in the Total Business in the ongoing business conducted by
Sellers and Sellers' Affiliates, and that Sellers and Sellers' Affiliates
will
continue in the use of any and all such process technology following the
Closing, subject to the limitations set forth in Section 10.1 hereof.
ARTICLE XI
Post-Closing Covenants
SECTION 11.1 Availability of Records. After the Closing, each
party shall retain and make available to the other party as reasonably
requested by such other party, its agents and representatives, any taxing
authority and any Governmental Entity all information, records or documents
relating to the Business, the Germany Business or the Employees for all
periods prior to Closing and shall preserve all such information, records
and documents until the later of (i) six years after the Closing, (ii) the
expiration of all statutes of limitations for Taxes for periods prior to
the Closing or extensions thereof applicable to the requesting party for
Tax information, records or documents or (iii) the required retention
period for all government contract information, records or documents. Each
party shall also make available to the other party, as reasonably requested
by such other party, personnel responsible for preparing or maintaining
information, records and documents, in connection with Tax matters,
environmental matters, governmental contracts, litigation or potential
litigation, including claims for workers' compensation, product liability,
general insurance liability and automobile insurance liability. Prior to
destroying any records related to a party for the period prior to the
Closing Date, the other party shall notify such party 30 days in advance of
any such proposed destruction of its intent to destroy such records, and
such other party will permit such party to retain any such records. With
respect to any litigation and claims which are Excluded Liabilities, each
party shall render all reasonable assistance which the other party may
request in defending such litigation or claim and shall make available to
such other party's personnel most knowledgeable about the matter in
question.
SECTION 11.2 Use of Trade or Service Marks. (a) Buyer shall not
use or permit its distributors to use the name "Witco" or any other
corporate, trade or service marks or names owned or used by Sellers or any
of Sellers' Affiliates, unless such marks or names are specifically
included in the Purchased Assets, Purchased Co-Assets, or are owned by
Witco Surfactants. All products (if applicable) and product packaging of
the Business and the Germany Business as of the Closing Date manufactured
by Buyer after the Closing Date shall bear a new code identification which
indicates the products were manufactured by Buyer.
(b) Notwithstanding Section 11.2(a), for a period of up to one
year from the Closing Date, Buyer shall be entitled to use all inventories
of packaging, labels and sales literature existing as of the Closing Date
bearing or reflecting any names or marks, other than names or marks set
forth on Schedule 11.2(b) which shall be used exclusively by Sellers, which
had been used by the Total Business prior to the Closing Date but which are
not Purchased Assets or assets retained by the Germany Business (altogether
"Marks") provided that:
(i) such use is strictly the same as existed prior to the
Closing Date;
(ii) the services and goods rendered and all goods produced,
distributed or sold under the Marks are of at least equal quality
standards as were maintained by Sellers and Witco Surfactants
prior to the Closing Date;
(iii) Sellers, through a mutually agreed upon accounting
firm or professional inspectors of goods, shall have the right to
inspect Buyer's operations and evaluate products to ensure
compliance with this Section 11.2(b); and
(iv) Buyer discontinues the use of such packaging, labels
and sales literature as soon as practicable after the Closing
Date.
(c) Buyer acknowledges that the Marks are the sole property of
Sellers, and they will (i) do nothing inconsistent with such ownership,
(ii) not attack the Marks in any way nor use, register or seek to register
any trademark or trade name which is the same as or similar to a ▇▇▇▇,
(iii) identify and use the Marks in accordance with any applicable
international, national, state and local laws or standards as may be
appropriate to protect the validity and strength of the Marks or as may be
reasonably requested by Sellers.
SECTION 11.3 Tax Matters.
SECTION 11.3.1 Cooperation. Without limiting the generality of
Section 11.3.2, Buyer shall fully cooperate with Sellers with respect to
the preparation of each return or other document required to be filed or
delivered to taxing authorities after the Closing Date in respect of any
Taxes which are payable with respect to any period beginning before the
Closing Date.
SECTION 11.3.2 Assistance. Without limiting the generality of
Section 11.1 or 11.3.1, after the Closing, Buyer, on the one hand, and
Sellers, on the other hand, shall provide each other with such assistance
as may reasonably be requested by any of them in connection with the
preparation of any Tax return, any audit or other examination by any taxing
authority, or any judicial or administrative proceedings relating to
liability for Taxes, and each will retain and, upon the request of the
other, provide the other with, any records or information which may be
relevant to such return, audit, examination or proceedings. Such assistance
shall include making employees available on a mutually convenient basis to
provide additional information and explanation of any material to be
provided hereunder and shall include furnishing to or permitting the
copying by the requesting party of any records, returns, schedules,
documents, work papers or other relevant materials which might reasonably
be expected to be of use in connection with such return, audit, examination
or proceedings. The party requesting assistance hereunder shall reimburse
the party whose assistance is requested for the reasonable out-of-pocket
expenses incurred by it in providing such assistance, but shall not be
required to reimburse the party providing such assistance with respect to
time of employees made available pursuant to this Section 11.3.
SECTION 11.4 Confidentiality. (a) In the event the transaction
contemplated by this agreement is completed, it is acknowledged that (i)
Buyer will come into possession of and employees of Buyer that were
formerly employees of Sellers as of the Closing Date will have in their
possession or be aware of materials, business information, financial
information, know-how, trade secrets, technology, documents, reports,
manuals, data, computer data, product formulae, etc. pertaining to the
Excluded Assets and other assets of Sellers not related to the Total
Business which embody or contain Sellers' confidential, proprietary and/or
trade secret information as well as proprietary, confidential and/or trade
secret information of their customers and which are not part of or relevant
to the Total Business to be purchased hereunder (altogether hereinafter
"Sellers' Confidential Information") and that (ii) Sellers will retain in
their possession certain proprietary, confidential and/or trade secret
materials, business information, financial information, know-how, trade
secrets, technology, documents, reports, manuals, data, computer data,
product formulae, etc. pertaining to the Total Business which are Purchased
Assets (collectively, "Buyer's Confidential Information"). Sellers'
Confidential Information and Buyer's Confidential Information hereinafter
are individually and collectively referred to as "Confidential
Information".
(b) Buyer and Sellers each agree that they shall, after the
Closing Date, (i) hold each other's Confidential Information in confidence,
using the care and caution each uses with respect to its own confidential
information; (ii) not disclose the other's Confidential
Information to any third parties as well as to their other employees; and
(iii) not utilize any of the other's Confidential Information for any
purpose other than as allowed pursuant to this Agreement; provided that the
foregoing obligations of confidentiality and non-use shall not extend or
shall cease to extend, as appropriate, to any Confidential Information
which: (1) in relation to Seller's Confidential Information, (A) as shown
by prior written records, was already in the Buyer's possession prior to
the Closing Date and was not acquired from Sellers or (B) is, or becomes,
generally available to the public through no fault or omission of Buyer; or
(2) in relation to Buyer's Confidential Information, is, or becomes,
generally available to the public through no fault or omission of Sellers;
or (3) in relation to Confidential Information (i) was generally available
to the public as of the Closing Date, (ii) is received by either party in
good faith from a third party who discloses such information to said party
on a non-confidential basis without violating any obligation of secrecy as
to the information disclosed or (iii) is compelled to be disclosed pursuant
to any requirement of law, court order, subpoena or similar legal
authority; provided, however, that Sellers or Buyer, as applicable, shall
give the other party prompt notice thereof and ▇▇▇▇ all information so
disclosed as confidential business information of the disclosing party.
Sellers or Buyer, as applicable, shall advise the other party of any such
requirement to disclose any confidential information, so that such other
party may seek appropriate legal relief. It is also agreed that information
which is specific shall not be considered as being within the foregoing
exceptions merely because it is embraced by general information within the
exceptions. Also, any combination of features shall not be considered to be
within the above exceptions merely because individual features of such
combination are within the exceptions, but only if the combination itself,
its principle of operations and its value or advantages are within the
exceptions.
(c) Each Party shall endeavor to destroy or return to the other
Confidential Information of the other which may be in tangible or machine
readable form unless otherwise agreed in writing.
(d) Each party shall advise its employees of their obligations
hereunder.
(e) Buyer and Sellers, on behalf of themselves and their
Affiliates, acknowledge and agree that each will, as of the Closing Date,
own an undivided interest in the Purchased Co-Assets, especially the
Overlapping Technologies/Products, and have possession of certain
proprietary, confidential, and trade secret information, data, etc.
(altogether "Co-Owned Confidential Information"). In an effort to protect
the proprietary and confidential nature of such Co-Owned Confidential
Information as well as preserve the value therein, Buyer and Sellers, on
behalf of themselves and their Affiliates, agree (i) to endeavor to limit
the disclosure of Co-Owned Confidential Information to those of their
employees who have a need to know, (ii) to treat such Co-Owned Confidential
Information consistent with the treatment of other confidential information
in their possession, and (iii) to limit the disclosure or publication of
such Co-Owned Confidential Information to that which is reasonably
necessary to be disclosed in the ordinary course of their respective
businesses. If, from the date of this Agreement until the tenth anniversary
of the Closing Date, either Buyer or Sellers decide to dedicate any
Co-Owned Confidential Information to the public and other than in
conjunction with the commercialization of the relevant technology, they
shall first endeavor to seek the permission for such dedication from the
other, such approval not to be unreasonably withheld. The obligations and
restrictions of this Section 11.4(e) shall not apply or shall cease to
apply, as appropriate, to any Co-Owned Confidential Information which: (X)
as shown by prior written records, was already in the Buyer's possession
prior to the Closing Date and was not acquired from Sellers; (Y) is, or
becomes, generally available to the public; or (Z) is received by Buyer in
good faith from a third party who discloses such information to the Buyer
on a non-confidential basis without violating any obligation of secrecy as
to the information disclosed. Information which is specific shall not be
considered as being within the foregoing exceptions merely because it is
embraced by general information within the exceptions. Also, any
combination of features shall not be considered as being within the above
exceptions merely because individual features of the
combination are within the exceptions, but only if the combination itself,
its principle of operations and its value or advantages are within the
exceptions.
(f) The provisions of confidentiality and non-use set forth
herein with respect to Confidential Information and Co-Owned Confidential
Information shall survive expiration or termination of this Agreement, and
the Closing.
(g) To the extent any of the provisions set forth in this Section
11.4 are inconsistent with the terms and conditions of any confidentiality
agreements pertaining to the Total Business and the sale thereof between
Buyer or any of Buyer and Witco or Sellers dated prior to April 1, 1999,
the provisions of this Section shall control.
(h) From the date hereof until the tenth anniversary of the
Closing Date, to the extent that either party sells any portion of its
business that contains any Confidential Information or Co-Owned
Confidential Information, the party selling any portion of such business
shall cause the buyer thereof to be bound by the provisions of this Section
11.4.
(i) Buyer agrees, for a period of three years from and after the
Closing Date, not to disclose any Confidential Information constituting
Technology Rights to its Affiliates engaged in a similar business unless
such Affiliate agrees to be bound by the provisions of this Section 11.4.
SECTION 11.5. Continuing Obligations. In the event of the sale of
all or substantially all of the assets of Witco, Witco shall cause the
purchaser to assume, and agree to be bound by, this Agreement and the
Environmental Agreement. Witco's obligations under this Section 11.5 shall
continue and remain in full force and effect, with respect to this
Agreement, for as long as any of the representations of Sellers and Witco
Surfactants survive pursuant to Section 12.3, and, with respect to the
Environmental Agreement, until the eleventh anniversary of the
Environmental Agreement. Nothing in this Section 11.5 shall relieve any of
the Sellers or Witco Surfactants of its obligations hereunder or under the
Environmental Agreement.
SECTION 11.6 Inventory Removal. Sellers will remove from the
Facilities on or prior to December 31, 1999, all Inventory that was
Obsolete Inventory as of the Closing Date.
ARTICLE XII
Indemnification and Survival
SECTION 12.1 Indemnification by Sellers. (a) Sellers' Indemnity.
Sellers shall indemnify and hold harmless Buyer and its Affiliates at all
times against and in respect of all losses, liabilities, costs and expenses
(including reasonable attorneys' fees) (collectively, "Losses") which Buyer
and its Affiliates may suffer or incur in connection with any of the
following:
(i) any breach of any of the representations and warranties
of Sellers or Witco Surfactants set forth in this Agreement;
provided, however, in respect of any breach of a representation
or warranty in respect of title to real property, Buyer shall
first exhaust its remedies pursuant to available title insurance
for Purchased Assets;
(ii) any Excluded Liabilities, or any breach by any Seller
or by Witco Surfactants of the covenants and agreements of
Sellers or Witco Surfactants set forth in this Agreement;
(iii) litigation matters of the Germany Business to the
extent relating to circumstances or events that existed occurred
prior to the Closing Date, whether or not set forth on Schedule
5.7;
(iv) German taxes resulting from items reflected in the
account balance for Schering acquisition step-up, net on the
Germany Closing Statement; provided, however, that Sellers or
their Affiliates may control any audit in respect of such
deferred taxes; and
(v) any violation of Applicable Law by Witco Surfactants
prior to the Closing to the extent Buyer gives Witco notice of
claim on or prior to the second anniversary of the Closing Date.
(b) Limitations on Sellers' Indemnity. Sellers shall not be
liable for a Loss covered under Section 12.1(a)(i) if such Loss is $250,000
or less and shall not be liable for any Loss covered under Section 12.1(a)
(i) until the aggregate of all such Losses for which Sellers are liable are
in excess of $5,000,000; in which event the indemnification obligation of
Sellers shall apply to the aggregate amount of such Losses in excess of
$250,000 (including Losses claimed prior to reaching such $5,000,000
threshold amount); provided, however, that Sellers' aggregate liability
under Sections 12.1(a)(i) shall not exceed 43.75% of the Purchase Price
referred to in Section 3.1; and, provided further, that the foregoing
limitations for Sellers' liability shall not apply in the case of any claim
by Buyer for Losses resulting from the breach by any of the Sellers of any
of the representations set forth in Section 5.20 (Taxes).
(c) Notice of Claims. Buyer shall promptly notify Witco in
writing, in reasonable detail, of all matters which may give rise to the
right to indemnification hereunder, it being understood that if Witco does
not receive notice of any matter known to Buyer and as to which Buyer or
its Affiliates are entitled to indemnification hereunder in time to contest
the determination of any such liability which is susceptible to being
successfully contested, Sellers shall not be obligated to indemnify Buyer
or its Affiliates with respect thereto. Buyer shall not admit any liability
with respect to, or settle, compromise or discharge any such matter covered
by this Section 12.1 without Witco's prior written consent. Witco, or a
Seller acting at the direction of Witco, shall have the right, with the
consent of Buyer, (which shall not be unreasonably withheld) to settle all
indemnifiable matters related to claims by third parties which are
susceptible to being settled, and to defend through counsel of its own
choosing, at its own expense, any action which may be brought by a third
party in connection therewith; provided, however, that Buyer shall have the
right to have counsel participate in such defense at its own expense and
further provided that Sellers may not settle any claim for equitable relief
against the Business without Buyer's prior written consent. In addition,
neither Witco nor a Seller at the direction of Witco shall settle any
indemnifiable matter in respect of Losses below the $5,000,000 threshold
amount contemplated in Section 12.1(b) without Buyer's prior written
consent. Buyer and Witco shall keep each other informed of all settlement
negotiations with third parties and of the progress of any litigation with
third parties. Buyer and Sellers shall permit each other reasonable access
to books and records and otherwise cooperate with all reasonable requests
of each other in connection with any indemnifiable matter resulting from a
claim by a third party.
SECTION 12.2 Indemnification by Buyer. (a) Buyer's Indemnity.
Buyer agrees to indemnify and hold harmless Sellers and their Affiliates at
all times against and in respect of Losses which Sellers and their
Affiliates may suffer or incur in connection with any of the following:
(i) any breach of any of the representations and warranties
of Buyer set forth in this Agreement;
(ii) any Assumed Liability and any liability or obligation
of the Germany Business as contemplated by Section 2.3 hereof, or
any breach of the covenants and agreements of Buyer set forth in
this Agreement;
(iii) the operation of the Business and the Germany Business
after the Closing Date, unless such Losses arise from or are
related to any circumstances, acts or omissions prior to the
Closing Date;
(iv) the failure of any Facilities to be in compliance with
any laws and regulations applicable to the ownership and
operation thereof from and after the Closing Date;
(v) any action or inaction of Buyer under Section 2.4 hereof
arising from Buyer's performance as Sellers' agent under
contracts or permits;
(vi) termination of Continuing Employees on or after the
Closing Date;
(vii) claims of Continuing Employees for failure to provide
Continuing Employees with any of the compensation, benefits,
service credit or severance pursuant to Article VII hereof; or
(viii) subject to Section 7.3(a), any claims for severance
by Continuing Employees based on a failure to offer salary and
benefits identical to those offered by Sellers.
(b) Notice of Claims. Witco shall promptly notify Buyer in
writing, in reasonable detail, of all matters which may give rise to the
right to indemnification hereunder, it being understood that if Buyer does
not receive notice of any matter known to Sellers and as to which Sellers
or their Affiliates are entitled to indemnification hereunder in time to
contest the determination of any such liability which is susceptible to
being successfully contested, Buyer shall not be obligated to indemnify
Sellers or their Affiliates with respect thereto. Sellers shall not admit
any liability with respect to, or settle, compromise or discharge any such
matter covered by this Section 12.2 without Buyer prior written consent.
Buyer, or a Buyer Subsidiary acting at the direction of Buyer, shall have
the right, without the consent of Sellers, to settle all indemnifiable
matters related to claims by third parties which are susceptible to being
settled, and to defend through counsel of their own choosing, at their own
expense, any action which may be brought by a third party in connection
therewith; provided, however, that Sellers shall have the right to have
counsel participate in such defense at their own expense. Witco, on behalf
of itself and Sellers and Affiliates entitled to indemnification hereunder,
and Buyer shall keep each other informed of all settlement negotiations
with third parties. Buyer and Sellers shall permit each other reasonable
access to books and records and otherwise cooperate with all reasonable
requests of each other in connection with any indemnifiable matter
resulting from a claim by a third party.
SECTION 12.3 Survival. The representations and warranties of
Sellers and Witco Surfactants and of Buyer contained herein shall survive
the Closing and remain in full force and effect for two (2) years after the
Closing Date, except as provided in this Section 12.3. The representations
and warranties of Sellers set forth in Section 5.20 entitled "Taxes" shall
survive the Closing until sixty (60) days after the first to occur of (i)
the expiration of the statute of limitations (and any extensions thereof)
applicable to the Tax in respect of which indemnification is being sought
without the assertion of a deficiency in respect thereof by the applicable
governmental agency, or (ii) the completion of the final audit and
determination by the applicable governmental agency with respect to such
Tax and final disposition of any deficiency resulting therefrom. Buyer's
rights to indemnification under Section 12.1(a)(ii), (iii),
(iv) and (v) and Sellers' rights to indemnification under Section
12.2(a)(ii), (iii), (iv), (v), (vi), (vii), and (viii) shall survive the
Closing and shall not expire.
No claim may be made based upon an alleged breach of any of such
representations or warranties whether for indemnification in respect
thereof or otherwise, unless written notice of such claim, in reasonable
detail, is given to Buyer or to Sellers, as the case may be, within said
period following the Closing.
SECTION 12.4 Limitation on Liability. (a) The rights and remedies
of Sellers and Buyer under this Section 12 are, solely as between Sellers
and Buyer, exclusive and in lieu of any and all other rights and remedies
which Sellers and Buyer may have under this Agreement or otherwise for
monetary relief with respect to any Losses covered hereby. Each party
agrees that the previous sentence shall not limit or otherwise affect any
non-monetary right or remedy which either party may have under this
Agreement or otherwise limit or affect either party's right to seek
equitable relief, including the remedy of specific performance.
(b) To the fullest extent permitted by law, none of Buyer nor any
of the Sellers shall be liable to the other, or their Affiliates, for any
claims, demands or suits for consequential, incidental, special, exemplary,
punitive, indirect or multiple damages connected with or resulting from any
breach after the Closing Date of this Agreement (other than breach of this
Article 12), or any actions undertaken in connection with or related
hereto, including any such damages which are based upon breach of contract,
tort (including negligence and misrepresentation), breach of warranty,
strict liability, statute, operation of law or any other theory of
recovery.
ARTICLE XIII
Termination
SECTION 13.1 Termination of Agreement. This Agreement may be
terminated at any time prior to the Closing Date.
SECTION 13.2 Mutual Consent. With the mutual consent of Buyer and
Witco.
SECTION 13.3 By Witco. By Witco, if
(a) by October 1, 1999, any of the conditions provided in
Section 9.1 shall not have been satisfied, complied with or
performed in any material respect, and Sellers shall not have
waived such failure of satisfaction, noncompliance or
nonperformance; or
(b) by July 20, 1999, the condition provided in Section
9.1(j) shall not have been satisfied and Sellers shall not have
waived such failure of satisfaction.
SECTION 13.4 By Buyer. By Buyer, if
(a) by October 1, 1999, any of the conditions provided in
Section 9.2 shall not have been satisfied, complied with or
performed in any material respect, and Buyer shall not have
waived such failure of satisfaction, noncompliance or
nonperformance; or
(b) by July 20, 1999, the condition provided in Section
9.2(o) shall not have been satisfied and Buyer shall not have
waived such failure of satisfaction.
SECTION 13.5 Closing Has Not Occurred. By either Witco or Buyer,
if the Closing shall not have occurred on or before October 1, 1999.
SECTION 13.6 Written Notice. In the event of any termination
pursuant to Section 13.1 (other than pursuant to Section 13.2), written
notice setting forth the reasons therefor shall forthwith be given by the
terminating party to the other. In addition, in the case of any termination
pursuant to Section, 13.3, 13.4 or 13.5, the party seeking termination must
not be in breach of any of its representations, warranties, covenants or
agreements contained in this Agreement.
SECTION 13.7 Continuing Confidentiality. If this Agreement shall
be terminated as herein set forth, Buyer agrees that they will remain
obligated under, and will comply with, the provisions of Section 14.3.
ARTICLE XIV
Miscellaneous
SECTION 14.1 Assignment. This Agreement and all the rights and
obligations granted hereby shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns, including by
merger or by operation of law, it being expressly agreed that this
Agreement shall not be assigned nor shall any rights or obligations arising
hereunder be transferred by one party without the prior written consent of
the other party except that Buyer may assign the Agreement in whole or in
part at any time prior to the Closing to one or more of its Affiliates and
may assign its rights hereunder at any time upon or after the Closing as
collateral in connection with financial transactions or to any successor
entity; provided, however, that no such assignment shall relieve Buyer from
the full liabilities and full financial responsibility under this
Agreement.
SECTION 14.2 No Press Release Without Consent. No press release
related to this Agreement or the transactions contemplated herein, or other
announcement to the employees (other than as required by applicable law or
as requested by European works councils as part of required consultations),
customers or suppliers of the Business or the Germany Business, will be
issued without the joint approval of Witco and Buyer, except any public
disclosure which Sellers, Witco Surfactants or Buyer in their good faith
judgment believe is required by applicable law or by any stock exchange on
which its securities or those of their Affiliates are listed (in which case
the party making the disclosure will use all commercially reasonable
efforts to consult with the other party prior to making any such
disclosure). Witco and Buyer will cooperate to prepare a joint press
release to be issued at the time of the signing of this Agreement and on
the Closing Date.
SECTION 14.3 Confidentiality. Except as required by applicable
law, all information related to the Business supplied to Buyer by Sellers
and Witco Surfactants shall be maintained in strict confidence by Buyer and
its employees, advisors and agents in accordance with the confidentiality
agreement entered into between Buyer and Sellers, provided that these
restrictions shall terminate upon Closing. In the event that this Agreement
is terminated, all written materials relating thereto shall be returned to
Sellers and Witco Surfactants or destroyed as provided in such
confidentiality agreement and Buyer shall deliver an officer's certificate
to Sellers and the Witco Surfactants certifying as to such return or
destruction. In such event, Buyer and their employees, advisors and agent
shall make no further use of such information whatsoever. The provisions of
this Section 14.3 shall be in addition to those set forth in Section 11.4
hereof.
SECTION 14.4 Expenses. Each party shall bear its own expenses
with respect to the transactions contemplated by this Agreement (including,
without limitation, fees of investment bankers and attorneys). Any sales,
transfer, use, stamp, stamp duty reserve, notarial fees or other similar
Tax (other than income Tax and VAT), duty, recording cost or (including,
without limitation, patent and trademark assignments) filing fees,
including in connection with any merger notification, and costs and
expenses of Sellers in connection with title insurance and surveys, in each
case, incurred upon the sale or transfer of the Purchased Assets or the
Subsidiary Shares shall be shared equally by Buyer and Sellers.
SECTION 14.5 Severability. Each of the provisions contained in
this Agreement shall be severable, and the unenforceability of one shall
not affect the enforceability of any others or of the remainder of this
Agreement.
SECTION 14.6 Entire Agreement. This Agreement may not be amended,
supplemented or otherwise modified except by an instrument in writing
signed by all the parties hereto. This Agreement and the Ancillary
Documents contain the entire agreement of the parties hereto with respect
to the transactions covered hereby, superseding all negotiations, prior
discussions and preliminary agreements made prior to the date hereof,
except the confidentiality agreement referred to in Section 14.3.
SECTION 14.7 No Third Party Beneficiaries. This Agreement is
solely for the benefit of the parties hereto and their respective
Affiliates and no provision of this Agreement shall be deemed to confer
upon third parties any remedy, claim, liability, reimbursement, claim of
action or other night in excess of those existing without reference to this
Agreement.
SECTION 14.8 Waiver. The failure of any party to enforce any
condition or part of this Agreement at any time shall not be construed as a
waiver of that condition or part, nor shall it forfeit any rights to future
enforcement thereof.
SECTION 14.9 Governing Law. This Agreement shall be construed and
enforced in accordance with and governed by the laws of the State of
Delaware without regard to the conflicts of laws provisions thereof.
SECTION 14.10 Counterparts. More than one counterpart of this
Agreement may be executed by the parties hereto, and each fully executed
counterpart shall be deemed an original.
SECTION 14.11 Choice of Forum. (a) Buyer and Sellers irrevocably
submit to the exclusive jurisdiction of (i) the state courts of the State
of Delaware and (ii) the United States District Court for the District of
Delaware, for the purposes of any suit, action or other proceeding arising
out of this Agreement or any transaction contemplated hereby. Buyer and
Sellers agree to commence any action, suit or proceeding relating hereto
either in the United States District Court for the District of Delaware or,
if such suit, action or proceeding may not be brought in such court for
jurisdictional reasons, in the state courts of the State of Delaware. Buyer
and Sellers further agree that service of process, summons, notice or
document by hand delivery or U.S. registered mail at the address specified
for Buyer or Sellers, as applicable, in Section 14.13 (or such other
address specified by Buyer or Sellers, as applicable, from time to time
pursuant to Section 14.13) shall be effective service of process for any
action, suite or proceeding brought against such Party in any such court.
Buyer and Sellers irrevocably and unconditionally waive any objection to
the laying of venue of any action, suit or proceeding arising out of this
Agreement or the transactions contemplated hereby in (i) the state courts
of the State of Delaware, or (ii) the United States District Court for the
District of Delaware, and hereby further irrevocably and unconditionally
waive and agree not to plead or claim in any such court that any such
action, suit or proceeding brought in any such court has been brought in an
inconvenient forum.
(b) Buyer and Sellers agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that Buyer and Sellers shall
be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this
Agreement, this being in addition to any other remedy to which they are
entitled at law or in equity.
SECTION 14.12 Further Documents. Each of Buyer, Sellers and Witco
Surfactants will, at the request of another party, execute and deliver to
such other party all such further instruments, assignments, assurances and
other documents as such other party may reasonably request in connection
with the carrying out of this Agreement and the transactions contemplated
hereby.
SECTION 14.13 Notices. All communications, notices and consents
provided for herein shall be in writing and be given in person or by means
of telex, facsimile or other means of wire transmission (with request for
assurance of receipt in a manner typical with respect to communications of
that type) or by mail, and shall become effective (x) on delivery if given
in person, (y) on the date of transmission if sent by telex, facsimile or
other means of wire transmission, or (z) four business days after being
deposited in the United States mails, with proper postage and
documentation, for first-class registered or certified mail, prepaid.
Notices shall be addressed as follows:
(i) If to Buyer, to:
▇▇▇▇▇▇▇▇▇▇▇ SKW Surfactants GmbH
▇/▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇-▇▇▇▇▇ ▇▇▇▇▇/▇▇▇▇▇▇▇
P.O. Box: ▇-▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile Number ▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Facsimile Number: ▇▇▇-▇▇▇-▇▇▇▇
(ii) If to Witco, to:
Witco World Headquarters
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
Facsimile Number: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
Cravath, Swaine & ▇▇▇▇▇
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile Number: 212-474-3700
provided, however, that if any party shall have designated a different
address by notice to the others, then to the last address so designated.
SECTION 14.14 Schedules. Items disclosed on any Schedule to this
Agreement shall be deemed to be disclosed on all Schedules hereto, and the
failure of Sellers or Witco Surfactants to list any item on more than one
Schedule shall not give rise to a claim or right on the part of Buyer.
SECTION 14.15 Construction. The language in all parts of this
Agreement shall be construed, in all cases, according to its fair meaning.
The parties acknowledge that each party and its counsel have reviewed and
revised this Agreement and that any rule of construction to the effect that
any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective duly authorized officers as of the date
first above written.
WITCO CORPORATION,
by: /s/ E. ▇▇▇▇ ▇▇▇▇
---------------------------------
Name: E. ▇▇▇▇ ▇▇▇▇
Title: Chairman, President & CEO
▇▇▇▇▇▇▇▇▇▇▇ SKW SURFACTANTS GMBH,
by: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Managing Director
Exhibit A-1
Business Statement
As of Dec. 31, 1998
(000's)
Janesville Mapleton Dom Other Int'l (b) Total
---------- -------- --------- --------- -------
Inventories, at FIFO,
net of reserves $ 4,099 $ 9,425 $ 1,645 $ 3,569 $ 18,738
Property, plant
and equipment, net 19,098 92,064 2,742(a) 17,651 131,555
------- --------- -------- -------- --------
Total Assets $ 23,197 $101,489 $ 4,387 $ 21,220 $150,293
======= ========= ======== ======== ========
(a) Includes $1,552 of project costs related to Malaysian project
(b) The following 12/31/98 exchange rates were used to convert local
currency to USD:
British Pound 1.6630
Spanish Peseta .0070470
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ .▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ .▇▇▇▇
▇▇▇▇▇▇▇▇▇ Real .8279
Singapore ▇▇▇▇▇▇ .▇▇▇▇
▇▇▇▇▇▇▇▇ Baht .02747
Korean Won .000831
Canadian Dollar .6514
Exhibit A-1
Detail of Domestic Other and
International per
Business Statement
Dec. 31, 1998
(000's)
Domestic Other
Inventories
Warehouses (a) $ 1,645
========
(a) Represents inventory at seven sites, including Witco warehouses and
consignment locations
Property, plant & equipment
Dublin $ ▇▇▇
▇▇▇▇▇▇▇▇ project costs 1,552
SAP hardware 732
--------
$ 2,742
=======
International
Inventories
Flimby, UK $ 988
Granollers, Spain 1,501
▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ 293
Brazil 66
Singapore 291
Thailand 117
Korea 11
Canada 192
---------
$ 3,569
=======
Property, plant & equipment
Flimby, UK $ 4,333
Granollers, Spain 12,782
Singapore 118
SAP hardware 418
--------
$17,651
=======
Exhibit ▇-▇
▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ Statement
Witco
Surfactants Witco
GmbH Witco Surfactants Witco Witco Witco
Audited Surfactants GmbH Surfactants Surfactants Surfactants
Statutory GmbH GAAP GmbH GmbH GmbH
Balance GAAP Balance Special Adjusted Adjusted
Sheet Adjustments (a) Sheet Adjustments Statement Statement(b)
(in DM) (in DM) (in DM) (in DM) (in DM) (in USD)
ASSETS
FIXED ASSETS
Intangible assets 234,922 56,893,000(3)(4) 57,127,922 57,127,922 34,248,189
Tangible assets 38,984,162 11,334,602(1)(2) 50,318,764 50,318,764 30,166,099
Financial assets 14,926,212 14,926,212 (14,926,212) 0 0
------------ ----------- ----------- ------------ ----------- ------------
54,145,296 68,227,602 122,372,898 (14,926,212) 107,446,686 64,414,288
------------ ----------- ----------- ------------ ----------- ------------
CURRENT ASSETS
Inventories 8,811,266 8,811,266 8,811,266 5,282,354
------------ ----------- ----------- ------------
Accounts receivable and
other assets
Accounts receivable,
trade 12,344,875 12,344,875 12,344,875 7,400,753
Accounts due from
affiliated companies 26,629,374 (78,435,602)(2)(5) (51,806,228) 51,806,228 0 0
Other assets 2,343,590 2,343,590 2,343,590 1,404,982
------------ ------------ ----------- ------------ ----------- -----------
41,317,839 (78,435,602) (37,117,763) 51,806,228 14,688,465 8,805,735
------------ ------------ ----------- ------------ ----------- -----------
Checks, cash on-hand and
cash in banks 1,945,784 1,945,784 (1,945,784) 0 0
------------ ----------- ------------ ----------- ------------
DEFERRED CHARGES AND
PREPAID EXPENSES 190,424 190,424 190,424 114,159
------------ ----------- ----------- ------------ ----------- ------------
TOTAL ASSETS 106,410,609 (10,208,000) 96,202,609 34,934,232 131,136,841 78,616,536
============ =========== =========== ============ =========== ============
LIABILITIES AND SHAREHOLDER'S
EQUITY
SHAREHOLDER'S EQUITY
Capital subscribed 6,000,000 6,000,000 (6,000,000) 0 0
Capital surplus 22,310,000 22,310,000 (22,310,000) 0 0
Retained earnings 830,039 (7,032,637) (6,202,598) 6,202,598 0 0
------------ ----------- ----------- ------------ ----------- ------------
29,140,039 (7,032,637) 22,107,402 (22,107,402) 0 0
------------ ----------- ----------- ------------ ----------- ------------
SPECIAL RESERVES 17,748,363 (17,748,363)(10) 0 0 0 0
------------ ----------- ----------- ------------ ----------- ------------
RESERVES AND ACCRUED
LIABILITIES
Pension accruals 28,621,000 3,937,000 (6) 32,558,000 32,558,000 19,518,521
Deferred taxes 11,500,000 (7) 11,500,000 11,500,000 6,894,250
Accrued taxes 400,000 (323,000)(8) 77,000 77,000 46,152
Other reserves and
accrued liabilities 5,001,000 5,001,000 5,001,000 2,998,100
------------ ----------- ----------- ------------ ----------- ------------
34,022,000 15,114,000 49,136,000 0 49,136,000 29,457,032
------------ ----------- ----------- ------------ ----------- ------------
LIABILITIES
Liabilities due to banks 80 80 80 48
Advance payments 41,824 41,824 41,824 25,073
Accounts payable, trade 7,372,200 7,372,200 7,372,200 4,419,634
Accounts due to affiliated
companies 16,579,800 16,579,800 (16,579,800) 0 0
Other liabilities 1,506,303 (541,000)(9) 965,303 965,303 578,699
------------ ----------- ----------- ------------ ----------- ------------
25,500,207 (541,000) 24,959,207 (16,579,800) 8,379,407 5,023,454
------------ ----------- ----------- ------------ ----------- ------------
TOTAL LIABILITIES AND 106,410,609 (10,208,000) 96,202,609 (38,687,202) 57,515,407 34,480,485
SHAREHOLDER'S EQUITY ============ =========== =========== ============ =========== ============
(a) See Attachment to Exhibit A-2.
(b) DM's converted to USD's using 12/31/98 exchange rate of .5995.
Exhibit A-2
Detail of Witco Surfactants GmbH Adjusted Statement
December 31, 1998
(in USD - 000's)
Intangible assets
Patents and licenses $ 2,298
Goodwill 31,950
--------
$34,248
=======
Tangible assets
Land $ 3,142
Automotive equipment 236
Buildings 7,797
Machinery and equipment 14,435
Furniture and fixtures 1,048
Data handling equipment 426
SAP hardware and software 2,698
Construction in progress 384
--------
$30,166
=======
Inventories
Raw materials $ 1,197
Reserve (148)
--------
$ 1,049
Resale goods $ 534
Reserve (47)
--------
487
Finished goods $ 3,112
Reserve (124)
--------
2,988
Mechanical supplies 758
-----
$ 5,282
Accounts receivable, trade =======
Accounts receivable $ 7,622
Reserve (221)
---------
$ 7,401
========
Other assets
Deposits $ 271
Pensions 1,134
---------
$ 1,405
=======
Deferred charges and prepaid expenses $ 114
========
Pension accruals ($19,519)
Deferred taxes =========
Depreciation ($ 5,319)
Schering acquisition step-up, net (3,197)
Pension accrual 1,671
Other, net (49)
---------
($ 6,894)
Accrued taxes ($ 46)
========
Other reserves and accrued liabilities ($ 2,998)
=========
Advance payments ($ 25)
=========
Accounts payable, trade ($ 4,419)
=========
Other liabilities ($ 579)
=========
Attachment to Exhibit A-2
Witco Surfactants is GmbH
GAAP Adjustments to December 31, 1998
Audited Statutory Balance Sheet
(amounts in thousands of DM)
1
Land 3,065
Buildings 3,071
Machinery 7,136
Accumulated depreciation - buildings 574
Accumulated depreciation - machinery 5,864
Retained earnings 6,834
To adjust property, plant and equipment to fair value at
acquisition and reflect accumulated depreciation on step-up
adjustment through Dec. 31, 1998
2
Computer Equipment 4,501
Due to affiliate 4,501
To reflect allocation from Corporate of SAP hardware and soft
costs
3
Patents 10,000
Accumulated amortization 6,167
Retained earnings 3,833
To adjust patents to fair market value at acquisition and reflect
accumulated amortization on step-up adjustment through Dec. 31,
1998
4
Goodwill 62,730
Accumulated amortization 9,670
Retained earnings 53,060
To record goodwill at acquisition and accumulated amortization
through Dec. 31, 1998
5
Retained earnings 73,935
Due to affiliate 73,935
To record liability for opening net assets in excess of
capitalization
6
Retained earnings 3,937
Pension liability 3,937
To adjust December 31, 1998 pension accrual from statutory basis
to US GAAP basis
7
Retained earnings 11,500
Deferred taxes 11,500
To record US GAAP deferred tax liability as of December 31, 1998
8
Accrued taxes payable 323
Retained earnings 323
To adjust 1998 tax provision for additional intercompany royalty
expense of DM648 recorded
9
Other liabilities (environmental reserves) 300
Other liabilities (Swap asset) 241
Retained earnings 541
To reverse environmental reserve on statutory books covered by
global environmental reserves maintained on Corporate ledgers for
GAAP purposes and reverse unrealized foreign exchange losses
recorded relating to hedge of intercompany investment in Witco
Italiana (unrealized foreign exchange gain/loss on hedge of
intercompany investment deferred for GAAP purposes)
10
Special reserves 17,748
Retained earnings 17,748
To reverse special reserve established for statutory purposes.
Special reserve permits accelerated write-off on fixed asset
investments in the year of purchase/construction, through other
income/expense on statutory books
Exhibit A-3
Germany Closing Statement as of __________
Witco Witco
Surfactants Surfactants Witco
GmbH Witco GmbH Surfactants
Audited Surfactants Audited GmbH
Statutory GmbH GAAP GAAP
Balance GAAP Balance Balance
Sheet Adjustments Sheet Sheet
----- ----------- ----- -----
(in DM) (in DM) (in DM) (in USD)
ASSETS
FIXED ASSETS
Intangible assets 0 0 0 0
Tangible assets 0 0 0 0
Financial assets 0 0 0 0
------- ------- ------ ------
0 0 0 0
------- ------- ------ ------
CURRENT ASSETS
Inventories 0 0 0
------- ------ ------
Accounts receivable
and other assets 0 0 0
Accounts receivable, trade 0 0 0 0
Accounts due from 0 0 0
affiliated companies ------- ------- ------ ------
Other assets 0 0 0 0
------- ------- ------ ------
Checks, cash on-hand
and cash in banks 0 0 0
------- ------ ------
DEFERRED CHARGES AND
PREPAID EXPENSES 0 0 0
------- ------- ------ ------
TOTAL ASSETS 0 0 0 0
======= ======= ====== ======
LIABILITIES AND SHARE-
HOLDER'S EQUITY
SHAREHOLDER'S EQUITY
Capital subscribed 0 0 0
Capital surplus 0 0 0 0
Retained earnings 0 0 0
------- ------- ------ ------
0 0 0 0
------- ------- ------ ------
SPECIAL RESERVES 0 0 0
------- ------ ------
RESERVES AND ACCRUED
LIABILITIES
Pension accruals 0 0 0 0
Deferred taxes 0 0 0 0
Accrued taxes 0 0 0 0
Other reserves and
accrued liabilities 0 0 0
------- ------- ------ ------
0 0 0 0
------- ------- ------ ------
LIABILITIES
Liabilities due to banks 0 0 0
Advance payments 0 0 0 0
Accounts payable, trade 0 0 0 0
Accounts due to
affiliated companies 0 0 0
Other liabilities 0 0 0
------- ------- ------ ------
0 0 0 0
------- ------- ------ ------
TOTAL LIABILITIES
AND SHAREHOLDER'S
EQUITY 0 0 0 0
======= ======= ====== ======
EXHIBIT B
ENVIRONMENTAL AGREEMENT
This ENVIRONMENTAL AGREEMENT dated as of June 22, 1999 ("Agreement"),
is among WITCO CORPORATION, a corporation organized under the laws of
Delaware ("Witco Corporation"), on behalf of itself and WITCO CORPORATION
U.K. LIMITED ("Witco UK"), WITCO ESPANA, S.L. ("Witco Spain") and WITCO
DEUTSCHLAND GmbH ("Witco Germany") (Witco Corporation, Witco UK, Witco
Spain and Witco Germany are collectively referred to herein as the
"Sellers"), and ▇▇▇▇▇▇▇▇▇▇▇ SKW SURFACTANTS GMBH, a company organized under
the laws of the Federal Republic of Germany ("Buyer").
W I T N E S S E T H:
WHEREAS, Witco Corporation has entered into that certain Purchase
Agreement dated as of the date hereof with Buyer (the "Purchase
Agreement"), pursuant to which Witco Corporation has agreed to sell to
Buyer, and Buyer has agreed to purchase from Sellers and such Affiliates,
the Business and the Germany Business, as defined in, and on the terms and
conditions provided for in, the Purchase Agreement; and
WHEREAS, included among the assets to be conveyed to the Buyer as part
of the Business are manufacturing facilities located in Mapleton, Illinois,
Janesville, Wisconsin, Flimby, United Kingdom and Granollers, Spain, and
included among the assets owned by Witco Surfactants is a manufacturing
facility located in Steinau, Germany (all of the foregoing facilities are
individually referred to herein as a "Facility" and collectively as the
"Facilities"); and
WHEREAS, this Agreement is intended to set forth the rights and
obligations of Sellers and Buyer with respect to all environmental
conditions existing at or relating to the Facilities, now or in the future,
and to establish the terms and conditions under which Sellers and Buyer
shall each have monetary responsibility for such environmental conditions.
NOW, THEREFORE, in consideration of the foregoing, the covenants and
agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Sellers and
Buyer hereby agree as follows:
ARTICLE 1
Definitions
All capitalized terms used and otherwise not defined herein shall have
the meanings given to such terms in the Purchase Agreement. In addition,
the following terms shall have the following meanings:
"Discretionary Remediation" means any Remediation which is voluntarily
undertaken and which is not required by an Environmental Agency to comply
with
applicable Environmental Laws, but excludes Remediation which Seller agrees
to perform or be responsible for pursuant to Section 3.1(d) hereof.
"Environmental Agency" means any federal, state or local governmental
regulatory agency in any jurisdiction where a Facility is located, and that
has jurisdiction to require Remediation or Remedial Action at a Facility.
"Environmental Claim" means a claim relating to or arising out of an
environmental condition at or originating from a Facility (i) for which
Buyer or Sellers have received notice from an Environmental Agency that
Remediation of the condition is required to comply with Environmental Laws
and (ii) which is addressed by procedures set forth in Section 3.1(d)
hereof.
"Environmental Law(s)" means any federal, state or local law
(including common law), regulation, ordinance or order or European
Commission regulation or directive, and any technical norm, interpretive
guidance, or annex thereto, or member state implementing laws and
regulations or common law in effect on the Closing Date and pertaining to
the protection of the environment including, without limitation, any law,
regulation, ordinance or order which governs: (i) the existence, removal or
remediation of Hazardous Substances on real property; (ii) the emission,
discharge, release, or control of Hazardous Substances into or in the
environment; or (iii) the use, generation, handling, transport, treatment,
storage, disposal or recovery of Hazardous Substances.
"Environmental Reports" means all investigation and remediation
reports on conditions at the Facilities prepared prior to the Closing Date
and made available to Buyer in the data room for the transaction, including
without limitation the Phase I and Phase II reports completed on behalf of
Sellers at the Facilities prior to the Closing Date, and the supplemental
Phase I and Phase II reports completed on behalf of Buyer in connection
with the sampling and analysis contemplated by Section 3.6 hereto, and
provided to Sellers prior to the Closing Date.
"Facility" or "Facilities" has the meaning given in the recitals
hereof.
"Hazardous Substance(s)" means and includes flammable substances,
explosives, radioactive materials, hazardous wastes or substances, toxic
wastes or substances, crude oil or any fraction thereof, refined or
partially refined petroleum products, or any other wastes, materials or
pollutants included in the definition of "hazardous substance," "toxic
substance," "hazardous material," "hazardous waste," "extremely hazardous
waste," "restricted hazardous waste," "petroleum substance" or words of
similar import under any Environmental Law.
"Known Pre-Closing Contamination" means a Hazardous Substance released
at or from a Facility prior to the Closing and which impacts the
environmental condition of a Facility and is identified in the
Environmental Reports.
"No Further Action Determination" means an authoritative determination
by an Environmental Agency that no further Remediation is required at a
Facility, or any portion thereof, to achieve the minimally acceptable
remediation criteria for industrial/commercial properties.
"Phase I and Phase II Reports" or "Phase I and Phase II
Investigations" means the phase I and phase II reports or phase I or phase
II investigations completed on behalf of Sellers at the Facilities prior to
the Closing Date.
"Post-Closing Contamination" means a Hazardous Substance released at
or from a Facility during the ownership or operation of such Facility by
the Buyer, their successors, purchasers or assigns after the Closing and
which impacts the environmental condition of the Facility, but does not
include the passive migration of a Hazardous Substance released prior to
the Closing.
"Remedial Action" or "Remediation" means any action taken to
investigate, clean up or otherwise respond to or contain releases of
Hazardous Substances at or from a Facility. Remedial Action or Remediation
shall not include any actions taken in connection with testing, cleaning,
emptying or repairing any fixed assets or fixtures located at a Facility
and which are, or may be, contributing to soil or groundwater conditions
requiring Remedial Action or Remediation.
"Remediation Costs" means costs and expenses incurred in connection
with Remedial Action or Remediation of soil or groundwater at a Facility
for which, and to the extent that, either Sellers or Buyer are liable
hereunder, including, without limitation, the following: costs and expenses
of environmental consultants; costs and expenses for sampling and analysis
of soil and groundwater at a Facility; administrative oversight costs
asserted by any Environmental Agency; costs and expenses for preparation of
reports and risk assessments, costs and expenses of remediation, treating
and disposing of Hazardous Substances (including costs of designing and
constructing treatment systems) and costs and expenses to conduct
post-Remediation confirmation sampling and monitoring, and to remediate
natural resources damages. Remediation Costs shall not include costs and
expenses associated with testing, cleaning, emptying, repairing or taking
any other action with respect to any fixed assets or fixtures located at a
Facility and which are, or may be, contributing to soil or groundwater
conditions required to be Remediated hereunder.
"Third Party" means a party other than Sellers or Buyer, or an
Affiliate of Sellers or Buyer, or any of their respective officers,
directors, employees, agents, consultants, successors, purchasers or
assigns.
"Unknown Pre-Closing Contamination" means a Hazardous Substance
released at or from a Facility prior to the Closing and which impacts the
environmental condition of the Facility, but which is not identified in the
Environmental Reports.
ARTICLE 2
Representations and Warranties
2.1 Witco Corporation's Representations and Warranties. Witco
Corporation, on its own behalf and on behalf of the other Sellers and the
Facility owned by each such Seller, hereby represents and warrants as
follows:
(a) Buyer's Opportunity to Conduct Due Diligence. Sellers have
provided Buyer with an opportunity to conduct such due diligence of the
environmental condition of the Facilities as Buyer, in its sole discretion,
deems necessary and appropriate, including without limitation, an
opportunity to visit and inspect the Facilities, make reasonable inquiry of
employees or other representatives or agents of Sellers who are
knowledgeable about the operation and environmental condition of the
Facilities, and review all written documentation concerning the
environmental condition of the Facilities, including without limitation,
all environmental permits and correspondence with governmental agencies.
(b) Data Room. In addition to the opportunities made available to
Buyer as set forth in Section 2.1(a), copies of the Phase I and Phase II
Reports prepared on Sellers' behalf, and other material written information
in Sellers' possession pertaining to the environmental condition of the
Facilities, have been placed in the data room established for this
transaction and have thereby been made available to Buyer for its
inspection.
(c) In connection with Sections 2.1(a) and (b) above, Sellers have
disclosed to Buyer any and all material environmental conditions
potentially requiring Remediation or Remedial Action known by Sellers to
exist at the Facilities.
2.2 Buyer's Representations and Warranties. Buyer hereby represents
and warrants as follows:
(a) Buyer's Due Diligence. Buyer has availed itself fully of the
opportunity, as set forth in Section 2.1(a) and Section 2.1(b), to conduct
such due diligence of the environmental condition of the Facilities as
Buyer, in its sole discretion, deems necessary and appropriate.
(b) Solicitation of Remedial Action. Except as set forth in Section
3.1(d), Buyer shall take no affirmative action to solicit from any Third
Party, including any Environmental Agency, any proceeding, order, directive
or other mandate to conduct Remedial Action at the Facilities which Sellers
are responsible for performing pursuant to the terms and conditions hereof,
and shall not communicate with, report or disclose to any Third Party,
including any Environmental Agency, any matters that could give rise to any
such Remedial Action, unless Buyer believes in good faith, and so informs
Sellers in advance in writing, that Buyer has a lawful obligation to take
such action; provided, however, Buyer shall not be obligated to provide
Sellers with such prior written notice where it would cause any action
required of Buyer by applicable environmental laws to be untimely. In
furtherance, and not in limitation, of the foregoing, Buyer will not
knowingly initiate or undertake any activity primarily for the purpose of
finding conditions requiring Remedial Action (including, without
limitation, any subsurface investigation at any of the Facilities), or
accelerating the timing or increasing the cost of any Remedial Action,
unless in response to a request from an Environmental Agency. The foregoing
shall not restrict Buyer from reporting to any Environmental Agency any
environmental condition at a Facility which Buyer has a legal obligation to
report under applicable environmental laws, or from investigating
subsurface conditions in connection with expansion or modification of
buildings, reactors, tanks, improvements, fixtures or equipment located at
a Facility.
ARTICLE 3
Obligations of Sellers
3.1 Sellers' Obligations. Subject to each of the conditions and
limitations set forth in the remaining sections of this Article, Sellers
shall have monetary responsibility for the following environmental matters:
(a) Known Pre-Closing Contamination. Remediation of any Known
Pre-Closing Contamination, so long as an Environmental Agency determines,
within seven years following the Closing, that Remedial Action is required
to comply with Environmental Laws in effect on the Closing Date; and
(b) Unknown Pre-Closing Contamination. Subject to the allocation
schedule set forth below and Section 3.1(c) hereof, Remediation of any
Unknown Pre-Closing Contamination, so long as an Environmental Agency
determines, that Remedial Action is required to comply with Environmental
Laws in effect on the Closing Date.
(i) For Unknown Pre-Closing Contamination for which notice is
received in accordance with Section 3.2(c) hereof during the first two
years after the Closing, Sellers shall be responsible for 100% of the
Remediation Costs.
(ii) For Unknown Pre-Closing Contamination for which notice is
received in accordance with Section 3.2(c) hereof during the third year
after the Closing, Sellers shall be responsible for 83% of the
Remediation Costs.
(iii) For Unknown Pre-Closing Contamination for which notice is
received in accordance with Section 3.2(c) hereof during the fourth
year after the Closing, Sellers shall be responsible for 67% of the
Remediation Costs.
(iv) For Unknown Pre-Closing Contamination for which notice is
received in accordance with Section 3.2(c) hereof during the fifth year
after the Closing, Sellers shall be responsible for 50% of the
Remediation Costs.
(v) For Unknown Pre-Closing Contamination for which notice is
received in accordance with Section 3.2 (c) hereof during the sixth
year after the Closing and thereafter, Sellers shall be responsible for
33% of the Remediation Costs.
(vi) For Unknown Pre-Closing Contamination for which notice is
received in accordance with Section 3.2 (c) hereof during the seventh
year after the Closing and thereafter, Sellers shall be responsible for
17% of the Remediation Costs.
(vii) For Unknown Pre-Closing Contamination for which notice is
received in accordance with Section 3.2 (c) hereof during the eighth
year after the Closing and thereafter, Sellers shall be responsible for
0% of the Remediation Costs.
(c) In the event of a breach of Witco Corporations' representation set
forth in Section 2.1 (c) hereof, the allocation schedule in Section 3.1(b)
above shall not apply with respect to the condition that is the subject of
such breach and Witco Corporation shall be responsible for 100% of
Remediation Costs associated with such condition.
(d) Anything in this Agreement to the contrary notwithstanding, in the
event that, in the ordinary course of Buyer's operations of the Facilities
(including, without limitation, any expansion or modification of buildings,
reactors, tanks, improvements, fixtures or equipment located thereat),
Buyer believes, in good faith, that a condition not required to be reported
to an Environmental Agency (including, without limitation, groundwater
migrating at or from a Facility) is either Known Pre-Closing Contamination
or Unknown Pre-Closing Contamination that constitutes a violation of
Environmental Laws in effect at the Closing, or Known Pre-Closing
Contamination or Unknown Pre-Closing Contamination that poses a threat to
human health or the environment, Buyer may request in writing Sellers to
perform or, if Buyer would be the Directing Party pursuant to Section 5.1
hereof, to be responsible for its allocated share of costs associated with,
Remediation of such condition. Sellers will evaluate such request in
accordance with action levels for Remediation of industrial/commercial
facilities. If Sellers agree to perform Remediation of such condition,
Remediation Costs shall be allocated in accordance with Section 3.1(a) and
(b) hereof. If Sellers decline to perform, or accept responsibility for
their allocated share of costs associated with, Remediation of such
condition, Buyer shall be relieved from any restrictions set forth herein
that would
otherwise prevent Buyer from reporting such condition to the applicable
Environmental Agency, and the parties shall perform Remediation, if any,
thereafter required by the Environmental Agency in accordance with the
terms and conditions hereof.
3.2 Limitations on Sellers' Obligations.
(a) Nonliabilities of Sellers. Notwithstanding any other provision of
this Agreement, Sellers shall have no liability for any of the following
matters:
(i) Any and all Remediation Costs incurred by Buyer in responding to
Post-Closing Contamination;
(ii) Any and all Remediation Costs incurred by Buyer in conducting
Remedial Action that Sellers do not perform or are not otherwise
responsible for in accordance with Section 3.1(d) hereof or has not
been required by an Environmental Agency within seven years after the
Closing;
(iii) Any and all Remediation Costs incurred by Buyer related to an
Environmental Claim for which Buyer has failed to provide Sellers
notice in accordance with Section 3.2(c) hereof;
(iv) Any and all Remediation Costs incurred by Buyer in conducting
Discretionary Remediation at any Facility;
(v) Any and all Remediation Costs incurred as a consequence of a
change in Environmental Laws or, except as set forth in Section 3.1(d)
hereof, a change in use of any Facility by Buyer after the Closing;
(vi) Subject to Section 3.1(c) hereof, any and all Remediation Costs
for Unknown Pre-Closing Contamination that are less than $25,000, per
occurrence, regardless of the date upon which the matter arises;
(vii) Buyer's allocated share of Remediation Costs for Unknown
Pre-Closing Contamination, to the extent Sellers are not liable for
such costs pursuant to Section 3.1(b), except as set forth in Section
3.1(c); and
(viii) Any administrative or civil fines or penalties assessed by an
Environmental Agency as a result of Buyer's actions or failure to act
or for which Seller does not receive notice in accordance with Section
3.2(c) hereof.
(b) Governing Year. The percentage of Sellers' monetary responsibility
under Section 3.1(b) shall be established based upon the year in which
Sellers receive notice in accordance with Section 3.2(c) of an
Environmental Claim for which Sellers are liable under this Agreement, and
such percentage shall apply until such time as the Remediation relating to
such Environmental Claim is fully performed.
(c) Notice. Sellers' obligation to pay Remediation Costs under Section
3.1 hereof is expressly conditioned upon Buyer providing prompt, timely
written notice of an Environmental Claim to Sellers. Notice shall be
considered prompt if it is received by Sellers as soon as reasonably
practicable following Buyer becoming aware of the basis to provide the
same, and notice shall be considered timely if it is received by Sellers
within seven years after the Closing. Buyer's notice shall include a copy
of any Environmental Agency's written determination, made within seven
years after the Closing, that Remediation is required to comply with
Environmental Laws in effect at the Closing or such other information or
documentation sufficient to identify the basis for the
Environmental Claim. Failure to include a copy of any Environmental
Agency's written determination, or such other documentation sufficient to
identify the basis for the Environmental Claim, shall relieve Sellers of
any responsibility under this Agreement to pay Remediation Costs.
(d) Remediation Standard. Sellers' obligation to perform Remediation
and pay Remediation Costs shall be limited, except with respect to natural
resources damages for each Facility, to the reasonable cost of work
necessary to achieve the Remediation criteria for industrial/commercial
properties as determined by the applicable Environmental Agency in the
jurisdiction in which such Facility is located, which may be evidenced by
the issuance of a No Further Action Determination by the Environmental
Agency having jurisdiction over the Facility. Buyer acknowledges that the
completion of Remediation hereunder to industrial/commercial standards,
and/or the attainment of a No Further Action Determination, may require
engineering controls and institutional controls, including deed
restrictions, that the applicable Environmental Agency determines are
necessary in connection with the Remediation. Buyer agrees to accept such
restrictions and controls as may be approved by an Environmental Agency and
agrees that such restrictions and controls consistent with this Section
3.2(d) shall be binding on Buyer and any successors or permitted assigns of
Buyer.
3.3 Fines and Penalties. Seller shall pay administrative or civil
fines or penalties assessed by an Environmental Agency in connection with
Known Pre-Closing Contamination or Unknown Pre-Closing Contamination,
regardless of any allocation of responsibility for Remediation Costs
hereunder for which Seller receives notice in accordance with Section
3.2(c) hereof, provided that such fines and penalties were not a result of
Buyer's actions or failure to act. Buyer and not Sellers shall be solely
responsible for payment of any administrative or civil fines or penalties
assessed by an Environmental Agency as a result of Buyer's actions or
failure to act or for which Seller does not receive notice in accordance
with Section 3.2(c) hereof.
3.4 Aggregate Responsibility. Notwithstanding any other provision of
this Agreement, Sellers' aggregate responsibility for Remediation Costs
under this Agreement, including without limitation Sections 3.1(a) and
3.1(b) hereof, shall not exceed 50% of the Purchase Price as defined in the
Purchase Agreement. Sellers shall provide Buyer with a cumulative
semi-annual accounting of all amounts spent in respect of Remediation Costs
under this Agreement.
3.5 Retained Liabilities. Notwithstanding any contrary provision of
this Agreement, Sellers shall retain all liability for Remediation and
claims by Third Parties in respect of Hazardous Substances present on or
under property other than a Facility as a result of operations of such
Facility, the Business or the Germany Business prior to the Closing Date.
Buyer agrees to provide Sellers with prompt notice of Buyer's receipt of any
such claim.
3.6 Additional Environmental Investigations. Sellers agree to permit
Buyer, between the date hereof and the Closing Date, and any professionals
retained by Buyer, to conduct such additional environmental investigations
as Buyer, in its sole discretion, deems necessary, including sampling and
analysis at the Facilities located in Mapleton, Illinois, Janesville,
Wisconsin and Flimby, U.K.
ARTICLE 4
Obligations of Buyer
4.1 Buyer's Sole Obligations. Notwithstanding any other provision of
this Agreement, Buyer shall be solely responsible for the following
matters:
(i) Any and all Remediation Costs incurred by Buyer in responding to
Post-Closing Contamination;
(ii) Any and all Remediation Costs incurred by Buyer in conducting
Remedial Action that Sellers do not perform or are not otherwise
responsible for in accordance with Section 3.1(d) hereof or has not
been required by an Environmental Agency within seven years after the
Closing;
(iii) Any and all Remediation Costs incurred by Buyer related to an
Environmental Claim for which Buyer has failed to provide Sellers
notice in accordance with Section 3.2(c) hereof;
(iv) Any and all Remediation Costs incurred by Buyer in conducting
Discretionary Remediation at any Facility;
(v) Any and all Remediation Costs incurred as a consequence of a
change in Environmental Laws or, except as set forth in Section 3.1(d)
hereof, a change in use of any Facility by Buyer after the Closing;
(vi) Subject to Section 3.1(c) hereof, any and all Remediation Costs
for Unknown Pre-Closing Contamination that are less than $25,000, per
occurrence, regardless of the date upon which the matter arises;
(vii) Buyer's allocated share of Remediation Costs for Unknown
Pre-Closing Contamination, to the extent Sellers are not liable for
such costs pursuant to Section 3.1(b), except as set forth in Section
3.1(c); and
(viii) Any administrative or civil fines or penalties assessed by an
Environmental Agency in connection with Known Pre-Closing Contamination
or Unknown Pre-Closing Contamination as a result of Buyer's actions or
failure to act or for which Seller does not receive notice in
accordance with Section 3.2(c) hereof and in connection with
Post-Closing Contamination.
ARTICLE 5
Performance of Remediation
5.1 Responsibility to Direct Work. Sellers shall have primary
responsibility for directing the performance of any Remediation for which
they have greater than 50% of the monetary liability, in whole or in part,
under this Agreement and shall retain all environmental consultants to
perform the Remediation, and Buyer shall have primary responsibility for
directing the performance of any Remediation for which it has 50% or more
of the monetary liability, in whole or in part, under this Agreement, and
shall retain all environmental consultants to perform the Remediation. All
environmental consultants so retained shall be with competent, recognized
consulting firms. The party directing the Remediation shall be the
"Directing Party," and the other party shall be the "Other Party." The
Directing Party shall review with the Other Party all material aspects of
the
proposed Remediation, as described below. The Directing Party shall provide
the Other Party with a draft of any proposed Remedial Action workplan,
investigation report, report regarding completed Remedial Action and other
similar reports and shall provide the Other Party with an opportunity to
review and comment upon the draft for a period of 30 days before it is
submitted to an Environmental Agency. The Directing Party shall incorporate
any reasonable revisions suggested by the Other Party if: (i) such
revisions do not materially alter the cost or scope of the proposed
Remediation, (ii) such revisions are necessary to comply with the terms
hereof or Environmental Laws or (iii) if Buyer is the Other Party, such
revisions are necessary for Buyer to operate the facilities in the ordinary
course of business. The Directing Party shall promptly provide the Other
Party with copies of all written communications between the Directing Party
and any Environmental Agency concerning any Remediation. The Directing
Party shall also provide the Other Party with notice of, and the Other
Party shall be entitled to attend, any meetings with representatives of the
Environmental Agency having jurisdiction over the Remediation or
environmental consultants concerning the Remediation. Similarly, the Other
Party (if it is the Buyer) shall advise the Directing Party of any matters
relating to a Facility that may affect the Directing Party's ability to
implement the Remediation. The Other Party and the Directing Party
generally shall cooperate in good faith to develop a mutually satisfactory
Remedial Action Plan which can be accomplished within any deadlines
established by an Environmental Agency.
The Directing Party shall have the right to initiate communications
with an Environmental Agency concerning the proposed Remediation at any
time. The Other Party agrees that it will not initiate any consultation
with any Environmental Agency concerning a Remediation being undertaken and
paid for by the Directing Party without providing notice to the Directing
Party, unless after consideration of the time delay associated with giving
prior notice to the Directing Party, any report that the Other Party is
legally required to give to an Environmental Agency would be untimely. The
Other Party shall also provide the Directing Party with advance notice of
any meeting it proposes to have with any Environmental Agency concerning
the Remediation, and provide the Directing Party with an opportunity to
attend. Regardless of whether the Directing Party or a representative of
the Directing Party attends any such meeting, or in any other case, the
Other Party agrees that it will not take any action with the intent of
interfering with or delaying the Directing Party's work or increasing the
Directing Party's responsibility beyond that which is required under this
Agreement or under any Environmental Laws.
5.2 Implementation of Work. All Remediation shall be conducted in a
manner that does not interfere unreasonably with or adversely affect
Buyer's operation of the Facility at which Remediation is being performed.
Subject to Sellers' right to direct the work when they are the Directing
Party, Buyer shall be kept advised of, and may oversee, the implementation
of the Remediation. Buyer, at its sole expense, and when it is not the
Directing Party, may also inspect all stages of the Remediation provided
that such inspection does not unreasonably interfere with or delay the
work. Following completion of Remediation for which Sellers are the
Directing Party, Buyer shall have title to all improvements, equipment and
other items required with respect to any Remediation.
5.3 Non Applicability. Articles 5, 6 and 7 shall not apply to any
Remediation for which Buyer has sole responsibility.
ARTICLE 6
Access
Sellers shall be granted access to the Facilities during normal
business hours or at such other times as may be agreed upon by Buyer and
Sellers, for the purpose of implementing any Remediation for which Sellers
are responsible under this Agreement. Sellers shall coordinate with Buyer
as to the timing of specific Remediation activities for which Sellers are
the Directing Party so as to minimize any disruption of Buyer's operations.
In this regard, Sellers shall provide Buyer with at least 48 hours advance
notice of their intention to enter a Facility for the purposes of
performing such Remediation. Buyer and Sellers agree to cooperate in good
faith to select a mutually acceptable alternative date for entry onto a
Facility if entry on the date desired by Sellers would result in an
unreasonable interference with Buyer's use or operation of such Facility.
ARTICLE 7
Insurance
Sellers agree that, in performing Remediation of a Facility, Sellers
or Sellers' agents shall carry liability insurance in the following minimum
amounts:
KINDS OF INSURANCE IN LIMITS NOT LESS THAN
Workmen's Compensation Statutory
Employer's Liability $100,000 each accident/
disease $500,000 Policy Limit
Comprehensive General Liability Combined Bodily Injury and
Property Damage
$1,000,000 each person
$1,000,000 each occurrence
Automotive Bodily Injury Liability (including $1,000,000 each person
hired automobiles and non-ownership liability). $1,000,000 each occurrence
Automotive Property Damage Liability $1,000,000 each occurrence
(including hired automobiles and non-
ownership liability).
ARTICLE 8
Indemnification
8.1 Indemnification by Sellers. Sellers agree to indemnify, defend and
save harmless Buyer and its Affiliates from and against any and all Claims,
liabilities, losses, costs and expenses (including reasonable fees and
expenses of attorneys and environmental consultants) (collectively,
"Losses") directly or indirectly arising out of or related to:
(a) any breach by Sellers of any of the representations, warranties
or covenants of Sellers set forth in this Agreement;
(b) the performance by Sellers of Remediation in accordance with the
terms and provisions hereof;
(c) Sellers' obligations under Sections 3.1 and 3.3 hereof; and
(d) any liabilities retained by Sellers pursuant to Section 3.5
hereof.
8.2 Indemnification by Buyer. Buyer agree to indemnify, defend and
save harmless Sellers and their Affiliates from and against any and all
Losses directly or indirectly arising out of or related to:
(a) any breach by Buyer of any of the representations, warranties or
covenants of Buyer set forth in this Agreement;
(b) the performance by Buyer of Remediation in accordance with the
terms and provisions hereof; and
(c) Buyer's obligations under Section 4.1 hereof.
8.3 Procedures for Indemnification. The party entitled to
indemnification hereunder (the "Indemnitee") shall promptly notify the
party providing indemnification hereunder (the "Indemnitor") in writing, in
reasonable detail, of all matters which may give rise to the right to
indemnification hereunder, it being understood that if the Indemnitor does
not receive notice of any matter known to the Indemnitee and as to which
the Indemnitee is entitled to indemnification hereunder in time to contest
the determination of any such liability, the Indemnitor shall not be
obligated to indemnify the Indemnitee with respect thereto only if
Indemnitor is actually prejudiced by the failure to receive timely notice.
Neither the Indemnitor nor the Indemnitee shall admit any liability with
respect to, or settle, compromise, or discharge any matter covered by this
Article 8, without the prior written consent of the other. The Indemnitor
shall have the right to defend through counsel of its own choosing, at its
own expense, any action which may be brought by a third-party in connection
therewith, provided, however, that the Indemnitee shall have the right to
have its counsel participate in such defense at its own expense. Indemnitor
and Indemnitee shall keep each other informed of all settlement
negotiations with third parties. Indemnitor and Indemnitee shall permit
each other reasonable access to books and records and otherwise cooperate
with all reasonable requests of each other in connection with any
indemnifiable matter resulting from a claim by a third-party.
8.4 Definitions. For purposes of this Article 8, the following terms
shall have the following meanings:
(a) "Claims" means all assertions, allegations, complaints, causes of
action, demands, suits, notices of actual or potential liability or
responsibility, claims for reimbursement or contribution, orders,
judgments, injunctions, requests or demands under claim of authority to
take action or refrain from taking action, liens, proceedings in
condemnation, executions upon judgment, or other claim, event,
information, or occurrence with respect to which a reasonable person
would respond or defend against. Claims shall include claims with or
without merit asserting liability for personal injury, death, sickness,
disease, emotional distress, loss of or damage to real or personal
property, pollution, nuisance, environmental damage or response action,
whether based on statute, strict liability, violation of any laws and
regulations applicable to the ownership or operation of the Facilities
(except as otherwise limited by the definition of Environmental Laws
hereunder), tort, warranty, contract, or the status of a party as
seller, buyer, owner, operator, generator, transporter, disposer or
otherwise in association with handling products, facilities or
materials.
ARTICLE 9
Limitation of Claims
It is the parties' intent that this Agreement set forth Sellers' and
Buyer's exclusive obligations to each other with respect to environmental
conditions associated with the Facilities, the Business or the Germany
Business excluding, however, compliance of Facility operations with
Environmental, Occupational, Health and Safety Laws addressed in the
Purchase Agreement. Buyer and Seller waive all other rights against each
other related to such environmental conditions, including rights otherwise
provided by law, including common law.
ARTICLE 10
Dispute Resolution
In the event of a dispute between the parties regarding any matter set
forth herein, the parties shall first endeavor to resolve such dispute at
the working team level (i.e., among the persons principally responsible for
discharging the parties' respective obligations hereunder). If the parties
are unable to resolve the dispute at the working team level, the dispute
shall be referred to a representative of senior management of each of Witco
Corporation, on behalf of Sellers, and Buyer for resolution. The parties
shall have 60 days from the date on which such dispute is referred to their
respective members of senior management to resolve the matters being
disputed. If the parties are unable to resolve the disputes within such 60
day period, the disputes shall be referred for final resolution to binding
arbitration in accordance with procedures mutually agreed between the
parties.
ARTICLE 11
Miscellaneous
11.1 Incorporation of Purchase Agreement. The provisions of Article 14
(Miscellaneous) of the Purchase Agreement, other than Section 14.1 thereof,
are incorporated herein and made a part of this Environmental Agreement.
11.2 No Assignment. This Agreement shall not be assignable by Buyer
without the prior written consent of Sellers, with the exception, however,
that Buyer may assign this Agreement to those of its Affiliates to which
Buyer may transfer the Facilities and/or the Business at any time without
Sellers' prior written consent. In such event Buyer shall provide Seller
with prompt notice of such assignment. Regardless of such assignment,
however, Buyer shall at all times remain liable to Sellers for its
obligations under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective duly authorized officers as of the date
first above written.
WITCO CORPORATION,
by:
-------------------------
Name:
Title:
▇▇▇▇▇▇▇▇▇▇▇ SKW SURFACTANTS GMBH,
by:
------------------------
Name:
Title:
Exhibit C
Exhibit C
to the
Purchase Agreement
ARBITRATION PROCEDURES
The following are the arbitration procedures to be used in
resolving any disputed portion of the Proposed Statements:
1. Written submission (the "Initial Submission") of each
party's position on issues to be arbitrated, if disputed by
the parties.
a. The Initial Submission will be submitted in writing to
the Referee by the end of the 15 business day period
referred to in Section 3.2(c)(ii) of the Purchase
Agreement.
2. A decision by the Referee (the "Initial Decision") on the
issues to be arbitrated (if disputed by the parties) will be
made within 15 days of the Initial Submission.
3. Written submissions of each party's substantive position on
issues (the "Substantive Submission").
a. The Substantive Submission will be submitted in writing
to the Referee within two weeks of the earlier of the
following two events: the date of the Referee's Initial
Decision or the end of the 15 business day period
referred to in Section 3.2(c)(ii) of the Purchase
Agreement.
b. Affidavits and all supporting material will be included
with the Substantive Submission.
4. Written Replies (the "Written Replies")
a. Written Replies will be filed within 10 days after
receipt of each party's Substantive Submission.
b. Affidavits and supporting materials will be included
with the Written Replies.
5. Conference with Referee (the "Referee Conference").
a. The Referee Conference will take place within 10 days
after the Written Replies are filed.
b. Each party will have 20 minutes to present its
position.
c. Accountants and other advisors who were involved in the
transaction will be present to answer questions.
d. Each party will then have 10 minutes to respond to the
other party's presentation.
e. After presentations and rebuttals, each party will
respond to questions from, or comments of, the Referee.
6. Referee's final decision.
a. The decision of the Referee, which will be final and
binding (absent manifest error or correction by the
Referee), will be rendered within 15 days of the
Referee Conference.
Exhibit D
Witco Surfactants GmbH
Profit and Loss Statement
Year Ended December 31, 1998
(All amounts in thousands)
Adjusted
Balance Balance Balance
in DM in USD Adjustments in USD
Net Sales 141,390 $ 80,507 $ 80,507
Cost of Goods Sold 113,243 64,481 64,481
-------- -------- -------- --------
Gross Profit 28,147 16,027 16,027
Operating Expenses
Selling expense 8,015 4,564 $ 369 4,933
General and administrative expenses 5,200 2,961 2,961
Research and development 5,792 3,298 3,298
Other expense (income) - net (826) (470) (470)
-------- -------- -------- --------
Total Operating Expenses 18,181 10,352 369 10,721
-------- -------- -------- --------
Operating Income 9,966 5,675 (369) 5,306
Other
Interest expense 473 269 269
Interest income (526) (300) (300)
-------- -------- -------- --------
Income Before Income Taxes 10,019 5,705 (369) 5,336
Income Tax Benefit 5,009 2,852 (184) 2,668
-------- -------- -------- --------
Net Income 5,010 $ 2,853 ($185) $ 2,668
======== ======== ======== ========
(Note: As owned and operated by Witco.)
Witco Surfactants GmbH
Analysis of Other Expense (Income) - Net Year Ended December 31, 1998
(All amounts in thousands of dollars)
Reversal of 1997 overaccruals ($200)
Charges to Witco GmbH for services rendered (276)
Gain on sale of fixed assets (204)
Expatriate cost differential 179
Other - net 31
----------
($470)
==========
EXHIBIT E
DRAFT (5) GPW/DJF: 2/6/99
To: [ ]
The Company: Witco Corporation UK Limited
The Property: Land lying to the south west of Elm Avenue, Flimby, Maryport
The Transaction: The sale of the Company's oleochemicals division
On your behalf we have investigated the title of the Company to the
Property which is more particularly described in the First Schedule in the
knowledge that you are relying on the accuracy of the statements in this
Certificate for the purpose of the Transaction.
1. Introduction
1.1 We have:-
(A) Examined and considered the documents of title and other
documents and papers relating to the Property produced to us,
which the Company has confirmed to us are all the documents of
title and other documents and papers relating to the Property of
which the Company has knowledge having taken all reasonable care
and enquiry and which are material for the purposes of giving
this Certificate; and
(B) Considered the results of the searches and replies to the
enquiries referred to in Part I of the Second Schedule which are
those which we consider appropriate in the circumstances of the
Transaction and having regard to the nature of the Property.
The information given in this Certificate arises solely from such
examination and consideration and the results of such searches and
enquiries and (to the extent that these do not disclose such
information) from material provided to us by the Company.
1.2 We have not inspected the Property nor have we made any enquiries of
the occupiers of the Property (other than the Company).
1.3 We have assumed that all deeds produced to us have been validly
executed and delivered by the parties to them and that all documents
produced to us are within the capacity and powers of, and have been
validly authorised by, each party. There is nothing on the face of the
documents which indicates otherwise.
1.4
(A) We have assumed, and the Company or a representative of the Group
("the Group") of companies of which the Company is part has
confirmed to us in writing, that the Company has provided us with
all documents and information relating to the Property which are
material for the purpose of giving this Certificate; and
(B) Where information has been provided to us by the Company, our
investigations have given no reason to doubt the accuracy of that
information but we cannot accept responsibility for it.
1.5 We give no opinion as to the capital or rental value of the Property.
1.6 Whilst we express no opinion on whether any transaction affecting the
Company's title to the Property may have been at an undervalue or
otherwise liable to be set aside under the provisions of the
Insolvency ▇▇▇ ▇▇▇▇, the Company has told us that it is not aware of
any circumstances which could render any such transaction liable to be
set aside under the provisions of that Act.
1.7 Any matter disclosed by this Certificate in relation to any particular
clause or paragraph is to be treated as being disclosed in relation to
any other relevant clause or paragraph.
1.8 Any reference to the Property includes each and every part of it and
all buildings and structures on it.
1.9 Any reference, express or implied, to a statute includes references
to:-
(A) That statute as amended, extended or applied by or under any
other statute at the date of this Certificate;
(B) Any statute which that statute re-enacts (with or without
modification); and
(C) Any subordinate legislation made at the date of this Certificate
under that statute, as amended, extended or applied as described
in paragraph (A) above or under any statute referred to in
paragraph (B) above.
1.10 The headings in this Certificate do not affect its interpretation.
2. Reliance on this Certificate
This Certificate is addressed to you and is intended solely for your
benefit in connection with the Transaction. It is not to be relied
upon by any other person or used for any other purpose and neither its
contents nor its existence may be disclosed other than to your
professional advisers without our prior written consent.
3. Applicable law
This Certificate is limited to English law as applied by the English
Courts and is given on the basis that it will be governed by and
construed in accordance with English law.
4. Certificate
On the basis of and insofar as the same is discoverable from our
investigations mentioned above, we certify that:-
4.1 Title
(A) Subject to the matters referred to in Parts I and II of the
Seventh Schedule:-
(i) In our opinion the Company has a good and marketable title
to the Property and is solely legally and beneficially
entitled to the Property;
(ii) The details of the Property set out in the First Schedule
are complete and accurate in all respects;
(iii) If the Company holds the Property under the terms of a
lease, the terms of the lease are fairly summarised in Part
I of the Fifth Schedule and the statements set out in Part
II of the Fifth Schedule are complete and accurate in all
respects;
(B) If the title to the Property is registered at H.M. Land Registry,
the Company is registered with the quality of title under the
title number referred to in the First Schedule. If the title to
the Property is not registered, save as specified in Part I of
the Seventh Schedule, the title of the Company commences with a
good root of title at least 15 years old where the Company's
tenure is freehold or commences with the Lease and (where
appropriate) continues from a good root of title at least 15
years old where the Company's tenure is leasehold.
4.2 Insurance
Save as mentioned in Part IV of the Seventh Schedule:-
(A) The Company or its insurance brokers have told us that the
details of the insurance of the Property are fairly summarised in
the Fourth Schedule.
(B) The Company or its insurance brokers have provided us with a
schedule of insurance cover and confirmation that the premiums
required to maintain such insurance in force up to the renewal
date next after the date of this Certificate have been paid.
(C) The Company has told us that it is not aware of any circumstances
rendering the policy void or voidable.
(D) Where the Property is leasehold and the Company is not an insured
under the policy, the Company or its insurance brokers have told
us that the interest of the Company is noted on the policy and
that a letter in satisfactory terms has been obtained from the
insurance company waiving any right which the insurance company
may have to be subrogated to the rights of the insured against
the Company.
4.3 Use
The Company has told us that the Property is presently used for the
purpose[s] (the "Existing Use") referred to in the First Schedule.
4.4 Matters affecting the Property
The statements set out in the Third Schedule are complete and accurate
in all respects except to the extent that they may be qualified in
Part I of the Seventh Schedule.
4.5 Leases
(A) Any leases, underleases, tenancies, licences or other agreements
or arrangements giving rise to rights of occupation (in each case
as amended) (the "Letting Documents") to which the Property is
subject are referred to in Part I of the Sixth Schedule. The
Company has told us that it is otherwise in actual occupation of
the Property on an exclusive basis and that, except by virtue of
the Letting Documents, no person, other than the Company, has any
right (actual or contingent) to possession, occupation or use of
or interest in the Property.
(B) The statements set out in Part II of the Sixth Schedule are
complete and accurate in all respects except to the extent that
they may be qualified in Part II of the Seventh Schedule.
5. The Company
5.1 A copy of the final draft of this Certificate has been sent to the
Company. The Company or a representative of the Group has confirmed to
us in writing within the five working days before the date of this
Certificate that to the best of the knowledge, information and belief
of the Company the information contained in this Certificate is
complete and accurate in all respects.
5.2 In the Schedules to this Certificate references to the Company
providing information to us shall be deemed to include a
representative of the Group providing such information to us.
THE FIRST SCHEDULE
The Property
1. Brief description: Land lying to the south west of Elm Avenue, Flimby,
Maryport shown edged red on the attached plan.
2. Tenure: Freehold.
3. Registered title number: CU42787.
4. Quality of title: Title Absolute.
5. Root of title, if unregistered: Not applicable.
6. Existing Use: The manufacture of speciality surfactants.
7. Easements benefiting the Property (if any): None.
THE SECOND SCHEDULE
Searches and enquiries
1. Date of official search in the Index Map and Parcels Index. 13th April
1999.
2. Date of local search certificate and replies to enquiries in part I of
Con 29 (1994 Edition) and enquiries No. 33 and 34 in part II of Con 29
(1994 Edition). 22nd April 1999.
3. Date of common land and town and village greens search. 12th April
1999.
4. Date of enquiries of The Coal Authority as to past, present and future
mining operations in proximity to the Property. 12th April 1999.
5. Date of Environment Agency reply to enquiry. 14th May 1999.
6. Date of Land Charges Act searches against every estate owner who was a
party to any transaction, or concerned in any event, comprised in the
relevant title (see Law of Property ▇▇▇ ▇▇▇▇ Section 25) where there
is no clear search with the title deeds. Not applicable.
7. Date of Land Charges Act searches against the Company and date of
expiry of priority. Not applicable.
8. Date of Land Registry search and date of expiry of priority. [ ].
9. Where title to the Property is not registered, date of search at the
Companies Registry of the file of all companies disclosed by the
documents of title as estate owners of the Property since the root of
title. Not applicable.
10. Date of search at the Companies Registry against the Company. [ ].
11. Dates and details of other searches or enquiries we considered to be
appropriate. None.
Note: These searches will be updated prior to completion.
THE THIRD SCHEDULE
Matters affecting the Property
Save as stated in Part I of the Seventh Schedule:
GENERAL
1. Documents of title
The documents of title consist of original documents or properly
examined abstracts and are held by us to the order of the Company.
Where necessary all title deeds are fully stamped with ad valorem
stamp duty and a produced document stamp.
2. Registration
Where title to the Property is not registered at H.M. Land Registry,
there is no caution registered against first registration and no event
has occurred in consequence of which such registration of title should
have been effected.
3. Fixtures and fittings
The Company has told us that all fixtures and fixed plant at the
Property are the Company's property free from encumbrances.
4. Access
The Property abuts a roadway maintainable at public expense at each
point where access is gained or has the benefit of all necessary
rights of way to and from such a roadway.
5. Rights and easements
At the date of this Certificate there are appurtenant to the Property
the rights and easements set out in the First Schedule. The Company
has told us that those rights and easements are the only rights and
easements necessary for the use and enjoyment of the Property or (if
no rights and easements are so set out) that none is required. Those
rights and easements are enjoyed freely without interruption and
without restriction as to hours of use or otherwise and are held for
the same estate or interest as the Company's estate or interest in the
Property. None of those rights and easements is enjoyed on terms
entitling any person to terminate or curtail it.
6. No recent construction work/agreements and warranties etc.
The Company has told us that no buildings on the Property have been
erected or extensions or major alterations carried out within the last
six years and that there are no agreements, certificates, guarantees,
warranties or insurance policies relating to any construction, repair,
replacement, treatment or improvement of any building constructed on
the Property.
7. Title policies
The Company has told us that there are no insurance policies relating
to any question of title affecting the Property.
8. Charges
There are no mortgages, charges or liens, legal or equitable, specific
or floating, affecting the Property.
9. Agreements
There are no agreements for sale, estate contracts, options, rights of
preemption or similar matters affecting the Property the provisions of
which remain to be performed.
10. Encumbrances
The Property is subject only to the covenants, restrictions,
stipulations, easements or other encumbrances of a material nature
disclosed in Part I of the Seventh Schedule. If there are no such
matters disclosed in Part I of the Seventh Schedule the Property is
not subject to any covenants, restrictions, stipulations, easements or
other encumbrances of a material nature. The Company has told us that
it has not received notice of any breach of and is not aware of any
breach of any covenants, restrictions, stipulations, easements or
other matters disclosed in Part I of the Seventh Schedule and that
such covenants, restrictions, stipulations, easements and other
matters do not materially adversely affect the Existing Use.
11. Adverse rights
The Company has told us that it has inspected the Property not more
than 10 working days before the date of this Certificate and that so
far as it is aware no one is in adverse possession of the Property or
has acquired or is acquiring any rights adversely affecting the
Property.
12. Overriding interests
The Company has told us that so far as it is aware the Property is not
subject to any of the overriding interests referred to in Section 70
of the Land Registration ▇▇▇ ▇▇▇▇.
13. Complaints
The Company has told us that it has not had occasion to make any claim
or complaint in relation to any neighbouring property or its use or
occupation.
14. Disputes
The Company has told us that there are no disputes, claims, actions,
demands or complaints in respect of the Property which are outstanding
or which are expected by it.
15. Notices
The Company has told us that no notices materially affecting the
Property have been given or received.
16. Outgoings
The Company has told us that the Property is not subject to the
payment of any outgoings other than the uniform business rate or water
rates (and in the case of leasehold property sums due under the Lease
including, without limitation, rent, insurance and service charge
reserved by the Lease) and the Company has told us that all such
payments have been made to date.
PLANNING
17. Lawful use
The Existing Use is a lawful or permitted use under the Town and
Country Planning legislation (which term includes the Town and Country
Planning ▇▇▇ ▇▇▇▇, the Planning (Listed Buildings and Conservation
Areas) ▇▇▇ ▇▇▇▇ and the Planning (Hazardous Substances) Act 1990).
18. Development
The Company has told us that it is not aware that any development
which has been carried out in relation to the Property is unlawful or
has been carried out without any necessary consents and permissions
being obtained, no enforcement proceedings under the Town and Country
Planning legislation have been commenced or notices served and it is
not aware that any such proceedings or notices have been proposed.
19. Validity of permissions
The Company has told us that no planning permission affecting the
Property is the subject of an existing challenge as to its validity.
Our local authority search did not reveal that any planning permission
has been issued within the three months immediately before the date of
such search.
20. Conditions
20.1 The planning permissions affecting the Property are either
unconditional or subject only to conditions which the Company has told
us have either been satisfied so that nothing further remains to be
done under them or, in the case of continuing conditions, are being
complied with and the Company knows of no reason why such conditions
should not continue to be so complied with.
20.2 There are no unusual or onerous conditions attaching to any planning
permission affecting the Property, and no planning permission is
subject to any condition or limitation making it temporary (other than
the conditions referred to in Town and Country ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
Sections 91 and 92) or personal to anyone.
21. Pending applications
The Company has told us that there is no application for planning
permission in respect of the Property awaiting determination and no
planning decision or deemed refusal which is subject to appeal.
22. Planning agreements
There is no agreement or planning obligation affecting the Property
under Section 18 of the Public Health ▇▇▇ ▇▇▇▇, Section 52 of the Town
and Country Planning ▇▇▇ ▇▇▇▇, Section 38 and Section 278 of the
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, Section 33 of the Local Government (Miscellaneous
Provisions) ▇▇▇ ▇▇▇▇, Section 106 of the Town and Country ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇, Section 104 of the Water Industry Act 1991 or any provision in
legislation of a similar nature and the Company has told us that it is
not required to enter into any such agreement or obligation.
23. Listed buildings etc.
None of the buildings or other structures or erections on the Property
has been listed under Section I of the Planning (Listed Buildings and
Conservation Areas) ▇▇▇ ▇▇▇▇ nor has the relevant local authority
served or authorised the service of any building preservation notice
under Section 3 of the Planning (Listed Buildings and Conservation
Areas) ▇▇▇ ▇▇▇▇ or any repairs notice under Section 48 of the Planning
(Listed Buildings and Conservation Areas) ▇▇▇ ▇▇▇▇ in respect of the
Property.
24. Compensation potentially repayable
No compensation has been received in respect of the Property under the Town
and Country Planning legislation which is potentially repayable under such
legislation.
25. Designated areas
The Company has told us that it is not aware that the Property is
within an area of archaeological importance nor is any building or
erection on the Property a scheduled monument within the meaning set
out in the Ancient Monuments and ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ nor is
the Property within an area or subject to any order or designation
which may qualify, regulate or affect its use in the future.
STATUTORY MATTERS
26. Statutory requirements
The Company has told us that it is not aware of any outstanding order,
notice or other requirement of any local or other authority that
affects the Existing Use or involves expenditure in compliance with it
nor of any other circumstances which may result in any such order or
notice being made or served.
27. Statutory compliance
The Company has told us that it has not received notice of any breach
of the requirements and that the Company is not aware of any material
breach of the requirements of:-
The Shops Acts 1950 to 1965
The ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
The Offices, Shops and Railway Premises Act 1963
The Fire Precautions ▇▇▇ ▇▇▇▇
The Health and Safety at Work etc. ▇▇▇ ▇▇▇▇
The Sunday Trading ▇▇▇ ▇▇▇▇
and other current or previous legislation or any regulations, orders,
notices or directions made or issued under such legislation capable of
enforcement at the date of this Certificate which affect the Property.
28. Fire certificate
The Company has told us that a fire certificate covering the Existing
Use of the Property is in force or that a fire certificate is not
required and that so far as the Company is aware the Property complies
in all material respects with current fire regulations affecting the
Property and the current requirements of the insurers of the Property.
29. Noise abatement zone order
The relevant local authority has not made or resolved to make any
noise abatement zone order under Section 63 of the Control of
Pollution ▇▇▇ ▇▇▇▇ for the area which includes the Property.
30. Compulsory acquisition
The Company has told us that it is not aware of any resolution,
proposal, order or act made or contemplated for the compulsory
acquisition of the Property or any private access to it by the local
or other authority.
OTHER MATTERS
31. Other matters
There are no other matters disclosed by our consideration of the
documents of title and other documents and papers referred to in
paragraph 1.1(A) of this Certificate or by the results of the searches
and the replies to enquiries referred to in Part I of the Second
Schedule which are not specifically referred to elsewhere in this
Certificate and which in our opinion should be brought to your
attention.
THE FOURTH SCHEDULE
Insurance details
Not applicable - the recipient will make its own insurance arrangements
following completion of the Transaction.
THE FIFTH SCHEDULE
Part I of the Fifth Schedule
Details of the Lease under which the Property is held
Not applicable
Part II of the Fifth Schedule
Matters affecting the Lease
Not applicable
THE SIXTH SCHEDULE
N.B. In this Schedule "rent" includes licence fee, "tenancy" includes
licence and "tenant" includes licensee.
Part I of the Sixth Schedule
Letting Document
None
Part II of the Sixth Schedule
Matters affecting the Letting Documents
Not applicable
THE SEVENTH SCHEDULE
Part I of the Seventh Schedule:
Qualifications to paragraph 4.1 of this Certificate
and to statements contained in the Third Schedule
3.1 The liquid nitrogen storage tank is the property of BOC.
6.1 All drainage and roadways on the Property were replaced between three
and six years before the date hereof.
10.1 Mines and minerals together with ancillary powers of working are
excepted and reserved from the registered title to the Property.
10.2 Our local search has revealed a footpath on the Property the location
of which is marked in purple on the attached plan. The Company has
told us that there is a public right of way across this footpath.
31.1 Our Coal Authority search has revealed that the Property is within the
likely zone of influence on the surface from workings in seams of
coal, the last date of workings being 1956. Notices of entitlement to
withdraw support from the area were published in 1955. Reserves of
coal exist in the locality of the Property which could be worked at
some time in the future subject to feasibility, licences and planning
consents.
31.2. Our Environment Agency search has revealed that parts of the Property
have been affected by flooding, and that there have been six
substantiated pollution incidents within a 250 metre radius of the
site, of which four were classed as chemical and two as agricultural.
Part II of the Seventh Schedule:
Qualifications to statements contained in Part II of the Fifth Schedule
Not applicable.
Part III of the Seventh Schedule:
Qualifications to statements contained in Part II of the Sixth Schedule
Not applicable.
Part IV of the Seventh Schedule:
Qualifications to statements contained in paragraph 4.2 of this Certificate
(as to Insurance)
Not applicable.