Exhibit 10.2

 

SERVICES AGREEMENT

 

This Services Agreement, dated as of July 1, 2004, by and between NewMarket
Services Corporation, a Virginia corporation (“NewMarket Services”), and Afton
Chemical Corporation, a Delaware corporation (“Afton”), recites and provides:

 

WHEREAS, NewMarket Services and Afton desire to enter into this Agreement to set
forth the roles and responsibilities with regard to services to be provided by
NewMarket Services to Afton.

 

NOW, THEREFORE, the parties agree as follows:

 

ARTICLE I

DEFINITIONS

 

1.1. Affiliate

 

“Affiliate” of a Person shall mean a Person that directly or indirectly
controls, is controlled by, or is under common control with, the first Person.
For purposes of this definition, “Control” when used with respect to any Person
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms “Controlling” and “Controlled” have meanings
correlative to the foregoing.

 

1.2. AOP

 

“AOP” shall have the meaning specified in Section 5.1.

 

1.3. Confidential Information

 

“Confidential Information” shall have the meaning specified in Section 7.1.

 

1.4. Governmental Authority

 

“Governmental Authority shall mean any federal, state, local, or foreign
government or governmental, quasi-governmental, administrative or regulatory
authority, agency, body, or entity, including any court or other tribunal.

 

1.5. Parties

 

“Parties shall mean NewMarket Services and Afton (Party means either NewMarket
Services or Afton).

 

1.6. Person

 

“Person” shall mean an individual, corporation, partnership, trust, association,
or entity of any kind or nature; or a Governmental Authority.

 

1.7. Records

 

“Records” shall have the meaning specified in Section 2.3.

 

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1.8. Representative

 

“Representative” shall have the meaning specified in Section 4.1.

 

1.9. Services

 

“Services” shall have the meaning specified in Section 2.1.

 

ARTICLE II

SERVICES TO BE PROVIDED

 

2.1. Exhibits.

 

(a) Exhibits 1 through 4 attached to and made a part of this Agreement describe
the services to be provided by NewMarket Services to Afton (the “Services”). The
Parties have made a good faith effort as of the date hereof to identify each
Service and to complete the content of the Exhibits accurately. It is
anticipated that the Parties will modify the Services from time to time. There
are certain terms that are specifically addressed in the Exhibits attached
hereto that may differ from the terms provided hereunder. In those cases, the
specific terms described in the Exhibits shall govern that Service.

 

(b) The Parties may also identify additional Services that they wish to
incorporate into this Agreement. The Parties will create additional Exhibits
setting forth the description of such Services, the Fees for such Services and
any other applicable terms.

 

2.2. Independent Contractors.

 

NewMarket Services will provide the Services either through its own resources,
the resources of its subsidiaries or Affiliates, or by contracting with
independent contractors as agreed hereunder.

 

2.3. Records.

 

NewMarket Services shall keep full and detailed records dealing with all aspects
of the Services performed by it hereunder (the “Records”) and:

 

(a) shall provide access to the Records to Afton at all reasonable times; and

 

(b) shall maintain the Records in accordance with good record management
practices.

 

ARTICLE III

FEES

 

3.1. General.

 

Afton will pay to NewMarket Services a fixed annual fee for each Service as set
forth in the attached Exhibits (collectively, the “Fees”). In addition, Afton
will pay to

 

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NewMarket Services properly documented expenses incurred by NewMarket Services
on Afton’s behalf that were not foreseen in the AOP (the “Expenses”). The Fees
and Expenses constitute full compensation to NewMarket Services for all charges
and costs incurred by NewMarket Services on behalf of Afton in providing the
Services, unless otherwise specifically provided in the Exhibits or agreed in an
AOP.

 

3.2. Payments.

 

NewMarket Services will deliver to Afton, no later than the last day of each
month, an invoice for the aggregate Fees and Expenses incurred for that month.
Afton will pay to NewMarket Services, monthly no later than the end of the
following month, the aggregate Fees and Expenses incurred during the previous
month.

 

3.3. Review of Fees.

 

(a) At the end of each year during the term of the Agreement, commencing as of
the date of the Agreement, NewMarket Services will review the charges and costs
actually incurred by NewMarket Services in providing any Service, as well as the
calculation of any related Fee and Expense (collectively, “Actual Cost”) during
the previous year. In the event that NewMarket Services determines that the
Actual Cost for any Service differs from the aggregate Fees and Expenses for
that Service for that period by more than two percent (2%), NewMarket Services
will deliver to Afton documentation for such Actual Cost and the Parties will
renegotiate in good faith to adjust the appropriate Fees and/or Expenses
accordingly, retroactively or prospectively.

 

(b) As a part of the AOP process referred to in Section 5.1, the Parties will
set Fees or new budgets for each ensuing year, and may make other changes to the
Fees with respect to each Service, based upon an increase or reduction to such
Service. Once an AOP has been finalized (whether by agreement or pursuant to the
provisions of Section 5.1), the Fee for each Service set out in that AOP will
apply for the ensuing year, subject to any subsequent written agreements between
Parties.

 

ARTICLE IV

REPRESENTATIVES

 

4.1. Representatives.

 

(a) A named representative of NewMarket Services and a named representative of
Afton will serve as administrative representatives (“Representative(s)”) of
NewMarket Services and Afton, respectively, to facilitate day-to-day
communications and performance under this Agreement. Each Party may treat an act
of a Representative of the other Party as being authorized by such other Party.
Each Party may replace its Representative by giving written notice of the
replacement to the other Party.

 

(b) No additional Exhibits, modifications to existing Exhibits, modifications to
an AOP approved pursuant to Section 5.1, or amendments to this Agreement shall
be effective unless and until executed by the Representatives of each of
NewMarket Services and Afton.

 

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ARTICLE V

PLANNING PROCESS

 

5.1. Annual Operating Plan.

 

The Representative of each Party will coordinate the development of an annual
operating plan (“AOP”) setting forth the activity levels and a budget for each
of the Services. In the AOP process, the Parties agree to use their best efforts
to harmonize the interests of Afton to have quality services at affordable cost
and the interest of NewMarket Services to recover its costs of performing the
Services. During each calendar year, an AOP for each Service for the next
calendar year will be submitted by the Representative of NewMarket Services for
review and approval. Approval by the Representative of Afton will constitute
approval and acceptance by Afton of the AOP.

 

5.2. Performance Review.

 

The Parties will meet annually to review progress against the AOP objectives,
Service standards, performance measures and activity levels. The Parties will
use their good faith efforts to resolve any issues concerning Service standards,
performance measures or changes in Fees from the AOP during these meetings.

 

ARTICLE VI

AUTHORITY; INFORMATION; COOPERATION; CONSENTS

 

6.1. Authority.

 

Each Party warrants to the other Party that:

 

(a) it has the requisite corporate authority to enter into and perform this
Agreement;

 

(b) this Agreement is enforceable against it; and

 

(c) it has obtained all consents or approvals of Governmental Authorities and
other Persons that are conditions to its entering into this Agreement.

 

6.2. Information Regarding Services.

 

Each Party shall make available to the other Party any information required or
reasonably requested by that other Party regarding the performance of any
Service and shall be responsible for timely providing that information and for
the accuracy and completeness of that information; provided, however, that a
Party shall not be liable for not providing any information that is subject to a
confidentiality obligation owed by it to a Person other than an Affiliate of it
or the other Party. NewMarket Services shall not be liable for any impairment of
any Service caused by its not receiving information, either timely or at all, or
by its receiving inaccurate or incomplete information from Afton that is
required or reasonably requested regarding that Service.

 

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6.3. Cooperation.

 

The Parties will use good faith efforts to cooperate with each other in all
matters relating to the provision and receipt of Services. Such good faith
cooperation will include providing electronic access to systems used in
connection with Services and using commercially reasonable efforts to obtain all
consents, licenses, sublicenses or approvals necessary to permit each Party to
perform its obligations. The Parties will cooperate with each other in making
such information available as needed in the event of any and all internal or
external audits, whether in the United States or any other country. If this
Agreement is terminated in whole or in part, the Parties will cooperate with
each other in all reasonable respects in order to effect an efficient transition
and to minimize the disruption to the business of both Parties, including the
assignment or transfer of the rights and obligations under any contracts.

 

6.4. Further Assurances.

 

Each Party shall take such actions, upon request of the other Party and in
addition to the actions specified in this Agreement, as may be necessary or
reasonably appropriate to implement or give effect to this Agreement.

 

ARTICLE VII

CONFIDENTIAL INFORMATION

 

7.1. Definition.

 

For the purposes of this Agreement, “Confidential Information” means non-public
information about the disclosing Party’s or any of its Affiliates’ business or
activities that is proprietary and confidential, which shall include, without
limitation, all business, financial, technical and other information, including
software (source and object code) and programming code, of a Party or its
Affiliates marked or designated “confidential” or “proprietary” or by its nature
or the circumstances surrounding its disclosure should reasonably be regarded as
confidential. Confidential Information includes not only written or other
tangible information, but also information transferred orally, visually,
electronically or by any other means. Confidential Information will not include
information that (i) is in or enters the public domain without breach of this
Agreement, or (ii) the receiving Party lawfully receives from a third party
without restriction on disclosure and to the receiving Party’s knowledge without
breach of a nondisclosure obligation.

 

7.2. Nondisclosure.

 

Each of NewMarket Services and Afton agree that (i) it will not disclose to any
third party or use any Confidential Information disclosed to it by the other
except as expressly permitted in this Agreement, and (ii) it will take all
reasonable measures to maintain the confidentiality of all Confidential
Information of the other Party in its possession or control.

 

7.3. Permitted Disclosure.

 

Notwithstanding the foregoing, each Party may disclose Confidential Information
(i) to the extent required by a court of competent jurisdiction or other
governmental authority or

 

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otherwise as required by law, including without limitation disclosure
obligations imposed under the federal securities laws, or (ii) on a
“need-to-know” basis under an obligation of confidentiality to its consultants,
legal counsel, Affiliates, accountants, banks and other financing sources and
their advisors.

 

7.4. Ownership of Confidential Information.

 

All Confidential Information supplied or developed by either Party shall be and
remain the sole and exclusive property of the Party who supplied or developed
it.

 

ARTICLE VIII

TERM AND TERMINATION

 

8.1. Term.

 

This Agreement shall remain in effect until such time as it has been terminated
as to all Services in accordance with Section 8.2 below.

 

8.2. Termination.

 

Either Party may terminate this Agreement without cause with respect to one or
more Services under this Agreement by providing twelve (12) months written
notice to the other Party or as otherwise agreed between the Parties hereto.

 

8.3. Termination Assistance Services.

 

NewMarket Services agrees that, upon termination of this Agreement or any of the
Exhibits, NewMarket Services will cooperate in good faith with Afton to provide
Afton (or its designee) with reasonable assistance to make an orderly transition
from NewMarket Services to another supplier of the Services.

 

ARTICLE IX

LIMITATION OF LIABILITY; INDEMNIFICATION

 

9.1. Limitation of Liability.

 

Except as may be provided in Section 9.2 below, NewMarket Services, its
controlling persons, if any, directors, officers, employees, agents and
permitted assigns (each, a “NewMarket Services Party”) shall not be liable to
Afton and its directors, officers, employees, agents or permitted assigns (each,
an “Afton Party”) and each NewMarket Services Party shall not be liable to any
Afton Party, in each case, for any liabilities, claims, damages, losses or
expenses, including, but not limited to, any special, indirect, incidental or
consequential damages, of a NewMarket Services Party or an Afton Party arising
in connection with this Agreement and the Services provided hereunder.

 

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9.2. Indemnification.

 

(a) NewMarket Services shall indemnify, defend and hold harmless each of the
Afton Parties from and against all liabilities, claims, damages, losses and
expenses (including, but not limited to, court costs and reasonable attorneys’
fees) (collectively referred to as “Damages”) of any kind or nature, of third
parties unrelated to any Afton Party caused by or arising in connection with the
gross negligence or willful misconduct of any employee of NewMarket Services in
connection with the performance of the Services, except to the extent that
Damages were caused directly or indirectly by acts or omissions of any Afton
Party. Notwithstanding the foregoing, NewMarket Services shall not be liable for
any special, indirect, incidental, or consequential damages relating to such
third party claims.

 

(b) Afton shall indemnify, defend and hold harmless each of the NewMarket
Services Parties from and against all Damages of any kind or nature, of third
parties unrelated to any NewMarket Services Party caused by or arising in
connection with the gross negligence or willful misconduct of any employee of
Afton in connection with Afton’s performance under this Agreement, except to the
extent that Damages were caused directly or indirectly by acts or omissions of
any NewMarket Services Party. Notwithstanding the foregoing, Afton shall not be
liable for any special, indirect, incidental, or consequential damages relating
to such third party claims.

 

9.3. Indemnification Procedures.

 

(a) A party entitled to indemnification pursuant to this Agreement (an
“Indemnified Party”) shall, with respect to any claim made against such
Indemnified Party for which indemnification is available, notify the other party
(the “Indemnifying Party”) in writing of the nature of the claim as soon as
practicable but not more than ten (10) days after the Indemnified Party receives
notice of the assertion of the claim. (The failure by an Indemnified Party to
give notice shall not relieve the Indemnifying Party of its obligations under
this Section 9.3, except to the extent that the failure results in the failure
of actual notice and the Indemnifying Party is damaged as a result of the
failure to give notice.) Upon receipt of notice of the assertion of a claim, the
Indemnifying Party may, at its option, assume the defense of the claim. If the
Indemnifying Party assumes the defense, the Indemnified Party shall have the
right to employ separate counsel and to participate in (but not control) any
such action, but the fees and expenses of such counsel shall be at the expense
of the Indemnified Party unless (a) the employment of counsel by the Indemnified
Party has been authorized by the Indemnifying Party, or (b) the Indemnified
Party has been advised by its counsel in writing that there is a conflict of
interest between the Indemnifying Party and the Indemnified Party in the conduct
of the defense of the action (in which case the Indemnifying Party shall not
have the right to direct the defense of the action on behalf of the Indemnified
Party), in each of which cases the reasonable fees and expenses of such counsel
shall be at the expense of the Indemnifying Party. If the Indemnifying Party
does not assume the defense, the Indemnified Party shall have the right to
employ counsel and to control any such action, and the reasonable fees and
expenses of such counsel shall be at the expense of the Indemnifying Party. An
Indemnifying Party shall not be liable for any settlement of an action effected
without its written consent (which consent shall not be unreasonably withheld),
nor shall an Indemnifying Party settle any such action without the written
consent of the Indemnified Party (which consent shall not be unreasonably
withheld). No Indemnifying Party will consent to the entry of any judgment or
enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to

 

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the Indemnified Party a release from all liability with respect to the claim.
Each of the Indemnifying Party and the Indemnified Party shall cooperate in the
defense of any claim for which indemnification is available and shall furnish
such records, information, testimony and attend such conferences, discovery
proceedings, hearings, trials and appeals as may reasonably be requested.

 

ARTICLE X

DISPUTE RESOLUTION

 

If any AOP is not submitted or is not approved by the Parties, or if the Parties
are unable to resolve any service, performance or budget issues or if there is a
material breach of this Agreement that has not been corrected within thirty (30)
days of receipt of notice of such breach, Representatives of NewMarket Services
and Afton will meet promptly to review and resolve those issues in good faith.

 

ARTICLE XI

MISCELLANEOUS

 

11.1. Governing Law.

 

This Agreement and performance hereunder will be governed by and construed in
accordance with the laws of the Commonwealth of Virginia without regard to the
principles of conflict of laws.

 

11.2. Assignment.

 

This Agreement is not assignable in whole or in part by either Party without the
prior written consent of the other; provided that either Party may assign this
Agreement in whole or in part to a parent, a direct or indirect wholly-owned
subsidiary, an Affiliate or a successor thereto.

 

11.3. Entire Agreement.

 

This Agreement, including the attached Exhibits, is the complete and exclusive
statement of the agreement between the Parties and supersedes all prior
proposals, understandings and all other agreements, oral and written, between
the Parties relating to the subject matter of this Agreement. This Agreement may
not be modified or altered except by written instrument duly executed by both
Parties.

 

11.4. Force Majeure.

 

Any delay or failure by either Party in the performance of this Agreement will
be excused to the extent that the delay or failure is due solely to causes or
contingencies beyond the reasonable control of such Party.

 

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11.5. Severability.

 

If any provision, clause or part of this Agreement, or the application thereof
under certain circumstances is held invalid or unenforceable for any reason, the
remainder of this Agreement, or the application of such provision, clause or
part under other circumstances shall not be affected thereby.

 

11.6. Notices.

 

All communications, notices and disclosures required or permitted by this
Agreement shall be in writing and shall be deemed to have been given one day
after being delivered personally or by messenger or being received via telecopy,
telex or other electronic transmission, or two days after being sent by
overnight delivery service, in all cases addressed to the person for whom it is
intended at the addresses as follows:

 

If to NewMarket Services:

 

330 South Fourth Street

 

Richmond, Virginia 23219

 

Attention: Vice President & General Counsel

 

If to Afton:

 

500 Spring Street

 

Richmond, Virginia 23219

 

Attention: President

 

or to such other address as a Party shall have designated by notice in writing
to the other Party in the manner provided by this Section 11.6.

 

11.7. Counterparts; Headings.

 

This Agreement may be executed in several counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one and the
same instrument. The Article and Section headings in this Agreement are inserted
for convenience of reference only and shall not constitute a part hereof.

 

IN WITNESS WHEREOF, the Parties have signed this Agreement on the date first set
forth above.

 

NEWMARKET SERVICES CORPORATION By:  

/s/ Steven M. Edmonds

Name:

 

Steven M. Edmonds

Title:

 

Vice President – General Counsel

 

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AFTON CHEMICAL CORPORATION

By:

  /s/ M. Rudolph West

Name:

  M. Rudolph West

Title:

  Secretary

 

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EXHIBIT 1

 

LEGAL SERVICES

 

I DESCRIPTION OF SERVICES

 

NewMarket Services will provide all necessary legal services to Afton during the
term of the Agreement, including, but not limited to, handling litigation and
intellectual property matters, reviewing commercial agreements, addressing
matters related to corporate law, and reviewing environmental and insurance
issues.

 

II SERVICE FEES

 

Service Fees are as set forth in Attachment A, attached hereto and incorporated
by reference.

 

3.1

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EXHIBIT 2

 

FINANCIAL SERVICES

 

I DESCRIPTION OF SERVICES

 

NewMarket Services will provide the following financial services to Afton during
the term of the Agreement:

 

  A. Treasury & Accounts Receivable, including: (1) collection of receivables;
(2) cash application; (3) customer/country risk profile; (4) past due
management; (5) cash management forecasting; (6) declaration of dividends; (7)
bank account management; and (8) foreign exchange management.

 

  B. Risk Management, including: (1) risk profile definition; (2) purchase
insurance; (3) claims management; (4) non-insurance risk management; (5)
employee education of coverages and procedures; and (6) continual assessment on
ways to lower risk.

 

  C. Business Decision Support, including: (1) monthly analysis of performance;
(2) preparation of AOP; (3) preparation of LRP; (4) customer profitability
analysis; (5) bid preparation service; (6) SAP and Powerplay maintenance; (7)
training of tools available; (8) standard analysis templates; and (9) cost
analysis.

 

  D. Cost Accounting, including: (1) SAP standard cost management; (2) rebates
and commissions management; (3) intercompany profit issues; (4) inventory
valuation management; and (5) customer billing.

 

  E. Accounts Payable, including: (1) pay invoices; (2) process expense reports;
(3) procurement card processing; and (4) vendor interface support.

 

  F. External Reporting, including: (1) auditor interface; and (2) internal
auditor interface.

 

  G. Tax Planning and Compliance, including: (1) federal, state and foreign
income tax compliance; (2) federal, state and foreign tax planning; and (3)
property, sales and use tax.

 

II SERVICE FEES

 

Service Fees are as set forth in Attachment A, attached hereto and incorporated
by reference.

 

3.2

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EXHIBIT 3

 

CORPORATE SERVICES

 

I DESCRIPTION OF SERVICES

 

NewMarket Services will provide the following corporate services to Afton during
the term of the Agreement:

 

  A. Human Resources, including: (1) performance management; (2) recruitment and
hiring; (3) pension plan administration; (4) savings plan administration; (5)
health and welfare benefit plan administration; (6) salary administration; (7)
payroll services; and (8) labor relations/contract negotiations.

 

  B. Information Technology, including: (1) provide, maintain and support
infrastructure; (2) hardware and software support; and (3) technology support
and solutions.

 

  C. External Affairs/Government Relations, including federal lobbying efforts
and legislative resources.

 

  D. Resources, including: (1) on-site medical, health and fitness center; (2)
real estate/facility maintenance and management services; and (3) MRO purchasing
support and administration.

 

II SERVICE FEES

 

Service Fees are as set forth in Attachment A, attached hereto and incorporated
by reference.

 

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EXHIBIT 4

 

MISCELLANEOUS SERVICES

 

I DESCRIPTION OF SERVICES

 

There are no miscellaneous services to be provided by NewMarket Services to
Afton.

 

II SERVICE FEES

 

Not applicable.

 

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Attachment A

 

NetMarket Services

 

Annual thousand$

         

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     Afton

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Controller

   220

Controller Audit Fees

   —  

Treasury

   400

Treasury Bank/Shareholder

   —  

Tax

   210

Accounts Payable

   260

Cost Accounting

   610

Business Decision Support

   330

Admin + Planning

   220

Admin Dir/Shareholders

   —  

General Services

   1,478

Riverfront

   —  

Medical

   130

External Affairs

   120

H/R

   1,060

Info Resources

   4,010

Old Town Lodge

   150

Old Town Farm

   70

Aircraft Related

   390

Legal

   2,430

Legal Directors

   —  

Total

   12,088     

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Trade Membership of $220M not included in any numbers above

 

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