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Exhibit 10.5
PARENT AGREEMENT
(PVC POWDER BLENDS, LP)
AND BUSINESS OPPORTUNITY AGREEMENT
AMONG
OCCIDENTAL CHEMICAL CORPORATION,
OCCIDENTAL PETROLEUM CORPORATION,
THE GEON COMPANY,
PVC POWDER BLENDS, LP
AND
OXY VINYLS, LP
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TABLE OF CONTENTS
Page
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SECTION 1 OWNERSHIP AND BUSINESS OF PARTNER SUBS............................... 3
1.1 Restrictions on Transfer and Pledge of Partner Sub Stock.... 3
1.2 Right of First Refusal and Right of First Option............ 4
1.3 Effect of Transfer.......................................... 6
1.4 Special Purpose Subsidiaries................................ 6
SECTION 2 STANDSTILL AGREEMENT AND CERTAIN OTHER MATTERS....................... 7
2.1 Standstill.................................................. 7
2.2 Exceptions.................................................. 7
SECTION 3 MISCELLANEOUS........................................................ 8
3.1 No Waivers.................................................. 8
3.2 Expenses in Connection with Exercise........................ 8
3.3 Confidentiality and Use of Information...................... 8
3.4 Partnership Competing Businesses............................ 9
3.5 Further Assurances.......................................... 9
3.6 Assignment; Successors and Assigns.......................... 9
3.7 Benefits of Agreement Restricted to the Parties............. 10
3.8 Notices..................................................... 10
3.9 Severability................................................ 12
3.10 Termination................................................. 12
3.11 Construction and Certain Definitions........................ 12
3.12 Counterparts................................................ 13
3.13 Governing Law............................................... 13
3.14 Obligations Regarding Affiliates............................ 13
3.15 Amendment................................................... 13
3.16 Jurisdiction; Consent to Service of Process; Waiver......... 13
3.17 Waiver of Jury Trial........................................ 14
3.18 Burlington Type Business.................................... 14
3.19 Pasadena Type Business...................................... 15
3.20 Burlington Non-Solicitation................................. 15
3.21 Pasadena Non-Solicitation................................... 16
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PARENT AGREEMENT
----------------
(PVC POWDER BLENDS, LP)
-----------------------
AND BUSINESS OPPORTUNITY AGREEMENT
----------------------------------
This PARENT AGREEMENT (PVC POWDER BLENDS, LP) AND BUSINESS OPPORTUNITY
AGREEMENT (this "Agreement") dated as of the 30th day of April, 1999, is entered
into among Occidental Chemical Corporation, a New York corporation ("OCC"), The
Geon Company, a Delaware corporation ("Geon"), Occidental Petroleum Corporation,
a Delaware corporation ("OPC"), PVC Powder Blends, LP, a Delaware limited
partnership (the "Partnership"), and Oxy Vinyls, LP, a Delaware limited
partnership (the "PVC Partnership," and together with OCC, OPC, Geon, and the
Partnership, the "Parties", and each individually, a "Party").
WHEREAS, each of OCC and Geon is a "Parent" for purposes of this
Agreement; and
WHEREAS, each of OPC and Geon is a "Subject Parent" for purposes of
this Agreement; PROVIDED, HOWEVER, that neither OPC nor Geon shall be a "Subject
Parent" from and after the expiration of 12 months from the date on which it and
its Affiliates no longer hold any Units in the Partnership; and
WHEREAS, Occidental PVC Compound LP, Inc., a Delaware corporation ("OCC
Partner Sub"), is a direct or indirect wholly-owned subsidiary of OCC; and OCC
is an indirect wholly-owned subsidiary of OPC; and
WHEREAS, 1999 General Compounding Partner Inc., a Delaware corporation
("Geon GP"), and 1999 Limited Compounding Partner Inc., a Delaware corporation
("Geon LP" and, together with Geon GP, the "Geon Partner Subs"), are both direct
wholly-owned subsidiaries of Geon; and
WHEREAS, OCC and Geon entered into a Master Transaction Agreement,
dated December 22, 1998 (the "Master Transaction Agreement"), providing for,
among other things, the formation of the Partnership pursuant to the Limited
Partnership Agreement of the Partnership dated as of the date of this Agreement
(the "Partnership Agreement") and the admission of the Geon Partner Subs and the
OCC Partner Sub as partners in the Partnership. The Geon Partner Subs and the
OCC Partner Sub, collectively or individually, as the context may require, are
referred to herein as the "Partner Subs"; and
WHEREAS, this Agreement is essential to the consummation of the closing
pursuant to the Master Transaction Agreement; and
WHEREAS, each Parent is willing to subject the Partner Sub Stock (as
defined in Section 1.1) to certain restrictions on transfer, as set forth in
this Agreement; and
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WHEREAS, each of OPC and Geon is willing to agree to certain covenants
in favor of the other in connection with the closing of the transactions
contemplated by the Master Transaction Agreement;
NOW THEREFORE, in consideration of the foregoing and the mutual
promises and covenants of the Parties, the Parties hereby agree as follows:
SECTION 1
OWNERSHIP AND BUSINESS OF PARTNER SUBS
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1.1 RESTRICTIONS ON TRANSFER AND PLEDGE OF PARTNER SUB STOCK.
(a) Each Parent agrees that, except as otherwise provided below in this
Section 1, or with the written consent of the other Parent, which consent may be
granted or withheld in such Parent's sole discretion, it will not, in any
transaction or series of transactions, directly or indirectly, (i) sell, assign
or otherwise dispose of, whether by act, deed, merger or otherwise ("Transfer")
or (ii) mortgage, pledge, encumber or create or suffer to exist any lien or
encumbrance upon or security interest in ("Pledge"), all or any part of the
capital stock or other equity interests (including any securities convertible
into or exchangeable for or carrying any rights to purchase, subscribe for or
otherwise acquire any such capital stock or other equity interests) of its
Partner Subs (collectively, the "Partner Sub Stock"). (Each of the defined terms
"Transfer"and "Pledge" is used herein both as a noun and as a verb.) Any attempt
by a Parent to Transfer or Pledge all or a portion of its Partner Sub Stock in
violation of this Agreement shall be void AB INITIO and shall not be effective
to Transfer such Partner Sub Stock or any portion thereof. The Partnership
Agreement contains provisions relating to the Transfer and Pledge of the Partner
Subs' direct interests in the Partnership.
(b) Each Parent agrees that all certificates (if any) representing
Partner Sub Stock, whether currently owned or hereafter acquired, shall carry
the following legend, which legend each Parent agrees to cause to be placed
thereon and to cause to remain thereon as long as the Partner Sub Stock is
subject to the restrictions of this Agreement:
THE SALE, ASSIGNMENT, PLEDGE OR OTHER TRANSFER OR HYPOTHECATION OF THE
STOCK OR OTHER EQUITY INTEREST REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO CERTAIN RESTRICTIONS PURSUANT TO AND MAY NOT BE EFFECTED
EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF AN AGREEMENT BINDING UPON
THE OWNER OF THE STOCK OR OTHER EQUITY INTEREST REPRESENTED HEREBY. THE
OWNER OR ISSUER WILL FURNISH A COPY OF SUCH AGREEMENT TO ANY PROPOSED
TRANSFEREE OR PLEDGEE WITHOUT CHARGE UPON REQUEST.
(c) Without the need for the consent of any Person and without the
application of the requirements of Section 1.2, each Parent may Transfer all
(but not less than all) of its Partner Sub Stock, if such Transfer is: (i) in
connection with (A) a merger, consolidation, conversion, share
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exchange or Change of Control of such Parent or (B) a sale or other disposition
by such Parent of assets including the Partner Sub Stock where such Partner Sub
Stock constitutes less than 50% of the book value of the aggregate assets to be
sold or disposed of, as reflected on such Parent's most recent audited
consolidated (or combined) financial statements; (ii) to an 80%-Owned Affiliate
of such Parent; or (iii) to the shareholders of (A) such Parent, in the case of
Geon, or (B) OPC, in the case of OCC; PROVIDED, HOWEVER, that the requirements
of Section 1.2(d)(i)-(vi) must be satisfied in connection therewith. For
purposes of the preceding sentence, the term "Change of Control" shall (A) for
Geon be defined in the same way as that term is defined for Geon in Section 2.2
in its capacity as a Subject Parent and (B) for OCC mean an event or
circumstance that results in OCC's no longer being an Affiliate of OPC.
(d) Except as provided in Section 1.1(c), nothing in this Agreement
shall prevent or restrict the Transfer or Pledge of the capital stock, equity
ownership interests or other securities of a Parent or any Person that owns a
direct or indirect interest in a Parent, and no such Transfer or Pledge of
securities issued by a Parent shall be deemed to constitute a Transfer or Pledge
of Partner Sub Stock hereunder.
(e) Each Parent (so long as such Parent is performing its obligations
hereunder) may Pledge all (but not less than all) of its Partner Sub Stock in
connection with a loan to such Parent, PROVIDED that (i) the loan to such Parent
has been approved by the Partnership and (ii) the Pledge shall be evidenced by
an instrument, reasonably satisfactory to the Partnership, wherein, in the case
of the Partner Sub Stock of Geon GP and Geon LP, the lender receiving such
Pledge shall agree that in the event such lender obtains a right of foreclosure
on Geon's Partner Sub Stock, such lender will foreclose on the Partner Sub Stock
of Geon's Partner Subs proportionately so that such lender will in all events
hold portions of Partner Sub Stock of Geon GP and Geon LP proportionate to
Geon's holdings thereof.
1.2 RIGHT OF FIRST REFUSAL AND RIGHT OF FIRST OPTION.
(a) Without the consent of the other Parent, no Parent may Transfer
less than all of its Partner Sub Stock, and unless such Transfer is otherwise
permitted by Section 1.1, no Parent may Transfer its Partner Sub Stock, directly
or indirectly, for consideration other than cash. Unless such Transfer is
otherwise permitted by Section 1.1, any Parent (the "Selling Parent") that
receives a bona fide offer to purchase all of its Partner Sub Stock that it
desires to accept (an "Offer") or that otherwise desires to Transfer all of its
Partner Sub Stock to any Person shall give written notice (the "Initial Notice")
to the Partnership and the other Parent (the "Offeree Parent") stating that the
Selling Parent has received an Offer or otherwise desires to Transfer its
Partner Sub Stock and shall set forth the cash purchase price and all other
terms of the Offer or the cash purchase price (established as provided below)
and all other terms on which it otherwise is willing to sell its Partner Sub
Stock (in each case, the "Offer Terms"). In establishing the Offer Terms for a
proposed sale that does not involve an Offer, the Selling Parent shall obtain an
appraisal from an independent appraiser with a reasonable level of industry
experience of the cash price that a willing buyer under no compulsion to buy
would pay and a willing seller under no compulsion to sell would accept for the
Partner Sub
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Stock of the Selling Parent (the "Fair Market Value"). Delivery of an Initial
Notice shall constitute the irrevocable offer of the Selling Parent to sell its
Partner Sub Stock to the Offeree Parent hereunder.
(b) The Offeree Parent shall have the option, exercisable by delivering
written notice (the "Acceptance Notice") of such exercise to the Selling Parent
within 60 days of the date of the Initial Notice, to elect to purchase all, but
not less than all, of the Partner Sub Stock of the Selling Parent on the Offer
Terms described in the Initial Notice. The Acceptance Notice shall set a date
for closing the purchase, such date to be not less than 30 nor more than 90 days
after delivery of the Acceptance Notice; PROVIDED, HOWEVER, that such time
period shall be subject to extension as reasonably necessary (up to a maximum of
an additional 120 days after such 90 day period) in order to comply with any
applicable filing and waiting period requirements under the Hart-Scott-Rodino
Antitrust Improvements Act (or any successor statute) or other Legal
Requirement. The closing shall be held at the Partnership's offices. The
purchase price for the Selling Parent's Partner Sub Stock shall be paid in
immediately available funds delivered at the closing, and all actions at the
closing shall conform in all material respects to the Offer Terms.
(c) If the Offeree Parent does not elect to purchase all of the Selling
Parent's Partner Sub Stock within 60 days after the receipt of the Initial
Notice, the Selling Parent shall have a further 180 days during which it may,
subject to Section 1.2(d), consummate the sale of its Partner Sub Stock (i)
substantially in accordance with the terms of the Offer or (ii) if no Offer is
involved, to a third party purchaser on terms that are not substantially more
favorable to such purchaser than the Offer Terms and at a price equal to not
less than 90% of the Fair Market Value of the Partner Sub Stock. If the sale is
not completed within such further 180-day period, the Initial Notice shall be
deemed to have expired and a new notice and offer shall be required before the
Selling Parent may make any Transfer of its Partner Sub Stock. If the Selling
Parent receives a written offer during such further 180-day period from a third
party purchaser that is for less than 90% of the Fair Market Value, and the
Selling Parent is willing to accept the offer, then (1) the offer shall be
treated as an Offer, and (2) the Selling Parent must comply with the provisions
of this Section 1.2 before the Selling Parent may make any Transfer of its
Partner Sub Stock to the third party purchaser that made the Offer.
(d) Notwithstanding the foregoing provisions of this Section 1.2,
except as provided in Section 1.1(c), a Parent may Transfer its Partner Sub
Stock only if all of the following occur:
(i) The proposed transferor is not in default in the timely
performance of any of its material obligations to the Partnership.
(ii) The Transfer is accomplished in a non-public offering in
compliance with, and exempt from, the registration and qualification
requirements of all federal and state securities laws and regulations.
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(iii) The Transfer does not cause a default under any material
contract (A) that has been approved unanimously by the Partnership
Governance Committee and (B) to which the Partnership is a party or by
which the Partnership or any of its properties is bound.
(iv) The Successor Parent executes an appropriate agreement to
be bound by this Agreement.
(v) The transferor and transferee bear all reasonable costs
incurred by the Partnership in connection with the Transfer.
(vi) The provisions of Section 1.2(e) are satisfied.
(vii) The Successor Parent must have sufficient resources to
assume the obligations of the Parent, including any capital that may
reasonably be expected to be requested from its Partner Subs by the
Partnership under the then effective Strategic Plan, or the Successor
Parent's obligations must be supported by a guarantee, letter of credit
or other credit support reasonably satisfactory to the other Parent,
and such Successor Parent must otherwise be reasonably acceptable to
the other Parent.
(e) Geon may Transfer the Partner Sub Stock of either of its Partner
Subs to any Person only if it simultaneously Transfers the Partner Sub Stock of
its other Partner Sub to such Person or a wholly-owned Affiliate of such Person.
1.3 EFFECT OF TRANSFER. Upon completion of any Transfer that is
permitted hereunder, the Successor Parent shall succeed to and be substituted
for the applicable Parent, with the same effect as if it had been named herein,
and unless such Parent shall then be an Affiliate of such Successor Parent, such
Parent and its Affiliates shall thereupon be released from all obligations under
this Section 1 and Section 3. For purposes of this Section 1, the term
"Successor Parent" shall mean the acquiring, succeeding or surviving entity in
any permitted Transfer that directly or indirectly owns the applicable Partner
Sub Stock following such transaction, if other than a Parent. In addition, a
Parent and its Affiliates shall be released from all obligations under this
Section 1 and (except as provided in Section 3.10) Section 3 at such time as
neither such Parent nor any of its Affiliates holds any Units in the Partnership
pursuant to a Transfer of such Units in accordance with the Partnership
Agreement.
1.4 SPECIAL PURPOSE SUBSIDIARIES. Each Parent covenants and agrees that
(i) the business of its Partner Subs shall be restricted solely to the holding
of the respective interests in the Partnership and the doing of things necessary
or appropriate in connection therewith, and (ii) it will cause its Partner Subs
not to own any assets, incur any liabilities or engage, participate or invest in
any business outside the scope of their businesses as described in clause (i)
hereof.
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SECTION 2
STANDSTILL AGREEMENT AND CERTAIN OTHER MATTERS
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2.1 STANDSTILL. Each Subject Parent agrees for the benefit of the other
Subject Parent that, until the fifth anniversary of the date of this Agreement,
neither it, nor any of its Affiliates shall, without prior written invitation or
request of the other Subject Parent: (i) in any manner acquire, agree to acquire
or make any proposal to acquire, directly or indirectly, any securities, assets
or property (other than an acquisition of assets or property in the ordinary
course of business) of the other Subject Parent, whether such agreement or
proposal is made with or to the other Subject Parent or a third party; (ii) make
any unsolicited proposal to enter into, directly or indirectly, any merger or
other business combination involving the other Subject Parent; (iii) make, or in
any way participate, directly or indirectly, in any "solicitation" of "proxies"
(as such terms are used in the proxy rules of the Securities and Exchange
Commission) to vote, or seek to advise or influence any person with respect to
the voting of, any voting securities of the other Subject Parent; (iv) form,
join or in any way participate in a "group" (within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934) with respect to any voting
securities of the other Subject Parent; (v) otherwise act, alone or in concert
with others, to seek to control the management, board of directors or policies
of the other Subject Parent; (vi) disclose any intention, plan or arrangement
inconsistent with the foregoing; or (vii) advise, encourage, provide assistance
(including financial assistance) to or hold discussions with any other Persons
in connection with any of the foregoing. Each Subject Parent also agrees during
such period not to: (a) request that the other Subject Parent (or its respective
directors, officers, employees or agents), directly or indirectly, amend or
waive any provision of this Section 2.1 (including this sentence); or (b) take
any action that might reasonably be expected to require that the other Subject
Parent make a public announcement regarding the possibility of a business
combination or merger.
2.2 EXCEPTIONS. Notwithstanding the provisions of Section 2.1:
(a) As to a Subject Parent, the provisions of Section 2.1 shall
automatically be terminated and of no further force and effect if any of the
following events occur with respect to the other Subject Parent: (i) a Change of
Control (as defined below) of the other Subject Parent shall have occurred, (ii)
the other Subject Parent shall have entered into a definitive agreement
providing for, or publicly announced its intention to effect, any transaction
involving a Change of Control of the other Subject Parent or (iii) a tender
offer or exchange offer shall have been commenced or publicly announced that, if
consummated, would have the effect with respect to the other Subject Parent
described in clause (C) of the definition of "Change of Control." A "Change of
Control" of a Subject Parent shall mean the occurrence of any of the following
events: (A) there shall be consummated any consolidation, conversion, merger or
share exchange of such Subject Parent (I) in which such Subject Parent is not
the continuing or surviving Person (other than a consolidation, merger or share
exchange with a wholly-owned subsidiary of such Subject Parent in which all
shares of common stock of such Subject Parent outstanding immediately prior to
the effectiveness thereof are changed into or exchanged for shares of common
stock of such subsidiary) or (II) pursuant to which the common stock of such
Subject Parent is converted into cash, securities or other property,
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other than, in each case, a consolidation, conversion, merger or share exchange
of such Subject Parent in which the holders of the common stock immediately
prior to the consolidation, conversion, merger or share exchange hold, directly
or indirectly, at least a majority of the voting power and common equity of the
continuing or surviving Person immediately after such consolidation, conversion,
merger or share exchange; (B) such Subject Parent's properties and assets are
sold or otherwise disposed of substantially as an entirety on a consolidated
basis to any Person or group of Persons in any one transaction or a series of
related transactions, other than as contemplated by the Master Transaction
Agreement; or (C) any Person or any Persons acting together that would
constitute a "group" (as defined in Section 2.1) (other than such Subject
Parent, any subsidiary of such Subject Parent, any employee stock purchase plan,
stock option plan or other stock incentive plan or program, retirement plan or
automatic dividend reinvestment plan or any substantially similar plan of such
Subject Parent or any subsidiary of such Subject Parent or any Person holding
securities of such Subject Parent for or pursuant to the terms of any such
employee benefit plan), together with any Affiliates thereof, shall acquire
beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of 50% or more of the voting stock of such Subject Parent.
(b) The terms of the first sentence of Section 2.1 shall not apply to
the purchase and sale of any securities of a Subject Parent by any pension or
other related employee benefit plans who are acting as passive investors in such
Subject Parent.
SECTION 3
MISCELLANEOUS
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3.1 NO WAIVERS. No failure or delay by a Party in exercising any right
or power under this Agreement, or any single or partial exercise of any such
right or power, shall preclude any other or further exercise thereof or the
exercise of any other right or power. Such single or partial exercise of any
right or power shall be cumulative and not exclusive of any rights or remedies
provided by law.
3.2 EXPENSES IN CONNECTION WITH EXERCISE. In the event of a dispute
between Parties regarding the exercise or enforcement of any of the rights of a
Party under this Agreement or the failure by a Party to perform or observe any
of the provisions of this Agreement, the Party or Parties that do not ultimately
prevail in such dispute shall be liable, and hereby agree, to reimburse, on
demand, each prevailing Party for any and all costs and expenses, including the
fees and expenses of legal counsel and of any other counsel, experts,
consultants or agents, that such prevailing Party may incur in connection
therewith.
3.3 CONFIDENTIALITY AND USE OF INFORMATION.
(a) Each Parent agrees that it and its Affiliates shall be bound by the
terms and conditions of Section 13.1 of the Partnership Agreement as if such
Person was a "Partner" as defined in such agreement.
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(b) Geon and OPC shall consult with each other on an ongoing basis with
respect to disclosures regarding the Partnership and its business and affairs
that each is required to make in reports filed from time to time with the
Securities and Exchange Commission.
(c) The letter agreements regarding confidentiality dated January 21,
1998 and May 18, 1998 between Geon and OCC are hereby terminated.
3.4 PARTNERSHIP COMPETING BUSINESSES.
(a) If any Parent or an Affiliate thereof desires to initiate or pursue
any opportunity to undertake, engage in, acquire or invest in a Business
Opportunity, such Person shall offer such Business Opportunity to the
Partnership under the terms and conditions set forth in Sections 9.3(c) and (d)
of the Partnership Agreement as if such Person were the Proposing Person with
respect thereto, and in such event the Partnership shall have the rights and
obligations with respect thereto set forth in such Sections 9.3(c) and (d).
(b) If any Parent or an Affiliate thereof desires to initiate or pursue
any opportunity to undertake, engage in, acquire or invest in an Oxy Vinyls
Business Opportunity, such Person shall offer such Oxy Vinyls Business
Opportunity to the PVC Partnership under the terms and conditions set forth in
Sections 9.3(c) and (d) of the Limited Partnership Agreement of the PVC
Partnership as if such Person were the PVC Proposing Person with respect
thereto, and in such event the PVC Partnership shall have the rights and
obligations with respect thereto set forth in such Sections 9.3(c) and (d).
3.5 FURTHER ASSURANCES. From time to time, each Party agrees to
execute and deliver such additional documents and provide such additional
information and assistance as the other Parties may reasonably require to carry
out the terms of this Agreement.
3.6 ASSIGNMENT; SUCCESSORS AND ASSIGNS.
(a) Except as provided in this Agreement and except that a Parent may
assign its rights or obligations under this Agreement to a third party in
connection with a transfer of direct interests in the Partnership owned by its
Partner Subs if such transfer is permitted and consummated in accordance with
the Partnership Agreement, no Parent may assign or delegate any of its rights or
obligations under this Agreement without the prior written consent of the other
Parent, which consent shall be in the sole discretion of such other Parent. Any
purported assignment or delegation without such consent shall be void and
ineffective.
(b) No Subject Parent may assign or delegate any of its rights or
obligations under this Agreement without the prior consent of the other Subject
Parent, which consent shall be in the sole discretion of such other Subject
Parent, except that a Subject Parent may assign its rights or obligations under
the agreement without such consent in connection with any Change of Control.
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3.7 BENEFITS OF AGREEMENT RESTRICTED TO THE PARTIES. This Agreement is
made solely for the benefit of the Parties, and no other Person shall have any
right, claim or cause of action under or by virtue of this Agreement.
3.8 NOTICES. All notices, requests, demands and other communications
that are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given if and when (i) transmitted by
telecopier facsimile during business hours with proof of confirmation from the
transmitting machine or (ii) delivered by commercial courier or other hand
delivery, as follows:
If to OPC: If to OCC:
Occidental Petroleum Company Occidental Chemical Corporation
10889 Wilshire Blvd. 5005 LBJ Freeway
Los Angeles, CA 90024 Dallas, TX 75244
Attention: President Attention: President
Telecopy Number: (310) 443-6977 Telecopy Number: (972) 404-3906
With a copy to: With a copy to:
Occidental Petroleum Corporation Occidental Petroleum Corporation
10889 Wilshire Boulevard 10889 Wilshire Boulevard
Los Angeles, California 90024 Los Angeles, California 90024
Attention: General Counsel Attention: General Counsel
Telecopy Number: (310) 443-6333 Telecopy Number: (310) 443-6333
If to Geon: And to:
The Geon Company Occidental Chemical Corporation
One Geon Center 5005 LBJ Freeway
Avon Lake, Ohio 44012 Dallas, Texas 75244
Attention: Chief Executive Officer Attention: General Counsel
Telecopy Number: (440) 930-1002 Telecopy Number: (972) 404-3957
With a copy to: If to the PVC Partnership:
The Geon Company Oxy Vinyls, LP
One Geon Center 5005 LBJ Freeway
Avon Lake, Ohio 44012 Dallas, Texas 75244
Attention: General Counsel Attention: Chief Executive Officer
Telecopy Number: (440) 930-1002 Telecopy Number: (972) 720-7402
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If to the Partnership: With a copy to:
PVC Powder Blends, LP Oxy Vinyls, LP
One Geon Center 5005 LBJ Freeway
Avon Lake, Ohio 44012 Dallas, Texas 75244
Attention: Chief Executive Officer Attention: General Counsel
Telecopy Number: (440) 930-1002 Telecopy Number: (972) 720-7403
With a copy to: And to:
PVC Powder Blends, LP Occidental Petroleum Corporation
One Geon Center 10889 Wilshire Boulevard
Avon Lake, Ohio 44012 Los Angeles, California 90024
Attention: General Counsel Attention: General Counsel
Telecopy Number: (440) 930-1002 Telecopy Number: (310) 443-6333
And to: And to:
Occidental Chemical Corporation The Geon Company
5005 LBJ Freeway One Geon Center
Dallas, Texas 75244 Avon Lake, Ohio 44012
Attention: President Attention: Chief Executive Officer
Telecopy Number: (972) 404-3906 Telecopy Number: (440) 930-1002
And to: And to:
Occidental Chemical Corporation The Geon Company
5005 LBJ Freeway One Geon Center
Dallas, Texas 75244 Avon Lake, Ohio 44012
Attention: President Attention: General Counsel
Telecopy Number: (972) 404-3906 Telecopy Number: (440) 930-1002
And to:
Occidental Petroleum Corporation
10889 Wilshire Boulevard
Los Angeles, California 90024
Attention: General Counsel
Telecopy Number: (310) 443-6333
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or to such other address as such Party shall have specified by notice to the
other Parties.
3.9 SEVERABILITY. In the event that any provisions of this Agreement
shall be Finally Determined to be unlawful, such provision shall, so long as the
economic and legal substance of the transactions contemplated hereby is not
affected in any materially adverse manner as to any Party, be deemed severed
from this Agreement and every other provision of this Agreement shall remain in
full force and effect.
3.10 TERMINATION. The second Recital to this Agreement and Sections
1.3, 2.1, 2.2, 3.18, 3.19, 3.20 and 3.21 set forth therein the timing for the
termination of, or release from, the applicable provisions of this Agreement. In
addition, (i) Section 3.3(b) shall terminate at such time as OPC or Geon, as the
case may be, is no longer required to make the disclosures referred to in
Section 3.3(b) to the Securities and Exchange Commission, and (ii) Section 3.4
shall terminate as of the later to occur of (a) the Not Partners Date or (b) the
fifth anniversary of the date of this Agreement. Except for the foregoing, this
Agreement shall terminate upon the termination of the Partnership; PROVIDED,
HOWEVER, that no termination under this Agreement shall discharge any accrued
obligations owed by a Parent or a Subject Parent as of the date of such
termination.
3.11 CONSTRUCTION AND CERTAIN DEFINITIONS.
(a) In construing this Agreement, the following principles shall be
followed: (i) no consideration shall be given to the captions of the articles,
sections, subsections or clauses, which are inserted for convenience in locating
the provisions of this Agreement and not as an aid in construction; (ii) no
consideration shall be given to the fact or presumption that any Party had a
greater or lesser hand in drafting this Agreement; (iii) examples shall not be
construed to limit, expressly or by implication, the matter they illustrate;
(iv) the word "includes" and its syntactic variants mean "includes, but is not
limited to" and corresponding syntactic variant expressions; (v) the plural
shall be deemed to include the singular, and vice versa; and (vi) each gender
shall be deemed to include the other gender.
(b) The terms "Affiliate," "Business Opportunity," "80%-Owned
Affiliate," "Finally Determined," "Legal Requirement," "Partnership Governance
Committee," "Person," "Proposing Person," "Strategic Plan" and "Units" have the
meanings set forth in the Partnership Agreement.
(c) The terms "Burlington Asset Sale Agreement," "Burlington Subject
Business," "Pasadena Asset Sale Agreement," "Pasadena Subject Business," "PVC"
and "PVC Partnership" have the meanings set forth in the Master Transaction
Agreement.
(d) The term "Burlington Type Business" means a business that (i)
develops, manufactures in the United States and Canada, and markets flexible
film and compounding PVC for molding applications and (ii) competes with the
Burlington Subject Business; PROVIDED, HOWEVER, that "Burlington Type Business"
shall not include any "Specified Business," as defined in the Partnership
Agreement or as defined in the Limited Partnership Agreement of the PVC
Partnership.
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(e) The term "Pasadena Type Business" means a business that (i) owns,
leases and operates, or contracts with third parties to operate, equipment used
to manufacture in the United States and Canada pellets from PVC resin, (ii)
markets, sells and distributes pellets manufactured from PVC resin and (iii)
competes with the Pasadena Subject Business; PROVIDED, HOWEVER, that "Pasadena
Type Business" shall not include any "Specified Business," as defined in the
Partnership Agreement or as defined in the Limited Partnership Agreement of the
PVC Partnership.
(f) The term "Oxy Vinyls Business Opportunity" means "Business
Opportunity," as defined in the Limited Partnership Agreement of the PVC
Partnership.
(g) The term "PVC Proposing Person" means "Proposing Person," as
defined in the Limited Partnership Agreement of the PVC Partnership.
(h) The term "Not Partners Date" means the first date hereafter when
neither the Partnership nor the PVC Partnership has both OCC or an Affiliate
thereof and Geon or an Affiliate thereof as partners (and by way of example only
and not of limitation, OCC or its Affiliate and Geon or its Affiliate would not
be partners of the Partnership upon the termination of the Partnership).
3.12 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original, and all of which when
taken together shall constitute one and the same original document.
3.13 GOVERNING LAW. The laws of the State of Delaware shall govern the
construction, interpretation and effect of this Agreement without giving effect
to any conflicts of law principles.
3.14 OBLIGATIONS REGARDING AFFILIATES. Each Parent shall cause its
Affiliates (including any Person controlling such Parent) to comply with all
provisions of this Agreement that apply to Affiliates of such Parent, and each
Parent shall be responsible for any failure of any such Affiliate to comply with
any such provision.
3.15 AMENDMENT. All waivers, modifications, amendments or alterations
of this Agreement shall require the execution of a written instrument signed by
each of the Parties.
3.16 JURISDICTION; CONSENT TO SERVICE OF PROCESS; WAIVER. ANY JUDICIAL
PROCEEDING BROUGHT AGAINST ANY PARTY TO THIS AGREEMENT OR ANY DISPUTE UNDER OR
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY MATTER RELATED HERETO
SHALL BE BROUGHT IN THE FEDERAL OR STATE COURTS OF THE STATE OF DELAWARE, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES TO THIS AGREEMENT
ACCEPTS THE EXCLUSIVE JURISDICTION OF SUCH COURTS AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT (AS FINALLY ADJUDICATED) RENDERED THEREBY IN CONNECTION
WITH THIS AGREEMENT. THE PARTIES AGREE THAT ANY AND ALL SERVICE OF PROCESS AND
ANY OTHER NOTICE IN ANY PROCEEDING
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SHALL BE EFFECTIVE AGAINST ANY PARTY IF DELIVERED PURSUANT TO THE NOTICE
PROVISIONS CONTAINED IN SECTION 3.8. THE FOREGOING CONSENTS TO JURISDICTION
SHALL NOT CONSTITUTE GENERAL CONSENTS TO SERVICE OF PROCESS IN THE STATE OF
DELAWARE FOR ANY PURPOSE EXCEPT AS PROVIDED ABOVE AND SHALL NOT BE DEEMED TO
CONFER RIGHTS ON ANY PERSON OTHER THAN THE PARTIES HERETO. EACH PARTY HEREBY
WAIVES ANY OBJECTION IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM NON CONVENIENS.
3.17 WAIVER OF JURY TRIAL. EACH PARTY HEREBY KNOWINGLY AND
INTENTIONALLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM
THEREIN.
3.18 BURLINGTON TYPE BUSINESS.
(a) If, at any time within five years after the date of this Agreement,
OPC or an Affiliate of OPC desires to initiate or pursue an opportunity to
undertake, engage in, acquire or invest in a Burlington Type Business by
investing in or acquiring a Person whose business is a Burlington Type Business,
acquiring assets of a Burlington Type Business, or otherwise engaging in or
undertaking a Burlington Type Business (a "Burlington Opportunity"), such Person
(a "Burlington Proposing Person") shall offer Geon the Burlington Opportunity on
the terms set forth in Section 3.18(b).
(b) When a Burlington Proposing Person offers a Burlington Opportunity
to Geon, Geon shall elect to do one of the following within a reasonably prompt
period:
(i) acquire or undertake the Burlington Opportunity for the
benefit of Geon as a whole, at the cost, expense and benefit of Geon;
PROVIDED, HOWEVER, that if Geon ceases to actively pursue such
opportunity for any reason, then the Burlington Proposing Person will
be entitled to proceed under clause (ii) below; or
(ii) permit the Burlington Proposing Person to acquire or
undertake the Burlington Opportunity for its own benefit and account
without any duty to Geon with respect thereto.
(c) Notwithstanding the provisions of Section 3.18(b), if the
Burlington Opportunity constitutes less than 25% (based on annual revenues of
the business to be acquired or invested in for the most recently completed
fiscal year) of an acquisition of or investment in assets, activities,
operations or businesses that is not otherwise a Burlington Type Business, then
a Burlington Proposing Person may acquire or invest in such Burlington
Opportunity without first offering it to Geon; PROVIDED, that after completion
of the acquisition or investment thereof, such Burlington Proposing Person must
offer the Burlington Opportunity to Geon pursuant to the terms of Section
3.18(b); and if Geon elects option (i) of Section 3.18(b) with respect thereto,
the Burlington
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Opportunity shall be acquired by Geon at its fair market value as
mutually agreed or Finally Determined as of the date of such acquisition.
3.19 PASADENA TYPE BUSINESS.
(a) If, at any time within five years after the date of this Agreement,
OPC or an Affiliate of OPC desires to initiate or pursue an opportunity to
undertake, engage in, acquire or invest in a Pasadena Type Business by investing
in or acquiring a Person whose business is a Pasadena Type Business, acquiring
assets of a Pasadena Type Business, or otherwise engaging in or undertaking a
Pasadena Type Business (a "Pasadena Opportunity"), such Person (a "Pasadena
Proposing Person") shall offer Geon the Pasadena Opportunity on the terms set
forth in Section 3.19(b).
(b) When a Pasadena Proposing Person offers a Pasadena Opportunity to
Geon, Geon shall elect to do one of the following within a reasonably prompt
period:
(i) acquire or undertake the Pasadena Opportunity for the
benefit of Geon as a whole, at the cost, expense and benefit of Geon;
PROVIDED, HOWEVER, that if Geon ceases to actively pursue such
opportunity for any reason, then the Pasadena Proposing Person will be
entitled to proceed under clause (ii) below; or
(ii) permit the Pasadena Proposing Person to acquire or
undertake the Pasadena Opportunity for its own benefit and account
without any duty to Geon with respect thereto.
(c) Notwithstanding the provisions of Section 3.19(b), if the Pasadena
Opportunity constitutes less than 25% (based on annual revenues of the business
to be acquired or invested in for the most recently completed fiscal year) of an
acquisition of or investment in assets, activities, operations or businesses
that is not otherwise a Pasadena Type Business, then a Pasadena Proposing Person
may acquire or invest in such Pasadena Opportunity without first offering it to
Geon; PROVIDED, that after completion of the acquisition or investment thereof,
such Pasadena Person must offer the Pasadena Opportunity to Geon pursuant to the
terms of Section 3.19(b); and if Geon elects option (i) of Section 3.19(b) with
respect thereto, the Pasadena Opportunity shall be acquired by Geon at its fair
market value as mutually agreed or Finally Determined as of the date of such
acquisition.
3.20 BURLINGTON NON-SOLICITATION. OCC agrees that, for a period ending
on the first anniversary of the date of this Agreement (unless the applicability
of this provision is terminated earlier pursuant to Section 1.3), it will not,
and will cause its Affiliates not to, directly or knowingly induce or attempt to
induce any Hired Employees (as defined in the Burlington Asset Sale Agreement)
to leave the employ of Geon; PROVIDED, HOWEVER, that nothing in this Section
3.20 shall prohibit OCC or its Affiliates from hiring or engaging any of the
foregoing who respond to a general solicitation not directed specifically to the
Hired Employees.
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3.21 PASADENA NON-SOLICITATION. OCC agrees that, for a period ending on
the first anniversary of the date of this Agreement (unless the applicability of
this provision is terminated earlier pursuant to Section 1.3), it will not, and
will cause its Affiliates not to directly or knowingly induce or attempt to,
induce any Hired Employees (as defined in the Pasadena Asset Sale Agreement) to
leave the employ of Geon; PROVIDED, HOWEVER, that nothing in this Section 3.21
shall prohibit OCC or its Affiliates from hiring or engaging any of the
foregoing who respond to a general solicitation not directed specifically to the
Hired Employees.
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IN WITNESS WHEREOF, the Parties have executed and delivered this
Agreement as of the date first above written.
OCCIDENTAL CHEMICAL CORPORATION
By: /s/ Richard A. Lorraine
-----------------------------------------------
Richard A. Lorraine
Executive Vice President and Chief
Financial Officer
THE GEON COMPANY
By: /s/ Thomas A. Waltermire
-----------------------------------------------
Thomas A. Waltermire
President and Chief Operating
Officer
OCCIDENTAL PETROLEUM CORPORATION
By: /s/ Stephen I. Chazen
-----------------------------------------------
Stephen I. Chazen
Chief Financial Officer and
Executive Vice President
PVC POWDER BLENDS, LP
By: 1999 General Compounding Partner Inc.,
general partner
By: /s/ Woodrow W. Ban
-----------------------------------------------
Name: Woodrow W. Ban
--------------------------------------------
Title: Assistant Secretary
-------------------------------------------
OXY VINYLS, LP
By: Occidental PVC, LLC, general partner
By /s/ John L. Hurst, III
--------------------------------------------
John L. Hurst, III
President