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EXHIBIT 10.2
CORPORATE SERVICES TRANSITION AGREEMENT
THIS CORPORATE SERVICES TRANSITION AGREEMENT (the
"Agreement"), dated as of ___________, 1998, between Great Lakes
Chemical Corporation, a Delaware corporation ("Great Lakes"), and The
Associated Octel Company Limited, a United Kingdom limited company
("Octel").
RECITALS
WHEREAS, this Agreement is entered into in
conjunction with a certain Transfer and Distribution Agreement (the
"Distribution Agreement"), dated as of ___________, 1998, between Great
Lakes and Octel Corp., a Delaware corporation;
WHEREAS, as described in the Distribution Agreement,
Great Lakes has been engaged, through its subsidiaries, in the
research, manufacturing and marketing of products in the lead alkyls
business, petroleum specialities business and performance chemicals
business (as more specifically defined therein as the "Transferred
Businesses");
WHEREAS, as described in the Distribution Agreement,
the Transferred Businesses shall not include certain assets, plants,
facilities, businesses and operations (as more specifically defined
therein as the "Excluded Assets");
WHEREAS, the Distribution Agreement provides that
Great Lakes and Octel shall enter into an agreement relating to certain
services to be provided by Octel to Great Lakes with respect to the
operation and maintenance of the Excluded Businesses (as more
specifically defined therein) and the Excluded Assets, as well as the
operation and maintenance of the businesses that were not transferred
to Octel (as more specifically defined therein as the "Non-Transferred
Businesses"), for a period of time from and after the Distribution
Date;
WHEREAS, Great Lakes desires that Octel provide and
perform, and Octel desires to provide and perform, certain services, as
more fully described and for the purposes stated in Schedule 1 to this
Agreement; and
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WHEREAS, to provide such services, Great Lakes and
Octel desire hereunder to enter into an agreement for the provision of
such services.
NOW, THEREFORE, in consideration of the premises
stated in the foregoing Recitals and the mutual promises of the parties
contained herein, Great Lakes and Octel, intending to be legally bound,
agree as follows:
Section 1. Definitions. As used in this Agreement,
capitalized terms defined immediately after their use shall have the
respective meanings thereby provided, and the following terms shall
have the following meanings:
(a) Distribution: the distribution as a
dividend to holders of Great Lakes common stock of all the shares of
Octel common stock held by Great Lakes on the basis provided in
the Distribution Agreement, which shall be effective on the close of
business on the date specified for the dividend by the Board of
Directors of Great Lakes.
(b) Distribution Date: the date as of which
the Distribution shall be effected as determined by the Board of
Directors of Great Lakes.
(c) Services: those corporate,
administrative, staff and technical services provided to Great Lakes
in respect of the Excluded Businesses and the Excluded Assets and
Non-Transferred Businesses, which services are set forth in Schedule 1
hereto, as such Schedule may from time to time be amended or revised
by the mutual agreement of the parties.
(d) Affiliate: shall have the meaning ascribed
thereto in the Distribution Agreement.
(e) Earnings Index: the monthly Index of
Average Earnings as published by or under the authority of HM
Government and, if the same is no longer published, there shall be
substituted therefor such other index, whether published by an
official authority or by a private organization, as the parties decide
is a satisfactory alternative thereto for the purposes of this
Agreement.
Section 2. Services to Be Provided by Octel.
(a) During the term of this Agreement, Octel
shall provide, and Great Lakes shall pay for, the Services set forth
in Schedule 1 hereto in accordance with this Agreement. The
Services set forth on Schedule 1 may from time to
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time be amended, as the parties shall agree, to add, omit or redefine
any of the services to be provided hereunder, the term for which such
services are to be rendered, and/or the charges or fees to be charged
therefor. The Services shall be rendered by Octel or its Affiliates to
Great Lakes or its Affiliates.
(b) If Great Lakes requests that Octel
provide any services relating to the Excluded Businesses and the
Excluded Assets or Non-Transferred Businesses in addition to the
Services initially set forth on Schedule 1, Great Lakes and Octel will
mutually discuss the matter and negotiate in good faith with a view
towards the provision of such services.
(c) The Services shall be of a type and
quantity not exceed ing similar services provided by Octel in respect
of the Excluded Assets, the Excluded Businesses and the
Non-Transferred Businesses prior to the Distribution Date.
(d) At any time during the term of this
Agreement, Great Lakes may terminate all or any portion of the
Services upon 60 days prior notice to Octel or as otherwise
provided in Schedule 1.
Section 3. Payments by Great Lakes.
(a) Great Lakes shall pay Octel fees for the
Services calculated as set forth in Schedule 1 hereto, all of which
are exclusive of value added tax at the applicable rate from
time to time which shall be for Great Lakes' account.
(b) The monthly fixed charges or fees for
treasury, accounting, payroll and information technology Services set
forth on Schedule 1 shall be paid on the first day of each month
in which the Services are to be performed. Any fees not payable as
fixed amounts provided under this Agreement shall be invoiced monthly
prior to the 30th calendar day of the calendar month next following
the calendar month in which the applicable services were performed.
Such invoices shall include appropriate supporting detail and payment
shall be due and payable net 30 days from receipt of a properly
completed invoice. Relevant books and records of Octel and its
Affiliates pertaining to the Services provided and to all reimbursed
costs shall be available for inspection and audit by Great Lakes
during normal business hours for a period of three months following
the delivery of the invoice for the period for which such Services
were provided.
(c) In the event Great Lakes reasonably and
in good faith disputes any charges invoiced by Octel pursuant to this
Agreement, Great Lakes shall
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deliver a written statement describing the dispute to Octel within 30
days following receipt of the disputed invoice. The statement shall
provide a description of the disputed items to enable Octel to identify
the nature of the dispute. Fees not so disputed shall be deemed
accepted and shall be paid by Great Lakes. If the parties cannot
resolve the dispute in a mutually satisfactory manner, the dispute
shall be submitted within 60 days from the date of notice, to an
independent public accountant based in the United Kingdom mutually
acceptable to the parties (the "Independent Accountant"). The
Independent Accountant will review the books and records of Great
Lakes, Octel and any Affiliate that performed Services that are the
subject of such disputed invoice, as the case may be, and make such
other investigation as it may deem necessary to verify the invoice. The
costs of the fees of the Independent Accountant shall be borne by Great
Lakes if the disputed portion of the invoice is determined to be
substantially correct, and borne by Octel if the disputed portion of
the invoice is determined to be substantially incorrect, with the
Independent Accountant having the authority to determine whether the
disputed portion of the invoice is substantially correct or
substantially incorrect. In the event that Great Lakes reasonably and
in good faith disputes any invoiced amount, pending any such final
determination, Great Lakes may withhold payment of the disputed amount
to Octel, with appropriate adjustment (including interest calculated on
a daily basis with quarterly rests at a rate equal to the base lending
rate for the time being in force of Barclays Bank Plc from the date
such payment was due until the date of receipt of payment by Octel of
any delayed payment due to it) to be made following such final
determination. The determination of the Independent Accountant shall be
final and binding on the parties.
(d) The prices set forth on Schedule 1 shall
be firm through December 31, 1998 and shall be subject to adjustment
on January 1, 1999 based upon the changes in the Earnings Index
between October 1997 and October 1998 (published in the December 1998
edition of HMSO Central Statistical Information Office), except for
the prices for Amlwch Medical Services, which shall be adjusted from
time to time to reflect Octel's normal commercial terms for such
Services.
Section 4. (a) Staffing. Octel shall make a
sufficient number of competent employees or contractors available to
render the services to be provided pursuant to this Agreement when
required. Except to the extent specific individuals are designated on
Schedule 1, Octel shall, in consultation with Great Lakes, determine
both the staffing required and particular personnel assigned to perform
the Services, including but not limited to, clerical staff,
technicians, professionals or otherwise. The persons assigned by Octel
to perform services under this Agreement shall remain in the employ of
Octel and shall be subject to the Octel salary and benefits programs.
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(b) No Solicitation. Great Lakes undertakes
on behalf of itself and its Affiliates that neither it nor they shall
solicit any employees of Octel assigned by Octel for the performance
of the Services within 6 months of such personnel ceasing to provide
Services to Great Lakes hereunder without Octel's prior written
consent.
Section 5. Independent Contractor Status. Octel shall
perform the Services as an independent contractor, and with respect to
the Treasury Services, Octel will provide two persons acting as
independent contractors to provide such Services. Nothing contained
herein shall be construed, applied or intended to create a relationship
between the parties hereto of principal and agent or of employer and
employee. Great Lakes and Octel shall each be responsible for reporting
its income and paying its own taxes. Neither party undertakes by this
Agreement to perform any obligation of the other party, whether
regulatory or contractual, or, except as set forth in this Agreement,
to assume any responsibility for the other party's employees,
contractors, business or operations or to take any other action to
affect the status of the parties (and their employees) as independent
contractors in the provision of Services hereunder. As between the
parties, Octel has the sole and exclusive right and obligation, and
Great Lakes has no right or obligation, to supervise, manage, contract,
direct, procure, perform or cause to be performed, all Services to be
performed by Octel under this Agreement, including the exclusive right
to hire, fire, discipline, supervise, evaluate, transfer, suspend,
lay-off, recall, promote, assign, reward or compensate employees or
others performing Services under this Agreement, to adjust their
grievances, to provide them benefits and to set the terms and
conditions of their employment.
Section 6. Access. Great Lakes agrees to grant to
representatives of Octel access to Great Lakes' facilities, employees,
agents and consultants to enable Octel to provide the Services.
Section 7. Confidentiality. Each party and its
Affiliates will hold, and will use their best efforts to cause their
respective members, partners, officers, directors, employees and other
agents to hold, in confidence, all confidential documents and
information concerning the other party or the Affiliates of the other
party furnished to such party or its Affiliates in connection with the
transactions effected pursuant to this Agreement, except to the extent
that such information can be shown to have been (i) previously known by
such party on a nonconfidential basis, (ii) in the public domain
through no fault of such party or (iii) obtained by such party on
nonconfidential basis from a source other than the other party or any
of its Affiliates
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who is rightfully in possession of such information and is under no
obligation of confidentiality to the other party; provided that such
party may disclose such information in connection with the
transactions effected pursuant to this Agreement to the members,
partners, officers, directors, employees and other agents of such party
or its Affiliates that have a need to know such information so long as
such persons are informed by such party of the confidential nature of
such information and have agreed in writing to be bound by the
obligations of confidentiality and non-use as provided in this
Agreement; and provided further that if any person described in the
immediately preceding proviso breaches its confidentiality obligations,
the party to whom the disclosure is attributable will inform the other
party and will use its best efforts at the request of such other party
to enforce such obligation. Notwithstanding the foregoing, each party
may disclose such information if (i) compelled to disclose by judicial
or administrative process or by other requirements of law, (ii)
necessary to establish such party's position in any litigation or any
arbitration or other proceeding based upon or in connection with the
subject matter of this Agreement or (iii) required to comply with the
rules of a stock exchange. Prior to any disclosure pursuant to the
preceding sentence, the disclosing party shall give reasonable prior
notice to the other party to this Agreement of such intended disclosure
and, if requested by such other party, shall use its best efforts to
obtain a protective order or similar protection for such information or
data (at the expense of such other party) and shall otherwise disclose
such information and data to the extent and only to the extent
necessary to comply with any applicable rule, regulation or policy of a
governmental entity or securities exchange. The obligation of a party
hereto to hold any such information in confidence shall be satisfied if
it exercises the same care with respect to such information as it would
take to preserve the confidentiality of its own similar information.
The provisions of this Section 7 shall survive for a period of ten
years (or such longer period as may be required by law) following any
termination of this Agreement. All confidential documents and
information furnished pursuant to this Agreement may be used only in
connection with the transactions effected pursuant to this Agreement.
If all or any part of the Services are terminated, each party and its
Affiliates will, and will use their best efforts to cause their
respective members, partners, officers, directors, employees,
accountants, counsel, consultants, advisors and agents to, destroy or
deliver to the other party, upon request, all documents and other
materials, and all copies thereof, obtained by such party or its
Affiliates or on their behalf from the other party in connection with
the Services so terminated that are subject to such confidence.
Section 8. Force Majeure. Octel shall be excused for
failure to perform any of its obligations under this Agreement (other
than the payment of any sums due to Great Lakes under this Agreement)
due to fire, storm, flood, earthquake,
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explosion, accident, acts of the public enemy, riots and other civil
disturbances, sabotage, strikes or other labor disputes, injunctions,
transportation embargoes or delays, acts of God, failure of performance
of third parties necessary to Octel's performance under this Agreement,
or the laws or regulations of national, state, regional and local
government or branch or agency thereof, or any other event or
circumstance beyond Octel's reasonable control, in each case for
reasons other than the adverse financial condition of Octel. Upon the
occurrence of any such event, Octel shall notify Great Lakes in writing
of the events causing delay or default in performance and shall use its
best efforts to remove or otherwise address the impediment to action as
soon as reasonably practicable, provided, however, that nothing herein
shall require Octel to settle any strike or other labor disputes other
than on terms which Octel considers to be reasonable and appropriate in
all the circumstances.
Section 9. Standard of Performance. Octel hereby
agrees and acknowledges that, in performing the Services, (a) it shall
perform the Services in a competent and workmanlike manner, and in
accordance with applicable statutes, rules and regulations of
governmental and regulatory agencies having jurisdiction (provided that
Octel is in no way guaranteeing that the Services provided hereunder
are in compliance with such statutes, rules and regulations) and (b) it
shall use at least the standard of care and good faith as it uses in
performing the Services for its own account.
Section 10. Effective Date and Term. This Agreement
shall become effective as of the Distribution Date. The initial term of
this Agreement shall commence on the Distribution Date and, except as
subject to early termination in accordance with Sections 2(d) and 11,
continue with respect to each of the Services for the term provided in
Schedule 1.
Section 11. Termination. This Agreement or the
Services may be reduced, suspended or terminated as follows:
(a) Termination Without Prior Notice.
Either party hereto may terminate this Agreement immediately upon
written notice to the other party in the event (i) of the other
party's voluntary bankruptcy or insolvency, (ii) that the other party
shall make an assignment for the benefit of creditors or (iii) that a
petition shall have been filed by or against the other party under a
bankruptcy law, a corporate reorganization law or any other law for
relief of debtors (or other law similar in purpose or effect), which
has caused such other party to have its business effectively
discontinued in its then present form.
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(b) Termination With Prior Notice. Either party
hereto may terminate this Agreement on 30 days' written notice to the
other if the other is in breach of this Agreement in any material
respect unless the breaching party, within such 30 day period, remedies
such breach, or, in the case of a breach which cannot reasonably be
remedied within such 30 day period, initiates action which can
reasonably be expected to cure such breach within the 60 day period
commencing upon receipt of such written notice.
(c) Suspension of Services. Subject to Great Lakes'
right pursuant to Section 3(c) to dispute charges invoiced by Octel, if
Great Lakes shall fail to pay the undisputed charges, fees or costs it
has agreed to pay under the provisions of this Agreement for the
Services, Octel may, upon 30 days prior written notice, withhold or
cease performing the Services and continue to due so until full payment
shall have been received.
(d) Suspension of Payment Obligation. If Octel shall
fail to timely perform any of the Services, Great Lakes may withhold or
cease payment of the charges, fees or costs it has agreed to pay under
the provisions of this Agreement for such Services and continue to do
so until full performance of such Services shall have been rendered.
Section 12. Employer's Liability Insurance;
Indemnification.
(a) Octel shall comply with all applicable
workers' compensation statutes and carry employer's liability
insurance covering all of Octel's personnel engaged in the performance
of the Services. Octel shall indemnify Great Lakes and its Affiliates
and their respective directors, officers, employees, agents and
representatives from and against any and all claims, losses, damages
or liabilities, including reasonable attorneys' fees (i) arising from
any claims by any person that by virtue of providing Services under
this Agreement such person is a de facto or de jure employee of Great
Lakes or its Affiliates or that Great Lakes or its Affiliates owes any
contractual duty or duty under any applicable law, regulation or
statute relating to wages, employee benefits, hiring, terms and
conditions of employment and like matters or (ii) for taxes or related
charges imposed upon any person providing Services to Great Lakes or
its Affiliates under this Agreement or upon such person's
compensation.
(b) Except as provided in the following
sentence, Octel agrees to indemnify, defend and hold harmless Great
Lakes and its Affiliates and their respective directors, officers,
employees, agents and representatives against any and
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all claims, losses, damages and liabilities, including reasonable
attorneys' fees, incurred by any of them and arising out of an
unintentional breach of this Agreement or any act of negligence by
Octel in its performance of the Services; provided, however, (i) that
any such indemnification shall not exceed the amount paid by Great
Lakes or its Affiliate for such Services; and (ii) Octel shall not be
required to provide indemnity for the unintentional breaches or acts of
negligence of the independent contractors provided by Octel to perform
Treasury Services. Octel agrees to indemnify, defend and hold harmless
Great Lakes and its Affiliates and their respective directors,
officers, employees, agents and representatives against any and all
claims, losses, damages and liabilities, including reasonable
attorneys' fees, incurred by any of them and arising out of an
intentional breach of this Agreement or any act of gross negligence or
willful misconduct by Octel in its performance of the Services;
provided, however, that Octel shall not be required to provide
indemnity for intentional breaches or acts of gross negligence or
willful misconduct by the independent contractors provided by Octel to
perform Treasury Services.
(c) Each party shall indemnify, defend and
hold harmless the other party and its Affiliates and their respective
directors, officers, employees, agents and representatives against any
and all claims, losses, damages and liabilities, including reasonable
attorneys' fees, incurred by any of them and arising out of or in
connection with any death, injury or industrial disease sustained by
the indemnifying party's employees, servants, agents and/or
representatives, irrespective of the cause of such death, injury or
industrial disease, including, without limitation, the negligence or
other breach of legal duty of an indemnified party hereunder.
Section 13. Provision of Information; License Fees.
During the term of this Agreement or any extension thereof, and subject
to Section 7.5 (Confidentiality) of the Distribution Agreement, each
party shall provide to the other party, free of any charge or cost, any
information, data or documents which either party reasonably requests
to fulfill the requesting party's reporting or compliance obligations
with any governmental entity, agency or authority; provided, however,
that, the provision of such information, data or documents does not
result in any undue burden or expense to the party supplying the
information. Great Lakes shall pay any license or other fees as shall
be required to permit Octel to perform the Services under this
Agreement; provided, however, that Great Lakes shall have the option,
at its sole discretion, to negotiate the terms of such licenses or the
amount of such fees on its own behalf.
Section 14. Notice. All notices, requests, demands
and other communications under this Agreement shall be in writing and
shall be deemed to have been duly given (a) on the date of service if
served personally on the party to whom
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notice is given, (b) on the day of transmission if sent via facsimile
transmission to the facsimile number given below, provided facsimile
confirmation of receipt is obtained promptly after completion of
transmission, (c) on the third business day after delivery to an
overnight courier service, provided receipt of delivery has been
confirmed, or (d) on the tenth 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 Great Lakes: Great Lakes Chemical Corporation
Xxx Xxxxx Xxxxx Xxxxxxxxx
Xxxx Xxxxxxxxx, Xxxxxxx 00000
Xxxxxx Xxxxxx
Attn: Vice President and General Counsel
Telecopy: (000) 000-0000
If to Octel: The Associated Octel Company Limited
P.O. Box 17, Oil Sites Road
Xxxxxxxxx Xxxx
Xxxxx Xxxxxx X00 0XX
Xxxxxx Xxxxxxx
Attn: Company Secretary and General
Counsel
Telecopy: (151) 356-6298
Any party may change its address by giving the other party written
notice of its new address in the manner set forth above.
Section 15. 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 16. No Third-Party Beneficiaries. This
Agreement is solely for the benefit of the parties hereto and is not
intended to confer upon any other person except the parties hereto any
rights or remedies hereunder, except in respect of indemnification
provisions contained herein conferring indemnification rights to third
parties to this Agreement.
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Section 17. 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 18. Schedules. The Schedules to this
Agreement shall be construed with, and shall be an integral part of,
and are hereby expressly incorporated into, this Agreement to the same
extent as if the same had been set forth verbatim herein.
Section 19. Severability. If any provision hereof is
or becomes illegal, invalid, or unenforceable under the laws of a
particular jurisdiction, such provision shall be fully severable with
respect to such laws; this Agreement shall be construed and enforced in
such jurisdiction as if such provision had never comprised a part
hereof; the remaining provisions hereof shall remain in full force and
effect in such jurisdiction and shall not be affected by such provision
or by its severance herefrom; and all of the provisions hereof shall
remain in full force and effect in all other jurisdictions and shall
not be affected by the severance of such provision under the laws of
such jurisdiction. Furthermore, in lieu of such provision there shall
be added automatically for purposes of such jurisdiction as part of
this Agreement a provision as similar in terms to such illegal,
invalid, or unenforceable provision as may be possible and be legal,
valid and enforceable in such jurisdiction.
Section 20. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of England, and
except as provided in Section 3(c) hereof, the parties hereby agree
that any dispute which may arise out of or in connection with this
Agreement shall be subject to the dispute resolution provisions set
forth in Article XI of the Distribution Agreement.
Section 21. Amendment and Modification.
(a) Any provision of this Agreement may be
amended or waived if, but only if, such amendment or waiver is in
writing and is signed, in the case of an amendment, by each party to
this Agreement, or in the case of a waiver, by the party against whom
the waiver is to be effective.
(b) No failure or delay by either party in
exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof or the
exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not be exclusive of
any rights or remedies provided by law.
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IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed and delivered as of the day and year
first above written.
GREAT LAKES CHEMICAL CORPORATION
By:
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Name:
Title:
THE ASSOCIATED OCTEL COMPANY LIMITED
By:
---------------------------------
Name:
Title:
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