EXHIBIT 10.1
FORM
of
MASTER SEPARATION AGREEMENT
dated as of
May___,2000
by and among
GREAT LAKES CHEMICAL CORPORATION
and
OSCA, INC.
TABLE OF CONTENTS
-----------------
ARTICLE 1
DEFINITIONS................................................................ 1
SECTION 1.01. Defined Terms............................................. 1
ARTICLE 2
CONTRIBUTION AND ASSUMPTION................................................ 6
SECTION 2.01. Contribution of Assets.................................... 6
SECTION 2.02. Assets Held for the Benefit of GLC........................ 6
SECTION 2.03. Assumption of Liabilities................................. 7
SECTION 2.04. Nonassignable Contracts................................... 7
ARTICLE 3
EMPLOYEE MATTERS........................................................... 7
SECTION 3.01. Responsibility For Employees in the United States......... 8
SECTION 3.02. Creation of 401(k) Plan and Transfer of GLC 401(k) Plan
Assets and Liabilities.................................... 8
SECTION 3.03. Further Agreements........................................ 8
ARTICLE 4
INDEMNIFICATION............................................................ 8
SECTION 4.01. Indemnification by OSCA................................... 8
SECTION 4.02. Indemnification by GLC.................................... 9
SECTION 4.03. Indemnification Procedures................................ 9
SECTION 4.04. Certain Limitations....................................... 10
ARTICLE 5
ACCESS TO INFORMATION...................................................... 11
SECTION 5.01. Restrictions on Disclosure of Information................. 11
SECTION 5.02. Legally Required Disclosure of Confidential Information... 12
SECTION 5.03. Access to Information..................................... 12
SECTION 5.04. Record Retention.......................................... 13
SECTION 5.05. Production of Witnesses................................... 14
i
SECTION 5.06. Reimbursement.............................................. 14
ARTICLE 6
MISCELLANEOUS............................................................... 14
SECTION 6.01. Entire Agreement........................................... 15
SECTION 6.02. Governing Law.............................................. 15
SECTION 6.03. Descriptive Headings....................................... 15
SECTION 6.04. Notices.................................................... 15
SECTION 6.05. Parties in Interest........................................ 16
SECTION 6.06. Counterparts............................................... 16
SECTION 6.07. Binding Effect; Assignment................................. 16
SECTION 6.08. Dispute Resolution......................................... 16
SECTION 6.09. Severability............................................... 17
SECTION 6.10. Failure or Indulgence Not Waiver; Remedies Cumulative...... 17
SECTION 6.11. Amendment.................................................. 17
SECTION 6.12. Authority.................................................. 17
SECTION 6.13. Interpretation............................................. 18
EXHIBITS
EXHIBIT A IPO and Distribution Agreement
EXHIBIT B Registration Rights Agreement
EXHIBIT C Services Agreement
EXHIBIT D Supply Agreement
EXHIBIT E Tax Disaffiliation Agreement
ii
FORM OF
MASTER SEPARATION AGREEMENT
This Master Separation Agreement ("Agreement") is entered into on May __,
2000 between Great Lakes Chemical Corporation, a Delaware corporation ("GLC"),
and OSCA, Inc., a Delaware corporation ("OSCA"). Capitalized terms used herein
and not otherwise defined shall have the meanings ascribed to such terms in
Article 1 hereof.
RECITALS
WHEREAS, GLC currently owns all of the issued and outstanding common stock
of OSCA;
WHEREAS, OSCA will make an initial public offering of an amount of its
common stock that will reduce GLC's voting interest in OSCA to not less than
80%; and
WHEREAS, the parties intend in this Agreement, including the Exhibits and
Schedules hereto, to set forth the principal arrangements between them regarding
the separation of OSCA from GLC.
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements set forth below, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Defined Terms. The following terms, as used herein, shall
have the following meanings:
"Affiliate" of any specified Person means any other Person directly or
indirectly Controlling, Controlled by, or under common Control with, such
specified Person; provided, however, that for purposes of this Agreement, (i)
GLC and its Subsidiaries (other than OSCA and its Subsidiaries) shall not be
considered Affiliates of OSCA and (ii) OSCA and its Subsidiaries shall not be
considered Affiliates of GLC.
"Ancillary Agreements" means each of the agreements which are attached as
Exhibits A through E to this Agreement, including any exhibits, schedules,
attachments, tables or other appendices thereto, and each agreement and other
instrument contemplated therein.
"Assets" means, except for cash and cash equivalents, any and all assets,
properties and rights, whether tangible or intangible, whether real, personal or
mixed, whether fixed, contingent or otherwise, and wherever located, including,
without limitation, the following:
(i) real property interests (including leases), land, plants, buildings
and improvements;
(ii) machinery, equipment, vehicles, furniture and fixtures, leasehold
improvements, supplies, repair parts, tools, plant, laboratory and
office equipment and other tangible personal property, including any
and all leases with respect thereto, together with any rights or
claims arising out of the breach of any express or implied warranty
by the manufacturers or sellers of any of such assets or any
component part thereof;
(iii) inventories, including raw materials, work-in-process, finished
goods, parts and accessories;
(iv) notes, loans and accounts receivable (whether current or not
current), interests as beneficiary under letters of credit, advances
and performance and surety bonds;
(v) banker's acceptances, shares of stock, bonds, debentures, evidences
of indebtedness, certificates of interest or participation in
profit-sharing agreements, collateral-trust certificates, investment
contracts, voting trust certificates, puts, calls, straddles,
options, swaps, collars, caps and other securities or hedging
arrangements of any kind;
(vi) financial, accounting and operating data and records including,
without limitation, books, records, electronic data, notes, sales
and sales promotional data, purchasing materials and data,
advertising materials, credit information, cost and pricing
information, customer and supplier lists, reference catalogs,
payroll and personnel records, facility blueprints and plant
layouts, minute books, stock ledgers, stock transfer records and
other similar property, rights and information;
(vii) Intellectual Property;
(viii) Contracts and all rights therein;
(ix) prepaid expenses, deposits and retentions held by third parties;
(x) claims, causes of action, choses in action, rights under insurance
policies, rights under express or implied warranties, rights of
recovery, rights of set-off, and rights of subrogation;
(xi) licenses, franchises, permits, authorizations and approvals; and
2
(xii) goodwill and going concern value.
"Business Day" means a day other than a Saturday, a Sunday, or a day on
which banking institutions located in the State of Indiana are authorized or
obligated by law or executive order to close.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, together with the rules and regulations promulgated thereunder.
"Commission" means the Securities and Exchange Commission.
"Confidential Information" means with respect to any party hereto, (i) any
Information concerning such party, its business or any of its Affiliates that
was obtained by another party hereto prior to the Effective Date, (ii) any
Information concerning such party that is obtained by another party under
Section 5.03, and (iii) any other Information obtained by, or furnished to,
another party hereto prior to the Effective Date, in each case that (a) was
marked "Proprietary" or "Company Private" or words of similar import by the
party owning such Information, or any Affiliate of such party, or (b) the party
owning such Information notified such other party in writing was confidential or
secret by the Effective Date.
"Consolidated Tax Period" has the meaning set forth in the Tax
Disaffiliation Agreement.
"Contracts" means any contract, agreement, lease, license, sales order,
purchase order, instrument or other commitment that is binding on any Person or
any part of its property under applicable law.
"Control" means the possession, direct or indirect, of the power to direct
or cause the direction of the management of the policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
"Controlling" and "Controlled" have the corollary meanings ascribed thereto.
"Effective Date" shall mean the date of the closing of the Initial Public
Offering.
"Environmental Remediation Business" means the former environmental
remediation services business owned by OSCA through its wholly owned subsidiary,
OSCA de Mexico, and the businesses operated by Four Seasons Environmental and
Aquaterra Engineering, which were sold in 1999.
"Final Determination" has the meaning set forth in the Tax Disaffiliation
Agreement.
"GLC" has the meaning set forth in the preamble to this Agreement.
3
"GLC Employee Benefit Plans" shall mean those GLC U.S. employee health and
welfare benefit plans in effect immediately prior to the Effective Date that
employees of OSCA were eligible to participate in immediately prior to the
Effective Date.
"GLC Financial Statements" means the financial statements of GLC for the
period ended December 31, 1999.
"GLC Liabilities" means all of the Liabilities of GLC that (i) are, except
for those Liabilities assumed by OSCA, reflected in the GLC Financial Statements
and remain outstanding at the Effective Date, (ii) arise in connection with GLC
after the date of the GLC Financial Statements and would be reflected in
financial statements of GLC as of the Effective Date if such financial
statements were prepared using the same accounting principles under which the
GLC Financial Statements were prepared, or (iii) are liabilities associated with
or arising from the Environmental Remediation Business or the OSCA Ocean
Technologies Business.
"Income Tax Return" has the meaning set forth in the Tax Disaffiliation
Agreement.
"Information" means all records, books, contracts, instruments, computer
data and other data.
"Intellectual Property" means any and all domestic and foreign patents and
patent applications, together with any continuations, continuations-in-part or
divisional applications thereof, and all patents issuing thereon (including
reissues, renewals and re-examinations of the foregoing); invention disclosures;
mask works; copyrights, and copyright applications and registrations;
trademarks, servicemarks, trade names, and trade dress, in each case together
with any applications and registrations therefor and all appurtenant goodwill
relating thereto; trade secrets, commercial and technical information, know-how,
proprietary or confidential information, including engineering, production and
other designs, notebooks, processes, drawings, specifications, formulae, and
technology; computer and electronic data processing programs and software
(object and source code), data bases and documentation thereof; inventions
(whether patented or not); and all other intellectual property under the laws of
any country throughout the world.
"Initial Public Offering" means the initial public offering by OSCA of
shares of OSCA Common Stock as contemplated by the IPO Registration Statement.
"IPO and Distribution Agreement" means the agreement to be entered into
between GLC and OSCA on or before the IPO Effective Date, the form of which is
attached hereto as Exhibit A.
"IPO Effective Date" means the date on which the IPO Registration Statement
is declared effective by the Commission.
4
"IPO Registration Statement" means the registration statement on Form S-1,
Registration No. 333-31956 filed by OSCA with the Commission in connection with
the initial public offering of the OSCA Common Stock, together with all
amendments and supplements thereto.
"Liabilities" means any and all debts, liabilities, guarantees, assurances,
commitments and obligations, whether fixed, contingent or absolute, asserted or
unasserted, matured or unmatured, liquidated or unliquidated, accrued or not
accrued, known or unknown, due or to become due, whenever or however arising
(including, without limitation, whether arising out of any Contract or tort
based on negligence or strict liability) and whether or not the same would be
required by generally accepted accounting principles to be reflected in
financial statements or disclosed in the notes thereto.
"OSCA" has the meaning set forth in the preamble to this Agreement.
"OSCA Business" means the business conducted by the OSCA sector of GLC at
any time on or before the Effective Date, including (i) all business operations
whose financial performance is reflected in the OSCA Financial Statements and
(ii) all business operations initiated or acquired by the OSCA sector of GLC
after the date of the OSCA Financial Statements; but excluding the Environmental
Remediation Business and the OSCA Ocean Technologies Business.
"OSCA Common Stock" means the Class A Common Stock, $0.01 par value per
share, of OSCA and the Class B Common Stock, $0.01 par value per share, of OSCA.
"OSCA Employee Benefit Plans" shall mean those employee benefit plans
established by OSCA in replacement of the GLC Employee Benefit Plans.
"OSCA Financial Statements" means the financial statements of OSCA for the
period ended December 31, 1999 as set forth in the IPO Registration Statement as
amended at the date of this Agreement.
"OSCA Ocean Technologies Business" means OSCA's 50% ownership interest in a
joint venture formed to provide pipeline commissioning and infrastructure
support services primarily in the Gulf of Mexico.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency, or political subdivision thereof.
"Prior Relationship" means the ownership relationship between GLC and OSCA
at any time prior to the Effective Date.
"Registration Rights Agreement" means the Registration Rights Agreement to
be entered into between GLC and OSCA on or before the IPO Effective Date, the
form of which is attached hereto
5
as Exhibit B.
"Representatives" means, with respect to any Person, any of such Person's
directors, officers, employees, agents, consultants, advisors, accountants, or
attorneys.
"Services Agreement" means the Services Agreement, effective as of the
Effective Date, between GLC and OSCA, a copy of which is attached hereto as
Exhibit C.
"Subsidiary" means with respect to any specified Person, any corporation or
other legal entity of which such Person or any of its Subsidiaries Controls or
owns, directly or indirectly, more than 50% of the stock of other equity
interest entitled to vote on the election of the members to the board of
directors or similar governing body; provided, however, that for purposes of
this Agreement, OSCA and its Subsidiaries shall not be considered Subsidiaries
of GLC.
"Supply Agreement" means the Supply Agreement, effective as of the
Effective Date, between GLC and OSCA, a copy of which is attached hereto as
Exhibit D.
"Tax Disaffiliation Agreement" means the Tax Disaffiliation Agreement,
effective as of the Effective Date, between GLC and OSCA, a copy of which is
attached hereto as Exhibit E.
"Third-Party Claim" means any claim, suit, arbitration, inquiry, proceeding
or investigation by or before any court, governmental or other regulatory or
administrative agency or commission or any arbitration tribunal asserted by a
Person other than any party hereto or their respective Affiliates which gives
rise to a right of indemnification hereunder.
ARTICLE 2
CONTRIBUTION AND ASSUMPTION
SECTION 2.01. Contribution of Assets. On the Effective Date, GLC (i) hereby
transfers (or causes its appropriate Subsidiaries and Representatives to
transfer) to OSCA all of its right, title and interest to any Assets relating
solely to the OSCA Business located in the United States and (ii) will have
transferred or shall transfer as promptly as reasonably practicable (or cause
its appropriate Subsidiaries and Representatives to transfer) to OSCA all of its
right, title and interest to any assets relating solely to the OSCA Business
located outside of the United States. OSCA shall receive and accept such Assets,
subject to the terms and conditions of this Agreement. OSCA acknowledges and
agrees that the foregoing transfers will be made "AS IS WHERE IS" and that
neither GLC nor any Subsidiary of GLC has made or will make any warranty,
express or implied, including without limitation any warranty of merchantability
of fitness for a particular purpose, with respect to any such Asset.
SECTION 2.02. Assets Held for the Benefit of GLC. OSCA acknowledges and
agrees
6
that any and all Assets it holds relating to the Environmental Remediation
Business and the OSCA Ocean Technologies Business are held for the benefit of
GLC and any benefits OSCA may receive from or arising out of the Environmental
Remediation Business or the OSCA Ocean Technologies Business, including, but not
limited to, insurance proceeds or proceeds from the sale of such assets, shall
be deemed to be for the benefit of GLC and shall promptly be reimbursed to GLC.
SECTION 2.03. Assumption of Liabilities.
(a) General. Effective as of the Effective Date, each of OSCA and/or its
Subsidiaries, as directed by OSCA, hereby assumes and on a timely basis shall
pay, perform, satisfy and discharge in accordance with their terms all
Liabilities relating to or arising out of the operations of the OSCA Business;
provided, however, that OSCA and/or its Subsidiaries shall not be obligated to
pay, perform, satisfy and discharge in accordance with their terms any
Liabilities relating to or arising out of the operations of the Environmental
Remediation Business or the OSCA Ocean Technologies Business.
(b) Nonrecurring Costs and Expenses. All costs and expenses incurred by
either party hereto to effect the transactions contemplated hereby shall be the
responsibility of OSCA, unless otherwise provided in any Ancillary Agreement.
SECTION 2.04. Nonassignable Contracts. Anything contained herein to the
contrary notwithstanding, this Agreement shall not constitute an agreement to
assign any Asset or Liability if an assignment or attempted assignment of the
same without the consent of another Person would constitute a breach thereof or
in any way impair the rights of a party thereunder or give to any third party
any rights with respect thereto. If any such consent is not obtained or if an
attempted assignment would be ineffective or would impair such party's rights
under any such Asset or Liability so that the party entitled to the benefits and
responsibilities of such purported transfer (the "Intended Transferee") would
not receive all such rights and responsibilities, then (a) the party purporting
to make such transfer (the "Intended Transferor") shall use commercially
reasonable efforts to provide or cause to be provided to the Intended
Transferee, to the extent permitted by law, the benefits of any such Asset or
Liability and the Intended Transferor shall promptly pay or cause to be paid to
the Intended Transferee when received all moneys received by the Intended
Transferor with respect to any such Asset and (b) in consideration thereof the
Intended Transferee shall pay, perform and discharge on behalf of the Intended
Transferor all of the Intended Transferor's Liabilities thereunder in a timely
manner and in accordance with the terms thereof which it may do without breach.
In addition, the Intended Transferor shall take such other actions as may
reasonably be requested by the Intended Transferee in order to place the
Intended Transferee, insofar as reasonably possible, in the same position as if
such Asset had been transferred as contemplated hereby and so all the benefits
and burdens relating thereto, including possession, use, risk of loss, potential
for gain and dominion, control and command, shall inure to the Intended
Transferee. If and when such consents and approvals are obtained, the transfer
of the applicable Asset shall be effected in accordance with the terms of this
Agreement.
7
ARTICLE 3
EMPLOYEE MATTERS
SECTION 3.01. Responsibility For Employees in the United States. Persons
who are or become employees of OSCA on or following the Effective Date will be
eligible to participate in the GLC Employee Benefit Plans, including the
cafeteria-style benefit plan and the life and accidental death and dismemberment
insurance plans, until 11:59 pm on December 31, 2000. GLC will provide
administrative and support services for the GLC Employee Benefits Plans and OSCA
will reimburse GLC for the costs associated with OSCA's participation in the GLC
Employee Benefits Plans as provided in the Services Agreement. On or before
January 1, 2001, OSCA will establish OSCA Employee Benefit Plans which will
initially have terms substantially similar to the corresponding GLC Employee
Benefit Plans.
SECTION 3.02 Creation of 401(k) Plan and Transfer of GLC 401(k) Plan Assets
and Liabilities. OSCA will establish the OSCA 401(k) Plan at the Effective Date
and, as promptly as possible after the Effective Date, GLC shall cause a trust
to trust transfer of funds related to OSCA employees from the GLC 401(k) Plan to
the OSCA 401(k) Plan.
SECTION 3.03 Further Agreements. From and after the Effective Date:
(a) GLC will retain the responsibility for filing the Form 5500s for all
years ending prior to January 1, 2001 for GLC Employee Benefit Plans and OSCA
will assume the responsibility for filing the Form 5500 for the OSCA 401(k)
Plan.
(b) OSCA shall, and shall cause its Subsidiaries, to provide credit to OSCA
employees for service with GLC, its successors and its Affiliates for purposes
of eligibility and vesting under all employee benefit plans. No pre-existing
conditions exclusions will apply under the OSCA medical plans except to the
extent such exclusion is applicable under the plan of GLC in effect immediately
prior to the Effective Date. Any amounts for out-of-pocket limits and benefit
maximums paid or incurred under the GLC Employee Benefit Plans by such employees
during the plan year will be counted toward such employee's out-of-pocket limits
and benefit maximums under the OSCA Employee Benefit Plans for the same plan
year.
(c) Notwithstanding anything herein to the contrary, to the extent that GLC
or OSCA holds a controlling interest in a subsidiary that maintains pension,
savings and/or welfare plans separate and apart from the GLC or OSCA plans, and
such subsidiary becomes a subsidiary of OSCA as a result of the separation of
OSCA from GLC, the plans of such subsidiary shall become/remain the
responsibility of such subsidiary, and no division or split-up of such plan will
occur as a result of the separation of OSCA from GLC.
ARTICLE 4
8
INDEMNIFICATION
SECTION 4.01. Indemnification by OSCA. OSCA and each Subsidiary of OSCA and
their respective successors-in-interest and assigns ("Indemnifying Parties")
shall jointly and severally indemnify, defend and hold harmless GLC and each of
its Subsidiaries and their respective successors-in-interest, and each of their
respective past and present Representatives ("Indemnitees") against any losses,
claims, damages, liabilities or actions, resulting from, relating to or arising,
whether prior to or following the Effective Date, out of or in connection with
(a) the Liabilities assumed by OSCA; (b) OSCA's conduct of its business and
affairs after the Effective Date; and/or (c) all obligations of OSCA pursuant to
the Ancillary Agreements, and the Indemnifying Parties shall reimburse the
Indemnitees for any reasonable attorneys' fees or any other expenses reasonably
incurred by any of them in connection with investigating and/or defending any
such loss, claim, damage, liability or action.
SECTION 4.02. Indemnification by GLC. GLC and its successors-in-interest
("Indemnifying Parties") shall jointly and severally indemnify, defend and hold
harmless OSCA and each of its Subsidiaries and their respective successors-in-
interest, and each of their respective past and present Representatives
("Indemnitees") against any losses, claims, damages, liabilities or actions,
resulting from, relating to or arising, whether prior to or following the
Effective Date, out of or in connection with (a) the GLC Liabilities or (b)
except with respect to the OSCA Business, GLC's conduct of its business and
affairs prior to or following the Effective Date and the Indemnifying Parties
shall reimburse such Indemnitees for any reasonable attorneys' fees or any other
expenses reasonably incurred by any of them in connection with investigating
and/or defending any such loss, claim, damage, liability or action.
SECTION 4.03. Indemnification Procedures.
(a) If any Indemnitee receives notice of the assertion of any Third-Party
Claim with respect to which an Indemnifying Party is obligated under this
Agreement to provide indemnification, such Indemnitee shall promptly give such
Indemnifying Party notice thereof (together with a copy of such Third-Party
Claim, process or other legal pleading) promptly after becoming aware of such
Third-Party Claim; provided, however, that the failure of any Indemnitee to give
notice as provided in this Section 4.03 shall not relieve any Indemnifying Party
of its obligations under this Section 4.03, except to the extent that such
Indemnifying Party is actually prejudiced by such failure to give notice. Such
notice shall describe such Third-Party Claim in reasonable detail.
(b) An Indemnifying Party, at such Indemnifying Party's own expense and
through counsel chosen by such Indemnifying Party (which counsel shall be
reasonably acceptable to the Indemnitee), may elect to defend any Third-Party
Claim. If an Indemnifying Party elects to defend a Third-Party Claim, then,
within ten Business Days after receiving notice of such Third-Party Claim (or
sooner, if the nature of such Third Party claim so requires), such Indemnifying
Party shall notify the Indemnitee of its intent to do so, and such Indemnitee
shall cooperate in the defense of such
9
Third-Party Claim. Such Indemnifying Party shall pay such Indemnitee's
reasonable out-of-pocket expenses incurred in connection with such cooperation.
Such Indemnifying Party shall keep the Indemnitee reasonably informed as to the
status of the defense of such Third-Party Claim. After notice from an
Indemnifying Party to an Indemnitee of its election to assume the defense of a
Third-Party Claim, such Indemnifying Party shall not be liable to such
Indemnitee under this Section 4.03 for any attorneys' fees or other expenses
subsequently incurred by such Indemnitee in connection with the defense thereof
other than those expenses referred to in the preceding sentence; provided,
however, that such Indemnitee shall have the right to employ one law firm as
counsel, together with a separate local law firm in each applicable jurisdiction
("Separate Counsel"), to represent such Indemnitee in any action or group of
related actions (which firm or firms shall be reasonably acceptable to the
Indemnifying Party) if, in such Indemnitee's reasonable judgment at any time,
either a conflict of interest between such Indemnitee and such Indemnifying
Party exists in respect of such claim, or there may be defenses available to
such Indemnitee which are significantly different from or in addition to those
available to such Indemnifying Party and the representation of both parties by
the same counsel would, in the reasonable judgement of the Indemnitee, be
inappropriate, and in that event (i) the reasonable fees and expenses of such
Separate Counsel shall be paid by such Indemnifying Party (it being understood,
however, that the Indemnifying Party shall not be liable for the expenses of
more than one Separate Counsel (excluding local counsel) with respect to any
Third-Party Claim (even if against multiple Indemnitees)) and (ii) each of such
Indemnifying Party and such Indemnitee shall have the right to conduct its own
defense in respect of such claim. If an Indemnifying Party elects not to defend
against a Third-Party Claim, or fails to notify an Indemnitee of its election as
provided in this Section 4.03 within the period of ten Business Days described
above, the Indemnitee may defend, compromise, and settle such Third-Party Claim
and shall be entitled to indemnification hereunder (to the extent permitted
hereunder); provided, however, that no such Indemnitee may compromise or settle
any such Third-Party claim without the prior written consent of the Indemnifying
Party, which consent shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, the Indemnifying Party shall not, without the
prior written consent of the Indemnitee, (i) settle or compromise any Third-
Party Claim or consent to the entry of any judgment which does not include as an
unconditional term thereof the delivery by the claimant or plaintiff to the
Indemnitee of a written release from all liability in respect of such Third-
Party Claim or (ii) settle or compromise any Third-Party Claim in any manner
that would be reasonably likely to have a material adverse effect on the
Indemnitee.
SECTION 4.04. Certain Limitations.
(a) Subject to Section 2.02, the amount of any indemnifiable losses or
other liability for which indemnification is provided under this Agreement shall
be net of any amounts actually recovered by the Indemnitee from third parties
(including, without limitation, amounts actually recovered under insurance
policies) with respect to such indemnifiable losses or other liability. Any
Indemnifying Party hereunder shall be subrogated to the rights of the Indemnitee
upon payment in full of the amount of the relevant indemnifiable loss. An
insurer who would otherwise be obligated to pay any claim shall not be relieved
of the responsibility with respect thereto or, solely by virtue of the
indemnification provision hereof, have any subrogation rights with respect
thereto. If any
10
Indemnitee recovers an amount from a third party in respect of an indemnifiable
loss for which indemnification is provided in this Agreement after the full
amount of such indemnifiable loss has been paid by an Indemnifying Party or
after an Indemnifying Party has made a partial payment of such indemnifiable
loss and the amount received from the third party exceeds the remaining unpaid
balance of such indemnifiable loss, then the Indemnitee shall promptly remit to
the Indemnifying Party the excess (if any) of (A) the sum of the amount
theretofore paid by such Indemnifying Party in respect of such indemnifiable
loss plus the amount received from the third party in respect thereof, less (B)
the full amount of such indemnifiable loss or other liability.
(b) The amount of any loss or other liability for which indemnification is
provided under this Agreement shall be (i) increased to take account of any net
tax cost incurred by the Indemnitee arising from the receipt or accrual of an
indemnification payment hereunder (grossed up for such increase) and (ii)
reduced to take account of any net tax benefit realized by the Indemnitee
arising from incurring or paying such loss or other liability. In computing the
amount of any such tax cost or tax benefit, the Indemnitee shall be deemed to
recognize all other items of income, gain, loss, deduction or credit before
recognizing any item arising from the receipt or accrual of any indemnification
payment hereunder or incurring or paying any indemnified loss. Any
indemnification payment hereunder shall initially be made without regard to this
Section 4.04(b) and shall be increased or reduced to reflect any such net tax
cost (including gross-up) or net tax benefit only after the Indemnitee has
actually realized such cost or benefit. For purposes of this Agreement, an
Indemnitee shall be deemed to have "actually realized" a net tax cost or a net
tax benefit to the extent that, and at such time as, the amount of taxes payable
by such Indemnitee is increased above or reduced below, as the case may be, the
amount of taxes that such Indemnitee would be required to pay but for the
receipt or accrual of the indemnification payment or the incurrence or payment
of such loss, as the case may be. The amount of any increase or reduction
hereunder shall be adjusted to reflect any Final Determination with respect to
the Indemnitee's liability for taxes, and payments between such indemnified
parties to reflect such adjustment shall be made if necessary.
(c) Any indemnification payment made under this Agreement shall be
characterized for tax purposes as if such payment were made immediately prior to
the Effective Date.
ARTICLE 5
ACCESS TO INFORMATION
SECTION 5.01 Restrictions on Disclosure of Information.
(a) Without limiting any rights or obligations under any other agreement
between or among the parties hereto and/or any of their respective Affiliates
relating to confidentiality, for a period of three years following the Effective
Date, each of the parties hereto agrees that it shall not, and shall not permit
any of its Affiliates or Representatives to, disclose any Confidential
Information to any Person, other than to such Affiliates or Representatives on a
need-to-know basis in connection
11
with the purpose for which the Confidential Information was originally
disclosed. Notwithstanding the foregoing, each of the parties hereto and its
respective Affiliates and Representatives may disclose such Confidential
Information, and such Information shall no longer be deemed Confidential
Information, to the extent that such party can demonstrate that such
Confidential Information is or was (i) available to such party outside the
context of the Prior Relationship on a nonconfidential basis prior to its
disclosure by the other party, (ii) in the public domain other than by the
breach of this Agreement or by breach of any other agreement between or among
the parties hereto and/or any of their respective Affiliates relating to
confidentiality, or (iii) lawfully acquired outside the context of the Prior
Relationship on a nonconfidential basis or (iv) independently developed by, or
on behalf of, such party by Persons who do not have access to, or descriptions
of, any such Confidential Information. Additionally, notwithstanding anything to
the contrary herein, any Information provided by GLC to OSCA or by OSCA to GLC
shall, except as hereafter agreed to in writing by the parties, not be deemed
Confidential Information with respect to the use of such Information by OSCA in
the ordinary course of OSCA's business or by GLC in the ordinary course of GLC's
business, respectively.
(b) Each of the parties hereto shall maintain, and shall cause their
respective Affiliates to maintain, policies and procedures, and develop such
further policies and procedures as shall from time to time become necessary or
appropriate, to ensure compliance with this Section 5.01.
SECTION 5.02. Legally Required Disclosure of Confidential Information. If
any of the parties to this Agreement or any of their respective Affiliates or
Representatives becomes legally required to disclose any Confidential
Information, such disclosing party shall promptly notify the party owning the
Confidential Information (the "Owning Party") and shall use all commercially
reasonable efforts to cooperate with the Owning Party so that the Owning Party
may seek a protective order or other appropriate remedy and/or waive compliance
with this Section 5.02. All expenses reasonably incurred by the disclosing party
in seeking a protective order or other remedy shall be borne by the Owning
Party. If such protective order or other remedy is not obtained, or if the
Owning Party waives compliance with this Section 5.02, the disclosing party or
its Affiliate or Representative, as applicable, shall (a) disclose only that
portion of the Confidential Information which its legal counsel advises it is
compelled to disclose or else stand liable for contempt or suffer other similar
significant corporate censure or penalty, (b) use all commercially reasonable
efforts to obtain reliable assurance requested by the Owning Party that
confidential treatment will be accorded such Confidential Information, and (c)
promptly provide the Owning Party with a copy of the Confidential Information so
disclosed, in the same form and format so disclosed, together with a description
of all Persons to whom such Confidential Information was disclosed.
SECTION 5.03. Access to Information. During the Retention Period (as
defined in Section 5.04 below), each of the parties hereto shall cooperate with
and afford, and shall cause their respective Affiliates, Representatives,
Subsidiaries, successors and/or assignees, and shall use reasonable efforts to
cause joint ventures that are not Affiliates (collectively, "Related Parties")
to cooperate with and afford, to the other party reasonable access upon
reasonable advance written request to all information (other than information
which is (i) protected from disclosure by the
12
attorney client privilege or work product doctrine, (ii) proprietary in nature
or (iii) the subject of a confidentiality agreement between such party and a
third party which prohibits disclosure to the other party) within such party's
or any Related Party's possession which was created prior to the Effective Date
or, with respect to any information which would be relevant to the provision of
a transitional service pursuant to this Agreement or any Ancillary Agreement,
information created during the period in which one party is providing the other
party with such transition service. Access to the requested information shall be
provided so long as it relates to the requesting party's (the "Requestor")
business, assets or liabilities, and access is reasonably required by the
Requestor as a result of the parties' Prior Relationship for purposes of
auditing, accounting, claims or litigation (except for claims or litigation
between the parties hereto), employee benefits, regulatory or tax purposes or
fulfilling disclosure or reporting obligations including, without limitation,
Information reasonably necessary for the preparation of reports required by or
filed under the Securities Exchange Act of 1934, as amended, with respect to any
period entirely or partially prior to the Effective Date.
Access as used in this paragraph shall mean the obligation of a party in
possession of Information (the "Possessor") requested by the Requestor to exert
its reasonable best efforts to locate all requested Information that is owned
and possessed by Possessor or any Related Party. The Possessor, at its own
expense, shall conduct a diligent search designed to identify all requested
Information and shall collect all such Information for inspection by the
Requestor during normal business hours at the Possessor's place of business.
Subject to confidentiality and/or security provisions as the Possessor may
reasonably deem necessary, the Requestor may have all requested Information
duplicated at Requestor's expense. Alternatively, the Possessor may choose to
deliver, at its own expense, all requested Information to the Requestor in the
form it was requested by the Requestor. If so, the Possessor shall notify the
Requestor in writing at the time of delivery if such Information is to be
returned to the Possessor. In such case, the Requestor shall return such
Information when no longer needed to the Possessor at the Possessor's expense.
In connection with providing Information pursuant to this Section 5.03,
each of the parties hereto shall upon the request of the other party make
available its respective employees (and those of their respective Related
Parties, as applicable) to the extent that they are reasonably necessary to
discuss and explain all requested Information with and to the requesting party.
SECTION 5.04. Record Retention.
(a) Books and Records. OSCA shall preserve and keep all books and records
included in the OSCA Assets or otherwise in the possession of OSCA or its
Related Parties, whether in electronic form or otherwise, for no less than ten
years from the Effective Date, or for any longer period as may be required by
any government agency, GLC's record retention schedule effective as of the
Effective Date or as GLC may subsequently notify OSCA that such schedule has
been modified, litigation, law, regulation, audit or appeal of taxes, tax
examination or the expiration of the periods described in Section 5.04(c),
where applicable (the "Retention Period") at OSCA's sole cost and expense. If
OSCA wishes to dispose of any books and records or other documents which
13
it is obligated to retain under this Section 5.04 after the Retention Period,
then OSCA shall first provide 90 days' written notice to GLC and GLC shall have
the right, at its option and expense, upon prior written notice within such 90-
day period, to take possession of such books or records or other documents
within 180 days after the date of OSCA's notice to GLC hereunder. Written notice
of intent to dispose of such books and records shall include a description of
the books and records in detail sufficient to allow GLC to reasonably assess its
potential need to retain such materials. In the event OSCA enters into an
agreement with a third party to sell a portion of its business, together with
the books and records related thereto, GLC shall have the right to duplicate
such books and records prior to any such disposition and, should the purchaser
of the OSCA Business be a competitor of GLC, GLC shall have the right to
prohibit the transfer or disclosure to such party of that portion of the former
books and records of GLC which GLC notifies OSCA contain confidential and
proprietary information. To the extent that books and records of GLC or any of
its Affiliates which contain information relating to the OSCA Business are not
included in the OSCA Assets, GLC agrees to cooperate with OSCA in providing OSCA
with any such information upon OSCA's reasonable request to the extent that any
such information exists and is reasonably separable from GLC information
unrelated to the OSCA Business. OSCA shall reimburse GLC for all of its
reasonable out-of-pocket costs incurred in connection with any such request.
(b) Tax Related Records. GLC and OSCA agree to retain all Income Tax
Returns, related schedules and workpapers, and all material records and other
documents as required under Section 6001 of the Code, as well as by any similar
provision of state or local income tax law, until the later of (i) the
expiration of the applicable statute of limitations for the tax period to which
the records relate, or (ii) the Final Determination has been made with respect
to all issues related to the final Consolidated Tax Period.
SECTION 5.05. Production of Witnesses. Until the sixth anniversary of the
Effective Date, each of the parties hereto shall use all commercially reasonable
efforts, and shall cause each of their respective Affiliates to use all
commercially reasonable efforts, to make available to each other, upon written
request, its directors, officers, employees and other Representatives as
witnesses to the extent that any such Person may reasonably be required (giving
consideration to the business demands upon such Persons) in connection with any
legal, administrative or other proceedings in which the requesting party may
from time to time be involved; provided, however, that with respect to any legal
or administrative proceedings relating to the tax liability of any of the
parties hereto or any of their respective Affiliates, each of the parties hereto
shall, and shall cause each of their respective Affiliates to, make their
directors, officers, employees and other Representatives available as witnesses
until such time as the statute of limitations have expired with respect to all
tax years prior to and including the year in which the asset transfers
contemplated by this Agreement are consummated.
SECTION 5.06. Reimbursement. Unless otherwise provided in this Article 5,
each party to this Agreement providing access, information or witnesses to
another party pursuant to Sections 5.03, 5.04 or 5.05 shall be entitled to
receive from the recipient, upon the presentation of invoices therefor, payment
for all reasonable out-of-pocket costs and expenses (excluding allocated
14
compensation, salary and overhead expense) as may be reasonably incurred in
providing such information or witnesses.
ARTICLE 6
MISCELLANEOUS
SECTION 6.01. Entire Agreement. This Agreement, together with the Ancillary
Agreements and all other Exhibits and Schedules attached hereto, constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersedes all prior written and oral and all contemporaneous oral
agreements and understandings with respect to the subject matter hereof.
SECTION 6.02. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware regardless of the
laws that might otherwise govern under principles of conflicts of laws
applicable thereto.
SECTION 6.03. Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
SECTION 6.04. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given when delivered in
person, by telecopy with answer back, by express or overnight mail delivered by
a nationally recognized air courier (delivery charges prepaid), or by registered
or certified mail (postage prepaid, return receipt requested) to the respective
parties as follows:
if to GLC:
Great Lakes Chemical Corporation
000 Xxxx 00/xx/ Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Vice President and General Counsel
Telecopy: (000) 000-0000
if to OSCA or its Subsidiaries:
OSCA, Inc.
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Vice President and Chief Financial Officer
Telecopy: (000) 000-0000
15
or to such other address as the party to whom notice is given may have
previously furnished to the others in writing in the manner set forth above. Any
notice or communication delivered in person shall be deemed effective on
delivery. Any notice or communication sent by telecopy or by air courier shall
be deemed effective on the first Business Day at the place at which such notice
or communication is received following the day on which such notice or
communication was sent. Any notice or communication sent by registered or
certified mail shall be deemed effective on the fifth Business Day at the place
from which such notice or communication was mailed following the day on which
such notice or communication was mailed.
SECTION 6.05. Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and their legal representatives
and successors, and each Subsidiary and each Affiliate of the parties hereto,
and nothing in this Agreement, express or implied, is intended to confer upon
any other Person any rights or remedies of any nature whatsoever under or by
reason of this Agreement, except for Article 4 (which is intended to be for the
benefit of the Persons provided for therein and may be enforced by such
Persons).
SECTION 6.06. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original but all of which shall
constitute one and the same agreement.
SECTION 6.07. Binding Effect; Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective legal
representatives and successors. This Agreement may not be assigned by any party
hereto; provided, however, that GLC may assign this Agreement in connection with
the sale of all or substantially all of its assets. The Schedules and Exhibits
attached hereto or referred to herein are an integral part of this Agreement and
are hereby incorporated into this Agreement and made a part hereof as if set
forth in full herein.
SECTION 6.08. Dispute Resolution. Resolution of any and all disputes
arising from or in connection with this Agreement, whether based on contract,
tort, or otherwise (collectively, "Disputes"), shall be exclusively governed by
and settled in accordance with the provisions of this Section 6.08. The parties
hereto shall use all commercially reasonable efforts to settle all Disputes
without resorting to mediation, arbitration, litigation or other third party
dispute resolution mechanisms. If any Dispute remains unsettled, a party hereto
may commence proceedings hereunder by first delivering a written notice from a
Senior Vice President or comparable executive officer of such party (the
"Demand") to the other parties providing reasonable description of the Dispute
to the others and expressly requesting mediation hereunder. The parties hereby
agree to submit all Disputes to non-binding mediation before a mediator
reasonably acceptable to all parties involved in such Dispute. If, after such
mediation, the parties subject to such mediation disagree regarding the
mediator's recommendation, such Dispute shall be submitted to arbitration under
the terms hereof, which arbitration shall be final, conclusive and binding upon
the parties, their successors and assigns. The arbitration shall be conducted in
Indianapolis, Indiana by three arbitrators acting by majority vote (the "Panel")
selected by agreement of the parties not later than ten (10) days after the
16
delivery of the recommendation provided by the mediator as described above or,
failing such agreement, appointed pursuant to the commercial arbitration rules
of the American Arbitration Association, as amended from time to time (the "AAA
Rules"). If an arbitrator so selected becomes unable to serve, his or her
successors shall be similarly selected or appointed. The arbitration shall be
conducted pursuant to the Federal Arbitration Act and such procedures as the
parties subject to such arbitration (each, a "Party") may agree, or, in the
absence of or failing such agreement, pursuant to the AAA Rules. Notwithstanding
the foregoing: (i) each Party shall have the right to audit the books and
records of the other Party that are reasonably related to the Dispute; (ii) each
Party shall provide to the other, reasonably in advance of any hearing, copies
of all documents which a Party intends to present in such hearing; and (iii)
each Party shall be allowed to conduct reasonable discovery through written
requests for information, document requests, requests for stipulation of fact
and depositions, the nature and extent of which discovery shall be determined by
the Parties; provided that if the Parties cannot agree on the terms of such
discovery, the nature and extent thereof shall be determined by the Panel which
shall take into account the needs of the Parties and the desirability of making
discovery expeditious and cost effective. The award shall be in writing and
shall specify the factual and legal basis for the award. The Panel shall
additionally have the authority to impose a confidentiality protective order.
The Panel shall apportion all costs and expenses of arbitration, including the
Panel's fees and expenses and fees and expenses of experts, between the
prevailing and non-prevailing Party as the Panel deems fair and reasonable. The
parties hereto agree that monetary damages may be inadequate and that any party
by whom this Agreement is enforceable shall be entitled to seek specific
performance of the arbitrators' decision from a court of competent jurisdiction,
in addition to any other appropriate relief or remedy. Notwithstanding the
foregoing, in no event may the Panel award consequential, special, exemplary or
punitive damages. Any arbitration award shall be binding and enforceable against
the parties hereto and judgment may be entered thereon in any court of competent
jurisdiction.
SECTION 6.09. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the fullest
extent possible.
SECTION 6.10. Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right. Subject to Section 6.08, all
rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
17
SECTION 6.11. Amendment. No change or amendment will be made to this
Agreement except by an instrument in writing signed on behalf of each of the
parties.
SECTION 6.12. Authority. Each of the parties hereto represents to the other
that (a) it has the corporate or other requisite power and authority to execute,
deliver and perform this Agreement and the Ancillary Agreements, (b) the
execution, delivery and performance of this Agreement and the Ancillary
Agreements by it have been duly authorized by all necessary corporate or other
action, (c) it has duly and validly executed and delivered this Agreement and
the Ancillary Agreements, and (d) this Agreement and each Ancillary Agreement is
a legal, valid and binding obligation, enforceable against it in accordance with
its terms subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and
general equity principles.
SECTION 6.13. Interpretation. The headings contained in this Agreement, in
any Exhibit or Schedule hereto and in the table or contents to this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Any capitalized term used in any Schedule or
Exhibit but not otherwise defined therein, shall have the meaning assigned to
such term in this Agreement. When a reference is made in this Agreement to an
Article or a Section, Exhibit or Schedule, such reference shall be to an Article
or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated. After the Effective Date, the OSCA Business shall be deemed to no
longer exist and all references made herein to OSCA as a party which operate as
of a time following the Effective Date, shall be deemed to refer to OSCA and its
Subsidiaries as a single party.
****
[SIGNATURES ON FOLLOWING PAGE]
18
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized on the day and
year first above written.
GREAT LAKES CHEMICAL CORPORATION
By _______________________________
Its ______________________________
OSCA, INC.
By________________________________
Its_______________________________
19
