EXHIBIIT 2.1
PURCHASE AGREEMENT
BETWEEN
CROMPTON CORPORATION
(AND ITS AFFILIATES NAMED HEREIN)
AND
AKZO NOBEL SURFACE CHEMISTRY L.L.C.
(AND ITS AFFILIATES NAMED HEREIN)
DATED AS OF JUNE 28, 2002
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS; INTERPRETATION 2
1.1. Definitions 2
1.2. Interpretation 8
ARTICLE 2 PURCHASE AND SALE 9
2.1. Sale of Assets by Sellers Other Than CIS 9
2.2. Procedures for Purchased Assets Not
Transferable 14
2.3. Title Issues 15
2.4. Construction, Safety, Health and Regulatory
Compliance Projects 15
2.5. Customer Remittances 15
ARTICLE 3 PURCHASE PRICE; CLOSING STATEMENT; ADJUSTMENTS;
CONSISTENT TREATMENT 15
3.1. Purchase Price 15
3.2. Closing Statement 16
3.3. Post-Closing Purchase Price Adjustment 17
3.4. Post-Closing Accrual Statement 17
3.5. Accrual Purchase Price Adjustments 19
3.6. Consistent Treatment 19
3.7. Currency Exchange Rates 20
3.8. Offset of Adjustments Against Purchase Price 20
ARTICLE 4 CLOSING 20
4.1. Closing Date 20
4.2. Transactions at Closing 20
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF SELLERS 21
5.1. Organization 21
5.2. Due Authorization 21
5.3. Sufficiency, Condition and Location of and
Title to Purchased Assets 22
5.4. Title to CIS Common Stock 22
5.5. Certain Contracts 22
5.6. Intangible Rights 24
5.7. Litigation 24
5.8. Employee Benefit Plans 24
5.9. Change in Control 25
5.10. U.S. Labor Matters 25
5.11. Default 25
5.12. Consents 26
5.13. Compliance with Applicable Laws 26
5.14. Management Compensation 26
5.15. No Changes 26
5.16. Real Property 27
5.17. Environmental, Occupational, Health and
Safety Matters 27
5.18. Permits 27
5.19. Tax Matters 28
5.20. Financial Statements 28
5.21. Inventory Statement 28
5.22. No Broker 28
5.23. Limitations on
Representations and Warranties 28
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BUYERS 29
6.1. Organization 29
6.2. Due Authorization 29
6.3. Consents 29
6.4. Litigation 29
6.5. No Contemplated Sales 29
6.6. No Broker 29
6.7. Availability of Funds 30
6.8. Environmental Reports 30
6.9. Promissory Note 30
ARTICLE 7 EMPLOYEES; PENSION AND OTHER BENEFIT PLANS 31
7.1. Employment of Employees of the Business 31
7.2. Maintenance of Base Salaries and Benefits;
Service Credit 31
7.3. Severance Benefits; Continuation of Severance
Program 32
7.4. Retirement Plans 32
7.5. Crompton Corporation Employee Savings Plan 32
7.6. Welfare Benefits 33
7.7. Executive Compensation 34
7.8. Worker Adjustment and Retraining Notification
Act 34
7.9. Vacation and Sick Pay 35
7.10. No Third Party Beneficiaries 35
ARTICLE 8 PRE-CLOSING COVENANTS OF SELLERS AND BUYERS 35
8.1. Corporate and Other Actions 35
8.2. Local Transfer Agreements 35
8.3. Consents and Approvals 35
8.4. Xxxx-Xxxxx-Xxxxxx and Other 35
8.5. Access to Information 36
8.6. Employment Assistance 37
8.7. Ordinary Course of Business 37
8.8. Bulk Transfer Laws 37
8.9. Leased Vehicles 37
8.10. Negotiations with Works Councils 37
8.11. Other Agreements 37
ARTICLE 9 CONDITIONS 38
9.1. Conditions to Obligations of Sellers 38
9.2. Conditions to Obligations of Buyers 38
ARTICLE 10 NON-COMPETITION 40
10.1. Sellers' Covenants 40
10.2. Intentionally Left Blank 41
10.3. Non-Solicitation 41
10.4. Additional Agreements 41
ARTICLE 11 POST-CLOSING COVENANTS 41
11.1. Availability of Records 41
11.2. Use of Trade or Service Marks 42
11.3. Tax Matters 43
11.4. Confidential Information 44
11.5. Inventory Removal 46
11.6. Change of Name of CIS 46
11.7. Welfare Plans 46
ARTICLE 12 INDEMNIFICATION AND SURVIVAL 47
12.1. Indemnification by Sellers 47
12.2. Indemnification by Buyers 48
12.3. Survival 49
12.4. Limitation on Liability 49
ARTICLE 13 TERMINATION 50
13.1. Termination of Agreement 50
13.2. Written Notice 50
13.3. Continuing Confidentiality 50
ARTICLE 14 ENVIRONMENTAL CONDITIONS 51
14.1. Definitions 51
14.2. Sellers' Representations and Warranties 53
14.3. Buyers' Representations and Warranties 53
14.4. CIS's Representations and Warranties 54
14.5. Sellers' Obligations 54
14.6. Limitations on Sellers' Obligations 56
14.7. Fines and Penalties 58
14.8. Aggregate Responsibility 58
14.9. Retained Liabilities 58
14.10. Sellers' Right to Remediate 58
14.11. CIS's Sole Obligations 58
14.12. Responsibility to Direct Work 59
14.13. Implementation of Work 60
14.14. Non Applicability 60
14.15. Access 60
14.16. Insurance 60
14.17. Indemnification by Sellers 61
14.18. Indemnification by Buyers 61
14.19. Indemnification by CIS 61
14.20. Procedures for Indemnification 62
14.21. Claims 62
14.22. Limitation of Claims 62
14.23. Dispute Resolution 63
ARTICLE 15 MISCELLANEOUS 63
15.1. Assignment 63
15.2. No Press Release Without Consent 63
15.3. Confidentiality 63
15.4. Expenses 64
15.5. Severability 64
15.6. Entire Agreement 64
15.7. No Third Party Beneficiaries 64
15.8. Waiver 64
15.9. Governing Law 64
15.10. Counterparts 65
15.11. Choice of Forum 65
15.12. Further Documents 65
15.13. Notices 65
15.14. Schedules 66
15.15. Construction 66
15.16. Guarantee 66
List of Schedules and Exhibits
Schedule 1(a) Additional Sellers
Schedule 2.1(a)(ii) Singapore Equipment
Schedule 2.1(a)(vi) Computer Programs and Software
Schedule 2.1(a)(viii) Sellers' Patents and Patent Applications
Schedule 2.1(a)(ix) Trademarks, Trademark Registrations,
Tradenames and Servicemarks
Schedule 2.1(a)(xi) Copyrights
Schedule 2.1(b)(xviii) Excluded Assets
Schedule 2.4 Construction, Safety, Health and Regulatory
Compliance Projects
Schedule 3.2(a) Inventory Valuation Methodologies
Schedule 3.6 Adjusted Purchase Price Allocation
Schedule
Schedule 4.2(c) Bank Account(s) for Payment of Purchase
Price
Schedule 5.1 Sellers' Jurisdictions of Organization
Schedule 5.3(a) Sellers' Liens
Schedule 5.3(a)(i) Contribution Agreement
Schedule 5.3(a)(ii) Limited Warranty Deed for the Houston
Facility
Schedule 5.3(a)(iii) Limited Warranty Deed for the Fort Worth
Facility
Schedule 5.3(c) Condition of Purchased Assets
Schedule 5.5 Material Business Contracts
Schedule 5.7 Litigation, Proceedings and Claims
Schedule 5.8 Employee Benefit Contracts and Plans
Schedule 5.9 Change in Control
Schedule 5.10 U.S. Labor Matters
Schedule 5.11 Sellers' and Others' Defaults
Schedule 5.12 Authorizations, Exemptions and Consents
Schedule 5.13 Sellers' Compliance with Applicable Laws
Schedule 5.15 No Changes
Schedule 5.17 Environmental, Occupational, Health and
Safety Matters
Schedule 5.18 Permits
Schedule 5.20(a) Financial Statement
Schedule 5.20(b) Financial Statement
Schedule 5.20(c) Financial Statement
Schedule 6.3 Buyers' Authorizations, Exemptions and
Consents
Schedule 6.4 Buyers' Litigation, Proceedings and
Claims
Schedule 7.1 Employees
Schedule 7.4(b) Foreign Retirement Benefits
Schedule 7.7 Management Employees; Change in Control
Employment Agreements
Schedule 10.1(a) Non-Competition
Exhibit A Inventory Statement
Exhibit B Arbitration Procedures
Exhibit 11.4 Excerpts from Xxxxxxxxxxx Purchase
Agreement
PURCHASE AGREEMENT
PURCHASE AGREEMENT dated as of June 28, 2002 (this
"Agreement"), among Crompton Corporation, a corporation organized
under the laws of Delaware ("Crompton"), Crompton Specialties
Pte., Ltd. and Crompton Specialties Asia Pacific Pte., Ltd.,
corporations organized under the laws of Singapore (collectively,
"Crompton Singapore"), Xxxxxxxx X.X. (Switzerland), a corporation
organized under the laws of Switzerland ("Xxxxxxxx X.X."), and
the additional Sellers listed on Schedule 1(a) hereto (Crompton,
Crompton Singapore, Xxxxxxxx X.X., and the entities listed on
Schedule 1(a) hereto are referred to individually as a "Seller"
and collectively as the "Sellers") and Akzo Nobel Surface
Chemistry L.L.C., a limited liability company organized under the
laws of Delaware ("Akzo LLC"), Akzo Nobel Surface Chemistry A.B.,
an entity organized under the laws of Sweden, and Akzo Nobel
Surface Chemistry Pte. Ltd., an entity organized under the laws
of Singapore (each referred to individually as a "Buyer" and
collectively as the "Buyers"), and, for purposes of Section
15.16, Akzo Nobel Chemicals Inc., a corporation organized under
the laws of Delaware ("Akzo Chemicals").
W I T N E S S E T H:
WHEREAS, Crompton owns all outstanding shares of common
stock, par value $0.01 per share, of Crompton Industrial
Specialties, Inc., a corporation organized under the laws of
Delaware ("CIS") ("CIS Common Stock");
WHEREAS, Seller Crompton conducts the Business (as defined
herein) in North America through CIS (including manufacturing
facilities owned by CIS located on 00000 Xxxxxx Xxxx, xx Xxxxxxx,
Xxxxx (the "Houston Facility") and on 000 X. Xxxxxxxxx Xxxxx xx
Xxxx Xxxxx, Xxxxx (the "Fort Worth Facility")); management
personnel located in Greenwich, Connecticut, and Houston, Texas;
research and development personnel located in Dublin, Ohio;
Itatiba, Brazil; and Meyrin, Switzerland; and direct sales
personnel located in various locations; Seller Crompton Singapore
conducts the Business in Singapore through manufacturing
equipment located in Singapore (the "Singapore Equipment"), an
office, laboratory and research and development personnel located
in Singapore, and direct sales personnel located in various
locations; and the remaining Sellers set forth on Schedule 1(a)
own limited inventory, Intangible Rights (as defined in Section
1.1), contracts and other assets of the Business outside of the
previously mentioned jurisdictions, and employ certain Employees
(as defined in Section 1.1) of the Business; in addition,
Crompton France S.A. conducts the Business through purchases of
products from a toll manufacturer in France;
WHEREAS, Sellers wish to sell and transfer, and Buyers wish
to purchase and assume, the assets and liabilities described
herein of Sellers' business of developing, manufacturing and
marketing nonionic, cationic and anionic specialty surfactants
for agricultural; oilfield; household, institutional and personal
care; and other industrial market segments (the "Business")
including such business conducted at the Houston Facility and the
Fort Worth Facility; the Singapore Equipment; and all laboratory
equipment used in connection with the Business located in
Seller's research and development facilities in Dublin, Ohio;
Itatiba, Brazil; and Meyrin, Switzerland; on the terms, and
subject to the conditions and limitations, set forth herein; and
WHEREAS, Sellers do not wish to sell and transfer, and
Buyers do not wish to purchase, Sellers' research and development
facilities in Houston, Texas; Dublin, Ohio; Itatiba, Brazil; and
Meyrin, Switzerland, Sellers' office and laboratory in Singapore
and Sellers' office in Greenwich, Connecticut;
NOW, THEREFORE, in consideration of the foregoing, the
covenants and agreements set forth herein, and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS; INTERPRETATION
1.1. Definitions. The following terms have the following
meanings when used herein:
"Accrual Purchase Price Adjustments" has the meaning set
forth in Section 3.5.
"Adjusted Purchase Price" has the meaning set forth in
Section 3.1(a).
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling or controlled by, or
under direct or indirect common control with, such Person.
Notwithstanding the foregoing, CIS shall not be considered an
Affiliate of Sellers or of Buyers.
"Agreement" has the meaning set forth in the recitals
hereof.
"Akzo Chemicals" has the meaning set forth in the recitals
hereof.
"Akzo LLC" has the meaning set forth in the recitals hereof.
"Ancillary Agreements" means (a) transitional services
agreements for Sellers to provide certain services to Buyers and
CIS in the United States, Europe, Latin America and Asia Pacific,
including short-term lease arrangements for Singapore, Itatiba,
Meyrin and Greenwich; (b) a supply agreement with respect to the
following compounds manufactured at the Houston Facility and
supplied by CIS to Sellers' Petroleum Additives Business: 1298
Soft Acid and NP 330; (c) a toll manufacturing agreement for the
supply by CIS to Sellers' Polymer Additives Business of stearate
products manufactured at the Houston Facility; (d) a lease
agreement providing for the lease by Sellers to CIS or Buyers of
research and development facilities in Dublin, Ohio; (e) a supply
agreement with respect to Witconol CO-360 manufactured at the
Houston Facility and supplied by CIS to Sellers OSiL Business;
and (f) a supply agreement with respect to the following
compounds manufactured at the Houston Facility and supplied by
CIS to Sellers' Crop Protection Business: various Sponto, Witco,
Witconol, Flo Mo, Morwet, Supralate and Petro Products.
"Antitrust Laws" means any and all laws regulating trade and
competition, in any jurisdiction, including the Xxxxxxx Antitrust
Act, the Xxxxxxx Act, the Xxxxxxxx Xxxxxx Act, the Federal Trade
Commission Act and the Treaty of Rome.
"Applicable Law" means, with respect to any Person, any
domestic or foreign, federal, state or local statute, law,
ordinance, rule, administrative interpretation, regulation,
order, writ, injunction, directive, judgment, decree or other
requirement of any Governmental Entity in effect on or prior to
the Closing Date (excluding any Environmental, Occupational,
Health and Safety Laws) applicable to such Person or any of its
Affiliates or any of their respective properties, assets or
business operations.
"Assignment and Assumption Agreements" means the Assignment
and Assumption Agreements and Bills of Sale to be executed and
delivered between Buyers and Sellers on the Closing Date,
including an Assignment and Assumption Agreement between Akzo
Nobel Surface Chemistry Pte. Ltd. and Crompton Singapore, an
Assignment and Assumption Agreement between Xxxxxxxx X.X.
(France) and Akzo Nobel Chemicals SAS, an Assignment and
Assumption between Crompton and Akzo LLC and bills of sale from
other relevant Seller entities to other relevant Buyer entities
for other Purchased Assets.
"Assumed Liabilities" has the meaning set forth in Section
2.1(c).
"Benefit Plans" has the meaning set forth in Section 5.8.
"Business" has the meaning set forth in the recitals hereof.
"Business Assets" means the Purchased Assets and the assets
of CIS (not to include any Excluded Assets).
"Business Contracts" has the meaning set forth in Section
2.1(a)(iv).
"Buyer" or "Buyers" has the meaning set forth in the
recitals hereof.
"Buyer Prorations" has the meaning set forth in Section 3.4.
"Buyers' 401(k) Plan" has the meaning set forth in Section
7.5(b).
"Buyers' Auditors" has the meaning set forth in Section
3.2(b).
"Buyers' Confidential Information" has the meaning set forth
in Section 11.4(a)(ii).
"Buyers' Flex Plan" has the meaning set forth in Section
7.6(d).
"Change in Control" has the meaning set forth in Section
7.7.
"Change in Control Employment Agreement" has the meaning set
forth in Section 7.7.
"Chinook Purchase Agreement" means the Equipment Sale and
Purchase Agreement between Chinook (Singapore) Pte. Ltd. and
Witco, dated 20 April 1998.
"CIS" has the meaning set forth in the recitals hereof.
"CIS Common Stock" has the meaning set forth in the recitals
hereof.
"Claims" has the meaning set forth in Section 14.21.
"Closing" has the meaning set forth in Section 4.1.
"Closing Date" has the meaning set forth in Section 4.1.
"Closing Inventory Statement" has the meaning set forth in
Section 3.2(c) and 3.2(d)(iii).
"Closing Inventory Statement Delivery Date" has the meaning
set forth in Section 3.3(b).
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" has the meaning set forth in
Section 11.4(a).
"Continuing Employees" has the meaning set forth in Section
7.1.
"Contracts" has the meaning set forth in Section 5.5.
"Contribution Agreement" has the meaning set forth in
Section 5.3(a).
"Covered Employees" has the meaning set forth in Section
7.6(d).
"Crompton" has the meaning set forth in the recitals hereof.
"Crompton 401(k) Plan" has the meaning set forth in
Section 7.5(a).
"Xxxxxxxx X.X." has the meaning set forth in the recitals
hereof.
"Crompton Singapore" has the meaning set forth in the
recitals hereof.
"Directing Party" has the meaning set forth in Section
14.12.
"Employees" has the meaning set forth in Section 7.1.
"Environmental, Occupational, Health and Safety Laws" shall
mean all federal, state, local and foreign laws, statutes, codes,
ordinances, rules, regulations, permits or orders relating to or
addressing the environment, health or safety, which shall
include, but not be limited to, the manufacture, distribution,
use, handling or disposal of any Hazardous Substances, or
occupational, workplace or worker safety and health.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Excluded Assets" has the meaning set forth in Section
2.1(b).
"Excluded Liabilities" has the meaning set forth in Section
2.1(d).
"Facilities" means the Houston Facility and the Fort Worth
Facility.
"Final Termination Date" has the meaning set forth in
Section 13.1(d).
"Fort Worth Facility" has the meaning set forth in the
recitals hereof.
"Governmental Consents" has the meaning set forth in Section
8.4(a)(ii).
"Governmental Entity" means any international, Federal,
state or local court, administrative agency or commission or
other governmental authority or instrumentality, domestic or
foreign.
"Guaranteed Obligations" has the meaning set forth in
Section 15.16.
"Guaranteed Party" has the meaning set forth in Section
15.16.
"Guarantor" has the meaning set forth in Section 15.16.
"Houston Facility" has the meaning set forth in the recitals
hereof.
"HSR Act" has the meaning set forth in Section 8.4(a)(i).
"Indemnitee" has the meaning set forth in Section 14.20.
"Indemnitor" has the meaning set forth in Section 14.20.
"Intangible Rights" means patents, patent applications,
trademarks, trademark applications, tradenames, service marks and
copyrights.
"Inventory" has the meaning set forth in Section 2.1(a)(i).
"Inventory Statement" means the statement of Inventory of
the Business at December 31, 2001, attached as Exhibit A hereto.
"Liens" has the meaning set forth in Section 5.3(b).
"Losses," as used in this Agreement except in Article 14,
has the meaning set forth in Section 12.1(a). For the purposes
of Article 14 only, "Losses" has the meaning set forth in Section
14.17.
"Management Group" means Messrs. Xxxxx Xxxxxxxxxxx, Xxx
Xxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxx, Xxxx Xxxxx, Xxxxxx Xxxxxxx,
Xxxx Xxxxxxx, Xxxxx Xxxxxx, and Xxxx Xxxxx.
"Marks" has the meaning set forth in Section 11.2(b).
"Other Party" has the meaning set forth in Section 14.12.
"Permitted Liens" means (i) Liens set forth in Schedule
5.3(a), (ii) mechanics', carriers', workmen's, repairmen's or
other like Liens arising or incurred in the ordinary course of
business that do not materially impair, and could not reasonably
be expected to materially impair, the continued use and operation
of the Business as presently conducted, Liens arising under
original purchase price conditional sales contracts and equipment
leases with third parties entered into in the ordinary course of
business and Liens for Taxes that are not due and payable or that
may thereafter be paid without penalty, (iii) leases, subleases
and similar agreements set forth in Schedule 5.3(a), (iv)
easements, covenants, rights-of-way and other similar
restrictions of record, (v) any conditions that may be shown by a
current, accurate survey or physical inspection of any
Facilities, assets or properties, (vi) (A) zoning, building and
other similar restrictions, (B) Liens that have been placed by
any developer, landlord or other third party on property over
which a Seller has easement rights or on any property leased to a
Seller and subordination or similar agreements relating thereto,
if any, that do not materially impair, and could not reasonably
be expected to materially impair, the continued use and operation
of the Business as presently conducted and (C) unrecorded
easements, covenants, rights-of-way and other similar
restrictions, if any, that do not materially impair, and could
not reasonably be expected to materially impair, the continued
use and operation of the Business as presently conducted and
(vii) other Liens, imperfections of title or encumbrances, if
any, that do not materially impair, and could not reasonably be
expected to materially impair, the continued use and operation of
the Business as presently conducted.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, trust or unincorporated
organization or Governmental Entity.
"Petroleum Additives" includes additives, fluids and greases
used in or as automotive lubricants, motor oils, heavy duty
diesel oils, marine lubricants, automotive transmission fluids,
automotive gear oils, marine gear oils, railroad oils, industrial
lubricants (including metalworking fluids, rolling oils, cutting
oils, stamping oils, way lubricants, hydraulic fluids, compressor
fluids and industrial gear oils) and in fuels.
"Post-Closing Accrual Statement" has the meaning set forth
in Section 3.4.
"Post-Closing Accrual Statement Delivery Date" has the
meaning set forth in Section 3.5.
"Privilege Period" has the meaning set forth in Section
11.3(d).
"Product Stewardship Materials" has the meaning set forth in
Section 8.5(b).
"Promissory Note" has the meaning set forth in Section
3.1(b)(ii).
"Proposed Inventory Statement" has the meaning set forth in
Section 3.2(a).
"Prorated Items" has the meaning set forth in Section 3.4.
"Purchase Price" has the meaning set forth in Section
3.1(a).
"Purchased Assets" has the meaning set forth in Section
2.1(a).
"Real Property" means the real property conveyed in the
Purchased Assets.
"Receivables" has the meaning set forth in Section
2.1(b)(v).
"Referee" has the meaning set forth in Section 3.2(d)(iii).
"Retained Inventory" means off-spec inventory described in
Schedule 3.2(a) hereto.
"Schedules" has the meaning set forth in Section 15.14.
"Seller" or "Sellers" has the meaning set forth in the
recitals hereof.
"Seller Material Adverse Effect" means any effect that is
materially adverse to the assets, properties, business, financial
condition or results of operations of the Business, taken as a
whole, other than any effect relating to (a) the economy or
financial markets in general or the industries in which the
Sellers or CIS operate in general; (b) the entry into this
Agreement or the announcement or pendency of the transactions
contemplated hereby; or (c) that certain Business customer
previously identified among the parties; and "material" and other
similar terms shall have a correlative meaning. For purposes of
determining whether any fact or circumstance involves a material
adverse effect on the results of operations of a party, any
special transaction charges incurred by such party as a result of
the consummation of transactions contemplated by this Agreement
shall not be considered.
"Seller Prorations" has the meaning set forth in Section
3.4.
"Sellers' Auditors" has the meaning set forth in Section
3.2(b).
"Sellers' Broker" has the meaning set forth in Section 5.20.
"Sellers' Confidential Information" has the meaning set
forth in Section 11.4(a)(i).
"Singapore Equipment" has the meaning set forth in the
recitals hereof.
"Sellers' Flex Plan" has the meaning set forth in Section
7.6(d).
"Sellers' knowledge" (and similar phrases) shall mean actual
knowledge of any of the members of the Management Group or
Messrs. Xxxxxx Xxxxx, Xxxxxx Xxxxxxxxxx, Xxxxx Xxxx, Xxxxxx
Fraeys de Veubeke or Xxxx Xxxxxxx, after due inquiry by
Crompton's in-house counsel of such people.
"Straddle Period Tax Returns" has the meaning set forth in
Section 11.3(c).
"Subsidiary" means, with respect to any Person, any other
Person, an amount of the voting securities, other voting
ownership or voting partnership interests of which is sufficient
to elect at least a majority of its board of directors or other
governing body (or, if there are no such voting interests, 50% or
more of the equity interests) of which is owned directly or
indirectly by such first Person. Notwithstanding the foregoing,
CIS shall not be considered a Subsidiary of Sellers or of Buyers.
"Supplemental Environmental Reports" means environmental
reports on environmental conditions at the Facilities completed
on behalf of Buyers and submitted to Sellers in accordance with
Section 6.8 hereof.
"Tax Matters" has the meaning set forth in Section 12.3.
"Taxes" means with respect to any Person: (i) any federal,
state, local, foreign and other net income, gross income, gross
receipts, sales, use, ad valorem, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp,
registration, transfer, occupation, premium, property, value-
added or windfall profit tax, custom duty or other tax of any
kind whatsoever (including, in the United Kingdom, rates and
national insurance), together with any interest and any penalty,
addition to tax or additional amount imposed by any taxing
authority (domestic or foreign) on such Person, and (ii) any
liability of such Person or any of its Subsidiaries for the
payment of any amount of the type described in clause (i) as a
result of being a member of any consolidated, combined or unitary
group.
"Technology Rights" has the meaning set forth in Section
2.1(a)(vii).
"Title Company" has the meaning set forth in Section 2.3.
"Title Reports" has the meaning set forth in Section 2.3.
"Transferred Account Balances" has the meaning set forth in
Section 7.6(d).
"Transition Period" has the meaning set forth in Section
11.7.
"Transition Plans" has the meaning set forth in Section
11.7.
"VAT" has the meaning set forth in Section 15.4.
"WARN" has the meaning set forth in Section 7.8(a).
1.2. Interpretation. The headings contained in this
Agreement, in any exhibit or schedule annexed hereto and in the
table of contents to this Agreement are for reference purposes
only and shall not affect in any way the meaning or
interpretation of this Agreement. When a reference is made in
this Agreement to an Article, Section, Schedule or Exhibit, such
reference shall be to an Article, Section, Schedule or Exhibit of
this Agreement unless otherwise indicated. Whenever the words
"included," "includes" or "including" are used in this Agreement,
they shall be deemed to be followed by the words "without
limitation." All accounting terms not defined in this Agreement
shall have the meanings determined in accordance with United
States generally accepted accounting principles. The words
"hereof," "herein" and "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. The
definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the
masculine as well as to the feminine and neuter genders of such
terms, and references to a Person are also to its permitted
successors and assigns.
ARTICLE 2
PURCHASE AND SALE
2.1. (a) Sale of Assets by Sellers Other Than CIS. Upon
the terms and subject to the conditions of this Agreement, at the
Closing all the Sellers shall sell, transfer, convey, assign and
deliver to Buyers, and Buyers shall purchase and accept, wherever
located, all right, title, and interest of such Sellers in and to
all the properties, assets and rights of any kind, whether
tangible or intangible, real or personal, used or held for use
exclusively in the Business, as the same may exist on the Closing
Date, except for the Excluded Assets and except as limited in the
following paragraphs of this Section 2.1(a) or elsewhere in this
Agreement, as well as the following assets owned by such Sellers
(which may or may not be included within the foregoing)
(collectively, the "Purchased Assets"):
(i) all of the inventory of the Business reflected on the
Inventory Statement (excluding inventory disposed of or used or
replaced in the ordinary course of business since the date of the
Inventory Statement, but including inventory acquired since that
date), including raw materials, intermediate and finished goods
inventories (including related packaging inventories), whether in
transit or located at one of the Facilities or at warehouses or
toll manufacturers maintained by the Business for use therein
(together with inventory held by CIS, the "Inventory");
(ii) the Singapore Equipment that is set forth on Schedule
2.1(a)(ii);
(iii) (A) all sales order files, engineering order
files, purchase order files, manufacturing records, advertising
and promotional materials and business files (except books of
account, general, financial and accounting records and other
data) owned by Sellers, relating exclusively or primarily to and
used exclusively or primarily in the Business (excluding those
related to Sellers' operations in France); and (B) books of
account, general, financial and accounting records and other data
owned by Sellers relating exclusively to and used exclusively in
the Business (excluding those related to Sellers' operations in
France and any contained on Sellers' SAP system), provided that
Sellers shall be permitted to retain copies of the materials
described in (A) or (B) above, or originals to the extent they
provide Buyers with copies of the same;
(iv) to the extent requisite consents have been obtained and
notices given with respect thereto, all rights and interest of
Sellers to or in all agreements, options, contracts, distributor
agreements, sales representative agreements, leases, license
agreements, instruments, purchase orders, sales orders and
commitments (including outstanding bids) relating exclusively or
primarily to and used exclusively or primarily in the Business
(collectively, together with any agreements, options, contracts,
distributor agreements, sales representative agreements, leases,
license agreements, instruments, purchase orders, sales orders
and commitments (including outstanding bids) held by CIS, the
"Business Contracts");
(v) to the extent transferable by law, all licenses,
approvals, certificates, permits, franchises or other evidence of
authority issued by a Governmental Entity and held by Sellers
relating exclusively to the Business;
(vi) to the extent requisite consents have been obtained,
all computer programs and software (including documentation and
related object and source codes), and all records thereof, that
are set forth on Schedule 2.1(a)(vi);
(vii) all rights, title and interest in and to all trade
secrets, unpatented inventions, protocols, know-how, product
formulae, product formulations, specifications, manufacturing
processes and procedures, operating parameters and conditions,
notebooks, reports, products, records of inventions, test
information, drawings, diagrams, designs, research and
development files, operating manuals, web-site and domain names
used exclusively in or related exclusively to the Business
(collectively, together with all rights, title and interest in
and to all trade secrets, unpatented inventions, protocols, know-
how, product formulae, product formulations, specifications,
manufacturing processes and procedures, operating parameters and
conditions, notebooks, reports, products, records of inventions,
test information, drawings, diagrams, designs, research and
development files, operating manuals, web-site and domain names
held by CIS, the "Technology Rights");
(viii) the non-U.S. patents, patent applications and
inventions not yet filed as patent applications set forth on
Schedule 2.1(a)(viii) hereto;
(ix) the non-U.S. trademarks, trademark registrations,
tradenames and servicemarks set forth on Schedule 2.1(a)(ix)
hereto;
(x) all claims (1) for infringement of any patents or
patent applications purchased hereunder, or other claims or
choses in action relating to the misuse or misappropriation of
the Technology Rights constituting Purchased Assets, to the
extent such infringement, misuse or misappropriation occurred
following the Closing Date or (2) for breach of warranty against
any manufacturer of equipment constituting Purchased Assets to
the extent of any breach of warranty occurring following the
Closing;
(xi) the registered copyrights set forth on Schedule
2.1(a)(xi) hereto;
(xii) the customer lists of the Business;
(xiii) all records of whatever nature relating to
employment of Continuing Employees, to the extent in Sellers'
possession and to the extent such files pertain to (1) skill and
development training and resumes, (2) seniority histories, (3)
salary and benefit information, (4) Occupational Safety and
Health Act medical reports, (5) active medical restriction forms
and (6) any other matters, provided that Sellers shall be
entitled to retain copies of such records, and in each case
disclosure of which by Sellers to Buyers is permitted under
Applicable Law without the consent of the Continuing Employee,
but not including any performance evaluations or disciplinary
records; and
(xiv) all outstanding shares of CIS Common Stock and the
corporate books and records of CIS.
(b) Excluded Assets. Sellers shall not sell, transfer or
assign, and Buyers shall not purchase, any of the following
assets of Sellers or CIS (such assets being collectively referred
to as the "Excluded Assets"), and, except as otherwise provided
below, to the extent any such assets are held by CIS immediately
preceding the Closing, they shall be transferred or assigned by
CIS to Sellers as of the Closing:
(i) all rights of Sellers arising under this Agreement and
the consummation of the transactions contemplated hereby;
(ii) all cash, commercial paper, certificates of deposit and
other bank deposits, treasury bills, investments, security
deposits and other cash equivalents and marketable securities and
xxxxx cash;
(iii) all corporate minute books, stock records and Tax
returns, sales tax exemptions and resale certificates of Sellers
(but not of CIS) and such other similar corporate books and
records of Sellers (but not of CIS); provided, however, that
Buyers shall be entitled to obtain copies of such other records
of Sellers relating to CIS and the Business Assets as Buyers may
reasonably require in connection with the operation of the
Business or use of the Business Assets subsequent to the Closing;
(iv) all interests in and to the corporate names of Sellers
or any Affiliates of Sellers, including "Crompton," "Witco" and
all variants thereof and all rights to the use of such names as
trademarks, except as may be licensed as set forth in Section
11.2 hereof;
(v) all notes, receivables or other rights to payment owing
to Sellers or CIS in respect of the Business as of the Closing
Date, including third party receivables and intercompany and
intracompany receivables owed by Sellers or CIS and their
Affiliates to the Business including, except as provided in
Section 3.4(e), rights to rebates and refunds under Business
Contracts (collectively, the "Receivables");
(vi) all rights to refunds in respect of Taxes that accrued
for periods ending prior to the Closing;
(vii) all transfer pricing, distribution and other
agreements among CIS, Sellers and their Affiliates designed to
facilitate transfers of products and funds related to the
Business among Crompton entities;
(viii) the land, buildings and facilities for the conduct
of business at Harahan, Louisiana, and the conduct of research
and development located in Meyrin, Switzerland; Itatiba, Brazil;
Houston, Texas (other than at the Houston Facility); Singapore;
Greenwich, Connecticut and Dublin, Ohio, and the assets of
Sellers (but not of CIS) contained therein other than those set
forth on Schedule 2.1(a)(ii);
(ix) the sales offices used by the Business;
(x) all trade secrets, unpatented inventions, protocols,
know-how, product formulae, product formulations, manufacturing
processes and procedures, products, records of inventions, test
information, drawings, diagrams, designs, research and
development files and operating manuals relating to: (a) all
products produced by Buyers for Sellers pursuant to the toll
manufacturing agreement for the supply by CIS to Sellers' Polymer
Additives Business of stearate products manufactured at the
Houston Facility; (b) the Petroleum Sulfonate Replacement (PSR)
project technology from Seller's Petroleum Additives Business,
including all cosulfonation technology for mixed synthetic and
natural feedstreams and the alkylation process for the
intermediate product; and (c) the PMMA project, which is
Polymethylmethacrylate (PMMA), acrylate and acrylic antistatic
agents based on salts of reaction products from carboxylic acids
and diamines including sulfonates of an imidazoline made from a
fatty acid and ethylenediamine;
(xi) any amounts payable to Crompton pursuant to the
disputes set forth on Schedule 5.7 hereof;
(xii) the SAP software and all other computer programs
and software (including documentation and related object and
source codes), and all records thereof used by Sellers and not
listed on Schedule 2.1(a)(vi);
(xiii) insurance or other similar policies and any rights
or claims thereunder;
(xiv) except as specifically provided herein, all shares
or other equity interests of Sellers in any direct or indirect
Subsidiary of Crompton;
(xv) all claims or rights of action (whether inchoate or
otherwise) held by the Business against CIS or Seller or any of
its Affiliates;
(xvi) any leased personal computers or laptops wherever
located;
(xvii) any inventory at the Houston Facility relating to
the production of stearates, any OSiL inventory located in
Singapore and Retained Inventory;
(xviii) the equipment set forth on Schedule 2.1(b)(xviii);
and
(xix) any inventory that has been invoiced to Sellers or
customers of Sellers prior to the Closing Date.
(c) Assumed Liabilities. On the Closing Date, upon the
terms and subject to the conditions of this Agreement, Buyers
shall assume the following and only the following liabilities in
respect of the Business (collectively, the "Assumed
Liabilities"):
(i) all the obligations of Sellers under or in respect of
Business Contracts, licenses, approvals, certificates, permits,
franchises or other evidences of authority issued by a
Governmental Entity, in each case, included as part of the
Purchased Assets;
(ii) the obligation to honor the restricted use provisions
in Section 7.8 of the Chinook Purchase Agreement on and after the
Closing Date;
(iii) all claims for damages, direct or consequential,
related to warranty claims for defective products of the Business
(whenever manufactured) shipped on and after the Closing Date;
(iv) all obligations under the Benefit Plans and all other
liabilities which are allocated to or assumed by Buyers, any
buyer Affiliate or any Employer pursuant to Article 7;
(v) all obligations and liabilities relating to or arising
out of any claims made by Continuing Employees (or their
dependents or beneficiaries) or labor organizations, unions or
associations representing Continuing Employees (i) which are
based on, arise out of, or result from, acts, facts,
circumstances, events or conditions occurring on or after the
Closing Date, including any such claims based upon the
transactions contemplated hereby or (ii) which are based on,
arise out of, or result from Buyers' selection of, efforts to
engage or other treatment of Continuing Employees;
(vi) all product liability claims (including claims for
injury, death or property damage) for products of the Business
shipped on and after the Closing Date;
(vii) all Taxes relating to the Purchased Assets which
accrue or relate to the operation of CIS, the Business or the
Business Assets on and after the Closing Date other than Taxes
for which Sellers are responsible under Section 15.4;
(viii) liability relating to intellectual property
constituting Purchased Assets in connection with events occurring
on or after the Closing Date; and
(ix) any and all liabilities, costs and obligations related
to compliance with Applicable Law from and after the Closing Date
related to Product Stewardship Materials.
(d) Excluded Liabilities. Buyers shall not assume and
shall have no responsibility in respect of the Business other
than the Assumed Liabilities (collectively, the "Excluded
Liabilities"), including the Excluded Liabilities set forth
below, and to the extent any Excluded Liabilities are liabilities
of CIS immediately preceding the Closing, they shall be
transferred or assigned by CIS to Crompton and assumed by
Crompton as of the Closing:
(i) any third party and intracompany and intercompany
accounts payable of the Business and current liabilities of the
Business for payroll withholding Taxes, self-insurance and
accrued advertising and similar expenses that are accrued prior
to the Closing Date;
(ii) except as provided in Section 2.1(c) above, any
liability or obligation to third parties or claims from third
parties, based on circumstances existing before Closing or the
conduct of the Business on or before Closing, including the
matters set forth on Schedule 5.7 and the rebates due to Monsanto
Company under current or prior material supply agreements for
periods prior to the Closing Date, pro rated in accordance with
Section 3.4(e);
(iii) all claims for damages, direct or consequential,
related to warranty claims for defective products of the Business
shipped prior to the Closing Date;
(iv) all obligations which are allocated to Sellers pursuant
to Article 7;
(v) all product liability claims (including claims for
injury, death or property damage) for products of the Business
shipped prior to the Closing Date;
(vi) any obligations of Sellers or their Affiliates under
any agreement limiting such entity's ability to compete in the
Business, to the greatest extent possible under any such
agreement;
(vii) all Taxes related to CIS, the Business and the
Business Assets which accrue (or have accrued) or relate to the
operation of CIS, the Business or the Business Assets prior to
the Closing Date, other than Taxes for which Buyers are
responsible under Section 15.4;
(viii) any and all liabilities, costs and obligations
related to noncompliance as of the Closing Date with Applicable
Law related to Product Stewardship Materials;
(ix) any and all liabilities, costs and expenses incurred
prior to Closing in connection with Retained Inventory and
Sellers' obligation to remove Retained Inventory pursuant to
Section 11.5; and
(x) any and all liabilities, costs and expenses of any
other kind not expressly assumed by Buyers pursuant to Section
2.1(c) or elsewhere in this Agreement.
2.2. Procedures for Purchased Assets Not Transferable. If
any property or right included in the Business Assets (other than
permits) (including property or rights pending assignment from
Sellers to CIS) is not assignable or transferable either by
virtue of the provisions thereof or under applicable law without
the consent of one or more third Persons, the parties shall use
their reasonable best efforts to obtain such consents after the
execution of this Agreement. If any of the permits included in
the Business Assets are not so assignable or transferable without
the consent of one or more third Persons, it shall be the
parties' obligation to use their reasonable best efforts to
obtain such consents or to obtain replacement permits issued in
the applicable Buyer's name or in the name of CIS. Each party
shall bear its own costs and expenses thereof, and neither party
shall be required to spend funds in connection therewith.
For any consent that has not been obtained prior to the
Closing Date, this Agreement and the related instruments of
transfer shall not constitute an assignment or transfer thereof,
and neither Buyers nor CIS shall assume Sellers' obligations with
respect thereto (unless Buyers act as if such a transfer and
assignment had occurred), but the parties shall use their
reasonable best efforts to obtain such consent as soon as
possible after the Closing Date or otherwise to obtain for Buyers
or CIS substantially all of the practical benefit and burden of
such property or rights. Each party shall bear its own costs and
expenses thereof, and neither party shall be required to spend
funds in connection therewith.
2.3. Title Issues. Sellers have provided to Buyers true
copies of the title reports set forth on Schedule 5.3(a)
(collectively, the "Title Reports") issued by First American
Title Insurance Company (the "Title Company"), and related recent
surveys, with respect to the Houston Facility and the Fort Worth
Facility.
2.4. Construction, Safety, Health and Regulatory Compliance
Projects. Schedule 2.4 sets forth a list of certain
construction, safety, health and regulatory compliance projects
currently ongoing or contemplated for the Business from the
Closing Date through 2003 (none of which have been completed on
the date hereof) at any of the Facilities. Buyers acknowledge
that CIS has previously agreed to pay, perform, and assume
responsibility for completing such projects and all related
matters pursuant to the Contribution Agreement. Sellers make no
representation or warranty of any nature whatsoever pursuant to
this Agreement regarding such projects.
2.5. Customer Remittances. Buyers agree that, following the
Closing Date, they will forward promptly to Sellers any
correspondence or messages and any monies, checks or other
consideration received by them or by CIS relating to Receivables
of the Business for periods prior to the Closing Date. Sellers
agree that, from and after the Closing Date, they will forward
promptly to Buyers any monies, checks or other instruments
received by them in respect of trade receivables of the Business
for periods from and after the Closing Date. Payments remitted
shall be applied (regardless of which party is the actual
recipient) on a specific identification basis where such payment
identifies an invoice number, and, where it does not, inquiry
will be made of the payor and the payment shall be applied as
directed by the payor.
ARTICLE 3
PURCHASE PRICE; CLOSING STATEMENT;
ADJUSTMENTS; CONSISTENT TREATMENT
3.1. Purchase Price.
(a) The total purchase price for the Business shall be
$95,000,000 (ninety-five million dollars) (the "Purchase Price"),
subject to adjustment after Closing as provided in Sections 3.3
and 3.5 (as so adjusted, the "Adjusted Purchase Price").
(b) The Purchase Price shall be paid as follows:
(i) $80 million by wire transfer in immediately available
funds at Closing, and
(ii) $15 million pursuant to the promissory note of Akzo
LLC, due on February 1, 2003 (the "Promissory Note").
3.2. Closing Statement. (a) On the day immediately
preceding the Closing Date, Sellers (i) shall conduct a physical
count of the Inventory located at the Facilities, (ii) shall
either conduct a physical count or obtain confirmations of all
Inventory that is located at warehouses or toll manufacturers and
(iii) shall support ownership (through bills of lading or
otherwise) of all Inventory that is then currently in transit.
Buyers and their representatives will be given the opportunity to
observe all activities in respect of any physical counts. Not
later than 90 days after the Closing Date, Sellers shall deliver
to Buyers a statement of the Inventory of the Business (the
"Proposed Inventory Statement") as of the Closing Date.
Inventory will be valued on the Proposed Inventory Statement in
accordance with Sellers' valuation methodologies as set forth on
Schedule 3.2(a) hereto.
(b) The Proposed Inventory Statement shall be accompanied
by a report of KPMG LLP, Sellers' independent accountants
("Sellers' Auditors"), to the effect that the Proposed Inventory
Statement and any related notes thereto were prepared in
accordance with the valuation methodologies set forth on Schedule
3.2(a). Following issuance of the Proposed Inventory Statement,
Sellers' Auditors shall permit Buyers' independent accountants
("Buyers' Auditors") to review, at their request, the report of
Sellers' Auditors, including all work papers, schedules and
calculations related thereto (subject to customary documentation
in connection therewith).
(c) If Buyers do not notify Sellers in accordance with
subsection (d)(i) below of any dispute regarding the Proposed
Inventory Statement, the Proposed Inventory Statement shall
become the "Closing Inventory Statement" for all purposes hereof.
(d) In the event Buyers have any dispute with regard to the
Proposed Inventory Statement or any item included therein, such
dispute shall be resolved in the following manner:
(i) Buyers shall notify Sellers in writing within 45 days
after Buyers' receipt of the Proposed Inventory Statement, which
notice shall specify in reasonable detail the nature of the
dispute;
(ii) during the 30-day period following Sellers' receipt of
such notice, Sellers and Buyers shall attempt to resolve such
dispute; and
(iii) if, at the end of the 30-day period specified in
subsection (ii) above, Sellers and Buyers shall have failed to
reach a written accord with respect to such dispute, the
undisputed portion shall be paid immediately as provided in
Section 3.3(b) and the disputed portion shall be arbitrated by
the New York, New York office of PricewaterhouseCoopers, LLP, or
such other mutually agreed upon nationally recognized accounting
firm located in New York, New York (the "Referee"), in accordance
with the arbitration procedures set forth on Exhibit B hereto.
The Proposed Inventory Statement, as modified by any adjustments
determined to be appropriate by the Referee, shall then be the
"Closing Inventory Statement." The decision of the Referee in
accordance with the provisions hereof shall be final and binding,
and there shall be no right of appeal therefrom. Each party
shall bear its own fees and expenses (including attorneys' fees
and expenses) in the arbitration, and each party shall pay one-
half the fees and expenses of the Referee.
(e) From the Closing Date until the final determination of
the Closing Inventory Statement, each party will grant to the
other and its respective representatives reasonable access during
usual business hours to agents and employees of such party and to
the books, records and files of the Business in its possession to
enable such party to review and otherwise satisfy itself as to
the accuracy of the Closing Inventory Statement and the
preparation thereof.
3.3. Post-Closing Purchase Price Adjustment. (a) The
amount of the Purchase Price shall be adjusted following the
Closing Date as follows: (i) the Purchase Price shall be
increased by the amount, if any, by which the value of the
Inventory reflected on the Closing Inventory Statement is greater
than the value of the Inventory as reflected on the Inventory
Statement, and (ii) the Purchase Price shall be decreased by an
amount, if any, by which the value of the Inventory as reflected
on the Closing Inventory Statement is less than the value of the
Inventory as reflected on the Inventory Statement. The parties
agree that, notwithstanding anything to the contrary set forth
herein, no adjustments shall be made to the Purchase Price as a
result of the Assumed Liabilities, the amount, value or quality
of property, plant and equipment located at any of the Facilities
or any changes in the values of the Assumed Liabilities or such
property, plant and equipment prior to the Closing.
(b) If the adjustment required by this Section 3.3 results
in a net increase in the Purchase Price, Buyers shall pay to
Sellers, or, at Sellers' direction, shall pay to designated
subsidiaries of Sellers, by electronic bank transfer of
immediately available funds, an amount equal to such net increase
within ten days after such final determination and delivery of
the Closing Inventory Statement (or agreement as to any
undisputed portion of such adjustment) (such date of final
determination and delivery of the Closing Inventory Statement, or
agreement as to any undisputed portion of such adjustment, the
"Closing Inventory Statement Delivery Date"). If the adjustments
required by this Section 3.3 result in a net decrease in the
Purchase Price, Sellers shall pay to Buyers, by electronic bank
transfer of immediately available funds, an amount equal to such
net decrease within ten days after the Closing Inventory
Statement Delivery Date. All amounts due and payable under this
Section 3.3 shall be paid with interest thereon accruing from 100
days after the Closing Date to the date of payment at the
Citibank, N.A. prime rate in effect on the business day
immediately prior to the due date of the payment.
3.4. Post-Closing Accrual Statement. No later than 90 days
after the Closing Date, Sellers shall prepare and deliver to
Buyers a statement (a "Post-Closing Accrual Statement") prorating
all the items listed in this Section 3.4 ("Prorated Items")
through and including the day immediately prior to the Closing
Date. Buyers shall provide Sellers full access to books and
records for such purpose. Sellers shall be liable to the extent
the Prorated Items relate to the time period prior to the Closing
Date ("Seller Prorations") and Buyers or CIS shall be liable to
the extent Prorated Items relate to periods from and subsequent
to the Closing Date ("Buyer Prorations"). Unless otherwise
indicated herein, all prorations will be based upon the ratio of
the number of days in the applicable period preceding the Closing
Date to the number of days in the applicable period. The
Prorated Items are as follows:
(a) all real estate, personal property and ad valorem Taxes
relating to the Business Assets, which relate to a period that
begins before and ends on or after the Closing Date (excluding
transfer and other Taxes, duties and costs referred to in Section
15.4). In connection with such proration of such Taxes, in the
event that actual Tax figures are not available at the time of
delivery of the Post-Closing Accrual Statement, such Taxes to be
prorated shall be based upon the actual Taxes for the preceding
year for which actual Tax amounts are available and such Taxes
shall be reprorated upon request of either party made within
60 days of the date that the actual amounts become available;
provided that the actual amount is at least 5% more or 5% less
than the amount on which the original proration was based, and
appropriate payment shall be made within 30 days after such
reproration; amounts calculated pursuant to this clause (a) that
are Buyer Prorations shall be treated as Taxes accrued on or
after the Closing Date, and amounts that are Seller Prorations
shall be treated as Taxes accrued before the Closing Date;
(b) rents, Taxes and other similar items payable or paid by
Sellers or CIS which relate to a period that begins before and
ends on or after the Closing Date under any Business Contract;
(c) the amount of any annuities, registration fees,
issuance fees and selected costs for the preparation, filing,
prosecution, issuance and maintenance or renewal of or with
respect to any patents, licenses or trademark registrations which
are held by CIS as of the Closing or are being assigned or
transferred to Buyers hereunder which relate to a period that
begins before and ends on or after the Closing Date;
(d) the amount of sewer rents and charges for water,
telephone, electricity and other utilities and fuel relating to
the Business Assets which relate to a period that begins before
and ends on or after the Closing Date;
(e) rebates and other discounts payable or to be credited
to, and refunds and overpayments receivable from or to be repaid
by, customers or any third parties under any Business Contracts
which relate to a period that begins before and ends on or after
the Closing Date; provided, however, that, in the case of supply
or customer contracts, such items shall be prorated on the basis
of the ratio of the total sales under such contracts prior to the
Closing Date during the applicable period to the total sales
under such Contract during the applicable period, regardless of
whether such rebates are based upon volume tiers, minimum
purchase requirements or any other mechanism that applies
rebates, etc. unevenly to product purchases during the applicable
period. Such amounts to be prorated shall be based upon Seller's
good faith estimate and shall be reprorated upon request of
either party made within 60 days of the date that the actual
amounts become available; and
(f) Employee payroll and associated payroll Taxes for any
payroll period that begins before and ends on or after the
Closing Date.
In addition to the Prorated Items, the Post-Closing Accrual
Statement shall also reflect any payments made by Sellers or CIS
prior to the Closing with respect to any Prorated Items. Sellers
agree to furnish Buyers with such documents and other records as
Buyers may reasonably request in order to confirm all adjustment
and proration calculations reflected on the Post-Closing Accrual
Statement.
In the event Buyers have any dispute with regard to the Post-
Closing Accrual Statement, such dispute shall be resolved in the
following manner:
(i) Buyers shall notify Sellers in writing within 30 days
after Buyers' receipt of the Post-Closing Accrual Statement,
which notice shall specify in reasonable detail the nature of the
dispute;
(ii) during the 30-day period following Sellers' receipt of
such notice, Sellers and Buyers shall attempt to resolve such
dispute; and
(iii) if, at the end of the 30-day period specified in
subsection (ii) above, Sellers and Buyers shall have failed to
reach a written accord with respect to such dispute, the
undisputed portion shall be paid immediately as provided in
Section 3.5 and the disputed portion shall be arbitrated by the
Referee in accordance with the arbitration procedures set forth
on Exhibit B hereto. The decision of the Referee in accordance
with the provisions hereof shall be final and binding, and there
shall be no right of appeal therefrom. Each party shall bear its
own fees and expenses (including attorneys' fees and expenses) in
the arbitration, and each party shall pay one-half the fees and
expenses of the Referee.
3.5. Accrual Purchase Price Adjustments. After the Closing
Date and in addition to any adjustments required pursuant to
Section 3.3, the Purchase Price shall be increased by the amount,
if any, by which Buyer Prorations had been paid by Sellers or CIS
prior to Closing and decreased by the amount, if any, by which
Seller Prorations had been paid by Buyer or CIS after the Closing
(collectively, "Accrual Purchase Price Adjustments"). All
Accrual Purchase Price Adjustments shall be reflected on the Post-
Closing Accrual Statement. If the Accrual Purchase Price
Adjustment results in a net increase in the Purchase Price,
Buyers shall pay to Sellers, or, at Sellers' direction, shall pay
to designated Subsidiaries of Sellers, by electronic bank
transfer in immediately available funds, an amount equal to such
net increase within ten days after the delivery of the Post-
Closing Accrual Statement (such date of delivery of the Post-
Closing Accrual Statement, the "Post-Closing Accrual Statement
Delivery Date"). If the Accrual Purchase Price Adjustment
results in a net decrease in the Purchase Price, Sellers shall
pay to Buyers (or, if directed by Buyers, to CIS), by electronic
bank transfer in immediately available funds, an amount equal to
such net decrease within ten days after the Post-Closing Accrual
Statement Delivery Date. Final payments with respect to
prorations contemplated by this Section 3.5 which are not able to
be calculated on or before the 90th day after the Closing Date
shall be paid by Buyers or Sellers, as the case may be, within
ten business days after confirmation thereof. All amounts due
and payable under this Section 3.5 shall be paid with interest
thereon accruing from 100 days after the Closing Date to the date
of payment at the Citibank, N.A. prime rate in effect on the
business day immediately prior to the due date of the payment.
3.6. Consistent Treatment. The parties hereto agree to
(a) allocate the Adjusted Purchase Price in accordance with
section 1060 of the Code and the allocation schedule attached as
Schedule 3.6 hereto, (b) treat and report the transactions
contemplated by this Agreement in all respects consistent with
Schedule 3.6 for purposes of any Taxes, and (c) not take any
action inconsistent with such obligations.
3.7. Currency Exchange Rates. For purposes of any
statements and adjustments made pursuant to Section 3.3, all
amounts will be paid in U.S. Dollars and delivered in the United
States unless otherwise agreed and, if applicable, calculated for
the Inventory Statement and the Closing Inventory Statement
pursuant to the currency exchange rates in effect on December 31,
2001 and the Closing Date, respectively. For purposes of any
statements and adjustments made pursuant to Sections 3.4 and 3.5,
all amounts will be paid in U.S. Dollars and delivered in the
United States unless otherwise agreed and, if applicable,
calculated pursuant to the currency exchange rates in effect on
the Closing Date.
3.8. Offset of Adjustments Against Purchase Price. In the
event any amounts in respect of the Closing Inventory Statement
or the Post-Closing Accrual Statement that have been finally
determined pursuant to the adjustment mechanisms set forth in
Section 3.2 or Section 3.4, respectively, as owing from Sellers
to Buyers have not been paid at the time final payment is made on
the Promissory Note, such amounts (including any interest due
thereon as provided in Section 3.3 or Section 3.5, as applicable)
shall be offset against the principal amount of the Promissory
Note and the principal amount of the Promissory Note shall be
reduced accordingly.
ARTICLE 4
CLOSING
4.1. Closing Date. The Closing (the "Closing") shall occur
on June 28, 2002, and shall be deemed effective at 12:01 a.m.,
New York City time, on June 28, 2002 (or, if not done by June 28,
2002, on the last business day of the month in which all
conditions in Article 9 are satisfied or waived), or at such
other time or date as Sellers and Buyers may agree (such date of
the Closing being referred to as the "Closing Date"). The
Closing shall take place at the offices of Wachtell, Lipton,
Xxxxx & Xxxx in New York City, New York, and a pre-closing of the
transactions contemplated hereby shall, subject to Article 9,
take place at 10:00 a.m. on the business day immediately prior to
the Closing Date at the same location.
4.2. Transactions at Closing. At the Closing, and on the
basis of the representations, warranties, covenants and
agreements made herein and in the exhibits hereto and in the
certificates and other instruments delivered pursuant hereto, and
subject to the terms and conditions hereof:
(a) Transfer of Excluded Assets and Excluded Liabilities
Held by CIS. CIS shall transfer and convey to Crompton and
Crompton will accept and assume any Excluded Assets or Excluded
Liabilities held by CIS.
(b) Transfer of Purchased Assets. Upon receipt of Buyer's
wire transfer in the amount of $80 million and the Promissory
Note signed by Akzo LLC and Guarantor, by documents in form and
substance reasonably satisfactory to counsel for Buyer, Sellers
shall (i) transfer and convey or cause to be transferred and
conveyed to Buyers (A) all the Purchased Assets and (B) a
certificate representing the CIS Common Stock being purchased by
Buyer pursuant hereto, with any required stock transfer stamps
affixed, duly endorsed for transfer or with stock powers duly
executed in blank attached, in good form for delivery, (ii)
deliver or cause to be delivered to Buyers the Assignment and
Assumption Agreements, all Ancillary Agreements, the conveyance
documents relating to Intangible Rights, deeds, and such other
good and sufficient instruments of transfer and conveyance as
shall be necessary to vest in Buyers title to all the Purchased
Assets, all fully executed by Sellers and (iii) deliver the
certificates, opinions and other documents required by Article
9.2.
(c) Payment of Purchase Price and Assumption of Assumed
Liabilities. In consideration for the transfer of the Purchased
Assets, Buyers shall pay to Sellers $80 million or, at Sellers'
direction, shall pay to designated subsidiaries of Sellers any
portion of such amount, by electronic bank transfer in
immediately available funds directly to the account(s) set forth
on Schedule 4.2(c) hereof and shall deliver to Sellers the
Promissory Note signed by Akzo LLC and Guarantor, and the
Assignment and Assumption Agreements fully executed by Buyers,
and all Ancillary Agreements, fully executed by Buyers or CIS, as
the case may be. For purposes hereof, the Purchase Price shall
be paid in U.S. Dollars. In addition, Buyers shall deliver to
Sellers the certificates and other documents required by Article
9.1.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SELLERS
Crompton, on behalf of all Sellers, represents and warrants
to Buyers as follows:
5.1. Organization. Each Seller and CIS is duly organized
and validly existing in good standing under the laws of the
jurisdiction of its organization set forth on Schedule 5.1
hereof, and is duly qualified to transact business as a foreign
corporation in all jurisdictions necessary to enable such Seller
or CIS to conduct the Business, except where the failure to be so
qualified could not reasonably be expected to have a material
adverse effect on the assets, business, financial condition or
results of operation of Sellers or CIS or to delay or impair
Sellers' or CIS' ability to consummate the transactions
contemplated hereby or to perform their obligations under the
Ancillary Agreements. Each Seller and CIS has all requisite
corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.
5.2. Due Authorization. Each Seller and CIS has full
corporate power and authority to execute, deliver and perform
this Agreement and such Ancillary Agreements to which it is a
party, and the execution and delivery of this Agreement and the
Ancillary Agreements and the performance of all applicable
obligations hereunder and thereunder have been duly authorized by
such Seller and CIS. The execution, delivery and performance of
this Agreement and the Ancillary Agreements by Sellers and CIS is
not prohibited or limited by, and will not result in the breach
of or a default under: (a) any provision of the governing
documents or By-Laws of Sellers or CIS, (b) (assuming that
requisite consents and approvals have been obtained) any material
Business Contract or any other material agreement or instrument
binding on any Seller or CIS, or (c) any applicable order, writ,
injunction, decree or law of any Governmental Entity. This
Agreement and the Ancillary Agreements have been duly executed
and delivered by each Seller party thereto and CIS and, assuming
execution and delivery by the other parties thereto, constitute,
or, in the case of the Ancillary Agreements and other documents
to be executed and delivered on the Closing Date, will
constitute, the legal, valid and binding obligation of each
Seller party thereto and CIS, enforceable against such party in
accordance with their respective terms, except as enforcement may
be limited or affected by applicable bankruptcy, insolvency,
moratorium, reorganization or other laws of general application
relating to or affecting creditors' rights generally.
5.3. Sufficiency, Condition and Location of and Title to
Purchased Assets.
(a) Pursuant to the Contribution Agreement dated May 1,
2002, a copy of which is attached as Schedule 5.3(a)(i) (the
"Contribution Agreement"), Crompton has conveyed to CIS the
Business Assets described in the Contribution Agreement.
Pursuant to limited warranty deeds with covenants against
grantor's acts dated June 17, 2002, copies of which are attached
as Schedule 5.3(a)(ii) and Schedule 5.3(a)(iii), Crompton has
conveyed fee simple title, subject to Permitted Liens, to the
Houston Facility and the Fort Worth Facility to CIS.
(b) Sellers have the right to sell, assign, transfer and
convey the Purchased Assets, and upon consummation of the
transactions contemplated by this Agreement Sellers will have
transferred to Buyers or CIS will hold, good and valid title to,
or valid leasehold interests in, or valid rights to use all the
Business Assets, in all material respects in each case free and
clear of all liens, mortgages, pledges, security interests or
encumbrances of every kind ("Liens"), except Permitted Liens, and
subject to obtaining any authorizations, exemptions and consents
listed on Schedule 5.12.
(c) The Business Assets constitute and will constitute at
the Closing assets (other than the Excluded Assets) sufficient in
all material respects to conduct the Business as conducted as of
the date hereof. Except as set forth on Schedule 5.3(c), the
plants, buildings, structures and equipment included in the
Business Assets and currently used in the Business are in
operating condition and repair satisfactory to conduct the
Business as conducted as of the date hereof, ordinary wear and
tear excepted, in all material respects.
(d) All Business Assets which constitute machinery and
equipment (except for laboratory equipment and office equipment
located in Sellers' research and development facilities in
Dublin, Ohio; Itatiba, Brazil; and Meyrin, Switzerland; and the
Singapore Equipment) are located upon premises as to which rights
are included in the Business Assets.
5.4. Title to CIS Common Stock. Crompton has good, legal
and valid title to the CIS Common Stock, free and clear of all
Liens. No Person other than Sellers has any contractual power or
right, whether or not shared with any other Person, to dispose of
or direct the disposition of the CIS Common Stock or to vote or
direct the voting of the CIS Common Stock.
5.5. Certain Contracts. Schedule 5.5 contains a complete
and accurate list of all contracts of the following types
relating to the Business and to which any of the Sellers or CIS
is a party or by which any one or more of them are bound as of
the date hereof (collectively, the "Contracts"):
(a) all material written contracts with any customer, toll
manufacturer, consignee, consignor, distributor, manufacturer,
broker, franchisor, franchisee, dealer, sales representative,
consultant, agent or management entity, including distribution
agreements, manufacturer representative agreements, management
agreements, agency agreements and bonus agreements;
(b) all material written contracts relating to any joint
venture, licensing arrangement, partnership or sharing of profits
or losses with any Person or permitting any Person to utilize any
material technology, know-how or proprietary information of the
Business;
(c) all material written contracts that contain an
obligation of confidentiality with respect to any information
furnished to a third party or received from a third party and
relating to the Business;
(d) all written personal property leases which involve or
are reasonably expected to involve expenditures in excess of
$50,000 during any fiscal year of the Business, and all real
property leases related thereto;
(e) all material written contracts licensing any Intangible
Rights included in the Purchased Assets;
(f) all written purchase orders and written contracts for
the purchase of materials, products or supplies that relate to
the Business and that are for a term of more than 12 months or
that involve or are reasonably expected to involve aggregate
payments of more than $100,000 during any fiscal year or that
were entered into other than in the ordinary course of the
Business;
(g) all written contracts for construction or for the
purchase of real estate, improvements, equipment, machinery and
other items which constitute capital expenditures or which
involve or are reasonably expected to involve expenditures in
excess of $50,000 during any fiscal year of the Business;
(h) all material written agreements with any other division
of Crompton or any Affiliate thereof (other than those agreements
described in Section 2.1(b)(vii) hereof);
(i) all material written agreements with any third parties,
or pursuant to any consortiums, for the testing of products
manufactured by the Business;
(j) all other written Business Contracts that involve or
may involve the payment or receipt by a Seller or CIS (whether in
payment of debt, as a result of a guarantee or indemnification,
for goods or services or otherwise) in excess of $50,000 over the
term thereof or which are not cancelable by a Seller or CIS on
less than 30 days' notice without any penalty or other financial
obligation; and
(k) all oral contracts that involve or are reasonably
expected to involve the payment or receipt by a Seller or CIS in
excess of $100,000 over the term thereof.
Except as otherwise set forth on Schedule 5.5, true and correct
copies of all Contracts listed on Schedule 5.5, together with all
amendments, waivers or changes in respect thereof, have been made
available to Buyers. Buyers further acknowledge and agree that,
without prejudice to Article 2, certain of the Contracts
disclosed thereon are not Business Contracts, and that such
Contracts will not be assigned to or assumed by Buyers or CIS,
provided, however, that if Buyers so request, Sellers will, at
Seller's discretion, either assign any such contract to Buyers or
CIS (as Buyers direct) in part (and in such event the part so
assigned shall be deemed a Business Contract), or appropriate
introductions shall be made to the contracting parties thereunder
to enable Buyers, at Buyers' option, to enter into appropriate
commercial relationships with respect thereto.
5.6. Intangible Rights. All patents, patent applications,
trademarks, trademark registrations, trade names, servicemarks,
copyright registrations and licenses and other rights related
thereto which are owned or used in the Business are set forth on
Schedules 2.1(a)(viii), (ix) and (xi). The Intangible Rights
included in the Business Assets are all of the Intangible Rights
exclusively used in or related to the Business, and no additional
Intangible Rights are necessary to conduct the Business in all
material respects in the same manner as conducted by Sellers
prior to the Closing. Except as set forth on the aforementioned
schedule, as of the date hereof (i) there are no material claims
outstanding or, to Sellers' knowledge, threatened, for patent
infringement, (ii) none of the patents, trademarks, service
marks, tradenames or copyrights included in the Business Assets
are being infringed upon by any other party, (iii) none of such
rights is subject to any outstanding order, decree, ruling,
charge, injunction, judgment or stipulation and (iv) none of the
trademarks, service marks, tradenames or copyrights included in
the Business Assets infringe upon any valid trademarks, service
marks, tradenames or copyrights of others.
5.7. Litigation. Schedule 5.7 is a list and brief
description, as of the date of this Agreement, of all material
litigation, proceedings and claims by or against any Seller or
CIS pending or, to Sellers' knowledge, threatened against any
Seller, in each case relating to the Business, or against CIS.
5.8. Employee Benefit Plans. (a) Schedule 5.8 is a list
of all employment contracts, material employee benefit plans and
other material employee arrangements (including "plans" within
the meaning of Section 3(3) of ERISA and collective bargaining,
works council, stock purchase, stock option, employment,
compensation, deferred compensation, pension, retirement,
severance, termination, separation, vacation, sickness,
insurance, welfare and bonus plans and agreements) under which
Sellers, with respect to any employee of any of them who works or
is employed in connection with the Business or with respect to
any former employee of the Business who is subject to a
collective bargaining agreement, or CIS has any obligation as of
the date hereof (the "Benefit Plans"). Sellers have made
available to Buyers copies of instruments evidencing all of the
Benefit Plans.
(b) Sellers have made all material contributions and all
material payments required to be contributed or paid with respect
to any Benefit Plans that are retirement benefits plans and with
respect to government-mandated plans, in each case that are
applicable to Employees employed outside of the U.S.
5.9. Change in Control. Except as disclosed in Schedule 5.9
or as otherwise provided herein, neither the execution nor
delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment
becoming due to any employee (current, former or retired) of the
Business, (ii) increase any benefits under any Benefit Plan or
(iii) result in the acceleration of the time of payment of,
vesting of or other rights with respect to any such benefits.
5.10. U.S. Labor Matters. As of the date hereof, except
as set forth on Schedule 5.10, in the United States:
(a) Neither Sellers nor CIS are party to any labor or
collective bargaining agreement with respect to the Business, and
no employees of the Business are represented by any labor
organization. With respect to the Business, within the three
years prior to the date hereof, there have been no representation
or certification proceedings, or petitions seeking a
representation proceeding, pending or, to Sellers' knowledge,
threatened in writing to be brought or filed with the National
Labor Relations Board or any other labor relations tribunal or
authority. Within the two years prior to the date hereof, to
Sellers' knowledge, there have been no significant organizing
activities involving the Business with respect to any group of
employees of the Business;
(b) except as would not have a Seller Material Adverse
Effect, there are no organized strikes, work stoppages, slowdowns
or lockouts pending or, to Sellers' knowledge, threatened in
writing against or involving the Business;
(c) except as set forth on Schedules 5.7 and 5.10, there
are no material complaints, charges or claims against Sellers or
CIS pending or, to Sellers' knowledge, threatened to be brought
or filed with any governmental authority, arbitrator or court
against any Seller or CIS based on, arising out of, in connection
with, or otherwise relating to the employment or termination of
employment of any individual who is or was employed in the
Business as of the date hereof;
(d) Sellers and CIS are in substantial compliance with
Applicable Law relating to the employment of labor, including
Applicable Law relating to wages, hours, WARN, collective
bargaining, discrimination, civil rights, safety and health,
workers compensation and the collection and payment of
withholding and/or social security taxes and any similar tax; and
(e) there has been no "mass layoff" or "plant closing" as
defined by WARN with respect to the Business within the six (6)
months prior to Closing.
5.11. Default. Except as set forth on Schedule 5.11,
none of the Sellers or CIS, and to Sellers' knowledge, no other
party to any Business Contract is in material default under any
provisions thereof, and no condition or set of facts exists
which, with notice, lapse of time or both would constitute a
material default thereunder on the part of the Seller party
thereto or CIS or, to Sellers' knowledge, on the part of any
other party thereto. To Sellers' knowledge, all Business
Contracts are valid and binding in all material respects.
5.12. Consents. Except as set forth on Schedule 5.12
and subject to the terms of Sections 2.2, no notice to, filing
with, authorization of, exemption by, or consent of, any Person
or Governmental Entity is required for Sellers to consummate the
transactions contemplated hereby.
5.13. Compliance with Applicable Laws. (a) Except as
set forth in Schedule 5.13, the Business is in substantial
compliance with Applicable Law. Items are listed on Schedule
5.13 for disclosure purposes only, and the listing of an item on
Schedule 5.13 does not constitute an admission by any party that
the matter disclosed constitutes a violation of Applicable Law or
a permit.
(b) CIS has at all times prior to the Closing Date
conducted all its activities in full compliance with the
Antitrust Laws.
5.14. Management Compensation. No member of the
Management Group has received or been offered a bonus, or any
similar type of compensation, that is in any manner contingent
upon the consummation or performance of the transactions
contemplated in this Agreement.
5.15. No Changes. Since December 31, 2001 through the
date hereof, Sellers and CIS have conducted the Business only in
the ordinary course of business except as set forth on Schedule
5.15 hereto and as set forth in the Contribution Agreement.
Without limiting the generality of the foregoing sentence, since
December 31, 2001 through the date hereof, there has not been:
(a) any Material Adverse Change in the financial condition
of the Business or assets of the Business, except for changes in
the ordinary course of business consistent with past practice;
(b) any casualty, damage, destruction, or loss, whether or
not covered by insurance, materially adversely affecting the
Purchased Assets or the Business, or any accidents in which any
employees or other persons have been killed or seriously injured;
(c) any failure to maintain the Business Assets in the
ordinary course or to make the planned capital expenditures with
respect to the Business, including in respect of the
construction, safety, health and regulatory compliance projects
set forth on Schedule 2.4 in a timely and workmanlike manner;
(d) any increase or decrease in the compensation, including
salary, bonuses, special compensation, severance or termination
pay payable to any employee or any increase in any benefit plan
obligations, other than normal merit increases in the ordinary
course of business consistent with past practice;
(e) any cancellation or waiver of any material right
relating to the operation of the Business;
(f) any sale, transfer, lease or other disposition of any
Business Asset, except in the ordinary course of business
consistent with past practice; or
(g) any agreement or commitment to take or do any of the
actions described in subsections (a) through (f) above, other
than the Contribution Agreement.
5.16. Real Property. None of the Sellers or CIS have
received written notice within the two years prior to the date
hereof of any pending zoning or other land-use regulation
proceedings or any proposed change in any Applicable Laws that
could reasonably be expected to have a material adverse effect on
the use or operation of the Real Property, nor have any of the
Sellers or CIS received written notice prior to the date hereof
of any special assessment proceedings that would have a material
adverse effect on the Real Property. There is not pending as of
the date hereof and Sellers and CIS have not received written
notice prior to the date hereof, of any eminent domain
proceeding.
5.17. Environmental, Occupational, Health and Safety
Matters. Except as set forth on Schedule 5.17:
(a) all operations and all facilities of Sellers related to
or used in the conduct of the Business and all operations and all
facilities of CIS are in material compliance with all applicable
Environmental, Occupational, Health and Safety Laws;
(b) none of the Sellers or CIS is aware of or has received
written notice within the two years prior to the date hereof of
any past, present or future events, conditions, circumstances,
activities, arrangements, practices, incidents, actions or plans
which may interfere with or prevent material compliance or
continued compliance with the Environmental, Occupational, Health
and Safety Laws or which may give rise to any material
occupational, safety or health related statutory, common law or
other legal liability, or otherwise form the basis of any
material claim, action, demand, suit, proceeding, hearing, study,
inquiry, investigation, notice or demand or notice of violation
based on or related to the conduct of the Business or the
operations of CIS; and
(c) as of the date hereof, there is no material civil,
criminal or administrative claim, action, proceeding, hearing,
study, inquiry, investigation or notice of violation pending or,
to Sellers' knowledge, threatened against or relating to any
Sellers' conduct of the Business or CIS with respect to
Environmental, Occupational, Health and Safety Laws.
Items are listed on Schedule 5.17 for disclosure purposes
only, and the listing of an item on Schedule 5.17 does not
constitute an admission by any party that the matter disclosed
constitutes a violation of Applicable Law or a permit.
5.18. Permits. Except as set forth on Schedule 5.18,
(a) the Sellers and CIS possess all material permits, including
permits pursuant to Environmental, Occupational, Health and
Safety Laws, necessary for the operation of the Business as
currently operated; and (b) all such permits are in full force
and effect, the Sellers and CIS are not in violation of any such
permit and no proceedings for the suspension or cancellation of
any permits are pending or threatened in writing. Items are
listed on Schedule 5.18 for disclosure purposes only, and the
listing of an item on Schedule 5.18 does not constitute an
admission by any party that the matter disclosed constitutes a
violation of Applicable Law or a permit.
5.19. Tax Matters. (a) Sellers and CIS have timely
filed or will timely file all Tax returns and have timely paid or
will timely pay all Taxes which are required to be filed and paid
before Closing and have paid or will pay all Taxes associated
with the conduct of the Business before the Closing.
(b) Other than those arising in the ordinary course of
business, there are no current or anticipated disputes or claims
concerning any Taxes related to the Business, the Business Assets
or CIS.
(c) There are no liens for Taxes, except for Taxes not yet
due and payable, on the Business or any of the Business Assets.
(d) Crompton is not a person other than a U.S. Person
within the meaning of the Code.
5.20. Financial Statements. The financial statement
included in Schedule 5.20(a) has been prepared in all material
respects on a consistent basis for all periods presented in
accordance with Crompton's internal reporting policies and
practices in effect at each respective time period. The
financial statement included in Schedule 5.20(b) fairly presents
in all material respects the results of operation of the Business
for the periods indicated. The financial statement included in
Schedule 5.20(c) fairly presents in all material respects the
book value of the assets of the Business at December 31, 2001.
5.21. Inventory Statement. The Inventory Statement was
prepared in accordance with Sellers' valuation methodologies as
set forth on Schedule 3.2(a) hereto.
5.22. No Broker. Except for Xxxxxxx Xxxxx & Co.
("Sellers' Broker"), none of the Sellers have engaged any broker
or other person who would be entitled to any brokerage fee or
commission in respect of the execution and delivery of this
Agreement or the consummation of the transactions contemplated
hereby. Sellers shall be solely responsible for any brokerage
fee or other commission due to Sellers' Broker.
5.23. Limitations on Representations and Warranties.
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS ARTICLE 5, NONE OF
THE SELLERS IS MAKING ANY REPRESENTATION OR WARRANTY AS TO THE
PURCHASED ASSETS OR THE BUSINESS (INCLUDING PURSUANT OR RELATING
TO THE INFORMATION MEMORANDUM OR OTHER DUE DILIGENCE DOCUMENT OR
FORECAST RELATING THERETO). ANY WARRANTY OR OTHER RIGHTS WHICH
MAY BE IMPLIED BY LAW OR OTHERWISE IN ANY JURISDICTION IS HEREBY
EXCLUDED OR, IF INCAPABLE OF EXCLUSION, IRREVOCABLY WAIVED AND
BUYERS AGREE THAT THEY AND THEIR AFFILIATES SHALL BRING NO ACTION
IN CONNECTION THEREWITH.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BUYERS
Akzo LLC, on behalf of Buyers, represents and warrants to
each Seller as follows:
6.1. Organization. Each Buyer is duly organized and validly
existing in good standing under the laws of the jurisdiction of
its organization and is duly qualified to transact business as a
foreign corporation in all jurisdictions, except where the
failure to be so qualified could not reasonably be expected to
have a material adverse effect on the assets, business, financial
condition or results of operation of Buyers or to delay or impair
Buyers' ability to consummate the transactions contemplated
hereby or to perform its obligations under the Ancillary
Agreements. Each Buyer has all requisite corporate power and
authority to own, lease and operate its properties and to carry
on its business as now being conducted.
6.2. Due Authorization. Each Buyer has full corporate power
and authority to execute, deliver and perform this Agreement and
the Ancillary Agreements, and the execution and delivery of this
Agreement and the Ancillary Agreements and the performance of all
obligations hereunder and thereunder have been duly authorized by
Buyers. The execution, delivery and performance of this
Agreement and the Ancillary Agreements by Buyers are not
prohibited or limited by, and will not result in the breach of or
a default under: (a) any provision of the Certificate of
Incorporation or By-Laws (or equivalent constitutive documents)
of Buyers, (b) any material agreement or instrument binding on
Buyers or (c) any applicable order, writ, injunction, decree or
law of any Governmental Entity. This Agreement and the Ancillary
Agreements have been duly executed and delivered by Buyers and
constitute, or, in the case of the Ancillary Agreements to be
executed and delivered on the Closing Date, will constitute, the
legal, valid and binding obligation of each Buyer, enforceable
against such party in accordance with their respective terms,
except as enforcement may be limited or affected by applicable
bankruptcy, insolvency, moratorium, reorganization or other laws
of general application relating to or affecting creditors' rights
generally.
6.3. Consents. Except as shown on Schedule 6.3, no notice
to, filing with, authorization of, exemption by, or consent of,
any Person or Governmental Entity is required for Buyers to
consummate the transactions contemplated hereby.
6.4. Litigation. Except as disclosed in Schedule 6.4, there
is no litigation, proceeding or claim pending or, to Buyers'
knowledge, threatened relating to or affecting Buyers' ability to
purchase or operate the Business, or assume the Assumed
Liabilities.
6.5. No Contemplated Sales. None of the Buyers or any
Affiliates or representatives thereof have any agreements as of
the date hereof relating to the sale or other disposition of all
or substantially all of the Business Assets following the
Closing.
6.6. No Broker. Buyers have not engaged any broker or any
other Person who would be entitled to any brokerage fee or
commission with respect to the execution and delivery of this
Agreement or the consummation of the transactions contemplated
hereby.
6.7. Availability of Funds. Buyers have immediately
available cash, or existing borrowing facilities or commitments
which, together with available cash, are sufficient to enable
them to consummate the transactions contemplated by this
Agreement.
6.8. Environmental Reports. Buyers have delivered to Seller
all of the Supplemental Environmental Reports providing the
results of Buyers' environmental investigations.
6.9. Promissory Note. In order to induce Crompton to
consummate the transaction contemplated by this Agreement, Akzo
LLC makes the following representations and warranties which
shall be true, correct, and complete in all respects as of the
date hereof, and such representations and warranties shall
survive the execution and delivery of this Agreement and the
Promissory Note:
(a) Akzo LLC is duly organized and existing and in
good standing under the laws of the jurisdiction of its
incorporation.
(b) The execution, delivery, and performance by Akzo
LLC of and under this Agreement and the Promissory Note have been
duly authorized by all necessary corporate action.
(c) The execution, delivery, and performance by Akzo
LLC of this Agreement and the Promissory Note do not and will not
(i) conflict with, result in a breach of, or constitute (with due
notice or lapse of time or both) a default under any material
contractual obligation or material lease of Akzo LLC, (ii) result
in or require the creation or imposition of any lien of any
nature whatsoever upon any properties or assets of Akzo LLC, or
(iii) require any approval of stockholders (other than
stockholder approval as have been obtained) or any approval or
consent of any Person under any material contractual obligation
of Akzo LLC.
(d) This Agreement, the Promissory Note and all other
documents contemplated hereby and thereby, if any, when executed
and delivered by Akzo LLC will be the legally valid and binding
obligations of Akzo LLC, enforceable against Akzo LLC in
accordance with their respective terms, except as enforcement may
be limited by equitable principles or by bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or
limiting creditors' rights generally.
(e) Akzo LLC is not a party to any contract or
agreement or subject to any charter or other corporate
restriction which materially and adversely affects its business,
property or assets, or financial condition. Neither the
execution nor delivery nor issuance of the Promissory Note, nor
fulfillment of nor compliance with the terms and provisions of
this Agreement or the Promissory Note, will conflict with, or
result in a breach of the terms, conditions or provisions of, or
constitute a default under, or result in any violation of, or
result in the creation of any lien upon any of the properties or
assets of Akzo LLC pursuant to the certificate of organization or
operating agreement of Akzo LLC, any award of any arbitrator or
any agreement (including any agreement with members), instrument,
order, judgment, decree, statute, law, rule or regulation to
which Akzo LLC is subject.
ARTICLE 7
EMPLOYEES; PENSION AND OTHER BENEFIT PLANS
7.1. Employment of Employees of the Business. The parties
hereto intend that, except as specifically provided in this
Section 7.1, there shall be continuity of employment with respect
to the employees who work or are employed in connection with the
Business as of the Closing Date and are listed on Schedule 7.1
hereto (the "Employees") and Buyers shall offer employment, or
shall cause CIS or an Affiliate of Buyer to offer employment,
commencing on the Closing Date, to the Employees, including those
Employees on vacation, leave of absence, or disability on the
Closing Date, on the same terms as those offered by Buyers to
their comparable current employees. The Buyer, CIS or the
Affiliate of Buyer offering employment to or employing a
Continuing Employee is referred to in this Article 7 as the
"Employer" and the Buyer, CIS and the other Affiliates of Buyer
are referred to collectively as the "Buyer Affiliates." In any
case where the Employer is not a Buyer, Buyers agree to cause the
Employer to abide by the requirements of this Article 7 and
guarantee the performance of the Employer to Sellers. Employees
who are offered employment by an Employer pursuant to this
Section 7.1 and who accept such employment or who transfer
automatically pursuant to any applicable law shall hereafter be
referred to as "Continuing Employees," provided that each
Employee who is on leave of absence or disability on the Closing
Date shall become a Continuing Employee only if and when he or
she returns to work with the Employer, and only if such return
occurs on or before the 274th day following the Closing Date, and
such Employee's "Transfer Date" shall be the date of such return
to work. The Transfer Date for all other Continuing Employees
shall be the Closing Date. Without limiting the generality of
any other provision of this Article 7, the Employer shall comply
with all requirements of applicable law in making offers of
employment to Employees, and shall make such offers on such terms
and conditions as may be required by applicable law to avoid, to
the extent possible under applicable law, giving rise to a right
on the part of any Employees to statutory severance.
7.2. Maintenance of Base Salaries and Benefits; Service
Credit. (a) Maintenance of Base Salaries and Benefits
Generally. The Buyer Affiliates shall maintain with respect to
each Continuing Employee, for a period of one year after the
Closing Date, a base salary that is not less than the base salary
provided to such Employees by Sellers immediately prior to the
Closing Date. For a period of one year after the Closing Date,
without interruption, the Buyer Affiliates shall maintain or
contribute to, with respect to the Continuing Employees, employee
compensation, benefit plans, policies, programs and arrangements
(other than pension plans) that are, in the aggregate,
substantially comparable to those provided pursuant to the
Benefit Plans in effect immediately prior to the Closing Date.
Continuing Employees employed in the United States shall be (i)
immediately eligible to participate in Buyers' cash balance
pension plan and (ii) eligible to participate in Buyers' 401(k)
plan not later than the first day of the second calendar month
that begins after the Closing Date, and the Buyer Affiliates
shall use their best efforts to ensure that such participation
begins on or as soon as possible after the Closing Date. Nothing
in this Section is intended to require an Employer to continue
the employment of any Continuing Employee for any minimum period
following the Closing.
(b) Service Credit. Continuing Employees shall be given
credit under the Buyer Affiliates' employee benefit plans for
accrued vacation and sick days not paid by Sellers pursuant to
Section 7.9 and for all other service with Sellers (or
predecessor employers to the extent Sellers provide past service
credit) for purposes of eligibility and vesting and calculation
of vacation, sick days and severance pay.
7.3. Severance Benefits; Continuation of Severance Program.
(a) For a period of one year after the Closing Date, without
interruption, the Buyer Affiliates shall provide to each
Continuing Employee severance pay and benefits that are no less
favorable than the greater of the severance pay and benefits
(i) provided to similarly situated employees of the Buyer
Affiliates under their severance benefit plans and practices then
in effect and (ii) provided by Sellers to the Employees under the
severance benefit plans and practices of Sellers in effect on the
date of this Agreement.
(b) Sellers shall be responsible for and shall pay and
provide any severance benefits due to Employees as a result of
the termination of their employment with Sellers before the
Closing Date. The Buyer Affiliates shall be responsible for and
shall pay and provide all severance benefits due to Employees as
a result of the termination of their employment with either the
Buyer Affiliates or Sellers on and after the Closing Date
(including as a result of the transactions contemplated by this
Agreement). In the event that any Employee employed by Sellers
in Europe does not accept an Employer's offer of employment due
to the Employer's job relocation requirements, Sellers shall use
reasonable efforts to find comparable positions with Sellers, if
any, for each such Employee and the provisions of Section 10.3
shall not be applicable to such Employees.
(c) Notwithstanding the foregoing, the respective
obligations of the Buyer Affiliates and Sellers with respect to
severance payable to Management Employees (as defined in Section
7.7) shall be governed exclusively by Section 7.7 and Sections
7.3(a) and (b) shall not apply to Management Employees.
7.4. Retirement Plans. (a) Witco Corporation Retirement
Plan. Prior to the Closing Date, or as soon as reasonably
practicable thereafter, Sellers shall cause the Witco Corporation
Retirement Plan to be amended to provide that each Continuing
Employee who participates in such retirement plan on the Closing
Date shall be fully vested in his or her entire accrued benefit
in such retirement plan as of the Closing Date. Such benefits
shall be payable to each such Continuing Employee, or, in the
case of a Continuing Employee's death, to the Continuing
Employee's beneficiaries, in accordance with the terms of the
Witco Corporation Retirement Plan and the requirements of
applicable law.
(b) Foreign Retirement Benefits. The treatment of all
pension benefits and other similar benefits in respect of service
with Sellers and Affiliates of Sellers of Continuing Employees
employed in any location outside the United States of America
shall be as set forth in Schedule 7.4(b).
7.5. Crompton Corporation Employee Savings Plan. (a)
Contributions. Prior to the Closing Date, or as soon as
reasonably practicable thereafter, Sellers shall contribute to
the Crompton Corporation Employee Savings Plan (the "Crompton
401(k) Plan") an amount equal to the salary deferral and other
contributions (if any) of each Continuing Employee who
participates in the Crompton 401(k) Plan plus related matching
contributions through the Closing Date, and Crompton shall cause
the Crompton 401(k) Plan to be amended to provide that each such
Continuing Employee shall be fully vested in his or her account
balance determined after taking into account the contributions
described in this paragraph.
(b) Buyers' 401(k) Plan. Effective as of the Closing Date,
the Employer shall have in effect a defined contribution plan
that includes a qualified cash or deferred arrangement within the
meaning of Section 401(k) of the Code ("Buyers' 401(k) Plan")
providing benefits as of the Closing Date to Continuing Employees
of the Business participating in the Crompton 401(k) Plan as of
the Closing Date. Each Continuing Employee who is participating
in the Crompton 401(k) Plan immediately prior to the Closing Date
shall be eligible to participate in the Employer's 401(k) Plan on
the Closing Date.
(c) Plan Distributions. Effective as of the Closing Date,
Continuing Employees who participate in the Crompton 401(k) Plan
shall be deemed terminated from employment solely for purposes of
the Crompton 401(k) Plan in accordance with Code Section 401(k)
and the regulations thereunder, and to the extent permitted,
shall be entitled to a distribution of their respective account
balance or an eligible rollover distribution to Buyers' 401(k)
Plan in accordance with Code Section 401(a)(31). Buyers' 401(k)
Plan shall provide for the receipt of such rollover.
7.6. Welfare Benefits. (a) Allocation of Liability.
Except as otherwise required by Applicable Law, Sellers shall
retain responsibility for claims incurred by Continuing Employees
or their covered dependents under Sellers' medical, dental, life
insurance, and disability benefit programs for each Continuing
Employee with respect to claims incurred by such Employees or
their covered dependents prior to the Closing Date. Claims
incurred by Continuing Employees or their covered dependents on
or after the Closing Date shall be the responsibility of the
Buyer Affiliates. For purposes of this paragraph, a claim is
deemed incurred when the services that are the subject of the
claim are performed; provided, however, in the case of life
insurance, a claim is deemed incurred when the death occurs; in
the case of disability benefits, a claim is deemed incurred when
the illness or condition that gives rise to the disability first
occurs unless the associated claim for disability benefits is not
first made before the 180th day following the Closing Date, in
which event the claim is deemed incurred on the date such claim
occurs; and, in the case of a hospital stay, all claims for
medical services rendered and medical supplies provided during
such stay are deemed incurred when the Employee or beneficiary
first enters the hospital.
(b) Preexisting Condition Limitations. With respect to any
"welfare benefit plan" (as defined in Section 3(1) of ERISA)
maintained by the Buyer Affiliates on the Closing Date for the
benefit of Continuing Employees on and after the Closing Date,
the Buyer Affiliates shall cause to be waived any waiting periods
and preexisting condition limitations that may apply and shall
give credit in determining any deductibles, co-payments and out-
of-pocket maximums for amounts paid by Continuing Employees under
similar plans maintained by Sellers in the 2002 calendar year.
(c) COBRA. The Buyer Affiliates shall assume all
liabilities and obligations arising under the continuation
coverage requirements of Section 4980B(f) of the Code and Section
601 of ERISA with respect to all Continuing Employees (or any
beneficiary or dependent of any such Employee) who, on or after
the Closing Date, have exercised or are eligible to exercise
their right to such continuation coverage. Sellers shall assume
all liabilities and obligations arising under the continuation
coverage requirements of Section 4980B(f) of the Code and Section
601 of ERISA with respect to all Employees (or any beneficiary or
dependent of any such Employee) who, prior to the Closing Date,
have exercised or are eligible to exercise their right to such
continuation coverage.
(d) Flexible Spending Accounts. Sellers and the Buyer
Affiliates shall take all actions necessary or appropriate so
that, effective as of the Closing Date, (i) the account balances
(whether positive or negative) (the "Transferred Account
Balances") under the Crompton Corporation Flexible Benefits
Program ("Sellers' Flex Plan") of the Continuing Employees who
are participants in Sellers' Flex Plan (the "Covered Employees")
shall be transferred to one or more comparable plans of the Buyer
Affiliates (collectively, the "Buyers' Flex Plan"); (ii) the
elections, contribution levels and coverage levels of the Covered
Employees shall apply under the Buyers' Flex Plan in the same
manner as under the Sellers' Flex Plan; and (iii) the Covered
Employees shall be reimbursed from the Buyers' Flex Plan for
claims incurred at any time during the calendar year in which the
Closing Date occurs submitted to the Buyers' Flex Plan from and
after the Closing Date on the same basis and the same terms and
conditions as under the Sellers' Flex Plan. As soon as
practicable after the Closing Date, and in any event within 10
business days after the amount of the Transferred Account
Balances is determined, Sellers shall pay Buyer the net aggregate
amount of the Transferred Account Balances, if such amount is
positive, and Buyer shall pay Sellers the net aggregate amount of
the Transferred Account Balances, if such amount is negative.
7.7. Executive Compensation. Buyers hereby assume all
obligations of Sellers and their Affiliates to the employees
listed on Schedule 7.7 (the "Management Employees") under the
Change in Control Employment Agreements listed on Schedule 7.7
(the "Agreements"). Buyers agree that the consummation of the
transactions contemplated by this Agreement will constitute a
"Change in Control" as such term is defined in each Agreement,
and Buyers agree to pay or to cause the applicable Employer to
pay any amounts due and payable pursuant to the applicable
Agreement with each Management Employee.
7.8. Worker Adjustment and Retraining Notification Act. (a)
Sellers' Obligations. Sellers shall not, at any time between the
date hereof and the Closing Date, effectuate a "plant closing" or
"mass layoff," as those terms are defined in the Worker
Adjustment and Retraining Notification Act of 1988 ("WARN"),
affecting in whole or in part any site of employment, facility,
operating unit or Employee of the Business, without complying
with the notice requirements and other provisions of WARN.
(b) Buyers' Obligations. No Employer shall, at any time
prior to 60 days after the Closing Date, effectuate a "plant
closing" or "mass layoff," as those terms are defined in WARN,
affecting in whole or in part any site of employment, facility,
operating unit or Employee of the Business, without complying
with the notice requirements and other provisions of WARN.
7.9. Vacation and Sick Pay. Except as provided in the next
sentence, the applicable Employers shall assume all liabilities
for vacation and sick leave that the Continuing Employees have
accrued but not used as of the Closing Date, and shall allow the
Continuing Employees to use such leave. To the extent that
Applicable Law requires that any Continuing Employee receive pay
in lieu of such leave as of the Closing Date, the applicable
Employers shall not assume the liabilities therefor, and Sellers
shall pay such amounts in accordance with Applicable Law.
7.10. No Third Party Beneficiaries. Nothing in this
Agreement is intended to create, nor shall anything in this
Agreement be deemed to create or have created, any third party
beneficiary rights related to the rights granted and benefits
conferred by this Article VII.
ARTICLE 8
PRE-CLOSING COVENANTS OF SELLERS AND BUYERS
8.1. Corporate and Other Actions. Each of the Sellers and
Buyers shall take, and Sellers shall cause CIS to take, all
necessary corporate action required to fulfill their respective
obligations under this Agreement, the Ancillary Agreements and
the transactions contemplated hereby and thereby.
8.2. Local Transfer Agreements. Each of the Sellers and
Buyers shall cooperate to identify, and enter into, such
additional ancillary agreements as may be necessary or
appropriate under the local laws of the foreign jurisdictions
where the Business is conducted, or assets are located, to cause
the transfer of the Business from the appropriate Seller to the
Buyers in accordance with local laws and regulations. Such
agreements will be entered into only on terms parallel to those
set forth herein (and without additional representations or
indemnities, which shall remain as set forth herein) and at a
purchase price equal to the allocated assets and liabilities for
Tax purposes.
8.3. Consents and Approvals. Subject to Section 2.2, each
of the Sellers and Buyers shall use reasonable best efforts to
obtain, and Sellers, prior to Closing, and Buyers, after Closing,
shall cause CIS to use reasonable best efforts to obtain, all
necessary consents and approvals to the performance of their
respective obligations under this Agreement, the Ancillary
Agreements and the transactions contemplated hereby and thereby.
Each of the Sellers and Buyers shall promptly make, and Sellers
shall cause CIS to promptly make, all filings, applications,
statements and reports to all Governmental Entities which are
required to be made prior to the Closing Date pursuant to any
Applicable Law in connection with this Agreement, the Ancillary
Agreements and the transactions contemplated hereby and thereby.
8.4. Xxxx-Xxxxx-Xxxxxx and Other. (a) Upon the terms and
subject to the conditions hereof, each of the parties hereto
shall use its reasonable best efforts to take, or cause to be
taken, all appropriate action, and do or cause to be done, all
things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions
contemplated by this Agreement as soon as practicable, including
(i) cooperating in the preparation and filing of any required
filings under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the "HSR Act"), or under any foreign antitrust,
competition or trade regulation law, regulation or statute, and
any amendments to any thereof, and (ii) promptly making all
required regulatory filings and applications including responding
promptly to requests for further information, to obtain all
licenses, permits, consents, clearances, approvals,
authorizations, qualifications and orders of governmental
authorities and parties to contracts with Sellers and their
Affiliates as are necessary for the consummation of the
transactions contemplated by this Agreement and to fulfill the
conditions to this Agreement ("Governmental Consents").
(b) Sellers and Buyers shall keep the other apprised of the
status of matters relating to the completion of the transactions
contemplated hereby and work cooperatively in connection with
obtaining Governmental Consents, including: (i) promptly
notifying the other of, and if in writing, furnishing the other
with copies of (or, in the case of material oral communications,
advising the other orally of) any communications from or with any
Governmental Entity with respect to the transactions contemplated
by this Agreement, (ii) permitting the other party to review and
discuss in advance, and considering in good faith the views of
one another in connection with, any proposed written (or any
material proposed oral) communication with any Governmental
Entity, (iii) not participating in any meeting with any
Governmental Entity unless it consults with the other party in
advance and, to the extent permitted by such Governmental Entity,
gives the other party the opportunity to attend and participate
thereat, (iv) furnishing the other party with copies of all
correspondence, filings and communications (and memoranda setting
forth the substance thereof) between it and any Governmental
Entity with respect to this Agreement and the transactions
contemplated hereby, and (v) furnishing the other party with such
information and reasonable assistance as such other party may
reasonably request in connection with its preparation of
necessary filings or submissions of information to any
Governmental Entity. Sellers and Buyers may, as each deems
advisable and necessary, reasonably designate any sensitive
material provided to the other under this Section as "outside
counsel only." Such materials and the information contained
therein shall be given only to the outside legal counsel of the
recipient and will not be disclosed by such outside counsel to
employees, officers, or directors of the recipient unless express
permission is obtained in advance from the source of the
materials (Sellers or Buyers as the case may be) or its legal
counsel.
8.5. Access to Information. (a) Sellers will permit
representatives of Buyers from and after the date hereof up to
the Closing Date to have access at all reasonable times to any
and all information, books, accounts, records, properties,
operations and facilities of every kind pertaining to the
Business, and will furnish Buyers with such financial, operating
or other data concerning the Business, including monthly reports
to management, as Buyers shall from time to time reasonably
request, subject to any confidentiality agreements to which
Sellers may be a party, provided that the foregoing shall be on
reasonably advance written notice to the Sellers. No
investigation made by Buyers pursuant to this Section shall
affect any representation or warranty of the Sellers or the
obligations of Sellers hereunder.
(b) Without limiting the generality of the foregoing,
Sellers will permit representatives of Buyers from and after the
date hereof until the Closing Date to have reasonable access to
any and all records and documents, including records and
documents that contain confidential business information,
maintained by any Seller or by CIS in connection with (i)
compliance by the Business with all legal requirements for
chemical registration to permit the entry of products into
markets for their intended uses and applications, or other public
circulation of information concerning hazards associated with
chemical products exposure or use pursuant to the Toxic
Substances Act, the Federal Insecticide, Fungicide and
Rodenticide Act, the Occupational Safety & Health Act, the Food
and Drug Act, and all state and foreign counterparts of such
laws, and (ii) the participation of the Business in voluntary
activities evidencing good product stewardship, including
participation in the Federal High Production Volume Program
(collectively, the "Product Stewardship Materials").
8.6. Employment Assistance. Sellers will provide reasonable
assistance (without incurring any expense or liability) to Buyers
in their efforts to employ all Employees.
8.7. Ordinary Course of Business. Subsequent to the date
hereof and prior to the Closing Date, except as contemplated in
this Agreement, or the other Ancillary Agreements, Sellers will
conduct the Business, and will cause CIS to conduct the Business,
in substantially the same manner as heretofore conducted and in
the usual and ordinary course consistent with past practice.
Subsequent to the date hereof and prior to the Closing Date,
except as contemplated in this Agreement, or the other Ancillary
Agreements, none of Sellers shall sell, lease or otherwise
dispose of, or agree to sell, lease or otherwise dispose of, and
Sellers shall assure that CIS shall not sell, lease or otherwise
dispose of, or agree to sell, lease or otherwise dispose of, the
Business Assets, except in the ordinary course of business
consistent with past practice.
8.8. Bulk Transfer Laws. Buyers hereby waive compliance by
Sellers with the provisions of any so-called "bulk transfer law"
or similar laws of any jurisdiction in connection with the sale
of the Purchased Assets to Buyers. Any liabilities that may be
asserted by third Persons against Sellers or Buyers as a result
of noncompliance with any such bulk transfer law shall be borne
by Buyers if Assumed Liabilities or by Sellers if Excluded
Liabilities, as provided in Article II. Buyers waive all rights
to Tax clearance certificates that would otherwise relieve Buyers
of liability for Taxes incurred by Sellers, and any liabilities
that may be asserted by a Governmental Entity or any other Person
against Sellers, CIS or Buyers as a result of such waiver will be
borne by Sellers.
8.9. Leased Vehicles. Prior to the Closing, Buyers shall
make any arrangements necessary to transfer the leases for any
leased vehicle used by the Business or by the Continuing
Employees to a leasing company selected by Buyers as of the
Closing Date. If Buyers do not make such arrangements, Buyers
acknowledge and agree that Seller will cancel all such leases
effective as of a date not later than the Closing Date, and
request the return of such vehicles to Sellers as of the
effective date of cancellation.
8.10. Negotiations with Works Councils. Sellers (and
Buyers to the extent required by law or otherwise at their
option) shall engage in all consultations necessary by law with
unions and works councils representing any of the Employees of
the Business to effect the transactions contemplated hereby.
8.11. Other Agreements. Sellers and Buyers shall
negotiate in good faith definitive Ancillary Agreements
(including a transition services agreement), which shall be
executed and delivered on the Closing Date.
ARTICLE 9
CONDITIONS
9.1. Conditions to Obligations of Sellers. The obligations
of Sellers to consummate the transactions contemplated by this
Agreement shall be subject to fulfillment at or prior to Closing
of the following conditions (any one or more of which may be
waived in whole or in part by Sellers):
(a) Officer's Certificate. There shall be delivered to
Sellers on the Closing Date a certificate, in form and substance
reasonably satisfactory to Sellers and their counsel, duly signed
by an officer of Akzo LLC, to the effect that:
(i) Performance of Agreements and Satisfaction of
Conditions. All agreements and conditions to be performed and
satisfied by Buyers hereunder on or prior to the Closing shall
have been duly performed and satisfied in all material respects;
and
(ii) Representations and Warranties. The representations
and warranties of Buyers contained in this Agreement shall be
true and correct on and as of immediately prior to the Closing
with the same effect as though made on and as of immediately
prior to the Closing, except for such representations and
warranties that speak as of a specific date, which shall be true
and correct as of that specific date.
(b) Waiting Periods. Any applicable mandatory waiting
period under the HSR Act and the European Union regulations shall
have expired or shall have been earlier terminated and, except as
would not have a Seller Material Adverse Effect or result in
criminal liability beyond monetary penalties, any other
applicable antitrust, competition or other similar laws or
regulations pursuant to which notification or report forms are
required to be filed or mandatory waiting periods observed shall
have been filed or observed as applicable.
(c) Injunctions. No provision of any applicable domestic
(whether Federal, state, or local) or foreign law or regulation
and no judgment, injunction, order or decree of a court or
Governmental Entity of competent jurisdiction shall be in effect
or have been entered which has the effect of making the Closing
illegal or which otherwise enjoins, restrains or prohibits the
consummation of the transactions contemplated by this Agreement.
(d) Other Agreements. Sellers, CIS and Buyers shall have
entered into the Ancillary Agreements.
(e) Negotiations with Works Councils. Sellers (and Buyer
to the extent required by law or otherwise at its option) shall
have engaged in all consultations necessary by law with works
councils representing the Employees of the Business, and no
further actions or consultations shall be required by law with
respect thereto.
9.2. Conditions to Obligations of Buyers. The obligations
of Buyers to consummate the transactions contemplated by this
Agreement shall be subject to fulfillment at or prior to the
Closing of the following conditions (any one or more of which may
be waived in whole or in part by Buyers):
(a) Officer's Certificate. There shall be delivered to
Buyers on the Closing Date a certificate, in form and substance
reasonably satisfactory to Buyers and their counsel, duly signed
by an officer of Crompton, to the effect that:
(i) Performance of Agreements and Satisfaction of
Conditions. All agreements and conditions to be performed and
satisfied by Sellers hereunder on or prior to the Closing Date
shall have been duly performed and satisfied in all material
respects; and
(ii) Representations and Warranties. The representations
and warranties of Sellers contained in this Agreement shall be
true and correct on and as of immediately prior to the Closing
with the same effect as though made on and as of immediately
prior to the Closing, except for such representations and
warranties that speak as of a specific date, which shall be true
and correct as of that specific date, in all such cases except as
would not have a Seller Material Adverse Effect.
(b) Material Adverse Effect. Between the date hereof and
the Closing Date, no event or condition shall have occurred or
arisen which has resulted in, or would reasonably be expected to
result in, a Seller Material Adverse Effect.
(c) Waiting Periods. Any applicable mandatory waiting
period under the HSR Act and the European Union regulations shall
have expired or shall have been earlier terminated and, except as
would not have a Seller Material Adverse Effect or result in
criminal liability beyond monetary penalties, any other
applicable antitrust, competition or other similar laws or
regulations pursuant to which notification or report forms are
required to be filed or mandatory waiting periods observed shall
have been filed or observed as applicable.
(d) Injunctions. No provision of any applicable domestic
(whether Federal, state, or local) or foreign law or regulation
and no judgment, injunction, order or decree of a court or
Governmental Entity of competent jurisdiction shall be in effect
or have been entered which has the effect of making the Closing
illegal or otherwise enjoins, restrains or prohibits the
consummation of the transactions contemplated by this Agreement.
(e) Other Agreements. Sellers, CIS and Buyers shall have
entered into the Ancillary Agreements.
(f) Negotiations with Works Councils. Sellers (and Buyer
to the extent required by law or otherwise at its option) shall
have engaged in all consultations necessary by law with works
councils representing the Employees of the Business, and no
further actions or consultations shall be required by law with
respect thereto.
ARTICLE 10
NON-COMPETITION
10.1. Sellers' Covenants.
(a) Sellers, in order to induce Buyers to enter into this
Agreement, expressly covenant and agree, on behalf of themselves
and their controlled Affiliates (judged at the time of
competition), that for a period of three (3) years from and after
the Closing Date, none of the Sellers or any of their controlled
Affiliates shall:
(i) own, manage, operate, control, or participate in or
direct any business of developing manufacturing and marketing
surfactants or surfactant blends of the following chemical types
containing organomodified siloxanes of less than 4% by weight;
(1) sulfates of organic materials manufactured by falling film
air/SO3 processes; (2) ethoxylated, propoxylated and carboxylated
surfactants; (3) ethoxylated amines; and (4) phosphate esters, or
(ii) own, manage, operate, control, or participate in or
direct any business of marketing sulfonates with a molecular
weight of less than 350, or developing, manufacturing and
marketing blended sulfonates with an average molecular weight of
less than 350;
(b) provided, however, that:
(i) the restrictions contained in this Section 10.1 shall
not restrict any present operations or activities of Sellers or
any of their controlled Affiliates other than the Business,
including those operations and activities set forth on Schedule
10.1(a) hereto; and
(ii) Sellers or any of their controlled Affiliates may
acquire, merge with, partner with, or agree to control, manage,
or participate in a business or with a Person that otherwise
would violate the foregoing restrictions as long as no more than
25% of the annual sales of a business or Person is in businesses
which violate the foregoing restrictions, Sellers or any of their
controlled Affiliates may acquire such business or Person as long
as it divests itself of the competing operations within 18 months
after such acquisition.
(c) Notwithstanding the foregoing: (i) Sellers may own an
aggregate of not more than 15% of the outstanding stock of any
class of any corporation that otherwise would violate the
foregoing restrictions, if such stock is listed on any securities
exchange or dealing facility (whether in the United States or
elsewhere) without violating the provisions of this Section 10.1,
provided that Sellers do not have the power to control or direct
the management or affairs of such corporation; and (ii) with
respect to any operations the restrictions of this Section 10.1
shall terminate upon Buyers' entering into an agreement for the
sale, transfer, lease or license of such operations or taking a
decision to suspend such operations.
10.2. Intentionally Left Blank.
10.3. Non-Solicitation. Sellers and each of their
Affiliates agree, for a three (3) year period commencing on the
date hereof in respect of the members of the Management Group and
the research and development staff of the Business, and for a one
(1) year period commencing on the date hereof in respect of any
other Employee (other than an hourly worker or Employee who
serves in a clerical function): (i) not to offer employment to
any such Employee or solicit any such Employee for employment, or
induce any such Employee to enter into any written or oral
arrangement, agreement or understanding regarding employment,
with Sellers and each of their Affiliates and (ii) not to offer
to retain any such Employee or solicit any such Employee to act
as a consultant or to otherwise provide services, or induce any
such Employee to enter into any written or oral arrangement,
agreement or understanding to act as a consultant or otherwise to
provide services, to Sellers and each of their Affiliates or any
Person providing consulting or other services to Sellers and each
of their Affiliates, without, in all cases, the prior written
consent of Akzo LLC (on behalf of all Buyers); provided that
"Employee," for purposes of the foregoing sentence only, shall
not include any Person not listed on Schedule 7.1 or listed on
Schedule 7.1 and not made an offer of employment by Buyer.
Notwithstanding the preceding sentence, Sellers and their
Affiliates may employ any Employee who contacts such party on his
own initiative and without any direct or indirect solicitation by
such party or who: (i) does not accept a Buyer's offer of
employment or has been terminated by Buyers after having accepted
Buyers' offer of employment or (ii) is not a member of the
Management Group or the research and development staff of the
Business and has declined Buyers' offer of employment. Nothing
in this Section is intended to prevent Sellers and their
Affiliates from conducting generalized solicitations for
employees (which are not specifically directed at Employees)
through the use of media advertisement, professional search firms
and otherwise.
10.4. Additional Agreements. Buyers and Sellers
acknowledge and agree that the foregoing and such related terms
set forth in any Ancillary Agreements are intended to be the only
restrictions binding against Buyers and Sellers and their
respective Affiliates following the Closing. For the avoidance
of doubt, Buyers acknowledge and agree that Sellers and Sellers'
Affiliates have, prior to the Closing, utilized technology
similar or, in some cases, identical to technology used in the
Business in the ongoing business conducted by Sellers and
Sellers' Affiliates, and that Sellers and Sellers' Affiliates
will continue in the use of any and all such technology following
the Closing, subject to the limitations set forth in Section 10.1
above.
ARTICLE 11
POST-CLOSING COVENANTS
11.1. Availability of Records. After the Closing, each
party shall use reasonable best efforts to retain and shall make
available to the other party, as reasonably requested by such
other party, its agents and representatives, any taxing authority
and any Governmental Entity, all information, records or
documents relating to the Business or the Employees for all
periods prior to Closing and shall use reasonable best efforts to
preserve all such information, records and documents until the
latest of: (i) six years after the Closing, (ii) the expiration
of all statutes of limitations for Taxes for periods prior to the
Closing or extensions thereof applicable to the requesting party
for Tax information, records or documents and (iii) the required
retention period for all government contract information, records
or documents. Each party shall also make available to the other
party, as reasonably requested by such other party, personnel
responsible for preparing or maintaining information, records and
documents, in connection with Tax matters, environmental matters,
governmental contracts, litigation or potential litigation,
including claims for workers' compensation, product liability,
general insurance liability and automobile insurance liability.
Prior to destroying any records related to a party for the period
prior to the Closing Date, the other party shall notify such
party 30 days in advance of any such proposed destruction of its
intent to destroy such records, and such other party will permit
such party to retain any such records. With respect to any
litigation and claims, each party shall render all reasonable
assistance which the other party may request in defending such
litigation or claim and shall make available to such other party
such party's personnel most knowledgeable about the matter in
question.
11.2. Use of Trade or Service Marks. (a) Buyers shall
not use or permit their distributors to use the names "Witco,"
"Crompton" or any other corporate, trade or service marks or
names owned or used by Seller or any of Seller's Affiliates,
unless such marks or names are specifically included in the
Purchased Assets. All products (if applicable) and product
packaging of the Business as of the Closing Date shipped and/or
manufactured by Buyers after the Closing Date shall bear a new
code identification which indicates the products were shipped
and/or manufactured by Buyers, as applicable.
(b) Notwithstanding Section 11.2(a), for a period of up to
one year from the Closing Date, Buyers shall be entitled to use
all inventories of packaging, labels and sales literature
existing as of the Closing Date bearing or reflecting any names
or marks which had been used by the Business prior to the Closing
Date but which are not Purchased Assets (collectively, "Marks"),
provided that:
(i) such use is strictly the same as existed prior to the
Closing Date;
(ii) the services and goods rendered and all goods produced,
distributed or sold under the Marks are of at least equal quality
standards as were maintained by Sellers prior to the Closing
Date;
(iii) Sellers, through a mutually agreed upon accounting
firm or professional inspectors of goods, shall have the right to
inspect Buyers' operations and evaluate products to ensure
compliance with this Section 11.2(b); and
(iv) Buyers discontinue the use of such packaging, labels
and sales literature as soon as practicable after the Closing
Date.
(c) Buyers acknowledge that the Marks are the sole property
of Sellers, and Buyers will (i) do nothing inconsistent with such
ownership, (ii) not attack the Marks in any way or use, register
or seek to register any trademark or tradename which is the same
as or similar to a Xxxx, or (iii) identify and use the Marks in
accordance with any applicable international, national, state and
local laws or standards as may be appropriate to protect the
validity and strength of the Marks or as may be reasonably
requested by Sellers.
(d) [Intentionally omitted.]
(e) At the Closing, Buyers shall grant back to Sellers a
perpetual, non-exclusive, royalty-free license to use (A) the
unregistered, common law trademarks Witcamine, Witcodet,
Witcohol, Witcomul, Witconate, Witcor, and Witflo and (B) the
registered trademarks Witconol, Witcamide, Emcol, Witbreak and
Witcolate from Schedule 2.1(a)(ix), which will be assigned to
Buyers at Closing, provided that:
(i) such use is strictly the same as existed prior to the
Closing Date, excluding use in connection with the Business;
(ii) Sellers acknowledge that the such marks are the sole
property of Buyers, and Sellers will (i) do nothing inconsistent
with such ownership, (ii) not attack such marks in any way or
use, register or seek to register any trademark or tradename
which is the same as or similar to one of the marks, or (iii)
identify and use each such xxxx in accordance with any applicable
international, national, state and local laws or standards as may
be appropriate to protect the validity and strength of the xxxx
or as may be reasonably requested by Buyers.
(f) At the Closing, Sellers shall grant to Buyers a
perpetual, non-exclusive, royalty-free license to use in the
Business any patents, patent applications, trade secrets,
unpatented inventions, protocols, know-how, product formulae,
product formulations, specifications, manufacturing processes and
procedures, operating parameters and conditions which are not
part of the Business Assets to the extent the same were used in
the conduct of the Business prior to the Closing.
11.3. Tax Matters. (a) Without limiting the generality
of Section 11.1, after the Closing, Buyers, on the one hand, and
Sellers, on the other hand, shall provide each other with such
assistance as may reasonably be requested by any of them in
connection with the preparation of any Tax return, any refund
claim, any audit or other examination by any taxing authority, or
any judicial or administrative proceedings relating to liability
for Taxes, and each will retain and, upon the request of the
other, provide the other with, any records or information which
may be relevant to such return, audit, examination or
proceedings. Such assistance shall include making employees
available on a mutually convenient basis to provide additional
information and explanation of any material to be provided
hereunder and shall include furnishing to or permitting the
copying by the requesting party of any records, returns,
schedules, documents, work papers or other relevant materials
which might reasonably be expected to be of use in connection
with such return, audit, examination or proceedings. The party
requesting assistance hereunder shall reimburse the party whose
assistance is requested for the reasonable out-of-pocket expenses
incurred by it in providing such assistance, but shall not be
required to reimburse the party providing such assistance with
respect to time of employees made available pursuant to this
Section 11.3.
(b) Crompton shall prepare and present to Akzo LLC for
filing prior to the due date all CIS Tax returns with respect to
Taxes that are required to be filed with respect to CIS taxable
years or periods ending on or before the Closing Date and
Crompton shall pay or reimburse Akzo LLC for any Taxes shown as
due on such Tax returns. Akzo LLC shall cause CIS to consent to
join, for all taxable periods of CIS ending on or before the
Closing Date for which CIS is eligible to do so, in any
consolidated, combined or unitary Tax returns relating to Tax
which Crompton shall request it to join. Akzo LLC shall prepare
and file or cause to be filed when due all CIS Tax returns that
are required to be filed with respect to CIS for periods
beginning and ending after the Closing Date and shall pay any
Taxes shown as due on such Tax returns.
(c) With respect to any Tax returns of CIS with respect to
a period beginning before and ending after the Closing Date
("Straddle Period Tax Returns"), Akzo LLC shall prepare and file
such Straddle Period Tax Returns.
(d) With respect to Straddle Period Tax Returns other than
those covered by Section 3.4(a), Crompton shall promptly pay to
Akzo LLC the amount of Taxes attributable to the period ending on
the Closing Date less any Taxes previously paid relating to such
period at the time such Tax return is filed. If Crompton has
overpaid the amount of Taxes attributable to such period Akzo LLC
shall refund such amount. For the sake of clarity, it is agreed
that if the Texas Franchise Tax Report for Year 2003 (covering
the privilege period of May 1, 2002 through December 31, 2003
(the "Privilege Period")) is determined on the net taxable earned
surplus basis, the tax shall be allocated to Crompton based on
the actual taxable income computed for federal income tax
purposes on the CIS pro forma stand-alone short period 2002
federal return ending with the Closing Date, with such
adjustments as are appropriate under Texas law. If the Texas
Franchise Tax Report for Year 2003 is determined on the net
taxable capital basis, then it shall be allocated to Crompton and
Akzo LLC, with the share allocated to Crompton being the lesser
of (1) an amount equal to the tax calculated as if the end of the
accounting period were the Closing Date or (2) an amount equal to
Crompton's share of the tax calculated using the statutory
accounting period with a proration of the tax based on the number
of respective days of ownership of Crompton and Akzo LLC during
the Privilege Period covered by the return.. It is further
agreed that if the tax for the 2003 Ohio Corporation Franchise
Tax Report (covering the period of May 1, 2002 through December
31, 2002) is determined on the net income basis, the tax shall be
allocated to Crompton based on the actual taxable income computed
for federal income tax purposes on the CIS pro forma stand-alone
short period 2002 federal return ending with the Closing Date,
with such adjustments as are appropriate under Ohio law. If the
tax for the 2003 Ohio Corporation Franchise Tax Report is based
on the Net Worth Basis, then it shall be allocated to Crompton
and Akzo LLC in the same manner as the Texas Franchise Tax Report
for Year 2003 is to be allocated if determined on a net taxable
capital basis.
11.4. Confidential Information. (a) In the event that
the transaction contemplated by this Agreement is completed, it
is acknowledged that (i) Buyers and/or their Affiliates will come
into possession of, and employees of Buyers that were formerly
employees of Sellers as of the Closing Date will have in their
possession or be aware of, materials, business information,
financial information, know-how, trade secrets, technology,
documents, reports, manuals, data, computer data, product
formulae, etc., pertaining to the Excluded Assets and other
assets of Sellers and others not related to the Business which
embody or contain Sellers' and others' confidential, proprietary
and/or trade secret information as well as proprietary,
confidential and/or trade secret information of customers and
which are not part of or relevant to the Business to be purchased
hereunder, including certain confidential information as to which
Sellers may have pre-existing obligations of confidentiality,
including "Confidential Information" as defined in Section
11.4(a) of the Xxxxxxxxxxx Purchase Agreement, which is attached
hereto as Exhibit 11.4 (collectively, "Sellers' Confidential
Information"), and that (ii) Sellers will retain in their
possession certain proprietary, confidential and/or trade secret
materials, business information, financial information, know-how,
trade secrets, technology, documents, reports, manuals, data,
computer data, product formulae, etc., pertaining to the Business
which are Business Assets (collectively, "Buyers' Confidential
Information"). Sellers' Confidential Information and Buyers'
Confidential Information hereinafter are individually and
collectively referred to as "Confidential Information."
(b) Buyers and Sellers each agree that they shall, after
the Closing Date: (i) hold each other's Confidential Information
in confidence using the care and caution each uses with respect
to its own confidential information; (ii) not disclose the
other's Confidential Information to any third parties as well as
to their other employees; and (iii) not utilize any of the
other's Confidential Information for any purpose other than as
allowed pursuant to this Agreement or any Ancillary Agreement;
provided that the foregoing obligations of confidentiality and
non-use shall not extend or shall cease to extend, as
appropriate, to any Confidential Information which:
(A) with respect to Sellers' Confidential Information, as
shown by prior written records, was already in Buyers' possession
prior to the Closing Date and was not acquired from Sellers;
(B) with respect to Sellers' Confidential Information, is,
or becomes, generally available to the public through no fault or
omission of Buyers, and with respect to Buyers' Confidential
Information is, or becomes, generally available to the public
through no fault or omission of Sellers;
(C) was generally available to the public as of the Closing
Date;
(D) with respect to Sellers' Confidential Information, is
received by Buyers in good faith from a third party who discloses
such information to Buyers on a non-confidential basis without
violating any obligation of secrecy as to the information
disclosed, and with respect to Buyers' Confidential Information,
is received by Sellers in good faith from a third party who
discloses such information to Sellers on a non-confidential basis
without violating any obligation of secrecy as to the information
disclosed; and
(E) with respect to Sellers' Confidential Information, is
independently developed by Buyers without reference to or use of
Sellers' Confidential Information, as evidenced by clear and
convincing evidence, and with respect to Buyers' Confidential
Information is independently developed by Sellers without
reference to or use of Buyers' Confidential Information, as
evidenced by clear and convincing evidence.
Information which is specific shall not be considered as
being within the foregoing exceptions merely because it is
embraced by general information within the exceptions. Also, any
combination of features shall not be considered to be within the
above exceptions merely because individual features of such
combination are within the exceptions, but only if the
combination itself, its principle of operations and its value or
advantages are within the exceptions.
Notwithstanding the foregoing, Buyers or Sellers, as the
case may be, shall be permitted to disclose any Confidential
Information of the other party which is compelled to be disclosed
pursuant to any requirement of law, court order, subpoena or
similar legal authority, provided, however, that Buyers or
Sellers, as applicable, shall xxxx all information so disclosed
as confidential business information of the disclosing party and
shall give the other party prompt notice of any such requirement
to disclose any Confidential Information, so that the other party
may seek appropriate legal relief.
(c) Each party shall endeavor to destroy or return to the
other all Confidential Information of the other which may be in
tangible or machine-readable form unless otherwise agreed in
writing.
(d) Each party shall advise its employees of their
obligations hereunder.
(e) The provisions of confidentiality and non-use set forth
herein with respect to Confidential Information shall survive
expiration or termination of this Agreement and the Closing for
ten years after the Closing Date.
(f) To the extent any of the provisions set forth in this
Section 11.4 are inconsistent with the terms and conditions of
any confidentiality agreement pertaining to the Business and the
sale thereof between Buyers and Sellers dated prior to the date
hereof, the provisions of this Article 11 shall control.
(g) Buyers and Sellers agree, for a period of ten years
from and after the Closing Date, not to disclose any Confidential
Information to any of their Affiliates that may be engaged in a
similar business to the Business unless such Affiliate agrees to
be bound by the provisions of this Section 11.4.
11.5. Inventory Removal. Unless otherwise agreed by the
parties, prior to December 31, 2002, Sellers will remove and
dispose of, at Sellers' risk and expense, any Inventory that was
Retained Inventory as of the Closing Date.
11.6. Change of Name of CIS. No later than five
business days after the Closing, Buyers shall file an amended
Certificate of Incorporation in the State of Delaware to change
the name of CIS so that "Crompton" is no longer in the name.
11.7. Welfare Plans. Notwithstanding anything to the
contrary in this Agreement, from the period beginning on the
Closing Date and continuing through June 30, 2002 (the
"Transition Period"), Sellers shall permit Continuing Employees
to continue to participate in the medical, dental, accidental
death and dismemberment, and life insurance Benefit Plans in
which they participate immediately prior to the Closing Date
(hereinafter the "Transition Plans"), on the same terms and
conditions as if they remained employees of Sellers. Sellers
shall send Buyers invoices for all costs incurred under the
Transition Plans during the Transition Period as soon as
practicable after the Closing Date, and Buyers shall pay such
costs in their entirety not later than five business days after
receiving any such invoice.
ARTICLE 12
INDEMNIFICATION AND SURVIVAL
12.1. Indemnification by Sellers. (a) Sellers'
Indemnity. Following the Closing, Sellers individually and
collectively shall indemnify and hold harmless Buyers and their
Affiliates and CIS against and in respect of all losses,
liabilities, costs and expenses (including reasonable attorneys'
fees) (collectively, "Losses") which Buyers and their Affiliates
or CIS may suffer or incur in connection with any of the
following:
(i) any breach of any of the representations and warranties
of any of the Sellers set forth in this Agreement;
(ii) any breach by any Seller of the covenants and
agreements of any of the Sellers set forth in this Agreement; and
(iii) any Excluded Liabilities.
(b) Limitations on Sellers' Indemnity. Sellers shall not
be liable for a Loss covered under Section 12.1(a)(i) if such
Loss is $250,000 or less and shall not be liable for any Loss
covered under Section 12.1(a)(i) until the aggregate of all
individual Losses in excess of $250,000 for which Sellers are
liable is in excess of $5,000,000, in which event the
indemnification obligation of Sellers shall apply to the
aggregate amount of such individual Losses in excess of $250,000;
provided, however, that Sellers' aggregate liability under
Section 12.1(a)(i) shall not exceed $23 million. For purposes of
the foregoing, Losses sustained in foreign currencies shall be
converted into U.S. Dollars as of the date on which the Loss is
experienced, at the exchange rate in effect for such currency on
the Closing Date. In addition, any claim for indemnity which
could be brought under either Sections 12.1(a)(i) or 12.1(a)(ii)
or which may be brought under either Section 12.1(a)(i) or
12.1(a)(iii) may only be brought under Section 12.1(a)(i).
Notwithstanding the foregoing, claims for Taxes for periods prior
to Closing relating to the breach of any representation or
warranty contained in Section 5.19 (Tax Matters) are not subject
to any limitation under this Section 12.1(b).
(c) Notice of Claims. Buyers shall promptly notify
Crompton (on behalf of all Sellers) in writing, in reasonable
detail, of all matters which may give rise to the right to
indemnification hereunder, it being understood that if Sellers do
not receive written notice of any matter known to Buyers and as
to which Buyers or their Affiliates are entitled to
indemnification hereunder in time to contest the determination of
any such liability which is susceptible to being successfully
contested, Sellers shall not be obligated to indemnify Buyers or
their Affiliates with respect thereto, and that, in any event,
any failure to give written notice shall relieve Sellers of
liability with respect thereto to the extent of any prejudice.
Provided that Sellers have accepted defense and indemnification
of Buyers with respect to a matter, Buyers shall not admit any
liability with respect to, or settle, compromise or discharge any
such matter covered by this Section 12.1, or file any papers or
provide any correspondence with respect to any such matter,
without Crompton's (acting on behalf of all Sellers) prior
written consent. Sellers shall have the right to settle all
indemnifiable matters related to claims by third parties which
are susceptible to being settled, and to defend through counsel
of their own choosing, at their own expense, any action which may
be brought by a third party in connection therewith; provided,
however, that Sellers shall have no authority to enter into any
settlement that requires any payment, action or forbearance on
the part of Buyers or any of their Affiliates or that may
reasonably be expected to affect Buyers' or their Affiliates'
continuation of the Business in substantially the same manner as
conducted by Sellers prior to the Closing or that may reasonably
be expected to impair the value to Buyers of the Business or any
of the Purchased Assets; and provided further, that Buyers shall
have the right to have counsel participate in such defense at its
own expense. Buyers and Sellers shall keep each other informed
of all settlement negotiations with third parties and of the
progress of any litigation with third parties. Buyers and Sellers
shall permit each other reasonable access to books, records,
facilities and personnel and otherwise cooperate (including by
providing personnel for deposition, interview, consultation or
otherwise as necessary or appropriate) with all reasonable
requests of each other in connection with any indemnifiable
matter resulting from a claim by a third party.
12.2. Indemnification by Buyers. (a) Buyers'
Indemnity. Buyers collectively and individually agree to
indemnify and hold harmless Sellers and their Affiliates at all
times against and in respect of Losses which Sellers and their
Affiliates may suffer or incur in connection with any of the
following:
(i) any breach of any of the representations and warranties
of any of the Buyers set forth in this Agreement;
(ii) any breach by any Buyer of the covenants and agreements
of any of the Buyers set forth in this Agreement;
(iii) any Assumed Liabilities;
(iv) the operation of the Business to the extent related to
the period after the Closing Date;
(v) the failure of any Facilities to be in compliance with
any laws and regulations applicable to the ownership and
operation thereof to the extent related to the period after the
Closing Date;
(vi) the projects set forth on Schedule 2.4 hereof;
(vii) Purchased Assets not transferable as described in
Section 2.2 hereof;
(viii) termination of Employees or Continuing Employees
on or after the Closing Date; and
(ix) termination of agents and/or distributors of the
Business under Business Contracts on and after the Closing Date.
(b) Notice of Claims. Crompton (acting on behalf of all
Sellers) shall promptly notify Buyers in writing, in reasonable
detail, of all matters which may give rise to the right to
indemnification hereunder, it being understood that if Buyers do
not receive written notice of any matter known to Sellers and as
to which Sellers or their Affiliates are entitled to
indemnification hereunder in time to contest the determination of
any such liability which is susceptible to being successfully
contested, Buyers shall not be obligated to indemnify Sellers or
their Affiliates with respect thereto and that, in any event, any
failure to give written notice shall relieve Buyers of liability
with respect thereto to the extent of any prejudice. Provided
that Buyers have accepted defense and indemnification of Sellers
with respect to a matter, Sellers shall not admit any liability
with respect to, or settle, compromise or discharge such matter
covered by this Section 12.2, or file any papers or provide any
correspondence with respect to any such matter, without the prior
written consent of Akzo LLC (acting on behalf of all Buyers).
Buyers shall have the right to settle all indemnifiable matters
related to claims by third parties which are susceptible to being
settled, and to defend through counsel of their own choosing, at
their own expense, any action which may be brought by a third
party in connection therewith; provided, however, that Buyers
shall have no authority to enter into any settlement that
requires any payment, action or forbearance on the part of
Sellers or any of their Affiliates; and provided further, that
Sellers shall have the right to have counsel participate in such
defense at their own expense. Sellers and Buyers shall keep each
other informed of all settlement negotiations with third parties
and of the progress of any litigation with third parties. Buyers
and Sellers shall permit each other reasonable access to books,
records, facilities and personnel and otherwise cooperate
(including by providing personnel for deposition, interview,
consultation or otherwise as necessary or appropriate) with all
reasonable requests of each other in connection with any
indemnifiable matter resulting from a claim by a third party.
12.3. Survival. The representations and warranties of
Sellers and Buyers contained herein shall survive the Closing and
remain in full force and effect until the close of business on
the 548th day after the Closing Date, provided that the
representations and warranties of Sellers set forth in Section
5.19 (titled "Tax Matters") shall survive the Closing until the
expiration of the statute of limitations (and any extensions
thereof) applicable to the Tax in respect of which
indemnification is being sought without the assertion of a
deficiency in respect thereof by the applicable governmental
agency. Sellers shall not be liable for any Losses with respect
to Taxes other than Taxes related to the Purchased Assets which
accrue or have accrued prior to the Closing Date, excluding Taxes
for which Buyers are responsible under Section 15.4.
No claim may be made based upon an alleged breach of any of
such representations or warranties whether for indemnification in
respect thereof or otherwise, unless written notice of such
claim, in reasonable detail, is given to Buyers or to Sellers, as
the case may be, within said period following the Closing.
12.4. Limitation on Liability. (a) To the fullest
extent permitted by law, none of Buyers or Sellers shall be
liable to the other, or its Affiliates, for any claims, demands
or suits for consequential, incidental, special, exemplary,
punitive, indirect or multiple damages, including lost profits,
connected with or resulting from any breach after the Closing
Date of this Agreement (other than breach of this Article 12), or
any actions undertaken in connection with or related hereto,
including any such damages which are based upon breach of
contract, tort (including negligence and misrepresentation),
breach of warranty, strict liability, statute, operation of law
or any other theory of recovery.
(b) The rights and remedies of Sellers and Buyers under
this Article 12 are, solely as between Sellers and Buyers,
exclusive and in lieu of any and all other rights and remedies
which Sellers and Buyers may have under this Agreement or
otherwise for monetary relief with respect to any Losses covered
hereby. Each party agrees that the previous sentence shall not
limit or otherwise affect any non-monetary right or remedy which
either party may have under this agreement or otherwise limit or
affect either party's right to seek equitable relief, including
the remedy of specific performance.
ARTICLE 13
TERMINATION
13.1. Termination of Agreement. This Agreement may be
terminated at any time prior to the Closing Date:
(a) By Mutual Consent. With the mutual consent of Akzo LLC
and Crompton; or
(b) By Crompton. By Crompton, on behalf of all Sellers, if
any of the conditions provided in Section 9.1 are not capable of
being satisfied, complied with or performed in any material
respect due to a breach by Buyers which Buyers cannot cure, and
Sellers shall not have waived such failure of satisfaction,
noncompliance or nonperformance; or
(c) By Buyers. By Buyers, if any of the conditions
provided in Section 9.2 are not capable of being satisfied,
complied with or performed in any material respect due to a
breach by Sellers which Sellers cannot cure, and Buyers shall not
have waived such failure of satisfaction, noncompliance or
nonperformance.
13.2. Written Notice. In the event of any termination
pursuant to Section 13.1 (other than pursuant to
Section 13.1(a)), written notice setting forth the reasons
therefor shall forthwith be given by the terminating party to the
other. In addition, in the case of any termination pursuant to
Sections 13.1(b), 13.1(c) or 13.1(d), the party seeking
termination must not be in material breach of any of its
representations, warranties, covenants or agreements contained in
this Agreement. No termination of this Agreement shall relieve
any party from liability hereunder in respect of breach.
13.3. Continuing Confidentiality. If this Agreement
shall be terminated as herein set forth, Buyers agree that they
will remain obligated under, and will comply with, the provisions
of Section 15.3.
ARTICLE 14
ENVIRONMENTAL CONDITIONS
The provisions in this Article 14 set forth the rights and
obligations of Sellers and Buyers with respect to all
Environmental Conditions existing at or relating to the
Facilities and the Business, now or in the future, and establish
the terms and conditions under which Sellers and Buyers shall
each have monetary and legal responsibility for such
Environmental Conditions.
14.1. Definitions.
For purposes of this Article 14, the following terms shall
have the following meanings:
"Discretionary Remediation" means any Remediation which is
voluntarily undertaken and which is not required by an
Environmental Agency to comply with applicable Environmental
Laws, but excludes Remediation which Sellers agree to perform or
be responsible for pursuant to Section 14.5(d) hereof.
"Environmental Agency" means any federal, state or local
governmental regulatory agency in any jurisdiction where a
Facility is located and that has jurisdiction to require
Remediation or Remedial Action at a Facility.
"Environmental Claim" means a claim relating to or arising
out of an environmental condition at or originating from a
Facility (i) for which CIS, Buyers or Sellers have received
notice from an Environmental Agency that Remediation of the
condition is required to comply with Environmental Laws or (ii)
which is addressed by procedures set forth in Section 14.5(d)
hereof.
"Environmental Condition" means any contamination by a
Hazardous Substance of surface soils, subsurface soils, surface
waters, groundwaters, leachate and stream or other sediments
present on, in, under, above or migrating from the Facilities, or
third party sites used by the Facilities or the Business.
"Environmental Law(s)" means any federal, state or local law
(including common law), regulation, ordinance or order, and any
technical norm, interpretive guidance, or annex thereto and
pertaining to the protection of the environment including any
law, regulation, ordinance or order which governs: (i) the
existence, removal or remediation of Hazardous Substances on real
property; (ii) the emission, discharge, release, or control of
Hazardous Substances into or in the environment; or (iii) the
use, generation, handling, transport, treatment, storage,
disposal or recovery of Hazardous Substances.
"Environmental Reports" means (i) all investigation and
remediation reports on conditions at the Facilities prepared
prior to the Closing Date and made available to Buyers in the
data room for the transaction, including the Phase I and Phase II
reports completed on behalf of Sellers at the Facilities prior to
the Closing Date, and (ii) the Supplemental Environmental Reports
to be completed on behalf of Buyers.
"Hazardous Substance(s)" means and includes flammable
substances, explosives, radioactive materials, hazardous wastes
or substances, toxic wastes or substances, asbestos, crude oil or
any fraction thereof, refined or partially refined petroleum
products, or any other wastes, materials or pollutants included
in the definition of "hazardous substance," "toxic substance,"
"hazardous material," "hazardous waste," " extremely hazardous
waste," "restricted hazardous waste," "petroleum substance" or
words of similar import under any Environmental Law.
"Known Pre-Closing Contamination" means a Hazardous
Substance released at or from a Facility prior to the Closing and
which impacts the environmental condition of a Facility and is
identified in the Environmental Reports.
"No Further Action Determination" means an authoritative
determination by an Environmental Agency that no further
Remediation is required at a Facility, or any portion thereof, to
achieve the minimally acceptable remediation criteria for
industrial/commercial properties.
"Phase I and Phase II Reports" or "Phase I and Phase II
Investigations" means the Phase I and Phase II reports or Phase I
or Phase II investigations completed on behalf of Sellers at the
Facilities prior to the Closing Date.
"Known Post-Closing Contamination" means a Hazardous
Substance released at or from a Facility as a result of a spill
or other sudden event which occurs after the Closing or that
consists of a Hazardous Substance that is a substance that was
first introduced at the Facility after the Closing, and, in
either case, which impacts the environmental condition of the
Facility, but does not include the passive migration of a
Hazardous Substance released prior to the Closing.
"Remedial Action" or "Remediation" means any action taken to
investigate, clean up or otherwise respond to or contain releases
of Hazardous Substances at or from a Facility. Remedial Action
or Remediation shall not include any actions taken in connection
with testing, cleaning, emptying or repairing any fixed assets or
fixtures located at a Facility and which are, or may be,
contributing to soil or groundwater conditions requiring Remedial
Action or Remediation.
"Remediation Costs" means costs and expenses incurred in
connection with Remedial Action or Remediation of soil or
groundwater at a Facility for which, and to the extent that,
either Sellers or CIS are liable hereunder, including the
following: costs and expenses of environmental consultants; costs
and expenses for sampling and analysis of soil and groundwater at
a Facility; administrative oversight costs asserted by any
Environmental Agency; costs and expenses for preparation of
reports and risk assessments, costs and expenses of remediation,
treating and disposing of Hazardous Substances (including costs
of designing and constructing treatment systems) and costs and
expenses to conduct post-Remediation confirmation sampling and
monitoring, and to remediate natural resources damages.
Remediation Costs shall not include costs and expenses associated
with testing, cleaning, emptying, repairing or taking any other
action with respect to any fixed assets or fixtures located at a
Facility and which are, or may be, contributing to soil or
groundwater conditions required to be Remediated hereunder.
"Third Party" means a party other than Sellers, CIS or
Buyers, or an Affiliate of Sellers, CIS or Buyers, or any of
their respective officers, directors, employees, agents,
consultants, successors, purchasers or assigns.
"Unknown Contamination" means a Hazardous Substance released
at or from a Facility which impacts the environmental condition
of the Facility, but which is neither Known Pre-Closing
Contamination nor Known Post-Closing Contamination.
REPRESENTATIONS AND WARRANTIES
14.2. Sellers' Representations and Warranties. Sellers
hereby represent and warrant as follows:
(a) Buyers' Opportunity to Conduct Due Diligence. Sellers
have provided Buyers with an opportunity to conduct such due
diligence of the environmental condition of the Facilities as
Buyers, in their sole discretion, deem necessary and appropriate,
including an opportunity to visit and inspect the Facilities,
make reasonable inquiry of employees or other representatives or
agents of Sellers who are knowledgeable about the operation and
environmental condition of the Facilities, and review all written
documentation in Sellers' possession concerning the environmental
condition of the Facilities, including all environmental permits
and correspondence with governmental agencies.
(b) Data Room. In addition to the opportunities made
available to Buyers as set forth in Section 14.2(a), copies of
the Phase I and Phase II Reports prepared on Sellers' behalf, and
other material written information in Sellers' possession
pertaining to the environmental condition of the Facilities, have
been placed in the data room established for this transaction and
have thereby been made available to Buyers for their inspection.
(c) In connection with Sections 14.2(a) and (b) above,
Sellers have disclosed to Buyers any and all material
environmental conditions potentially requiring Remediation or
Remedial Action known by Sellers to exist at the Facilities.
(d) Deepwells. There are no closed deepwells located at
the Houston Facility.
14.3. Buyers' Representations and Warranties. Buyers
hereby represent and warrant to Seller as follows:
(a) Buyer's Due Diligence. Buyers have availed themselves
fully of the opportunity, as set forth in Section 14.2(a) and
Section 14.2(b), to conduct such due diligence of the
environmental condition of the Facilities as Buyers, in their
sole discretion, deem necessary and appropriate.
(b) Solicitation of Remedial Action. Except as set forth
in Section 14.5(d), Buyers shall take no affirmative action to
solicit from any Third Party, including any Environmental Agency,
any proceeding, order, directive or other mandate to conduct
Remedial Action at the Facilities which Sellers are responsible
for performing pursuant to the terms and conditions hereof, and
shall not communicate with, report or disclose to any Third
Party, including any Environmental Agency, any matters that could
give rise to any such Remedial Action, unless Buyers believe in
good faith, and so inform Sellers in advance in writing, that
Buyers have a lawful obligation to take such action; provided,
however, Buyers shall not be obligated to provide Sellers with
such prior written notice where it would cause any action
required of Buyers by applicable environmental laws to be
untimely. In furtherance, and not in limitation, of the
foregoing, Buyers will not knowingly initiate or undertake any
activity primarily for the purpose of finding conditions
requiring Remedial Action (including any subsurface investigation
at any of the Facilities), or accelerating the timing or
increasing the cost of any Remedial Action, unless in response to
a request from an Environmental Agency. The foregoing shall not
restrict Buyers from reporting to any Environmental Agency any
environmental condition at a Facility which Buyers have a legal
obligation to report under applicable Environmental Laws, or from
investigating subsurface conditions in connection with expansion
or modification of buildings, reactors, tanks, improvements,
fixtures or equipment located at a Facility.
14.4. CIS's Representations and Warranties. CIS hereby
represents and warrants to Seller as follows:
(a) Solicitation of Remedial Action. Except as set forth
in Section 14.5(d), CIS shall take no affirmative action to
solicit from any Third Party, including any Environmental Agency,
any proceeding, order, directive or other mandate to conduct
Remedial Action at the Facilities which Sellers are responsible
for performing pursuant to the terms and conditions hereof, and
shall not communicate with, report or disclose to any Third
Party, including any Environmental Agency, any matters that could
give rise to any such Remedial Action, unless CIS believes in
good faith, and so informs Sellers in advance in writing, that
CIS has a lawful obligation to take such action; provided,
however, CIS shall not be obligated to provide Sellers with such
prior written notice where it would cause any action required of
CIS by applicable environmental laws to be untimely. In
furtherance, and not in limitation, of the foregoing, CIS will
not knowingly initiate or undertake any activity primarily for
the purpose of finding conditions requiring Remedial Action
(including any subsurface investigation at any of the
Facilities), or accelerating the timing or increasing the cost of
any Remedial Action, unless in response to a request from an
Environmental Agency. The foregoing shall not restrict CIS from
reporting to any Environmental Agency any environmental condition
at a Facility which CIS has a legal obligation to report under
applicable environmental laws, or from investigating subsurface
conditions in connection with expansion or modification of
buildings, reactors, tanks, improvements, fixtures or equipment
located at a Facility.
OBLIGATIONS OF SELLERS
14.5. Seller's Obligations. Subject to each of the
conditions and limitations set forth in the remaining sections of
this Article, Sellers shall have monetary responsibility for the
following environmental matters:
(a) Known Pre-Closing Contamination. Remediation of any
Known Pre-Closing Contamination, so long as an Environmental
Agency determines, within ten years following the Closing, that
Remedial Action is required to comply with Environmental Laws;
and
(b) Unknown Contamination. Subject to the allocation
schedule set forth below and Section 14.5(c) hereof, Remediation
of any Unknown Contamination, so long as an Environmental Agency
determines that Remedial Action is required to comply with
Environmental Laws.
(i) For Unknown Contamination for which notice is received
in accordance with Section 14.6(c) hereof during the first two
years after the Closing, Sellers shall be responsible for 100% of
the Remediation Costs.
(ii) For Unknown Contamination for which notice is received
in accordance with Section 14.6(c) hereof during the third year
after the Closing, Sellers shall be responsible for 83% of the
Remediation Costs.
(iii) For Unknown Contamination for which notice is
received in accordance with Section 14.6(c) hereof during the
fourth year after the Closing, Sellers shall be responsible for
67% of the Remediation Costs.
(iv) For Unknown Contamination for which notice is received
in accordance with Section 14.6(c) hereof during the fifth year
after the Closing, Sellers shall be responsible for 50% of the
Remediation Costs.
(v) For Unknown Contamination for which notice is received
in accordance with Section 14.6(c) hereof during the sixth year
after the Closing and thereafter, Sellers shall be responsible
for 33% of the Remediation Costs.
(vi) For Unknown Contamination for which notice is received
in accordance with Section 14.6(c) hereof during the seventh year
after the Closing and thereafter, Sellers shall be responsible
for 17% of the Remediation Costs.
(vii) For Unknown Contamination for which notice is
received in accordance with Section 14.6(c) hereof during the
eighth year after the Closing and thereafter, Sellers shall be
responsible for 0% of the Remediation Costs.
(c) In the event of a breach of Sellers' representation set
forth in Section 14.2(c) hereof, the allocation schedule in
Section 14.5(b) above shall not apply with respect to the
condition that is the subject of such breach and Sellers shall be
responsible for 100% of Remediation Costs associated with such
condition.
(d) Anything in this Article 14 to the contrary
notwithstanding, in the event that, in the ordinary course of
CIS's operations of the Facilities after the Closing (including
any expansion or modification of buildings, reactors, tanks,
improvements, fixtures or equipment located thereat), CIS or
Buyers believe, in good faith, that a condition not required to
be reported to an Environmental Agency (including groundwater
migrating at or from a Facility) is either Known Pre-Closing
Contamination or Unknown Contamination that constitutes a
violation of Environmental Laws, or Known Pre-Closing
Contamination or Unknown Contamination that poses a threat to
human health or the environment, CIS or Buyers may request in
writing Sellers to perform or, if CIS would be the Directing
Party pursuant to Section 14.12 hereof, to be responsible for its
allocated share of costs associated with, Remediation of such
condition. Sellers will evaluate such request in accordance with
action levels for Remediation of industrial/commercial
facilities. If Sellers agree to perform Remediation of such
condition, Remediation Costs shall be allocated in accordance
with Sections 14.5(a) and 14.5(b) hereof. If Sellers decline to
perform, or accept responsibility for their allocated share of
costs associated with, Remediation of such condition, CIS and
Buyers shall be relieved from any restrictions set forth herein
that would otherwise prevent CIS or Buyers from reporting such
condition to the applicable Environmental Agency, and Sellers and
CIS shall perform Remediation, if any, thereafter required by the
Environmental Agency in accordance with the terms and conditions
hereof.
14.6. Limitations on Sellers' Obligations.
(a) Liabilities of Sellers. Notwithstanding any other
provision of this Agreement, Seller shall have no liability for
any of the following matters:
(i) Any and all Remediation Costs incurred by CIS or Buyers
in responding to Known Post-Closing Contamination;
(ii) Any and all Remediation Costs incurred by CIS or Buyers
in conducting Remedial Action that Sellers do not perform or are
not otherwise responsible for in accordance with Section 14.5(d)
hereof or has not been required by an Environmental Agency within
the time periods specified in Sections 14.5(a) and 14.5(b);
(iii) Any and all Remediation Costs incurred by CIS or
Buyers related to an Environmental Claim for which CIS or Buyers
have failed to provide Sellers notice in accordance with Section
14.6(c) hereof;
(iv) Any and all Remediation Costs incurred by CIS or Buyers
in conducting Discretionary Remediation at any Facility;
(v) Any and all Remediation Costs incurred in conducting a
Remedial Action at a Facility, or any portion thereof, for which
a No Further Action Determination has been obtained;
(vi) Subject to Section 14.5(c) hereof, any and all
Remediation Costs for Unknown Contamination that are less than
$25,000, per occurrence, regardless of the date upon which the
matter arises;
(vii) CIS's allocated share of Remediation Costs for
Unknown Contamination, to the extent Seller is not liable for
such costs pursuant to Section 14.5(b), except as set forth in
Section 14.5(c); and
(viii) Any administrative or civil fines or penalties
assessed by an Environmental Agency as a result of CIS's or
Buyers' actions or failure to act or for which notice is not
provided to Sellers in accordance with Section 14.6(c) hereof.
(b) Governing Year. The percentage of Sellers' monetary
responsibility under Section 14.5(b) shall be established based
upon the year in which Sellers receive notice in accordance with
Section 14.6(c) of an Environmental Claim for which Sellers are
liable under this Article 14, and such percentage shall apply
until such time as the Remediation relating to such Environmental
Claim is fully performed.
(c) Notice. Sellers' obligation to pay Remediation Costs
under Section 14.5 hereof is expressly conditioned upon CIS or
Buyers providing timely written notice of an Environmental Claim
to Sellers. Notice shall be considered timely if it is provided
within the time periods specified in Sections 14.5(a) and
14.5(b). CIS's or Buyers' notice shall include a copy of any
Environmental Agency's written notice, made within the time
periods specified in Sections 14.5(a) and 14.5(b), that
Remediation is required to comply with Environmental Laws or such
other information or documentation sufficient to identify the
basis for the Environmental Claim. Failure to include a copy of
any Environmental Agency's written determination, or such other
documentation sufficient to identify the basis for the
Environmental Claim, shall relieve Sellers of any responsibility
under this Agreement to pay Remediation Costs but only to the
extent Sellers are prejudiced by the failure to provide such
documentation.
(d) Remediation Standard. Sellers' obligation to perform
Remediation and pay Remediation Costs shall be limited, except
with respect to natural resources damages for each Facility, to
the reasonable cost of work necessary to achieve the Remediation
criteria for industrial/commercial properties as determined by
the applicable Environmental Agency in the jurisdiction in which
such Facility is located, which may be evidenced by the issuance
of a No Further Action Determination by the Environmental Agency
having jurisdiction over the Facility. CIS and Buyers
acknowledge that the completion of Remediation hereunder to
industrial/commercial standards, and/or the attainment of a No
Further Action Determination, may require engineering controls
and institutional controls, including deed restrictions, that the
applicable Environmental Agency determines are necessary in
connection with the Remediation, and CIS and Buyers agree to
provide Sellers with reasonable assistance in obtaining such
controls and restrictions. CIS and Buyers agree to accept such
restrictions and controls as may be approved by an Environmental
Agency and agree that such restrictions and controls consistent
with this Section 14.6(d) shall be binding on CIS and any
successors or permitted assigns of CIS, provided, however, that
such deed restrictions and/or engineering controls do not have a
material adverse effect or unreasonably interfere with then-
existing industrial/commercial site operations.
14.7. Fines and Penalties. Sellers shall pay
administrative or civil fines or penalties assessed by an
Environmental Agency in connection with Known Pre-Closing
Contamination or Unknown Contamination, regardless of any
allocation of responsibility for Remediation Costs hereunder for
which Sellers are provided notice in accordance with Section
14.6(c) hereof, provided that such fines and penalties were not a
result of CIS's or Buyers' actions or failure to act after the
Closing. CIS or Buyers and not Sellers shall be solely
responsible for payment of any administrative or civil fines or
penalties assessed by an Environmental Agency as a result of
CIS's or Buyers' actions or failure to act after the Closing or
for which Sellers are not provided notice in accordance with
Section 14.6(c) hereof.
14.8. Aggregate Responsibility. Notwithstanding any
other provision of this Agreement, Sellers' aggregate
responsibility for Remediation Costs under this Agreement,
including Sections 14.5(a) and 14.5(b) hereof, shall not exceed
$47.5 million. Sellers shall provide Buyers with a cumulative
semi-annual accounting of all amounts spent in respect of
Remediation Costs under this Agreement.
14.9. Retained Liabilities. Notwithstanding any
contrary provision of this Article 14, Sellers shall have all
liability for Remediation and claims by Third Parties in respect
of Hazardous Substances present on or under property other than a
Facility as a result of operations of such Facility or the
Business prior to the Closing Date. CIS and Buyers agree to
provide Sellers with prompt notice of CIS's or Buyers' receipt of
any such claim.
14.10. Sellers' Right to Remediate. Notwithstanding any
contrary provision of this Agreement, Sellers have the right, in
their sole discretion, to perform Remediation at either or both
of the Facilities and to seek and obtain a No Further Action
Determination regardless of whether an Environmental Claim has
been made.
OBLIGATIONS OF CIS
4.11. CIS's Sole Obligations. Notwithstanding any other
provision of this Article 14, CIS shall be solely responsible for
the following matters:
(a) Any and all Remediation Costs incurred by CIS in
responding to Post-Closing Contamination;
(b) Any and all Remediation Costs incurred by CIS in
conducting Remedial Action that Sellers do not perform or are not
otherwise responsible for in accordance with Section 14.5(d)
hereof or has not been required by an Environmental Agency within
the time periods specified in Sections 14.5(a) and 14.5(b);
(c) Any and all Remediation Costs incurred by CIS related
to an Environmental Claim for which CIS or Buyers have failed to
provide Sellers notice in accordance with Section 14.6(c) hereof;
(d) Any and all Remediation Costs incurred by CIS in
conducting Discretionary Remediation at any Facility;
(e) Any and all Remediation Costs incurred in conducting a
Remedial Action at a Facility, or any portion thereof, for which
a No Further Action Determination has been obtained;
(f) Subject to Section 14.5(c) hereof, any and all
Remediation Costs for Unknown Contamination that are less than
$25,000, per occurrence, regardless of the date upon which the
matter arises;
(g) CIS's allocated share of Remediation Costs for Unknown
Contamination, to the extent Sellers are not liable for such
costs pursuant to Section 14.5(b), except as set forth in Section
14.5(c); and
(h) Any administrative or civil fines or penalties assessed
by an Environmental Agency as a result of CIS's or Buyers'
actions or failure to act or for which notice is not provided to
Sellers in accordance with Section 14.6(c) hereof.
PERFORMANCE OF REMEDIATION
14.12. Responsibility to Direct Work. Sellers shall have
primary responsibility for directing the performance of any
Remediation for which they have greater than 50% of the monetary
liability, in whole or in part, under this Article 14 and shall
retain all environmental consultants to perform the Remediation,
and CIS shall have primary responsibility for directing the
performance of any Remediation for which it has 50% or more of
the monetary liability, in whole or in part, under this Article
14, and shall retain all environmental consultants to perform the
Remediation. All environmental consultants so retained shall be
with competent, recognized consulting firms. The party directing
the Remediation shall be the "Directing Party," and the other
party shall be the "Other Party." The Directing Party shall
review with the Other Party all material aspects of the proposed
Remediation, as described below. The Directing Party shall
provide the Other Party with a draft of any proposed Remedial
Action workplan, investigation report, report regarding completed
Remedial Action and other similar reports and shall provide the
Other Party with an opportunity to review and comment upon the
draft for a period of 30 days before it is submitted to an
Environmental Agency. The Directing Party shall incorporate any
reasonable revisions suggested by the Other Party if: (i) such
revisions do not materially alter the cost or scope of the
proposed Remediation, (ii) such revisions are necessary to comply
with the terms hereof or Environmental Laws or (iii) if CIS is
the Other Party, such revisions are necessary for CIS to operate
the Facility in the ordinary course of business. The Directing
Party shall promptly provide the Other Party with copies of all
written communications between the Directing Party and any
Environmental Agency concerning any Remediation. The Directing
Party shall also provide the Other Party with notice of, and the
Other Party shall be entitled to attend, any meetings with
representatives of the Environmental Agency having jurisdiction
over the Remediation or environmental consultants concerning the
Remediation. Similarly, the Other Party (if it is CIS) shall
advise the Directing Party of any matters relating to a Facility
that may affect the Directing Party's ability to implement the
Remediation. The Other Party and the Directing Party generally
shall cooperate in good faith to develop a mutually satisfactory
Remedial Action Plan which can be accomplished within any
deadlines established by an Environmental Agency.
The Directing Party shall have the right to initiate
communications with an Environmental Agency concerning the
proposed Remediation at any time. The Other Party agrees that it
will not initiate any consultation with any Environmental Agency
concerning a Remediation being undertaken and paid for by the
Directing Party without providing notice to the Directing Party,
unless, after consideration of the time delay associated with
giving prior notice to the Directing Party, any report that the
Other Party is legally required to give to an Environmental
Agency would be untimely. The Other Party shall also provide the
Directing Party with advance notice of any meeting it proposes to
have with any Environmental Agency concerning the Remediation,
and provide the Directing Party with an opportunity to attend.
Regardless of whether the Directing Party or a representative of
the Directing Party attends any such meeting, or in any other
case, the Other Party agrees that it will not take any action
with the intent of interfering with or delaying the Directing
Party's work or increasing the Directing Party's responsibility
beyond that which is required under this Article 14 or under any
Environmental Laws.
14.13. Implementation of Work. All Remediation shall be
conducted in a manner that does not interfere unreasonably with
or adversely affect the operation of the Facility at which
Remediation is being performed. Subject to Sellers' right to
direct the work when they are the Directing Party, CIS shall be
kept advised of, and may oversee, the implementation of the
Remediation. CIS, at its sole expense, and when it is not the
Directing Party, may also inspect all stages of the Remediation
provided that such inspection does not unreasonably interfere
with or delay the work. Following completion of Remediation for
which Sellers are the Directing Party, CIS shall have title to
all improvements, equipment and other items required with respect
to any Remediation.
14.14. Non Applicability. Section 14.12 through (and
including) Section 14.16 shall not apply to any Remediation for
which CIS or Buyers have sole responsibility.
ACCESS
14.15. Access. Sellers shall be granted access to the
Facilities during normal business hours or at such other times as
may be agreed upon by CIS and Sellers, for the purpose of
implementing any Remediation for which Sellers are responsible
under this Article 14. Sellers shall coordinate with CIS as to
the timing of specific Remediation activities for which Sellers
are the Directing Party so as to minimize any disruption of
operations at the Facility. In this regard, Sellers shall
provide CIS with at least 48 hours' advance notice of their
intention to enter a Facility for the purposes of performing such
Remediation. CIS and Sellers agree to cooperate in good faith to
select a mutually acceptable alternative date for entry onto a
Facility if entry on the date desired by Sellers would result in
an unreasonable interference with the use or operation of such
Facility.
INSURANCE
14.16. Insurance. Sellers agree that, in performing
Remediation of a Facility, Sellers or Sellers' agents shall carry
liability insurance in the following minimum amounts:
KINDS OF INSURANCE IN LIMITS NOT LESS THAN
Workmen's Compensation Statutory
Employer's Liability $100,000 each accident/disease
$500,000
Policy Limit
Comprehensive General Liability Combined Bodily Injury and
Property Damage
$5,000,000 each person
$10,000,000 each occurrence
Automotive Bodily Injury $1,000,000 each person
Liability (including hired $1,000,000 each occurrence
automobiles and non-ownership
liability).
Automotive Property Damage $1,000,000 each occurrence
Liability (including hired
automobiles and non-ownership
liability).
INDEMNIFICATION
14.17. Indemnification by Sellers. Sellers agree to
indemnify, defend and hold harmless CIS and Buyers and their
Affiliates from and against any and all Claims, liabilities,
losses, costs and expenses (including reasonable fees and
expenses of attorneys and environmental consultants)
(collectively, "Losses") directly or indirectly arising out of or
related to:
(a) any breach by Sellers of any of the representations,
warranties or covenants of Sellers set forth in this Article 14;
(b) the performance by Sellers of Remediation in accordance
with the terms and provisions hereof;
(c) Sellers' obligations under Sections 14.5 and 14.7
hereof; and
(d) any liabilities retained by Sellers pursuant to Section
14.9 hereof.
14.18. Indemnification by Buyers. Buyers agree to
indemnify, defend and hold harmless Sellers and their Affiliates
from and against any and all Losses directly or indirectly
arising out of or related to any breach by Buyers of any of the
representations, warranties or covenants of Buyers set forth in
this Article 14.
14.19. Indemnification by CIS. CIS agrees to indemnify,
defend and hold harmless Sellers and their Affiliates from and
against any and all Losses directly or indirectly arising out of
or related to:
(a) any breach by CIS of any of the representations,
warranties or covenants of CIS set forth in this Article 14;
(b) the performance by CIS of Remediation in accordance
with the terms and provisions hereof; and
(c) CIS's obligations under Section 14.11 hereof.
14.20. Procedures for Indemnification. The party
entitled to indemnification hereunder (the "Indemnitee") shall
promptly notify the party providing indemnification hereunder
(the "Indemnitor") in writing, in reasonable detail, of all
matters which may give rise to the right to indemnification
hereunder, it being understood that if the Indemnitor does not
receive notice of any matter known to the Indemnitee and as to
which the Indemnitee is entitled to indemnification hereunder in
time to contest the determination of any such liability, the
Indemnitor shall not be obligated to indemnify the Indemnitee
with respect thereto only if Indemnitor is actually prejudiced by
the failure to receive timely notice. Neither the Indemnitor nor
the Indemnitee shall admit any liability with respect to, or
settle, compromise, or discharge any matter covered by Section
14.14 through (and including) Section 14.21, without the prior
written consent of the other. The Indemnitor shall have the
right to defend through counsel of its own choosing, at its own
expense, any action which may be brought by a third party in
connection therewith, provided, however, that the Indemnitee
shall have the right to have its counsel participate in such
defense at its own expense. Indemnitor and Indemnitee shall keep
each other informed of all settlement negotiations with third
parties. Indemnitor and Indemnitee shall permit each other
reasonable access to books and records and otherwise cooperate
with all reasonable requests of each other in connection with any
indemnifiable matter resulting from a Claim by a third party.
14.21. Claims. For purposes of Section 14.14 through
(and including) Section 14.20, "Claims" means all assertions,
allegations, complaints, causes of action, demands, suits,
notices of actual or potential liability or responsibility,
claims for reimbursement or contribution, orders, judgments,
injunctions, requests or demands under claim of authority to take
action or refrain from taking action, liens, proceedings in
condemnation, executions upon judgment, or other claim, event,
information, or occurrence with respect to which a reasonable
person would respond or defend against. Claims shall include
claims with or without merit asserting liability for personal
injury, death, sickness, disease, emotional distress, loss of or
damage to real or personal property, pollution, nuisance,
environmental damage or response action, whether based on
statute, strict liability, violation of any laws and regulations
applicable to the ownership or operation of the Facilities
(except as otherwise limited by the definition of Environmental
Laws hereunder), tort, warranty, contract, or the status of a
party as seller, buyer, owner, operator, generator, transporter,
disposer or otherwise in association with handling products,
facilities or materials.
LIMITATION OF CLAIMS
14.22. Limitation of Claims. It is the parties' intent
that this Article 14 set forth Sellers', CIS's and Buyers'
exclusive obligations to each other with respect to Environmental
Conditions associated with the Facilities or the Business.
Buyers and Sellers waive all other rights against each other
related to such Environmental Conditions, including rights
otherwise provided by law, including common law. No limitation
on the rights or obligations of any party or on the remedies
available to any party set forth in any other Article of this
Agreement (including Article 12) shall have any force or effect
with respect to the obligations of the parties under this Article
14.
DISPUTE RESOLUTION
14.23. Dispute Resolution. In the event of a dispute
between the parties regarding any matter set forth in this
Article 14, the parties shall first endeavor to resolve such
dispute at the working team level (i.e., among the persons
principally responsible for discharging the parties' respective
obligations hereunder). If the parties are unable to resolve the
dispute at the working team level, the dispute shall be referred
to a representative of senior management of each of Sellers and
Buyers for resolution. The parties shall have 60 days from the
date on which such dispute is referred to their respective
members of senior management to resolve the matters being
disputed. If the parties are unable to resolve the disputes
within such 60 day period, the disputes shall be referred for
final resolution to binding arbitration in accordance with
procedures mutually agreed between the parties.
ARTICLE 15
MISCELLANEOUS
15.1. Assignment. This Agreement and any rights or
obligations arising hereunder shall not be assignable by Buyers
without the prior written consent of Crompton, on behalf of
itself and all Sellers, or by Sellers without the written consent
of Akzo LLC (on behalf of all Buyers), provided that Sellers may
assign the right to receive any payment hereunder without Akzo
LLC's consent.
15.2. No Press Release Without Consent. No press
release related to this Agreement or the transactions
contemplated herein, or other announcement to the Employees
(other than as required by law or as requested by European works
councils as part of required consultations), customers or
suppliers of the Business will be issued without the joint
approval of Crompton, acting on behalf of all Sellers, and Akzo
LLC acting on behalf of Buyers, which approval will not be
unreasonably withheld, except any public disclosure which Sellers
or Buyers in their good faith judgment believe is required by law
or by any stock exchange on which its securities or those of
their Affiliates are listed (in which case the party making the
disclosure will use commercially reasonable efforts to consult
with the other party prior to making any such disclosure).
Crompton, acting on behalf of all Sellers, and Akzo LLC, acting
on behalf of Buyers, will cooperate to prepare separate press
releases to be issued at the time of the signing of this
Agreement and on the Closing Date.
15.3. Confidentiality. Except as required by Applicable
Law, all information related to the Business supplied to Buyers
by Sellers shall be maintained in strict confidence by Buyers and
their employees, advisors and agents in accordance with the
Letter Agreement dated May 9, 2000 entered into between Buyers
and Xxxxxxx Xxxxx & Co., on behalf of Sellers, as amended by
Amendment No. 1 to Letter Agreement dated February 19, 2002,
provided that these restrictions shall terminate upon Closing.
In the event that this Agreement is terminated, all written
materials relating thereto shall be returned to Sellers or
destroyed as provided in such confidentiality agreement and
Buyers shall deliver an officer's certificate to Sellers
certifying as to such return or destruction. In such event,
Buyers and their employees, advisors and agents shall make no
further use of such information whatsoever. The provisions of
this Section 15.3 shall be in addition to those set forth in
Section 11.4 above.
15.4. Expenses. Each party shall bear its own expenses
with respect to the transactions contemplated by this Agreement
(including fees of investment bankers and attorneys). Any sales,
transfer, use, stamp, stamp duty reserve, notarial fees or other
similar Tax (other than income Tax), duty, recording cost
(including patent and trademark assignments), filing fees, costs
and expenses in connection with title insurance and surveys
(including the costs and expenses incurred in connection with the
updates contemplated by Section 2.3) or other costs or expenses
incurred upon the sale or transfer of the Purchased Assets shall
be shared equally by Buyers and Sellers, notwithstanding any
local custom, practice or requirement that imposes the obligation
to pay such impositions in whole or in part on either party.
Should the Taxing authorities determine that the sale and
transfer of the Assets is subject to Value Added Tax ("VAT"),
then Sellers shall add 50% of the appropriate amount of VAT to
that portion of the Purchase Price that reflects the Assets
transferred by and between Buyers and the Affiliates of Sellers
located in Australia, Brazil, Canada, France, Mexico, Singapore
and Thailand, as applicable, and shall send to Buyers (or, as
appropriate, to their Affiliates) an invoice reflecting that
amount of VAT.
15.5. Severability. Each of the provisions contained in
this Agreement shall be severable, and the unenforceability of
one shall not affect the enforceability of any others or of the
remainder of this Agreement.
15.6. Entire Agreement. This Agreement may not be
amended, supplemented or otherwise modified except by an
instrument in writing signed by Akzo LLC (acting on behalf of all
Buyers) and Crompton (acting on behalf of all Sellers). This
Agreement and the Ancillary Agreements contain the entire
agreement of the parties hereto with respect to the transactions
covered hereby, superseding all negotiations, prior discussions
and preliminary agreements made between the parties prior to the
date hereof, except the confidentiality agreement referred to in
Section 15.3.
15.7. No Third Party Beneficiaries. This Agreement is
solely for the benefit of the parties hereto and their respective
Affiliates and no provision of this Agreement shall be deemed to
confer upon third parties any remedy, claim, liability,
reimbursement, claim of action or other right.
15.8. Waiver. The failure of any party to enforce any
condition or part of this Agreement at any time shall not be
construed as a waiver of that condition or part, nor shall it
forfeit any rights to future enforcement thereof. Any waiver of
any part of this Agreement shall only be valid if in a writing
executed by Akzo LLC (on behalf of all Buyers) and Crompton (on
behalf of all Sellers).
15.9. Governing Law. This Agreement shall be construed
and enforced in accordance with and governed by the laws of the
State of Delaware without regard to the conflicts of law
provisions thereof.
15.10. Counterparts. More than one counterpart of this
Agreement may be executed by the parties hereto, and each fully
executed counterpart shall be deemed an original.
15.11. Choice of Forum. Buyers and Sellers irrevocably
submit to the exclusive jurisdiction of (i) the state courts of
the State of Delaware and (ii) the United States District Court
for the District of Delaware, for the purposes of any suit,
action or other proceeding arising out of this Agreement or any
transaction contemplated hereby. Buyers and Sellers agree to
commence any action, suit or proceeding relating hereto either in
the United States District Court for the District of Delaware or,
if such suit, action or proceeding may not be brought in such
court for jurisdictional reasons, in the state courts of the
State of Delaware. Buyers and Sellers irrevocably and
unconditionally waive any objection to the laying of venue of any
action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby in (i) the state courts of the
State of Delaware, or (ii) the United States District Court for
the District of Delaware, and hereby further irrevocably and
unconditionally waive and agree not to plead or claim in any such
court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum.
15.12. Further Documents. Each of Buyers and Sellers
will, at the request of another party, execute and deliver to
such other party (or, to the extent it controls CIS at the
relevant time, will cause CIS to execute and deliver to the other
party) all such further instruments, assignments, assurances and
other documents as such other party may reasonably request in
connection with the carrying out of this Agreement and the
transactions contemplated hereby.
15.13. Notices. All communications, notices and consents
provided for herein shall be in writing and be given in person or
by means of telex, facsimile or other means of wire transmission
(with request for assurance of receipt in a manner typical with
respect to communications of that type) or by mail, and shall
become effective (a) on delivery if given in person, (b) on the
date of transmission if sent by telex, facsimile or other means
of wire transmission, or (c) four business days after being
deposited in the United States mails, with proper postage and
documentation for first-class registered or certified mail,
prepaid.
Notices shall be addressed as follows:
(i)If to Buyers, to:
Akzo Nobel Surface Chemistry L.L.C.
000 X. Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: President
with a copy to:
Akzo Nobel Inc.
000 X. Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Assistant General Counsel
(ii) If to Sellers, to:
Crompton Corporation
World Headquarters
Xxx Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: General Counsel
Facsimile Number: (000) 000-0000
With a copy to:
Xxxxxx X. Xxxxx, Esq.
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile Number: (000) 000-0000
provided, however, that if any party shall have designated a
different name, address or facsimile number by written notice to
the others, then to the last name, address or facsimile number so
designated.
15.14. Schedules. The information disclosed in the
Schedules attached to this Agreement (the "Schedules") is
disclosed subject to the confidentiality provisions of Section
11.4 of this Agreement and should not be used for any purpose
other than the purposes contemplated by this Agreement. Items
disclosed on any one Schedule hereto shall be deemed to be
disclosed on all other Schedules hereto, and the failure to list
any item on more than one Schedule shall not give rise to any
claim or right.
15.15. Construction. The language in all parts of this
Agreement shall be construed, in all cases, according to its fair
meaning. The parties acknowledge that each party and its counsel
have reviewed and revised this Agreement and that any rule of
construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the
interpretation of this Agreement.
15.16. Guarantee. Akzo Chemicals ("Guarantor") hereby
represents and warrants that it is duly organized and validly
existing in good standing under the laws of the jurisdiction of
its organization and is duly qualified to transact business as a
foreign corporation in all jurisdictions, except where the
failure to be so qualified could not reasonably be expected to
have a material adverse effect on its assets, business, financial
condition or results of operation or to delay or impair its
ability to perform its obligations in connection with the
transactions contemplated hereby. Guarantor hereby represents
and warrants that it has full corporate power and authority to
execute, deliver, and perform this Agreement and the performance
of all obligations hereunder has been duly authorized by
Guarantor. Guarantor hereby irrevocably, absolutely and
unconditionally guarantees to each Seller (each, a "Guaranteed
Party"), as a primary obligor and not merely as a surety, the
due, punctual and complete performance and payment (and not
merely collection) in full of all obligations and liabilities of
each Buyer hereunder and of CIS after the Closing Date, as and
when due and payable or required to be performed pursuant to any
provision of this Agreement and the Promissory Note (the
"Guaranteed Obligations"). To the fullest extent permitted by
applicable law, Guarantor waives presentment to, demand of
payment from and protest to any other Person of any of the
Guaranteed Obligations, and also waives notice of acceptance of
its guarantee and notice of protest for nonpayment. The
obligations of Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of
the invalidity, illegality or unenforceability of the Guaranteed
Obligations, or otherwise. Guarantor hereby waives all
suretyship defenses and all defenses based upon impairment of
suretyship status. Without limiting the generality of the
foregoing, the obligations under this guarantee shall not be
conditioned or contingent upon any preservation or enforcement of
any rights or remedies against any Person or property, the
pursuit or assertion by any Guaranteed Party or any other Person
at any time of any right or remedy against any Person or against
any collateral security or other property or any pursuit or
assertion of any right of setoff or recoupment. This guarantee
is a continuing guarantee.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective duly authorized
officers as of the date first above written.
CROMPTON CORPORATION AKZO NOBEL SURFACE
CHEMISTRY L.L.C.
By
Name: Xxxx X. Xxxxxxxx XX By:
Title: Senior Vice Name:
President and Title:
General Counsel
AKZO NOBEL SURFACE
CROMPTON SPECIALTIES PTE., LTD. CHEMISTRY A.B.
By By:
Name: Xxxx X. Xxxxxxxx XX Name:
Title: Authorized Title:
Signatory
AKZO NOBEL SURFACE
CROMPTON SPECIALTIES ASIA CHEMISTRY PTE., LTD.
PACIFIC PTE., LTD.
By:
By____________________________ Name:
Name: Xxxx X. Xxxxxxxx XX Title:
Title: Authorized
Signatory
AKZO NOBEL CHEMICALS INC.
XXXXXXXX X.X. (FRANCE) By:
Name:
By Title:
Name: Xxxx X. Xxxxxxxx XX
Title: Authorized
Signatory
XXXXXXXX X.X. (SWITZERLAND)
By
Name: Xxxx X. Xxxxxxxx XX
Title: Authorized Signatory
CROMPTON INDUSTRIAL
SPECIALTIES, INC.
By
Name: Xxxx X. Xxxxxxxx XX
Title: President
EXHIBIT A
INVENTORY STATEMENT
EXHIBIT B
ARBITRATION PROCEDURES
The following are the arbitration procedures to be used in
resolving any open issues with respect to the Proposed Inventory
Statement, the Post-Closing Accrual Statement or the Volume
Statement:
1. Presentation of each side's written proposal of the Proposed
Inventory Statement, the Post-Closing Accrual Statement or the
Volume Statement, as applicable, to be submitted in writing to
the Referee by the end of the 30-day period referred to in
Sections 3.2(d)(ii) and 3.4(ii) of the Agreement.
2. Written presentation of each side's substantive position on
disputed issues.
a. To be submitted in writing to Referee within two weeks of
the end of the 30-day period referred to in Sections 3.2(d)(ii)
and 3.4(ii) of the Agreement.
b. Affidavits and all supporting material to be included.
3. Written replies.
a. To be filed within 10 days after receipt of initial written
submission.
b. Affidavits and all supporting material to be included.
4. Conference with Referee.
a. To take place within 10 days after replies are filed.
b. Each side will have 30 minutes to present its position.
c. Accountants and other advisors who were involved in the
transaction will be present to answer questions.
d. Each side will then have 15 minutes to respond to the other
side's presentation.
e. After presentations and rebuttals, each side will respond
to questions from, or comments of, Referee.
5. Decision.
a. Referee to make decision within 15 days following
conference.
