1
EXHIBIT 10.1
RESTRUCTURING, TRANSFER AND SEPARATION AGREEMENT,
dated as of __________ 1998
by and among
CONOCO INC.
(FORMERLY KNOWN AS CONOCO ENERGY COMPANY)
and
E.I. DU PONT DE NEMOURS AND COMPANY
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1 General ................................................... 2
ARTICLE II
RESTRUCTURING AND RELATED TRANSACTIONS
Section 2.1 The Restructuring ......................................... 24
Section 2.2 Transfers of Assets ....................................... 25
Section 2.3 Methods of Transfer and Assumption ........................ 26
Section 2.4 Organization of Registrant; Execution of Related Agreements 28
Section 2.5 The Intercompany Notes .................................... 29
Section 2.6 Registration of Conoco Shares ............................. 32
ARTICLE III
ASSUMPTION AND RETENTION OF LIABILITIES
Section 3.1 Assumed Liabilities ....................................... 34
Section 3.2 Retained Liabilities ...................................... 34
Section 3.3 Construction of Agreements ................................ 34
ARTICLE IV
CERTAIN RESTRUCTURING DEFINITIONS
Section 4.1 Assumed Liabilities ....................................... 35
Section 4.2 Retained Liabilities ...................................... 37
Section 4.3 Transferred Assets ........................................ 39
Section 4.4 Excluded Assets ........................................... 39
Section 4.5 Shared Contracts .......................................... 39
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ARTICLE V
Page
CORPORATE GOVERNANCE AND CERTAIN FINANCIAL REPORTING
AND OTHER MATTERS
Section 5.1 Rights Plan Amendments ................... 40
Section 5.2 Charter/bylaw Amendments ................. 40
Section 5.3 Conoco Board Representation .............. 41
Section 5.4 Committees ............................... 43
Section 5.5 Accounting Principles .................... 44
Section 5.6 Tax Free Spin-Off ........................ 45
Section 5.7 Survival of Rights ....................... 46
ARTICLE VI
SURVIVAL, INDEMNIFICATION, CLAIMS
AND OTHER MATTERS
Section 6.1 Survival of Agreements ................... 46
Section 6.2 Indemnification .......................... 47
Section 6.3 Procedure for Indemnification ............ 51
Section 6.4 Other Claims for Indemnification ......... 55
Section 6.5 Contribution ............................. 55
Section 6.6 No Beneficiaries ......................... 56
Section 6.7 Indemnification of Directors and Officers 56
ARTICLE VII
CERTAIN ADDITIONAL MATTERS
Section 7.0 Post-Closing Transactions ................. 56
Section 7.1 Non Assignment, Further Assurances ........ 57
Section 7.2 Delayed Companies; Interim Period ......... 61
Section 7.3 Notice of Separation ...................... 65
Section 7.4 Resignations .............................. 65
Section 7.5 Other Agreements .......................... 65
Section 7.6 Payment of Separation Expenses ............ 65
Section 7.7 Signs; Use of Company Name ................ 66
Section 7.8 Products, Supplies and Documents .......... 67
Section 7.9 Plant Closings and Layoffs ................ 67
Section 7.10 Litigation ............................... 67
Section 7.11 No Restrictions on Post-Closing
Competitive Activities; Corporate Opportunities 68
Section 7.12 Intellectual Property ................... 70
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ARTICLE VIII
Page
ACCESS TO INFORMATION AND SERVICES
Section 8.1 Provision of Corporate Records ..................... 71
Section 8.2 Access to Information .............................. 72
Section 8.3 Production of Witnesses and Individuals ............ 73
Section 8.4 Retention of Records ............................... 73
Section 8.5 Confidentiality .................................... 74
Section 8.6 Privileged Matters ................................. 76
Section 8.7 Mail and Other Communications ...................... 78
ARTICLE IX
INTERCOMPANY BUSINESS RELATIONSHIPS
Section 9.1 Cash Management; Settlement of Intercompany Accounts 79
Section 9.2 Letters of Credit .................................. 82
Section 9.3 Guarantee Obligations .............................. 83
Section 9.4 Settlements for Cash Collections and Disbursements
After the Cash Settlement Date .......................... 84
Section 9.5 Termination of Intercompany Agreements ............. 85
Section 9.6 DuPont Hungary Loan ................................ 86
ARTICLE X
INSURANCE
Section 10.1 General ........................................... 86
Section 10.2 Excess Liability Policies ......................... 86
Section 10.3 Transfer of Existing Policies ..................... 86
Section 10.4 Director's and Officer's Insurance ................ 88
Section 10.5 Conoco Liability Policies ......................... 88
Section 10.6 Insurance and Indemnities ......................... 89
ARTICLE XI
ENVIRONMENTAL MATTERS
Section 11.1 Certain Article XI Definitions .................... 89
Section 11.2 Conoco Environmental Liabilities .................. 90
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Page
Section 11.3 DuPont Environmental Liabilities .................. 91
Section 11.4 Other Environmental ............................... 92
Section 11.5 Damages, Awards, Etc .............................. 92
Section 11.6 Remediation ....................................... 92
Section 11.7 Exclusive Remedy/Indemnification .................. 93
ARTICLE XII
CONDITION TO CONSUMMATION OF DISTRIBUTION; TERMINATION
Section 12.1 Condition ......................................... 93
Section 12.2 Termination ....................................... 93
ARTICLE XIII
DISPUTE RESOLUTION
Section 13.1 Mediation ......................................... 94
Section 13.2 Initiation ........................................ 94
Section 13.3 Submission to Mediation ........................... 94
Section 13.4 Provisional Remedies .............................. 94
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Complete Agreement ................................ 95
Section 14.2 Allocation of Costs and Expenses .................. 95
Section 14.3 Governing Law ..................................... 95
Section 14.4 Jurisdiction; Forum ............................... 95
Section 14.5 Notices ........................................... 96
Section 14.6 Amendment and Modification ........................ 97
Section 14.7 Successors and Assigns ............................ 97
Section 14.8 No Third Party Beneficiaries ...................... 97
Section 14.9 Counterparts ...................................... 97
Section 14.10 Interpretation ................................... 98
Section 14.11 Annexes, Etc ..................................... 98
Section 14.12 Legal Enforceability ............................. 98
Section 14.13 Texas Deceptive Trade Practices Act .............. 98
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EXHIBITS
Exhibit A Certificate of Incorporation
Exhibit B By-Laws
Exhibit C Shareholders Rights Plan
Exhibit D Note of Conoco Inc., dated July 20, 1998 and
Conoco Guarantee
Exhibit E Employee Matters Agreement
Exhibit F Transitional Services Agreement
Exhibit G Tax Sharing Agreement
Exhibit H Natural Gas Supply Agreement
Exhibit I Information Services Agreements
Exhibit J Motor Carrier Contract
Exhibit K Registration Rights Agreement
Exhibit L Form of Employee Benefits Note
Exhibit M Mont Belvieu Agreements
SCHEDULES
Schedule 1(a) Mixed-Use Subsidiaries
Schedule 1(b) Transferred Business Companies
Schedule 1(c) Construction Fleet
Schedule 4.4 Excluded Assets
Schedule 6.2 Registration Statement
Schedule 7.2 Delayed Companies
Schedule 7.10(a) Conoco Actions
Schedule 7.10(b) DuPont Actions
Schedule 9.3 DuPont Guarantees
Schedule 9.5 Intercompany Agreements
Schedule 10.5 Named Insured
Schedule 11.1(a) Transferred Environmental Assets
Schedule 11.1(b) Retained Environmental Assets
Schedule 11.2(d) Conoco Liabilities for Environmental Claims
Schedule 11.3(d) DuPont Liabilities for Environmental Claim
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RESTRUCTURING, TRANSFER AND SEPARATION AGREEMENT
RESTRUCTURING, TRANSFER AND SEPARATION AGREEMENT (this
"Agreement"), dated as of ____________, 1998, by and between E.I. du Pont de
Nemours and Company, a Delaware corporation ("DuPont") and Conoco Inc. (formerly
known as Conoco Energy Company), a Delaware corporation ("Conoco").
WHEREAS, in addition to its chemicals, life sciences,
fibers, polymers, and other materials businesses, DuPont has been engaged
through Conoco and its various predecessor companies and their various
Subsidiaries (as defined herein) and divisions in exploring for, developing,
producing, refining, transporting, marketing and distributing oil and gas and
associated by-products in connection with the Transferred Business (as defined
herein);
WHEREAS, Conoco, Conoco Inc. (formerly known as
Continental Oil Company), a Delaware corporation ("CI") and their various
predecessor companies and their various Subsidiaries and divisions have been
engaged in various businesses, primarily exploring for, developing, producing,
refining, transporting, marketing and distributing oil and gas and associated
by-products and the manufacture, sale and distribution of chemicals;
WHEREAS, the Board of Directors of DuPont has determined
that it is in the best interests of DuPont and its stockholders for Conoco to
offer shares of Class A Common Stock, par value $.01 per share (the "Class A
Common Stock") of Conoco for sale to the public pursuant to an initial public
offering ("IPO") and in connection therewith for DuPont and Conoco to separate
their respective businesses so that from and after the Effective Date the
Transferred Business will be held by Conoco and its Subsidiaries and divisions
(the "Separation");
WHEREAS, as set forth herein and subject to the terms
and conditions hereof, DuPont wishes to transfer and assign to Conoco, and to
cause its Subsidiaries to transfer and assign to Conoco, the assets of the
various divisions, and the stock and other equity securities representing
Conoco's ownership interest in various Subsidiaries and other entities in and
through which the Transferred Business is conducted, in exchange for the
assumption by Conoco or one or more of the Transferred Business Companies (as
defined herein) of the liabilities and obligations relating to the Conoco
Business;
WHEREAS, DuPont and Conoco have determined that it is
necessary and desirable to set forth the principal transactions required to
effect the Restructuring
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(as defined herein) and the Separation and to set forth other agreements that
will govern certain other matters in connection with the Restructuring and the
Separation.
NOW, THEREFORE, in consideration of the premises or
promises and the mutual covenants and agreements contained herein and intending
to be legally bound hereby, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 General. As used in this Agreement,
capitalized terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
Action: shall mean any action, claim, suit, arbitration,
subpoena, discovery request, proceeding or investigation by or before any court
or grand jury, any Governmental Authority or arbitration tribunal.
AEP Proposed Joint Ventures: shall mean the proposed
joint ventures described in the letter of intent, dated October 2, 1997 among
AEP Resources, Inc., CI and DuPont.
Affiliate: shall mean, with respect to any specified
Person, a Person that, directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such specified Person. For purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: shall have the meaning set forth in the
recitals.
Agrico Inc.: shall mean American Agricultural Chemical
Company, a Delaware corporation.
Appropriate Conoco Subsidiary: shall have the meaning
set forth in Section 6.2(b).
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Appropriate Retained Subsidiary: shall have the meaning
set forth in Section 6.2(a).
Asset: shall mean, with respect to any Person, any and
all of such Person's title and ownership interest in and to all properties,
assets, claims, Contracts and businesses of every kind, character and
description, whether real, personal or mixed, whether accrued, contingent or
otherwise, and wherever located, including, without limitation, the following:
(i) all cash, cash equivalents, notes and accounts receivable (whether current
or non-current); (ii) all certificates of deposit, banker's acceptances and
other investment securities; (iii) all real properties, including pipelines,
refineries, plants, buildings and other structures and improvements (including
construction in progress) located thereon, fixtures contained therein and
appurtenances thereto; (iv) all leasehold improvements and all machinery,
equipment (including all transportation and office equipment), fixtures, trade
fixtures and furniture; (v) all office supplies, production supplies, spare
parts, other miscellaneous supplies and other tangible property of any kind;
(vi) all capital stock, partnership interests and other equity or ownership
interests or rights, directly or indirectly, in any Subsidiary or other entity;
(vii) all raw materials, work-in-process, finished goods, consigned goods and
other inventories; (viii) all registered and unregistered trademarks, service
marks, service names, trade styles and trade names (including, without
limitation, trade dress and other names, marks and slogans) and all associated
goodwill; all statutory, common law and registered copyrights; all patents; all
applications for any of the foregoing together with all rights to use all of the
foregoing and all other rights in, to, and under the foregoing; all know-how,
inventions, discoveries, improvements, processes, formulae (secret or
otherwise), specifications, trade secrets, whether patentable or not, licenses
and other similar agreements, confidential information, and all drawings,
records, books or other indicia, however evidenced, of the foregoing; (ix) all
rights existing under all Contracts; (x) all rights (including ownership rights
or rights arising under Contracts) existing, relating to all computer hardware,
software, computer programs, systems and documentation relating thereto; all
databases and reference and resource materials; (xi) all prepayments, deposits,
performance bonds or prepaid expenses and deferred tax accounts to the extent
they constitute an asset and not a liability of such party; (xii) all claims,
causes of action, choses in action, rights of recovery and rights of set-off of
any kind; (xiii) all customer lists and records pertaining to customers and
accounts, personnel records, all lists and records pertaining to suppliers and
agents, and all books, ledgers, files and business records of every kind; (xiv)
all advertising materials and all other printed or written materials, including
purchase orders, forms, labels, shipping materials, catalogues, sales brochures,
operating manuals, and instructional documents; (xv) all permits, licenses,
approvals and authorizations, to the extent
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transferable, of Governmental Authorities or third parties relating to the
ownership, possession or operation of the Assets; (xvi) all goodwill as a going
concern and all other intangible properties; (xvii) all employee contracts,
including, without limitation, the right thereunder to restrict an employee from
competing in certain respects; and (xviii) all trucks, automobiles, railcars and
other vehicles, and all vessels, tankers and barges.
Assumed Liabilities: shall have the meaning set forth in
Section 4.1.
Audit: shall mean any audit, assessment of Taxes, other
examination by any Tax Authority, proceeding, or appeal of such a proceeding
relating to Taxes, whether administrative or judicial.
Xxxx Chemical: shall mean Xxxx Chemical Inc., a Delaware
corporation.
Cash Settlement Date: shall have the meaning set forth
in Section 9.1(a).
Charter Amendment: shall have the meaning set forth in
Section 5.6(b).
Christiana: shall mean Christiana Insurance Limited, a
Bermuda corporation.
CI: shall have the meaning set forth in the recitals.
Class A Common Stock: shall have the meaning set forth
in the recitals.
Class B Common Stock: shall mean Class B Common Stock,
par value $.01 per share, of Conoco.
Code: shall mean the Internal Revenue Code of 1986, as
amended, or any successor statute.
Combined Limit Losses: shall have the meaning set forth
in Section 10.2.
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Confidential Business Information: shall have the
meaning set forth in Section 8.5(a)(iii).
Confidential Information: shall have the meaning set
forth in Section 8.5(a)(i)
Confidential Operational Information: shall have the
meaning set forth in Section 8.5(a)(ii).
Conoco: shall have the meaning set forth in the
recitals.
Conoco Action: shall have the meaning set forth in
Section 7.10.
Conoco Board: shall mean the Board of Directors of
Conoco.
Conoco Books and Records: shall mean the books and
records of DuPont and its Subsidiaries (or true and complete copies thereof),
including all computerized books and records owned by DuPont and its
Subsidiaries, to the extent they primarily relate to the Transferred Business or
the Transferred Assets, including, but not limited to, the minute books,
corporate charters and by-laws or comparable constitutive documents, records of
share issuances, and related corporate records of the Transferred Business
Companies, all such books and records primarily relating to Transferred
Employees, the purchase of materials, supplies and services, the manufacture and
sale of products by the Transferred Business or dealings with customers of the
Transferred Business and all files primarily relating to any Action the
Liability with respect to which is included in Assumed Liabilities, except that
no portion of the books and records of DuPont or the Retained Subsidiaries
containing minutes of meetings of any board of directors of any of them shall be
included. Notwithstanding the foregoing, "Conoco Books and Records" shall not
include any Tax Returns or other information, documents or materials relating to
Taxes.
Conoco Business: shall mean the businesses in which, and
the activities as to which, the Conoco Group or any member thereof was formerly
or is currently engaged (including exploring for, producing, developing,
refining, transporting, marketing and distributing oil and gas and associated
by-products thereof, any chemical business or activities and any other business
or activities), and the business and activities which were formerly or are
currently conducted by any of such entities, businesses or divisions through use
or ownership of the Transferred Assets or any other Assets of the Conoco Group,
including, but not limited to, (i) the Transferred Business, (ii) the business
and activities formerly conducted by Conoco's
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chemicals division (including, but not limited to, operations sold to Vista
Chemical) and all activities conducted by DuPont or any of its Subsidiaries in
connection therewith or related thereto, (iii) the operations of Agrico Inc.,
(iv) exploring for, producing, developing, refining, transporting, marketing and
distributing oil and gas and associated by-products thereof by DuPont or any of
its Subsidiaries for the benefit of the Conoco Group or any member thereof,
including the business and activities of DuPont France and DuPont Italy (v) the
business and activities conducted through, and ownership of, CI's interest in
the Pocahontas Partnership, (vi) the activities and operations of DuPont, any of
its Subsidiaries and any of their employees (including, but not limited to, the
activities and operations of Sentinel and DERS) to the extent performed for or
on behalf of the Conoco Business on or before the Effective Date (as defined
without giving effect to this clause (vi)) and (vii) the actions and activities
of Conoco and the Transferred Business Companies in connection with the AEP
Proposed Joint Ventures. The "Conoco Business" specifically excludes (i) the
business and activities which were formerly or are currently conducted by CONSOL
Energy and its controlled affiliates and joint ventures in which it is a
participant and Pitt-Consol (other than through CI's interest in the Pocahontas
Partnership), (ii) the businesses sold to Xxxx Chemical, including the
operations at Matagorda and Chocolate Bayou, Texas, (iii) the businesses and
activities of DuPont Netherlands and (iv) the businesses and activities of
Sentinel except as provided in clause (vi) above.
Conoco Environmental Liabilities: shall have the meaning
set forth in Section 11.2.
Conoco Group: shall mean collectively, Conoco, CI, and
the other Transferred Business Companies, any of their predecessor companies or
businesses or any of their Subsidiaries, business units or divisions.
Conoco Guarantee: shall mean the guarantee by Conoco,
dated as of July 24, 1998, of CI's obligations under the Note, dated July 20,
1998 and attached hereto as part of Exhibit D.
Conoco Master Note: shall mean the promissory notes
evidencing indebtedness of CI to DuPont under the DuPont Master Note Agreement.
Conoco Party: shall have the meaning set forth in Section 6.2(a).
Conoco Patents: shall mean (a) all U.S. and foreign
patents, patent applications and patent disclosures (including all reissues,
divisions, continuations,
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continuations-in-part, substitutions, extensions, or renewals of any of the
foregoing) owned by or under obligation of assignment to Conoco or any
Transferred Business Company or with respect to which Conoco or any Transferred
Business Company has the power to grant an immunity from suit for infringement,
(b) all U.S. and foreign patents, patent applications and patent disclosures
(including all reissues, divisions, continuations, continuations-in-part,
substitutions, extensions, or renewals of any of the foregoing) granted after
the Effective Date by the applicable Governmental Authorities based on all
applications owned by or under obligation of assignment to Conoco or any
Transferred Business Company or with respect to which Conoco or any Transferred
Business Company has the power to grant an immunity from suit for infringement,
(c) all U.S. and foreign patent, patent application, and patent disclosure
(including all reissues, divisions, continuations, continuations-in-part,
substitutions, extensions, or renewals of any of the foregoing) rights which are
owned by or under obligation of assignment to Conoco or any Transferred Business
Company resulting from Joint Invention Conceptions documented in invention
disclosures as of the Effective Date, and (d) the patent for gas-to-liquids
technology, to the extent not otherwise owned by Conoco or one of the
Transferred Business Companies at the Effective Date.
Conoco Payables: shall have the meaning set forth in
Section 9.1(b).
Conoco Rights Plan: shall have the meaning set forth in
Section 2.4(a).
CONSOL Energy: shall mean CONSOL Energy Inc., a Delaware
corporation.
Construction Fleet: shall mean the vehicles, Equipment
and machinery utilized in construction which are owned by DuPont or a Retained
Subsidiary and which, in whole or in part, from time to time, are used in the
Transferred Business or operated by employees of Conoco or a Transferred
Business Company, including but not limited to the items set forth on Schedule
1(c).
Contract: shall mean any contract, agreement, lease,
Equipment lease, license, sales order, purchase order, instrument or other
commitment or arrangement that is binding on any Person or entity or any part of
its property under applicable Law.
Conveyancing and Assumption Instruments: shall mean
collectively, the various bills of sale, undertakings and other agreements,
instruments and other
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documents to be entered into in order to effect the Restructuring, and the
transfer of Assets and the assumption of Liabilities in the manner contemplated
by Section 2.3.
Danube: shall mean Danube Insurance Limited.
DCEO: shall mean Du Pont Chemical and Energy Operations,
Inc., a Delaware corporation.
DEC: shall mean Du Pont Energy Company, a Delaware
corporation.
Delayed Company: shall have the meaning set forth in
Section 7.2(a).
DERS: shall mean DuPont Environmental Remediation
Services, Inc., a Delaware corporation.
Dispute: shall have the meaning set forth in Section
13.1.
DuPont: shall have the meaning set forth in the
recitals.
DuPont Action: shall have the meaning set forth in
Section 7.10.
DuPont Board: shall mean the Board of Directors of
DuPont.
DuPont Books and Records: shall mean the books and
records (or true and complete copies thereof), including all computerized books
and records, minute books, corporate charters and by-laws or comparable
constitutive documents, records of share issuances and related corporate records
of or owned by DuPont and its Subsidiaries (including Conoco and the Transferred
Business Companies) other than the Conoco Books and Records. Notwithstanding the
foregoing, "DuPont Books and Records" shall not include any Tax Returns or other
information, documents or materials relating to Taxes.
DuPont Business: shall mean the businesses in which, and
the activities as to which, DuPont and its Subsidiaries, including Conoco and
the Transferred Business Companies, have been formerly or are currently engaged,
but excluding the Conoco Business.
DuPont Designees: shall have the meaning set forth in
Section 5.3(b).
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DuPont Environmental Liability: shall have the meaning
set forth in Section 11.3.
DuPont France: shall mean Du Pont de Nemours (France)
X.X.
XxXxxx Guarantee Amount: shall mean as of the Effective
Date $1,610,390,718, and thereafter, such amount as adjusted from time to time
in the good faith judgment of the Chief Financial Officer or the Treasurer of
DuPont, after consultation with, and effective upon written notice to, Conoco,
to reflect any increase or decrease in financial exposure of DuPont under the
DuPont Guarantees, the termination of DuPont Guarantees or the removal or
replacement of DuPont's obligations under the DuPont Guarantees; provided that
the DuPont Guarantee Amount shall not be initially adjusted until the amount of
any such increase or decrease exceeds $50 million, and then adjusted to the full
extent of such amount, and thereafter, the DuPont Guarantee Amount shall only be
further adjusted when the amount of any additional increase or decrease is equal
to or greater than $50 million, or in the case of a decrease which reduces the
DuPont Guarantee Amount to zero.
DuPont Guarantee Fee: shall have the meaning set forth
in Section 9.3(b).
DuPont Guarantees: shall have the meaning set forth in
Section 9.3(a).
DuPont Hungary: shall mean DuPont Conoco Hungary Kft., a
Hungarian corporation.
DuPont Hungary Loan: shall mean the amounts owed as of
the date hereof by DuPont Hungary to DuPont Engineering Products X.X.
XxXxxx Italy: shall mean, collectively, Du Pont de
Nemours Italiana S.p.A. and Du Pont Conid S.p.A.
DuPont Master Note Agreement: shall mean the Note
Agreement between DuPont and CI, dated as of October 2, 1989, as the same may be
amended from time to time.
DuPont Master Note: shall mean promissory notes
evidencing indebtedness of DuPont under the DuPont Master Note Agreement.
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XxXxxx Xxxxxxxxxxx: shall mean DuPont de Nemours
(Nederland) B.V. and its Subsidiaries (other than Conoco CS Spol. s.r.o.)
DuPont Party: shall have the meaning set forth in
Section 6.2(b).
DuPont Patents: shall mean (a) all U.S. and foreign
patents, patent applications and patent disclosures (including all reissues,
divisions, continuations, continuations-in-part, substitutions, extensions, or
renewals of any of the foregoing) owned by or under obligation of assignment to
DuPont or any Retained Subsidiary or with respect to which DuPont or any
Retained Subsidiary has the power to grant an immunity from suit for
infringement, (b) all U.S. and foreign patents, patent applications and patent
disclosures (including all reissues, divisions, continuations,
continuations-in-part, substitutions, extensions, or renewals of any of the
foregoing) granted after the Effective Date by the applicable Governmental
Authorities based on all applications owned by or under obligations of
assignment to DuPont or any Retained Subsidiary or with respect to which DuPont
or any Retained Subsidiary has the power to grant an immunity from suit for
infringement, and (c) all U.S. and foreign patent, patent application and patent
disclosure (including all reissues, divisions, continuations,
continuations-in-part, substitutions, extensions, or renewals of any of the
foregoing) rights which are owned by or under obligation of assignment to DuPont
or any Retained Subsidiary resulting from Joint Invention Conceptions documented
in invention disclosures as of the Effective Date.
DuPont Payables: shall have the meaning set forth in
Section 9.1(b).
DuPont Transferred Assets: shall mean (i) any and all
Assets owned by a Mixed-Use Subsidiary that are not primarily used in the
Transferred Business and (ii) the stock of any Subsidiary owned by a Transferred
Business Company, which Subsidiary, after giving effect to the transfer, if any,
of Transferred Assets, would only be engaged in the Retained Business.
DTPA: shall have the meaning set forth in Section 14.13.
Effective Date: shall mean the close of business on the
date on which the first closing of the IPO occurs.
Effective Time: shall mean the time on the Effective
Date on which the first closing of the IPO occurs.
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Employee Benefits Adjustment Amount: shall have the
meaning set forth in Section 2.5(c)
Employee Benefits Note: shall have the meaning set forth
in Section 2.5(c).
Employee Matters Agreement: shall mean the Employee
Matters Agreement between DuPont and Conoco dated the date hereof, substantially
in the form of Exhibit E hereto.
Environment: shall mean any surface water, groundwater,
drinking water supply, land surface or subsurface strata, or ambient air.
Environmental Claim: shall mean any third party action,
lawsuit, claim or proceeding which seeks to impose Liability or injunctive
relief for (i) noise, (ii) pollution or protection of the air, surface water,
groundwater or land, (iii) solid, gaseous or liquid waste generation, treatment,
storage, disposal or transportation, or (iv) damages to persons, property or
natural resources resulting from a Release into the Environment of any Hazardous
Substances.
Environmental Permit: shall mean any permit, license,
approval or other authorization under any applicable Law, regulation and other
requirement of any Governmental Authority relating to pollution or protection of
the environment, including laws, regulations or other requirements relating to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, or hazardous or toxic materials or wastes into ambient air,
surface water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants or hazardous or toxic materials or wastes.
Equipment: shall mean all equipment, fixtures, physical
facilities, tank batteries, surface and subsurface machinery, inventory, spare
parts, supplies, tools and other tangible personal property, including, without
limitation, casing, tubing, tubular goods, rods, pumping units and engines,
derricks, platforms, separators, compressors, gathering lines, flow lines,
tanks, and communication systems and equipment.
Excess Director Number: shall have the meaning set forth
in Section 5.3(d).
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Excess Proceeds: shall have the meaning set forth in
Section 2.5(b).
Excluded Assets: shall have the meaning set forth in
Section 4.4.
Final Determination: shall mean the final resolution of
any Tax (or other Tax matter) for a taxable period, including related interest
or penalties, that, under applicable law, is not subject to further appeal,
review or modification through proceedings or otherwise, including (1) by the
expiration of a statute of limitations or a period for the filing of claims for
refunds, amending Tax Returns, appealing from adverse determinations, or
recovering any refund (including by offset), (2) by a decision, judgment,
decree, or other order by a court of competent jurisdiction, which has become
final and unappealable, (3) by a closing agreement or an accepted offer in
compromise under Section 7121 or 7122 of the Code, or comparable agreements
under laws of other jurisdictions, (4) by execution of an Internal Revenue
Service Form 870 or 870AD, or by a comparable form under the laws of other
jurisdictions (excluding, however, with respect to a particular Tax Item for a
particular taxable period any such form that reserves (whether by its terms or
by operation of law) the right of the taxpayer to file a claim for refund and/or
the right of the Tax Authority to assert a further deficiency with respect to
such Tax Item for such period), or (5) by any allowance of a refund or credit,
but only after the expiration of all periods during which such refund or credit
may be recovered (including by way of offset).
GAAP: shall mean generally accepted accounting
principles of the United States as in effect from time to time.
Governmental Authority: shall mean any nation or
government, any state, municipality or other political subdivision thereof and
any entity, agency, commission or court, whether domestic or foreign or
multinational, exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government and any executive
official thereof.
Hazardous Substance: shall mean any substance, whether
solid, liquid or gaseous, which is listed, defined or regulated as a "hazardous
substance", "hazardous waste", "solid waste", "oils", "pollutants", or
"contaminants" or otherwise classified as hazardous or toxic, in or pursuant to
any Requirements of Environmental Law; or which is or contains asbestos, any
polychlorinated biphenyls, urea formaldehyde foam insulation, explosive or
radioactive material, or motor fuel or other petroleum hydrocarbons.
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Income Tax: shall mean (a) any Tax based upon, measured
by, or calculated with respect to (1) net income or profits (including, without
limitation, any capital gains Tax, minimum Tax and any Tax on items of Tax
preference, but not including sales, use, real or personal property, gross or
net receipts, transfer or similar Taxes) or (2) multiple bases if one or more of
the bases upon which such Tax may be based, measured by, or calculated with
respect to, is described in clause (1) above, or (b) any United States state or
local franchise Tax.
Indebtedness: of any Person shall mean, (a) all
obligations of such Person for borrowed money, including any Indebtedness under
the Note or with respect to deposits or advances of any kind, b) all obligations
of such Person evidenced by bonds, debentures, notes or similar instruments, (c)
all obligations of such Person upon which interest charges are customarily paid,
(d) all obligations of such Person under conditional sale or other title
retention agreements relating to property or assets purchased by such Person,
(e) all obligations of such Person issued or assumed as the deferred purchase
price of property or services, (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any mortgage, lien, pledge, or other encumbrance on
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (g) all guarantees by such Person of
Indebtedness of others which in the aggregate exceed Two Billion Dollars
($2,000,000,000), (h) all capital lease obligations of such Person, and (i) all
securities or other similar instruments convertible or exchangeable into any of
the foregoing, but excluding (1) industrial revenue bonds, (2) operating leases,
(3) in the case of CI, the Revolving Credit Facility and (4) daily cash
overdrafts associated with routine cash operations.
Indemnifiable Loss Deduction: shall have the meaning set
forth in Section 6.2(e)(i).
Indemnifying Party: shall mean any party who is required
to pay any other person pursuant to this Agreement.
Indemnitee: shall mean any party who is entitled to
receive payment from an Indemnifying Party pursuant to this Agreement.
Indemnity Payment: shall mean the amount an Indemnifying
Party is required to pay to (or for the benefit of) an Indemnitee pursuant to
this Agreement.
Information: shall have the meaning set forth in Section
8.2.
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Information Services Agreements: shall mean
collectively, the Information Systems and Telecommunications Carrier
Transitional Services Agreement, the Information Systems Transitional Services
Agreement, the Information Systems Side Letter Agreement, the Lease Agreement
for office and data center space located in Ponca City, Oklahoma and the Lease
Agreement for office and data center space located in Houston, Texas all of
which are between DuPont and Conoco, dated as of the date hereof substantially
in the form of Exhibit I hereto.
Intercompany Accounts: shall have the meaning set forth
in Section 9.1(d).
Intercompany Agreement: shall mean any Contract between
any entities included within the Retained Business (including, without
limitation, DuPont and the Retained Subsidiaries), on the one hand, and any
entities included within the Transferred Business (including, without
limitation, Conoco and the Transferred Business Companies), on the other hand,
entered into prior to the Effective Date.
Intercompany Loan: shall have the meaning set forth in
Section 2.5(a).
Interim Period: shall have the meaning set forth in
Section 7.2(a).
IPO: shall have the meaning set forth in the recitals.
IPO Excess: shall have the meaning set forth in Section
2.5(b). IRS: shall mean the Internal Revenue Service or any successor agency or
authority.
Joint Invention Conceptions: shall mean, with respect to
patents, invention conceptions jointly developed by (a) DuPont and/or any
Retained Subsidiary and (b) Conoco and/or any Transferred Business Company.
Law: shall mean any law, statute, ordinance, rule,
regulation, order, writ, judgment, injunction or decree of any Governmental
Authority.
Liabilities: shall mean any and all Indebtedness,
liabilities and obligations, whether accrued, fixed or contingent, mature or
inchoate, known or unknown, reflected on a balance sheet or otherwise,
including, but not limited to, those arising under any law, rule, regulation,
Action, order, injunction or consent
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decree of any Governmental Authority or any judgment of any court of any kind or
any award of any arbitrator of any kind, and those arising under any contract,
commitment or undertaking.
Losses: shall mean any and all damages, losses,
deficiencies, Liabilities, obligations, penalties, judgments, settlements,
claims, payments, fines, interest, costs and expenses (including, without
limitation, the costs and expenses of any and all Actions and demands,
assessments, judgments, settlements and compromises relating thereto and the
costs and expenses of attorneys', accountants', consultants' and other
professionals' fees and expenses incurred in the investigation or defense
thereof or the enforcement of rights hereunder), including direct and
consequential damages, but excluding punitive damages (other than punitive
damages awarded to any third party against an Indemnified Party).
Mixed-Use Subsidiaries: shall mean those corporations,
partnerships, joint ventures, or other entities set forth on Schedule 1(a).
Mont Belvieu Agreements: shall mean the Pipeline
Operation Agreement, the Ethane Storage and Throughput Agreement, the Ethylene
Storage and Throughput Agreement, the Emergency Call Transportation Service
Agreement and the Purity Ethane Sales Agreement between DuPont and Conoco, dated
the date hereof, substantially in the forms included in Exhibit M hereto.
Natural Gas Supply Agreement: shall mean the Natural Gas
Supply Agreement between DuPont and Conoco, dated the date hereof, substantially
in the form of Exhibit H hereto.
Net Proceeds: shall have the meaning set forth in
Section 7.2(d).
New Notes: shall have the meaning set forth in Section
2.5(c).
Non-Permitted Names: shall have the meaning set forth in
Section 7.7.
Note: shall mean the Promissory Note issued by CI to
DEC, dated as of July 20, 1998, in the principal amount of $7.5 Billion, a copy
of which is attached hereto as part of Exhibit D.
Note Interest: shall have the meaning set forth in
Section 2.5(b).
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NYSE: shall mean The New York Stock Exchange, Inc.
Option Amount: shall mean the algebraic sum of (a) the
Deemed Future Appreciation, (b) the After Tax Adjustment and (c) 50% of an
amount equal to the result obtained by subtracting the Intrinsic Value of
Elected Options from the Intrinsic Value of Non-Elected Options. For purposes of
this definition:
"Active Conoco Employees" shall mean Conoco Employees
eligible to elect to cause the DuPont Stock Options and DuPont SARs held by such
employees to be cancelled and to be granted options to acquire Newly Granted
Options and Newly Granted SARs pursuant to Section 2.06 of the Employee Matters
Agreement;
"After Tax Adjustment" shall mean an amount equal to 50%
of 29% of the Intrinsic Value of all DuPont Stock Options held by Active Conoco
Employees other than incentive stock options within the meaning Section 422 of
the Code;
"Deemed Future Appreciation" shall mean 32.25% of the
average price of common stock of DuPont over the five trading days ending on the
date on which the initial offering price to the public of a share of common
Stock of Conoco in the IPO is determined (calculated as the average of the mean
of the high and low prices on each of these five days as reported on the NYSE)
(the "DuPont Stock Price") multiplied by the total number of shares of common
stock of DuPont subject to Non-Elected Options;
"Intrinsic Value" of Elected Options or Non-Elected
Options, as applicable, shall mean for each such option as to which the DuPont
Stock Price exceeds the exercise price thereof, the product of (x) the number of
shares of common stock of DuPont subject to such option and (y) the DuPont Stock
Price less the exercise or base price of such option;
"Elected Options" shall mean DuPont Stock Options and
DuPont SARs (excluding Conoco Key Unit Options) outstanding as of the close of
business on October 19, 1998, determined pursuant to the records of the relevant
plan administrator, held by Active Conoco Employees as to which such employees
have elected to cause such DuPont Stock Options and DuPont SARs to be cancelled
and to be granted options to acquire Newly Granted Options and Newly Granted
SARs pursuant to Section 2.06 of the Employee Matters Agreement; and
"Non-Elected Options" shall mean DuPont Stock Options
and DuPont SARs outstanding as of the close of business on October 19, 1998,
determined
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pursuant to the records of the relevant plan administrator, held by Active
Conoco Employees as to which such employees have not elected to cause such
DuPont Stock Options and DuPont SARs to be cancelled and to be granted options
to acquire Newly Granted Options and Newly Granted SARs pursuant to Section 2.06
of the Employee Matters Agreement.
All other capitalized terms used in this definition, but
not defined in this definition shall have the meanings ascribed to such terms in
the Employee Matters Agreement.
Outside Date: shall have the meaning set forth in
Section 2.5(b).
Outstanding Check Amount: shall have the meaning set
forth in Section 9.1(c).
Person: shall mean an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization or a
Governmental Authority.
Petrozuata: shall mean Petrolera Zuata, Petrozuata C.A.,
a Venezuelan compania anonima in which Conoco owns an indirect non-controlling
50.1 percent equity interest.
Pitt-Consol: shall mean Pitt-Consol Chemical Company, a
New Jersey corporation.
Pocahontas Partnership: shall mean the Pocahontas Gas
Partnership, a Virginia general partnership.
Principal Related Agreements: shall have the meaning set
forth in the definition of Related Agreements.
Privilege: shall have the meaning set forth in Section
8.6(a).
Privileged Information: shall have the meaning set forth
in Section 8.6(a).
Registration Rights Agreement: shall mean the
Registration Rights Agreement between DuPont and Conoco, dated the date hereof,
substantially in the form of Exhibit K hereto.
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Registration Statement: shall have the meaning set forth
in Section 2.6(a).
Related Agreements: shall mean, collectively, the
Employee Matters Agreement, the several Transitional Services Agreements, the
Tax Sharing Agreement, the Natural Gas Supply Agreement, the Registration Rights
Agreement, the Motor Carrier Contract, the Note and the Conoco Guarantee, the
Employee Benefits Note and the associated guarantee by Conoco, the Revolving
Credit Facility and the related guarantee of CI's obligations thereunder by
Conoco, the Information Services Agreements, the Mont Belvieu Agreements, the
Engineering and SHE Standards and Guidelines License Agreement, the UPbase(TM)
System Software License Agreement and the DME Tolling Agreement (the foregoing
agreements, collectively, the "Principal Related Agreements"), and all other
agreements to be entered into between DuPont and the Retained Subsidiaries, on
the one hand, and Conoco and its Subsidiaries, on the other hand, in connection
with the Restructuring, the Separation and the consummation of the transactions
contemplated hereby or which relate to the ongoing relationship between Conoco
and its Subsidiaries on the one hand, and DuPont and the Retained Subsidiaries,
on the other hand.
Release: shall mean any release, spill, emission,
discharge, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration into the indoor or outdoor Environment or into or out of
any property.
Representative: shall mean, with respect to any Person,
each of such Person's directors, officers, employees, representatives,
attorneys, accountants, advisors and agents, and each of the heirs, executors
and assigns of any of the foregoing.
Requirements of Environmental Law: shall mean all
requirements of environmental or ecological laws or regulations, including all
requirements imposed by any law, rule or regulation of any Governmental
Authority at any time in effect which relate to (i) noise, (ii) pollution or
protection of the air, surface water, groundwater or land, (iii) solid, gaseous
or liquid waste generation, treatment, storage, disposal or transportation, or
(iv) employee health and safety.
Restated Tax Saving Amount: shall have the meaning set
forth in Section 6.2(e)(ii).
Restructured Notes: shall have the meaning set forth in
Section 2.5(b).
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Restructuring: shall have the meaning set forth in
Section 2.1.
Retained Business: shall mean the businesses in which,
and the activities as to which, DuPont and its Subsidiaries, including Conoco
and its Subsidiaries, are currently engaged, but excluding in any event the
Transferred Business. The "Retained Business" shall include (i) CONSOL Energy
and its controlled affiliates and joint ventures in which it is a participant
(other than through CI's interest in the Pocahontas Partnership), (ii)
Pitt-Consol, (iii) Sentinel and (iv) DuPont Netherlands.
Retained Environmental Assets: shall have the meaning
set forth in Section 11.1(b).
Retained Liabilities: shall have the meaning set forth
in Section 4.2.
Retained Subsidiary: shall mean any Subsidiary of DuPont
at any time after the date of this Agreement, including DuPont Netherlands, but
excluding Conoco and the Transferred Business Companies.
Revolving Credit Facility: shall mean a revolving credit
facility provided to CI by DEC providing for borrowings in an aggregate
principal amount not to exceed $500 million at any one time outstanding.
Risk Manager: shall have the meaning set forth in
Section 10.2.
Ruling: shall have the meaning set forth in Section
5.6(b)
SEC: shall mean the U.S. Securities and Exchange
Commission.
Securities Act: shall mean the Securities Act of 1933,
as amended.
Senior Executive: shall mean the Chief Executive
Officer, Chief Financial Officer or General Counsel of DuPont or Conoco, as
applicable.
Sentinel: shall mean Sentinel Transportation Company, a
Delaware corporation.
Separation: shall have the meaning set forth in the
recitals.
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Separation Expenses: shall mean (a) those expenses to be
paid by DuPont pursuant to Section 6(f) of the underwriting agreement to be
entered into in connection with the IPO and (b) those expenses, incurred and
paid between May 11, 1998 and 24 months following the date on which DuPont's
voting power falls below 50% of the voting power of all of the outstanding
shares of Voting Stock of Conoco, incurred with third parties, on a non
recurring basis directly as result of the IPO, the Restructuring, the Separation
or any transaction subsequent to the IPO (including a series of related
transactions) resulting in a reduction in the number of shares of Voting Stock
beneficially owned by DuPont, provided that prior to any such subsequent
transaction the voting power of the shares of Voting Stock beneficially owned by
DuPont is not less than 50% of the voting power of all of the then outstanding
shares of Voting Stock. Notwithstanding anything to the contrary in this
Agreement, (i) expenses that benefit future operations of the Transferred
Business will not be Separation Expenses; (ii) Separation Expenses must be
out-of-pocket expenditures which meet accounting guidelines for both
discontinued operations under APB 30 and for gain/loss accounting treatment and
shall specifically exclude accruals (provided that expenses that would otherwise
have qualified as Separation Expenses but which have been accrued shall be
deemed Separation Expenses once such expenses have been paid and provided
further that Separation Expenses shall not include any costs and expenses
associated with pension plans or severance owed to employees which are
exclusively provided for in the Employee Matters Agreement); (iii) in the event
that the parties disagree as to whether an expense meets accounting guidelines
for both discontinued operations under APB 30 and for gain/loss accounting
treatment or otherwise qualifies generally as a Separation Expense under this
definition and therefore qualifies for reimbursement by DuPont pursuant to this
Agreement, DuPont's good faith decision shall be final; (iv) any increased costs
associated with a contract as to which third party consent was obtained with
respect to the Separation (other than nonrecurring breakage and similar fees and
incidental expenses paid in order to obtain such consents) will not be
Separation Expenses, (v) amounts paid pursuant to the indemnification and
contribution provisions of this Agreement and the Related Agreements will not be
Separation Expenses, (vi) expenses that are not incurred and paid prior to or on
the date which is twenty four months from the date on which DuPont's voting
power falls below 50% of the voting power of all of the outstanding shares of
Voting Stock of Conoco shall not be Separation Expenses and (vii) Separation
Expenses, shall not include costs and expenses related to information technology
which will be governed exclusively by the Information Services Agreements.
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Shared Contracts: shall mean Contracts with third
parties which directly benefit both DuPont or a Retained Subsidiary and Conoco
or one of its Subsidiaries.
Shared Contractual Liabilities: shall mean Liabilities
in respect of Shared Contracts.
Subsidiary: shall mean (a) a corporation, at least a
majority of the voting or capital stock of which is as of the time in question
directly or indirectly owned by such party and (b) any other partnership, joint
venture, association, joint stock company, trust, unincorporated organization or
other entity, in which such party, directly or indirectly, owns a majority of
the equity interest thereof or has the power to elect or direct the election of
at least a majority of the members of the governing body of such entity or
otherwise has control over such entity (e.g., as the managing partner of a
partnership).
Target Cash Amount: shall mean $225 million of cash and
cash equivalents (in United States Dollars or an equivalent amount in foreign
currency, determined using the exchange rates quoted in the Financial Times two
business days prior to the Cash Settlement Date), excluding from the foregoing
$225 million amount (i) $70 million (which shall consist of (A) any certificates
of deposit held by Danube, valued at their face amounts, and (B) to the extent
in excess of the amount set forth in clause (A) above, other forms of cash and
cash equivalents held by Danube and its subsidiaries whether or not
characterized or classified as such by GAAP); and (ii) the amounts of unearned
premiums and loss reserves required by Section 10.3 to be ceded by Danube to
Christiana pursuant to Section 10.3 to the extent such amounts have not been
paid by Danube to Christiana as of the Cash Settlement Date.
Tax or Taxes: shall mean any charges, fees, levies,
imposts, duties, or other assessments of a similar nature, including income,
alternative or add-on minimum, gross receipts, profits, lease, service, service
use, wage, wage withholding, employment, workers compensation, business
occupation, occupation, premiums, environmental, excise, employment, sales, use,
transfer, license, payroll, franchise, severance, stamp, occupation, windfall
profits, withholding, social security, unemployment, disability, ad valorem,
estimated, highway use, commercial rent, capital stock, paid up capital,
recording, registration, property, real property gains, value added, business
license, custom duties, or other tax or governmental fee of any kind whatsoever,
imposed or required to be withheld by any Tax Authority including any interest,
additions to tax, or penalties applicable or related thereto.
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Tax Authority: shall mean a governmental authority or
any subdivision, agency, commission or authority thereof or any
quasi-governmental or private body having jurisdiction over the assessment,
determination, collection or imposition of any Tax (including, without
limitation, the IRS).
Tax Item: shall mean any item of income, gain, loss,
deduction or credit, or other attribute that may have the effect of increasing
or decreasing any Tax.
Tax Returns: shall mean any return, report, certificate,
form or similar statement or document (including, any related or supporting
information or schedule attached thereto and any information return, amended tax
return, claim for refund or declaration of estimated tax) required to be
supplied to, or filed with, a Tax Authority in connection with the
determination, assessment or collection of any Tax or the administration of any
laws, regulations or administrative requirements relating to any Tax.
Tax Saving Amount: shall have the meaning set forth in
Section 6.2(e)(i).
Tax Sharing Agreement: shall mean the Tax Sharing
Agreement between DuPont and Conoco, dated the date hereof, substantially in the
form of Exhibit G hereto.
Third Party Claim: shall have the meaning set forth in
Section 6.3(a).
Third Party Sites: shall have the meaning set forth in
Section 11.4.
Tie-In Limit Loss: shall have the meaning set forth in
Section 10.4(b).
Transferred Assets: shall have the meaning set forth in
Section 4.3.
Transferred Business: shall mean the businesses and
activities currently conducted by Conoco, its Subsidiaries and other Transferred
Business Companies described in the narrative portion of the section entitled
"Business" in the Registration Statement, but excluding (i) by CONSOL Energy and
its controlled affiliates and joint ventures in which it is a participant (other
than through CI's interest in the Pocahontas Partnership) and Pitt-Consol, (ii)
by DuPont Netherlands, (iii) by Sentinel, (iv) in the United States by DuPont
and its Subsidiaries (other than Conoco and its Subsidiaries) and (v) outside of
the United States by DuPont and its
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Subsidiaries of the same general type and nature as the businesses and
activities referred to in clause (iv) above.
Transferred Business Companies: shall mean those
corporations, partnerships, joint ventures, or other entities each of which
currently conducts the Transferred Business which are set forth on Schedule
1(b).
Transferred Employees: shall mean (a) those persons who
are employed as officers or employees of the Transferred Business immediately
prior to or effective as of the Effective Date and (b) all former officers and
employees of the Transferred Business who, immediately prior to the termination
of their employment, were employed in the Transferred Business. In the event
that on the Effective Date (or if such person is no longer employed as of the
Effective Date, then as of the last date of such person's employment) any person
was or shall be employed in the Transferred Business, as well as in the Retained
Business, such person shall be considered a Transferred Employee if, but only
if, on the Effective Date (or if such person is no longer employed as of the
Effective Date, then as of the last date of such person's employment) such
person's primary employment was or shall be in the Transferred Business.
Transferred Environmental Asset: shall have the meaning
set forth in Section 11.1(a).
Transitional Services Agreements: shall mean the several
Transitional Services Agreements between DuPont and/or any of the Retained
Subsidiaries on the one hand, and Conoco, and/or any of its Subsidiaries, on the
other hand, dated the date hereof, substantially in the form of Exhibit F
hereto.
Vista Chemical: shall mean CONDEA Vista Company
(formerly named Vista Chemical Company), a Delaware corporation.
Voting Stock: shall mean the Class A Common Stock, the
Class B Common Stock and any other capital stock of Conoco entitled to vote
generally in the election of directors but excluding any class or series of
capital stock only entitled to vote in the event of dividend arrearages thereon,
whether or not at the time of determination there are any such dividend
arrearages.
WARN Act: shall have the meaning set forth in Section
7.9.
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Waste Site: shall mean any well, pit, pond, lagoon,
impoundment, ditch, landfill, waste storage container, site or area where waste
materials or Hazardous Substances have been Released, deposited, stored,
disposed of, placed or otherwise come to be located.
ARTICLE II
RESTRUCTURING AND RELATED TRANSACTIONS
Section 2.1 The Restructuring. Subject to the terms and
conditions of this Agreement, DuPont and Conoco shall use, and shall cause their
respective Subsidiaries to use, their respective reasonable commercial efforts
to consummate, on or prior to the Effective Date, the transactions heretofore
documented and agreed to by the parties hereto as constituting the restructuring
(the "Restructuring"). It is the intent of the parties that after consummation
of the Restructuring, subject to receipt of all approvals required of any
Governmental Authority or any third party as set forth more fully in Sections
7.1 and 7.2 hereof, (i) the Transferred Business Companies will all be owned,
directly or indirectly, by Conoco and the Transferred Business will be conducted
entirely by Conoco and its Subsidiaries, (ii) Conoco or one of the Transferred
Business Companies will own all of the Transferred Assets, (iii) Conoco or one
or more of the Transferred Business Companies will, to the extent not previously
liable therefor, have assumed and be liable for all of the Assumed Liabilities,
(iv) the Retained Business will be conducted entirely by DuPont and the Retained
Subsidiaries, (v) DuPont or one of the Retained Subsidiaries will own all of the
DuPont Transferred Assets and the Excluded Assets and (vi) DuPont or one of the
Retained Subsidiaries will, to the extent not previously liable therefor, have
assumed and be liable for all of the Retained Liabilities.
Section 2.2 Transfers of Assets.
(a) Prior to or for one year following the
Effective Date, if DuPont or Conoco, as the case may be, identifies any Asset,
other than Shared Contracts, owned by one of the Mixed-Use Subsidiaries which
(i) at such time and for the prior 12 month period was used primarily in the
Transferred Business and is then owned by DuPont or one of the Retained
Subsidiaries or (ii) at such time and for the prior 12 month period was used
primarily in the Retained Business or is an Excluded Asset and is then owned by
Conoco or one of the Transferred Business Companies, DuPont or Conoco, as the
case may be, shall or shall cause any such Asset to be conveyed, assigned,
transferred and delivered in accordance with
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Section 2.3 to the entity identified by DuPont or Conoco, as the case may be, as
the appropriate transferee.
(b) For one year following the Effective Date,
if DuPont or Conoco, as the case may be, identifies any Asset (other than any
stock or other equity interest in a Delayed Company) then owned by either DuPont
or any of the Retained Subsidiaries, on the one hand, or Conoco or any of the
Transferred Business Companies, on the other hand, that, both DuPont and Conoco
each agree in their good faith judgment more properly belongs to the other
party, or a Subsidiary of the other party, then DuPont or Conoco, as the case
may be, shall convey, assign, transfer and deliver or shall cause any such Asset
to be conveyed, assigned, transferred and delivered in accordance with Section
2.3 to the entity identified by Conoco or DuPont, as the case may be, as the
appropriate transferee; provided, however, that the foregoing shall not apply to
the sale or transfer of any stock of, equity interests in, or Assets of DuPont
Netherlands, which sales or transfers, if any, shall be at fair market value (it
being agreed that the parties have no obligations or agreement as to any such
sale or transfer).
(c) As soon as is reasonably practicable
following the Effective Date, DuPont shall, or shall cause the appropriate
Retained Subsidiary to convey, assign, transfer and deliver in accordance with
Section 2.3 the Assets listed on Schedule 1(c) to the entity identified by
Conoco as the appropriate transferee.
(d) The parties hereto acknowledge and agree
that except for transfers pursuant to the Restructuring, any transfers occurring
more than one year following the Effective Date, and the transfer of the equity
interests in DuPont Netherlands, if any, the transfers of Assets provided for in
this Agreement are to be made without any additional consideration other than
the assumption of Liabilities by the transferee.
(e) All conveyances, assignments, transfers and
deliveries of Assets occurring after the Effective Date pursuant to this Section
2.2 shall be governed by the terms of this Agreement. In furtherance of the
foregoing, any Asset transferred pursuant to this Section 2.2 to Conoco or one
of the Transferred Business Companies shall be deemed a Transferred Asset and
any Asset transferred to DuPont or one of the Retained Subsidiaries shall be
deemed a DuPont Transferred Asset for all purposes of this Agreement and the
Related Agreements.
Section 2.3 Methods of Transfer and Assumption. The
parties hereto agree that (a) required transfers of Transferred Assets (other
than, in general, Assets
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owned by Transferred Business Companies which are not Mixed-Use Subsidiaries)
and DuPont Transferred Assets shall be effected by delivery by DuPont or one of
the Retained Subsidiaries to Conoco or to one of the Transferred Business
Companies, or by Conoco or one of the Transferred Business Companies to DuPont
or to one of the Retained Subsidiaries, as the case may be, of (i) with respect
to those Assets which are evidenced by capital stock certificates or similar
instruments, certificates duly endorsed in blank or accompanied by stock powers
or other instruments of assignment executed in blank, (ii) with respect to any
real property interest or any improvements thereon owned by a Mixed-Use
Subsidiary, a deed without any warranty as to title of the transferor (or any of
its Affiliates) and without any covenant covering transferor's (or any of its
Affiliate's) acts or the equivalent thereof in accordance with local practice,
and (iii) with respect to all other Assets owned by a Mixed-Use Subsidiary, such
good and sufficient instruments of contribution, conveyance, assignment and
transfer, in form and substance reasonably satisfactory to DuPont and Conoco, as
shall be necessary to vest in DuPont, Conoco or their respective Subsidiaries,
as the case may be, all of the title and ownership interest of DuPont, Conoco or
their respective Subsidiaries, as the case may be, in and to any such Asset, (b)
to the extent necessary, the assumption of the Retained Liabilities contemplated
pursuant to Section 3.2 hereof shall be effected by delivery by DuPont or the
applicable Retained Subsidiaries, as the case may be, to Conoco or the
applicable Transferred Business Companies of such good and sufficient
instruments of assumption, in form and substance reasonably satisfactory to
DuPont and Conoco, as shall be necessary for the assumption by DuPont or the
Retained Subsidiaries of the Retained Liabilities, and (c) to the extent
necessary, the assumption of the Assumed Liabilities contemplated pursuant to
Section 3.1 hereof shall be effected by delivery by Conoco or the Transferred
Business Companies, as the case may be, to DuPont or the applicable Retained
Subsidiaries, as the case may be, of such good and sufficient instruments of
assumption, in form and substance reasonably satisfactory to DuPont and Conoco,
as shall be necessary for the assumption by Conoco or the Transferred Business
Companies of the Assumed Liabilities. Each of the parties hereto also agrees to
deliver to any other party hereto such other documents, instruments and writings
as may be reasonably requested by such other parties hereto in connection with
the transactions contemplated hereby. Notwithstanding any other provisions of
this Agreement to the contrary, (x) THE TRANSFERS AND ASSUMPTIONS REFERRED TO IN
THIS SECTION 2.3 AND THE SEPARATION OF THE TRANSFERRED BUSINESS FROM THE
RETAINED BUSINESS ARE BEING MADE WITHOUT ANY REPRESENTATION OR WARRANTY OF ANY
NATURE (a) AS TO THE VALUE OR FREEDOM FROM ENCUMBRANCE OF, ANY ASSETS, (b) AS TO
ANY WARRANTY OF MERCHANTABILITY OR WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE
OF, OR ANY
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OTHER MATTER CONCERNING, ANY ASSETS OR (c) AS TO THE LEGAL SUFFICIENCY TO CONVEY
TITLE TO ANY ASSETS, and (y) the instruments of transfer or assumption referred
to in this Section 2.3 shall not include any separate representations and
warranties. DuPont and Conoco hereby acknowledge and agree that ALL ASSETS ARE
BEING TRANSFERRED "AS IS, WHERE IS." Conoco shall bear the economic and legal
risks that any conveyances of the Transferred Assets to Conoco or one of its
Subsidiaries by DuPont or one of the Retained Subsidiaries shall prove to be
insufficient or that Conoco's or any Transferred Business Company's title to any
of the Transferred Assets which they currently own (or, after giving effect to
the Restructuring and the transfers contemplated by this Agreement, will own)
shall be other than good and marketable and free from encumbrances, and DuPont
shall bear the economic and legal risks that any conveyances of DuPont
Transferred Assets to DuPont or one of the Retained Subsidiaries by Conoco or
one of its Subsidiaries shall prove to be insufficient or that DuPont's or any
Retained Subsidiaries' title to any of the DuPont Transferred Assets shall be
other than good and marketable and free from encumbrances. DuPont and Conoco
hereby further acknowledge and agree that in the event and to the extent that
there is any conflict between the provisions of this Agreement and the
provisions of any of the instruments of transfer or assumption referred to in
this Section 2.3, the provisions of this Agreement shall control except where a
specific conveyancing instrument (i) specifically (A) provides that such
instrument shall control over this Section 2.3 and (B) refers to this specific
Section 2.3 by number and (ii) has been approved in writing by the General
Counsel or an Associate General Counsel of each of DuPont and Conoco.
Section 2.4 Organization of Registrant: Execution of
Related Agreements.
(a) Prior to the Effective Time, Conoco shall
take, and DuPont shall take, and as the indirect sole stockholder of Conoco,
approve or ratify, or cause to be approved or ratified, any and all actions that
are reasonably necessary or desirable to be taken by DuPont or Conoco to
effectuate the transactions contemplated by this Section 2.4 and Section 2.5 in
a manner consistent with the terms of this Agreement, including, without
limitation, the following: (i) amending the Certificate of Incorporation of
Conoco so that the provisions thereof at the Effective Time shall be the
provisions set forth on Exhibit A attached hereto; (ii) amending the By-Laws of
Conoco so that the provisions thereof at the Effective Time shall be the
provisions set forth on Exhibit B attached hereto; (iii) entering into, as of
the Effective Time, a shareholder rights agreement between Conoco and the rights
agent set forth therein having substantially the same provisions, with such
changes thereto
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as DuPont and Conoco may approve, as those set forth on Exhibit C attached
hereto (the "Conoco Rights Plan"); (iv) adopting, preparing and implementing
appropriate plans, agreements and arrangements for employees of Conoco and
non-employee directors of Conoco (including, without limitation, the employee
benefit plans, agreements and arrangements to be established pursuant to the
Employee Matters Agreement (with such changes thereto as DuPont may approve in
its sole discretion)); and (v) electing or otherwise appointing those
individuals designated in the Registration Statement to be directors or officers
of Conoco, effective as of or prior to the Effective Date, except for those to
be elected or appointed thereafter.
(b) On or prior to the Effective Date, DuPont
and Conoco shall enter into the Principal Related Agreements, each of which
shall be effective as of the Effective Time, unless otherwise specified therein.
Section 2.5 The Intercompany Notes.
(a) Prior to the Effective Time, DuPont and
Conoco shall, and shall cause their respective Subsidiaries to take all actions
necessary or advisable to restructure the existing loans between DuPont and the
Retained Subsidiaries, on the one hand, and Conoco and its Subsidiaries, on the
other hand (the "Intercompany Loans") such that following such restructuring,
the only remaining Intercompany Loans shall be represented by the Note, the
DuPont Master Note, the Conoco Master Note and the Restructured Notes (as
defined below).
(b) Immediately following the closing of the
IPO, Conoco shall lend or contribute out of the gross proceeds of the IPO
received by Conoco (net of underwriting discounts and commissions) an amount
equal to the accrued and unpaid interest on the Note as of the Effective Date
(the "Note Interest") plus $2.654 billion (or such lesser amount as constitutes
all of the gross proceeds net of the expenses set forth in the preceding
parenthetical and the Note Interest) to CI and Conoco shall immediately
thereafter cause CI to first, pay the Note Interest to DEC and second, to pay
the remainder of such $2.654 billion (or lesser) amount to DEC in partial
satisfaction of its obligations under the Note, to repay, in part, principal
under the Note. To the extent less than an amount equal to the Note Interest
plus $2.654 billion has been paid pursuant to the preceding sentence, upon the
closing of the exercise of the underwriters' over-allotment
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option of the IPO, the proceeds of such exercise shall be applied in a like
manner to the extent necessary to pay the balance of such amount. To the extent
the gross proceeds of the IPO (net of underwriting discounts and commissions and
other offering expenses not theretofore paid) received by Conoco including upon
exercise of the underwriters' over-allotment option exceed an amount equal to
the Note Interest plus $2.654 billion (such excess, being referred to herein, as
the "Excess Proceeds"), Conoco shall (x) first purchase from the holder or
holders thereof, in whole or in part, at the face amount thereof plus accrued
interest thereon, the promissory notes of Norske Conoco A/S, payable to the
order of DCEO, in the aggregate principal amount of 3,403,000,000 Norwegian
Kroner, (y) second (to the extent sufficient funds remain out of the Excess
Proceeds) repay to the holder or holders thereof, in whole or in part, the
promissory note, dated as of August 31, 1998, of Conoco, payable to the order of
DCEO, in the principal amount of $827,447,710.83 plus accrued interest thereon,
(such note, together with the notes for 3,403,000,000 Norwegian Kroner described
above, the "Restructured Notes") and (z) thereafter (to the extent sufficient
funds remain out of the Excess Proceeds) contribute funds to CI and cause CI to
repay to the holder or the holders thereof, in whole or in part, amounts
outstanding under the Conoco Master Note, plus accrued interest thereon;
provided, however, the aggregate cash used to repay or repurchase the
Restructured Notes and the Conoco Master Note pursuant to the foregoing shall
equal the lesser of (1) the Excess Proceeds and (2) the aggregate face amount of
the Restructured Notes plus accrued interest thereon and the Conoco Master Note
plus accrued interest thereon. Promptly following such repayment and/or purchase
and following any cash payment pursuant to Section 9.1 below, DuPont shall, or
shall cause the Retained Subsidiaries to contribute the Restructured Notes and
the Conoco Master Note (excluding any portion of the Restructured Notes or the
Conoco Master Note that DuPont determines to maintain outstanding in accordance
with Section 2.5(c)) to Conoco, to the extent not previously purchased by Conoco
or repaid in full; provided that DuPont may delay such contribution of all or
part of the Restructured Notes and the Conoco Master Note until the date (the
"Outside Date") that is 5 business days following the later of the Cash
Settlement Date and the date of receipt by Conoco of the proceeds of the sale of
stock of Conoco pursuant to the underwriters' over-allotment option in the IPO.
In the event the Excess Proceeds exceeds the amount set forth in clause (2) of
the second preceding sentence (such excess being called the "IPO Excess"),
Conoco shall, if and to the extent requested by DuPont (and DuPont shall have
until the Outside Date to so request) use all or a portion of the IPO Excess to
pay accrued interest and principal on the Note.
(c) If the sum of the Option Amount and $10.4
million (such sum, the "Employee Benefits Adjustment Amount") is positive,
Conoco shall, if and at such time as requested by DuPont, but no later than the
later of the Outside Date and 30 days following the Effective Date, cause CI to
deliver a promissory note, substantially in the form attached hereto as Exhibit
L, to DEC in an amount equal to the Employee Benefits Adjustment Amount (the
"Employee Benefits Note", and,
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together with the Note, the "New Notes"). If the Employee Benefits Adjustment
Amount is negative, DuPont shall instead pay to Conoco an amount in cash equal
to the absolute value of the Employee Benefits Adjustment Amount 30 days
following the Effective Date. To the extent that any portion of the Restructured
Note of Conoco to DCEO in the principal amount of $827,447,710.83 or the Conoco
Master Note would otherwise be contributed to Conoco pursuant to Section 2.5(b),
DuPont may maintain outstanding, in lieu of receiving all or a portion of the
Employee Benefits Note in accordance with the first sentence of this Section
2.5(c), all or a portion of such remaining principal balance of such
Restructured Note or the Conoco Master Note in an amount not to exceed 94% of
the principal amount of the Employee Benefits Note that would otherwise be
delivered in accordance with the first sentence of this Section 2.5(c) and being
so replaced. To the extent that only a portion of, but not the entire, Employee
Benefits Note is to be replaced by all or a portion of the aforesaid
Restructured Note or the Conoco Master Note (such portion being deemed to be a
"New Note"), Conoco shall deliver the Employee Benefits Note in accordance with
the first sentence of this Section 2.5(c), but in a principal amount equal to
the (A) Employee Benefits Adjustment Amount minus (B) 100% (and not 94%) of the
principal amount of the portion of the Employee Benefits Note so replaced.
(d) Following the Effective Date and until all principal
and accrued interest due under the New Notes shall have been paid in full, on
the first business day after the date of the receipt thereof by Conoco or any of
its Subsidiaries, Conoco shall, or shall cause its relevant Subsidiary to, lend
or contribute to CI an amount equal to 100% of the cash proceeds of (i) the
incurrence of Indebtedness by Conoco or any of its Subsidiaries (other than
Petrozuata) (net of underwriting discounts and commissions and other reasonable
costs (other than Separation Expenses) associated therewith, such other
reasonable costs to be mutually agreed upon by Conoco and DuPont) except for the
incurrence of Indebtedness pursuant to the Revolving Credit Facility or (ii) the
issuance or sale of equity securities by Conoco or any of its Subsidiaries (net
of underwriting discounts and commissions and other reasonable costs (other than
Separation Expenses) associated therewith, such other reasonable costs to be
mutually agreed upon by Conoco and DuPont); provided, however, that to the
extent that amounts are to be paid pursuant to this subsection (d) in respect of
the Restructured Note, Conoco shall make such payments directly. Immediately
following any loan or contribution described above, Conoco shall cause CI to pay
the entire amount of such loan or contribution (which will be equal to 100% of
the cash proceeds received by Conoco or any of its Subsidiaries as described in
clauses (i) and (ii) above) to the holder or holders of the New Notes in partial
satisfaction of its obligations under the New Notes, except to the extent that
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all or part of the amount of such loan or contribution is used to repay any
Indebtedness of Conoco, CI or any of their Subsidiaries to DuPont and any of its
Subsidiaries, other than Conoco, CI and their Subsidiaries, but only to the
extent DuPont consents to the repayment of such Indebtedness in lieu of payment
under the New Notes. Amounts applied to the prepayment of the New Notes as
provided in this Section 2.5(d) shall be applied (a) first, to the accrued and
unpaid interest on the Note, (b) second, to the principal of the Note (c) third,
to accrued and unpaid interest on the portions, if any, of the Restructured Note
and the Conoco Master Note that remain outstanding in accordance with Section
2.5(c), (d) fourth, to the principal of the Employee Benefits Note and (e)
fifth, to the principal of the notes referred to in clause (c) above.
Notwithstanding the foregoing, the provisions of Section 2.5(d)(ii) shall not
apply to the net proceeds received from the exercise of stock options granted to
directors, officers and employees of the relevant entity.
(e) In addition, on or before the Cash Settlement Date,
DuPont shall pay CI amounts owed under the DuPont Master Note, including accrued
interest thereon.
Section 2.6 Registration of Conoco Shares.
(a) Conoco has filed a registration statement on Form
S-1 (as the same may be amended from time to time, including all exhibits
thereto, the "Registration Statement") under the Securities Act covering the
number of shares of Class A Common Stock set forth therein (which sets forth
appropriate disclosure concerning Conoco, the Transferred Business, the
Transferred Assets, the IPO and certain other matters).
(b) As promptly as practicable following the date of
this Agreement (to the extent not theretofore accomplished):
(i) Conoco will use its best efforts to cause such
Registration Statement to be declared effective and to
effect the IPO in accordance with the terms of this
Agreement, including by (1) responding promptly to any
comments from the SEC with respect thereto, after
consultation with DuPont, and (2) taking such other
actions as shall be reasonably required in order to have
the Registration Statement declared effective under the
Securities Act as soon as reasonably practicable
following the date hereof.
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(ii) Conoco shall file in a timely manner with the SEC and
cause to become effective any registration statements or
amendments thereto which are appropriate to reflect the
establishment of, or amendments to, any employee benefit
and other plans relating to the Transferred Business
contemplated by the Employee Matters Agreement or
described in the Registration Statement.
(iii) Conoco shall take all such action as may be necessary or
appropriate to register or qualify the Class A Common
Stock under state securities or "Blue Sky" Laws or such
other action under such laws as is necessary or
appropriate in connection with the transactions
contemplated by this Agreement.
(iv) Conoco shall enter into certain agreements (including an
underwriting agreement) necessary or appropriate to
facilitate the IPO.
(v) Conoco shall obtain "comfort" letters and updates
thereof from its independent accountants addressed to
the underwriters of the IPO, such letters to be in
customary form and covering matters of the type
customarily covered in "comfort" letters to
underwriters.
(vi) Conoco shall cooperate with the underwriters of the IPO
to facilitate timely preparation and delivery of
certificates representing the Class A Common Stock and
to enable the Class A Common Stock to be in such
denominations and registered in such names as the
underwriters may request.
(vii) Conoco shall participate and have senior management of
Conoco available to participate in any "roadshow"
marketing efforts reasonably requested by the lead
managing underwriter of the IPO.
(viii) Conoco shall prepare, and Conoco shall file and seek to
make effective, an application to permit listing of the
Class A Common Stock on the NYSE.
(b) DuPont and Conoco agree that DuPont shall have the
right, in its sole discretion, to determine whether to satisfy or cause to be
satisfied,
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the underwriter's over-allotment option in the IPO with shares of Conoco sold by
DuPont, Conoco or some combination of shares of Conoco sold by DuPont and
Conoco.
ARTICLE III
ASSUMPTION AND RETENTION OF LIABILITIES
Section 3.1 Assumed Liabilities. Upon the terms set forth in
this Agreement, Conoco hereby agrees with DuPont to, or to cause the appropriate
Transferred Business Company to, assume, and agree to pay, perform and discharge
promptly when due any and all Assumed Liabilities; provided however, that
notwithstanding the foregoing, nothing in this Section 3.1 shall require Conoco
to make a capital contribution to, or otherwise invest in, purchase assets or
services from, or lend, advance or otherwise supply or accelerate the payment of
funds to, any of the Transferred Business Companies in order to enable such
Transferred Business Company to satisfy an Assumed Liability.
Section 3.2 Retained Liabilities. Upon the terms set forth in
this Agreement, DuPont hereby agrees with Conoco to, or to cause a Retained
Subsidiary to, pay, perform and discharge promptly when due any and all Retained
Liabilities, including all Liabilities expressly assumed by DuPont and any
Retained Subsidiary under the terms of this Agreement or any of the Related
Agreements; provided however, that notwithstanding the foregoing, nothing in
this Section 3.2 shall require DuPont to make a capital contribution to, or
otherwise invest in, purchase assets or services from, or lend, advance or
otherwise supply or accelerate the payment of funds to, any of the Retained
Subsidiaries in order to enable such Retained Subsidiary to satisfy a Retained
Liability.
Section 3.3 Construction of Agreements. Notwithstanding any
other provision in this Agreement to the contrary, in the event and to the
extent that there shall be a conflict between the provisions of this Agreement
and the provisions of any Related Agreement or any other agreement entered into
by DuPont or the Retained Subsidiaries, on one hand, and Conoco or the
Transferred Business Companies on the other hand, pursuant to this Agreement or
the Related Agreements, the provisions of this Agreement shall control except
for conflicts between the provisions of this Agreement and any Principal Related
Agreement, in which case the provisions of such Principal Related Agreement
shall control; provided, however, notwithstanding the foregoing, in the case of
a conflict between the provisions of this
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Agreement and the provisions of one of the several Transitional Services
Agreements, the provisions of the particular Transitional Services Agreement
shall control only to the extent that (x) the provision in question is contained
in the form of Transitional Services Agreement attached hereto as Exhibit F or
(y) is approved by the General Counsel or an Associate General Counsel of both
DuPont and Conoco.
ARTICLE IV
CERTAIN RESTRUCTURING DEFINITIONS
Section 4.1 Assumed Liabilities. "Assumed Liabilities" shall
mean any and all Liabilities, whether arising before or after the Effective
Date, of DuPont or its Subsidiaries (including Conoco and the Transferred
Business Companies), or any of their predecessor companies or businesses, or any
of their Affiliates, Subsidiaries or divisions, relating to, resulting from or
arising out of the present, past or future operation or conduct of the Conoco
Business or ownership or use of Assets in the Conoco Business (including the
ownership or use of the Transferred Assets). "Assumed Liabilities" shall include
but not be limited to the following:
(a) all Liabilities which would properly be set forth,
reflected, disclosed or reserved for on a combined balance sheet of Conoco and
the Transferred Business Companies as of the Effective Date, prepared in the
same manner as the most recent audited combined balance sheet of Conoco included
in the Registration Statement (after giving effect to any pro forma adjustments
reflected in the Registration Statement), but excluding any such Liabilities
attributable to DuPont Netherlands;
(b) all Liabilities pursuant to, under or relating to
all Contracts relating exclusively to the Conoco Business or the Transferred
Assets, regardless of whether Conoco or a Transferred Business Company or DuPont
or a Retained Subsidiary is a party to such Contract;
(c) all warranty, performance and similar obligations
entered into or incurred in the course of business of the Conoco Business with
respect to its products;
(d) all Conoco Environmental Liabilities;
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(e) all Liabilities and obligations assumed by, retained
by or agreed to be performed by Conoco or any of its Subsidiaries pursuant to
this Agreement or any of the Related Agreements;
(f) all Liabilities relating to, arising out of or
resulting from the Conoco Actions and all Liabilities relating to, arising out
of or resulting from all other Actions which are related to, or arise out of the
operations or conduct of the Conoco Business or the ownership or use of the
Assets in the Conoco Business (including the ownership of the Transferred
Assets), whether arising before or after the Effective Date;
(g) all Liabilities relating to all Actions for alleged
or actual patent infringement relating to, resulting from or arising out of the
use by DuPont or any Retained Subsidiary of any Conoco Patents in accordance
with the immunity described in Section 7.12(a);
(h) all Liabilities relating to, resulting from or
arising out of the transfer of the Transferred Assets pursuant to this Agreement
or the Related Agreements other than Liabilities for Separation Expenses;
(i) Conoco's portion, determined pursuant to Section 4.5
hereof, of Shared Contractual Liabilities;
(j) all Liabilities relating to, resulting from or
arising out of the business and operations sold to Vista Chemical by DuPont and
Conoco;
(k) all Liabilities relating to, arising out of or
resulting from the ownership or use of Excluded Assets to the extent they arise
out of (1) the use of such Assets in, or for the benefit of, the Conoco Business
or (2) the operation or use of such Assets by Conoco or a Transferred Business
Company or an employee thereof;
(l) all Liabilities relating to, resulting from, or
arising out of options to purchase stock of Conoco, including options issued
pursuant to Section 2.06 of the Employee Matters Agreement;
(m) all Liabilities arising from any activities and
operations of DuPont, any of its Subsidiaries and any of their employees
(including, but not limited to, the activities and operations of Sentinel and
DERS) to the extent performed for or on behalf of the Conoco Business; and
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(n) all Liabilities arising from the actions and
activities of Conoco and the Transferred Business Companies in connection with
the AEP Proposed Joint Ventures;
provided, however, that notwithstanding the foregoing, Assumed Liabilities shall
in no event include (i) any Liabilities with respect to any Environmental Claims
or Requirements of Environmental Law that are neither Conoco Environmental
Liabilities nor provided for in clause (j) above, (ii) Liabilities that
relate to Taxes other than pursuant to this Agreement or any of the Related
Agreements, including the Tax Sharing Agreement or (iii) any Liabilities for
Separation Expenses.
Section 4.2 Retained Liabilities. "Retained Liabilities" shall
mean any and all Liabilities, whether arising before or after the Effective
Date, of DuPont or its Subsidiaries or any of their predecessor companies or
businesses, or any of their Affiliates, Subsidiaries or divisions relating to,
resulting from or arising out of the present, past or future operations or
conduct of the DuPont Business, or ownership or use of the DuPont Transferred
Assets or any other Assets (other than the Transferred Assets) owned by DuPont
and the Retained Subsidiaries, other than any Assumed Liabilities. "Retained
Liabilities" shall include but not be limited to the following (other than any
which are Assumed Liabilities):
(a) all Liabilities arising out of, relating to or
resulting from the ownership or use of the Excluded Assets to the extent they
arise out of (1) the use of such Assets in, or for the benefit of, the DuPont
Business or (2) the operation or use of such Assets by DuPont or a Retained
subsidiary or an employee thereof;
(b) all Liabilities pursuant to, under or relating to
all Contracts relating exclusively to the DuPont Business or the DuPont
Transferred Assets or any
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other Assets (other than the Transferred Assets) owned by DuPont and the
Retained Subsidiaries, regardless of whether Conoco or a Transferred Business
Company or DuPont or a Retained Subsidiary is a party to such Contract;
(c) all warranty, performance and similar obligations
entered into or incurred in the course of business of the DuPont Business with
respect to its products;
(d) all DuPont Environmental Liabilities;
(e) all Liabilities and obligations assumed by, retained
by, or agreed to be performed by DuPont or any of the Retained Subsidiaries
pursuant to this Agreement or any of the Related Agreements;
(f) all Liabilities relating to Actions relating to,
resulting from or arising out of the DuPont Actions and all Liabilities relating
to, resulting from or arising out of all other Actions, which are related to or
arise out of the operations or conduct of the Retained Business or the ownership
or use of the Assets in the DuPont Business (including the DuPont Transferred
Assets and the Excluded Assets), whether arising before or after the Effective
Date (except in all cases the Actions described in Section 4.1(f) hereof);
(g) the Liabilities relating to all Actions for alleged
or actual patent infringement relating to, resulting from or arising out of the
use by Conoco or any Transferred Business Company of any DuPont Patents in
accordance with the immunity described in Section 7.12(b);
(h) All Liabilities for Separation Expenses;
(i) DuPont's portion, determined pursuant to Section 4.5
hereof, of Shared Contractual Liabilities;
(j) All Liabilities relating to, resulting from or
arising out of the businesses and operations sold to Xxxx Chemical, including
the operations at Matagorda and Chocolate Bayou, Texas;
(k) All Liabilities relating to, resulting from or
arising out of options to purchase stock of DuPont (including, without
limitation, options held by retired employees, but excluding Liabilities
relating to, resulting from or arising out of the cancellation of such options
upon the issuance of options to purchase stock of
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Conoco pursuant to Section 2.06 of the Employee Matters Agreement) other than
the Employee Benefits Note;
(l) All Liabilities arising from any activities and
operations of Conoco, any of the Transferred Business Companies and any of their
employees to the extent performed for or on behalf of the DuPont Business; and
(m) all Liabilities arising from the actions and
activities of DuPont and the Retained Subsidiaries in connection with the AEP
Proposed Joint Ventures;
provided, however, that notwithstanding the foregoing, Retained Liabilities
shall in no event include any (i) Liabilities with respect to any Environmental
Claims or Requirements of Environmental Law that are neither DuPont
Environmental Liabilities nor provided for in clause (j) above or (ii)
Liabilities that relate to Taxes other than pursuant to this Agreement or any of
the Related Agreements, including the Tax Sharing Agreement.
Section 4.3 Transferred Assets. "Transferred Assets" shall
mean collectively (i) any and all Assets of Conoco and the Transferred Business
Companies (other than any Mixed-Use Subsidiaries) following consummation of the
Restructuring, (ii) the Assets of the Mixed-Use Subsidiaries used primarily in
the Conoco Business and (iii) the Assets set forth on Schedule 1(c), but in any
event excluding the Excluded Assets.
Section 4.4 Excluded Assets. "Excluded Assets" shall mean:
(a) the Assets of the Construction Fleet except for the
Assets listed on Schedule 1(c); and
(b) the Assets listed on Schedule 4.4 as the same may be
supplemented from time to time prior to the Effective Date by DuPont, after
consultation with Conoco.
Section 4.5 Shared Contracts.
(a) With respect to Shared Contractual Liabilities
pursuant to, under or relating to a given Shared Contract, such Shared
Contractual Liabilities shall be allocated between the parties as follows:
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(i) First, if a Liability is incurred exclusively in respect
of a benefit received by one party, the party receiving
such benefit shall be responsible for such Liability.
(ii) Second, if a Liability cannot be so allocated under
clause (i), such Liability shall be allocated to the
parties based on the relative proportions of total
benefit received (over the term of the Shared Contract,
measured as of the date of the allocation) under the
relevant Shared Contract. Notwithstanding the foregoing,
each party shall be responsible for any or all
Liabilities arising out of or resulting from its breach
of the relevant Shared Contract.
(b) If DuPont or any Retained Subsidiary, on the one
hand, or Conoco or any Transferred Business Company, on the other hand, receives
any benefit or payment under any Shared Contract which was intended for other
party, DuPont and the Retained Subsidiaries, on the one hand, or Conoco and the
Transferred Business Companies, on the other hand, will use their respective
reasonable best efforts to deliver, transfer or otherwise afford such benefit or
payment (on an after-tax basis) to the other party.
ARTICLE V
CORPORATE GOVERNANCE AND CERTAIN FINANCIAL REPORTING
AND OTHER MATTER
Section 5.1 Following the Effective Date and for so long
as DuPont beneficially owns shares representing at least 30% of the voting power
of all of the outstanding shares of Voting Stock, without the prior written
consent of DuPont, Conoco shall not amend or modify the Conoco Rights Plan.
Section 5.2 So long as DuPont owns shares representing
30% of the voting power of all of the outstanding shares of Voting Stock, Conoco
will not, without the prior consent of DuPont, adopt any amendments to its
Restated Certificate of Incorporation or Bylaws or take or recommend to its
stockholders any action during the term of this Agreement which would (i) impose
limitations on the legal rights of DuPont or any of the Retained Subsidiaries as
Conoco stockholders other than those imposed pursuant to the express terms of
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this Agreement or the form of Conoco's Restated Certificate of Incorporation set
forth as Exhibit A hereto, including, without limitation, any action which would
impose restrictions (A) based upon the size of security holding, the business in
which a security holder is engaged or other considerations applicable to DuPont
or any of the Retained Subsidiaries and not to security holders generally, or
(B) with reference to Class B Common Stock (or if no Shares of Class B Common
Stock are then outstanding, to Class A Common Stock) generally, by means of the
issuance of or proposal to issue any other class of securities having voting
power disproportionately greater than the equity investment in the Company
represented by such securities; (ii) involve the issuance or corporate action
providing for the issuance of any warrant, capital stock or other security (A)
which is, or under specified circumstances will become, convertible into or
represent the right to acquire any securities of DuPont or any of the Retained
Subsidiaries (other than pursuant to customary provisions for adjusting the
securities for which any such warrant is exercisable or into which any such
stock or security is convertible) or (B) any other rights which (including
rights of redemption) are dependent upon the amount of voting securities owned
by DuPont or any of the Retained Subsidiaries; (iii) deny any benefit to DuPont
or any of the Retained Subsidiaries proportionately as holders of any class of
voting securities that is made available to other holders of the same class of
voting securities generally; or (iv) alter voting or other rights of the holders
of any class of voting securities so that any such rights (or the vote required
with respect to any matter) are determined with reference to the amount of
voting securities held by DuPont or any of the Retained Subsidiaries; provided,
that this Section 5.2 shall not prohibit Conoco from adopting the Conoco Rights
Plan or taking any action otherwise prohibited hereby, so long as DuPont and the
Retained Subsidiaries are, either expressly or as part of a class of
stockholders which includes DuPont and the Retained Subsidiaries, exempted from
such action or the limitations on legal rights imposed thereby.
Section 5.3 Conoco Board Representation. (a)
Beginning on the Effective Date, and for so long as DuPont beneficially owns
shares representing 50% or more of the voting power of all of the outstanding
Voting Stock, DuPont shall have the right to designate for nomination by the
Conoco Board (or any nominating committee thereof) to the Conoco Board a
majority of the members of the Conoco Board. For so long as DuPont beneficially
owns shares representing less than 50% but more than 10% of the voting power of
all of the outstanding Voting Stock, DuPont shall have the right to designate
for nomination by the Conoco Board (or any nominating committee thereof) to the
Conoco Board a proportionate number of members of the Conoco Board, as
calculated in accordance with Section 5.3(d). Notwithstanding anything to the
contrary set forth herein, Conoco's obligations with respect to the election or
appointment of DuPont
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designated members shall be limited to the obligations set forth under
subsections (b) and (c) below.
(b) Conoco shall exercise all authority under applicable
law and shall use its best efforts to cause five persons designated by DuPont to
be elected to the Conoco Board effective as of the Effective Date (one such
designee of DuPont in Class I and two such designees of DuPont in each of Class
II and Class III for terms ending on the first, second and third annual meetings
thereafter, respectively). Commencing with the annual meeting of stockholders of
Conoco to be held in 1999 and prior to each annual meeting of stockholders of
Conoco thereafter, DuPont shall be entitled to present to the Conoco Board or
any nominating committee thereof such number of designees of DuPont (each, a
"DuPont Designee") for election to the class of directors up for election to the
Conoco Board at such annual meeting as would result in DuPont having the
appropriate number of DuPont Designees on the Conoco Board as determined
pursuant to subsection (a) above. If the Conoco Board ceases to be a classified
board, DuPont shall be entitled to present to the Conoco Board or any nominating
committee thereof five (or such other number of DuPont Designees as would result
in DuPont having the appropriate number of DuPont Designees on the Board as
determined pursuant to subsection (a) above) DuPont Designees, or such other
number of designees, as determined pursuant to Section 5.3(d), for election to
the Conoco Board at each annual meeting of stockholders of Conoco.
(c) Conoco shall at all such times exercise all
authority under applicable law and use its best efforts to cause all such
designees to be nominated as Board members by the nominating committee of the
Conoco Board if there is such a committee. Conoco shall cause each DuPont
Designee for election to the Conoco Board to be included in the slate of
designees recommended by the Conoco Board to Conoco's stockholders for election
as directors at each annual meeting of the stockholders of Conoco (or at any
special meeting held for the election of directors) and shall use its best
efforts to cause the election of each such DuPont Designee, including soliciting
proxies in favor of the election of such persons. In the event that any DuPont
Designee elected to the Conoco Board shall cease to serve as a director for any
reason, the vacancy resulting therefrom shall be filled by the Conoco Board with
a substitute DuPont Designee, unless such vacancy was caused by action of
stockholders (in which case, in accordance with Conoco's Restated Certificate of
Incorporation, the stockholders shall fill such vacancy). In the event that as a
result of an increase in the size of the Conoco Board, DuPont is entitled to
have one or more additional DuPont Designees elected to the Conoco Board
pursuant to subsection (a) above, the Conoco Board shall appoint the appropriate
number of such additional DuPont Designees, unless such increase in size of the
Conoco Board was caused by
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the action of stockholders (in which case, in accordance with Conoco's Restated
Certificate of Incorporation, the stockholders shall elect such additional
director or directors). The parties hereto agree that the directors of Conoco
identified in the Registration Statement include five DuPont Designees.
(d) If at any time that DuPont Designees are serving on
the Conoco Board, DuPont beneficially owns shares representing less than 50% but
more than 10% of the total voting power of all of the outstanding Voting Stock,
the number of persons DuPont shall be entitled to designate for nomination by
the Conoco Board (or any nominating committee thereof) for election to the
Conoco Board shall be equal to the number of directors computed using the
following formula (rounded to the nearest whole number): the product of (1) the
percentage of the voting power of all of the outstanding shares of common stock
of Conoco beneficially owned by DuPont and (2) the number of directors then on
the Conoco Board (assuming no vacancies exist). Notwithstanding the foregoing,
if DuPont beneficially owns shares of common stock of Conoco representing less
than 50% of the total voting power of all outstanding shares of common stock of
Conoco and the calculation of the formula set forth in the foregoing sentence
would result in DuPont being entitled to elect a majority of the members of the
Conoco Board, the formula will be recalculated with the product being rounded
down to the nearest whole number; provided, however, that if DuPont, at any
time, acquires additional common stock of Conoco so that DuPont beneficially
owns shares of common stock of Conoco representing 50% or more of the total
voting power of all of the outstanding shares of common stock of Conoco, then
the number of persons DuPont shall be entitled to designate for nomination by
the Conoco Board (or any nominating committee thereof) for election to the
Conoco Board shall be adjusted upward, if appropriate as a result of rounding,
in accordance with the provisions of this Section 5.3(d). If the number of
DuPont Designees serving on the Conoco Board exceeds the number determined
pursuant to the foregoing sentences of this Section 5.3(d) (such difference
being herein called the "Excess Director Number"), then DuPont shall use its
reasonable best efforts to cause DuPont Designees selected by DuPont in its sole
discretion (the number of which designees shall be equal to the Excess Director
Number) to promptly resign from the Conoco Board, and, to the extent such
persons do not so resign, DuPont shall assist Conoco in increasing the size of
the Conoco Board, so that after giving effect to such increase, the number of
DuPont Designees on the Conoco Board is in accordance with the provisions of
this Section 5.3(d).
Section 5.4 Committees. Effective as of the Effective
Date and for so long as DuPont beneficially owns shares of common stock of
Conoco representing 50% or more of the voting power of all of the outstanding
shares of common stock of
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Conoco, the Audit and Compliance Committee and the Compensation Committee and
any other committee of the Conoco Board which performs functions analogous to
those normally performed by the foregoing types of committees shall be composed
of directors at least a majority of which are DuPont Designees and each other
committee of the Conoco Board shall include at least one DuPont Designee.
Effective as of the Effective Date and for so long as DuPont beneficially owns
shares of common stock of Conoco representing less than 50% but more than 10% of
the voting power of all of the outstanding shares of common stock of Conoco,
each committee of the Conoco Board shall, unless DuPont consents otherwise,
include at least one DuPont Designee. The parties hereto agree that the members
of Conoco's Audit and Compliance Committee and Conoco's Compensation Committee
identified in the Registration Statement are composed of directors at least a
majority of which are DuPont Designees.
Section 5.5 Accounting Principles. (a) Effective as
of the Effective Date and for so long as DuPont beneficially owns shares of
common stock of Conoco representing 50% or more of the voting power of all of
the outstanding Voting Stock, Conoco may not change its accounting principles or
practices if a change in such accounting principle or practice would be required
to be disclosed in Conoco's financial statements as filed with the SEC or
otherwise publicly disclosed therein without the prior written consent of
DuPont, except for changes which are required by GAAP and as to which there is
no discretion on the part of Conoco, as concurred in by Conoco's auditors prior
to its implementation.
(b) For so long as DuPont beneficially owns shares
representing 20% or more of the voting power of the outstanding Voting Stock (i)
Conoco will furnish DuPont within nine (9) business days after the end of each
quarter and eleven (11) business days after the end of each fiscal year, the
unaudited balance sheet, income statement and statement of cash flows of Conoco
and its Subsidiaries as at the end of such period, (ii) Conoco shall furnish to
DuPont such financial information or documents in the possession of Conoco or
any of its Subsidiaries as DuPont may reasonably request, and (iii) Conoco shall
furnish to DuPont on a monthly basis such management and other periodic reports
related to financial information in the form and substance consistent with the
practice of Conoco as of the date of this Agreement. For so long as DuPont
beneficially owns shares representing 50% or more of the voting power of all of
the outstanding Voting Stock, Conoco will furnish DuPont the consolidated
balance sheet, consolidated income statement and consolidated statement of cash
flows, if any, of Conoco and its Subsidiaries as at the end of each such
quarterly and annual
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period in the form and substance consistent with the practice of Conoco as of
the date of this Agreement.
Section 5.6 Tax Free Spin-Off.
(a) At any time after the Effective Date, if DuPont
advises Conoco that it intends to pursue a Tax-Free Spin-Off (as defined in
Exhibit A hereto) or that it intends to otherwise distribute all or a portion of
the capital stock of Conoco beneficially owned by DuPont to its securityholders
by way of dividend, exchange or otherwise, Conoco agrees to take all action
reasonably requested by DuPont to facilitate such transaction and, subject to
the following sentence, DuPont shall reimburse Conoco for its reasonable
out-of-pocket expenses incurred in connection with such actions. In the event a
registration statement is filed in connection with such transaction, Conoco and
DuPont will cooperate to take actions analogous (to the extent applicable) to
those set forth in the Registration Rights Agreement with respect to a Demand
Registration and in particular the parties will indemnify and provide
contribution to each other in a manner analogous to that set forth in Section 8
of the Registration Rights Agreement.
(b) Prior to a Tax-Free Spin-Off, (i) Conoco will have
the right to propose to DuPont an amendment to its certificate of incorporation
providing for the automatic conversion on a one-for-one basis of the shares of
Class B Common Stock into shares of Class A Common Stock upon the occurrence of
circumstances specified in such proposal so long as such amendment (a) does not
otherwise affect any of the rights of the holders of Class A Common Stock or
Class B Common Stock (including rights of transferability) or affect the ability
(except with respect to the tax-free nature of the spin-off) to accomplish the
Tax-Free Spin-Off and (b) is otherwise valid under the Delaware General
Corporation Law (the "Charter Amendment") and (ii) if DuPont seeks to obtain
from the IRS a ruling (the "Ruling") as to the tax-free nature of the Tax-Free
Spin-Off, then DuPont will diligently pursue obtaining such ruling on the basis
that such Charter Amendment is effective; provided, however, that
notwithstanding anything to the contrary DuPont shall not be required (x) to
propose or to raise with the IRS any Charter Amendment which, based on the
advice of its counsel, DuPont reasonably believes will, if effective, result in
a material delay in, or material reduction in the likelihood of, obtaining such
a favorable Ruling and (y) to file a ruling request with respect to, or continue
to pursue obtaining, the Ruling on the basis that the Charter Amendment is
effective if, after approaching the IRS, DuPont, in its sole discretion,
determines in good faith that pursuing such Ruling on such basis is having or
may have an adverse effect on the ability to obtain the Ruling or result in a
delay with respect thereto which DuPont
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not be in its best interests. If DuPont determines to effect a Tax-Free
Spin-Off without obtaining a Ruling, it shall have no obligation with respect
to any proposed Charter Amendment if it concludes, in good faith, after
consultation with counsel, that such Charter Amendment would result in an
increased risk that the intended Tax-Free Spin-Off would not qualify under
section 355 of the Code (or any successor provision) and be tax-free to DuPont,
its shareholders or Conoco.
Section 5.7 Survival of Rights. In the event Conoco
ceases to be a publicly traded company or becomes a Subsidiary of a publicly
traded Company (other than DuPont), all of the rights of DuPont set forth in
this Article V shall continue in full force and effect and shall apply to any
publicly traded company that, directly or indirectly, through one or more
intermediaries, controls Conoco. Conoco agrees that, without the consent of
DuPont, it will not enter into any Contract which will have the effect set
forth in the first clause of the preceding sentence, unless such publicly
traded company agrees to be bound by the foregoing provision. As used in this
Section 5.7, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through ownership of voting securities, by contract or
otherwise.
ARTICLE VI
SURVIVAL, INDEMNIFICATION, CLAIMS
AND OTHER MATTERS
Section 6.1 Survival of Agreements. (a) All covenants
and agreements of the parties contained in this Agreement shall survive the
Effective Date in accordance with their terms; provided, however, that the
covenants and agreements of the parties set forth in this Article VI shall
survive the Effective Date in perpetuity.
(b) All of the obligations of DuPont and the
Retained Subsidiaries, on the one hand, and Conoco and its Subsidiaries, on the
other hand, pursuant to this Agreement shall survive and be unaffected by the
sale or other transfer by DuPont or any of the Retained Subsidiaries, on the
one hand, or Conoco or any of its Subsidiaries, on the other hand, of any their
respective Assets or businesses or the assignment by DuPont or any of the
Retained Subsidiaries, on the one hand, or Conoco or its Subsidiaries, on the
other hand, of any of their respective Liabilities.
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Section 6.2 Indemnification.
(a) DuPont shall, and, in the case of
clauses (i) and (iii) below, shall in addition cause each of the Appropriate
Retained Subsidiaries to, indemnify, defend and hold harmless Conoco and its
Subsidiaries and each of their Affiliates engaged in the Conoco Business, and
each of Conoco's, such Subsidiaries' and such Affiliates' directors, officers,
employees and agents (each a "Conoco Party") from and against, and shall
reimburse such Indemnitees with respect to, any and all Losses relating to,
resulting from or arising out of, (i) any of the Retained Liabilities (whether
arising prior to or after the Effective Date) and all Liabilities arising out
of the operation or conduct of the DuPont Business or use or ownership of the
DuPont Transferred Assets or any other Assets (other than the Transferred
Assets) owned by DuPont and the Retained Subsidiaries after the Effective Date,
(ii) any claim that the information included in the Registration Statement
under the captions set forth on Schedule 6.2 hereto is false or misleading with
respect to any material fact or omits to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, (iii) all
Liabilities relating to, resulting from or arising out of the use by DuPont or
any Retained Subsidiary of any Non-Permitted Names pursuant to Sections 7.7 and
7.8, and (iv) any failure by a DuPont Party to perform, or violation by a
DuPont Party of, any provision of this Agreement or the Related Agreements
which is to be performed or complied with by DuPont or the Retained
Subsidiaries. As used in this subsection (a), the "Appropriate Retained
Subsidiary" shall mean the Retained Subsidiary, if any, whose activities or
conduct (or whose predecessors' activities or conduct) caused or resulted in
the Loss in question.
(b) Conoco shall, and, in the case of
clauses (i) and (iv) below, shall in addition cause the Appropriate Conoco
Subsidiaries to, indemnify, defend and hold harmless DuPont and the Retained
Subsidiaries and each of their Affiliates, and each of DuPont's, such
Subsidiaries' and such Affiliates' directors, officers, employees and agents
(other than any Conoco Party) (each a "DuPont Party") from and against, and
shall reimburse such Indemnitees with respect to, any and all Losses relating
to, resulting from or arising out of (i) any of the Assumed Liabilities
(whether arising prior to or after the Effective Date) and all Liabilities
arising out of the operation or conduct of the Conoco Business or the use or
ownership of the Transferred Assets after the Effective Date, (ii) any claim
that the information included in the Registration Statement other than under
the captions set forth on Schedule 6.2 hereto is false or misleading with
respect to any material fact or omits to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were
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made, not misleading, (iii) any Liabilities of DuPont relating to, resulting
from or arising out of its status as a holder of shares, directly or
indirectly, of a Conoco Party, (iv) any Liabilities relating to, resulting from
or arising out of the use by Conoco or any of its Subsidiaries of any
Non-Permitted Names pursuant to Sections 7.7 and 7.8, (v) any failure by a
Conoco Party to perform, or violation by a Conoco Party of, any provision of
this Agreement or any of the Related Agreements which is to be performed or
complied with by Conoco or any of its Subsidiaries. As used in this subsection
(b), the "Appropriate Conoco Subsidiary" shall mean the Subsidiary of Conoco,
if any, whose activities or conduct (or whose predecessors' activities or
conduct) caused or resulted in the Loss in question.
(c) Effective as of the Effective Time,
Conoco for itself and on behalf of its Subsidiaries hereby releases, remises
and forever discharges each DuPont Party, in their respective capacities as
such, from any Liability, obligation or responsibility for any and all past
actions or failures to take action, including any actions which may be deemed
to have been negligent or grossly negligent, relating to, resulting from or
arising out of the operation or conduct of any businesses, Assets (including
activities performed thereat) or operations managed or operated by, or
operationally related to, directly or indirectly, the Conoco Business and the
DuPont Business, except for any Liability, obligation or responsibility for any
action or failure to take action in accordance with the provisions of this
Agreement or for any fraudulent act or willful or intentional misconduct in the
operation or conduct of Conoco Business or the DuPont Business prior to the
Effective Date. Effective as of the Effective Time, DuPont for itself and on
behalf of its Subsidiaries hereby releases, remises and forever discharges each
Conoco Party, in their respective capacities as such, from any Liability,
obligation or responsibility for any and all past actions or failures to take
action, including any actions which may be deemed to have been negligent or
grossly negligent, relating to, resulting from or arising out of the operation
or conduct of any businesses, Assets (including activities performed thereat)
or operations managed or operated by, or operationally related to, directly or
indirectly, the Conoco Business and the DuPont Business, except for any
Liability, obligation or responsibility for any action or failure to take
action in accordance with the provisions of this Agreement or for any
fraudulent act or willful or intentional misconduct in the operation or conduct
of Conoco Business or the DuPont Business prior to the Effective Date. Nothing
set forth in this subsection (c) shall limit or otherwise affect any party's
rights or obligations pursuant to, or contemplated by, this Agreement and the
Related Agreements, including any obligations relating to indemnification and
the assumption of Liabilities.
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(d) The amount which any Indemnifying Party
is required to pay to any Indemnitee pursuant to Section 6.2(a) or Section
6.2(b) shall be reduced (including, but not limited to, retroactively) by any
recovery, judgment, settlement or other amounts actually recovered, including
insurance proceeds except to the extent attributable to risks retained solely
by Danube and Christiana (provided that, in accordance with Section 10.6(a)
hereof (except as otherwise provided in Section 10.6(b)), no Indemnitee shall
be obligated to pursue insurance coverages under its excess liability insurance
program for any Loss), by such Indemnitee in respect of such Loss. If an
Indemnitee shall have received an Indemnity Payment in respect of a Loss and
shall subsequently actually receive a recovery, judgment, settlement or other
amount in respect of such Loss, then such Indemnitee shall promptly, but in no
event later than five business days, pay to such Indemnifying Party a sum equal
to the lesser of the amount of such recovery, judgment, settlement or other
amount actually received, net of any taxes, or the amount of Indemnity Payments
actually received previously in respect of such Loss.
(e) (i) An Indemnitee that has
received an Indemnity
Payment in respect of a
Loss from an Indemnifying
Party shall pay to such
Indemnifying Party an
amount equal to any Tax
Saving Amount realized by
the Indemnitee promptly
upon its receipt. For
purposes of this Section
6.2(e), the "Tax Saving
Amount" shall equal the
amount by which the Income
Tax of the Indemnitee or
any of its Affiliates are
reduced (including, without
limitation, through the
receipt of a refund, credit
or otherwise), plus any
related interest received
from a Tax Authority, as a
result of claiming as a
deduction or offset on any
relevant Tax Return
(including, without
limitation, any claim for
refund) amounts
attributable to a Loss (the
"Indemnifiable Loss
Deduction"). An
Indemnifying Party shall
pay to an Indemnitee an
amount equal to any
increase in the Income
Taxes of the Indemnitee as
a result of receiving an
indemnity payment from
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the Indemnifying Party
(grossed up to take into
account such payment, if
applicable).
(ii) In the event that an Indemnitee incurs a
Loss, such Indemnitee shall claim as a
deduction or offset on any relevant Tax
Return (including, without limitation, any
claim for refund) such Loss to the extent
such position is supported by substantial
authority (as defined in Section 6.3(c) of
the Tax Sharing Agreement) with respect to
U.S. federal, state and local Tax Returns or
has similar appropriate authoritative
support with respect to any Tax Return other
than U.S. federal, state and local Tax
Returns. The Indemnitee shall have primary
responsibility for the preparation of its
Tax Returns and reporting thereon such
Indemnifiable Loss Deduction; provided, that
the Indemnitee shall consult with, and
provide the Indemnifying Party with a
reasonable opportunity to review and comment
on the portion of the Indemnitee's Tax
Return relating to the Loss. If a dispute
arises between the Indemnitee and the
Indemnifying Party as to whether there is
"substantial authority" (with respect to
U.S. federal, state and local Tax Returns)
or similar appropriate authoritative support
(with respect to any Tax Return other than
U.S. federal, state and local Tax Returns)
for the claiming of an Indemnifiable Loss
Deduction, such dispute shall be resolved in
accordance with the principles and
procedures set forth in Section 8 of the Tax
Sharing Agreement. Both DuPont and Conoco
shall act in good faith to coordinate their
Tax Return filing positions with respect to
Indemnity Payments for the periods that
include an Indemnity Payment. There shall be
an adjustment to any Tax Saving Amount
calculated under Section 6.2(e)(i) hereof in
the event of an Audit which results in a
Final Determination that increases or
decreases the amount of the Indemnifiable
Loss Deduction reported on any relevant Tax
Return of the Indemnitee. The Indemnitee
shall promptly inform the Indemnifying Party
of any such Audit and shall attempt in good
faith to sustain the Indemnifiable Loss
Deduction at issue in the Audit. Upon
receiving a written notice of a Final
Determination in respect of an Indemnifiable
Loss Deduction, the Indemnitee shall
redetermine the Tax Saving Amount
attributable to the
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Indemnifiable Loss Deduction under Section
6.2(e)(i) hereof, taking into account the
Final Determination (the "Restated Tax
Saving Amount"). If the Restated Tax Saving
Amount is greater than the Tax Saving
Amount, the Indemnitee shall promptly pay
the Indemnifying Party a sum equal to the
difference between such amounts. If the
Restated Tax Saving Amount is less than the
Tax Saving Amount, then the Indemnifying
Party shall promptly pay the Indemnitee, an
amount equal to the difference between such
amounts.
(iii) Notwithstanding any other provision of this
Agreement, to the extent permitted by
applicable law, the parties hereto agree
that any Indemnity Payment made hereunder
shall be treated as a capital contribution
or dividend distribution, as the case may
be, immediately prior to the Effective Date,
for all Tax purposes, and accordingly, as
not includible in the taxable income of the
recipient.
(f) THE PARTIES HERETO UNDERSTAND AND AGREE
THAT THE INDEMNIFICATION OF AN INDEMNITEE BY AN INDEMNIFYING PARTY PURSUANT TO
THIS ARTICLE VI MAY INCLUDE INDEMNIFICATION FOR LOSSES RESULTING FROM OR
ARISING OUT OF, DIRECTLY OR INDIRECTLY, AN INDEMNITEE'S OWN NEGLIGENCE.
(g) The indemnification provisions of this
Article VI (i) shall apply without regard to, and shall not be subject to, any
limitation by reason of set-off, limitation or otherwise and (ii) are intended
to be comprehensive and not to be limited by any requirements of Law concerning
prominence of language or waiver of any legal right under any Law (including,
without limitation, rights under any workers compensation statute or similar
statute conferring immunity from suit) and the parties hereto hereby waive all
such rights.
Section 6.3. Procedure for Indemnification.
(a) If any party shall receive notice of
any Action brought, asserted, commenced or pursued other than by a DuPont Party
or a Conoco Party (hereinafter a "Third Party Claim"), with respect to which a
DuPont Party or a Conoco Party is or may be entitled to an Indemnity Payment,
it shall give the potential Indemnifying Party prompt notice thereof (including
any pleadings relating
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thereto) after becoming aware of such Third Party Claim, specifying in
reasonable detail the nature of such Third Party Claim and the amount or
estimated amount thereof to the extent then feasible (which estimate shall not
be conclusive of the final amount of such claim); provided, however, that the
failure of a party to give notice as provided in this Section 6.3(a) shall not
relieve any Indemnifying Party of its indemnification obligations under this
Article VI, except to the extent that any Indemnifying Party is actually
prejudiced by such failure to give notice.
(b) For any Third Party Claim concerning
which notice is required to be given under subparagraph (a) of this Section
6.3, an Indemnifying Party may elect to defend the Third Party Claim through
counsel appointed by the Indemnifying Party, which counsel shall be reasonably
satisfactory to the Indemnitee. An Indemnifying Party electing to defend a
Third Party Claim must (i) notify the Indemnitee of its election to defend
within 30 days of receipt of notice of such claim pursuant to Section 6.3(a) or
sooner if the nature of the Third Party Claim so requires and (ii) acknowledge
and agree in writing that if such Third Party Claim is adversely determined,
such Indemnifying Party will have an obligation to pay Indemnity Payments to
the Indemnitee in respect of the Indemnifiable Losses relating to such Third
Party Claim and that such Indemnifying Party waives all defenses it may have to
contest such obligation. Notwithstanding the foregoing, DuPont, in its sole
discretion, upon written notice (which notice shall include DuPont's basis for
electing to defend such Third Party Claim(s) and whether or not DuPont
acknowledges its liability for Indemnity Payments with respect to such Third
Party Claim(s) in accordance with the prior sentence), may elect to defend (or
assume the defense of) any Third Party Claim or series of related Third Party
Claims that:
(i) relate in any way to the Conoco Business,
Transferred Assets or the Assumed
Liabilities if a DuPont Party is named a
party thereto and if (x) DuPont's or one of
the Retained Subsidiaries' ability to
conduct its business could be impaired in
any significantly adverse manner as a
result of any injunctive relief sought or
(y) an adverse resolution of such Third
Party Claim (or series of related Third
Party Claims) presents in the good faith
judgment of DuPont's General Counsel a
reasonable risk of having an adverse effect
on the business, operations, financial
condition, results of operations or
prospects of (1) DuPont and the Retained
Subsidiaries, taken as a whole, in an
amount greater or equal to $300 million or
(2) one of the Retained Subsidiaries
organized outside the United States in an
amount greater than or equal to $50
million, in which case
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(A) DuPont or one of the Retained
Subsidiaries shall pay all costs and
expenses incurred in connection with the
defense of such Third Party Claim(s) if
DuPont or one of the Retained Subsidiaries
is the Indemnifying Party with respect to
such Third Party Claim(s) or (B) such costs
and expenses shall be included in DuPont's
or one of the Retained Subsidiary's Losses
if Conoco or one of its Subsidiaries is the
Indemnifying Party with respect to such
Third Party Claim(s); or
(ii) with respect to which both parties
hereto, or Conoco and a Retained
Subsidiary, or DuPont and a Subsidiary of
Conoco may be Indemnifying Parties, and to
which paragraph (i) above does not apply
and as to which, in the good faith
judgement of the General Counsel of DuPont,
the portion of the aggregate Liability that
is the responsibility of DuPont and any
Retained Subsidiaries (after taking into
account indemnification obligations
hereunder) equals or exceeds the portion of
such Liability that is the responsibility
of Conoco and any Subsidiaries of Conoco.
In any case in which both DuPont and Conoco
may be Indemnifying Parties with respect to
a Third-Party Claim, regardless of whether
DuPont has the right to defend pursuant to
this paragraph (b)(ii), all costs and
expenses shall be paid by the party
obligated to make any Indemnification
Payment to the other, if they are not both
required to do so, and if they are both so
required, or neither is so required, then
all costs and expenses shall be paid by the
parties pro rata based on their respective
proportionate liability for any settlement
or judgment reached or entered (after
taking into account any Indemnification
Payments pursuant to this Agreement). If
neither party has any liability to a third
party, the parties shall share the fees and
expenses equally.
(c) The Indemnifying Party's right to
defend any Third Party Claim includes the right (after consultation with the
Indemnitee following at least five business days written notice thereof) to
compromise, settle or consent to the entry of any judgment or determination of
liability concerning such Third Party Claim; provided, however, that the
Indemnifying Party shall not compromise, settle or consent to the entry of
judgment or determination of liability concerning any Third Party Claim without
prior written approval by the Indemnitee if the terms or conditions of such
compromise, settlement or consent would, in the reasonable judgment
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of the Indemnitee, have a significantly adverse financial impact or an adverse
effect upon the ongoing operations of the Indemnitee. Notwithstanding any other
provision of this Section 6.3, unless otherwise agreed to by the parties in
writing, no party shall enter into any compromise or settlement or consent to
the entry of any judgment which does not include as an unconditional term
thereof the giving by the third party of a release of both the Indemnitee and
the Indemnifying Party from all further liability concerning such Third Party
Claim.
(d) In the event that counsel for both the
defending party and the non-defending party is required and joint counsel
cannot adequately represent the interests of both the defending party and the
non-defending party due to a conflict of interest, the non-defending party
shall have the right to participate in the defense of any Third Party Claim by
employing separate counsel at the expense of such non-defending party without a
right of reimbursement from the defending party. In addition, in all cases, the
non-defending party may participate in the defending party's defense of any
Third Party Claim in which the non-defending party has any interest by
employing separate counsel; provided, however, that (i) the defending party
shall control, manage and direct the defense of such Third Party Claim and (ii)
the non-defending party's participation shall be at the non-defending party's
cost and expense without a right of reimbursement from the defending party.
(e) If the party having the right to elect
to defend a particular Third Party Claim pursuant to Section 6.3(b) elects not
to defend, or fails to respond regarding its election to defend in a timely
manner, a particular Third Party Claim, the other party shall defend such Third
Party Claim without any prejudice to its rights to indemnification from the
Indemnifying Party pursuant to this Article VI. In such case, (i) the
Indemnitee shall have the right to compromise, settle or consent to the entry
of any judgment with respect to such Third Party Claim as provided in Section
6.3(c), (ii) the amount of such compromise, settlement or judgment shall be
determinative of the amount of the Loss (but such compromise, settlement or
judgment shall not necessarily be determinative of which party hereunder is
entitled to indemnification) and (iii) the Indemnifying Party shall bear all
costs and expenses of defending such Third Party Claim; provided, however, that
if both parties may be Indemnifying Parties with respect to such Third Party
Claim, the non-defending party shall reimburse the defending party promptly
upon demand by the defending party for the non-defending party's proportionate
share of all out-of-pocket costs and expenses reasonably incurred in connection
with the defending party's defense of such Third Party Claim.
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(f) The non-defending party shall make
available to the defending party and its counsel all employees, books and
records, communications, documents, items or matters within its knowledge,
possession or control that are necessary, appropriate or reasonably deemed
relevant by the defending party with respect to such defense; provided,
however, that subject to Section 8.6 hereof, nothing in this subparagraph (f)
shall be deemed to require a party to make available books and records,
communications, documents or items which (i) in such party's good faith
judgment could result in a waiver of any Privilege or (ii) such party is not
permitted to make available because of any Law or any confidentiality
obligation to a third party, in which case such party shall use its reasonable
efforts to seek a waiver of or other relief from such confidentiality
restriction.
(g) Upon final judgment, determination,
settlement or compromise of any Third Party Claim, and unless otherwise agreed
by the parties in writing, the Indemnifying Party shall pay promptly on behalf
of the Indemnitee, or to the Indemnitee in reimbursement of any amount
theretofore required to be paid by it, the amount of any and all Losses
suffered by such Indemnitee (other than attorneys' fees incurred by such
Indemnitee in the event it participates in its own defense, except in the
circumstance where the Indemnifying Party has failed to assume the defense of
any Third Party Claim) with respect to such claim as determined by such final
judgment, determination, settlement or compromise. Upon the payment in full by
the Indemnifying Party of such amount, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have any right or
claim relating to such Third Party Claim. Such Indemnitee shall cooperate with
such Indemnifying Party in a reasonable manner, and at the cost and expense of
such Indemnifying Party, in prosecuting any subrogated right or claim.
Section 6.4 Other Claims for Indenmificaiton. Any claim
on account of a Loss which does not result from a Third Party Claim shall be
asserted by written notice from the Indemnitee to the Indemnifying Party
stating the specific provisions of this Agreement upon which such claim is
based. Such Indemnifying Party shall have a period of 30 days from actual
receipt of the notice (or such shorter time period as may be required by law as
indicated by the Indemnitee in the written notice) within which to respond
thereto. If such Indemnifying Party does not respond within such 30-day (or
lesser) period, then there shall be a rebuttable presumption that such
Indemnifying Party has accepted responsibility for such claim. If such
Indemnifying Party does respond within such 30-day (or lesser) period and
rejects such claim in whole or in part, such Indemnitee shall be free to pursue
resolution as provided in Article XIII hereof.
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Section 6.5 Contribution. If the indemnification
provided for in Section 6.2 is unavailable to an Indemnitee in respect of any
Loss arising out of or related to information contained in the Registration
Statement as provided in clause (ii) of Section 6.2(a) and clause (ii) of
Section 6.2(b), then the Indemnifying Party, in lieu of indemnifying such
Indemnitee, shall contribute to the amount paid or payable by such Indemnitee
as a result of such Loss, in such proportion as is appropriate to reflect the
relative fault of Conoco and each other Conoco Party, on the one hand, and
DuPont and each other DuPont Party, on the other hand, in connection with the
statements or omissions which resulted in such Loss. The relative fault of a
Conoco Party, on the one hand, and of a DuPont Party, on the other hand, shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by a Conoco Party or a
DuPont Party.
Section 6.6 No Beneficiaries. Except to the extent
expressly provided otherwise in this Article VI, the indemnification provided
for by this Article VI shall not inure to the benefit of any third party or
parties and shall not relieve any insurer who would otherwise be obligated to
pay any claim of the responsibility with respect thereto or, solely by virtue
of the indemnification provisions hereof, provide any subrogation rights with
respect thereto and each party agrees to waive (and, as applicable, cause its
Subsidiaries to waive) such rights against the other (and, as applicable, its
Subsidiaries) to the fullest extent permitted by law.
Section 6.7 Indemnification of Directors and Officers.
For purposes of this Article VI, and notwithstanding anything to the contrary
contained herein, (i) officers of DuPont shall not be Conoco Parties, but shall
be deemed DuPont Parties, whether or not such officers of DuPont serve on the
Conoco Board, (ii) officers of Conoco shall not be deemed DuPont Parties, but
shall be deemed Conoco Parties, whether or not such officers of Conoco serve on
the DuPont Board, and (iii) Persons who (A) serve on both the Conoco Board and
the DuPont Board and (B) are not officers of either DuPont or Conoco, shall be
deemed both DuPont Parties and Conoco Parties.
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ARTICLE VII
CERTAIN ADDITIONAL MATTERS
Section 7.0 Post-Closing Transactions. As more fully
set forth in Sections 7.1 and 7.2 below, and subject to the limitations
therein, the parties hereto intend to effect the Separation, including all
required transfers of any Transferred Business Companies, Transferred Assets
and DuPont Transferred Assets on or prior to the Effective Date or, to the
extent any approvals, filings or consents are required with or from any
Governmental Authorities or third parties or otherwise contemplated by the
parties in connection with the Restructuring, as soon as practicable
thereafter. In the case of any such transfers not complete at the Effective
Date, the parties further intend, subject to the provisions of Sections 7.1 and
7.2 below, to treat the Person to whom such Asset or company would otherwise
have been transferred, insofar as is reasonably possible, as being entitled to
all of the benefits and burdens relating thereto, including possession, use,
risk of loss, potential for gain and control, from and after the Effective
Date.
Section 7.1 Non Assignment. Further Assurances. (a)
Notwithstanding anything else in this Agreement to the contrary, this Agreement
shall not constitute an agreement to assign, convey or transfer any Action,
Asset or Contract, including stock or other ownership interests in a
Transferred Business Company or any claim or right or any benefit arising
thereunder or resulting therefrom as to which consent or approval to
assignment, conveyance or transfer thereof or amendment thereof (including, but
not limited to, consents and approvals of Governmental Authorities) is required
but has not been obtained as of the Effective Date unless and until such
consent is no longer required or has been obtained.
(b) Subject to Section 7.2, DuPont and
Conoco agree that they will use their respective reasonable commercial efforts
to obtain any consent, approval or amendment (including, but not limited to,
consents and approvals of Governmental Authorities) required to (i) convey,
assign, transfer and deliver to Conoco or the applicable Transferred Business
Companies all of DuPont's or the applicable Retained Subsidiaries' title and
ownership interest in and to the Transferred Assets and to convey, assign,
transfer and deliver to DuPont or the applicable Retained Subsidiaries all of
Conoco's or its applicable Subsidiaries' or any Delayed Company's title and
ownership interest in and to any DuPont Transferred Assets to be conveyed to
DuPont or the Retained Subsidiaries hereunder and (ii) have Conoco or its
applicable Subsidiary assume, pay, perform and discharge the Assumed
Liabilities and to obtain the release of DuPont or the applicable Retained
Subsidiary
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therefrom, and, to the extent required, have DuPont or its applicable Retained
Subsidiary assume, pay, perform and discharge the Retained Liabilities and to
obtain the release of Conoco or its applicable Subsidiary therefrom including
with respect to (i) and (ii) any consent, approval or amendment required for
any necessary novation or assignment of all Contracts, agreements, leases,
licenses and other rights of any nature whatsoever relating to any Assets
(including, without limitation, all bids, quotations and proposals which have
been made by DuPont or any of the Retained Subsidiaries on behalf of the
Transferred Business or by Conoco or any Transferred Business Company on behalf
of the Retained Business which are outstanding as of the Effective Date);
provided, however, that neither DuPont and the Retained Subsidiaries nor Conoco
and its Subsidiaries shall be obligated to pay any consideration in order to
obtain any such consent, approval or amendment (except that DuPont shall be
required to pay filing fees, other administrative charges and other reasonable
out-of-pocket expenses to the extent they are Separation Expenses); and
provided, further, however, that neither DuPont nor Conoco is, in this
Agreement or in any Related Agreement, representing or warranting in any way
that the obtaining of the consents or approvals, the execution and delivery of
any amendatory agreements and the making of the filings and applications
contemplated by this Agreement shall satisfy the provisions of all applicable
agreements or the requirements of all applicable laws or judgments; and
provided, further, that Conoco and any applicable Subsidiary shall bear the
economic and legal risk that any required consents, approvals or amendments are
not obtained or that any requirements of law or judgments are not complied
with, with respect to the transfer of the Transferred Assets and that DuPont
and any applicable Retained Subsidiary shall bear the economic and legal risk
that any required consents, approvals or amendments are not obtained or that
any requirements of law or judgments are not complied with, with respect to
DuPont Transferred Assets.
(c) In the event and to the extent that
DuPont is unable to obtain any such required consent, approval or amendment
required to transfer, convey or assign the Transferred Assets (other than the
stock of a Delayed Company) to Conoco or one of its Subsidiaries, DuPont shall,
and shall cause the Retained Subsidiaries to, continue to hold and, to the
extent required by the terms applicable to such Asset, operate the Asset in the
case of real or personal property or to be bound thereby in the case of
Contracts and unless not permitted by law, Conoco shall, and shall cause its
Subsidiaries to, pay, perform and discharge fully, promptly when due all the
obligations of DuPont or the Retained Subsidiaries thereunder from and after
the Effective Date, and Conoco shall, and shall cause its Subsidiaries to,
indemnify the DuPont Parties for all Losses arising out of such performance by
Conoco or any of its Subsidiaries. DuPont shall, and shall cause the Retained
Subsidiaries to,
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without further consideration therefor, pay and remit to Conoco promptly all
monies, rights and other considerations received in respect of such
performance. Conoco shall, and shall cause its Subsidiaries to, indemnify the
DuPont Parties for all Losses arising out of any actions (or omissions to act)
of DuPont or any Retained Subsidiary (i) taken at the direction of Conoco (or
if Conoco fails to provide such direction) or (ii) absent gross negligence or
willful misconduct, taken at the initiative of DuPont or one of the Retained
Subsidiaries with respect to any Contracts, agreements, leases, licenses, or
other rights or commitments.
(d) In the event and to the extent that
Conoco is unable to obtain any such required consent, approval or amendment
required to transfer, convey or assign any DuPont Transferred Asset (other than
the stock of a Delayed Company) to DuPont or one of the Retained Subsidiaries,
Conoco shall, and shall cause its Subsidiaries to, continue to hold and, to the
extent required by the terms applicable to such Asset, operate the Asset in the
case of real or personal property or to be bound thereby in the case of
Contracts and unless not permitted by law, DuPont shall, and shall cause the
Retained Subsidiaries to, pay, perform and discharge fully, promptly when due
all the obligations of Conoco or its Subsidiaries thereunder from and after the
Effective Date, and DuPont shall, and shall cause the Retained Subsidiaries to,
indemnify the Conoco Parties for all Losses arising out of such performance by
DuPont or any of the Retained Subsidiaries. Conoco shall, and shall cause its
Subsidiaries to, without further consideration therefor, pay and remit to
DuPont promptly all monies, rights and other considerations received in respect
of such performance. DuPont shall, and shall cause the Retained Subsidiaries
to, indemnify the Conoco Parties for all Losses arising out of any actions (or
omissions to act) of Conoco or any of its Subsidiaries (i) taken at the
direction of DuPont (or if DuPont fails to provide such direction) or (ii)
absent gross negligence or willful misconduct, taken at the initiative of
Conoco or one of its Subsidiaries with respect to any Contracts, agreements,
leases, licenses, or other rights or commitments.
(e) Subject to Section 7.2, to the extent
that any conveyances, assignments, transfers and deliveries of the Assets
contemplated by this Agreement or the Related Agreements shall not have been
consummated on or prior to the Effective Date (including, but not limited to,
the failure or inability to obtain a required approval, consent or amendment),
DuPont and Conoco shall cooperate to effect such consummation as promptly
thereafter as shall be practicable. Without limiting the generality of the
foregoing, at any time and from time to time after the Effective Date, at the
request of DuPont or Conoco, as the case may be, and without further
consideration, DuPont or the Retained Subsidiaries, on the one hand, and Conoco
or its Subsidiaries, on the other hand, will execute and deliver to DuPont or
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the Retained Subsidiaries, as the case may be, or to Conoco or its
Subsidiaries, as the case may be, such other instruments of transfer,
conveyance, assignment and confirmation and take such action as DuPont or
Conoco, as the case may be, may reasonably deem necessary or desirable in order
to more effectively transfer, convey and assign to the other and to confirm in
the other all title and ownership interest held by the transferor to all of the
Assets transferred hereunder, to put the transferee in actual possession and
operating control thereof and to permit the transferee to exercise all
ownership rights with respect thereto held by the transferor (including,
without limitation, rights under Contracts and other arrangements as to which
the consent of any third party to the transfer thereof shall not have
previously been obtained) and Conoco or its Subsidiaries and DuPont or the
Retained Subsidiaries will execute and deliver to DuPont or Conoco, as the case
may be, all instruments, undertakings or other documents and take such other
action as DuPont and Conoco may reasonably deem necessary or desirable in order
to have Conoco or one of the Transferred Business Companies fully assume and
discharge the Assumed Liabilities and relieve DuPont of any Liability with
respect thereto and to have DuPont or the Retained Subsidiaries, to the extent
necessary, to fully assume and discharge the Retained Liabilities and relieve
Conoco of any Liability with respect thereto; provided, that both DuPont and
Conoco understand and agree that, neither shall be liable in any manner to any
person who is not a party to this Agreement for any failure of any of the
transfers contemplated by this Agreement to be consummated on or subsequent to
the Effective Date. Notwithstanding the foregoing, DuPont and Conoco shall not
be obligated, in connection with the foregoing, to expend monies other than
filing fees, administrative charges, and other reasonable out-of-pocket
expenses, which shall be borne by DuPont to the extent they are Separation
Expenses.
(f) Whether or not all of the Transferred
Assets or the Assumed Liabilities shall have been legally transferred or
transferred of record to or assumed by Conoco or one of the Transferred
Business Companies or whether all of the Assets to be transferred to DuPont or
one of the Retained Subsidiaries or the Retained Liabilities shall have been
legally transferred or transferred of record to or assumed by DuPont or one of
the Retained Subsidiaries as of the Effective Date, DuPont and Conoco agree
that as between DuPont and Conoco and their respective Subsidiaries, as of the
Effective Date, (i) Conoco or one of the Transferred Business Companies shall
have, and shall be deemed to have acquired, complete and sole beneficial
ownership over all of the Transferred Assets, except as described in this
Section 7.1 with respect to Assets which are non-assignable and as described in
Section 7.2 with respect to Delayed Companies, together with all of DuPont's
and the Retained Subsidiaries' rights, powers and privileges (except as
provided in Section 8.6 hereto) incident thereto, and shall be deemed to have
assumed in
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accordance with the terms of this Agreement all of the Assumed Liabilities and
all of DuPont's and the Retained Subsidiaries' duties, obligations and
responsibilities incident thereto and (ii) DuPont or one of the Retained
Subsidiaries shall have, and shall be deemed to have acquired, complete and sole
beneficial ownership over all of the DuPont Transferred Assets to be transferred
to DuPont and the Retained Subsidiaries hereunder, except as described in this
Section 7.1 with respect to Assets which are non-assignable and except as
described in Section 7.2 with respect to Delayed Companies, together with all of
Conoco's and its Subsidiaries' rights, powers and privileges (except as provided
in Section 8.6 hereto) incident thereto, and shall be deemed to have assumed, to
the extent required, in accordance with the terms of this Agreement all of the
Retained Liabilities and all of Conoco's and its Subsidiaries' duties,
obligations and responsibilities incident thereto.
Section 7.2 Delayed Companies; Interim Period.
(a) With respect to any Transferred
Business Company not owned directly or indirectly by Conoco as of the Effective
Date, including, but not limited to, the entities set forth on Schedule 7.2
(each a "Delayed Company"), DuPont and Conoco agree that from the Effective
Date until it is conveyed to Conoco or any of its Subsidiaries (or until it is
otherwise transferred by DuPont pursuant to paragraph (e) hereof) (the "Interim
Period"), DuPont, or each Retained Subsidiary of DuPont that directly or
indirectly owns a Delayed Company, shall retain title to the Delayed Company;
provided, that it may transfer the Delayed Company to another Retained
Subsidiary that is wholly owned, directly or indirectly, by DuPont. For the
period specified in clauses (i) and (ii) of the first sentence of subsection
(d) below and until the sale process provided for therein has been completed or
abandoned, DuPont shall cause each Delayed Company not to declare or pay any
dividends or other distributions, except out of net cash flow generated by the
Retained Business, to DuPont or any Retained Subsidiary or any other Person and
shall cause the Delayed Companies not to redeem, repurchase or otherwise
acquire any of its capital stock; provided, however, that the provisions of
this sentence shall terminate and be of no further effect with respect to a
particular Delayed Company at such time as that particular Delayed Company is
no longer a direct or indirect wholly owned Subsidiary of DuPont. Conoco,
directly or indirectly, shall provide the funding requirements (which shall
include an allocable portion of corporate overhead and non-allocated expenses)
of the portion of the business and operations of each Delayed Company
conducting the Transferred Business not covered by cash on hand at such Delayed
Company in amounts and at times determined by DuPont and shall repay and
indemnify DuPont or any Retained Subsidiary for any such funding advanced by it
to fund the portion of the business and operations of the Delayed Company
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conducting the Transferred Business after the Effective Date; provided, that in
the case of any Mixed-Use Subsidiary which is a Delayed Company, the calculation
of the funding required to be provided by Conoco shall be adjusted to (i)
reimburse DuPont or a Retained Subsidiary for the funding provided by cash
generated by the business and operations of such Delayed Company through the
conduct of the Retained Business and for any funding of such Delayed Company
provided by DuPont or any Retained Subsidiary or otherwise generated by the
Retained Business and (ii) reimburse Conoco or any Subsidiary of Conoco for the
funding, if any, of that portion of the business and operations of the Delayed
Company conducting the Retained Business after the Effective Date which is
provided by cash generated by the business and operations of such Delayed
Company conducting the Transferred Business.
(b) Prior to the receipt of the approvals of all
Governmental Authorities required to transfer a Delayed Company to Conoco or any
of its Subsidiaries, if applicable, during the Interim Period, management of
such Delayed Company shall operate such Delayed Company without control by
Conoco or any of its Subsidiaries, and DuPont shall instruct the management of
such Delayed Company to operate such Delayed Company in the ordinary course of
business in accordance with existing plans and budgets of such Delayed Company.
If the exercise of managerial control by Conoco is not prohibited by law, Conoco
shall exercise managerial control over such portion of the business and
operations of each Delayed Company which conducts the Transferred Business and
neither DuPont nor any Retained Subsidiary shall have any duty or obligation
with respect thereto. DuPont and its Subsidiaries shall (i) not be liable in any
manner for the activities or operations of such portion of the business and
operations of each Delayed Company which conducts the Transferred Business or
the activities of the directors, officers and employees of any Delayed Company
during the Interim Period to the extent such activities relate to such portion
of the business and operations of the Delayed Company which conducts the
Transferred Business and (ii) shall be indemnified by Conoco and its
Subsidiaries from any and all Losses sustained by DuPont or any of the Retained
Subsidiaries in connection with the activities described under (i) above or
otherwise attributable to DuPont or any Retained Subsidiary with respect to its
status as holder of the shares of such Delayed Company during the Interim
Period.
(c) DuPont shall, during the Interim Period, provide, or
cause to be provided, outsourcing services to a Delayed Company to the extent
such services are currently provided to such Delayed Company by DuPont or any
Retained Subsidiary. Such services shall be provided in accordance with the
terms and at the cost provided for in the relevant Transitional Services
Agreement. A Delayed
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Company or any Transferred Business Companies, as the case may be, shall be
deemed to have been granted licenses immediately prior to or on the Effective
Date by DuPont or any Retained Subsidiary, any Delayed Company and Conoco or any
of its Subsidiaries, as the case may be, to use all intellectual property owned
or licensed (in the case of licensed intellectual property, subject to the terms
thereof) by such grantor and previously used in connection with the recipient's
business and on the same terms and conditions that such intellectual property
was licensed or made available to the recipient prior to the Effective Date.
(d) If all or part of the transfer of a Delayed Company
is prohibited by a Governmental Authority, DuPont shall, for a period ending on
the the later of (i) two years following the Effective Date or (ii) one year
following DuPont's good faith determination that such prohibition exists and a
waiver or other relief therefrom cannot be obtained on a commercially reasonable
basis, with the consent of Conoco (which consent shall not be unreasonably
withheld), use its reasonable commercial efforts to transfer, or cause to be
transferred, to a third party all of the Assets and Liabilities of such Delayed
Company relating to the operations and conduct of the Transferred Business (if
none of such Assets and Liabilities could be transferred to or assumed by
Conoco) or the portion of such Assets and Liabilities that could not be
transferred to Conoco on terms reasonably acceptable to Conoco; provided, that
DuPont shall be entitled to comply with and to rely upon any advice, orders or
instructions of a Governmental Authority with respect to any such transfer or
sale; and further, provided, that any such transfer or sale shall be made
without any undertakings on the part of DuPont or any Retained Subsidiary, but
that DuPont shall bear all costs, expenses and taxes arising from the sale or
transfer of such Assets and Liabilities; and further, provided, that DuPont
shall keep Conoco reasonably informed about its efforts to cause such sale or
transfer and DuPont shall consider, but have no obligation to implement, any
recommendations Conoco may have regarding such process. Following the later to
occur of (i) and (ii) above, DuPont shall have no further obligation to
effectuate or cause any sale or transfer pursuant to this Section 7.2(d). Upon
such sale or transfer, all duties and obligations of DuPont or any Retained
Subsidiary with respect to such Delayed Company shall thereupon cease except as
otherwise provided in this Agreement. The proceeds to DuPont, the relevant
Retained Subsidiary or the relevant Delayed Company (net of any costs, expenses
and taxes, including any required repayments of debt, to the extent they are not
Separation Expenses, (the "Net Proceeds")), if any, of such transfer or sale
shall be remitted to Conoco upon receipt of such Net Proceeds by DuPont, the
relevant Retained Subsidiary or the relevant Delayed Company. However, if DuPont
or the relevant Retained Subsidiary is required to make an expenditure in
connection with such sale or transfer that is not a Separation Expense,
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Conoco shall, promptly following the consummation of such transfer or sale,
reimburse DuPont or the relevant Retained Subsidiary for the full amount of such
expenditure. If, following the later to occur of clause (i) and (ii) above (or
earlier, with the consent of Conoco), DuPont or the relevant Retained Subsidiary
liquidates such Delayed Company, the Net Proceeds of such liquidation shall, if
permitted by Law, be remitted to Conoco upon receipt of such Net Proceeds by
DuPont or the relevant Retained Subsidiary. The payments provided for in the
previous two sentences shall be made subject to any currency, or exchange or
other regulation or requirement of Governmental Authorities. Notwithstanding the
foregoing, if a Delayed Company is a Mixed-Use Subsidiary, DuPont may (i)
transfer all Assets of the Delayed Company which constitute part of the Retained
Business to DuPont or one of the Retained Subsidiaries prior to any sale of all
or part of such Delayed Company to a third party or a liquidation of the Delayed
Company, (ii) sell only the Assets of the Delayed Company which constitute part
of the Transferred Business to a third party or (iii) sell all of the Assets of
the Delayed Company or all of the stock of the Delayed Company, in which case,
DuPont shall only remit to Conoco the Net Proceeds which are allocable to the
portion of the Delayed Company which conducted the Transferred Business. In the
case of clauses (i) and (ii) above, the amount of Net Proceeds to be remitted by
DuPont to Conoco shall be calculated after giving effect to the transfer of the
Assets of the Delayed Company which constitute part of the Retained Business in
the case of clause (i), and only giving effect to the sale of the Assets of the
Delayed Company which constitute part of the Transferred Business in the case of
Clause (ii).
(e) During the Interim Period, DuPont or one of the
Retained Subsidiaries will promptly provide Conoco and its Subsidiaries with
such financial and other information with respect to such portion of the
business and operations of each Delayed Company which conducts the Conoco
Business as may be reasonably requested by Conoco, unless the provision of such
information would be prohibited by applicable law or by contractual obligations
to third parties in the reasonable judgment of DuPont. During the Interim
Period, DuPont and Conoco will, and will cause their respective Subsidiaries to,
cooperate and to use commercially reasonable efforts to obtain all required
approvals of any Governmental Authorities for any sale or transfer of Assets and
assumptions of Liabilities of any Delayed Company relating to the operations and
conduct of the Conoco Business.
(f) In the event that any Delayed Company which is also
a Mixed-Use Subsidiary that is conveyed to Conoco or any of its Subsidiaries
owns any DuPont Transferred Assets after such conveyance, Conoco and its
Subsidiaries shall continue to operate such assets and conduct that portion of
the Retained
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Business attributable to those Assets in the ordinary course of business. Conoco
and its appropriate Subsidiaries shall take all actions reasonably required to
transfer such DuPont Transferred Assets to DuPont or the appropriate Retained
Subsidiary as soon as is practicable following receipt of all required approvals
of all Governmental Authorities. The provisions of Section 7.2(a), (b), (c), and
(e) shall apply to DuPont and the Retained Subsidiaries, such DuPont Transferred
Assets and the conduct of that portion of the Retained Business conducted by
such Delayed Company attributable to those Assets to the same extent such
provisions are applicable to Conoco and its Subsidiaries, the Transferred Assets
and the operation of the Conoco Business pursuant to such subsections. No later
than 30 days following receipt by Conoco or any of its Subsidiaries of any cash
proceeds in respect of the sale or transfer of any DuPont Transferred Assets
pursuant to this subsection 7.2(f), Conoco shall remit to DEC an amount of cash
equal to the gross proceeds received by Conoco or any of its Subsidiaries
pursuant to such sale or transfer.
Section 7.3 Notice of Seperation. Following the
Effective Date, Conoco shall, and shall cause its Subsidiaries to use
commercially reasonable efforts to advise and put on notice all third parties
with whom Conoco or any of its Subsidiaries conducts business or maintains
contractual relationships that Conoco is an independent public company and no
longer a wholly owned Subsidiary of DuPont.
Section 7.4 Resignations. On or prior to the Effective
Date, DuPont shall cause all directors, officers and employees of DuPont who are
directors and officers of any Transferred Business Company (other than any named
in the Registration Statement as intended to be directors or officers of Conoco
or any other Transferred Business Company) to resign from such positions with
such Transferred Business Company, and Conoco shall cause all persons who are or
will be Transferred Employees and who are officers or employees of DuPont or
officers, employees, or directors of any Retained Subsidiary (other than
Sentinel) to resign from such positions with DuPont or with such Retained
Subsidiary; provided however, that no person who is named in the Registration
Statement as being or intended to be or remain a director of Conoco or DuPont
shall be required to resign from such Board.
Section 7.5 Other Agreements. On or prior to Effective
Date, DuPont and Conoco shall, and shall cause their respective Subsidiaries (as
appropriate) to, enter into and deliver the Related Agreements and the
Conveyancing and Assumption Instruments.
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Section 7.6 Payment of Seperation Expenses. DuPont shall
be responsible for reimbursing Conoco for Separation Expenses incurred by Conoco
and its Subsidiaries in accordance with the following provisions:
(a) Within 30 business days following the
Effective Date, Conoco shall prepare, and DuPont shall fully cooperate in
preparing, an invoice reflecting all Separation Expenses paid by Conoco or any
of its Subsidiaries for the period beginning May 11, 1998 through and including
the Effective Date. Not later than 30 business days following delivery of such
invoice, DuPont shall, or shall cause any of the Retained Subsidiaries to, pay
to Conoco or any of its Subsidiaries in cash the amount of Separation Expenses
reflected on such invoice.
(b) For each calendar month (or for such
other time period as the parties shall mutually agree following the Effective
Date) commencing with the month following the month in which the Effective Date
occurs and, unless sooner terminated by mutual agreement of the parties hereto,
continuing for two years from the date on which DuPont's voting power falls
below 50% of the voting power of all of the outstanding shares of common stock
of Conoco, within 30 business days of the end of the month (or such other
relevant period) in question, Conoco shall prepare, and DuPont shall fully
cooperate in preparing, an invoice which shall reflect the Separation Expenses
paid by Conoco and its Subsidiaries during the month (or such other relevant
period) in question; provided that, with respect to the first such period, such
invoice shall not reflect Separation Expenses paid prior to or on the Effective
Date (which expenses shall be reflected on the invoice provided for under
subsection (a) above). Not later than 30 business days following delivery of
each such periodic invoice, DuPont shall, or shall cause any of the Retained
Subsidiaries to pay in cash the amount reflected on such periodic invoice.
(c) As promptly as practicable following the
date of this Agreement, Conoco shall provide DuPont with an estimate of the
total amount of Separation Expenses for which reimbursement is to be provided
pursuant to the foregoing provisions.
Section 7.7 Signs: Use of Company Name. Except as
provided in Section 7.8, as soon as practicable, and in any event within 60 days
after the Effective Date, DuPont and Conoco, at DuPont's expense, shall remove
(or, if necessary, on an interim basis cover up) any and all exterior and
interior signs and identifiers which refer or pertain to DuPont or the Retained
Business on the Transferred Assets, in the case of Conoco, or which refer to or
pertain to Conoco or the Transferred Business on the Assets of DuPont or the
Retained Subsidiaries, in the case of DuPont
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(in each case, other than on the Assets of any Delayed Company for so long as
such company remains a Delayed Company). After such period, (i) Conoco shall not
use or display the name "DuPont" or variations thereof, or other trademarks,
tradenames, logos or identifiers using such name or otherwise owned by or
licensed to DuPont which have not been assigned or licensed to Conoco and (ii)
DuPont shall not use or display the name "Conoco" or variations thereof, or
other trademarks, tradenames, logos or identifiers using such name or otherwise
owned by or licensed to Conoco which have not been assigned or licensed to
DuPont (collectively, in each case, "Non-Permitted Names"), without the prior
written consent of the other; provided, however, notwithstanding the foregoing,
that nothing contained in this Agreement shall prevent DuPont or Conoco from
using the other's name in public filings with Governmental Authorities,
materials intended for distribution to either party's stockholders or any other
communication in any medium which describes the relationship between the
parties.
Section 7.8 Products, Supplies and Documents. DuPont and
Conoco shall have the right to use existing products, supplies and documents
(including, but not limited to, purchase orders, forms, labels, shipping
materials, catalogues, sales brochures, operating manuals, instructional
documents and similar materials, and advertising material) being transferred to
it pursuant to this Agreement which have imprinted thereon or otherwise use a
Non-Permitted Name, for a period not to exceed 180 days following the Effective
Date (or for such longer period as necessary to fulfill existing contractual
relationships under contracts which have not been novated or in the business and
operations of any Delayed Company for so long as such company remains a Delayed
Company); provided, however, that DuPont and Conoco agree (i) to use only such
supplies and documents existing in inventory as of the Effective Date and (ii)
not to order or utilize in any manner any additional supplies and documents
which have imprinted thereon or otherwise use a Non-Permitted Name.
Section 7.9 Plant Closings and Layoffs. Conoco agrees
that it shall not, and shall not permit any of its Subsidiaries, at any time
during the 120-day period following the Effective Date, effectuate (i) a "plant
closing" as defined in the Worker Adjustment and Retraining Notification Act of
1988 (the "WARN Act") affecting any site of employment or operating units within
any site of employment of the Transferred Business or (ii) take any action to
precipitate a "mass layoff" as defined in the WARN Act affecting any site of
employment of the Transferred Business, except, in either case, after complying
fully with the notice and other requirements of the WARN Act. Conoco agrees to,
and shall cause its Subsidiaries to, indemnify DuPont and the Retained
Subsidiaries and to defend and hold DuPont
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and the Retained Subsidiaries harmless from and against any and all Losses which
DuPont and the Retained Subsidiaries may incur in connection with any Action or
claim of violation brought against DuPont and any of the Retained Subsidiaries
under the WARN Act or any state, local and foreign plant closing and layoff law,
which relate, in whole or in part, to actions taken by Conoco or any of its
Subsidiaries with regard to any site of employment of Conoco or any of its
Subsidiaries or operating units within any site of employment of the Transferred
Business.
Section 7.10 Litigation. Following the Effective Date,
(a) Conoco shall have exclusive authority and control over the investigation,
prosecution, defense and appeal of all pending Actions relating to or arising in
connection with the Conoco Business, the Transferred Assets or the Assumed
Liabilities, including Actions with respect to the matters set forth on Schedule
7.10(a) (each, a "Conoco Action"), and may settle or compromise, or consent to
the entry of any judgment with respect to any such Action, without the consent
of DuPont, and (b) DuPont shall have exclusive authority and control over the
investigation, prosecution, defense and appeal of all pending Actions relating
to or arising in connection with the DuPont Business, the Excluded Assets or the
Retained Liabilities, including Actions with respect to the matters set forth on
Schedule 7.10(b) (each, a "DuPont Action"), and may settle or compromise, or
consent to the entry of any judgment with respect to, any such Action without
the consent of Conoco; provided, that if both DuPont and Conoco are named as
parties to any Conoco Action or DuPont Action, to settle or compromise, or
consent to the entry of any judgment with respect to, any such Action, DuPont,
any of the Retained Subsidiaries, Conoco and any of its Subsidiaries must comply
with the provisions of Section 6.2. Conoco shall, and shall cause its
Subsidiaries to, indemnify, defend and hold harmless the DuPont Parties, and
DuPont shall, and shall cause the Retained Subsidiaries to, indemnify and hold
harmless each of the Conoco Parties, in the manner provided in Article VI, from
and against all Losses arising out of or resulting from each such Action over
which such Indemnifying Party has authority and control pursuant to this Section
7.10. Conoco shall, and shall cause its Subsidiaries, to use best efforts to
have DuPont and any DuPont Parties removed as parties to any Conoco Action in
which they are named parties as soon as is reasonably practicable, and DuPont
shall, and shall cause the Retained Subsidiaries to, use best efforts to have
Conoco and any Conoco Parties removed as parties to any DuPont Action in which
they are named parties as soon as is reasonably practicable.
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Section 7.11 No Restrictions on Post-Closing Competitive
Activities: Corporate Opportunities.
(a) It is the explicit intent of each of the
parties hereto that the provisions of this Agreement shall not include any
non-competition or other similar restrictive arrangements with respect to the
range of business activities which may be conducted by the parties hereto.
Accordingly, each of the parties hereto acknowledges and agrees that nothing set
forth in this Agreement shall be construed to create any explicit or implied
restriction or other limitation on (i) the ability of any party hereto to engage
in any business or other activity which competes with the business of any other
party hereto, or (ii) the ability of any party to engage in any specific line of
business or engage in any business activity in any specific geographic area.
(b) Except as provided in the Principal
Related Agreements, DuPont and the Retained Subsidiaries shall have the right
to, and shall have no duty not to, (i) engage in the same or similar business
activities or lines of business as Conoco and its Subsidiaries, (ii) do business
with any client or customer of Conoco and its Subsidiaries and (iii) employ or
otherwise engage any officer or employee of Conoco and its Subsidiaries, and
neither DuPont nor any Retained Subsidiary nor any officer or director thereof
shall be liable to Conoco and its Subsidiaries or its stockholders for breach of
any fiduciary duty by reason of any such activities of DuPont or the Retained
Subsidiaries or of such person's participation therein. Except as would
otherwise result in a violation of law by DuPont or Conoco or any of their
respective Subsidiaries, Conoco and any of its Subsidiaries shall have the right
to, and shall have no duty not to, (i) engage in the same of similar business
activities or lines of business as DuPont and the Retained Subsidiaries (ii) do
business with any client or customer of DuPont and the Retained Subsidiaries and
(iii) employ or otherwise engage any officer or employee of DuPont and Retained
Subsidiaries and neither Conoco nor any of its Subsidiaries nor officer or
director thereof shall be liable to DuPont and the Retained Subsidiaries or
their shareholders for breach of any fiduciary duty by reason of any such
activities of Conoco or its Subsidiaries or of such persons participation
therein. In the event that DuPont or any of the Retained Subsidiaries acquires
knowledge of a potential transaction or matter which may be a corporate
opportunity for both DuPont or any of the Retained Subsidiaries and Conoco and
any of its Subsidiaries, neither DuPont nor the Retained Subsidiaries nor any
DuPont Designee shall have any duty to communicate or present such corporate
opportunity to Conoco or its Subsidiaries and shall not be liable to Conoco and
its Subsidiaries or to Conoco's stockholders for breach of any fiduciary duty as
a stockholder of Conoco by reason of the fact that DuPont or any of the Retained
Subsidiaries pursues or acquires such corporate opportunity for itself, directs
such corporate opportunity to another person or entity, or does not present such
corporate opportunity to Conoco and its Subsidiaries. In the event that Conoco
or any of its Subsidiaries acquires knowledge of a potential transaction or
matter which may be a
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corporate opportunity for both DuPont or any of the Retained Subsidiaries and
Conoco or any of its Subsidiaries, neither Conoco nor any of its Subsidiaries
shall have any duty to communicate or present such corporate opportunity to
DuPont or any of the Retained Subsidiaries and shall not be liable to DuPont or
any of the Retained Subsidiaries or to DuPont's stockholders for breach of any
fiduciary duty by reason of the fact that Conoco or any of its Subsidiaries
pursues or acquires such corporate opportunity for itself, directs such
corporate opportunity to another person or entity, or does not present such
corporate opportunity to DuPont or any of the Retained Subsidiaries. For the
purposes of this Section 7.11, "corporate opportunities" of Conoco and its
Subsidiaries shall include, but not be limited to, business opportunities which
Conoco or its Subsidiaries are financially able to undertake, which are, by
their nature, in a line of business of Conoco or its Subsidiaries, are of
practical advantage to them and are ones in which Conoco or its Subsidiaries
have an interest or a reasonable expectancy, and in which, by embracing the
opportunities, the self-interest of DuPont or the Retained Subsidiaries or any
of their officers or directors will be brought into conflict with that of Conoco
and its Subsidiaries, and "corporate opportunities" of DuPont and the Retained
Subsidiaries shall include, but not be limited to, business opportunities which
DuPont or the Retained Subsidiaries are financially able to undertake, which
are, by their nature, in a line of business of DuPont or the Retained
Subsidiaries, are of practical advantage to them and are ones in which DuPont or
the Retained Subsidiaries have an interest or a reasonable expectancy, and in
which, by embracing the opportunities, the self-interest of Conoco or its
Subsidiaries or any of their officers or directors will be brought into conflict
with that of DuPont and the Retained Subsidiaries.
Section 7.12 Intellectual Property.
(a) Conoco hereby grants to DuPont and the
Retained Subsidiaries, effective as of the Effective Time, a world-wide,
irrevocable immunity from suit for infringement of all Conoco Patents used as of
the Effective Date by DuPont or any Retained Subsidiary in the operation of the
Retained Business; provided, however, that such immunity shall not extend to use
by DuPont or any Retained Subsidiary of any Conoco Patents for uses other than
uses for which such Conoco Patents are used by DuPont or any Retained Subsidiary
as of the Effective Date; and provided, further, that neither DuPont nor the
Retained Subsidiaries shall have the right to transfer or grant such immunity to
a third party (other than a third party purchaser of substantially all of the
business and Assets to which immunities pertain).
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(b) DuPont hereby grants Conoco and the
Transferred Business Companies, effective as of the Effective Time, a
world-wide, irrevocable immunity from suit for infringement of all DuPont
Patents used as of the Effective Date by Conoco or any Transferred Business
Company in the operation of the Transferred Business; provided, however, that
such immunity shall not extend to use by Conoco or any Transferred Business
Company of any DuPont Patents for uses other than uses for which such DuPont
Patents are used by Conoco or any Transferred Business Company as of the
Effective Date; and further, provided, however, that neither Conoco nor the
Transferred Business Companies shall have the right to transfer or grant such
immunity to a third party (other than a third party purchaser of substantially
all of the business and Assets to which immunities pertain).
(c) The immunity from suit granted by this
Section 7.12 shall extend for the period during which any DuPont Patents and
Conoco Patents respectively are in force and effect.
ARTICLE VIII
ACCESS TO INFORMATION AND SERVICES
Section 8.1 Provision of Corporate Records. As soon as
practicable after the Effective Date, DuPont shall, subject to the provisions of
this Section 8.1, use all reasonable commercial efforts to deliver or cause to
be delivered to Conoco all Conoco Books and Records in the possession of DuPont
or any Retained Subsidiary and Conoco shall use all reasonable commercial
efforts to deliver or cause to be delivered to DuPont all DuPont Books and
Records in the possession of Conoco or any Transferred Business Company. The
foregoing shall be limited by the following specific provisions:
(i) To the extent any document (including
computer tape) can be subdivided without
unreasonable effort into two portions, one
of which constitutes a Conoco Book and
Record and the other of which constitutes a
DuPont Book and Record, such document
(including computer tape) shall be so
sub-divided and the appropriate portions
shall be delivered to the parties.
(ii) Neither party shall be required to conduct
any general search or investigation of its
files.
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(iii) "Reasonable commercial efforts" shall
require only deliveries of (a) specific and
discrete books and records or a reasonably
limited class of items requested by the
other party and (b) specific and discrete
books and records identified by either party
in the ordinary course of business in which
it determines to be material to the other's
business.
(iv) Each party may retain copies of books and
records delivered to the other, subject to
holding in confidence in accordance with
Section 8.5 hereof information contained in
such books and records.
(v) Each party may in good faith refuse to
furnish any Information if it believes in
good faith that doing so could adversely
affect its ability to successfully assert a
claim of Privilege.
(vi) Neither Party shall be required to deliver
to the other books and records or portions
thereof which are subject to any Law or
confidentiality agreements which would by
their terms prohibit such delivery;
provided, however, if requested by the other
party, such party shall use its reasonable
commercial efforts to seek a waiver of or
other relief from such confidentiality
restriction.
Section 8.2 Access to Information. From and after the
Effective Date, DuPont and Conoco, subject to compliance by the other, its
Subsidiaries and all of their designated Representatives with the provisions of
Section 8.5, shall afford to each other and to each other's authorized
accountants, counsel and other designated Representatives reasonable access and
duplicating rights (with copying costs to be borne by the requesting party)
during normal business hours to all books and records and documents,
communications, items and matters (collectively, "Information") within the
knowledge, possession or control of the other party or any DuPont Party or
Conoco Party relating to the Transferred Assets, the Excluded Assets, the DuPont
Transferred Assets, the Conoco Business, the DuPont Business, the Assumed
Liabilities, the Retained Liabilities, the Delayed Companies and the Transferred
Employees, insofar as such access is reasonably required by DuPont or Conoco or
any of their Subsidiaries or Affiliates, as the case may be, for a particular
purpose and is permitted by Law (and shall use reasonable efforts to cause
persons or
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firms possessing relevant Information to give similar access). Without limiting
the generality of the foregoing, Information may be requested under this for
audit, accounting and tax purposes and in connection with Actions (other than
Actions in which both DuPont or any Retained Subsidiary, on the one hand, and
Conoco or any of its Subsidiaries, on the other hand, as the case may be, are
parties and may be adverse to one another in such Action), as well as for
purposes of fulfilling disclosure and reporting obligations. Notwithstanding
anything to the contrary in this Agreement, neither DuPont or any of the
Retained Subsidiaries, on the one hand, nor Conoco or any of its Subsidiaries,
on the other hand, shall be required to disclose any information to the other or
their authorized Representatives if doing so could violate any Contract or Law
to which DuPont or any of the Retained Subsidiaries, on the one hand, or Conoco
or any of its Subsidiaries, on the other hand, is a party or is subject or which
any believes in good faith could result in a loss of the ability to successfully
assert a claim of Privilege.
Section 8.3 Production of Witnesses and Individuals.
From and after the Effective Date, DuPont and Conoco shall use reasonable
efforts to make available to each other, upon written request, its officers,
directors, employees and agents for fact finding, consultation and interviews
and as witnesses to the extent that any such person may reasonably be required
in connection with any Actions (other than Actions in which both DuPont or any
Retained Subsidiary, on the one hand, and Conoco or any of its Subsidiaries, on
the other hand, as the case may be, are parties and may be adverse to one
another in such Action) in which the requesting party may from time to time be
involved relating to the conduct of the Conoco Business or the Retained
Business. DuPont and Conoco agree to reimburse each other for reasonable
out-of-pocket expenses (other than officers' or employees' salaries) incurred by
the other in connection with providing individuals and witnesses pursuant to
this Section 8.3.
Section 8.4 Retention of Records. Except when a longer
retention period is otherwise required by law or agreed to in writing, including
as provided in the Tax Sharing Agreement, DuPont and Conoco shall retain, in
accordance with their respective records control schedule policy existing from
time to time, all material Information relating to the Conoco Business, the
Restructuring or the transactions contemplated hereby. The parties hereto agree
that upon written request from the other that certain Information relating to
the Conoco Business, the Restructuring or the transactions contemplated hereby
be retained in connection with an Action, the parties shall use reasonable
efforts to preserve and not to destroy or dispose of such Information without
the consent of the requesting party. If a party shall request in writing prior
to the scheduled date for the destruction or disposal of
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any Information that any of the Information proposed to be destroyed or disposed
of be delivered to such requesting party, the other party shall promptly arrange
for the delivery of the Information so requested, and the requesting party shall
pay the reasonable out-of-pocket costs of the delivering party in connection
therewith; provided, however, nothing in this Section 8.4 shall require the
delivery of any Information which (i) in the party's good faith judgment could
result in a waiver of any Privilege or (ii) such party is not permitted to
deliver because of any Law or confidentiality obligation with a third-party with
respect to which such party shall use its reasonable commercial efforts to
obtain a waiver of or other relief from such confidentiality restriction.
Section 8.5 Confidentially.
(a) For a period (i) in the case of
Confidential Information that is Confidential Business Information, of ten years
from the Effective Date and (ii) in the case of Confidential Information that is
Confidential Operational Information, continuing into perpetuity, DuPont and
Conoco shall hold and shall respectively cause the Retained Subsidiaries and
Conoco's Subsidiaries to hold, and shall each cause their respective officers,
employees, agents, consultants and advisors to hold, in strict confidence and
not to disclose or release without the prior written consent of the other party,
any and all Confidential Information (as defined herein); provided, that the
parties may disclose, or may permit disclosure of, Confidential Information (i)
to their respective auditors, attorneys, financial advisors, bankers and other
appropriate consultants and advisors who have a need to know such information
and are informed of their obligation to hold such information confidential to
the same extent as is applicable to the parties hereto and in respect of whose
failure to comply with such obligations, Conoco or DuPont, as the case may be,
will be responsible or (ii) if the parties, the Retained Subsidiaries or
Conoco's Subsidiaries are compelled to disclose any such Confidential
Information by judicial or administrative process or, in the opinion of
independent legal counsel, by other requirements of law. Notwithstanding the
foregoing, in the event that any demand or request for disclosure of
Confidential Information is made pursuant to clause (ii) above, DuPont or
Conoco, as the case may be, shall promptly notify the other of the existence of
such request or demand and shall provide the other a reasonable opportunity to
seek an appropriate protective order or other remedy, which both parties will
cooperate in obtaining. In the event that such appropriate protective order or
other remedy is not obtained, the party whose Confidential Information is
required to be disclosed shall or shall cause the other party to furnish, or
cause to be furnished, only that portion of the Confidential Information that is
legally required to be disclosed. As used in this Section 8.5:
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(i) "Confidential Information" shall mean
Confidential Business Information and
Confidential Operational Information of one
party which, prior to or following the
Effective Date, has been disclosed by DuPont
or the Retained Subsidiaries, on the one
hand, or Conoco or its Subsidiaries, on the
other hand, in written, oral (including by
recording), electronic, or visual form to,
or otherwise has come into the possession
of, the other, including pursuant to the
access provisions of Section 8.2 hereof or
any other provision of this Agreement
(except to the extent that such Information
can be shown to have been (a) in the public
domain through no fault of such party (or,
in the case of DuPont, any of the Retained
Subsidiaries or, in the case of Conoco, any
of its Subsidiaries) or (b) later lawfully
acquired from other sources by the party
(or, in the case of DuPont, such Retained
Subsidiary or, in the case of Conoco, such
Subsidiary) to which it was furnished;
provided, however, in the case of (b) that
such sources did not provide such
Information in breach of any confidentiality
obligations).
(ii) "Confidential Operational Information" shall
mean all proprietary, technical or
operational information, data or material
including, but not limited to, (a)
specifications, ideas and concepts for
products, equipment, processes and services;
(b) manufacturing and performance
specifications and procedures; (c)
engineering drawings and graphs; (d)
technical, research and engineering data;
(e) formulations, materials and material
specifications; (f) laboratory studies and
benchmark tests; (g) service and operation
manuals; (h) quality assurance policies,
procedures and specifications; (i)
evaluation and/or validation studies; (j)
pending patent applications; (k) all other
know-how, methodology, procedures,
techniques and trade secrets related to
research, engineering, development and
manufacturing; (l) market development plans
and forecasts, research and development
agreements, and customer and vendor
information; (m) computer software and
derivatives thereof, (n) training materials
and information; (o) decision and risk
analysis information; and (p) technical
environmental information.
(iii) "Confidential Business Information" shall
mean all proprietary information, data or
material other than Confidential
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Operational Information, including, but not
limited to (a) proprietary company-level and
divisional earnings reports and forecasts,
(b) proprietary macro-economic reports and
forecasts, (c) proprietary company-level and
divisional business plans, (d) proprietary
general market evaluations and surveys and
(e) proprietary financing and credit-related
information.
Notwithstanding the first sentence of this Section 8.5(a), with respect to any
Confidential Business Information that is disclosed after the Effective Date
(which shall be deemed to be Confidential Information for the purposes of this
Section), the obligations of this subsection shall terminate ten years after the
date of the first disclosure of such Confidential Business Information to DuPont
or the Retained Subsidiaries, on the one hand, or Conoco or its Subsidiaries, on
the other hand.
(b) Notwithstanding anything to the contrary
set forth herein, (i) DuPont and the Retained Subsidiaries, on the one hand, and
Conoco and its Subsidiaries, on the other hand, shall be deemed to have
satisfied their obligations hereunder with respect to Confidential Information
if they exercise the same degree of care (but no less than a reasonable degree
of care) as they take to preserve confidentiality for their own similar
Information and (ii) confidentiality obligations provided for in any agreement
between DuPont or any of the Retained Subsidiaries, or Conoco or any of its
Subsidiaries, on the one hand, and any employee of DuPont or any of the Retained
Subsidiaries, or Conoco or any of its Subsidiaries, on the other hand shall
remain in full force and effect. Confidential Information of DuPont and the
Retained Subsidiaries, on the one hand, or Conoco and its Subsidiaries, on the
other hand, in the possession of and used by the other as of the Effective Date
may continue to be used by such Person in possession of the Confidential
Information in and only in the operation of the Retained Business or Transferred
Business, as the case may be, and may be used only so long as the Confidential
Information is maintained in confidence and not disclosed in violation of
Section 8.5(a). Such continued right to use may not be transferred to any third
party unless the third party purchases all or substantially all of the business
and Assets in one transaction or in a series of related transactions for which
or in which the relevant Confidential Information is used or employed. In the
event that such right to use is transferred in accordance with the preceding
sentence, the transferring party shall not disclose the source of the relevant
Confidential Information.
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Section 8.6 Privileged Matters.
(a) DuPont and Conoco agree that their
respective rights and obligations to maintain, preserve, assert or waive any or
all privileges belonging to either corporation with respect to the Conoco
Business or the DuPont Business, including but not limited to the
attorney-client and work product privileges (collectively, "Privileges"), shall
be governed by the provisions of this Section 8.6. With respect to matters
relating to the DuPont Business, DuPont shall have sole authority in perpetuity
to determine whether to assert or waive any or all Privileges, and Conoco shall
take no action (nor permit any of its Subsidiaries to take action) without the
prior written consent of DuPont that could result in any waiver of any Privilege
that could be asserted by DuPont or any Retained Subsidiary under applicable law
and this Agreement. With respect to matters relating to the Conoco Business,
Conoco shall have sole authority in perpetuity to determine whether to assert or
waive any or all Privileges, and DuPont shall take no action (nor permit any of
the Retained Subsidiaries to take action) without the prior written consent of
Conoco that could result in any waiver of any Privilege that could be asserted
by Conoco or any of its Subsidiaries under applicable law and this Agreement.
The rights and obligations created by this Section 8.6 shall apply to all
Information as to which DuPont or Conoco or their respective Subsidiaries would
be entitled to assert or has asserted a Privilege without regard to the effect,
if any, of the Separation ("Privileged Information"). Privileged Information of
DuPont includes but is not limited to (i) any and all Information existing prior
to the Separation regarding the DuPont Business but which after the
Restructuring is in the possession of Conoco or any of its Subsidiaries; (ii)
all communications subject to a Privilege occurring prior to the Separation
between counsel for DuPont or any of the Retained Subsidiaries (including
in-house counsel and former in-house counsel who are Transferred Employees) and
any person who, at the time of the communication, was an employee of DuPont or
any of the Retained Subsidiaries, regardless of whether such employee is or
becomes an employee of Conoco or any of its Subsidiaries; and (iii) all
Information generated, received or arising after the Effective Date that refers
or relates to Privileged Information generated, received or arising prior to the
Effective Date. Privileged Information of Conoco includes but is not limited to
(i) any and all Information generated prior to the Separation regarding the
Conoco Business but which after the Restructuring is in the possession of DuPont
or any of the Retained Subsidiaries; (ii) all communications subject to a
Privilege occurring prior to the Separation between counsel for Conoco or any of
its Subsidiaries (including in-house counsel and former in-house counsel who are
employees of DuPont or the Retained Subsidiaries) and any person who, at the
time of the communication, was an employee of Conoco or any of its Subsidiaries,
regardless of whether such employee is or becomes an employee of DuPont or any
of the Retained Subsidiaries; and (iii) all Information
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generated, received or arising after the Effective Date that refers or relates
to Privileged Information generated, received or arising prior to the Effective
Date.
(b) Upon receipt by DuPont or Conoco, as the
case may be, of any subpoena, discovery or other request from any third party
that actually or arguably calls for the production or disclosure of Privileged
Information of the other or if DuPont or Conoco, as the case may be, obtains
knowledge that any current or former employee of DuPont or Conoco, as the case
may be, has received any subpoena, discovery or other request from any third
party that actually or arguably calls for the production or disclosure of
Privileged Information of the other, DuPont or Conoco, as the case may be, shall
promptly notify the other of the existence of the request and shall provide the
other a reasonable opportunity to review the Information and to assert any
rights it may have under this Section 8.6 or otherwise to prevent the production
or disclosure of Privileged Information. DuPont or Conoco, as the case may be,
will not produce or disclose to any third party any of the other's Information
covered by a Privilege under this Section 8.6 unless (a) the other has provided
its express written consent to such production or disclosure, or (b) a court of
competent jurisdiction has entered an order not subject to interlocutory appeal
or review finding that the Information is not entitled to protection from
disclosure under any applicable privilege, doctrine or rule.
(c) DuPont's transfer of Conoco Books and
Records and other Information to Conoco, DuPont's agreement to permit Conoco to
obtain Information existing prior to the Separation, Conoco's transfer of DuPont
Books and Records and other Information and Conoco's agreement to permit DuPont
to obtain Information existing prior to the Separation are made in reliance on
DuPont's and Conoco's respective agreements, as set forth in Section 8.5 and
this Section 8.6, to maintain the confidentiality of such Information and to
take the steps provided herein for the preservation of all Privileges that may
belong to or be asserted by DuPont or Conoco, as the case may be. The access to
Information being granted pursuant to Section 8.2 hereof, the agreement to
provide witnesses and individuals pursuant to Section 8.3 hereof and the
disclosure to Conoco and DuPont of Privileged Information relating to the Conoco
Business or DuPont Business pursuant to this Agreement in connection with the
Separation shall not be asserted by DuPont or Conoco to constitute, or otherwise
deemed, a waiver of any Privilege that has been or may be asserted under this
Section 8.6 or otherwise. Nothing in this Agreement shall operate to reduce,
minimize or condition the rights granted to DuPont and Conoco in, or the
obligations imposed upon DuPont and Conoco by, this Section 8.6.
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Section 8.7 Mail and Other Communications.
After the Effective Date, each of DuPont and Conoco may receive mail, telegrams,
packages and other communications properly belonging to the other. Accordingly,
at all times after the Effective Date, each of DuPont and Conoco authorizes the
other to receive and open all mail, telegrams, packages and other communications
received by it and not unambiguously intended for the other party or any of the
other party's officers or directors, and to retain the same to the extent that
they relate to the business of the receiving party or, to the extent that they
do not relate to the business of the receiving party, the receiving party shall
promptly deliver such mail, telegrams, packages or other communications (or, in
case the same relate to both businesses, copies thereof) to the other party as
provided for in Section 14.5 hereof. The provisions of this Section 8.7 are not
intended to, and shall not, be deemed to constitute an authorization by either
DuPont or Conoco to permit the other to accept service of process on its behalf
and neither party is or shall be deemed to be the agent of the other for service
of process purposes.
ARTICLE IX
INTERCOMPANY BUSINESS RELATIONSHIPS
Section 9.1 Cash Management; Settlement of Intercompany
Accounts.
(a) Conoco shall make or cause its
Subsidiaries (other than Petrozuata) to make, cash distributions or other
payments to DuPont or any Retained Subsidiary, at such time, in such form and in
amounts to be determined by DuPont in its sole discretion after consultation
with Conoco, including repayments or purchases of the Restructured Notes and the
Conoco Master Note, such that as of the close of business on the first calendar
month-end following the Effective Date (the "Cash Settlement Date"), after
giving effect to such payments and the following transactions: (i) the receipt
by Conoco of the net proceeds of the IPO, including upon exercise of the
underwriters' over-allotment option and any payments made in respect of the
DuPont Master Note and (ii) the required repayments on or repurchases of the
Note, the Restructured Notes and the Conoco Master Note, as set forth in Section
2.5(b), Conoco and its Subsidiaries (excluding Petrozuata) will have an
aggregate amount of cash and cash equivalents equal to the Target Cash Amount
(with the distribution of such cash and cash equivalents among Conoco and its
Subsidiaries to be as mutually agreed by DuPont and Conoco); provided that no
portion of the IPO Excess or any other cash shall be paid to DuPont or a
Retained Subsidiary (other than
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in whole or in part in payment or purchase of one or more of the Restructured
Notes or the Conoco Master Note or, as otherwise provided in this Section 9.1(a)
or Section 2.5(b), in whole or in partial payment of the Note), but may be used
as all or a portion of the Target Cash Amount. Notwithstanding the foregoing,
any cash and cash equivalents of Conoco and any of its Subsidiaries (other than
Petrozuata) on or prior to the Cash Settlement Date, and any IPO proceeds
received after the Cash Settlement Date upon the exercise of the underwriters'
over-allotment option, shall be used to make payments, first, in respect of any
remaining portion of the Restructured Notes and any accrued interest thereon and
second, in respect of any remaining portion of the Conoco Master Note and
accrued interest thereon (and, after such Restructured Notes and the Conoco
Master Note have been paid in full, to make payments in respect of the Note
including accrued interest thereon if and to the extent DuPont so requests) so
long as, as of the Cash Settlement Date and after giving effect to the foregoing
payments as if they had occurred on the Cash Settlement Date, Conoco and its
Subsidiaries (excluding Petrozuata) will have an aggregate amount of cash and
cash equivalents equal to the Target Cash Amount. Notwithstanding the foregoing,
Conoco and DuPont agree that as of the close of business on the Cash Settlement
Date, Danube and its Subsidiaries shall have at least $70 million in cash or
cash equivalents, (including amounts held in the form of certificates of
deposit, valued at their face amounts) whether or not such amounts are
characterized or classified as such by GAAP, plus such additional amounts as are
required to be paid to Christiana as provided in Section 10.3 to cover unearned
premiums and loss reserves to the extent such amounts have not already been
paid.
(b) If, as of the close of business on the
Cash Settlement Date, (i) DuPont or any of the Retained Subsidiaries has any
liability or obligation to make cash payments to third parties for the benefit
of Conoco or any of the Transferred Business Companies which have not yet been
paid (whether or not invoices have been received or liabilities accrued)
("DuPont Payables"), or (ii) Conoco or any of the Transferred Business Companies
has any liability or obligation to make cash payments to third parties for the
benefit of DuPont or any of the Retained Subsidiaries which have not been paid
(whether or not invoices have been received or liabilities accrued) ("Conoco
Payables"), then on the 30th business day following the Cash Settlement Date if
(x) the DuPont Payables exceed the Conoco Payables, then Conoco shall promptly
pay to DuPont in immediately available funds an amount equal to the difference
between the DuPont Payables and the Conoco Payables and (y) the Conoco Payables
exceed the DuPont Payables, then DuPont shall promptly pay to Conoco in
immediately available funds an amount equal to the difference between the Conoco
Payables and the DuPont Payables; provided, however, that to the extent DuPont
and Conoco agree, the accounting of, and the adjustment with
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respect to, the DuPont Payables and the Conoco Payables may be done on a
separate Subsidiary-by-Subsidiary basis.
(c) If, as of the close of business on the
Cash Settlement Date, there are checks or other drafts or withdrawals written on
disbursement bank accounts of Conoco or the Transferred Business Companies which
are utilized by the Transferred Business prior to the Cash Settlement Date which
have not been cashed and deducted from such accounts as of the close of business
on the Cash Settlement Date (the sum of all such checks, drafts or withdrawals,
the "Outstanding Check Amount"), DuPont shall promptly pay to Conoco in
immediately available funds an amount equal to the Outstanding Check Amount;
provided, however, that to the extent DuPont and Conoco agree, the adjustment
with respect to the Outstanding Check Amount may be done on a separate
Subsidiary-by-Subsidiary basis.
(d) Except as otherwise expressly provided
in this Agreement, all intercompany and interdivisional receivables, payables,
cash overdrafts and other accounts in existence between Conoco and the
Transferred Business Companies, on the one hand, and DuPont and the Retained
Subsidiaries, on the other hand (the "Intercompany Accounts"), under DuPont's
cash management program or otherwise (other than the Note, the Restructured
Notes, the Employee Benefit Note, amounts owed under the DuPont Hungary Loan,
amounts owed pursuant to the second sentence of Section 2.5(c), amounts owed to
DuPont or a Retained Subsidiary under the DuPont Master Note Agreement, if any,
borrowings under the Revolving Credit Facility and payments pursuant to Sections
7.1 and 7.2 hereof), shall be cancelled immediately prior to the close of
business on the Cash Settlement Date or otherwise settled by mutual agreement of
the parties. Except as expressly provided in this Agreement, including Section
9.5 and Section 7.2, following the Effective Date, no such intercompany
transactions (other than those arising from commercial dealings in the ordinary
course of business) shall be entered into except pursuant to the express terms
and conditions of the Transitional Services Agreements or the other Related
Agreements.
(e) Thirty days following the Cash
Settlement Date, DuPont and Conoco shall reconcile all transfers, payments and
calculations made pursuant to this Section 9.1 as of the Cash Settlement Date,
and to the extent any such transfer, payment or calculation was made in error,
including by reason of subsequently dishonored third party checks or otherwise,
an appropriate payment shall be made by DuPont or Conoco, as the case may be, to
the other party.
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(e) Following the Effective Date, each of
DuPont and Conoco shall give the other party and any independent auditors of
such other party full access at all reasonable times to the DuPont Books and
Records and the Conoco Books and Records, as the case may be, relating to
periods prior to the Cash Settlement Date for purposes of verifying the amounts
to be paid pursuant to Section 9.1(b) and 9.1(c) above and for resolving any
disputes related thereto. The amounts settled shall, to the extent applicable,
be calculated in accordance with GAAP.
(f) Promptly following the Effective Time,
DuPont shall make the Revolving Credit Facility available to Conoco, subject to
the terms and conditions thereof. No repayments may be made by Conoco or any of
its Subsidiaries in respect of borrowings outstanding under the Revolving Credit
Facility prior to the Outside Date. Neither Conoco nor any of its Subsidiaries
nor DuPont nor any of its Subsidiaries may borrow any amounts under the DuPont
Master Note Agreement after the Effective Time.
Section 9.2 Letters of Credit. (a) After the Effective
Date, if letters of credit for the account of DuPont or any Retained Subsidiary
issued on behalf of or for the benefit of a Transferred Business Company remain
outstanding, Conoco shall, and shall cause its Subsidiaries to, use their
respective best efforts to replace such letters of credit as promptly as
practicable with letters of credit issued for the account of Conoco or any of
its Subsidiaries (it being understood that neither obtaining such replacement
letters of credit by Conoco or one of its Subsidiaries nor any drawings pursuant
thereto shall be deemed to result in the incurrence of Indebtedness for purposes
of Section 6(c) of the Note). Following the Effective Date, (i) Conoco shall
indemnify and hold harmless the DuPont Parties for any Losses arising from or
relating to such unreplaced letters of credit, including but not limited to, any
fees in connection with the issuance and maintenance thereof and (ii) Conoco
shall not, and shall not permit any of its Subsidiaries to, enter into, renew or
extend the term of, increase its obligations under, or transfer to a third
party, any loan, lease, Contract or other obligation in connection with which
DuPont or any Retained Subsidiary has issued any letters of credit which remain
outstanding. The parties hereto agree that neither DuPont nor any of the
Retained Subsidiaries will have any obligation to renew any letters of credit
issued on behalf of the Transferred Business after the expiration of any such
letter of credit. Commencing on the earlier to occur of (i) two years following
the Effective Date and (ii) the first date on which the voting power of shares
of Voting Stock beneficially owned by DuPont falls below 50% of the total voting
power of all of the outstanding shares of Voting Stock, Conoco shall pay to
DuPont a fee payable at the end of each calendar quarter calculated by applying
a rate of .20% per annum to the average outstanding balance
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during such quarter of any outstanding letters of credit issued for the account
of DuPont or any Retained Subsidiary on behalf of or for the benefit of any
Transferred Business Company.
Section 9.3 Guarantee Obligations.
(a) DuPont and Conoco shall cooperate and
Conoco shall use its best efforts to terminate, or to cause Conoco, one of its
Subsidiaries, or one of its Affiliates (other than DuPont and any of the
Retained Subsidiaries) to be substituted in all respects for DuPont and any of
Retained Subsidiaries in respect of, all obligations of DuPont or any of the
Retained Subsidiaries under any loan, financing, lease, Contract or other
obligation (other than letters of credit governed by Section 9.2) in existence
as of the Effective Date pertaining to the Transferred Business for which DuPont
or any of the Retained Subsidiaries is or may be liable, as guarantor, original
tenant, primary obligor or otherwise including, but not limited to (so long as
they are of the same type or nature), as those set forth on Schedule 9.3, but
excluding Shared Contracts ("DuPont Guarantees"). If such a termination or
substitution is not effected by the Effective Date, (i) Conoco shall indemnify
and hold harmless the DuPont Parties for any Losses arising from or relating to
DuPont Guarantees, and (ii) from and after the Effective Date, Conoco shall not,
and shall not permit any of its Subsidiaries to, enter into, renew or extend the
term of, increase its obligations under, or transfer to a third party, any loan,
lease, Contract or other obligation for which DuPont is or may be liable
pursuant to a DuPont Guarantee. DuPont agrees that it shall notify Conoco in a
timely manner of any changes to the DuPont Guarantee Amount. To the extent that
DuPont or the Retained Subsidiaries have performance obligations under any
DuPont Guarantee, Conoco will use best efforts to (i) perform such obligations
on behalf of DuPont and the Retained Subsidiaries or (ii) otherwise take such
action as requested by DuPont so as to put DuPont and the Retained Subsidiaries
in the same position as if Conoco, and not DuPont and the Retained Subsidiaries,
had performed or were performing such obligations, including, without
limitation, concurrently purchasing from DuPont and the Retained Subsidiaries
such products that DuPont and the Retained Subsidiaries are required to purchase
pursuant to the relevant DuPont Guarantee in lieu of performance by Conoco or
any of its Subsidiaries. If Conoco concurrently purchases products from DuPont
and the Retained Subsidiaries, the price to be paid by Conoco or any of its
Subsidiaries shall be an amount sufficient to fully indemnify DuPont and the
Retained Subsidiaries for all costs and expenses related to the purchase by
DuPont and the Retained Subsidiaries of such products.
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(b) Commencing on the earlier to occur of
(i) two years following the Effective Date or (ii) the first date on which the
voting power of shares of common stock of Conoco beneficially owned by DuPont
falls below 50% of the total voting power of all of the outstanding shares of
Voting Stock, Conoco shall pay to DuPont a fee payable at the end of each
calendar quarter calculated by applying a rate of .20% per annum to the average
outstanding DuPont Guarantee Amount during such quarter (the "DuPont Guarantee
Fee").
(c) Conoco agrees that it will not, without
the express written consent of DuPont, which consent may be withheld in the sole
discretion of DuPont, enter into any agreement with respect to a merger,
consolidation or amalgamation with, or sale of all or substantially all the
assets, in one transaction or in a series of related transactions to, any third
party, unless such third party expressly agrees as a term of such agreement to
(i) terminate, or to cause such third party or one of its Affiliates to be
substituted in all respects for DuPont in respect of, all obligations of DuPont
or any of the Retained Subsidiaries under the DuPont Guarantees, (ii) indemnify
and hold harmless the DuPont Parties for any Losses arising from or relating to
DuPont Guarantees, (iii) assume or guarantee the payment to DuPont of any unpaid
DuPont Guarantee Fee by Conoco or any successor to Conoco in accordance with
Section 9.3(b) above and (iv) not, and to not permit Conoco or any of its
Subsidiaries or Affiliates to, renew or extend the term of, increase its
obligations under, or transfer to another third party, any loan, lease, Contract
or other obligation for which DuPont is or may be liable pursuant to a DuPont
Guarantee prior to such termination or substitution.
Section 9.4 Settlements for Cash Collections and
Disbursements After the Cash Settlement Date.
(a) For each calendar month commencing with
the month in which the Cash Settlement Date occurs and, unless sooner terminated
by agreement of the parties, continuing for a period of two years thereafter,
(i) within 30 business days of the end of the month in question, DuPont shall
prepare, and Conoco shall fully cooperate in preparing, a statement of
transactions which shall reflect a complete analysis of any cash collections and
cash disbursements by DuPont and the Retained Subsidiaries on behalf of Conoco
and its Subsidiaries (including those relating to the Transferred Business)
during the relevant month and (ii) within 30 business days of the end of the
month in question, Conoco shall prepare, and DuPont shall fully cooperate in
preparing, a statement of transactions which shall reflect a complete analysis
of any cash collections and cash disbursements by Conoco and its Subsidiaries on
behalf of DuPont and the Retained Subsidiaries during the relevant
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month (including those relating to the Retained Business and the Delayed
Companies); provided in each case that, with respect to the first such monthly
period such statement shall not reflect any cash collections or disbursements
occurring prior to the Effective Date.
(b) Not later than 30 business days
following delivery of each such monthly statement, Conoco shall, or shall cause
one of it Subsidiaries to pay to DuPont or one of the Retained Subsidiaries or
DuPont shall, or shall cause one of the Retained Subsidiaries pay to Conoco or
one of its Subsidiaries, as the case may be, in cash an amount necessary to
eliminate the account balance as reflected in each such statement unless DuPont
and Conoco otherwise agree in writing. Payments made pursuant to this Section
9.4 shall not, for any purpose of this Agreement, constitute Losses or be set
off against any other payments to be made, Liabilities asserted or claims made
pursuant to this Agreement, including but not limited to Article VI hereof.
(c) Following the end of the two-year period
referred to in Section 9.4(a) above (or such earlier period as the parties
hereto may agree), (i) DuPont shall promptly turn over to Conoco all cash and
other similar amounts received by DuPont and the Retained Subsidiaries which
properly constitute Assets attributable to the Transferred Business and (ii)
Conoco shall promptly turn over to DuPont all cash and other similar amounts
received by Conoco and its Subsidiaries which properly constitute Assets
attributable to the Retained Business.
Section 9.5 Termination of Intercompany Agreements.
Each of the parties hereto agrees that, except as otherwise expressly provided
in this Agreement, the several Transitional Services Agreements, the Related
Agreements or the agreements set forth on Schedule 9.5, all Intercompany
Agreements and all other intercompany arrangements and course of dealings
whether or not in writing and whether or not binding in effect immediately prior
to the Effective Date shall continue in full force and effect; provided that
either Conoco or any of its Subsidiaries, on the one hand, or DuPont or any of
the Retained Subsidiaries, on the other hand, may terminate any Intercompany
Agreements or any such arrangements or course of dealings (other than any
Related Agreement, the Restructured Notes, the agreements set forth on Schedule
9.5 and the DuPont Hungary Loan) on 60 days written notice to the other unless a
different period of notice of termination is specified therein (in which case,
such different period shall control), but in any event may be terminated one
year after the Effective Date.
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Section 9.6 DuPont Hungary Loan. Conoco shall use its
best efforts to obtain the required approvals of all Governmental Authorities to
repay the DuPont Hungary Loan as promptly as practicable following the Effective
Date and Conoco shall cause the DuPont Hungary Loan to be repaid in full,
including accrued interest thereon, promptly following the receipt of all such
approvals. Promptly following receipt by DuPont or any Retained Subsidiary of
funds in repayment of the DuPont Hungary Loan, DuPont shall or shall cause a
Retained Subsidiary to remit all of such funds to Conoco, or any subsidiary of
Conoco, as Conoco may designate.
ARTICLE X
INSURANCE
Section 10.1 General. Except as otherwise specifically
provided for herein, Conoco and DuPont understand and agree that as of the
Effective Date all existing insurance policies providing coverage for the Assets
and Liabilities of Conoco and DuPont on a combined basis will have been modified
such that the Transferred Assets, the Conoco Business and the Assumed
Liabilities will be insured separately by Conoco.
Section 10.2 Excess Liability Policies. In the event of
a Combined Limit Loss (as defined below), Conoco and DuPont agree that their
respective risk managers (each, a "Risk Manager") shall use best efforts to
agree on the allocation of insurance proceeds and, in the event of an agreement,
to issue joint instructions to Danube and Christiana and to cause Danube and
Christiana to likewise issue joint instructions to their respective reinsurers,
as appropriate. If the Risk Managers fail to agree on an allocation of insurance
proceeds, the allocation shall be resolved by the dispute resolution process set
forth in Article XIII hereof. As used in this Section 10.2, "Combined Limit
Losses" shall mean any Losses covered by certain excess liability policies under
both the Conoco and DuPont insurance programs (and the reinsurance policies
obtained by Danube and to be obtained by Christiana with third party reinsurers
for the same coverages) which contain "combined limit" endorsements which
require joint instructions from the "named entity" (as such term is defined in
such policies) be issued to determine the allocation of insurance proceeds.
Section 10.3 Transfer of Existing Policies.
(a) It is the intention of the parties that
as of the Effective Date insurance matters relating to the Retained Business and
Retained Liabilities
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shall be the responsibility of DuPont and Christiana, and insurance matters
relating to the Conoco Business shall be the responsibility of Conoco and
Danube. Prior to the Effective Date, DuPont and Conoco shall use their
respective reasonable commercial efforts to cause (i) Danube to reinsure with,
and cede to Christiana, and for Christiana to issue the reinsurance with respect
to the insurance policies (other than the excess liability policies issued by
Danube to DuPont which are provided for in clause (iii) below) and the
associated dollar amounts of unearned premiums (by reason of relating to the
remaining balance of the insured period) previously received by Danube to the
extent they relate to the Retained Business and Retained Liabilities; (ii)
Danube to (x) reinsure with Christiana, and for Christiana to assume all unpaid
claims, whether known or unknown, arising in connection with the Retained
Business and/or Retained Liabilities which had heretofore been insured against
by Danube, and (y) cede to Christiana a dollar amount in cash representing the
loss reserves carried by Danube with respect to such reinsured claims referred
to in clause (x) valued as of the Effective Date or such other date as the Risk
Managers of DuPont and Conoco may mutually establish, plus an amount in cash
equal to the market price of reinsurance for adverse developments on all unpaid
claims assumed by Christiana, whether known or unknown, as established by
DuPont's and Conoco's mutual broker, J&H Xxxxx & XxXxxxxx and agreed to by the
respective Risk Managers of DuPont and Conoco; and (iii) Danube to cancel the
excess liability policies theretofore issued by Danube to DuPont to the extent
they relate to the Retained Business, and to refund to DuPont the premiums on
the current years policy, which by reason of relating to the remaining term
thereof have not been earned.
(b) Prior to the Effective Date, DuPont and
Conoco shall cause Danube to instruct the insurers of the current excess
liability reinsurance program applicable to the DuPont Business to amend the
policies issued to Danube such that Christiana and not Danube shall be the
"named entity" under such policies. DuPont shall cause Christiana to pay the
unearned premium on such reinsurance policies to the extent they relate to the
Retained Business for the remaining term of each policy year to J&H Xxxxx &
XxXxxxxx, the broker administering such policies who shall thereafter issue a
premium refund to Danube in like amount. DuPont and Conoco, respectively, shall
cause Danube and Christiana, respectively, to issue a joint letter of
instructions to each reinsurer, allocating between their respective policy
programs the existing claims for which notice has been given to such reinsurer.
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Section 10.4 Director's and Officer's Insurance.
(a) On or before the Effective Date, the
directors and officers of Conoco and its Subsidiaries shall become insureds
under a separate director's and officer's insurance program to be established by
Conoco at its expense.
(b) In the event of a Tie-In Limit Loss (as
defined below), Conoco and DuPont agree that their respective Risk Managers
shall use best efforts to agree on the allocation of insurance proceeds and, in
the event of an agreement, to issue joint instructions to their respective
insurers, as appropriate. If the Risk Managers fail to agree on an allocation of
insurance proceeds, the allocation shall be resolved by the dispute resolution
process set forth in Article XIII hereof. As used in this Section 10.4, "Tie-In
Limit Losses" shall mean any Losses covered by certain directors and officers
policies under both the Conoco and DuPont insurance programs which contain
"tie-in limit" endorsements which require joint instructions to be issued to
determine the allocation of insurance proceeds.
Section 10.5 Conoco Liability Policies. Conoco agrees
that immediately prior to the Effective Date and for as long as there is either
a DuPont Guarantee obligation outstanding or DuPont treats for financial
accounting purposes its equity holding in Conoco on a consolidated basis, Conoco
(i) will take all actions necessary consistent with Conoco's current insurance
practices, to continue to purchase and maintain insurance coverage of
substantially the same types and amounts as it has heretofore purchased and
maintained and (ii) provide that DuPont be a "named insured" under those
liability policies of Conoco which are solely controlled by Conoco, including,
but not limited to, those set forth on Schedule 10.5 hereto, at no premium cost
to DuPont therefor, such that DuPont has rights to coverage that are no less
than the rights conferred on any other insured under such policies with respect
to liabilities that DuPont may incur relating to, resulting from or arising out
of the Conoco Business; provided that, in the case of (ii), when DuPont no
longer treats its equity holding in Conoco on a consolidated basis for financial
accounting purposes, such "named insured" status will only be in respect to
liabilities that DuPont may incur as a result of a DuPont Guarantee obligation
with respect to the Transferred Business. During the applicable period set forth
in the first sentence of this Section 10.5, all of Conoco's liability policies
to which clause (ii) of the preceding sentence applies shall provide that DuPont
will be given at least 60 days advance written notice by the insurer of any
cancellation of such policies, any reduction in coverage thereunder, or any
deletion of DuPont as a "named insured," and Conoco shall not cancel any such
policy or reduce the coverage available thereunder in any manner detrimental to
DuPont, without DuPont's prior written consent. DuPont agrees to promptly
release Conoco from its obligations under this Section 10.5 following the date
on which (i) there are no DuPont Guarantee obligations outstanding and (ii)
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DuPont no longer treats its equity holding in Conoco for financial accounting
purposes on a consolidated basis.
Section 10.6 Insurance and Indemnities.
(a) An Indemnitee shall not be obligated to
pursue insurance coverages under its excess liability insurance program for any
Loss. With respect to such excess liability insurance programs, an Indemnitee,
in its sole discretion, may elect to pursue its rights to indemnity hereunder to
the exclusion of, or in addition to, pursuing an insurance recovery for such
Losses.
(b) Notwithstanding anything to the contrary
set forth herein, (i) with respect to the insurance policies where Conoco and
DuPont are each named insureds under the same policy, the parties shall together
use reasonable commercial efforts to maximize insurance recoveries prior to
either party seeking indemnification as provided under this Agreement with
respect to that portion of a Loss covered by insurance pursuant to any such
policy, and (ii) any insurance recovery by an Indemnitee made under any
insurance program (whether excess liability or otherwise) shall be credited
against an Indemnifying Party's obligation pursuant to Section 6.2(d), if
applicable, only after being reduced by any retroactive premium adjustment or
co-insurance obligation of the Indemnitee, or the cost to the Indemnitee of
reinstating aggregate limits under its liability insurance program.
(c) Notwithstanding the provisions of
Section 6.3(g) to the contrary, an Indemnifying Party shall not have subrogation
rights to pursue an Indemnitee's insurance coverage for a Loss.
ARTICLE XI
ENVIRONMENTAL MATTERS
Section 11.1 Certain Article XI Definitions. For
purposes of this Article XI, (a) "Transferred Environmental Assets" shall mean
(i) theTransferred Assets, (ii) all other Assets, whether or not currently owned
by Conoco, DuPont, any of their respective Subsidiaries or Affiliates or any
predecessors thereof, formerly owned by the Conoco Group or used in the
operation or conduct of the Conoco Business, (iii) all Assets of Conoco and its
Subsidiaries acquired from and after the Effective Date or used in the operation
or conduct of the Transferred Business from and after the Effective Date, and
(iv) all Assets and businesses listed on Schedule
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11.1(a); and (b) "Retained Environmental Assets" shall mean (i) the Assets of
DuPont and the Retained Subsidiaries, other than the Transferred Assets,
following the consummation of the Restructuring and the transactions
contemplated by Section 2.2 hereof, (ii) all other Assets, not currently owned
by DuPont, any of its Subsidiaries or Affiliates or any predecessors thereof,
formerly owned by DuPont or used in the operation or conduct of the DuPont
Business, (iii) all Assets of DuPont and the Retained Subsidiaries acquired from
and after the Effective Date or used in the operation or conduct of the Retained
Business from and after the Effective Date, and (iv) the Assets and businesses
listed on Schedule 11.1(b), but in the case of (b)(i), (b)(ii) and (b)(iii)
above, excluding all Transferred Environmental Assets.
Section 11.2 Conoco Environmental Liabilities. On the
terms and subject to the conditions set forth in this Agreement, Conoco agrees
to assume, pay, perform and discharge promptly when due those Liabilities set
forth below (the "Conoco Environmental Liabilities"):
(a) Except for (i) Liabilities arising from
or related to the matters set forth on Schedule 11.1(b) and (ii) Liabilities for
the Environmental Claims or matters identified on Schedule 11.3(d), all
Liabilities with respect to all Environmental Claims and Requirements of
Environmental Law (whether or not under applicable law or regulations which
DuPont or any Retained Subsidiary would have a right of contribution against
Conoco or any Transferred Business Company therefor) relating in any manner to
any of the Transferred Environmental Assets, including, but not limited to, any
act or omission of any employees or agent thereof;
(b) All Liabilities, costs or expenses
associated with obtaining or maintaining compliance with Environmental Permits
related to the Conoco Business;
(c) All Liabilities with respect to any
Waste Site not located on any of the Transferred Environmental Assets into which
waste materials or Hazardous Substances from any of the Transferred
Environmental Assets have been placed prior to the date hereof, or are placed
after the date hereof, but into which no waste materials from any of the
Retained Environmental Assets have been placed prior to or after the date
hereof;
(d) All Liabilities for the Environmental
Claims or matters identified on Schedule 11.2(d); and
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(e) Liabilities arising from any activities
and operations of the DuPont Business and any of the employees thereof
(including, but not limited to the activities and operations of DERS) concerning
the matters referenced in Sections 11.2(a), 11.2(b), 11.2(c) and 11.2(d), to the
extent performed for or on behalf of the Conoco Business.
Section 11.3 DuPont Environmental Liablilities. On the
terms and subject to the conditions set forth in this Agreement, DuPont agrees
to pay, perform and discharge promptly when due those Liabilities set forth
below, but excluding in any event all Conoco Environmental Liabilities (the
"DuPont Environmental Liabilities"):
(a) Except for (i) Liabilities arising
from or related to the matters set forth on Schedule 11.1(a) and (ii)
Liabilities for Environmental Claims or matters identified on Schedule 11.2(d),
all Liabilities with respect to all Environmental Claims and Requirements of
Environmental Law (whether or not under applicable law or regulations Conoco or
any Transferred Business Company would have a right of contribution against
DuPont or any Retained Subsidiary therefor) relating in any manner to any of the
Retained Environmental Assets, including, but not limited, to any act or
omission of any employee or agent thereof;
(b) All Liabilities, costs or expenses
associated with obtaining or maintaining compliance with Environmental Permits
related to the Retained Business;
(c) All Liabilities with respect to any
Waste Site not located on any of the Retained Environmental Assets into which
waste materials or a Hazardous Substance from any of the Retained Environmental
Assets have been placed prior to the date hereof, or are placed after the date
hereof, but into which no waste materials or a Hazardous Substance from any of
the Transferred Environmental Assets have been placed prior to or after the date
hereof; and
(d) All Liabilities for the Environmental
Claims or matters identified on Schedule 11.3(d).
(e) Liabilities arising from any
activities and operations of the Conoco Business and any employees thereof
concerning the matters referenced in Sections 11.3(a), 11.3(b), 11.3(c) and
11.3(d), to the extent performed for or on behalf of the DuPont Business.
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Section 11.4 Other Environmental. Notwithstanding
anything to the contrary contained herein, all Liabilities for Environmental
Claims with respect to any Waste Site not located on any of the Transferred
Environmental Assets and not located on any of the Retained Environmental Assets
("Third Party Sites") into which (i) waste materials or a Hazardous Substance
from the Transferred Environmental Assets have been intentionally placed prior
to the date hereof or are placed on or after the date hereof, and (ii) waste
materials or a Hazardous Substance from the Retained Environmental Assets have
been intentionally placed prior to the date hereof or are placed on or after the
date hereof, shall be allocated as between the parties to this Agreement (a) to
Conoco in accordance with the ratio of the volume of waste materials or
Hazardous Substances from the Transferred Environmental Assets to the total
volume of wastes at the site and (b) to DuPont in accordance with the ratio of
the volume of waste materials or Hazardous Substances from the Retained
Environmental Assets to the total volume of wastes at the site; provided, that
Conoco, in the case of the Transferred Environmental Assets and DuPont, in the
case of the Retained Environmental Assets, shall bear all transporter
liabilities with respect to waste it generated and transported to such Third
Party Sites, in cases where transporter services with respect to such wastes
were provided by Sentinel, Inc. or its predecessors.
Section 11.5 Damages, Awards, Etc. Notwithstanding
anything to the contrary contained in this Agreement, (a) Conoco shall be
entitled to any monies, damages or awards from third parties, including with
respect to insurance, contribution or cost recovery awards, recovered after the
Effective Date with respect to Conoco Environmental Liabilities, and (b) DuPont
shall be entitled to any monies, damages or awards from third parties, including
with respect to insurance, contribution or cost recovery awards, recovered after
the Effective Date with respect to DuPont Environmental Liabilities.
Section 11.6 Remediation. As between the parties to this
Agreement, (a) Conoco will have full authority to control, direct, manage and
implement remediation and to determine its scope, and conduct all negotiations,
meetings and settlements with Governmental Authorities with respect to Conoco
Environmental Liabilities; provided, however, that Conoco may contract with
DuPont on mutually agreeable terms for DuPont to perform any such activities
with respect to Conoco Environmental Liabilities on Conoco's behalf, and (b)
DuPont will have full authority to control, direct, manage and implement
remediation and to determine its scope, and conduct all negotiations, meetings
and settlements with Governmental Authorities with respect to DuPont
Environmental Liabilities; provided, however, that DuPont may contract with
Conoco on mutually agreeable terms for Conoco to
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perform any such activities with respect to DuPont Environmental Liabilities on
DuPont's behalf.
Section 11.7 Exclusive Remedy/Indemnification.
(a) Notwithstanding any Requirements of
Environmental Law or the provisions or principles of any other statutory or
common law including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act, as amended, and state law analogues,
and except with respect to Waste Sites addressed in Section 11.4, the provisions
of this Article XI and the indemnification provisions in Article VI shall
constitute the parties' exclusive remedy with respect to each other for all
Liabilities pursuant to the Requirements of Environmental Law arising from the
ownership of, or conduct of business with respect to, the Transferred
Environmental Assets or the Retained Environmental Assets.
(b) Except as otherwise provided in this
Article XI or as would be inconsistent herewith the provisions of Sections
6.2(d), (e), (f) and (g), 6.3, 6.4, and 6.6 shall apply to this Article XI and
claims for indemnification hereunder.
ARTICLE XII
CONDITION TO CONSUMMATION OF DISTRIBUTION: TERMINATION
Section 12.1 Condition. Consummation of the transactions
provided for in this Agreement and the Related Agreements is conditioned upon,
and shall only be effected upon or after, (i) the final approval of the
Separation, the Restructuring and the IPO by the Board of Directors of DuPont
and (ii) the closing of the IPO.
Section 12.2 Termination. This Agreement may be
terminated and the Separation, the Restructuring and the IPO abandoned by the
Board of Directors of DuPont in its sole discretion, without the approval of
Conoco at any time prior to the Effective Time. In the event of any such
termination, no party shall have any liability of any kind to any other party.
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ARTICLE XIII
DISPUTE RESOULUTION
Section 13.1 Mediation. Except with respect to disputes
relating to Section 8.6 hereof and as provided in Section 13.4 hereof, if a
dispute, claim or controversy arises out of or arises in connection with this
Agreement, the Related Agreements or any other agreement entered into in
accordance with this Agreement, including, but not limited to, the termination
or validity thereof or any matter involving a Loss ("Dispute"), DuPont and
Conoco agree to first use the following procedures, in lieu of either party
initially pursuing other available remedies, to resolve the Dispute.
Section 13.2 Initiation. A party seeking to initiate the
procedures shall give written notice to the other party, describing briefly the
nature of the Dispute. A meeting shall be held between the parties within 10
days of the receipt of such notice, attended by individuals with decision-making
authority regarding the Dispute, to attempt in good faith to negotiate a
resolution of such Dispute.
Section 13.3 Submission to Mediation. If, within 30 days
after such meeting, the parties have not succeeded in negotiating a resolution
of the Dispute, DuPont and Conoco agree to refer the matter to a panel
consisting of one (1) Senior Executive or the delegee thereof from DuPont and
one (1) Senior Executive or the delegee thereof from Conoco (which Senior
Executives or delegees shall not have been directly involved in the Dispute) for
review and resolution. Upon such referral, the Senior Executives or delegees
shall review the following materials provided by DuPont and Conoco: a copy of
the terms of this Agreement and a concise (less than 10 page) summary of the
basis of each party's contentions, including the relevant facts and areas of
disagreement. If the Dispute cannot be resolved by the Senior Executive panel
pursuant to this Section 13.3 within 25 days of the referral of such Dispute,
DuPont and Conoco may then pursue any and all remedies at law or in equity.
Section 13.4 Provisional Remedies. Notwithstanding the
provisions of this Article XIII, any party may seek from any court having
jurisdiction hereof any interim, provisional or injunctive relief that may be
necessary to protect the rights or property of any party or maintain the status
quo before, during or after the commencement of the mediation process set forth
in this Article XIII.
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ARTICLE XIV
MISCELLANEOUS
Section 14.1 Complete Agreement. This Agreement,
including the Schedules, Annexes, Exhibits and the Related Agreements, shall
constitute the entire agreement between DuPont and Conoco with respect to the
subject matter hereof and shall supersede all previous negotiations, commitments
and writings with respect to such subject matter.
Section 14.2 Allocation of Costs and Expenses. DuPont or
a Retained Subsidiary shall pay (or, to the extent incurred by and paid for by
Conoco or any Transferred Business Company following the Effective Date, will
promptly reimburse Conoco or such Transferred Business Company for any and all
amounts so paid) for all Separation Expenses.
Section 14.3 Governing Law. This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of Delaware (regardless of the laws that might otherwise govern under applicable
principles of conflicts law) as to all matters, including, without limitation,
matters of validity, construction, effect, performance and remedies.
Section 14.4 Jurisdiction: Forum.
(a) By the execution and delivery of this
Agreement, DuPont and Conoco submit, and agree to cause their respective
Subsidiaries to submit, to the personal jurisdiction of any state or federal
court in the State of Delaware in any suit or proceeding arising out of or
relating to this Agreement or the Related Agreements.
(b) To the extent that DuPont or Conoco or
any of their respective Subsidiaries has or hereafter may acquire any immunity
from jurisdiction of any Delaware court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property,
DuPont or Conoco, as the case may be, hereby irrevocably waives, and agrees to
cause their respective Subsidiaries to waive, such immunity in respect of its
obligations with respect to this Agreement.
(c) The parties hereto agree that an
appropriate, convenient and non-exclusive forum for any and all disputes between
any of the parties hereto or their respective Subsidiaries arising out of this
Agreement, the Related Agreements
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or the transactions contemplated hereby and thereby shall be in any state or
federal court in the State of Delaware.
(d) THE PARTIES HERETO AGREE THAT THEY
HEREBY IRREVOCABLY WAIVE AND AGREE TO CAUSE THEIR RESPECTIVE SUBSIDIARIES TO
WAIVE, THE RIGHT TO TRIAL BY JURY IN ANY ACTION TO ENFORCE, OR INTERPRETING, THE
PROVISIONS OF THIS AGREEMENT OR ANY RELATED AGREEMENT.
Section 14.5 Notices. All notices, requests, demands and
other communications under this Agreement shall be in writing and, unless
otherwise provided herein, shall be deemed to have been duly given (i) on the
date of service if served personally on the party to whom notice is given, (ii)
on the day of transmission if sent via facsimile transmission to the facsimile
number given below; provided, telephonic confirmation of receipt is obtained
promptly after completion of transmission, (iii) on the business day after
delivery to an overnight courier service or the Express mail service maintained
by the United States Postal Service; provided, receipt of delivery has been
confirmed or (iv) on the fifth day after mailing; provided, receipt of delivery
is confirmed, if mailed to the party to whom notice is to be given, by first
class mail, registered or certified, postage prepaid, properly addressed and
return-receipt requested, to the party as follows:
If to DuPont, to:
E.I. du Pont de Nemours and Company
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
(000) 000-0000
Attn: Xxxxx X. Xxxxxxxxx, Esq.
Associate General Counsel
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
(000) 000-0000
Attn: Xxx X. Xxxxx, Esq.
Xxxxxx Xxxxxx Xxxxx, Esq.
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If to Conoco:
Conoco Inc.
000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
(000) 000-0000
Attn: X. X. Xxxxxxxxxx
Senior Vice President, Legal, and
General Counsel
With a copy to:
Xxxxx & Xxxxx, L.L.P.
Xxx Xxxxx Xxxxx
000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
(000) 000-0000
Attn: Xxxxxx X. Xxxxx, Esq.
Either party may change its address or fax number by giving the other party
written notice of its new address in the manner set forth above.
Section 14.6 Amendment and Modification. This Agreement
may be amended, modified or supplemented only by written agreement of the
parties.
Section 14.7 Successors and Assigns. This Agreement and
all of the provisions hereof shall be binding upon and inure to the benefit of
the parties and their respective successors and permitted assigns, but neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by either party without the prior written consent of the other
party.
Section 14.8 No Third Party Beneficiaries. Except for
the provisions of Article VI which are intended to benefit any DuPont Party or
Conoco Party in accordance with the terms thereof, this Agreement is solely for
the benefit of the parties hereto and their respective Subsidiaries and is not
intended to confer upon any other Person except the parties hereto and their
respective Subsidiaries any rights or remedies hereunder.
Section 14.9 Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
Section 14.10 Interpretation. The Article and Section
headings contained in this Agreement are solely for the purpose of reference,
are not part of the agreement of the parties and shall not in any way affect the
meaning or interpretation
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of this Agreement. Whenever any words are used herein in the masculine gender,
they shall be construed as though they were also used in the feminine gender in
all cases where they would so apply.
Section 14.11 Annexes, Etc. The Annexes and Schedules
shall be construed with and as an integral part of this Agreement to the same
extent as if the same had been set forth verbatim herein.
Section 14.12 Legal Enforceability. Any provision of
this Agreement which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 14.13 Texas Deceptive Trade Practices Act. Each
of Conoco and DuPont hereby agrees and acknowledges that it is a Business
Consumer (as defined in the Texas Deceptive Trade Practices Act-Consumer
Protection Act, TEX. BUS. & COM. CODE ss. 17.41 et. seq. (the "DTPA")) with
assets of more than $25 million or is controlled by a corporation or entity with
assets of more than $25 million and therefore does not qualify as a Consumer (as
defined in the DTPA) under the DTPA and accordingly may not pursue a DTPA claim
in connection with the Separation and the transactions contemplated by this
Agreement, including the Schedules, Annexes, Exhibits and Related Agreements.
Furthermore, Conoco and DuPont agree not to assert the Consumer status of any of
its Subsidiaries, Affiliates, insurers, officers, directors, employees, agents
and/or any other Person for purposes of pursuing a DTPA claim in connection with
the Separation and the transactions contemplated by this Agreement, including
the Schedules, Annexes, Exhibits and Related Agreements. The parties further
agree that to the extent the DTPA is applicable or hereinafter becomes
applicable to the Separation or this Agreement, each of Conoco and DuPont hereby
waives, to the fullest extent permitted under the law, all provisions of the
DTPA.
Section 14.14 Petrozuata. To the extent any provisions
of this Agreement require Conoco to cause or otherwise compel its Subsidiaries
to act in a particular fashion, these provisions shall not apply to Petrozuata,
except to the extent that Conoco or any of its other Subsidiaries has the
contractual power to cause Petrozuata to act in such fashion.
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IN WITNESS WHEREOF, the parties hereto have caused this
Restructuring, Transfer and Separation Agreement to be
executed and delivered as of the day and year first above written.
CONOCO INC.
(Formerly known as Conoco Energy
Company)
By:_______________________
Name:
Title:
E.I. DU PONT DE NEMOURS AND
COMPANY
By:_______________________
Name:
Title:
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