Exhibit 10.31Execution Copy  MASTER AGREEMENT AND PLAN OF MERGER Dated as of November 15, 2005 
 

 
**TABLE OF CONTENTS**       Page 1. The Share Purchases  1 1.1 Sale and Purchase of the Foreign Subsidiary Shares  1 1.2 Share Purchase Closing  1 1.3 Purchase Prices for Foreign Subsidiary Shares  2      2. The Merger  2 2.1 The Merger  2 2.2 Merger Closing  2 2.3 Merger Consideration  3 2.4 Effective Time  3 2.5 Certificate of Incorporation and Bylaws of the Surviving Corporation  3 2.6 Directors and Officers of the Surviving Corporation  3 2.7 Effects of the Merger  3      3. Conversion of Shares in the Merger  4 3.1 Conversion of Capital Stock  4 3.2 Waiver of Appraisal Rights  4      4. Adjustments to Foreign Subsidiary Purchase Prices and Merger Consideration  4 4.1 Procedure for Determining Adjustments to each Foreign SubsidiaryPurchase Price and the Merger Consideration  4 4.2 Foreign Subsidiary Purchase Price and Merger Consideration Adjustment  6      5. Representations and Warranties of the Shareholder and the Company  6 5.1 Corporate Status and Authority  6 5.2 No Conflicts, Consents and Approvals  6 5.3 Corporate Status of the Company; Authority  7 5.4 The Shares  7 5.5 Subsidiaries  8 5.6 Financial Statements  8 5.7 Absence of Undisclosed Liabilities  8 5.8 Assets and Properties  8 5.9 Contracts  9 5.10 Employment Agreements and Benefits.  9 5.10.1 Employment Agreements and Plans  9 5.10.2 ERISA; Employee Benefit Matters  10 5.10.3 Tax Qualification  11 5.10.4 Labor Matters  11 5.11 Intellectual Property  11 5.12 Governmental Authorizations; Compliance with Law  12 5.13 Litigation  12 5.14 Taxes  12 
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       Page 5.15 Absence of Changes  13 5.16 Insurance  14 5.17 Environmental Matters  14 5.18 Accounts Receivable  15 5.19 Business Inventory; Customer List  15 5.20 Affiliate Transactions  15 5.21 Brokers  15      6. Representations and Warranties of the Parent and Merger Sub  16 6.1 Status and Authority  16 6.2 No Conflicts, Consents and Approvals  16 6.3 Financial Ability to Perform  17 6.4 Solvency  17 6.5 Litigation  17 6.6 Purchase for Investment  17 6.7 Brokers  18 6.8 Insurance  18 6.9 No Knowledge of Misrepresentations and Omissions  18 6.10 Sevalco  18      7. Certain Covenants  18 7.1 Consents; Obligations of the Parties  18 7.2 Obligations of the Shareholder and Company  19 7.2.1 Conduct of Business  19 7.2.2 Access and Information  21 7.2.3 Certain Resignations  22 7.2.4 Severance Agreements  22 7.2.5 Certain Real Property Matters  22 7.3 Obligations of the Parent and Merger Sub  23 7.4 Taxes  23 7.5 Publicity  28 7.6 Supplements to Disclosure Schedules  28 7.7 Contact with Customers and Suppliers  29 7.8 Credit Support Arrangements  29 7.9 Noncompetition  29 7.10 Appraisals  29 7.11 Certain Foreign Conversions  30      8. Employees and Employee Benefit Plans  30 8.1 Compensation and Benefits of Company Employees  30 8.1.1 Plan Funding Statements  31 8.1.2 Dispute Resolution Process  32 8.1.3 Certain Company Benefits  32 8.1.4 Filings and Records  32 8.1.5 Employee Savings Plan  33 8.1.6 Welfare Plans  33 8.1.7 Retiree Medical and Life  34 
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       Page 8.1.8 WARN  34 8.1.9 Paid Time Off/Vacation  34 8.1.10 Collective Bargaining  34 8.1.11 Workers’ Compensation  35 8.1.12 U.S. Bargaining Pension Plan  35 8.1.13 Canadian Pension Plan  35 8.1.14 Sevalco Ltd Plan  35      9. Conditions Precedent to Share Purchases  39 9.1 General  39 9.2 Conditions to Obligations of the Parties  39 9.2.1 HSR Act  39 9.2.2 No Injunction  39 9.2.3 Consents  39 9.2.4 Transition Services Agreement  39 9.3 Conditions to Obligations of the Shareholder and the Company  40 9.3.1 Representations, Warranties and Covenants of the Parent  40 9.3.2 Officer’s Certificate  40 9.3.3 Credit Support Arrangements  40 9.4 Conditions to Obligations of the Parent  40 9.4.1 Representations, Warranties and Covenants of theShareholder and the Company  40 9.4.2 Officer’s Certificate  40 9.4.3 Financing  41      10. Conditions Precedent to Merger  41 10.1 General  41 10.2 Conditions to Obligations of the Parties  41 10.2.1 HSR Act  41 10.2.2 No Injunction  41 10.2.3 Consents  41 10.2.4 Share Purchase Closing  41 10.2.5 Consummation of Foreign Conversions  41 10.3 Conditions to Obligations of the Shareholder and the Company  41 10.3.1 Representations, Warranties and Covenants of the Parent and MergerSub  41 10.3.2 Officer’s Certificate  42 10.3.3 Credit Support Arrangements  42 10.4 Conditions to Obligations of the Parent and Merger Sub  42 10.4.1 Representations, Warranties and Covenants of the Shareholder and theCompany  42 10.4.2 Officer’s Certificate  42 10.4.3 Financing  42 10.4.4 Certain Transfers  42      11. Indemnification  43 11.1 Survival of Representations and Warranties and Covenants  43 
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       Page 11.2 Indemnification  43 11.2.1 By the Shareholder  43 11.2.2 By the Parent  45 11.2.3 Indemnification Procedures  46 11.2.4 Mitigation  49 11.2.5 Tax Treatment  49 11.2.6 Exclusive Remedy  49 11.2.7 Accounts Receivables Claims  50      12. Definitions  50      13. General Provisions  58 13.1 Modification; Waiver  58 13.2 Entire Agreement  59 13.3 Certain Limitations  59 13.4 Termination  59 13.5 Expenses  61 13.6 Further Actions  61 13.7 Post-Closing Access  61 13.8 Notices  61 13.9 Assignment of Agreement; Assignment of Non-Disclosure Agreements  62 13.10 No Third Party Beneficiaries  62 13.11 Counterparts  62 13.12 Interpretation  63 13.13 Severability  63 13.14 Governing Law  63 13.15 Consent to Jurisdiction  63 13.16 Waiver of Punitive and Other Damages and Jury Trial  64 13.17 Specific Performance; etc  64 EXHIBITS   Exhibit A Form of Share Purchase Agreements for Columbian Tiszai Carbon LimitedExhibit B Form of Share Purchase Agreement for Columbian Carbon Europa SRLExhibit C Form of Share Purchase Agreement for Columbian Chemicals Canada LtdExhibit D Form of Share Purchase Agreement for Columbian Chemicals Brasil, LtdaExhibit E Form of Share Purchase Agreement for Columbian Chemicals Europa GmbH and Columbian Carbon Deutschland GmbHExhibit F Form of Share Purchase Agreement for Columbian (U.K.) LimitedExhibit G Form of Transition Services AgreementSCHEDULES   Schedule 1.3 Foreign SubsidiariesSchedule 4.1 Form of Closing Balance Sheet
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   Schedule 5.2(a) Certain ConflictsSchedule 5.2(b) Certain Consents and Approvals (Shareholder or Joint Filings)Schedule 5.3 InvestmentsSchedule 5.5 SubsidiariesSchedule 5.6 Financial StatementsSchedule 5.8 Real Property; Certain LiensSchedule 5.9 ContractsSchedule 5.10.1 Employment Agreements, Collective Bargaining Agreements and PlansSchedule 5.10.2(a) ERISA Matters (Multiemployer Plans)Schedule 5.10.2(b) ERISA Matters (Unfunded Liabilities)Schedule 5.10.2(c) ERISA Matters (Non-Deductible Plans)Schedule 5.10.2(d) ERISA Matters (Contributions, Reserves and Plan Operations)Schedule 5.10.2(e) ERISA Matters (Termination of Post-Retirement Welfare Benefits)Schedule 5.10.3 Tax Qualification of PlansSchedule 5.10.4 Labor MattersSchedule 5.11(a) Company Intellectual PropertySchedule 5.11(b) Exceptions to Company Intellectual PropertySchedule 5.11(c) Intellectual Property InfringementSchedule 5.12 Governmental AuthorizationsSchedule 5.13 LitigationSchedule 5.14 TaxesSchedule 5.15 Absence of ChangesSchedule 5.16 InsuranceSchedule 5.17 Environmental MattersSchedule 5.18 Certain Security ArrangementsSchedule 5.19(a) Customer ListSchedule 5.19(b) Certain Customer ActionsSchedule 5.20 Affiliate TransactionsSchedule 6.2(b) Certain Consents and Approvals (Parent Filings)Schedule 6.3 Commitment LettersSchedule 7.2.1(a)(i) Bahia Project ExpendituresSchedule 7.2.1(a)(ii) North Bend Project ExpendituresSchedule 7.2.1(x) Intercompany LiabilitiesSchedule 7.2.1(y) Intercompany ReceivablesSchedule 7.7 Contact with Customers and SuppliersSchedule 7.8 Credit Support ArrangementsSchedule 7.10 AppraisalsSchedule 8.1.1-A Unfunded PBO of Pension Plans Retained by ParentSchedule 8.1.1-B Unfunded APBO of Post-Retirement Welfare PlansSchedule 9.2.3(i) Share Purchase Governmental ConsentsSchedule 9.2.3(ii) Share Purchase Third Party ConsentsSchedule 10.2.3(i) Merger Governmental ConsentsSchedule 10.2.3(ii) Merger Third Party ConsentsSchedule 12 Shareholder Retained LitigationSchedule 12.1 Capital ExpendituresSchedule 13.12 Knowledge Group
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     MASTER AGREEMENT AND PLAN OF MERGER, dated as of the 15th day of November, 2005, by andamong Columbian Chemicals Acquisition LLC, a Delaware limited liability company (the“Parent”), Columbian Chemicals Merger Sub, Inc., a Delaware corporation wholly-owned byParent (the “Merger Sub”), Columbian Chemicals Company, a Delaware corporation (the“Company”), and Phelps Dodge Corporation, a New York corporation (the“Shareholder”). Undefined capitalized terms in this Agreement are defined in Section 12.     WHEREAS, the Company and the Subsidiaries of the Company listed on Schedule 5.5 hereto conductan international carbon black business;     WHEREAS, the Shareholder owns all of the issued and outstanding capital stock of the Company,which consists of 1,000 shares of common stock, par value $1.00 per share (the “Shares”);     WHEREAS, among other things, the Shareholder and the Company wish to sell, or cause the saleof, and the Parent wishes to cause certain of its Subsidiaries to purchase, the outstanding sharesor quotas, as the case may be (collectively the “Foreign Subsidiary Shares”, and suchtransactions are the “Share Purchases”), of the foreign subsidiaries identified on Schedule1.3 hereto (the “Foreign Subsidiaries”), each Share Purchase to be consummated on the termsand conditions set forth in this Agreement and the applicable form of Share Purchase Agreement,which forms are attached hereto as Exhibits A-F (the “Share Purchase Agreements”); and     WHEREAS, the respective Boards of Directors of the Parent, Merger Sub and the Company haveeach determined that it is advisable and in the best interests of their respective companies andequity holders to consummate, and have approved, the business combination transaction provided forherein in which, following the consummation of the Share Purchases contemplated by the precedingWHEREAS clause, the Merger Sub would merge with and into the Company and the Company would be thesurviving corporation (the “Merger”); and the Shareholder, as the sole shareholder of theCompany, has approved the Merger.     NOW, THEREFORE, in consideration of the mutual promises, covenants, representations andwarranties made herein and of the mutual benefits to be derived herefrom, the receipt andsufficiency of which is hereby acknowledged, the parties hereto agree as follows:     1. The Share Purchases.     1.1Sale and Purchase of the Foreign Subsidiary Shares. Subject to the terms andconditions of this Agreement and the Share Purchase Agreements, the Shareholder and Company willsell or cause the sale of, and the Parent will purchase or cause the purchase of, the applicableForeign Subsidiary Shares to the applicable Subsidiary of Parent as set forth on Schedule 1.3.     1.2Share Purchase Closing. Unless this Agreement shall have been terminated and thetransactions herein contemplated shall have been abandoned pursuant to Section 13.4, and subject tothe satisfaction or waiver (where applicable) of the conditions set forth in Section 9, the closingof the Share Purchases (the “Share Purchase Closing”) will take place at the offices ofDebevoise & Plimpton LLP, 919 Third Avenue, New York, New York 10022 at 10:00 a.m.,New York time, on December 15, 2005, or, if the conditions set forth in Section 9 have not been
 

 
satisfied or waived on such date, three Business Days after the satisfaction or waiver of suchconditions (the “Share Purchase Closing Date”), provided that the Share PurchaseClosings with respect to (i) the sale of Columbian Chemicals Brasil Ltda. shall take placeat the offices of Pinheiro Neto Advogados, Rua Boa Vista, 254, 9° Andar, São Paolo, Brazil01014-907 at the equivalent São Paolo, Brazil time, (ii) the sale of Columbian CarbonEuropa S.R.L. shall take place at the offices of Norton Rose, Via di Parione 12, 00186 Rome, Italy,at the equivalent Rome, Italy time, (iii) the sale of Columbian Chemicals Europa GmbH andcertain shares of Columbian Carbon Deutschland GmbH shall take place at the offices of Debevoise &Plimpton LLP, Taubenstrasse 7-9, 60313 Frankfurt am Main, Germany, at the equivalent Frankfurt,Germany time, and (iv) the sale of Columbian Tiszai Carbon, LLC shall take place at theoffices of Szecskay Ugyvedi Iroda, Kossuth ter 16-17., H-1055, Budapest Hungary, at the equivalentBudapest, Hungary time. At the Share Purchase Closing, except as otherwise provided in theapplicable Share Purchase Agreement:     (a) the Company will deliver, or cause to be delivered, to the relevant acquisitionentity of the Parent certificates representing the Foreign Subsidiary Shares, endorsed inblank or accompanied by stock powers in favor of the applicable Subsidiary of Parent,accompanied by all requisite stock transfer stamps;     (b) the Parent will deliver, or cause to be delivered, the Foreign Subsidiary PurchasePrices for the Foreign Subsidiary Shares to the applicable Subsidiary of the Company by wiretransfer of immediately available funds to a previously designated account of the Company orthe relevant Subsidiary of the Company; and     (c) each of the parties hereto will deliver all other instruments, agreements,certificates and documents required to be delivered by such party on or prior to the SharePurchase Closing Date pursuant to this Agreement and the relevant Share Purchase Agreement.     1.3Purchase Prices for Foreign Subsidiary Shares. The aggregate purchase price for theForeign Subsidiary Shares shall be an amount equal to $358,340,000 in cash, which reflects the sumof the purchase prices for the Foreign Subsidiaries as set forth in Schedule 1.3 (the “ForeignSubsidiary Purchase Prices”), subject to adjustment pursuant to Section 4.     2. The Merger.     2.1The Merger. Following the consummation of the Share Purchases, upon the terms andsubject to the conditions of this Agreement, the Merger Sub shall be merged with and into theCompany and the separate existence of the Merger Sub shall thereupon cease. The Company shall bethe surviving corporation in the Merger (the “Surviving Corporation”). As a result of theMerger, the outstanding shares of capital stock of the Merger Sub and the Company shall beconverted or cancelled in the manner provided in Section 3.     2.2Merger Closing. Following the consummation of the Share Purchases, and subject tothe satisfaction or waiver (where applicable) of the conditions set forth in Section 10, theclosing of the Merger (the “Merger Closing”) will take place at the offices of Debevoise &Plimpton LLP, 919 Third Avenue, New York, New York 10022 at 2:00 p.m., New York time, on
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the Share Purchase Closing Date or, if the parties shall have so agreed in writing, the first BusinessDay following the Share Purchase Closing Date (the “Merger Closing Date”). At the MergerClosing:     (a) the Parent will deliver, or cause to be delivered, the Merger Consideration to theShareholder by wire transfer of immediately available funds to a previously designatedaccount of the Shareholder; and     (b) each of the parties hereto will deliver all other instruments, agreements,certificates and documents required to be delivered by such party on or prior to the MergerClosing Date pursuant to this Agreement.     2.3Merger Consideration. The “Merger Consideration” for the Company and theRemaining Subsidiaries shall be an amount equal to $184,610,000 in cash, subject to adjustmentpursuant to Section 4.     2.4Effective Time. At the Merger Closing, the Company and the Merger Sub shall file acertificate of merger as contemplated by the DGCL (the “Certificate of Merger”), togetherwith any required related certificates, with the Secretary of State of the State of Delaware (the“Secretary of State”), in such form as required by, and executed in accordance with,Section 251(c) of the DGCL. The Merger shall become effective at such time as the Certificate ofMerger is duly filed with such Secretary of State on the Merger Closing Date, or at such later timeas Parent and the Company shall agree and specify in the Certificate of Merger. As used herein,the “Effective Time” shall mean the time on the Merger Closing Date at which the Mergershall become effective.     2.5 Certificate of Incorporation and Bylaws of the Surviving Corporation. At theEffective Time, (i) the Certificate of Incorporation of the Company as in effectimmediately prior to the Effective Time shall be the Certificate of Incorporation of the SurvivingCorporation until thereafter amended as provided by law and such Certificate of Incorporation, and(ii) the Bylaws of the Company as in effect immediately prior to the Effective Time shallbe the Bylaws of the Surviving Corporation until thereafter amended as provided by law, theCertificate of Incorporation of the Surviving Corporation or such Bylaws.     2.6 Directors and Officers of the Surviving Corporation. The directors of the MergerSub and the officers of the Company immediately prior to the Effective Time shall, from and afterthe Effective Time, be the directors and officers, respectively, of the Surviving Corporation untiltheir successors shall have been duly elected or appointed and qualified or until their earlierdeath, resignation or removal in accordance with the Surviving Corporation’s Certificate ofIncorporation and Bylaws.     2.7 Effects of the Merger. At the Effective Time, the effect of the Merger shall beas provided in this Agreement, the Certificate of Merger and the applicable provisions of the DGCL.Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, allthe property, rights, privileges, powers and franchises of the Company and the MergerSub shall vest in the Surviving Corporation, and all debts, liabilities and duties of theCompany and the Merger Sub shall become the debts, liabilities and duties of the SurvivingCorporation.
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     3. Conversion of Shares in the Merger.     3.1 Conversion of Capital Stock. At the Effective Time, by virtue of the Merger andwithout any action on the part of the holder thereof:     (a) Capital Stock of the Merger Sub. Each issued and outstanding share of thecommon stock, par value $0.01 per share, of the Merger Sub (the “Merger Sub Stock”)will be converted into and become one fully paid and nonassessable share of common stock,par value $1.00 per share, of the Surviving Corporation (the “Surviving CorporationStock”). Each certificate representing outstanding shares of the Merger Sub Stock shallat the Effective Time represent an equal number of shares of Surviving Corporation Stock.     (b) Cancellation of Certain Shares of Company Common Stock. All shares ofcommon stock of the Company, par value $1.00 per share, that are owned by the Company astreasury stock shall be canceled and retired and shall cease to exist, and no cash or otherconsideration shall be delivered in exchange therefor.     (c) Conversion of the Shares. Each of the Shares shall no longer beoutstanding and shall automatically be cancelled and retired and shall cease to exist, andeach holder of a certificate that immediately prior to the Effective Time represented theShares shall thereafter cease to have any rights with respect thereto, except for the rightto receive the Merger Consideration with respect to the Shares formerly represented thereby.     3.2 Waiver of Appraisal Rights. The Shareholder hereby acknowledges that it has votedthe Shares in favor of the Merger and has irrevocably waived, and will not seek to assert, anyright to an appraisal of the Shares under the DGCL.     4. Adjustments to Foreign Subsidiary Purchase Prices and Merger Consideration.     4.1 Procedurefor Determining Adjustments to each Foreign Subsidiary Purchase Price and the Merger Consideration.For the purpose of determining adjustments, if any, to each Foreign Subsidiary Purchase Price andthe Merger Consideration, within 90 days following, in the case of Foreign Subsidiary PurchasePrice adjustments, the Share Purchase Closing, and in the case of Merger Consideration adjustments,the Merger Closing, the Parent will deliver to the Shareholder: (i) a balance sheet ofeach Foreign Subsidiary and a consolidated balance sheet of the Company and the RemainingSubsidiaries as of the close of business on the Share Purchase Closing Date or Merger Closing Date,as applicable (each, a “Closing Balance Sheet”), each of which shall present fairly, in allmaterial respects, the consolidated financial condition of the Persons subject thereof and beprepared (x) in accordance with GAAP, as applied in the preparation of the 2004 BalanceSheet (including the adjustments for GAAP presentation set forth in Schedule 4.1), and (y)using the line items set forth in the form of Closing Balance Sheetset forth in Schedule 4.1, and (ii) in the case of each Foreign Subsidiary PurchasePrice adjustment, a statement showing the calculation of final Working Capital for the applicableForeign Subsidiary (each a “Foreign Subsidiary Final Working Capital”), and in the case of the
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Merger Consideration adjustment, a statement showing the calculation of final Working Capitalfor the Company and the Remaining Subsidiaries (the “Company Final Working Capital”) (eacha “Closing Statement”) and (iii) customary Company management representationletters addressed to the Shareholder.     (a) During the 30-day period following the Shareholder’s receipt of each ClosingBalance Sheet and each Closing Statement, the Shareholder shall be given full access to theworking papers of the Parent and the Company Group and their respective independent auditorsas well as to the personnel, properties, books, records, schedules, analyses and workingpapers of the Company Group involved in or relating to the preparation of each ClosingBalance Sheet and each Closing Statement. Each Closing Balance Sheet and each ClosingStatement shall become final and binding upon the parties on the 31st day following theShareholder’s receipt thereof unless the Shareholder gives written notice of itsdisagreement with any such Closing Balance Sheet and any such Closing Statement (the“Notice of Disagreement”) to the Parent prior to such date. The Notice ofDisagreement shall specify in reasonable detail the nature of any such disagreement. If aNotice of Disagreement is received by the Parent in a timely manner, then each disputedClosing Balance Sheet and Closing Statement (each as revised in accordance with clause (x)or (y) below) shall become final and binding upon the parties upon the earlier of(x) the date on which the Shareholder and the Parent resolve in writing anyapplicable differences they have with respect to the matters specified in the Notice ofDisagreement and (y) the date on which any applicable disputed matters are finallyresolved in writing by the Accounting Firm.     (b) During the 30-day period following the delivery of a Notice of Disagreement incompliance with clause (a) above, the Shareholder and the Parent shall seek in goodfaith to resolve any differences they may have with respect to the matters specified in theNotice of Disagreement. During such period, each of the Parent and its independent auditorsand the Shareholder and its independent auditors shall have full access to the other’sworking papers and to the personnel, properties, books, records, schedules, analyses andworking papers of the Shareholder relating to the preparation of the Notice of Disagreement.If, at the end of such 30-day period, the Shareholder and the Parent shall not haveresolved such differences, the Shareholder and the Parent shall submit to the nationaloffice of Deloitte & Touche LLP or, if such firm is unwilling or unable to serve, thenational office of any other “big four” accounting firm selected by the Parent that has nomaterial relationship with the Parent, the Shareholder or their respective Affiliates (the“Accounting Firm”) for review and resolution of any and all matters that remain indispute and that were properly included in the Notice of Disagreement. The Shareholder andthe Parent shall use their respective commercially reasonable efforts to cause theAccounting Firm to render a decision resolving the matters in dispute within 30 daysfollowing the submission of such matters to the Accounting Firm. The Shareholder and theParent agree that judgment may be entered upon the determination of the Accounting Firm inany court having jurisdiction over the partyagainst which such determination is to be enforced. The cost of any review andresolution (including the fees and expenses of the Accounting Firm and reasonable fees andexpenses of legal counsel of the parties) pursuant to this Section 4.1(b) shall be borne bythe Shareholder and the Parent in inverse proportion as they may prevail on matters
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resolvedby the Accounting Firm, which inverse proportionate allocations shall also be determined bythe Accounting Firm at the time the determination of the Accounting Firm is rendered on themerits of the matters submitted.     4.2 Foreign Subsidiary Purchase Price and Merger Consideration Adjustment. As soon aspracticable after each Foreign Subsidiary Final Working Capital and the Company Final WorkingCapital have been determined pursuant to Section 4.1 (but in any event within three Business Daysafter each such determination), the Parent, if any applicable Foreign Subsidiary Final WorkingCapital or the Company Final Working Capital, as the case may be, exceeds the applicable ForeignSubsidiary Target Working Capital or the Company Target Working Capital, respectively, or theShareholder, if any applicable Foreign Subsidiary Final Working Capital or the Company FinalWorking Capital, as the case may be, is less than the applicable Foreign Subsidiary Target WorkingCapital or the Company Target Working Capital, respectively, shall deliver to such other party, bywire transfer of immediately available funds to the account specified by the recipient, an amountequal to the sum of (i) the amount of each such excess *plus*(ii) interest on thenet amount of such excess from the applicable Closing Date through but excluding the date on whichsuch net amount is paid at a rate per annum equal to the average over such period of the Federalfunds discount rate as published in The Wall Street Journal. Notwithstanding the foregoing, withthe consent of the parties, not to be unreasonably withheld, all such adjustments shall beaggregated such that one party shall make a single aggregated payment to the other party.     5. Representations and Warranties of the Shareholder and the Company. Except as setforth in the Schedules hereto, the Shareholder and the Company, jointly and severally, representand warrant to the Parent and Merger Sub as follows:     5.1 Corporate Status and Authority. The Shareholder is a corporation dulyincorporated, validly existing and in good standing under the laws of the State of New York and hasthe corporate power and authority to own the Shares and to execute and deliver this Agreement andperform its obligations hereunder. The execution, delivery and performance of this Agreement havebeen duly authorized by the Board of Directors of the Shareholder, which approval constitutes allnecessary corporate action on the part of the Shareholder for such authorization. This Agreementhas been duly executed and delivered by the Shareholder and constitutes the valid and bindingobligation of the Shareholder, enforceable against the Shareholder in accordance with its terms,except as such enforceability may be limited by applicable bankruptcy, reorganization, insolvency,fraudulent conveyance, moratorium, receivership or similar laws affecting creditors’ rightsgenerally and by general principles of equity (whether considered at law or in equity).     5.2 No Conflicts, Consents and Approvals.     (a) Except as set forth in Schedule 5.2(a), neither the execution, delivery or performance ofthis Agreement by the Shareholder or the Company nor the consummation of thetransactions contemplated hereby will result in (i) any conflict with the certificateof incorporation or by-laws of the Shareholder or any member of the Company Group, (ii)subject to obtaining the consents, approvals and authorizations and making the filings referred toin Section 5.2(b), any breach or violation of or default under any applicable statute, regulation,
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judgment, order or decree of any Governmental Authority or any mortgage, agreement, indenture orany other instrument to which the Shareholder or any member of the Company Group is a party or bywhich any of them or their respective properties or assets are bound, (iii) any Personbeing granted (with or without notice of lapse of time or both) any right of termination,cancellation, acceleration or modification in or with respect to, any Contract or other agreementto which the Shareholder or any member of the Company Group is a party or by which any of them ortheir respective properties or assets are bound, or (iv) the creation or imposition of anyliens, security interests, adverse claims, charges or encumbrances (collectively, “Liens”)on the Shares or the assets of any member of the Company Group, except for Permitted Liens, except,in the case of clauses (ii) and (iii), as would not reasonably be expected,individually or in the aggregate, to have a Material Adverse Effect.     (b) Except as set forth in Schedule 5.2(b) and for filings, consents or approvals that arerequired with respect to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the“HSR Act”), the execution and delivery of this Agreement and the consummation of thetransactions contemplated hereby will not require the Shareholder or any member of the CompanyGroup to obtain any material consent, approval or authorization of or make any filing with anyGovernmental Authority or any other Person.     5.3 Corporate Status of the Company; Authority.     (a) The Company has all requisite corporate power and authority to conduct its business and toown or lease its properties, as now conducted, owned or leased. The Company is duly qualified and,where such concept is recognized, is in good standing as a foreign corporation duly authorized todo business in all jurisdictions, in each case, in all material respects. The Company does nothave any equity interest or investment in any Person other than as set forth in Schedule 5.3 orSchedule 5.5.     (b) The Company is a corporation duly incorporated, validly existing and in good standingunder the laws of the State of Delaware and has the corporate power and authority to execute anddeliver this Agreement and perform its obligations hereunder. The execution, delivery andperformance of this Agreement have been duly authorized by the Board of Directors of the Company,which approvals constitute all necessary corporate action on the part of the Company for suchauthorization. This Agreement has been duly executed and delivered by the Company and constitutesthe valid and binding obligation of the Company, enforceable against the Company in accordance withits terms, except as such enforceability may be limited by applicable bankruptcy, reorganization,insolvency, fraudulent conveyance, moratorium, receivership or similar laws affecting creditors’rights generally and by general principles of equity (whether considered at law or in equity).     5.4 The Shares. The authorized, issued and outstanding capital stock of the Companyconsists solely of the Shares. The Shares are owned by the Shareholder, free and clear of allLiens other than Permitted Liens. The Shares have been duly authorized and validly issued andare fully paid and non-assessable. There are no outstanding options, warrants, conversion orpreemptive or other rights or agreements of any kind (other than this Agreement) for the purchaseor acquisition from, or the sale or issuance by, the Shareholder or the Company of any
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shares ofcapital stock, or any securities that are convertible into or exchangeable for shares of capitalstock, of the Company, and no authorization therefor has been given.     5.5 Subsidiaries. Schedule 5.5 sets forth a complete and correct list of theSubsidiaries of the Company. Where such concept is recognized, each Subsidiary of the Company isin good standing under the laws of the jurisdiction of its organization. Schedule 5.5 sets forththe number of issued and outstanding shares or quotas of each such Subsidiary and the Personsowning such issued and outstanding shares or quotas. Such issued and outstanding shares or quotasare owned, directly or indirectly, by the Company, free and clear of all Liens other than PermittedLiens. Except as set forth in Schedule 5.5, there are no outstanding options, warrants, conversionor preemptive or other rights or agreements of any kind for the purchase or acquisition from, orthe sale or issuance by, any Subsidiary of the Company of any shares of capital stock or quotas ofsuch Subsidiary, and no authorization therefor has been given.     5.6 Financial Statements. The Company has delivered to the Parent: (i)(a) audited consolidated statements of operations, changes in shareholder’s equity and cashflows of the Company for the fiscal years ended December 31, 2002, 2003 and 2004 and (b)audited consolidated balance sheets of the Company as at such dates (collectively, the “AuditedFinancial Statements” and the audited consolidated balance sheet as at December 31, 2004, the“2004 Balance Sheet”) and (ii) (a) unaudited interim consolidatedstatements of operations, changes in shareholder’s equity and cash flows for the six months endedJune 30, 2005 and (b) an unaudited interim consolidated balance sheet as at such date(collectively, the “Interim Financial Statements” and, together with the Audited FinancialStatements, the “Financial Statements”). Except as set forth in Schedule 5.6, theFinancial Statements have been prepared in accordance with United States generally acceptedaccounting principles (“GAAP”) applied on a consistent basis throughout the periodsindicated and present fairly in all material respects the financial condition of the Company on aconsolidated basis as at the respective dates indicated and the results of operations and cashflows of the Company on a consolidated basis for the respective periods indicated, except asotherwise noted therein and subject, in the case of the Interim Financial Statements, to theabsence of certain footnotes.     5.7 Absence of Undisclosed Liabilities. Except for Liabilities and obligations(i) reflected or reserved against in the Financial Statements, (ii) reflected inthe Schedules hereto, or (iii) incurred in the ordinary course of business since December31, 2004, the Company has no material undisclosed Liabilities.     5.8 Assets and Properties. Schedule 5.8 lists all material items of real propertyowned by the members of the Company Group (the “Owned Real Property”) and all materialitems of real property leased by the members of the Company Group (the “Leased RealProperty”), in each case, as of the date hereof. Except as set forth in Schedule 5.8, theapplicable member of the Company Group has (a) legal and beneficial ownership of each itemof Owned Real Property and (b) a valid leasehold estate in each item of Leased RealProperty, in each case free and clear of all Liens other than Permitted Liens. Except as would notreasonably be expected,individually or in the aggregate, to have a Material Adverse Effect, the applicable member ofthe Company Group has legal and beneficial ownership of, or valid leasehold interests in, all ofthe tangible personal property and assets that are reasonably necessary for the continued conductof the business of the Company Group, taken as a whole, as currently conducted, in each case free
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and clear of any Liens other than Permitted Liens. This Section 5.8 does not relate tocontractual, intellectual property or insurance assets and properties, which are addressed solelyin Sections 5.9, 5.11 and 5.16, respectively.     5.9 Contracts. Schedule 5.9 lists all Contracts. For purposes of this Agreement,“Contracts” means all written agreements, contracts and commitments of the following typesto which any member of the Company Group is a party as of the date hereof (other than real propertyleases, labor or employment-related agreements, intellectual property licenses, insurance policiesand affiliate transactions, which are addressed solely in Sections 5.8, 5.10, 5.11, 5.16 and 5.20,respectively): (a) joint venture and limited partnership agreements, (b)mortgages, indentures, loan or credit agreements, security agreements and other agreements andinstruments relating to the borrowing of money or extension of credit in any case in excess of$1,000,000 per calendar year, (c) distribution, marketing, purchasing, energy or supplyagreements involving in excess of $1,000,000 of product, raw materials or other items per calendaryear, (d) other agreements, contracts and commitments that are not cancelable by any memberof the Company Group on less than 120 days’ notice and that require payment by any member of theCompany Group after the date hereof of more than $1,000,000 per calendar year, and (e)contracts prohibiting or restricting in any material respect the ability of the Company to operatein any geographic area. Except as set forth in Schedule 5.9, to the knowledge of the Shareholderand the Company, (x) the applicable member of the Company Group is in compliance with itsobligations under the Contracts and (y) each of the Contracts is in full force and effect,valid and binding and enforceable against the applicable member of the Company Group in accordancewith their respective terms, except, in the case of clauses (x) and (y), as would not reasonably beexpected, individually or in the aggregate, to have a Material Adverse Effect. None of theContracts require the Company to make any capital expenditure in excess of $1,000,000 per annum,other than in the ordinary course of business, consistent with past practice, after the Closings.Except as set forth in Schedule 5.9, there are no oral agreements or understandings that arematerial to the results of operation or financial condition of the Company.     5.10 Employment Agreements and Benefits.          5.10.1 Employment Agreements and Plans. Schedule 5.10.1 lists all (a)material employment and consulting agreements (including severance, retention and change ofcontrol agreements) to which any member of the Company Group is a party, other thanagreements that by their terms may be terminated or canceled by any member of the CompanyGroup with notice of not more than the greater of 60 days and the period of notice requiredunder applicable law, in each case, without penalty or payment obligation, (b)collective bargaining agreements with any labor unions currently representing employees ofany member of the Company Group, and (c) material “employee benefit plans,” asdefined in section 3(3) of ERISA (whether or not subject to ERISA), profit sharing, pension,retirement, termination indemnity, early retirementbridge benefit or similar post-employment or post-retirement benefits, bonus, incentivecompensation, stock option, restricted stock, equity-based, phantom equity, deferredcompensation or other material fringe benefit plans, programs and arrangements under which(i) any Company Employee or Former Employee (in each case, including anybeneficiaries and dependants thereof) is or may become eligible to participate or derive abenefit and that is or has been maintained, established or contributed to by theShareholder, any member of the Company
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Group, or any trade or business, whether or notincorporated that, together with any member of the Company Group, is, or would have been atany date of determination occurring within the preceding six years, treated as a singleemployer under section 414 of the Code for the benefit of Company Employees and FormerEmployees, or (ii) any member of the Company Group may have any material liability(collectively, items described in this clause (c), the “Plans”). Schedule 5.10.1shall indicate those Plans that are or, as of the Closing Date, will be sponsored ormaintained by any member of the Company Group (each such Plan, a “Stand-AlonePlan”), and shall indicate those Plans that are or, as of the Closing Date, will besponsored or maintained by any member of the Company Group the domicile of which is anon-U.S. jurisdiction. With respect to each Plan and each other arrangement included onSchedule 5.10.1, the Shareholder has heretofore made available to the Parent a complete andcorrect copy of the Plan or other operative document and any amendments thereto, and withrespect to each Plan subject to ERISA, each of the following documents, as applicable:(i) a copy of the most recent Summary Plan Description and all materialmodifications and (ii) with respect to each Stand-Alone Plan, (A) a copy ofthe trust or other funding agreement and any amendments thereto, (B) a copy of themost recent annual report, (C) a copy of the most recent actuarial report, and(D) the most recent determination letter from the IRS with respect to each Plan thatis intended to be qualified under section 401 of the Code and all notices of reportableevents received following receipt of such letter.          5.10.2 ERISA; Employee Benefit Matters. Except as set forth in Schedule5.10.2(a), no Plan (other than a “multiemployer plan” as defined in section 3(37) of ERISA)that is subject to section 302 of ERISA or section 412 of the Code has incurred an“accumulated funding deficiency” within the meaning of section 302 of ERISA or section 412of the Code that remains unsatisfied on the date hereof. None of the Plans is a“multiemployer plan” as defined in Section 3(37) of ERISA. There are no outstandingliabilities under Title IV of ERISA with respect to which any member of the Company Groupwould reasonably be expected to have any material liability, and no such liabilities wouldreasonably be expected to arise as a result or in connection with the transactionscontemplated by this Agreement. Except as set forth on Schedule 5.10.2(b), none of theStand-Alone Plans has any material unfunded liabilities that are not reflected on the booksand records of a member of the Company Group. No material disputes or claims (other thanroutine claims for benefits in the ordinary course) are pending or, to the Shareholder’sknowledge, threatened with respect to any Plan. No material audits, inquiries, reviews,proceedings, claims or demands are pending with any Governmental Authority with respect toany Plan. Except as set forth on Schedule 5.10.2(c), no Plan or other arrangement,individually or collectively, provides for any payment by the Company Group to any employeethereof that is an “excess parachute payment” pursuantto Section 280G of the Code if paid as a result of or in connection with thetransactions contemplated by this Agreement. No member of the Company Group has incurredany material liability for any tax or penalty imposed by section 4975 of the Code or section502(i) of ERISA relating to any Plan. Except as set forth in Schedule 5.10.2(d),(i) all material contributions and other payments required under ERISA, the Code orother applicable law to have been made by the applicable member of the Company Group to eachPlan have been timely made, (ii) all Plans are in compliance in all materialrespects with all applicable laws and have been administered in accordance with their terms,and (iii) with respect to each Plan that is subject to or governed by laws of anyjurisdiction other than the United States, all material amounts required to be reserved onaccount of each such Plan have been so reserved in accordance with reasonable accounting
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practices prevailing in the country where such Plan is established. Except as set forth onSchedule 5.10.2(e), each Plan that provides post-retirement welfare coverage (other than anycoverage required to be provided by applicable law or by any collective bargaining agreementor related document to which any member of the Company Group is party) may be amended,modified or terminated on and after the Share Purchase Closing Date or Merger Closing Date,as applicable, without material liability to any member of the Company Group (other than thepayment of benefits incurred in the ordinary course prior to the date of such amendment,modification or termination).          5.10.3 Tax Qualification. Except as set forth in Schedule 5.10.3, (i)each Plan intended to be qualified under section 401(a) of the Code has received a favorabledetermination letter from the IRS as to its qualification under the Code and to the effectthat each such trust is exempt from taxation under section 501(a) of the Code, and, to theknowledge of the Shareholder and the Company, nothing has occurred since the date of suchdetermination letter that will adversely affect such qualification or tax-exempt status, and(ii) each other Plan intended to qualify for favorable tax treatment under the lawsof any other jurisdiction have received all approvals or determinations necessary to obtainsuch favorable tax treatment and, to the knowledge of the Shareholder and the Company,nothing has occurred that will adversely affect the tax status of any such Plan. To theknowledge of the Shareholder and the Company, the Plan established pursuant to Section8.1.12 meets all requirements for qualification for favorable tax treatment under Section401(a) of the Code.          5.10.4 Labor Matters. Except as set forth in Schedule 5.10.4, since January 1,2004, there have been no material strikes, work stoppages, slowdowns, lockouts or grievancesor other labor disputes pending or, to the knowledge of the Shareholder and the Company,threatened against any member of the Company Group. Except as set forth in Schedule 5.10.4,each member of the Company Group is in compliance with all applicable labor, employment,occupational safety and other similar laws except where the failure to so comply would notreasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.     5.11 Intellectual Property.     (a) Schedule 5.11(a) lists, as of the date hereof: (i) all material patents andapplications therefor, trademarks and service marks and registrations and applications therefor,registered copyrights and trade names (collectively, “Intellectual Property”) owned by anymember of the Company Group (“Owned Intellectual Property”) and (ii) all agreementsgranting material rights in Intellectual Property (“Licenses”) to any member of the CompanyGroup (other than from any other member of the Company Group) (“Company Licenses” and,together with Owned Intellectual Property, “Company Intellectual Property”).     (b) Except as set forth in Schedule 5.11(b), (i) members of the Company Group are theowners of, or have the right under the Company Licenses to use, the Company Intellectual Propertylisted in Schedule 5.11(a), free and clear of all Liens other than Permitted Liens, and(ii) there are no Licenses by any member of the Company Group granting to any third party(other than any other member of the Company Group or their joint venture partners) exclusive rightsin the Company Intellectual Property listed in Schedule 5.11(a).
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     (c) Except as set forth in Schedule 5.11(c), since October 15, 2003, no member of the CompanyGroup has received any written notice or claim that it is infringing on or otherwise violating therights of any Person in respect of the trademarks, registered copyrights, trade names, servicemarks or patents of such Person and, to the knowledge of the Shareholder and the Company, there hasbeen no infringement by any Person of the Company Intellectual Property, in each case.     5.12 Governmental Authorizations; Compliance with Law. Except as set forth inSchedule 5.12, the applicable members of the Company Group hold all material licenses, permits andother governmental authorizations necessary to conduct the business of the Company Group, taken asa whole, as currently conducted, and no member of the Company Group has received any written noticeof any violation of any statute, rule, regulation, judgment, order, decree, permit, concession,franchise, or other governmental authorization or approval applicable to it or to any of itsproperties, except for violations that would not reasonably be expected, individually or in theaggregate, to have a Material Adverse Effect. This Section 5.12 does not relate to employeebenefits, Tax or environmental matters, which are addressed solely in Sections 5.10, 5.14 and 5.17,respectively.     5.13 Litigation. Except as set forth in Schedule 5.13, there are no Actions orProceedings pending or, to the knowledge of the Shareholder and the Company, threatened, againstany member of the Company Group that (i) would reasonably be expected to result in theissuance of an order restraining, enjoining or otherwise prohibiting or making illegal theconsummation of any of the transactions contemplated by this Agreement or (ii) wouldreasonably be expected to result in (a) any injunction or other equitable relief againstany member of the Company Group that would interfere in any material respect with the business oroperations of the Company Group, taken as a whole, as currently conducted or (b) anyDamages that would be reasonably expected, individually or in the aggregate, to have a MaterialAdverse Effect.     5.14 Taxes. Except as set forth in Schedule 5.14, (a) all Tax Returnsrequired to be filed by or with respect to each member of the Company Group on or prior to theShare Purchase Closing Date with respect to the Foreign Subsidiaries and on or prior to the MergerClosing Date with respect to the Company and the Remaining Subsidiaries have been filed (or willhave been filed prior to the Share Purchase Closing Date or the Merger Closing Date, asapplicable), (b) no written claim for assessment or collection of Taxes with respect to thebusiness or assets of any member of the Company Group is being asserted against the Shareholder orany member of the Company Group, other than such claims that have been reserved against in theFinancial Statements or fully resolved or settled, and (c) there are no tax allocation ortax sharing agreements between any member of the Company Group, on the one hand, and theShareholder or any of its Affiliates (other than any member of the Company Group), on the otherhand, that will be binding on the Parent or any member of the Company Group after the SharePurchase Closing Date or the Merger Closing Date, as applicable. Except as set forth in Schedule5.14 or as reflected or reserved against in the Financial Statements, and except for Taxes thepayment of which, or failure thereof to be paid, would not reasonably be expected, individually orin the aggregate, to have a Material Adverse Effect, all Taxes shown as due on or before the SharePurchase Closing Date with respect to the Foreign Subsidiaries and on or prior to the MergerClosing Date with respect to the Company and the Remaining Subsidiaries on such Tax Returns
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havebeen paid (or will have been paid prior to the Share Purchase Closing Date or the Merger ClosingDate, as applicable). Except as set forth in Schedule 5.14, no member of the Company Group is orsince December 31, 1987 has been a “distributing corporation” or a “controlled corporation” withinthe meaning of Code section 355. Except as set forth in Schedule 5.14, no member of the CompanyGroup is required to include in income any adjustment pursuant to Code section 481(a) by reason ofa voluntary change in accounting method initiated by the Company (or any Subsidiary). Except asset forth in Schedule 5.14, no member of the Company Group has engaged in any reportabletransactions that were required to be disclosed pursuant to Treasury Regulation section 1.6011-4.Except as set forth in Schedule 5.14, Schedule 5.14 also accurately and completely identifies thereversals of deferred tax accounts relating to depreciation or amortization of property of themembers of the Company Group listed therein.     5.15 Absence of Changes. Since June 30, 2005, except as otherwise contemplated bythis Agreement or in Schedule 5.15, the business of the Company Group taken as a whole has beenconducted in the ordinary course in substantially the same manner in which it has been previouslyconducted, there has been no Material Adverse Effect, and no member of the Company Group has:     (a) issued, sold, granted, purchased or redeemed any shares of its capital stock or anysecurities convertible into or exchangeable for such shares of capital stock;     (b) incurred any material liabilities or obligations, except liabilities andobligations incurred in the ordinary course of business and advances from the Shareholder oranother member of the Company Group consistent with past practice;     (c) mortgaged, pledged or subjected to any Lien any of its properties or assets, exceptfor Permitted Liens;     (d) increased the compensation of any officer or employee, other than (i) asrequired by any agreement in effect on the date hereof, (ii) to comply withapplicable law or (iii) in the ordinary course of business;     (e) established, entered into or amended any Plan or other contract or arrangementapplicable to any Company Employee or Former Employee in a manner that increases actual orpotential costs to any member of the Company Group;     (f) disposed or agreed to dispose of any material properties or assets except in theordinary course of business;     (g) canceled or forgiven any material debts or claims except in the ordinary course ofbusiness; or     (h) entered into any written agreement or arrangement to do any of the foregoing.
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     5.16 Insurance. Schedule 5.16 sets forth a complete and correct list, as of the datehereof, of the material insurance policies currently maintained by the Shareholder and the CompanyGroup with respect to the business of the Company Group.     5.17 Environmental Matters. Except as set forth in Schedule 5.17:     (a) each member of the Company Group is in compliance and has at all times compliedwith all applicable Environmental Laws;     (b) each member of the Company Group has obtained, and is in compliance with, allpermits and authorizations required under applicable Environmental Laws and no Actions orProceedings are pending, or to the knowledge of the Shareholder or the Company, threatened,to revoke, terminate, cancel, appeal, challenge, amend or modify any such permits orauthorizations;     (c) none of the members of the Company Group has received from any GovernmentalAuthority any oral or written notice of violation, non-compliance, liability or potentialliability arising under any applicable Environmental Laws, other than matters that have beenfully corrected and resolved and that are no longer outstanding, including the payment ofany fines or penalties with respect thereto;     (d) no judicial proceeding or governmental or administrative action or other action ofany other Person is pending, or to the knowledge of the Shareholder or the Company,threatened under any applicable Environmental Law pursuant to which any member of theCompany Group has been named as a party;     (e) no member of the Company Group has (i) entered into any agreement with anyGovernmental Authority or any other Person pursuant to which any member of the Company Grouphas agreed to remediate any condition resulting from the release or threatened release ofHazardous Substances or (ii) assumed or retained anyenvironmental liability or investigatory, corrective or remedial obligation of anyother Person arising under contract or by operation of any Environmental Law;     (f) no member of the Company Group has any liability under Environmental Laws forreleasing Hazardous Substances at any property previously owned or leased by the CompanyGroup; and     (g) no member of the Company Group has (i) treated, stored, disposed, arranged orpermitted the disposal of, transported, handled or released any Hazardous Substance at orfrom any of their current properties or facilities in a manner that has given rise to anydamages or any investigatory, corrective or remedial obligation under any applicableEnvironmental Law, or (ii) been identified as a “Potentially Responsible Party” under CERCLAor any similar state law due to any of the foregoing activities or its ownership oroperation of any of the current properties or facilities.     Notwithstanding any of the representations and warranties contained elsewhere in thisAgreement, matters arising under Environmental Laws shall be governed exclusively by this Section5.17.
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     5.18 Accounts Receivable. Each of the accounts and notes receivable of the CompanyGroup to be reflected on the Closing Balance Sheet (i) shall have arisen from a bona fidesales transaction in the ordinary course of business and is payable on ordinary trade terms,(ii) to the knowledge of the Shareholder and the Company, will be the legal, valid andbinding obligation of the respective debtor, enforceable against such debtor in accordance with itsrespective terms, (iii) will not be subject to any valid set-off or counterclaim,(iv) will not represent an obligation for goods sold on consignment, on approval or on asale-or-return basis or subject to any other repurchase or return arrangement, (v) will becollectible within 180 days of its due date in the aggregate recorded amount thereof, net of anyapplicable reserve reflected in the Closing Balance Sheet, and (vi) will not be the subjectof any pending Actions or Proceedings brought by or on behalf of any member of the Company Group.Except as set forth on Schedule 5.18, there are no security arrangements or collateral securing therepayment or other satisfaction of receivables of the Company or any member of the Company Group.     5.19 Business Inventory; Customer List. As of the date hereof, (i) subject toreserves for quantities of obsolete, “off-spec”, and slow-moving inventory at levels customary withpast practice, the inventories of the Company Group are of usable and salable quality in theordinary course of business, and (ii) the Company Group has on hand such quantities of workin process and finished product as is reasonably required to timely fill current orders and tomaintain the manufacture and shipment of products at their normal levels. Schedule 5.19(a)contains a list of the 10 largest customers of the Company Group in each of the tire, mechanicalrubber goods and industrial blacks categories by revenue for the fiscal year ended December 31,2004 and sets forth next to each such customer the approximate percentage of net sales representedby such customer for the fiscal year ended December 31, 2004. Except as otherwise set forth onSchedule 5.19(b), none of the customers listed on Schedule 5.19(a) have ceased doing business withthe Company or any member of the Company Group, have materially diminished the amount of suchbusiness or have provided written or, to the knowledge of the Shareholder andthe Company, oral notice of an intention to cease or materially decrease such business, sinceJanuary 1, 2005.     5.20 Affiliate Transactions. Except as disclosed in Schedule 5.20, (i) thereare no written or material oral agreements, arrangements or understandings, between the Company orany member of the Company Group, on the one hand, and the Shareholder, any officer, director orAffiliate (other than any member of the Company Group) of the Shareholder, on the other hand, and(ii) no member of the Company Group provides or causes to be provided any assets, servicesor facilities to the Shareholder or any such officer, director or Affiliate. Except as disclosedin Schedule 5.20, each of the agreements, arrangements or understandings listed therein inaccordance with clause (i) above was entered into on an arm’s-length basis.     5.21 Brokers. All negotiations relating to this Agreement and the transactionscontemplated hereby have been carried out without the intervention of any Person acting on behalfof the Shareholder or any member of the Company Group in such manner as to give rise to any validclaim against the Parent or any member of the Company Group for any brokerage or finder’scommission, fee or similar compensation, except for Citigroup Global Markets, Inc., the fees ofwhich shall be paid by the Shareholder.
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     6. Representations and Warranties of the Parent and Merger Sub. The Parent and MergerSub, jointly and severally, represent and warrant to the Shareholder and the Company as follows:     6.1 Status and Authority.     (a) The Parent is a limited liability company duly organized, validly existing and in goodstanding under the laws of the State of Delaware and has the power and authority to execute anddeliver this Agreement and perform its obligations hereunder. The execution, delivery andperformance of this Agreement have been duly authorized by the managing member(s) of the Parent,which approval constitutes all necessary action on the part of the Parent for such authorization.This Agreement has been duly executed and delivered by the Parent and constitutes the valid andbinding obligation of the Parent, enforceable against the Parent in accordance with its terms,except as such enforceability may be limited by applicable bankruptcy, reorganization, insolvency,fraudulent conveyance, moratorium, receivership or similar laws affecting creditors’ rightsgenerally and by general principles of equity (whether considered at law or in equity).     (b) The Merger Sub is a corporation duly incorporated, validly existing and in good standingunder the laws of the State of Delaware and has the power and authority to execute and deliver thisAgreement and perform its obligations hereunder. The execution, delivery and performance of thisAgreement have been duly authorized by the board of directors of the Merger Sub, which approvalconstitutes all necessary action on the part of the Merger Sub for such authorization. ThisAgreement has been duly executed and delivered by the Merger Sub and constitutes the valid andbinding obligation of the Merger Sub, enforceable against the Merger Sub in accordance with itsterms, except as such enforceability may be limited by applicable bankruptcy, reorganization,insolvency, fraudulent conveyance, moratorium, receivership or similar laws affecting creditors’rights generally and by general principles of equity (whether considered at law or in equity).The Merger Sub was formed solely for the purpose of engaging in the transactions contemplated by this Agreement, has engaged in no otherbusiness activities and has conducted its operations only as contemplated hereby.     6.2 No Conflicts, Consents and Approvals.     (a) The execution, delivery and performance of this Agreement by the Parent and Merger Subwill not result in (i) any conflict with the limited liability company agreement,certificate of incorporation or by-laws of the Parent or Merger Sub, (ii) any breach orviolation of or default under any applicable statute, regulation, judgment, order or decree of anyGovernmental Authority or any mortgage, agreement, indenture or any other instrument to which theParent or Merger Sub is a party or by which the Parent, Merger Sub or any of their respectiveproperties or assets are bound, or (iii) the creation or imposition of any Lien, except, inthe case of clauses (ii) and (iii), where such breaches, violations or defaults and such Lienswould not reasonably be expected, individually or in the aggregate, to materially impair theability of the Parent or Merger Sub to perform their respective obligations under, or to consummatethe transactions contemplated by, this Agreement.
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     (b) Except as set forth in Schedule 6.2(b), no consent, approval or authorization of or filingwith any Governmental Authority or Person is required on the part of the Parent or Merger Sub inconnection with the execution and delivery of this Agreement or the consummation of thetransactions contemplated hereby, except filings, consents or approvals (i) that arerequired with respect to the HSR Act or (ii) others that, if not made or obtained, wouldnot reasonably be expected, individually or in the aggregate, to materially impair the ability ofthe Parent or Merger Sub to perform their respective obligations under, or to consummate thetransactions contemplated by, this Agreement.     6.3 Financial Ability to Perform. The Parent has received, and furnished to theShareholder and Company a copy of, the commitment letters set forth on Schedule 6.3 (the“Commitment Letters”) with respect to an amount of financing (the “FinancingAmount”) sufficient to pay the Foreign Subsidiary Purchase Prices and the Merger Considerationand all related fees and expenses. The Commitment Letters are valid and binding, in full force andeffect and enforceable against the Parent and its Affiliates and, to the knowledge of the Parent,the financing sources party thereto, and the Parent knows of no facts or circumstances that arereasonably likely to result in any of the conditions set forth in the Commitment Letters not beingsatisfied. The Commitment Letters constitute, and upon execution of definitive financingagreements providing for the Financing Amount (the “Definitive Financing Agreements”), theCommitment Letters and the Definitive Financing Agreements will constitute, the entire and completeagreement between the parties thereto with respect to the financing contemplated thereby.     6.4 Solvency. Immediately after giving effect to the transactions contemplated bythis Agreement, the Parent, Merger Sub and each member of the Company Group shall (i) beable to pay its debts as they become due, (ii) own property that has a fair saleable valuegreater than the amounts required to pay their respective debts (including a reasonable estimate ofthe amount of all contingent liabilities) and (iii) have adequate capital to carry on itsbusiness. No transfer of property is being made and no obligation is being incurred in connectionwith the transactions contemplated by this Agreement with the intent to hinder, delay or defraud eitherpresent or future creditors of the Parent, Merger Sub or of any member of the Company Group.     6.5 Litigation. There are no Actions or Proceedings pending or, to the knowledge ofthe Parent, threatened, against the Parent or Merger Sub that would reasonably be expected toresult in the issuance of an order restraining, enjoining or otherwise prohibiting or makingillegal the consummation of any of the transactions contemplated by this Agreement.     6.6 Purchase for Investment. The Parent and Merger Sub are acquiring the Shares andForeign Subsidiary Shares for investment and not with a view toward any resale or distributionthereof except in compliance with the Securities Act of 1933, as amended (the “SecuritiesAct”). The Parent and Merger Sub hereby acknowledge that the Shares and Foreign SubsidiaryShares have not been registered pursuant to the Securities Act and may not be transferred in theabsence of such registration or an exemption therefrom under the Securities Act. The Parent andMerger Sub have sufficient knowledge and experience in financial and business matters so as to becapable of evaluating the merits and risks of its investment in the Shares and Foreign SubsidiaryShares and is capable of bearing the economic risks of the transactions contemplated by thisAgreement.
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     6.7 Brokers. All negotiations relating to this Agreement and the transactionscontemplated hereby have been carried out without the intervention of any Person acting on behalfof the Parent or Merger Sub in such manner as to give rise to any valid claim against the Parent,Merger Sub, the Shareholder or any member of the Company Group for any brokerage or finder’scommission, fee or similar compensation.     6.8 Insurance. The Parent and Merger Sub acknowledge that, as of the Closing Date,the members of the Company Group will cease to be entitled to the benefit of insurance arrangementsthat, prior to the Closing Date, were extended to them as Subsidiaries of the Shareholder.     6.9 No Knowledge of Misrepresentations and Omissions. Other than as disclosed in thePhase I Environmental Site Assessments made available to Parent and its Affiliates in the onlinedata room established by the Shareholder in connection with the transactions contemplated by thisAgreement, the Parent and Merger Sub have no knowledge that any of the representations andwarranties of the Shareholder and the Company is not true and correct in all material respects;provided that, neither the Parent nor the Merger Sub shall be deemed to have any knowledgeof any misrepresentation or breach of any representation or warranty made by the Shareholder or theCompany in this Agreement based upon any information contained in such Phase I Environmental SiteAssessments.     6.10 Sevalco. It is the present intention of the Parent to cause Sevalco Ltd to beoperated in the ordinary course of business.     7. Certain Covenants.     7.1 Consents; Obligations of the Parties.     (a) Subject to the terms and conditions of this Agreement, each party shall use itscommercially reasonable efforts to cause each of the Closings to occur, including, withoutlimitation, (i) taking such actions as are contemplated by Section 7.1(b), (ii)obtaining all consents, approvals or actions of, making all filings with and giving all notices toGovernmental Authorities or any other Person required in connection with the consummation of thetransactions contemplated hereby, and (iii) defending against any Actions or Proceedingschallenging this Agreement or the consummation of the transactions contemplated hereby, includingseeking to have any temporary restraining order, preliminary injunction or other legal restraint orprohibition entered or imposed by any court or other Governmental Authority and that is not yetfinal and non-appealable to be vacated or reversed; provided that neither the Shareholder,the Company nor any of their respective Affiliates shall be required to make any material monetaryexpenditure, commence or be a plaintiff in any litigation or other proceeding or offer or grant anymaterial accommodation (financial or otherwise) to any Person.     (b) Each of the Shareholder and Parent or the appropriate Affiliate(s) of the Parent shallfile as promptly as practicable with the United States Federal Trade Commission (the “FTC”)and the United States Department of Justice (the “DOJ”), in each case pursuant to the HSRAct: (i) the notification and report form, if any, required for the transactionscontemplated hereby, which form shall be filed not later than 10 Business Days following theexecution and
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delivery of this Agreement, and (ii) any supplemental information requestedin connection therewith, which information shall be filed as promptly as practicable and in noevent later than five Business Days following the request therefor during the initial waitingperiod. Any such notification and report form and supplemental information shall be in substantialcompliance with the requirements of the HSR Act. The Shareholder, Company, Parent and Merger Subshall comply as promptly as practicable with any other laws of any country or the European Unionthat are applicable to any of the transactions contemplated hereby and pursuant to which anyconsent, approval or authorization of, or filing with, any Governmental Authority or any otherPerson in connection with such transactions is necessary.     (c) Each of the Shareholder, Company, Parent and Merger Sub shall furnish to the other partieshereto such necessary information and reasonable assistance as the other party may request inconnection with its preparation of any filing that is necessary under the HSR Act or any other law.The Shareholder, Company, Parent and Merger Sub shall keep each other apprised of the status ofany communications with, and any inquiries or requests for additional information from, the FTC andthe DOJ and any other Governmental Authority and shall comply promptly with any such inquiry orrequest. Each of the Shareholder, the Company, Parent and Merger Sub shall use its commerciallyreasonable efforts to obtain any clearance required under the HSR Act or any other consent,approval or authorization of any Governmental Authority necessary for the purchase and sale of theForeign Subsidiary Shares and the Merger; provided that with respect to any consent,approval or authorization of any Governmental Authority in Korea, the Parent and Merger Sub shalltake all actions necessary to obtain any such consent, approval or authorization, including withoutlimitation holding separate or divesting any businessor assets of any member of the Company Group or of the Parent or any of its Subsidiaries orAffiliates, including in response to a definitively required condition by the Korean Fair TradeCommission.     (d) The Parent shall use commercially reasonable efforts to obtain the financing contemplatedby Section 9.4.3, or alternative financing on substantially comparable or more favorable terms, aspromptly as practicable. For purposes of this Section 7.1(d), the “commercially reasonableefforts” of the Parent shall include acceptance of any changes in the terms and conditions of suchfinancing pursuant to any “market flex” provisions contained in the Commitment Letters or any otheragreement or understanding entered into by the Parent in connection therewith. The Parent shallnot, without the prior written consent of the Shareholder, such consent not to be unreasonablywithheld or delayed, amend, modify or supplement any provision of the Commitment Letters(including, without limitation, the conditions precedent therein); provided, that except asotherwise set forth in this Agreement nothing contained herein shall restrict the Parent in itsnegotiations, execution or delivery of the Definitive Financing Agreements.     7.2 Obligations of the Shareholder and Company.          7.2.1 Conduct of Business. From the date hereof until (i) with respectto the Foreign Subsidiaries, the Share Purchase Closing, and (ii) with respect tothe Company, the Merger Closing, except as set forth in the Schedules hereto, ascontemplated by this Agreement or as otherwise consented to by the Parent in writing, suchconsent not to be unreasonably
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withheld or delayed, the Shareholder shall cause, and theCompany shall and shall cause, each member of the Company Group to:     (a) carry on its business in the ordinary course in substantially the same manner inwhich it previously has been conducted and, to the extent consistent with such business, useits commercially reasonable efforts to preserve intact its present business organization andto preserve its relationships with customers, suppliers and others having business dealingswith it; provided, the Company may incur any (i) Bahia Project Expenditure,so long as such expenditure is consistent with the Company’s estimates of expendituresreflected in Schedule 7.2.1(a)(i) and (ii) North Bend Project Expenditure, so longas such expenditure is consistent with the Company’s estimates of expenditures reflected inSchedule 7.2.1(a)(ii), provided, further, that the Company may incur BahiaProject Expenditures not reflected in Schedule 7.2.1(a)(i) and North Bend ProjectExpenditures not reflected in Schedule 7.2.1(a)(ii), subject to the prior consent of theParent, such consent not to be unreasonably withheld or delayed, and provided,further, that the Shareholder shall periodically update the Parent (upon Parent’sreasonable request) on the status of the Bahia Project and North Bend Project and theformation and implementation of plans associated with the Bahia Project and the North BendProject;     (b) not enter in any commitments or other agreements regarding the financing of theBahia Project or the North Bend Project without the prior written consent of Parent, suchconsent not to be unreasonably withheld or delayed;     (c) not amend its charter documents or by-laws;     (d) not merge or consolidate with, purchase substantially all of the assets of, orotherwise acquire any business or any Person;     (e) not take any action or omit to take any action, which action or omission wouldresult in a material breach or inaccuracy of any of the representations and warranties setforth in Section 5.15 as of the Share Purchase Closing or Merger Closing, as the case maybe;     (f) maintain its books of account and records in its usual, regular and ordinarymanner;     (g) not sell any material assets outside the ordinary course of business consistentwith past practices;     (h) not settle any claims related to the KKPC Matter;     (i) not agree or commit to do any of the foregoing referred to in clauses (a)-(h); and     (j) promptly advise the Parent and Merger Sub of any fact, condition, occurrence orchange known to the Shareholder or the Company that, individually or in the aggregate, wouldreasonably be expected to have a Material Adverse Effect or cause a breach of this Section7.2.1.
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     Notwithstanding the foregoing, immediately prior to (x) the Share Purchase Closingwith respect to the Foreign Subsidiaries and (y) the Merger Closing with respect to theCompany and the Remaining Subsidiaries: (i) all outstanding liabilities, includingshort-term and long-term liabilities, (A) due to the Shareholder and/or any of itsAffiliates (other than any member of the Company Group) from any member of the Company Group(including liabilities owing by the Shareholder or any of its Affiliates to third parties that wereincurred for the benefit of any member of the Company Group), or (B) due to any member ofthe Company Group from the Shareholder and/or any of its Affiliates (other than any member of theCompany Group), shall each be capitalized or settled in accordance with Schedule 7.2.1(x),(ii) all outstanding accounts receivable and long-term receivables (A) due to theShareholder and/or any of its Affiliates (other than any member of the Company Group) from anymember of the Company Group, or (B) due to any member of the Company Group from theShareholder and/or any of its Affiliates (other than any member of the Company Group), shall eachbe capitalized or settled in accordance with Schedule 7.2.1(y), (iii) the Company shall,and shall cause each member of the Company Group to, declare and pay a dividend or otherwise make adistribution of all available Cash and Cash Equivalents in such a manner as to cause thedistribution to the Shareholder of all available Cash and Cash Equivalents of the Company Group inexcess of the Target Cash Amount, and at the Merger Closing the Company shall have the Target CashAmount, and (iv) the Shareholder shall transfer or cause to be transferred to the Companyall accounts receivable of the Company Group purchased prior to the Share Purchase Closing Date orMerger Closing Date, as the case may be, by the Shareholder or any of its Affiliates in connectionwith the Shareholder’s accounts receivable securitization program that have not been collected infull as of the Share Purchase Closing Date. All outstanding liabilities (including short-term andlong-term liabilities described in clause (i) above) and all outstanding accounts receivableand long-term receivables (described in clause (ii) above), that arise, are created or arediscovered on or after the date hereof (and therefore are not listed on Schedule 7.2.1 (x) orSchedule 7.2.1 (y)), shall be capitalized or settled immediately prior to the Share PurchaseClosing with respect to the Foreign Subsidiaries and the Merger Closing with respect to the Companyand the Remaining Subsidiaries in the same manner as outstanding liabilities of a similar type areto be capitalized or settled as provided in the Schedules, provided, that all outstandingliabilities of a type not reflected in the Schedules shall be capitalized or settled in a mannermutually agreed upon by the Parent and the Shareholder. The last paragraph of this Section 7.2.1shall not apply to employee benefits matters that are covered under Section 8.          7.2.2 Access and Information.     (a) From the date hereof until the Share Purchase Closing, upon reasonable notice, each of theShareholder and the Company shall and shall cause each member of the Company Group to give to theParent, Merger Sub and their respective representatives reasonable access at all reasonable timesduring normal business hours to the management, properties, books and records of the members of theCompany Group and furnish for inspection such information and documents in its possession relatingto the Company Group as the Parent or Merger Sub may reasonably request, provided that, inthe exercise of the foregoing rights, each of the Parent and Merger Sub shall not, and shall useits best efforts to cause its representatives not to, interfere with the operation and conduct ofthe business of any member of the Company Group, and provided, further, thatwithout the prior written consent of the Shareholder and the Company, the Parent, Merger Sub andtheir respective representatives shall not be entitled to any such access,
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information or documents(i) as to which the attorney-client privilege or attorney work-product doctrine may beavailable or apply or (ii) the disclosure of which is restricted by contract or applicablelaw except in strict compliance with such contract or law. All such information and documentsobtained by the Parent shall be subject to the terms of the Non-Disclosure Agreement, datedFebruary 24, 2005, as amended, between the Parent and the Shareholder and the ConfidentialityAgreement dated July 26, 2005, between the Parent, the Shareholder and DC Chemicals Co., Ltd.(together, the “Non-Disclosure Agreements”).     (b) From the Share Purchase Closing to the Merger Closing, upon reasonable notice, each of theShareholder and the Company shall and shall cause each member of the Company Group (other than theForeign Subsidiaries) to give to the Parent, Merger Sub and their respective representativesreasonable access at all reasonable times during normal business hours to the management,properties, books and records of such Company Group members and furnish for inspection suchinformation and documents in its possession relating to such Company Group members as the Parent orMerger Sub may reasonably request, provided that, in the exercise of the foregoing rights,each of the Parent and Merger Sub shall not, and shall use its best efforts to cause itsrepresentatives not to, interfere with the operation and conduct of the business of any such memberof the Company Group, and provided, further, that without the prior written consentof the Shareholder and the Company, the Parent, Merger Sub and their respective representativesshall not be entitled to any such access, information or documents (i) as to which theattorney-client privilege or attorney work-product doctrine may be available or apply or(ii) the disclosure of which is restricted by contract or applicable law except in strictcompliance with such contract or law. All such information and documents obtained by the Parent shall besubject to the terms of the Non-Disclosure Agreements.          7.2.3 Certain Resignations. The Shareholder shall cause each member of theBoard of Directors and officer of any member of the Company Group that is also an employeeor officer of the Shareholder to submit his or her resignation from such board of directorsor as an officer of such member of the Company Group, respectively, effective as of theShare Purchase Closing Date or Merger Closing Date, as applicable.          7.2.4 Severance Agreements. On the Share Purchase Closing Date or MergerClosing Date, as applicable, or as promptly as reasonably practicable following the SharePurchase Closing Date or Merger Closing Date, as applicable, the Shareholder shall pay orotherwise satisfy all liabilities and obligations arising under any severance, retention orchange of control agreements between the Shareholder, any member of the Company Group or anyof their Affiliates, on the one hand, and any officer, employee or consultant of any memberof the Company Group, on the other hand.          7.2.5 Certain Real Property Matters. On or prior to the Merger Closing, theShareholder (i) shall cause the applicable member of the Company Group to sell,transfer, convey, assign and deliver to the Shareholder or one of its Affiliates (other thanany member of the Company Group) good, valid and marketable fee simple title to each of theClosed Sites, free and clear of all Liens other than Permitted Liens, and (ii) inaccordance with Section 11.2.1, shall assume and agree to pay, honor and discharge when dueall liabilities and obligations to third parties relating exclusively to such Closed Sitesthat are incurred after the Merger Closing Date.
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     7.3 Obligations of the Parent and Merger Sub. From the Share Purchase Closing untilthe Merger Closing, except as set forth in the Schedules hereto, as contemplated by this Agreementor as otherwise consented to by the Shareholder in writing, such consent not to be unreasonablywithheld or delayed, the Parent shall cause each Foreign Subsidiary to:     (a) carry on its business in the ordinary course in substantially the same manner inwhich it previously has been conducted and, to the extent consistent with such business, useits commercially reasonable efforts to preserve intact its present business organization andto preserve its relationships with customers, suppliers and others having business dealingswith it;     (b) not take any action or omit to take any action, which action or omission wouldresult in a material breach or inaccuracy of any of the representations and warranties setforth in Section 5.15 with respect to the Company and its Subsidiaries (excluding theForeign Subsidiaries) (such Subsidiaries, the “Remaining Subsidiaries”) as of theMerger Closing;     (c) maintain its books of account and records in its usual, regular and ordinarymanner;     (d) not agree or commit to do any of the foregoing referred to in clauses (a)-(c); and     (e) promptly advise the Shareholder of any fact, condition, occurrence or change knownto the Parent that would reasonably be expected to have a Material Adverse Effect or cause abreach of this Section 7.3.     7.4 Taxes.     (a) Except to the extent reflected or provided for in any Closing Balance Sheet, theShareholder shall pay and be responsible for (without duplication of amounts otherwise payable)(i) federal, state, local and foreign Taxes of or payable by or attributable to any memberof the Company Group attributable to all taxable periods (or portions thereof) ending on or priorto the Share Purchase Closing Date with respect to the Foreign Subsidiaries and on or prior to theMerger Closing Date with respect to the Company and the Remaining Subsidiaries, (ii) anyliability for federal, state, local or foreign Taxes asserted against any member of the CompanyGroup under the provisions of Treasury Regulation section 1.1502-6(a) that impose several liabilityon members of an affiliated group of companies that file consolidated returns, or similarprovisions of any foreign, state or local law, in respect of Taxes of any other Person (other thanthe Company Group for which the Shareholder is liable under clause (i) above) attributable to alltaxable years (or portions thereof) ending on or prior to the Share Purchase Closing Date withrespect to the Foreign Subsidiaries and beginning on or prior to the Merger Closing Date withrespect to the Company and the Remaining Subsidiaries, (iii) up to US$9,000,000 in capitalgains Taxes arising in connection with the sale of the quotas of Columbian Chemicals Brasil, Ltda.to an Affiliate of the Parent, (iv) 50% of any transfer, registration, sales, use, stamp,ad valorem and similar Taxes resulting from the transactions contemplated by this Agreement,(v) subject to clause (iv) above, any U.S. Taxes arising in connection with the SharePurchase
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Closing and the Merger Closing, and (vi) any Taxes resulting from a breach of anyrepresentation or warranty in Section 5.14. Except with respect to those Taxes payable by theShareholder as provided for in the previous sentence, Parent shall pay and be responsible for anyTaxes resulting from the transactions contemplated by this Agreement and any foreign Taxes arisingin connection with the Share Purchase Closing, including without limitation, any such Taxes arisingas a result of an election by or on behalf of the Parent or the Surviving Corporation under section338 of the Code or under any similar provision of applicable state or local tax law. The Parentshall pay and be responsible for, and shall indemnify and hold harmless the Shareholder and theShareholder’s Affiliates (other than any member of the Company Group) from and against, all Taxesof or payable by or attributable to any member of the Company Group that are not described in thisSection 7.4(a) as being the responsibility of the Shareholder. In the case of Taxes that arepayable with respect to a taxable period that begins before the Share Purchase Closing Date withrespect to the Foreign Subsidiaries or before the Merger Closing Date with respect to the Companyand the Remaining Subsidiaries and ends after the Share Purchase Closing Date or Merger ClosingDate, as applicable, the portion of any such Tax that is allocable to the portion of the periodending on the Share Purchase Closing Date or Merger Closing Date, as applicable, shall be deemedequal to the amount which would be payable if the taxable year ended at the time of the SharePurchase Closing or Merger Closing, as applicable, and the Parent and the Surviving Corporationshall prepare books and working papers (includinga closing of the books) that will demonstrate the income and activities of the applicablemembers of the Company Group for the period ending at the time of the Share Purchase Closing orMerger Closing, as applicable, and such post-closing partial period. In the event that one party(the “Tax Indemnitor”) is obligated to indemnify the other party (the “TaxIndemnitee”) for any Tax under this Section 7.4(a), such indemnity amount shall be reduced bythe present value of any future Tax benefits to be realized by the Tax Indemnitee resulting fromsuch Tax (such present value to be determined by mutual agreement of the Tax Indemnitor and the TaxIndemnitee or, if they are unable to agree, by the Tax Dispute Accountants pursuant to Section7.4(f)).     (b) Tax Returns.     (i) The Shareholder’s Responsibility. The Shareholder shall cause each member of theCompany Group to join, for all taxable periods (or portions thereof) ending on or prior to theShare Purchase Closing Date with respect to the Foreign Subsidiaries and on or prior to the MergerClosing Date with respect to the Company and Remaining Subsidiaries, in (A) theconsolidated federal income Tax Returns of the Shareholder and (B) the consolidated,combined or unitary state, local or foreign income Tax Returns of or including the Shareholder orany of its Affiliates (other than the relevant members of the Company Group) with respect to whichany member of the Company Group (x) has joined in the most recent taxable year or(y) is required by law to join in filing, and shall prepare and file all such Tax Returns.The Shareholder shall prepare or cause to be prepared and file or cause to be filed all other TaxReturns that are required to be filed by or in respect of the relevant members of the Company Groupon or prior to the Share Purchase Closing Date or Merger Closing Date, as the case may be.     (ii) The Parent’s Responsibility. The Parent and the Surviving Corporation shallprepare or cause to be prepared and file or cause to be filed all Tax Returns required to be filedby or in respect of the Company Group other than those Tax Returns described as the Shareholder’sresponsibility in Section 7.4(b)(i) above and shall report on such Tax Returns
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(including any consolidated federal income Tax Return filed by the Surviving Corporation) any transactions orevents by or relating to any relevant member of the Company Group after the Share Purchase Closingwith respect to the Foreign Subsidiaries and after the Merger Closing with respect to the Companyand Remaining Subsidiaries. Any such Tax Returns with respect to which the Parent or the SurvivingCorporation is responsible for preparing and filing pursuant to this Section 7.4(b)(ii) thatinclude the taxable periods (or portions thereof) ending on or prior to the Share Purchase ClosingDate with respect to the Foreign Subsidiaries and on or prior to the Merger Closing Date withrespect to the Company and Remaining Subsidiaries shall, insofar as they relate to any member ofthe Company Group, (x) be on a basis consistent with the last previous such Tax Returnsfiled in respect of any such member of the Company Group and (y) be submitted to theShareholder for its review and approval at least 30 Business Days prior to the filing date, suchapproval not to be unreasonably withheld.     (iii) Cooperation. The Shareholder, Company, Parent and Merger Sub shall cooperatewith each other, and after each of the Share Purchase Closing Date and Merger Closing Date, theParent, Merger Sub and the Surviving Corporation shall cause any relevant member of the CompanyGroup to cooperate with the Shareholder, with respect to the preparation and filing of any Tax Return for which the other is responsible pursuant to this Section 7.4(b). Withoutlimiting the generality of the foregoing, with respect to all federal consolidated income TaxReturns and state and local consolidated, combined and unitary and foreign Tax Returns of theShareholder or any of its Affiliates for all taxable years (or portions thereof) ending on or priorto the Share Purchase Closing Date with respect to the Foreign Subsidiaries and on or prior to theMerger Closing Date with respect to the Company and Remaining Subsidiaries, the Parent and theSurviving Corporation shall cause each member of the Company Group to prepare accurately andcompletely and submit to the Shareholder all “tax packages” and all other information reasonablyrequested by the Shareholder and necessary for the preparation and filing of such Tax Returns bythe Shareholder not later than 120 days after the Share Purchase Closing Date or Merger ClosingDate, as applicable, except that all “foreign reporting packages” shall be submitted to theShareholder not later than March 31st of the year following the year in which the SharePurchase Closing or Merger Closing, as applicable, occurred. In the event that, after having madeinquiry of the Parent and the Surviving Corporation, the Shareholder shall have reason to believethat such tax packages, foreign reporting packages and other information will not be provided tothe Shareholder on a timely basis, the Shareholder shall have the right, at the Parent’s expense,to retain PricewaterhouseCoopers LLP, or other accounting firm of its choice, to prepare suchpackages and information and submit the same to the Shareholder. In the event the Shareholderexercises its rights under the preceding sentence, the Parent and the Surviving Corporation shallcause the Company Group to fully cooperate with and provide all necessary information and access toPricewaterhouseCoopers LLP or such other accounting firm as may be necessary to enable it toaccurately and completely prepare such packages and information for submission to the Shareholder.     (iv) Amended Returns. For all taxable periods (or portions thereof) ending on orprior to the Share Purchase Closing Date with respect to the Foreign Subsidiaries and on or priorto the Merger Closing Date with respect to the Company and Remaining Subsidiaries, each of theParent and the Surviving Corporation shall not, and shall cause each member of the Company Groupnot to, file (or consent to file) any amended Tax Returns or a claim for a refund of any Tax,unless the Shareholder shall have reviewed and consented in writing to the contents of any
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such amended Tax Return (or claim for a refund) prior to the filing thereof (which consent shall not beunreasonably withheld or delayed).     (c) Refunds. The Shareholder shall be entitled to retain, or receive immediatepayment from any member of the Company Group or the Parent or the Surviving Corporation of, (i) anyTax refund, excluding any Tax refunds that were taken into account in Current Assets for purposesof the adjustments in Section 4, but including, without limitation, refunds arising by reason ofamended returns filed after the Share Purchase Closing Date or Merger Closing Date, as the case maybe, and refunds or other distributions of any amounts deposited in connection with the taxlitigation described in Schedule 5.14 under the heading “Tax Litigation”, or (ii) credit of anytaxes (plus any interest thereon received with respect thereto from the applicable taxing authorityor Governmental Authority) relating to any member of the Company Group for which the Shareholder isresponsible under Section 7.4(a) or has otherwise paid or caused to be paid. In addition, anyreduction of Taxes (“Reduced Taxes”) (i) due with respect to the assets or business of anymember of the Company Group for any period or partial period ending after the Share PurchaseClosing Date with respect to the Foreign Subsidiaries or the Merger Closing Date with respect tothe Company and the Remaining Subsidiaries that is attributable to an adjustment on audit by a taxing authority requiring any member of the Company Group to capitalizeexpenses or otherwise defer deductions that were currently deducted on a Tax Return as originallyfiled for periods ending on or prior to the Share Purchase Closing Date or the Merger Closing Date,as the case may be, shall be credited to the Shareholder, and the Parent or any member of theCompany Group shall pay over such Reduced Taxes to the Shareholder promptly after the receipt ofany refund of Taxes attributable thereto or the payment of any Reduced Tax or the reporting of anyTax liability in an amount reflecting such Reduced Taxes, less the reasonable expenses incurred bythe Parent or the Surviving Corporation, if any, to amend any Tax Returns in order to pursue suchrefund, or (ii) due with respect to the assets or business of the Company Group, for any period orpartial period ending on or before the Share Purchase Closing Date with respect to the ForeignSubsidiaries or the Merger Closing Date with respect to the Company and the Remaining Subsidiariesthat is attributable to an adjustment on audit by a taxing authority requiring any member of theCompany Group to deduct expenses that were capitalized or accelerate anticipated deductions, ineach case, on a Company Group Tax Return relating to periods or portions thereof ending on or priorto the Share Purchase Closing Date or the Merger Closing Date, as the case may be, shall becredited to the Parent and the Shareholder shall pay over such Reduced Taxes to the Parent promptlyafter the receipt of any refund of Taxes attributable thereto, less any reasonable expensesincurred by the Shareholder, if any, to amend any Tax Returns in order to pursue such refund. Anydispute with respect to Reduced Taxes shall be resolved by the Tax Dispute Accountants, and anysuch determination by the Tax Dispute Accountants shall be final. The Parent shall be entitled tothe benefit of any other refund or credit of Taxes (plus any interest thereon received with respectthereto from the applicable taxing authority) relating to any member of the Company Group. TheParent, the Shareholder and the Surviving Corporation shall reasonably cooperate, and the Parentshall cause the Company Group and their other Affiliates to reasonably cooperate, with theShareholder with respect to claiming of any refund or credit referred to in this Section 7.4(c),including discussing potentially available refunds or credits and preparing and filing any amendedTax Return or other claim for a refund except to the extent the Parent reasonably determines thatthe filing of such amended Tax Return or other claim for a refund would have a Material AdverseEffect on the Company Group, taken as a whole.
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     (d) Audits. Each of the Parent, Merger Sub, Company and Shareholder shall promptlynotify the other parties in writing within 10 Business Days from its receipt of notice of(i) any pending or threatened federal, state, local or foreign Tax audits or assessments ofany member of the Company Group, so long as any taxable periods (or portions thereof) ending on orprior to the Share Purchase Closing Date or Merger Closing Date, as applicable, remain open, and(ii) any pending or threatened federal, state, local or foreign Tax audits or assessmentsof the Parent, Merger Sub, Company or the Shareholder which may affect the Tax liabilities of anymember of the Company Group, in each case for taxable periods (or portions thereof) ending on orprior to the Share Purchase Closing Date or Merger Closing Date, as applicable, providedthat the failure of one party to timely notify the other parties of any such Tax audit orassessment pursuant to this sentence shall not increase, decrease or otherwise affect the indemnityright or obligation of either party, so long as such failure does not materially prejudice suchother party. Notwithstanding the foregoing and provided the Shareholder acknowledges potentialliability therefor, the Shareholder shall have the right to represent the interests of theapplicable member of the Company Group and control the conduct and disposition of any Tax audit oradministrative or court proceeding relating to Taxes for any taxable periods (or portions thereof) ending on or prior to the Share Purchase Closing Date or Merger Closing Date, as applicable,and for which the Shareholder may be responsible hereunder, and the Parent and the SurvivingCorporation shall have the right to consult with the Shareholder during such proceedings at theirown expense. With respect to any Tax audit or administrative or court proceeding relating to anyTax Return for a taxable period beginning before the Share Purchase Closing Date or Merger ClosingDate, as applicable, and ending after the Share Purchase Closing Date or Merger Closing Date, asapplicable, which shall be controlled by the Parent, the Parent shall (x) afford theShareholder and its Tax advisors a reasonable opportunity to participate in the conduct of anyadministrative or judicial proceeding regarding or arising out of any audits or assessments,including, without limitation, the right to participate in conferences with taxing authorities andto submit pertinent material in support of the Shareholder’s position, and (y) not acceptany proposed adjustment or enter into any settlement or agreement in compromise that would resultin a claim for indemnification against the Shareholder pursuant to this Agreement without the priorwritten consent of the Shareholder, which consent shall not be unreasonably withheld. The Parentagrees that it shall, at its own expense, cooperate fully, and cause the Surviving Corporation andeach member of the Company Group to cooperate fully, with the Shareholder and its representativesin connection with such audit or proceeding, including timely furnishing all work papers and otherdocuments requested by any relevant taxing authority and making relevant employees and officersavailable in connection with such audit or proceeding.     (e) Conduct of Business. After the Share Purchase Closing with respect to the ForeignSubsidiaries and after the Merger Closing with respect to the Company and Remaining Subsidiaries,as to matters that could affect the Tax Returns of the Shareholder or any member of the CompanyGroup with respect to periods ending on or prior to the Share Purchase Closing Date or MergerClosing Date, as applicable, the Parent or the Surviving Corporation shall cause each applicablemember of the Company Group to carry on its business only in the ordinary course in substantiallythe same manner as heretofore conducted.     (f) Tax Dispute Resolution Mechanism. Any dispute among the parties involving Taxesarising under this Agreement shall be resolved as follows: (i) the parties will in goodfaith attempt to negotiate a prompt resolution of the dispute, (ii) if the parties areunable to negotiate a
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resolution of the dispute within 30 days, the dispute will be submitted tothe national office of a firm of independent accountants of nationally recognized standingreasonably satisfactory to the Shareholder and the Parent (the “Tax Dispute Accountants”),(iii) the Tax Dispute Accountants shall resolve the dispute, in a fair and equitable mannerand in accordance with applicable Tax law and the provisions of this Agreement, within 30 daysafter the parties have submitted the dispute to the Tax Dispute Accountants, whose decision shallbe final, conclusive and binding on the parties, absent fraud or manifest error, (iv) anypayment to be made as a result of the resolution of a dispute shall be made, and any other actiontaken as a result of the resolution of a dispute shall be taken, on or before the fifth BusinessDay following the date on which the dispute is resolved, and (v) the fees and expenses ofthe Tax Dispute Accountants in resolving a dispute will be borne by the Shareholder and the Parentin inverse proportion as they may prevail on the issues resolved by the Tax Dispute Accountants,which inverse proportionate allocation shall also be determined by the Tax Dispute Accountants atthe time the determination of the Tax Dispute Accountants is rendered on the merits of the issuessubmitted.     (g) The Shareholder shall report, or shall cause to be reported, the Share Purchases astransactions occurring prior to the Merger and shall include, or cause to be included, any income,gain or loss attributable to the Share Purchases on all federal, state, local or foreign TaxReturns (including any consolidated, combined, unitary or other similar returns) of the Shareholderand each Subsidiary that is a transferor of Foreign Subsidiary Shares for tax periods that includethe Share Purchase Closing Date.     (h) Election Under Section 301.7701-3 of the Treasury Regulations. The Shareholdershall have the right to make an election under Section 301.7701-3 of the Treasury Regulations,prior to the Share Purchase Closing, to treat any Subsidiary of the Company as a partnership ordisregarded entity for U.S. federal income Tax purposes.     7.5 Publicity. Prior to the Merger Closing, no press release, public announcement ordisclosure to any third party related to this Agreement or the transactions contemplated herebyshall be issued or made without the joint written approval of the Shareholder or the Parent, unlessrequired by law, stock listing requirements or applicable administrative regulation, in which casethe Shareholder or the Parent, as the case may be, shall use its commercially reasonable efforts toallow the other party sufficient time, consistent with such obligations, to review the nature ofsuch legal obligations and to comment upon such disclosure prior to publication.     7.6 Supplements to Disclosure Schedules. From time to time prior to the Share PurchaseClosing in the case of the Foreign Subsidiaries and the Merger Closing in the case of the Companyand Remaining Subsidiaries, the Shareholder and Company may amend or supplement any Schedule heretoby delivery of a written amendment or supplement thereto to the Parent and Merger Sub. Any suchamendment or supplement shall only be effective to modify such representations and warranties forthe purpose of determining the fulfillment of the conditions precedent set forth in Sections 9.4.1or 10.4.1, unless the Parent promptly objects to any such amendment or supplement. No suchamendment or supplement shall be effective to modify the representations and warranties made by theShareholder and the Company on the date hereof for purposes of the Shareholder’s indemnificationobligations under this Agreement.
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     7.7 Contact with Customers and Suppliers. Except with respect to Persons listed onSchedule 7.7 hereto whom the Parent and its Affiliates, advisors, agents, employees, directors andofficers may contact, prior to the Share Purchase Closing with respect to the Foreign Subsidiariesand prior to the Merger Closing with respect to the Merger so long as it provides the Shareholderwith reasonable advance written notice and an opportunity to be present, the Parent shall not, andshall cause its Affiliates, advisors, agents, employees, directors or officers not to, contact orcommunicate with the employees, customers, creditors, suppliers and licensors of, or other Personshaving commercial relationships with, any member of the Company Group in connection with thetransactions contemplated hereby (and not with respect to ordinary commercial communications)without the prior written consent of the Shareholder, which consent shall not be unreasonablywithheld but may be conditioned upon a representative of the Shareholder being present at any such meetingor conference.     7.8 Credit Support Arrangements. The Parent acknowledges that the Shareholder and/or itsAffiliates (other than members of the Company Group) have entered into the arrangements listed inSchedule 7.8, pursuant to which (a) guarantees (including of performance under contracts,leases or agreements), letter of credit or other credit arrangements, including surety andperformance bonds, have been issued by or for the account of the Shareholder and/or its Affiliates(other than the members of the Company Group) or (b) the Shareholder and/or its Affiliates(other than the members of the Company Group) are the primary or secondary obligors on debtinstruments or financing or other contracts or agreements, in any case to support or facilitatebusiness transactions by members of the Company Group. Such arrangements are referred to herein asthe “Credit Support Arrangements.” At or prior to the Share Purchase Closing in the caseof the Foreign Subsidiaries and at or prior to the Merger Closing in the case of the Company andRemaining Subsidiaries, the Parent shall or shall cause the Merger Sub to (i) obtainreplacement Credit Support Arrangements or (ii) repay, or cause the repayment of, all debtand other obligations to which such Credit Support Arrangements relate (and cause the cancellationof such Credit Support Arrangements) or arrange for the Parent or one of its Subsidiaries to besubstituted as the obligor thereof.     7.9 Noncompetition. The Shareholder will, for a period of three years from the MergerClosing Date, refrain from, either alone or in conjunction with any other Person, directly orindirectly through its current Affiliates, engaging in any business or activity that involves inany material respect the production and supply of carbon black as currently conducted by theShareholder through the Company (such business or activity, a “Competing Business”). TheShareholder’s ownership of (i) any Person that derives less than 10% of its total annualrevenues from a Competing Business or (ii) less than 1% of the outstanding voting shares ofany publicly held company, which would otherwise be prohibited by this Section 7.9, shall notconstitute a violation of this Section 7.9.     7.10 Appraisals. Promptly, and in any event within 45 days from the date hereof, theParent shall deliver to the Shareholder appraisals reasonably satisfactory to the Shareholder,which may be prepared by the Parent, supporting the purchase price set forth in Schedule 1.3 foreach Foreign Subsidiary and the amount of the Merger Consideration allocated to the Company andeach Remaining Subsidiary as set forth in Schedule 7.10.
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     7.11 Certain Foreign Conversions. As promptly as practicable, the Shareholder shall useits good faith efforts to cause (i) Columbian Carbon Spain, Ltd. to convert into a Sociedadde Responsabilidad Limitada under the laws of Spain, and (ii) Columbian Chemicals Canada,Ltd. to convert into an unlimited liability company under Canadian law (together, the “ForeignConversions”)     8. Employees and Employee Benefit Plans.     8.1 Compensation and Benefits of Company Employees. The employees of the CompanyGroup (including any employee who is on an approved paid or unpaid leave of absence or salarycontinuance or short-term disability leave (as the case may be) and any other employee who has thelegal or contractual right to be employed by any member of the Company Group) shall be referred toas “Company Employees.” Effective as of the Share Purchase Closing with respect to theForeign Subsidiaries and as of the Merger Closing with respect to the Company and RemainingSubsidiaries, the Parent shall, or shall cause the Surviving Corporation or a member of the CompanyGroup to, employ or continue to employ all Company Employees represented by a union in accordancewith the terms and conditions set forth in any applicable collective bargaining agreements,including without limitation those listed in Schedule 5.10.1, and all non-union-represented CompanyEmployees in accordance with this Section 8. From and for one year after the Share PurchaseClosing Date with respect to the Foreign Subsidiaries and from and for one year after the MergerClosing Date with respect to the Company and Remaining Subsidiaries, the Parent will, or will causethe Surviving Corporation or a member of the Company Group to, provide or continue to provide eachCompany Employee with employee compensation and benefits and other terms and conditions ofemployment that are in the good faith opinion of the Parent substantially comparable in theaggregate to the compensation and benefits and terms and conditions provided to each such CompanyEmployee by the Shareholder or its Affiliates, as applicable, immediately prior to the SharePurchase Closing or Merger Closing, as the case may be. Notwithstanding the foregoing, thisSection 8.1 shall not be construed as a guarantee of continued employment of the Company Employeesfor a specified period. Except to the extent provided in this Section 8 or as otherwise providedin this Agreement, from and after the Share Purchase Closing or Merger Closing, as the case may be,the Parent shall, or shall cause the Surviving Corporation or applicable member of the CompanyGroup to, honor, pay, perform and satisfy any and all liabilities, obligations and responsibilitiesto or in respect of each Company Employee arising under the terms of or in connection with anyapplicable Plan, any applicable employment, consulting, severance, retention, change of control orsimilar agreement or arrangement, in each case as in effect immediately prior to the Share PurchaseClosing or Merger Closing, as applicable, excluding (x) any Plans or applicable agreementsor arrangements maintained by the Shareholder and/or its Affiliates (other than any member of theCompany Group) after the Share Purchase Closing or Merger Closing, as applicable, and (y)any claims or liabilities arising under or incurred with respect to any Plan or applicableagreements or arrangements based on events occurring prior to the Share Purchase Closing or MergerClosing, as applicable. Except to the extent provided in this Section 8 or as otherwise providedin this Agreement, the Shareholder shall assume and indemnify and hold the Company Group harmlessagainst liabilities, obligations and responsibilities described in clauses (x) or (y) of thepreceding sentence. For all purposes under all compensation and benefit Plans applicable toCompany Employees after the Share Purchase Closing or Merger Closing, as applicable, the Parentshall, or shall cause the Merger Sub or applicable member of the Company
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Group, as applicable, to continue to treat all service by Company Employees with the Shareholder, the Company and any andall Subsidiaries or Affiliates of the Shareholder or the Company before the Share Purchase Closingor Merger Closing, as the case may be, as service with the Parent, Merger Sub or the Company ortheir Affiliates to the same extent as recognized by the Shareholder, the Company and allSubsidiaries or Affiliates of the Shareholder or the Company prior to the Share Purchase Closing or Merger Closing, as the case may be;provided that the foregoing shall not apply to the extent that its application would resultin a duplication of benefits.     8.1.1 Plan Funding Statements.     (a) Without duplication for purposes of determining any Foreign Subsidiary Purchase Prices andMerger Consideration, 100% of the Unfunded PBO with respect to any Plan listed on Schedule 8.1.1-Aplus 100% of the Unfunded APBO with respect to any Plan listed on Schedule 8.1.1-B shall be treatedas Indebtedness.     (b) The Unfunded PBO and Unfunded APBO with respect to any Plan described in Schedules 8.1.1-Aand 8.1.1-B will be set forth in a Plan Funding Statement delivered by the Shareholder to theParent within 30 days following the Share Purchase Closing Date or Merger Closing Date, asapplicable. Upon receipt of the relevant Plan Funding Statement, the Parent shall have the rightto review and confirm the accuracy of the calculations. The Parent shall deliver a Plan Notice ofDisagreement to the Shareholder within 45 calendar days after receiving the relevant Plan FundingStatement if the Parent disagrees with the Shareholder’s calculation of Unfunded PBO or UnfundedAPBO, which Plan Notice of Disagreement will initiate the Dispute Resolution Process set forth inSection 8.1.2. If the resolution of any dispute regarding a Plan Funding Statement is resolvedprior to the adjustment, if any, of the Foreign Subsidiary Purchase Prices and the MergerConsideration pursuant to Section 4.2, then the adjusted Unfunded PBO or Unfunded APBO will be usedin calculating any such adjustment. If the resolution of any disputes regarding a Plan FundingStatement is delayed on account of the Dispute Resolution Process and thus cannot be finalizeduntil after the applicable adjustment, if any, is determined pursuant to Section 4.2, then theamount of the applicable Unfunded PBO or Unfunded APBO shall be paid by the Shareholder to theParent in immediately available funds by wire transfer to an account specified by the Parent within15 days from the completion of the Dispute Resolution Process.     (c) For purposes of Sections 8.1.1 and 8.1.2: (i) “Plan Funding Statement”shall mean a statement prepared by a nationally recognized actuarial firm selected by theShareholder setting forth the amount of the Unfunded PBO and/or Unfunded APBO, if any, with respectto each Plan, as well as all the data (and supporting calculations) used to determine theseamounts, (ii) “PBO” for each applicable Plan shall mean the projected benefitobligation, calculated in accordance with GAAP (Financial Accounting Statements 87, 106, 112 orother accounting statements, as applicable) and the assumptions and methodologies set forth on therelevant portion of Schedule 8.1.1-A, for each such Plan as of the Share Purchase Closing Date orMerger Closing Date, as applicable, (iii) “Unfunded PBO” shall mean the excess, ifany, of the PBO for each Plan over the fair value, as of the last day of the month preceding themonth in which the Share Purchase Closing or Merger Closing, as applicable, occurs, of the assetsof such Plan and other assets identified on Schedule 8.1.1-A, as of the Share Purchase Closing Dateor Merger
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Closing Date, as applicable, (iv) “APBO” for each applicable Plan shallmean the accumulated post-employment benefit obligation, calculated in accordance with GAAP(Financial Accounting Statements 106, 112 or other accounting statements, as applicable) and theassumptions and methodologies set forth on the relevant portion of Schedule 8.1.1-B, for each suchPlan as of the Share Purchase Closing Date or Merger Closing Date, as applicable, (v)“Unfunded APBO” shall mean the excess, if any, of the APBO for each Plan over the fair value, as of the last day ofthe month preceding the month in which the Share Purchase Closing or Merger Closing, as applicable,occurs, of the assets of such Plan and other assets identified on Schedule 8.1.1-B, as of the SharePurchase Closing Date or Merger Closing Date, as applicable, and (vi) “Plan Notice ofDisagreement” shall mean a written statement setting forth in reasonable detail the basis for adispute. For the avoidance of doubt, Unfunded PBO and Unfunded APBO cannot be less than zero.Further, Unfunded PBO and Unfunded APBO will be determined on a plan by plan basis in accordancewith the Plan Funding Statement.          8.1.2 Dispute Resolution Process. During the 10 calendar day period immediately followingthe delivery of a Plan Notice of Disagreement, the Parent and the Shareholder shall seek in goodfaith to resolve any differences that they may have with respect to any matter specified in thePlan Notice of Disagreement. If at the end of such 10 calendar day period the Parent and theShareholder have been unable to agree upon a Plan Funding Statement, then the Parent and theShareholder shall submit to a nationally recognized, independent actuarial firm (selected by theparties) for review and resolution any and all matters that remain in dispute with respect to thePlan Notice of Disagreement. The Parent and the Shareholder shall use commercially reasonableefforts to cause the independent actuarial firm to deliver a final Plan Funding Statement within 20calendar days from such submission (which determination shall be binding on the parties hereto),and the cost of such independent actuarial firm shall be split equally between and paid by theParent and the Shareholder. During the 20 calendar day review by the independent actuarial firm,the Parent and the Shareholder will each make available to the independent actuarial firm suchindividuals and such information, books and records as may be reasonably required (including of theCompany and Merger Sub) by the independent actuarial firm to make its final determination.          8.1.3 Certain Company Benefits. Effective as of the Share Purchase Closing with respect toForeign Subsidiaries and as of the Merger Closing with respect to the Company and RemainingSubsidiaries, the Shareholder or one of its Affiliates shall cause each Company Employee (otherthan Covered Employees as defined in Section 8.1.12) and Former Employee who participates in thePhelps Dodge Retirement Plan or the Phelps Dodge Corporation Supplemental Retirement Plan to ceaseto accrue any additional benefits thereunder. Effective as of the Share Purchase Closing or MergerClosing, as applicable, the Shareholder shall, or shall cause one of its Affiliates other than anymember of the Company Group to, assume or maintain sponsorship of and be solely responsible for,all benefits accrued under the Phelps Dodge Retirement Plan and the Phelps Dodge CorporationSupplemental Retirement Plan.          8.1.4 Filings and Records. The Shareholder, the Parent, the Merger Sub and the CompanyGroup shall cooperate in making all appropriate filings required under the Code or ERISA and anyapplicable securities laws, implementing all appropriate communications with participants,maintaining and transferring appropriate records and taking all such other actions as may benecessary and appropriate to implement the provisions of this Section 8.
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          8.1.5 Employee Savings Plan. After the Share Purchase Closing Date with respect to theForeign Subsidiaries and after the Merger Closing Date with respect to the Company and RemainingSubsidiaries, the Shareholder and its Affiliates shall permit each Company Employee who is aparticipant in the Phelps Dodge Employee Savings Plan to elect, in accordance with the terms andconditions of the Phelps Dodge Employee Savings Plan, to (i) receive a distribution of thevalue in his account less the amount of any outstanding loan to such participant under such plan(such participant’s “Account Balance”), (ii) roll over such participant’s AccountBalance to an individual retirement account of such participant or (iii) roll over suchparticipant’s Account Balance to a 401(k) plan maintained by the Parent, the Surviving Corporationor a member of the Company Group by wire transfer as soon as is administratively feasible followingthe Share Purchase Closing Date or Merger Closing Date, as the case may be, and notification thatsuch 401(k) plan will accept such rollovers.          8.1.6 Welfare Plans. Prior to the Share Purchase Closing in the case of ForeignSubsidiaries and prior to the Merger Closing in the case of the Company and Remaining Subsidiariesand effective no later than the Share Purchase Closing or Merger Closing, as applicable, the Parentand Merger Sub shall establish or identify welfare benefit plans, which may include plans of theCompany Group (including plans providing medical, dental, COBRA coverage, vision care, legalservices, educational assistance, adoption assistance, employee assistance, long-term disability,short-term disability, group term life and accidental death and dismemberment insurance, executivelife insurance, dependent life insurance, business travel accident insurance, and a cafeteria planunder section 125 of the Code with a healthcare spending account and a dependent care spendingaccount), that will, subject to Section 8.1, provide benefits to (and assume liabilities andaccount balances of the Shareholder’s cafeteria plan with respect to) Company Employees and theirdependents. Without limiting the generality of the foregoing, effective as of the Share PurchaseClosing or Merger Closing, as the case may be, the Company Group shall be responsible and liablefor providing the appropriate COBRA notices to the relevant Company Employees and theirbeneficiaries who experience a “qualifying event” on or after the Share Purchase Closing or MergerClosing, as applicable, and for providing or continuing to provide coverage required under COBRAwith respect to the relevant Company Employees and their beneficiaries who experience a “qualifyingevent” on or after the Share Purchase Closing or Merger Closing, as applicable, except with respectto any person participating in any Plans the Shareholder shall retain or assume on and after theShare Purchase Closing Date or Merger Closing Date, as applicable. The Shareholder shall retainliability and responsibility for all benefits requirements under COBRA with respect to CompanyEmployees, Former Employees and their beneficiaries who experience a qualifying event prior to theShare Purchase Closing or Merger Closing, as applicable. If Company Employees participate in thewelfare benefit plans of the Parent or its Affiliates after the Share Purchase Closing or MergerClosing, as the case may be, the Parent shall, or shall cause the Merger Sub or Company Group to,(i) cause any pre-existing conditions or limitations and eligibility waiting periods underany group health plans of the Parent or its Affiliates to be waived with respect to the CompanyEmployees and their eligible dependents and (ii) give each Company Employee credit for theplan year in which the transition from the Shareholder’s or its Affiliates’ (other than the Company Group) plans to the Parent’s or itsAffiliates’ plans occurs towards applicable deductibles and annual out-of-pocket limits forexpenses incurred prior to the transition date; provided, that the foregoing shall not apply to theextent that its application would result in a
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duplication of benefits. From and after the SharePurchase Closing or Merger Closing, as applicable, the Shareholder shall remain responsible for allclaims of Former Employees and their eligible dependents and for claims of Company Employees andtheir eligible dependents incurred prior to the Share Purchase Closing Date or Merger Closing Date,as applicable, under those Plans that are maintained and sponsored by the Shareholder (other thanliabilities under a cafeteria plan in which account balances have been transferred as described inthis Section) and the Parent, Merger Sub and the Company Group shall be responsible for allliabilities incurred by any Company Employee and his/her eligible dependents under those Plans thatare maintained by the Parent or its Affiliates on or after the Share Purchase Closing Date orMerger Closing Date, as applicable.          8.1.7 Retiree Medical and Life. Except as provided in any applicable collective bargainingagreement, the Parent or Merger Sub shall provide, or shall cause the Company Group to provide orcontinue to provide, for a minimum of two years after the Share Purchase Closing Date or MergerClosing Date, as applicable, retiree medical and retiree life plans for the Company Employeessubstantially similar to such plans maintained by the Shareholder and its Affiliates for suchCompany Employees immediately prior to the Share Purchase Closing or Merger Closing, as applicable.Prior to the Share Purchase Closing Date, the Shareholder shall assume, and shall indemnify andhold Parent, Merger Sub, the Company Group and their Affiliates harmless against, all liabilities,costs or expenses related to, or incurred as a consequence of, the provision of post-retirementwelfare benefits (including without limitation post retirement medical and retiree life plans andother post-employment benefits) to any Person other than Company Employees.          8.1.8 WARN. Without limiting the obligations of the Shareholder, Company, Parent or MergerSub under this Agreement, the parties hereto agree that they shall take such actions necessary toretain the Company Employees so as not to require notice under the Workers Adjustment andRetraining Notification Act, as amended (“WARN Act”), and any similar statute prior to theexpiration of the 60 day period following the Share Purchase Closing and Merger Closing. TheParent and Merger Sub shall assume all obligations and liabilities under, arising out of or relatedto the WARN Act or any similar statute unless such obligation and liability is incurred in itstotality prior to the Share Purchase Closing Date or Merger Closing Date, as applicable.          8.1.9 Paid Time Off/Vacation. As of the Share Purchase Closing with respect to the ForeignSubsidiaries and the Merger Closing with respect to the Company and Remaining Subsidiaries, theParent, Merger Sub or the applicable member of the Company Group shall credit, or shall cause to becredited, each Company Employee with unused paid time off/vacation days and any personal daysaccrued in accordance with the vacation and personnel policies and labor agreements applicable toany such Company Employee only and to the same extent as accrued on the Closing Balance Sheet.          8.1.10 Collective Bargaining. The Parent and Merger Sub shall cause the applicable membersof the Company Group to recognize each union that, at the Share Purchase Closing or Merger Closing,as applicable, represents any of the Company Employees (and, to the extent applicable, any FormerEmployee) as the collective bargaining representatives of such employees.
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          8.1.11 Workers’ Compensation. The Company Group shall retain and, to the extent necessary,assume all obligations and liabilities for all workers’ compensation benefits and claims of anyCompany Employee and Former Employee only to the same extent as accrued on the Closing BalanceSheet.          8.1.12 U.S. Bargaining Pension Plan.     (a) Prior to the Merger Closing, the Shareholder shall establish and cause the Company Groupto assume sponsorship of, or shall cause the Company Group to establish a qualified defined benefitpension plan for the benefit of the Company Employees covered by the Phelps Dodge Retirement Planwho are covered by collective bargaining agreements (the “Covered Employees”), which planshall provide the Covered Employees with benefits substantially identical to the benefits providedto such Covered Employees under the Phelps Dodge Retirement Plan as of the date hereof (the“U.S. Bargaining Pension Plan”). The Shareholder shall take, or shall cause the CompanyGroup to take, all necessary action to qualify the U.S. Bargaining Pension Plan under theapplicable provisions of the Code and shall make any and all filings and submissions to theappropriate Governmental Authorities required to be made by it in connection with the transfer ofthe assets described below.     (b) The Shareholder shall cause the trustee of the Phelps Dodge Retirement Plan to transfer tothe U.S. Bargaining Pension Plan the minimum amount of assets of the Phelps Dodge Retirement Planrequired to be transferred to fund the obligations in respect of the Covered Employees, calculatedin accordance with the de minimis rule of Treasury Regulation § 1.414(l)-1(n) as determined by anindependent actuary selected by the Shareholder.     (c) Effective as of the date such assets are transferred, each Covered Employee whoparticipates in the Phelps Dodge Retirement Plan shall cease to accrue any additional benefitsthereunder and each such Covered Employee shall commence participation in and accrual of benefitsunder the U.S. Bargaining Pension Plan and the U.S. Bargaining Pension Plan shall assume allliability of the Phelps Dodge Retirement Plan with respect to such Covered Employees.          8.1.13 Canadian Pension Plan. To the extent that employees of Shareholder and itsAffiliates (other than Company Employees) participate in the Retirement Plan for Salaried Employeesof Columbian Chemicals Canada Ltd. (Registration No. 0486928 (the “Canadian Pension Plan”), priorto the Share Purchase Closing, Shareholder and Phelps Dodge Corporation of Canada Limited (“PhelpsCanada”) shall cooperate in effecting the transfer of such benefit liabilities and related planassets as soon as practicable to a pension plan or plans sponsored by or established byShareholder or any of its Affiliates (other than any member of the Company Group); provided that ifsuch transfer is not completed prior to the Share Purchase Closing, Shareholder, Phelps Canada andParent shall cooperate in effecting such transfer as soon as practicable thereafter.          8.1.14 Sevalco Ltd Plan     (a) Commencing as of the date hereof, the Shareholder shall use good faith efforts to obtainwithin 12 months of the Share Purchase Closing (i) a clearance statement from the U.K.
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Pensions Regulator (the “Pensions Regulator”) that neither the Shareholder, the CompanyGroup nor any person connected or associated with them (as defined in sections 249 and 435 UKInsolvency Act 1986) as at the date hereof (each an “Applicant”) will be liable for theimposition of a contribution notice or financial support direction nor would it be reasonable forthe Pensions Regulator to issue such a notice or direction, and (ii) the agreement of each of thetrustees of the Sevalco Ltd Plan (the “Sevalco Trustees”) to the contents of such anapplication to the Pensions Regulator for a clearance statement.     (b) In connection with the Shareholder’s efforts to obtain such clearance statement and theagreement of the Sevalco Trustees, from and after the date hereof, each of the Parent, Merger Suband the Company Group shall (i) cooperate with the Shareholder and shall provide suchinformation (including, but not limited to, the information relating to the Company, the Parent andMerger Sub described in clause (c) below) as the Shareholder, the Sevalco Trustees or the PensionsRegulator may request, (ii) upon the request of the Shareholder, appear at and participatein meetings with the Shareholder, the Sevalco Trustees, the Pensions Regulator, and/or any otherPerson the Shareholder may reasonably request, (iii) not, without the prior written consentof the Shareholder, communicate with the Pensions Regulator or any Sevalco Trustee regarding theclearance statement sought by any Applicant or any related matter, except to the extent required bylaw, (iv) cooperate and consult with one another, and with the Shareholder, with regard toany negotiations or communications with or actions to be taken at the request of the PensionsRegulator or the Sevalco Trustees concerning the Sevalco Ltd Plan, (v) keep all mattersregarding the application for a clearance statement confidential, and (vi) except as set forth inclause (d)(vii), meet its own costs of complying with this provision.     (c) The Parent, Merger Sub and the Company Group shall provide to the Shareholder and theSevalco Trustees promptly, and in any event within five working days of a request thereof, or ifnot reasonably available, as soon as reasonably practicable thereafter, the following information:     (i) Table showing comparison of the position of all creditors of Sevalco Ltd. and the CompanyGroup before and after the Share Purchase Closing;     (ii) Statutory accounts of the Parent and the Merger Sub;     (iii) Financial forecasts, management accounts and business plans for Sevalco Ltd and theCompany Group after the Share Purchase Closing;     (iv) Details of the debt that will rank above the Sevalco Ltd Plan as an unsecured creditor ofSevalco Ltd. and the Company Group after the Share Purchase Closing;     (v) Valuation of Sevalco Ltd’s and the Company Group’s significant assets at the date hereof;and     (vi) Sevalco Ltd and the Company Group’s plans for funding the Sevalco Ltd Plan after theShare Purchase Closing.     (d) The Shareholder shall make contributions to the Sevalco Ltd Plan as provided in paragraphs(i) through (vii) below.
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     (i) In the event that a clearance statement for the benefit of the Applicants is issued by thePensions Regulator regarding the funding of the Sevalco Ltd Plan prior to the one year anniversaryof the Share Purchase Closing (a “Clearance Statement”), as soon as practicable after suchissuance, and subject to clauses (d)(v) through (d)(vii), the Shareholder shall transfer to theSevalco Ltd Plan (i) cash or cash equivalents equal to the lesser of (A) an amount equal to(x) $10.4 million minus (y) the aggregate amount paid by any member of the Company Group to theSevalco Ltd Plan during the period commencing on the date hereof and ending on the close ofbusiness on the Share Purchase Closing Date (the “Pre-Closing Payment”, and the amountequal to $10.4 million minus the Pre-Closing Payment shall be the “Benchmark Amount”), and(B) the amount of contributions (adjusted to include any Installment Amount) that, pursuant to theClearance Statement, have been agreed or are required to be made to the Sevalco Ltd Plan (theamount in and (B) above shall be defined as the “Clearance Statement Funding Amount”), plus(ii) cash or cash equivalents equal to 50% of the amount, if any, by which the ClearanceStatement Funding Amount exceeds the Benchmark Amount. If the Shareholder makes a contribution tothe Sevalco Ltd Plan pursuant to this clause (d)(i), the Shareholder shall not have any obligationpursuant to clause (d)(ii) below.     (ii) In the event that a contribution notice or a financial support direction, in each caseregarding the funding of the Sevalco Ltd Plan (each, a “Support Direction”), is issued bythe Pensions Regulator against one or more of the Applicants before the issuance of a ClearanceStatement, as soon as practicable after such issuance and, subject to clauses (d)(v) and (d)(vii),the Shareholder shall transfer to the Sevalco Ltd Plan (i) cash or cash equivalents equalto the lesser of (A) the Benchmark Amount and (B) the amount of contributions (adjusted to includeany Installment Amount) that, pursuant to the Support Direction, have been agreed or are requiredto be made to the Sevalco Ltd Plan (the amount in (B) above shall be defined as the “SupportDirection Funding Amount”), plus (ii) cash or cash equivalents equal to 50% of theamount, if any, by which the Support Direction Funding Amount exceeds the Benchmark Amount. If theShareholder makes a contribution to the Sevalco Ltd Plan pursuant to this clause (d)(ii), theShareholder shall not have any obligation pursuant to clause (d)(i) above.     (iii) In the event the Clearance Statement or Support Direction requires some or all of thecontributions to be made to the Sevalco Ltd Plan by the Shareholder in installments extendingbeyond the first anniversary of the Share Purchase Closing (the “Installments”), then forthe purposes of clause (d)(i) and (ii) above the Installments shall be attributed their net presentvalue calculated using an 8% per annum discount rate (such aggregate net present value shall bedefined as the “Installment Amount”).     (iv) In the event that no Clearance Statement or Support Direction is issued prior to the oneyear anniversary of the Share Purchase Closing, or the Support Direction takes the form of orincludes an arrangement whereby the Shareholder or any of its Affiliates is jointly and severallyliable for or must guarantee the funding of the Sevalco Ltd Plan and no immediate or staggeredpayment of cash is required in the absence of default by Sevalco Ltd, on or as soon as practicableafter the first anniversary of the Share Purchase Closing, the Shareholder shall transfer to theSevalco Ltd Plan cash or cash equivalents equal to the Benchmark Amount.     (v) Notwithstanding anything to the contrary in this Agreement, the Shareholder, any of itsAffiliates and any Applicant other than in each case, after the Share Purchase Closing Date,
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the Company Group (the “Sevalco Plan Ltd. Indemnitees”) shall in no case be required totransfer cash or cash equivalents or make any payments to the Sevalco Ltd Plan pursuant to thisAgreement, the Clearance Statement, the Support Direction or otherwise that have a value in excessof an aggregate amount equal to $20 million minus the Pre-Closing Payment.     (vi) The Parent and the Merger Sub shall be solely responsible for all liabilities andobligations related to the Sevalco Ltd Plan in excess of the amounts for which Shareholder isresponsible pursuant to paragraphs (i) through (v) of this Section 8.1.14(d) without taking intoaccount any payment to the Shareholder pursuant to clause (d)(vii) (the “Shareholder FundingObligation”), and the Parent and Merger Sub shall indemnify the Sevalco Ltd. Plan Indemniteesagainst all Damages (including without limitation any liability under a contribution notice and/orfinancial support direction imposed by the Pensions Regulator) incurred or suffered and payable byany Sevalco Ltd. Plan Indemnitees in connection with the Sevalco Ltd. Plan in excess of theShareholder Funding Obligation.     (vii) Where the Shareholder is subject to a liability described under clauses (d)(i) to (v)above, the Shareholder shall be entitled at its discretion to elect either:     (1) to make a payment directly to the Sevalco Ltd Plan or other Person to whichthe liability relates; or     (2) to make a payment to the Parent, Merger Sub, Company Group or Sevalco Ltd that shall bedelivered to and/or used by Sevalco Ltd to pay an amount equal to such payment to the Sevalco LtdPlan or other person to which the liability relates,either of which shall discharge in full the Shareholder’s obligations under this Agreement inrespect of the liability concerned.If the Parent, Merger Sub, Company Group or Sevalco Ltd subsequently receives from Her Majesty’sRevenue & Customs (“HMRC”) a payment or Relief arising in respect of any liability orpayment contemplated by this clause (d) then:     (A) the Parent, Merger Sub, Company Group or Sevalco Ltd, as appropriate, shall notify theShareholder of that fact as soon as reasonably practicable and in any event within 10 days, and ifso required by the Shareholder shall take at the Shareholder’s expense (or shall procure thatSevalco Ltd shall take) reasonable endeavors as the Shareholder may request to obtain such payment or Relief (keeping the Shareholder fully informed of the progress of any actiontaken and providing the Shareholder with copies of all relevant correspondence and documentation);and     (B) the Parent, Merger Sub, Company Group or Sevalco Ltd, as appropriate, shall pay to theShareholder the amount received by the Parent, Merger Sub, Company Group or Sevalco or the amountthat the Parent, Merger Sub, Company Group or Sevalco has saved by virtue of any Relief.Any payment required to be made by the Parent, Merger Sub, Company Group or Sevalco Ltd under thisclause (d)(vii) shall be made:
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     (x) in a case where the Parent, Merger Sub, Company Group or Sevalco Ltd receives a paymentfrom HMRC, within 14 days of the receipt thereof; and     (y) in a case where the Parent, Merger Sub, Company Group or Sevalco Ltd obtains Relief,within 14 days after the date on which corporation tax would have become payable to HMRC but forthe use of such Relief.The Shareholder shall indemnify the Parent, Merger Sub, the Company Group and Sevalco Ltd againstall Damages incurred or suffered and payable by any of them in connection with any action takenpursuant to this clause (d)(vii)(2).     9. Conditions Precedent to Share Purchases.     9.1 General. The respective obligations set forth herein of the Shareholder, Company, theParent and Merger Sub to consummate the Share Purchases at the Share Purchase Closing shall besubject to the fulfillment, on or before the Share Purchase Closing Date, in the case of theShareholder, of the conditions set forth in Sections 9.2 and 9.3, and, in the case of the Parent,of the conditions set forth in Sections 9.2 and 9.4, in each case as related to the SharePurchases; provided that a party shall be precluded from asserting that a relevantcondition hereinafter set forth in Section 9 has not been satisfied by reason of any matter, fact,failure or circumstance expressly contemplated by this Agreement or, subject to Section 7.6,disclosed in the Schedules hereto.     9.2 Conditions to Obligations of the Parties.          9.2.1 HSR Act. The waiting period under the HSR Act with respect to the transactionscontemplated by this Agreement shall have expired or been terminated and the waiting periods underthe antitrust or competition laws of any other applicable foreign jurisdictions (other than Brazil)in which the Company considers a notification to be necessary prior to the consummation of thetransactions contemplated by this Agreement shall have expired or been terminated.          9.2.2 No Injunction. The consummation of the transactions contemplated hereby in connection with the Share Purchasesshall not have been restrained, enjoined or otherwise prohibited by any applicable law, includingany order, injunction, decree or judgment of any court or other Governmental Authority of theUnited States.          9.2.3 Consents. All consents of (i) Governmental Authorities listed in Schedule9.2.3(i) and (ii) other Persons listed in Schedule 9.2.3(ii), shall have been made,obtained, given or the applicable waiting periods thereunder shall have expired or been terminated.          9.2.4 Transition Services Agreement. The parties hereto shall have executed and delivereda Transition Services Agreement in substantially the form attached as Exhibit G hereto.
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     9.3 Conditions to Obligations of the Shareholder and the Company.          9.3.1 Representations, Warranties and Covenants of the Parent. The representations andwarranties of the Parent in Section 6 in connection with the Share Purchases shall be true andcorrect in all respects, if qualified by materiality, and shall be true and correct in all materialrespects, if not qualified by materiality, at and as of the Share Purchase Closing with the sameeffect as though made at and as of such time (except that those representations and warranties thatare made as of a specific date shall be correct only as of such date). The Parent shall have dulyperformed and complied in all material respects with all covenants contained herein required to beperformed or complied with in connection with the Share Purchases by it at or before the SharePurchase Closing.          9.3.2 Officer’s Certificate. The Parent shall have delivered to the Shareholder and theCompany a certificate, dated the Share Purchase Closing Date and signed by its President or aSenior Vice President, as to the fulfillment of the conditions set forth in Section 9.3.1, it beingunderstood that such certificate shall be deemed to have been delivered only in such officer’scapacity as an officer of the Parent (and not in his or her individual capacity) and shall notentitle any party to assert a claim against such officer in his or her individual capacity.          9.3.3 Credit Support Arrangements. The Shareholder shall have received releases or otherterminations, in form and substance reasonably satisfactory to the Shareholder, of all of theobligations of the Shareholder and its Affiliates under the Credit Support Arrangements withrespect to the Foreign Subsidiaries.     9.4 Conditions to Obligations of the Parent.          9.4.1 Representations, Warranties and Covenants of the Shareholder and the Company. The representations and warranties in Section 5 as applicable to the Shareholder, the Companyand the Foreign Subsidiaries in connection with the Share Purchases shall be true and correct inall respects, if qualified by materiality or Material Adverse Effect, and shall be true and correctin all material respects, if not qualified by materiality or Material Adverse Effect, at and as ofthe Share Purchase Closing with the same effect as though made at and as of such time (except thatthose representations and warranties that are made as of a specific date shall be correct only asof such date). The Shareholder and the Company shall have duly performed and complied in allmaterial respects with all covenants contained herein required to be performed or complied with inconnection with the Share Purchases by it at or before the Share Purchase Closing.          9.4.2 Officer’s Certificate. Each of the Shareholder and the Company shall have deliveredto the Parent a certificate, dated the Share Purchase Closing Date and signed by its President,Executive Vice President, a Senior Vice President or Vice President, as to the fulfillment of theconditions set forth in Section 9.4.1, it being understood that such certificate shall be deemed tohave been delivered only in such officer’s capacity as an officer of the Shareholder or the Company(and not in his or her individual capacity) and shall not entitle any party to assert a claimagainst such officer in his or her individual capacity.
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          9.4.3 Financing. Subject to compliance by the Parent with its obligations under Section7.1(d), the Parent shall have obtained an amount of financing not less than the Financing Amountupon terms substantially as set forth in the Commitment Letters or pursuant to alternativefinancing as contemplated by Section 7.1(d).     10. Conditions Precedent to Merger.     10.1 General. The respective obligations set forth herein of the Shareholder, Company,Parent and Merger Sub to consummate the Merger at the Merger Closing shall be subject to thefulfillment, on or before the Merger Closing Date, in the case of the Shareholder, of theconditions set forth in Sections 10.2 and 10.3, and, in the case of the Parent, of the conditionsset forth in Sections 10.2 and 10.4, in each case as related to the Merger Section 10.2;provided that a party shall be precluded from asserting that a relevant conditionhereinafter set forth in Section 10 has not been satisfied by reason of any matter, fact, failureor circumstance expressly contemplated by this Agreement or, subject to Section 7.6, disclosed inthe Schedules hereto.     10.2 Conditions to Obligations of the Parties.          10.2.1 HSR Act. The waiting period under the HSR Act with respect to the transactionscontemplated by this Agreement shall have expired or been terminated and the waiting periods underantitrust or competition laws of any other applicable foreign jurisdictions in which the Companyconsiders a notification to be necessary prior to the consummation of the transactions contemplated by thisAgreement shall have expired or been terminated.          10.2.2 No Injunction. The consummation of the transactions contemplated hereby inconnection with the Merger shall not have been restrained, enjoined or otherwise prohibited by anyapplicable law, including any order, injunction, decree or judgment of any court or otherGovernmental Authority of the United States.          10.2.3 Consents. All consents of (i) Governmental Authorities listed in Schedule10.2.3(i) and (ii) other Persons listed in Schedule 10.2.3(ii), shall have been made,obtained, given or the applicable waiting periods thereunder shall have expired or been terminated.          10.2.4 Share Purchase Closing. The Share Purchase Closing shall have occurred and each ofthe Share Purchases shall have been consummated.     10.2.5 Consummation of Foreign Conversions. The Foreign Conversions shall haveoccurred.     10.3 Conditions to Obligations of the Shareholder and the Company.          10.3.1 Representations, Warranties and Covenants of the Parent and Merger Sub. Therepresentations and warranties in Section 6 as applicable to the Parent and Merger Sub inconnection with the Merger shall be true and correct in all respects, if qualified by materiality,and shall be true and correct in all material respects, if not qualified by materiality, at and asof the Merger Closing with the same effect as though made at and as of such time (except that those
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representations and warranties that are made as of a specific date shall be correct only as of suchdate). The Parent and Merger Sub shall have duly performed and complied in all material respectswith all covenants contained herein required to be performed or complied with in connection withthe Merger by it at or before the Merger Closing.          10.3.2 Officer’s Certificate. Each of the Parent and Merger Sub shall have delivered tothe Shareholder and the Company a certificate, dated the Merger Closing Date and signed by itsPresident or a Senior Vice President, as to the fulfillment of the conditions set forth in Section10.3.1, it being understood that such certificate shall be deemed to have been delivered only insuch officer’s capacity as an officer of the Parent or Merger Sub (and not in his or her individualcapacity) and shall not entitle any party to assert a claim against such officer in his or herindividual capacity.          10.3.3 Credit Support Arrangements. The Shareholder shall have received releases or other terminations, in form and substancereasonably satisfactory to the Shareholder, of all of the obligations of the Shareholder and itsAffiliates under the Credit Support Arrangements with respect to the Company and RemainingSubsidiaries.     10.4 Conditions to Obligations of the Parent and Merger Sub.          10.4.1 Representations, Warranties and Covenants of the Shareholder and the Company. Therepresentations and warranties in Section 5 as applicable to the Shareholder, the Company and theRemaining Subsidiaries in connection with the Merger shall be true and correct in all respects, ifqualified by materiality or Material Adverse Effect, and shall be true and correct in all materialrespects, if not qualified by materiality or Material Adverse Effect, at and as of the MergerClosing with the same effect as though made at and as of such time (except that thoserepresentations and warranties that are made as of a specific date shall be correct only as of suchdate). The Shareholder and the Company shall have duly performed and complied in all materialrespects with all covenants contained herein required to be performed or complied with by it inconnection with the Merger at or before the Merger Closing.          10.4.2 Officer’s Certificate. Each of the Shareholder and the Company shall have deliveredto the Parent and Merger Sub a certificate, dated the Merger Closing Date and signed by itsPresident, Executive Vice President or a Senior Vice President, as to the fulfillment of theconditions set forth in Section 10.4.1, it being understood that such certificate shall be deemedto have been delivered only in such officer’s capacity as an officer of the Shareholder or theCompany (and not in his or her individual capacity) and shall not entitle any party to assert aclaim against such officer in his or her individual capacity.          10.4.3 Financing. Subject to compliance by the Parent with its obligations under Section7.1(d), the Parent shall have obtained an amount of financing not less than the Financing Amountupon terms substantially as set forth in the Commitment Letters or pursuant to alternativefinancing as contemplated by Section 7.1(d).          10.4.4 Certain Transfers. Title to each of the Closed Sites shall have been transferredpursuant to and in accordance with Section 7.2.5; and the issued and outstanding
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shares of Capital Gestao de Negocios Ltda, a company existing under the laws of Brazil, shall have been transferred to Shareholder.     11. Indemnification.     11.1 Survival of Representations and Warranties and Covenants. The representations and warranties contained in Sections 5 and 6 and in the certificatesdelivered pursuant to Sections 9.3.2 and 9.4.2, and the covenants contained herein to be fullyperformed or complied with at or prior to the Share Purchase Closing Date or Merger Closing Date,as applicable, shall survive the Share Purchase Closing or Merger Closing, as applicable, and shallremain in full force and effect until the later of (x) March 15, 2007, and (y) thedate that is one year and 45 days after the Share Purchase Closing Date or the Merger Closing Date,as applicable; provided that: (a) the representations and warranties set forth inSections 5.1, 5.3, 5.4, 5.5, 5.10, 5.14 shall survive until sixty (60) days after the expiration ofthe applicable statute of limitations and (b) the representations and warranties set forthin Section 5.17 shall survive for a period of five years after the Share Purchase Closing Date withrespect to the Foreign Subsidiaries and seven years after the Merger Closing Date with respect tothe Company and Remaining Subsidiaries. No claim for indemnification under this Section 11 may beasserted with respect to such representations, warranties or covenants after the date indicated inthe preceding sentence unless, prior to such date, the party seeking indemnification shall havesuffered actual Damages and shall have notified in reasonable detail the party from whomindemnification is sought of a claim for indemnity hereunder.     11.2 Indemnification.          11.2.1 By the Shareholder. From and after the Share Purchase Closing with respect to theShare Purchases and from and after the Merger Closing with respect to the Merger, the Shareholdershall indemnify and hold the Parent harmless from and against any expenses, loss, liability ordamage, including reasonable attorneys’ fees and other out-of-pocket costs and expenses(collectively, “Damages”), incurred or sustained by the Parent resulting from: (i)non-fulfillment of any covenant or the breach of any representation or warranty on the part of theShareholder or Company contained in this Agreement, (ii) the Shareholder RetainedLitigation, as applicable, or (iii) the Shareholder Retained Environmental Liabilities, asapplicable, provided that there shall not be any duplicative payments or indemnities by theShareholder, and provided, further, that any indemnification relating to Taxmatters shall be governed solely by Section 7.4. The Shareholder acknowledges and agrees that inrespect of its indemnification obligations under Section 11.2.1(i), it shall have no right to seekcontribution from the Company from and after the Share Purchase Closing with respect to the SharePurchases and from and after the Merger Closing with respect to the Merger. Each of theShareholder and the Company acknowledge and agree that the statement of present intention made bythe Parent in Section 6.9 shall not give rise to liability to any Person as a result of any actionstaken, or omitted to be taken by Parent or any of its Affiliates from and after the Share PurchaseClosing Date or Merger Closing Date, as applicable.     (a) The following limitations shall apply to the Shareholder’s indemnificationobligations:
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     (1) The amount of any Damages incurred by the Parent shall be reduced by thenet amount of the Tax benefits realized by the Parent, any member of the CompanyGroup or any other Affiliate of the Parent by reason of such Damage.     (2) The amount of any Damages incurred by the Parent shall be reduced by thenet amount the Parent, or any member of the Company Group or any other Affiliate ofthe Parent recovers (after deducting all reasonable attorneys’ fees, out of pocketexpenses and other costs of recovery) from any insurer or other party liable forsuch Damages, and the Parent shall use commercially reasonable efforts to effect anysuch recovery.     (3) The Parent shall not be entitled to indemnification for those portions ofany Damages (x) that have arisen as a result of any grossly negligent andwillful act or omission by the Parent or any of its Affiliates on or after the SharePurchase Closing Date or Merger Closing Date, as applicable (including, withoutlimitation, resulting from any change in their respective accounting principles,practices or methodologies, or (y) that were subject to an adjustment to anyForeign Subsidiary Purchase Price or the Merger Consideration, as applicable,pursuant to Section 4; provided, however, that for purposes of thisSection 11.2.1(a)(3), acts or omissions related to the closure or sale of any OwnedReal Property or Leased Real Property shall not be considered willful acts oromissions by the Parent or any of its Affiliates pursuant to clause (x) above.     (4) The Parent shall not be entitled to indemnification for any Damages withrespect to any individual breach (or breaches related to the same facts) of arepresentation or warranty in Section 5.17 if the amount of such Damages (reduced asprovided in clauses (a)(1) and (a)(2) above) does not exceed $500,000.     (5) The Parent shall be entitled to indemnification under Section 11.2.1(i)(with respect to breaches of representations and warranties only and not withrespect to the non-fulfillment of any covenants) only with respect to that portionof the aggregate amount of its Damages (reduced as provided in clauses (a)(1) and(a)(2) above) that exceeds $6,000,000.     (6) The aggregate amount of Damages payable to the Parent under Section11.2.1(i) or (with respect to Asbestos Liabilities arising from cases first filedduring the period from the second anniversary of the Share Purchase Closing Date orthe Merger Closing Date, as applicable, to the seventh anniversary thereof)11.2.1(iii) shall not exceed 20% of the amount equal to (x) the sum of eachof the Foreign Subsidiary Purchase Prices and the Merger Consideration *minus*(y) the sum of the Target Cash Amount and the aggregate amount of Damagespaid or otherwise incurred (without duplication) by the Shareholder or any of itsAffiliates under the Share Purchase Agreement or in connection with a breach ofSection 13.17(b).
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     (7) The Parent shall not be entitled to indemnification with respect to anyclaim arising out of or relating to Environmental Law to the extent such claimsresult from the closure or sale of Sevalco Ltd or any of Sevalco Ltd’s properties.       (b) For the avoidance of doubt, the limitations on the Shareholder’s indemnificationobligations set forth in clauses (a)(5) and (a)(6) above shall not apply to Damages incurredor sustained by the Parent arising out of:     (1) the Shareholder Retained Environmental Liabilities, other than AsbestosLiabilities arising from cases filed during the period from the second anniversaryof the Share Purchase Closing Date or the Merger Closing Date, as applicable, to theseventh anniversary thereof;     (2) Asbestos Liabilities arising from cases filed prior to the secondanniversary of the Share Purchase Closing Date or the Merger Closing Date, asapplicable; and     (3) the Shareholder Retained Litigation.        11.2.2 By the Parent. From and after the Share Purchase Closing with respect to the SharePurchases and from and after the Merger Closing with respect to the Merger, the Parent shall, andshall cause the Company Group to, indemnify and hold the Shareholder harmless from and against anyDamages incurred or sustained by the Shareholder as a result of (i) non-fulfillment of anycovenant or the breach of any representation or warranty on the part of the Parent or Merger Subcontained in this Agreement, or (ii) the ownership of the Foreign Subsidiary Shares, theMerger or the business or operations of the Company Group, after the Share Purchase Closing in thecase of the Share Purchases and after the Merger Closing in the case of the Merger,provided that there shall not be any duplicative payments or indemnities by the Parent, andprovided,further, that any indemnification relating to Tax matters shall begoverned solely by Section 7.4.Notwithstanding anything in this Agreement to the contrary:     (a) The amount of any Damages incurred by the Shareholder shall be reduced by the netamount of the Tax benefits realized by the Shareholder or any of its Affiliates (other thanthe Company Group) by reason of such Damage.     (b) The amount of any Damages incurred by the Shareholder shall be reduced by the netamount the Shareholder or any of its Affiliates recovers (after deducting all reasonableattorneys’ fees, out-of-pocket expenses and other costs of recovery) from any insurer orother party liable for such Damages, and the Shareholder shall use reasonable efforts toeffect any such recovery.     (c) The Shareholder shall not be entitled to indemnification for those portions of anyDamages that were subject to an adjustment to any Foreign Subsidiary Purchase Prices or theMerger Consideration pursuant to Section 4.
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     (d) The Shareholder shall be entitled to indemnification under Section 11.2.2(i) (withrespect to breaches of representations and warranties only and not with respect to thenon-fulfillment of any covenants only with respect to that portion of the aggregate amount of its Damages (reduced as provided in paragraph (a) and (b) above)that exceeds $6,000,000.     (e) The aggregate amount of Damages payable to the Shareholder under Section 11.2.2(i)shall not exceed 20% of the sum of the Foreign Subsidiary Purchase Price and MergerConsideration.     (f) The Parent shall not be liable for any Damages, as reduced pursuant to clauses(a) and (b) above, for any Shareholder Retained Litigation, as applicable,provided the Parent complies with, and permits the Shareholder and its Affiliates toexercise their respective rights under, Section 11.2.3(b).          11.2.3 Indemnification Procedures. A party entitled to indemnification hereunder shallherein be referred to as an “Indemnitee.” A party obligated to indemnify an Indemniteehereunder shall herein be referred to as an “Indemnitor.”     (a) If an Indemnitee receives notice of any claim or the commencement of any action byany third party that such Indemnitee reasonably believes may give rise to a claim forindemnification from an Indemnitor hereunder, and such Indemnitee intends to seekindemnification from such Indemnitor with respect thereto under this Section 11, suchIndemnitee shall promptly provide written notice thereof to such Indemnitor. Such noticeshall (i) specify in reasonable detail the basis on which indemnification is beingasserted, (ii) provide a reasonable estimate of the amount of the Damages assertedtherein, (iii) specify the provision or provisions of this Agreement under whichsuch Damages are asserted and (iv) include copies of all notices and documents(including court papers) served on or received by the Indemnitee from such third party.Upon receipt of such notice, the Indemnitor shall be entitled to participate in such claimor action, to assume the defense thereof, and to settle or compromise such claim or action;provided that the Indemnitor shall not enter into any settlement that provides forinjunctive or other non-monetary relief affecting the Indemnitee without the prior writtenconsent of the Indemnitee, which consent shall not be unreasonably withheld or delayed.After notice to the Indemnitee of the Indemnitor’s election to assume the defense of suchclaim or action, the Indemnitor shall not be liable to the Indemnitee for any legal or otherexpenses subsequently incurred by the Indemnitee in connection with the defense thereof,provided that the Indemnitee shall have the right to employ counsel to represent itif either (x) such claim or action involves remedies other than monetary damages andsuch remedies, in the Indemnitee’s reasonable judgment, could have or reasonably be expectedto have a Material Adverse Effect on such Indemnitee or (y) the Indemnitee hasavailable to it one or more defenses or counterclaims that are inconsistent with one or moreof the defenses or counterclaims alleged by the Indemnitor and which could be materiallyadverse to the Indemnitor, and in any such event the fees and expenses of such separatecounsel shall be paid by the Indemnitee. If the Indemnitor does not elect to assume thedefense of such claim or action within 45 days of the Indemnitee’s delivery of the noticeand other documents that it is required to deliver to the Indemnitor in respect of such a
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claim or action, the Indemnitee shall be entitled to assume the defense thereof. Unless it has been conclusively determined through a final non-appealable judicial determination(or settlement tantamount thereto) that the Indemnitor is not liable to the Indemnitee underthis Section 11.2.3, the Indemnitee shall act reasonably and in accordance with its goodfaith business judgment with respect thereto, and shall not settle or compromise any suchclaim or action without the consent of the Indemnitor, which consent shall not beunreasonably withheld. The parties shall render to each other such assistance as mayreasonably be requested in order to insure the proper and adequate defense of any such claimor action, including making employees available on a mutually convenient basis to provideadditional information and explanation of any relevant materials or to testify at anyproceedings relating to such claim or action.     (b) Notwithstanding anything in Section 11.2.3(a) to the contrary, with respect to anyShareholder Retained Litigation, (i) counsel defending such litigation shall beselected by the Shareholder or one of its Affiliates in their sole discretion, and suchcounsel (x) shall have access to the employees and information of the Company Group in thesame manner as has occurred in the defense of such litigation prior to the Share PurchaseClosing or the Merger Closing, (y) shall not be deemed or claimed to have anyattorney-client relationship with the Parent and its Affiliates other than the Company Groupand (z) shall not be disqualified from representing the Shareholder and its Affiliates inany Action or Proceeding with the Parent and its Affiliates by virtue of such defense of theShareholder Retained Litigation, and Parent and its Affiliates hereby consent to suchrepresentation and waive any claim that such counsel may be disqualified from representingShareholder and its Affiliates in any Action or Proceeding by virtue of such defense of theShareholder Retained Litigation, (ii) upon the reasonable request of the Parent, theShareholder will provide the Parent with updates from time to time following the SharePurchase Closing or Merger Closing, as applicable, regarding any material developments insuch matter but otherwise shall have no obligation to inform the Parent regarding the statusof any such matter, (iii) all decisions regarding the conduct of such litigation,including, without limitation, any settlement decisions or appeal decisions, shall remainsolely with the Shareholder and its Affiliates, and the Shareholder and its Affiliates shallhave the right to pursue, settle or otherwise resolve any such litigation at any timewithout advance notice to or the consent of the Parent, on such terms as the Shareholder andits Affiliates deem appropriate in their sole discretion; provided the Shareholdershall have no right to bind the Parent and its Affiliates in the settlement of any suchShareholder Retained Litigation without the consent of the Parent and its Affiliates, whichconsent shall not be unreasonably withheld, (iv) the Parent and its Affiliates willprovide the Shareholder with full access at all times to the Company Group’s properties,books, records and personnel, and documents, as the Shareholder may reasonably request inconnection with the Shareholder Retained Litigation, and (v) the Parent and itsAffiliates will make the Company Group’s personnel available as witnesses in the ShareholderRetained Litigation or in any other capacity requested by the Shareholder in connection withthe Shareholder Retained Litigation.     (c) Within 10 Business Days after an Indemnitee sustains or should have known that ithas sustained any Damages not involving a third party claim or action that such Indemniteereasonably believes may give rise to a claim for indemnification from an
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Indemnitor hereunder, and such Indemnitee intends to seek indemnification from such Indemnitor with respect thereto under this Section 11, such Indemnitee shall, if aclaim in respect thereof is to be made against an Indemnitor, deliver notice of such claimto the Indemnitor, which notice shall contain the information described in the secondsentence of Section 11.2.3(a). Subject to Section 11.1, if the Indemnitee fails to providesuch notice within such 10 Business Day period, the Indemnitor will not be obligated toindemnify the Indemnitee with respect to such claim to the extent that the Indemnitor’sability to defend such claim has been actually prejudiced by such failure of the Indemnitee.If the Indemnitor does not notify the Indemnitee within 30 days following its receipt ofsuch notice that the Indemnitor disputes its liability to the Indemnitee, such claimspecified by the Indemnitee in such notice shall be conclusively deemed a liability of theIndemnitor and the Indemnitor shall pay the amount of such claim to the Indemnitee promptlyafter demand therefor or in the case of any notice in which the amount of the claim (or anyportion thereof) is estimated, on such later date when the amount of such claim (or suchportion thereof) is finally determined. If the Indemnitor has timely disputed its liabilitywith respect to such claim as provided above, the Indemnitor and the Indemnitee shallproceed in good faith to negotiate a resolution of such dispute and, if not resolved throughnegotiations, such dispute shall be resolved by litigation in an appropriate court ofcompetent jurisdiction in accordance with Sections 13.14, 13.15 and 13.16.     (d) Without limiting the Shareholder’s rights under other provisions of this Agreement,the Shareholder shall have the right to assume primary control of the resolution of anymatter arising under any Environmental Law for which it has an indemnification obligation,including the option to (i) commission any studies or tests reasonably necessary todefine or delineate the extent of any contamination or non-compliance with EnvironmentalLaws, (ii) contact Governmental Authorities, make any reports to GovernmentalAuthorities, submit any investigation, remediation or compliance plans to such authorities,negotiate with such authorities and otherwise deal with such authorities, (iii)prepare the work plan for any investigation, remediation or correction of non-compliancewith Environmental Laws, and (iv) conduct or direct any such investigation,remediation or correction of noncompliance with Environmental Laws. With respect to claimsbrought pursuant to Section 11.2.1(i) for breaches of representations or warrantiescontained in Section 5.17, the Shareholder shall provide the Parent with a right toparticipate in matters for which the Shareholder has primary control, including, (i)the right to receive and comment on copies of all environmental and engineering studies,work plans, data prepared by the Shareholder or its agents and correspondence or othersubmissions received from or sent to the Governmental Authority overseeing anyinvestigation, remediation or correction of non-compliance with or liability under anyEnvironmental Laws (and the Shareholder shall address in such documents the reasonablecomments of the Parent), and (ii) the right to attend as an observer any meetingswith Governmental Authorities overseeing any investigation, remediation or correction ofnon-compliance with or liability under any Environmental Laws.     (e) With respect to claims brought pursuant to Section 11.2.1(i) for breaches ofrepresentations or warranties contained in Section 5.17, the Shareholder shall conduct
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any resolution of any matter arising under any Environmental Law for which it has an indemnification obligation and for which it accepts primary control in a manner thatwill not unreasonably interfere with or unreasonably interrupt the operations or business ofthe Parent or unreasonably compromise the safety of the property or the business oroperations thereon. Promptly upon completion of any phase of investigatory, remedial orcorrective actions, the Shareholder shall use commercially reasonable efforts to restore anyadversely affected portion of the property to its pre-disturbed condition, such that theParent can continue its operations in the manner in which such operations were conductedprior to the commencement of the investigatory, remedial or corrective action.     (f) The Shareholder shall have satisfied its indemnification obligations under thisAgreement with respect to any matter arising under any Environmental Law if the result meetsor exceeds the least stringent standards (including any lesser standards resulting from anysite-specific risk assessments and including any deed and land use restrictions andinstitutional controls to the extent such restrictions reasonably comport with the usage ofthe property as of the Share Purchase Closing Date or Merger Closing Date, as the case maybe, and do not unreasonably interfere with Parent’s operation of property), based on the useof the property on the Share Purchase Closing Date or Merger Closing Date, as the case maybe, and applicable Environmental Laws as in effect on the date that any remedial orinvestigative activities are concluded so long as such standards are or would be acceptableto the Governmental Authority directly overseeing such matter.     (g) Notwithstanding anything in this Agreement to the contrary, the Parent shall not beentitled to indemnification with respect to any claim arising out of or relating to anyEnvironmental Law to the extent that such claims are discovered or identified byenvironmental sampling or testing conducted by or on behalf of the Parent or its Affiliates,successors, assigns or transferees after the Share Purchase Closing Date or Merger ClosingDate, as applicable, unless such sampling or testing (i) is requested by aGovernmental Authority or is reasonably necessary to comply with an applicable EnvironmentalLaw, (ii) is reasonably necessary to respond to or correct an imminent andsubstantial threat of risk to human health or the environment or (iii) is reasonablynecessary for maintenance or repair performed for a bona fide business purpose.          11.2.4 Mitigation. The parties shall cooperate with each other with respect to resolvingany claim or liability with respect to which one party is obligated to indemnify the other partyhereunder, including by using commercially reasonable efforts to mitigate or resolve any such claimor liability.          11.2.5 Tax Treatment. Each of the Shareholder and the Parent agrees to treat anyindemnification payment made pursuant to this Section 11 as an adjustment to the Foreign SubsidiaryPurchase Prices or Merger Consideration, as applicable, for all Tax purposes unless otherwiserequired by applicable law.          11.2.6 Exclusive Remedy. Subject to Section 13.17 and except with respect to fraud, the indemnities provided for in thisAgreement shall be the sole and exclusive remedy of the Parent and Merger Sub and their Affiliatesafter the Closings against the Shareholder, the
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Company and their Affiliates for any inaccuracy of any representation or warranty or any failure or breach of covenant, obligation, condition oragreement to be performed or fulfilled by the Shareholder hereunder or any matters arising underany Environmental Law with respect to any member of the Company Group, including but not limited toany environmental conditions on, at, under or emanating from the facilities owned, leased oroperated by any member of the Company Group or elsewhere.          11.2.7 Accounts Receivables Claims. In the event that the Shareholder agrees to or isotherwise required to pay any Damages in connection with a breach of the representation set forthin Section 5.18(v), the Parent shall, or shall cause the applicable member of the Company Group to,promptly upon receipt of and in any event as a condition precedent to such payment, transfer to theShareholder or its designee all right, title and interest to the uncollected receivables givingrise to such payment. The Parent acknowledges and agrees that the Shareholder may seek collectionof such receivables by any reasonable means it deems appropriate, including litigation, and theParent shall not, and shall cause each member of the Company Group not to, object to or otherwiseseek to impair, any such collection.     12. Definitions. As used herein, the following terms have the following meanings:          2004 Balance Sheet: as defined in Section 5.6.          Account Balance: as defined in Section 8.1.5.          Accounting Firm: as defined in Section 4.1(b).   Actions or Proceedings: any action, suit, arbitration, judicial oradministrative actions, injunctions, judgments, orders, decrees, proceedings or governmentalinvestigations or audit.   Additional Funding Amount: as defined in Section 8.1.14(d).   Affiliate: with respect to any Person, any other Person that directly orindirectly controls, is controlled by, or is under common control with, the first Person.   Agreement: this Master Agreement and Plan of Merger, including the Schedulesand Exhibits hereto.   Asbestos Liabilities: any liability arising from or relating to asbestoslitigation cases or claims filed during the period commencing on or after the Share PurchaseClosing Date with respect to the Foreign Subsidiaries or on or after the Merger Closing Datewith respect to the Company and the Remaining Subsidiaries and ending on the seventhanniversary thereof that allege asbestosis or other personal injury or illness associated with exposure or alleged exposure to asbestos or otherwise based on thepresence or alleged presence of asbestos or asbestos-containing materials (each, an“Asbestos Exposure”) at any current real property or facility owned, leased,occupied or operated by the Company Group or any of their respective predecessors orAffiliates or in any product manufactured, marketed, sold, installed or distributed by theCompany Group or any of their respective predecessors or Affiliates, provided that(i) Asbestos
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Liabilities shall not include any liability arising from an Asbestos Exposure in which the facts or events underlying such Asbestos Exposure first existed orfirst occurred after the Share Purchase Closing Date with respect to the ForeignSubsidiaries or after the Merger Closing Date with respect to the Company and the RemainingSubsidiaries, and (ii) with respect any liability arising from an Asbestos Exposurein which the facts or events underlying such Asbestos Exposure occurred or existed bothprior to and after the Share Purchase Closing Date and the Merger Closing Date, AsbestosLiabilities shall not include any liability attributable to the Asbestos Exposure thatoccurred or existed after the Share Purchase Closing Date with respect to the ForeignSubsidiaries or after the Merger Closing Date with respect to the Company and the RemainingSubsidiaries.     Asbestos Litigation: the asbestos litigation cases that are currently pendingagainst the Company Group and marked with an asterisk on Schedule 5.13.     Audited Financial Statements: as defined in Section 5.6.     Bahia Project: a contemplated expansion of the operations and business ofColumbian Chemicals Brasil, Ltda.     Bahia Project Expenditures: all expenditures and costs relating to the BahiaProject, made on or after September 1, 2005, to and including the Share Purchase ClosingDate or the Merger Closing Date, as applicable.     Board of Directors: the board of directors of any specified Person.     Business Day: any day that is not (i) a Saturday, (ii) aSunday or (iii) any other day on which commercial banks are authorized or requiredby law to be closed in the City of New York.     Canadian Pension Plan: as defined in Section 8.1.13.     Capital Expenditures: capital expenditures from January 1, 2005 up to but notincluding the Share Purchase Closing Date or Merger Closing Date, as applicable, as recordedon the Closing Balance Sheet in accordance with GAAP, excluding any Bahia ProjectExpenditures and North Bend Project Expenditures.     Cash and Cash Equivalents: all cash and all other checks, bank drafts,certificates of deposits, other bank deposits and other similar items that are customarilycharacterized as cash equivalents.     CERCLA: the Comprehensive Environmental Response, Compensation and Liabilityof 1986, as amended.     Certificate of Merger: as defined in Section 2.4.     Closed Sites: the sites and properties currently owned by the Company Groupthat are located in Seminole, Texas, Swartz, Louisiana and Mojave, California.
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     Closing Balance Sheet: as defined in Section 4.1. For the avoidance of doubt,such Closing Balance Sheet shall reflect any transactions permitted in Section 7.2.1 takenfollowing the date hereof to the Share Purchase Closing Date or the Merger Closing Date, asapplicable, and shall exclude Shareholder Retained Environmental Liabilities and all eventsoccurring after the Share Purchase Closing Date or the Merger Closing Date, as applicable.     Closing Date: the Share Purchase Closing Date and the Merger Closing Date, asapplicable.     Closing Statement: as defined in Section 4.1.     Closings: the Share Purchase Closing and the Merger Closing.     COBRA: the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended.     Code: the Internal Revenue Code of 1986, as amended.     Commitment Letters: as defined in Section 6.3.     Company: as defined in the recitals.     Company Employees: as defined in Section 8.1.     Company Final Working Capital: as defined in Section 4.1.     Company Group: the Company and its Subsidiaries, and after the Share PurchaseClosing and the Merger Closing, the Surviving Corporation and all Persons which immediatelyprior to the Share Purchase Closing were Subsidiaries of the Company.     Company Intellectual Property: as defined in Section 5.11(a).     Company Licenses: as defined in Section 5.11(a).     Company Target Working Capital: $85,214,000.     Competing Business: as defined in Section 7.9.     Contracts: as defined in Section 5.9.     Covered Employees: as defined in Section 8.1.12(a).     Credit Support Arrangements: as defined in Section 7.8.     Current Assets: the value of all current assets of the relevant ForeignSubsidiary or of the Company and the Remaining Subsidiaries, as applicable, reflected on aClosing Balance Sheet, *including*, without duplication, (a) all Bahia ProjectExpenditures and North Bend Project Expenditures, and (b) Cash and Cash Equivalentsincluding the
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Target Cash Amount but *excluding*to the extent relevant (i) deferred tax assets, (ii) contra-assets or reserves for securitization of accounts receivable, (iii) intercompany accounts, (iv) income tax receivables,(v) reserves and receivables relating to the KKPC dispute, and (vi) reservesrelated to inventory accounted for on a last-in-first out basis.     Current Liabilities: the value of all current liabilities of the relevantForeign Subsidiary or of the Company and the Remaining Subsidiaries, as applicable,reflected on a Closing Balance Sheet, *including*, without duplication, the outstandingaggregate amount of Indebtedness, but *excluding*to the extent relevant (i) payablesrelating to the KKPC dispute, (ii) intercompany payables, (iii) deferred taxliabilities and (iv) income tax payables.     Damages: as defined in Section 11.2.1.     Definitive Financing Agreements: as defined in Section 6.3.     DGCL: the General Corporation Law of the State of Delaware.     DOJ: as defined in Section 7.1(b).     Effective Time: as defined in Section 2.4.     Environmental Law: any foreign, federal, state, or local law, statute, rule,regulation or order, including all common law, each as amended or in effect on or prior tothe Share Purchase Closing Date in the case of the Share Purchases and the Merger ClosingDate with respect to the Merger relating to (i) the manufacture, transport, use,treatment, storage, disposal, arrangement for disposal, release or threatened release ofHazardous Substances, or (ii) pollution or the protection of human health (as itrelates to exposure to Hazardous Substances) and the environment (including, withoutlimitation, natural resources, air, and surface or subsurface land or waters).     Environmental Liabilities: any costs, liabilities or obligations arising underEnvironmental Laws (whether known or unknown, foreseen or unforeseen, contingent orotherwise, fixed or absolute or present or arising in the future), including withoutlimitation costs, liabilities or obligations arising from any of the following conditions orevents, regardless of when occurring or arising: (i) any adverse environmentalconditions resulting from the presence, release, threatened release or disposal of HazardousSubstances, (ii) any exposure to or damage from any Hazardous Substances,(iii) the transportation, storage, treatment, recycling, disposal or arrangement fordisposal of Hazardous Substances, or (iv) any violation of any Environmental Law.     ERISA: the Employee Retirement Income Security Act of 1974, as amended.     Financial Statements: as defined in Section 5.6.     Financing Amount: as defined in Section 6.3.     Foreign Conversions: as defined in Section 7.11.
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     Foreign Subsidiaries: as defined in the recitals.     Foreign Subsidiary Final Working Capital: as defined in Section 4.1.     Foreign Subsidiary Purchase Price: as defined in Section 1.3.     Foreign Subsidiary Shares: as defined in the recitals.     Foreign Subsidiary Target Working Capital: $19,923,000 for Columbian CarbonEuropa SRL, $13,081,000 for Columbian Chemicals Brasil, Ltda., $12,920,000 for ColumbianChemicals Canada, Ltd., negative $98,000 for Columbian Chemicals Europa GmbH, $9,445,000 forColumbian Tiszai Carbon, LLC, $15,074,000 for Columbian (U.K.) Limited, and $6,941,000 forColumbian Carbon Deutschland GmbH.     Former Employees: former employees of any member of the Company Group.     FTC: as defined in Section 7.1(b).     GAAP: as defined in Section 5.6.     Governmental Authority: any national government, any state or province orother political subdivision thereof, and any entity exercising executive, legislative,judicial, regulatory or administrative functions of or pertaining to government, including,without limitation, any government authority, agency, department, board, commission orinstrumentality of the United States of America, any State of the United States of Americaor any political subdivision thereof.     Hazardous Substance: any material, substance or waste that is: (i)listed, classified or regulated as a “hazardous waste,” “hazardous substance” or “toxicsubstance” pursuant to any applicable Environmental Law, (ii) any petroleum productor by-product, friable asbestos, radioactive materials, urea formaldehyde insulation orpolychlorinated biphenyls, or (iii) with respect to which liability or standards ofconduct are imposed under any Environmental Law.     HSR Act: as defined in Section 5.2(b).     Indebtedness: shall mean, without duplication, all obligations of a relevantmember of the Company Group: (i) for borrowed money, (ii) evidenced bynotes, bonds, debentures or similar instruments, (iii) for reimbursement under drawnletters of credit, bankers’ acceptance or surety bonds, (iv) for the deferredpurchase price of goods or services (other than trade payables or accruals incurred in theordinary course of business), (v) under capital leases, (vi) arising underany conditional sale or title retention agreements, (vii) in connection withcontra-assets or reserves for securitization of accounts receivable, (viii) forUnfunded PBO and Unfunded APBO, (ix) Unfunded Capital Expenditures, and (x) from any guarantees of the obligations describedin clauses (i)-(ix) above.     Indemnitee: as defined in Section 11.2.3.
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     Indemnitor: as defined in Section 11.2.3.     Installment Clearance Statement: as defined in Section 8.1.14(d).     Installment Funding Amount: as defined in Section 8.1.14(d).     Intellectual Property: as defined in Section 5.11(a).     Interim Financial Statements: as defined in Section 5.6.     IRS: the Internal Revenue Service of the United States.     KKPC: Korea Kumho Petrochemicals Co., Ltd.     KKPC Matter: refers to a pending arbitration between Columbian Chemicals KoreaCo., Ltd. and KKPC regarding certain invoices and purchasing policies.     Leased Real Property: as defined in Section 5.8.     Liability: means any liability or obligation, whether known or unknown,asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated orunliquidated and whether due or to become due, regardless of when asserted by or against theCompany Group, as of the end of the business day on the Share Purchase Closing Date and theMerger Closing Date, as applicable.     Licenses: as defined in Section 5.11(a).     Liens: as defined in Section 5.2(a).     Material Adverse Effect: a material adverse effect on (a) thebusiness, operations, assets, liabilities, condition (financial or otherwise) or results ofoperations of the Company Group, taken as a whole, or (b) the ability of theShareholder or the Company to perform its obligations hereunder or to consummate thetransactions contemplated hereby, other than any change or effect that results from orrelates to: (x) the announcement by the Shareholder of its intention to sell anymember of the Company Group, including any announcement related to the execution anddelivery of this Agreement, (y) the consummation of the transactions contemplated bythis Agreement, or (z) changes in (i) financial, securities or other marketconditions affecting the industries in which any member of the Company Group operates, and(ii) applicable law or regulations or accounting standards, principles orinterpretations.     Merger: as defined in the recitals.     Merger Closing: as defined in Section 2.2.     Merger Closing Date: as defined in Section 2.2.     Merger Consideration: as defined in Section 2.3.
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     Merger Sub: as defined in the recitals.     Merger Sub Stock: as defined in Section 3.1(a).     Minimum Capital Expenditures: minimum monthly capital expenditures as setforth on Schedule 12.1.     Non-Disclosure Agreements: as defined in Section 7.2.2.     North Bend Project: a contemplated cogeneration project at the North Bendfacility of the Company.     North Bend Project Expenditures: all expenditures and costs relating to theNorth Bend Project, made on or after September 1, 2005, to and including the Share PurchaseClosing Date or the Merger Closing Date, as applicable.     Notice of Disagreement: as defined in Section 4.1(a).     Owned Intellectual Property: as defined in Section 5.11(a).     Owned Real Property: as defined in Section 5.8.     Parent: as defined in the recitals.     PBO: as defined in Section 8.1.1(c).     Pensions Regulator: as defined in Section 8.1.14(a).     Permitted Liens: (i) Liens reflected in the Financial Statements or inSchedule 5.8, (ii) Liens for Taxes not due and payable or that are being contestedin good faith by appropriate proceedings, (iii) Liens of warehousemen, mechanics andmaterialmen and other similar Liens incurred in the ordinary course of business, and(iv) any other Liens that do not materially interfere with the current use of theproperties affected thereby or would not be reasonably expected, individually or in theaggregate, to have a Material Adverse Effect.     Person: any natural person, firm, limited liability company, generalpartnership, limited partnership, joint venture, association, corporation, trust,Governmental Authority or other entity.     Plan Funding Statement: as defined in Section 8.1.1.     Plan Notice of Disagreement: as defined in Section 8.1.1.     Plans: as defined in Section 5.10.1.     Reduced Taxes: as defined in Section 7.4(c).
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     Relief: any relief, loss, allowance, exemption, set-off, deduction or credit,in computing or against income, profits and gains or UK corporation tax or any right torepayment of UK corporation tax.     Remaining Subsidiaries: as defined in Section 7.3(b).     Secretary of State: as defined in Section 2.4.     Securities Act: as defined in Section 6.6.     Sevalco Ltd Plan Indemnities: as defined in Section 8.1.14(d).     Sevalco Trustees: as defined in Section 8.1.14(a).     Share Purchase Agreements: as defined in the recitals.     Share Purchase Closing: as defined in Section 1.2.     Share Purchase Closing Date: as defined in Section 1.2.     Share Purchases: as defined in the recitals.     Shareholder: as defined in the recitals.     Shareholder Funding Obligation: as defined in Section 8.1.14(d).     Shareholder Retained Environmental Liabilities: (A) all EnvironmentalLiabilities arising from or relating to (i) the Closed Sites or (ii) theSuperfund Sites; and (B) all Asbestos Liabilities.     Shareholder Retained Litigation: the Asbestos Litigation and the litigation,claims, proceedings and related activities with respect to the matters specified in Schedule12.     Shares: as defined in the recitals.     Stand-Alone Plan: as defined in Section 5.10.1.     Subsidiary: with respect to any Person (the “Parent Entity”), anyother Person (other than a natural person), whether incorporated or unincorporated, of whichat least a majority of the securities or ownership interests having by their terms ordinaryvoting power to elect a majority of the board of directors or other persons performingsimilar functions is directly or indirectly owned or controlled by the Parent Entity or byone or more of its respective Subsidiaries or by the Parent Entity and any one or more ofits respective Subsidiaries.     Superfund Sites: the Casmalia Disposal Site located in Santa Barbara County,California and the JIS Industrial Service Landfill located in Jamesburg, New Jersey.
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     Surviving Corporation: as defined in Section 2.1.     Surviving Corporation Stock: as defined in Section 3.1(a).     Target Cash Amount: $10,000,000 of unrestricted cash in the accounts of theCompany in the United States.     Tax Dispute Accountants: as defined in Section 7.4(f).     Tax Indemnitee: as defined in Section 7.4(a).     Tax Indemnitor: as defined in Section 7.4(a).     Tax Return: any report, return, statement or other written informationrequired to be filed with a taxing authority in connection with Taxes.     Taxes: means any federal, state, local, or foreign income, gross receipts,license, single business, payroll, employment, excise, severance, stamp, occupation,premium, windfall profits, environmental (including taxes under Code §59A), customs duties,capital stock, franchise, profits, withholding, social security (or similar), unemployment,disability, real property, personal property, sales, use, transfer, registration, valueadded, alternative or add-on minimum, estimated, or other tax of any kind whatsoever,including any interest, penalty, or addition thereto, whether disputed or not and anyexpenses incurred in connection with the determination, settlement or litigation of anyliability for Taxes.     Transition Services Agreement: the Transition Services Agreement by and amongthe Shareholder, the Company and the Parent, substantially in the form of Exhibit G hereto.     Unfunded APBO: as defined in Section 8.1.1.     Unfunded Capital Expenditures: the amount by which Capital Expenditures isless than the Minimum Capital Expenditures as of the Share Purchase Closing Date or MergerClosing Date, as applicable, prorated for the month in which each Closing occurs.     Unfunded PBO: as defined in Section 8.1.1.     U.S. Bargaining Pension Plan: as defined in Section 8.1.12(a).     WARN Act: as defined in Section 8.1.8.     Working Capital: Current Assets *less*Current Liabilities.     13. General Provisions.     13.1 Modification; Waiver. This Agreement may be amended or modified only by a writteninstrument executed by each of the parties hereto. Any of the terms and conditions of thisAgreement may be waived in writing at any time by the party entitled to the benefits thereof.
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     13.2 Entire Agreement. This Agreement, including the Schedules and Exhibits hereto (whichare hereby incorporated by reference and made a part hereof), is the entire agreement of theparties with respect to the subject matter hereof and supersedes all other prior agreements andunderstandings, oral or written, express or implied, between the parties hereto and theirrespective Affiliates, representatives and agents in respect of the subject matter hereof(including, without limitation, the Descriptive Offering Memorandum, dated February 2005, withrespect to the Company Group and any supplements thereto), except that this Agreement does notsupersede the Non-Disclosure Agreements, the terms and conditions of which the parties heretoexpressly reaffirm.     13.3 Certain Limitations. It is the explicit intent and understanding of each of theparties hereto that neither party nor any of its Affiliates, representatives or agents is makingany representation or warranty whatsoever, oral or written, express or implied, other than thoseset forth in Sections 5 and 6 and in the certificates delivered pursuant to Sections 9.3.2 and9.4.2 and neither party is relying on any statement, representation or warranty, oral or written,express or implied, made by the other party or such other party’s Affiliates, representatives oragents (including, without limitation, with respect to any estimates, projections, forecasts,budgets or other forward-looking information delivered or made available to the Parent or itsrepresentatives), except for the representations and warranties set forth in such Sections. EXCEPTAS OTHERWISE SPECIFICALLY SET FORTH IN THIS AGREEMENT, THE PARTIES EXPRESSLY DISCLAIM ANY IMPLIEDWARRANTY OR REPRESENTATION AS TO CONDITION, MERCHANTABILITY OR SUITABILITY AS TO ANY OF THE ASSETSOF ANY MEMBER OF THE COMPANY GROUP AND, EXCEPT AS OTHERWISE SPECIFICALLY SET FORTH IN THISAGREEMENT, IT IS UNDERSTOOD AND AGREED THAT THE PURCHASER TAKES THE ASSETS OF EACH MEMBER OF THECOMPANY GROUP AND ANY ENTITY LISTED IN SCHEDULE 5.3 OR 5.5 “AS IS” AND “WHERE IS”. The partiesagree that this is an arm’s length transaction in which the parties’ undertakings and obligationsare limited to the performance of their obligations under this Agreement. The documents that havebeen made available to each of the Parent and Merger Sub or their representatives by theShareholder and the Company or their representatives shall be deemed disclosed and deliveredpursuant to this Agreement. The parties have participated jointly in the negotiating and draftingof this Agreement.     13.4 Termination.     (a) This Agreement may be terminated:     (i) at any time prior to the Share Purchase Closing by mutual written consent of theParent and the Shareholder;     (ii) at any time before the Share Purchase Closing, by the Shareholder or the Parent,(x) in the event of a material breach hereof by the non-terminating party, if suchnon-terminating party fails to cure such breach within five Business Days followingnotification thereof by the terminating party, or (y) upon notification of thenon-terminating party by the terminating party that the satisfaction of any condition to theterminating party’s obligations under this Agreement becomes impossible or
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impracticable with the use of commercially reasonable efforts, if the failure of such condition to be satisfied is not caused by a breach hereof by the terminating party;     (iii) by the Parent or the Shareholder, by written notice to the other party, if theShare Purchase Closing shall not have taken place on or before March 31, 2006, or such laterdate as the parties may have agreed to in writing, provided that the non-occurrenceof the Share Purchase Closing is not attributable to a breach of any of the terms hereof bythe party seeking termination;     (iv) at any time before the Merger Closing, by the Shareholder or the Parent,(x) in the event of a material breach hereof by the non-terminating party, if suchnon-terminating party fails to cure such breach within five Business Days followingnotification thereof by the terminating party, or (y) upon notification of thenon-terminating party by the terminating party that the satisfaction of any condition to theterminating party’s obligations under this Agreement becomes impossible or impracticablewith the use of commercially reasonable efforts, if the failure of such condition to besatisfied is not caused by a breach hereof by the terminating party; or     (v) by the Parent or the Shareholder, by written notice to the other party, if theMerger Closing shall not have taken place on or before March 31, 2006, or such later date asthe parties may have agreed to in writing, provided that the non-occurrence of theMerger Closing is not attributable to a breach of any of the terms hereof by the partyseeking termination.     (b) If this Agreement is terminated as provided in Section 13.4(a), the transactionscontemplated by this Agreement shall be terminated without further action by either party. If thetransactions contemplated by this Agreement are terminated as provided herein:     (i) the Parent shall return to the Shareholder all documents and other materialsreceived from the Shareholder, its Affiliates, the Company Group or their respective agents(including all copies of or materials developed from any such documents or other materials)relating to the transactions contemplated hereby, whether obtained before or after theexecution hereof; and     (ii) all confidential information received by the Parent with respect to theShareholder and its Affiliates shall be otherwise treated in accordance with theNon-Disclosure Agreements, which shall remain in full force and effect notwithstanding thetermination of this Agreement.     (c) If this Agreement is terminated as provided in Section 13.4(a), this Agreement shallbecome null and void and of no further force or effect, except for (i) Section 7.2.2 to theextent it makes information disclosed thereunder subject to the Non-Disclosure Agreements and(ii) this Section 13.4, Section 7.5 (relating to publicity), and Section 13.5 (relating tocertain expenses). Nothing in this Section 13.4 shall be deemed to release either party from anyliability for any breach by such party of the terms and provisions of this Agreement or to impairthe right of either party to compel specific performance by the other party of its obligationsunder this Agreement pursuant to Section 13.17.
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     (d) Notwithstanding any other provision in this Agreement to the contrary, upon termination ofthis Agreement pursuant to Section 13.4(a), the Shareholder will remain liable to the Parent forany breach of this Agreement by the Shareholder existing at the time of such termination, and theParent will remain liable to Shareholder for any breach of this Agreement by Parent existing at thetime of such termination, and the Shareholder or the Parent may seek such remedies, includingdamages and fees of attorneys, against the other with respect to any such breach as are provided inthis Agreement or as are otherwise available at law or in equity.     13.5 Expenses. Except as expressly provided herein, whether or not the transactionscontemplated herein shall be consummated, each party shall pay its own expenses, costs and feesincident to the preparation and performance of this Agreement; provided that the Parentshall be responsible for all filing fees in connection with (i) filings required by the HSRAct and (ii) any other filings with Governmental Authorities set forth on Schedules9.2.3(i) and 10.2.3(i).     13.6 Further Actions. Each party shall execute and deliver such certificates and otherdocuments and take such other actions as may reasonably be requested by the other party in order toconsummate or implement the transactions contemplated hereby, including in connection withobtaining the Financing Amount.     13.7 Post-Closing Access. In connection with any matter relating to any period prior to,or any period ending on, the Share Purchase Closing Date or Merger Closing Date, as the case maybe, the Parent shall, upon the request and at the expense of the Shareholder, provide theShareholder and its representatives with full access at all reasonable times during normal businesshours to the properties, books and records of the members of the Company Group and furnish forinspection such information and documents in its possession relating to the Company Group as theShareholder may reasonably request. The Parent shall, and shall cause the members of the CompanyGroup to, execute such documents as the Shareholder may reasonably request to enable theShareholder to file any required reports or Tax Returns relating to any of the members of theCompany Group. The Parent shall not dispose of such books and records during the ten-year period beginning with theShare Purchase Closing Date or Merger Closing Date, as applicable, without the Shareholder’sconsent, which shall not be unreasonably withheld. Following the expiration of such ten-yearperiod, the Parent may dispose of such books and records at any time upon giving 60 days’ priorwritten notice to the Shareholder, unless the Shareholder agrees to take possession of such booksand records within 60 days at no expense to the Parent.     13.8 Notices. All notices, requests, demands and other communications hereunder shall bein writing and shall be deemed to have been duly given if: (a) delivered personally,(b) sent by registered or certified mail in the United States, return receipt requested,(c) sent by reputable overnight air courier (such as DHL or Federal Express) or (d)sent by fax, as follows:   if to the Shareholder or the Company, at: if to the Parent or Merger Sub:   Phelps Dodge Corporation Columbian Chemicals Acquisition LLCOne North Central Avenue c/o One Equity PartnersPhoenix, Arizona 85004-2306 320 Park AvenueFax: (602) 366-7321 New York, New York 10022
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   Attention: S. David Colton, Esq. Fax: (212) 277-1533  Attention: Mark Amrhein, Esq.   with a copy to: with a copy to:   Debevoise & Plimpton LLP Milbank, Tweed, Hadley & McCloy LLP919 Third Avenue 1 Chase Manhattan PlazaNew York, New York 10022 New York, New York 10005Fax: (212) 909-6836 Fax: (212) 822-5671Attention: Michael W. Blair, Esq. Attention: Charles J. Conroy, Esq.or to such other address or to such other Person as either party hereto shall have last designatedby notice to the other party.     All such notices, requests, demands and other communications shall be deemed to have beenreceived (w) if by personal delivery, on the next Business Day after such delivery,(x) if by registered or certified mail in the United States return receipt requested, onthe seventh Business Day after the mailing thereof, (y) if by reputable overnight aircourier, on the next Business Day after the mailing thereof or (z) if by fax, on the nextBusiness Day following the day on which such fax was sent, provided that a copy is also sent byregistered or certified mail, return receipt requested.     13.9 Assignment of Agreement; Assignment of Non-Disclosure Agreements.     (a) This Agreement shall be binding upon and inure to the benefit of the parties hereto andtheir respective successors and permitted assigns, but shall not be assignable, by operation of lawor otherwise, by any party hereto without the prior written consent of the other parties and any purported assignment or other transfer without such consent shall be void andunenforceable; provided that the Parent and the Merger Sub may assign all of its rights orinterests (but not its obligations) hereunder (including without limitation its rights underSection 7.4 and Section 11) to any financing sources.     (b) The Shareholder shall, or shall cause any member of the Company Group to, assign to theParent or its designee all confidentiality and non-disclosure agreements entered into by theShareholder and/or any member of the Company Group with respect to the sale of the Company. In theevent any such agreement is incapable of being assigned, Shareholder shall, at Parent’s reasonablerequest and sole expense enforce the confidentiality and other provisions thereof for the benefitof Parent and its Affiliates.     13.10 No Third Party Beneficiaries. Nothing in this Agreement shall confer any rights uponany Person that is not a party or a successor or permitted assignee of a party to this Agreement.     13.11 Counterparts. This Agreement may be executed in counterparts (including byfacsimile), both of which shall constitute one and the same instrument.
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     13.12 Interpretation. The Section headings in this Agreement are for convenience ofreference only and shall not be deemed to alter or affect the meaning or interpretation of anyprovision hereof. Any references to Sections or Schedules in this Agreement shall refer toSections of and Schedules to this Agreement unless otherwise indicated. Any references to “theShareholder’s or the Company’s knowledge” or “the knowledge of the Shareholder and the Company”shall mean the actual/constructive knowledge of the individuals set forth on Schedule 13.12,without any duty of investigation or inquiry. The disclosure of any matter in the Schedules heretoshall be deemed to be a disclosure for all purposes of this Agreement, but shall expressly not bedeemed to constitute an admission by the Shareholder or the Parent, or to otherwise imply, that anysuch matter is material for the purposes of this Agreement.     13.13 Severability. If any provision, including any phrase, sentence, clause, section orsubsection, of this Agreement is invalid, inoperative or unenforceable for any reason, suchcircumstances shall not have the effect of rendering such provision invalid, inoperative orunenforceable in any other case or circumstance, or of rendering any other provision hereincontained invalid, inoperative or unenforceable to any extent whatsoever.     13.14 Governing Law. This Agreement shall be construed, performed and enforced inaccordance with the laws of the State of New York without giving effect to its principles or rulesof conflict of laws to the extent such principles or rules would require or permit the application of the laws of anotherjurisdiction.     13.15 Consent to Jurisdiction.     (a) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself andits property, to the exclusive jurisdiction of any New York State court or Federal court of theUnited States of America sitting in New York City, and any appellate court from any thereof, in anyAction or Proceeding arising out of or relating to this Agreement or the transactions contemplatedhereby or for recognition or enforcement of any judgment relating thereto, and each of the partieshereto hereby irrevocably and unconditionally agrees that all claims in respect of any such Actionor Proceeding may be heard and determined in such New York State court or, to the extent permittedby law, in such Federal court. Each of the parties hereto agrees that a final judgment in any suchAction or Proceeding shall be conclusive and may be enforced in other jurisdictions by suit on thejudgment or in any other manner provided by law.     (b) Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullestextent it may legally and effectively do so, any objection which it may now or hereafter have tothe laying of venue of any Action or Proceeding arising out of or relating to this Agreement or thetransactions contemplated hereby in any New York State or Federal court. Each of the partieshereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of aninconvenient forum to the maintenance of such Action or Proceeding in any such court.     (c) Each party to this Agreement irrevocably consents to service of process in the mannerprovided for notices in Section 13.8. Nothing in this Agreement will affect the right of any partyto this Agreement to serve process in any other manner permitted by law.
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     13.16 Waiver of Punitive and Other Damages and Jury Trial.     (a) THE PARTIES TO THIS AGREEMENT EXPRESSLY WAIVE AND FOREGO ANY RIGHT TO RECOVER PUNITIVE,EXEMPLARY, LOST PROFITS, CONSEQUENTIAL OR SIMILAR DAMAGES IN ANY ARBITRATION, LAWSUIT, LITIGATIONOR PROCEEDING ARISING OUT OF OR RESULTING FROM ANY CONTROVERSY OR CLAIM ARISING OUT OF OR RELATINGTO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.     (b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY OR CLAIM WHICH MAY ARISE OUT OF ORRELATE TO THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE ITHEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECTOF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THETRANSACTIONS CONTEMPLATED HEREBY.     (c) EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT ORATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OFLITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (ii) IT UNDERSTANDS AND HAS CONSIDEREDTHE IMPLICATIONS OF SUCH WAIVERS, (iii) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (iv)IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS ANDCERTIFICATIONS IN THIS SECTION 13.16.     13.17 Specific Performance; etc(a) Each of the parties hereto acknowledges and agreesthat, in the event of any breach of this Agreement, the non-breaching party would be irreparablyand immediately harmed and could not be made whole by monetary damages. It is accordingly agreedthat the parties hereto (a) shall be entitled, in addition to any other remedy to whichthey may be entitled at law or in equity, to obtain injunctive relief or to compel specificperformance of this Agreement in accordance with any action instituted in accordance with Section13.15 and (b) will waive, in any action for specific performance, the defense of theadequacy of a remedy at law.     (b) Parent shall take, and after the Share Purchase Closings shall cause each member of theCompany Group to take, all action necessary to cause each buyer under a Share Purchase Agreementnot to seek any remedy thereto for any Damages incurred under such Agreement.
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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as ofthe date first above written.       PHELPS DODGE CORPORATION       By /s/ Ramiro G. Peru         Name: Ramiro G. Peru    Title: Executive Vice President & Chief    Financial Officer       COLUMBIAN CHEMICALS COMPANY       By /s/ James Berresse         Name: James Berresse    Title: President and Chief Executive Officer       COLUMBIAN CHEMICALS ACQUISITION LLC       By /s/ Thomas F. Kichler         Name: Thomas F. Kichler    Title: Manager       COLUMBIAN CHEMICALS MERGER SUB, INC.       By /s/ Woohyun Lee         Name: Woohyun Lee    Title: President
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Exhibits A-FForm of Share Purchase AgreementsA-1

 
Exhibit GForm of Transition Services Agreement
 

 
EXHIBIT A     QUOTA PURCHASE AGREEMENT, dated as of [___], 2005 (this “Agreement”), amongColumbian International Chemicals Corporation (Seat: US — Marietta, GA West Oak, Commons Court1800, USA) (“CICC”), Columbian Chemicals Company (Seat: US — 300 62 Marietta, GA, West Oak CommonsCourt 1800, USA) (“Columbian”) (each, a “Seller” and collectively, the“Sellers”), and [Newco], a [foreign jurisdiction] [entity] (the “Purchaser”).W I T N E S S E T H:     WHEREAS, Phelps Dodge Corporation, a New York corporation (“Phelps Dodge”), Columbian,Columbian Chemicals Acquisition LLC, a Delaware limited liability company (the “Parent”),and Columbian Chemicals Merger Sub, Inc., a Delaware corporation, have entered into a MasterAgreement and Plan of Merger dated November 15, 2005 (the “Master Agreement”), providing,inter alia, for the sale of Columbian Tiszai Koromgyártó Kft. (Registration No.05-09-002252; Seat: 3581 Tiszaújváros hrsz. 2052.) (the “Company”), pursuant to Section 1.1of the Master Agreement;     WHEREAS, pursuant to this Agreement the Purchaser1 herewith acquires the Quotas,including without limitation (i) the quota having a face value of HUF 999,000,000 representing 99.9% of the Company’s registered capital (“Quota 1”), owned by CICC, and (ii) the quota having a facevalue of HUF 1,000,000 representing 0.1 % of the Company’s registered capital (“Quota 2”) owned byColumbian (Quota 1 and Quota 2 are collectively referred to herein as the “Quotas”); and     WHEREAS, the Sellers wish to sell the Quotas to the Purchaser, and the Purchaser wishes topurchase the Quotas from the Sellers, on the terms and conditions and for the consideration setforth in this Agreement; and     NOW, THEREFORE, in consideration of the mutual promises, covenants, representations andwarranties made herein and of the mutual benefits to be derived therefrom, the parties hereto agreeas follows: 1 Please note that pursuant to Section 4 point(4) of Hungarian Act on Business Associations of CXLIV of 1997 (“CompanyAct”) a single-member business association may not be the sole member ofa business association.
 

 
ARTICLE ISALE AND PURCHASE OF QUOTAS     1.1 Sale and Purchase of Quotas. Subject to the terms and conditions hereof, at theClosing, each Seller will sell to the Purchaser, and the Purchaser will purchase from each Seller,the Quotas set forth opposite such Seller’s name in the column entitled “Quotas” in Schedule 1.1,for a purchase price for each Seller equal to the amount set forth opposite such Seller’s name inthe column entitled “Seller Purchase Price” (the “Per Seller Purchase Price”). Theaggregate purchase price to be paid by the Purchaser for all Quotas is US$103,160,000, subject topro rata adjustment pursuant to Section 4 of the Master Agreement (the “Purchase Price”).     1.2 Assignment of Certain Payment Rights. Each Seller hereby assigns to Phelps Dodgeall of its rights and obligations, if any, to receive and to pay, respectively, the amount of anyadjustment to the Purchase Price, as determined in accordance with Section 4 of the MasterAgreement.     1.3 Closing. The closing of the sale and purchase of the Quotas (the “Closing”) willtake place at the offices of Debevoise & Plimpton LLP, 919 Third Avenue, New York, New York 10022,on the Share Purchase Closing Date as defined in the Master Agreement (the “Closing Date”).At the Closing:     (a) An Authorized Officer of each Seller, acting in person or by power of attorney,shall sign a modification of the Quotaholders’ List of the Company (the “Quotaholders’List”) to indicate the Purchaser as the owner of such Seller’s Quota, and the ManagingDirector of the Company shall file that modification with the Metropolitan Court ofRegistration; and     (b) the Purchaser will pay to each Seller or to such Seller’s designee, by wiretransfer of immediately available funds to such account as shall be designated in writingby such Seller to the Purchaser at least two Business Days prior to the Closing Date, anamount equal to such Seller’s Per Seller Purchase Price.     1.4 Post Closing formalities. Within thirty days of Closing, the Managing Director ofthe Company shall cause a notice of the modification of the Quotaholders’ List to be published inthe Company Gazette.
2

 
ARTICLE IIDEFINITIONS     2.1 Specific Definitions. As used in this Agreement and the Schedule hereto, thefollowing terms have the following meanings:     Affiliate: with respect to any Person, any other Person that directly orindirectly controls, is controlled by, or is under common control with, the first Person.     Authority: any entity exercising executive, legislative, judicial, regulatoryor administrative functions of or pertaining to government, including, without limitation,any government authority, agency, department, board, commission or instrumentality ofHungary or any political subdivision thereof.     Authorized Officer: With respect to either Seller, any duly authorizedPresident, Vice President or Secretary of such Seller.     Business Day: any day that is not (i) a Saturday, (ii) aSunday or (iii) any other day on which commercial banks are authorized or requiredby law to be closed in the City of New York.     Lien: any lien, security interest, adverse claim, charge or encumbrance.     Material Adverse Effect: a material adverse effect on (a) thebusiness, operations, assets, liabilities, condition (financial or otherwise) or results ofoperations of the Company or (b) the ability of such Seller to perform itsobligations hereunder or to consummate the transactions contemplated hereby, other than anychange or effect that results from or relates to: (x) the announcement by suchSeller of its intention to sell the Company, including any announcement related to theexecution and delivery of this Agreement, (y) the consummation of the transactionscontemplated by this Agreement or (z) changes in (i) economic, regulatoryor political conditions (including, without limitation, acts of war, declared orundeclared, armed hostilities and terrorism), (ii) financial, securities or othermarket conditions affecting the industries in which the Company operates, and (iii)applicable law or regulations or accounting standards, principles or interpretations.     Person: any natural person, firm, limited liability company, generalpartnership, limited partnership, joint venture, association, corporation, trust, Authorityor other entity.
3

 
ARTICLE IIIREPRESENTATIONS AND WARRANTIES AS TO THE SELLERS     Each Seller, severally and not jointly represents and warrants to the Purchaser as follows:     3.1 Corporate Status and Authority. Such Seller is a corporation duly incorporated,validly existing and in good standing under the laws of the State of Delaware and has the corporatepower and authority to own the Quotas and to execute and deliver this Agreement and perform itsobligations hereunder. The execution, delivery and performance of this Agreement have been dulyauthorized by the board of directors of such Seller, which approval constitutes all necessarycorporate action on the part of the Seller for such authorization. This Agreement has been dulyexecuted and delivered by such Seller and constitutes the valid and binding obligation of suchSeller, enforceable against such Seller in accordance with its terms, except as such enforceabilitymay be limited by applicable bankruptcy, reorganization, insolvency, fraudulent conveyance,moratorium, receivership.     3.2 No Conflicts, Consents and Approvals.     (a) Neither the execution, delivery or performance of this Agreement by such Sellernor the consummation of the transactions contemplated hereby will result in (i) anyconflict with the certificate of incorporation or by-laws of the Seller, (ii)subject to obtaining the consents, approvals and authorizations and making the filingsreferred to in Section 3.2(b), any breach or violation of or default under any applicableregulation of any Authority or any mortgage, agreement, indenture or any other instrumentto which such Seller is a party or by which it or its properties or assets are bound,(iii) any Person being granted (with or without notice of lapse of time or both)any right of termination, cancellation, acceleration or modification in or with respect toany material agreement to which such Seller is a party or by which it or its respectiveproperties or assets are bound, or (iv) the creation or imposition of any Liens onthe Quotas, except, in the case of clauses (ii) and (iii), as would not reasonably beexpected, individually or in the aggregate, to have a Material Adverse Effect.     (b) By executing this Agreement, the Sellers unconditionally and irrevocably approvethe modification of the Quotaholders’ List by an AuthorizedOfficer of each Seller in accordance with the transfer of Quotas contemplated hereinand the registration of such transfer with the Metropolitan Court of Registration.
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     (c) Except as set forth in Schedule 3.2(b), no material consent, approval orauthorization of or filing with any Authority or Person is required on the part of suchSeller in connection with the execution and delivery of this Agreement or the consummationof the transactions contemplated hereby.     3.3 Title to Quotas and Capitalization. The Quotas represent 100% of the registeredcapital of the Company. Each Seller owns beneficially and of record the Quotas set forth oppositesuch Seller’s name in the column entitled “Quotas” in Schedule 1.1 which are free and clear of allencumbrances. The Quotas have been duly authorized and are fully paid and non-assessable. Thedelivery in the manner provided in Section 1.3 will transfer to the Purchaser valid title to theQuotas, unencumbered, other than Liens created by the Purchaser of any of its Affiliates. Thereare no outstanding options, warrants, conversion or other rights or agreements of any kind (otherthan this Agreement) for the purchase or acquisition from, or the sale or issuance by, any Selleror the Company of any quotas of the registered capital, and no authorization therefore has beengiven.     3.4 Waiver of Pre-emption Rights. Each Seller shall cause the Company to execute thedeclaration set forth in Schedule 3.4, pursuant to which the Company shall state that it does notwish to exercise its statutory pre-emption right and that it does not wish to appoint a third partyto exercise its pre-emption right relating to the Quotas which are the subject of this Agreement.ARTICLE IVREPRESENTATIONS AND WARRANTIES OF THE PURCHASER     The Purchaser represents and warrants to each Seller as follows:     4.1 Corporate Status and Authority. The Purchaser is a [___] duly [___], validlyexisting and in good standing under the laws of [___] and has the [___] power and authority toexecute and deliver this Agreement and perform its obligations hereunder. The execution, deliveryand performance of this Agreement have been duly authorized by [the board of directors of thePurchaser, which approval constitutes all necessary corporate action on the part of the Purchaserfor such authorization]. This Agreement has been duly executed and delivered by the Purchaser andconstitutes the valid and binding obligation of the Purchaser, enforceable against the Purchaser inaccordance with its terms, except as such enforceability may be limited by applicablebankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium, receivership.
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     4.2 No Conflicts, Consents and Approvals.     (a) The execution, delivery and performance of this Agreement by the Purchaser willnot result in (i) any conflict with [the organizational documents] of thePurchaser, (ii) any breach or violation of or default under any applicableregulation, of any Authority or any mortgage, agreement, indenture or any other instrumentto which the Purchaser is a party or by which the Purchaser or any of its properties orassets are bound, or (iii) the creation or imposition of any Lien, except, in thecase of clauses (ii) and (iii), where such breaches, violations or defaults and such Lienswould not reasonably be expected, individually or in the aggregate, to materially impairthe ability of the Purchaser to perform its obligations under, or to consummate thetransactions contemplated by, this Agreement.     (b) No consent, approval or authorization of or filing with any Authority or Person isrequired on the part of the Purchaser in connection with the execution and delivery of thisAgreement or the consummation of the transactions contemplated hereby, except filings,consents or approvals that, if not made or obtained, would not reasonably be expected,individually or in the aggregate, to materially impair the ability of the Purchaser toperform its obligations under, or to consummate the transactions contemplated by, thisAgreement.ARTICLE VCONDITIONS TO CLOSING     5.1 Conditions to the Obligation of the Purchaser. The obligation of the Purchaser toconsummate the transactions contemplated hereby shall be subject to the satisfaction or waiver bythe Purchaser on or prior to the Closing Date of each of the following conditions:     (a) Each of the representations and warranties of each Seller contained in Article IIIshall be true shall be true and correct in all respects, if qualified by materiality, andshall be true and correct in all material respects, if not qualified by materiality, at andas of the Closing Date with the same effect as though made at and as of such time. EachSeller shall have duly performed and complied in all material respects with all covenantscontained herein required to be performed or complied with by it at or before the ClosingDate.     (b) All of the Conditions to Obligations of the Parties and Conditions to Obligationsof the Parent set forth in Sections 9.2 and 9.4, respectively, of the Master Agreementshall have been satisfied or waived.
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     (c) CICC shall have delivered to the Purchaser a certificate, dated the Closing Dateand signed by its President, Executive Vice President or a Senior Vice President, as to thefulfillment of the conditions set forth in Section 5.1(a), 5.1(b), it being understood thatsuch certificate shall be deemed to have been delivered only in such officer’s capacity asan officer of CICC (and not in his or her individual capacity) and shall not entitle anyparty to assert a claim against such officer in his or her individual capacity.     5.2 Conditions to the Obligation of the Sellers. The obligation of the Sellers toconsummate the transactions contemplated hereby shall be subject to the satisfaction or waiver byCICC (on behalf of the Sellers) on or prior to the Closing Date of each of the followingconditions:     (a) Each of the representations and warranties of the Purchaser contained in ArticleIV shall be true shall be true and correct in all respects, if qualified by materiality,and shall be true and correct in all material respects, if not qualified by materiality, atand as of the Closing Date with the same effect as though made at and as of such time. ThePurchaser shall have duly performed and complied in all material respects with allcovenants contained herein required to be performed or complied with by it at or before theClosing Date.     (b) All of the Conditions to Obligations of the Parties and Conditions to Obligationsof the Shareholder and Columbian set forth in Sections 9.2 and 9.3, respectively, of theMaster Agreement shall have been satisfied or waived.     (c) The Purchaser shall have delivered to CICC a certificate, dated the Closing Dateand signed by its President or a Senior Vice President, as to the fulfillment of theconditions set forth in Section 5.2(a) and 5.2(b), it being understood that suchcertificate shall be deemed to have been delivered only in such officer’s capacity as anofficer of the Purchaser (and not in his or her individual capacity) and shall not entitleany party to assert a claim against such officer in his or her individual capacity.ARTICLE VINO SURVIVAL OF REPRESENTATIONS AND WARRANTIES     6.1 No Survival of Representations and Warranties. The representations, warrantiesand covenants of the Sellers and the Purchaser contained in this Agreement orin any certificate delivered in connection with this Agreement shall not survive the Closing,and any and all breaches of such representations, warranties and covenants shall be deemed waivedas of the Closing.
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ARTICLE VIIGENERAL PROVISIONS     7.1 Master Agreement. All matters not provided for herein shall, if provided for inthe Master Agreement, be governed by the terms and conditions set forth therein. In the event ofconflict between this Agreement and the Master Agreement, the Master Agreement shall takeprecedence.     7.2 Remedies. For the avoidance of doubt, the parties to this Agreement expresslyagree that the sole remedy for any controversy or claim arising out of or relating to thisAgreement or the transactions contemplated hereby shall be the recovery provided under the terms ofthe Master Agreement. Each party expressly waives and foregoes the right to any other remedyarising out of or relating to this Agreement or the transactions contemplated hereby.     7.3 Further Actions. Each party shall execute and deliver such certificates and otherdocuments and take such other actions as may reasonably be requested by the other party in order toconsummate or implement the transactions contemplated hereby.     7.4 Termination. This Agreement shall terminate on the earlier of the date determinedby written agreement of the parties hereto and the date of termination of the Master Agreement.     7.5 Notices. All notices, requests, demands and other communications hereunder shallbe in writing and shall be deemed to have been duly given if: (a) delivered personally,(b) sent by registered or certified mail in the United States, return receipt requested,(c) sent by reputable overnight air courier (such as DHL or Federal Express) or (d)sent by fax, as follows:if to the Sellers, to:[_____]with a copy to:Debevoise & Plimpton LLP