EXHIBIT
10.1
AGREEMENT OF SETTLEMENT
AND RELEASE IN FULL
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THE
STATE OF TEXAS
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KNOW
ALL MEN BY THESE PRESENTS:
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COUNTY
OF HARRIS
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This AGREEMENT OF SETTLEMENT AND RELEASE IN FULL
(“ Agreement ”) is made and
entered into by and between Varco and ICO, as more fully described
in the Definitions section below.
Recitals
Whereas , Varco International, Inc. n/k/a National
Oilwell Varco, Inc., Varco L.P., and Varco Coating Ltd., as Buyer
Parties, and ICO, Inc., ICO Global Services, Inc., ICO Worldwide,
Inc., ICO Worldwide Tubular Services Pte Ltd, The Innovation
Company, S.A. de C.V., and ICO Worldwide (U.K.) Ltd, as Sellers,
entered into that certain Purchase Agreement dated July 2, 2002
(“ Purchase Agreement ”), with
a Closing Date of September 6, 2002 (“ 2002
Closing ”).
Whereas , pursuant to Article X of the Purchase
Agreement, Sellers agreed to indemnify and hold harmless the Buyer
Parties, their Affiliates and their respective Representatives
(collectively, the “ Buyer Indemnified
Parties ”) against certain Losses that such
Buyer Indemnified Party shall actually incur.
Whereas , pursuant to Article X of the Purchase
Agreement, Buyers agreed to indemnify and hold harmless the Seller
Parties, their Affiliates and their respective Representatives
(collectively, the “ Seller Indemnified
Parties ”) against certain Losses that such
Seller Indemnified Parties shall actually incur.
Whereas , after the Closing Date, Varco made certain
indemnification claims for Losses allegedly arising out of,
resulting from or based upon alleged breaches of the Purchase
Agreement or liabilities allegedly retained by ICO pursuant to the
Purchase Agreement (“ Noticed Claims
”);
Whereas , ICO denies any liability for any of the
Noticed Claims.
Whereas , Varco and ICO (the “
Parties ”) seek to resolve any and
all liability of the Parties arising out of the Noticed Claims and
certain other claims that may be brought by the Parties.
NOW, THEREFORE, in consideration of the mutual
promises exchanged in this Agreement and other good and valuable
consideration, the sufficiency of which is hereby acknowledged and
confessed, Varco and ICO agree as follows:
I.
Definitions
The following
DEFINITIONS shall apply throughout this
Agreement. Any capitalized term not defined herein shall have the
same meaning as defined in Annex A of the Purchase
Agreement.
1.1
“
ICO ” means ICO, Inc., a Texas corporation, ICO Global
Services, Inc., a Delaware corporation, ICO Worldwide, L.P., f/k/a
ICO Worldwide, Inc., a Texas limited partnership, The Innovation
Company, S.A. de C.V., a corporation organized under the laws of
Mexico, and ICO Worldwide (U.K.) Ltd., a corporation organized
under the laws of the United Kingdom.; the agents, employees,
officers, directors, shareholders and attorneys of ICO, Inc., ICO
Global Services, Inc., ICO Worldwide, L.P., The Innovation Company,
S.A. de C.V., and ICO Worldwide (U.K.) Ltd.; all companies or firms
affiliated with, subsidiary to, or the parent company of ICO, Inc.,
ICO Global Services, Inc., ICO Worldwide, L.P., The Innovation
Company, S.A. de C.V., and ICO Worldwide (U.K.) Ltd.; the
predecessors, successors and assigns of ICO, Inc., ICO Global
Services, Inc., ICO Worldwide, L.P., The Innovation Company, S.A.
de C.V., and ICO Worldwide (U.K.) Ltd.; and the successor and
assigns of each of the foregoing, and any and all other persons,
firms, and corporations claiming by, through, under, or on behalf
of the persons or entities named in this definition of
ICO.
1.2 “
ICO Released Claims ” means the ICO
Thibodaux Claims.
1.3
“ ICO Thibodaux Claims ”
means those claims that have been brought against ICO as of
the date hereof in Cause No. 2001-16872, C.M. Thibodaux
Company, Ltd. v. Exxon Mobil Corp., et al. , in the Civil
District Court for the Parish of Orleans, State of Louisiana,
Division I-14.
1.4
“ Noticed Claims ” means those
claims made by Varco, allegedly constituting breaches of the
Express Warranties and Excluded Liability claims, and including any
Loss, demand, claim or cause of action for damage to an Asset or
other site-related remedies (e.g. site investigation and
remediation) because of an Environmental Condition, violation of
Environmental Laws, or Encumbrance under the Purchase Agreement,
relating to or concerning the following facilities and
matters:
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4950 Andrews
Highway and 5012 Andrews Highway, Odessa, Texas;
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North Mustang
Drive, Denver City, Texas;
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Fulton Road,
Odessa, Texas;
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100 and 200
East 61st Street, Odessa, Texas;
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300 West 61st
Street, Odessa, Texas;
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8869 West 26th
Street, Odessa, Texas;
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Stevens Road,
Odessa, Texas;
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Oklahoma City,
Oklahoma (Tubular and Casing Pipeyard; Tubular Inspection Facility
and Sucker Rod Inspection Facility);
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Sheldon Road,
Houston, Texas;
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West Little
York, Houston, Texas;
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Products
Liability (Quail Tube Inspection Facility, Drill Tube International
Inspection Failure and BP Deepwater Coating Failure);
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International
Tubular Services Product Liability Claim; and
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the Varco
Thibodaux Claim.
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1.5
“ Released Claims ” means the
ICO Released Claims and the Varco Released Claims.
1.6
“ Transferred Properties ”
means all Real Property included in the Assets, the interest in
which was transferred to Varco under the Purchase Agreement,
including owned and leased property.
1.7
“ Varco ” means Varco
International, Inc. n/k/a National Oilwell Varco, Inc., a Delaware
corporation, Varco L.P., a Delaware limited partnership, National
Oilwell Varco, L.P., a Delaware limited partnership, and Varco
Coating Ltd., a corporation organized under the laws of Canada; the
agents, employees, officers, directors, shareholders and attorneys
of Varco International, Inc. n/k/a National Oilwell Varco, Inc.,
Varco L.P., National Oilwell Varco, L.P., and Varco Coating Ltd.;
all companies or firms affiliated with, subsidiary to, or the
parent company of Varco International, Inc. n/k/a National Oilwell
Varco, Inc., Varco L.P., National Oilwell Varco, L.P., and Varco
Coating Ltd.; the predecessors, successors and assigns of Varco
International, Inc. n/k/a National Oilwell Varco, Inc., Varco L.P.,
National Oilwell Varco, L.P., and Varco Coating Ltd.; and the
successor and assigns of each of the foregoing, and any and all
other persons, firms, and corporations claiming by, through, under,
or on behalf of Varco International, Inc. n/k/a National Oilwell
Varco, Inc., Varco L.P., National Oilwell Varco, L.P., and Varco
Coating Ltd.
1.8
“ Varco Released Claims ” means
any and all existing and future claims, demands, theories of
recovery, and causes of action, whether known or unknown, pending
or threatened, for any and all existing, future, known, and unknown
damages and remedies that arise out of, result from or are based
upon
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any other
direct claims by Varco related to Environmental Conditions on any
or all of the Transferred Properties, any violations of
Environmental Laws in connection with conditions on such
Transferred Properties, and any investigation, remedial or other
cleanup activities undertaken in connection thereon (including
without limitation any claims, past, present, and future, related
to NORM, RCRA or capital improvements);
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specifically
excluding the ICO Thibodaux Claim, any claims concerning an
Environmental Condition or violation of Environmental Law by a
Person with an interest in title or a lease to a leased property
transferred as a Transferred Property against Varco or against ICO
as predecessor-in-interest;
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any claims
concerning an Environmental Condition or violation of Environmental
Law that may be asserted against Varco or ICO by a Person who is
the property owner or other property interest holder after Varco
sells or leases or otherwise grants or transfers any interest in
any Transferred Property to such Person, following a sale,
transfer, or lease of the property by Varco, or
otherwise;
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any claims by
Varco as property owner or operator or other property interest
holder of a property owned or operated by Varco as of the Effective
Date hereof, which property is not a Transferred Property, where
such claims arise
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out of
Environmental Conditions on the Transferred Properties as of the
Closing Date; and
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any claims
against, or orders or injunctions applicable to, Varco or ICO made
by any Governmental Authority relating to Environmental Conditions
on any Transferred Property or violations of Environmental Laws by
Varco or by ICO in connection with ICO’s ownership or
operation of the Transferred Properties prior to the Closing
Date;
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and in
connection therewith all actual damages; all costs associated with
the investigation; all exemplary and punitive damages; all
penalties of any kind, including WITHOUT
LIMITATION any tax liabilities or penalties; damage to
business reputation; lost profits or good will; consequential
damages; damages ensuing from loss of credit; and, prejudgment and
postjudgment interest, costs and attorney’s fees. This
definition further includes, BUT IS NOT LIMITED TO
, all elements of damages, all remedies, and all claims, demands,
and causes of action that are now recognized by law or that may be
created or recognized in the future by any manner, including
WITHOUT LIMITATION by statute, regulation, or
judicial decision; PROVIDED that nothing in the
foregoing provisions is intended to, and this provision shall not,
release ICO from the ICO Released Claims.
1.9
“ Varco Thibodaux Claim ” means
the claim brought against Varco by the Plaintiff in Cause No.
2001-16872, C.M. Thibodaux Company, Ltd. v. Exxon Mobil Corp.,
et al. , in the Civil District Court for the Parish of
Orleans, State of Louisiana, Division I-14.
II.
Agreement
2.1 In connection
with the execution and delivery of this Agreement Varco and ICO
acknowledge this Agreement is effective as of Noon, Central
Standard Time, on November 21, 2006 (“ Effective
Date ”). On or before the Effective Date, at a
closing to be held at the offices of Varco in Houston, Texas
(“ Closing ”), ICO shall deliver to
Varco the following consideration totaling
$7,500,000.00:
(a) A “Joint
Release Certificate” executed by ICO from ICO and Varco to
the Escrow Agent, Citibank, N.A., irrevocably instructing the
Escrow Agent to disburse all of the Escrow Fund (“
Escrow Fund ”) and any accrued interest
thereon to National Oilwell Varco, L.P. as the
successor-in-interest to Varco, L.P. according to the terms of that
Exhibit “A” attached hereto (estimated to be
$5,417,004.42 on November 17, 2006) and upon disbursement of all of
the Escrow Fund plus its accrued interest to close the Escrow
Account and terminate the Escrow Agreement;
(b) A cash payment
in the amount of t
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